Academic journal article Journal of Australian Political Economy

The Practical Heart of Markets

Academic journal article Journal of Australian Political Economy

The Practical Heart of Markets

Article excerpt

To men thoroughly imbued with this matter of fact habit of mind the laws and theorems of economics, and of the other sciences that treat of the normal course of things, have a character of "unreality" and futility that bars out any serious interest in their discussion. The laws and theorems are "unreal" to them because they are not to be apprehended in the terms which these men make use of in handling the facts with which they are perforce habitually occupied (Veblen, 1898: 397).

By addressing the 'practical heart' of markets, my aim in this article is to explore the way markets carry on despite the peculiar, mathematically limited and opportunistically versatile, character of human calculation. The abstract theorems of economics may be unreal to practical 'men' but the curious thing is they calculate still. In any social world there are vast unknowns compensated by routine, practice and habit, but also by faith, piety and fundamentalisms of all sorts, including religious, market and even liberal secular (see Block, 2010; Thompson, 2006). Viewed from a pragmatist perspective, knowledge is always partial, always shifting and always social. An admission of deficits, of course, is not the same as an admission of complete ignorance. While critics from Thorstein Veblen (1898) through J.K. Galbraith (1954/1975; 1958) to Mark Granovetter (1985) and the 2001 Nobel prize winner Joseph Stiglitz, have lined up to dismiss even the possibility of the perfect information stipulated in neoclassical models of exchange, no-one is claiming that markets run on nothing. So if it's not perfect information what is driving market calculation? Michel Callon's influential solution was to propose that the sociological impulse to add a 'little more soul' to the economic agent be resisted in favour of research into how 'framed, formatted and equipped with prostheses' human beings nevertheless calculate (1998: 51).

In the ensuing decade and some, a plethora of research, into financial markets especially, (1) has endeavoured to do just that. This research has lucidly demonstrated the performative range of market tools, technologies and techniques in creating the conditions of possibility for particular forms of market action. And yet, with all the emphasis on the material practices of calculation, something of the mundane, practical heart of consumer market calculation escapes largely unexplored in this corpus. (2)

Economic sociology has had its primary answer to what this something is for decades; at least since the 'Parsonian' pact that made economies the business of economists and the social the business of sociologists. Callon's (1998) exasperation with the sociological effort to demonstrate the social 'embeddedness' of economic agents derived not so much from a disagreement that economic action was also social, but from a frustration with the failure of sociologists to grasp how action nevertheless sometimes became economic. Of course, economic agents are also social but the challenge, Callon insisted, lies in examining how the social is temporarily set aside in the framing of market transactions, and how equipment and rules are adopted which enable calculation to take place. If sociologists are to understand how this happens, and what consequences ensue, they have to do more than object that economic actors also have social ties.

Callon's intervention has since altered the way many sociologists, in Europe in particular, approach markets. It has cross-fertilised a much broader empirical turn and reinvigorated the study of material practices (3). The result has been much better descriptions of what is going on, at least in some sorts of market, and a much better understanding of the way tools, techniques, formulae and equipment combine to produce particular forms of action. This result, however, has not exactly settled questions about the social content, still less the social consequences, of markets. Some critics are unconvinced by the claim that the social can be framed out, even temporarily and partially, from market transactions while others are disappointed by the critical potential of a solution that invokes an associative rather than a humanist definition of the social. …

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