The title of this post may seem a bit misleading, because I am not going to be writing about what many readers would automatically assume – the role of high-tech companies or products behind the recent shenanigans.  After all, that nonsense was at least one or two speculative bubbles ago. What I want to do is take a few lines and point out that the financial sector is a very real, almost tangible example of the failure of imagination often found in considerations of technology – and, by extension, technology policy.

Financial instruments, whether we’re talking about basic mortgages (sub-prime or otherwise) or more complicated derivatives like the credit default swaps that may have had a hand in locking up several financial services companies, are technologies.  They aren’t as tangible, so to speak, as other technologies, but their creation still has consequences – consequences rarely engaged until after they have emerged and changed the world – for better or worse.  But I don’t expect some kind of ELSI (Ethical, Legal and Social Implications) research program to emerge in business schools or in Science and Technology Studies departments, focused on the financial sector.  Ironically enough, there’s probably no money in it.

Changes in the business world can often be traced to changes in the instruments and forms of organization used by companies to acheive their goals.  Corporations didn’t always exist, after all.  The form had to be created.  Alfred Chandler, in his historical scholarship, has focused on the business operations behind several key industries, most of which were involved in innovation – either then or now.  The Visible Hand is a revelatory (well, for me anyway) history of how the formation of corporations and partnerships was critical to how the railroads and retail emerged in the United States during the 19th and 20th centuries.  In short, capital intensive industries needed new forms of organizations to function.

What can be said of financial instruments is true of the biggest one of all – “the market”.  Contrary to the most pious of free market disciples, markets are constructed by their participants, and the context in which those participants operate.  But this construction, as well as the financial instruments that are wielded within markets, do not receive proper scrutiny in the same way that many technologies do not.  They demonstrate what philosopher of technology Davis Baird describes in Thing Knowledge as device objectivity.  The choices and values that go into the creation of these instruments is hidden behind their function, or more explicity in the case of many financial instruments, their sheer incomprehensiveness to any but the most high market priests (while Alan Greenspan was particularly good at playing the financial oracle, his successor at the Fed, Ben Bernanke, is certainly adept at saying a lot and a little at the same time).

I am not trying to present some magic explanation for the very fine mess we’re in.  That’s way beyond my pay grade (particularly at Prometheus).  Hopefully I’ve tried to suggest here how the challenges policy researchers face when dealing with technologies and their interactions with societies need not be narrowly considered.  The patterns we have observed in other areas can be of use outside of what is generally thought of as technology.  It’s not restricted to the now (see Neal Stephenson’s The Baroque Cycle for a great examination of changes in financial technology in the transition to early capitalism), and it’s not restricted to the gee whiz stuff most people think of when they hear about technology.  There’s no good reason to stovepipe our knowledge and what we’ve learned because of some arbitrary defintion.

For instance, climate change policy is going to form – if it hasn’t already – various kinds of markets.  For the financial instruments used there, what kind of thought has been given to how these technologies will work, and if the working of those technologies will acheive the desired outcomes?