Our new guest blogger and the material makings of new “moral” economic order
March 19, 2010
A guest blogger has just joined Socializing Finance. Juliane Reinecke, organizer of the recent Valuation conference in Cambridge, has been sharing her thoughts with us.
Reinecke is a PhD Candidate at the Judge Business School (University of Cambridge) and lives in Paris, where she visits and teaches at various French institutions across management and sociology. Her research explores the dynamics of Fair Trade standardization.
I met Reinecke at the 2009 Goldsmith winter conference, and was struck by a compelling episode in her ethnography. The labeling organization that she researched basically charged a higher price for labeled coffee. The aim was to buy coffee beans from coffee growers at a higher, read “fair,” cost. But how much is fair? This thorny question was tackled by the organization through an internal study. But the study did not resolve the ambiguity, leading to further controversy. Reinecke expected the representatives of the coffee traders to be the ones fighting most fiercely against price increases. But the opposition came from the members who were in touch with food retailers. The matter of fair value, in other words, is an unsettled controversy, and an unpredictable one at that. Different firm constituents had opposing interests, which were resolved through debate among the groups representing them within the organization.
Reinecke’s research advances the programmatic manifesto for economic sociology of my coauthor David Stark. If not the achievement leftie political ideals, Stark asks, what’s the point of modern economic sociology be? One option would be the study of organizations. But should economic sociology just be the study of business? Stark advocates an alternative agenda – the study of worth, and how it is defined and redefined through specific material and calculative tools.
So what’s worthwhile? What makes things valuable? The question was asked again in the aptly named Valuation conference that Reinecke organized at the Crassh center. The roots of valuation in consumer markets can be studied with the techniques pioneered by science-studies that the social studies of finance have so successfully mobilized. To wit, find out the controversies. Locate how they are being resolved. Identify the sources of “durability” that come out of this controversy – the tools. And examine how these tools are shaping value.
The Value conference thus discussed several tools for the construction of value in consumer markets — outside finance (again, see Reinecke’s post for more background). From the presentations, it became clear that the metronomy of “brand value” is almost as advanced as that of Black-Scholes. Lury and Moor’s presentation delved on the paradoxes involved in quantifying the brand value of the great European cities. Measuring brands sounds impossible – kind of like touching the intangible. But the hard-working brand consultants behind this project have come up with peculiar techniques such as measuring a city’s “conversation value.” There’s something wrong about reducing Paris or Rome to the chatter of the Easyjet brigade. And so I left Lury’s presentation wishing to hear more about the ambivalence about this measurement enterprise that was detectable in her tone.
By way of contrast, it was clear from Ravasi’s presentation that there is no established methodology to measure the symbolic value of a product. Something as simple as good design —aesthetic and utilitarian value—still merges in a mysterious whole that is communicated, as religion was during the middle ages, through colorful images of iconic iMacs and iPods. Only this time we, the smart academics, are the illiterate peasants in the cathedral.
Arvidsson’s presentation described in some way the digital version of Lury’s brand consultants. He discussed the use of Web 2.0 tools such as Facebook to pick up on what users say about a firm’s reputation. This can then be used to proxy the firm’s ethical standing, i.e., its moral value. The technique is both similar and different from Lury and Reinecke’s findings. What’s fair? In the user-rated world of blogs and chats, fair is not defined by an organized controversy within an NGO (as they argue), but by the opinions of an opinionated few online users.
In sum, ten years after the development of the social studies of finance, we are witnessing the rise of an entire universe of professionals… labelers, consultants or bloggers, devoted to the construction of value in consumer markets. Understanding their actions, tools, and forms of debate resolution is a critical and exciting new frontier in our understanding of value.