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Turbulent Worlds : Financial Markets and Environmental Crisis Melinda Cooper Theory Culture Society 2010 27: 167 DOI: 10.1177/0263276409358727 The online version of this article can be found at: http://tcs.sagepub.com/content/27/2-3/167

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167-190 TCS358727 Cooper_Article 156 x 234mm 30/03/2010 16:07 Page 167

Turbulent Worlds Financial Markets and Environmental Crisis

Melinda Cooper

Abstract Focusing on the speculative methodologies used to generate models of the financial and meteorological future, this article develops a series of theses on the ‘evental’ and ‘atmospheric’ quality of contemporary power. What is at stake in the circulation of capital today, I argue, is not so much the exchange of equivalents as the universal transmutability of fluctutation. Whether we are dealing with the turbulence of world financial markets or that of complex earth systems, the non-dialectical relation can itself be extracted, recombined and liquefied, as it were, in a dimension of its own. In the same way that financial derivatives price the variable relation between and across national currencies, weather derivatives now make it possible to issue contracts on the unknowable contingencies embedded in complex atmospheric relations. This reconfiguration of value requires a thorough rethinking of classical sociological conceptions of debt, promise and political violence. Key words biopolitics ■ debt

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environmental politics

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financial markets

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imperialism

Worlds in Transition HE INTEGRATION of financial markets in the early 1970s initiated a period of enduring and structural turbulence in world economic affairs. When the convertibility of the dollar against gold was replaced by floating and volatile exchange rates, the unpredictable was, of necessity, factored into the calculus of world economic futures. Henceforth turbulence could not be prevented; it could only be managed. The abolition of national controls over exchange rates has not, however, signalled the demise of imperial power as such. Rather it has engendered a qualitatively

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Theory, Culture & Society 2010 (SAGE, Los Angeles, London, New Delhi, and Singapore), Vol. 27(2–3): 167–190 DOI: 10.1177/0263276409358727



168 Theory, Culture & Society 27(2–3)

new form of imperial power (neither national nor international in nature) of which the United States has been the chief beneficiary. It is not necessary to look for some conspiracy of interests to recognize that the recurrence of chaotic instabilities in the liberalized markets of the developing world has in fact become highly profitable to a certain kind of internationally mobile financial institution. The political theorist Peter Gowan has argued that US imperial power is dependent on the sporadic production of monetary and financial turbulence in the emerging economies (1999: 115–24). The periodic financial crises of South East Asia and Latin America have been far from deleterious to US financial interests, since the threat of devaluation impels the private funds invested in states to flood back into the US markets, where they have lowered interest rates and fuelled successive stock market booms. Thus Gowan concludes that the big hedge funds are not a speculative aberration of US capital but are rather acting in the interests of its macroeconomic health, which is in turn inseparable from the interests of Wall Street. The production of monetary and financial turbulence, whether threatened or real, exercises an undeniable political leverage. It enables the international financial institutions to force through the privatization of state industries, welfare and infrastructure, and to further impose forms of debt-financing (securitized debt and short-term loans, for example) that are most volatile and most profitable to the institutional investment funds. In the current context, there is something both strategic and accidental about this form of political intervention, since it relies for its effects on a market-generated turbulence that can materialize in any place at any time and whose unfolding is essentially unpredictable. That US financial markets are able to navigate this field of turbulent relations without (until recently) succumbing to their more dangerous side effects is a function of the exceptional status of the US dollar. The demise of dollar–gold convertibility magnified rather than restricted the reach of American financial markets – the dollar, after all, is no longer accountable to any standard of value yet continues to function as the world’s de facto reserve currency. Liberated from the necessity of having to pay off its own debts, the United States, alone of all nations, has been empowered to release unlimited quantities of non-convertible dollars into global circulation. Through the act of fiat debt creation the US is effectively able to create (and recreate) a world empire, inspiring the practical if not willing confidence of the world’s investors in the trustworthiness of its promises and the liquidity of its markets.1 We need not follow Gowan in insisting that the US is destined to remain the epicentre of this economy of turbulence in order to appreciate the suggestiveness of his argument. Indeed, as US international influence and the oil–dollar connection starts to look increasingly fragile, it is becoming conceivable that the locus of world financial power might shift, without affecting the productivity of turbulence per se. Today the US-dollar denominated world of integrated financial markets is in crisis. The recent financial turmoil has brought to an end the immunity Downloaded from tcs.sagepub.com at UNIV CALIFORNIA SAN DIEGO on October 31, 2010


Cooper – Turbulent Worlds 169

of the US economy from the turbulence of world financial flows, calling into question the willingness of global investors to sustain the liquidity of Wall Street capital markets. Even a former chief economist of the International Monetary Fund (IMF) has remarked that the US has experienced the kind of precipitous decline in liquidity, credit and employment that, in recent history, was seen only in emerging market crises (Johnson, 2009). The turbulence that could once be safely exported to the peripheries of the world economy has now returned to haunt the heartland. For the moment, the US is protected by the singular privilege of paying its foreign debts in its own currency, which it is able to create at will. Nevertheless, a turning point has been reached, not only with respect to the immunity of the US domestic economy but also its continuing sustainability as world financial power. The 2008 report of the National Intelligence Council, Global Trends 2025: A Transformed World, expresses concern that the US is currently relying on an ‘exorbitant privilege’ which may at some point cease to exist (National Intelligence Council, 2008). Doubling but not quite coinciding with the financial crisis is the growing consensus within the US political and financial class that global environmental risk (of which climate change has become the key marker) is not something that can be indefinitely exported beyond American borders. However tenuous its precise connection with the phenomenon of global warming, Hurricane Katrina can be singled out as the turning point when climate change began to be treated seriously as a problem of imperial management. The change in tack had as much (if not more) to do with the growing awareness of the geopolitical costs of oil dependence as any sudden environmentalist epiphany. In response to these intimations of crisis, an emerging policy discourse associated with centrist think-tanks such as the Center for a New American Security (CNAS) and the Center for American Progress contends that America has no choice but to revisit the kind of grand strategy initiated in the aftermath of the Second World War. This would not mean a return to Cold War military thinking but the invention of a new grand strategy capable of moving beyond the oil-centric geopolitics of the Bush era (see for example Brimley et al., 2008; Burke and Parthemore, 2008). The problem confronting these strategists is how to navigate the US-dollar denominated world through the extreme turbulence of financial, climate and energy crisis. Will North American power as world power survive the end of oil? Will the US be able to maintain its exorbitant privilege – that of issuing the world’s reserve currency – in the face of geopolitical alignments between China, Russia, Africa and the Middle East? All of these questions are connected in more or less perverse ways to the increasingly visible effects of climate change. As ice caps melt, formerly un-navigable ocean routes and deep-sea ocean beds have been opened up to imperial conquest. The prospect of climate change and dwindling fossil fuel supplies has intensified rather than diminished territorial struggles over oil reserves and transportation routes. At the same time, new spaces of conquest have been opened up – this time, Downloaded from tcs.sagepub.com at UNIV CALIFORNIA SAN DIEGO on October 31, 2010



no longer the recesses of the earth and sea but the flow space of hydrological currents linking ocean, freshwater, atmosphere and landmass evaporation. The CNAS has recently launched a project on America’s role as ‘protector of the global commons’ – a problematic that has historically been closely connected to efforts to expand the American frontier.2 It defines the global commons as the air, sea and skies – the space of atmospheric circulation in which struggles over new and old energy sources are likely to be played out. It is not only the actual space of atmospheric circulation that the US aspires to dominate, however, but also and more importantly, the abstract, topological space of the securitized risk markets, in which weather turbulence plays an increasingly significant role. It is a measure of the growing political imbrication of climate, energy and economic futures that some of the most far-reaching of current proposals for coping with climate change are being developed in the financial sector. The Stern Review, sponsored by the UK Treasury in 2006, promotes financial solutions to climate change not only as a means of funding the transition from carbon-based to alternative fuels but also as a lucrative business opportunity in itself (Stern, 2006). The market for weather risk management extends beyond carbon trading to include a whole spectrum of novel financial instruments designed to price and manage the risks associated with extreme weather events, natural catastrophes and unexpected temperature fluctuations (Mills, 2008). The world’s major weather risk markets are currently housed in the United States – the expansion of these markets would therefore seem to offer one possible exit strategy from the liabilities of the dollar–oil nexus. The convergence of US strategic, geopolitical and financial interests in an overarching logistics of turbulence goes some way to explaining the recent volte-face of the US political class on the question of international negotiations on climate change. In the build-up to the Copenhagen conference of December 2009, which is set to revise the Kyoto protocol for 2012, the US was looking to establish its exceptional position in world politics not by absenting itself from the negotiating table but rather by imposing itself as world leader in the commercial and political opportunities offered by climate change. Under the rubric of climate change security, an emerging policy discourse insists on the necessity of responding to financial, ecological and energy crisis in the context of an integrated grand strategy of imperial power. My intent in this article is not to offer any predictions about the evolving fortunes of American imperial power. Nor am I interested in adding to the vast futurological literature on the combined financial, climate and energy crises. I would like to focus instead on the specific futures methodology that has come to inform strategic planning in each of these domains. What I am referring to here is scenario planning, a forecasting technique which attempts to divine not this or that aspect of the future but the multiple future worlds attendant on alternative actions in the present. In its globalizing scope, scenario planning might be characterized as the practical, methodological counterpart to the power relations described by world Downloaded from tcs.sagepub.com at UNIV CALIFORNIA SAN DIEGO on October 31, 2010



systems theory.3 The scenarios method is the preferred risk-analysis technique of global political institutions (the IMF, the World Economic Forum, the Intergovernmental Panel on Climate Change [IPCC]) and national institutions with a vested interest in world systemic events, most notably the United States. It is perhaps the most ubiquitous and most consequential of epistemologies in contemporary politics. Yet it has received surprisingly little academic attention, other than the most technocratic in nature.4 I will begin by looking at the history of scenario planning as a futures methodology, arguing that it was adopted by conservative thinktanks in the United States as the latter’s imperial power came to be aligned with the logistics of global turbulence. I will then turn to the specific uses of scenario planning in the weather risk markets, where financial and meteorological turbulence are coupled together in new instruments such as weather derivatives, before turning once again to the strategic uses of scenarios in the discourse of climate security. More generally I am interested in the suggestive resonances between scenario planning and the philosophy of possible worlds. With its insistence on the world-creative force of imagination, belief and confidence, possible worlds philosophy lends itself all too readily to the operations of contemporary financial and imperial power. It is, however, too closely invested in the operations of power to reflect on its constitutive idealism, an idealism that blinds it to the intimate relationship between imperialism in the speculative mode and the pre-emptive form of political violence. In the concluding part of the article, I will reflect on the convergence between financial responses to climate change and the growing interest, within the US polity, in climate change as a security concern. Climate Change, Scenarios and Possible Worlds It was in the context of the first oil crisis that strategists associated with French petroleum companies Shell and ELF began experimenting with new forecasting techniques designed to register the essentially uncertain nature of the future. In a world economic environment in which prices were increasingly volatile, what these strategists sought to develop was a mathematically rigorous method that nevertheless built on the non-quantitative and emotive dimension of our relation to the future. The ‘prospective’ method recognized that degrees of wishfulness (belief, confidence and trust) play a formative role in the realization of futures. In the words of one of its theorists, Michel Godet, prospectives are ‘anticipated retrospectives’ (1982: 296). Their collective action is unpredictable yet, under circumstances unspecified by the theory itself, decisive in shaping the future state of the world – the world as it will have been. In the United States, the method was adopted and perfected by the strategist Herman Kahn in his work at the conservative think-tank, the Hudson Institute (Aligica, 2004). It was Kahn who popularized the practice of scenario planning as a collective thought-experiment in which specialists from different disciplines are asked to imagine and unfold a series of alternative futures from a position of present uncertainty. The Downloaded from tcs.sagepub.com at UNIV CALIFORNIA SAN DIEGO on October 31, 2010



initial selection of alternative scenarios forms a crucial first step in this methodology – it needs to include both the more obvious and the more unexpected of futures, futures that test the limits of the imagination. The adoption of scenario planning as a privileged forecasting method signalled a move away from the predictive strategies deployed in the context of the Cold War and the international economic order established at Bretton Woods. The pre-eminent futurological methods of the 1960s (the Delphi method, games theory, equilibrium theory in neoclassical and postKeynesian economics) shared a common investment in the possibility of prediction. While fixed exchange rates governed the relative stability of trade between national economies and currencies, the doctrine of mutual deterrence established a paranoid balance of terrors between the two world superpowers, the Soviet Union and the United States. On the economic and strategic planes alike, the configuration of powers which confronted the United States in the period following the Second World War was one which seemed to demand a logistics of equilibrium. Herman Kahn, who had been a champion of these predictive methodologies, now insisted that US strategy needed to ‘plan for that which is more or less predictable’ and to ‘hedge against that which is uncertain, both to be able to exploit favourable events and guard against the consequences of unfavourable ones’ (Kahn, 1973: 104–5).5 What he now referred to as scenario planning formed the basis for his response to such ecological treatises as the Limits to Growth report, in which he argued that US economic growth could indeed be pursued beyond the limits of peak oil (Kahn and Simon, 1984). Today scenario planning is deployed extensively across a range of disciplines, institutions and policy sciences.6 It has been adopted as a longterm planning technique by Royal Dutch Shell and other energy companies faced with the enduring uncertainty of oil prices and the political instability of the world’s oil supply regions. International financial institutions such as the World Economic Forum use it as a means of mapping out the uncertain futures of globally integrated financial markets. In the wake of the financial crisis, reinsurers have called for its systematic use as a ‘preemptive risk management tool’ in the securitized risk markets (CRO Forum, 2009). The applications of scenario planning are not limited to the global capital markets however. As the natural sciences adopt the framework of complex adaptive systems to model the dynamics of ocean currents, atmospheric turbulence and the hydrological cycle, scenario planning provides an insight into the multiple and uncertain futures engendered by their interactions (Peterson, 2005). Thus the benchmark climate change futures published annually by the United Nations (UN) IPCC are developed using the scenario method. The IPCC defines a scenario as ‘a coherent, internally consistent and plausible description of a possible future state of the world’ and rates the plausibility of each scenario in terms of ‘the degree of confidence’ it inspires rather than its mathematical probability (Carter et al., 2007: 145). Scenarios are therefore ‘not predictions or forecasts but are alternative images without ascribed likelihoods of how the future might Downloaded from tcs.sagepub.com at UNIV CALIFORNIA SAN DIEGO on October 31, 2010



unfold’ (2007: 145). The scenario method has been particularly influential in the United States. Post-9/11, it has become standard procedure in disaster planning and response, where it serves as a model for simulation exercises designed to prepare for the ‘unexpected’ crisis event. It is also the method of choice for public administrations, private think-tanks and academic research institutes interested in shaping the future of strategic and economic decisions around energy, foreign policy and the natural environment. The National Intelligence Council publishes a scenario-based report every four years, which offers three alternative perspectives on the evolution of key global trends (geopolitical, strategic and economic) over the following 15 years. As explained on the website: Scenarios are plausible alternative views about how the future may develop. They differ from forecasting in that they do not attempt to predict the future based on linear extrapolations of the past. Scenarios do not seek to project the future. Instead, they focus on the identification of discontinuities and how these could potentially develop as a set over time.7

As a futures methodology, scenario planning is designed to foster decision-making under conditions of uncertainty. Its focus is not risk as such, but rather the radical uncertainty of unknowable contingencies – events for which it is impossible to assign a probability distribution on the basis of past frequencies. Instead, it develops a semantics of counterfactual propositions, opening up onto a pluriverse of alternative event-contingent worlds. If x were to occur, what world would we be living in? If x had occurred (or had not), what world would we be living in? As these discontinuous ramifications unfold, the spectrum of alternative futures is expanded beyond the logical possibilities of simple prediction, affording us a glimpse not only into the possible futures of the actual world but also into the proliferating pasts and futures of counterfactual worlds. Unrestrained by the principle of non-contradiction, these counterfactual worlds are able to entertain contingencies that would be mutually exclusive in any one actual world. The futures methodology of scenario planning bears a striking resemblance to possible worlds thinking, a philosophical current that has roots both in Leibnizian ontology and the most pragmatic of contemporary logics.8 The problem of possible worlds lies at the very heart of Leibniz’s metaphysics, tying together his early, practical observations on the combinatorial arts of probability with his later, speculative work on divine powers of creation.9 For Leibniz, there is an internal correlation between objective probability, mental conceivability and the greater or lesser propensity of worlds to exist. The creatability of worlds corresponds to degrees of possibility in the mind of God. The actual world is the most perfectly conceivable in the mind of God – indeed the best of all possible worlds – because it is a world absolutely free from contradiction. Contemporary possible worlds, on the other hand, are contradiction-tolerant logics – in this they differ from Leibniz’s conception. Indifferent to chronology, they are able to Downloaded from tcs.sagepub.com at UNIV CALIFORNIA SAN DIEGO on October 31, 2010



move backwards as well as forwards, positing futures from which a series of alternative pasts can then be ‘back-cast’. The contemporary philosophy of possible worlds is aligned with what is known as formal modal logic, or the logic of possibility, necessity and contingency. It is interested in the ways things could be, or could have been, modes of being that are rendered by the grammatical constructions of the conditional or the subjunctive. Relying on a methodology of counterfactual propositions, possible worlds theories make semantic claims about the greater or lesser plausibility of contingent or uncertain events. These propositions are of a subjective rather than an objective nature. Contemporary possible worlds theories thus establish a complex causal relationship between subjective expectation (propositions about contingent events and the degree of credibility we assign to them) and the actual creation of worlds, virtual or otherwise. The precise ontological status of these worlds remains a matter of dispute. Is a possible world creatable by virtue of its conceivability? And does the greater or lesser conceivability of a world have a bearing on its propensity to come into existence? Certain of its philosophers claim that possible worlds are as real as actual worlds, in other words, that the ways the world could be or could have been are themselves actual ‘states of the world’ possessed of their own generative effects and sphere of influence.10 With their expansive ontological status and indifference to the law of non-contradiction, these imaginative worlds are capable of enduring extremes of turbulence. In the words of one philosopher, the logic of counterfactuals is that of Leibniz after the death of God (Rescher, 1997: 121). Claiming to conjure up worlds through the very act of promise, trust and imagination, it is not difficult to see why the possible worlds of scenario planning have held such an irresistible appeal for US strategists of the neoliberal era. The philosophers of possible worlds have trouble distinguishing between the powers of speculative imagination and the actual event of world creation. This, it might be argued, is precisely the delusion which has beset American imperial power over the last few decades. American power, after all, is premised on its continued ability to inspire confidence in the creditworthiness of the dollar, which it creates at will.11 To speak of a delusion here is not to denigrate the operative force of delusion as such. Paraphrasing Marx, the imperial power of the US dollar is not so much a metaphysical illusion as a real abstraction, a power to actualize the most ethereal of relations (turbulence as the generic form of the contingent event) into forces, qualities and quantities of the most material kind. This power may not be precise in its effects but is nevertheless all-encompassing in its ambitions (which is why effective challenges to US imperial power are also so often inspired by fantasies of world dominion). It is a power that works through the expansion of intensive as well as extensive frontiers – the continuous generation of new spheres of unpredictable, securitized risk being the chief means through which it also seeks to realize its geopolitical aims. Currently, the most contested of these frontiers is represented by climate change and its attendant volatilities. I therefore now turn to an Downloaded from tcs.sagepub.com at UNIV CALIFORNIA SAN DIEGO on October 31, 2010



investigation of emerging financial markets in environmental, weatherrelated and climate-indexed products, before reflecting on the geopolitical ambitions that function as their mirror image. Trading Turbulence – Climate Change Futures and Weather Derivatives The last decade has seen a rapid expansion of financial innovations seeking to couple the economic risks of climate change with the riskdistributive capacities of the liberalized capital markets. In recent years, the market for weather risk management has expanded beyond the more familiar cap-and-trade credits to include a whole spectrum of novel financial instruments designed to price and manage the risks associated with extreme weather events, natural catastrophes and unexpected turbulence. The latter include catastrophe bonds, securities that manage the risks of improbable but catastrophic natural events, and environmental derivatives, financial instruments that respond to unpredictable fluctuation in the weather. Initially, most weather contracts were designed to meet the needs of a particular buyer and seller and were sold over the counter (OTC) through large investment banks and insurance companies. As the market has grown, there has been a trend toward the standardization of products that are now traded like other derivatives through the Chicago Climate Exchange and the Chicago Mercantile Exchange, which list and trade futures and options on temperature indices for dozens of cities in the US, Europe and Japan. As banks, insurance houses and hedge funds have moved into weather products over the past five years, the market has undergone a rapid expansion, to the point that the World Bank is now pushing developing countries to adopt them as a way of managing climate change risk. Interestingly, while the viability of derivatives as a form of unregulated transnational money has come seriously into question over the last year, trading in weather derivatives has been one of the few markets to survive the credit crunch relatively unscathed. The growth in markets for environmental risk is a direct consequence of the internal transformations of the insurance industry over the past few decades. The disintermediation of banking, finance and insurance in the late 1980s and 1990s meant that insurance brokers were now able to repackage and sell risk in the form of tradable securities. As the capital markets became a legitimate sphere of risk-hedging for insurance companies, the world’s major reinsurers (Swiss Re, Munich Re, Allianz) began to replace their formerly cautious investment strategies with newly designed insurance-linked securities such as catastrophe bonds and weather derivatives (Sigma, 2005, 2006). While weather-related risk had once been covered through indirect means, such as property insurance, the contingencies of the weather could now be directly hedged and traded in the capital markets. The curious effect is that climate change – and the critical or singular events it may engender – has become a speculative opportunity like any other in a market hungry for critical events. Downloaded from tcs.sagepub.com at UNIV CALIFORNIA SAN DIEGO on October 31, 2010



There is of course a long history of metaphorical exchanges between finance, meteorology and hydrodynamics. The mathematician Benoît Mandelbrot constructed an entire geometry of nature on the model of price fluctuation in the commodity futures markets (2004). In Mandelbrot’s work, the convertibility between natural turbulence and speculative finance is at once analogical and realist. What Mandelbrot is proposing is something like a speculative ontology of nature, in which the weather and the market are subject to similar laws of unpredictable turbulence.12 In the current context, such a proposition is both increasingly plausible and dangerously seductive, since it obviates any consideration of the historical process by which environmental turbulence comes to be correlated with price and the political effects that derive from this conjunction. Today, the question of the relationship between natural and financial turbulence is of considerable practical interest to economists interested in pricing the weather for the insurance industries. The irreversible, complex nature of the weather makes it recalcitrant to actuarial models of risk management. If climate change can be likened to an experiment in the atmospheric state of the world: ‘we may never be able to observe enough experiments to approximate the probability of global climate change in the relative frequency sense: such events are inherently unique’ (Chichilnisky and Heal, 1993: 66). When we are unable to calculate a probability distribution over possible future states of the world, the risk becomes incalculable in statistical terms, and therefore uninsurable. There is no fundamental value, no equilibrium point of nature, around which we could calibrate our predictions. In such situations, the choice of alternatives is necessarily speculative and can only be expressed in subjective terms, as a function of our relative degrees of confidence, belief or uncertainty. We recognize that there are several different options about what the impacts of climate change are, but feel unable to choose definitely between these alternatives. In such a case, it is natural to think of the frequency distribution of environmental changes as a state of the world, a risk, in the savage sense: we do not know what value it will assume. (Heal and Kringstrom, 2002: 30)

The problem identified by these economists is that of decision-making under conditions of uncertainty. Put simply, how is it possible to manage risk when traditional insurance techniques are unworkable? How to assign a price to the unknowable value? The authors suggest a number of alternatives. What if we traded securities contingent on particular, unpredictable states of nature? In other words, what if we correlated unknowable value to unpredictable nature and priced these in affective terms – in the language of confidence, trust and degrees of belief? This is in fact the solution that has been offered by the invention of environmental derivatives, financial instruments designed to price and trade both in the uncertainties of the weather and our own uncertainties about the future of climate change. Downloaded from tcs.sagepub.com at UNIV CALIFORNIA SAN DIEGO on October 31, 2010



Unlike other recently created climate-related instruments such as catastrophe bonds, weather derivatives are tradable risk contracts that deal with the possibility of adverse but non-catastrophic weather. These instruments allow businesses to protect their revenues from unexpected or unfavourable weather conditions by transferring the risk onto the capital markets. The most popular derivatives so far have been temperature-related and are designed for energy producers who may be adversely affected by unanticipated weather swings. Their pricing is based on the concept of heating degree days (HDD) and cooling degree days (CDD), or rather on the exposures related to these indexes. Other derivatives are linked to temperature-related germination times. Thus derivatives traded in the agricultural sector use an index based on so-called GDDs or growing degree days. Plants . . . and insects require a certain amount of heat to move from one development stage to the next (for example, from seed to fruit, or egg to adult). Before a seed or egg germinates or gestates, a certain temperature must be reached; continued development is then a function of the temperature from one day to the next. (Banks, 2002: 92)

Other products again are structured around physical flows (streamflow and wind) and critical change-of-state events such as precipitation (snow, frost, rain). Each contract involves a buyer and a seller who agree on the weather index on which the contract is to be based, the time period and the index threshold or strike. In a temperature-based weather swap, for example, two companies who face opposite weather risks can enter into a contract, with payments falling to one or the other party depending on whether the temperature moves above or below a certain threshold; while in weather-based call and put options, the buyer receives a payment if the average temperature over a given period falls above or below the strike threshold.13 Derivatives are contracts that allow a business to hedge against the occurrence of unpredictable, adverse events ranging from exchange rate fluctuation to political turmoil and extreme weather. Traded in the financial markets, derivatives also allow investors to wager on the relative chances of the derivatives contract itself, effectively transforming the risk-hedging contract into an instrument of speculation. Janus-faced, derivatives merge the actuarial and the speculative, circulating as hedging instruments and wagers at one and the same time. A recently published manual for the derivatives trader urges the reader to adapt to the ‘event time’ of the financial markets (Webb, 2006: 9–10). What follows is a series of chapters introducing the investor to the complex menu of events now available for trading. Volatile weather, exchange rate fluctuation, a turbulent political climate – all of these provide occasions for entering into a derivatives contract. So too do the systemic catastrophe risks – from financial crisis to hurricanes – which materialize once a certain, critical threshold of turbulence has been crossed. Where the neoclassical economist discards the unexpected event from his calculus of the future, the trader in derivatives focuses on the Downloaded from tcs.sagepub.com at UNIV CALIFORNIA SAN DIEGO on October 31, 2010



fluctuation itself and the critical points at which an unexpected event might happen to occur. Derivatives-trading demands a particular kind of relationship to the future, one that might be characterized as speculative, as opposed to predictive, expectation. Since the price assigned to the future is itself a function of the collective expectations of all traders, no single expectation can hope to offer a rational forecast.14 Prior to 1980, the bulk of derivatives trading was in commodity-related futures allowing buyers to hedge against future price changes in a given storable asset such as wheat or cotton, and each of these categories was traded separately. Forwards, futures and options are all derivatives contracts that speculate on the price volatilities of storable commodities, with differing degrees of abstraction. From the 1980s, however, these contracts were rapidly superseded by derivative products that could be applied to nonstorable products such as financial instruments and repackaged among themselves. Not only did futures markets begin to be dominated by transactions on financial instruments but also new types of derivative contracts such as swaps emerged that were from the outset financially oriented and could not be understood through the discourse on commodity derivatives (Bryan and Rafferty, 2006: 48). In the process, it is the very relationship between the measurable ‘substance’ of the commodity – its stored value – and the event-related nature of price that is reworked: where traditional derivatives contracts traded in the future prices of commodities, financial derivatives trade in futures of futures, turning promise itself into the means and ends of accumulation. In this regard, derivatives pose a number of challenges to orthodox theories of money. If money is time, then time is no longer that which measures the movement of commodities and the labour invested in them. In what are called the money markets, money mediates itself and time relates to time, becoming a function of its own fluctuation (LiPuma and Lee, 2004: 118). Thus money must be conceived within a logic of the event rather than a dialectic of form, limit and measure (such as Hegel delineated in his Science of Logic and Marx famously reversed in his derivation of the commodity form). Interestingly this returns us to the very early work of Marx – the Marx who in his doctoral thesis on Lucretius referred to the clinamen as the ‘accidens of the accidens’, an accident constitutive of entire worlds (1975: 63, 51). Derivatives challenge the idea that the circulation of money must be anchored in some fundamental, underlying value, even of a conventional kind. Indeed what derivatives trade in, according to Bryan and Rafferty, is the very contestability of fundamental value.15 We cannot predict the unfolding of climate change and its effect on prices, even in the short term. Its parameters of variation are unknowable. Yet we can create a derivatives contract allowing us to wager on this very uncertainty. The derivatives contract also challenges the causal definition of money in its relationship to debt. If all money is born of debt, with its double reference to promise and obligation, then what is the particular debt form of the derivative? Downloaded from tcs.sagepub.com at UNIV CALIFORNIA SAN DIEGO on October 31, 2010



Derivatives work through a process of financial leverage – using debt (borrowing) in order to generate surplus, which can then be used to borrow an even larger amount of money.16 The generation of surplus from debt is the classic form of capital accumulation, first identified by Marx in his formula for interest-bearing capital M-M⬘. Yet the leverage effect is magnified many times over in the case of derivatives, where what is being exchanged is not simply a future claim to a given commodity, asset or risk category but a future claim to an expansive network of fluidly interlinked futures, at increasingly baroque levels of abstraction. By desubstantializing and recombining risks across different asset classes, derivatives markets engender an extreme internal sensitivity to disruptive events. When different kinds of derivative instruments are combined together, relatively small wagers allow for an extraordinary degree of leverage over entire eventworlds. Conversely, relatively small, localized and seemingly punctual events (a spate of foreclosures, for example) may reverberate across an entire, interconnected network of qualitatively disparate assets, instruments and markets, threatening also to implode a whole event-world – the financial market itself. Theories of money as social relation have tended to assume that modern money is vouchsafed by trust in the authority of the nation-state. In this view, only national (or international) political institutions are capable of issuing legitimate currency. Yet in a context where currency conversion rates are unpredictable and beyond state control, national and international forms of trust and authority cannot claim to underwrite cross-border transactions.17 In the absence of a single source of trustworthiness (whether gold standard or national currency), financial derivatives have emerged as a de facto money form, capable of straddling difference without reducing it to a single standard of value. The derivative then is a relational value par excellence, one which no longer finds any nominal foundation in the nation-state. For this reason, it is able to price events that the nation-state cannot or can no longer underwrite. Foremost amongst these uninsurable events, as Ulrich Beck (2008) has noted, is the global environmental risk. In a globally integrated financial regime in which fixed exchange rates have been abolished, derivatives have emerged as the new money-form, the universal means for deciding the price of money. The absence of fundamental value or measure – even of a nominal kind – is a given in today’s financial markets. There is no final determination to the value of value. No equivalence across borders. No market equilibrium. Nevertheless, money circulates. The derivative, then, can be defined as the instrument that allows for the continuity of circulation in and across immeasurable difference. The real abstraction of contemporary capitalist relations is not dialectic in nature (if it ever was) but rather topological.18 Its world is one of absolute spacetime compression, in which metric distances are abolished in favour of sensitivities at a distance and collapsible horizons. What is at stake in the circulation of capital today is not so much the exchange of equivalents as the universal transmutability of fluctuation. It is the event of turbulence Downloaded from tcs.sagepub.com at UNIV CALIFORNIA SAN DIEGO on October 31, 2010



itself that becomes tradable, even or indeed especially when its parameters of variation are unknowable. In both cases, a reduction is involved. Where commodity exchange reduces the world to a mass of standardized, qualitatively indifferent exchange values, what the market in derivatives extracts from the noise and colour of the world are its event-making relations. The turbulence engendered by connectedness. Turbulence is the event emerging from an irresolvable relation between two or more ‘flows’ that are themselves relations. ‘Derivatives are monetized relations of the relations of capital’ (LiPuma and Lee, 2004: 86). Thus the derivative contract might respond to the relation between two currencies, whose value is always fluctuating, or it might respond to the relation between exchange rates themselves (the relations of relations), or between kinds of relations, floating and fixed (as in the swap contract). It may also express the relation between any number of circulating flows (atmospheric, hydrological and ecosystemic), in short the ensemble of relations that generate what we call the weather. There is no doubt a certain elective affinity between global environmental risks and the denationalized form of promise embodied in instruments such as financial derivatives. This is not a natural affinity, however, but rather an effect of their common abstractability. In the perspective offered by fractal mathematics, turbulence is an ‘absolute curvature’ whose qualitative instantiation is a matter of indifference. Whether we are dealing with the turbulence of world financial markets or that of complex earth systems, the non-dialectical relation can itself be extracted, recombined and liquefied, as it were, in a dimension of its own. In the same way that derivatives on exchange rates price the variable relation between and across national currencies or interest rates, weather derivatives make it possible to price contracts on the incalculable relations and unknowable contingencies engendered by complex atmospheric and hydrological processes. Through this process of abstraction, derivatives do not lose but rather gain power of another order. Up until the 1980s, standard economic accounts described derivatives as peripheral effects of cash or spot markets, as if the price of ‘derivatives’ were literally derived from the prices of the latter. The derivative was therefore assumed to represent (in the case of risk hedging) or misrepresent (when it is used for speculative purposes) a fundamental value determined in the spot market and ultimately in the exchange of storable commodities. However, the rise in financial derivatives such as swaps makes it increasingly difficult to maintain the standard account of price determination and causality. The derivative-market trades in events pertaining to the money markets themselves, and in the process inevitably occasions events of its own making. Derivatives, it might be said, generate an atmospherics that is utterly indifferent to the qualitative nature of any one event class (meteorogical, financial and political turbulence are entirely convertible) and nevertheless effective at generating events of its own kind. Market-related events on a more or less catastrophic scale have become so endemic to the workings of capitalist relations today that it is no longer possible to dismiss them as a surface effect of underlying or real economic Downloaded from tcs.sagepub.com at UNIV CALIFORNIA SAN DIEGO on October 31, 2010



forces. Far from restricting their movements to the space of the market itself, financial events reverberate ‘outward’, reinvesting and remodulating relationships among the productive forces, commodities and stocks they are assumed to derive from (Bryan and Rafferty, 2006: 63). Indeed, it has become apparent that in most cases, not only prices in cash and commodities markets but also in financial markets specializing in stock, interest rate and currencies, are now subject to the extreme vicissitudes of derivatives trading rather than the other way around. In the era of capital market liberalization, political and economic power lies in the art of leveraging the event, of harnessing debt accumulation to determine the shape of possible future worlds. While traditional modes of property-right and promissory claim are not abolished, the appropriation of the event ascends to a leading role in the hierarchy of power relations, cutting up, subsuming and recombining the risks associated with the most abstract of economic and social relations. The leverageable event can be of any kind – financial, political or biospheric – or a combination of the risks associated with these. Yet while derivatives abstract from the substantive nature of things and forces, they simultaneously operate at the most intimate of material levels, investing the transversal relations that connect and combine the entire world of priceable risk. The power of leverage is one of potentiation through connection, the power to liquefy and freeze relations, to potentialize and depotentialize connections, and thus to shape (and be shaped by) the possibilities of movement of everyday life. This is a power that operates in the future subjunctive, since the promise of leverage is a claim over the future in all its unknowability – a claim over event worlds that have yet to actualize in space and time.19 The peculiar powers, along with the systemic dangers of this form of leverage have been acknowledged by recent efforts to manage the endogenous risks of derivatives markets. In the wake of the financial crisis, regulators have persistently called for the more systematic use of scenario planning as a way of ‘preparing for the unexpected’ events endemic to integrated markets (CRO, 2009: 5). It is now widely argued that the denationalization of money through securitized debt markets requires a strategy of ‘preemptive risk management’ capable of responding to contagion across multiple jurisdictions (2009: 5). That the pre-emptive power of denationalized money nevertheless works to secure the imperial privilege of the US dollar is one of the structural paradoxes of the present configuration of world powers. The US is not so much a national as a world imperial power, the magnetic pull of the dollar being premised on the intrinsic volatility of all other currencies. There is thus no contradiction between the denationalization of money, evidenced in the circulation of such instruments as financial derivatives, and the premise that the United States acts as the pivot of world power relations. This is an exorbitant privilege that the United States seeks to preserve, precisely through its efforts to expand beyond the limits of oil into a newly posited sphere of abstract atmospheric relations. If this expansion is financial, I Downloaded from tcs.sagepub.com at UNIV CALIFORNIA SAN DIEGO on October 31, 2010



would suggest that it must also be strategic. It is by no means surprising, then, that the growth of securitized financial markets trading in atmospheric risks has been accompanied, in the United States, by a renewed interest in the climate as a space of military concern. At stake here is not only the problem of adjudicating competing territorial claims to the ‘global commons’ (previously uncolonized spaces such as the deep oceans, geothermal energy reserves and the outer atmosphere) but also that of dealing with the nonlocalizable events of climate change – turbulence as an event which may materialize in any place at any time. Just as financial markets are moving into the newly created sphere of weather-related risks, US strategy foresees a future in which conflict will unfold in the turbulent space of atmospheric flows. Climate Change Scenarios, War Games and Ecological Security In July 2008, the CNAS invited 45 scientists, national security strategists, and members of the business and policy communities from Asia, South Asia, Europe, and North America to participate in an international climate change ‘war game’. The simulated war game, which pitted emerging geopolitical blocs such as China, East Asia and Russia against the United States, was the outcome of three collectively imagined scenarios designed to explore the security implications of global climate change. As the CNAS website explains: Military organizations and businesses around the world have long used such exercises to anticipate future developments and manage risk and uncertainty – and to test how plans, strategies, and ideas may hold up in a range of plausible futures. Generally, the lessons of these games have less to do with the ‘product’ within the game than with the process of playing. So while the Climate Change War Game did not result in a fictitious international agreement that would cut greenhouse gases in China and transfer resources for adaptation from the United States to India, the debates and developments in the course of having such discussions were illuminating.20

The war game exercise was the culmination of an ongoing project to map out the foreign policy and national security consequences of climate change over a three-decade period.21 The latter project, convened by the CNAS and Center for Strategic and International Studies (CSIS) throughout 2006 and 2007, brought together a group of national security specialists and climate scientists to fashion three future conflict scenarios around climate change. Basing its outlook on the scenario reports published by the IPCC, the group begins with a baseline scenario of ‘expected’ climate change, from which it then derives two, increasingly dramatic visions of ‘unexpected’ future worlds. The problematic of climate change security renews with the focus on ecological, biological and human security which emerged during the Clinton years, when defence specialists sought to redefine the conflict environment Downloaded from tcs.sagepub.com at UNIV CALIFORNIA SAN DIEGO on October 31, 2010



of a post-Cold War era (Dalby, 2002). The intervening years of the George W. Bush administration have, if anything, intensified the urgency of these concerns, so that climate change has now risen to a commanding position within the new security concerns of the incoming administration. The failure of US intervention in the Middle East, the rising fortunes of China and the recent financial crisis have all underscored the fragility of an imperial geopolitics pivoting around the dollar–oil nexus. Within current US strategizing then, climate change has become a security concern not only because it poses political risks of its own (so-called ‘environmental refugees’ figuring prominently among these) but also because it is inseparable from the larger issues of energy security, energy transition and the exceptional role of the US dollar within world financial flows. If the US administration now aspires to play a leading role in the post-Kyoto international climate negotiations, this reflects not so much on the different politics of the Democrats and the Republicans (both parties had previously contributed to the failure of Kyoto) but on the growing realization, right across the political spectrum, that climate change must be incorporated into grand strategy. What then is the strategic future imagined by these various climate change scenarios? It is notable that none of the scenarios developed by the CNAS and CSIS entertains any serious possibility of climate stabilization. Instead the baseline scenario foresees a future in which post-Kyoto negotiations will lead to reductions without, however, arresting or reversing current meteorological trends. All three scenarios look forward to a decidedly postequilibrium world, buffeted by greater or lesser degrees of turbulence. The strategic ineffectiveness of the normal distribution of statistical events is a given here. Pointing to the fact that even the recent history of climate change has surpassed the worst-case scenarios of former IPCC projections, the CNAS and CSIS outline three scenarios, the last of which describes a worldsystemic phase transition – a catastrophic tipping point leading from one metastable climate regime to another. Turbulence cannot be averted then. The long-term strategy of the US can no longer be one of deterrence, as it was during the Cold War. Rather the aim will be that of maintaining the topological cohesion of a world in and through the most extreme periods of turbulence. In complex systems theory, this property of topological cohesion is referred to as ‘resilience’ (the term, which was first used in its contemporary scientific understanding in ecosystems theory, is now ubiquitous in strategic thinking). If the discourse on climate security foresees a future in which the atmosphere will be opened up as a field of conflict, this is both a return to and a radical departure from Cold War efforts at direct intervention into the weather. Both the United States and Soviet Union began exploring the possibilities of geoengineering as a weapon of war at the very outset of the Cold War, experimenting with techniques as diverse as cloud seeding, the release of reflective particles into the atmosphere and the use of giant shades to intercept sunlight. In retrospect it might seem surprising that as recently as the 1960s, meteorologists were confidently anticipating the Downloaded from tcs.sagepub.com at UNIV CALIFORNIA SAN DIEGO on October 31, 2010



transformation of weather forecasting into an exact science and that John von Neumann, one of the inventors of games theory, was contemplating a complete control of the climate toward strategic ends. It is one of the ironies of post-Second World War scientific progress that the vastly increased mathematical capacities of computer-generated weather forecasting would be the means of unmasking the essential unpredictability of the weather over periods longer than a few days. It was in detailed computational studies on the possibilities of weather prediction that Edward Lorenz first outlined the fundamentals of chaos theory, establishing the principle of nonpredictability in non-linear complex systems.22 Chaos theory undermined the very premise of geoengineering. The prospects, however, were sufficiently alarming that in 1976 the United Nations adopted a Convention on the Prohibition of Military or Any Other Hostile Use of Environment Modification Techniques. Recent publications in US foreign policy journals have attempted to revive geoengineering as a serious technological response to climate change. Their arguments, however, are more instructive about the strategic risks of such an option than they are convincing about its usefulness. One article concedes that ‘the highly uncertain but possibly disastrous side effects of geoengineering interventions are difficult to compare with the dangers of unchecked global climate change’ and that ‘it is hardly wise to mess with a poorly understood global climate system using instruments whose effects are also unknown’ (Victor et al., 2009: 68, 69). The paradox of this argument is that it calls for a strategic intervention into the atmosphere in order to pre-empt the worst effects of climate change, while acknowledging that such an intervention may itself be indistinguishable from the process of climate change – that is to say, equally unpredictable, incalculable and turbulent in its unfolding. If the authors nevertheless entertain the possibility of a ‘unilateral’ use of geoengineering, it is because the logic of climate security discourse lies elsewhere. Recent US strategy is less concerned about the effects of climate change as such (turbulence is assumed) than it is about the consequences for US imperial power. The precise when and where of turbulence is indifferent. What matters is whether the accidental event of turbulence can be harnessed to the strategic ends of sustaining the US-dollar denominated world. This is a model of strategic power that aspires to harness ‘whatever’ happens, the event of turbulence of ‘whatever’ kind (meteorological, financial, political), however it might evolve – a power of all possible worlds. In one sense then, the modern philosophy of possible worlds is justified in asserting that worlds are creatable by virtue of being imagined or believed in. After all, the imperial power of the United States only survives to the extent that the world’s investors continue to believe in the creditworthiness of its promises. The strategic and financial power of the US (the two so closely entangled) is as much a matter of trust, confidence and indeed faith as anything else. Yet the philosophy of possible worlds ignores the coercion that is required to enforce the credibility of promise. In this it remains idealist. The trustworthiness of all money is reinforced, in the last Downloaded from tcs.sagepub.com at UNIV CALIFORNIA SAN DIEGO on October 31, 2010



instance, by the threat of violence. The imposition of the US dollar as global reserve currency goes hand in hand with a more or less overt monopolization of military force – the threat, sometimes expressed openly, that any contestation of US financial power will lead to military confrontation on a world scale. In order to continuously (re)create world order through the preemptive release of debt, the US must also, in the last instance, wield the power to enforce the dollar’s monopoly as world reserve currency. The power to create possible worlds is both the power to issue money, through the speculative force of imagination, credibility and trust, and the power to enforce contract through the threat, however veiled, of violence. The mutual relationship between trust and authority, faith and violence, is a couplet that philosophers have long identified as the basis for the social power of money. What distinguishes the imperial power of the United States today is the form, scope and temporality of this violence. In line with its capacity to issue debt without redemption, the imperial power of the US rests on a threat that is pre-emptive and unlimited in scope (unlimited referring as much to its indeterminate, non-localizable character as to its megalomania). Its theatre of war is not simply world systemic in scope. It is also ecosystemic. In this respect, it aspires to be world creative in the most material sense of the term, while threatening, in the end, to destroy worlds. Notes 1. For more detailed reflections on the paradox of US imperial power in the era of floating exchange rates, see Panitch and Gindin (2008: 17–47) and Arrighi (1994: 300–24). 2. Details on this project can be found on their website: http://www.cnas.org/ contestedcommons 3. Wallerstein (2007) for example draws on the framework of complex systems theory to describe the dynamics of world politico-economic systems. Both world systems theory and scenario planning rely on the models of complex non-linear systems developed in the context of second-order cybernetics. However, while world systems theory is critical, historical and analytic in perspective, scenario planning is pragmatic and strategic. 4. See however the illuminating analyses provided by Marieke de Goede (2008), Lakoff (2007) and Fearnley (2005). 5. My reading of Herman Kahn departs from that of Ghamari-Tabrizi (2005) who understands scenario planning as a contribution to the strategic thinking of mutual deterrence and games theory. My argument assumes that Kahn’s own understanding of scenario planning underwent an important shift, as he rejected the equilibrium models of games theory in favour of a model of world systems in a state of continual turbulence. There is thus a Cold War version of scenario planning and a post-Cold War version (although the latter emerged long before the Cold War formally came to an end). 6. See Fukuyama (2006) for a fairly representative collection of scenario exercises. 7. See: www.dni.gov/nic/NIC_2025_global_scenarios.html 8. On this point, see for example Aligica (2005). Downloaded from tcs.sagepub.com at UNIV CALIFORNIA SAN DIEGO on October 31, 2010


186 Theory, Culture & Society 27(2–3) 9. Ian Hacking (2006) provides a longer discussion of Leibniz’s theory of possible worlds and its relationship to early probability theory. For an introduction to contemporary possible worlds theory, see Nicholas Rescher (1997), who also offers a comparison with Leibniz’s thought. Contemporary possible worlds theory was first developed by the philosopher Saul Kripke in the 1950s. For an overview of the currents and controversies within contemporary possible worlds theory, see Girle (2003). 10. David Lewis (1986) makes the most extreme claims on behalf of the ontological status of possible worlds. 11. Throughout this article, I am assuming a certain familiarity with sociological theories of money. Drawing on a long tradition of sociological thought, moving from Gabriel Tarde to Georg Simmel, Geoffrey Ingham (2004) reminds us that money is essentially a promise – a future-oriented proposition whose liquidity requires a certain level of trust among strangers. All money is constituted by a complex tissue of promissory credit and debt relations. These relationships of trust, confidence and obligation are of a non-personal nature, sustained only by the authority of the institution that issues promises to pay. Creditworthiness, in short, is a function of degrees of belief. My analysis is also informed by the more recent contributions of Sinclair (2004), Bryan and Rafferty (2007), each of whom complicates Ingham’s state theory of money in light of recent developments in finance. Without explicitly addressing the relationship between the powers of debt and the psychology of belief, it seems to me that possible world theory (and scenario planning) presume a certain historically specific articulation between debt and imperial power. 12. The modern understanding of turbulence was developed in 18th- and 19thcentury fluid mechanics, which sought to mathematize the dynamics of water flow (Darrigol, 2005). Drawing on the mathematical language of the differential calculus, fluid mechanics formalized turbulence as a curvature tending toward a finite limit or tangent. However, the limitations of such a formula were already visible to 19thcentury mathematicians, who pointed to the existence of mathematical anomalies such as ‘monstrous curves’ – continuous, proliferating curvatures for which it is impossible to establish a tangent or limit. In the language of the calculus, these curves posed the enigmatic problem of continuous functions without derivatives. It is in the late 20th century, in the work of Mandelbrot, that we find the most sustained attempt to think through the ubiquity of monstrous curvature in nature. Mandelbrot finds his inspiration in the many examples of natural processes that do not respect the principle of equilibrium. Weather turbulence, the fragmented contour of a coastline, the distribution of astral dust in space. These phenomena, he argues, are the norm rather than the exception in nature. Resituating the mathematics of turbulence in historical context, he rereads the classical conception of turbulence in fluid mechanics as a function of the particular infrastructural and engineering problems with which it was confronted. The classical mathematics of turbulence is concerned with the dynamics of turbulence within bounded currents such as pipelines, canals and chimneys (Mandelbrot, 1995: 125). The physical boundaries of flow are therefore reflected in the mathematical hypothesis of the limit to curvature. Mandelbrot, in contrast, is interested in the problem of assigning a mathematical value to turbulence in open spaces such as the ocean. The particular conception of curvature which he derives from such phenomena – a curvature he calls the fractal – is unique in that it reproduces itself without tending to any finite limit. In mathematical terms, the fractal is a curve without a tangent. In the language of physics, it is irreducible Downloaded from tcs.sagepub.com at UNIV CALIFORNIA SAN DIEGO on October 31, 2010


Cooper – Turbulent Worlds 187 turbulence – turbulence that does not conform to the principle of equilibrium. In the context of statistics and probability theory, the fractal evokes the possibility of ‘savage chance’ or non-normalizable risk – an event for which it is impossible to establish a probability distribution. Of course, some would argue that such a conception of turbulence is already present in ancient ‘atomist’ theories such as those of Epicurus and Lucretius. Michel Serres (2001) explores the continuities between Lucretius’ theory of the clinamen and contemporary dynamics. For a philosophical reading of turbulence which attempts to complicate both Leibniz and Mandelbrot, see Deleuze (2006). 13. For further details on weather derivatives, see the industry analyses of Banks (2002), Labatt and White (2007) and Dischel (2002). For theoretical analyses germane to the one I am attempting to develop here, see Pryke (2007) and Thornes and Randalls (2007). 14. In this respect, I differ from LiPuma and Lee, who argue that the specificity of derivatives as a money-form lies in their pertaining to risk rather than commodities or labour. All money-forms can be defined according to a particular riskrelationship. What is pertinent here is the nature of the risk at stake in the trading of derivatives. Properly speaking, the future to which a derivative refers designates an unpredictable or incalculable risk and therefore is no longer a risk per se – rather, it is an event. Far from precluding a consideration of labour, this requires a rethinking of the politics of labour exploitation in terms of risk exposure and experiment. 15. ‘[Derivatives] turn the contestability of fundamental value into a tradable commodity. In so doing, they provide a market benchmark for an unknowable value’ (Bryan and Rafferty, 2006: 37). Contrast this statement with LiPuma and Lee, who are always pining after the loss of ‘fundamental values’, which they locate, not incidentally, in the realm of culture, morals and religion. 16. Although a derivatives contract does not involve an explicit borrowing of money, the effect of borrowing is implicit in the contract itself which is effectively a debt. 17. On the debate between ‘chartalist’ or state-theories of money and the argument that derivatives constitute a form of denationalized money, see Ingham (2004) and Bryan and Rafferty (2007). 18. On this point, I depart from the analyses of Colletti (1973) and, more recently, Mann (2009). 19. The Oxford English Dictionary refers to the subjunctive as a tense ‘designating a mood’; its ‘forms’ can be ‘employed to denote an action or a state as conceived (and not as a fact) and [are] therefore used to express a wish, command, exhortation, or a contingent, hypothetical or prospective event.’ 20. See URL (consulted December 2008): http://www.cnas.org/node/956 21. The outcomes of this project are published in Kurt Campbell (2008). 22. On the post-war history of numerical weather prediction, geo-engineering and chaos theory, see Cox (2002: 218–25). References Aligica, Paul Dragos (2004) ‘The Challenge of the Future and the Institutionalization of Interdisciplinarity: Notes on Herman Kahn’s Legacy’, Futures 36: 67–83. Downloaded from tcs.sagepub.com at UNIV CALIFORNIA SAN DIEGO on October 31, 2010


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Melinda Cooper is the author of Life as Surplus: Biotechnology and Capitalism in the Neoliberal Era (Washington University Press, 2008). She currently works as a lecturer in the Department of Sociology and Social Policy, University of Sydney, and is an Honorary Fellow of the Centre for Biomedicine and Society, Kings College, London. [email: [email protected]]
