Experimentation in the face of uncertainty is a complex systems answer to the established notions of risk and loss avoidance in the financial arena. Bay and Bäckius are adding to the traditional conceptions of experimentation the notions of mental models and ontology. They argue that experimentation is the creation of something new in the face of uncertainty and risk. The emergent, derived from a set of adjacent possibles, is allowed to redefine both “that which is” and “the yet to be.” Bay and Bäckius illustrate this with examples drawn from the field of financial derivatives and the Swedish region of Gotland.
If we were to pick out one widely recognized feature of our world on which most of us would be likely to agree, perhaps even take for granted, we would suggest this to be uncertainty. For sure: what could be more true, or self-evident, than this? Everything moves, changes, fluctuates, transforms—and we along with it. One could, however, attempt to approach the matter from a slightly different point of view: Uncertainty is the widely recognized “explanatory principle”1 of our world—its reality principle if you like—the principle according to which what is referred to as “our world” could be said to exist—its condition of possibility. An explanatory principle serves as an ideational “linkage” that enables us “to create a plausible and coherent pattern from what we apprehend … to delimit the scope of our attention by punctuating our phenomenal experiences, removing equivocality and thereby helping to configure a version of reality to which we then subsequently respond.”2
Hence our world, according to this constructivist view, is not in itself uncertain, but rather made that way. This “worldmaking,”3 this institutional creation process, follows a simple two-stage procedure. First there is categorization (classifying, defining, coding, carving out, determining), the cleaving or cutting-in-two of an ambiguous world. “In contrast, the second stage of creation is in the social anchoring of the new categories; the order that resulted from the adventurous cut is legalized;”4 that is to say, the categories are codified (organized, ordered, arranged, structured), in short, named. The “activity of categorizing is essentially individual, the naming essentially social.”5 The first activity requires tremendous artistic craftsmanship or skill; the second a profound knowledge of sociotechnical baptizing procedures. Uncertainty, thus shalt be thy name. From the moment when uncertainty is established as the determinant of the human condition, our world seems—in an odd sort of way—calm and restful, circumscribed, a haven, a safe place to be, a place to call “home,” a dwelling to return to—for certain.
But does not this solitary categorizing process, and this social organizing procedure, presuppose that the uncertain is more or less familiar to us? That the uncertainty of the uncertain is more or less given? That the future—in a sense—is now, already here? That the not yet is already? That the no-where of the future is now-here? Definitely. Uncertainty, in order to be uncertain, would have to concern only that which by definition cannot be known in advance, handled beforehand, that which belongs exclusively to the future, the not-yet, the advent, that which is always to come.
The “proper” name of uncertainty (if it has a name) should, perhaps, be ambiguity (from the Latin ambigere, to wander about, go around, waver, dispute, argue, from ambi-, both, both ways, on both sides, around, about, and –igere, from agere, to drive, lead, act, do). This thereby indicates the roaming around on both sides of uncertainty and certainty at one and the same time; that is to say, the simultaneous acting on either the side of uncertainty or on the side of certainty. Perhaps.
Skill, an individual capacity, concerns discernment, the ability to make distinctions, to separate and divide, delimit, to make decisions; that is to say, the capacity to judge, or rather, pre-judge, since to make a judgment is always to judge in advance, beforehand. It is the ability to judge in accordance with a pre-established order or point of reference. In other words, it deals with the capacity, in relation to some sort of transcendent value, to predict and calculate the future. Skill, consequently, has nothing to do with ambiguity. It can handle only what may be foretold and it acts accordingly: within the limits of its competence, its jurisdiction—according to rule.
Knowledge, a social capacity, knows and understands only that which is familiar, that which is recognizable within a certain social setting or context, that with which it is already acquainted, that which it shares with many; that is to say, that which it encounters in the company of others for (at least) the second time. Hence knowledge concerns that which is discernible, interpretable, possible to understand, within a predefined set of constraining rules, a system of judgments. Knowledge, for certain, knows nothing about the ambiguous, the radically uncertain (how could it?). It knows only uncertainty in relation to certainty—certain uncertainty—to that which it knows for sure, to what it already understands.
A skillful handling of uncertainty misses the ambiguous completely. A knowledgeable approach to uncertainty inevitably fails to say anything at all about the radically uncertain. And even if handled ever so competently, even if captured in the most clever manner, what would one have caught? Whatever the catch may be, it will no doubt have more to do with certainty than with ambiguity—for sure.
Uncertainty, in its more radical sense—or, in other words, the ambiguous—is undecidable, pure event, happening, radical singularity, haecceity:
“nothing”, or, rather, “no thing”, no object, no form—because it is symmetrical and equivocal; it’s not yet properly articulated, ordered, organised, not yet been converted into a product or effect. In other words, the happening is a heterogeneous process that has no before or after, no start or finish, no cause or effect. Only when it takes its place in the network of what has already happened does it become ordered and organised, translated into an effect.6
Experiencing and experimenting (from the common Latin root experiri, to try, attempt, test, essay): to pass through, to travel through the aporia of impossibility,9 to pursue the impossible, to go where it is not possible to go, to run up against the radically other, the monstrous, the undecidable, the mysterious, the unknowable—the need to act or proceed where the way appears to be blocked, where the limit—the definition, the determination—paralyzes, the necessity to pursue a beyond that can never be reached. To experience and experiment “is to advance by navigating, to walk by traversing. And by traversing consequently a limit or border.”10 It means encountering that which cannot be anticipated or foreseen, the unexpectable, the “beyond,” that which is still to come, always to come, that which cannot in principle come about except in passing. “There would be no experience without the waiting on the coming of the other, the coming of the event.”11 Hence, ambiguity “would be the experience that we are not able to experience.”12
Experiencing the ambiguous would be experimenting with the possibility of the impossible, attempting the impossible—again and again, endlessly. Experimenting would be inventing (from the Latin invenire, to find, from in, in, into, and venire, to come) the impossible, discovering that which is always still to come, which can never be reached or come about, inventing/discovering the coming of the other, the incoming of radical otherness. Uncertainty, skill and knowledge? No! Postpone the decision, unsecure the determinate, the categories, uproot the systems, traverse the givens. Experience is no skill, experimentation not a knowledge. The experiri of experience and experimentation is invention— tekhnê still in touch with tukhê, that which lies beyond human control, skill-and-knowledge still attached to the impossible/unknowable—the capacity to at once affect and be affected, seize and be seized, the capability to, at one and the same time, play and be played (with).
In our view, the world—we—is stuck, caught inside a binary system, a dichotomous field, the aporetic dualism of certainty and uncertainty. We are bewitched by the techniques of prediction, of knowing in advance, seduced by the thingness of being, the IS-world. We are rooted in the only uncertainty we know, that is to say, calculable or measurable uncertainty. We have lost hold of ambiguity, our potential space, the route not to but of experience—the experience of the opportunities of the future. Ambiguity (is) the experience of uncertainty, the affirmation of instability, of lability, the continuous unsecuring of every system, the potential uprooting of every human construct. It is a future “which is in the process of coming about—the new, remarkable, and interesting that replace the appearance of truth and are more demanding than it is. What is in the process of coming about is no more what ends than what begins,”13 it is that which unsecures, uproots, seizes differently, without reaching, that which holds while letting go; that is to say, that which knows “how to move between things, establish a logic of the AND, overthrow ontology, do away with foundations, nullify endings and beginnings.”14 It is invention, passibility: “the ability to let things come as they present themselves.”15
This article is an experiment, a trial, an attempt at experiencing the invention of ambiguity, the other scene of uncertainty, the triton genos, the third thing in between certainty and uncertainty. There are two combatants: one against the system (of judgment, of knowledge); one within oneself.
One of the lessons from the nineties is that the financial markets can be quite ruthless to those who do not consider the administration of financial risks to be as important as the company’s core business.16
Economy, economic activity, it appears, is not what it used to be. Something must have happened in order for the above statement to become utterable, something of such magnitude and importance that the economy as a whole has (or should have) learned a lesson, something that seems to have transformed the entire economic system. All of a sudden risk itself seems as significant as what is risked; uncertainty and risk appear to be just as opportune as instrumental certainty is dangerous. Risk no longer appears to be something secondary in relation to the company’s main activities, something that should be handled separately, that lies outside or beyond the company’s raison d’être. Risk itself, it is suggested, should receive the same attention as that from which it is said to derive, that is, the economic activity that supposedly underlies and caused it. The entire economy and its dichotomous system are on trial, its categories are questioned, put to the test; in other words: the clear-cut distinction between the financial and the underlying economy, between means and ends, between capital markets and spot markets, threatens to collapse. The way we see it, this shift in the perception of risk is an economic turning point—the crisis of economy, a condition of instability within the very concept of economics, indicating the possibility that economy deals neither with certainty nor uncertainty but lability, ambiguity, volatility. Risk is economic crisis turned operational, uncertaintyin-action.
Economic risk—the radically strange element that is part of the economy but that the economy itself cannot grasp or comprehend—can thus be said to divert the economic system, to bring it into play, to place it in continuous variation, open it up to its potential space, to return or deviate it into its always latent, inherent crisis: the risk of meaning nothing (beyond the meaning of the speculative game), of representing nothing, of arriving nowhere, of delivering nothing, of serving no utilitarian purpose whatsoever. In the financial world there are no foundations left on which to base an economic need, or a utilitarian cause. Derivatives are the means with which to navigate this demi-world. Financial derivation seizes the economic system differently, otherwise, grasps it in abstracto, intercepts the price volatility, the risks, the very movements of the underlying economy. Through a double movement—seizing economic risk while being seized by it—financial derivation intervenes in the very midst of the economic, intercepts economic risk taking itself, puts it to play—at once plays with and lets itself be played by it.
As liquidity increases on the derivatives market, its instrumental activities—the exchanges between the derivatives market and the underlying market—decrease. Hence one could (almost) say that on the derivatives market nothing, or, rather, no-thing, is bought or sold, traded or exchanged; only the exchange transaction itself is exchanged—“a pure exchange where nothing is exchanged, where there is nothing real except the movement of exchange, which is nothing.”17 Indeed, financial derivation was never intended to be instrumental, to cultivate, alter or deliver (its) underlying economy, but to deliver itself from it. In fact: “If the [derivatives] market were perfect, the contracts would never result in an actual delivery.”18 Failure, deviation, is a natural part of financial derivation, it is, we would suggest, designed to fail, that is, it should de facto fail to deliver. “Futures and options markets do not create or destroy wealth—they merely transfer it … One investor’s gains are another’s losses.”19
Stated another way, financial derivation deterritorializes the underlying economy, transforms it into an “underlying interest”20 (from the Latin interesse, to be in between), a sort of in-between being inhabiting the gap, the lapse of time between the buying or selling of the underlying economy and its realization, the incoming of the future, the advent of the unforeseeable. It matters little or close to nothing whether the underlying reality is a commodity: pork bellies, corn, live cattle, electricity, pulp, wool or gold; or financial: shares, indices, currencies, treasury bills, or bonds. What counts, though, is the risk, the price movements, the fluctuations and oscillations in the prices of the various underlying realities; or, perhaps better, what is of interest is the seizing, grasping, capturing, intercepting of the underlying, its undertaking.
Financial derivatives, through the extremely creative intervention of rhizomic risk, open up a potential space, a milieu for the aleatory, for chance and opportunity, for financial derivation—“milieu not only as the ‘middle’ of something (rather than its beginning/origin or end/finality) and some thing ‘in the middle’ of its operation, but as the medium or environment of its development, ‘in the midst’ of everything else.”21 Financial derivatives create a passibility in the midst of the economy, an interesting medium through which financial derivation not only opens up the economy to its multiple possibilities, but at one and the same time tries to preserve this openness, to keep it in constant flux and transformation, in continuous variation, en procès; to prepare it for making new connections, for creating new possibilities of economic life, for putting economies to new spectacular uses. “It is no accident that the word ‘risk’ itself in the original Arabic meant ‘earning one’s daily bread’.”22
Regional development is at the top of the political agenda in Sweden, since its potential as a driving force for the economic growth of the nation is becoming increasingly acknowledged. But the question of regionality is very seldom, if ever, raised. What makes a region?
Let us turn to a Swedish exemplar, Gotland. Gotland is a big island on the Swedish east coast, and commonly refered to as a “region.” Its geography is clear cut, surrounded as it is by a waterline; the “native tongue” is a very characteristic dialect (or a set of local dialects, not easily distinguishable for a stranger); the island hosts an assemblage of customs, games and cuisines that are typical and very Gotlandish. In short: Gotland is a geographical and cultural unit—a region—and as such it is bound to have its own cultural or regional identity, something originally Gotlandish.
In a Swedish research report on regional development, the focus is set on cultural identity and its relationship to small-scale, entrepreneurial business activities on Gotland. The researchers coin the term “identipreneurship” to designate any enterprise that generates business from its regional identity; that is, business that is firmly anchored in regionality, that is rooted in the primeval culture of the region. The manager of this task is named the identipreneur, someone, an entrepeneur, who “wants to refine something in the regional culture and identity, he or she regards the regionality as being powerful.23 The identipreneur “considers the cultural inheritance to have an emancipatory rather than inhibitory effect on the enterprise. The identipreneur is a person who transforms what is unique and original for the region into business ideas.”24 Economic growth, then, stems from the isdem of identity, i.e. from the singular and unique this as such. What is absent in the written report is the idem, the other of identity, the equalizing this as that. The idem that is at work in the transformation of regional uniqueness into business is a castrated one, since nothing indicates a transformative movement in the opposite direction; the unique may be used, but not touched. The isdem operates vertically and by authority; it is rooted in the original—the archregional—and everything originating from it is always eventually called back by its referential powers; a referent patronizing its signs.
However, the authors of the report clearly advocate a horizontal network25 (e.g. cooperatives, sports clubs, choirs, circles of friends) as a model for the social system that is to facilitate this identipreneurship (and they present empirical support for both the isdem foundation of identipreneurship and the superiority of the horizontal to the vertical network in the case of Gotland).26 The difference between the vertical and the horizontal equals that of the tree and the rhizome. The rhizome, the multiplicity of roots and stems, grows and expands without reference to a center or an origin; i.e. it operates by uprooting, always by the middle. Thus, the radically horizontal network is uprooted, deterritorializing, connecting equals—idem. The networks observed (from a regionalist viewpoint) on Gotland are called back, overcoded, by the referential authority of the isdem, the arch-Gotlandish—the horizontal is verticalized. But the two mechanisms of identity never work separately, one by one, but are always intertwined, interrelated, one and one. Purely vertical regionalities would be fascist, and pure horizontality breeds bastards. However, as we all know, bastards are experimental, delirious combos—half man, half insect, half man-and-insect.
The regional situation for Gotland, as the report describes it, is characterized by a strong isdem and a weak idem—the vertical rules the horizontal. However, there is a potential diversion, a possible turning towards the other of regionality and, of course, of the main land. The actualization of the turning demands a stretching of the horizon, a bastardization, a letting loose of the archregional grip, an opening towards the other, the unforeseen—the invention of a passage for strangers, in both directions. Such a passage would be a suitable working space for the entrepreneur, the middleman, the undertaker constantly grasping for the in-between being, the intermezzo (entrepreneur, from the Latin inter, between, and prehendere, to seize, grasp, capture).
Our problem, however, does not concern Gotland, the island, its inhabitants and visitors, but regional thinking and its ideational off-springs—Gotland is already en route, the turning is already in the making. The island is overflowing with activity, business and art and culture are already in the blender, island and mainland too. All the successful enterprises (whatever the term “successful” might signify) presented in the research report are works of entrepreneurs, as we understand the term—or at least tending that way. For us, Gotland displays a great deal of “passability,” it gives “itself as a passage to the events which come to it from a ‘something’ that it does not know.”27 Like every human construct, Gotland is open to the incoming of the other, the invention of the future, “there is no social system that does not leak from all directions.”28
Isn’t this an exemplary “region,” isn’t this what regional development is all about? Yes and no! What is happening on Gotland is not a product of regionalization, the island is exemplary despite regional thinking. And it is not a case of a development driven by a clever use of regional identity, that is, the conception of identity where the other is ruled out by the superiority of the unique. Development—as well as its kin, evolution—is a vertical movement, always evolving from a center (the fittest, the government, the leader). The “passability” of Gotland doesn’t work that way, it is more of a becoming than a developing. And becoming is not evolution.
In becoming it is … a matter of involuting; it’s neither regression nor progression. … It is obviously the opposite of evolution, but it is also the opposite of regression, returning to a childhood or to a primitive world. To involute is to have an increasingly simple, economical, restrained step.29
Involuting means, among many things, the letting in of the other of identity—isdem and idem, the unique and its equal, a respect for both. It means touching the original without (ab)using it, trying without exhausting. The incoming of the other, the equal, demands empathy and care from whomever it affects, allowing the ambiguous. It demands allowance and an economical care for every singularity and all uniqueness. Allowance, a sense of the economical, empathy—these are all horizontalizations, uprooting affections. Business making grounded in and driven by a unique identity—e.g the arch-Gotlandish—must be handled with care and sobriety.
The Gotlandish, in order to be Gotlandish, cannot be repeated mechanically, it is not ready-made, applicable in each and every venture or business situation requiring a Gotlandish touch or flavor, a recipe for success—this would be exhaustion rather than sobriety, development rather than involution. The Gotlandish, in order to be Gotlandish, must have an opening or gap within itself, leaving room for the other, the different, the idem; it must be invented anew, repeated, again and again, on every new occasion, as if for the first time. Involuting is repetition, not of the same but of the other, i.e. reiteration. It is invention, the reinvention of the strange in the familiar, the different in the same—becoming Gotlandish.
Regions are constructs of regional thought. Regional thinking means thinking territorially, thinking within limits, bounded, deadlock. If we are to be capable of deterritorialized thinking, thinking in connective, “empathic” lines, we must involute thought, prepare ourselves “to receive what thought is not prepared to think.”30 Involuting thinking is another way of uprooting—a long affair of experimentation.
“There is no creation without experiment.”31 Likewise, there is no experimentation without invention, without the incoming of otherness, without an openness towards the future—an openness continually running the risk of going adrift, astray, of getting lost. “As soon as you address the other, as soon as you are open to the future, as soon as you have a temporal experience of waiting for the future, of waiting for someone to come: that is the opening of experience,”32 of experimentation, the possibility of failure.
Experience reserves a play space, a situation that cannot be foreseen; it “evokes a space that is not given in advance but that opens as one advances,”33 that becomes en route. Experimentation “deals in the continuous and unfinished; it is what is forever approached but never attained, what is always approximated but never fully realised.”34 We learn how to experiment, how to combat the world, how to seize the world differently; not in order to transform it, but to translate it otherwise, to concept the very movement in between himself and the world, to seize the world in abstracto. Financial derivation experiments with the world itself, the economic world, breaks it open, derives it, delivers it from its underlying restraints, providing thereby new possibilities of economic life.
- Abrams, P, McCulloch, A., Abrams, S. and Gore, P (1976) Communes, Sociology and Society, Cambridge: Cambridge University Press. Blyton,P and Bacon, N. (1997) “Re-casting the Occupational Culture in Steel: Some Implications of Changing from Crews to Teams in the UK Steel Industry”, Sociological Review, Vol. 45, No. 1: 79-101. Braverman,H. (1974) Labor and Monopoly Capital, New York: Monthly Review Press.
- Cooper, R. and Law, J. (1995) “Organization: Distal and Proximal Views”, in S. Bacharach, PGagliardi and B. Mundell (eds) Research in the Sociology of Organizations, Greenwich, Conn.: JAI Press.
- Deetz, S. (1992) Democracy in an Age of Corporate Colonization, New York: State University of New York Press.
- Foucault, M. (1982) “The Subject and Power”, in H.L. Dreyfus and P Rabinow, Beyond Structuralism and Hermeneutics, Brighton: Harvester Press.
- Giddens, A. (1979) Central Problems of Social Theory, London: Macmillan.
- Gouldner, A.W. (1954) Patterns of Industrial Bureaucracy, New York: Free Press.
- Knights D. (1997) “Organization Theory in the Age of Deconstruction: Dualism, Gender and Postmodernism Revisited”, Organization Studies, Vol. 18, No. 1, Jan.
- Knights, D. and Willmott, H. (1983) “Dualism and Domination: a Critical Examination of Marx, Weber and the Existentialists”, Australian and New Zealand Journal of Sociology, Vol. 19, No. 1: 33-49.
- Latour, B. (1993) We Have Never Been Modern, New York: Harvester Wheatsheaf.
- Merton, R.K., Gray, A.P, Hockey, B. and Selvin, H.C. (eds) (1957) Reader in Bureaucracy, New York: Free Press.
- Oliver, N. (1991) “The Dynamics of Just-in-time”, New Technology, Work and Employment, Vol. 6, No. 1: 19-42.
- Selznick, P (1949) TVA and the Grass Roots, New York: Harper & Row.
- Weber, M. (1947) The Theory of Social and Economic Organization, London: Routledge and Kegan Paul.
- Womack, J., Jones, D. and Roos, D. (1990) The Machine that Changed the World, London: Macmillan.