Critique of Speculation. Speculative Practices and Speculative Bubbles in a Capital and Media Theory Perspective

• Applicant: Dr. Oliver Kuhn
• Subject Area: Sociological Theory
• Term: from 2014 to 2019
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 251798362

The project develops a general theory of speculation that helps to describe and evaluate functions and consequences of speculative practices in various social fields. The required terminology is obtained and tested in a comparison of speculative practices in the social fields of science and economy. A general socio-theoretical concept of speculation provides a more appropriate description of the differentiated social handling of future risk and uncertainty, but is only available in the current literature as a metaphor or as mere assertion of analogies.The following, preliminarily developed working definition is to be tested for both fields: An investment of capital can be called speculative, if it attempts to generate profits from the early anticipation of evaluation developments by (dis)investing against the expectations of the mainstream. This concept connects to economic definitions on the one hand, to Bourdieu's concept of the "subversive investment strategy", speculating on uncertain opportunities on the other. It can be applied to economic capital as to "scientific capital" (Bourdieu). With regard to the evaluative direction two modes can be distinguished: either "rising" ventures are anticipated before "the average" expects and thus realizes their rising (pioneer speculation). Or one can disinvest before "the mass" expects a loss of value of a venture and thus realizes that loss (bubble speculation). Compared to investments based on normalized, conventional expectations, speculative imaginations of the future are associated with extraordinary opportunities and with increased risk of loss of capital (eg. loss of scientific reputation).By means of secondary analysis of empirical studies and theoretical synthesis, the study will contribute to an informed critique of speculation. The current scientific assessment of functions and consequences of speculative practices is likewise ambiguous for scientific and economic practices: Criticisms of seemingly effortless appropriation of capital by means of circular self-affirmation of speculative expectations or of collective misallocation of capital (bubble) are accompanied by a glorification of speculative and innovative risk-taking. Only a precisely describing theory of speculation that fully exploits the available empirical research will help to clarify the conditions which produce intended or perverse effects and to what extent both sides could be separated. The possible costs of a regulative repression of speculation are to be discussed for both fields. Finally, the potential of a description of euphoric or repressive societal responses to subversive practices of speculation as an indicator of "Zeitgeist" will be examined.

• DFG Programme: Research Grants