April 29, 2013
by Annelise Riles

A Chinese Translation of Collateral Knowledge

I am really honored that thanks to the hard work of my colleague Yu Xingzhong, a Chinese translation of Collateral Knowledge is forthcoming very soon from the China Democracy and Law Publishing House.  I am very grateful to Professor Yu, to Pang Congrong, the editor of the book, and to the four translators Jiang Zhaoxin, Yu Ming, Qiu Zhaoji and Wang Guojia for this wonderful edition.

Professor Yu also organized a wonderful discussion of the book at the  East Asian Law and Society Conference in Shanghai, on March 22.  We were really fortunate to have comments by translators Qiu Zhaoji and Wang Guojia, by Pang Conrong, the editor of the edition, and by Luke Nottage and Fleur Johns, both of Sydney law faculty.  It was a fascinating discussion for me.  One of the highlights was Wang Guojia’s discussion of what the book’s themes about the interrelationship of public and private spheres might have to say to the Chinese experiments with privatization.

Chinese readers may also be interested in this very substantive discussion of the Chinese translation of collateral knowledge prepared based on the discussions of a March 13 meeting of a researcher study group at Northwest University of Politics and Law under the guidance of Professor Qiu Zhaoji, who translated one chapter of the book:


May 30, 2011
by Annelise Riles

The Nightmare of Transparency

In a recent Business Week article, Hernando de Soto is once again peddling his simplistic view of property rights as the path to pure market transparency. He argues, to considerable journalistic and popular acclaim, that the problem with derivatives markets is simply that property rights are not sufficiently well defined and standardized.  Bring in good old fashion property law and related tools such as title registration, he argues, and the markets will magically clean up.

As I discuss at some length in my book, the proposal is preposterous from the point of view of anyone who knows anything about property law. Property rights are never clear in the way that non lawyers imagine them to be.  As I show with regard to actual cases of property claims in the derivatives markets, as is the case with ordinary property rights, there is tremendous room for interpretation, confusion, conflict and gamesmanship within the language of property law.

De Soto should know better.  He claims to have come upon his insist through field research, and I would venture that even a few casual conversations with any legal expert in the derivatives markets would reveal how property sets the stage for conflict of a different kind rather than bringing pure clarity to things.  But since I have laid out the problems with De Soto’s claim that property achieves transparency in the book, let me ask a different question instead: is transparency tout court always a good thing?

One of the painful rituals of daily life in Tokyo at the moment is the daily review of government statistics on radiation levels.  In response to complaints that it was not sufficiently transparent about radiation risks, the government is now drowning us in numbers.  There are readings taken by each city, each prefecture, and by the national government for each city and prefecture.  There are numbers for each kind of radiation–cesium, iodine, and so on.  Of course the numbers produced by the national and local governments rarely match up.  And we are given no explanation of these numbers since that would be the biased view of government officials–it is just purely transparent information. Truck loads and truck loads of it.

So we the citizens are left to ask ourselves every day how we translate these numbers into an answer to questions like, is it safe for my four year old to play outside today? Is it safe for me to drink the milk or the water? What are the odds of my dying of cancer as a result of my exposure to the rain this summer? And so on.

My husband and I both have PhDs in social scientific subjects and are used to working with data. And yet the deeper we try to dig into these numbers–to compare them for example against the safety standards set by international bodies–the more confused things become. First, it is as if just about every international organization, and every local data collecting body in Japan, has its own system of units.  Conversion between these units turns out to be basically impossible as they are apples and oranges, measuring different things. But some of the problem is simply the violence of probabilities. Learning for example that exposure increases cancer risk by a certain percentage tells you nothing about your own situation since it is based on averages, across global populations (is the average nuclear victim an eighty year old Swede or a twenty year old Bangladeshi?).  And in the case of nuclear accidents we have so little data anyway that those probabilities are probably best described as guesses.

But even though we know that these numbers tell us next to nothing, we can’t stop ourselves. The information is there, it is transparent, so we feel almost compelled to enter into it. Its analysis becomes the daily ritual of our worry.  Did iodine levels go up or down compared to yesterday? And what does that mean, anyway relative to how much iodine our child absorbed, or how much he can absorb?  Every day this analysis of the numbers ends with the same sick feeling in the stomach of total confusion, total lack of clarity about an issue of paramount importance to our family. I experience this daily ritual as its own kind of political violence.  It is as if this absurd cacophony of purely ordered data is taunting me, leaving me all the more exhausted and demoralized.

Now I realize this transparency nightmare seems quite far away from the wonders of property law de Soto would prescribe for the derivatives markets. Yet it is not so different in fact.  After all, market transparency, which is what he advocates, is just a matter of the availability of data. If the data is available, the theory goes, some smart people will make sense of it all. And yet data itself is only meaningful within a framework.  Our problem is that we lack a framework for analyzing the numbers because the people who produced the numbers themselves also lack a singular and coherent framework.  In that situation, the consumer of transparency is saddled with the absurd burden of making meaning–making something standard and comparable–out of what by definition is not standard.  This is often the case in the derivatives markets as well.  In the derivatives markets traders often dodge the pure impossibility of the task by just doing what everyone else is doing–using the same model, the same pricing tool as the next guy, even if we all know its limitations. That is called a herd mentality and we have seen its disastrous effects.

May 5, 2011
by Annelise Riles

Lecture at Wesleyan

On Monday I gave a public lecture at Wesleyan University about Collateral Knowledge. The audience was mainly humanists and critical theorists and the presentation was geared toward what the book might have to say to those audiences rather than to lawyers or regulators  Video of the event:

[flashvideo filename=http://condor.wesleyan.edu/openmedia/upub/video/lectures/2011/chum/chum_05_02_11.m4v /]

April 28, 2011
by Annelise Riles
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Questioning the standard diagnosis of the financial crisis

Yesterday the Cornell Book Store organized a book signing for Collateral Knowkedge. I talked about some of the themes in the book and then we had a great discussion. What made it so fun was the mix of disciplines represented by the participants–economics, sociology, philosophy of law, anthropology–and the surprising points of agreement and mutual interest emerging across the disciplines. One of the themes was whether transparency is always a good thing, or even possible at all in financial regulation (a topic I have written about on this site here). Another was whether the crisis was caused by a greedy individuals, as many commentators suggest, or by much more haphazard and much more systemic glitches in the day to day systems–evaluation mechanisms that don’t mesh from one office to another, people who can’t reach each other because they can’t speak the same language literally or figuratively, and so on. The economist Levon Barseghyan thought that both institutional factors and individual moral culpability were responsible but he pointed out how different our conception of the regulatory fix would be, and how harder it becomes, once we accept that the crisis is not just caused by individual greed.

April 27, 2011
by Annelise Riles

Collateral Knowledge Book Launch

Today the Cornell Law School organized a celebration of the publication of Collateral Knowledge. The event, attended by about 80 faculty and students from across the campus, featured presentations by Tom Baker, Deputy Dean and William Maul Measey Professor of Law and Health Sciences at the University of Pennsylvania Law School and Frank Upham, Wilf Family Professor of Property Law at the New York University School of Law about the significance of the book for financial regulation and for Japanese legal studies, respectively, as well as some general comments from me.  Video of the presentations as well as powerpoint slides accompanying Tom Baker’s presentation are here.

January 21, 2011
by Annelise Riles

What is Collateral Knowledge?

Collateral Knowledge - Book Cover

We’re now in the final countdown towards publication of my forthcoming book, Collateral Knowledge: Legal Reasoning in the Global Financial Markets. My publisher just unveiled the cover and I am really honored to have three people whose work I respect tremendously–Howell Jackson at Harvard Law, Bruce Carruthers at Northwestern’s Sociology department and Bill Maurer at UC Irvine’s Law School and Anthropology Department–saying some really nice things about the project on the back cover. The book can now be pre-ordered from Amazon and from the University of Chicago Press.

Someone recently asked me to explain why I picked this title for a book about private global governance. The book takes as its motif the workings of collateral in the financial markets. Participants in the global derivatives markets routinely post collateral with one another as assurance that they will make good on their promises before they trade. The regime of collateral maintenance and collateral calls proved surprisingly robust during the financial crisis, and tweaking the quantities and methods of accounting for collateral remains one of the principal policy proposals for financial regulation going forward.

I call the book Collateral Knowledge because I am interested in all the knowledge work that goes on behind the scenes to make collateral do its job–the computers, the documents, the legal arguments, the industry committees and much more. I argue that all this activity does far more work than first meets the eye. I go so far as to claim that it amounts to a kind of “private constitution”–a set of templates for action and institutional relationships that constrain market participants and govern how they act in ordinary times and in moments of crisis.

But I am really interested in collateral as one example of the role of legal expertise in financial markets. After all, collateral is basically a species of property law, and its management involves teams of legal experts around the world, from bureaucrats to professors to paralegals and practicing lawyers. I argue that law is “collateral knowledge” in the sense that it is often treated as something on the sidelines, under the radar screen, “collateral” to the main action of market transactions. And yet just like collateral in the financial markets, legal expertise turns out to play a very important role in market governance. Understanding how lawyers think–what kinds of problems they see, what kinds of solutions they imagine for their problems, how they work together, how they work with other market players, and how they interpret and react to regulatory efforts, helps us to understand a great deal that goes unnoticed about market governance (and its limitations as currently imagined).

And of course collateral knowledge is also a play on the concept of collateral damage–the notion that there are unintended but often drastic consequences to certain ways of thinking and doing things. Thinking about legal practice in global market governance helps us to think in fresh ways about why so much has gone wrong and what options are available for reform.

November 15, 2010
by Annelise Riles
1 Comment

Upcoming presentations

This week, I will present and discuss some of the findings of my upcoming book Collateral Knowledge: Legal Reasoning in the Global Financial Markets at two separate events.

First at 4:30pm on Monday, November 15, at the Colloquium Series of the Department of Science and Technology Studies at Cornell University:

Title: “Collateral Knowledge: Legal Reasoning in the Global Financial Markets
When: Monday, November 15, 4:30pm
Where: 374 Rockfeller Hall, Cornell University, Ithaca, NY

And on Friday at the Annual Meeting of the American Anthropological Association (New Orleans, LA), in a session entitled “Uncertain Paradigms: Ethnography and Theory“:

Title: “Collateral Knowledge”
When: Friday, November 19, 2:45pm (Session begins at 1:45pm)
Where: Sheraton New Orleans, New Orleans, LA

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