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mackenzie seminar – theory or just-so stories?

Teppo

I have really enjoyed reading MacKenzie’s An Engine, Not a Camera. A well-written, engaging, and delightfully detailed book about the emergence and history of financial economics.

But, where is the theory in the book, or, where is the “performativity”? While there are occasional excursus of theoretical explanation, the book more generally felt like a just-so story (and, there certainly is nothing wrong with that – see Kipling’s delightful Just So Stories), rather than a theoretical work with meaningful evidence. Put differently, the book is historicism and story-telling at its best, but, a theoretical contribution? – I don’t believe so.

Let me explain. Performativity and the strong program of social construction is associated with, or rather founded on, the belief that there is, as such, no meaningful reality outside of that which is created through language, culture, and, in this case, theory. In other words, there are no meaningful, pre-existing truths, or, “false” or “true” theories (note how words such as false, true, and reality are always put in quotation marks), but theories are a function of the epistemic communities that one belongs to, and theories reflexively create reality rather than explaining theory-independent reality. Thus, in invoking “performativity” MacKenzie in essence is arguing that financial theories and models, and markets for that matter, do not meaningfully assess any underlying real value, but rather, create it. The distinctions here are quite fine and may seem like petty semantics as the performativity argument is extremely slippery, but any potential theoretical contribution hangs in the balance of these fine but momentous (well, “momentous” to our small academic communities – the things we quibble about…) distinctions.

The problem of performativity essentially is that the argument suggests that theory pre-exists or creates, rather than describes or explains, reality, at least in its strong version (e.g., Latour and Woolgar, in Laboratory Life, argue that microbes do not really exist, only as they were “created” and realized through scientist interaction – Kuhnian extremism). The effort in the strong program of social construction is to take knowledge out of the domain of the universal and real, and to bring it into the domain of the contingent and social (Martin Hollis edited a great book on the matter – Rationality and Relativism – with contributions by Bloor and Barnes – early developers of the “strong program” to which MacKenzie contributes). [Click below to read more…]

If we take the definition that “performativity is the idea that theories and models bring about the very conditions that they attempt to explain,” then, the immediate question is – why? It seems that theories take effect where there are justified reasons for believing that they are true. Thus, not just anything can be asserted (and thus created) as reality, which seems to be the case based on performativity. In short, performativity lacks meaningful boundaries for what can be asserted and why it is taken to be true and real, rather it simply in post hoc fashion labels whatever happens to emerge in reality as: performativity.

Now, can theories be wrong and nonetheless be acted upon (and thus become real)? Of course they can. But, this however in no way provides evidence for performativity, even though MacKenzie hopes to make these links. Theories over time get “checked” by reality, and continually adjusted over time, with increasingly better explanations of given phenomenon. Now, does the fact that theories affect reality provide evidence for performativity? No. Of course true theories can affect reality (the natural sciences provide plenty of robust examples), but, theories only affect reality within the limits of their actual explanation, impact and improvement (without quotations marks) on that reality – a distinction that performativity does not seem to make. That is, the truth of theories and associated progress is not mere rhetoric, but rather, real.

As a final comment – performativity is also extremely ad hoc in that when predictions of theories and models are not found to be true (the key thesis of performativity is that theories, whether false or true, strongly create reality), they are simply labeled counterperformativity. That is ad hoc, and suspiciously convenient for retrospective story-telling.

Now, stepping back, the discussion above of course involves deep epistemological commitments, and thus I do not aim to necessarily change the mind of the card-carrying social constructionist. But, based on the arguments above, performativity seems to fall well short of theoretical and logical rigor. This is important to note, as other reviews have also lauded the book for its historical accuracy, but they have not tackled the associated theoretical matters, but have labeled the theory mere “philosophizing” that the reader needs to wade through to get to the historical facts and nuggets (see e.g., David Warsh’s review of the book). Again, I don’t dispute the facts of MacKenzie’s well-written and engaging book, but, the facts don’t support his theory of performativity. I doubt the author sees the book’s contribution only in re-telling facts associated with the emergence of financial economics, but rather, in advancing the theory of performativity. Of course, it was not quite clear to me whether MacKenzie hoped to argue for a strong version of performativity (in fact, I was looking for more discussion of his theory), I could see some short term “weak-weak”-form performativity in his arguments, but most efforts in social construction, particularly its strong incarnations (a school of thought that MacKenzie is associated with), hope to have their cake and eat it too, rather than just nibble at the edges.

Undoubtedly, more on this book later.

Written by teppo

November 14, 2006 at 7:59 am

9 Responses

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  1. […] Teppo Felin at Orgtheory.net has an excellent post today on Donald MacKenzie’s An Engine, Not a Camera: How Financial Models Shape Markets – which has received praise from Michel Callon, Karin Knorr-Certina — and Paul Samuelson!  […]

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  2. You offend me every day and I still make comments to you. ;)

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    brayden

    November 15, 2006 at 11:31 pm

  3. Well, there you go. Then the ‘answer’ must be (b).

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    teppo

    November 15, 2006 at 11:40 pm

  4. Teppo,

    I think your post is essentially correct in regards to the weakness of the performativity argument as laid out by Mackenzie. This version is fairly broad, especially in its weak “theory affects the reality that it purports to describe” formulation. In The Constitution of Society Giddens makes pretty much the same argument, but to establish the point that social actors take into account social scientific theories, and that therefore such theories can never be used to predict their behavior, which is the opposite of the performativity argument.

    Mackenzie is very careful to not try to forcefully argue that his historical research clinches the argument. I think the fact that some of the book has already undergone peer review in AJS accounts for the fact that he’s careful not to make any grand claims about the whole thing. So in that respect you have to give him credit.

    However, your point about the empirical underspecificity of the theory stands: given a case where a theory seems to predict reality it is impossible to tell if it does so because the theory predicts fundamental properties of the social world, or because agents are “taking into account” some features of the theory and therefore “rigging it” so that its predictions come true.

    Furthermore, if conditions change and the theory seems like it no longer does a good job of predicting the relevant phenomena, a performativity theorist can always claim that the reason for that (a la Giddens) is itself a process driven by some sort of performativity.

    My sense of the whole thing is that if a theory is subject to “performativity” issues, then it is fundamentally incomplete. That is a truly successful social scientific theory, has to be able to account not only for a given set of social phenomena under the assumption that actors are “dopes” vis a vis some aspect of the theory, but should also be able to make sense of the world when actors are conceived of as “knowledgeable.”

    For instance, modern organization theory to be empirically successful, has to be able to predict the behavior of organizational actors under the assumption that the behavior of these actors is governed by certain tenets of organizational theory itself. And that these awareness may change the organizational environment so that the theory becomes a self fulfilling prophecy.

    The problem with the performativity argument ultimately, is that it is probably making a mountain out of mole-hill, in that is isolating as unique and specific what is probably a common-place process (this is Giddens’ view). Thus, according to John Meyer’s take on Weber, modern definitions of rationality imply the implementation of bureaucratic arrangements, objective and impersonal systems of accounting and evaluation, etc. The reason for this is that the “theory” of modernity embodied in Western institutions says that these organizational arrangements and procedures “result” in efficient outcomes and success.

    Because all actors end up implementing these procedures, even if the connection between organizational structure and success is random, some of the most successful actors (those that survive) will end up having the requisite accouterments making our modern theory of bureaucratic organizations “true” (the same appears to be true for nation-states and economic growth according to Evans’ research on “Weberianism” in state institutions).

    Is this “performativity”? I would say that at least under the weak definition, it certainly is. But then that means that performativity is a much more general process (which was the point of Barnes’ essay on “bootstrapped induction.” But it also means that it loses its “French exoticism” (it is already part of macro-institutional theory). And there is no reason to think that it is unique to economic institutions (the orienting notion of performativity could be applied to any instance of “institutionalization” in any areas of social life).

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    Omar

    November 24, 2006 at 2:36 pm

  5. I think we roughly agree then.

    Though – a question that emerges from your comment is – why exactly do we then need “performativity” if much of the “institutionalization” intuition covers the same matter? (I have not seen distinctions made in the literature, and, for me the MacKenzie book rather haphazardly cites various theories from Hutchins on to others – without careful theoretical development and distinctions).

    And then, even if we turn this into an institutional story – there is an important question of whether we find institutionalization here (in Meyer’s sense, perhaps more of a Northian sense), or something else. Sure, practices and models were widely adopted and they diffused, but, I don’t know that myth and ceremony capture what is happening.

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    teppof

    November 26, 2006 at 7:07 am

  6. Hi,
    Daniel Beunza brought to my attention the on-going discussion among organisational theorists about performativity. So, I wrote something about it.
    Yuval
    http://socfinance.wordpress.com/2007/02/18/mechanics-of-performativity-pt-1/

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    yuvalmillo

    February 18, 2007 at 4:22 pm

  7. […] complementary to the Economics-As-Engine-Not-Camera type of intuition (though, I admittedly struggle with that).  The sociology of price seems like an area worth further investigation in economic […]

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  8. […] comments that followed Teppo’s posting on performativity, and similar debates on orgtheory (here, here, and here), socializing finance, organizations and markets, and old- fashioned journal articles […]

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  9. […] bank run example illustrates this). We’ve hashed some of this already in previous posts (for example, here), so I won’t belabor these […]

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