In 1945, the average US stock was held for 4 years. In 2000, it was for 8 months, in 2008, 2 months and by 2011, 22 seconds.
This staggering compression of time and space evidences the invisible and relentless rationalisation of return and the associated costs, centrally innovated by and embodied in the algorithmic machinery of the contemporary financial markets.
The Normalisation of Deviance I
Through the course of my research and encounters at all project locations, I became aware of the central role of these infrastructures of algorithmic machinery innovated and pioneered by financial capital. When the project began in 2010, around 30-40% of trading, globally, was completed through the application of this technology, currently, it is almost 85%.
There are many forms and variations of what we understand as algorithms, but on a basic level, they are a complex coded model, relying on the input of enormous quantities of data to enable binary decisions based upon that data and all completed at lightening speed – yes or no. The overarching imperative to minimise risk, remove arbitrariness, ensure consistency and critically, certainty while simultaneously, the possibility of abstraction.
A UK Government Office of Science report in 2012 forecast that within a decade through, ‘Algorithmic Trading’, ‘High Frequency Trading’ or ‘Black Box Trading’, there would be no human traders. The same report observed that algorithms would in time, self-evolve as ‘genetic algorithms’, through their ability to experience, i.e. building upon their previous market experiences and therefore requiring no human intervention.
Starkly, they also warned, that within such a framework, there existed the potential for what they described as ‘instability’ through the ‘Normalisation of Deviance’ which they identified as when, ‘unexpected and risky events come to be seen as ever more normal, until a disaster occurs’,
It is important to stress that the wide-scale application of algorithmic technology and machine learning was innovated in the markets with increasing significance in the early 1980s, one of the first applications involving the theft of the data feed of the New York Stock Exchange. Too often this relationship between finance and technology, is overlooked and/or indeed under-represented and creates a didactic and overly simplistic binary between capital and technology rather than the more appropriate evolutionary framework in terms of extractive capital.
My central thesis is that financial capital seeks everything to be recreated in its image and therefore, how, as a researcher to represent these structures, whether visible or invisible, material or immaterial, viewing them as inscribed cultural systems and to give these processes description.
Therefore, a critical component of the installation that I wish to highlight is the installation soundscape, titled, ‘The Normalisation of Deviance I’, which is immersive in scale and envelopes the complete space. Algorithms emit pulses as they travel through fibre-optic cables (although presently shifting to light) and function 24 hours a day, 365 days of the year. Thereby, functioning ceaselessly while beyond the visual and aural realm of human beings, so how to represent something we, as citizens, cannot see or hear yet centrally facilitates the parasitic speculation upon our futures.
Collaborating with my brother, Ken, who works as a programmer and composer and through the application of an algorithm, which he coded, to identify the words “market” and/or “markets” in public speeches given by relevant national Ministers of Finance, this data is then transformed to create the installation soundscape.
To date, ‘localised’ algorithmic translations of speeches by Michael Noonan (Ireland), George Osborne (United Kingdom), Pierre Moscovici (France) and Jeroen Dijsselbloem (Netherlands & former Eurozone Group President) have been included in exhibitions in those countries.
The intention conceptually is to re-represent the functioning of contemporary financial capital through the conduit of the now financialised nation-state. In turn, to create a tension between all the material objects of the installation – photographs, artefacts, transcripts etc – and the possibility of their abstraction through the functioning of the infrastructure which the soundscape represents.
‘…we still need human traders here…but this will decrease in time…but not eliminated…this trading floor is still new for us…the traders still only getting used to this….but yes, in time we will go to technology and in time, we will dismantle these trading floors…in time..’
The Normalisation of Deviance II
In 2011, a researcher in Chicago, calculated the number of trading positions taken globally on one stock in one nanosecond. The total was 14,000 and the resulting data would equate to 6 feet high stack of A4 paper. This inspired the construction of a tower of paper as part of several installations of THE MARKET (2010-)(See installation detail). The following quotation appears on each individual page of the installation column of paper:
…what people don’t understand… is that what happens in the market is pivotal to their lives… not on the periphery…but slap, bang, in the middle…
(fieldnotes of telephone conversation with Senior Trader (name withheld), Dealing Room, Investment Bank, London, February 2013)