Financial History Webinar – April 12, 2021 – John Handel

April 12, 2021
11 am EST
“The Politics of Arbitrage: Connecting and Disconnecting Global Markets, 1870-1920.”
John Handel, Ph.D. Candidate in History, University of California in Berkeley
Twitter: @_john_handel 
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John Handel is a historian of Modern Europe in general and Modern Britain in particular. He focuses on the history of finance during the nineteenth century and his dissertation explores the social, infrastructural, and epistemological underpinnings that helped create the first modern financial markets.

Rather than viewing arbitrage trading as a natural, iron law of how markets work, this paper argues that formal financial arbitrage trading as it first emerged in the late nineteenth century was the result of the creation of a series of interlocking systems of financial infrastructure. Arbitrage trading required very high forms of social trust with partner arbitrageurs, a highly skilled and yet precarious underclass to transmit messages at high speeds, particular forms of knowledge (especially quantitative ones), and certain material infrastructural connections without which arbitrage would not have been possible. After demonstrating how arbitrage trading was built on top of these interlocking systems, this paper will conclude by looking at the politics of arbitrage: how the creation of a modern financial system had resulted in deep social divisions between particular people within markets, and especially between different markets themselves. The politics of arbitrage trading thus resulted not only in some forms of financial connection and globalization but also very consciously, forms of disconnection that reverberated into the financial system of the twentieth century.