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The last months of 2008 saw the outbreak of the most severe economic crisis since 1929. This crisismay represent a major reconfiguration of world economic councils (from G7 to G20) and also mark

profound changes in the relationship between states and the economic and financial domains.Sociological reasoning cannot restrain from reflecting on the instruments that were central to thecrisis, on these weapons of mass destruction of the economy: financial innovations, and especiallythe most responsible for the subprime crisis, financial derivatives. Although addressed in some

studies (Allen and Pryke, 2000, Mackenzie and Millo, 2003; Arnoldi, 2004; LiPuma and Lee,2005), the present context requires an approach which describes the role of derivatives as aninstrument of financial domination. This is an indispensable initiative towards an understanding ofhow this technology sabotaged financial hegemony from the inside.

Derivatives are financial innovations which allow risk control. This is an interesting way to definethese instruments, because it presents them as an economic symptom of the "risk society" (Beck,1986). But how does the economy deal with the perception that their activity is somethingsurrounded by threats? The economic system understands things on its terms (Luhmann, 1998); itsunderstanding and control of risk are based on pricing and transactions in the market. Theconstruction of risks according to the understanding of the economy requires, however, a series of

operations. Bruno Latour (1987) and Michel Callon (1986) provide a list of such operations, whichcan be summarized as the following: visualization, disentanglement and standardization.

If we go back to Adam Smith's trade of the pin-maker, it is not difficult to see how even this prosaiccapitalist production site is subject to a myriad of risks. Our pin-maker is exposed to fluctuations inthe market price of his pins, which may fall and reduce his profits to zero. This is the so calledmarket risk. His customers may buy pins on term and, at one point, they can simply stop paying.This is the so called credit risk. The taxonomy of economic risks is very diverse and rich, showinghow people are attentive seeing and classifying different types of menaces in the economy. This is afirst step towards the exploitation of risks by financial innovations: it needs to be categorized, it hasto be visible.

Once visible, risk may be disentangled. This is arranged through a negotiation between thecompany that wants to disengage from risk and a bank or other financial institution that wants totake it. An example can be draw from the simplest of derivatives, the forward contract. The pin-maker buys its raw materials from abroad and, therefore, in order to avoid exposure to exchangerate changes of the post-Bretton Woods world, he goes to a bank and negotiates the delivery of acertain amount of foreign currency, in a specified future date, but at a price determined in the

present.

Both visible and disentangled from the economic activity of a specific company, risk becomes then

mobile. It can be dissociated from the place where it is created and can circulate and be transferedamong different hands. The acceleration of its mobility depends yet on another operation: risk needsto be standardized and combinable. The contract for the transfer of risk, which our pin-makersigned the last paragraph, is not standardized. But if contracts are drawn up with equal terms andand the same values, they can be traded by banks in aftermarket. Risk can thus circulate freely andcan also change hands anonymously without any apparent limit.

The perception of production as something surrounded by risks combined with the financial tools todeal with them are responsible for a reconceptualization of economic activity. The traditional ideaof economic activity in the manufacturing sector emphasizes the importance of organizational orentrepreneurial (or yet exploitational) values, but this view is fiercely challenged by the idea of an

economy of risk. Producing a good means incurring in various exposures to losses; production nolonger means organization (or exploitation) of productive factors, but prevention from threats.Economic activity seen as risk management corresponds to the work of institutional investors and

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other financial institutions, which effectively confine themselves to the control of the adequateexposure level of financial investments, balancing speculation and hedging. This correspondence

points to the original location from which this new cognitive scheme about the economy has sprung.Not only did the financial world found this new way of looking at economic reality, but it did alsopromote finance to the status of translator of other economic agents' interests. Finance translate theirinterests in its terms and, thus, reconstruct their goals so they have to go through the financial world

to carry out their objectives (Callon, 1986; Akrich, Callon, Latour, 2002).

The relation of companies with derivatives constitute the possibility of action at distance (Latour,1987) on its financial costs. Nevertheless, this is not a remote action in geographical terms, as incartographic or techno-scientific inscriptions (Latour, 1990). Rather, derivatives allow control overthe action of future facts (Tarde, 1901), i.e., they allow action at temporal distance and control offuture events. Thus, companies may know at which price they may acquire foreign currency for itsinternational operations in the future by means of currency options or yet they may also know thevalue of a debt's services with a variable interest rate through an interest rate swap. While money

potentially controls geographically scattered resources, financial innovations enable control overresources scattered over time.

The hegemony of financial power is a recurring theme in sociological thought (Hilferding, 1981;Mintz and Schwarz, 1985; Orlan, 1999). Financial innovation is one of the main instruments bywhich financial actors maintain that position. These actors are the center of a network; they have theability to enroll several other players on their program and, hence, assume the size of a macro-actor(Callon, Latour, 1981). The world, according to the ambition of this logic, moves neither under thedominance of efficiency (cit industrielle), nor under the dominance of flexibility and willingness to

projects (cit de projets) (Boltanski; Chiapello, 1999). Financial institutions associate themselveswith an array of different actors, companies, government regulation agencies, people, mathematicalmodels, contracts, placing themselves at the center of a chain of elements (irreversibly) stabilizedand taking in their hands the construction of the economy. The recent crisis denaturalized financialhegemony and showed how this setting can be reversed not only by resistance of counter-hegemonic programs, but also by instruments of its own.

Akrich, M.; Callon, M.; Latour, B. (2002) The key to success in innovation, part I: the art ofinteressement.International Journal of Innovation Management. 6(2), pp.187206.

Arnoldi, Jakob. (2004) Derivatives: Virtual values and real risks. Theory, Culture & Society.21(6), pp.23-24.

Beck, Ulrich. (1986)Risk society. London: Sage.Boltanski, Luc; Chiapello, ve. (1999)Le nouvel esprit du capitalisme. Paris: Gallimard.

Callon, Michel. (1986) Some Elements of a Sociology of Translation: Domestication of theScallops and the Fishermen of Saint Brieuc Bay. in: Law, John (Ed.). Power, Action and Belief: anew Sociology of Knowledge? London: Routledge & Kegan Paul. pp.196-233.

Callon, M.; Latour, B. (1981) Unscrewing the big Leviatan: how actors macro-structure reality andhow sociologists help them to do so. in: Knorr, C.; Cicourel, A. (Eds.). Advances in social theoryand methodology: towards an integration of micro and macro sociologies . London: Routledge &

Kegan Paul, pp.277-303.

Hilferding, Rudolf. (1981 [1921])Financial capital. London: Routledge & Kegan Paul.

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Latour, Bruno. (1987) Science in action. Cambridge, MA: Harvard University Press.

___________. (1990) Drawing Things Together. in: Lynch, M.; Woolgar, S. (Eds.).Representation in Scientific Practice. Cambridge, MA: MIT Press, pp.19-68.

LiPuma, Edward, and Benjamin Lee. (2005) Financial Derivatives and the Rise of Circulation.

Economy and Society. 34, pp.404-427.

Luhmann, Niklas. (1988) Die Wirtschaft der Gesellschaft. Frankfurt: Suhrkamp.

Mackenzie, Donald; Millo, Yuval. (2003) Constructing a market, performing a theory:the historicalsociology of a financial derivatives exchange.American Journal of Sociology. 109(1), pp.107-145.

Mintz, B; Schwarz, M. (1985) The power structure of american business. Chicago: ChicagoUniversity Press.

Orlan, Andr. (1999)Le pouvoir de la finance. Paris: Odile Jacob.

Pryke, M.; Allen, J. (2000) Monetized time-space: derivatives - money's 'new imaginary'?.Economy and Society, 29(2), pp.264-284.

Tarde, Gabriel. (1901) L'action des faits futurs, Revue de Metaphysiques et de Morale. IX,pp.119-137.