On the magical underpinnings of our ostensibly rational economies.
Since at least the nineteenth century, economists have imagined the market as a profoundly rational way of organizing society. Unlike other modes of economic organization, the market is governed by natural laws that ensure the most efficient possible allocation of resources. Modern financial economists take this logic even further, seeing new financial instruments as a means of efficiently managing risk. These visions betray a mechanical conception of economy. Like a well-oiled machine, buyers and sellers play their part in a larger whole, balancing each other out and enabling practical reason to lead societies to ever-greater levels of prosperity.
There is something irrational, something supernatural—even magical—about the way global finance operates.
In many ways the contemporary financial economy does look like a machine. Think, for example, of its Bloomberg terminals, its automated trading systems, and its algorithm wars. But if global finance is a machine, then there is something irrational, something supernatural—even magical—about the way it operates. It’s not just the periodic bouts of mania, panic, and crisis; nor is it the apparently endless drive to accumulate, to conjure more and more wealth out of a void. It’s that in these and other processes, a range of psychic investments are at work—curious attachments that bind us to money, to projected futures, to imaginary orders, and ultimately, to the modes of power upon which capitalism depends. The magical parts make and move the mechanical whole. This, at least, is the controversial idea developed in a string of new books to which this forum is dedicated.