The politics of financial value

Banking stress tests between indeterminacy and struggles.
By Frédéric Lordon

Whereas the neoclassical theory of finance has always claimed that financial assets had a “fundamental value”, Keynesian arguments about radical uncertainty as well as arguments drawn from a Spinozist approach in political economy rather lead to the opposite conclusion of a fundamental indeterminacy in financial value. This indeterminacy is lifted through social processes, such as the building up of collective beliefs. These processes however may take a more overtly political tone, whenever situations arise where the value has to be “decided.” Agents or groups may then strive in a conflicting way to set the value in their best interests. It is typically the case during financial crises where indeterminacy, suddenly returning, gives way to multiple valuation conflicts. US banking stress tests straightforwardly show these struggles as part of what could be called a “politics of value.”


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