Artist & researcher

The effects of financialization to art education, research, and practice: risk, volatility, and the unknown unknowns

ELIA Biennial Conference 2022: No Stone Unturned. Thursday, 24 November, 2022


I am interested how the discourses of art, education and finance converge; through terms such as speculation, narrative, fictioning or myth-making — debt, credit, volatility and risk.

Financialization is the fourth pillar of economics with production, consumption and distribution. It is speculative and performative. It is not only speculation on what future might be, but finance makes — and forces — things to happen, change, transform or disappear now, through this speculation.

Financialization is a process where finance expands to non-financial value systems and forces them to adapt to these narratives (Birch & Muniesa 2020). The financial narratives and systems expand into non-financial spheres like art education, practice and research.

Financialization in this context means how the arts’ intrinsic models, schemes of thought or narratives are altered and transformed by financial ones — how the speculative and abstract narratives of finance manifest and perform in education, practice and research.

In a recent research project that I am leading, with researcher from the arts and economics, we ask how we contend that arts’ epistemologies are increasingly informed by financial models: in how we perform, push forward or speculate on the future. We will research the theories, models and intuitions of these both fields.

How does it perform in the fields of art education and research? How it takes place, not as separate, but as part of the larger societal context, i.e., financialization?

First a contextualization on what contemporary financialization stands for.


Financial turn, the political dominance of the financial sector over other sectors of capital followed by the stagflation of the early 1970s reached its full dominance in the early 1980s. One of the effects has been stagnant wages in contrast to soaring market assets. The part of this narrative is that private funds are keener on taking risk than governmental institutions (Mazzucato 2019). Since 2007 mortgage crises in the US, followed by the global credit crisis in 2008 and 2009 the political power of finance has paradoxically been strengthened by the weakness of financial sector (Krugman 2020).

Financialization means a restructuring of the non-financial spheres Karl Polanyi  argues already in 1944. The dominant neo-classical economic thought with the Efficient Market Hypothesis regards that market is based on spontaneous order where prices fully reflect all available information: and because of that the market is the best way to validate truth (Hayek 1968; Fama 1970). All agents must calculate utility, must have the ability to make the right choice, and must adjust their choices to price signals (Knorr Cetina & Preda 2012).

Finance is founded on the ability to quantify and estimate future changes of price of an asset (Mehrling 2017). Philosopher Jean-Pierre Dupuy regards how in this process economics has gained a dominant position in the society, so much, that we no longer find it unusual that economics “has taken over our very ways of thinking about the world.” (Dupuy 2014, xii)  He writes:

“economy functions by projecting itself into a future that does not yet exist, but that it brings into existence by allowing itself to be pulled forward in time, as it were, until it reaches the very moment when  the future it has imagined becomes real.”( Dupuy 2014, xiv-xv)

Professor of Social and Political Thought Robert Meister writes that financialization is pervasive in that it grows to effect through set of technologies for financializing activities that are otherwise outside the financial sector, making financial sector hegemonic, and “the alternatives to its political power much more difficult to imagine and bring about.” (Meister 2021, xi) However, the problems of financial modeling are less mathematical than they are conceptual (Derman 2016, 8).

Choreographer and social activist Randy Martin wrote that financialization must be understood “as a generalization and extension of financial ways of thinking to all sectors of capitalism.” The entrepreneurial individual has been superseded by the concept of strategic rehedging ofoptions

“the fully financialized self is a portfolio of assets with ever-changing exposures to risk and opportunity that must be actively managed over the course of a lifetime in response to inherently uncertain future conditions.” (Meister 2021, xi)

Financialization is the general organizing worldview in the same way as commodification once was. Martin wrote how the optionality and hedging ‘life portfolio’ to make better choices is the category through which financialised subjects negotiate ‘creditworthiness’ (Meister 2021, 103).  No more the homo œconomicus with skills and abilities, but an investor or investee with diverse portfolio of assets hedged against the exposure of risk. The financial man having options, hedged against the adversity.

In contrast to commodity markets, the financial markets can translate developments that might otherwise threaten capitalism’s stability, such as global warming or rising socioeconomic inequality through options and derivatives.  The markets can trade volatility and contradictory to anticapitalist movements reap financial benefit from any turbulence translating political and economic insecurity into something to be monetized (Esposito 2015, 89-107).

Credit is a promise

Finance has always existed as one of the major functions in human societies, and economic inventions since the Renaissance have been extremely influential to science and culture – and vice versa. Keith Hoskin and Richard Macve write how the invention and distribution of the double-entry bookkeeping was key to rewriting the new social world in early mediaeval times (Hoskin & Macve 1986, 109). In the first University institutions in Paris and Bologna, in 12th century, the bookkeeping tools were adopted to pedagogical institutions. The commerce needed qualified administrative staff, which the new Universities could provide, but double-entry bookkeeping was also used in disciplining and examination of students.

We still used study-credits like points, tokens or pegs. They consist of hours of committed work and participation. They convert studying into measurable units of labour and time. But today, my focus is on the conceptual level of credit as a promise.

Credit is a promise to pay. Relaxation today comes at the price of greater constraint sometime in the future. Credit is based on future expectations and it is inherently unstable, because the future it refers always will be different than anyone imagined. The economist Perry Mehrling writes that this inherent instability of credit goes to the heart of our existential and metaphysical sense of the future, because “We don’t know the future but we are nevertheless required to behave as though we do.” (Mehrling 2017, 8)

Depending on your point of view, what counts as money, counts as credit to someone else; every liability is someone else’s asset. Mehrling writes that: “thinking of every agent in the economy as a kind of bank, in the sense that every agent needs to be attending to the daily inflow and outflow of cash balances.” (Mehrling 2016, 4)

Another aspect of credit and money relation is that at one level, an agent cannot increase the quantity of money  but can increase the amount of credit by their actions.

The elasticity of credit is the key because this elasticity offers a degree of freedom and relaxes the constraint posed by the scarcity of money (Mehrling 2013, 399). Credit creates an interlocked web of commitments, promises to pay or delay of the final settlement. There is constant and dynamic swing between the elasticity and discipline and scarcity.

The credit is founded on the assets of trust, reliability, reputation and attributes which all are prone to  change in time. If we look at the education system and the relation to credit – I do not mean here monetary credit, or even the study credits, but more the conceptual and social credit that the system hangs on – we can recognize the increasingly important role of assets and credit. The credit keeps our focus on that uncertain future, on the narratives of future. Even in the scarcest conditions, some form of elasticity for credit is needed.

For example, an MA student has assets – a resource controlled by someone or something because of past events, and from which future benefits are expected to flow (Birch and Muniesa 2020) —  skills, experiences, bodily functions, affective traits, even loyalty, taste, habits and other qualities, which are tied to potential future profit. A form of ‘social credit’ is issued from the staff – teachers, professors, lecturers, and admin staff – to the students. But, on the other end the same relationships bound staff, as well, who need credit from the dean, board, and so forth; who, henceforth have similar relationship with the ministry of education. In the university the knowledge is the currency, and our assets build our creditability.  Someone else’s money is other one’s credit.

Capability of credit

Credit is performative in addressing us to behave as we would know what the future entails for us. Credit is the essential part of the fabric of the society based on commitment, and on trust. The confidence and control of the liquidity are based on our capacities and capabilities. The economist Frederic Benham describes how money is nothing more than a “gigantic confidence trick” — it works as long as we believe in it (Valdez and Molyneux 2016, 30). The final settlement is pushed further when confidence remains.

The future for the MA student, teacher, admin staff, professor or the researcher is ultimately uncertain, but with amount of social credit it is hedged as ‘risk-free’. Credit and confidence allow us to function and realize our capabilities. We have the freedom to select and choose when we have amount of elasticity on our credit, and we can hedge our options, our relationship with future. Yet, greater inequality could result from greater liberty.

Meister (2021, 71-72) writes that “Capabilities create options, options are freedoms, and freedom has intrinsic value”. Choices make future value in present, yet, the future outcomes may have zero probability and no guarantee of any value in the unforeseeable future. This is the logic of the options and derivatives in the financial markets.

The logic of the options is central to financialization and has crucial difference with the commodity market because options are valuable without any realizable outcomes or opportunities (Meister 2021, 99). The logic manufactures options from stocks, and the value of them, what you believe they are worth, always involves some construction of model or theory. Models translate intuitions to values (Derman 2016, 11). But theories and models are attempts to eliminate time and to make the world invariant, so that present and future become one, writes Emanuel Derman (2011, 7).  There is greater value when the expiry date of the option is farther aways, so the added value increases in time, that is the time with right to choose, and how the differences, or alternative outcomes widen or narrow during that time (Meister 2021, 104).

In the review of the reconstruction programme of the arts sector, launched by Uniarts Helsinki in 2022 the authors utilize terms of capability and knowledge:

“the concept of capability refers to the whole that is comprised of resources, competence, knowledge and effective practices that are needed for reaching the set goals in the field. If this whole is lacking in a major way in some respects, it is not possible to utilise the resources in a meaningful way.” (Pekkarinen, Siltanen and Virkkala 2022, 8)

The term ‘capabilities’ is often connected with the work by Martha Nussbaum (2011), but has connection with the economics, also. It proposes that we need to build capacity to make better choices and build systems that aims at making people better choosers. Such a capacity-building has replaced the neoliberal conceptualization of human capital.

The profits are not rewards for taking knowable risks, argues the economist Frank H. Knight in 1921, but profits are “a premium accruing to those who invest despite the uncertainty about those components of the future that are intrinsically unhedgeable.” (Meister 2021, 77) They are profits accrued between the present moment — where our choises and capabilities matter — and the future — where they may not matter anything at all. Our credit increases with our capability in taking risk.  

But as financial analyst Emanuel Derman warns us on blind faith on models, that, for instance, when acting on the predictive models of the future, our own actions may make the predictions false. The options traders price the volatility of their own expectations of volatility, therefore they are really trading on their doubt about their models (Derman 2009).  

The logic of finance provides a way to get paid for what we do now, yet, there is always a good reason to doubt that anything I do between now and future, can justify me in believing that ”if I do this, the future will be different.” (Dupuy 2014, 30) The elasticity of credit, between the actual and the possible, is the elasticity of doubt.  


So, my recap and series of questions for you is following.

My education and professional career coincide with the process of financialization, already from the early 1970s, but more importantly when I begin my artistic education in the 1990s. In the 1990s in the UK and Europe, the precarious populations were turned towards the expanding market of financial products, through credit, creditworthiness and personal debt. This is what we understand today as general privatization. Robert Meister writes:

”personal debt and public taxation were presented as competing ways to finance benefits to poorer segments of the general population.” (Meister 2021, 56)

The privatization concerned especially the population from the lower income, precarious households who were pushed to take students loans – in other terms, to pay in debt and not in taxes, and ‘just to hang a little longer’. How do you reflect on that? What was your personal relation to these changes? What did you had to learn about credit, debt and finance?

I had mentioned that since the more extreme financialization of the society, the logic of homo œconomicus, concept used by Foucault and the economist in the Chicago School in the 1980s, has been replaced or reformulated so, that we no longer identify as entrepreneurs, but as investees, as argued by Jacques-Olivier Charron (2010, 2015) and Michel Feher (2018). The logic is a kind of transversal interconnectedness by debt and credit. Our awareness of our assets, capabilities to take risk, and comprehension of the volatility of time, uncertainty of future.

The other side is that why these choices, these risks and investments? There is a backward narrative in it, that is based on the past and expecting the future to be the similar as the past. At the same time, through investee conditions, we are fully aware that it might not be like that. We need capabilities to create options for the future. But future options are based on the assessment of the past narratives, but also on the awareness that the path chosen was one among other possible lives one could have lived (Meister 2021, 102). What the past risks or volatility tell me, is  only that how much I did not know what to expect. So, what is the logic of educating into arts?

“You can be disappointed only if you had hoped and desired. To have hoped means to have had preconceptions — models, in short — for how the world should evolve. To have had preconceptions means to have expected a particular future. To be disappointed therefore requires time, desire, and a model.”[1]

The new information is often unexpected, but there is also danger that I mistake new information for random noise. There is a difficulty of distinguishing new information from noise, especially with intuition. That is why we use theory and models, which are only so good at it. How do we deal with noise and creditworthiness amongst ourselves in the context of art education? In the context, where the unexpected is the only thing that is constant – yet we believe that our models provide some security, however they are only based on assumptions as approximations to reality. But, what is the role of these models, for instance creditworthiness, or the future volatilitye in the context of art education?


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Nussbaum, Martha C. 2011. Creating Capabilities: The Human Development Approach. Cambridge: Belknap Press

Pekkarinen, Jenni, Kirsi Siltanen and Mika Virkkala (eds.) 2022. Taidealan Jälleenrakennus: Polkuja alan kestävään tulevaisuuteen [Reconstruction of the arts sector: Roadmap to a sustainable future for the field]. Helsinki: Taideyliopisto

Polanyi, Karl. [1944] 2001. The Great Transformation: The Political and Economic Origins of Our Time. Boston: Beacon Press

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[1]         Derman 2011, 8