[Reader-list] Speculation and Acquisition

[Aman Sethi]

Dear Jeebesh,

Read your post with great interest.  It covers a massive range of
processes, and i would like to just think abt a few - particularly on
speculation.

The idea of speculation is particularly interesting because, over the
last two years have seen three of my closest friends join financial
service providers like banks and other companies like J.P Morgan etc,
and have spent many hours engaged in conversations such as you have
described under the "acquisition" section.  Crucial to the dreams of
small investors - such as myself - is the "mutual fund".  A name that
automatically brings to mind pictures of all groups f people
"mutually" making large amounts of money.  And such conversations
produce in us a collective idea of a dream of wealth way beyond our
present situations.  Mutual funds also produce around them sandstorm
of data - quarterly performance results, day by day "Net Asset Value"
figures, or NAVs, and of course predictions on further gains.  There
is also the mythology of oppurtunities missed - a friend once told me
that if i had invested just one lakh in infosys in the early 1990s, i
would worth abt 10 crores today.  (i may have exaggerated the figures
- but the essence remains the same).  The lesson the listener is
expected to draw is the need to start investing today.

Over the last two years, i have also had the privilege of being privy
to another type of conversation on  speculations and acquisition.
While conversations with bankers involve travels into rarefied realms
of notional gains, hedge funds and other seemingly unreal transactions
(that produce very very real money), conversations at bara tooti -
where i did a Sarai fellowship tend to employ very similar imagery,
and produce very similar "sensations" -for lack of a better word.  In
one of my posts - titled job oppurtunities for LLPPs - looks at the
idea of the "paisa vasool scheme"; where the tag line is, that "If you
buy a jamuna-paari long eared bakari on the day your daughter is born,
at 18 you will have enough money to pay for her wedding."- which is
not that different from the kind of schemes offered by companies like
HDFC etc - who offer "young-star" policies that are supposed to secure
your child's future.

Here speculation no longer works on the mobility of capital - it works
on a more old-school idea of investment in "assets", that don't have
the kind of interchangeability or mobility of capital.  The long
-eared bakari cannot be converted into a sugar-cane eating pig for
instance (another way of making lots of money), with the ease in which
ure mutual fund can be converted into shares, or another mutual fund
or other such financial vehicles.  Your pig is your pig - and cannot
be converted into your goat until a certain gestation period.  The
animal-farm dream seems to be to create some sort of an eternal motion
machine - where the pig grows up on farm waste, and produces manure
that produces more farm-produce which gives more waste - and more pigs
and fresh capital which moves growth that creates  some sort of a
phase-shift in an already exponential growth curve .- or in other
words - works on the powers of compounding.

What is interesting is that both models seems to have a sort of
inevitability about them - almost like the water cycle.  Money shall
move from point A to Point B, where upon it shall shall rise - at a
certain cut off point, the gains shall be siphoned off to a tertiary
point C - resulting in further gains; at some point the seed capital
is removed and placed back at Point A, and so the cycle continues,
only this time it is larger and longer and possibly even more
productive.

Both systems also require the expert to pick out the right asset - the
right fund or the healthiest animal.

I realise now that i have wandered rather far from the jeebesh's
conversation, but would like to end with one last question.  Every
time i left either Bara tooti or 4S,  i found myself wondering why
everyone just didnt do this - buy a  mutual fund or a goat or a pig
and make it big?

the answers i got usually pinned it down to the inability of people to
understand and exploit the system to its fullest - the "nach na jane
aangan teda" sort of argument - or the inability of people to simply
enter the space where they can begin speculating in right earnest ...

maybe it is this link between speculation - in its purest sense - the
dream of making it big - and the acquisition of a tool of wealth ,
that the schism between the two becomes most apparent.

Best
A.




On 4/10/07, Jeebesh Bagchi <jeebesh at sarai.net> wrote:
>
> Dear All,
>
> Here are some fragmentary notes that may gather some life in
> circulation!
>
> ----------------------
>
> Over the last few years two processes have got sharply delineated and
> visible.
>
> Speculation and Acquisition
>
> I) Speculation (dreams of wealth and mobility with displacement)
>
> Speculation is crucial to how we inhabit the world of property. The
> thought of "how long to hold on" ; "when to buy"; "when to sell"
> occupies a fair degree of brain power and conversational time in
> people with property or plans of property or resentment about
> property. The dreams of unimagined gains swing many a robust mind to
> confusion and grandeur.
>
> Speculation acts on mobility of capital. But, its relationship to
> acquisition is less explored. How does it effect the "acreage" of
> acquisition?
>
> II)Acquisition
>
> The dramatic visibility of  capture of land for fast-track projects -
> infrastructural, production enterprises and ancillary structures
> (service and real estate) has brought the politics of acquisition
> into sharp focus . Here state intervenes with speed to produce space
> for deployment of technologies and architectures to mobilize and
> intensify production. The capture of large tracts of land is crucial
> for this.  (Relative measures of speed of different nation-states are
> sources of ruminations of edit pages of newspapers).
>
> Obstacles to this process are:
>
> a) If the process of buying and selling is kept "as usual" then there
> is a huge problem of aggregation, assembling of land.
>
> b) Crucially, various property owners who, anticipating better future
> bargains through differential and escalating rent, prefer not to sell
> outright within the given acquisition rates.
>
> c) The refusal by so-called obdurate and non-progressive
> sensibilities that do not want to sell land and thus come in the way
> of land being transformed into a commodity which can then be
> transactable through global financial networks.
>
> d) The millions of "non-owner" users of land who do not have "titles"
> but have long duree embedded material life committed around land.
> These are the people who come into the way of enforced selling and
> buying of land in a very forceful way.
>
> This is a nightmare situation for hungry large investments. Political
> society, however efficient, will take years to get land cleared for
> any project if they are to move with persuasion and intricate time
> consuming individual bargains.
>
> This enormous quagmire is sought to be overcome by the legal seizure
> of the "public", in whose name land will be acquired. Thus the weight
> of "public purpose" is critical in any acquisition act. Without a
> discourse of "public purpose" we would be face to face with naked
> apparatus of violence of state and capital. State mediates this
> violence discursively by constantly creating a field of to-be-
> negotiated "growth/development path". It is around this negotiation
> that media and political parties debate the pros and cons of the
> violence and ensuing displacement.
>
> In the present, Acquisition Narratives seem to follow a pattern.
>
> (outside earshot)
> A notice
> Restlessness
> Persuasion
> Conflicts
>
> (peripheral vision)
> Confrontations
> Violence unleashed by state apparatus
>
> (lists and blogs)
> Condemnation
>
> (loud big fights)
> Opining around pros and cons, a pathetic debate on what is best for
> National Interest, Pride and Glory.
>
> A fear of falling sensed all around.
>
> Capitalism's sustained production of despair (which occasionally gets
> submerged by euphoria) best manifests during these debates.
>
> What gets left behind? Crucially, after the heat, what are the ways
> of thinking.?
>
> Forced acquisitions will accelerate. It will confront deeper
> sediments of social and material life. There will be temporary halts
> and jerks but the juggernaut is on. It will attempt to suspend all
> forms of coalitions and mobilizations. Violence will accelerate and
> so will rallying cries. We seem to be trapped in a spiral that takes
> in its wake higher and higher human costs. But imagination of today
> is so locked into power and wealth as the motor of history, that it
> is impossible to move aside the "national" and see a larger canvas,
> drawing other spaces and times. (Police records in China record for
> 80,000 protest, rioting and disturbances last year).
>
> In peace time all national units are to compete with each other and
> learn to produce faster and cheaper.
>
> In war time all national units will compete to annihilate each other
> with speed and efficiency.
>
> warmly
> jeebesh
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