Fabian Muniesa

Peripheral Vision Economic Markets as Calculative Collective Devices

How to address empirically the calculative character of markets without dissolving it? In our paper, we propose a theoretical framework that helps to deal with markets without suspending their calculative properties. In the first section, we construct a broad definition of calculation, grounded on the anthropology of science and techniques. In the next sections, we apply this definition to three constitutive elements of markets: economic goods, economic agents and economic exchanges. First, we examine the question of the calculability of goods: in order to be calculated, goods must be calculable. In the following section, we introduce the notion of calculative distributed agencies to understand how these calculable goods are actually calculated. Thirdly, we consider the rules and material devices that organize the encounter between (and aggregation of) individual supplies and demands, i.e. the specific organizations that allow for a calculated exchange and a market output. Those three elements define concrete markets as collective organized devices that calculate compromises on the values of goods. In each, we encounter different versions of our broad definition of calculation, which we illustrate with examples, mainly taken from the fields of financial markets and mass retail.

Market technologies and the pragmatics of prices

Abstract This article contributes to a pragmatist analysis of pricing and valuation through an account of the production of closing prices at the Paris Bourse. The Paris Bourse is an electronic stock exchange and the actors in charge of its technological configuration often need to face concerns about the quality of the prices that the configuration produces. Closing prices are particularly important because they constitute references that circulate widely. The author analyses how a problem of representativeness of closing prices was raised in the late 1990s and how several techniques aimed at solving it. In order to deal with this problem of representativeness, the author proposes the consideration of prices as signs in a pragmatist manner. Adapting Charles S. Peirces theory of the sign to the study of prices, the author concentrates attention on the material display of prices, on their capacity to stand as traces of some event, and on the way they may suit a set of calculative conventions.

A flank movement in the understanding of valuation

The sociological understanding of valuation often starts with an idea of value as something that something has by virtue of how people consider it (that is, it is socially constructed, a convention, a social representation, a projection). At some point, however, analysis also often draws a contrast between this sort of appraisal and some other type of value that the thing may have as a result of its own condition (what it costs, how it is made, with what kind of labour, money and materials, what it is worth in relation to objective standards and fundamental metrics). Dissatisfaction with this binary approach has been expressed in various quarters, but the pragmatist contribution of John Dewey provides a particularly useful resource with which to engage with the subject. This article reviews some aspects of this dissatisfaction, with a focus on the pragmatist idea of valuation considered as an action. I discuss this idea in relation to financial valuation, referring in particular to early pedagogical materials on corporation finance elaborated in the context of the professionalization of business administration. Finally I elaborate on the usefulness of a pragmatist stance in the understanding of financial valuation today.

The Provoked Economy: Economic Reality and the Performative Turn

Do things such as performance indicators, valuation formulas, consumer tests, stock prices or financial contracts represent an external reality? Or do they rather constitute, in a performative fashion, what they refer to? The Provoked Economy tackles this question from a pragmatist angle, considering economic reality as a ceaselessly provoked reality. It takes the reader through a series of diverse empirical sites - from public administrations to stock exchanges, from investment banks to marketing facilities and business schools - in order to explore what can be seen from such a demanding standpoint. It demonstrates that descriptions of economic objects do actually produce economic objects and that the simulacrum of an economic act is indeed a form of realization. It also shows that provoking economic reality means facing practical tests in which what ought to be economic or not is subject to elaboration and controversy. This book opens paths for empirical investigation in the social sciences, but also for the philosophical renewal of the critique of economic reality. It will be useful for students and scholars in social theory, sociology, anthropology, philosophy and economics.

Organised detachment: Clearinghouse mechanisms in financial markets

Bringing transactions to an end constitutes a crucial stage of market activity: the detachment between the counterparties engaged in a trade must be guaranteed. In financial markets, this operation relies on organisational technologies, such as clearinghouses, that can reach a high degree of sophistication. In this paper, we use financial clearinghouse mechanisms to explore how such detachment technologies are constructed. Based on several historical examples, our review shows that clearinghouse mechanisms developed on the basis of an increasingly IT-enabled organisational separation between the trading and clearing stages of market activity were a crucial factor that enabled clearinghouses to calculate the mutual obligations of the counterparties and perform the consequential steps. Our analysis goes on to reveal a paradoxical thread in the evolution of clearing: increasing informational and calculative capacity have lead clearing mechanisms to breach the separation on which their ability to operate was dependent - the boundary between trading activity and clearing processes. These findings shed a new light on the reflexive nature of IT-enabled market innovations and emphasise their role in re-introducing new forms of disorganisation back into contemporary financial markets.

Towards a practical approach to responsible innovation in finance: New Product Committees revisited

The purpose of this paper is to highlight the potentials offered by New Product Committees for the development of responsible innovation in the financial services industry; and to provide grounds for policy recommendations. The paper takes the form of collective, interdisciplinary reflection and experience within the industry. New Product Committees can serve a practical approach to responsible innovation in finance.

PROVOCATIVE CONTAINMENT AND THE DRIFT OF SOCIAL-SCIENTIFIC REALISM

The post-World War II period gave rise to a large number of social-scientific techniques for investigating and intervening in social reality. A particular group of these, exemplified here by the experiments of Moreno, Lewin, Bion, Milgram and Zimbardo, worked by establishing suggestive micro-realities in which participants were exposed to, or experimented with, selected ‘social problems’. We investigate the nature of these techniques – being simultaneously highly artificial and disturbingly realistic – and propose the notion of ‘provocative containment’ to understand their operation and effects. We point to five ingredients of their characteristic mode of operation – expressionism, incitement, trauma, distillation and technology – and argue that they do not serve to represent a simplified version of social reality, but rather to ‘realize’ particular forms of social life intrinsic to the medium of provocative containment.

BECOMING A MEASURING INSTRUMENT

This article provides an ethnographic examination of olfactory consumer testing in the perfume industry. What kind of reality is generated within such practices? The analysis is focused on one particular testing method used in order to assess the hedonic performance of fine fragrances. The authors observe what happens inside the testing venue. The article concentrates on the problem of the simulacrum (how the reality provoked within the test may serve as a proxy for the reality of ‘consumer behaviour’) and analyses how participants actively engage into the task of becoming measuring instruments (of fragrances and of themselves).

The problem with economics: naturalism, critique and performativity

How natural is economic nature and how provocative is it to claim that this nature is a provoke done? The purpose of this contribution is to expose the problem of the naturalness of economic things. Naturalism in modern economic reason is examined through a series of ‘breaching thought experiments’: intellectual setups in which economics, economic critique and the critique of economics are confronted to annoying situations or uncomfortable paradoxes. The very idea of the performativity of economics and the critical reactions it prompts are analysed in these terms: that is, as an anthropological test on the quandaries of economic naturalism.

Grappling with the Economy of Enrichment

In a conversation with Fabian Muniesa from the board of editors of Valuation Studies, Luc Boltanski and Arnaud Esquerre unravelled a few of the distinguishing features of their new work on the sociology of valuation. Combining an updated view on the pragmatics of justification and a more recent preoccupation with the problem of prices, their proposal appears as both a suitable contribution and a timely challenge to current threads in valuation studies. It also interacts in a stimulating fashion with their concomitant analysis of the political atmosphere in France, and more widely of the shift to identity that so vividly informs the critique of capitalism today.