Scholars and pundits see speculation as a group psychosis, one that creates euphoric manias and devastating crashes; they describe it as “irrational exuberance” (Shiller 2000) or “the madness of crowds” (Mackay 1980 [1841]; see also Chancellor 1999; Galbraith 1994; Kindleberger 2000). Describing speculation as psychosis, however, scholars downplay both the pervasiveness and the productivity of forecasting as a capitalist practice. I have
underscored the uncertainties surrounding real estate investment in India in order to highlight the vital, productive role that stories about the future play in shaping industry members’ actions. Some of these stories take the form of narratives about India’s progress; others are the statistical extrapolations and industry forecasts so common in business discourse. Developers and investors imagine the future so that they can ready themselves for it; they use speculative discourses to forge strategies, projects, and plans. These acts of imagination are not “the madness of crowds” but the logic of contemporary business
49 For information about these projects, see the developers’ websites. Information about Raheja’s SEZ can be found on the page, “Raheja engineering SEZ,” http://www.rahejasez.com/re-sez-about.asp (accessed December 16, 2009). DLF touts its Emporio mall on the webpage “DLF
Emporio,”http://www.dlf.in/dlf/wcm/connect/dlf_malls/Retail/Retail/Projects/Operational+Projects/The +Emporio+Vasant+Vihar%2C+New+Delhi/ (accessed December 16, 2009). For information on
“Aerotropolis,” see Agrawal 2008 and Express India 2008. My description of the Silverglades Tauns Valley Retreat project comes from the project brochure, which the developer gave me.
practice. They have become a significant means of organizing people that is distinct from
the state-imposed dictates of planning and development projects (Ferguson 2005; Holston 1989; Li 2007; J. Scott 1998). They therefore deserve renewed scholarly attention.
The stories about the future that guide real estate developers and investors blur the neat Keynesian distinction between “speculation” (“forecasting the psychology of the market”) and “enterprise” (“forecasting the prospective yield of assets over their whole life”) (Keynes 1936, 158; see also Kaplan 2003). I have argued that the “fundamentals” that inform investors’ understanding of the prospective yield of Indian real estate assets are shared stories about the future of Indian economy and society that mingle with and are supported by third order interpretations about others’ belief in those stories. Estimations of the future state of the “market” do not rest on the assumption that “the existing affairs will continue indefinitely” as Keynes assumes (1936, 152), but rather on the assumption that they will change. Socially produced and circulated, stories about GDP growth, rising incomes, urbanization, and socio-cultural change are part of a very potent narrative about India’s post- liberalization triumph on a global stage.
In the context of these stories about India’s growth and progress, “speculation” has become as dirty a word in the real estate business as it is in academic scholarship. Real estate developers do not explain skyrocketing land and real estate prices as the result of their own speculative activities; rather, they take them as proof that the “India story” is true. My informants’ denial of their own acts of speculation is a central component of their attempt to attract investment: they must create the appearance of profitability, and avoid the appearance of “irrational exuberance.” As Anna Tsing writes, “in speculative enterprises, profit must be imagined before it can be extracted; the possibility of economic performance must be
conjured like a spirit to draw an audience of potential investors” (Tsing 2005, 57). Such dramatic performances are often materially effective, attracting investors, persuading buyers, and ultimately producing buildings.
Sociologists conclude that rather than merely describing markets, economic
knowledge sometimes performatively produces effects in them (see Callon 1998; MacKenzie 2006; MacKenzie et al. 2007). It would be impossible to prove the performativity of
speculative real estate discourses, since developers’ claims to profitability rest on broad sociological trends and stories about growth that circulate through many institutional environments, from international real estate consultancies to investment banks and
multilateral organizations. Yet developers do not wait for social trends to play out, either. The mere activity of other developers and investors and the presence of new buildings in India serves as a sign of growth and an indication of the felicity of industry prognostications. Real estate discourses are therefore more proleptic than performative.50
These discourses about the future do create concrete realities – though not necessarily the social realities of industry rhetoric. Based on these discourses about a glorious, globally-integrated Indian future, Indian governments are clearing slums and displacing their own populaces to provide land for developers. The new “infrastructure for growth” that developers are building is not the infrastructure that the majority of the
population needs: affordable housing, water, sanitation, and transport. Rather, it is a landscape designed to enable large multinational corporations, foreign investors, and Indian
elites to accumulate capital.51 Its construction testifies to the power of these speculative discourses to present possibilities for action, align various individuals, firms, and
governments to them, and produce effects in the world.
51 Where the state has partnered with private firms to build urban infrastructure “for the masses,” it is on model whereby users pay. Cost-recovery and user-fee schemes raise a number of issues in terms of equity, access, and implementation (see, for example, Ranganathan et. al. 2009).