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performativity and the critique of economics

Omar

Glancing through the contributions of this newly released volume on performativity, economics and science studies, I quickly realized that there is an entire performativity “debate” that I had been blissfully unaware of until now. In our previous discussion of performativity, we mostly focused on the coherence and claim to uniqueness and innovativeness of this fuzzy concept. Yet, in the interdisciplinary matrix of “social studies of the economy” the notion that economics does not only describe and represent markets but also “performs” them has led to an entirely different and raucous conflict.

In essence, say critics of Michel Callon’s (1998) version of the story, if the main role of economics is to directly intervene in reality and construct markets in direct interaction with (and direct modification of) human, non-human, textual and socio-technical realities and their interrelationships, and if the primary weakness of older takes on the relationship of the social sciences to economics (such as economic sociology) had been their sole focus on the adequacy (or lack thereof) of economic theories as representational tools, then does that mean that the “critique” of economics is no longer possible and does that imply that we have to accept economics as an all powerful master capable of bending the world to conform to its dictates? Does that mean that an alternative to the “economic worldview” is therefore no longer even possible to imagine?

Anti-Callonistas reject the sole focus of the perfomativists on the all-powerful ability of economics (and economists) to bend reality’s will to conform to its specifications. Instead, they attempt to bring back the social sources of economic magic, and argue that the “construction” and “performance” of markets still requires a good deal of good ol’ fashioned access to political power. Without this, no performance and re-arrangements of human and non-human socio-technical networks is forthcoming.

It seems to me that this debate seems to conflate some important issues. First, there is the question of whether economic theories and economic models are adequate representations of market phenomena in the abstract. After all, while in agreement with Callon, it is true that economists have played a part in the construction of various contemporary markets, this has not always been the case, since as every economic historian would point out, markets as social structures are older than economics as an intellectual pursuit. Thus, pace Callon, I would say that the “critique” of economic theory is still certainly valid when it comes to actually existing historical markets. So that economic theory (and economic history) can certainly be challenged as a representational device in its claim to represent all market phenomena past and present, even those that did not owe their existence to the intervention of economics as a technological bundle and a profession.

Second, there is the conflation of the various senses of performativity and the limits of economic theory. I find the performativity story convincing in the following sense: it is possible–within limits–to refashion, the communicative, relational, cognitive and informational nature of a given social structure so as to move it closer to the simplified market model that economists usually trot out. That is, one can go from an informationally inadequate, cognitively limited, communicatively segmented social structure to one that features actors with the requisite cognitive prostheses, quasi-instantaneous access to information, lower transaction costs etc. that approximates the actors and thin social environment postulated by economic models. You can then “seal off”–in Thompson’s sense–this socio-technical system from environmental disturbances (this usually takes some political doing) and voila you’ve got a (neoclassical) “market.”

However, this will only occur in certain very delimited circumstances, which might explain the reason why the toy case studies that have become Kuhnian exemplars in performativity research (i.e. the partitioning of the FCC spectrum, Norwegian fisheries, the Chicago stock exchange) all kind of “look alike.” The are single-industry cases in which something that was previously uncommodified (waves, futures, fish) became commodified. Yet, I wonder whether the Callonian exhortation that we should stop worrying about economics as a representational device and come to love the utility function would be very useful for those who are interested in “big” market phenomena: those dealing with multi-industry, multi-site (upstream and downstream) arrangements of producers and consumers (the market phenomena that Harrison White is interested in modeling in Markets from Networks for instance) and the systems that are of interest to both industrial economists and organizational ecologists.

When it comes to those type of market phenomena, the study of the “performance” of which cannot be easily fit into the busy schedule of a Parisian anthropologist of science, the representationalist critique of economic sociology is completely justified: economic theory is simply not a good descriptive (or even predictive) device, and economic professionals with their experimental models and computer simulations were not responsible for their construction nor are they currently responsible for their continuing functioning. Those are the markets that get milk to your breakfast table (or Pizza to your dinner table), not the fancy ones that the Parisian folk like to study (they don’t like Pizza), but probably the most important ones nonetheless.

Written by Omar

August 4, 2007 at 1:45 pm

5 Responses

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  1. Hi,
    I read your paper on “performativity” twice, and I can’t determine what it is you are trying to determine…
    Is there some practical application of the “performativity”concept, and if so, to what end?
    How can a society ever be sealed off from “environmental disturbances” without the use of force?
    Most importantly, you said, “economic theory is not a good descriptive device.”
    My question is: Who’s economic theory? Adam Smith’s or Julienne Malveaux’s?
    And what do you mean by “descriptive?” Music theory is no more “descriptive” of MUSIC than Economic Theory is to ECONOMY, but what they do is to help us to understand the complex nature of the relationships between the notes (in music) or between the traders (in economy).
    The Economy is NOT a giant switchboard, but many intellectuals treat it as such, asking if only you would let THEM have a go… they would know just what switches to flip and what knobs to turn, to ensure a never ending economic boom!

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    Michael Fitzgerald

    August 4, 2007 at 5:16 pm

  2. […] critique, by Omar at OrgTheory, has the dual distinction of being snidely pissy and wrong. First the pissy. […]

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  3. […] to accompany almost every discussion I witnessed about performativity. A good example for this is a recent post in Org Theory, but this is only one […]

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  4. […] Third, Omar might wonder if blind responsiveness to stupid voters is a behavior encouraged by economists like Caplan. Are bad policies “real” or are they just another example of performativity of economic theor…? […]

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  5. […] they are embedded. The celebrated Ferraro, Pfeffer, and Sutton paper (AMR, 2005), and the broader “performativity” critique of economics, is a typical example of this attitude. Some heterodox economists even long […]

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