Cockpits of Capitalism: An Ethnography of Financial Analysis

Since the emergence of modern capitalism, financial analysts have played a critical role in producing visions of “the economy” and its future development. As experts in financial markets, they analyze market developments and predict future scenarios that enable other financial market participants to speculate on the rise or fall of stock prices, the success or failure of particular investment products, and the growth or decline of entire national economies. The substance of the analysts’ evaluation and forecasting practices is, however, heavily disputed among economists in the academic realm. In neoclassical economic theory, the assumption that markets are informationally efficient fundamentally challenges the legitimacy of the work of financial analysts. Moreover, neoclassical economists, as well as scholars from alternative economic schools of thought, claim that the degree of uncertainty inherent to financial markets makes prediction impossible.

Drawing on 24 months of fieldwork in the financial analysis department of an international Swiss bank, I elaborate on why, given the skepticism expressed by economic theory, financial analysts exist in the market. To do so, I look at financial analysis from three different angles. First, I describe financial analysts as a sub- professional group and focus on how they differentiate themselves from other bankers to become accepted as a group of experts. Second, I look at the everyday valuation and forecasting practices of analysts and illustrate how calculative practices, culturally embedded interpretations and social interaction are combined to produce persuasive forecasts. Third, I study the organizational role of financial analysts and show how they gain influence when interacting with other sub-professional groups such as investment advisors, fund managers and clients. Based on these three empirical parts, I argue that through processes of differentiation, the performance of expertise, and the creation and circulation of narratives, financial analysts become meaningful actors in the market. In so doing, I claim that their role in the market is not based on their ability to predict the future, but on their ability to create and circulate investment stories that frame market movements as something that “makes sense” and can be understood through the work of financial analysts.