The Hypertrophy of the Over: Speculative Capital and Derivatives

Abstract

The allocation of capital today is increasingly dominated by financial and derivative interests. It is not the real economy that drives the financial economy; conversely, it is the financial economy that structures the real economy. The metaphor “central nervous system of capital” refers to the financial constellation of capitalist economies. If the capital principle is the energetic engine of the breathing capital monster, then the financial system is its brain and central nervous system. Derivatives and all other exotic and synthetic financial instruments, which, on the one hand, are to be understood as technologies of power, and on the other hand, as speculative forms of capital with which returns are achieved, represent today a necessary condition for the constantly occurring implementation of capitalization in the entire economic field. Derivatives are seen as instruments that the speculative chapter and its agents create in complex processes (constructive and destructive) and use, especially within endogenous circuits, to also dig deeper and deeper into the processes of industrial production by means of a machine of securitization/insurance that operates the creation, design, and distribution of the risks of derivatives trading, as a kind of informal supervisory authority.