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Jazz, Risk, and Political Economy
In spite of everything, there was in the life I fled a zest and a joy and a capacity for facing and surviving disaster that are very moving and very rare. Perhaps we were, all of us ... bound together by the nature of our oppression, the specific and peculiar complex of risks we had to run; if so, within these limits we sometimes achieved with each other a freedom that was close to love.
— James Baldwin, The Fire Next Time
Every time I go on stage to play, I'm risking. ... I recently got into the stock market and it's a hobby now. The stocks that I'm most interested [in] are the riskier ones, the growth stocks. I told the stockbroker, "Yo! I'm used to risk. I do it every night."
— Tony Williams, in Don Snowden, "A Lifetime of Risky Riffs," Los Angeles Times
I begin here with a brief account of a "TED Talk" presented by jazz vibraphonist Stefon Harris and his quartet, entitled "There are no mistakes on the bandstand." Harris' 2011 "TED Talk" outlines the oft-noted insight that jazz musicians can take ostensible "mistakes" and turn them to their advantage: the initial appearance of a jarring dissonance can, with the right touch, be integrated into the sonic palate of the performance in the immediacy of the moment. Harris's argument about navigating "mistakes" in jazz would be relatively unremarkable if he were presenting it to an audience of music educators, who have encountered this argument numerous times over the past several decades. However, in the context of this particular TEDSalon presentation, the argument took on a more intriguing application: Ten minutes into the thirteen-minute talk, having elaborately demonstrated the jazz musician's capacity for adapting to musical "mistakes" on the fly, Harris turns to his audience and asks, "So how does all this relate to behavioral finance?" The casual viewer of Harris' video could be forgiven for overlooking the fact that the occasion for the talk, the TEDSalon New York 2011, was in fact a conference devoted to the field of behavioral finance, which TED produced in concert with Allianz Global Investors, a subsidiary of the Munich-based multinational financial services corporation.
Behavioral finance is an emerging field that harnesses behavioral psychology as a tool for understanding investor decisions, particularly insofar as they deviate from the rational market behaviors postulated by traditional economics. At the TEDSalon conference, behavioral finance was put to work in a variety of contexts, including Shlomo Benartzi's talk on the psychological impediments to saving for retirement, or Daniel Goldstein's lecture on the usefulness of "commitment devices" in binding us to presently unpalatable investing decisions. For its part, Harris's workshop on mistakes in jazz improvisation enjoins the investor to embrace those opportunities denied to the financially risk-averse. Here, Harris's lesson in performative flexibility is deployed as a broader analogy for the idealized subject of the financial markets: nimble and dynamic, the contemporary investor-subject is hailed as uniquely alive to the potentiality of the moment, seizing its possibilities in the manner of the jazz soloist navigating a set of turbulent harmonic changes.
Jazz has recently been taken up as a metaphorical point of departure for a variety of sites in contemporary business practice. As Mark Laver and others have noted in a recent special issue of Critical Studies in Improvisation, the small jazz combo has served as a leitmotiv in jazz-themed management theory, serving as a metaphor for corporate strategy and organization. Scholars in the field of organization studies have deployed this business-centered jazz analogy in a variety of divergent contexts, addressing such topics as the question of "strategic fit" (the effort to coordinate an organization's internal dynamics and its external environment), or the issue of how to develop new practices of product development. Moreover, management consultants have put these theoretical approaches to work in practical environments: Michael Gold weaves live jazz into his Jazz Impact leadership workshops for Credit Suisse employees and the faculty of Ivy League business schools, while Chris Washburne and John Kao have each riffed on jazz as a metaphor for business innovation before the assembled dignitaries at the World Economic Forum in Davos. These ventures in jazz-centered management theory and practice almost invariably point to the jazz musician's proclivity for taking risks.
If the jazz musician's willingness to take chances has been understood as a powerful analogy for behavioral finance, or as a useful metaphor for the post-Fordist corporation, it likely derives from the alignment of risk taking with the prevailing ideologies of neoliberal capitalism. The individual "entrepreneurial self" of the neoliberal imaginary, set loose within the volatile conditions of the free market, is ultimately responsible for finding their own way within this shifting terrain. Without recourse to state institutions or collective solidarities, the isolated market actor is forced to rely upon a quicksilver intuition, a heightened attunedness to the possibilities latent within rapid economic change. Consequently, as Philip Mirowski has noted, risk has been moved to the center of postmodern life, and it has assumed an emboldened form: we no longer strictly adhere to a prudent, actuarial sense of risk, in which the designation of "risky" is assigned only to rainy-day contingencies. Rather, the "risk profile" of the neoliberal, entrepreneurial self is given over to "irrational leap[s] of faith," to a "bald impetuous abandon in the face of an intrinsically unknowable future." The same quality of disinhibition that allows Stefon Harris to embrace musical mistakes is promoted elsewhere as a necessary condition of advancement in the contemporary private sector.
Our contemporary language of risk presents the concept as a neutral abstraction. In a context shaped by the dehistoricizing impulses of neoclassical economics, we have learned to understand risk as pure potentiality, severed from its origins in the messier terrain of social disparities and structural inequality. Risk has a history, a traceable legacy of shifting cultural meanings. If it is usually understood as abstract and disembodied, it can take on tactile and audible forms. As Randy Martin has suggested, modernist and postmodern aesthetic practices of chance, improvisation, and indeterminacy are shot through with the sensibility of risk, and their appearance across the gamut of twentieth century expressive forms indexes the wax and wane of risk as a resonant category of experience. These sensibilities are particularly relevant to our understanding of jazz and African diasporic musical forms, as numerous observers have marshaled rhetorics of risk as a way of explaining the music's aesthetic and social dynamism, in contexts ranging from the so-called "moldy fig" debates of the 1930s through to the "jazz wars" of the 1990s.
The present chapter takes up the music of postbop, a jazz legacy extending from the 1960s Miles Davis Quintet through to the "young lions" of the 1980s, as a focal point for a historically situated genealogy of risk. Throughout my analysis, I maintain a focus on varieties of financial risk, in order to accentuate the indebtedness of our broader risk vocabularies to questions of political economy. At the same time, I hope to demonstrate that prevailing discourses of financial risk operate without recourse to a sufficiently capacious conceptualization of their historical resonances and social consequences: in contrast to the abstract conceptions of risk associated with our present culture of financialization, I propose to trace an alternative lineage of risk that attends to its historical particularities in midcentury and late twentieth-century American life. In particular, I'm interested in the ways that the exclusion of African Americans from the trappings of postwar middle-class prosperity anticipates certain aspects of the more generalized precariousness of economic life under neoliberalism.
An attention to a properly historicized account of risk will offer a useful point of entry as we consider the aesthetic, political, and socioeconomic discourses that accompany the emergence of neoclassicist jazz as a historical phenomenon. Attending to dynamics of risk provokes us to consider a variety of interesting questions: In what sense does neoclassicist jazz serve as a trace of broader tensions in the relationship between class dynamics, race thinking, and political economy? How might the analysis of political economy be harnessed as a properly hermeneutic tool, a way into our understanding of "the music itself?"
RISK, UNCERTAINTY, AND NEOLIBERAL IDEOLOGIES
American economic life in the early twenty-first century operates under the weight of a century-old legacy in which risk is understood as potentially quantifiable, knowable, and manageable. The models of probabilistic calculation embraced by lenders, merchants, insurance companies, and financial speculators during the nineteenth century anticipate the rise of a neoclassical model of economics in which the tumultuous vagaries of market dynamics are made manageable through their reduction to quantitative inputs. In its most simplistic form, neoclassical economics holds that market actors have complete and transparent access to information, distilled within the quantitative abstraction of the commodity's price, and maximize their individual self-interest by acting upon this information in a rational manner. The availability of probabilistic modeling lent a numerically rigorous imprimatur to economic thought, during the period in which "political economy" underwent its transition to the modern discipline of "economics": under the new rubric, economists were increasingly beholden to a set of abstract metrics that they kept meticulously separate from any qualitative approach to social thought. With new modes of probabilistic calculation and neoclassical methodologies at hand, capital and its academic tributaries increasingly held out the possibility of a world in which risk could be completely domesticated.
However, some economic observers have expressed skepticism about the degree to which probabilistic models can outline a clear topography of risk. One of the most well-known formulations of this argument was articulated by Frank Knight, whose 1921 work Risk, Uncertainty, and Profit challenged the field's prevailing assumptions about the calculability of probable outcomes in the analysis of market dynamics. Crucial here is his distinction between risk and uncertainty: a situation of "risk" involves an unknown future in which a statistical distribution of possible outcomes is known, while in situations of "uncertainty," statistical probabilities are more difficult to calculate, owing to a fundamental uncertainty about the appropriate categories of analysis. Situations of "uncertainty" require the analyst to engage in a qualitative and intuitive judgment about the range of possible outcomes, before a probability can be calculated for each one. For example, a situation of Knightian risk may involve something along the lines of insurance for fire hazard, in an environment where reliable actuarial data is obtainable about the availability of fire hydrants, density of housing, building materials, and so forth: probabilities can be generated for a narrow range of outcomes ("house burns down" or "house doesn't burn down") based upon a known set of categories. By contrast, a situation of uncertainty, as one might encounter in attempting to determine the performance of economic indices in emerging markets, may confront the market analyst with an inordinately complex range of possible categories of analysis, not all of which may be readily obvious: the observer must factor in the impact of environmental conditions, labor conditions, political unrest, and a host of other factors elusive to probabilistic analysis. Situations of uncertainty entail a dimension of volatility: there is a sense in which the market actor grappling with a situation of uncertainty must ultimately abandon any uncritical faith in actuarial prediction, and give himself or herself over to a radical extemporaneity of decision making.
Since the early 1970s, our contemporary market dynamics have become caught up in a set of contradictory tensions between prevailing assumptions about the sound efficiencies of quantitative, "data-driven" methodologies of Knightian risk, on the one hand, and the market's de facto exploitation of volatile Knightian uncertainty, on the other. We can look to the collapse of the Bretton Woods agreement as one likely point of departure for many of these tensions. During the Nixon administration, the long-standing stability of the postwar Bretton Woods agreement, which pegged the value of international currencies to a U.S. dollar valued at $35 per ounce of gold, came under mounting pressure overseas as the U.S. government took on an expanding trade deficit and accumulated significant war debt from its intervention in Vietnam. Concerns over the continued viability of the gold-backed dollar led foreign nations to drain U.S. gold reserves, and so, on August 13, 1971, the Nixon administration announced that it was closing the "gold window," effectively decoupling the value of the U.S. dollar from the gold standard and negating the Bretton Woods consensus.
The collapse of the Bretton Woods system and the resultant regime of floating international currency rates have had a variety of important ramifications. The deregulation of currency ratios catalyzed the rollback of numerous other regulatory mechanisms, as commercial banks sought to elude domestic restrictions by pursuing offshore financial transactions. The ability of states to maintain domestic policy priorities became undermined as financial markets sought, and acquired, new autonomy from government oversight. The trade in financial derivatives took on new, unforeseen volatilities as currency swaps and other financial instruments became the principal means through which market actors hedged against uncertainty. The "liberation" of exchange rates from the fixity of the Bretton Woods consensus, coupled with the ensuing turbulence of newly deregulated financial markets, has magnified the potential for genuinely unpredictable conditions of Knightian uncertainty.
Contemporary economic conditions have often tended to reward those adept in an extemporaneous, improvised response to market unknowns. As Arjun Appadurai has noted, the reliably successful protagonist of contemporary market volatility adheres to a set of "swashbuckling" and heroically contrarian dispositions, ultimately siding with the qualitative, intuitive strategies appropriate to Knightian uncertainty over prevailing quantitative methodologies of risk management. According to Appadurai, "it is not hard to see, especially in the past year or two ... that we are in the presence not of sober risk managers but of individuals who have chosen to define — without any models, methods, or measurements to guide them — the space of financial uncertainty as such." As Mirowski has suggested, this "swashbuckler" has become a central protagonist in the historical circumstances leading up to the global financial crisis of 2008. The rhetoric of the free market frequently celebrates the agent of reckless abandon, given over to an unshakeable faith in the trajectory of future events: if the mid-century image of the corporate CEO was that of the gray-flannel bean-counter, bringing a Calvinist risk aversion to the most minor business decision, our present notion of the chief executive has come to resemble something closer to the adrenaline-fueled publicity stunts staged by Virgin's Richard Branson, who has rappelled down the sides of his own buildings in a bid to tie his adventurous corporate brand to his own outsized personality.
RISK, JAZZ, AND MANAGEMENT CONSULTING
Something like this valorization of Knightian uncertainty over Knightian risk likely informs the recent interest in jazz among contemporary managerial theorists. For the impulse to look to a jazz combo performance as a kind of corporate tutorial in creative improvisation is not so far removed from the conversations that must have been taking place at countless firms over the past couple of decades: old logics of adherence to fiscal prudence have been deemed inadequate in the face of contemporary market volatility, and emboldened CEOs have called upon their employees to throw themselves into an embrace of something closer to Knightian uncertainty. Organization theorist Frank Barrett, in his book Yes to the Mess: Surprising Leadership Lessons for Jazz, makes explicit this analogy between jazz improvisation and the recent corporate celebration of creative "disruption": "Jazz improvisers focus on discovery in times of stress. They know how to ensure that they don't get stuck in old habits even when reliable routines might seem like the quickest way to relieve anxiety. ... While there are no guarantees of outcomes, they realize the benefit of a mind-set that maximizes opportunities, understands the importance of intelligent risk taking, and most important, learns by saying yes and leaping in." Elsewhere, as Laver has noted, Michael Gold's Jazz Impact consultancy incorporates Risk as one of five organizing principles for his application of the business-centered jazz metaphor, grouped together by way of the acronym APRIL (Autonomy, Passion, Risk, Innovation, and Listening). For Gold, jazz musicians' cultivation of a "zone of improvisational freedom" provides a space in which risk taking can generate new and innovative ideas.
Excerpted from "The Jazz Bubble"
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Table of Contents
Introduction: Banks, Bonds, and Blues 1
1 "Controlled Freedom"; Jazz, Risk, and Political Economy 33
2 "Homecoming": Dexter Gordon and the 1970s Fiscal Crisis in New York City 65
3 Selling the Songbook: The Political Economy of Verve Records(1956-1990) 103
4 Bronfman's Bauble: The Corporate History of the Verve Music Group (1990-2005) 126
5 Jazz and the Right to the City: Jazz Venues and the Legacy of Urban Redevelopment in California 157
6 The "Yoshi's Effect": Jazz, Speculative Urbanism, and Urban Redevelopment in Contemporary San Francisco 178
Works Cited 253