Performativity in “Theories of Markets and Theories of Society”

May 4, 2007

I recently got a draft of a review paper, Theories of Markets and Theories of Society by Marion Fourcade, and now, that the paper is out, (American Behavioral Scientist, 50:8, 1015-1034) I would like to say a few words about the piece. A brief disclaimer first: my work is discussed favorably in the review, which is great. However, this not the main reason, I am writing about the piece. I refer to it here because I think that it presents a very useful map of ideas and concepts in contemporary economic sociology.

Fourcade begins by presenting a general dichotomy between ‘field analysts’ and ‘network analysts’. Then, perpendicularly to this dichotomy, Fourcade presents the work of ‘the performativists‘:

Finally is a group I will designate as the performativists, a much more recent stream of research, by and large coming out of Europe and out of science studies, who emphasize the way technologies (that is, men-machine complexes produced by –for instance– accountants, economists, or operations researchers) intervene in the construction of markets and economies.

This is a very nice definition to the work that falls under the broad label of performativity and can serve as a good starting, in my mind, to a discussion about the new developments in economic sociology. Having said that, I think that the truly radical ideas that that the performativity stream brings (or rather, re-introduces) to economic and organisational sociology have been subdued somewhat in the review and I would like to refer to one of these here briefly.

Let us look again at the connection between technologies and market behaviour and evolution that is mentioned in the definition above. Market technologies are products of expert knowledge that is being put through a ‘social mangle’ and performativity analyses the ways in which expert knowledge (i.e. risk management, management accounting, etc) turns, in effect, into an economic technology and is being embedded into economic activity.

Apart from the neat idea of ‘unexpected consequences’ that performativity applies to various cases, what this expert knowledge – technology – markets connection implies is that we should re-configure economics itself. That is, if the radical message of performative economic sociology is adhered to, then the study of economic action would refer not only to how humans interact (this leads us back to the famous story about baboon society), but equally to how humans and machines interact and bring about economic realities.

In other words, performativity calls for a change in the fundamental unit of analysis of economic action. The ‘economic atom’ of neoclassical economics – the single, utility maximising agent – is replaced by an ‘economic molecule’ – a cluster of humans and devices. Performativity offers this cluster as the basic unit of economic action.

It has to be mentioned that very similar things were suggested by Philip Mirowski in his seminal Machine Dreams. What the ‘performativity people’ add here is a more compact set of theoretical statements that can be applied to a wide variety of analysis topics in economic sociology.

4 Responses to “Performativity in “Theories of Markets and Theories of Society””

  1. daniel beunza Says:

    hey Yuval, am I reading you correctly? i thought that the study of how machines and humans interact was economic sociology… in its performative variant. but you say it’s economics?

  2. yuvalmillo Says:

    Yes. It was a bit a unclear. I think now things are clarified.

  3. Peter Says:

    I continue to try to wrap my head around this idea and its implication (for instance, does your ‘molecule’ imply that economic sociology produce a micro- and macro-economic sociology, with cluster as basis, parallel to economics? I don’t necessarily think you do, but it’s worth worrying a tiny bit about that).

    But let me push a bit on the molecule notion. Should we be taking the actor-in-relation-to-technology as a ‘given’ and then mobilizing that to understand, say, an industry? I could see an analysis of hedge fund traders using ‘black box traders’ (literally, traders + their tools) as a basis for economic action.

    I could also see understanding the molecule itself as the object of study. Turn of 20th century economists searched around for ‘demonstration projects’ to theorize risk – insurance and futures markets were two alternatives, and early ideas of ‘risk’ before, say, Knightian uncertainty, don’t resemble later ones. More broadly, sometimes agents seek a technology (options traders seeking tools) and sometimes the tools seek agents (economists, and their theories, looking for ways to be more involved and then ingratiating themselves into the Dept. of Agriculture)

    These seem like two different projects. Or maybe this is just a way of saying that there’s still a lot we don’t yet know. Any thoughts on how this adjusts to the agenda of economic sociology?

  4. […] 16th, 2007 In previous posts (here and here) I put forward the concept of economic molecules: the idea that the basic decision-making […]

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