ABSTRACT
The chapter presents two modes of critical discussions about financial models. One mode refers to criticizing finance as a science involved in developing and spreading unrealistic models that are detached from the complex reality of economic life. The proponents of this strong critical position take the “ideological” or even “political” standpoint and show how finance is always enmeshed with social and political power and contributes to inequality, unjust risk distribution, market crashes, etc. (critical as political). The other approach—as pursued, for example, by social studies of finance—shifts the attention from how financial models fail to adequately represent the economic reality to how they are used and shape, or perform, reality. The performativity approach questions the traditional representational view of finance and aims for a deeper understanding of financial practices and their interplay with models and theories (critical as analytical). The connection between the two modes in form of politics of performativity is explored.
