Re: [OPE-L] Financial Derivatives and Value Theory

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Sun May 08 2005 - 12:33:50 EDT

haven't read this one either. rb

Financial Derivatives and the Globalization of Risk

Edward LiPuma, Benjamin Lee

224 pages (August 2004)
ISBN 0-8223-3407-0 Cloth - $69.95
ISBN 0-8223-3418-6 Paperback - $19.95

The market for financial derivatives is far and away the largest and
most powerful market in the world, and it is growing exponentially.
In 1970 the yearly valuation of financial derivatives was only a few
million dollars. By 1980 the sum had swollen to nearly one hundred
million dollars. By 1990 it had climbed to almost one hundred billion
dollars, and in 2000 it approached one hundred trillion. Created and
sustained by a small number of European and American banks,
corporations, and hedge funds, the derivatives market has an enormous
impact on the economies of nations-particularly poorer
nations-because it controls the price of money. Derivatives bought
and sold by computer keystrokes in London and New York affect the
price of housing in Johannesburg, Kuala Lumpur, and Buenos Aires.
Arguing that social theorists concerned with globalization must
familiarize themselves with the mechanisms of a world economy based
on the rapid circulation of capital, Edward LiPuma and Benjamin Lee
offer a concise introduction to financial derivatives.
LiPuma and Lee explain how derivatives are essentially wagers-often
on the fluctuations of national currencies-based on models that
aggregate and price risk. They describe how these financial
instruments are changing the face of capitalism, undermining the
power of nations, and perpetrating a new and less visible form of
domination on postcolonial societies. As they ask: How does one know
about, let alone demonstrate against, an unlisted, virtual, offshore
corporation that operates in an unregulated electronic space using a
secret proprietary trading strategy to buy and sell arcane financial
instruments? LiPuma and Lee provide a necessary look at the obscure
but consequential role of financial derivatives in the global economy.

"The prominence of a new kind of speculative finance capital in
organizing global order and disorder is a topic of vital contemporary
importance. By addressing this topic, this short, clear account
advances the somewhat muddled debates over economic
globalization."-Craig Calhoun, president of the Social Science
Research Council

Edward LiPuma is Professor of Anthropology at the University of
Miami. He is the author of Encompassing Others: The Magic of
Modernity in Melanesia and coeditor of Bourdieu: Critical
Perspectives. Benjamin Lee is Professor of Anthropology and
Philosophy at New School University and Dean of its Graduate Faculty
of Political and Social Science. He is the author of Talking Heads:
Language, Metalanguage, and the Semiotics of Subjectivity (published
by Duke University Press) and coeditor of Semiotics, Self, and

Table of Contents
Preface ix
1. Global Flows and the Politics of Circulation 1
2. Derivatives, Risk, and Speculative Capital 33
3. Historical Conjunctures 67
4. The Institutional Basis of Derivatives 85
5. Deriving the Derivative 107
6. The World of Risk 141
7. Derivatives and the Stability of the State 161
Glossary 191
Notes 195
Bibliography 201
Index 207

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