Economic Molecule – a reaction

June 6, 2007

A few weeks ago I mentioned in a post the concept of Economic Molecule. This notion argues that in contrast with mainstream economics, which employs an atomistic view that sees the individual as its basic unit of analysis, it would be beneficial if economic sociology would use a different unit of analysis. That unit of analysis, the single Economic Molecule, is the cluster of people, machines and procedures that together make up the most basic meaningful node in markets: these molecules, and not the ‘naked’ individuals, make decisions and bring about changes in the structure and nature of markets.

Peter Levin wrote a reaction to this notion:

You suggested in your earlier post that the argument made by the performativity crowd puts front-and-center a new conception of the economic actor. The ANT emphasis on calculative agencies implies a subject whose very subjectivity intersects with the tools at her disposal. I guess I think about Doctor Octopus from Spiderman 2 (or Spiderman himself, for that matter). The prosthetics don’t need to be self-aware to be, in an important sociological sense, a part of you. (I mean, Heather Mills McCartney has a prosthetic leg, on which she danced well into the running of Dancing with the Stars. When we think about her, her prosthetic leg is actually a part of her – we can argue about ‘real’ or ‘fake’, internal or external, but in a sociological sense Ms. Mills encompasses the natural and artificial).

This is a differences of degree rather than kind, goes the argument, from say, your eyeglasses, or a telephone. Nothing new here, an over-generalization of Latour and Callon, among others. But applied to traders, it becomes interesting.

We could study black-box trading systems, or electronic trading more broadly, as a similar ‘molecule’ (3 atoms of human brain, 1 atom of finance theory, 2 atoms of hardware/software). What was once just ‘cognition’ becomes immediately and irrevocably contextualized. You literally can’t make sense of a rational economic trader without his finance theory, his screens, charts, formulae, software, colleagues, telephones. I myself would want to disentangle the theories, the technology, the networks, but nevertheless, we could learn quite a bit more from starting at this point and seeing how variability in context/tools/theories change how we ‘do’ markets.

But there is a second avenue of research here. My own impulse is to take on how and why these particular atoms glom into these particular molecules to begin with – the constellation of priors that give rise to what we think of as the economic actor. I guess I incline towards doing physics rather than chemistry (please excuse the reproduction of this distinction, I mean it without its usual hierarchy and status claims). Hence my interest in information, gender, discretion. I want to know not so much the effects of the molecules on markets, but the circumstances and conditions of the atoms-to-molecules transformations.

I’m not sure how new this is, frankly. I think it sounds a lot like H. Becker’s attempts to shift form artist as individual genius to artist as focal node in art worlds. And I also think there is something too expansive about the ‘molecule’ notion – I mean, why stop at finance theory and software as prostheses? It quickly becomes everything, from the high-tech wireless handhelds traders use to trade, to learning mathematics in grade school. Which is fine, but then at some point it gives less rather than more empirical traction on markets and economic sociology.

But this is an important line of reasoning nevertheless.

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