Binding the future

Our idea of the future used to be simple. Things happen as they will, and we can only hope and pray that life will be the same, if not better. Today, in the modern world, we are told that we can do more than hope. We can act or decide now so that whatever may come will make little difference. This involves calculating the risk and assigning a price to it. In this manner, we bind the future. We first encounter this mode of thinking in the form of an insurance policy. Today it is everywhere.

With stunning suddenness, the horizon of the future has come to our doors in just the past two months, because of the Middle East war. Though far from where we are, and though we played no part in starting it, this war has upended our daily lives in ways we have only started to count.

Many of my middle-class friends find themselves calculating the future in precisely this way. They are asking how much it costs to install solar panels on their rooftops, and whether the investment will pay off. They are looking at the Chinese or Vietnamese electric vehicles (EVs) that have become popular almost overnight, wondering whether it makes sense to trade in the family car. Even the cheapest EV comes at a price, and one must ask if it is worth drawing down the family’s savings for a vehicle that may not fetch a good resale value when the time comes to let it go.

No one knows when the war will end, or how, or what the world will look like after. But the big players of the economic world are not content to wait and see. At every moment, they are calculating risks and pricing uncertainty. In doing so, they are making decisions that effectively serve as public communications about the future. In calculating the future, they shape it, and they pass on the costs to the rest of us. The prices of oil futures are a small part of this story, though the most visible.

Financial markets operate almost entirely on their calculations of the future as seen from the present. More importantly, they bind the future by trading it today. A so-called derivative is a present transaction whose object is a future state of the world. But it is more than a description of that state. The moment the derivative is created and traded, it reshapes the future it was supposed only to anticipate. The complexity this generates is not easy for the layperson to untangle. We pay for it all the same.

Here at home, we have been preoccupied with wild swings in pump prices and the prospect of fuel rationing. Many of us have given up trying to understand the reasoning behind the numbers. We suspect price manipulation or profiteering somewhere along the line. I think it is more complicated than that. These prices are the structural outcomes of a modern practice of trading future presents. Markets sell the illusion of steering the future while in fact foreclosing it.

Outside Metro Manila, countless Filipino families are doing a different kind of calculation, one that is more existential. Should a relative working in Abu Dhabi, or Doha, or Dubai come home now, while it is still possible and while government repatriation flights are still available? We have more than a million overseas Filipino workers in the region. Business has abruptly stopped in what used to be one of the busiest economic hubs in the world. If they come home now, it may not be easy to return when things settle down.

Jennifer, a mother of two, has worked for two years as a cleaner for a service company in Abu Dhabi. She calls her husband Dan almost daily to say she is safe. Her company has retrenched half its workforce; she is among the lucky ones who’ve been retained. Ben, a neighbor in the same barangay, works as an assistant electrician in Doha. He calls his wife Elsa to assure her he is still employed and intends to stay on as long as he can. Their employers, no doubt, are making their own calculations about how long before they must close shop.

Millions like Jennifer and Ben are hanging on to threadbare lives amid the uncertainties of this war. Many once worked at the Doha and Dubai airports and are now on unpaid leave, waiting for normal operations to resume. Then there are the thousands of Filipino seafarers on oil tankers and cargo ships stranded in the Persian Gulf and the Arabian Sea, unable to sail because of the blockades imposed separately by Iran and the United States. We do not have an exact count of them, or a clear picture of how they are coping, because communication is restricted. Rescue, at this point, is not a near prospect.

Their fates, in a real sense, are held by the shipowners and their insurers in London. The insurers see these tankers in terms of the monetary value of the cargo they carry, and the price of each crew member’s life. The insurance markets are not constituted to reflect what those lives mean to the families and communities that wait for them. That work is left to us. To name them, one by one, when the markets cannot.