Financialisation of Valuation

Eve Chiapello

Human Studies
A Journal for Philosophy and the Social
Sciences

ISSN 0163-8548
Volume 38
Number 1

Hum Stud (2015) 38:13-35

DOI 10.1007/s10746-014-9337-x

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Hum Stud (2015) 38:13–35
DOI 10.1007/s10746-014-9337-x

SCHOLAR’S SYMPOSIUM

Financialisation of Valuation

Eve Chiapello

Published online: 9 December 2014

 Springer Science+Business Media Dordrecht 2014

Abstract This article shows that forms of analysis and calculation specific to
finance are spreading, and changing valuation processes in various social settings.
This perspective is used to contribute to the study of the recent transformations of
capitalism, as financialisation is usually seen as marking the past three decades.
After defining what is meant by ‘‘financialised valuation,’’ different examples are
discussed. Recent developments concerning the valuation of assets in accounting
standards and credit risk in banking regulations are used to suggest that colonisation
of financial activities by financialised valuations is taking place. Other changes,
concerning the valuation of social or cultural activities and environmental issues are
also highlighted in order to support the hypothesis of a parallel colonisation of non-
financial activities by financialised valuations. Specifically, the language of finance
appears to gradually being incorporated into public policies, especially in Europe—
and this trend seems to have gathered pace since the 2000s. Some interpretations are
proposed to understand why public policies are seemingly increasingly reliant on
financialised valuations.

Keywords Financialisation
Valuation
Public policy

The contemporary period appears to be marked by a rise, in all areas of life, of a

wide range of quantifications intended for purposes such as to assess performance or
inform service users, consumers, or financial backers. Quantified assessments are
increasing, and among them specifically economic assessments.
Various critical discourses in response to this phenomenon can be identified.
They are found throughout the public debate, and intermingle. There is criticism of

E. Chiapello (&)
Centre d’Etudes des Mouvements Sociaux, Institut Marcel Mauss (UMR 8178 CNRS/EHESS),
190-198 Avenue de France, 75013 Paris, France
e-mail: eve.chiapello@ehess.fr

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quantification as commensuration (Espeland and Stevens 1998) that is paving the

way for finding equivalences or trade-offs. Then there is criticism of quantification
in terms of money (or monetisation) which is the general equivalent par excellence,
in contrast to other possible types of quantification. Monetisation is particularly
problematic when the aim is ‘‘pricing the priceless,’’ be it nature (Fourcade 2011) or
domestic activities (Zelizer 1985, 1994). Finally, there is criticism of economization
in the sense that measurement is oriented towards economic concerns. The
criticisms of monetisation and economization are bound up with the fear of seeing
these forms of quantification come to dominate others, imposing their forms of
valuation, and building up a world that could be described as one-dimensional
(Marcuse 1964) in which certain dominant orders of worth could become tyrannical
(Walzer 1983). The concern to retain a variety of valuation matrices thus appears to
be ‘‘one significant condition for greater resilience (along with better distribution of
resources)’’ (Lamont 2012: 202).
My aim in this paper is to contribute to these analyses and add weight to these
concerns. But I want to go beyond these ‘‘economic’’ or ‘‘monetary’’ qualities. If
quantifying is, as Desrosières (2008: 10) said, ‘‘agreeing a convention then
measuring,’’ then very different conventions can be brought into play to create a
monetary or economic measure. In the tradition of much research on the economics
of conventions in France (Eymard-Duvernay 2006) showing that several valuation
conventions may exist to value products traded on the same market, I think it is
necessary to take a fairly detailed look at the conventions used in order to pluralise
the idea of economic quantification or monetary measurement. This pluralisation
enables us to concentrate on a subset of economic conventions I consider
‘‘financialised’’.
An important distinction is made between ‘‘financial’’ or ‘‘monetised’’ quanti-
fications and ‘‘financialised’’ quantifications. The boundary of the financialisation of
conventions does not lie between monetary quantifications and other types of
quantification, but makes distinctions inside those two groups. Some monetary
quantifications do not use financialised conventions but nevertheless end up as a
financial figure. In contrast, some non-monetary quantifications, for example certain
scores or percentages, are rooted in financialised reasoning even if they are not
expressed in monetary units. The first part of this article is dedicated to defining
precisely what is a financialised valuation.
The position defended in this paper is that the current period is marked by the
progressive diffusion of ‘‘financialised’’ conventions. First, these conventions are
changing the ways of assigning financial values. They are gradually replacing the
old reasonings and forms of calculation previously used in financial activities
(principally banking and insurance, but also in the financial departments of
businesses and public organisations). As a result, I argue that we are witnessing a
financialisation of financial matters. Part 2 is dedicated to this phenomenon.
Financialised metrics and forms of reasoning are also noticeably being used
in situations that in the past were not even approached from an economic angle or as
a mainly financial issue. These questions are in a process of economisation, i.e., a
process ‘‘through which activities and behaviours and spheres or fields are
established as being economic’’ (Çalişkan and Callon 2009: 370). I seek to show

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more specifically that this process of economisation is taking particular paths and in
fact relies on financialised reasonings. Economicisation can take several forms, but
currently the financialised form appears to be particularly predominant. As a result,
in many situations, economicisation takes the form of financialisation. My aim in
part 3 is to show that financialised conventions are becoming an established
approach to all kinds of questions that used to be relatively untouched by economic
reasoning.
This approach through valuation processes, and the metrics that equip them,
makes it possible to propose a new definition of financialisation that is able to
engage in dialogue with the research on financialisation (Van der Zwan 2014).
Analysis of the transformation in the forms of valuation and observation of the
financialisation of valuation casts light on new aspects of the financialisation
process. Financialisation is usually defined as a process of morphological
transformation of capitalism, entailing the capture of resources by finance in the
broadest sense through expansion of the financial markets, a rise in the number and
variety of financial operators and finally the development of a service industry
associated with financial activities (audit, consulting, and law firms, rating agencies,
etc.) (Krippner 2005; Epstein 2005; Duménil and Lévy 2001). Our analysis of the
financialisation of valuation suggests another aspect of financialisation: the gradual
colonisation by specific ‘‘financialised’’ techniques and calculation methods.
I use the concept of colonisation with a primarily metaphorical meaning: the
ingraining of financialised metrics and reasonings in spaces and situations where
they were previously non-existent or less common, which tends to reduce the
importance of prior forms of valuation, changing the ecology of the holds available
for action and maybe even the modes of subjectification.1 This articles outlines a
general diagnosis of colonisation, which is also a call for research aiming to
understand its scale and its reality in the practices and processes of institutionali-
sation that allow this progression. The Habermassian and critical connotation of the
concept of colonisation is assumed as these forms relate to strategic action rather
than communicative action, constituting a specific mode of rationalisation which I
believe may lead to a loss of freedom and meaning. It seems to me that the questions
raised by Power (1997) on the subject of auditing, when he identifies two opposite
types of audit ‘‘failure’’ or ‘‘pathology’’ (decoupling and colonisation2) should be
also addressed in relation to financialised valuation processes.
This article looks at the extension of financialised valuation forms through
transformations of the regulatory frameworks and formulations of public policies
1
The notion of subjectification is part of a Foucauldian heritage and concerns the fabrication of
subjects.Çalişkan and Callon (2009: 389) make the following comment on the importance of this concept
in the study of economisation: ‘‘Subjectification implies that, if some modes of valuation are seen as
economic and if they are related to behaviours also considered as economic, it is because agents have
been configured and formatted as subjects who are technically and mentally equipped to enact these
valuations’’.
2
Decoupling is when ‘‘the audit process becomes a world in itself, self-referentially creating auditable
images of performance’’ (Power 1997: 95). Colonisation is when ‘‘the values and practices which make
auditing possible penetrate deep into the core of organizational operations, not just in terms of requiring
energy and resources to conform to new reporting demands but in the creation over time of new
mentalities, new incentives and perception of significance’’ (1997: 97).

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mainly at European Union (EU) level. The question of the transformations induced
by adoption and implementation of these policies and the true extent of colonisation
(or decoupling) can only be answered empirically in a case-by-case approach that is
well beyond the scope of this article. However, my position is that at the very least,
a certain degree of colonisation is one explicit goal of these policies and regulations,
and that these changes thus merit critical analysis.
Finally, the aim of this article is to contribute to an analysis of the changes in
capitalism. Taking up the common idea that financialisation is a new ‘‘stage’’ in
capitalism which is characterized by the dominance of finance, I suggest analysing
what, in finance and its related calculations, could constitute the specific
‘‘signature’’ of financialised capitalism. This perspective is in some respects similar
to the viewpoint discussed by Bryer (2000). Bryer argues that it is not so much the
kind of accounting used (double-entry or single-entry) that made the difference
between feudal, capitalistic, and capitalist mentalities but rather the kind of
calculations performed (what he calls the ‘‘accounting signature’’). I myself have
already proposed referring to accounting practices as a way to date the various
stages of capitalism in different institutional and historical settings (Berland and
Chiapello 2009). By making themselves familiar with calculative practices, social
scientists were able to better specify the concept of capitalism (Chiapello 2007), so
it should be fruitful to try to analyse the current period of capitalism through its
typical calculative devices.
The next section offers a better specification of the special features of
financialised valuation, in order to trace the financialisation of valuation in various
social settings.

What is a Financialised Valuation?

The concept of valuation as borrowed from the pragmatist tradition (Dewey 1939)
enables to displace analysis of the concept of value towards the concept of
valuation. This concept draws attention to the fact that value is non intrinsic to the
object but produced in the relationship between the object and the person who
considers it valuable, and results from practical valuation activities (Muniesa 2011).
Valuation as a process of worth attribution involves various operations:
identifying and selecting which objects should be paid attention (and thus what
escapes attention), qualifying what is valuable, i.e., the viewpoint from which
objects are praised, estimating their ‘‘worth’’3 within the chosen framework. This
last operation can itself bring into play a technical apparatus of varying degrees of
sophistication, and produce a quantification of value, possibly in monetary terms.
Analytically, we may attempt to distinguish valuation as a process of worth
attribution from evaluation involving a second level of judgment, i.e., comparison
of this value with an objective to be achieved or the estimated value of something

3
Boltanski and Thevenot’s (2006) model makes it possible to identify the plurality of possible judgement
principles, the worth attribution operations, and the different ‘‘tests’’ to which things and people are
subjected in order to reach an agreement on relative worth.

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else (for example a benchmark), but empirically the two processes are often
impossible to separate. Two aspects of the valuation processes are specifically
examined here, relating to two stages of the process: first of all, the viewpoint from
which things are assessed, i.e., the set of assumptions regarding what counts in the
situation, which are bound up with the people performing the valuation or for whom
it is performed; and second, the calculation methods and metrics used.
Financialised valuation will be defined as valuation processes equipped by
models, instruments, and representations belonging to the explicit knowledge
underpinning the approach and practices of finance professionals. This knowledge is
taught and may be accessible in finance textbooks for example. It draws on two
sources: financial economics (as a branch of research in economics and economic
theory that has seen huge development since the 1960s) and mathematical finance
(practical calculative tools, techniques, and formulas that have been developed over
the years).
Three approaches to valuation can be identified in finance: calculation of net
present value, probability-based estimation, and market prices. It is the valuation
practices founded on these three processes and various combinations of them that I
consider to be gradually colonising the existing forms of economic quantification.
Each of these three approaches has its own long history. They may pair up to form
hybrids on certain subjects and in certain settings, and today all three are jointly
involved in the most recent financial modelling techniques (Walter 2006).
I shall now examine each one to bring out the assumptions embedded in
calculation conventions. The purpose of this analysis is to identify a series of ideal-
type elements in financialised approaches that can offer an investigation instrument
to explore different empirical contexts.

Calculation of Net Present Value (NPV)

The first valuation approach is based on discounted cash flows (DCF). This
calculation method consists of forecasting the future economic flows that will be
generated by using the object to be valued, and applying a discount to those flows to
bring them to present value so they can be added together. The more distant the
flows, the lower their present value, and so the less they contribute to the value of
the object. This valuation method takes an ambivalent view of the future, since it
defines value by future cash flows but is quick to reduce that value by applying a
discount rate. This technique, which is more than a century old (Doganova 2014;
Parker 1968) and was initially used mainly to value financial bonds, has become
generalised and is now presumed to be valid for any kind of goods. It can be seen as
a consequence of the adoption of Utility value by neoclassical economics, and is
closely associated with the name of Irving Fisher, an American economist who at
the beginning of the 20th century proposed a new theory of capital and income
associated with a set of actuarial metrics (1906). Under the utilitarian definition, the
value of goods lies in the services they will provide in the future. Goods are seen as
‘‘capital goods’’ (goods in which capital is invested) and their value is related to
their capacity as value-producers: an object is only worth buying (only ‘‘has value’’)

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if it generates returns that are higher than the amount initially invested. This
financialised technique examines everything from an investor’s viewpoint.
Apart from the fairly unreliable nature of estimated future cash flows, the NPV
technique involves another arbitrary choice: the discount rate. This choice is
particularly problematic as it can cause wide variations in the results of the
calculation, even to the point of changing the final judgment on an investment,
which can swing from profitable to unprofitable depending on the selected rate. Yet
the need to discount to present value is certainly one of the most firmly-rooted
central beliefs in financial calculations. Application of a discount rate is explained in
the financial reasoning by the fact that every investment should be compared with
an alternative. The underlying idea is that the investor can always, at the very least,
choose not to invest in goods and instead put his money in an interest-bearing
account.4 Therefore, to be acceptable, the investments available to him must offer
more than the interest on savings. So discounting helps to sustain the fantasy that at
any moment in time, the money invested could be recovered and invested
elsewhere. It is based on the assumption that investments are perfectly liquid and
interchangeable, which is never in fact the case, since money loses its liquid form as
soon as it is invested. The liquidity of financial markets, as Keynes showed, creates
an illusion of investment liquidity. The actors on the financial markets may trade
shares and be liquid, but the assets in which businesses have invested are not liquid,
unless they themselves also invest in financial assets. Financialised calculation
techniques have thus incorporated the illusion of liquidity which is specific to the
financial markets.

Probability-based Estimation of Value

The second valuation method used in finance is probability-based statistics.

Statistics were used in the 19th century by insurers to estimate the probabilities of
accident or death based on observed past frequencies, but remained confined to the
world of actuaries. It was only later that they arrived in the world of finance, through
the work of researchers trying to predict stock exchange movements (Walter 1996,
1999). Fluctuations in prices on the markets, and the occasionally high volatility
even within a single day, were incompatible with the idea that prices necessarily
have some objective foundation, and can be predicted. One ‘‘solution’’ to this
problem has been to consider it possible to describe stock market prices using
mathematical expectations and volatility (standard deviation). This hypothesis then
became generalised and is now used to construct models assuming that value
generally follows a probabilistic law that is principally describable by the mean and
standard deviation (as in a Gaussian distribution). This conceptualisation was then
introduced into all management and valuation models, and every financial valuation
now assumes that the two criteria of risk and return will be taken into consideration.

4
That is how the earliest users of the method for assessing non-financial investments in the late 19th
century justified discounting cash flows (Doganova 2014). Nowadays, scholars would put the emphasis on
opportunity cost, which is more general than only considering savings in banks.

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A redefinition of the concept of risk thus resulted, as risks are conceived by

financial theory as probabilisable. Consideration of risks in finance assumes it is
possible to conduct analyses of a large number of events that can calibrate statistical
forecasting models based on the law of large numbers. Statistical analysis of risk
and the study of volatilities has become more important than close knowledge. The
discount rate used to calculate NPV has also become justified by the risk the
investor bears. Any investment must have a higher return than a bank deposit,
because an investment is riskier.
According to this second valuation technique, the value of anything can be
reduced to a couple of indicators (risk and return). Portfolio management models
then provide easy techniques to manage investments. This information reduction
also makes it possible to manage risks: describing them in terms of volatilities
makes it easy to devise ways of diversifying them. These ideas paved the way for
very strong assumptions about the special abilities of financial actors such as fund
managers and investment banks—abilities deriving from their presumably good
intellectual equipment. Investors—thanks to their special knowledge—are seen as
the most capable of allocating available economic resources in an optimal way.
Under these theories, these actors’ capacity to discern the most profitable
investments (through examination of a wide universe of possible investments and
application of models of investment choices) and diversify risks (through their
portfolio, and their exchange of risks, since these actors are considered capable of
calculating risks, assigning a price to them and trading in them) makes them
supposedly the actors best placed to decide for the common good because they are
the best able to improve overall economic efficiency. These ideas provide strong
backing for the expansion of the power held by financial actors.

Market Prices as the True Value

Price has always been used as a source of valuation. In accounting for instance,
purchases have always been recorded at acquisition price, and for as long as
businesses have carried out inventories (several centuries), market value has been
used as the basis for the value of assets. Similarly, the market prices of comparable
goods are traditionally used to estimate the money that could be made from selling a
given object. Recently, however, prices have acquired a substantially higher status.
In finance theory, market value is not considered as one value among others, but as
the best estimation of the true worth of goods. This approach relies on the efficient
market hypothesis that gained ground in the 1970s (Walter 1996). The market is
viewed as a place that organises the meeting between all opinions of the future to
make prices, which are therefore, in this thought framework, better than every
estimated calculation. The power of veridiction of value is thus entrusted to the
market; all other systems aiming to calculate values are seen as inferior and
potentially turned into servants of market value.
Financial theory postulates that at any point in time, if the market operates
properly (i.e., is liquid and well-informed), the market price is equal to the
‘‘fundamental value’’ of goods defined as the Utility value (i.e., based on assessment
of the future services to be provided). Once this axiom was firmly established,

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finance research started imagining it could ‘‘extract’’ from market prices (which tell
the truth) other less accessible ‘‘values’’. This was the kind of reasoning behind the
development of valuation models for derivatives (which initially are not products
with a market value). Financial modelling proposed to extract their value from the
market price for the shares (or goods) concerned by the derivatives, and this
valuation procedure made it possible to put them on the market by offering prices
(MacKenzie 2006; MacKenzie and Millo 2003). The idea of extracting all kinds of
values from observation of prices flourished, and finance now broadly proposes to
value all types of objects based on the market prices of objects that in some cases
bear little relation to the object to be valued.
With this final foundation of financialised valuation practices, the viewpoint of
investors, who are already well-served by NPV which presents things from an angle
that is favourable to them, and are already considered the best able to make
investment decisions and manage risks due to their statistic modelling equipment, is
endowed with the additional property of producing the best forecasts for the future.
The market is where the largest number of expectations meet, and so all the
information available on the future is supposed to be reflected in the price.
The three currents of valuation that meet in financial theory have a certain
number of common factors in addition to the crucial point of constructing value
from the financial investor’s point of view, which is deemed the best and the
‘‘fairest’’. Short-termism is another important feature. Discounting is reducing the
influence of the future, instituting a preference for the present. Belief in the ability
of today’s prices to incorporate information about the future is founding ahistorical
models that cannot conceive of the major historical shifts or take the long term into
consideration. Risks, seen in terms of statistical dispersions observed in a recent
past, are minimised. And finally, the assumption of liquidity and the mental
experience of ever-possible conversion into money disconnects the reasoning from
material life. The financial viewpoint has no need to know or understand the actual
production processes (combining people and material resources under the
constraints of technical procedures in concrete situations) in order to make
decisions.
In the next section, I will show that the investor’s view and the associated forms
of financialised valuations are becoming very widespread, first and foremost in
financial activities themselves.

The Colonisation of Financial Activities by Financialised Valuation

Financial activities have always used metrics and valuations, but in the past they
were less dependent on the three principles presented above. Historical cost-based
calculations which do not assign a value to time and simply use it for deferral and
spreading techniques (depreciation, full costing), risk assessments that do not seek
to relate risks to a continuum of probabilities, and valuations that do not reason in
terms of capital are all examples of non-financialised quantifications used in
financial activities. My objective in this section is to suggest that developments in
valuation practices in those activities are increasing the importance of financialised

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conventions. I now present two examples of the resulting colonisation of financial

activities: accounting standardisation and management of bank credit.

Accounting Standardisation and the Valuation of Assets

Accounting standardisation dictates to firms the way they must report on their
economic activities. The financial statements organise, in particular, calculation of
profit for the period and provide an image of the firm’s assets and liabilities
quantified exclusively in monetary language. It is still possible to adopt various
conventions to produce this economic representation. Accounting standards choose
among these conventions to impose some to the exclusion of others. Accounting
standardisation has a history, like all fields of regulation. Standards change because
conceptions of problems and situations change. And financialisation of valuation
methods prescribed in accounting standards is one of the most striking changes of
the past few years. A key date concerning Europe is 2002.
Until 2002, the EU’s policy was to harmonise accounting frameworks by means
of directives, which left Member States a certain freedom to preserve national
traditions. In 2002, a Regulation replaced this slow, rough harmonisation with a
quick, mandatory unification for the consolidated accounts of all listed companies.
Member States are now obliged to enforce standards (called International Financial
Reporting Standards or IFRS) issued by the IASB (International Accounting
Standards Board), a private body based in London. And IFRSs are clearly
financialised standards (Capron 2005). One central point is the promotion of ‘‘fair
value’’ as a central principle of valuation5 (Müller 2013). This principle marks a
break from previous accounting standardisation because it makes market prices
more important in the construction of balance sheets, as more assets are now
regularly readjusted to market price. In the past, it was considered more prudent to
keep them at historical cost (often the past market price). This change can be
considered as a sign of an increasing belief in the market’s power of veridiction. But
yet such practices were widespread in the 19th century, before any standards were
issued for company accounts. The really new development is the possibility of using
financial models (calculation of NPV for forecast flows, or more sophisticated
models derived from financial engineering) to value certain balance sheet items
whenever there are no available market prices. Financial models are thus seen as
being able to estimate a quasi-market price. For many financial assets, market value
or its best simulation through models is now the only acceptable measure for
valuing the firm’s financial assets. The regulations lay down a very interesting
ranking of valuation methods. They list ‘‘three levels’’ of valuation for financial
assets,6 i.e., ways of determining their ‘‘fair value,’’ depending on whether a market
price exists (level 1), no market price exists but other observable data can be used in
estimation models (level 2), or no observable data exists, in which case valuation is

5
Fair value is defined in IFRS 13 as ‘‘the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date’’.
6
IFRS 13, released by the IASB in 2011 and endorsed by the EU in December 2012, adopts the three-
level valuation logic of the 2006 US standard FAS 157.

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entirely based on financial modelling (level 3).7 Never mind that this ‘‘fair value’’ is
volatile and depends on the ups and downs of the market, or that it is based on
predictions rather than actual facts. Implementation of the fair value principle has
brought into company accounts made-up models based on a very wide range of
assumptions about the future (in the case of level 2 or 3 valuations). It also
introduces an assumption that investments are liquid, i.e., could be sold at any
moment in order to invest the money more profitably elsewhere. If not, why would it
be so important to value them at an estimation of the exit price?
The principal reason for this adoption of the fair value principle is that it is
important for the primary users of financial statements, defined in the standards as
investors,8 to have an accurate idea of the value of firms’ financial portfolios.9 This
move can be analysed as a result of the financial markets’ increasing influence in the
financing of the economy, such that firms are obliged to help market actors make
their choices by presenting their activities in a way that is relevant to them. And
since this quantified representation is the only existing representation of the firm
(there is only one set of published accounts), it is no exaggeration to say that the
firm itself changes nature. For a country like France where the accounting tradition
was far removed from these concepts, the firm described by accounting standards
has gone from being an institution-firm that produces merchandise, to a
merchandise-firm (Chiapello 2005). The viewpoint from which the accounts are
established has changed, from that of the producer of goods and services seeking to
construct a long-term, profitable economic activity, to that of purchasers of
securities on the markets who are interested in making a profit by trading in those
securities.
The other example of colonisation of financial activities by the financialised
valuations I want to discuss concerns the management of bank credit.

Banking Supervision and the Valuation of Credit Risks and Credit Rate

The relevant moment of change in this case occurred more or less in the same period
and relates to bank regulations. For several decades now, international discussions
have been held in Basel at the head office of the Bank for International Settlements,
leading to the Basel Accords. These have been modified several times, giving three
successive versions: Basel I (1988), Basel II (2004), and Basel III (2010). My
particular concern here is the changes regarding the question of credit risks between

7
Regarding derivatives, which played a very important role in the 2008 crisis, it should be noted that it is
very unusual for them to have a level 1 valuation.
8
The conceptual frameworks of both the American and international accounting standard-setters
consider that accounting must primarily satisfy investors (Zhang and Andrew 2013; Young 2006); the
needs of other users of accounting information are considered to be met if investors’ needs are met.
9
The impact of these standards on corporate accounting image and calculation of profits is clearly
enormous for firms with large financial portfolios, i.e., banks and insurance companies. Other provisions
also based on a financialised approach to financialised valuation have affected non-financial firms through
other channels, but there is not enough space here to discuss this further.

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the Basel I Accord (1998) and the Basel II Accord (2004),10 with a particular focus
on determination of the level of capital needed to guarantee stability in the financial
system. Credit risk is the oldest and still a principal risk for banks. It is the risk that
the person who has promised to repay a loan will not be sufficiently solvent to do so
within the time and terms agreed. Requiring banks to keep a minimum level of
capital to cover that risk can improve the stability of the financial system by limiting
the risks of bank failure (the capital held can be used to absorb losses). This is not
the only possible regulatory measure to protect the stability of the financial system
in case of a credit crisis. However, following the adoption of the Basel Accords in
1988, their central notion—capital requirements against credit risk—has become a
major instrument of financial regulation at global level. The EU, in particular, is a
very obedient pupil, systematically transposing the Basel rules into its laws very
broadly for application to all EU banks, while the United States for example apply
them mainly to the largest banks.
The Basel II reform of the regulatory capital ratio was marked by a complete
change in the calculation method and the introduction of models deriving from
financial theory (Baud and Chiapello 2014), producing a financialisation of the
credit risk valuation. Under Basel I, regulatory capital was calculated using simple
rules based on the type of borrower. The required capital was equivalent to 8 % of
the credit outstanding, but this could be reduced by weighting. Some credits only
required 4 % of the capital (mortgages secured on real estate property), others
1.6 % (loans to OECD banks), and sometimes there was no protected capital
requirement or 0 % (loans to OECD States). The system thus included judgements
that were crude, to say the least, regarding risks (no risks on OECD States) but
made fast, simple calculation possible. These modalities were completely revised
in Basel II. The banks could now use two methods: the ‘‘standardised approach’’
and the ‘‘internal ratings-based (IRB) approach’’. Analysis of these methods shows
that the quantification conventions underlying the new calculation rules derived
directly from the dominant theories of market finance. Calculation of capital
requirements follows the IRB approach (which is in practice the approach
imposed by the bank supervisor in the case of France) by applying a financial
mathematical model, the ASRF (Asymptotic Single Risk Factor) model, which is
based on probabilities of borrower default established by the bank itself from a
statistical analysis of its credit portfolio. This calculation method is in fact based
on the transposition to credit activities, for all types of borrowers (including
individuals, unlisted firms, and a variety of non-profit organisations), of theoretical
models developed from the 1970s onwards for securities traded on the financial
markets. Those models consider that a firm’s future position can be represented by
a random variable following a normal distribution, whose parameters (average
expected return and risk) can be estimated using information supplied by the
financial markets, and information based on share prices in particular. Banking
regulations thus require all banks to use this model and implement a special rating
system of borrowers, which are financialised methods, in order to estimate

10
The methods and instruments for calculating credit risk introduced under Basel II were not changed in
Basel III, and are still the standard regulatory rule for computing credit risk today.

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their financial soundness. But the colonisation by financialised valuations goes

further.
Indeed, to be able to use the IRB method (the least capital-intensive), banks have
to pass the ‘‘use test’’ proving that they did not devise their ratings system solely for
regulatory purposes in order to save capital, but also use it in their everyday
business, particularly in decisions regarding approval of and interest rates on credit.
Estimating credit risk has been one of the core tasks in a banker’s profession ever
since the profession existed, and so banks have developed routines, methods, and
approaches to understand their clients and make their decisions as to whether to
grant credit and at what rates. While some banks, especially those dealing in
consumer credit, had developed statistical studies on default rates and the
determinants of default in order to guide their decisions, such practices by no
means extended to all banks or all types of credit and client groups. Transposition of
the Basel accords into European, then French, law placed the banks under an
obligation to conduct studies, manage their credit portfolio accordingly and charge
for credit based on the statistically estimated risk. This new approach to credit
strongly disqualifies the local knowledge and experience accumulated by credit
managers. Applications and projects are no longer assessed on their own merits, but
as bearers of indicators (figures) that predict probable estimated risks under models
calibrated on the basis of past history. Also, bankers have less control over their
interest rate policy: variations in rates are set by category, based on the statistical
risk.
The banks’ mission is therefore tendentially redefined. The bank is understood
more as a firm in which people invest than a firm whose purpose is to distribute
funding and enable households and businesses to invest. The calculation method of
the credit rate is indeed designed to minimise the level of required capital for the
bank to cover its risks, and thus maximise shareholder returns. More broadly, the
preoccupation with having banks that are able to attract private capital and offer
good returns was constantly repeated when the accords were in negotiation. Of
course, this conception of the bank also tends to deny the specificities of other types
of banks, mutual societies or public credit establishments, and is imposing a single
relational model in respect of the providers of capital. Here again, financialisation of
valuation methods has transformed financial management and financial indicators
themselves, and given priority to the interests of investors on the financial markets,
in this case the shareholders of banking companies.
In the next section, I will suggest that colonisation by financialised valuations is
not restricted to financial activities.

The Colonisation of Non-financial Activities by Financialised Valuation

Three examples of financialised valuation practices are examined, concerning the

questions of giving and subsidising, cultural and environmental policies.

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Financialisation of Valuation 25

The Valuation of Social Organisations Activities

When someone decides to give some money to a charity, or when a local authority
decides to award a grant to some social actor, there is always some form of
valuation beforehand. First of all, the decision must be made to provide support, and
then how much. This valuation operation is what is gradually becoming
financialised. There is a redefinition of the idea of donations and grants, which
become investments that must have returns. These required returns are called
‘‘social returns’’ (but may also be financial). This is a highly specific view of
valuation, which requires a connection between the money invested and what the
organisation produces, with a view to choosing between organisations based on
compared social returns.
There are several examples of indications of this change, starting with the
invention of a method to calculate ‘‘Social Return On Investment’’ (SROI). This
method suggests that social organisations should define their social impacts in
detail, then measure them in monetary value, and finally where possible discount the
cash flows to present value, such that an expense can be linked to social gains
expressed in monetary terms. This invention might be of no consequence if it were
not carried by powerful forces that promote it tenaciously and more broadly convey
the idea that measuring the ‘‘social impact’’ of organisations is important for
planning public action and the donations market (Alix and Baudet 2013). The
largest investment banks see ‘‘Impact Investing’’ as a new way of investing and
social organisations as a new class of assets (Morgan 2010). Philanthropists and
savers who want to ‘‘make their money meaningful’’ want to give or invest money
where it will be most socially profitable, and States are seeking to attract such funds
and make social investment attractive at this time of highly constrained budgets.
The EU, for example, draws on the concept of social impact in the wording of
regulations intended to govern financing for social undertakings, and thus seeks to
promote systematic measurement of those impacts (European Social Entrepreneur-
ship Funds 2013). The United Kingdom put ‘‘impact investing’’ on the G8 agenda
(G8 Social Impact Investment Forum 2013). ‘‘To leverage this momentum and
move the social impact investment market towards global scale and sustainability’’.
The aim is to create an international support community, better understand market
potential and move towards ‘‘transparency and standardisation in impact measure-
ment’’. In response to this pressure, the OECD is conducting studies to guide public
action on these questions.
This idea of impact investing should not be confused with the demand for
accountability, or the desire to assess the policies conducted, even though some
confusion often persists in the debates. We may desire transparency regarding use of
the funds or think carefully about the choice of the best policies. But this does not
mean that the only way to approach these questions is as an investor who seeks the
best return, invests, and divests as opportunities come up. Yet, that is indeed what
happens: one of the most entrenched fantasies is the idea that social impact could be
reduced to a single indicator that would enable investors to choose quite simply
between a range of proposals. Instead of considering only risks and returns, they
could simply add a third metric, social impact (Morgan 2012). This aim is presented

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as a justification for major investments made to set up collection of standardised

information on impacts. Such is the objective pursued by the Impact Reporting and
Investment Standards (IRIS), issued to create a common framework of definitions
and management of the performance for ‘‘impact investors’’. Currently, these
criteria are gradually becoming established as a benchmark for impact reporting to
major investors such as JP Morgan and Crédit Suisse. All reports prepared in
compliance with these specific metrics are collected in an Impact Base, which is a
database managed by the Global Impact Investing Network.11 In fact, what is
happening is very similar to the developments in Socially Responsible Investment
(SRI) (a construction of standard metrics and summaries in the form of ratings
intended for use by investors in making remote choices between different
universes), except that SRI never sought to extend financial investment practices
to NGOs and the non-profit sector. It simply wanted to change the criteria for
investment, while continuing to invest only in firms that were mostly already listed.
Various sources can be identified for this shift in the conception of social action.
First of all, the emergence in 1990s California of ‘‘venture philanthropy’’12 among
the nouveaux riches of Silicon Valley, who after their success from funding internet
start-ups, thought they could apply the rules of venture capital to their philanthropic
activities (Abeles 2002). At the same period and also in the United States, the
concept of ‘‘social entrepreneurship’’ was born, promoted by Ashoka, an NGO
founded by a former consultant from McKinsey and co, and Harvard Business
School.13 Social entrepreneurship is based on the premise that what social activities
are lacking to achieve real efficiency is genuine entrepreneurs who will manage
their activities with the same verve and the same methods as entrepreneurs in the
for-profit world. These ideas then spread throughout the world, relayed by business
schools in the 2000s, then investment banks since 2010. The worlds of donation and
investment are hybridising. Measuring impact (under a method similar to SROI) is
promoted by the European Venture Philanthropy Association (EVPA) which
considers that venture philanthropy covers both grant making and social investment
at once.
What so far appears to be no more than a way of organising a market likely to
attract private funds into social organisations, also legitimises more radical
propositions regarding ways of conducting social policies and spending public
money, such as the Social Impact Bonds (SIB) systems. SIBs were invented in the
United Kingdom and are now being promoted by the American ‘‘schools of
government’’ (see Liebman and Sellman 2013). In these arrangements, public
money is used to give financial returns to providers of private capital who invest in
social matters in the State’s place. The investors—not the social organisations they
finance—are paid on the basis of their social results (payment for success). The aim
is to take activities that are currently known to be unable to survive solely by
providing their services on the markets, and make those activities lucrative for

11
www.thegiin.org.
12
SROI was invented in this milieu and then spread to Europe via the United Kingdom. ‘‘A Guide to
SROI’’ was published by the Cabinet Office in 2009. A new version has been issued in 2012 (see on line).
13
The famous Business school launched the Social Enterprise Initiative in 1993.

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capital providers. SIBs are experimental today, and it is not certain that they will
become established practice, but their promoters (such as the former venture
capitalist Sir Ronald Cohen, advisor to the British government on these matters) are
at the table in current international discussions about social impact investing.

The Valuation of Artistic Activities

A similar phenomenon is appearing on the question of cultural policies. It is well

known how much artistic and cultural activities need public funds to exist, and a
similar redefinition of public expenditure as an investment is also taking place. Once
again, this change was not sudden, being preceded by a large number of
developments and shifts. Once again, it is possible to trace the arrival of these
questions in the field of public action by observing the change in policies at EU
level. Although this is an area in which the Member States retain significant
independence, the EU has produced an increasingly assertive cultural policy over
the years, introducing its first real strategy for culture (‘‘The European Agenda for
Culture’’) in 2007. More recently, this policy has evolved to become part of the
‘‘Europe 2020 Strategy for smart, sustainable and inclusive growth’’, the EU’s
10-year growth strategy adopted in 2010. This strategy emphasises the importance
of ‘‘creativity, innovation, and entrepreneurship’’ defined as central to the cultural
sector. Considered in this way, cultural activities have much ‘‘more than intrinsic
value’’. The cultural sector is seen as ‘‘important for economic, educational[,] and
social reasons and the EU would wish to see all Member States with thriving and
vibrant cultural sectors, optimising the transformative economic and social power of
culture’’ (European Commission 2011). Cultural expenses are now seen as
investments for economic development, as reflected in the economic effects of
EU-funded programmes such the European Capitals of Culture, festivals or major
museum facilities which are believed to boost regional development through the
numbers of tourists they attract. And culture itself is redefined as being part of the
broader set of ‘‘Cultural and Creative industries’’—which include architecture,
archives and libraries, artistic crafts, audiovisual activities (such as film, television,
video games, and multimedia), cultural heritage, design, festivals, music,
performing arts, publishing, radio, and visual arts. As was already the case in
social matters, thinking in terms of investments goes hand in hand with a blurring of
the boundaries between for-profit and non-profit activities. In the cultural field, it
also goes hand in hand with non-differentiation of the artistic, the innovative and the
creative, partly unified by the digital revolution. Protecting the artistic field’s
independence of the economic field, as conceived by Bourdieu (1996), is not the
justification for public policy at European level. On the contrary, the aim is to
encourage hybridisation between the two worlds. Before this blend was promoted
by European policies, its advent was prepared by several works of academic
research on creative cities, creative clusters and the creative class (Florida 2002)
then taken up by public cultural policies in various countries, especially the United
Kingdom, from the mid-1990s onwards (Hesmondhalgh 2008). One of the reasons
for this movement is the aim to take advantage of growth expectations arising from
the internet revolution to legitimate the act of spending public money on the cultural

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sector, which is considered a necessary component of overall creativity and the

appeal of local regions for the creative class (which also includes all highly-
educated workers, professionals, and business managers under Florida’s broad
definition). In this case, as in the others studied in this part of the article, the
financialised definition of activities has provided justification for public expenditure.
Consequently, one possible interpretation of this change is that it is a redefinition of
former policies in politically correct language and this can even extend public
action. For some European countries where cultural policies, especially for the
audiovisual industries, are less substantial than in France, the European initiative
could in fact inspire the first public support policies.
But I would argue that the shift in the language and the forms of justification
influence what can be done and how it can be done. This redefinition is taking place
in a context where States are not supposed to be able to invest in creativity, leaving
public policy the task of taking measures to attract private investment to the cultural
sector. In the EU, this will be done through a ‘‘financial instrument’’ that is an
integral part of the new policy named ‘‘Creative Europe,’’ a system of guaraantees
for bank loans taken out by cultural organisations of all sizes (including freelance
individuals), presented as a way of extending public action by calling on private
investment.
Moving on from public policies to the art market, there are even more convincing
examples to support the argument that valuation of artistic work is becoming
financialised. Works of art are now considered not only for their aesthetic quality,
but overtly as a new class of asset that is useful in managing a diversified portfolio
(Hutter 2014; Horowitz 2010). As a publication by the bank JP Morgan explains,
‘‘[o]nly recently has art investing been viewed through the lens of modern portfolio
theory and considered as a potential alternative investment in a portfolio of assets.
(…) art can offer long-term return potential that is uncorrelated with other asset
classes’’ (Morgan 2014). The arrival of new categories of buyers who have made
money on the financial markets has also changed the art market, as these new buyers
bring with them their speculative business practices, just as the new philanthropists
transformed donation practices due to inspiration from their success in venture
capitalism.
We shall now turn to the case of environmental issues, which have also seen a
shift in valuation schemas. Of the three cases discussed in this part, this is doubtless
the furthest advanced in terms of the development of metrics inspired by the
theoretical corpus of finance.

Environmental Policies and the Valuation of Nature

Two topics are central to global environmental politics: global warming and
declining biodiversity. Both are covered in the UN conventions signed in Rio in
1992, and it is astonishing to see how far the practices and methods of finance have
been used to produce public policies on environmental issues since mid-1990s.
On the question of climate change, the Kyoto Protocol (1997) required
establishment of an international market for greenhouse gas emission rights.
Although the protocol was not ratified by the United States, the EU embarked on the

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project and opened an emissions quota market for Member States from 1 January
2005. This requires a great number of ‘‘investments in form’’ (Thévenot 1984), for
instance to achieve commensurability and exchangeability for differing types of
emission that all produce greenhouse gases (MacKenzie 2009). In this case the
market is used for its valuation power, which financial theory considers the best
device to reveal values. Setting up a market should make it possible to put a value
on negative externalities in terms of the CO2 emissions generated by firms. Once the
value has been revealed by the market, it can be incorporated into company
accounts and influence economic decisions. The second advantage of a market is
that the actors involved are supposed to achieve optimal allocation of rights to
pollute, i.e., the rights will be bought by the firms ‘‘best able’’ to make them
profitable. Once again, this approach to the problem did not burst into public
policies out of nowhere. The economicisation of the environment (i.e., the belief
that these questions can be solved with economic instruments) had already begun in
the 1970s,14 but took a financialised turn more recently with the solution of the
emission rights market. This movement is particularly striking as the earliest forms
of economicisation were based on the ‘‘polluter pays’’ principle, and thus required
tax policies that could use economic calculations (for instance to work out the
appropriate levels of taxation), but not finance instruments.
On the question of biodiversity, political consideration currently broadly involves
the idea of ‘‘ecosystem services’’. The success of this idea must be analysed through
its carefully-cultivated analogy with the specifically financial idea that the value of
an object relates to the services it renders. Nature can then be presented as ‘‘natural
capital’’ which has value through the returns it generates for its owner. Nature
conservation specialists (ecologists, naturalists) appear to have used the notion of
ecosystem services and natural capital metaphorically at first in the early 1980s, to
stress the importance of ecosystems and draw political attention to these matters.
The notion progressively became an established concept in discussions. It was
central to the Millenium Ecosystem Assessment launched by the UN in 2000, which
involved more than 1,300 experts from around a hundred countries. A new project
began in 2007, this time aiming to assign monetary values to all these services
through the The Economics of Ecosystem and Biodiversity (TEEB) initiative,15
hosted by the United Nations Environment Programme that issued its first report in
2010. This elicited growing interest in ‘‘market’’ solutions (environmental service
markets and payments for environmental service or PES) (Boisvert and Vivien
2012). Although these solutions make it possible to redefine pre-existing policies
(such as distribution of subsidies to the farming sector), it is likely that they also
encourage a change in priorities in response to the potential deterioration of nature.
Three actions have traditionally been considered possible, through the following
mitigation hierarchy: protection to prevent damage, restoration if damage is done,
which means intervening in nature itself, and finally offsetting damage by paying a
14
According to an ongoing analysis of the history of OECD debates by Pestre (2014), economicisation
appears to result from a clear political aim pursued since the early 1970s to make environmental questions
secondary to the question of economic growth, as a reaction to the Club of Rome, which sees the
environmental question as an obligation to slow down economic growth.
15
www.teebweb.org.

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sum of money or creating ‘‘equivalent nature’’ elsewhere. With the rise of

knowledge that reasons in terms of ecosystem services and methods aiming to turn
these ‘‘services’’ into economic flows that can be discounted to calculate values,
development of an offsetting market became much more conceivable, allowing a
polluter to pay to restore the same services in a different place. The offsetting
solution, long considered a last resort, thus moved up to first place. It suits
businesses, who have gained room for manoeuvre, it suits new association-type
actors, which see these offsetting payments as sources of funding, and finally it suits
new firms positioning themselves as providers of offsetting services. The market for
offsetting action in biodiversity can also take the pioneering example of the Clean
Development Mechanisms invented by the Kyoto protocol, through which
greenhouse gas emissions in the North can be offset by financing reduction projects
in countries in the South. There are also experiments with sort of Environmental
Impact Bonds, in which financial investors are remunerated for investments that
reduce environmental problems.
Once again, the financialised form taken by reflection on these issues is nothing
less than staggering. As in the other cases discussed, it is accompanied by the
emergence of new financial actors positioning themselves on these markets
(Tordjman and Boisvert 2012).

Discussion

I have suggested that forms of analysis and calculation specific to finance are
spreading and changing valuation processes, which are drawing more on one of the
three sources of financialised valuation discussed in the first part of this article. This
financialisation of valuation not only transforms the pre-existing financial quanti-
fications; it also proposes new ways of judging the actions of an organisation for
social, artistic, or cultural activities, and even nature. In each case there is a
redefinition of the object being valued, which comes to be seen from the investors’
viewpoint. Table 1 summarises the changes at work in conventions.
The language of finance appears to be gradually invading public policies,
especially in Europe—and that colonisation has gathered pace since the 2000s. This
suggests that we have entered a new stage of the financialisation process in
capitalism. First, from the 1980s on states began to deregulate financial activities
and facilitate the growth of financial industries, then, since the 1990s, they have
actively supported the construction of global financial markets and experimented
with new types of regulation based on financial theory recommendations (with
guiding principles such as transparency, corporate governance, market liquidity, and
so on). The cases of banking supervision and accounting standardisation addressed
in this article make this point very obvious. The financial industry has continued
growing in size, power, and wealth during the period and the States have become
increasingly dependent on it. The current stage is marked by a reshaping of a
growing number of public policies infused by financialised reasoning, even those
policies promoting historically very different valuation principles, such as those
addressing social, cultural, or environmental questions. It is as if States are

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 Table 1 Summary of studied changes in valuation processes
Type of financialised convention changing the valuation Resulting view of entities, redefinition Alternative valuation or
calculation, potentially
marginalised

Valuation of assets Discounting cash flows, financial modelling The firm is a portfolio of assets Historical cost
Financialisation of Valuation

of business firms (DCF, modelling) The firm as a commodity The firm as a production place
Valuation of credit Financial modelling Projects described by a small number of Close knowledge and expertise
risk Statistical definition of credit risk indicators to be entered into a scoring of credit managers
algorithm The bank as distributor of credit
Rate setting according to risk scores
The bank as remunerator of shareholders’ to finance the economy and
(Statistics, modelling) capital individuals
Valuation of social Social impact measurement Social service producers as an opportunity Social workers’ expertise
activities Social return on Investment to make money, disciplined by investors Covering social needs
(DCF and risk-return information reduction analogy) Blurring the boundaries between profit Long-term work on the
and non- profit fundamentals
Valuation of Art as de-correlated asset Blurring the boundaries between art, Art for art’s sake. Aesthetic
Author's personal copy

artistic activities Art as part of creative industries innovation and, creativity, between value
culture and business
(investors’ viewpoint, portfolio analysis)
Valuation of Market for greenhouse gas emissions Ownership rights to pollution Pollution as destruction
environmental Natural capital, payment for ecosystem services, offsetting market Pollution rights as assets Offsetting is the last resort
issues (forward-looking definition of value, market’s veridiction power) Nature as services Non-anthropocentric valuation
of nature
31

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increasingly considering common questions in terms of investment that can just as

well be made by private investors as by the state itself. National economic
difficulties are preventing States from making the necessary social, cultural, and
environmental investments themselves, but they can dedicate public resources to
organising incentives to attract private investors and extend their action. In fact they
are actively encouraged to do so by new actors who propose to use the mechanisms
of finance to do good, and are also on the lookout for new asset classes to expand
their activities. This deepening of financialisation may be connected to capitalism’s
need to commodify and marketize more and more activities in order to grow and
expand its field of operations. What is striking here is that this process of
commodification uses the language of finance. The markets that are created are all
dependent on investment markets. The commodities that are created are financial
assets related to new intangible commodities such as ecosystem services or social
impacts and these intangible products exist purely because of the financialised
valuation techniques that brought them into being.
The question remains of why politicians and civil servants are throwing
themselves into this financialisation of public policies. Overarching explanations
that consider these actors converted to a new ideology or ‘‘bought’’ by capital are to
be avoided. The difficulties of public action are probably a better starting point to
understand why defenders of the public interest rally round these solutions in order
to advance their favourite causes (which are not the same as the causes of financial
investors). Several theories can be put forward. States’ difficulties in exerting any
influence over globalised companies may lead them to enrol market mechanisms,
and rely on so-called ‘‘market discipline’’ to achieve through interested action what
they cannot achieve through direct coercion. In the case of changes in bank
supervision, and changes in accounting standards, States trying to construct
common international regulations to influence global financial interaction have
believed they had no choice but to use standards resulting from self-regulation,
thereby incorporating highly financialised representations into their public action,
and these representations then spread to activities of a more local nature. Another
factor is that the work of producing global standards is itself dominated by actors
with strong links to financial actors.
The EU case is very interesting in this respect. Member States may want to
construct a strong coordinated policy level to retrieve some power over capitalism,
but they do not want to transfer competences at supranational level. And the
international body (the EU Commission) whose job it is to draft EU Regulation
must deal continuously with diverging Member State policies. Adoption of the
language of financialised capitalism at least gives the EU Commission support from
private actors, and also has the advantage of not offending any national sensitivities
(Chiapello and Medjad 2009). This may explain why the EU appears to be in the
vanguard of the financialisation process, since it very strictly applies the
financialised solutions arising from international negotiations, as seen in both the
cases of the Kyoto protocol and the Basel Accords. As the EU has exclusive
competence over a small number of matters including competition, it is the language
of the market, and that language principally, that enables it to formulate public
policies. The principal available channels are harmonisation of standards applicable

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to private actors in order to make competition fairer, or active organisation of

incentive systems. The Kyoto protocol negotiations illustrate this point as the idea
of constructing a market mainly results from the EU’s inability to promote tax-
system solutions (for which only the Member States are competent).

Conclusion

The aim of this article was to draw attention to what I have called financialisation of
valuation. Forms of reasoning and calculating combined with an investors’
viewpoint, and techniques from investing which originally developed in several
spaces, are currently being used in public policy formulation and are therefore
loaded with coercive force. I have sought to show that this process has an embedded
potential to redefine human activities and public action. The critical force of these
analysis, conveyed by the notion of colonisation of the space of representations and
valuation, is largely programmatical. Research is needed on these questions.
Valuation struggles are taking place in these different spaces, and it is important to
consider contrary and alternative currents, and the alternative hypothesis of
decoupling. One should also look beyond the teleological assumptions implied by
these concepts of directional change (evidenced in the—action suffixes of
colonisation, financialisation, economicisation) and retain only their heuristic
power. In-depth studies of the interaction between actors and systems, and their
effects, would be one way to explore these avenues for research.

Acknowledgments A previous version of this article was first presented in 2014 at two research
seminars in Paris (LIRSA, CNAM Paris; Research Center for Capitalism, Globalization and Governance,
ESSEC Paris) where it attracted a certain amount of pertinent criticism from attendees. I have had the
opportunity to discuss part of this article at the ‘‘Numbers from the Bottom’’ workshop organized at Wiko
in Berlin (March 2014) and with C. Baud and C. Walter. The comments of one anonymous reviewer and
the two special issue guest editors were also very valuable. My thanks are extended to all. I am also
indebted to Ann Gallon for her much appreciated editorial help.

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