Thinking about design in finance

August 23, 2013

The more objects are turned into things – that is, the more matters of facts are turned into matters of concern – the more they are rendered into objects of design through and through. Bruno Latour

What is design? The answer depends upon your theory of design.

The comment section of an article at the TABB Group – Elegant Design and Market Structure: An Oxymoron – demonstrates this point nicely. In this piece, Larry Tabb draws a strong distinction between what is desirable and what is achievable in market structure.  Design, he suggests, is hampered by practical issues of implementation and communicating with technical people.

Tabb argues that desirable outcomes occur in situations where design is under tight institutional control. Kirtkujawa responds that to the contrary, the real issue is that simple market design is being thwarted by unnecessary regulation, while anonymole concurs that in a perfectly untouched environment markets will self-organize.

Comments supporting unfettered market evolution get pushed back by asussman who suggests that while systems might evolve organically, market structure is made based on rules imposed on it through specific interventions. At this point, brennan raises the issue of design principles – What are the statements guiding design whether controlled or emergent?

We experienced our own debate about design in the last post (Computing, communication and markets). Tero raised the issue that computers and software are necessarily designed by people; I replied that while systems engineers may not have a vision of the design aspects specific to markets; and JP cautioned that numerous moments of designing market infrastructure can lead to unanticipated properties in the aggregate.

The intellectual politics of design should not be taken lightly.  It has become a driving force in a number of areas of research from Nudge theory in behavioral economics to city design in urban planning. The Parsons School of Design, made famous by the reality show Project Runway, for example, embodies the idea that design is socially important and requires a dedicated education separated from other substantive concerns.

(The school boldly states that “Today The New School and Parsons are committed to employing design thinking as a way to help solve complex global problems”).

Science studies is also part of the design-philic movement. (After all, what is social construction of science other than the idea that knowledge is produced as institutions, infrastructures and practices get… designed?) Latour provided five reasons why this concept has baked-in advantages over other constructivist terminologies.  Perhaps his definition can help anchor the conversation over the role of design in finance.

Latour on design in A Cautious Prometheus? (2008):

–          As a concept, design implies a humility that seems absent from the word “construction” or “building”.

–          A second and perhaps more important implication of design is an attentiveness to details that is completely lacking in the heroic, Promethean, hubristic dream of action.

–          Design lends itself to interpretation; it is made to be interpreted in the language of signs.

–          The fourth advantage I see in the word “design” […] is that it is never a process that begins from scratch: to design is always to redesign.

–          The fifth and decisive advantage of the concept of design is that it necessarily involves an ethical dimension which is tied into the obvious question of good versus bad design. 

2 Responses to “Thinking about design in finance”

  1. Juan Pablo Pardo-Guerra Says:

    Another very interesting post, Martha! And timely, particularly in the context of the three-hour outage yesterday.

    A sociology/philosophy/anthropology of design would contribute tremendously to the discussion, and Latour’s definition is a nice start. Indeed, I think the metaphor can be stretched further, by insisting on the aesthetic practices associated to design and how they negotiate their meaning, limits and legitimacy in the making of objects. A bit like what occurs in London with the Fourth Plinth on Trafalgar Square: the discussions on the project were humble yet fascinating re-designs of public art, and merit much analysis. But what is perhaps more interesting is not the discussions in and of themselves, but rather how the projects were crystallized: the debates, conflicts and criticisms that emerged when design met the politics of the plinth.

    Taking the idea to a topic closer to home, the recent story of markets is interesting, in part, because it shows this tensions between design and construction. The NMS was a fine, well-designed system (for some, others may disagree). But it resulted in what we have today. Design is unpredictable, after all!

  2. […] with the language of design provides, as Martha Poon rightly pointed out, a more productive approach to the study of markets. But it also makes possible imagining a bolder […]

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