In this ongoing research, I try to connect the history of futures trading in North America and Europe from its beginnings until today with the unfolding of risk as a key concept of modern market economies.


Risk is an essentially modern type of insecurity. Economic acting always means facing insecurity, but in traditional agricultural societies, it is given mainly in the form of hazards (crop failures, wars, epidemics). Those hazards are not banned in modern capitalist societies, but risks have gained tremendously in importance. The term risk has several notions and different meanings in different academic fields (e.g. economics versus sociology). One might agree that the more general concept of uncertainty, as conceived in modern Western culture, exhibits different dimensions that each reflect qualitatively different degrees of manageability and controllability—may it be regarding the causation (natural/divine vs. human), the mediation (imposed vs. voluntarily taken), or the assessability (unpredictable vs. predictable). ‘Risk’ always refers to an uncertainty which is or seems rather manageable or controllable. Hazards like crop failures and epidemics are attributed to nature or God and exogenous to the economy, they cannot be avoided and are rather unpredictable, and thus they are subject to fate.

In modern economies, uncertainties appear often to be endogenous to the economy (depending on the decisions of other economic actors), calculable, and subject to decision making of the person facing the uncertainty. This is not least because modern economies are organized around markets. The uncertainty about the future course of prices in these markets is among the least controllable variables in economic decision making, a decisive factor for success or failure of companies, as well as a constant menace to the safeguarding and improvement of a household’s living standard and consuming habits. Yet to take risks, to venture, is at the heart of an industrial economy subscribing to self-sustained growth. In early modern Europe, such an idea would have disgraced contemporary thinkers: ‘Venture’ essentially meant ‘adventure,’ and that way of action was relegated to the boundaries of a rather set and static society, in which at least the majority of people was meant to hold on to their given occupation and place in live. Today, on the contrary, there prevails an ideal of economic freedom, in which thoughtful risk-taking is no longer condemned, but honored: Nothing ventured, nothing gained. The transition from traditional to modern capitalist societies marks the birth of a risk-economy. Obvious as it is, this fact has attracted little attention of historians.

Among the different kinds of markets, futures markets stand out as emblematic for modern risk economies. In the past 150 years, the commercial practice of futures trading has fundamentally changed the mechanics and logic of commodity and financial markets. It extended markets through time, shifted the focus from trading goods to trading expectations about the future state of the good’s market, and enhanced possibilities to manage and even utilize price risk. Futures exchanges, as sites of futures trading and derivative markets, are praised by some as ingenious risk management and market-making inventions, and despised by others as mere ‘casinos of capitalism’, in which the economy is put at stake. A more nuanced judgment is hampered not least by a general lack of comprehensive historical knowledge regarding the genesis of futures exchanges and their transformation up until today.

While today, the category of reducing and expanding risk may be the main viewpoint on futures trading and maybe even economic systems as a whole, this has not been the decisive perspective during the emergence and a large part of the history of futures exchanges. Consequently, futures exchanges cannot simply be viewed as a rational institutional solution to the obvious problem that actors face uncertainty and, in modern market economies, especially price risk. Instead, futures exchanges were and are contingent but enduring historical institutions that actually underwent fewer changes in the last one and a half centuries than the discourses which attributed them different places in differing interpretations of the economy—discourses, in which the exchanges themselves actively took part, not least through their public relation efforts. So how and why did futures trading emerge, develop the way it did and become what it is today? How was futures trading interpreted, discussed, and judged? What have been the economic and cultural implications? And how did the concept of risk entered into all this?