New Tendencies in Economic Sociology
At the moment Elizabeth Price’s video installation called ‘Choir’ is running at the New Museum in New York. The 15-minute video brings together a range of visual and auditory material and archival technologies to reflect on spaces of assembly and performance. The photographs and film footage captures visuals that all together sketch out the space of an ecclesiastical auditorium. Afterwards the film stages a sardonic or provocative performance taking the shape of a chorus. The soundtrack underpins the visual impressions involving throwing tambourines and forcing houseguests to chant ‘We Know’ into a microphone around eighty times. A synthesis of architecture creating a collective voice is presented through the installation.
Moving away from this performance another collective assembly is takeing place in the Zuccotti Park close to the New York Stock Exchange at Wall Street. In the park occupants have settled to demonstrate against the neoliberal economic system. Hundreds of people gathering with signs saying “Healthcare not Wealthfare”, “People before profit” and singing statistical numbers of the increasing unemployment rate in the U.S. A girl dressed in a clinical uniform with a sign saying ‘PhD Biochemical scientist seeking full time job’ is giving an interview to a reporter from one of the many news magazines present at the scene.
The encampment of the protesters in itself forms an assembly surrounded by reporters, photographers, tourists and most of all police. Demonstrators have painted their faces like zombies and are eating false dollar bills. The event has been portrayed in the media as a theatre play or mere acting. The New York Times writes that: ‘some people have suggested the Occupy Wall Street protest is a mere form of street theater, that the protesters have a myriad of grievances…’. However, considering the Wall Street Occupation from the perspective of economic sociology something else might be at stake than what comes to the front said in the New York Times. That is, the performance that might not be devalued as merely acting, but staging a new form of social critique within the emergence of an ‘attention’ economy. Thinking of this event in concert with recent tendencies in the field of economic sociology there is no doubt that the Occupy Wall street movement touches upon the intermingling between the field of economics and the social.
The protests located outside Wall Street have spread across the world. They want to gain attention from the government in order to change the current capitalistic regime and claim their right to participate. On Monday in Chicago one sign read: “If corporations are people, why can’t we put them in jail?” The protesters are blaming the banking system of producing social inequality, which they take as proof of a ‘sick system’. MacKenzie and Milo (2003) explores the cultural and legal barriers to the creation of ﬁnancial derivatives markets in the United States in the late 1960s and early 1970s and explain the role of economics in undermining those barriers – it seems that the diversions between the social and the capital world are at issue once again.
The material written on socializing finance mainly addresses the tools and devices of financial trading from ‘inside’ the wall of the trading room. However Stark and Prato are currently working on developing a notion of ‘attention spaces’ in a future publication, which might open up for a different interpretation.
The protesters claim sharp dichotomies such as economics versus society and calculation versus sociability. In this case it might even be said that Callon’s (2007) attempt to merge the field of STS with economic sociology legitimizes this point of view – saying that the economists need to make a cut in order to trade implies that the operation of financial models rest on a logic incompatible with a social world. Furthermore, Beunza and Stark (2011) explore the social dimension of quantitative finance through ethnographic studies inside a derivatives trading room of a major investment bank. Their study demonstrates how traders engage in a practice of reflexive modeling (using models to translate stock prices into estimates of what their rivals think in order to detect possible errors in their own models). They found that this practice turns modeling into a vehicle for distributed cognition.
Projecting the argument from inside the trading room to the protests outside of its walls one could say the division leads to resonance where Wall Street becomes a metaphor for the financial industry and, thereby, is to be blamed for the current credit crisis. This means that financial instruments are not just abstracted from the social world and not embedded within society, but are trading the social itself while making cuts and divisions. The models produce an image of the economics as abstracting or trading the social – which might be what the protestors outside Wall Street object to. A vision, of course, co-produced by the media reporting on this event, the signs as well as the bodies themselves are material devices that altogether constitute the assembly in a style similar to the way in which Price wants us to perceive of the choir, the auditorium and its construction of space.
A collective voice is heard screaming over the crowd in the park and around Wall Street accusing the bankers to be criminals – a division in which traders again become gamblers. One of the protestors is quoted in New York Times saying: ‘I think a good deal of the bankers should be in jail’ – again the traders becomes multiple objects and new divisions are produced. The crowd outside Wall Street is, in Beunza and Starks words, ‘a systematic formation of human bodies’ (2012 p. 10) positioned in the streets that form the financial district of Manhattan in full display, and not only dressed up for the city but dressed up for the news and reports around the world. Facing the protesters at Zuccotti Park I felt that such materiality is to be included in the analysis of the sociality of finance. Following an STS approach Beunza and Stark refer to Callon who analyses the materiality of calculation including financial models saying that ‘[m]odels frame decisions and quantify alternatives, thereby exerting a mediating role on financial valuation’ (Beunza and Stark 2012 p. 11).
In continuation, Prato and Stark (2011) attempt to understand how the distribution of attention in markets affects valuation. Looking at trading of securities Prato and Stark investigate the network that are created from the attention allocated from multiple agents to multiple objects saying that ‘the resulting patterns yield a social structure of attention’ (2011 p. 8). Objects are located within a network structure of attention given by the actors who observe and evaluate. The actors are connected by a local space of attention and mediated through objects and not necessarily personally connected. They hypothesize that the more members of a group are proximate in the social space of attention, the more similar will be their assessments of a given entity.
However, testing this in the trading of securities can also be said about economics in general and the demonstrations against Wall Street in particular. That is, how the division between the social and the financial world are made up, that is, how the embeddedness of the economic field within society are sustained by such representations. The last months occupation of Wall Street demonstrates a socio-technical network that directs collective rage (or civil unrest) against the financial sector. The network is part of attention structures that produce divisions and diversions making Wall Street responsible for the economic crisis. From Elizabeth Price’s video installation saying “we know” to financial trading there seems to be a gap of dimensions – one that might be bridged by our understanding of performance pointing towards new tendencies on the field of economic sociology. I suggest that Prato and Stark (2011) do not only contribute to economic sociology by developing a socio-technical account that grasps the new forms of sociality introduced by financial models ‘inside’ the trading room, but also the divisions and diversions it produces outside the walls of the stock exchange. As also Stark and Beunza argues, financial models are ‘disembedded yet entangled’ (2011 p. 3). As if the choir was envisioned as a response to the events outside Wall Street it seems that the protestors were filling a space – almost an architectural staging of resistance proposing a new kind of social critique.
Beunza, Daniel and Stark, David (2011): “From Dissonance to Resonance: Cognitive Interdependence in Quantitative Finance.” Economy and Society, forthcoming.
MacKenzie, Donald and Millo, Yuval (2003): “Constructing a Market, Performing Theory: The Historical Sociology of a Financial Derivatives Exchange.” American Journal of Sociology 109(1):107-145.
Michel, Callon (2007): “What does it mean to say that economics is performative? Pp. 311-357 in Donald MacKenzie, Fabian Muniesa, and Lucia Siu, eds., Do Economists Make Markets? On the performativity of economics. Princeton: Princeton University Press.
Prato, Matteo and Stark, David (2011): “Attention Structures: Cognitive Networks among Security Analysts” , COI working paper.