MATRIZ DE OPERACIONALIZACIÓN DE LAS VARIABLES Variable: TRANSFORMACION DIGITAL

Most are now aware of the arms race known as “high-frequency trading” currently underway in the market as investment firms, deploying custom-coded algorithms, compete to exploit microfluctuations and capture the bits that add up to bytes that add up to dollars. As this practice relies absolutely on speed and volume (any individual buy or sell is evaluated by a system that counts in microseconds and calculates in microprofits), its most noted effect has been the competition for physical proximity to the various exchange servers and access to the fiber-optic cables through which the market streams. In the first instance, this points to the material limit rapidly being approached by disparate teams of mathematicians, coders, engineers, and their financiers: the speed at which information can travel.

The obvious consequence of this acceleration toward the material horizon is that the closer they get to this limit, the less marked the differences (and therefore the possibility for competitive advantage) between each firm. If we had, so far, fully accounted for the dynamics of high-frequency trading, the inevitable resolution is that, taken as a whole, the practice would become janitorial: predictably vacuuming up the small change in a role accommodated for by—and eventually indispensable to—the market. (There are indications that this might already be happening, as the firms that specialize in this practice have reported diminishing returns in the years following their first explosive profits.) However, the possibility of resolution is forestalled by other strategies that exploit not so much raw technological power as the theorization and practice of noise.

In 2010 the newswire Dow Jones introduced a service called Lexicon that delivers real-time financial news translated into actionable form for its subscribers’

computers to parse. In the first instance, this provision simply underscores the raw power of computer-assisted trading insofar as no human trader could read and assimilate this constant stream of data while analyzing the market to exploit any lag between the immediacy of the news and its effects. The more fundamental principle at work, however, is the capacity for algorithms to recognize meaning in noise—to draw information from data. If in the above example this is rendered as a simple effect of speed (the possible effect of any specific bit of news on the market may well be better understood by the mind than the algorithm, and the latter only acquires its advantage through the raw computational power that backs it), this speed, which is after all the effect of power, is also deployed to explore the noise of the market in order to generate information. In one tactic, the noise of real-time market data is scanned for signs that a large fund is buying specific securities in order that the high-frequency trader’s system can leverage its speed, buying up

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these securities and immediately selling them for a marginal but significant profit.

In response, these large funds now deploy their own algorithms to camouflage their trading activities, breaking up larger trades into smaller units that they hope will be indistinguishable from noise. Market analysis firms that commercialize their ability to read market noise have stepped into this fray, selling their information to teams hoping to uncover competitive strategies and to see if their own algorithmic signatures were identified. And of course, there is the practice discovered by market analysis of introducing noise (through the tactical dispersal of algorithms that, say, place tens of thousands of buy orders per second before canceling them over extended periods) in order to increase latency (a kind of noise) in a system for which one’s own productive algorithms are tuned accordingly.

In very practical, immediate, and diverse ways, high-frequency trading is involved with noise, and this makes it a useful model through which to think about recent work in noise theory. What I am particularly interested in are those theoret-ical models that take noise, as a figure, to be invested with subversive potential, a potential analogous to the possibility of the political act in the field of the social.¹ If this is a big claim, and it is, the reasoning is nevertheless sound. The logic is best explicated through thinking about noise as a category of music production:

noise as (anti-genre) genre.² For the musician, the challenge of producing noise properly, and avoiding any of the mannerisms that we might expect when presented with “noise music” (which function to standardize the genre and thus negate its aspiration to be noise), is significant. For this reason, certain practical principles have come to be articulated for the noise artist: improvisation, dissonance, the use of nontraditional instruments and sounds, and, above all, the principle of non-repetition. (Non-repetition is fundamental if sound is to escape the structuring principles of rhythm and melody and be noise, not music.) Formally, then, claims for the radicality of noise as a music are justified, at least to the degree that (a neces-sarily specific instantiation of ) noise evades assimilation as genre—the established order that structures the production and reception of music.

From this short description, it is clear why this model of noise would be attractive to those interested in theorizing the political act. The act, as a disruptive gesture that forcibly reframes the symbolic order, is opposed here to an action, which

1 For examples of this position, see Mattin and Anthony Iles, eds., Noise & Capitalism (Donostia-San Sebastian, Spain: Areteleku Audiolab, 2009).

2 Ray Brassier notes: “In being used to categorise all forms of sonic experimentation that ostensibly defy musico-logical classification—be they para-musical, anti-musical, or post-musical—‘noise’

has become a generic label for anything deemed to subvert established genre. It is at once a specific sub-genre of musical vanguardism and a name for what refuses to be subsumed by genre.”

“Genre is Obsolete,” in Noise and Capitalism, 62. For this reason, everything from Beethoven to free jazz to black metal can be articulated through noise. However, for our purposes, “noise music” can simply refer to a category of music production whose practitioners are explicit in their commitment to exploring radical notions of noise, and includes such figures as John Cage, The Nihilist Spasm Band, and Hijokaidan.

is any gesture that is already accounted for by this order. In the political dimen-sion, the act’s paradigmatic instantiation is obviously revolution. As it is typically understood, what allows for the act to occur in the first instance is the subject’s alienation from a complete absorption in the symbolic order. Put simply, for the act, the order that structures the subject’s world must first be denaturalized insofar as the subject’s alienation from this order is at the same time the acknowledgement of this order as contingent and mutable. What this inevitably involves is some kind of engagement with the real, namely that which is unaccounted for by the sym-bolic order, indeed, that which the order attempts to foreclose. If, in music, noise is inescapably an exploration of the space outside the symbolic order (of genre), it is at the same time an exploration of the real as such, and is in this sense a model for radical alterity.

Part of what makes this model of noise and its relationship to the real con-vincing is noise music’s inherent antagonism. This antagonism is not because noise needs to be aesthetically “aggressive” (John Cage’s 4’33” demonstrates this nicely), but because in situating itself as music it needs to perform its otherness. According to Jacques Lacan, of course, the real is experienced as threatening to the degree that it undermines the integrity of the symbolic order and that order’s capacity to organize the subject’s experience of reality. And it is easy enough to map this on to noise music’s antagonistic otherness. However, so far as this model of noise exists as a negative relation to the symbolic order, it is that order which decides whether this or that is noise. And if, in this model, noise is our stand-in for the real, then what distinguishes the real (i.e., noise) from banal reality (say, sound, in general) is its framing as such by the symbolic. In this case, then, the real is rendered as the effect of a positioning, or attitude, on the part of the symbolic’s subject.

In order to articulate the problem with this account, we will return to the example of high-frequency trading. It is immediately observable that the model of noise being employed here is of a different kind. Noise, the market’s oceans of 1S and 0S that comprise the practice’s milieu, is not the real, but merely reality. In the simple bifold model we’ve been describing, reality simply names the matter—the undifferentiated all of everything—on which the symbolic is understood to work.³ From the level of the subject, of course, reality is reality-as-mediated-by the sym-bolic, and we can call this “ground.” The noise ground that forms the world of the market articulates one problem with the noise model of the real we’ve already pointed toward, which is that noise as such doesn’t trouble the symbolic so far as it can be articulated as (mere) noise. (When noise appears in that space organized for it by the symbolic it is nothing more than a recognized element of the what-is.)

3 The distinction here between reality and the real is not dissimilar to the difference between the real as it is articulated in early and late Lacan. In the former, the real simply names the undifferentiated matter on which the symbolic is understood to work, while the articulation of the real in late Lacan intervolves the real with notions of traumatic excess.

Noise, as it exists in the model of the market, is not formally antagonistic for the symbolic, but is, rather, indifferent, having been domesticated as one of the sym-bolic’s elements. (It is of course not a question of intentionality but the extent to which this noise conforms to the role accorded to it in ground.) This indifference, or at least non-antagonism, gives us a clue as to why the noise (music) model above inevitably articulates the real in its subjective dimension, which is that its noise is fundamentally a representation of noise that, as an intentional (art) thing, exists for the subject (in the first instance, anyway).

If indifferent noise in the market model is analogous to pre- or un-symbolic reality, where nonetheless this noise is accommodated as ground by the symbolic, one might expect that the real makes its appearance in those moments when analysis uncovers some previously unobserved aspect that has escaped symbolization, for example, the discovery of a pattern that signals the presence of an algorithm that expresses a novel strategy. One can imagine here a technician running a mass of data through a freshly tweaked algorithm and finding not the previously observed noise, but that part of that noise was the result of a pattern of orders and cancel-lations, emanating from a single IP address in bursts every 400 milliseconds, 1200, 3600. If this does not fully work as a model for the real, it is because this operation is already accounted for by the symbolic: it is precisely the kind of thing that the original algorithmic analysis was expecting to find, even if its specific instantiation surprises. If the real is to have any meaning beyond its effects for the subject, it must be both material and novel (and therefore antagonistic to ground if only to the extent that its novelty is disruptive). Like the act, it must disrupt the symbolic order in a way that is coextensive with its own appearance; unlike the action, its existence cannot have been prescribed a place in ground. The market model of noise provides us with a useful analogue, most dramatically instantiated by the so-called flash crash of May 6, 2010.

On that date at 14:42, the US stock market experienced a sudden, massive plunge before returning, more or less, to its previous state twenty-five minutes later, in the process evaporating and then recreating one trillion dollars in assets. Though there is disagreement over the causal mechanisms, the official report published by the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) argues that the event was sparked by a single, poorly executed algorithm that, in the first instance, caused the value of the shares it was written to sell to sharply decline.⁴ The effects of this mishandled algorithm were then exacer-bated by high-frequency trading algorithms that had first purchased the contracts en masse as they appeared on the market, but then rapidly began unloading them as their value fell, accelerating the drop. As these effects were registered across the

4 Findings Regarding the Market Events of May 6, 2010, prepared by the staff of the US Commodity Futures Trading Commission and the U.S. Securities and Exchange Commission (Washington, DC, September 30, 2010). Available at www.sec.gov/news/studies/2010/marketevents-report.pdf.

market, and because of the speed and scale in which the event unfolded, these algo-rithms got caught up in feedback loops with one another, rapidly buying and selling the same securities back and forth and in the process driving the prices of some blue-chip stocks to a single cent, while others ballooned to $999.99, if only temporarily.

Although there are numerous reasons to doubt the accuracy of this official account, of special interest for us is that this narrative articulates the origin of this event as the result of a rogue algorithm (programmed to sell a large block of shares at a rate set to a percentage of the trading volume of the previous minute, but crucially without consideration of price or time, and with the consequence that too many shares were offered too quickly, thereby driving down their value).

In effect, the report frames the event as the result of an externality insofar as the alien logic of the algorithm in question did not conform to the logic of the market to the extent that it continued to put shares up for sale even as this action continued to drive down the value of the shares that it was still programmatically committed to sell. This narrative of a disruptive externality aligns with the noise music model of the real insofar as the real (in this case, the logic of this specific algorithm) is understood to derive its power to subvert the symbolic order precisely through its otherness to this order. However, the SEC and CFTC’s practical response—the introduction of virtual “circuit breakers” that automatically suspend trading on shares that are seen to move up or down more than a certain percentage over a short period of time—gives the lie to their own narrative.

There was nothing novel about the original trades, either in volume (which was not uncommon for the investment firm in question) or in the use of this par-ticular algorithm (which had been deployed in the past). All of its actions were actions, gestures that were “legal” in the sense of conforming to the symbolic order’s established practices. The response (of introducing circuit breakers) evidences this in that officials could not identify a core generator responsible for the event of May 2010 against which to regulate (despite the narrative of the report). Its response was therefore confined to the attempt to register and limit the effects of this unknown cause should it reappear (which it has numerous times since). And it is here, in our market model of noise, that we find the real: when, as a consequence of the normal run of things, reality returns unexpected effects and a spectral shape emerges from noise. It is the experience of ground-become-figure: some hidden element of mate-rial reality appears to act, to escape the symbolically mandated options to produce a new, simultaneously undermining the symbolic order’s hegemony insofar as this new has no place in the established order.

While the preceding does not invalidate the noise music model of the real, it does require a different model of the act. As we have seen, the noise music model values the real insofar as it demonstrates alterity and therefore carries the potential to provoke an act: the subject, when presented with the choice between actions A or B, and having caught a glimpse of the noisy real beyond the symbolic order, chooses, instead, nineteen. That is, the subject acts when it performs a gesture that escapes

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the symbolically mandated options and thereby reflexively forces a reconfiguration of ground, of the what-is recognized and what-is possible. The subjective (noise music) model of the real is thus paired with the thoroughly subject- affirming model of the act. From a different perspective, however, the real—in its appearance as a new in ground—is already involved in this work of forcing. This real does not instan-tiate the possibility of an act (as a gesture that reconfigures the symbolic) since, in this sense, an act has already occurred. However, as a new, the real necessarily opens up the possibility for new gestures, or what we might here call quasi-acts.

These gestures, made possible by the appearance of the real, are not acts as such to the extent that they do not originate in the subject (but are, rather, made available to this subject). But nor are they properly actions, for they do not originate in the symbolic order and therefore participate, as all actions do, in the maintenance of this order. And it is here that we come to the crux of the matter, which is that this gesture (neither an act nor action) only has meaning in relation to the real, while from the perspective of the symbolic it can only appear as noise.