Fuzzy knowledge: an historical exploration of moral hazard and its variability
In: Economy and society, Band 44, Heft 1, S. 91-109
ISSN: 1469-5766
33 Ergebnisse
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In: Economy and society, Band 44, Heft 1, S. 91-109
ISSN: 1469-5766
In: Review of international political economy, Band 17, Heft 3, S. 454-480
ISSN: 1466-4526
In: Soundings: a journal of politics and culture, Band 41, Heft 41, S. 8-18
ISSN: 1741-0797
In: Soundings: a journal of politics and culture, Heft 41, S. 8-18
ISSN: 1362-6620
In: Review of evolutionary political economy: REPE, Band 2, Heft 3, S. 403-429
ISSN: 2662-6144
Abstract
Mainstream economic theories of the firm argue that the boundary between firm and market is determined by efficiency-enhancing logics which optimise coordination or bargaining outcomes. Drawing on social anthropological work, this paper critiques these accounts, arguing instead that firms are socially embedded and that firm boundary formation should therefore be understood as an attempt to fix the limits of certain relational rights and obligations that are moral in their conception. Consequently, boundaries are often contested and subject to renegotiation. We employ the parsimonious concepts of 'dams and flows' to examine how attempts to curtail the claims of some stakeholders and extend the claims of others at any one historical moment produce boundaries of different kinds. To illustrate this, we first trace the moral arguments used to advance limited liability rights to shareholders during the Companies Act in the mid-nineteenth century, which cut or 'dammed' obligations at a particular point and moment, directing new flows of obligation and wealth. We then explore the different moral reasoning of agency theory—the foundation of the financialised firm—which foregrounds the property rights of shareholder principles and obligations of managerial agents to them. We argue that this moral reasoning led to new dams and flows that have changed corporate governance and accounting practice, producing—counterintuitively—a reinvigorated form of managerialism, leaving the firm financially and morally unstable; its boundaries increasingly unable to contain its relational tensions.
In: Tischer , D & Leaver , A 2017 , ' Through a Glass Darkly : Tracing the Mundane Organisation of a Bubble Network ' , Academy of Management Proceedings , vol. 2017 , no. 1 . https://doi.org/10.5465/AMBPP.2017.254
Despite the scholarly attention given to the causes of the Financial Crisis 2007-2009, there has been no research on the mundane organisation of the CDO (Collateralized Debt Obligations) market. By studying connections between supply-side actors, our paper examines structural developments in the CDO market. We treat the CDO as a network product, thus viewing the product as interface through which parties involved in the production interact. Our database contains interactions between supply-side actors involved in 373 US CDOs which are analysed using network analysis tools to draw out longitudinal structural developments and the centrality of actors. Our findings highlight how activity in the supply-side exploded after 2003 through the entrance of new actors as the market scaled up; however, actors present before 2003 remain central at the height of market activity in 2006/07, whereas new entrants appear to gain little traction. Crucially, the network exhibits a core-periphery structure centred on actors linked to mundane organising functions that have received little attention in previous studies, but where their central position may have contributed to the poor CDO market performance and financial crisis.
BASE
In: Juncture: incorporating PPR, Band 21, Heft 3, S. 215-221
ISSN: 2050-5876
Adam Leaver and Karel Williams argue that since 1979 successive British governments have embraced an economic model that has produced systemic failure and pervasive mismanagement in many business sectors – yet appear to have learned nothing from this failure.
In: New political economy, Band 12, Heft 3, S. 349-368
ISSN: 1469-9923
In: New political economy, Band 12, Heft 3, S. 349-368
ISSN: 1356-3467
SSRN
In: Beaverstock , J , Leaver , A & Tischer , D 2021 , ' How financial products organize spatial networks : Analyzing collateralized debt obligations and collateralized loan obligations as 'networked products' ' , Environment and Planning A . https://doi.org/10.1177/0308518X211029654
During the 2010s, Collateralized Loan Obligations (CLOs) rapidly became a trillion-dollar industry, mirroring the growth profile and peak value of its cousin – Collateralized Debt Obligations (CDOs) - in the 2000s. Yet, despite similarities in product form and growth trajectory, surprisingly little is known about how these markets evolved spatially and relationally. This paper fills that knowledge gap by asking two questions: how did each network adapt to achieve scale at speed across different jurisdictions; and to what extent does the spatial and relational organization of today's CLO structuration network, mirror that of CDOs pre-crisis? To answer those questions, we draw on the global financial networks (GFN) approach, developing our own concept of the networked product to explore the agentic qualities of CDOs and CLOs – specifically how their technical and regulatory 'needs' shape the roles and jurisdictions enrolled in a GFN. We use social network analysis to map and analyze the evolving spatial and relational organization that nurtured this growth, drawing on data harvested from offering circulars. We find that CDOs spread from the US to Europe through a process of transduplication – that similar role-based network relations were reproduced from one regulatory regime to another. We also find a strong correlation between pre-crisis CDO- and post-crisis CLO-GFNs in both US$- and €-denominations, with often the same network participants involved in each. We conclude by reflecting on the prosaic way financial markets for ostensibly complex products reproduce and the capacity for network stabilities to produce market instabilities.
BASE
In: Tischer , D , Maurer , B & Leaver , A 2019 , ' Finance as 'bizarre bazaar' : Using documents as a source of ethnographic knowledge ' , Organization , vol. 26 , no. 4 , pp. 553-577 . https://doi.org/10.1177/1350508418808231
Markets and finance have long attracted ethnographic interest but the nature of their activity – opaque, secretive and increasingly placeless – precludes traditional ethnographic fieldwork. In this article, we propose documents as an alternative access point to these organisations as an ethnographic object of enquiry. Documents do not only present a written record, but they also enact relationships and encode tacit understandings. We develop Geertz's work on the bazaar by taking an indirect route to access the field site – collateralised debt obligation – through documents. In reading these documents, we assume the position of investors who, in the absence of alternative publicly available information, are dependent on the documentary accounts made available to them by the sellers. These media act in ways that are similar to tourist guidebooks, a comparison we use to reframe the exchange as one that builds upon sociocultural relations rather than the abstract market relationships described by mainstream economists. We propose that these documents are not merely representational artefacts of the organisation but serve to establish and maintain social relationships between buyers and sellers through the management, standardisation and ritualisation of information disclosed to the investor.
BASE
In: Organization: the interdisciplinary journal of organization, theory and society, Band 26, Heft 4, S. 553-577
ISSN: 1461-7323
Markets and finance have long attracted ethnographic interest but the nature of their activity – opaque, secretive and increasingly placeless – precludes traditional ethnographic fieldwork. In this article, we propose documents as an alternative access point to these organisations as an ethnographic object of enquiry. Documents do not only present a written record, but they also enact relationships and encode tacit understandings. We develop Geertz's work on the bazaar by taking an indirect route to access the field site – collateralised debt obligation – through documents. In reading these documents, we assume the position of investors who, in the absence of alternative publicly available information, are dependent on the documentary accounts made available to them by the sellers. These media act in ways that are similar to tourist guidebooks, a comparison we use to reframe the exchange as one that builds upon sociocultural relations rather than the abstract market relationships described by mainstream economists. We propose that these documents are not merely representational artefacts of the organisation but serve to establish and maintain social relationships between buyers and sellers through the management, standardisation and ritualisation of information disclosed to the investor.
In: New political economy, Band 15, Heft 1, S. 9-28
ISSN: 1469-9923
In: New political economy, Band 15, Heft 1, S. 9-28
ISSN: 1469-9923
The paper criticises current metaphorical characterisations of hedge funds as either trader/arbitrageurs or speculator/gamblers. We argue that these two different characterisations share a definition-identity-outcome frame within which hedge funds are separate and distinct from other financial actors, and engaged in an activity of buying and selling assets with 'real' and fixed risk/return characteristics. To break with this frame, our article makes two discursive moves. First, it counters metaphor with analogy by replacing the metaphor of buying and selling with the analogy of war, drawing on Deleuze and Guattari's concept of 'war machine'. Second, it combines the military analogy of war with our own political and economic concept of conjuncture to emphasise the relevance of space and time in understanding hedge fund practice and performance. These two moves open up a different approach which highlights the interconnectedness of hedge funds with other financial actors, and the increasing difficulty of distinguishing hedge funds from other financial and non-financial companies who now engage in combat using identical strategies. The techniques of shorting and leveraging are presented as weapons not tools because hedge funds are not just active traders, but active manipulators of those trades, when the goal is to 'make the positions work'. We conclude, however, that this strategy becomes more difficult on new terrain as the economic conjuncture shifts from excess liquidity to credit crunch. Adapted from the source document.