Abstract: The neoclassical market model is the overwhelming basis for contemporary views of markets as fair, efficient, or both. But is it an appropriate starting point? The article draws on Frank Knight’s 1920s work on the economics of uncertainty to show that the ideal of perfect competition conceals a tacit trade-off between equality and certainty. Largely undetected, this trade-off continues to govern financialized capitalist democracies, evading normative and political debate. By explaining how markets and firms resolve the problem of uncertainty, Knight shows that all supposed market benefits, even allocative efficiency, are not costless to society. More specifically, Knight argued that modern markets are premised on a tacit agreement between a handful of “daring” entrepreneurs and the “risk-averse” public: the former agree to carry the uncertainties of business-life in return for a substantially larger share of its power and rewards. Despite the highly static assumptions of neoclassicism, therefore, and its linked assumption of perfect knowledge, uncertainty is far from absent in modern economics. It is built into firms and markets and manifests itself as a steep social and material hierarchy.
Abstract: The article examines the early reception of Knight’s and Keynes’ accounts of uncertainty and their overlooked role in the development of financial economics. Knight’s famous distinction between risk and uncertainty bore a deep social and political significance, dividing humanity into risk-takers and the risk-averse. This same distinction, I argue, along with its asymmetries of power and rewards, was reproduced in Hicks’ 1939 dynamic equilibrium model. It was recast as an opposition between hedgers and speculators in a market for risk, on the one hand, and between institutional investors and the general public, on the other. Hicks’s synthesis heeds both Knightian and Keynesian notions of uncertainty, adopting the former’s idea of profit-earning uncertainty-bearers and the latter’s definition of money as an imperfect though widely used hedge against uncertainty. Closer to Knight than to Keynes, Hicks’s model raises a fundamental political question: is inequality a price worth paying for greater certainty in economic life?
Abstract: Risk carries unique significance for democratic politics today as it faces the challenges of rising inequality, neoliberalism, and systemic racism. To show how, the article divides “risk” into two complementary political models: a technocratic logic of risk allocation, concerned primarily with safety, and a forensic logic of risk attribution, concerned with holding risk takers and risky policies to account. Both have had pervasive effects on a transformed welfare state, increasingly focused on “personal responsibility” and privatized risk-management. But risk has also played a key role in the way post-1968 movements have organized and challenged the logic of privatization. Risk-based movements, the article argues, especially from the political margin, are key agents in promoting a new political form founded on risk attribution. The article focuses on the exemplary case of the American environmental justice movement in the 1980s and 90s as it reframed social justice around three core demands: accountability from decisions makers, equitable risk distribution (including redress for extreme inequities, past and present), and broad participation in decisions about danger and communities’ well-being.
Abstract: To better account for deepening global inequalities, political theory could greatly enhance empirical and normative work by answering a fundamental question: what is profit? When engaging political-economic questions, however, theorists often begin thinking from the concept of private property. This, I argue, has obscured the central role of profit as an organizing category for capitalist societies since the eighteenth century. Grounded in the dynamic and uncertain processes of production and accumulation, profit displaces the proprietary citizen and subject of natural rights and gives rise to new social protagonists, who lay claim to increasingly asymmetric rewards. In particular, the article calls attention to a dangerous contemporary sensibility, which sees profit as inherently unlimited. As a viable, robust alternative, it presents Adam Smith’s idea of profit as a regular, uniform rate that acts as a productive constraint on business activity, shapes character, and safeguards against risk by widely distributing its costs.
Abstract: The article asks why and how Hannah Arendt framed The Human Condition as a history of modern science. It answers that, in telling the history of instrumental rationality and the work of the experimental scientist, Arendt accomplished three main things. First, by identifying science as a form of “work” Arendt could demonstrate the significance of her threefold division of human activity into labor, work, and action, highlighting the dangers of their indistinction. Second, she used the form of organization typical of scientists—a professional community founded on standards of objectivity—to warn against the substitution of the appearance of publicity for true openness. Finally, she identified the transgression of the boundaries of action as the site where a political community might become visible to itself, taking the unsuccessful attempts of postwar “public scientists” to reckon with their past as a cautionary tale. Her account of modern science thus allows her to define freedom through its dependence on humanmade boundaries, politicizing the very act of history-writing.