Ten Precepts for the Social Studies of Finance

[John McCreery]

The title of this discussion is the title of Chapter 2 of Donald MacKenzie (2009) Material Markets: How Economic Agents are Constructed. Oxford: Oxford University Press, pp. 8-36. I would heartily recommend that all anthropologists read this chapter, regardless of whether they have a particular interest in markets or economic anthropology. Here I will simply list the 10 precepts and provide a few lines of explication for each precept. In conclusion, I will say a few words about why I think this list is important enough that all of us should study the original chapter and consider its implications for their own research. 

 

1. Facts matter

 

Markets (and other forms of social interaction) involve the production and circulation of facts, where a fact is "A thing known...to have occurred or to be true." The question raised here is not whether facts really exist or whether they are really true. It is, instead, how propositions that people take to be facts are produced and validated.

 

2. Actors are embodied

 

All markets are combinations of human beings and physical objects. The human beings have bodies. Corporeality—in the sense of the material capacities and limitations of those bodies and brains—is critical to how markets [and other social systems] function.

 

3. Equipment matters

 

Equipment, the means necessary for performing social acts, may be either physical or conceptual technology. In the case of modern markets and trading rooms, the essential presence of computers, electronic networks, and the programs that run on them is unavoidable. [I would add that the same is true of ritual—thus the effort that priests, healers, magicians put into assembling what they regard as the necessary materials for their rites to be effective.]

 

4. Cognition and calculation

 

"Not only can combinations of multiple human beings and objects do things an unaided individual cannot, but the performance of the same task by an unaided individual can be expected to have different properties from its performance by a combination of this sort." Music is an obvious example, a melody whistled by an individual takes on a different character when incorporated into a score for performance by an ensemble. 

 

5. Actors are agencements

 

"Agencement" is a French term taken from the work of Deleuze and Guattari but used by Mackenzie in a sense borrowed from Michel Callon's work on actor-network theory. "In Callon's analysis...an economic actor is not an individual human being, nor even a human being 'embedded in institutions, conventions, personal relationships or groups'....an actor is 'made up of human bodies but also of prostheses, tools, equipment, technical devices, algorithms, etc.' —in other words is made of an agencement." Imagine a musician without his or her instrument, a tennis player without a racquet, an emperor without his courtiers and his robes. 

 

6. Classification and rule following are finitist processes. 

 

Mackenzie writes that, "finitism is most easily introduced as a theory of the application of terms to instances or particulars." A conventional view of semantics is that every term, e.g., "red," "woman," "market" or "deity," has one and only one proper meaning defined by a set of necessary and sufficient conditions."Thus, for any term A, the universe is divided into things which are either A or not-A. "In contrast, finitism denies that the universe of all the items and activities that may ever be encountered should be though of as divided in advance into instances of A and not-A. All we ever have—as individuals or as an entire culture—is a finite set of past applications of 'A' to particulars." Thus, we are forever running into things that do not fit our current classifications and being forced to rethink what A or B might mean.

 

7. Economics does things

 

Economics does more than analyze how markets work; it prescribes how they ought to work, and, MacKenzie notes, has been remarkably successful in propagating its vision of how and why markets work the way they do. A social science of markets challenges this vision.

 

8. Innovation isn't linear

 

Conventional views of economic and other forms of evolution imagine a gradual process in which innovation is subordinate to negative feedback and becomes a matter of adaptation to given conditions. But what if it isn't? What if innovation can reshape the conditions under which markets [or other social institutions] work? Exploding instead of adapting to niches?

 

9. Market design is a political matter

 

"That linear views are invalid has an important consequence. If the process by which technologies or markets develop were as a linear model posits, the politics of technology (or the politics of markets) would be reduced to a simple but unattractive set of choices: to embrace innovation indiscriminately; to acquiesce passively; or to resist innovation." But if linear views are not true, then innovations are neither irresistible nor simply to be resisted in a reactionary mode; more nuanced understandings and policy making may be possible.

 

10. Scales aren't stable

 

"A material sociology of markets should be suspicious of the assumption that scales are fixed: that 'micro' phenomena will remain small, and 'macro' phenomena remain small." [As the mathematics of chaos and complexity demonstrate, small changes in initial conditions can have gigantic consequences, with institutions that seemed immovable objects proving evanescent.]

 

Now for those concluding remarks that I promised: "Ten precepts!" Isn't that too many to get our heads around. Couldn't each of these propositions be debated independently? They could—but that would miss the point. Combined they become a program for a broader and deeper understanding that includes not only human bodies and minds, but the tools and other equipment without which many, perhaps most, forms of social interaction are impossible. Combined, they compel us to look at our topics—markets, rituals, fetishes, identities, selves from multiple angles that require combination to make an account of what we observe a persuasive one. They rule out from the start the conventional exercise of beginning with a single, binary distinction, arguing about it and imagining that we have "solved" the problem with which we began. They compel us to be what anthropologists have long claimed to be, purveyors of holistic understandings that incorporate perspectives others neglect, as they focus exclusively on this or that particular aspect of the human condition.

[John McCreery]

Nikos, you haven't bothered to read the chapter. You haven't bothered to read the book. You leap to conclusions from second hand testimony and offer no data to support unwarranted ad hominem arguments. How is it that you expect to be taken seriously?

 

There is one good thing in what you say: Yes, it should be obvious that markets are made by people. That Mackenzie argues for precisely that, and also for paying careful attention to the human brains and bodies, equipment and other technologies that make what they do possible. His contribution is intellectually valuable because the dominant ideologies of market economics pay attention only to what are labeled economic "forces" and actors who make "rational choices" from which these sorts of considerations are missing.  

 

Some people rant. Others, like Mackenzie, demonstrate useful models to follow to those of us who want to understand the world around us. Which is more valuable? 

 

I rest my case.

 

 

 

 

 

[M Izabel]

Like facts, fiction matters too as my experience with the case of the Philippines shows that, in regards to poverty and corruption, what is fictional today becomes factual tomorrow and vice versa.   What is interesting is how the masses use fiction to expose and highlight the facts that closely  affect them and how the elite reject the  facts as fictions and marginalize the  masses as  uneducated,  gullible fools.  I can cite two  examples.  The  poor  in Manila slum areas believe  that cops and people in the government  intentionally let loose rats with lighted wicks on their backs to cause fire in communities of  wooden shanties, so  they  can start subdivisions, public constructions, and other development projects.  The elite, anthropologists and sociologists  in universities included, consider such  talk   an urban legend, forgetting  the poor's main point that they are viewed as eyesores and  the government won't even  help them improve their lives but make them worse.  Another one was the  rumor decades ago that the Marcoses  had billions in Swiss banks.  The poor were hopeful that they believed it even though the elite media practitioners disproved it by pointing out the exclusion of the Marcoses from the Forbes list of billionaires.  Again, it  was fiction according to the educated and the mighty.  Ten years later, bank papers showed that, indeed, the Marcoses had 20 billion dollars that have  doubled or  quadrupled  by  now.  Those are just the documented ones.  My point is that between a fact and a fiction  lies a  truth.  It is the  job of the anthropologists to know why  facts  are fictional to some and  fictions  are factual to others.  Maybe, just maybe,  in the middle of such intellectual exercise, truths will come out.

[Keith Hart]

Nikos, cool it! You sometimes have very perceptive and erudite things to say, but it seems that you often post to express yourself in a way that does not encourage open participation in our discussions. Your comments are often close to flaming. See our first rule. Speaking for myself -- but also I know for some other OAC members -- your presence among us is highly valued. We have issued private warnings in the past. This is a public warning. Please moderate the tone of your contributions. I count you as a friend, so it pains me to issue a rebuke in this way

[M Izabel]

Keith, I think if one reads between lines in what Nikos writes and disregards his seemingly  obnoxious way of  expressing  his views, he shares some  good points.  He is a puzzle for sure, maybe due to language or  culture.  The problem  with OAC is that we still put premium on academic  authority  than on ideas  outside the box.  When I started here maybe two years  ago, I talked  about models of webs, networks, and systems that invited loud  rejections  and ad hominems.  Now that we talk about Deleuze and cultural mapping and   Latour and his  ANT, I don't see any criticisms.  Even John's post above is obvious  to me as about precepts that are results of network analysis.  I  remember  how someone even dropped Bourdieu's name to dismiss modeling, which I believe is important in any  social  science project since  anything social  can be mapped.  I learned a lesson though that  publishing is important than expressing  ideas.  Publications establish authorities  and ideas are  secondary.  I wonder if my observation is the reason why I seldom see newbies, undergrads, non-academics, freelancers express their views untainted by the rigidity and restrictions of academe  and their earnest but arrogance-free ideas in anthropology websites.

[Keith Hart]

M, you have a point. I have been involved in this kind of attempt to break out of the rut for 20 years and the dead hand of academia is without doubt a major reason why participation is restricted. But society doesn't exist out there; it is to some extent a creation of individual subjectivity. Your experience is not everyone's.

I was waiting to get involved in McKenzie's approach to see what others have to say. But instead, we have been having an argument about manners. I would insist that asking people to be moderate in expressing their views is a separate issue from the issue of academic authority. I also want to restore John's thread, while he is asleep in Japan, to the substance he asked us to discuss. I do believe that the above sequence has something to do with McKenzie's style. I find myself in enthusiastic agreement with your previous comment about fact and fiction. There is something arid, I think, in the 10 precepts. This is because they are analytical and break up the connections we might otherwise make. Stories are important.

I still have something to say about the content, but, once we get beyond the tantrums, I am not confident that an exchange between John and me will attract others into the conversation.

 

[Alberto Corsin Jimenez]

Thanks, John. This is most interesting. I am a fan of McKenzie - and I think much of the work coming out of the new social studies of science approach to the sociology of finance (Alex Preda, Fabian Muniesa, Daniel Beunza) is excellent and definitely worth reading.

 

Briefly, I would like to draw attention to one aspect of McKenzie's list of precepts: the 'where' and 'how' he distinguishes between methodological and theoretical aspects in the study of finance. A question arising from the where/how this line (between methods and theory) is drawn follows. 

 

The methodological focus on 'agencements' (equipment, bodies and embodiment, distributed cognition and calculation, actants, classification) is of course a classical topos in anthropology: I think it is fair to say that one could find similarly useful advice by looking at any of the Notes and Queries handbooks. Ethnographers have long been trained to look out for and make records of all kinds of 'agencements' (although they went by other names then). But they were also taught to look out for and listen to less visible and audible types of agency: those that only long-term fieldwork could elicit.

 

So here goes my methodology-turned-theory question: which and whose agencements are those that social students of science and technology make speak? Where does the 'agencement' stand between methodology and theory?

 

 

 

 

 

 

[M Izabel]

Aren't methodologies and theories agencements themselves?  Aren't they also within the realm of structure, agency, and performativity?  Mcfall (2009) wrote in a paper published by Journal of Cultural Economy:

 

"Agencements are arrangements endowed with the capacity of acting in different ways depending upon how they are configured. In advocating the term 'agencement' Callon's aim is to signal the close interweaving of words and actions and thus jettison the more Austinian associations of performativity. Agencement calls attention to the various processes by which economic actors, both human and non-human, are endowed with the fixtures, fittings and devices necessary to conduct themselves in particular ways."

 

http://oro.open.ac.uk/17179/2/CDA20051.pdf

 

I think, at least for me, it is better to ask how "social students of science and technology" appropriate or situate structure and agency that both exist in a network.  I don't think they can specifically speak about or to something or someone if they are dealing with multi-systems in a network that cannot be meaningfully understood through targeting specific actors and isolating particular actions.  

[John McCreery]

Where does the 'agencement' stand between methodology and theory?

Alberto, that's an interesting question. If where is to how as method is to theory, don't we have to say that agencement clearly lies on the side of method? It's an idea that points at where to look rather than explaining how what we see there got there. 

 

To me, however, MacKenzie's 10 precepts are neither theory or method but rather a list of topics that need to be included in holistic understanding. It is, in this respect, analogous to a set of instructions to be issued to the blind men trying to describe the elephant, where that list would include

1. the trunk
2. the ears
3. the tusks
4. the side
5. the legs
6. the tail, etc., 

the implication being that if you have left out one of this elements something important is missing.

 

Also, you are right of course that much of what MacKenzie says is anticipated in Notes and Queries. But who among us actually does Notes and Queries style ethnography, the sort of ethnography that Edmund Leach, among others, called "butterfly collecting"? As scientists we have an hypothesis to test; as interpreters/translators we may have something in particular that we want to communicate the proper nuances; as activists we have moral or political agendas to pursue. We are all, however, busy people, whose attention is focused by our projects in ways that make us neglectful of things we might want to consider. Being stuck on a tropical isle for two or more years with nothing to do but assemble details to answer all of the questions that Notes and Queries asks is what my Japanese colleagues call a dream within a dream, i.e., not likely. 

 

From this perspective both the ten precepts and the agencement at this center might be called Notes and Queries for Busy People. The list is short enough that we can see what we've got and what we are missing in whatever argument we're formulating. It is also, however, long enough to include things that make us stop and wonder, "What if? Or where did that come from?"

Thus, for example, when I wrote my dissertation on the symbolism of Daoist magic, I didn't consider, let alone answer, the question where the equipment (the god statues, the altar, the incense, the spirit money, the food, etc.) came from. Now I think I should have looked at that.

 

I find agencement especially intriguing in relation to my current project, whose focus is the creative teams who produce advertising. Compared with MacKenzie's hedge fund example, what is striking about them is the fluidity of combinations of people and equipment in play at different stages in developing and producing understanding. The initial brainstorming may involve just two or three people whose equipment is pencils and pieces of paper and a space in which they can talk with each other. Then, as preparations for the presentation to the client begin, others may get involved. If the project is a TV commercial, one bottleneck may be the availability of a "sketchman," with the skills and materials required to produce a storyboard. If the client OKs the proposal, all sorts of additional people and equipment may be involved, to find a location or studio, arrange for sets, props, hair and makeup, organize and operate the lighting, the cameras and the sound equipment involved. After the shoot, the process moves on to the editing and mixing studios. The core of the team may be constant; but even its members may only work together on this project. In this case the agencement  is far more fluid than the one that Mackenzie describes—if that is, we consider only the five individuals sitting around the table in the hedge fund case he describes. If we consider the other relationships involved, e.g., between traders concluding a deal, the same problematic of relatively constant core and deal-by-deal fluidity emerges......

 

I could go rattling on, but this should be enough to indicate why I like MacKenzie so much. His precepts aren't an answer for every question. In fact they aren't answers to any question. They are signs that say, "Look here...Look there...Look over there..." and point us to interesting questions. That makes me happy to see where they take us. 

 

 

 

 

[Huon Wardle]

[McKenzie's] precepts aren't an answer for every question. In fact they aren't answers to any question. They are signs that say, "Look here...Look there...Look over there..." and point us to interesting questions. That makes me happy to see where they take us.

 

That is fine as long as we maintain a critical approach to what our gaze is being trained on - which is hard if we accept the image of ourselves as merely circumstantial assemblages in the manner described by this intellectual movement. I like the possibility that economics could be exploded by particular combinations of actors and networks. But I think Nikos is right to point to economics as a form of coercion not merely as a wrong theoretical description:

 

The evaluation  of national economies such as Greece, Portugal and Ireland by the evaluation big houses ( Standard and Poors, Fitch, Moodies)[:] is [this] not a ''constructed fact'' that all MUST BELIEVE  and take as real ? These '' facts'' can create local or even global crises and during this upsidedown some can profit millions.

 

'Agencement' is a key element of the post-structuralist programme of continuing to de-centre the subject even after confidence in the grand narrative of structure has fallen away. Sceptically we may well say that it is a way of preserving the special priesthood of social scientists per se. I think Leach, if he were around today, would be trying to pull the carpet from under this one.

[Keith Hart]

I think you are right, M. To understand why and to respond to Alberto's comparison with Notes and Queries, it is necesary to attempt a sort of historical sociology of Science Studies and to revisit ethnography in the classical period which they resemble somewhat. Before I sketch my answer, I should say that there is nothing pleases me more than personal enthsusiasm shared and I am very grateful to John for sharing this. I am of course deeply immersed in the study of finance (two public presentations to write for this week) and McKenzie is a towering figure in the field. I have an abiding distrust of Actor Network Theory and its French founders, especially when applied to economics, but that should not detract from the considerable advances made by Science Studies as a field. It is hard to be balanced in a restricted context like this.

The agency of intellectuals is taken for granted in France, but often hidden from view. Thus the universality of myths was always tempered by the subjectivity of their interpreter which Levi-Strauss only revealed fully in Tristes Tropiques. Latour and Callon worked together, then split, now their work at the Centre de Sociologie de l'Innovation is carried on by Fabian Muniesa and others. Here is a tendentious summary of their approach to science.

In the first place they don't study the science as an intellectual practice. Being unable to understand Maxwell's equations, they study the Cavendish laboratory. They reject any history of science that privileges intellectual breakthroughs by individuals. Thus the molecules are said to do the real work of fermentation, not Pasteur. Horace Darwin's machines in Cambridge are at least as important as theoretical physics, perhaps more so. Excavating the hidden social organization of laboratory work is an exercise in realist ethngoraphy of which Malinowski would have been proud. So ideas take second place in this worldview and the main thinking is done by the sociologist of science. Revealing the agency of non-human actors is represented as a democratic move against entrenched intellectual elites. On the one hand, genuine discoveries were made, as they were by the classical ethnographers, but there is also a war of position going on within the academic division of labour, with the scientists and lately the economists potential losers.

Since we are in Paris, it might be more suitable to visit ethnographic precedents there than in Notes and Queries. Mauss's Manual of Ethnography is the longest thing he wrote and it was published in 1947. It is well worth reading, not least for his section on economy and money in particular. But what was it for? Mauss himself never did any fieldwork, and the Institut d'Ethnologie both trained graduate ethnologists and gave instruction to administrators, missionaries and their like to collect data in the colonies. He wrote very little after The Gift and, if you read 'Techniques of the body', you will notice that it peters out as a classification of 'things to look for'. It is notable that the leading ethnologist of the time, Marcel Graule, developed a fieldwork method based on the assumption that culture was locked up in the minds of local intellectuals whose secrets had to be teased out by the master intellectual, the ethnographer himself. So there is an implicit division of labour here between the theorists (home-based or travelling) and the common foot soldiers.

It occurred to me, while reading the Ten Precepts, that another analogy with a research program based on agencement, might be Talcott Parsons's school in mid-century, when he and his leading side-kicks were establishing structural-functionalist sociology -- the same preoccupation with lists and classification. This is a serious point, not a satirical one. Donald McKenzie knows that he is leading the formation of a new segment fo the academic division of labour whose foot soldiers will need practical guidance, especially since they don't understand what they are studying at the same intellectual level as insiders. The messianic tone is highly reminiscent of British social anthropology between the wars. They too based their conclusions on limited observations of everyday routines without acquiring the deep understanding of some natives. The achievements of both cults are remarkable nonetheless.

This is too big a topic and I haven't got round to the approach to finance as such yet. But I implore readers to think twice before importing yet another French jargon word untranslated into English. It guarantees imitation without understanding and covers up imprtant questions of both theory and method. Perhaps more significantly, sturctualist Marxism and post-structuralsim allowed their anglophone imitators to carry on with their old habits while dressing them up as something new. I would suggest rather that, when agency is credited to human and non-human actors alike, it pays to question the author's motives and, if possible, explore the social history that produced him or her.

M Izabel said:

Aren't methodologies and theories agencements themselves?  Aren't they also within the realm of structure, agency, and performativity?  Mcfall (2009) wrote in a paper published by Journal of Cultural Economy:

 

"Agencements are arrangements endowed with the capacity of acting in different ways depending upon how they are configured. In advocating the term 'agencement' Callon's aim is to signal the close interweaving of words and actions and thus jettison the more Austinian associations of performativity. Agencement calls attention to the various processes by which economic actors, both human and non-human, are endowed with the fixtures, fittings and devices necessary to conduct themselves in particular ways."

 

http://oro.open.ac.uk/17179/2/CDA20051.pdf

 

I think, at least for me, it is better to ask how "social students of science and technology" appropriate or situate structure and agency that both exist in a network.  I don't think they can specifically speak about or to something or someone if they are dealing with multi-systems in a network that cannot be meaningfully understood through targeting specific actors and isolating particular actions.  

[Keith Hart]

Huon Wardle said:

'Agencement' is a key element of the post-structuralist programme of continuing to de-centre the subject even after confidence in the grand narrative of structure has fallen away. Sceptically we may well say that it is a way of preserving the special priesthood of social scientists per se. I think Leach, if he were around today, would be trying to pull the carpet from under this one.

Huon, we posted without seeing the other's. I hope that what I wrote makes a start towards that goal.

[John McCreery]

Huon, if I read you correctly, you don't like 'agencement' because the intellectual movement that spawned the term uses it to de-centre the subject and present selves as mere circumstantial assemblages. But though I am only half through Material Markets, I have yet to see Mackenzie use the term in this way. His examples suggest an alternative view in which 'agencement!' appears to me the union of a set of social relations with a set of material things (bodies, spatial arrangements, equipment, algorithms with material results) that directs our attention to how the members of these two sets interact and affect one another. The result is a materially (pun intended) richer description of how certain market mechanisms, e.g., hedge fund trading rooms, actually work. De-centred selves are nowhere to be found.

Could it be that a critique rooted in genealogy and guilt by association is less useful that what Mackemzie actually appears to do, borrow some thoughts and a handy term from the tradition in question and, pragmatic Scot that he appears to be, reformulating them in a way that enriches understanding of his topic?