and ship sizes.69 It is important to point out that these prices are not some objective, singular, ‘scientifically determined’ number but a convergence by a number of different vested actors on a set of estimated current and future prices. Freight futures contracts based on this index emerged in 1985, while freight options were invented in 2007, at the height of the boom in global trade. Freight futures were to be used to ‘hedge’ (or protect) against price volatility on a given route by speculating on the future of the index. For a buyer of a futures contract, if future freight rates rise, any loss on spot prices can be offset by future gains.70
While derivatives were ostensibly invented as a risk management scheme for buyers and sellers to protect themselves (or ‘hedge’) against price fluctuations, from the very first they had two major effects. First, they allowed for speculation, in ways that made the underlying goods or products immaterial to the process of exchange. It did not matter what commodity was exchanged. The wagers were placed on the price going up or down rather than on the commodity itself. In effect, financial derivatives encouraged ‘the greatest gambling game on earth’ by placing bets on stock markets.71 Second, the derivatives could – and did – directly affect prices through a feedback loop. In Donald MacKenzie’s words, the mathematical models that underlay options pricing were ‘an engine not a camera’ – producing the effect they claimed to represent. And, as MacKenzie’s meticulous account shows, the model ‘provided an economic justification for what might otherwise have seemed dangerously unrigorous mathematics’.72 Though MacKenzie’s language is circumspect, ‘dangerously unrigorous mathematics’ is essentially a euphemism for wild gambling on a completely imaginary future.
While the Baltic Dry Index is now the prevalent index for bulk goods and WorldScale (established in 1952) is used for tracking tanker cargo, no single index exists for tracking prices of containerised freight. Shipbrokers’ associations and freight consulting firms can provide such indices based on pricing data provided by their members or subscribers. For example, Drewry Shipping Consultants started producing the World Container Index (on eight major container routes) in 2006; Harper Petersen & Co. has offered HARPEX (also on eight time-charter routes for various container ship sizes) since 2004.73 The Chinese government has also created its own indices. The China Containerised Freight Index and the Shanghai Containerised Freight Index were first devised in 1998 and 2005, respectively. The former is an amalgam of both spot and futures prices on containerised export routes from ten Chinese ports on twelve international routes (calculated by twenty-two domestic and international shipping firms). The latter tracks only spot prices on containers exported from Shanghai (whose freight market is characterised by high fluctuations).74 The Shanghai Index was invented very specifically because the Chinese government hoped to create a freight derivatives market to benefit from the volatility – and rising prices – of freight rates.75
As is clear from this account, the price-setting processes are determined not only by empirically measurable factors but also by subjective measures determined by panellists – the very profitability of whose businesses depends on the prices their data constructs. This tautological magic has animated the financialisation of the shipping routes. The ‘science’ at the heart of financial route-making is as much about the affective attachments, political landscapes, and financial interests of the participants as it is about supposedly ‘objective’ market factors. Something of the traces of the political relations that created trade routes survives in these electronic models.
By the time residents woke from their stupor, their patch of sea was already buried under hundreds of thousands of tonnes of earth and divided up into valuable plots of real estate and housing developments. None of their carefully preserved deeds confirming their ownership could help them recover the lands of their ancestors.
Abdo Khal, Throwing Sparks
Curzon’s ‘Prancing in the Persian Puddle’ 1
In the left side of this photograph from the India Office Records, a tall man wearing a heavy striped robe and kufiya is standing next to his horse. On the far right, a canopied raft carries a blurry load of berobed and kufiya-wearing Arab men. But the gaze inevitably lands at the centre of the photograph, where three men – one half-naked with sun-darkened skin and two clothed in white robes – carry two other men in full British imperial regalia and pith helmets across the wet sand. Another pith-helmeted colonial officer seems to be directing the raft on the right, his back to the camera. The robed man on the left is thought to be Shaikh Mubarak al Sabah, the ruler of Kuwait. One of the men carried on the back of the Arab porters is the Viceroy of India, Lord Curzon of Kedleston.
In November 1903, Curzon arrived on a viceregal tour of the Persian Gulf so that he could claim the much-contested body of water and its littorals for Britain. The tour took in Muscat, Bandar Abbas, Bahrain, Kuwait, and Sharjah. Curzon’s authorised biographer Earl Ronaldshay wrote,
Lord Curzon arriving in Kuwait2
The presence of the ships gave to the prestige of the Viceroy the spectacular reinforcement which appealed so directly to the oriental mind. ‘The small harbour’, he wrote when describing his visit to Muscat, ‘with our big white ship and the Lawrence in the foreground, and behind them the dark hulls of no less than six British men-o-war, presented a spectacle such as the Muscatis never before have witnessed’.3
Curzon landed at Shuwaikh, a small anchorage about three miles from Kuwait City (and today a thriving cargo port), rather than at the burgeoning dhow harbour at the centre of the town. Curzon was to ride into town, so that he could enact ‘a ceremonial entry … with becoming display’.4 The becoming display, however, was belied by Curzon’s arrival on the shore in Kuwait. This was ‘less dignified than he could have wished, for, the water being shallow, he was faced with the alternative of being carried ashore, or of arriving on the back of a donkey without bridle or stirrup’.5 Charles Belgrave, the much-hated, domineering British colonial adviser imposed on the ruler of Bahrain, described such ceremonial arrivals in Bahrain thus:
Even when the pier was built official arrivals were not very dignified proceedings. When the tide was low, distinguished visitors, with their swords swinging round their legs, had to leap, nervously, from a bobbing skiff on the slippery pier steps, watched by the anxious reception committee waiting above them … Now [in 1960], most people travel by air and visitors arriving by ship can come alongside in launches, for the pier extends a quarter of a mile into the sea. But until the deep-water pier, which is under construction, is built, steamers still anchor about three miles from the shore.6
