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art as postdisciplinary practice vol. I of II

The

DERIVATIVE CONDITION TECHNOCAPITALISM or, how its TECHNOWLEGDE powered by VOLATILITY & LEVERAGE wields PERFORMATIVE SPEECH NARRATIVE ALGO DATA FICTION projects works words performances

gerald nestler 5


Biographical note I am an artist and author. In my practice, I combine theory and conversation with installation, video, performance, intervention, text, sound and speech. I also develop and curate formats of collaborative practice between art, science, philosophy and many other fields of expertise. I focus on this postdisciplinary approach to research and practice methodologies because I believe that the challenges we are facing today and across ecological, political, economic and cultural fields, demand that we explore new bonds and new alliances as well as new forms of artistic-activist intervention and resistance. For over 20 years, I have been exploring what I term the derivative condition of social and material relations, its models, technologies, infrastructures, operations and narratives. A recent interest concerns the language of power and its regime change from representative to performative speech. Spearheaded by AI and data-driven technocapitalism, this shift erodes the systems of representation and thus affects politics and social relations as well as economies and forms of production. It exacerbates at-risk conditions, a fact reflected, for instance, in the downward spiral from citizen to consumer to (AI) product. It also manifests in what I perceive as social asset class system: hung between the conflicting poles of leverage and default, bad credit and liability, the tiers of the debt classes are dominated by those who ‘live’ the future-at-present, aka the leverage class. With aesthetics of resolution, I aim to activate the multilayered semantic field of the term resolution as a toolkit to counter black box asymmetry, inequity and non-transparency. Orbiting between evolution and revolution, resolution not only provides a vast reservoir of distinctions that create new worlds of knowledge. Effectively bringing resolution full circle implicates exceeding the limitations and constraints of critique and dissent. So, what are new horizons of resistance in this context? One that I explore, and which I call renegade activism, queries whether we can ‘make the black box speak from inside.’ In my understanding, we pass the line of critique to radical resolution when we form an affiliation or alliance with a renegade. An expert witness who is at the same time deeply at-risk, the renegade is at the turning point of resistance when resolution shifts to insurrection.

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I graduated from the Academy of fine arts, Vienna (1992) and subsequently engaged in digital media and early Internet practices. The boom of the new economy and the rise of neoliberalism in the wake of the fall of communism led me to conduct artistic research as a broker and trader (1994-97) to investigate how finance affects economies, societies and the production of subjectivity. My artistic work has been shown internationally since the late 1990s, e.g. in Beijing, Berlin, Graz, Hamburg, Hong Kong, Innsbruck, Linz, London, Munich, New York, Paris, Shanghai, Sao Paulo, Toronto and Vienna. Amongst other grants, I was awarded the Austrian State Grant for Visual Art (2003), the 2010 PhD Single Research Bursary, Department of Visual Cultures, Goldsmiths, and the Austrian state studio grants Beijing (2008) and New York/ISCP (2016). I have published, edited and lectured widely on art, finance and technopolitics. Publications include: “Yx,� an artist book/reader on finance and economy as fields of artistic research (Schlebruegge.Editor, Vienna, 2007); Kunstforum International issues 200+201 on Art and Economy (ed. with Dieter Buchhart, 2010); a case study in Forensis. The Architecture of Public Truth (ed. by Forensic Architecture, Sternberg, Berlin, 2014); the reader Making of Finance (ed. with Armen Avanessian, Merve, Berlin, 2015); the Finance and Society issue on Art and Finance (ed. with Suhail Malik, vol. 2/1, 2016); an article in Performance Research Vol. 25/3, 2020; and essays in Data Loam (Sometimes Hard, Usually Soft): The Future of Knowledge Systems, Johnny Golding, Martin Reinhart, Mattia Paganelli (eds), De Gruyter, 2020, Retracing Political Dimensions: Strategies in contemporary new media art, Oliver Grau, Inge Hinterwaldner (eds), De Gruyter, 2020 and Routledge Handbook to Critical Finance Studies (coauthored with Victoria Ivanova, Christoan Borch, Robert Wosnitzer (eds), 2020. I am a member of the Technopolitics working group, Vienna. I was a a member of the Volatility working group, New York and a researcher at Forensic Architecture. I hold a PhD from the Centre for Research Architecture, Department of Visual Cultures, Goldsmith, University of London (2017). www.geraldnestler.net www.technopolitics.info www.theoriesinmind.net www.thefutureofdemonstration.net www.gold.ac.uk/architecture forensic-architecture.org 7


Gerald Nestler | projects, works and texts (mainly from) 2012 - 2019. All works, texts, images, photos Š Gerald Nestler, except where stated otherwise. 8


THE NEW DERIVATIVE ORDER My skin’s a neat thing Inhibiting and enforcing Waves of corporate nervous streams. My flesh is a neat thing. Moving about freely I rise again and again To spill my love into you. Pervasive Accumulative I commune. Ecstatic Erratic I sing my volatile tune. I change modes And composition. I contract commodified visions. I’m your recombinant Social DNA I thrive When you gather in hope. And I wither When you fall in despair. I move in seasonal tides But my seasons Are way to elusive For you to cherish the ride. So be assured! In your presence I dwell And I smile At the surf of all your human desires. In your future I thrust And I gaze At the tide of your falling pride When you yell at my depthless mires. Oh! You drink me and drown Oh! You eat me and choke. For it’s you I digest. For it’s you in whom I invest. Oh, baby! How you nourish me! I change modes And composition. I contract commodified visions. I’m your recombinant Social DNA But some say: I am running on empty, Uncovered, And that it’s a crime. My lifespan is but a quarter And my value’s not worth a dime. They say: I’m a loaded gun, A structural affliction. And that my derivative yields Only feed bubble-fiction. They say: I’m reason’s veil A mere mirror of your emotions. I only reflect what is pale, A blasphemous contortion, A daimonic religion to fail.

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But my love! Be assured! I’m a bastion of calm For I won’t disappoint you When you come and surrender again.

Oh! You drink me and drown Oh! You eat me and choke. For it’s you I digest. For it’s you in whom I invest. Oh, baby! How you nourish me! Oh! It’s a quick deal. Oh, such an easy feel’, You make me live And I make you die For intertwined our longings lie. I change modes And composition. I contract commodified visions. I’m your recombinant Social DNA. Private consumption And debt Are all that I ask And here is my bid in exchange: That into my branded mind’s Immaterial texture You breathe out your name. So be assured! I fulfil your dependence On financial nutrition, On unquenchable futures, And that game of hire and fire. Oh, baby! All those thrills you so dearly admire. I change modes And composition. I contract commodified visions. I’m your recombinant Social DNA Quasi-poetic science Co-opts alliance Charging my voice. I renew my licence Enunciating the essence That alone is never due to expire: You are my pray and I’m your desire. So, my love! Be assured! I’m no entity Nor nature’s child. I tender no single chance For shorter or longer I’m taking a glance At you, my options advance. And I stay put To call that moment Of another time And I see its trailing behind, An arena fluid and sublime: All life a commodity Exchanged in my realm. Traded endlessly In numbers more than divine. My fluid body is the emergence Of truth. It’s my temporal field Where your space becomes Loose. So be assured! I adore you, my lamb But beware of my wrath. Live in my shelter Or your world Shall go bust.


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THE NEW DERIVATIVE ORDER. Algo Script Autofest, 2010. Text work, exhibited and published in various formats. The lyrics were originally written for a composition by the electronic musician and sound architect Szely.

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ENLITEMENT. Neon text work, 2003. Deriviative Bond Emissions. No 1. A collection of ongoing text works.

pages 12 - 15:

“Building Ruins.” Text published (without the postscriptum) in: The New City Reader, Issue 9: Legal, Dec. 2010, as part of the exhibition THE LAST NEWSPAPER, The New Museum, New York. Guest editor: Eyal Weizman. Texts by members of Roundtable 2, Centre for Research Architecture, Goldsmiths, London. 10


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Reuters. by offering images ready for distribution in print, on TV and online, photo agencies are creating a defined space—an image space—that itself distributes a certain understanding established through repetition. The parameters of this space are defined by the locations in which a specific picture repeatedly appears. Several variations of this picture exist, each showing the three actors: the telescope and the two policemen. The headlines under the image vary: — “EU teams to patrol Greek border amid migrant surge,” bbC News, October 25, 2010 — “EU mounts massive operation to police Greece­Turkey border,” novinite.com, November 5, 2010 — “Premières patruilles europé­ ennes à la frontière Greco­Turque,” L’express, November 5, 2010 — “Frontex patrol begin along Evros River,” ana­mpa.gr, November 5, 2010 — “Arrests at the border,” Athens News, October 14, 2010 There is a striking commonness in the use of headlines that define what is there to be seen, just as there was a similar framing of the object—the telescope—and the schooling of the gaze of the border patrol officers. What does this image space perform? Does repetition produce a form of normal­ ity through which the reader learns? Is the policing of the border a practice to which these images contribute? If so, the image, a core factor in social inter­ action, becomes a source of control and being governed.

BuilDing ruins by Gerald Nestler

Reports and reflections abound on the concept of “ruin” as a financial condi­ tion that can apply equally to individual homeowners, small businesses, banks and even to entire nation­states. but the notion of ruin might indicate another current development concerning the temporal order of global finance today and its impact on the social and legal spaces that constitute the realm inhab­ ited by people. On May 6, 2010, high­frequency trading in the E­mini S&P Futures mar­ ket started a cascade of selling activity in an already bearish situation that

spilled over into other markets and mar­ ketplaces. The event, termed the “Flash Crash,” resulted in the biggest one­day point decline in the history of the Dow Jones Industrial Average. The Flash Crash—in the words of London School of Economics profes­ sor Daniel buenza, “a watershed event in the history of markets”—constitutes the ultimate ruin of the vanishing socio­ spatial arena of exchange and price discovery. The open­outcry trading pit was shot into pieces in six minutes, a havoc in which automated trading forced old­school market makers to clear the floor. Vivid audio of this event can be found on youTube—search “tradersaudio.com.” However the event might serve as a template for a wider context in which spatial relations tend to become subjected to a temporal mode of markets. High­frequency, or “flash,” trading is a set of financial methodologies based on algorithms allowing executions of trades in milliseconds. Today, it amounts for over 70% of equity trades in the U.S. and is growing all over the world. Its proponents claim high­frequency trading deepens pools of liquidity in the markets, reducing volatility. It also shortcuts the relatively illiquid and slow human agents in the few remaining trad­ ing pits and shows a stark contrast to the exchange of imitation and control between human traders on site. The pace of global financial circu­ lation flushing in and out of economies is setting new records. In this temporal scheme, space dissolves into non­space, deflating in the electronic moments of transaction. Negotiating risk in temporal threads poses a threat to older social systems and even nation­states that can­ not simply dispose of the old order of space. The spatial realms inhabited by individuals—consisting of their social, societal and cultural constructions, and multifarious connections—are undergo­ ing a decisive shift from political and legal to financially controlled systems. This adaptation of derivative finance methodologies to the social arena, often called financialization, is the truly unprecedented side­effect of high­fre­ quency trading, yielding a concise, new socio­spatial equation: transaction dis­ poses of action. The flow of algorithmic trades deconstructs social and spatial architec­ tures by “building ruins.” The ruin is the global structural settlement of derivative finance, as it constitutes the precarious space in which the negotiation of risk

is not disturbed. Social fabric is turned into ruins to provide the essential sites of accelerated intrusion and withdrawal of capital. The commodification of every­ thing can be seen as the method of deconstruction, or rather, the construc­ tion of ruins by which the standardized exchange of contracts regulates the assessment of value on a screen of global scope. The current debates and frantic poli­ cies enacted around the debt crises of nation­states such as Ireland, Portugal, Spain, Greece and their banks, the sub­ prime housing crisis, even the end of pit trading itself as the arena of exchange are only a few examples of the psychol­ ogy of derivative finance paving its way beyond social and spatial dimensions. Contrary to other invasions of power, this system creates ruins as collateral for its own action. As an order of near­immedi­ acy it distorts economies and fragments space. The space of action is aban­ doned, further allowing transactions to flow free of human agency. Any kind of policy or law that tries to regulate trad­ ing of derivatives is interpreted by its advocates as an unruly infringement of the rule of free trade, although the latest crisis has made it obvious that the main argument for market economy—that only the market and its mechanism of supply and demand provide real prices and val­ ues—has not only been suspended but rendered inoperative. The institutionalized legal systems of the modern nation­state cannot cope with this automated, globalized system of finance. Deregulation—a manifesta­ tion of a set of arbitrary market rules instead of the rule of law—has therefore helped to bring about a decisive weak­ ening of democratic structures. The crisis of legality is abundantly evident in the absence of a global approach to financial law; individual nations and their citizenries are largely undefended by weak international regulatory bod­ ies, whose main advisors and even representatives often come from the finance industry proper. With the radical decoupling of finance and economy, the slogan of the 1990s, still haunting today, needs to be reformulated: “It’s not the economy; it’s the people, stupid!”

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Postscriptum: Outsourcing and investing in financial products has not only led to a stifling of industrial production especially in the USA but also to an infrastructure that is deteriorating. On the one hand, the congress does not even agree on state investment in essential infrastructure. On the other hand, a specific infrastructure was recently buried into the ground between New York and Chicago: The Spread Networks Chicago-NY Dark Fiber network was built on a stretch of 1300 km between the financial centers of both cities. It offers a 13.33 millisecond round trip, which is of course slightly faster than any other infrastructure could take you back and forth (Kevin Slater in a TED-talk compares it with a mouse click that is 37 times slower). This fiber optic cable doesn’t, of course, transport humans or commodities. Instead, it was built to transport algorithms on the shortest possible route to save 3 milliseconds, which according to Professor Ben Van Vliet at the Illinois Institute of Technology is “close to an eternity in automated trading”. The costs for this ultimate trading weapon, which have not been disclosed, were estimated by Forbes to be around 300 million Dollars. And as algo trading makes up about 70 per cent of today’s trading in US stocks, “anybody pinging both markets has to be on this line, or they’re dead,” as Jon A. Najarian says, a cofounder of OptionMonster, a company tracking high frequency trading. This is a far cry from medieval Italian moneylenders breaking their bank on the piazza when they were forced out of business. And one might wonder what will break in this system in circumstance of bankruptcy. Or rather, with the financial crisis as a forced ruining of social institutions and a further ramping up of financial technologies, don’t we need to realize that human action is itself faced with a kind of bankruptcy, at least in those representative forms still so dear to us? We might therefore see ourselves confronted with a situation that would be better described by a term such as “sociocruptcy”, a broken social order, in which algorithms with the speed of light define value, worth and along with it humanity or what we used to think of it. It will need more than an occupation of Wall Street – a mere symbol of an older order. This territory is also confronted with ruin by an upgrade in technology that rings in a shift from the occupation of space to one of time. It doesn’t only arrest the future but the moments of presence as well. What we actively need to confront today might therefore be the dark and light pools of virtual bets that define the contingent realm of reality.

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City The New City Reader invited common room to be the guest editor of its Politics section. common room has refused this opportunity. See the insert in this issue--“Common Circular 5”--for their response.

The New City Reader is a newspaper on architecture, public space and the city, published as part of “The Last Newspaper,” an exhibition running at the New Museum of Contemporary Art from October 6, 2010 – January 9, 2011. Conceived by executive editors Joseph Grima and Kazys Varnelis, the news­ paper’s content centers on the spatial implications of epochal shifts in technology, economy and society today. The New City Reader will consist of one edition published over the course of the project, with a new section produced weekly from within the museum’s gallery space, each led by a differ­ ent guest editorial team of architects, theorists and research groups. These sections will be available free at the New Museum and—in emulation of a practice common in the nineteenth­century American city and still popular in China and other parts of the world today—will be posted in public on walls throughout the city for collective reading. The next issues will be MUSIC, guest edited by DJ N­RON & DJ/rupture, and STyLE, guest edited by Robert Sumrell.

FOR WALL ASSEMbLy…

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The New City Reader ExECUTIVE EdIToRS Joseph Grima Kazys Varnelis MANAGING EdIToR Alan Rapp ASSoCIATE MANAGING EdIToR John Cantwell ASSoCIATE EdIToRS Brigette Borders daniel Payne

NEEd To VENT oR JUST PAY THE RENT? Let it out in NEW CITY REAdER CLASSIfIEdS -Advertise for free lgnlgn.com -#rantsandraves #helpwanted #lgnlgn

Guest Editors ART dIRECToR Neil donnelly dESIGNER Chris Rypkema EdIToRIAL CARTooNIST Klaus

CITY Network

food Park (Will Prince &

WEATHER Jeffrey Inaba,

“The Last Newspaper” is

Architecture Lab, Columbia University Graduate School of Architecture, Planning and Preservation

Krista Ninivaggi) & Nicola Twilley

C-Lab

curated by Richard flood and Benjamin Godsill. for more information please visit newmuseum.org

WEB dIRECToR

EdIToRIAL Joseph Grima &

Jochen Hartmann

Kazys Varnelis

SoCIAL MEdIA MANAGER Cheryl Yau

CULTURE School of Visual Arts d-Crit SPoRTS Jeannie Kim & Hunter Tura LEISURE Beatriz Colomina, Spyros Papapetros, Britt Eversole & daria Ricchi, Media & Modernity, Princeton University

REAL ESTATE Mabel o. Wilson & Peter Tolkin (Sideprojects) BUSINESS frank Pasquale & Kevin Slavin LEGAL Centre for Research Architecture at Goldsmiths PoLITICS common room MUSIC dJ N-RoN & dJ/rupture STYLE Robert Sumrell SCIENCE david Benjamin & Livia Corona

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LoCAL Geminidas & Nomeda Urbonas (Nugu) & Saskia Sassen oBITUARIES Michael Meredith & Hilary Sample, MoS CLASSIfIEdS Leagues and Legions

The New City Reader online: newcityreader.net twitter.com/ newcityreader This project was made possible thanks to generous support from the New Museum of Contemporary Art, Columbia University Graduate School of Architecture, Planning, and Preservation, Joe and Nina day, Anonymous donors, and the Willametta K. day foundation. Special thanks to: Elian Stefa; Lisa Phillips, director, the New Museum; Emily Colasacco, NYC doT; Linco Printing.

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Centre for Research Architecture, Goldsmiths— Nabil Ahmed Lawrence Abu Hamdan Ayesha Hameed Sidsel Meineche Hansen Gerald Nestler Godofredo Pereira Lorenzo Pezzani Oliver Rees Kerstin Schroedinger Paulo Tavares Lucia Tozzi Füsun Türetken Eyal Weizman

Blowing up the pieces trAnsmitting universAl JurisDiction

3 the exhumAtion oF simón BolívAr moDel eviDence

FloAting Forum

4 BuilDing ruins speech AnD spAtiAl tActics murky eviDence

Forensic Architecture by Eyal Weizman

These days architecture and urban­ ism increasingly frequent national and international courts. This is because the built environment is turning to become both the means of violation and a source of evidence that can bear witness to the events that traversed them. Legal claims that are brought to courts and tribunals often include images of con­ troversial or destroyed buildings or menacing structures. The field of foren­ sic architecture must now emerge to transform the built environment from an illustration of alleged violations to a source of knowledge about historical events or rather, as a complex method­ ology aimed at narrating histories from the structures that it saturates. The word forensic derives from the Latin forensis, which means forum and refers to the practice of making Continued on Page 2


ON PURPOSE. The New Derivative Order Kunstraum Bernsteiner, Vienna February 28 – April 25, 2012 The market is always right, it’s a life form that has being in its own right. You know in a Gestalt sort of way – it has form and meaning – it has life, it has life in and of itself ... and we are a sum of our parts, or it is a sum of its parts. —An unnamed trader, in an interview with sociologist Karin Knorr-Cetina

| Speculation—Risk | Credit—Debt | Contingency—Probability | | Value—Price | Volatility—Leverage | Algorithms—Decision-making |

The impact of financial markets on the social construction of reality has become thoroughly evident. From this perspective, a society that has incorporated economic interpretations of narratives and concepts such as credit, debt, risk or speculation faces a specific challenge: To what extent have we abandoned the present for a future we cannot know even if the most complex mathematical models are employed? ON PURPOSE. The New Derivative Order addresses the terms preposed, which have been appropriated by financial and economic interests to a high degree. The aim of the exhibition was to engage in a discussion around these terms and their respective relevance not only for our perception of the world but also its production. This included the arguably all-encompassing, net-like appearance of the financial empire, repercussions on social institutions and the effects on individual modes of self-realization. The artistic involvement did not stop at a critical account; rather, potentials were addressed that go beyond the status quo of a neoliberal and financially dominated world in order to multiply the narratives and fictions behind the above-mentioned notions by re-formulating individual and common agencies. 16


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ON PURPOSE. The New Derivative Order was an exhibition in progress. It hosted artworks and performances as well as talks and discussions with economists, traders, sociologists, philosophers and artists. The events and their participants were objects and exhibits equal to the installations, videos, voices, drawings, texts and algorithms – they all inhabited and populated the space (partly temporarily) and created contexts for thoughts, acts and objects and thus for further research as an associative practice.

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Exhibition The exhibition was part of an ongoing project that offered a platform for a profound exchange between art, philosophy, sociology and finance. Calling for a radical reflection of the issues at stake, the project assembled contributions to a critique of financial biopolitics in order to attempt a redefinition of narrative structures in-between social evaluations and relations. The exhibition was structured around three formats of artistic research: artworks | performance workshops and events | talks and discussions. The setting and its exhibits changed with the performances and events.

Works Videos, sculptures, installations, photography, audio and text works, algorithms. The works constituted aspects of an interrogation of the following questions: How is our imagination of reality changed by a perception influenced by economic and financial interests? Which purposes, ideologies and technological penetrations are behind the distortions we today see in the social fabrics on a global scope? How can we lever out dominating interpretations and realize new approaches in the area of agency in a social environment that is significantly made up of a narrative fusion of economic interest, mathematical codes and technologies of space and time.

Performative Events The show opened with a performance, which was followed by a workshop with international performers and choreographers. The Europe In Motion workshop – a EU-project co-organized by brut (Vienna), Bimeras (Istanbul), Dance4 (Nottingham) and springdance (Utrecht) and led by Jonathan Burrows and Gerald Nestler (Vienna stage) – developed interventions revolving around the body as the place of ideological objectifications of capital and labour. The subsequent performance event was part of imagetanz festival. 19


Talks and discussions The theme of the exhibition was also examined on a theoretical level in talks and discussions with participants from different fields of research. These meetings addressed political, philosophical, sociological and artistic questions by close questioning financial markets and their ideological as well as methodological foundations, rationalizations, and fictions. In this context, a PhD seminar of the Centre for Research Architecture, Department of Visual Cultures, Goldsmiths, University of London was hosted at which amongst other questions contingency was discussed as a medium in relation to philosophy, sociology, finance and art as practice-based research.

Contributions by: Elie Ayache (financial engineer, philosopher) Jonathan Burrows (choreographer, performer) Sylvia Eckermann (artist) Brian Holmes (art and cultural critic) Karin Knorr-Cetina (sociologist) Further contributions: Konrad Becker (artist) Katja Mayer (researcher in science studies) Armin Medosch (artist and researcher) Stefan Nowotny (philosopher) Felix Stalder (sociologist) Simon Streather (artist and actor) Peter Szely (composer, electronic sound artist) Eyal Weizman (architect and theoretician Members of the Centre for Research Architecture, Goldsmiths, London.

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C = S N(d1) – X e-rT N(d2) Works CONTINGENT CLAIM. Portrait of a Philosophy Video, 35’23’’ The video portraits Elie Ayache, the author of The Blank Swan. The End of Probability (2011). Ayache, a financial engineer and former options trader who has turned to philosophy in order to propose a new theoretical framework for financial markets in which contingency replaces probability, speaks about derivative trading in relation to philosophical concepts developed by Quentin Meillassoux, Alain Badiou, Gilles Deleuze and Henri Bergson, amongst others. By referring to J. L. Borges’ Pierre Menard. Author of the Quixote, he conceptualizes price discovery as a form of writing (derivatives). The exchange of contingent claims (written) to him constitutes the “technology of the future.” The video was shown as part of the assemblage Bottomless Pit, Elastic.

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P = Xe-rT N(-d2) – S N(-d1) BOTTOMLESS PIT, ELASTIC Assemblage A trampoline or swing, the sculpture’s volatile architecture when set in motion by the visitors starts dancing the random walk. The skeleton of a new and all embracing“being” or “life form,” its flesh is composed of an archival net of molecular material, a tapestry abundant in historic and contemporary attempts to rationalize the situational and contingent economy of the future. The work assembles attempts to craft a situational technology which “creates future(s)” on financial markets as well as critical and opposing voices. By making the inherent volatility of the financial framework come alive the assemblage calls for a radical artistic and theoretical involvement in re-addressing practices and notions such as credit, debt, risk, margins, speculation, and automation to counter what is at stake when we exploit our and the earth’s future at present.

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LA DERIVATION HUMAINE Temporarily applied text works based partly on modified quotes from different sources (e.g. Jack London, The Heart of Darkness).

SPEECH ACT ALGORIZM Drawing / Writing in progress A large piece of paper served as the recording medium of the discussions and talks and became a medium of agency over the course of the exhibition. The Black-Scholes-Merton formula – applied to calculate prices in derivative option trading – was inscribed as a “water mark”. Arguably the most significant mathematical model of our time, it was awarded with the Nobel Prize in economics in 1997. The 1987 market crash is considered the event when the this model collapsed in the face of trading as an emergent activity. Nevertheless, the formula continues to be used widely to calibrate option prices in order to protect against incommensurability. Speech Act Algorizm appropriated the notion of recalibration to critically address social and cultural moments of derivativisation and to activate a turn from transaction to action.

I’VE NEVER SEEN ANYTHING LIKE THIS Audio recording Financial algorithms (a term that refers to the 9th century scholar Al-Chwarizmi) are applied to perform complex operations at low latency. Currently operating at millisecond speed, high frequency trading is conducted beyond the threshold of human cognitive abilities. Thus, decision-making processes are increasingly based on automated algorithmic processes. The Flash Crash on May 6, 2010 was a watershed event in financial history, as it marks the first major market crash triggered by algorithms. A live audio recording covering the incident from the S&P trading floor in Chicago gives evidence of the event’s severity.

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LOVE IN THE 21st CENTURY (COOL POP) Love in the 21st Century (Cool Pop) reactualises Robert Indiana’s sculpture love (1964) by calling into question the state of mutual recognition in the current social climate and the interpretation of the term CREDIT under neoliberalism. Installed in the courtyard of the exhibition space, the word melted away under adverse outside influences. Ice Sculpture, 240 x 220 cm.

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VOLATILITY SMILE

With Agnieszka Dmochowska, Karin Pauer, Gabri M. Einsiedl, Julia Mach, Filip Szatarski, Jasmin Hoffer, Martin Tomann. Together, the performers becoma a living sculpture, a tableau vivant, derived from Salvador Dali and Philippe Halsman’s photographic collage In Voluptas Mors (1951).

The task is to physically realize and endure a virtually impossible approximation to the historic photomontage by holding the position as long as possible. Far from being surreal, this time-based sculpture effects a visual experience of fragile beauty.

Epitomizing the absurdities that materialize in the spectacular reconstructions of commonality, the provocations by the corporate reframing of debt and solidarity become corporeal.

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Special project in the Basement CRYSTAL MATH 1-channel video with 5.1 sound Video installation: Sylvia Eckermann Lyrics and title: Gerald Nestler Sound: Peter Szely Voice: Simon Streather

With thousands of meters of nylon threat, Sylvia Eckermann weaved a spider web-like projection screen to visualize the utilization of networks as traps that catch pray rather than as communicative realms of social media. Her captivating “expressive verbal image” (Sabine Dreher) addresses a pervasive scheme ranging from financial markets to data retention to the Web 2.0. The branding of Facebook as a social network and agent of change, for instance, stands in stark contrast to its market value as a “dark pool” (an unregulated exchange place) of economic information exploitation by means of big data technologies. As regards finance, algorithms derived from mathematical models make up about 70 per cent of transactions in major markets; further to that, decisionmaking is being sourced out to these processes, as transactions at microsecond speed are all too fast for human cognition. Thus, the recent quantitative turn in finance manifests a growing dependence on, if not addiction to, mathematically computed calculus – a ‘truth’ expressed in the probabilistic approximations of a divinatory science of sorts. Unfolding beneath the profound abyss of split seconds, a gulf opens not only between human and artificial actors. Beyond predatory schemes of competitive advantage, a parasitic system that is at the same time the host produces risks that open up to yawning chasms in the social fabrics of societies, their institutions and their productive capacities. The contingent and therefore manifold options of shaping the future feed derivative fictions of a future-at-present. The voice of Simon Streather enunciates these bottomless pits put into words by Gerald Nestler, whose lyrics The New Derivative Order depict the market as a being that breeds our “recombinant social DNA.” Oh baby! How you nourish me! 30


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In the Eye of the Storm the Future Rests Assemblage, drawing Based on the architectural design of the trading floor, a patent by Ruben Jennings (1878) that precedes architectural modernity, the work traces the relations of the construction to communication technology on the one hand and historic precursors such as the architecture of the Greek theatre (which derives from places of ritual and divination) on the other hand. The collage reveals a panorama of divinatory practices that ranges from the construction of the oracle after consultation (ancient Greece) to a construction of the oracle during consultation (price discovery in market making). The claim structure of today’s scopic-global finance theatre becomes recognizable, as the present potentiality of subjectivity dissolves in the promise of a future-at-present.

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The fabric mounted in the exhibition space was modeled after the so-called “volatility smile� (see graph below). These implied volatility patterns signify deficiencies in the Black-Scholes-Merton option pricing model which assumes constant volatility. Unknown before the crash of 1987, this theoretical anomaly of option trading implies that contingencies, i.e. events that cannot be foreseen, reduce standard probability calculus to absurdity. Following the crash, out-of-themoney options, which have no intrinsic value and tend to erode quickly, have been priced higher to due a loss of confidence in the standard model.

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Thanks to: Sylvia Eckermann and Elie Ayache, Christian Droste, Susanne Haider & art:phalanx, Brian Holmes, Bettina Kogler / brut & Jonathan Borrows and the performers of Europe In Motion, Karin Knorr-Cetina, Katja Mayer, Armin Medosch & Technopolitics research group, Bruce Stinson, Simon Streather, Klaus Strickner, Felix Stalder, Szely, and the members of the Centre for Research Architecture, Goldsmiths, University of London. Special thanks to: Alois Bernsteiner and his team www.friendsandart.at

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GLITCH

Unser Schreibzeug arbeitet mit an unseren Gedanken A Medien.Kunst.Tirol exhibition at KUNSTRAUM INNSBRUCK May 18 – June 29, 2013

With Lawrence Abu Hamdan, Sylvia Eckermann, Thomas Feuerstein, Christina Goestl, Gerald Nestler, Axel Stockburger, Szely. Curated by Maximilian Thoman and Gerald Nestler.

In the 1980s and 1990s, media and sound artists appropriated technical glitches – a provocation for engineers and technicians – for creative uses, turning these marginal disorders into an investigative aesthetics of communication technology. In recent years, glitches have turned from mere errors, production faults or transmission failures to occurrences that increasingly trigger systemic catastrophes. By adopting the term social glitch (G. Nestler), the exhibition project extends former artistic approaches by re-appropriating the technical term glitch (denoting a disruption or malfunction of electronic data) to conduct a wider investigation of technological malfunctions that affect social systems, institutions and practices. From this perspective, malfunction does not only refer to random or human error and technical defect but includes automation inadequacies and failures of algorithmic analysis and decisionmaking as well as wilful negligence, predatory schemes and wanton destruction that pass through code.

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While the artistic projects on show concentrate on a wide range of social glitches experienced today, they are connected by their critical involvement with such appearances. As the sheer magnitude of constantly occurring glitches trigger socially eruptive moments, Friedrich Nietzsche’s early and originally affirmative remark „Unser Schreibzeug arbeitet mit an unseren Gedanken“ (our writing tools are also working on our thoughts, 1882) reveals a more problematic nature of hybrid, complex and potentially disastrous relations and interests. To name but a few, they oscillate between quantitative thought and technological implementation, rational choice and financialization, biopolitics and political (e.g. legal) as well as economic (e.g. austerity) measures. The production of risk and the occurrence of contingent events .meet in an environment in which social glitches are far from harmless. Rather, they produce effects that threaten individuals as well as whole societies. The marginal disorders that spawned countless investigations into the aesthetics of communication technology in former decades of artistic practice gave way to a delusional disorder on a global scope that needs be radically addressed today in all its appearances.

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CARRIER HOTEL Assemblage of video, sound, text, objects and neon, 2010-2013

Carrier Hotels are no residences for human travellers. As sensitive spaces of the financial industry, their rooms are computer server hard drives and their hallways the bandwidths of data corridors. Data packets dwell for time spaces calculated in microseconds – and thus beyond human cognitive abilities – only to travel on with the lowest latency feasible. While this constitutes a social glitch of enormity for discretionary competence, a new dimension of (trans-)action patterns manifests in algorithms and derivative contracts. Questions pertaining to risk and hedging, venture and insuring as well as credit (debt) and security are posed on a speculative level whose volatile fluctuations oscillate between the poles of probability calculus and contingent events.

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In the form of a symbolic hotel room, Carrier Hotel assembles perceptions that put in perspective the complexities of such events. The assemblage is composed of new work but also hosts existing art works and material: The architecture of the hotel is composed of an authentic derivative contract (328 pages printed on transparent foil) that was introduced in the market in 2007 and subsequently caused a market crash. Predatory Glitch, 2010, the processing of a live audio coverage of the Flash Crash (by Ben Lichtenstein of TradersAudio) that deals with the displacement of human by automated trading agents. Contingent Claim. Portrait of a Philosophy, 2012, a video with the options trader, financial engineer and philosopher Elie Ayache on a new philosophy of derivative markets that attempts to replace the paradigm of probability with one of contingency. Hot Potato. No risk no fun in the dark pool, 2013, is a neon text work on the occurrence of a signal event as a bifurcation on the ‘social event horizon’.

Carrier Hotel was shown at GLITCH. Unser Schreibzeug arbeitet mit an unseren Gedanken, Medien.Kunst.Tirol Kunstraum Innsbruck, 2013.

Next page: Hot Potato. No risk no fun in the dark pool, 2013 48


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SKEWED ENTRAILS The Non-Space of Money or the Pseudo-Common Oracle of Risk Produktion

Paper published in Paratactic Commons an amber Art and Technology Festival and Conference publication, Istanbul, 2012. Published by BIS / Body-Process Arts Association. Ekmel Ertan & Fatih Aydogdu © 2012 / 2013 | amberTXT / BIS ISBN: 978-605-88807-8-8

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GERALD NESTLER

The Non-Space of Money or the Pseudo-Common Oracle of Risk Production54


Intro: A living being What is at stake when we think about money and its relation to the commons? When we address this question we need to start out at those places where money moves today – the financial markets. Therefore, I’d like to begin by quoting from a conversation between a trader and the sociologist Karin Knorr Cetina: “Trader: You know it’s an invisible hand, the market is always right, it’s a life form that has being in its own right. You know, in a sort of Gestalt sort of way (…) it has form and meaning. Karin Knorr: It has form and meaning which is independent of you? You can’t control it, is that the point? T: Right. Exactly, exactly! K: Most of the time it’s quite dispersed, or does it gel for you? T: Ah, that’s why I say it has life, it has life in and of itself, you know, sometimes it all comes together, and sometimes it’s all just sort of dispersed, and arbitrary, and random, and directionless and lacking cohesiveness. K: But you see it as a third thing? Or do you mean the other person? T: As a greater being. K: (…) T: No, I don’t mean the other person; I mean the being as a whole. And the being is the foreign exchange market – and we are a sum of our parts, or it is a sum of its parts.” It might sound odd to call the market a “being”, a living organism. One would rather think of the market as a network, a place of exchange and abstraction, a normalizing apparatus, or a capitalist revenant of Hobbes’ Behemoth. Especially today, when markets are less and less populated by actual human beings but instead are driven by algorithms – mathematical equations that account for up to 80% of transactions in many of the major markets today.

Text by Gerald Nestler Keywords: monetary commons, non-space of money, pseudo-commons , exchange culture, capitalism, time vs. common space.

But if we take this pseudo-common notion of a living being serious as a description of what the market has come to be, in order to recover ground from where to query the idea of a money commons, we need to critically address both the systemic heart of today’s financial capitalism – the mathematics of probability theory and their application in derivative markets – and its physical heart: Have our bodies, our organs, and our minds been turned into what I seems an updated version of the colonial plantation? Or differently, are we still the owners of our organs – of our productive, communicative and sensitive qualities – or

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have they been exploited to a level of organs without bodies, that is, creative energy providers with very limited potential to actualize in the full sense of the meaning – in a total reversal of the famous notion of the “body without organs” that Gilles Deleuze adopted from Antonin Artaud and later developed further with Felix Guattari? “The enemy is the organism,” the authors of Mille Plateaux write, “the Body-withoutOrgans is opposed not to the organs but to that organization of the organs called the organism.” [1] A further question tackles the notion of being in the sense of acting in presence. The financialization of the last two decades and the current debt crisis are widely interpreted as trapping people in a gridlock concerning future opportunities and possibilities (which accounts for the darker meaning of ‘securities’). However, by exploiting the future, financial capitalism is actually annihilating the present as well. It cuts into the actual relations between people as they are happening. The double-sided meaning of a term such as bond that on the one hand refers to engaged and close relationship and on the other to debt obligation has suffered brutal coercion towards the latter. And thus, while we experience the constraints of debt pervading all aspects of daily life, tearing apart the vestiges of the common body, more and more people become aware of the urgency to revive relation building and human action that are happening at present, in the lived empowerment of communality. Given the space available, I can only outline a very raw picture of a few aspects of the pseudo-commons of the current money system and its repercussions. I confine myself to three narratives. Albeit quite distinct they share a common undercurrent: Firstly, referring to David McNelly I try to trace the capitalist imagery of the body; Secondly, money and the limits of market exchange as regards the commons, the gift and debt with reference to Marcel Hénaff and David Graeber; Thirdly, the oracle as the construction site of the future, which at first might seem odd to a modern mind, as modernity prides itself of having exposed such practices as superstitious and preposterous to reason. And finally, by combining these narrative lines I hope to present an admittedly rudimentary outline of what a money commons might need to consider.

[1] Deleuze and Guattari, Mille Plateaux, 1987, p. 158

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I. Organs without body 1816 was termed the “Year Without a Summer” or the “Poverty Year”. Caused by a low in solar activity in combination with the volcanic eruption of Mount Tambora in Indonesia, the most severe summer climate abnormalities resulted amongst other things in major food shortages across the Northern hemisphere, from Canada and the Unites States across Europe and China. This darkening of the atmosphere was also the cause for an altogether different event: “’Incessant rainfall” Mary Shelley wrote, during a “wet, ungenial summer”[2] forced her, Lord Byron, John Polidori and friends to stay indoors for much of their holiday at Lake Geneva. One evening, they decided to find out who could write the scariest story. The outcome of this contest was Mary Shelley’s “Frankenstein, or The Modern Prometheus” and Lord Byron’s “A Fragment”, which Polidori later rewrote as “The Vampyre”, the romantic blueprint for the genre of the living dead. David McNally[3], in his recent book “Monsters of the Market” (2012), elucidates that both Frankenstein’s creature and the imagery of the living dead are stories profoundly linked with early industrial capitalism. Frankenstein’s creature, he writes, was a mirror image of the havoc industrialization worked on the working class. Assembled from body parts Frankenstein stole from graveyards, the ‘creation’ of the monster sheds light on a dark but lucrative practice of the day when anatomists and other professions capitalized on the body parts of those hanged from the gallows.[4] McNally concludes that Shelley’s readers knew very well what this meant: Those executed were often sentenced to death for nothing more than stealing food. After the execution they were not simply buried but dissected, an act that was part of the sentence. This lead to riots under the gallows where working class people fought for the bodies of their deceased as an act of resistance: At least in death the bodies of the working poor that were dissected for the profitable exploitation of a capitalist division of labor should remain intact. Quoted from http:// en.wikipedia.org/wiki/ Mary_Shelley

[2]

[3] A speech by David McNally can be found here: www.youtube.com/ watch?v=nNoQ8RryYOE

[4] McNelly ascribes the origins of the term “body snatcher” to this historical horror

After assembling the monster, Frankenstein made alive a new creature by running electricity through the parts. According to McNally, this is another image of the rise of capitalism and industrial revolution – the assemblage of a new class, the working class, by machinery, electricity and human energy. But for Shelley, McNelly continues, redemption is not impossible: Frankenstein’s monster has speech and learns to read. One of the books the author mentioned is Volney’s “Ruins of Empires”, one of the most radical socialist, anti-racist and anti-slavery texts of the era. Towards the end of the book, sailors mutiny on a ship in the arctic sea: Only revolt can prevent further human tragedies.

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The living dead incorporated in the zombie is a product of SaintDomingue, today’s Haiti. Unlike the vampire, the undead zombie mirrors the experiences of Negro slave plantation laborers. It is, McNally tells us, “the life-less being, the living-dead, a human being stripped of identity, memory, consciousness, and subjectivity.” It forcefully evokes the image of capitalist exploitation that subjects the slaves to spend their lives as mere body parts. Made to work as physical energy, they produce the colonialists’ profits. As a human being reduced to flesh, the zombie is the antithesis of creation in the Greek sense of the word: creas means flesh or meat in Greek. Ultimately, though, the “zombies awaken and strike back. They bring anarchy and destruction on polite, civilized, policed, bourgeois society.” With this statement, McNelly doesn’t refer to the latest Hollywood remake or cheap copy of the zombie story but to real events and historic fact: Haiti, a French dominion, was not just the most profitable colony of the day. It was also the site of the only successful slave revolution. Inspired by the French revolution and frustrated by the fact that the new rights had not been granted to them, their revolution not only defeated the French but also all subsequent attempts by the Spanish and British colonialists to conquer this ‘treasure island’. It is therefore not surprising that the living dead became the emblematic figure of the rebel monsters in the struggles after the crisis of 2008. Both stories, reflecting the perverse alienation of people by capitalist and colonialist exploitation, mourn but at the same time animate the mutilated body. This same human body, however, constitutes the disputed commons of an altogether different battleground, the register of law. The integrity of the body is, after all, an indispensable and inalienable right of (common) law. Some of its fundamental premises are liability for debt and the inevitable fact of death. The latter might seem odd but becomes clear when we take into account a further body, one that came into being in the 19th century as a construct of law. The corporation emerged not only in stark contrast to but in fact by an act of appropriation of and capitalization on the body of the slave. The corporate body consumed the civil rights of personhood by a contortion of the 14th amendment to the US constitution, initially adopted to provide citizenship and civil rights to former slaves. This is no trivial fact, as it constitutes a crucial moment in privatizing enclosures from the commons. Since Roman times and the origin of Western law, juridical persons were not granted the same rights as human beings, simply because they could not die and therefore seek to accumulate power and wealth beyond the reach of law itself. 58

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The 19th century gave birth to a number of beings that despite their stark contrasts could be described as ‘organs without body’. And I wonder if the idea of the pursuit of happiness so dear to the American dream has not been embodied in the nightmare of a corporate body, a commercial counter-image of communality (also, it was the corporation that exported it globally)? Does the pursuit of happiness imply acceptance of an ‘evolutionary ladder’ that leads from the resurrection of the living dead to the transcendence of the natural body to the entitlement to partake in the pseudo-common surplus-heaven of capitalism by incorporating into legal persons? Or simpler, does the pursuit of happiness in the face of capitalism require individuals to incorporate? And to further extend McNally’s narrative: Those who have not attained corporate personhood for themselves, do they partake in corporate happiness by a fraction, that is, by a volatile contract that regulates their service as a self-colonizing resource in which they reassemble their organs on demand? We will return to this question later when we try to understand how to conceptualize these organs without body who at the same time ‘live’ as autonomous, self-responsible corpses.

II. The commons of gift culture vs. the pseudo-commons of money exchange While economists in general agree on the necessity of markets, there are degrees of acceptance as regards interference of the state. Roughly speaking, this is exemplified by the approaches of the two arguably most influential proponents of the field, John Maynard Keynes and Friedrich August Hayek. While Keynes welcomed fiscal and monetary measures by the democratic state to balance inadequacies in recession and depression, Hayek trusted price-changes as delivering information and favored free market exchange between profit-geared (incorporated) individuals without interference by the state except for provisions taken on e.g. money supply, contracts, and property rights, all crucial for corporate bodies. Both main adversaries of today’s economics[5], of course, never challenged the state-finance complex of capitalism as such. Keynes trusted government to keep the economy afloat while for Hayek the medium is the market, to paraphrase McLuhan. They were both the heirs of an economic thought that Karl Marx had actually deconstructed long before, in Capital Vol. 1: An unusual proof can be found here: www.youtube.com/ watch?v=d0nERTFo-Sk [5]

“[…] the historical movement which changes the producers into waged workers, appears on the one hand as their emancipation from serfdom and from the fetters of the guilds, and this side alone exists

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for our bourgeois historians. But on the other hand these new freedmen became sellers of themselves only after they had been robbed of all their own means of production and all the guarantees of existence offered by the old feudal arrangements.” David Harvey in a speech entitled “The end of Capitalism?” describes the crucial distinction as follows: “Money is not capital, commodities are not capital, the buying and selling of labor power is not capital; what is capital is a class relation between capital and labor in the act of production that allows capital to extract a surplus from the work of the labor.”[6] For a money commons, we therefore need to think outside both the boxes of the state as a kind of last resort and the markets as the embodiment of perfect competition and optimal wealth creation, especially as we are confronted with a technopolitical state-finance complex with neither the ‘individual’ nor the state in a position of authority. So, what is money and were are its boundaries, if there are any? In the historic account – or the “fairy tale”, as anthropologist David Graeber likes to call it – that is still heavily leaned on in economics, markets develop from a premodern and rather underdeveloped exchange called barter – the direct exchange of goods and services without the intermediary of money. In this view, only money by flowing through free markets is able to allocate resources, discover fair prices and allow participants to engage in rational exchange. But when economists speak of markets, they seldom mean the local farmer’s market around the corner with its personal relations and credit granting. What they refer to, instead, are those time-prone transaction spaces where goods, services and information are allocated on the principle of supply and demand, establishing prices by rational profit-seeking individuals under the preliminary of perfect competition. Personal attachment and recognition are rather irrational acts in such an environment. At the same time, markets today are not only sites of transaction but to a large degree have become computerized systems in which trading itself is at centre of attention and time rules over space. Financial transactions reside in their own world of microseconds where proprietary equations are recalculated and risk estimates recalibrated. Today, the methods applied are less dependent on economics than on physics and mathematics[7]. In the ‘science fiction’ of derivative markets, money is not simply a neutral medium of exchange. It is a commodity, or, in other words, a contractual body of exchange. It’s erratic, inconceivable movements that follow random walks are dissected in ever more complex and refined algorithms that punctuate the void of the unknown to render

[6] David Harvey, www. youtube.com/watch?v =EYzKsiev43Q&feature =related

[7] Today, finance is to quite some extent a field of mathematicians and physicians. This indicates a radical change in the ideology of the future: From the 1960s and 70s utopia of colonizing interstellar space to the colonization of future time.

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fragile surfaces on which to tread, as if the future and the realm of uncertainty were a tenuously physical, material plane. What are the paths that are carved out of uncertainty? What are the traces that are made and followed, produced and queried at the very same time? We will see that these questions are more related to those above than we might think at first glance. Before we can try to answer these questions we need to briefly address the relations and affiliations that money constructs, in order to deconstruct the fairy tale of the origin of markets and social ubiquity of money. The anthropologist Marcel Hénaff, in his profound treatise “The Price of Truth. Gift, money and philosophy” (2010), delivers a striking comparison for the economies of gift, barter and money: Gift cultures, he postulates, are bound to human relationships and kinship, while barter and money economies are diametrically opposed. They are defined by excluding personal relationships, as this would compromise the underlying reason for their existence: to facilitate exchange with people who are outside the bonds that constitute the body of a specific commons.[8] For Hénaff, relations between people cannot be made equal and turned into a corollary of money, as the bonds are part of the reciprocal rituals of a community. But exchanges of goods or services exist that need a medium of exchange accepted by parties that share no deeper relation with one another or because relations are actually to be avoided. Gift cultures, however, argues Hénaff by referring to Marcel Maus, Bronislaw Malinowski and others, differ form economic exchange because nothing is directly given back in exchange for the offering. And, the offering is not transferable. Still, they are reciprocative not only because the gift has to be redeemed at some later stage but also because the bonds between people who materialize these gifts nurture these cultures. Hénaff shows that even if money is introduced, it becomes part of the gift culture as a token of reciprocity without monetary value. It is never transferred, i.e. the money-gift does not return to the monetary cycle, as this would be tantamount to violating the fundamental premise of gift culture – the recognition of the other.

[8] David Graeber goes even further and derives the origin of money as coinage from payment of mercenary soldiers.

The economies of barter, money and gift exist are concurrent but distinct from each other. In Hénaff’s words: “When equitable exchanges of goods are involved, gift-exchange relationships must give way to commercial relationships. There is a precise converse to this requirement: commercial relations are not capable of creating bonds between humans and cannot aim to do so.” (346) Hénaff therefore argues that we need to draw a line between these forms of exchange and proposes the term “ceremonial money” (296) for gift offerings. This clearly shows

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that there is no evolution from gift to barter to money. The history upheld since the days of Adam Smith is a myth. The modes of gift, barter and money exchange have existed along each other and still do, despite the current hegemonic power of the money regime. Hénaff clearly shows where the stakes are between credit and debt as forms of recognition as well as contract: “[…] the commercial relationship is not a priori the polar opposite of the gift-exchange relationship. The two are not situated at the same level. One is not the negation of the other, but there are circumstances in which one must prevail and the other give way. Their stakes are heterogeneous and yet constantly connected. When the purpose is to compensate work, compensation must be achieved in abidance with the agreement that has been conducted. When the aim is to express esteem or to reinforce a relationship, the appropriate means is gift exchange. There is a contractual economy, but it cannot be claimed that there is a gift-exchange economy. […] The wages paid are a right, not a favor. They involve an objective relationship, not an emotional bond. They are governed by norms of justice, not by the generosity of employers“ (381-382). This social contract, it seems, was severely violated in the debt crisis, and this is not simply a breach of decorum. Rights are on the verge of becoming favors granted to a shrinking number of people. The archeologist David Graeber in his bestseller “Debt, The first 5000 years” convincingly illustrates that debt, the current medium of social ruin and profit maximization, historically precedes money. He shows that it was a moral concept before it became an economic one. Reciprocal gift exchange existed before debt became a quantified and transferable commodity exchanged with money as unit of account: “The first markets form on the fringes of [Mesopotamian temple] complexes and appear to operate largely on credit, using the temples’ units of account. But this gave the merchants and temple administrators and other well-off types the opportunity to make consumer loans to farmers, and then, if say the harvest was bad, everybody would start falling into debt-traps. This was the great social evil of antiquity – families would have to start pawning off their flocks, fields and before long, their wives and children would be taken off into debt peonage. […] Rulers would regularly conclude the only way to prevent complete social breakdown was to declare a clean slate or ‘washing of the tablets,’ they’d cancel all consumer debt and just start over. In fact, the first recorded word for ‘freedom’ in any human language is the Sumerian amargi, a word for 62

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debt-freedom, and by extension freedom more generally, which literally means ‘return to mother,’ since when they declared a clean slate, all the debt peons would get to go home.”[9] The underlying narrative sounds strikingly familiar to the current situation, except for the idea of a clean slate that seems far beyond the grasp of those in power today. Even the living dead reverberate as hostages of debt bondage. Money, the ostensibly neutral medium of exchange is not only beyond the reciprocal bonds of the commons. It actually ruins them in order to commodify each and every aspect of life, subjecting it to contracts that are exchanged by the volatile price of a speculative provision of supply and demand. We could therefore argue that in such a society – or econociety, to call it by a more proper name – a shift has happened in the relations of market economy and gift relationship: What I mean is that the banking crisis as a market crisis can be read as a turning point towards a perverted gift-relation that we usually call the debt crisis. Why? Because modern contractual market capitalism – or neoliberalism – went bankrupt, which not only means that it was unable to pay its debts but became unable to redeem the contracts it had entered. The privatization of profits and the subsequent socialization of debt are tantamount to veering the bond of debt into a financialization of relationships. This scheme could be termed a “construction of ruins”, in which the capitalist financial system was actually rescued from collapse by an imposed “favor”, a forced “generosity” not only of taxpayers but entire populations that were not declared too big to fail. This goes along the above-mentioned ruining of democratic and labor rights, the dismantling of the welfare state and a quantification of gift relations on an unheard of level. Metaphorically speaking, the English term “gift” – a present – metamorphosed into the German word “Gift” – poison. Quasirational exchange has turned into emotional bondage and the staggering amounts of debt no longer conform to the juridical layout of contractual exchange – a fact proven by the quantitative easing measures of central banks that are ongoing simply because the money market as such, the direct lending between banks, has virtually been absent since the default of Lehman Brothers. What we see today seems more akin to a scheme that is capitalizing ceremonial money as “a unit of reciprocal offering” (270) – it is a destruction of credit. see: http://www. nakedcapitalism. com/2011/08/whatis-debt-%E2%80%93an-interview-witheconomic-anthropologist-david-graeber. html [9]

What we are confronted with is a perverted ‘money commons’ in which the corporate body devours the natural person. In the words of David Graeber, “Instead of creating some sort of overarching institution to protect debtors, they […] protect creditors. They essentially declare (in defiance of all traditional economic logic) that no debtor should ever

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be allowed to default. Needless to say the result is catastrophic. We are experiencing something that looks like what the ancients were most afraid of: a population of debtors skating at the edge of disaster.” This “skating at the edge of disaster” corresponds to the colonization of the future in financial markets where low money margins lever high stakes of risk and the speed of high frequency trading squeezes the moment of presence into the realm of microseconds.

III. The contemporary oracle, or the construction of futures at consultation When people try to describe the incessant gamble in the financial markets, they often resort to the metaphor of the casino. Although this comparison has its charm (unfortunately, we lack the space to delve into some striking examples) the casino, as a game of chance, does not help to understand the utter urgency of what is at stake for the future and the present. In “Il Regno e la Gloria” (2007), Giorgio Agamben extends Foucault’s investigations of governmentality by referring to the “anarchic” – the foundationless – condition of the oikonomia that spins around an ontological void, constituting a state of exception.[10] The latest incorporation of oikonomia, financial capitalism, has been utilizing the fictive reflections of probability theory to trade risk and exploit the future. In derivative markets, money is not simply a neutral medium of exchange but, as we said, a commodity, a contractual body of exchange. Its erratic, inconceivable movements are dissected in ever more complex products – the derivative contracts – that punctuate, so to say, the void of the unknown becoming, rendering volatile surfaces on which the price avatar treads, as if the realm of uncertainty, the contingent future were a material plan e. The ‘market being’, therefore, lives in the twilight zone between today and the morrow haunting a specter that has always been concealed to human knowledge, whether we apply complex mathematical models or read the entrails of slaughtered animals. This human quest for capturing the future allows us to examine the market beyond its usual conceptualization as a modern incorporation of games of chance. The question I want to sketch out in admittedly broad outline is whether the pseudo-common utopia of the perfect market and its current main line of production, derivative risk potentials, are to be conceived as the contemporary revenant of a practice that not only precedes modernity but seemed to have been obliterated by it: the oracle.

[10] Matteo Pasquinelli has countered Agamben’s approach in To Have Done with the Dispositif of God! On the Archeology of Norm in Canguilhem, Foucault and Agamben, which can be found here: http://matteopasquinelli.com/dispositifcanguilhem-foucaultagamben.

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Martti Nissinen, in a text on ancient Greek divination gives us the following account: “From a cognitive point of view […] divination can be seen as a system of making sense of the world, dealing with social or cognitive uncertainty, obtaining otherwise inaccessible information and to get things done, to make things right and to keep them that way … Divination tends to be future-oriented, not necessarily in the sense of foretelling future events, but as a method of tackling the anxiety about the insecurity of life and coping with the risk brought about by human ignorance.” [11] This reasoning that divination is less about foretelling and more about risk and uncertainty seems to me to give evidence of a rational approach of actors in their relations to the unknown (future), even if it means consulting a god. Xenophon, in his “Recollections of Socrates” quotes the Athenian philosopher: “Those intending to control houses or cities […] needed to use divination. For he considered that to be able to work as a carpenter, […] or a farmer or a ruler, or to be able to examine such crafts, or to calculate, or to manage or to govern – all things like these were learnable and could be grasped by human reason. But the most important aspects of these things, he said, the gods kept to themselves, and these were in no way clear to men. For it is not clear to the person planting a field well who will harvest it; not to the person building a house well who will live in it; […] nor to the man skilled in politics whether it will benefit him to take a leading role in the city.” [12]

By Martti Nissinen, “Prophecy and Omen Divination: Two Sides of the Same Coin”, in: Amar Annus (Ed.), Divination and Interpretation of Signs In the Ancient World, p. 341.

[11]

[12] Xenophon, Recollections of Socrates (Memoranilia), 1.1.7-9.

Even though Socrates speaks about divine oracle, he gives the story of derivative markets in a nutshell and we can conclude, in short, that the underlying ideology of the market continues this ancient practice in a modern guise. The contemporary oracle of derivative futures is at the heart of the symbolic universe of societies meshed in global econociety. Adam Smith’s remnant of the superhuman god, the invisible hand, points to the submerged history of Zeus and Apollo. Comparing Socrates’ claim with the new paradigm, we can also conclude that it has been thoroughly reversed. Absolute truth as the sphere of god(s) has been replaced by absolute contingency. Divination as the mantic rationalization of unknown events has been substituted by mathematics of probability. Derivative markets claim to master the contingent realm of uncertainty. Truth has ceased to be the realm of a god. Truth resides in the realm of the price-discovery avatar. Today, the bottomless pits of the market place are the Omphalos of our world. In these non-spaces of the contemporary oracle (the ontological

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void Agamben refers to) the specters of new futures are produced at every split second. Here, in the loss of the present moment that is sacrificed for the very next potential future lies the systemic navel of alienation, a nave that appears as a black (w)hole absorbing prospects and expectations. Our decisions have become derivative to a financial capitalist dystopia. We have become the subtle meat (creation, Greek creas = meat, flesh) of cognitive capitalism, its neuronal resource. The derivative oracle is the non-space of contemporary sovereignty. It is the transcendental law of absolute contingency that becomes immanent in the (mis)management of the future. Thus, derivative markets today fabricate the technē of the future, expanding the void of foundation to a void of potential. The dystopian scope of such a ‘theology’ does not, however, confine itself to the future, which is the realm of emerging human agency. It stretches ‘back’ to another time, a time ‘outside’ chronology: the present. In the financial oracle geared towards contingent future moments, presence is only real as the technopolitical passage of price discovery. Obliterated by the hegemony of a contorted idea of the future, it is the very experience of the subjective realness of the present that is truly at stake.

IV. The face To reinvigorate practices of the common (for the common is neither ‘new’ nor ‘innovative’), I suggest addressing the issue of presence as experienced time and common space against a hegemonic regime of time. The exploitation of contingent becoming by enclosures of possession does not happen without constrictions or struggles, as we all know. In the process, ruins are constructed[13] of possible worlds holding potential futures by equating the world in the face of price. But to mend our ‘skewed entrails’ and body parts, we need to go beyond a mere rearrangement of exchange. A money commons needs to respect the different kinds of bonds that are akin to what Hénaff terms “ceremonial money” of reciprocity, instead of the mere exchange of goods out of self-interest. But to do this, we need to understand what actually gets lost in the exploitation of bodies, exchanges, and the future. I will confine myself to one thing: The event as the encounter with the other. As I said above, financial markets equate the world in the face of price. Here, I would like to go back to Marcel Hénaff and to his reading of Emmanuel Levinas’ “Totality and Infinity” (1969). Levinas asks: Who is the other? And he answers: “The other always happens. He is pure event. He always

[13] Contrary to the ruin as a collateral damage or wreckage, I refer to the construction of ruins as a neoliberal strategy invalidating and capitalizing on existing knowledge traditions.

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comes from elsewhere, unexpectedly, unpredictably, not in any accidental sense but by definition. ‘The absolutely new is the other’” (TI 219). “How can any relationship with the other be possible, then? It can be so precisely because it happens, and it happens only because the other’s otherness is not already given in the sameness of our subjectivity. According to Levinas, what makes otherness happen as an encounter is the presence of the human face. ‘The face is present in its refusal to be contained. In this sense it cannot be comprehended, that is encompassed’” (TI 194)… “It resists totality and manifests infinity”. (398) We sense the brutality and violence that capitalist exploitation must exert in order to violate the encounter with the face of the other. The commodification of anyone is to de-face the other, is ultimately to destroy dignity in the face of price. When we ‘encounter’ the emergence of prices, price discovery becomes the paradigmatic event of enclosure. This implies that alienation is tantamount to averting the gaze from the other. The derivative contract that binds the organs without body capturing potential futures in a self-colonizing exchange – and concerning the questions above I propose to call this the Human Derivative – is the face that is substituted by the price, the incommensurable that is bend to the mathematics of quantification in the exploitation of profit. “Our obligation to the other,” Hénaff continues, “originates from this very presence. The ethical obligation that arises from the encounter with the other, the unconditional obligation to which the infinity of his face testifies, does not amount to a formal obligation but to an obligation to give – to give ourselves.” From the point of the face, the entire body comes into view, not as a mutilated but as an intact body and the infrangible body of the law. This is not to say that there is no place for the exchange of goods via money. Rather, it leads to acknowledging that to give ourselves introduces a reciprocal relationship. In order to burst the bonds of debt obligation, we don’t need the “freedom to govern ourselves but the freedom of granted recognition and shared respect.” (401) Beyond facilitating distribution and access to the exchange of money, goods and services outside the bourgeois profit maxim, a money commons would be the medium in which the contingent but real presence of our actions and relations is constantly and reciprocally acknowledged. TWO FINAL REMARKS: 1. Oikonomias Attempts to find new ways to make, produce, disseminate, and connect in a self-sufficient manner as well as in the spirit of fair sharing, oppose 67

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the contemporary forces of the market – a term equivalent to economy. But when we look at emerging forms of the commons it seems that a remarkable change has been happening. While Aristotle’s treatment of the term oikonomia gave ancient Athenians a kind of blueprint on how to deal with the management of the house, the classic philosopher of antiquity clearly separated the acts pertaining to the house and the state, the oikonomia and the polis. When the market today has come to replace the state (or is its double), we might ask: What if the markets were a very limited view of economy? Can we still refer to this as an economy proper? Wouldn’t it make sense to posit that it is actually in the practices and conceptualizations of the commons that oikonomia is finding new ground and new sense? Here we find economies (I use the plural deliberately) that are built – on purpose or by accident – akin to the original meaning of the Greek term “taking-care of the house”. It seems to me that we encounter an underlying economic commons that is a social commons: The urgency and necessity to radically experiment with and redefine our notions of economy. Contrary to Aristotle’s time, of course, the house is not a clearly fixed and immobile entity of masters and slaves, land and produce. These economies are open, fluid and sometimes even transient. From subsistence agricultures to grassroots movements to DIY to precarious labor to digital commons, much of what we are witnessing is trying to evade capitalist market. While the pandemonium of financial risk production as an ‘eternal credit line’ must be dismissed, there are indeed risks worth taking, one of which we could call “risk of solidarity”. By taking on this risk in the face of the other we could transform the alienating transactions on the common body of our future to actual common political actions. To do this, we might need to conceptualize, create and establish economies that acknowledge the existence of multifarious practices of welfare. In contrast to the finance-economy hegemony that pervades our worldview as if it was the natural order of the ‘thing life of society,’ to paraphrase Appadurai, we need to create opportunities for polymorphic economies where the polis, i.e. the political field embracing these economies, is the agora where various commons exist side by side. Money commons could then link interchangeable platforms of presence and ‘face-value’ where voice is given, found and rewarded in many ways. 2. A technology of sabotage and mediation And finally, a more technological and paratactical remark: Derivatives are an invention of financial markets to exploit not only risks but weaknesses, as stated by economist Robert J. Shiller [14] who is certainly

[14] Robert J. Shiller, Finance and the Good Society, Princeton, 2012, p. 78-80

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no enemy of the capitalism. Still, they are somewhat distinct as they are not property as such but legally and mathematically formulated contracts. The difference might seem small but might be fundamental if we look at derivatives from the perspective of a technowledge: As other algorithms, it is the uses we apply them to and not the ideology attached that unlock their potential. As a technology of the future, derivatives constitute a methodology to deal with emerging and volatile behaviors in complex situations. The financial engineer and philosopher Elie Ayache, in his attempt to overthrow the reign of probability theory and its dominance in markets, reintroduces the term “contingent claim”, which we could describe as a kind of written testament, a collection of wills shared between two or more people (parties) opened after the ‘death’ of the option (at the end of its agreed lifetime). For Ayache, this allows for a negotiation of future events in the face of price directly, on spot. These claims are evoked by the constant price changes leading to continuous recalibration, which again bear new claims. Thus, Ayache argues, any event, even the most outlandish, is dealt with in the marketplace with the contractual claims written by market makers. Writing, to him, is an act of producing the future at the moment, in potentiality. It also serves as evidence, as the forensic object at actualization when these option-life testaments are opened. We could picture them as algorithmic sense organs that capture the miniscule movements in-between events and in-between transactions by the agents on the trading floor. David Harvey in the talk mentioned above speaks about how we could appropriate and take over what corporations have developed: „... it’s not hard at all to imagine that capacity of centralized planning how it currently exists in corporations – Wal-Mart, for example does it beautifully – it’s not hard to image taking that over and turning it into a social purpose instead of turning it into mere profiteering. And when I say this, people are saying, you like Wal-Mart? And my answer is, well, they’ve come up with some techniques we can use. And we shouldn’t run away from talking about using those techniques just because Wal-Mart has it. We should really study those things and figure out how it works.” Would something similar make sense with derivatives? Would it be sensible to think about reprogramming and recontextualizing this technology? Can we subvert their capitalist source code and appropriate them in the fields of social and common action, a mediation that is probably no less complex and contingent than market transac69

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tions? Could we become capable of applying a technology for contingent sharing in the face of the other, instead of in the face of price? The underlying of such a Speech Act Algorithm would not be a stock or other property asset but a specific cause for common action deriving from the desires and/or needs of people. What is lacking, though, is a philosophy of contingency that counters probability theory as the paradigmatic mathematics of the market and might allow us to craft a notion of the derivative based on fundamental assumptions of common interest of welfare. Given that an oikonomia of the commons also needs to reflect and deal with a complex and uncertain world, ‘anarchic derivatives,’ or in other words, algorithms facilitating recognition and sharing might assist collective reciprocal exchange and reward in many fields and applications. At the same time they could produce an algorithmic creativity of sabotage, to take a term from Matteo Pasquinelli’s Animal Spirits: A Bestiary of the Commons (2008) against the capitalist paradigm of creative destruction and exploitation. Christian Siefkes, in his contribution to David Bollier and Silke Helfrich’s publication The Wealth of the Commons entitled “The Boom of CommonsBased Peer Production” writes: “While production for the market aims to produce something that can be sold, the usual goal of peer production is to produce something useful. Projects have a common goal, and all participants contribute to that goal in one way or another. They do so because they share the objectives of the project, because they enjoy what they are doing, or because they want to ‘give back’ to the community. This differs from market production which is based on exchange.” The importance and success of free software, for instance, rests on a commons everybody can use, improve and share. Richard Stallman wrote its framework, the GNU General Public License (GPL), in the 1980s. Although we seem far from such a moment, would it make sense to discuss approaching financial technologies in a similar way? Would it make sense to imagine derivative mediation not subjected to market rules and goals but to peer encouragement for the production of something useful? It seems to me that in case financial technologies and methods were desirable and useful for the commons in order to support, share and insure approaches to a money commons, we might need an equivalent framework of licenses and rights that free such technologies from capitalist enclosure. In this case, we need to conceptualize and write the copyleft of finance.

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Gerald Nestler

The Non-Space of Money

Bibliography Giorgio Agamben, Il Regno e la Gloria, Torino (2007) Deleuze, Gilles and Guattari, Félix, A Thousand Plateaus: Capitalism and Schizophrenia, Minneapolis (1987) David Graeber, Debt, The first 5000 years, New York (2011) Marcel Hénaff, The Price of Truth. Gift, money and philosophy, Stanford (2010)

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Karin Knorr Cetina, “From Pipes to Scopes: The Flow Architecture of Financial Markets,“ in: Distinktion Scandinavian journal of social theory 7 (2003), pp. 7-23 Emmanuel Levinas, Totality and Infinity: An Essay on Exteriority, Pittsburgh (1969)

Matteo Pasquinelli, Animal Spirits: A Bestiary of the Commons, Rotterdam (2008) Christian Siefkes, “The Boom of Commons-Based Peer Production,” in: David Bollier and Silke Helfrich, The Wealth of the Commons, 2012

David McNally, Monsters of the Market, Boston (2012)

In his artistic practice and research, Gerald Nestler focuses on the impact of global finance on individual and communal life. He works on a critique of the financial apparatus in which Human Derivatives are exploiting but at the same time opportunities arise for revolutionizing common practices. Nestler graduated from the Academy of fine arts Vienna in 1992. From 1994 to 1997 he did ‘field-work’ as a broker and trader. In 2003 he received the Austrian State Grant for Visual Art. In 2007 he published Yx, an artist book on finance as a field of artistic research. In 2010 he edited the issues 200 and 201 of the German art magazine Kunstforum International on art and economy (with D. Buchhart). Recent projects include The Trend Is Your Friend, a performative and interactive artistic experiment (with S. Eckermann, 2010), Superglue. Artistic Research on Scientific Research (with G. Straub, 2011) and On Purpose. The New Derivative Order (2012). He is a practice-based PhD candidate at the Centre for Research Architecture, Visual Cultures, Goldsmiths, London. Nestler teaches at the Department of


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CARGO CARRY CULT

Charged voyages in algo measure Lecture performance by Gerald Nestler with a contribution by Tav Falco, May 22, 2013 WWTBD - What Would Thomas Bernhard Do Kunsthalle Wien and Wiener Festwochen Curated by Nicolaus Schafhausen and Lucas Gehrmann, CathÊrine Hug May 17 – 26, 2013

While the visual stimuli of financial market transactions appear anaemic, their mathematically generated but nevertheless erratic moments exalt the imagination. Perpetually seeking dissolution, surreal dichotomies of relationships open up between invisibility and omnipotence, inconceivability and ad hoc access, time as an object and space as the transcendent medium of objectification. While the ancient Greek placed coins on the eyes and tongues of their deceased, to pay Charon for passage to the realm of the shades, the phenomenal world of terrestrials darkens and suffocates in the presence of algorithmic flashes whose moneyed microseconds establish a social event horizon beyond human perception. The aesthetics of codes below-threshold conceal an elaborate fiction. It glorifies mind and body as volatile but quantifiable neuronal objects. Thus, neither of us is present at such dizzying heights but as potential resource. The automated crest they call the future consumes the present before the moment emerges. And all image erased. 73


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Special thanks to: Tav Falco, Lucas Gehrmann 76


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COUNTERING CAPITULATION From Automated Participation to Renegade Solidarity. High-frequency trading and the forensic analysis of the Flash Crash, May 6, 2010. An artistic research project and single channel video, 11:20 min., 2013-14. Produced with the support of the Haus der Kulturen der Welt, Berlin.

COUNTERING CAPITULATION engages with the inquiries following the Flash Crash of May 6, 2010, an event that went down as the biggest one-day market decline in financial history. Focusing on a remarkable forensic analysis that not only contradicted the official findings of the regulatory authorities and shed light on the impact of algorithmic trading but also developed tools to visualize material processes that operate beyond human perception, Nestler argues that in the current legal framework evidence of market events can only be produced by a double figure of the expert witness: when the (forensic) analyst is joined by a whistleblower. With this ambivalent, contingent and marginal figure at its heart—a renegade, a traitor, a defector—COUNTERING CAPITULATION proposes a multilayered, postdisciplinary artistic practice engaged in creating narrative instabilities that coagulate dissent into insurrection: “enhancing resolution” in the technological, legal as well as social and political sense of the term. The video concludes with a call for building “renegade solidarity” between whistleblowers—exemplary figures of contemporary insurrection—and the general public to counter the excesses of (automated) schemes of evaluation and decision-making, not only as regards financial markets but proprietary black box regimes in general. Gerald Nestler: research, concept, text and editing Flash Crash charts and animations courtesy of Nanex LLC Synthetic algo voice over: Alva & Tom Sylvia Eckermann: animation Sound editing: szely Thanks to: Eric Hunsader, Sylvia Eckermann, Brian Holmes, Eyal Weizman. Supported by bm:ukk Austria. 78


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COUNTERING CAPITULATION was presented at:

FORENSIS A co-production by Haus der Kulturen der Welt, funded by the Capital Cultural Fund, and by Forensic Architecture, ERC-funded research project based at Goldsmiths, University of London.

Haus der Kulturen der Welt, Berlin Curated by Anselm Franke and Eyal Weizman. March 15 2014 - May 5, 2014

The exhibition included contributions by: Lawrencence Abu Hamdan, Nabil Ahmed, Maayan Amir, Gabriel CuĂŠllar, Daar (Decolonizing Architecture Art Residency, Sandi Hilal, Alessandro Petti, And Eyal Weizman), Grupa Spomenik / The Monument Group (Damir Arsenijevic, Ana Bezic, Pavle Levi, Jelena Petrovic, Branimir Stojanovic, Milica Tomic), Ayesha Hameed, Charles Heller, Helene Kazan, Thomas Keenan, Steffen Kraemer, Adrian Lahoud, Armin Linke, Modelling Kivalina, Model Court (Lawrence Abu Hamdan, Sidsel Meineche Hansen, Lorenzo Pezzani, Oliver Rees), Gerald Nestler, Godofredo Pereira, Nicola Perugini, Alessandro Petti, Lorenzo Pezzani, Cesare P. R. Romano, Susan Schuppli, Francesco Sebregondi, Situ Research, Caroline Sturdy Colls, Territorial Agency ( John Palmesino, Ann-Sofi RĂśnnskog), Paulo Tavares, Srdjan Jovanovic Weiss, Eyal Weizman, Ines Weizman. 80


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Financial Forensics and the double Figure oF the expert witness gerald nestler

Financial Forensics and the double Figure oF the expert witness gerald nestler

the Flash crash of May 6, 2010 was the biggest one-day market decline in history. it saw the dow Jones industrial average plunge by about 1,000 points—9 percent of its total value—only to recover those losses within minutes. a forensic investigation of this financial event conducted by the data analyst nanex revealed that, in contrast to claims by us authorities, which put the blame on human trading, it was in fact trade orders executed automatically by algorithms that caused the crash. nanex noticed evidence of market activity at fractions of milliseconds by analyzing the Flash crash at a time resolution far quicker than conventional data records, which usually show one-minute trading intervals. computer-based high-frequency trading is beyond the capacity of human experience or action. in order to support their claim, nanex used otherwise secret trading data provided by waddell & reed, the mutual fund blamed for the crash. here the traditional role of the expert witness is taken by a collaboration between the forensic analyst and the renegade company, which joined forces to provide information in contravention of the industry’s unwritten law of secrecy.

the Flash crash of May 6, 2010 was the biggest one-day market decline in history. it saw the dow Jones industrial average plunge by about 1,000 points—9 percent of its total value—only to recover those losses within minutes. a forensic investigation of this financial event conducted by the data analyst nanex revealed that, in contrast to claims by us authorities, which put the blame on human trading, it was in fact trade orders executed automatically by algorithms that caused the crash. nanex noticed evidence of market activity at fractions of milliseconds by analyzing the Flash crash at a time resolution far quicker than conventional data records, which usually show one-minute trading intervals. computer-based high-frequency trading is beyond the capacity of human experience or action. in order to support their claim, nanex used otherwise secret trading data provided by waddell & reed, the mutual fund blamed for the crash. here the traditional role of the expert witness is taken by a collaboration between the forensic analyst and the renegade company, which joined forces to provide information in contravention of the industry’s unwritten law of secrecy.

Left: Display table layout, FORENSIS exhibition, Haus der Kulturen der Welt, Berlin 2014

Pages 79, 81, 83: Screenshots of COUNTERING CAPITULATION, single-channel video, 11:20 min., 2014

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CouNTerING CapITuLaTIoN From automated participation to renegade solidarity High-frequency trading and the forensic analysis of the Flash Crash, May 6, 2010 Gerald Nestler single channel video, 9:55 min., 2013

CouNTerING CapITuLaTIoN From automated participation to renegade solidarity High-frequency trading and the forensic analysis of the Flash Crash, May 6, 2010 Gerald Nestler single channel video, 9:55 min., 2013

The video concludes with a call for renegade solidarity between the forensic analyst, the whistleblower and the general public as basis for an informed political debate on the effects of algorithmic trading not just on financial markets but on society at large.

Focusing on a remarkable forensic analysis that not only contradicted the official findings of the regulatory authorities but also shed light on the impact of high-frequency trading, Nestler argues that in the current legal framework evidence of financial market events can only be produced by a double figure of the expert witness: the forensic analyst joined by a renegade whistleblower.

The video concludes with a call for renegade solidarity between the forensic analyst, the whistleblower and the general public as basis for an informed political debate on the effects of algorithmic trading not just on financial markets but on society at large.

Focusing on a remarkable forensic analysis that not only contradicted the official findings of the regulatory authorities but also shed light on the impact of high-frequency trading, Nestler argues that in the current legal framework evidence of financial market events can only be produced by a double figure of the expert witness: the forensic analyst joined by a renegade whistleblower.

Countering Capitulation engages with the inquiries following the Flash Crash of May 6, 2010, an event that went down as the biggest one-day market decline in history.

Image © Nanex, LLC

“NaNex FLasH CrasH suMMary reporT,” NaNex, sepTeMber 27, 2010. This time-line graph distinguishes “the events that caused the crash from those that were effects of the crash. The main chart covers from 14:42:30 to 14:52:00 in 1 second intervals, and the inset covers from 14:42:43 to 14:42:46 in 25ms intervals.”

Countering Capitulation engages with the inquiries following the Flash Crash of May 6, 2010, an event that went down as the biggest one-day market decline in history.

Image © Nanex, LLC

“NaNex FLasH CrasH suMMary reporT,” NaNex, sepTeMber 27, 2010. This time-line graph distinguishes “the events that caused the crash from those that were effects of the crash. The main chart covers from 14:42:30 to 14:52:00 in 1 second intervals, and the inset covers from 14:42:43 to 14:42:46 in 25ms intervals.”

both charts show e-mini s&p 500 index depth and cumulative Waddell & reed contracts sold. Nanex’s findings contradict the official report issued by the seC (the us securities and exchange Commission) and the CFTC (the us Commodity Futures Trading Commission) as regards the catalyst of the Flash Crash by showing that the bulk of trades by the mutual fund Waddell & reed “occurred after the market bottomed and was rocketing higher—a point in time that the seC report tells us the market was out of liquidity.” Quoted from: “May 6’th 2010 Flash Crash analyses: Continuing Developments: sell algo Trades,” Nanex, october 8, 2010, http://www.nanex. net/FlashCrashFinal/FlashCrashanalysis_ Wr_update.html. Images: © Nanex, LLC.

both charts show e-mini s&p 500 index depth and cumulative Waddell & reed contracts sold. Nanex’s findings contradict the official report issued by the seC (the us securities and exchange Commission) and the CFTC (the us Commodity Futures Trading Commission) as regards the catalyst of the Flash Crash by showing that the bulk of trades by the mutual fund Waddell & reed “occurred after the market bottomed and was rocketing higher—a point in time that the seC report tells us the market was out of liquidity.” Quoted from: “May 6’th 2010 Flash Crash analyses: Continuing Developments: sell algo Trades,” Nanex, october 8, 2010, http://www.nanex.net/ FlashCrashFinal/FlashCrashanalysis_Wr_update.html. Images: © Nanex, LLC.

These charts by Nanex show the growth of high frequency quoting (left) and high frequency trading (right) from 2008-2012. Nanex estimate that algorithmic trading accounts for 70% of trades and 99,9% of quotes. Hence, algorithmic trading constitutes market liquidity. The obvious conclusion: algorithmic trading machines have taken over. Images © Nanex, LLC.

These charts by Nanex show the growth of high frequency quoting (left) and high frequency trading (right) from 2008-2012. Nanex estimate that algorithmic trading accounts for 70% of trades and 99,9% of quotes. Hence, algorithmic trading constitutes market liquidity. The obvious conclusion: algorithmic trading machines have taken over. Images © Nanex, LLC.


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COUNTERING CAPITULATION, installation views FORENSIS, Haus der Kulturen der Welt, Berlin, 15.3. – 5.5.2014 © Laura Fiorio / Haus der Kulturen der Welt 84


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Mayhem in Mahwah

The Case of the Flash Crash; or, Forensic Reperformance In Deep Time It must be the case that I have some perception of the movement of each wave on the shore if I am to be able to apperceive that which results from the movements of all the waves put together, namely the mighty roar which we hear by the sea. –– Gottfried Wilhelm Leibniz1

Automated Daemons Shoot first, ask questions later. –– Eric Hunsader2

When financial market prices plummeted and caused havoc on May 6, 2010, stock indices such as the Dow Jones Industrial Average and the Standard & Poor’s 500 (S&P500) incurred enormous losses in record time, and even single company stock notations crashed to previously unknown low levels, only to rebound minutes later.3 To quote but one of the many sources commenting on this global flash of financial pandemia, the event “carries the distinction for the second largest point swing, 1,010-points, and the biggest one-day point decline, of 998.5-points, on an intraday basis in the 114-year history of the Dow Jones Industrial Average.”4 It was not just traders with open positions who were caught off-guard and severely affected. What has become known as the Flash Crash simultaneously sent a shockwave through wider business circles. Live on CNBC, for instance, TV newscast presenters and commentators were discussing the financial backgrounds of the severe protests taking place in Greece as a consequence of the credit crunch and the austerity cuts; but they seemed compelled to shift their attention increasingly to a financial event whose sheer magnitude left them stunned—the immense and unexpected drop in market prices occurring right before their eyes.5 Clueless as to what had catalyzed the crash— economic data did not account for a blow of such ferocious violence—they resorted to idiomatic terms such as “capitulation.”

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Initially, the TV-screen showed live footage of the Greek insurgence in Athens meshed with economic data feeds and real-time market prices (a constant presence not only in today’s business media) ticking away in a smaller window below. But the live broadcast of protesters pitted against police forces gradually faded, with the discussion shifting in tone and content. Market charts began to fill the screen as the conversation plunged into an emotional debate about what specific contingency might have triggered the downward flood of transactions. The suggested speculative explanations included a “fat finger event” (a typing error), a breakdown of machines (a hardware failure), a software glitch, and rapid-selling action due to the European (and especially the Greek) credit crisis. One commentator was heard reiterating recommendations to buy because of the “ridiculously low” levels of some stocks; another proposed “shock and awe” politics in order to get the economy running again. The forceful global deformations introduced by the neoliberal reformulation of self-interested profit maximization became apparent in this instant of simultaneous broadcasting of civil unrest and financial war. The live coverage of the uprising in Greece and the fall in prices, each with its accompanying visual and oral rhetoric, unintentionally evoked the stark contrast between the capitalist regime of financialization6 on the one hand, with its debt-induced grip on politics and the economy, and on the other hand the effects of this regime on the notion of the public good. When the spotlight panned from the destroyed common ground in Greece to the historic instance of an algorithmic crash, market disequilibrium on a gigantic scale obscured a catastrophic failure of an even vaster extent. The Flash Crash eclipsed what has become the symbol of the ruination of the agora of commonality, epitomized by the eruption of popular protest in the site of its ancient origin in Athens. Figs. 1, 2. Stills from CNBC News, May 6, 2010. Images © CNBC

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Below the radar of agencies that were established to monitor market activity, corporate self-interest had created an even deeper level of incorporation: it was programed into the “genetic” code of a new breed of financial agency, the automated daemons of algorithmic trading.7 Derivatives of mathematical models, algorithms had already revolutionized the logistic infrastructure of exchanges by displacing the trading pit and thus its market makers (the human traders known as “locals”) in favor of faster execution rates. Subsequently, these daemonic powers were let loose to directly negotiate with one another on computerized matching machines, exploiting trading opportunities at a speed inaccessible to their human competitors. The foundations for this radical shift were established in the early 1970s. Donald Mackenzie informs us that “financial economics […] did more than analyze markets; it altered them. It was an ‘engine’ in a sense not intended by [Milton] Friedman: an active force transforming its environment, not a camera passively recording it.”8 Gil Scott-Heron’s 1970 “The Revolution Will Not be Televised” comes to mind, a politically radical poem released at about the same time when the most significant model, the Black-Scholes formula, introduced an algorithm that sparked the first derivative wave of neoliberal market revolutions that today hold sway over the world. But while Mackenzie’s account is mainly concerned with “bodies” and their operations, High Frequency Trading (HFT) has in the meantime abandoned human traders for algorithmic market making. As collateral damage, the epitome of territorialized capitalism, Wall Street, had become a mere symbol. While the crowded trading floor of the New York Stock Exchange (NYSE) is still the undisputed televisual icon of the “market,” the media presence obfuscates, more than reveals, what the market has actually become, as a result of what I term the quantitative turn in finance. Since 2012 the NYSE and its trading floor have been the property of Intercontinental Exchange, a provider of algorithmic trading platforms operating from Atlanta, USA.9 The new pivotal architectural nodes of what has turned into a deterritorialized, informational capitalism are now the nondescript and non-representative warehouse buildings, filled to the brim with computer servers and fiber optics, in suburban areas such as Mahwah, New Jersey.10 Although in 2010 this was still future in the making, something unsettling had dawned on acute observers of the epic failure described as the Flash Crash: algorithmic daemonic powers, put in the driver’s seat, had slipped away from human control. For the first time, bots had caused mayhem. Not only were automated trading desks11 affected, but this “revolution” flashed into view as a globally televised event. 88


Forensics without a Forum The past is only the impatience of the future. –– Elie Ayache12

Despite these potential warning signs, however, acute observation was not widespread. A joint commission of two US regulatory bodies, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), undertook an investigation13 into the transaction matrix of this singular event: its results were widely criticized as unsatisfying.14 In a nutshell, the report came to the conclusion that human error reinforced by computer trading procedures triggered the Flash Crash. It blamed a single trader of a mutual fund representing long-term investors for causing the meltdown. Meanwhile, a less-cited investigation conducted by a small market data feed analyst, Nanex, produced a more convincing result, which challenged the SEC report.15 Nanex based its research methodology on what could be called a forensic archeology of historical trading data, and reached a conclusion that, unlike the official report, was not unwittingly16 streamlined to a financial elite with major vested interests in high frequency trading (or HFT—this is the generic term for computer-driven algorithmic trading, which takes place in microseconds). As we will see in more depth below, Nanex proved that algorithmic trade execution triggered the event without human interference. The reason the two reports arrived at such divergent results cannot be attributed to a shortage of material to investigate. Rather, we can ascribe the successful approach to two crucial factors. The first is a quality of depth in investigation, or more technically, the production of quantitative camera-engines with higher resolution on the split-second time scale in which high frequency trading is carried out. The strata to be investigated had to be discovered and discerned rather than simply considered and surveyed. Thus, algorithmic analytic devices were crucial for unearthing the archeological evidence.17 Its material elusiveness—which I will attribute below to a new breed of machines that turn apperception from conscious perception (when mental attention is coupled with previous experiences and conceptions) to technological cognition—hides a thick surface of myriads of data characterized by a propensity towards invisibility and a sort of “counter-perception” that easily escapes cognizability This fact marks the second crucial aspect of the analysis, the act that made it possible in the first place: the disclosure of proprietary trading data. I will refer below to this ambiguous but essential act as 89


a manifestation of the Janus-face of the expert witness in the field of a forensics of algorithmic and automated trading. The SEC and CFTC based their official report on the material made available by exchanges and market participants, which showed one-minute trading intervals. This dataset would have been adequate to scrutinize trading activities before the ascent of HFT. But today, to quote the founder of Nanex, Eric Hunsader, “in the blink of an eye, the market moves what used to take humans thirty minutes.”18 With HFT and the Flash Crash—whose naming enunciates a new category of speed—a one-minute resolution view of the material composition conceals more than it reveals. The following account of the Facebook stock market launch (IPO) illustrates the order of magnitude: Eric Hunsader: […] NASDAQ was trying to open the IPO up. By their third attempt, they’re telling everybody Wait, we’ll get it at 11:05. No, we’ll get it at 11:10, no we’ll get it at 11:30. So it was do or die time. […] Somebody there has the bright idea to just reboot the system. It takes NASDAQ offline a full seventeen seconds. […] When NASDAQ finally did reappear, what happened? The orders that were resting in the book all that time immediately disappeared. Like 60%-70% of all liquidity within 200 milliseconds is gone. Chris Martenson: So seventeen seconds of going dark for one of the largest ex changes out there. That must have been several lifetimes for these algorithms. EH: Seventeen million microseconds. CM: Seventeen million microseconds, that’s forever. EH: It is forever and that’s why we see the liquidity and all these books just go—poof!19 For Hunsader, the order of magnitude of microsecond time scales poses a threat to market activity per se. An instantly precipitated lack of liquidity–– the disappearance of automated market orders––is the blueprint for market collapse because “[a]lgorithms prefer predictability. If something spooks them (e.g., unexpected breaking news; a delay in the market’s opening), they simply stop trading. […] With no support and no bids, prices can drop dizzyingly fast. Making matters worse, the ‘smarter’ algos [financial lingo for algorithms] can recognize a downdraft in process and begin piling back into the market on the short side, exacerbating the price declines.”20 But what this quotation also illustrates is the sheer pointlessness of scrutinizing market activity at one-minute intervals. The officials charged with throwing light on the background of the Flash Crash therefore examined an 90


image that they mistook for razor-sharp, unaware that it was blurred and useless. Nanex was able to escape the trap by mistrusting the superficial matrix of one-minute trading accounts. Eric Hunsader subsequently commented that the SEC/CFTC analysts clearly “didn’t have the dataset to do it in the first place. One-minute snapshot data, you can't tell what happened inside of that minute,” also noting that his own analysts “didn’t really see the relationship between the trades and the quote rates until we went under a second.”21

Reperformative Forensics In real-world systems, nothing could be less normal than normality. –– Andrew Haldane and Benjamin Nelson, Bank of England22

Nanex is a market research firm that supplies real-time data feeds of trades and quotes for all US stock, option and futures exchanges. As their website states, “we have archived this data since 2004 and have created and used numerous tools to help us sift through the enormous dataset: approximately 2.5 trillion quotes and trades as of June 2010.”23 Elsewhere they declare that “Nanex’s database is now more than 20 times the size of NASA’s. That’s right—we’ve got more data on the stocks than we do on space.”24 The capacity to build algorithmic machines that allow the processing of information on such a scale is fundamental to gaining a resolution capable of visualizing— and thus understanding—the trades and quotes that are executed far below the threshold of human sense perception. Nevertheless, Nanex did not see this data as sufficient to account for the Flash Crash because they could not match it to its respective sources. As the former HFT trader David Lauer remarked:

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The markets and the interplay in the industry between all theses firms with all these very complicated and complex technology systems and how they interact makes the entire system of exchanges, high-frequency, brokers and the interaction between the technology, it makes it a complex system. […] There is no cause and effect that you can point to. What caused the Flash Crash is a nonsense question. […] And, if you were to replay the same sequence of events, identically, there’s no guarantee that it will cause a Flash Crash again. That’s the nature of complex systems.25


Fig 3. “We present this Flash Crash Summary Report using a time-line graph to distinguish the events that caused the crash from those that were effects of the crash. 92


The main chart covers from 14:42:30 to 14:52:00 in 1 second intervals, and the inset covers from 14:42:43 to 14:42:46 in 25ms intervals.” “Nanex Flash Crash Summary 93 Report,” Nanex, September 27, 2010. Image © Nanex, LLC.


The next step, therefore, was to apply a different strategy, or rather to extend the approach. Discontented with the official report, Nanex resorted to an investigation accomplished not only after the fact but also after the investigation: they asked the party blamed (though not identified) in the official report, the mutual fund Waddell & Reed, to grant access to their trading data. In line with the capitalist proprietary regime, it is quite plausible that the fund would have declined this request if it had been made before they were blamed. But by the time the Nanex analysts were conducting their investigation, Waddell & Reed would have had a keen and vested interest in clearing their name, such that they were prepared to disclose their trading data from the time of the Flash Crash. Hence, the incorporation of the “source code” of a proprietary dataset allowed Nanex to classify the data and deliver an account of the actual events that happened in micro time.26 The analysis relies on an apparatus that pairs the following three different custom-made quantitative frameworks in an effort to deliver a sufficient approximation of trading operations: firstly, Nanex’s enormous and everextending archive of financial data; secondly, their adaptive quantitative resolution devices that allow investigating these data sets; and finally, the algorithmic trading data of a proprietary participant. This framework allowed them to produce the groundbreaking narrative that subsequently brought to light the cybernetic regime of HFT. Borrowing a linguistic term that is widely used in computing, econometrics, and quantitative finance, we can outline this process as the parsing of the trading performance after the fact (the

Fig. 4: 250 millisecond interval chart. Fig. 5: 1 second interval chart. Images © Nanex, LLC.

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proprietary dataset provided by Waddell & Reed) by performative cameras that not only analyze but craft a narrative representation (the analysis accomplished by Nanex). The final representation of the event is composed of an abundance of colorful simulations produced to visualize and flesh out the activities that took place in microseconds. This is a techno-aesthetics that counters the fundamentally iconoclastic situatedness of quantitative informational sign machines which do not communicate with humans. The vision-enhancing sensors that detect the time-blurred traces and help to mark discriminations in a highly complex environment deliver information that has to be “digested” in a separate stage in order to raise it to the surface of visibility and comprehensible representations. Thus, the forensic analysis is neither fully embodied nor defined by the abstract representations of data traffic. Rather, the methodology directing the analysis is situated, i.e. constructed, in between the juncture of performance as the actual presence of an event taking place (exemplified by the occurrence of the Flash Crash) and representation as providing “visual collateral” of a performative re-animation of the original obscured presence after the fact. From this, we can now outline a sharper distinction which will help us to grasp what is at play in the documentation and evaluation apparatus. Artificial sense organs reach into deep time by increasing the resolution bandwidth in order to revisit the otherwise insensible “scene of the crime.” The forensic analysis is thus an intricate and extensive

Both charts show eMini S&P 500 index depth and cumulative Waddell & Reed contracts sold. Nanex’s findings contradict the official report as regards the catalyst of the Flash Crash by showing that the bulk of the mutual fund Waddell & Reed’s trades “occurred after the market bottomed and was rocketing higher— a point in time that the SEC report tells us the market was out of liquidity.” “May 6th 2010 Flash Crash Analyses: Continuing Developments: Sell Algo Trades,” Nanex, October 8, 2010. 95


cybernetic undertaking characterized by a process of re-mapping, re-modeling, re-visioning, and re-narrating a specific past that happened at near-light speed—a performance ex post that was the occurrence of a future event. As this approach re-enacts the performance of the event, the methodology can be specified as reperformance. The technological, calculative aspect of sifting data to come up with evidence—enacting the reperformance—becomes explicit in the sheer enormity of the material Nanex examined:

May 6th had approx. 7.6 billion […] records. We generated over 4,500 datasets and over 1,200 charts before uncovering what we believe precipitated the 600 point drop beginning at 14:42:46 and ending at 14:47:02. In generating these data sets we have also developed several proprietary applications that identify the conditions described in real time or for historical analysis.27

While the ground layers of the disaster zone that led to the blaming of the usual culprit—a human agent—showed nothing but detritus, only rigorous research into the deeper, less perceptible strata of microscopic time revealed the actual material matrix. What emerges is an excavation that evaluates an inversion of the relation between time and space: while the common notion of archeology entails entering into concrete and thick space cautiously (as when employing technologies of surveying, probing, and classifying, for instance), in order to extract the material witness of a former era, a forensic archeology of finance, in contrast, probes into the imperceptible materiality of time to detect patterns and recover artifacts whose existence is derived from financial models and built on technologies of miniaturization, automation and infrastructure aligned with politics of securing, excluding, and enclosing. The story of the Flash Crash unfolds in the immensely extended realm of trading bandwidth in which what becomes apparent is a technopolitical regime of exclusion/inclusion that clearly prioritizes the algorithmic “aesthetic and mode of thought”28 of a tiny but superior elite of HFT traders, or, more precisely, HFT quants. In the attempt to illustrate the complex background of the impact, Nanex resorted to metaphor: “The SEC report uses an analogy of a game of hot-potato. We think it was more like a game of dodge-ball among firstgraders, with a few eighth-graders mixed in. When the eighth-graders got the ball, everyone cleared the deck out of panic and fear.”29

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The Liquidation of Liquidity Shit happens, don’t judge me. –– Suhail Malik30

With this in mind, it is not surprising that sociologists of finance, such as the London School of Economics’ Daniel Beunza, speak of the Flash Crash as a watershed event in the history of markets. The official narrative has up to the present day not seen fit to abandon the usual scapegoat of the human actor, presumably due to a reluctance to lay the blame upon technologies and infrastructures that have seen massive investment in recent years, including high-end quantitative engineering, fiber optic networks and data collocation systems, as well as the security infrastructure (the global real-time network architecture of financial markets).31 Yet the actual analysis of the Flash Crash produces a picture saturated with a violence whose perpetrators evidentially were neither human agents nor human-robot interactions (as the SEC report concluded) but massive robot-robot interactions materialized in trading quotes. In the era of algorithmic trading, distinguishing between quotes (bids or offers) and actual trades (when a bid and an offer are matched and deliver a price) is crucial because in comparison to quotes only a smaller amount of market action delivers trades. Nanex provides estimates that tell the story in full: more than 70 per cent of exchange trades are due to algorithms; but exchange quotes surpass this figure

Fig. 6. The left chart shows the growth of high frequency quoting. Fig. 7. The right chart shows the (lack of) growth of high frequency trading. Images ©Nanex, LLC. 97


to a degree that lends the term capitulation a new meaning—99.9 per cent.32 These figures prove that a bot almost always partners a transaction. Hence, algorithmic trading adds to market liquidity,33 as advocates of HFT never get tired of emphasizing.34 The irony, though, is that they are more than right on this point—in actual fact, algorithmic trading is the liquidity of the market. The obvious conclusion is that trading machines have taken over. High-level investment strategies are shifting from human decision-making to machine decision-making. Wilkins and Dragos argue that “[a]lgorithms are no longer tools, but they are active in analyzing economic data, translating it into relevant information and producing trading orders.”35 With algorithms calculating probability and deciding on entry and exit strategies as well as execution, an event (for instance bad news about the economy or political incidents, etc.) might easily stop their action and massively drain the market of liquidity, as the incident of Facebook’s IPO illustrates.36 Which human market-maker on one of the few remaining trading floors would dare to take competitive issue with bots acting in microseconds in the knowledge that “shit happens”––that bot quotes disappear in a flash or a bot strategy triggers a huge amount of other bots that reinforce the event? As a result of speed, the market forum is deserted in a flash (by human standards) when a Flash Crash (by algorithmic standards) is born. The evidence procured by Nanex’s exacting application of forensic data gathering and analyses to a degree seldom experienced in the context of financial markets reveals that trading technologies and procedures today shape markets beyond both the intellectual and political grasp of officially installed regulatory bodies.37 These facts point to a space of (trans)action which not only surpasses human trading and regulatory surveillance capabilities: the incompetence of governance—technologically as well as intellectually—also has obvious effects on the political leverage of policymakers and, in turn, of constituents. This is exacerbated by the fact that we are dealing with a field in which the eyewitness is invalidated because these processes are beyond the cognitive ability of the human brain.38 No-one is present at the scene, no-one observes what is happening. As one commentator put it, quoting the trader and author Sal Arnuk:

It’s not just that humans are less and less involved in trading; it’s that they can’t be involved. ‘By the time the ordinary investor sees a quote, it’s like looking at a star that burned out 50,000 years ago.’39 98


From an imaginary perspective of algorithms (or algos), humans live in a backward corner of the galaxy. From a human perspective, algos are out of direct reach and the remote control unit has been lost in the bedlam of deregulation, political stalemate, and the “irrational exuberance” of economic boom times.40 These shortcomings are not only detrimental in an economic sense. They stifle the potential for delivering judgment through the processes of political dissent, debate, and control (for recovering remote control, as it were), as they already relegate informed political and legal action to the level of non-transparency with regard to business procedures. The “liquidity” essential for policymaking—the availability of all information required for informed decision-making—is liquidated as well. The public forum introduced to deliver evidence after the fact has capitulated while forensic analysis capable of establishing collected evidence has seldom been heard.

Algorithmic Apperception All consciousness is a matter of threshold. — Gilles Deleuze41

The distinct narratives that were constructed around the Flash Crash and its investigations illustrate to what extent a forensics of financial markets already encounters difficulties in the phase of collecting evidentiary statements. Obtaining such data from the black boxes of proprietary trading firms is notoriously hard.42 Moreover, investigations are seldom brought before a legal forum, as they already meet insurmountable obstacles at the level of networked governance. A detailed examination of this case—an endeavor that would go beyond the constraints of this article—would show that this is not simply a technical question but is rooted in the interests of incorporated stakeholders.43 Adopting the viewpoint of ecological economics, Wilkins and Dragos address this issue the following way:

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At the bottom there are the basal species—slaves, serfs, proletarians, free labor, consumers, account holders, etc. These strata are preyed on by those further up the food chain—pension funds, insurance companies, mutual funds, retail banks; and they in turn feed larger financial institutions, such as hedge funds, brokers, investment banks, propriety trading HFTs, etc. Each financial actor exploits the inefficiencies of the prey species and in the process produces new inefficiencies, further increasing the information gradient. Within this complex ecology there is a gradual stabilisation of predator-prey relationships, but unlike an actual ecosystem, the financial system has a much higher rate of change, leading to more abrupt singular


events like flash-crashes evolving according to an accelerated rate of punctuated equilibria, with multiple black swans and mass extinctions.44

Algorithmic bots quote in microseconds. But a quote is just an offer to buy or sell, not a transaction. On the one hand, as mentioned above, quoting provides liquidity for transactions to happen (there is “always” a quote that matches your order and thus renders a transaction and a price). On the other hand, enormous amounts of quotes flood the matching machines of exchange places. Quotes are often placed without the intention to execute. In such instances, their objective is not to facilitate transaction, i.e. to trade; rather, as hidden searchlights in the “dark time” beyond human perception, they prey, for instance, on inefficiencies in the ways large block orders are executed by institutional investors that are rebalancing their huge portfolios.45 There is little doubt that such aggressive conduct would be considered a crime if we were to translate it to human behavior. But the latest breed of financial daemons seem to be accorded special allowances in this regard, as Jerry Adler has suggested:

Many [quotes] were never meant to be executed; they are there to test the market, to confuse or subvert competing algorithms, or to slow trading in a stock by clogging the system—a practice known as quote stuffing. It may even be a different stock, but one whose trades are handled on the same server. On the Internet, this is called a denial-of-service attack, and it’s a crime. Among quants, it’s considered at most bad manners.46

Doyne Farmer, co-director of the program on complexity economics at Oxford’s Institute for New Economic Thinking, notes that “under price-time priority auction there is a huge advantage to speed.”47 As perception and decision must also be in touch under micro-time conditions, in order to avoid acting purely at random (or rather to implement the random indeterminacy of contingencies), quants (financial lingo for the quantitative analysts that develop algorithms) have consequently been programming decision-making into financial algorithms. Farmer’s statement therefore leaves room for an interpretation that points to an incentive to implement hurdles for competitors and other insiders (such as regulators) alike. Keeping them in the dark about algorithmic processes not only results in unfair competitive advantage, but ultimately leads to a technological politics of segregation that amounts to the survival of the fittest quant.48 Felix Salmon, a financial blogger for Reuters comments: “inevitably, at some point in the future, significant losses will end up being borne by investors with no direct connection to the HFT world, which is so complex that its potential systemic repercussions are literally 100


unknowable.”49 It is safe to say, therefore, that such a development extends the predator-prey logic of capitalist market competition to a new order of magnitude, which incidentally makes a mockery of the judiciary. The crucial question is not that of the (in)equality of investment opportunities— to which the predator-prey metaphor would provide an answer. The more radical effects are “borne” by decision-making processes: we cannot make a decision on something that we do not perceive. Recognition in at least one of its many manifestations—be they visual, textual, technological, algorithmic or other—is conditional for apperception and decision-making. Michel Serres’ concept of the parasite/host seems more apt to delineate the new capitalist hegemony that becomes apparent in the interleaving of the black box of time fractions and the black box of proprietary technology, in which even the ideology of the “free market” is reduced to utter absurdity, with proprietary artificial sensing organs capable of penetrating into the dark kept undisclosed by their owners as if their possession were an inalienable right. Given the sheer influence of capitalist markets on society and the power of decision-making exercised by financial over public interests—a situation we have been witnessing over and over again in recent years—this not only applies to those individual investors that bots feed off directly (Salmon’s concern) but also to the trillions of people who are “invested” as resources in a parasitic system that is at the same time the host.

A Parasite Host This is truly the brave new world we are trying to regulate. –– Commodity Futures Trading Commission (CFTC) Commissioner Scott O’Malia50

The cross-fade on CNBC that slowly followed the turn of attention from the live footage of the Greek insurrection to the uncanny intrusion of increasingly volatile market data is not simply a random coincidence of events or an unfortunate accident. Rather, the Flash Crash constitutes the proof of concept of the power of quantitative decision-making circuits. HFT has not suffered in the aftermath of the collapse. Quite to the contrary, it gained a competitive advantage over other market participants. Furthermore, it became evident that it is obscure to those commissioned to regulate these practices. In other words, the regulators are not in a superior position. To the contrary, the decisive superiority of HFT corporations over political supervisory bodies was effectively confirmed by SEC representatives when they conceded that the 101


task of building and installing a data feed from scratch, which would allow them to monitor market activity, proved too complex. Thus the SEC had to resort to subscribing to the homegrown data collection system of an HFT company. “The wide gulf in technical prowess between the regulators and the regulated became painfully clear that year [of the Flash Crash], prompting the SEC to explore hiring an outside firm that could gather up-to-the-minute market feeds from the public exchanges.”51 Although this policy move was welcomed, the deal highlights a paradoxical politics that follows the logic of the lesser evil: the data provider commissioned by the SEC, Tradeworx, is one of the foremost HFT trading firms.52 Their CEO, Manoj Narang, is one of the industry’s most outspoken champions of data-driven decision-making.53 The game that is visually represented by changing numbers on TV screens all over the world today has in fact become invisible and beyond the knowledge even of insiders, as parasitic circuits use technology to conceal their profit opportunities. As Eric Hunsader remarks, “we allow people with faster connections to place and remove offers or bids faster than the speed of light can deliver that information to the other market participants.”54 Thus such practices derail the backbone of capitalist market logic, the allocation of resources based on supply and demand; in an ironic turn, Adam Smith’s “invisible hand” makes new sense. In the aftermath of the technologybased quantitative turn in finance, access to a data stream service alone is not the solution to reaching and staying on the same level as corporate HFT units. Technological development leaps forward and so does knowledge production. In this field of technopolitics, critics lament, regulators lag far behind even though steps have been taken to come up to par. In 2010, the SEC, which until then had mainly employed lawyers, started to hire more technically-oriented staff. But as one newly drafted specialist, economist Rick Bookmaster, concedes in a Washington Post article, the stakes are high and the gamble could well be lost due to the disadvantages of competition:

This job cannot be done by SEC lawyers or career government workers. […] We need to entice market professionals into government service who are on par with those in industry. […] The challenge […] is in recruiting undergraduate computer science wizards who might otherwise […] trade for hedge funds. We have to rely on public spiritedness as opposed to dollars to pull them here.55

This attests to the degree of perversity inherent in the financial system. 102


Having first been lured away with big salaries from the less affluent fields of science and production, engineers, mathematicians and physicists are subsequently subject to attempts to persuade them to help take action against the new hegemony. This attests to the overexposure of markets in society: a more twisted, if not false, version of public spiritedness would be hard to find. Although this boils down to drafting in renegades willing to “sacrifice” for a greater good, financial capitalism per se is not challenged. Such a “greater good” seems a far cry from, for example, the common good that would be effected by dissolving the debt bonds set up by markets and financialization. Hence, the complex, self-generating, self-replicating, self-referential registers of algorithms are part of a larger medium of information circulation. Geared towards exploiting miniscule inefficiencies (in financial terms, arbitrage), what has been termed an arms race to zero (the competitive battle to achieve the technological means of trading at speeds approaching the speed of light) is directed towards deeper levels of exploitation that connect these low latency (i.e. extremely rapid delay processing) machines to the slower computer networks of the financial infrastructure, and from there to wider social nets. In terms of the logistics inherent in HFT, distribution is paramount. Automation not only produces material items (bids and offers, in our example) but also manipulates the conditions of delivery by distorting the “field homogeneity” of the financial matching network. In other words, equal access to the matching machines of exchange places tends to be squashed where HFT rules. Automated spreading of quotes, for example, is not about benefitting from market liquidity by the generic matching process of supply and demand (bids and offers), which is reflected in prices. Rather, these schemes make the address by attracting and decoying technologically less privileged order frames and thus construct prices by distorting supply and demand. As producers of noise (the myriads of quotes that serve as liquidity traps), these parasites are only the first in a line, feeding off a host that is in turn a parasite exploiting arbitrage opportunities, and so on. “In the parasitic chain, the last to come tries to supplant his predecessor.”56 Battled out between corporate vested interests that can afford the escalating expenses, the transactions delivered by the infrastructure of trading engines create the impression of a virtual if not immaterial battlefield subject to only minor material restraints. Nevertheless, the pivotal factor in leveraging this speed war is geographical location. As mentioned before, the less space 103


between the proprietary trading and the exchange’s matching engines, the faster the process and consequently the bigger the competitive advantage for whoever is thus optimizing the logistics of HFT automation. Speed is of the essence. This is why with HFT the “information gradient” discussed by Wilkins and Dragos above is basically a speed gradient. “A trend that began with pigeons ends with subatomic particles, carrying data that is outdated almost before it arrives at its destination.”57 Even if there is an absolute limit to these developments, a divide has opened up, a gaping but invisible abyss: by exploiting timescales beyond the threshold of perception a new class of enclosures has found the means effectively to hide its machinations from slower competitors and public influence alike. In this field, Gottfried Wilhelm Leibniz’s notion of apperception has ceased to be a conception of conscious experience emerging from small, unconscious perceptions. The myriads of mathematically constructed small perceptions (of which these camera-engines are not at all “unconscious”) define a virtual field of machine apperception where those who do not command the latest cyborg infrastructure are captured or blocked. The financial market architecture with its proprietary algorithmic logistics has become a black box not only with regard to the parameters of official inquests, but also in terms of knowability much more generally. Thus, what the black box emits is not information but noise. This technowledge (to craft a term for the fusion of technology and knowledge beyond human apperception) exerts influence not only on much of the industry but of necessity cripples the public forum as a whole. We encounter a global system that acts not only in the dark but “in the dark of time.” While the past is a random figure, a deficient but nonetheless highly valued stochastic reservoir of historic data calibrated to model future probabilities, the future has turned into a becoming that eclipses the very notion of the moment. In the horizon of human experience, a violence has taken hold that is unnamable, as the flashes of its now have no opening. It only strikes collateral. When that instant leaks into a moment (the same moment yet a fraction after the micro-instant) and noise starts inflating into a bubble, the abyss of the market crash opens to a bottomless pit of “capitulation” on all fronts.58 Suddenly, the helpless idiom expressed on CNBC Live reveals its pathological purport: It manifests an assault on a defenseless public—capitulation is nothing else than the cry for bailout. The parasite takes host-age, blackmailing 104


with debt. Thus, the true derivative—that which is dependent on and at the same time fundamental for risk markets—is not a tradable risk product but the public as last resort. We are the ultimate hedge.

The Future Forum and the Double Figure of the Expert Witness Those who exercise power always arrange matters so as to give their tyranny the appearance of justice. — La Fontaine59

If it weren’t for the sheer mathematical abstraction, iconoclast “imagery” and legal non-disclosure arrangements that occlude these closed microsecond sessions from almost any investigation,60 let alone inquest, the violence exerted and the pains suffered would arguably not so easily slip under the cover of the hegemonic ideology of the free market as social institution. In the war over miniscule trajectories of future events (risk potentials) and inadequacies happening in moments that can only be noticed by bots (arbitrage opportunities), all those who are not invested in the latest breed of cyborg engines lack apperception and speech—and thus the means for conscious and experienced perception and expression. Furthermore, as we have learnt, microsecond manifestations escape inquest and litigation. One could make the case that a violence that violates below the threshold of political forums (including that of jurisdiction) undermines the economic as well as political frameworks set up to keep regimes of power in check. Bot coding is about a relational apperception constituted in an idiom of risk sensitivity, measure, and production that is not constructed to communicate with humans directly. The artificial life world of financial automation, unsurprisingly perhaps, is not about freedom and equality. It is about a struggle for competitive advantage, if not monopoly, battled out on a surface on which humans cannot tread. The live audio recording of the Flash Crash from one of the few remaining trading floors where human traders still serve as market makers delivers striking proof of the intermittent uninhabitability of the trading environment.61 It also resonates with the Nanex quotation cited above: “When the eighth-graders got the ball, everyone cleared the deck out of panic and fear.” Despite the near-elimination of the eyewitness from the scene (who as market maker is an expert witness at the same time), the paradigmatic shift to electronic exchange (in most markets) gives rise to the cognate notion of a subtly different kind of witness, one who would be capable of challenging this 105


calculative rape: the traitor, the informant, the renegade who transgresses the unwritten laws of complicity and secrecy. By providing material from undisclosed or classified sources on a broad range of subjects this figure of the whistleblower has in recent years turned the principal witness for the public, procuring otherwise unavailable evidence of violence. In the financial context, this particular manifestation of the witness—who does not testify on the basis of real presence—becomes the medium of forensics by a logistics of redirection (e.g. the leaking of confidential material that cannot—must not— speak for itself). This witness is not a plain informant. The financial renegade who presents objects as subjects-of-debate is an expert witness as much as the scientific analyst ally who subsequently (re)constructs the forensic narrative by composing the facts. The story of the Flash Crash offers an example of paradigmatic and at the same time ambiguous significance for the possible production of future forums, depicting in all its complexity the horizon of an exposed and discontinuous self-regulating force against the boundless utopia of a self-regulating market. This Janus-faced configuration of the doubled expert witness might indeed be a figure that resonates with the complex situations encountered by forensics, in which “only the criminal can solve the crime.”62 The notion of the expert witness as one who was originally involved in the event under investigation seems to highlight the Achilles’ heel of the particular mode of calculative oppression that works through HFT as part of the paradigm of the neoliberal market. The intricate problem of the resolution of the Flash Crash demonstrates the ambiguity contained: the participation of an insider or even (alleged) perpetrator is required in order to unearth evidential data that was buried in fractions of a second. This is reflected in the SEC’s strategy of employing figures with first-hand experience of and expertise in the activities they want to uncover: Michael Fioribello, 38, might know more about derivatives than anyone else at the agency. Before going to the SEC, he worked at AIG for nearly a decade, helping to manage the company’s derivatives operation […]. [He] has provided colleagues with insights into how financial players structure derivatives to conceal something that could be illegal. “[…] There can be bells and whistles done to reduce transparency or otherwise circumvent federal securities laws.”63 In addition to hiring renegades, a further ambiguous but vital objective is to accelerate technological advancement in order to come up to par with perpetually evolving industry standards.64 In contrast to espionage 106


or surveillance, exploring and surveying an as-yet-unknown environment bears a similarity to cybernetic reconnaissance. The military analogy reveals a problematic approach in the regulatory body’s perpetual chasing after a glimpse behind an ever-moving frontline, as the afore-mentioned subscription to the data feed of HFT’s leading proponent Tradeworx by the SEC illustrates. Finally, another ambiguity suggests itself: the only way out for policymakers, lawyers, activists, and the public in general—the only route forward to the public forum and away from the dominance of boundless and unregulated (i.e. self-regulating) markets—entails, at least for the time being, actively encouraging and supporting the disclosure of proprietary financial data to the public—a criminal offense, except where the source is the owner. Only renegade solidarity aimed against the pathological deformation of cognoscibility in this vital field of contemporary power relations seems capable of delivering the relevant information that is fundamental, to paraphrase the quotation from Leibniz which opened this paper, for apperceiving the “mighty roar” of financial markets. In all its ambiguity, reperformative forensic analysis, performed by the double figure of the cyborg expert witness, is a productive force in facilitating a body of accurate performative translations that incorporate the nucleus of the future forum. Instead of resorting to simple answers (the human factor) it enters directly into complex power relations. In concert with a specific public (in neoliberal lingo, stakeholders), this insurrection against an increasing hegemony of algorithmic daemon powers may facilitate leverage (as ample proof alone is apparently not sufficient) to resurrect both the legal forum of corporate litigation and the political forum of legislation. Renegade solidarity, however, exceeds the finance-state complex. It invigorates the fundamental principles of democracy by directly addressing the public for the common weal.65 The future forum becomes apparent in manifestations and revolts that counteract the neoliberal zeal to redirect the bottomless volatilities of crises from shareholders to society by absorbing the public into competing stakeholder groups. Thus, the future forum in excess of calculation exceeds demand for justice.66 It will act to dismantle parasitic proprietary enclosures, foster decision-making on and in a resurrected agora ofcommunality and give voice to those whose inalienable rights are trulyexploited.

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Notes 1 Gottfried Wilhelm Leibniz, correspondence with Arnould, October 9, 1687, in Philosophical Writings, trans. M. Morris (London: J.M. Dent & Sons, 1934), 85. 2 Eric Hunsader, “Coexisting without Colocating,” HFT Review (Hunsader’s blog), October 18, 2011, http://www.hftreview.com/pg/blog/erichunsader/read/12033/ coexisting-without-colocating. 3 The Wall Street Journal published a more detailed summary one day after the slump on May 7, 2010. See Lauricella and McKay, “Dow Takes a Harrowing 1,014.14-Point Trip,” The Wall Street Journal, May 7, 2010. 4 Gary Dorsch, “The Forgotten ‘Flash Crash’––One-year later,” Global Money Trends newsletter, May 2, 2011, http://www.sirchartsalot.com/article.php?id=152. 5 See “FLASH CRASH May 6, 2010 CNBC,” http://www.youtube.com/watch?annotation_id=a nnotation_191025&feature=iv&src_vid=7UhKOs3dYk4&v=IJae0zw0iyU, accessed Sept. 2013. 6 Wikipedia summarizes “financialization” succinctly as “a term that describes an economic system or process that attempts to reduce all value that is exchanged (whether tangible, intangible, future or present promises, etc.) either into a financial instrument or a derivative of a financial instrument.” http://en.wikipedia.org/wiki/Financialization, accessed September 2013. 7 The website of the Linux-based operating system Arch has a short and comprehensive definition: “A daemon is a program that runs as a ‘background’ process (without a terminal or user interface), commonly waiting for events to occur and offering services. A good example is a web server that waits for a request to deliver a page […]. While these are full featured applications, there are daemons whose work is not that visible.” https://wiki.archlinux.org/ index.php/Daemons, accessed September 2013. 8 Donald Mackenzie, An Engine, Not a Camera (Cambridge: MIT Press, 2006), 12. 9 Javier E. David, “ICE to Buy NYSE for $8.2 Billion, Ending Era of Independence,” CNBC, December 20, 2012, http://www.cnbc.com/id/100330589. 10 “The data center of NYSE Euronext, the international conglomerate that includes the New York Stock Exchange, is in a building in suburban Mahwah, New Jersey, 27 miles from Wall Street.” Jerry Adler, “Raging Bulls: How Wall Street Got Addicted to Light-Speed Trading,” Wired, August 3, 2012. 11 Coincidentally, Automated Trading Desk LLC pioneered automated HFT in the wake of the 1987 market crash. They state on their webpage: “Welcome to the future of automated trading. […] A world where only those that can move fast enough to predict market shifts are able to compete at the highest level.” http://www.atdesk.com, last accessed October 2013. 12 Elie Ayache, The Blank Swan: The End of Probability (Chichester: Wiley, 2010), 421. 13 “Findings regarding the market events of May 6, 2010.” Reports of the staffs of the CFTC and SEC to the joint advisory committee on emerging regulatory issues, September 30, 2010, http://www.sec.gov/news/studies/2010/marketevents-report.pdf. For two examples of criticism concerning the report’s findings, see Tyler Durden (alias), “SEC Releases Final Flash Crash Report—Waddell And Reed Blamed As Selling Catalyst,” ZeroHedge, October 1, 2010, http://www.zerohedge.com/article/sec-releases-final-flash-crash-report-waddell-andreed-blamed-selling-catalyst; and for harsh criticism even before the official presentation of the report, Christopher Steiner, “Searching For Flash Crash Culprit, The SEC Fingers Wrong Man,” Forbes, September 9, 2010, 108


14 Nanex’ final statement, titled “Flash Crash Mystery Solved,” March 26, 2013, can be found with links to its research at http://www.nanex.net/aqck2/4150.html, last accessed September 2013. 15 A statement by Nanex, however, points to a different conclusion: “The email exchange [with one of the co-authors of the official report] was very disturbing because the explanation was basically a new and bizarre definition of liquidity […] [that] states that if a High Frequency Trader (HFT) aggressively buys contracts by executing against existing orders posted by a seller, then the HFT could be classified as a liquidity provider, and the seller classified as a liquidity taker. […] it is exactly opposite of the industry accepted understanding of liquidity, not to mention, basic common sense. It's like saying up is down and down is up. It seems they were trying to fit the data to match a foregone conclusion. […] To base any future regulations on either of these papers would be ill-advised and reckless. Someone needs to do some serious house cleaning at the SEC and CFTC.” “The SEX Redefines Liquidity (when it’s convenient),” Nanex Research, April 12, 2012, http://www.nanex.net/aqck/2977.html. 16 “Analysis of the ‘Flash Crash’,” Nanex, June 18, 2010 (since updated), http://www.nanex. net/20100506/FlashCrashAnalysis_Intro.html. 17 Transcript of Adam Taggart, “Eric Hunsader: Investors Need to Realize the Machines Have Taken Over. The Blink of an eye is a lifetime for HFT algos,” Peak Prosperity, October 6, 2012, http://www.peakprosperity.com/podcast/79804/nanex-investors-realize-machines-taken-over. 18 Ibid. 19 Ibid. 20 “U.S. ‘flash crash’ report ignores research – Nanex,” Sify Finance, October 5, 2010, http://www.sify.com/finance/u-s-flash-crash-report-ignores-research-nanex-news-insurancekkfiEjeciij.html. 21 Andrew G. Haldane and Benjamin Nelson, “Tails of the unexpected,” paper presented at “The Credit Crisis Five Years On: Unpacking the Crisis,” conference held at the University of Edinburgh Business School, June 8–9, 2012, http://www.bankofengland.co.uk/publications/ Documents/speeches/2012/speech582.pdf, at 20. 22 “Analysis of the ‘Flash Crash’.” 23 Andy Mills, “Fast Cash Dash Flash Crash Clash: Hear and See Some Super Trading,” Radiolab, February 6, 2013, http://www.radiolab.org/ story/267356-fast-cash-flash-crash-mad-dash-clash/. 24 David Lauer in Marijke Meerman, dir., “The Wall Street Code,” documentary, 51 min, http://www.youtube.com/watch?v=kFQJNeQDDHA, at 46:00–46:48, accessed November 2013. 25 See, for example, “May 6th 2010 Flash Crash Analysis: Continuing Developments Sell Algo Trades,” Nanex, October 8, 2010 (since updated), http://www.nanex.net/FlashCrashFinal/ FlashCrashAnalysis_WR_Update.html. 26 See the “About” page on Nanex’s website, June 18, 2010, http://www.nanex. net/20100506/FlashCrashAnalysis_About.html. 27 Luciana Parisi, Contagious Architecture: Computation, Aesthetics, and Space (Cambridge: MIT Press, 2013), x. Parisi traces the “logic of computation and its ingression into culture” (ix) in architectural and interaction design. Although she does not respond directly to finance, her characterization of digital algorithms is also applicable to financial algorithms, insofar as she describes them as “performing entities: actualities that select, evaluate, transform, 109


and produce data” (ix) which “are not simply representations of data, but are occasions of experience insofar as they prehend information in their own way” (xii–xiii). 28 “May 6th 2010 Flash Crash Analysis: Final Conclusion,” Nanex, October 14, 2010, http:// www.nanex.net/FlashCrashFinal/FlashCrashAnalysis_Theory.html. 29 This quip was intended to illustrate the state of contemporary art. Suhail Malik, lecture given at the California Institute of the Arts (CalArts), April 2, 2013, http://vimeo.com/71058588 (36:33-36:36). The relationship between contemporary art and finance, and their underlying dependence on indeterminacy rather than uncertainty, are addressed in a forthcoming text by the author. 30 For accounts of the background of the Flash Crash and algorithmic trading respectively, see Marije Meerman, dir., Money & Speed: Inside the Black Box (Netherlands, 2013), 49 mins., http://www.youtube.com/watch?v=H4BzsevJthw; and The Wall Street Code (Netherlands, 2013), 50 mins., http://www.youtube.com/watch?v=kFQJNeQDDHA, both last accessed November 2013. 31 “The Rise and Fall of the HFT Machines,” Nanex Research, http://www.nanex.net/ aqck/2804.HTML, accessed September 2013. 32 Liquidity is essential for price discovery. It constitutes trading opportunity at an asked price (with minor variance) because of the availability of a buyer or seller respectively. Thus, it implies a constant exchange of information and trades. Loss of liquidity implies unacceptable prices that could ultimately lead to a crash. 33 See, for example, this MIT Technology Review feature story on the quant entrepreneur Manoj Narang: Bryant Urstadt, “Trading Shares in Milliseconds,” MIT Technology Review, December 21, 2009, http://www.technologyreview.com/featuredstory/416805/ trading-shares-in-milliseconds. 34 Inigo Wikins and Bogdan Dragos, “Destructive Destruction? An Ecological Study of High Frequency Trading,” Mute, January 22, 2013, http://www.metamute.org/editorial/articles/ destructive-destruction-ecological-study-high-frequency-trading#. 35 Tyler Durden, “Nanex: Investors Need to Realize the Machines have Taken Over,” October 6, 2012, Zero Hedge, http://www.zerohedge.com/news/2012-10-06/ guest-post-nanex-investors-need-realize-machines-have-taken-over. 36 See more in “U.S. ‘flash crash’ report ignores research.” 37 See Parisi, Contagious Architecture. 38 Adler, “Raging Bulls.” 39 The expression “irrational exuberance” was used by the former Federal Reserve Board Chairman Alan Greenspan to describe the Dot Com boom and its possibly detrimental results. “Remarks by Chairman Alan Greenspan,” Annual Dinner and Francis Boyer Lecture of The American Enterprise Institute for Public Policy Research, Washington, D.C., December 5, 1996, http://www.federalreserve.gov/boarddocs/speeches/1996/19961205.htm, last accessed September 2013. 40 Gilles Deleuze, The Fold: Leibniz and the Baroque, trans. Tom Conley (Minneapolis: University of Minnesota Press, 1993), 64. 41 This problem is often the basis of complaints voiced by sociologists of finance like Donald Mackenzie and others. See also note 60 42 As regards the Flash Crash, Nanex’s final statement on the case ends with the following remark: “The HFT lobby will vehemently deny any blame for causing the flash crash and will 110


43 use a number of straw man arguments, eventually enlisting the SEC final flash crash report which named Waddell & Reed as the cause (W&R). [...] This is a very complex subject and lobbyists will use that to bamboozle you.” Nanex, “Flash Crash Mystery Solved.” 44 Wilkins and Dragos, “Destructive Destruction?” 45 By trading ahead of index fund rebalancing algorithmic program trading exploits institutional investors who split big orders into smaller trades to manage risk. Thus, algo traders parasitically prey upon investors’ returns. For descriptions of the diverse strategies used by algo traders, see Scott Pattersen, Dark Pools (New York: Crown Business, 2012). 46 Adler, “Raging Bulls.” 47 J. Doyne Farmer, “The impact of computer based training on systemic risk,” 11. Paper presented at the London School of Economics, January 11, 2013, http://www.lse.ac.uk/fmg/ events/conferences/Systemic-Risk-Centre/Foresight-Report_110113/Papers-and-slides/DoyneFarmer.pdf. 48 As mentioned above, financial regulation is to a great extent conducted by the industry itself. 49 See Will Knight, “Watch High-Speed Trading Bots Go Berserk,” August 7, 2012, http:// www.technologyreview.com/view/428756/watch-high-speed-trading-bots-go-berserk. 50 Scott O’Malia, quoted in Kambiz Foroohar, “Trading Pennies Into $7 Billion Drives HighFrequency’s Cowboys,” Bloomberg, October 6, 2010, http://www.bloomberg.com/news/201010-06/trading-pennies-into-7-billion-profit-drives-high-frequency-s-new-cowboys.html. 51 Dina El Boghdady, “SEC going high-tech with real-time trade data,” The Washington Post, Dec. 24, 2012. 52 See http://www.tradeworx.com/. 53 See Urstadt, “Trading Shares in Milliseconds.” 54 Laurence Knight, “A dark magic: The rise of the robot traders,” BBC News, July 8, 2013, http://www.bbc.co.uk/news/business-23095938. 55 Zachary A. Goldfarb, “SEC is hiring more experts to assess complex financial systems,” The Washington Post, June 15, 2010. 56 Michel Serres, The Parasite (Minneapolis: University of Minnesota Press, 2007), 4. 57 Adler, “Raging Bulls.” 58 Noise––as the opposite of information––was first elucidated as a theory of pricing by Fischer Black in “Noise,” paper given at the Forty-Fourth Annual Meeting of the America Finance Association, New York, December 20–30, 1985, published in Journal of Finance, vol. 41, issue 3 (July 1986): 529–543. 59 La Fontaine (1668). 60 Andrew Lo, the Director of the Laboratory for Financial Engineering at the MIT Sloan School of Management, addressed this problem at a Conference on Systemic Risk and Data Issues in 2011, referring to a study he conducted on a “quant meltdown” in 2007: “we felt a bit odd about this because […] you know for a fact that there are people out there that know what actually happened but they’re not talking. So in fact, this entire paper could be science fiction or it could be dead on, we have no idea. To this day we don’t know because nobody is talking. They are not allowed to talk because that would disadvantage their shareholders.” Video available at http://www.youtube.com/watch?v=nuDIoBeNwD0 (see 13:20-13:55). 61 In the thick of the hostile moments of the Flash Crash, Ben Lichtenstein, the “voice of the CME S&P futures pit” exclaimed (to take a single example): “This will blow people out in a big way like you won’t believe,” Traders Audio, “May 6 2010 Stock Market Crash,” May 12, 2010, 111


http://www.youtube.com/watch?v=1mC4tu1NhUA. 62 This is the subtitle of the chapter on Forensic Architecture in Eyal Weizman, The Least of All Possible Evils: Humanitarian Violence from Arendt to Gaza (London: Verso, 2012). 63 Goldfarb, “SEC is hiring more experts.” 64 Ibid. 65 Its precarious and vulnerable state in informational capitalism might to some extent be conditioned by insufficient coalitions against the global investor/shareholder hegemony—a crucial counterbalance in order to curtail power regimes, which, for instance, trade unions exerted in industrial capitalism. 66 In the light of automated algorithmic practices in which the future is exploited by the generation of microsecond arbitrage opportunities, the future forum will be a counter-future forum where agency is recuperated from the capitalist enclosure of a future-at-present— among many other things by making use of (instead of being used by) algorithmic processes.

Text contribution published in: Forensis. The Architecture of Public Truth. Forensic Architecture (eds.), Sternberg Press, Berlin, 2014. With contributions by Lawrence Abu Hamdan, Nabil Ahmed, Maayan Amir, Hisham Ashkar & Emily Dische-Becker, Ryan Bishop, Jacob Burns, Howard Caygill, Gabriel Cuéllar, Eitan Diamond, DAAR (Decolonizing Architecture Art Residency), Anselm Franke, Grupa Spomenik, Ayesha Hameed, Charles Heller, Helene Kazan, Thomas Keenan, Steffen Krämer, Adrian Lahoud, Armin Linke, Jonathan Littell, Modelling Kivalina, Model Court, Working Group Four Faces of Omarska, Gerald Nestler, Godofredo Pereira, Nicola Perugini, Alessandro Petti, Lorenzo Pezzani, Cesare P. Romano, Susan Schuppli, Francesco Sebregondi, Michael Sfard, Shela Sheikh, SITU Research, Caroline Sturdy Colls, Territorial Agency (John Palmesino & Ann Sofi Ronnskog), Paulo Tavares, Füsun Türetken, Robert Jan van Pelt, Srdjan Jovanovic Weiss/ NAO, Eyal Weizman, Ines Weizman, Chris Woods.

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HEDGE AVANTGARDE

Renegades, Traitors, Educators
 Inquiries into an Aesthetics of Resolution Artistic research | Solo show Kunstraum Bernsteiner, Vienna, May 5 - June 13, 2015.

HEGDE AVANTGARDE disperses the time-based flow of the cinematic documentary into a spatial arrangement of material artefacts through which visitors move in time and space. Video footage, images, graphics, voice, performance, objects and texts provide the material for a query that resonates around the issue as to whether the conditions of perception and agency in the era of black boxes are being modified – if not disintegrated – into myriad derivative devices that are custom-built to exclude (capitalize) and at the same time internalize (socialize) underlying human assets. This begs the question whether an aesthetics of “resolution” could serve as a toolbox to counter proprietary schemes by employing the full purport of the term. The arbitrary, marginal but at the same time insurgent figure of the renegade – a traitor inside systems and an educator beyond their confines – is introduced as potential pharmakon against the ruptures that transform knowledge into capital, and vision into social blindness. Among other materials, the exhibition features video works with Haim Bodek (financial expert and whistleblower) and Randy Martin (dancer and theorist); a mathematically-derived performance by Paul Wilmott (mathematician and expert in quantitative finance) and 3 performers that targets the spectators, financialized sport equipment; and educational footage about a financial transaction, which generated $600,000 profit; contracts drawn up for the 1% and the 99%, respectively, as well as an official whistleblower form.

All photos of HEDGE AVANTGARDE © Wolfgnag Thaler 114


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THE VOLATILITY PARADIGM. Two-piece sculpture, 2015 LA POVERA NELLA SUA CASA. Futurismo Nuovo. Social contracts for the 1% and the 99% respectively. ‘Gestell’: contingent claim contract (derivatives contract), job application, transparent foils, cellotape, glass fiber bars, aluminium pipes, rope, corian, pedestal made of books, copies.

Following pages: LEVERAGE GYM. Device for Fat Tail Performances. Derivative sport equipment for non-directional fluctuations. Volatility Smile: “There was no promise in it, there was nothing in it.” Volatility Skew: “We were not looking at this as some kind of future.” Skateboard, laser engraving, varnish. 116


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Previous pages: RESOLUTIONIZATIONS. self-organized | self-regulated | mythological, 2015 600K TRADE. Video, 2015. FORM TCR. TIP, COMPLAINT OR REFERRAL. Adaptation of the official SEC-whistleblower form, print, 2015.

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This page: WE TAKE YOU EVERYWHERE, BUT GET YOU NOWHERE Paul Wilmott and Gerald Nestler, blackboard, 2015.

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THE NEW DERIVATIVE ORDER. REGISTER, 2014 The work delineates the socio-genetic register of a new and allembracing “being”. Originally a native of the market, this “lifeform” leads a nomadic existence roaming and colonizing other habitats. Underlying its math-lingual chemistry is the archival net of its molecular material, a tapestry assembling historic and contemporary attempts to rationalize the situational and contingent economy of the future. The algorithmic parasite embraces an aesthetics of code beyond human perception, yearning to bear the avatar of singularity bred from financial technowledge. A volatile oracle of automated, instantaneous constructions, this black box feeds on the present and blots out the past. Yet, with a host of ineradicable particles of recollection, critique and resistance inscribed at its core, the new order contains the buried potentials for radical engagement against the depletion of common notions and interests, and thus against the exploitative biopolitics of a derivative future-at-present. 126


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Portraits of a Philosophy Series: CONTINGENT CLAIM I. Elie Ayache. CONTINGENT ETHICS II. Haim Bodek. CONTINGENT OPTIONALITY III. Randy Martin. https://vimeo.com/channels/aor Video stills: CONTINGENT ETHICS. Portrait of a Philosophy II – Haim Bodek. Aesthetics of resolution: a poiesis of technological ethics. Sound: Szely. extra camera: Sylvia Eckermann, Mathias Kessler. 1-channel video, 44:46 min. 2014-15. CONTINGENT OPTIONALITY. Portrait of a Philosophy III – Randy Martin. Aesthetics of resolution: thinking the derivative as shared risk potentiality. 1-channel video, 27:45 min., Sound: Szely. 2014-15. volatile relations among natural, social, corporate and sentient bodies.

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THE NEW DERIVATIVE ORDER. Register. Pigment print, framed, 125 x 269 cm, 2014. CONTINGENT ETHICS. Portrait of a Philosophy II – Haim Bodek. Aesthetics of resolution: a poiesis of turning technology into ethics. 1-channel video, 44:46 min.. Sound: Szely. Extra camera: Sylvia Eckermann, Mathias Kessler. 2014-15. CONTINGENT OPTIONALITY. Portrait of a Philosophy III – Randy Martin. Aesthetics of resolution: thinking the derivative as shared risk potentiality. 1-channel video, 27:45 min. Sound: Szely. 2014-15 ICONIC HEDGE. Food and Beverage, Risk and Reward Books, Whiskey, Rum, transparent foil, 22 x 30 cm, 2015. THE VOLATILITY PARADIGM. Two-piece sculpture, 2015 comprising: LA POVERA NELLA SUA CASA. Futurismo Nuovo. Social contracts for the 1% and the 99% respectively. ‘Gestell’: contingent claim contract (derivatives contract), job application, transparent foils, cellotape, glass fiber bars, aluminium pipes, rope, corian, pedestal made of books, copies. LEVERAGE GYM. Device for Fat Tail Performances. Derivative gym equipment for non-directional fluctuations. Volatility Smile: “There was no promise in it, there was nothing in it.” Volatility Skew: “We were not looking at this as some kind of future.” Skateboard, laser engraving, varnish. 130


FORM TCR. TIP, COMPLAINT OR REFERRAL. Adaptation of the official SEC-whistleblower form. Digitex print, 216 x 330 cm, 2015. RESOLUTIONIZATIONS. self-organized | self-regulated | mythological. Photos of the Hedge fund Sang Lucci / Flash Crash visualizations (courtesy Nanex LLC). 4 prints, 30 x 50 cm, 2015 600K TRADE Video, Hedgefonds Sang Lucci, New York, 2015. WE TAKE YOU EVERYWHERE, BUT GET YOU NOWHERE Lecture performance. Derivations of financial mathematics & volatile sequences of movement in a crowded space. With Paul Wilmott and the performers Andrea Gunnlaugsdottir, Nizan Kalina, Evandro Pedroni. Blackboard, chalk, mathematical formulas, text, 2015. RENEGADES TRAITORS EDUCATORS. Text work on wall, adhesive letters, 50 x 900 cm, 2015.

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De Sign Your Self-Colonisation as Human Resource Micro Brand and Consume Your Awareness You are Not as Rare as Reality

Grafik / Textarbeit aus der Serie: Derivative Bond Emissions, No. 6, Issue for post-individual subjectivities Klebebuchstaben, 80 x 210 cm. Auflage 3/1. 2009.

Derivative Bond Emissions No.6, Issue for post-individual subjectivities. Text work, 2009

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Countering Capitulation. Exhibition views: “I stood before the source...” 2016. Curated by Letters & Handshakes. Blackwood Gallery, University of Toronto Mississauga contemporary art centre. Photo credit: Sam Holmes.

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Exhibition views: “The Promise of Total Automation.” Curated by Anne Faucheret. Kunsthalle Wien, Vienna, 2016. Hot Potato. Neon text work. 2013. The New Derivative Order. Algo Script Autofest. Text work. Adhesive letters on floor. 2010/2016. Photo credit: Jorit Aust.

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“A-Symmetry - Algorithmic Finance and the Dark Side of the Efficient Market.� An essay published in: Risk Equipment. Technosphere Magazine, #9, April 2017, a magazine of the Haus der Kulturen der Welt, Berlin. 137


Gerald Nestler 2015

RESOLUTIONIZATIONS. self-organized

GERALD NESTLER

A-Symmetry Algorithmic Finance and the Dark Side of the Efficient Market Financial market actors manage their risks through what are seen as efficient trading schemas, often while creating new inefficiencies and systemic risks in turn. Starting from the Flash Crash of 2010, artist and theorist Gerald Nestler investigates the problem of information asymmetries in high-frequency trading, demonstrating the need for a new aesthetics of resolution.

I NT R O DUCT I ON. CA P I T U LAT I O N AUT O M AT I Q UE. R ES O LUTI O N A N D DI S S O LUT I O N B EY O ND V I S I B I L I TY .............

99 per cent of finance doesn’t know how the stock market works. —Haim Bodek

On May 6, 2010, bots played havoc among financial market centers causing mayhem in less than five minutes. The Flash Crash, as it has become known, went viral as the biggest one-day decline in the history of financial markets. During the rapid slump, the Dow Jones Industrial Average plunged by about 1,000 points – nine per cent of its total value – only to recover most of its losses in the next twenty minutes. CNBC Live, initially covering the political stalemate of the Greek austerity crisis and the ensuing protests in the streets of Athens, shifted immediately to the trading floor of the New York stock exchange: “What the heck is going on down there? […] I don’t

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know […] this is fear, this is capitulation.” 1

1 Quoted from (https://www.youtube.com /watch?v=Bnc9jR2WDgo).

The Flash Crash constitutes a watershed event in financial markets. Algorithmic trading had taken center-stage. Human traders lost their bearings in the

event and a live broadcast for professional traders commented: “This will blow people out in a big way like you won’t believe.” 2 Technically, capitulation means panic selling due to pessimism and resignation. But apart from financial losses, the term “capitulation” implies a liquidation of visibility in the sense of unmediated human perception and collective resolution. Hence, the broadcast

highlighted the relevance of political economy today. What, one may ask, informs such potent noise without leaving much of a trace? And how does it affect us?

2 Ben Lichtenstein, the “voice of the CME S&P futures pit,” Traders Audio, “May 6, 2010 Stock Market Crash,” May 12, 2010 The original source is no longer available online but the quote can be found here: Gerald Nestler, COUNTERING CAPITULATION. From Automated Participation to Renegade Solidarity, single channel video, 11:20 min., 2013-14 [from 10:36] (https://vimeo.com /channels/aor).

The debate that ensued in the aftermath of this ferocious event pitted for the first time in financial market history those who upheld the generally accepted opinion, which blames human error, against a dissenting opinion, which held algorithmic trading and automation accountable. As collateral, high-frequency trading (HFT) came to public attention. Journalists and bloggers picked up on the topic and eventually it appeared as if the financial markets were at the mercy of smart quants and developers who tuned hardware, tweaked infrastructure, and coded algorithms to drive these automated speculations. 3 The HFT expert and whistleblower Haim Bodek speaks of “avalanching” to describe the real-time violence with which HFT orders

impact markets – a massive melt down that would dwarf the Flash Crash is an event with a probability far above zero.

3 To list all the blog entries, articles, and publications on this topic would go beyond the scope of this essay (the Wikipedia entry “2010 Flash Crash” lists some of the more noted contributions), I only mention two books, which became bestsellers, Scott Patterson, Dark Pools: The Rise of A. I. Trading Machines and the Looming Threat to Wall Street. New York: Crown Publishing Group, 2012; and Michael Lewis, Flash Boys. New York: Norton & Company, 2014.

Stills from CNBS News, May 6, 2010. Image: CNBC.

HFT achieved unparalleled market shares (up to 80 percent of US stock transactions in 2012) due to the high trading volume necessary to deliver profits (see below). However, the impact of HFT

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as the characteristic feature of contemporary finance is often exaggerated. Revenues are relatively small when compared to the total market. 4 More recently,

HFT market share has dropped due to hypercompetition and the infrastructure costs that accrue in the effort to stay competitive in markets with diminishing bid-ask spreads (a result of HFT competition). 5 However, automation and algorithms have, apart from exploiting “predictive

structures,” 6 ushered in a new trading paradigm: the direct interception into the pricing mechanisms relying on speed (or, more technically, low latency).

In order to examine the consequences of HFT I resort to the term “resolution” and its relation to immediacy as visibility.

What are the most consequential implications of quantitative trading in a hypercompetitive environment? The diverging

4 Revenues in the sector were at 7.2 billion US dollars in 2009 but diminished to 1.3 billion in 2014.

5 See, for example the Deutsche Bank Report High Frequency Trading: Reaching its limits (https://www.dbresearch.com /PROD/DBR_INTERNET_ENPROD/PROD0000000000406105/Highfrequency_trading%3A_Reaching_the_limits.pdf).

6 Donald MacKenzie, “A material political economy: Automated Trading Desk and price prediction in highfrequency trading,” Social Studies of Science (article first published online: December 6, 2016 DOI: https://doi.org/10.1177/0306312716676900), p. 6.

interpretations of the Flash Crash 2010 can help us to delineate the issue of HFT and its regulation as a starting point to tackle some of the artificial

unknowns that shape this practice today. My interest is not in resolving which of the two positions holds true – both the official investigation by the joint SEC/CFTC 7 report and the analysis by the financial data provider Nanex are controversial and received comprehensible criticism. Instead, I will focus on the

“visibility conditions” (how they relate to immediacy) and the resolution philosophy that informs them.

7 The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC)

THE F L A SH CRA SH . RESOLUTION IN M ICR O T IM E .............

A distributed system is one in which the failure of a computer you didn’t even know existed can render your own computer unusable. —Leslie Lampor t 8

The investigation of the Flash Crash resulted in a joint official

8 Leslie Lamport in: My Writings Distribution 75. Email message sent to a DEC SRC bulletin board at 12:23:29 PDT, May 28, 1987 http://lamport.azurewebsites.net/pubs/distributedsystem.txt

report by the US-regulatory authorities, the SEC and the CFTC. 9 It was published a few months after the incident and put the 9 blame on human trading. A contrasting analysis of the event conducted by a small financial data provider claimed that the crash was in fact caused by orders executed automatically by algorithms. Nanex LLC, 10 a financial

service provider, records trading data and was therefore in the position to examine the event on their own account.

The SEC and CFTC based their official report on the material made available by exchanges and market participants, which usually has a resolution of one-minute trading intervals. This dataset would have been adequate to scrutinize trading

“Findings Regarding the Market Events of May 6, 2010: Reports of the staffs of the CFTC and SEC to the joint advisory committee on emerging regulatory issues,” September 30, 2010 (http://www.sec.gov/news/studies /2010/marketevents-report.pdf).

10 Nanex is a market research firm that supplies real-time data feeds of trades and quotes for US stock, option and futures exchanges. Their website states, “[W]e have archived this data since 2004 and have created and used numerous tools to help us sift through the enormous dataset: approximately 2.5 trillion quotes and trades as of June 2010.”

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activities before the ascent of HFT. But today, “in the blink of an eye, the market moves what used to take humans thirty minutes.” 11 The quote by the founder

of Nanex illustrates the sheer pointlessness of scrutinizing market activity above the transaction frequency of the fastest traders. Their professional experience with market data allowed Nanex to intuitively escape the trap of the oneminute resolution, which in the case of HFT conceals more

than it reveals. 12 They realized that conventional market data records did not show any material traces of what might

have initiated the rupture, which tore the intricate fabric of market prices. They decided to delve deeper into the “abyss” of micro-time and look at fractions of a second. Step-by-step,

they enhanced the temporal resolution and eventually, at a dizzying depth of time, the material traces of the Flash Crash

11 Transcript of Adam Taggart, “Eric Hunsader: Investors Need to Realize the Machines Have Taken Over. The blink of an eye is a lifetime for HFT algos,” Peak Prosperity, October 6, 2012 (http://www.peakprosperity.com/podcast /79804/nanex-investors-realize-machines-taken-over).

12 Another example is the crash of Knight Capital in 2010. Nanex, who analyzed the incident, remark: “If we zoom in and look at what happens under one second, then a clear pattern emerges. We think it’s important to note that the SEC claimed there is no value to be gained from looking at data in time resolutions under a second ‘because it is just noise’. We strongly disagree.” (http://www.nanex.net/aqck2/3522.html).

came into view.

When Nanex made a strike of market activity far below the threshold of perception, what they ‘”saw” at first glance looked like a glitch. But what emerged from the forensic analysis were the

imprints of an elaborate scheme. They had encountered information in a realm that was deemed to only emit noise if anything. 13 As the founder and CEO of Nanex, Eric Hunsader, stated: “The SEC/CFTC analysts clearly didn’t have the dataset to do it in the first place. One-

minute snapshot data, you can’t tell what happened inside of that minute. We didn’t really see the relationship between the trades and the quote rates until we went under a second.” 14 Their final statement was unambiguous: “High Frequency Trading caused the Flash Crash. Of this, we are sure.” 15

13 Noise as opposed to signal is the term for random information in information theory. As financial markets are constructed as information markets (both in the Hayekian sense of the price regime and cybernetics), noise is a constituent element of trading. Following Fischer Black we can define it as the ubiquitous other of information: “Noise makes financial markets possible, but also makes them imperfect,” in Fischer Black, “Noise,” Journal of Finance, vol. 41, no. 3 (1986), pp. 529‒43, here p. 530.

14 U.S. ‘flash crash’ report ignores research ‒ Nanex,” Sify Finance, October 5, 2010 (http://www.sify.com/finance/us-flash-crash-report-ignores-research-nanex-newsinsurance-kkfiEjeciij.html). ZeroHedge was one of the first finance blogs to report on Nanex’s Flash Crash analysis and embedded an interactive map of their findings, see (http://www.zerohedge.com /article/most-detailed-forensic-analysis-flash-crash-dateand-likely-ever).

15 See Nanex ~ 26-Mar-2013 ~ Flash Crash Mystery Solved (http://www.nanex.net/aqck2/4150.html). Even though Nanex found evidence of trades they could not provide evidence on the perpetrator because the law protects proprietary data and its source.

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Gerald Nestler, self-organized, “We present this Flash Crash Summary Report using a time-line graph to distinguish the events that causedRESOLUTIONIZATIONS. the crash from those that were effects of the2015 crash. The main chart covers from 14:42:30 to 14:52:00 in 1 second intervals, and the inset covers from 14:42:43 to 14:42:46 in 25ms intervals.” “Nanex Flash Crash Summary Report,” Nanex, September 27, 2010. Image: Nanex, LLC.

I won’t address the truth claims of Nanex’s and the official reports. My main concern is the discrepancy between the material traces and their consequences. I will therefore focus on Nanex as one provider of a set of forensic resolutions 16 on the material data of the Flash Crash. It raises the question of how resolution techniques operate as regards visualization

(making tools that enhance perception and render material evidence), evaluative measuring (computation / calculation

16 The author has developed an aesthetic concept on the term “resolution” which due to space cannot be presented here. For those interested, this link provides more information: https://researchcultures.com/issues /1/towards-a-poietics-of-resolution.html.

of sequences and relations) and knowledge-production (analysis / interpretation of material). Even though such high-resolution telescopes offer glimpses into financial microtime, attribution, and solution – the decisive elements of the semantic field of the term resolution – are beyond the capacity of Nanex or any third party (both market participants and the general public). The question as regards the actuator(s) of the Flash Crash has as yet not been fully resolved. 17

17 This essay is also not concerned with the recent exposure of the ostensible culprit. According to a news report, “Mr Sarao’s spoofing netted him a profit of $40m (£28m), according to the US,” the Independent, February 5, 2016 (http://www.independent.co.uk/news/business /news/navinder-singh-sarao-british-flash-crash-traderbroke-no-laws-says-lawyer-a6856791.html).

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R E P E R F O R M ATI V E F O R EN S I C S I N A HY P E RC O M P E TITIV E ENV IRONM ENT .............

All consciousness is a matter of threshold. —Gilles Deleuze 18

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31.03.18, 15:02 18 Gilles Deleuze, The Fold: Leibniz and the Baroque, trans. Tom Conley (Minneapolis: University of Minnesota Press, 1993), p. 64.

An investigation into the complexity of market interplay is not only confronted with one or several black boxes but with the meta-black box of the market per se, which encompasses the entire system in its complexity, including but not restricted to brokers, traders (in the broadest term), and market centers. As the former HFT trader David Lauer remarks:

The markets and the interplay in the industry between all these firms with all these very complicated and complex technology systems and how they interact makes the entire system of exchanges, high-

frequency, brokers and the interaction between the technology, it makes it a complex system. […] There is no cause and effect that you can point to. What caused the Flash Crash is a nonsense question. […] And, if you were to replay the same sequence of events, identically, there’s no guarantee that it will cause a Flash Crash again. That’s the nature of complex systems. 19 Nanex, after failing to attribute motive and blame, amended their strategy towards an investigation that mixed forensic

19 David Lauer in Marijke Meerman (dir), The Wall Street Code, documentary, 51 min (http://www.youtube.com /watch?v=kFQJNeQDDHA, at 46:00–46:48).

analysis with “witness review” by information disclosure. They asked the party blamed (though not identified) by the official report, the mutual fund

Waddell & Reed, to grant access to their trading data. In accordance with the capitalist proprietary regime, it is most plausible that the fund would have declined if they had not been blamed. But by that time, Waddell & Reed had a vested interest in clearing their name. The incorporation of the proprietary source code allowed Nanex to classify the data of a specific address. Their analysis relied on an apparatus that pairs four quantitative frameworks in an effort to deliver sufficient

approximation to the trading operations: Nanex’s extensive archive of financial data; quantitative analysis; custom-made, adaptive resolution devices that powered the investigation of the data sets; and the algorithmic trading data from the financial black box (the mutual fund and the executing algorithm of their broker Barclay Capital Inc.). 20 This framework led Nanex to deviate from the official narrative. Even if their interpretation is controversial (algo traders, for instance, hailed the official report), it helped

20 See, for example Herbert Lash, “CFTC, Barclays discussed Waddell algorithm-source,” Reuters, October 22, 2010 (http://www.reuters.com/article/flashcrashbarclays-idUSN2219178020101022).

bring the cybernetic regime of HFT to light.

A paper presented in 2014 co-authored by members of the original investigation team of the SEC and CFTC report maintains the official narrative (2010) that “HFT did not cause the Flash Crash, but contributed to extraordinary market volatility experienced on May 6, 2010. […] high frequency trading contributes to flash-crash-type events by exploiting short-lived imbalances in market conditions.” 21 The authors detect immediacy as problematic, as it is exacerbated by HFT to its own benefit.

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21 Andrei Kirlinko et al., The Flash Crash: The Impact of High Frequency Trading on an Electronic Market (2014), p. 2, see (http://www.cftc.gov/idc/groups/public /@economicanalysis/documents /file/oce_flashcrash0314.pdf).

Because advanced trading technology can be deployed with little alteration across many automated markets, the cost of providing intermediation services per market has fallen drastically. As a result, the supply of immediacy provided by the HFTs has skyrocketed. At the same time, the benefits of immediacy accrue disproportionally to those who possess the technology to take advantage of it. As a result, HFTs have


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also become the main beneficiaries of immediacy, using it not only to lower their adverse selection

costs, but also to take advantage of the customers who dislike adverse selection, but do not have the technology to be able to trade as quickly as they would like to. These market participants express their demands for immediacy in their trading orders, but are too slow to execute these orders compared to the HFTs. Consequently, HFTs can both increase their demand for immediacy and decrease their supply of immediacy just ahead of any slower immediacy-seeking customer. 22

22 Kirilenko et al.,The Flash Crash, p. 3.

Immediacy, I would argue, defines visibility as a performative issue. In relation to market activity – especially in times of high volatility but not

restricted to these moments – immediacy equals visibility, or, more accurately, immediacy is technological visibility constructed by resolution techniques. Hence, developers in the algorithmic

trading space increase obscurity within the entire playing field by narrowing, if not modifying, the field of visibility (of the order book, to be precise). This instance is the most current in a row of

performative revolutions in finance that started with the displacement of (human) floor traders by quants (the framing of finance by Black Scholes Merton (BSM); the quantification of the volatility curve in the pricing regime) and goes hand in hand with shifts between cost centers and profit centers. 23

When we accept immediacy as a form of visibility in microtime – engineered by resolution techniques that both

23 I owe this assessment to the HFT expert and whistleblower Haim Bodek with whom I am currently working on the cartography of algorithmic trading.

enhance the visual field and act upon it (and obscuring it for those lacking the means) – we can adopt Michel Callon and Donald MacKenzie’s remarks on performativity. While MacKenzie focuses on a different realm of financial market activity – precisely derivatives trading and the BSM model, and hence the profit model of finance that was challenged by HFT and other low latency

trading applications – Callon offers a wider interpretation of performativity: “My thesis is that both the natural and life sciences, along with the social sciences, contribute towards enacting the realities that they describe.” 24 The black box as a scientific apparatus has conquered finance and constructs its reality in

24 Michel Callon, What does it mean to say that economics is performative?, CSI Working Papers Series no.

a similar way as economic theories acted on it. When we 005, 2006, p. 7. think of all the flash crashes that keep recurring or the “avalanching” Bodek mentions, the term “counterperformativity” 25 seems to highlight this fact even more robustly:

Whereas the notion of a self-fulfilling prophecy explains success or failure in terms of beliefs only, that of performativity goes beyond human minds and deploys all the materialities

comprising the socio-technical agencements that constitute the world in which these agents are plunged: performativity leaves open the possibility of events that might refute, or even happen

25 MacKenzie, in An Engine, not a Camera: “The strong, Barnesian [a term he uses to distinguish his sociological from Austin’s linguistic approach] sense of ‘performativity,’ in which the use of a model (or some other aspect of economics) makes it ‘more true,’ raises the possibility of its converse: that the effect of the practical use of a theory or model may be to alter economic processes so that they conform less well to the theory or model. Let me call this possibility – which is not explicit in Callon’s work – ‘counterperformativity.’” See Donald MacKenzie, An Engine, not a Camera. Cambridge, MA: MIT Press, p. 19.

independently of, what humans believe or think. MacKenzie proposes the notion of counter-performativity to denote these failures, because in this case the [Black Scholes Merton] formula produces behaviors that eventually undermine it. 26 Due to the complexity described by Lauer, the market cannot simply be “captured” in all its immediacy and “replayed” like a film. 27 The vision-enhancing sensors that detect time-

blurred traces and mark discriminations in a complex environment deliver information from noise, which has to be unearthed and then resolved in a separate stage. Thus, a forensic analysis is neither fully embodied nor defined by the abstract representations of data traffic. Rather, the analysis is

26 Callon, What does it mean to say that economics is performative?, p. 17.

27 In a philosophical discussion of this thought, Jon Roffe emphasizes the “eventual character of price […], for, strictly speaking, no price can ever be repeated. This is because any given price is recorded on a surface and in this way changes it. To repeat the same price – where price is now grasped at the moment of its advent – can never 144 have the same effect on the market surface itself.” See


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situated, i.e. constructed, in between the juncture of

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performance as the actual presence of an event taking place (exemplified by the occurrence of the Flash Crash);

Roffe, Abstract Market Theory. Basingstoke: Palgrave Macmillan, 2015, p. 71.

performative analysis as providing (making visible) “visual collateral” of a “re-animation” of the original obscured presence after the fact; and beyond market activity per se, and thus also beyond MacKenzie’s use of the term, counterperformativity as the effect of a renegade act disclosing material otherwise under non-disclosure as a consequence of “capitulation.” 28

28 The performative setting of Nanex’s analysis might have influenced its outcome counterperformatively in the sense that analysis constructs findings and solutions.

Gerald Nestler, RESOLUTIONIZATIONS. self-regulated, 2015.

We can now outline a sharper distinction, which will help us to grasp what is at play in the forensic documentation and evaluation apparatus. Artificial sense organs reach into micro-time by

increasing the resolution bandwidth in order to revisit the otherwise insensible “scene of the crime.” The analysis is thus an intricate and extensive cybernetic undertaking characterized by a process of re-mapping, re-modeling, re-visioning, and re-narrating a specific past that happened at

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near-light speed—a performance ex post that was the occurrence of a future event. As this approach re-enacts the performance of the event, the methodology can be specified as a reperformance. The technological, calculative aspect of sifting data to come up with evidence – enacting the reperformance – becomes explicit in the sheer enormity of the material Nanex examined:


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May 6th had approximately 7.6 billion […] records. We generated over 4,500 datasets and over 1,200 charts before uncovering what we believe precipitated the swift 600 point drop […]. In

generating these data sets we have also developed several proprietary applications that identify the conditions described in real time or for historical analysis. 29 Only rigorous research into the deeper, imperceptible strata

29 Data quoted from Nanex data feed information (http://www.nanex.net/20100506 /FlashCrashAnalysis_About.html).

of microscopic time reveals the actual material matrix. Such an excavation elucidates an inversion of time from Chronos to Kairos – from a chronological

interpretation (replay) of pricing to one of intense event time (real time). Methodologically, it

inverts the relation between time and space: while the common notion of archaeology entails entering into concrete and thick space cautiously (as when employing technologies of surveying, probing, and classifying), in order to extract the material witness (a truth) of a former era, an archaeology of finance is a forensics of the performance of the future. It probes into the imperceptible materiality of time becoming. It detects patterns and recovers artifacts whose

existence are derived from financial models and built on technologies of miniaturization, automation, and infrastructure aligned with the politics of securing, excluding, and enclosing.

Research is applied on a field of “making happen” in which “the concept of performativity has lead to the replacement of the concept of truth (or non-truth) by that of success or failure.” 30 This time around, however, it was not an economic modeling of volatility (i.e. hedging risk) but latency and order-book penetration (i.e. the technologically induced pursuit of riskless profits).

30 Callon, What does it mean to say that economics is performative?, p. 13.

A N O IS E W ITH O U T S I G N A L : I N F O R M ATI O N A S Y M M E TRY .............

Noise crashes within as well as without. —N. Katherine Hayles 31

31 N. Katherine Hayles, How We Became Posthuman: Virtual Bodies in Cyberspace, Literature, and Informatics. Chicago, IL: The University of Chicago Press, 1999, p. 291.

The Flash Crash narrative unfolds in the extended realm of trading bandwidth and the reduction of profit margins in which a technopolitical regime of success/failure becomes apparent via exclusion/inclusion. It prioritizes the algorithmic aesthesis of an elite of HFT traders. 32 Manoj Narang, a former 32 The conviction of BATS Global Markets by the SEC on champion of HFT, viewed this as part of the competitive the grounds of a preference of a group of influential HFTs ecology of HFT that is synonymous with other technological – who, as Bodek elucidates, are often shareholders of the exchanges – proves this. This information asymmetry was applications: due to specific advantageous order types.

[…] many micro-industries experience an initial phase of immense profitability, which in turn attracts a great many new participants. These new participants drive up competition, which in turn causes profit margins to diminish. Eventually, so many participants are competing that margins can turn negative. 33 Bodek, however, whose HFT hedge fund went bankrupt due to “order flow information asymmetries,” gives a darker view of the “noisy” ecology of HFT:

33 Rishi K. Narang (with contributions by Manoj Narang), The Truth about High-Frequency Trading. Hoboken, NJ: Wiley, 2014, pp. 18‒19.

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There’s basically interaction in the market. This firm knows how this works here, they know this practice works over there, and they’re able to get to 15% or 20% of the market because they know

that – and that’s the only reason they can get there […] you have this efficient market and certain regulators say it’s great, it’s only a penny wide, the customer gets the best price. And now I’m telling you, you can have a firm with 20% of the market and the rules change a little bit and some

transparency happens and they collapse to 3%. So, what’s your takeaway? What’s my epiphany? I basically believe that individuals running large trading companies, cannot actually tolerate a zero profit margin environment. We will find ways around that situation. We will cheat. We will manufacture situations. We will undermine infrastructure. 34 Below the radar of state agencies established to regulate

market activity, corporate self-interest created an even deeper level of incorporation programmed into automated

34 Haim Bodek in Gerald Nestler, CONTINGENT ETHICS: Portrait of a Philosphies series II, 2014, single channel video. [0:20:24] There seems to be a relation between zero spread and zero marginal utility and the corporate schemes of nevertheless extracting profits by manufacturing monopolies.

trading as the “genetic” code of a new breed of agency in the

market system. Mathematical models and algorithms revolutionized the logistic infrastructure of exchanges and displaced the trading pit and its market makers (human traders known as “specialists” or “locals”) in favor of faster execution rates and smaller spreads. 35 Algorithmic traders instituted an arena around and between matching engines where they intervene without human

intermediaries. Inigo Wilkins and Bogdan Dragos argue that “algorithms are no longer tools, but they are active in analyzing economic data, translating it into relevant information and producing trading orders.” 36 J. Doyne

Farmer, a former financial engineer and co-director of the program on complexity economics at Oxford’s Institute for New Economic Thinking, notes, “under price-time priority auction there is a huge advantage to speed.” 37 And as exchange places are also profit-seeking corporations, the competition expands to the market system in its entirety. Exchanges are not a sort of public places in which capitalist competitors meet; they are players with their own business interests and offer structural as well as financial incentives to increase trading volume, to give but one example.

35 Donald MacKenzie and Juan Pablo Pardo-Guerra argue that “[t]wenty years ago, share trading in the US was still almost entirely human-mediated and mostly took place in just two marketplaces: NYSE [New York Stock Exchange} and NASDAQ [National Association of Securities Dealers Automated Quotations]. Now, there are thirteen exchanges and more than fifty other trading venues. Only a very small minority of deals are now consummated by human beings: the heart of trading is tens of thousands of computer servers, in often huge datacenters linked by fiber-optic cables carrying millions of messages a second.” See MacKenzie and Pardo-Guerra, “Insurgent capitalism: Island, bricolage and the re-making of finance,” Economy and Society, vol. 43, no. 2 (2014), pp. 153‒82.

36 Inigo Wilkins and Bogdan Dragos, “Destructive Destruction? An Ecological Study of High Frequency Trading,” Mute, January 22, 2013 (http://www.metamute.org/editorial/articles/destructivedestruction-ecological-study-high-frequency-trading#).

37 J. Doyne Farmer, “The impact of computer based

What emerged is a hypercompetitive environment that training on systemic risk,” Paper presented at the London tweaks market system rules and infrastructures. It “skews” School of Economics, London, January 11, 2013. the smile problem from the surface of derivatives-pricing to the immediacy of latency volatility – a term I propose for the inconsistencies (rather than uncertainties) in a hypercompetitive trading environment, in which developers have replaced quants as the leaders of innovation. Even if there is an absolute limit to speed, the operable spaces of time between human perception and algorithmic reaction time are cosmic, to say the least. A divide of response time has opened up, the gaping but invisible abyss of latency: a new class of resolution enclosures and scales – and hence knowledge – has found the means to effectively hide its machinations from less immediate competitors. If derivative finance and its abstract models were (and still are) a mystery to the public at large, automated trading has escalated finance beyond all recognition. Here, Gottfried Wilhelm Leibniz’s notion of apperception ceases to be a conception of conscious experience emerging from small, unconscious perceptions. The myriads of mathematically constructed small perceptions (of which these camera-engines are not at all “unconscious”) define a virtual field of machine apperception where those who do not command the latest cyborg infrastructure are captured or blocked. Information asymmetries gain traction on the level of systemic visibility. The financial market architecture with its proprietary logistics is a black box not only with regard to the parameters of official inquest, but also in terms of

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knowability in general (and beyond algorithmic trading proper). What the high-frequency black box emits is not information but noise. Such technowledge (a term I use to distinguish bot-coded acquisition of knowledge) exerts influence not only on the industry, but of necessity also incapacitates the public forum as a whole. Quantitative speech translates into intense algorithmic violence, invisible and insensible, built on performances that are real but unrecognizable (fictitious capital in the sense of applying tricks and asymmetries but not in the sense of it being insubstantial). Noise exceeds the category of information theory. It is the asymmetric other that is not detected by the majority of market participants because it is not a signal in the sense of communication. In the ever-denser, hypercompetitive environment of

narrowing spreads, only the ruthless survive. Noise is a guerilla tactics that stops at nothing in its ‘“pursuit” for profit. 38 It is not simply a tool; it is a weapon 38 Haim Bodek’s whistle-blowing proved that also market of counterinformation that injures without inflicting the feeling of pain directly; a powerful and disruptive “rhythual,” to add the layer of the ‘immediated’ frequency of algorithmic speech to Judith Butler’s performative “ritual”:

centers are partners in crime, e.g. see Bradley Hope, “BATS to Pay $14 Million to Settle Direct Edge Order-Type Case: SEC Fine Is a Record Amount Against a Stock Exchange,” The Wall Street Journal, January 12, 2015 (http://www.wsj.com/articles/direct-edge-exchanges-topay-14-million-penalty-over-order-type-descriptions1421082603).

The performative needs to be rethought not only as an act that an official language-user wields in order to implement already authorized effects, but precisely as

social rhythual [original: ritual], as one of the very ‘modalities of practices [that] are powerful and hard to resist precisely because they are silent and insidious, insistent and insinuating’: When we say that an insult strikes like a blow, we imply that our bodies are injured by such speech. 39 The most cunning insults are indirect. Fischer Black, in his seminal text succinctly entitled Noise, holds that “noise is

information that hasn’t arrived yet.” 40 When we accept, as evidence has shown, that low latency trading is defined by

39 Judith Butler, Excitable Speech: A Politics of the Performative. London and New York: Routledge, 1997, p. 159.

speed advantage, we must ascertain a bifurcation that goes far beyond competitive advantage in Hayekian information markets. 41 Those who do not command the automated

40 Fischer Black, “Noise,” Journal of Finance, vol. 41, no. 3 (1986), pp. 529‒43, here p. 529. Black counts five models of noise, the one quoted here relates to business cycles and unemployment and as such, we imply, to the wider economy and to social consequences.

insidious” other of information; they cannot perform equally and thus cannot partake in “that reiterative power of [market] discourse to produce the phenomena that it

41 See also note 12.

rhythual of micro-time face noise as the “silent and

regulates and constrains,” 42 to adopt Butler’s linguistic reading of performativity to the fitting speculative speech of

financial markets. 43 We might say that insult as information asymmetry turns into the violence of noise asymmetry and its fictitious claims – a limitation of visibility that forms the space in which the reiteration of algo speech becomes the dominant (cipher) language; an avalanching of “volatility created by circulatory forces so as to preserve and restore [their] liquidity.” 44

42 Judith Butler, Bodies that Matter: On the Discursive Limits of Sex. New York: Routledge, 1993, p. xii, accessed online (https://en.wikipedia.org/wiki/Performativity).

43 I should note here that adopting Butler’s work to finance is not a novel approach. Arjun Appadurai writes in Banking on Words, that “Judith Butler’s work introduced the idea of what I now refer to as retro-performativity, which allows us to see that ritual can be regarded as a framework for the co-staging of uncertainty and certainty in social life.” See Appadurai, Banking on Words: The Failure of Language in the Age of Derivative Finance. Chicago, IL: University of Chicago Press, 2016, p. 111.

44 Edward Li Puma, “Ritual in Financial Life,” in Benjamin Lee and Randy Martin (eds), Derivatives and the Wealth of Societies. Chicago, IL, and London: The University of Chicago Press, 2016, p. 51 (term “their” and 148 emphasis by the author).


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Gerald Nestler, RESOLUTIONIZATIONS. mythological, 2015.

F INANCE AND ITS M ODE OF P RO DUCTIO N .............

Only money is free from any quality and exclusively determined by quantity. —Georg Simmel 45

45 Georg Simmel, The Philosophy of Money. London and New York: Routledge, 3rd edition, 2004, p. 281.

While in the early 1990s, quants were still dependent on human runners and traders on the

trading floors in Chicago and other major market centers (with the exception of the NASDAQ), artificial (neural) networks and automation of order transaction, order flow, and the price engine took another ten years and more to be implemented fully. The electronic global data flow represented by the Bloomberg terminal as a non-human extension of the “individual” traders on

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the trading floor, forged a cyborg dividuality in which every dividual blends into and is bound to the global information and pricing engine. 46 Uncertainty is 46 As regards capitalism, one might think of Gilles turned into a global negotiation on volatility (risk), Deleuze and Félix Guattari’s notions of “body without calibrated dividualy and externalized individually in the case organs” and “organs without body” in the sense that the corporation could be interpreted as the ‘legal individual' of underperformance. In his thesis on proprietary trading, from whose incorporated organism dividuals derive. See Robert Wosnitzer argues, “the subjectivity of the trader is Gerald Nestler, “The Non-Space of Money, or, the Pseudo-


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mutually co-constitutive with the practice of prop trading,

where a dividual subject emerges that has mastered, for better or worse, the social and economic value of a world in which the derivative rules.” 47 For Arjun Appadurai this derivative logic exceeds beyond the world of trading:

Contemporary finance lies at the heart of […] dividualizing techniques, because it relies on a management and exploitation

Common Oracle of Risk Production,” in Paratactic Commons: amber’12 art and Technology Festival Catalog (December 2013), pp. 150‒54, also online (https://issuu.com/ekmelertan/docs/amber12/1).

47 Robert Wosnitzer, “Desk, Firm, God, Country: Proprietary Trading And The Speculative Ethos Of Financialism,” unpublished PhD thesis New York University, 2014, p. 171; publication forthcoming.

of risks that are not the primary risks of ordinary individuals in an uncertain world but the derivative or secondary risks that can be designed in the aggregation and recombination of large masses of dividualized behaviors and attributes. 48

In the course of the production of these claims, Austin’s performativity shifted to Callon’s conception and

48 Arjun Appadurai, “The Wealth of Dividuals,” in: Benjamin Lee and Randy Martin (eds), Derivatives and the Wealth of Societies. Chicago, IL, and London: University of Chicago Press, 2016, p. 25.

MacKenzie’s “counterperformativity” (both underscore the impact of economics on finance) and eventually turned into a non-individual ontology of immanence in which technological risk

assemblages composed of human and bot actors have become the productive force of complex and contingent open-heart operations on a future in real time. The operational division between uncertainty and risk that Frank Knight introduced in 1921 49 and which underlies derivative finance has found its corresponding technologies with the scientification of

49 Frank H. Knight, Risk, Uncertainty, and Profit. Boston, MA: Hart, Schaffner & Marx, 1921.

finance. I abstract this shift by arguing that the mode of

production of finance is the production of risk 50 – the material production and exploitation of quantifiable futures (options) by trading volatility (on volatility and so forth) in a sea of uncertainty 51 – a state of affairs that goes beyond neoliberalism and financialization and that I propose to term the derivative condition of social relations. Every option is a virtual, quasi-material trajectory into the future and in tight connection with the myriads of other options traded. Deleuze writes:

The only danger in all this is that the virtual could be confused

50 This is a theoretical concept of the function of financial markets, and not a trivial allegation against the speculative rage of markets and their catastrophic consequences.

51 While Esposito argues that “uncertainty […] is the engine and stimulus of economic activity, allowing for the development of creativity and the generation of novelties” (Elena Esposito, „The structures of uncertainty: performativity and unpredictability in economic operations,” Economy and Society, 42:1, p. 120), accepted opinion in the social studies of finance holds that markets block out uncertainty in favor of risk.

with the possible. The possible is opposed to the real; the

process undergone by the possible is therefore a ‘realization’. By contrast, the virtual is not opposed to the real; it possesses a full reality by itself. The process it undergoes is that of actualization. 52 The recalibration process of dynamic hedging and implied

52 Gilles Deleuze, Difference and Repetition. New York: Columbia University Press, 1994, p. 211.

volatility is a “thick narrative” of the Deleuzian virtual – of virtual pricing actualized at every moment (markets trade and no possibility exists). It is a virtual universe that resolves the future by the actualization of price quasi in parallel to real events. As

the production of risk is finance’s mode of production – processed by a multitude of complex price layers circulating and recalibrated at any given moment – to say “parallel” is not to say that these worlds do not meet. Quite to the contrary, by blocking out uncertainty and elaborating massive

systems that calculate and exploit risk (options), this mode of production is an attractor for reality to emerge within its volatile “gravitational” field. In the words of Elie Ayache, the market is “the technology of the future.” 53 Today, the technology of the future is enshrined in the black box; resolution – both as technology and solution – is

53 Elie Ayache, The Medium of Contingency. An Inverse View of the Market, Basingstoke: Palgrave Macmillan, 2015, p. 52.

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proprietary without exception. Externalities do not only appear as the “past” of industrial activity (as its consequence), they affect the future. Consequence trails ahead, as finance – one should rather say the finance-state complex as the result of the 2008 financial crisis – models the world along the lines of probability regimes (this is not confined to markets, as e.g. big data proves). While future profits are being reaped, future losses are socialized (austerity politics, for one, are

schemes on the future) – a counterperformativity not of the market but the world. The absolute distance between now and the future is approximated for those who can attach to the future as an intensive space of immediate visibility 54 – mainly by way of leveraging resolution technowledge; it is inaccessible for those whose obligations are defined by debt as a bond to the past. 55

Gerald Nestler, RESOLUTIONIZATIONS. resolution, 2015.

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54 Roffe: “absolute surfaces are intensive surfaces.” in Abstract Market Theory, p. 70.

55 The space for this article does not allow a discussion of leverage and debt in the social order. Elsewhere I make use of this divide to offer a reading of information capitalism’s social class relations, in which what I call the leverage class relishes in good prospects, and the different tiers of the debt-classes are tied to past obligations and illiquid presents, which annihilate the possibilities of the future.


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EF F ICIENT M A RKET POST-UT O P IA .............

Performativity is not about creating but about making happen. —Michel Callon 56

56 Michel Callon, CSI Working Papers Series, 2006, p. 22.

N. Katherine Hayles reminds us “for information to exist, it must always be instantiated in a medium.” 57 Bots act (but not always interact) on the infrastructure. To paraphrase Marshall McLuhan, they “massage” 58 an electronic “body” whose environment

(market) they reconfigure into an algorithmic space. At the center of HFT are developers that speed up transactions to

the level of microseconds. Profit is not primarily being sought by dynamic hedging in an uncertain environment. HFT is less engaged with implied volatility and the pricing of derivatives. Hence, quants – not long ago the masters of this universe – are at the threshold of being replaced by big data systems. 59 In this technosphere, the “core” of the market – the order book – is being exploited directly and with high volume in the attempt to amass small but (deemed relatively) riskless profits by reading, interfering, and controlling the signals sent by the matching engine. The production of risk turns into an operational hazard of

57 Hayles, How we Became Posthuman, p. 13.

58 “Massaging” is used here in a playful way similar to Marshall McLuhan’s. His dictum, “The medium is the message,” in Understanding Media (1964), in which the medium shapes “the scale and form of human association and action,” here, is extended to the algorithmic realm and the effects of bots on both the individual and political body. Space does not allow engaging more deeply with McLuhan’s media theory and its relevance for algorithmic media. See McLuhan, Understanding Media: The Extensions of Man. New York: McGraw-Hill, 1964.

59 See, for example, Nathaniel Popper, “The Robots Are Coming for Wall Street,” The New York Times Magazine, February 26, 2016 (http://www.nytimes.com/2016/02 /28/magazine/the-robots-are-coming-for-wallstreet.html).

optimizing infrastructure, hardware, code, and market infrastructure (including exchange places and order types) rather than a mathematically scrutinized pocket of uncertainty. And while the complex algorithms of derivative trading serve

the calculation and recalibration of all the prices in the derivative universe, HFT algos need to be simple in order to facilitate low latency interaction. Massive amounts of data are analyzed, but the trading logistics is streamlined to happen in a flash. As regards the technological incorporation of financial markets today and their infrastructure, the principle resolution threshold is the visibility of the order book – the information is (in the

textbook ideal) visible to all market participants and can be acted upon instantly. The Regulation National Market System (Reg NMS), for example, was enacted to establish such a market ideal, but ‘instantly’ exploited by execution rates faster then price consolidation. The introduction of Regulation NMS in 2007 triggered the dramatic surge of HFT volume in US equity markets. Not well understood at the time was that for-profit electronic exchanges had

artificially spurred this volume growth, catering to the ‘the new market makers’ by providing HFTs specialized features and discriminatory advantages that dovetailed with HFT strategies. Indeed, by circumventing the purpose and intent of Regulation NMS through a myriad of legal exceptions and clever regulatory workarounds, electronic exchanges have assisted HFTs in exploiting market fragmentation for mutual gain at the expense of institutional investors. 60

60 Haim Bodek in his talk on the topic of “The Problem of

HFT” at the Denver Security Trader Association ‒ 43rd The crucial term for real-time action is “instant,” as it opens Annual Convention, July 12, 2013 (http://haimbodek.com up to the whole gamut of technowledge that constantly /past_events.html). redefines latency and speed horizons – and therefore the increment of an actionable instant as well as the constriction of immediate visibility to resolution 152 machines. As the outspoken HFT critic Bodek ascribes the “cannibalistic” acceleration to


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competitive advantage: Since 2007, we saw compression in the algorithm trading space where the profit margins approached near zero. And I am part of that problem. I ran my firm specifically to tighten up markets. We

sometimes call that the race to the bottom in the business. […] What is the activity that’s driving that race to the bottom? You say, ‘If I can make a near-risk-free fraction of a cent and even if the whole day would have demanded a little bit more, I’m happy to do that now even if we barely make a profit because I’m basically taking away the opportunity for someone else to make a profit.’ […] The

strategy, which many of the algorithm trading firms did, was basically market share and just bring it to a place where our competition couldn’t handle it. 61 As the financial engineer, philosopher, and automation critic Elie Ayache points out, however, the scientific paradigm

61 Haim Bodek, CONTINGENT ETHICS: Portrait of a Philosphies series II, 2014, single channel video, [0:14:20]. (https://vimeo.com/channels/aor)

behind quantitative trading and automation hasn’t changed – and thus implicitly refutes Rishi K. Narang’s assertion that “quantitative trading can be defined as the systematic implementation of

trading strategies that human beings create through rigorous research.” 62 To Ayache, automated trading is not a new scientific method (an achievement he reserves for the volatility smile problem), but a new wave of exploitation within the probability paradigm and its futile scales:

62 Rishi K. Narang, Inside the Black Box: The Simple Truth About Quantitative Trading. Hoboken, NJ: Wiley, 2015, p. xi.

The market is the only place where the qualitative absolute event, the one that is irreducible to measure and scale and probability, finds quantitative expression, in a material medium borne by numbers, or rather prices. The market is quantitative history. One should keep in mind this contradiction in terms: one should remain aware that the historical event is incalculable and

unquantifiable because it precedes any scale; and then understand the extraordinary nature of price (and of its medium: the market) as the quantification of that unquantifiability. This is why the market is truly the technology of the future. You have to realize that price is not a number. Quantifying the event (translating it into numbers) is impossible; yet the market is such a

translation, precisely in so far as it takes place outside of possibility. “Quantitative history” does not mean that the event is being forced into the mold of numbers. Rather, a quantity, a number of an extraordinary nature, has been found such that history can be quantified. 63 In a nutshell, for Ayache the market is real, whereas probability is not. 64 To his mind, the hard problem of the

volatility smile has not been resolved, nor has it been tackled in algorithmic trading on the supposition that the (option) pricing technology (BSM reversed) works.

63 Elie Ayache, The Medium of Contingency, 2015, p. 52.

64 Ayache’s insistence on finance as a body constituted by human traders in the trading pit evokes N. Katherine Hayles’ question, “If we can capture the Form of ones and zeros in a nonbiological medium – say, on a computer disk – why do we need the body’s superfluous flesh?”. See Hayles, How we Became Posthuman, p. 13.

In the classic form of HFT, algorithmic trading accelerates

the exploitation of an old paradigm 65 materially embedded in the computer-powered calculative evaluation of massive data sets. Predication machines attempt to evade their unpredictable contingent event by trading in fractions of a

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second. 66 They reorganize the market to an extraction of price from big data. This performative paradigm exploits a future it doesn’t know and doesn’t need to know as it meets it immediately. The production of risk, a potentially massive concept for complex societies and their needs and desires, complexifies price without producing a present in which it

65 How this plays out in financial corporations was shown by Karen Ho in: Liquidated: An Ethnography of Wall Street. Durham, NC, and London: Duke University Press, 2009.

66 Knight Capital Group’s loss is an instance of an unpredictable event within the black box itself. On August 1, 2012, the HFT trader lost over 400 million Dollars in 30 minutes due to a technical error, and the firm had to file for bankruptcy. Nanex, who analyzed their trades, commented, “[T]he glitch led to 4 million extra trades in 550 million shares that would not have existed otherwise.”


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translates back to value. Rather, it produces massive

volatilities in the social realm – resolution dissolves to leveraging power in markets that are deemed to operate in

See (http://www.nanex.net/aqck2/3522.html); and (http://www.bloomberg.com/news/articles/2012-08-02 /knight-shows-how-to-lose-440-million-in-30-minutes).

consistence with regulations and laws.

Face to face with an increasingly efficient market, however, even those at the forefront of

technological innovation run into massive “resistance” – trading a market without utilizable spread is like hitting a wall at full speed. Market-makers operate on the spread to provide

liquidity, hedge their own risk, and make profit, whether they are locals or HFT. But with speed at a technological threshold at which high-end competitors cannot exploit against others (see the Bodek quote above), the utopia of neoclassic economics meets its end of time: the realization of perfect efficiency is at the same time the end of the market. But it is evidentially not the end of

trading. As always there are some who think and act outside the box. This time, however, it is not quantitative or technological innovation that allows for the exploitation of profits. Increasingly, competitive advantage is only possible by rigging the market in ways to go far beyond the machinations portrayed by books like Dark Pools or Flash Boys. Abusive and collusive behaviors undermine or circumvent regulation (euphemistically called “regulation arbitrage”), market infrastructure, and order-book microstructure, as whistleblower cases and legal settlements have shown. 67 Heavily invested intellectually in the old paradigm of probability evaluation and profit making running on survival instinct, capitalist hypercompetition has opened a door towards the dark side of the efficient market in which the law, regulation, and exchanges are part of strategic management. Risk is implemented into the very institutions that were established to govern against it.

67 Besides Bodek’s cases, see also, for example: “Whistleblower award for NYSE fine goes to HFT critic,” MarketWatch, March 1, 2016 (http://www.marketwatch.com/story/whistlebloweraward-for-nyse-fine-goes-to-hft-critic-2016-03-01); U.S. Securities and Exchange Commission, “SEC Charges New York-Based High Frequency Trading Firm …,” 2014-229 [online](https://www.sec.gov/News/PressRelease/Detail /PressRelease/1370543184457); and Victor Golovtchenko, “Dark Pools Settlements to Cost Barclays, Credit Suisse Over $150m,” Finance Magnates, January 2, 2016 (http://www.financemagnates.com/forex/regulation /dark-pools-settlements-to-cost-barclays-credit-suisseover-150-mln/).

“A-Symmetry. Algorithmic Finance and the Dark Side of the Efficient Market,” published in: Risk Equipment. Technosphere Magazine, #9, 04/17. Haus der Kulturen der Welt, Berlin. https://technosphere-magazine.hkw.de/ Revised excerpts from Gerald Nestler, Flash Renegades. From an Aesthetics to a Politics of

Resolution. Algorithmic Finance and the 2010 Flash Crash, 2016 (publication in preparation). Image series: Gerald Nestler, RESOLUTIONIZATIONS. self-organized | self-regulated |

mythological, Photographs of the hedge fund Sang Lucci and of high-resolution visualizations of Flash Crashes (courtesy Nanex LLC), 4 prints, approx. 30 x 50 cm, 2015, the artist and Nanex LLC.

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INSTANTERNITY Black Box Body Cult. A performative cartography of algorithmic perception. Realized at: Vorbrenner17, Innsbruck, Austria. 154


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INSTANTERNITY

Black Box Body Cult A performative cartography of algorithmic perception at turns participation into physical disordering of concentration. Gerald Nestler with Haim Bodek (high-frequency trader and whistleblower), Sylvia Eckermann (artist) and Davide De Lillis, Eva MĂźller, Sebastian Collado (performing artists).

Vorbrenner 17 Innsbruck, April 6, 2017. Curated by Magdalena Dreschke Photo credit: Christa Pertl / LACHSGRAU

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INSTANTERNITY proceeds from the thesis that we are living through a shift from representational to performative speech of power, grounded in the exploitation of leverage and volatility to capture future potentiality. This is a radical change and while we have learned to read representative power over the course of centuries, we yet lack the tools to imagine and decipher this new speech. This shift, we argue, might be the reason why it is so difficult to grasp the biopolitics of technocapitalism, rather than its asserted complexity and abstraction. From this perspective, INSTANTERNITY explores the body’s capacity for cognition and resistance. As an artistic-ethnographic experiment, it offers physical gestures and the experience of aesthetic disruption. INSTANTERNITY works through the hypothesis that in order to deconstruct and reshape the performative language of power, we need to nurture our capacity for sensing it; not only with our minds but especially with our bodies. The body, we argue, is the multidimensional and multi-sensory space where terms like volatility and leverage reverberate and acquire new meaning. 158


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During a lecture by Haim Bodek and Gerald Nestler on the intricacies of automated finance and data-driven technocapitalism, 3 performers act in and on the audience. The performers move through the crowd in a volatile, speculative fashion, enacting a physically intense parallel universe to the performative treating of algorithmic power. The event produces physical noise at the same time as it represents complex information. Physical interference disorients and ruptures representative functions and intellectual attention towards an alertness of sensing performative power. Randy Martin spoke of a nonknowledge of the derivative and Erin Manning and Brian Massumi poetically evoked “what moves as a body, returns as the movement of thought.” In this vein, INSTANTERNITY takes the world of big data directly to the audience. Not in an attempt to build consensus -- or “yield a moment of joy.” But rather by invoking the experience of ‘magical’ discomfort that in turn provokes the empathic intelligence of the body. From this force field in which highly specific – if not arcane knowledge – is physically and emotionally experienced, the urgency of intellectual apprehension is born.

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Photo Š Houda Lazrak

INSTANTERNITY. A CARTOGRAPHY OF AUTOMATED FINANCE Talk, ACFNY – Austrian Cultural Forum New York, January 23, 2017. Haim Bodek, Sylvia Eckermann, Gerald Nestler. Moderated by artist Mark Tribe, the discussion provided an introduction to a field of artistic research that maps automated finance and its role in financial markets as well as society. Gerald Nestler, Haim Bodek and Sylvia Eckermann delve deep into the volatile world of automated finance. They discuss how it colonizes social relations with algorithmic automation. They address the race to zero latency and zero spread; financial trading ideologies and its relations to science; the complex legal limbo of regulation arbitrage, information asymmetry, leverage and fraud; and the role of human beings in this data-driven universe. 161


Aesthetics of Resolution. A postdisciplinary approach to countering the technocapitalist black box

xxii congresso da sociedade iberoamericana de gráfica digital 22th conference of the iberoamerican society of digital graphics 07|08|09|novembro|2018 iau usp | são carlos | sp br

Gerald Nestler, PhD Independent artist | Austria | mail@geraldnestler.net

Abstract Visibility and knowledge are based on access to information. We usually consider this as either a question of collecting new or examining existing data. However, the term “black box society” (Pasquale) points to a situation in which data are deliberately concealed, enabling complex processes of technocapitalist exploitation. Manufacturing information asymmetry and noise have become effective tools to gain competitive advantage across all levels of life. This text argues that adverse technopolitical schemes can be addressed with an aesthetics of resolution and with the figure of the renegade, an expert who makes the black box speak from inside. Keywords Aesthetics; Black box automation; Big data; Finance; Information asymmetry; Resolution; Renegade

INTRODUCTION. Capitulation Automated – Resolution and Dissolution beyond Visibility “99 per cent of finance doesn’t know how the stock market works.” —Haim Bodek

On May 6, 2010, bots played havoc among financial market centers causing mayhem in less than five minutes. The Flash Crash, as it has become known, went viral as the biggest one-day decline in the history of financial markets. During the rapid slump, the Dow Jones Industrial Average plunged by about 1,000 points – nine per cent of its total value – only to recover most of its losses in the next twenty minutes. CNBC Live, initially covering the political stalemate of the Greek austerity crisis and the ensuing protests in the streets of Athens, shifted immediately to the trading floor of the New York stock exchange: “What the heck is going on down there? … I don’t know… this is fear, this is capitulation.”1 The Flash Crash was a watershed event in financial markets. Algorithmic trading had taken center-stage. Human traders lost their bearings in the event. A livebroadcast for professional traders commented: “This will blow people out in a big way like you won’t believe.” 2 Technically, capitulation means panic selling due to pessimism and resignation. But apart from financial losses, the term “capitulation” implies a liquidation of visibility in the sense of unmediated human perception and collective resolution. Hence, the broadcast highlighted the relevance of political economy today. What informs such potent noise without leaving much of a trace? And how does it affect us? The debate that ensued in the aftermath of the event for the first time in financial market history pitted those who uphold the generally accepted opinion, which blames human error, against a dissenting opinion, which hold algorithmic trading and automation accountable. As a collateral, highfrequency trading (HFT) came to public attention, as journalists and bloggers picked up on the topic. 3 Eventually, it appeared as if the financial markets were at the mercy of quants and developers who tuned hardware,

tweaked infrastructure and coded algorithms that drive automated speculations. The financial expert and whistleblower Haim Bodek speaks of „avalanching“ to describe the real time violence by which HFT orders impact markets. A massive meltdown that would dwarf the Flash Crash is an event whose probability is far above zero today. HFT achieved unparalleled market shares (up to 80 per cent of U.S. stock transactions in 2012) due to high trading volume necessary to deliver profits. However, HFT as the characteristic feature of contemporary finance is often exaggerated. Revenues are relatively small compared to the total market.4 Recently, market share has dropped due to hypercompetition and infrastructure costs that accrue in the effort to stay competitive in markets with diminishing bid-ask spreads (a result of competition). 5 However, automation and algorithms have, apart from exploiting „predictive structures” (MacKenzie (2016, 6), ushered in a new trading paradigm: direct interception into the pricing mechanism relying on speed (or, technically, low latency). Figure 1: CNBC live coverage, Flash Crash Capitulation, 2010

With competition intensifying in this segment, too, what appeared are schemes that distort competition directly on the level of market infrastructure (for instance, the so-called order type controversy). As will be shown below, some market centers supported (and apparently still do) “regulation arbitrage:” with the growing number of exchanges – profit-seeking corporations fighting for market share, rather than public institutions – the exploitation of

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regulation asymmetries has become thriving business for traders in the know (which are frequently shareholders of these very market centers). Market activity increasingly borders on, or is already on the paths of, illegality. In order to examine the consequences of HFT I will resort to the term “resolution” and its relation to immediacy as visibility. I will first look at two diverging interpretations of the Flash Crash 2010 to delineate the debate and the issues relevant for HFT and its regulation, before I enter into an examination of what seem to me the most consequential implications of quantitative trading that shape the core of this article. My interest is not in resolving which of the two positions holds true – both the official investigation by the joint CFTC/ SEC report and the analysis by the financial data provider Nanex are controversial and received criticism. Instead, I focus on the “visibility conditions” (how they relate to immediacy) and the resolution philosophy that informs them.

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In brief, my proposition is threefold: Firstly, and based on my reading of the Flash Crash and financial automation, in the current technological and legal frameworks algorithmic trading is incentivized (mainly by technological innovation and by order types that are offered by profit-seeking exchange places, and compound competitive advantage). Transparency rules 6 have less weight than proprietary rights; individual, sectoral and public interests are to a large extent mutually incompatible. This conflict, which I argue is pervasive in all data fields, is due to technological, legal as well as philosophical reasons and their interrelations, a fact that transcends finance into other forms of automation. The complexity of automation is not a matter of any one of these conditions but a result of their interaction. Hence, establishing visibility is in this instance a question of developing resolution tools that deliver insight. I propose the term “aesthetic of resolution” as a method to analyze black box automation.7 As I will argue finally, rather than attempting to penetrate the black box from outside – and here I am referring not only to finance but to black boxes in general – opacity dissolves into transparency only by a shift of mentality by which aesthetics of resolution as a technophilosophical concept turn into a politics of resolution. This shift is based on the necessity that knowledge transpires from inside the black box. It rests on what I term the figure of the renegade – the notion of resolution is linked to the ambivalent figure of the informant, the whistleblower – a traitor for her field but an educator of the general public.

THE FLASH CRASH. Resolution in Microtime “A distributed system is one in which the failure of a computer you didn't even know existed can render your own computer unusable.” —Leslie Lamport

The investigation of the Flash Crash resulted in a joint official report by the United States regulatory authorities, the SEC and the CFTC (2010). It was published a few months after the incident and put the blame on human trading. But a contrasting analysis of the event conducted by a small financial data provider claimed that the crash was in fact caused by orders executed automatically by algorithms. Nanex LLC records trading data and was thus in the position to examine the event on their own account. The official report was based on material made available by exchanges and market participants, which usually has a resolution of one-minute trading intervals. Such dataset

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might have been adequate to analyze trading activities before the ascent of HFT, but today “in the blink of an eye, the market moves what used to take humans thirty minutes” (Eric Hunsader, founder of NANEX, in: Taggart, 2010). This quote by the founder of Nanex illustrates the sheer pointlessness of scrutinizing market activity above the transaction frequency of the fastest traders. Their professional experience with market data allowed Nanex to intuitively escape the trap of one-minute resolution, which in our case conceals more than it reveals.8 They realized that conventional market data records did not show any material traces of what might have initiated the rupture that tore the intricate fabric of market prices. Hence, they delved deeper into the ‘abyss’ of micro-time to look at fractions of a second. Step-by-step, they enhanced the temporal resolution, and eventually, at dizzying depths of time, the material traces of the Flash Crash came into view. When Nanex made a strike of market activity far below the threshold of perception, what they ‘saw’ at first glance looked like a glitch. But what emerged from the forensic analysis were the imprints of an elaborate scheme. They had encountered information in a realm that was deemed to only emit noise if anything.9 As Eric Hunsader stated: “The SEC/CFTC analysts clearly didn’t have the dataset to do it in the first place. One-minute snapshot data, you can't tell what happened inside of that minute. We didn’t really see the relationship between the trades and the quote rates until we went under a second” (Nanex, 2010). Their final statement was unambiguous: “High Frequency Trading caused the Flash Crash. Of this, we are sure.”10 As mentioned above, I won’t address the truth claims of both the official report and Nanex. My main concern is the discrepancy between the material traces and their consequences. I will focus on Nanex as provider of a set of forensic resolutions on the material data of the Flash Crash, which raises the question of how resolution techniques operate as regards visualization (making tools that enhance perception and render material evidence); evaluative measuring (computation of sequences and relations); and knowledge production (analysis and interpretation). Even though high-resolution ‘telescoping’ offers glimpses into financial microtime, attribution and solution – decisive elements of the semantic field of the term resolution – rest beyond the capacity of Nanex or any third party (market participants and the general public). The question as regards the actuator(s) of the Flash Crash has still not been resolved.11 REPERFORMATIVE FORENSICS IN A HYPERCOMPETITIVE ENVIRONMENT “All consciousness is a matter of threshold.” —Gilles Deleuze

An investigation into the complexity of market interplay is not only confronted with one or several black boxes but with the meta-black box of the market per se. It encompasses the entire system in its complexity, including but not restricted to brokers, traders (in the broadest term), market makers and centers. As the former HFT trader David Lauer remarks: “The markets and the interplay in the industry between all these firms with all these very complicated and complex technology systems and how they interact makes the entire system of exchanges, high-frequency, brokers and the interaction between the technology, it makes it a complex system. There is no cause and effect […] What caused the Flash Crash is a nonsense question. […] if you were to replay the same sequence of events, identically,


Figure 2: Flash Crash analysis, courtesy Nanex LLC

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there’s no guarantee that it will cause a Flash Crash again. That's the nature of complex systems” (Meerman, 2013). After failing to attribute motive and blame, Nanex changed their investigative strategy to mixed forensic analysis and witness review. They asked the mutual fund Waddell & Reed – the party blamed by not identified by the official report – to grant access to their trading data. it is most plausible that in accordance with the capitalist proprietary regime the fund would have declined disclosure had they not been blamed. But by the time Waddell & Reed had a vested interest in clearing their name. The incorporation of the proprietary source code allowed Nanex to classify the data of a specific address. Their analysis relied on an apparatus that pairs four quantitative frameworks in an effort to deliver sufficient approximation to the trading operations: Nanex’s extensive archive of financial data; quantitative analysis; custom-made, adaptive resolution devices that power the investigation of data sets; and the algorithmic trading data from the financial black box (including the execution algorithm of Barclay Capital Inc., their broker).12 This framework led Nanex to deviate from the official narrative. Although their interpretation is controversial (algo traders, for instance, hailed the official report), it brought the cybernetic regime of HFT to light. A paper co-authored by members of the official investigation maintains the narrative that “HFT did not cause the Flash Crash, but contributed to extraordinary market volatility experienced on May 6, 2010. […] high frequency trading contributes to flash-crash-type events by exploiting short-lived imbalances in market conditions” (Kirilenko et al., 2014, 2). The authors detect immediacy as problematic, as it is exacerbated by HFT to its own benefit. “Because advanced trading technology can be deployed with little alteration across many automated markets, the

cost of providing intermediation services per market has fallen drastically. As a result, the supply of immediacy provided by the HFTs has skyrocketed. […] the benefits of immediacy accrue disproportionally to those who possess the technology to take advantage of it. As a result, HFTs have become the main beneficiaries of immediacy, using it not only to lower their adverse selection costs, but also to take advantage of the customers who dislike adverse selection and do not have the technology to be able to trade as quickly as they would like to. […] Consequently, HFTs can both increase their demand for immediacy and decrease their supply of immediacy just ahead of any slower immediacy-seeking customer.” (Kirilenko et al., 3). Immediacy, I’d argue, defines visibility as a performative issue. In relation to market activity – especially in, but not restricted to, times of high volatility – immediacy equals visibility: immediacy is technological visibility constructed by resolution techniques. Developers in the algorithmic trading space increase obscurity within the entire playing field by narrowing, if not modifying, the field of visibility (of the order book, to be precise). This instance is the most current in a row of performative revolutions in finance that started with the displacement of (human) floor traders by quants (the framing of finance by Black Scholes Merton (BSM); the quantification of the volatility curve in the pricing regime; which goes hand in hand with shifts between cost centers and profit centers.13 When we accept immediacy as a form of visibility in microtime – engineered by resolution techniques that both enhance the visual field and act upon it (and obscuring it for those lacking the means) – we can adopt Michel Callon and Donald MacKenzie’s theory of performativity. While MacKenzie focuses on a different realm of financial market activity – precisely derivatives trading and the BSM model, and hence the profit model of finance that was challenged

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by low latency trading applications – Callon (2006) offers a wider view on performativity: „My thesis is that both the natural and life sciences, along with the social sciences, contribute towards enacting the realities that they describe.” The black box as a scientific apparatus has conquered finance and constructs its reality in a similar way as economic theories acted on it. In the light of recurring flash crashes and avalanches, MacKenzie’s “counterperformativity” 14 seems to highlight this fact even more robustly: Whereas the notion of a selffulfilling prophecy explains success or failure in terms of beliefs only, that of performativity goes beyond human minds and deploys all the materialities comprising the socio-technical agencements that constitute the world in which these agents are plunged: performativity leaves open the possibility of events that might refute, or even happen independently of, what humans believe or think.

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Due to the complexity described by Lauer, the market cannot simply be “captured” in all its immediacy and “replayed” like a film. 15 The vision-enhancing sensors, which detect time-blurred traces and mark discriminations in a complex environment, deliver information from noise. It has to be unearthed and then resolved in a separate stage. Thus, a forensic analysis is neither fully embodied nor defined by the abstract representations of data traffic. Rather, the analysis is situated, i.e. constructed, inbetween the juncture of performance as the actual presence of an event (exemplified by the occurrence of the Flash Crash); performative analysis as providing “visual collateral” of a “re-animation” of the original obscured presence after the fact; and beyond market activity per se and thus beyond MacKenzie’s use of the term “counterperformativity,” as the effect of a renegade act disclosing material otherwise under non-disclosure and as a consequence of “capitulation.”16 Figure 3: “2015 Dollar-Flash Crash data burst, courtesy Nanex.

We can now outline a sharper distinction, which will help us to grasp what is at play in the forensic documentation and evaluation apparatus. Artificial sense organs reach into deep time by increasing the resolution bandwidth in order to revisit the otherwise insensible “scene of the crime.” The analysis is thus an intricate and extensive cybernetic undertaking characterized by a process of re-mapping, remodeling, re-visioning, and re-narrating a specific black box past that happened at near-light speed—a performance ex post that was the occurrence of a future event. As this approach re-enacts the performance of the event, the methodology can be specified as a reperformance. The technological, calculative aspect of sifting data for evidence – enacting the reperformance –

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becomes explicit in the sheer enormity of the material Nanex examined: “May 6th had approximately 7.6 billion […] records. We generated over 4,500 datasets and over 1,200 charts before uncovering what we believe precipitated the swift 600-point drop […]. In generating these data sets we have also developed several proprietary applications that identify the conditions described in real time or for historical analysis.”17 Only rigorous research into the deeper, imperceptible strata of microscopic time reveals the material matrix. Such excavation elucidates an inversion of time from Chronos to Kairos from a chronological interpretation (replay) of pricing to one of intense event time (real time). Methodologically, it inverts the relation between time and space: while the common notion of archaeology entails entering into concrete and thick space cautiously (as when employing technologies of surveying, probing, and classifying), in order to extract the material witness (a truth) of a former era, archaeology of finance is forensics of performance in the future. It probes the imperceptible materiality of time becoming. It detects patterns, recovers artifacts whose existence is derived from financial models and built on technological miniaturization and automation, aligned with the politics of securing, excluding, and enclosing. Research is applied to an infrastructure that ‘makes happen’ in which “the concept of performativity has led to the replacement of the concept of truth (or non-truth) by that of success or failure” (Callon, 2006, 13). This time around, though, it is not economic volatility modeling (i.e. hedging risk) but latency and order book penetration (i.e. the technological pursuit of riskless profits). The Flash Crash narrative unfolds in the extended realm of trading bandwidth and the reduction of profit margins in which the technopolitical regime of success/failure becomes apparent via exclusion/inclusion, prioritizing the algorithmic aesthesis of an elite of HFT traders. For Manoi Narang (2014, 18-19), a former champion of HFT, the field’s competitive ecology is synonymous with other technological applications: “many micro-industries experience an initial phase of immense profitability, which in turn attracts a great many new participants. These new participants drive up competition, which in turn causes profit margins to diminish. Eventually, so many participants are competing that margins can turn negative.” Haim Bodek, however, whose HFT hedge fund went bankrupt due to “order flow information asymmetries,” gives a darker view of HFT’s “noisy” ecology: “There’s basically interaction in the market. This firm knows how this works here, they know this practice works over there, and they’re able to get to 15% or 20% of the market because they know that – and that’s the only reason they can get there […] you have this efficient market and certain regulators say it’s great, it’s only a penny wide, the customer gets the best price. And now I’m telling you, you can have a firm with 20% of the market and the rules change a little bit and some transparency happens and they collapse to 3%. So, what’s my epiphany? I basically believe that individuals running large trading companies, cannot actually tolerate a zeroprofit margin environment. We will find ways around that situation. We will cheat. We will manufacture situations. We will undermine infrastructure” (in: Nestler, 2014).18 Below the radar of state agencies established to regulate market activity, corporate self-interest created an even deeper level of incorporation programmed into automated trading as the “genetic” code of a new breed of agency in the market system. Mathematical models and algorithms


revolutionized the logistic infrastructure of exchanges and displaced the trading pit and its market makers (human traders known as “specialists” or “locals”) in favor of faster execution rates and smaller spreads. Algorithmic traders instituted an arena around and between matching engines where they intervene without human intermediaries. Inigo Wilkins and Bogdan Dragos (2013) argue that “algorithms are no longer tools, but they are active in analyzing economic data, translating it into relevant information and producing trading orders.” J. Doyne Farmer (2013), a former financial engineer and co-director of the program on complexity economics at Oxford’s Institute for New Economic Thinking, notes, “under/price-time priority auction there is a huge advantage to speed.” What emerged is a hypercompetitive environment that tweaks rules and infrastructures. It ‘skews’ the smile problem from the surface of derivatives pricing to the immediacy of latency volatility – a term I propose for the inconsistencies (rather than uncertainties) in a hypercompetitive trading environment, in which developers have replaced quants as the leaders of innovation. Even if there is an absolute limit to speed, the operable spaces of time between human perception and algorithmic reaction time are cosmic, to say the least. A divide of response time has opened up, the gaping but invisible abyss of latency: a new class of resolution enclosures and scales – and hence knowledge – has found the means to effectively hide its machinations from less immediate competitors. If derivative finance and its abstract models were (and still are) a mystery to the public at large, automated trading has escalated finance beyond all recognition. Here, Gottfried Wilhelm Leibniz’s notion of apperception ceases to be a conception of conscious experience emerging from small, unconscious perceptions. The myriads of mathematically constructed small perceptions (of which these camera-engines are not at all “unconscious”) define a virtual field of machine apperception where those who do not command the latest cyborg infrastructure are captured or blocked. Information asymmetry gains traction on the level of systemic visibility. Financial market architecture with its proprietary logistics is a black box not only with regard to the parameters of official inquest, but also in terms of knowability and objectivity in general (and beyond algorithmic trading proper). What the high-frequency black box emits is not information but noise. Such technowledge (a term I use to distinguish bot-coded acquisition of knowledge) exerts influence on the industry, but of necessity also incapacitates the public forum as a whole. Quantitative speech translates into algorithmic violence, invisible and insensible, built on performances that are real but unrecognizable (fictitious capital not in the sense of it being insubstantial but in the sense of applying tricks and asymmetries). Noise exceeds the category of information theory towards the asymmetric other that is not detected by the majority of market participants because it is not a signal in the sense of communication. In the ever-denser, hypercompetitive environment of narrowing spreads only the ruthless survive. Noise is a guerilla tactics that stops at nothing in its ‘pursuit’ for profit. 19 It is not simply a tool; it is a weapon of counterinformation that injures without directly inflicting the feeling of pain; a powerful and disruptive “rhythual,” to add the layer of the ‘immediated’ frequency of algorithmic speech to Judith Butler’s (1997, 159) performative “ritual”: “The performative needs to be rethought not only as an act that an official language-user wields in order to implement already authorized effects, but precisely as social rhythual” [original: ritual], as one of the very "modalities of practices [that] are powerful and hard to resist precisely because they are silent and insidious, insistent and insinuating:'

When we say that an insult strikes like a blow, we imply that our bodies are injured by such speech.” The most cunning insults are indirect. Fisher Black, in his seminal text succinctly entitled Noise (1986, 529), holds that “noise is information that hasn’t arrived yet.” When we accept, as evidence has shown, that low latency trading is defined by speed advantage, we must ascertain a bifurcation that goes far beyond competitive advantage in Hayekian information markets: Those who do not command the automated rhythual of micro-time face noise as the “silent and insidious” other of information; they cannot perform equally and thus cannot partake in “that reiterative power of [market] discourse to produce the phenomena that it regulates and constrains,“ to adopt Butler’s linguistic reading of performativity to the fitting speculative speech of financial markets (1993, xii).20 Insult as information asymmetry turns into the violence of noise asymmetry – a limitation of visibility that forms the space in which the reiteration of algo speech becomes the dominant language; an avalanching of “volatility created by circulatory forces so as to preserve and restore [their] liquidity” (Li Puma, 2016, 51). But such asymmetry plays out on the systemic level of platform capitalism, rather than between individual entities – corporate noiseing of information is manufactured in financial markets as well as other data fields. It is therefore a question of the politics of regulation and the law. What we are confronted with are schemes that benefit from exploiting regulation arbitrage, i.e. regulatory and legal overlaps or gaps.

AESTHETICS OF RESOLUTION “Performativity is not about creating but about making happen.” — Michel Callon

The success of HFT strategies and technologies is a convincing example of a shift in which performance implies an ontology that flattens the relations between human and non-human actors to the point of the annihilation of the former. Here, flattened ontology is not an ontology in which all are (approximately) equal, but one in which a paradigm prevails by reconfiguring nodes and connections. As soon as its reign stabilizes, hierarchies solidify, albeit in very volatile, metastable fashions. Automated markets are a consequential step in the techno-quantification of markets – including the data industry, which is market-driven and financialized (and it needs mentioning that derivatives are paradigmatic metadata!) – where technology as technowledge forms a new medium. N Katherine Hayles (1999, 13) reminds us, “for information to exist, it must always be instantiated in a medium.” Bots act (but not always interact) on the infrastructure. To paraphrase Marshall McLuhan, they ‘massage’21 an electronic ‚body’ whose market environment they reconfigure into an algorithmic space. At the center of HFT are developers that speed up transactions to the level of microseconds. Profit is not primarily being sought by dynamic hedging in an uncertain environment. HFT is less engaged with implied volatility and the pricing of derivatives. Hence, quants – masters of the universe not long ago – are being replaced by big data systems.22 In this technosphere, the ‘core’ – the order book – is exploited directly with high volume to amass small but (relatively) riskless profits by reading, interfering and controlling matching engine signals. The production of risk – the fundamental mode of production of finance as it engages with the future – turns into an operational hazard; optimizing infrastructure, hardware and code, rather than mathematically scrutinizing pockets of uncertainty. And

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while the complex algorithms of derivative trading recalibrate all the prices to reengineer the derivative universe, HFT algos are simple in order to facilitate low latency interaction; massive amounts of data are analyzed, but trading logistics are streamlined to happen in a flash. As regards the technological incorporation of financial markets today and their infrastructure, the principle resolution threshold is the visibility of the order book – ideally, information is visible to and can instantly be acted upon by all market participants. Regulation National Market System (RegNMS) was enacted to establish such a market ideal but ‘instantly’ exploited by execution rates faster than price consolidation. The crucial term for real-time action is “instant”, as it opens up to the whole gamut of technowledge that constantly redefines latency / speed horizons – and therefore the increment of an actionable instant as well as the constriction of immediate visibility to resolution machines. The HFT trader and whistleblower Haim Bodek ascribes the “cannibalistic” acceleration to competitive advantage: “Since 2007, we saw compression in the algorithm trading space where the profit margins approached near zero. And I am part of that problem. I ran my firm specifically to tighten up markets. We sometimes call that the race to the bottom in the business. […] “If I can make a near-risk-free fraction of a cent and even if the whole day would have demanded a little bit more, I’m happy to do that now even if we barely make a profit because I’m basically taking away the opportunity for someone else to make a profit. […] The strategy, which many of the algorithm trading firms did, was basically market share and just bring it to a place where our competition couldn’t handle it” (in: Nestler, 2014, 14:20).

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As the financial engineer and philosopher Elie Ayache points out, however, the scientific paradigm behind quantitative trading and automation hasn’t changed – and thus implicitly refutes Rishi K. Narang’s assertion (2015, xi) that “quantitative trading can be defined as the systematic implementation of trading strategies that human beings create through rigorous research.” To Ayache, automated trading is not a new scientific method (an achievement he reserves for the volatility smile problem) but a new wave of exploitation within the probability paradigm and its futile scales (2015, 52): “The market is the only place where the qualitative absolute event, the one that is irreducible to measure and scale and probability, finds quantitative expression, in a material medium borne by numbers, or rather prices. The market is quantitative history. One should keep in mind this contradiction in terms: one should remain aware that the historical event is incalculable and unquantifiable because it precedes any scale; and then understand the extraordinary nature of price (and of its medium: the market) as the quantification of that unquantifiability. This is why the market is truly the technology of the future. You have to realize that price is not a number. Quantifying the event (translating it into numbers) is impossible; yet the market is such a translation, precisely in so far as it takes place outside of possibility. 'Quantitative history' does not mean that the event is being forced into the mold of numbers. Rather, a quantity, a number of an extraordinary nature, has been found such that history can be quantified.” In a nutshell, for Ayache the market is real, whereas probability is not.23 To his mind, the hard problem of the volatility smile has not been resolved, nor has it been tackled in algorithmic trading on the supposition that the (option) pricing technology (BSM reversed) works. Algorithmic trading accelerates the exploitation of an old paradigm24 materially embedded in

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the computer-powered calculative evaluation of massive data sets. Predication machines attempt to evade their unpredictable contingent event by trading in fractions of a second.25 They reorganize the market to an extraction of price from big data. This performative paradigm exploits a future it doesn’t know and doesn’t need to know as it meets it immediately. The production of risk as a technology to deal with volatility – a potentially massive concept for complex societies and their needs and desires – complexifies price, but without producing a present in which the latter is translated back to value. Rather, it produces massive volatilities in the social realm. Resolution dissolves into leveraged power. THE TERM RESOLUTION AND ITS SEMANTIC FIELD “Noise crashes within as well as without.” –N. Katherine Hayles

The notion of resolution involves technologies that engineer thinking and affecting, orient attractions and forge applications. Resolution is not restricted to technical appropriation, such as a device for perceiving (previously undiscovered worlds), a visualization tool, the setting of a laboratory, big data evaluations or the like. Neither is it only a cultural technique of conciliation and consultation to craft compromise and compensation. It is rather a basic category, though not uncharged with ideologies. An instrument of power, it inspired revolutions and served restorations. Its trajectory is towards openings and new perspectives but at the same time it can also be reversed to map the scales of new hierarchies. Fundamentally, however, resolution initializes new layers of thought that move from surface to surface in a connective, interrelating and unbiased way (initially a flat ontology) that erupt in new visions and knowledge. In such a post-disciplinary arena of research, philosophy and art are natural allies. Resolution apparatuses are instrumental for developing tools and methodologies. They provide us with significant and relevant meaning in a technological as well as political sense but also produce competitive advantage when commodified. As such, resolution is one of information capitalism’s cardinal means for producing attraction, evaluation and appreciation. This is due to the fact that it is about commensurable relations and associations (pricing), or, as Bruno Latour (1993,161) says about actors: “Nothing is by itself ordered or disordered, unique or multiple, homogeneous or heterogeneous, fluid or inert, human or inhuman, useful or useless. Never by itself, but always by others.” Its productive feature of profit maximization is an inheritance from post-Fordist operations (e.g. while a digital camera contains the full scope of its resolution capacity the price paid determines which resolution is unlocked; this is not simply a technique to control access and commercial interests but the sign(ature) of the capitalist order). Here, the semantic openness of the term resolution that spans from visualization to knowledge to decision is enclosed technologically, semantically and socially. Here, its intrinsically flat ontology as a communicative ensemble is breached, broken, corrupted, redirected, and stratified: The black box is a machine that exploits resolution through the whole gamut of the latter’s semantic potentials. It inserts hierarchies. However, resolution techniques are a performative power and therefore never pure, impeccable and flawless. There are glitches, inconsistencies and noise that escape the probabilistic contraption, in consumer products as well as in finance. Human-technological entanglements give rise to new forms of (volatile) collectives. Hayles (1999, 29) general thesis comes to


mind: “[t]he contemporary pressure toward dematerialization, understood as an epistemic shift toward pattern / randomness and away from presence / absence, affects human and textual bodies on two levels at once, as a change in the body (the material substrate) and as a change in the message (the codes of representation).” While accounts of financial practice up to the 2000s, such as Mackenzie’s, are concerned with “bodies” (physical and mental ones as well as devices) and their “messaging” operations (extended and augmented), automated trading conglomerations are replacing human market interaction and its ‘trivial’ resolution apparatuses for algorithmic highresolution market making. Technology made it imperative to automate, control volume and reduce latency, in order to stay in the game – not only for small ‘boutique’ hedge funds but also for big players like investment banks. These massive real time calculations expand beyond the financial field into other black box operations that fold in new scales and hierarchies and new entanglements. Such information asymmetry – and the black box is an engine set up to produce and sustain information asymmetry – conquers the whole gamut of the semantic potentiality of resolution. It has the distinct ‘advantage’ that it constructs the future on a probabilistic trajectory: for the ‘uninitiated,’ it feels as if events happen contingently. Hence, noise and information are the two faces of a violent scheme that acts under the veil of complexity and uncertainty while it extracts the future (the product) from the simplest activities and imaginations (its natural resource, its raw material). The politics of security and austerity are but the social and economic implementations of such exposure. And we should add that this constructs the future today towards a post-capitalist society. “There Is No Alternative,” the older model’s extraction of profits is becoming defunct.26 It is to be seen if the post-capitalist order will be based on an authoritarian implementation of ‘sharing’ 27 or the empowerment of new subjectivities and collectives. I therefore conclude with an example of an ambiguous (and even marginal) figure and its environment that at the same time hold the potential for rethinking and reactivating autonomy dynamically and reorients agency beyond critique. As I delineated above, here the aesthetics transform into politics of resolution. TOWARDS A POLITICS OF RESOLUTION. THE FIGURE OF THE RENEGADE “Wall Street is not immoral; it is amoral. When you are not comfortable having an ethical discussion with somebody over lunch, that’s a clue. When those types of basic question are taboo you’re not going to have much reflection.” —Haim Bodek

Scientific and technological progress have had far-reaching implications on financial markets, from human to algorithmic market-making; from available time periods for successful investment to those for successful speculation (to discern the terminology for frequencies of transaction turnovers); from value and evaluation to price and pricing, from randomness to risk production as a complex and contingent operation on the future. Beyond the market proper, this shift has radically affected a fundamental category and notion, as Jon Roffe (2015, 29-30) argues: “value has no place at all in the market, which is solely the regime of price. This is already implicit in the definition of values as qualitative since the market is a locus for quanta alone. The individual and collective habits and the institutionalized social memory that provide the field in

which values come into being and are deployed, is opposed the market, characterized as contingent opening onto the future, and figured in open-ended and unqualified pricing process. While] the market is not a necessary reality – and could not be, given the through-and-through contingent character of the pricing-process – it nonetheless confronts social formations with the radical contingency that the process embodies […] the pricing process always has the potential to undermine value.” At the same time, the quantification of pricing (beginning with implied volatility calculated on BSM) has affected a flat(er) ontology in financial markets. Especially Ayache and Roffe’s recent philosophical elaborations delineate the performative resolution of contingent claims (Ayache’s preferred term for derivatives). The hierarchy of underlying price above derivative value has flattened out to the recalibration of derivative prices constantly derived from and implied in the underlying as well as derivatives on derivatives. Volatility of volatility introduces a surface into the market, for which price stands as the non-human nonessentialist actant. The complex and intricate operations and machinations between humans and bots result in new resolutions that either constrain, or, resolve, our perception and cognition. Here, what I term aesthetics of resolution approaches politics of resolution based on a technowledge that conceptualizes and provokes what Levi R. Bryant (2011, 289) describes as “an attentiveness [that] would provide us with the resources for thinking strategies of composition that might push collectives into new basins of attraction.” And he continues (226-7) with a gamechanging environment: “Latour proposes the practice of composition as an alternative to critique. Where critique aims at debunking, composition aims at building. Where critique focuses on content and modes of representation, composition focuses on regimes of attraction. If regimes of attraction tend to lock people into particular social systems or modes of life, the question of composition would be that of how we might build new collectives that expand the field of possibility and change within the social sphere.” However, as the Flash Crash and its investigations show, in order to push resolution to the level of immediacy, we are in need of an attractor that is both inside and outside the black box. In other words, this counter-agent must provide a trajectory and an exchange out-of and in-to. Black boxes – operators that extract competitive monopolies by folding in a new ontology of resolution – are machines whose performances excise the productive elements from the communicative flow by implementing access hierarchies (including what I called “the rhythual of noise asymmetries”). This undefined reiterated power can only be addressed by the resonance of an agent who not only knows the violence expertly but takes the consequences of exposing herself (embodying the massive risk entailed). I call this attractor-agent the figure of the renegade. Merriam Webster defines “renegade” as a “person who leaves one group, religion, etc., and joins another that opposes it,” or, as “someone or something that causes trouble and cannot be controlled.” Hence, the renegade is a traitor who transgresses the unwritten laws of complicity and secrecy in her system, her industry. But (often by default rather than design) she becomes educator of the general public (in institutional degrees). This is another point that takes effect in all sectors and fields of power beyond finance: by providing material from undisclosed or classified sources, the renegade has become the principal expert witness for the public, procuring otherwise unavailable (unknown) evidence of information asymmetry (most famously, of course, Edward Snowden).

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In the financial context, this particular manifestation of the witness – that does not testify on the basis of real presence – becomes the medium of forensics by a logistics of redirection (e.g. the leaking of confidential material that cannot speak for itself). The story of the Flash Crash offers an example of the significance for the possible production of future publics, depicting in all its complexity the horizon of an exposed and discontinuous self-regulating force against the boundless utopia of a self-regulating market. In the impasse between “perspectives” such as the official investigation and Nanex’s renderings, the intricate problem of resolution demonstrates the ambiguity contained: the participation of a traitor is required to unearth data buried in undisclosed documents, in fractions of a second or elsewhere. Hence, the paradigmatic shift to technowledge also gives rise to the cognate notion of a subtly different witness than the eye-witness, one who is capable of challenging calculative violence without plainly being an informant. The financial renegade who presents objects as subjects-of-debate is an expert witness as much as the scientific analyst who subsequently (re)performs the forensic narrative by composing the facts (both can be the same person, or, the incorporation of human and nonhuman expertise). As marginal and ambivalent such moves might sometimes seem they nonetheless constitute opposition within the system. Revisiting Judith Butler’s (1993, 163) reasoning on the speech act and applying it to our field of inquiry, the one who speaks is directly addressed by the violence: “Insurrectionary speech becomes the necessary response to injurious language, a risk taken in response to being put at risk, a repetition in language that forces change.”

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When confronted with the black box it seems that composition and association are secondary to the renegade act (they follow it), which itself is secondary to an event or a series of events (violence). Reframing Judith Butler’s reading of the performative from the marginal as a potential for insurrection, the renegade opens new inroads into sets of technowledge for building new compositions and collectives by performatively ‘in-citing’ speech from affirmation to allegation. Systemically speaking, a marginalized outside (e.g. the public) can again be (1993, 160) “inaugurated into a sociality:” “The performative is not a singular act used by an already established subject, but one of the powerful and insidious ways in which subjects are called into social being from diffuse social quarters, inaugurated into sociality by a variety of diffuse and powerful interpellations. In this sense the social performative is a crucial part not only of subject formation, but of the ongoing political contestation and reformulation of the subject as well. The performative is not only a ritual practice: it is one of the influential rituals by which subjects are formed and reformulated. This point […] raises again the possibility of a speech act as an insurrectionary act.” The ambivalence, the perils and the counterperformativity of the renegade surface in the flowing story (in: Nestler (2014, min. 40:36): Haim Bodek exposed an order type violation (“Hide Not Slide”) by Direct Edge (now a subsidiary of BATS Global Markets) in 2011, which resulted in the record penalty of $14m: 28 “The whistleblower syndrome is kind of a pattern. The whistleblower says that ‘this is obviously wrong and I’m going to call it out’ and then when I call it out everyone else is going to realize that it’s wrong and it’s just going to get fixed right away. What he doesn’t realize is that everybody knows about it. So, the message a whistleblower should probably address is […] ‘you know this is wrong and I know all of you recognize this

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is happening, but this is wrong.’ And when you realize that that’s what whistleblowing is – that you’re making people go through the uncomfortable process of looking at themselves, that’s all it is – you realize you’re not the hero, you’re not bringing new information to the table. You’re the guy pointing out the thing that no one wants to see, that everybody knows about. And what’s weird about all these cases is that it seems that these, call it injustices, happen in pharmaceuticals, in labor and it’s the same pattern over and over, where there’s massive injustices which no one wants to talk about and no one wants to admit vocally but everybody knows that’s how things work. It doesn’t change until the whistleblower does it.” This marginal position notwithstanding, however, the figure of the renegade points to a destination that emphasizes the potential for resistance inside rather than outside a system, in our case financial markets and information capitalism. In fact, the renegade constitutes an act that proceeds from mere dissent (critique within a system) to concrete insurrection (an act of resistance and renunciation). The renegade is an expert acting from a point of no return, a risk taker at the point of ultimate crisis. By speaking out and sharing proprietary data or classified information, she not only discloses what was excluded from public debate but also manifests noncompliance as an act of civil courage. This is a point to be taken seriously even when the experiences that cause her to be disobedient do not inform an ethical decision to act against structural violence, but to an attempt to improve and advance the system – a fact that applies to many industry whistleblowers. The renegade is not a heroic figure; it is as ambiguous as the world she inhabits. But this is not to the disadvantage of the concept: in the midst of (fabricated) noise – in which noise becomes the master of information – the system accidentally yields information; exploiting the event of sectoral asymmetry resolves societal blindness. This renegade act – essentially a violation of current custom, rule or law – produces a host of viable resolution materials across the semantic field of the term ranging from shared visualization, discrimination and cognition to decision-making. Whatever the impulse, each act perforates an autonomy that is otherwise decreasingly conceded to natural persons while it is granted to corporate bodies by virtue of their assumed maturity and complexity. Hence, the renegade act reclaims autonomy against all odds and against platform capitalist and data driven forms of sovereignty. That said, it certainly does not constitute political autonomy with a capital A – an autonomy that bestows rights or vests powers. To the contrary, it constitutes a singular act that attracts serious problems and might fail. The renegade is an extremely precarious figure, as history has shown unmistakably. Moreover, enclosure, virtualization and commodification of data by normalization leads to a constitution of citizenship where the virtual, bot-assembled stake in the subject increasingly separates it from its physical body. What is looming at our political horizon is its disappearance from the social contract and from status, rights and autonomy (Hayles, 1999). But Bruno Latour (1999, 270) reminds us: “While a division between nature and society renders invisible the political process by which the cosmos is collected in one livable whole, the word ‘collective’ makes this process central.” Hence, if we expand the figure of the renegade to a notion of collective voices and practices – a step in the transformation from aesthetics to politics of resolution – we can conceive renegade solidarity as a forceful strategy of renegade incorporations. It counters information capitalism’s immediate biopolitical grip on life


and its ever-shrinking distance (physically, affectively and ethically), which it manufactures from the absolute distance it invests in – knowledge does not resolve, it dissolves into what it cannot know but what it can intensify as price. The making of resolution and the renegade act stand against the violence of information asymmetries and noise by counter-constructing their “assemblies.” Renegade solidarity stands for a politics of resolution of counterinstitutions, in which a collective of experts (activists, scientists, artists, nonhuman agents) act together to enhance resolution across the whole gamut of its semantic and political meaning. 29 The autonomy gained is ambivalent, marginal, in a state of constant flux and highly volatile if not outright dangerous. At the same time, it creates value by producing myriad forms of knowledge and generating tactics of infiltration. In intensifying, reinforcing recursive acts that belong to language as well as to other logics of expression, new modes of making (poietics) can come into existence and produce new ways of perceiving, thinking and making the world. This is a case of offering platforms of affiliation (rather than the conformity exploited by platform capitalism); and a case of strengthening the desire and urgency to participate in forms of common ownership and autonomies that exist side by side and in flux.30 And in which the future is seen with differentiating, envisioning and resolving eyes through all the folds that distort the playing field. In short, to move from low-res to high-res across the whole gamut of resolution’s consequential – and hence not only technological or financial but also philosophical and political – meanings.

CONCLUSION The term resolution speaks of intellectual, physical and affective potentials; it involves technological and algorithmic properties, operations and the “distances” between them. It is a socially powerful node of how we may sense, map, differentiate and support material and at the same time performative relations. Moreover, it holds the potential for thinking and creating access to value(s) in radical contrast to the capitalist price(ing) engine and its proprietary logic, without losing the performative edge necessary within complex societies in flux. Against the enclosures and the noise of capital, autonomy is to be reconceptualized as a dynamic, open, aleatoric and instantaneous process (acts connected to a multitude of contingent moments) that purposely integrates ambiguous, heteronomous influences in order to make resolution in the full meaning of the term. The multifaceted semantic field of resolution and its technological, aesthetic, social and political significance – ranging from visualization, discrimination, intelligence and knowledge to intention, purpose, (common) initiative and (joint) decision-making – offers a collectivity that presents a conceptual basis for a practice, which does not lose sight of rethinking sociopolitical constitutions against the conditions that make the ruptures and breaches of social contracts possible in the name of proprietary interest. Thus, it plays an eminent role in the effort of tracing aesthetic (what we ‘see’), poietic (what we ‘make’) as well as political (how we apply these to resolution as decision-making) consequences. Carving out an aesthetics of resolution in order to move towards a politics of resolution is a move from dissent to insurrection in solidarity with the figure of the renegade. Here, solidarity can either mean becoming or supporting the traitoreducator. Here, we encounter a revolutionary figure of our time that “re-maps” the playing field within a emancipatory paradigm that is not only interested in research and

analysis of data and events (critique) but in the technopolitical consequences of data processes, evaluations and decisions in order to make the black box speak and change its course (insurrection-resistance).

ACKNOWLEDGMENTS I’d like to thank Haim Bodek for his insights and engagement. This research started with the exhibition Forensis at Haus der Kulturen der Welt, Berlin, 2014, curated by Anselm Franke and Eyal Weizman (a project by Forensic Architecture and the Centre for Research Architecture, Goldsmiths, University of London).

REFERENCES Appadurai, A. (2015) Banking on Words. The Failure of Language in the Age of Derivative Finance. Chicago: The University of Chicago Press. Appadurai, A. (2016) The Wealth of Dividuals. In: B. Lee, R. Martin; Derivatives and the Wealth of Societies. Chicago: The University of Chicago Press. Ayache, E. (2015) The Medium of Contingency. An Inverse View of the Market. Basingstoke: Palgrave Macmillan. Black, F. (1986) Noise. Journal of Finance, 41 (3), 529-543. Bryant, L. R. (2011) The Democracy of Objects. London: Open Humanities Press. Butler, J. (1993a) Bodies that Matter: On the Discursive Limits of "Sex. New York, London: Routledge. Butler, J. (1997b) Excitable Speech. A Politics of the Performative. New York, London: Routledge. Callon, M. (2006) What does it mean to say that economics is performative?. CSI working papers series 005. CFTC/SEC (2010) Reports of the staffs to the joint advisory committee on emerging regulatory issues. September 30. Coeckelbergh, M. (2015) Money Machines. Electronic Financial Technologies, Distancing, and Responsibility in Global Finance. Farnham: Ashgate. Deleuze, J. (1994) Difference and Repetition. New York: Columbia University Press Farmer, J. D. (2013) The impact of computer based training on systemic risk. London School of Economics, January 11. Hayles, N.K. (1999) How we Became Posthuman. Virtual Bodies in Cybernetics, Literature, and Informatics. Chicago: The University of Chicago Press. Ho K. (2009) Liquidated: An Ethnography of Wall Street. Durham: Duke University Press. Kirilenko, A., Kayle, A.S., Samadi, M., Tuzun, T. (2011) The Flash Crash: The Impact of High Frequency Trading on an Electronic Market. Online: http://www.cftc.gov/idc/groups/public/@economicanalysis/docum ents/file/oce_flashcrash0314.pdf Knight, F.H. (1921) Risk, Uncertainty, and Profit. Boston: Hart, Schaffner & Marx: Boston. Latour, B. (1993a) The Pasteurization of France. Cambridge: Harvard University Press. Latour, B. (1999b) Pandora's Hope: Essays on the Reality of Science Studies. Cambridge: Harvard University Press. Li Puma, E. (2016) Ritual in Financial Life. In: B. Lee, R. Martin (Eds.), Derivatives and the Wealth of Societies. Chicago: The University of Chicago Press. MacKenzie, D. (2016) A Material Political Economy: Automated Trading Desk and Price Prediction in High-Frequency Trading. Social Studies of Science, 47 (2), 172-194.

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MacKenzie, D. (2006) An Engine, not a Camera. Cambridge: MIT Press. McLuhan, M (1964) Understanding Media: The Extensions of Man. Cambridge: MIT Press. Meerman, M. (2013) The Wall Street Code. Film documentary, 51 min. Online: http://www.youtube.com/watch?v=kFQJNeQDDHA. Nanex (2010) Flash Crash Summary Report. Sept. 29. Online: http://www.nanex.net/FlashCrashFinal/FlashCrashSummary.html Narang, R. K. (2014) The Truth about High-Frequency Trading. Hoboken: Wiley. Narang, R. K. (2015) Inside the black box: the simple truth about quantitative trading. Hoboken: Wiley.

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Nestler G. (2014) Contingent Ethics. Portrait of a Philosophy series II: Haim Bodek. Single channel video. Online: https://vimeo.com/channels/AoR Roffe, J. (2015) Abstract Market Theory. Basingstoke: Palgrave Macmillan. Simmel, G. (1990) The Philosophy of Money. London: Routledge. Taggart, A. (2012) Eric Hunsader: Investors Need to Realize the Machines Have Taken Over. The Blink of an eye is a lifetime for HFT algos. Peak Prosperity, October 6. Wilkins, I., Dragos, B. (2013) Destructive Destruction? An Ecological Study of High Frequency Trading. Mute, January 22.

1 CNBC news coverage of the Flash Crash. Online: https://www.youtube.com/watch?v=Bnc9jR2WDgo, last accessed June 23, 2018. 2 Ben Lichtenstein, voice of the CME S&P futures pit, in his live-coverage of the Flash Crash, https://vimeo.com/103128278 (10:42 min). 3 See Wikipedia entry “2010 Flash Crash” for a list of noted contributions. 4 Revenues in the sector were at USD 7.2bn in 2009 but diminished to USD 1.3bn in 2014. 5 See, e.g., a Deutsche Bank report: https://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000406105/Highfrequency_trading%3A_Reaching_the_limits.pdf 6 In this context, transparency does not only refer to data access but also to law and regulation. 7 Technically, black box refers to systems that feed inputs and produce outputs without disclosing their inner workings (which might be unknown). In finance, it denotes computer-based trading systems that apply algorithms to trade financial products automatically. 8 “We think it's important to note that the SEC claimed there is no value to be gained from looking at data in time resolutions under a second ‘because it is just noise’. We strongly disagree.” See: http://www.nanex.net/aqck2/3522.html 9 Noise as opposed to signal is the term for random information in information theory. As financial markets are constructed as information markets (both in the Hayekian sense and cybernetics), noise is a constituent element of trading. Following Black (1986, 530) we can define it as the ubiquitous other of information: “Noise makes financial markets possible, but also makes them imperfect.” 10 Despite the evidence of trades, evidence on the perpetrator is impenetrable, as the law protects proprietary data and its source. 11 This essay is also not concerned with the exposure of an alleged culprit in 2016. 12 See, for example: http://www.reuters.com/article/flashcrash-barclays-idUSN2219178020101022 13 I owe this assessment to the HFT expert and whistleblower Haim Bodek with whom I work on a cartography of algorithmic trading. 14 For more on the term “counterperformativity,” see MacKenzie (2006, 19). 15 Jon Roffe (2015, 71) emphasizes the „evental character of price […], for, strictly speaking, no price can ever be repeated. This is because any given price is recorded on a surface and in this way changes it. To repeat the same price – where price is now grasped at the moment of its advent – can never have the same effect on the market surface itself.” 16 The performative setting of Nanex’s analysis might have influenced its outcome counter-performatively in the sense that analysis constructs findings and solutions. 17 Nanex, see: http://www.nanex.net/20100506/FlashCrashAnalysis_About.html 18 A relation seems to exist between zero spread and zero marginal utility and corporate profit extraction by manufacturing monopolies. 19 Haim Bodek’s whistleblowing proves that exchanges are partners in crime. See, for example: http://www.wsj.com/articles/direct-edgeexchanges-to-pay-14-million-penalty-over-order-type-descriptions-1421082603. 20 Arjun Appadurai previously referred to Butler (2016, 111): “[She] introduced the idea of what I now refer to as retro-performativity, which allows us to see that ritual can be regarded as a framework for the co-staging of uncertainty and certainty in social life.” 21 “Massaging” used in a similarly playful way as McLuhan (1964) in "the medium is the message:” The medium shapes "the scale and form of human association and action.” I extend this to the algorithmic realm and the effects of bots on individual and political bodies. 22 See, for example: http://www.nytimes.com/2016/02/28/magazine/the-robots-are-coming-for-wall-street.html 23 Ayache’s insistence on finance as a body constituted by human traders in the trading pit evokes Hayles (1999, 13): “If we can capture the Form of ones and zeros in a nonbiological medium – say, on a computer disk – why do we need the body's superfluous flesh?” 24 How this plays out in financial corporations was shown by Ho (2009). 25 E.g. Knight Capital bankruptcy as black box event. On August 1, 2012, the HFT trader lost over 400 million Dollars in 30 minutes due to a technical error. “The glitch led to 4 million extra trades in 550 million shares that would not have existed otherwise” (Nanex). 26 Another point is venture capitalists’ reconceptualization of guaranteed basic income as risk capital. Here, Hayekian market ideology fuses with Schumpeterian creative destruction to push back the (welfare) state in favor of an entrepreneurial investor ‘society’. 27 E.g.: Social credit scoring applications like the Chinese “Sesame Credit score” are based on derivative logics. Risk options are constantly produced and monitoring others as well as oneself recalibrates one’s volatile reputation (price) within this technoecology. 28 See: https://www.sec.gov/news/pressrelease/2015-2.html#.VLP9qyvF9g0 29 It might seem far-fetched, but Butler’s (1997, 124) suggestions as regards homosexuality might be helpful also in the context of systemic as well as individual implications for renegade solidarity in that “we surely need to take seriously the contention that ‘coming out’ is intended as a contagious example, that it is supposed to set a precedent and incite a series of similarly structured acts in public discourse.” 30 Including open source apps and infrastructures as well as blockchain technologies such as cryptocurrencies and contracts.

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Unleashing the technical present SWITCHES Haus der Kulturen der Welt, Berlin, Nov 30, 2017. Discursive installation and program, in collaboration with HKW Berlin (Katrin Klingan, Nicholas Houde, Janek MĂźller, Christoph Rosol, Johanna Schindler).

1948 Unbound was part of the Technosphere research project, 2015-2019.

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With Morehshin Allahyari, Marie-Luise Angerer, Elie Ayache, Anna Echterhรถlter, Thomas Feuerstein, Alexander R. Galloway, Johnny Golding, Orit Halpern, Marian Kaiser, Giuseppe Longo, Gerald Nestler, Julian Oliver, Sophia Roosth, Sarah Sharma, Felix Stalder, Ubermorgen. 174


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Unleashing the technical present TOKENS Haus der Kulturen der Welt, Berlin, Dec 02, 2017. Program by HKW in collaboration with Victoria Ivanova (curator, cultural theorist) & Patricia Reed (artist, writer), visual design by Anil Bawa-Cavia and Patricia Reed, co-produced with Harry Sanderson. With Anil Bawa-Cavia, Benjamin Bratton, Anna EchterhĂślter, Oscar Guardiola-Rivera, Gerald Nestler, Vera Tollmann & Boaz Levin

All 1948 Unbound imgaes Š Joachim Dette

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Interview

The derivative condition, an aesthetics of resolution, and the figure of the renegade: A conversation

Finance and Society 2018, 4(1): 126-43 Š The Author(s) 10.2218/finsoc.v4i1.2744

Gerald Nestler

Artist and independent researcher, Austria

Christian Kloeckner University of Bonn, Germany

Stefanie Mueller

Goethe University Frankfurt, Germany

Abstract The work of the artist and writer Gerald Nestler explores finance and its social implications since the mid-1990s. Based on his professional experience as a trader as well as on postdisciplinary research, he has developed a unique approach that brings together theory and conversation with installation, video, performance, text, and other art forms. Probing into the narrative structures of contemporary capitalism, Nestler offers a techno-political critique directly from the core of the financial markets. This interview addresses his reading of the derivative as a world-producing apparatus that shapes the experience of the present by preconfiguring the future, and that provokes a shift from representational to performative speech in the actualization of biopower based on the exploitation of volatility and leverage. In conversation with Christian Kloeckner and Stefanie Mueller, he argues for the formation of specific human/non-human alliances that directly attack algorithmic as well as socioeconomic black-boxing (schemes that monopolize inherently non-scarce resources), so as to open our imagination to skills and tactics that would allow us to navigate the rich but volatile flows of social, political, and economic abundance.

Keywords Art, resolution, renegade, derivatives, volatility, leverage A graduate of the Academy of Fine Arts Vienna, Gerald Nestler worked as a broker and trader in the 1990s. The experience had a formative impact on his critical thought and art practice, Corresponding author: Gerald Nestler, Neulinggasse 9, 1030 Vienna, Austria. Email: mail@geraldnestler.net http://www. geraldnestler.net

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enabling him to emerge as a rare figure in the contemporary art world, combining a technical understanding of the markets with an ability to engage across the disciplines with leading critics and theorists of contemporary finance, as well as a commitment to shaping and challenging this discourse through artistic practice. Nestler has exhibited his work internationally and received numerous grants and awards, most recently a residency at New York’s International Studio and Curatorial Program (ISCP), where he collaborated with the artist Sylvia Eckermann and the high-frequency trading whistleblower Haim Bodek to create a performative mapping of automated financial markets and algorithmic perception. In 2017, he received a practice-based PhD from the Centre for Research Architecture at Goldsmiths, University of London. His publications include: Yx — Fluid Taxonomies — Enlitened Elevation — Voided Dimensions — Human Derivatives — Vibrations in Hyperreal Econociety (Nestler, 2007), the edited collection Making of Finance (Avanessian and Nestler, 2015), a special issue on ‘Art and finance’ in this journal (Nestler and Malik, 2016), and an essay on the topic in the Routledge Handbook to Critical Finance Studies (Borch and Wosnitzer, forthcoming). Stefanie Mueller (SM)/Christian Kloeckner (CK): Gerald, your artistic practice and critical writing have for a long time engaged the logic of finance and how it interacts with our broader social reality. Let’s begin this conversation by talking about how you got into this, and what you mean by the term ‘human derivative’, which seems to be central to your thinking and your art. Gerald Nestler (GN): I first developed this term around 2004/05 when I began to theoretically systematize my artistic practice, which was based on my stint as a broker and a trader in the 1990s. It derives from what was first my instinct, or intuition, that with the introduction of the market ideology into politics and society, the world of derivatives has come to function as a sort of processual blueprint for relations and relationships in general. Concerning terminology, however, I prefer ‘derivative condition’. The term ‘human’ is ambiguous and, contrary to my approach, might seem to exclude non-human agents. It might make sense here to track back a little. I was actually trained as a painter and graduated from the Academy of Fine Arts Vienna in 1992. But I spent my last year as a student delving into the ‘newly hatched’ Internet, which then seemed to hold potential for all kinds of new artistic practices. However, it quickly became clear that the Internet would become a much vaster and deeper social phenomenon, reaching far beyond scientific and artistic uses. I wondered if artists wouldn’t have to engage with the economy – and the market especially – in order to get a grasp on the actual powers that today shape societies and subjectivities. Due to my background, I had no clue about most anything relating to the field (like most people in the art scene then), and I therefore felt an urgency to take up research. As an artist, my interest was more in the practice of finance rather than academic economics. I wasn’t interested in the theory so much as what it meant to act and react in this world, and also what kinds of effects this would have on me personally. I was lucky enough to get the chance to work for a trading outfit in 1994. I didn’t plan to make a career out of it, I just wanted to learn, to know. And this artistic field work – or rather work experience, as I had to commit fully in order to keep the job, to stay a member of a community that wouldn't let anyone from outside observe them – turned into a formative experience. Not so much because it taught me what kind of ‘animal’ the market is (or what kind of animal it made of me), but because I realized how much the market had ‘infected’ life. That the ‘market being’, as a trader in an interview with Karin Knorr Cetina once remarked, was everywhere. There is a difference between a hunch and an experience, right? And to me, this was a direct experience I wouldn’t have had without doing it myself. 179


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So, when I left the trading outfit in 1997, it was clear to me that I would work on this topic for the next couple of years, though I didn’t expect it would become a lifetime engagement. I had to come to grips with quite a few things: firstly, I had to make sense of my experience; secondly, I had to engage in a wider discussion and critique of finance; and thirdly, I had to find ways to deal artistically with a power field that defied typical forms of representation and imagery. I would say it was not by default that I began to read theory covering macro- and microeconomics, financial literature, but also philosophy, sociology, and critical theory, amongst other fields. But I was dissatisfied; nothing really related to what I had experienced, or, what I felt my experience would mean if I extended it to a more general level. And that’s when I started to make notes vis-à-vis my reading, later developing texts and what I would call my hypothesis and theory of which the terms ‘econociety’ and ‘human derivative’ were some of the first outcomes. SM: What did that transition from financial practice to theory and art look like? GN: What intrigued me most when I began learning about finance, and especially derivatives, was their heterogeneity. They appeared to be more than an awkward and elusive scheme to make money on the decline of a stock, for example. Rather, they had a quite fascinating history that included, among many other things, a shift in attitude concerning games of chance from hazardous and unproductive guesswork to scientific speculation. The question of how to deal with risk, i.e., volatility, was revolutionized, for better or for worse. Even though there were and are lots of gamblers around, the shift towards science and computation indicated to me that we are dealing with a very different animal than one might expect at first. So when I refer to the derivative condition, I argue that developments in finance since the early 1970s have had a forming influence on the reality of relations beyond the market and the economy per se. I also suggest that concepts like financialization, immaterial labor, and debt, which were and still are circulating within critical discourse, might fall short of fully characterizing this phenomenon. We usually get interpretations and critiques based on specific fields of research. And while we can learn a lot from them, they are also restricted to the specifics of the respective discipline, which means that they turn a blind eye to aspects that are nevertheless foundational. Or, they are based on an affirmation or critique of capitalism that can often be a bit too religious in regard to its founding theories (as in ‘Hayekianism’ or ‘Marxism’). From my experience as a trader and reader of a wide range of literature, finance was truly a meta-field born out of the input from (and being formed by) many different fields. I felt that in order to make sense of it, one had to expand one’s reading beyond financial and economic papers to computer technology, computation and information theory, cybernetics, mathematics and physics, philosophy, psychology, and ethnography, as well as to many other fields. One has to take legal aspects into consideration, as we are dealing with specific forms of contracts, i.e., a complication or complexification of contractually agreed upon promises, which in this instance turn into claims. We might even need a new word that describes the epistemic framework, and this is why I introduced the term ‘technowledge’ to underscore both the human and non-human contributions to visualizing and solving issues and making decisions. So, when a purely economic outlook is not sufficient, what is the perspective from which it might make the most sense to look at finance as a social field, as a field that shapes societies and subjectivities? My personal interest as an artist and activist – in the sense of working towards agency – was to understand finance and the market as a part of contemporary life, and therefore to try to locate a form of ‘agency’ within it. And to me it 180


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seemed as if derivatives were the key to understanding a new form of sociality; a mode of relationality that is increasingly treated with quantitative methods, a mathematical and technological machine that evaluates relations and that doesn’t rely on past or present so much as future encounters. Simmel’s critique of money’s quantification of value already makes a similar argument, but the derivative condition, at least as I see it, in the context of technological revolution and the re-evaluation of state power, radicalizes and exceeds the change in social relations Simmel was referring to. This is now a regime of relations based less on values as such (qualitative aspects based on institutional or non-institutional forms of trust, for example), but on price as a quantitative and incessantly recalibrated meeting of expectations and anticipations concerning the future. Even the paradigmatic methodology, probability theory, doesn’t really go back to any values of the past when applied to historic data. The notion of the past has no bearing here. These data are simply the existing pool of future expectations actualized in a former past, which are ‘now’ again applied to estimate another future. So we have a regime that is totally geared towards the (potential) future, whose anticipations are constantly recalibrated and manifested through pricing. CK: And how do you understand this logic to relate to the broader social realm? GN: When I looked at how people today are included in the system, how our society organizes education, careers, health care, how social media organize relations between people, it dawned on me that there was an analogy, even conformity, with the financial concept of the derivative. And that therefore the social contract could be described by drawing on the financial derivative, which to me implies that the former is contingent on the latter. We are witnessing and living a social contract in which a presently performed speculative engagement with a contingent future has become the rule rather than the exception. To give but one example, even the education of our children, at least in those countries that have embraced financial capitalism the most, can be interpreted in analogy with the derivative model: a set of bets on the future ‘inscription’ into the social fabric via usefulness and network, with time value diminishing swiftly towards ‘settlement’ of the obligation to perform. These kinds of ‘decision’ are based on the market as the ‘underlying social security’ – a contingent social unconscious, a contingent social unknown – that is highly volatile and therefore prone to trading and to being traded. And on which any potential future value (the market is incomplete because of contingency) is calculated and translated into the complex mechanism of pricing. It is evaluated – or, more to the point, recalibrated – according to the optionality of the respective outcomes relative to social, financial, educational, urban, and even racial backgrounds. The derivative condition therefore describes a new bio-political hegemony enacted by the regime of competitive pricing. It not only influences the relations between ‘people and market’ (the liberal condition) or ‘people, market and state’ (the neoliberal condition), but also the relations between people who are encouraged, or rather summoned, to leave their putative comfort zone and engage in delivering their respective future potentials in the form of commodified and tradable assets. The ‘random walk’ has become the paradigmatic pace in almost every respect, and ‘volatile equilibrium markets’ are the successors to the welfare state, whose ‘global’ social safety net has been turned into the ‘ubiquity’ of a privatized security – a control industry, to use Deleuze’s terminology. Contrary to all the declarations on the value of life, human or otherwise, this becomes increasingly contingent on how it proves itself on a market, i.e., how it competes in the pricing contest. This is no longer a beauty contest or a casino; it is a fight for survival, serious and fiercely competitive, concerning a variety of cultures and lifestyles, but also life forms and species. 181


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As Michel Feher (2009) has shown, the profit-seeking entrepreneurial spirit is turned into an appreciation-seeking speculative spirit. When I say speculation, I mean the market triangle of speculation, hedging, and arbitrage. It includes hedging one’s future, and arbitrage opportunities – riskless profits, gained on a sort of ‘closed-outcry market’, where imitation and control are still paramount for competitive edge. Even relational or family ties and other connections are either made to pay (arbitrage) or dissolve (mainly an externality). Just think of the latest generation of social credit scores in China, and how they are beginning to turn every relation into a highly volatile asset in relation to all other individualized assets. This turns the concept of the individual from one of inalienable rights and authenticity into one of automated derivation and volatility (risk). If you have ‘friends’ with lower scores, your score is instantly affected. This is an extreme but very real example of the derivative condition because everyone is betting on presently anticipated future outcomes, and constantly has to recalibrate their own and their friends’ ‘option price’. And these systems are implemented to involve every individual in the ‘game’. It is the perfect information market in which everyone is not only a sensor but also an agent – however, neither for their own good nor for a common good – but for an underlying control system that knows no value, only price. The shift was slow enough to work subliminally. Metaphorically speaking, it resembles the urban legend in which a frog never notices it is being cooked alive because the water is very slowly brought to the boiling point. A lot of people, I would say, feel ‘froggish’. We are often confused, even numb and blind vis-à-vis developments that undermine democratic accountability in favor of the evaluation regimes of market and security apparatuses. ‘Securityzation’ (as a power triangle of security, austerity, and asset investments) is decoupling and blacking out general assumptions on civil and political rights (and human rights too, which are rewritten around a credit system in which inalienable rights do not exist), reducing participation in political and economic affairs and decision-making. And all this is happening within a context of increasing automation of data and commodity production. CK: Do you see any upsides to the derivative condition, or ways of making it constructive for envisioning a different future? GN: Now, the ‘good thing’, so to say, is that this regime – or technology, as Elie Ayache would call it – is ultimately about relations and their potentials for generating outcomes in the future (see Ayache, 2010; 2015). More so, it is about expectations on real events (underlying and vanilla options), as well as about expectations on expectations (more complex derivatives). The question is, therefore, whether we can make derivatives and their utilization a science or practice for organizing complex societies in a fairer and more inclusive way. If they are a technology developed from scientific premises, doesn’t this imply that there is a way to free them from the grip of financial capitalism or state power? Even though the alliance between capitalism and the sciences is as old as derivatives markets themselves, they might not be coessential. What I call the derivative paradigm might therefore be turned into a more open and approachable arena (a multitude of arenas) in which anticipations and expectations, necessities and desires, fears and values, could be exchanged in any way. And this fight for survival might be turned into a time-space of contingency, where we as human and nonhuman agents realize, or actualize, the contingent becoming of the future together. At least I believe it’s worth putting some thought into what we could call a ‘derivative poietics’, although I prefer to use the term of poietics of resolution. 182


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CK: This reminds me of Randy Martin’s (2015) argument, in the context of his pursuit of the ‘social logic of the derivative’, that risk is instrumental to artistic practice and actualized in improvisational movement practices such as skateboarding, surfing, or postmodern dance. GN: Great that you mention Randy, who I was fortunate to meet and conduct a video interview with as part of my series, Portrait of a Philosophy (Nestler, 2014-15b). His premature death is really a major loss. I believe he would agree that risk has been a central category of modernity. It is therefore ‘alive’ in the arts, the sciences, and other fields, and not only in the economy and markets. It is said that the term was initially ‘loaned’ in the context of sixteenth-century commercial language from the Latin resicum, describing cliffs near a coast that constituted a danger to trading vessels of the early colonial era. Its origin is therefore within the economic sphere. However, the exposure to hazard embedded in the term is not confined to the dangerous effort to sail the seas along the coast, due to infant navigation skills or any other reason. The whole idea behind such endeavors is encapsulated in the emperor Charles V’s motto, ‘Plus Ultra’, which defies the ancient ‘Non Plus Ultra’, pushing beyond the then known world and its limits at the Pillars of Hercules near the Straits of Gibraltar. This defiance of boundaries is, I would argue, the core of what constitutes modernity, which is defined by reorienting the perspective from past paradigms and eternal glory to future possibilities. It took pride in transgressing the limits of the older world not only commercially, but also philosophically and socially. I would therefore extend the notion of risk, as it seems to me implicit in many other human endeavors. One root of this paradigm shift is certainly the humiliation by what was to become the origin of modern science: the insight that the Earth revolves around the sun and not the other way round. A further transformative event can be seen in the Lisbon earthquake on All Saint’s Day in 1755, which has been identified as a major event in the disruption of Western faith in a benevolent God, introducing a profound feeling of uncertainty (with Voltaire, for example, it was proof of the absurdity of Leibniz’s ‘best of all possible worlds’ theodicy). Enlightenment philosophers like Immanuel Kant turned to study natural instead of supernatural causes for such events. It became increasingly clear that we don’t possess perfect information and that there is no deity either, at least not in any communion with humans. To cut a long story short, uncertainty entered the world, and along with it came risk. Not only as hazard but also as opportunity, as the early studies on probability by Fermat, Pascal, Huygens and others showed. When it comes to the field I am engaged in, the arts, I would go as far as to call risk a fundamental value, at least in Western art. Since the Renaissance, and even more profoundly since Modernism and various avant-garde movements, artists have engaged in increasing revolutions of style, perception, perspective, and Weltanschauung – constant insurrections and radical changes within their own field – in which they have not only produced the respective ‘results’ (artworks) but also stood up for them. The whole process of being an artist is therefore to ‘embody risk’. Art is not a discipline in the academic or technical sense of the term since the ancient artes were separated into ars and techne during the Renaissance. Art is a practice that is intrinsically a leap, a jump into the unknown, into an abyss. It is a perception of crisis – it often moves along ‘self-introduced crises’ – within which a new path is found. This is a hazard and a chance. Even if experience might lead the way, it does not suffice. It needs to go beyond experience; serendipity is sine qua non. Randy’s narratives of dance or skateboarding are wonderful examples of risk-taking on a wide array of levels within, as you mention, the current ‘social logic of derivatives’. Such forms of risk (at the level of play) might look rather innocuous, or even insignificant, to the outsider who might value the gamble on one’s property or an entrepreneurial effort. But we shouldn’t forget that as a result, new 183


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terrain, new perspectives, experiences, and outlooks are obtained, not only in art but also for life itself. Since the early days of modernity, art has been a social engine by which we perceive and comprehend our world, certainly not solely but in part because artists are not about averting or hedging risk so much as embodying it. In art, therefore, risk is fundamental, and in that specific instance, science, economy, and art are akin to one another and might be called the triple star of modernity, the trinity of the future god. In the economy, and in finance especially, the embodiment of risk has been a collective effort since at least the first stock company in sixteenth-century Amsterdam. But the collective gets together in order to distribute, limit, and profit from risk. First in colonial merchandise reminiscent of the origin of the term, and subsequently in ever subtler and diverse, yet at the same time more powerful schemes. From the corporation as a non-human and immortal embodiment to the methodologies of insurance and the first derivatives, we look out over a human endeavor geared towards not embodying risk but abstracting risk towards the market and externalizing into bodies that which the market rationale rejects. (The economic notions of ‘rationality’ as well as ‘externality’ are examples of its affective power). In a world in which every action is to be geared towards the future to render a profit, as the Austrian economist Ludwig von Mises (1949) once put it, uncertainty becomes the realm of economics par excellence. Uncertainty as the constant companion of every action has to be dealt with; it has to ‘enter into negotiations’. As to my certainly limited knowledge, it was Frank Knight who in his book, Risk, Uncertainty and Profit (1921), established this negotiation by his distinction between uncertainty and risk. Knight’s distinction is fundamental because while uncertainty cannot be modeled, risk can, or at least that’s what Black-Scholes-Merton and other pricing models attempt with volatility calculation. According to Knight (1964: 20), “It will appear that a measurable uncertainty, or ‘risk’ proper […] is so far different from an unmeasurable one that it is not in effect an uncertainty at all. We […] restrict the term ‘uncertainty’ to cases of the non-quantitative type”. Uncertainty cannot be quantified, but risk can. For the further development of finance, this distinction is seminal, especially in the post1971 world, and represents a climax of theoretical approximation since the term ‘risk’ first appeared some 500 years earlier. Contrary to risk management, my production of risk theorem argues that risk is a measure beyond knowledge methodologically applied to face uncertainty. It’s sort of the ‘particle mathematics’ of finance. No trader faces uncertainty by sheer and adamant hazard, i.e., by direct and unchecked confrontation with uncertainty, and it only seems so because of the way the market serves as a forum in which uncertainty speaks through the voice of risk. Metaphorically speaking, risk is about pursuing a lead not of past traces but of future ones. It is sort of a quasi-forensics of future events – an enunciation of things as virtuals in the market forum. As if we could quasi-materialize a trace becoming. And the more ‘risk particles’ – we can now, by way of example, call them options – materialize by quantification (that is, all derivative prices traded), the less uncertainty we appear to encounter on our way forward (liquidity/price as relation), and the more we seem to know about the future’s actual but ‘fleeting approach’ (matter/price as particle). When communication technology, cybernetics, computation and economic modeling – the Black Scholes Merton model – finally converged in the quantification of risk in 1973, it sparked a whole new industry and whole new logics of production – what we now call ‘derivative finance’. There were other factors as well and in the same year: political ones like the collapse of the Bretton Woods agreement and the oil crisis; institutional ones like the founding of the Chicago Board Options Exchange; legal ones like contractual commodification and standardization, to give but a few examples. What I find interesting is how quickly the attitude towards derivatives was adjusted from condemning them as an immoral gamble on 184


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the economy of a country and even an unpatriotic act against a country’s wealth, to embracing them as a scientifically sound method of evaluating risk, i.e. volatility, even though the techniques in question were developed in casino gambling by scientists and future finance wizards like Edward O. Thorp (on this see Thorp, 2011; Avanessian and Nestler, 2015). But the point I would like to make here is that at least to me, what finance does – its mode or logics of production – is the production of risk. And I mean this, as mentioned above, neither in the sense of risk management nor in the rather bland criticism that it produces unattainable risks and thus eventually leads to disaster. Even if that is true, it is less a moral question than a systemic one. What I mean by the production of risk is that in information capitalism, risk is the method of separating the wheat of risk from the chaff of uncertainty; it is ‘our’ way of anticipating future events and potentials; and when we examine derivative markets what we see is that price substitutes value, quantification succeeds over qualification, in order to deal with expectations. While Plato favored the reading of a bird’s liver killed at the spot, we take refuge in a spot market in which the future is delivered at present by what I’d like to call the ‘random oracle’. If the first anticipated measure of risk is volatility and when its expectations are traded, it is obvious that there are many, as the future is unknown and outcomes have to be evaluated in price as to their likelihood. But as we all know from our own experience, one expectation leads to the next and so on. The sheer ‘complexity’ of derivatives – I should qualify that I’m not speaking here about the later generation of complex derivatives that use correlation copulas, and which should possibly be named differently as they don’t derive directly from an underlying – can therefore be attributed to the ever-extending derivative valuations written upon each other, which are additionally evaluated by implied volatility at any further moment in order to recalibrate the whole derivative setting on the actualized price – the volatile heart rate of finance, if you will. SM: You’ve just raised the issue of expectation. You’ve also talked about human beings – as derivatives – in terms of ‘a potential of expectations’. Could you elaborate on that? I was struck by this phrase because it seemed to capture an attitude towards subjectivity expressed by recent trends in technologies of the self, the ‘quantified self movement’, and so on. GN: Now, if we accept that financial methods have had an impact on other social realms and even affected the individual (the so-called ‘financialization’ thesis), then the production of risk would have to be detected within the life of people and institutions as well. And I think it is safe to say that the neoliberal agenda and its affirmation of ‘risk culture’ (a term in finance for riskaffine activity) has itself produced a society of risk takers, regardless of whether risks are hedged or even detested: accepting and taking risk is the neoliberal virtue. In finance, risk sets the tone for all three major motions or applications – speculation, hedging, and arbitrage – and to go back to your example, I would think that this is also the case in the technologies of the self, in the quantification of bodily and other data, and in the quantified self-movement. There is a future-at-present urgency in an increasing number of activities. Not only in actions (which are all about the future anyway, according to Mises) but also in caring and other still profit-free and therefore externalized activities. This urgency is all the more significant in the context of the measures of the austerity crisis, which not only empty the future as an array of possibilities but also empty the present as the actual ‘place’ in which the future is always born, and in which risk can be embodied. This seems to me to extend the notion of financialization to what I used to call the ‘human derivative’ (and which I now prefer to think of as the derivative condition, or the derivative paradigm, respectively, if we speak about the methodology). It is a conceptual approach to delineate the self-production of risk as a 185


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complexified promise that manifests in the competitive clashes of claims, as the array of future options of everyone’s identities, or subjectivities in evolution, who in any way participate economically. The promise as a social contract is ideologically incorporated in the capitalist market as the competitive negotiation of dividual claims, and there is no human right outside the leveraged capture of consuming opportunities. This is neither linear nor flat, as the whole gamut of derivative recalibration is staged as well, for instance, in constant self-monitoring, self-tracking, and self-sensoring; in the constant re-evaluation of one’s options and the debts taken to leverage them (in education as well as in career-development, for instance); in the constant institutional and self-reliant measuring of performance of potential and delivery (by one’s company or university, one’s peers or students) within an environment that integrates the individual derivative condition into the social protocol and dividual life-feeds of quantified surveillance, corporate (meta-individual/dividual) exchange data, data mining and big data ‘evaluation’ (a term we should actually substitute with pricing).

Figures 1-2. Gerald Nestler, RESOLUTIONIZATIONS: Self-organized/self-regulated/mythological, 2015. 4 prints, approx. 30x50cm. Photographs of the hedge fund Sang Lucci and high-resolution visualizations of Flash Crashes. Courtesy and copyright of the artist/Nanex LLC. 186


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SM: I am interested in the question of mimesis, broadly speaking. High-frequency trading (HFT) is literally too fast for human beings to experience in actu. Your visualizations of the Flash Crash take their cue from Nanex’s reconstruction, but that is a reconstruction; experience is only possible after the fact. How can art meet this challenge, the fact that it is trying to capture something that is not a human experience even in its occurrence? GN: Your question reminds me of a statement of a trader in Marije Meerman’s documentary on HFT, The Wall Street Code, who said: “What caused the Flash Crash is a nonsense question. If you were to replay the same sequence of events identically, there’s no guarantee that it will cause a Flash Crash again. That’s the nature of complex systems” (quoted in Meerman, 2013). That’s an interesting thought, right?

Figure 3. One of six maps of automated finance charted with Haim Bodek. Open Studio at ISCP New York, 2016. Photo: Sylvia Eckermann. See Nestler (2014-15a).

Complexity is seen as the interrelation between a large amount of players, human as well as non-human, which plays out far beyond the limits of human perception and comprehension. Replaying the entire sequence even with all its data would not be a mechanic simulation but a real-time event with all its contingencies. The market system, with its myriad of firms that use all kinds of models, technologies, and code, is more akin to Einsteinian field relativity than Newtonian physics, as Randy Martin (1990) already mentioned in his book, Performance as Political Act. At that time, market transactions still relied on human traders and took an average of 12 seconds. Now we are approaching nanoseconds, that is, 0.00000001 seconds of transaction time. Even if one trader can oversee his or her machines, the real-time interrelations of all the machines overtax both players and regulators. No wonder that the latency of the consolidated price tape (National Best Bid and Offer), a central plank in the SEC’s 2005 Regulation National Market System (Reg NMS), was parasitically exploited. Speed advantage has always been ‘creatively’ exploited and financial markets provide an endless array of exploitable information asymmetries and arbitrage opportunities. Which certainly added to the race for speed and the race for zero margin that we have seen in the last ten 187


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years. However, as the HFT whistleblower Haim Bodek has observed, the algo-space became quickly deserted during the Flash Crash, and eventually human traders had to step in again (see Nestler, 2014-15a). To some degree, this means that the contest between humans and algorithms has not yet been won by the latter (an argument Elie Ayache has also made). Today, the situation has changed again, as Bodek argues, and it is often regulatory arbitrage, relating to order types for example, that makes the difference, and these schemes rely on so-called human ‘collaboration’ rather than automation (see Nestler et al., 2017). What fascinated me as an artist about the Flash Crash was the fact that high-resolution does not always increase knowledge but also noise and chaos, and that the latter could well be manufactured rather than occur naturally. This revelation just jumped at me and I began to think about an aesthetics of resolution in which mimesis – to use your word – would be a performative tool, rather than a process of representation, imitation, or the like. Mimesis would not represent or imitate reality but make it happen, it would turn the time arrow around, if you like, and preconfigure the present from the future. In a way, this means to imitate the future (real) and to perform (actualize) it in the present. It would be a step too far to explain this in detail here, but more generally I think that due to the innovations in finance since the 1970s, there has been a turn in the way power speaks to us from representation to performance, and this is another reason why I speak of the derivative condition. This is a radical change for which we do not yet have the means to read. We have learned to decipher representations over the course of hundreds of years, but we lack the sensory, intellectual tools to imagine and instinctively decipher performative speech. To me, this is more likely the reason why it seems so difficult to understand the bio-politics of financial capitalism, rather than the assertion that finance is so complex and abstract.1 So I am interested in mimesis not defined as representation but as performance and, if you ask me – with reference to mimesis – how art can challenge power that we cannot perceive, one way to do this is to revert to mimesis as a physical experience. For example, I am working on a series of performance lectures (the first one in 2015 with Paul Wilmott, and more recently with Haim Bodek) that address finance performatively, both intellectually as well as physically. The body, it seems to me, is the space in which terms like volatility, leverage, speculation, and so on, reverberate very differently and more directly than when we try to make sense of them intellectually. While Haim and I speak, the audience (our underlying) encounters performers (our derivative contingent), who move through the ‘crowd’ in a volatile, speculative fashion, enacting in a sort of parallel universe what I would call the performative violence of finance power. They interfere with the audience’s ‘natural’ interest in following the lecture and divert their attention. They touch and move the audience, rearrange their position, and so on. In a sense, we produce physical noise at the same time as we perform a complex representation of information. So, it is about physical interference and rupture by distracting the representative functions we apply ‘automatically’ as a way to support special ‘senses’ that allow us to decipher performative power. More generally, I think we are at a point today at which we need to confront the narratives that shape our existence, our relations and our potentials as individuals as well as societies. If you like, one could call this a new ‘realistic’ art that is aware of the fact that our reality is constructed; that there are interests and contingencies at the same time; that the expert is at a loss to tell the truth; and in which reconstruction – another truth paradigm – is at a loss to relive an event. Such an art would make use of those narratives to perform its own fictions; fictions that are open and generative, but at the same time also full of interests and contingencies. We should remind ourselves that fiction is quite a powerful tool, and can be more persuasive than other forms of narration because the ‘truths’ it comes up with are full of 188


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noise and therefore aesthetically powerful. They encourage and spawn the imagination, perform mimesis on the fly to resemble a future rather than a past. While there are fictive narratives that come in the disguise of authenticity to influence (public) opinion (think about the adverse consequences of public relations, propaganda, and advertising), there is also science fiction and its narrative capabilities as an approximating trajectory to a future reality (utopian as well as dystopian). But to whatever uses all these and other tools have been aimed at, they constitute our cultural heritage and resource. They tell us about our potentials, our hopes, and our capabilitiesÍž and they remind us of the consequences of our omissions, our crimes, and the injuries we inflict on each other and the world we inhabit. So, the imagination that weaves fictions as well as the body that is exposed to forces and at the same time constitutes a relatively untapped potential of sensing, memorizing, and acting, is an interesting thing to experiment with in the face of performative power.

Figures 4-5. Photos from INSTANTERNITY: A Black Box Body Cult, 2017. Vorbrenner 17, Freie Theater Innsbruck, 2017. Performers: Davide De Lillis, Eva Mueller, Sebastian Collado. Photos: Christa Pertl/LACHSGRAU. See Nestler et al. (2017). 189


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To capture something that is not a human experience is an old trick and happens not only in art. Elena Esposito once proposed to examine the novel (an artistic invention) and probability theory (a scientific one) under the same paradigm; an escape route from uncertainty that invents narratives which are ‘real’ enough for us to accept their reality, even though we know they are fictive (see Esposito, 2007). Both constitute parallel registers that influence our passions, our aims, and our decisions. Can we ever capture an event if not by reinventing and reconstructing it? Do algorithmic real-time decisions produce the world without human voice, and will they set up a zoo in which voice simulates culture, and will this be ‘reality’? ‘After the fact’ and ‘before the fact’ might be considerations that are melting into each other and are seemingly becoming indistinguishable. Usually, science would be called to the task to investigate, discriminate, and distinguish between facts and fiction. But with Esposito, we see that this is not always possible nor is it always sensible (and we don’t even mention the role of power politics and vested interests here). We therefore have to change the register and/or the regime. Essentially, art is a register- and regime-changing thing. It is therefore, at least potentially, the proper medium to relate to realities devoid of experience; either because those experiences are in the future, in a lost past, or hidden at present. In a sense, art is experience after the fact, act and matter at the same time. One more point. Art is a practice that takes its power from the world, from the latter’s huge archive of experiences and relations, from mixing in and taking out. Art is postdisciplinary because it has always been anti-disciplinary at heart. And art is out for accomplices wherever they hail from. So, what I found intriguing about Nanex, for example, was how adamantly they performatively followed the trace and the huge amount of data visualizations and analyses they published in order to make their point. I was also fascinated by the response they had in their community and how they were able to define language (think of terms like ‘spoofing’, ‘quote stuffing’, and so on). Up to this day, they are a main data and image source for flash crashes, data bursts, and other market incidents. Their financial data archive and the machines they build to sift through it constitute a very distinctive approach to a financial forensics. But while to my mind, finance as a regime has successfully turned the notion of forensis topsy-turvy by using the past as resource (data) archive of the future (a becoming by algorithmic speech), Nanex demonstrated an analysis of a past event that was scientifically sound, yet revealed at the same time how irrelevant such a reconstruction had become; and how irrelevant it is whether they are right or wrong. This kind of evidence and this kind of truth are meaningless within a proprietary black box environment; they have no purport, no relevance, as they don’t relate to anything except the non-reproducible, the noncomprehensible – at least within an ideology of representation and imitation, and its legislative and executive policies. Experience is now happening before the fact; and if not, you’re too late. (Even the winners are too late; they just don’t see it because their affirmative performance blinds them). SM: In this context, when you talk about an aesthetics of resolution and ‘the double figure of the expert witness’, you also mention the figure or position of the renegade. In how far is witnessing a renegade act in your piece? GN: Nanex delivered data and visualizations beyond human experience. Although this is extremely unusual for the proprietary nature of finance, this is not unusual per se, as that is what enhancing resolution has been all about since at least the days of Galileo’s telescope. He saw things that no one else had seen before him. Science is deeply rooted in its development in devising resolution apparatuses. In scientific studies, however, when you ‘see’ something 190


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new, you chart the traces, you describe them, you name them, and so on. In the case of Nanex’s analysis of the Flash Crash, however, the traces they found could not be charted properly and given an ‘address’. If you don’t mind my analogy, the experimental reconstruction as ‘proof of concept’ of forensics led to ‘castrated’ evidence. They could only claim a hypothesis antithetical to the official investigation by the SEC and Commodity Futures Trading Commission and shout it out loud. There are many that disagree, but this is also true for the official report. Up to this day, at least to my knowledge, no evidence exists as to what happened exactly and we will have to see what the trial of Navinder Singh Sarao will produce. This sparked my interest in the term resolution, and in its full semantic meaning. The term offers so much more than the technological layers of what we can perceive. It comprises visualization, cognition, knowledge-production, decision-making, (joint) determination, and majority vote. This means that the term’s meanings run through the whole gamut of how a collectivity deals with issues, the contingent, the unknown. It spans across the scope of democratic legitimation. All this made it a very interesting concept for me as an artist. I would always say that art is intrinsically political. Hence, when I speak of an aesthetics of resolution, I mean a ‘realism’ that encompasses the whole semantic field, or, in other words, that works against those crucial nodes and sites where flows are interrupted, diverted, exploited, and voided. Every system has its resolution apparatuses – and this informs its culture – but none has ever been so successful as capitalism and (appropriated) science as its tool. Capitalism is an intricate system for directing and diverting flows; and that’s what exploitation and accumulation mean. Marx’s ‘general intellect’ comes to mind here, as does the contemporary capitalist appropriation of the sharing economy, to give but one example. Deeply intertwined with science and technology (as well as the arts when they support power), it governs inclusion and exclusion to such a degree that an outside of the system seems inconceivable today. This implies the erosion of mimesis by pure performative imitation physically, mentally, and algorithmically, and ironically sets the stage for the era after post-capitalism. I’m thinking here of Schumpeter’s notions of creative destruction, of the entrepreneur (which we can also recognize today in the ideology of Silicon Valley), and his belief in the collapse of capitalism from within its elite. One post-capitalist mark is what I call the figure of the renegade, a traitor within systems but an educator for the public. The renegade – for example, a whistleblower – is usually an expert witness who, for whatever reason, rescinds allegiance and takes counter-action. This figure is marginal (these kinds of actions rarely occur and are met with hard consequences), ambivalent (her calls are mostly about improving rather than dismantling structures and systems), and most of all fragile (because of the cascade of expert mediations necessary to make highly specialist knowledge comprehensible, not only for the public but even for the expert forum of the court, for example – and this is why I speak of a double figure of the expert witness). But at the same time, the renegade constitutes a revolutionary figure of change from within instead of from outside, as she moves from mere critique and dissent to actual forms of insurrection. And this is crucial, as it opens up new perspectives and potentials for systemic change. Ironically, the very individual and her agency take center stage at a time when such significance is deemed increasingly powerless in the eye of automation. But such a premise is less outrageous as it might seem, given that the U.S. Declaration of Independence summons everyone to act against abuse of power. Within the scope of this contextualization – the artistic creation of the narrative fiction – what seems promising is to develop a triangular relation between the aesthetics of resolution, the figure of the renegade, and a poietics of resolution – that is, specific projects that make and shape resolution in the full meaning of the term: firstly, to promote open access, liability-attribution, and public scrutiny against proprietary and state 191


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interests; and secondly, to support and build new relations, bonds, and forms of solidarity between human and non-human agents, as well as non-agents. This might seem overambitious, but in terms of an artistic approach that focuses on consequences, it means developing narratives, imageries, and fictions that tell stories (which include but are not restricted to consequential ones), and hence produce imaginations that intensify trust that a different world is possible. CK: In The Uprising, Franco ‘Bifo’ Berardi calls for a re-poeticization of our language that has become dominated by the universal exchangeability and automation of signs. According to Berardi (2012: 68), poetry’s excess of sensuousness translates socially into an “insurrection of slowness, withdrawal, and exhaustion”. It seems to me you’re aiming for something quite different with your idea of a derivative poietics? GN: If I understand Berardi correctly, he is aiming at a poetics in the sense of a sensitivity and imagination in relation to the body that undermines the network society and its algorithmic powers, which channel the movement (spatially, temporally, affectively) of people in a swarmlike way, through metastable governance. I have much sympathy for this attempt, but you are right, my approach of a poietics of resolution seems to differ from Berardi’s poetic one. My point of departure is that we are already living in a post-neoliberal world. Since the Lehman bankruptcy and the following bailout, we have seen enormous sums poured into the financial system, just to keep it afloat. And these programs are continuing; just think of the US and Eurozone’s quantitative easing measures. Neoliberalism as an ideology in which the state is in the back seat has turned into a state-finance order. One might argue that the German version of neoliberalism, ordoliberalism, with its emphasis on the role of the nation state, has become the new paradigm with austerity programs as its corresponding politics. Socializing the losses produced by the financial system might finally mean financing consumption of those who have to bear the burden. However, it also means that the financial system doesn’t work. In a nutshell, capitalism and its market system died on September 15, 2008, of apoplectic asset seizure, and since then it has been put in an artificial coma to support and monitor its life functions. Society is the derivative function of an artificially underlying ‘autonomy’ because the ruling ideology cannot imagine a world without capitalism. It has no clue and no desire to develop institutions that exceed neoliberal information capitalism. But due to this lethal event and its total denial, authoritarianism is emerging as an answer to the post-democratic crisis. Dissent is not a question of political attitude anymore, and so we are positively forced to think about alternative forms of resistance and make them happen. This doesn’t mean that neoliberalism was expelled from the face of the world; to the contrary, it ferociously tries to hardwire itself into memes, genes, and bytes. Coded into automated networks, exploitation and control will run beyond human intervention – including the intervention of the capitalist ‘superhuman’ elite. To give but one example: in analogy with the technologies of radio and television, which were initially invented as two-way systems but were quickly restricted to one-way sender-receiver media, we are today witnessing a much deeper exploitation of anything as resource by turning each ‘voiceless’ particle into a sensor that unconsciously communicates its metadata into automated calibration systems. Even though we might still think of the Internet as a multi-way communication system, the main bid streams run between bots and into black box proprietary systems where they are exploited without much limitation. Data prohibition, if I may call it so, foils our rights of access, narrowing down our ability to reason and to act. Legal personhood increasingly resides in the cloud and on proprietary servers, where the integrity of the legal subject is disconnected. Recoded, 192


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recreated, reborn as speechless voice, everything transmits and communicates – terms that are downgraded to mean facilitating mindless reactive non-mutual impulses. I don’t see how slowing down in the way Berardi proposes would help here in any substantial way. What kind of revolutionary potential would it offer? Who would it enlighten? Taken to its extreme, it sounds a bit like a work-life-balance revolt for the selected few who are still in the position to choose, and who probably live in (Western) Europe, to a lesser degree in the US, and to a still lesser degree in some pockets of Asia, the Middle East, Africa and the Americas. I don’t believe in a reactionary refusal of technology (although to be clear, this is not what Berardi advocates), because we should actually be thinking about how we can use and redefine technologies. It is, for example, a well-known fact that technologies are more often than not developed in open contexts (open access, peer-to-peer, state-funded, and so on), and are exploited for proprietary interest at a later stage. Now, besides derivatives, what are the potentials of the blockchain, a distributed data and program base and public ledger technology whose peer-to-peer trust infrastructure is only just beginning to be put to use? What are the potentials of cryptocurrencies, which are already being speculatively exploited by proprietary interests? These are questions I believe are viable and crucial, and they are not in any way about slowness. I believe we need multi-speed approaches, if you like – different ways to approach things, different speeds. Molecular micro-time processes happen at a very different speed than human lovemaking or galactic supernovas. But they are all “pleasure climaxes” that we either experience or become aware of, producing a “conscious mobilization of the erotic body of the general intellect” (Berardi, 2012: 8). When I argue for a poeitics rather than for poetry, I argue for the conceptual and material realization of critique qua internal insurrection. Mind you, those people who are potential renegades are everywhere. It is not an elite or a group of radicals. It’s common people, everyone who tries to make a career and a livelihood and therefore has to affirm the system. In philosophical terminology, the move from an aesthetic to a poietic (making) of resolution, and from describing to activating materials, connections, networks, registers, and properties is not a elite issue, and not even the issue of a revolutionary elite. Rather, it would be a truly precarious proletarian move, if we define the precariat as all those who do not belong to what Leslie Sklair (2001) has called the ‘transnational capitalist class’ and their accessories. Basically, what I think we need to achieve is a transformation of the basic notion of capitalism: property. Unfortunately, English doesn’t offer a distinction between what we call ‘Besitz’ and ‘Eigentum’ in German. But from these distinct concepts – the former legally relating to a wider concept of possession and relation, the latter distinctly attached to title and claim – capitalism was formed and interest born. Everything we possess and thus relate to, including but not at all restricted to labor, can be transferred into an asset and into a debt; German offers another double term here with ‘Schuld’ (guilt) and ‘Schulden’ (debt obligation). Today, this is encoded in a non-trivial distinction, which defines the social order of information capitalism. And I would argue, in extension of Maurizio Lazzarato (2012; 2014) and Erik Olin Wright’s (2010) claims, that it is here where we can unlock the financial aspect of the contemporary class system, as it appropriates and incorporates credit evaluation (materially, relationally, and contractually). If we look at how access to capital and profit maximization is granted or denied, we quickly find two completely different registers of credit and thus appreciation schemes: debt and leverage. Debt is a credit obligation, such as a loan or a mortgage, and binds the risk-prone future of the debtor to a past she has to redeem. Leverage, however, is different, as it facilitates the class membership of those who negotiate and control the future by actively acting on and recalibrating or externalizing risk. Albeit contingent, it is the contemporary access to the ‘wealth of nations’ delivered by an other193


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worldliness that floats far above the commonplace of debt and austerity. I would therefore propose to deconstruct the financial class system into three ‘social asset classes’ that are defined by an upper class with access to leverage; a lower class burdened by debt; and a third underclass with no access to either leverage or debt, which bifurcates further into two information capitalist ‘pariah classes’: those who are externalized to survival mode in welfare or quasi-welfare nations, and those who are externalized into pure and irrevocable poverty. What we need, and I believe Berardi would agree, is a fundamental change of the property regime, which nurtures the credit regime. To invoke another financial term with a much larger semantic base, we need to produce cultural and economic equity with new forms of contractual and non-contractual bonds. This would mean an appropriation of power as a performative speech for common means. And we need to find ways to make sure that these new ‘bonds’ will not be hijacked, as is already happening with the sharing economy and the crypto-economy. This to me defines the moment after post-capitalism. And people are developing a host of new technologies, skills, and concepts, from open-access software, to automated 3D-printing, to cryptocurrencies and the blockchain. ‘Off-market’ art and activism is a site of experiment with many of these things. And while the attempted outsides of “slowness, withdrawal and exhaustion” are essential recovery outings to revitalize poetic imagination and resistance, the insurrection I am interested in comes from inside the system (because that is where we all are), from its volatile jumps and information asymmetries. This upheaval takes up schemes and technologies, many of which have been hijacked before, translates and repurposes them, and plays and connects freely with temporalities. In light of the complexity and richness of the societies and cultures we live in (even though we are witnessing their destruction on a daily basis today), I’m not so sure that to ‘push the delete button’ on technologies like derivatives is a good idea, for example. To me the task is rather to develop ways of turning such technologies into useful tools against capitalist appropriation and the leverage class of the 1%, into tools on the side of commonism. Maybe we won’t need them, but I’m not so sure about that. We will have expectations and desires, there will be volatility, and we will anticipate on a more infrastructural level. People have always imaged and built tools for sharing their needs and expectations, their hopes and burdens, and the risks implied in multiple ways. Let me therefore end with a quote by Félix Guattari (2013: 1-2), written in 1989, at a moment before algorithms took off, but after the quantitative turn in finance and its first major crash in 1987: Because machines are in a position to articulate statements and record states of fact at the rhythm of the nanosecond and, perhaps tomorrow, the picosecond does not mean that they are diabolical powers that threaten to dominate man. In fact, people are all the less justified in turning away from machines given that, after all, they are nothing other than hyperdeveloped and hyperconcentrated forms of certain aspects of human subjectivity and, let us emphasize, precisely not those aspects that polarize humans into relations of domination and power.

Notes 1.

The performative speech fully arrives in fields outside finance, such as politics and media, with Mercer’s investment in Brexit and the Trump presidential campaign. Donald Trump’s disinterest in truth, I would argue, is based in a speculative logic. It operates performatively in the sphere of contingency. He redesigns Twitter – his dynamic hedging platform – as a Dark Pool in which the creation of waves of noise turns into competitive advantage; and escalation – that is, the production of volatility – rings in the collapse of the probability paradigm. Surfing the volatility wave, so to say, annihilates the democratic forum of discourse. Interestingly, right-wing 194


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reactionaries have grasped the biopower of ‘fat tails’ for politically exploiting information asymmetry, while the ‘progressives’, whose faith is still with truth (i.e., probability), are unwittingly turned into ‘losers’ – to use Trump’s term – who cannot face up to the turn from truth to pretence. Noise is the master of information, it has replaced fact as the productive vehicle of leveraging attention power.

References Avanessian, A. and Nestler, G. (eds.) (2015) Making of Finance, translated by J. Csuss and G. Nestler. Berlin: Merve. Ayache, E. (2010) The Blank Swan: The End of Probability. Chichester: John Wiley & Sons. Ayache, E. (2015) The Medium of Contingency: An Inverse View of the Market. Houndmills: Palgrave MacMillan. Berardi, F. (2012) The Uprising: On Poetry and Finance. Los Angeles, CA: Semiotext(e). Borch, C. and Wosnitzer, R. (eds.) (Forthcoming) Routledge Handbook to Critical Finance Studies. London: Routledge, in press. Esposito, E. (2007) Die Fiktion der wahrscheinlichen Realität. Frankfurt: Suhrkamp. Feher, M. (2009) Self-appreciation; or, the aspirations of human capital. Public Culture, 21(1): 21-41. Guattari, F. (2013) Schizoanalytic Cartographies, translated by A. Goffey. London: Bloomsbury [1989]. Knight, F.H. (1964) Risk, Uncertainty, and Profit. New York, NY: Augustus M. Kelley [1921]. Lazzarato, M. (2012) The Making of the Indebted Man: An Essay on the Neoliberal Condition, translated by J.D. Jordan. Los Angeles, CA: Semiotext(e). Lazzarato, M. (2014) Signs and Machines: Capitalism and the Production of Subjectivity, translated by J.D. Jordan. Los Angeles, CA: Semiotext(e). Martin, R. (1990) Performance as Political Act: The Embodied Self. New York, NY: Bergin & Garvey. Martin, R. (2015) Knowledge Ltd: Toward a Social Logic of the Derivative. Philadelphia, PA: Temple University Press. Meerman, M. (dir.) (2013) The Wall Street Code. VPRO backlight documentary. Available at: <https://www.youtube.com/watch?v=hw3XtscVCVI>. Accessed 29 January 2018. Nestler, G. (2007) Yx — Fluid Taxonomies — Enlitened Elevation — Voided Dimensions — Human Derivatives — Vibrations in Hyperreal Econociety. Wien: Schlebrügge Editor. Nestler, G. (2014-15a) CONTINGENT ETHICS. Portrait of a Philosophy Series II. Haim Bodek. 1-channel video, 44:46 minutes. Available at: <https://vimeo.com/channels/aor/127559794>. Accessed 29 January 2018. Nestler, G. (2014-15b) CONTINGENT OPTIONALITY. Portrait of a Philosophy Series III. Randy Martin. 1channel video, 27:45 minutes. Available at: <https://vimeo.com/channels/aor>. Accessed 29 January 2018. Nestler, G., Bodek, H. and Eckermann, S. (2017) INSTANTERNITY. A Black Box Body Cult. A Performative Mapping of Automated Finance and Algorithmic Perception. 47:30 minutes. Available soon at: <https://vimeo.com/channels/AoR>. Nestler, G. and Malik, S. (eds.) (2016) Special issue: Art and finance. Finance and Society, 2(2): 94224. Sklair, L. (2001) The Transnational Capitalist Class. Oxford: Blackwell. Thorp, E.O. (2011) Putting the cards on the table: A talk with Edward O. Thorp. Journal of Investment Consulting, 12(1): 5-14. von Mises, L. (1949) Human Action: A Treatise on Economics. New Haven, CT: Yale University Press Wright, E.O. (2010) Envisioning Real Utopias. London: Verso. 195


MAKING THE BLACK BOX SPEAK

Towards a renegade aesthetics of resolution A project in the framework of

THE FUTURE OF DEMONSTRATION. Season 2 Episode 3 October 24-25, 2018, Atelier Augarten Vienna and online.

PERFORMANCE | LIVE STREAM /BROADCAST: October 24, 2018. TALKS: October 25, 2018.

The live stream and further information can be found at http://thefutureofdemonstration.net/passion/e03/index.html

All fig. are video stills from live-stream footage.

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Visibility and knowledge are based on access to information. We usually consider this as either a question of collecting new or examining existing data. However, the term “black box society” (Frank Pasquale) points to a situation in which data are deliberately concealed: manufacturing information asymmetry – imbalances of power due to misinformation, extreme leverage, concealment or fraud – has become an effective tool for gaining competitive advantage across all levels of life. The logics of technocapitalism signify a crisis of the body politic – they not only restrain agency but carve out new forms of exploitation and segregation. As power increasingly shifts from representative to performative speech, it reorganizes the strata of society by creating class divisions that affect bodies, minds and affiliations along quite different lines as how class and consent have been contextualized historically. MAKING THE BLACK BOX SPEAK addresses these issues by focusing on the term resolution. Its semiotic wealth – ranging from perception and cognition to knowledge production and joint decision-making – evokes an ecology in which all bodies communicate, but also reveals how automated control predicts, curtails and exploits common potentials.

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Producing resolution against the technocapitalist regime is, however, barely accessible to critique or direct action. Therefore, we propose a radical step that takes dissent to insurrection â&#x20AC;&#x201C; the resistance we aim for is based on alliances with those who make the black box speak from inside. Episode 3 revolves around an ambivalent, volatile and marginalized figure, the renegade (such as a whistleblower or data activist) who exposes malpractice, abuse of power, violations of law and criminal offense. Stigmatized and persecuted as a traitor by her own industry or state, this expert witness at risk is in turn also indispensable as an educator in the general public interest. MAKING THE BLACK BOX SPEAK probes forms of resistance (epistemic, social and affective) and solidarity (sharing risks) that cut through the black box. What is at stake here is deeply performative, material and bodied. Episode 3 therefore explores how we can apply the rich body of resolution to a plasticity that can resolve what has been disrupted and marginalized. MAKING THE BLACK BOX SPEAK proposes an artistic-activist mode of action that exceeds established critical frameworks of art, political theory and academic discourse. Renegade activism calls for resistance as insurgence.

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MAKING THE BLACK BOX SPEAK.

Towards a renegade aesthetics of resolution A project by Gerald Nestler and Sylvia Eckermann in collaboration with the following artists and experts:

PERFORMANCE | LIVE-STREAM + BRODCAST Atelier Augarten, Vienna, October 24, 2018.

CONTRIBUTORS Haim Bodek, Sylvia Eckermann, Maya Ganesh, Aldo Giannotti, Florentina Holzinger, Volkmar Klien, Gerald Nestler, Peng! Collective, Nina Porzer, Denis ‘Jaromil’ Roio, Soulcat E-Phife, UBERMORGEN (featuring Zenker and Stefan Endres). Vocal Ensemble: Christine Gnigler, Lorina Vallaster, Joachim Rigler. Stunting: FightingFor Film. Data Bodies: Jon Eckermann, Elisa Winkler. Special Guest Appearance: Frank Pasquale. RENEGADE ACTIVISM. A series of conversations on resistance in the algorithmic condition. October 25, 2018 Frank Pasquale & Denis “Jaromil” Roio Maya Ganesh & Alistair Alexander Haim Bodek & Gerald Nestler Moderation: Ina Zwerger. THE GLASS ROOM EXPERIENCE, Tactical Technology Collective Exhibition: October 24 - 25, 2018 (Vienna premiere!) Workshops: October 25, 2018: Alistair Alexander, Tactical Tech.

MAKING THE BLACK BOX SPEAK was realized as Episode 3 of the art series THE FUTURE OF DEMONSTRATION, Season 2, October 24-25, 2018, at Atelier Augarten Vienna, on OKTO TV and online. 206


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MAKING THE BLACK BOX SPEAK was realized first as episode 3 of

THE FUTURE OF DEMONSTRATION

Idea & Artistic Concept: Sylvia Eckermann, Gerald Nestler Artistic Directors: Sylvia Eckermann, Gerald Nestler, Maximilian Thoman

THE FUTURE OF DEMONSTRATION (FoD) is an art series that focuses on new formats that expand and intensify artistic practice in response to the challenges we are facing in the ecological, societal and cultural spheres. As an experiment in technopolitical resolution, the art series offers space to imagine, create, collect and share across genres and disciplines and beyond conventional forms of critique. To that effect, FoD brings together artists, theorists, activists, scientists and other experts. Together, they explore how the political, technological, pedagogical and aesthetic capacities of demonstration cross-fertilize narratives, techniques and affiliations of resistance in concrete forms and shapes. The art series is divided into seasons and episodes. Each season is defined by a leitmotif whose thematic cluster informs the episodes. Each episode is at once artistic environment, performative space, installative setting, field of participation, discursive gathering and film set. The leitmotif is not only the theme, it also characterizes the collective energy addressed by its season. The artistic events are broadcasted live; experimenting with streaming as an art form, the films replace conventional types of documentation with artistic web series â&#x20AC;&#x201C; FoD continues online. As such, the art series is an invitation to participants, audience and viewers alike to engage in demonstrations that not only raise the question what is to be done? But also address the urgency of what we can achieve together? FoD has to date been realized twice by over 200 participants and team members. Season 1, VERMĂ&#x2013;GEN. October 31 - November 11, 2017 at Reaktor, Vienna, on OKTO TV and online. Season 2 PASSION. October 20 - 25, 2018 at Atelier Augarten, Vienna, on OKTO TV and online. www.thefutureofdemonstration.net 208


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The Future of Demonstration Season 1 : 31. Oktober _ 11. November 2017

VERMÃ&#x2013;GEN EPISODE 1

GROUND TRUTH:

The al-Araqib Museum of Struggle Forensic Architecture 31.10. + 1.11. EPISODE 2

ALIEN INTROSPECTION Xenofeminism, Robotics & Machinic Promiscuity 2.11. + 3.11. EPISODE 3

NAURUTICA

Synthetic Future Islands & the Tragedy of Outer Space 4.11. + 5.11. EPISODE 4

LIVERATION.

PROMETHEUS DELIVERED A Conceptual Narration on Biotechnological Divination 6.11. + 7.11. EPISODE 5

PROOF_OF_BURN Burning Money. Burning Value. Burning Trust.

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8.11. + 9.11.


MAKING THE BLACK BOX SPEAK v.2 extended MUFFATWERK, Munich, November 2-3, 2018, in the framework of the “10. Tage Politik im freien Theater.”

A 2-day performative intervention on Technocapitalism in closely intertwined circulations based on 3 episodes of THE FUTURE OF DEMONSTRATION. Season 1. Episode 5, 2017 | Proof-of-Presence Season 2. Episode 1, 2018 | Supra-Citizenship Season 2. Episode 3, 2018 | Making the Black Box Speak Idea & concept: Sylvia Eckermann and Gerald Nestler, in collaboration with Dietmar Lupfer, director Muffatwerk.

PERFORMANCE + INTERVENTIONS The project was an experimental choreography for a new artistic format. Closely intertwined and connected, performances, interventions, sound, music, talks and conversations brought the project’s collective themes – global citizenship, cryptoeconomics and technopolitical resistance – into resonance with each other. The audience experienced and participated in demonstrations that extended from the central site and the auditorium to outdoors. Rigging points for stuntperformances were mounted on the ceiling. Projection walls showed video and life-cam content as well as Skype-broadcasts. The event was also live-streamed.

EXHIBITION + WORKSHOPS The Glass Room Experience, Tactical Technology Collective, Berlin An exhibition with 2 workshops conducted by Alistair Alexander. The Mining Museum, Enxuto & Love. Mask.ID, Peng! Collective. Screening of THE FUTURE OF DEMONSTRATION 2017/2018 (8 films).

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PAR Alist Haim Enxu Nies Flore Volkm Nest Porz Rigle Zenk Soph


RTICIPATING ARTISTS | EXPERTS tair Alexander / Tactical Technology Collective, m Bodek, Domingo Castillo, Sylvia Eckermann, uto and Love, FightingForFilm, Maya Ganesh, s Gabriel, Christine Gnigler, Max Hampshire, entina Holzinger, Jürgen Kleft aka Shellpunk, mar Klien, Bogna Konior, Laura Lotti, Gerald tler, Andrew Newman, Frank Pasquale, Nina zer, Peng! Collective, Soulcat E-Phife, Joachim er, Alex Suárez, UBERMORGEN (featuring ker and Stefan Endres), Lorina Vallaster, hie-Carolin Wagner.

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What you see is not what you get. In fact, you see next to nothing. Your vision is blurred. Not by distraction but by deflection. Distraction entertains you by giving you something to hold on to, to bond with. And you enjoy the noise because it makes information so much more interesting. Deflection moves you subtly away from yourself and those you might bond with. This is the real game, but you’re not invited to join. To the contrary, with all this asymmetry and deception, you’re out of your depth, you have no clue how excluded you are; even though you’re right inside – here, where noise reigns; where noise is the master of information. What’s the difference, you ask, why should I care? Well, now the game plan is for you to get lost but not in the entertaining sense. Now what’s happening is you; you are performed; and this is your bondage, for which you pay dearly at any microsecond of what they call your life. Now, you’re no longer pray to representation. It’s all performative and affective, the stage is all yours; and that’s all you’ve got left – this volatile void you navigate, but not on your terms. You don’t even know the terms, but you play along “I must,” you say. ‘Want to see what you really get? Well, in this case you’ve got to turn your blind eye away; abandon your artificial affiliations; breach those lopsided contracts; alienate those who exploit you. Turn Renegade – fight those who impose their terms, who own you That’s counterintuitive, you say, and risky! For sure! But nothing comes without risk – find companions to share it with! This is not the end of the game. It’s the beginning. Resolution awaits you. Intro text to MAKING THE BLACK BOX SPEAK by Gerald Nestler Originally spoken by Anna Mendelssohn at The Future of Demonstration 2018 214


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WHISPER. Status Code: No Entity Found Sound installation, based on a video of the same title. 4:49 Min., 2016/2019 Sound: Sylvia Eckermann Lyrics: Gerald Nestler The work exposes the libidinal power of financial capitalism. In Gerald Nestler’s lyrics, the voice of the market/money/capital addresses us directly. Its seductive speech is set to rhythm and sound by Sylvia Eckermann who also generated the visual surface. Computer voices strike up the digital hip hop of futures. Volatile swings define the imagery. We are the object of desire. The derivative constitute the “recombinant social DNA” of the body politic. “Oh baby! How you nourish me!”

Presented at

HYSTERICAL MINING An exhibition of the Kunsthalle Wien in the context of the VIENNA BIENNALE FOR CHANGE, Kunsthalle Wien, June 29 - October 6, 2019. Artists: Trisha Baga, Louise Drulhe, Veronika Eberhart, Sylvia Eckermann & Gerald Nestler, Judith Fegerl, Fabien Giraud & Raphaël Siboni, Katrin Hornek, Barbara Kapusta, Marlene Maier, Pratchaya Phinthong, Marlies Pöschl, Delphine Reist, Tabita Rezaire, Miao Ying. Curators: Anne Faucheret, Vanessa Joan Müller

HELICOTREMA – Recorded Audio Festival 2019 Palazzo Grassi and Teatrino di Palazzo Grassi, Venice, November 6-7, 2019. Curated by the art collective Blauer Hase (Mario Ciaramitaro, Riccardo Giacconi, Daniele Zoico) and the independent curator Giulia Morucchio.

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Video stills. WHISPER. Status Code: No Entity Found. Helicotrema. Photo: Blauer Hase and Giulia Morucchio.

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NOISE IS THE MASTER OF INFORMATION

Algorithmic Cognition at the Turn from Representative to Performative Power Lecture-performance | Discursive Space of HYSTERICAL MINING, Kunsthalle Wien Karlsplatz, September 27, 2019. Gerald Nestler and Sylvia Eckermann, joined via Skype by high-frequency, crypto trader and whistleblower, Haim Bodek.

The artists reconstructed a development that, despite its societal impact, has not received much attention yet. While (possible) effects of Big Data, algorithms, automation and AI are widely discussed, the question remains: What kind of language does (bio)power speak in the era of technocapitalism? How does it address us? On the basis of examples such as Twitter politics, social credit scores and the quantified self, the artists will identify a shift from representative to performative speech, aimed to anticipate and exploit the contingency of social relations and individual behaviors. How can (feminist) theories and practices show us ways to undermine these data-driven logics of control (that primarily target affects and aim at involvement) as well as provide ways to destabilize divisive forms of male-dominated escalation politics and profit maximization?

Video still. Eckermann/Nestler, Noise, 2018

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MAKING TRUTH. Vienna Art Week, 2019 MAKING TRUTH EXHIBITION PARCOURS 14 selected studios have prepared exhibitions for this year’s motto. Artists’ talks take place in each of the studios. The talks are scheduled to form a talk parcours through the city. The selected studios also open their doors during the times of the Open Studio Days. Artists: Bernhard Cella, Beatrice Dreux, Tomas Eller, Karin Ferrari, John und Joy Gerrard, Anna Jermolaewa, Jakob Lena Knebl, Claudia Märzendorfer, Gerald Nestler and Sylvia Eckermann, Klaus Pichler, Lisl Ponger, Lois Renner, Ashley Hans Scheirl, Martin Walde. STUDIO TALK WITH THE ARTISTS. Gerald Nestler and Sylvia Eckermann in conversation with Friedrich von Borries, architect and curator, Berlin. November 17, 2019. A self-proclaimed real estate tycoon and staunch capitalist enters the stage to capture the political scene. Ostensibly typing alphabetic code, he in fact recodes the proprietary data platform. Surfing the volatility wave, Donald Trump triggers fat tails and thus redesigns Twitter as Dark Pool. The escalation of waves of noise turns into competitive advantage and such production of volatility sounds the bell for truth as a function of probability. Fat tail events are deemed extremely rare; but now, they rattle down in electronic speed, leveraged by fake news and other malignant information asymmetries. Noise has taken over fact as the productive vehicle to trigger affect and leverages attention, giving way to sociopathic, authoritarian symptoms. In truth, it seems, noise is the master of information. But for some, “The One who Speaks the Truth” has separated the eternal realms of truth and falsehood eons ago. His performative speech is the power that evades all contingency. And for others again, as someone recently remarked, in line with an aesthetics in the field of consequences, “we should rather insist, as counterintuitive as it may seem, on the evidentiary dimension of art and its truth value.” What can we expect? Resolution awaits you.

MAKING TRUTH LINE-UP Studio Building of the Academy of Fine Arts Vienna, November 22, 2019. TRUTH, RECALIBRATED. Gerald Nestler and Haim Bodek. Haim Bodek and Gerald Nestler will explore the making and unmaking of fact and fiction in finance and other data-driven spheres of technocapitalism. THE making truth line-up concludes the festival week in terms of content. The focus is on socio-politically active artists and the work of activist groups whose projects in recent years have helped uncover social grievances and stimulate broad discussion. 220


MAKING TRUTH Exhibition view: Studio Eckermann and Nestler. Photo credit: Sandro Zeizinger. 221


Derivative Bond Emissions. No. 19 and No. 20. 2017/2018. A series of text works realized in varous media since 2004. 222


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Gerald Nestler | projects, works and texts (mainly from) 2012 - 2019. All works, texts, images, photos Š Gerald Nestler, except where stated otherwise. 226


art as postdisciplinary practice vol II of II

AESTHETICS OF RESOLUTION INQUIRIES into BLACK BOX INFORMATION ASYMMETRY and NONTRANSPARENCY

THE FIGURE OF

THE RENEGADE From Critique to RESISTANCE as INSURRECTION

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art as postdisciplinary practice vol II of II

AESTHETICS OF RESOLUTION

RENEGADE AKTIVISM

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The Derivative Condition | Aesthetics of Resolution | Renegade Activism  

Gerald Nestler | projects, works and writings, (mainly from) 2012 - 2019.

The Derivative Condition | Aesthetics of Resolution | Renegade Activism  

Gerald Nestler | projects, works and writings, (mainly from) 2012 - 2019.

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