It's been a long year in many ways. Here are the partings noted on this blog:
Sunday, December 21, 2025 Michel Callon (1945–2025): A life with passion for economies, in J. of Cultural Economy
Saturday, August 30, 2025 Michel Callon (1945-2025)
Showing posts sorted by date for query callon. Sort by relevance Show all posts
Showing posts sorted by date for query callon. Sort by relevance Show all posts
Wednesday, December 31, 2025
The year in passings
Sunday, December 21, 2025 Michel Callon (1945–2025): A life with passion for economies, in J. of Cultural Economy
Thursday, January 2, 2025 Diane Coleman, Fierce Foe of the Right-to-Die Movement, (1953-2024)
Sunday, December 21, 2025
Michel Callon (1945–2025): A life with passion for economies, in J. of Cultural Economy
Here's an appreciation of the great economic sociologist:
Michel Callon (1945–2025): A life with passion for economies
Koray Caliskan &Alexandre Mallard, Journal of Cultural Economy, Published online: 15 Dec 2025 https://doi.org/10.1080/17530350.2025.2595423
"Readers of the Journal of Cultural Economy will likely remember Michel Callon for the remarkable line of inquiry into markets that he initiated in the 2000s. Yet to recall how he approached the economy throughout his intellectual journey – and how, in doing so, he transformed our very understanding of economies – is a good way to honor an intellectual beacon of our times."
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Earlier:
Saturday, August 30, 2025 Michel Callon (1945-2025)
Saturday, August 30, 2025
Michel Callon (1945-2025)
Hans Kjellberg informs me that the eminent sociologist of markets, Michel Callon has died. Kjellberg writes about his long collaboration with Callon, including an interval during the Covid pandemic that involved the three of us:
"A more recent collaboration was the essay “The design and performation of markets: a discussion” that I curated between Alvin Roth and Michel for a special issue of AMS Review on theorizing markets (with Riikka Murto). I had spoken to Michel about contributing an essay to the issue, but when Alvin suggested that they do something together, Michel very quickly accepted this intellectual challenge. Their exchange took place at the height of the pandemic, and I acted as the go-between and facilitator of their (mostly email-based) exchange of ideas. It developed into a great example of what is needed in contemporary society: two intellectual giants coming from very different starting points engaging in an open and earnest conversation to try to understand each other’s point of view. If you have not yet read it, have a look at: https://lnkd.in/dBxJBbtW."
Here's the obit from the Centre for the Sociology of Innovation:
"Michel Callon passed away on July 28, 2025.
...
"With an interest in economics (and economy) since his early days, Michel Callon developed a keen understanding of markets in the late 1990s, focusing on the role of scientific knowledge and technical devices. The 1998 collective volume he edited, The Laws of the Markets, paved the way for an original analysis of market phenomena that many researchers in France and other countries would follow. In Market Devices (2007), Callon, Yuval Millo, and Fabian Muniesa compiled a collection of texts emblematic of the variety of devices used in the organization of markets. In Market in the Making (2021), he analyses how market arrangements work and questions their integration into contemporary society. "
Here are all my blog posts mentioning Callon.
Friday, March 21, 2025
Market design comes to the "new new economic sociology" (and vice versa)
In the Journal of Cultural Economy, sociologists reflect on their involvement with engineers in a project to integrate wind-generated electricity in Denmark.
Ossandón, J., & Pallesen, T. (2025). The new new economic sociology – the market intervention test. Journal of Cultural Economy, 1–21. https://doi.org/10.1080/17530350.2025.2451252
ABSTRACT: "This paper explores what happens when the ‘new new economic sociology’ – the figure created with Callon’s importation of ANT to the study of markets – intervenes in market interventions. Empirically, the paper examines a situation in which a researcher moves out of her habitual position of studying economists and engineers doing markets, to instead take part in an effort of engineering a market. The paper has two contributions. One is analytical. We propose a framework to inspect that special constrained situation in which the new new economic sociology coexists with market design. The second contribution is more practical. We hope what we propose in this paper, will help others in a similar situation to understand the particular direction of their intervention. "
Tuesday, October 29, 2024
"Reviews of Michel Callon’s Markets in the Making: Rethinking Competition, Goods, and Innovation, In Journal of Cultural Economy
Here's a set of brief reactions to Michel Callon's book Markets in the Making: Rethinking Competition, Goods, and Innovation. The reactions are by a diverse set of authors (as an economist I added a good deal to the diversity:)
"Review Symposium: Michel Callon’s Markets in the Making: Rethinking Competition, Goods, and Innovation. Zone Books," by Michel Callon, Paul Langley, Bill Maurer, Timothy Mitchell , Alvin Roth & Koray Caliskan, Journal of Cultural Economy Published online: 28 Oct 2024
The symposium collects the following comments:
Introduction to the symposium by Koray Caliskan
Markets in the making by Paul Langley
The anthropologist at the end of the world? Salvaging anthropology for alternative value propositions by Bill Maurer
Special and highly artificial processes by Timothy Mitchell
Markets in the making by Alvin E. Roth
Discussion and commentary by Michel Callon
*********
Here is the beginning of my comment:
"Markets in the making
Alvin E. Roth
It is a pleasure to read Michel Callon’s completed book, after a lengthy pandemic correspondence, abridged in Callon and Roth (2021). Callon appreciates that markets are complex, dynamic, and an essential part of society, which itself is constantly changing, not least in response to changes in technology (such as computers and the internet). The book itself is testimony to the speed of change: speaking of gambling addicts, Callon writes “One day it will be possible to reach him at home through an app.” In the U.S. this has happened already, particularly for betting on sporting events while they are underway.
Much of what he says will be very agreeable to both sociologists and economists, although there is room to disagree about how some previous work is interpreted.
The book is not easy reading: the complexities that Callon considers prompt him to develop new words to describe them. He speaks of market “agencements” (which are constantly “reagencing,”) and, “passiva(c)tion” (which requires new punctuation and word formation, as markets help goods become “pass(act)ive”).
Callon also redefines familiar terms such as “competition” and “innovation.”
In market agencements, perfect competition … has nothing to do with that of neoclassical economics. Its only goal is to make bilateral transactions proliferate …
and
Without innovation, there is no competition, and as a consequence, there is no market activity. … As we will see throughout this book, th[is] rule brooks no exceptions.
Rules that brook no exceptions worry me.
Notwithstanding these quibbles, Callon’s aim is to alert us to how markets, marketplaces, their participants, and the transactions they foster, all interact with one another and the larger economy in intricate ways that shape the society that also shapes them ... "
*********
Here is the beginning of Callon's response to all the remarks in the Symposium:
"Discussion and commentary
Michel Callon
What better way to express my gratitude to the colleagues invited by the JCE than to confess that, thanks to them and their demanding reading, I have a better understanding of what I was trying to do.
When you decide to write a book you have to start with a simple question and try, whatever happens, to take it (develop it) to the end. If you don't succeed, if difficulties and contradictions pile up along the way, it's because the question was badly formulated, or worse, it was uninteresting.
The question I began with is both fundamental and undeniably ambitious: What are the felicity conditions of a commercial transaction, understood as the exchange of property rights for monetary payment? This question, though simple in words, encompasses a vast and intricate world. It involves a specific environment where particular agents engage in relationships, where certain property rights are assigned to entities, where valuation mechanisms are in place, and where currencies circulate. This book focuses on the organization and architecture of this world.
Neologisms
It is difficult to grasp the peculiarities and characteristics of this world without making a detour into economic anthropology, which is one of the fields that studies it. I could have avoided the challenge, given the richness and complexity of this literature, but doing so would have meant abandoning the question. What kept me from giving up was a phrase from Nietzsche that Bruno Latour liked to quote: “For I approach deep problems such as I do cold baths: fast in, fast out.” (Nietzsche Citation2001, 231). Don't be afraid of the cold, but don't let it paralyze you! I tried to follow the advice as best I could, but maybe I didn’t get out of the bath quickly enough! The book is long—probably too long. But that’s not all. Not only does it lack illustrations (mea culpa), but it also introduces neologisms that are almost impossible to pronounce.
Take, for example, the notion of passivaction. When Koray Caliskan and I were looking for a word to describe the curious process that frames an entity's actions, whatever it may be, without limiting the entity’s ability to take unexpected actions, we first thought of “passivation.” We soon realized, however, that this term was quite rightly giving rise to complete misunderstandings. Few had read Antoine Hennion and Emilie Gomard's seminal article on people addicted to hard drugs, which showed that: a) becoming passive required complex and costly efforts, and b) passivity was a form of action in itself. To avoid creating new words, we settled on “pacifying.” While it was a better choice, it didn't fully capture the reality of the process.
When words are lacking, the only solution is to come up with new ones, in the hope that they will capture what we are trying to grasp. Whether we are talking about human beings, technical objects or non-human living beings and the services they provide, there is a balance to be struck between programmed behavior and the ability to deal with the unexpected. What would be the value of a worker with no sense of initiative? What would be the value of a technical object incapable of adapting (being adapted) to new circumstances? What would be the value of a draught horse that, through extreme domestication, had lost all ability to improvise?
No framing can completely stop overflows, and if it could, it would block any chance for adaptation and change. When a process is this universal, continuing to misname it would be a mistake. As Albert Camus said, “To misname things is to add to the misery of the world.” Passivaction may be a barbaric word, but it highlights the dual movement that transforms an entity into something that both acts and is acted on, both configured and configures, both passive, and thus active, or passivacted!"
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Earlier:
Thursday, January 6, 2022 The design and performation of markets: a discussion, by Michel Callon and Alvin Roth in the AMS Review
And if you are meeting Callon for the first time, here's an interview he gave last year:
From Innovation to Markets and Back. A Conversation with Michel Callon by Alexandre Mallard —
Here's a snippet from that interview:
"I can count on one hand the collaborations I’ve since had with economists: an edited volume on the concept of network with Patrick Cohendet, Dominique Foray, and François Eymard-Duvernay (Foray et al., 1999), and a recent article cosigned by Alvin Roth on the role of economics in formatting the economy (Callon & Roth, 2021). I enjoyed working with these colleagues because they were open and respectful, and I tried to be too. They understood my efforts to be in dialogue with their discipline. Their attitude was in stark contrast with the majority of their colleagues who were arrogant, bordering on dismissive. Every time I’ve had to share a flight with economists someone has snarked, “Michel, I hope the plane you’re boarding isn’t a social construction!” Economics is by no means a dismal science, but too often economists make it one.
...
"Through these encounters, so filled with incomprehension, it hit me that the very definition of economics was in play. There were so many things to question that went beyond pounding on homo oeconomicus, his unrealism or his vices and virtues. For instance, in contrast to evolutionary economics, mainstream economics was entirely based on an unrealistic definition of goods that was strikingly limited when applied to scientific knowledge. In asserting that scientific knowledge was intrinsically (by nature) non-rival and non-excludable, mainstream economists implicitly recognized that they were completely uninterested in the associated milieu of goods, that is to say in everything that gives them the capacity to be useful and consequently to be used. Economists did not realize that without an associated milieu a good is not a good. A scientific statement airlifted over the Gobi desert has no other fate than to dissipate into the sands because it is deprived of the socio-technical environment that gives it meaning and utility. Likewise, without the infrastructure that allows it to take off, navigate, and land, without the fuel supply contracts, control towers, and air traffic controllers, without the insurance companies, international regulations, and the legal agreements, an Airbus 380 remains grounded. A Nespresso capsule in the palm of George Clooney’s hand, without its dedicated machine or a supply of running water, is as useless as a car on an uninhabited island lost in the middle of the Pacific Ocean. A thing is not born a good, it becomes one; a thing is not born a public good, it must become one too."
Wednesday, May 15, 2024
Interviews with school choice stakeholders
Here's a paper about school choice in New Orleans, organized around interviews with New Orleans "Experts and Administrators" on the one hand and "Activists and Educators" on the other.
Akchurin, Maria, and Gabriel Chouhy. "Designing Better Access to Education? Unified Enrollment, School Choice, and the Limits of Algorithmic Fairness in New Orleans School Admissions." Qualitative Sociology (2024): 1-43.
Abstract: "Economic sociologists have long recognized that markets have moral dimensions, but we know less about how everyday moral categories like fairness are reconciled with competing market principles like efficiency, especially in novel settings combining market design and algorithmic technologies. Here we explore this tension in the context of education, examining the use of algorithms alongside school choice policies. In US urban school districts, market design economists and computer scientists have applied matching algorithms to build unified enrollment (UE) systems. Despite promising to make school choice both fair and efficient, these algorithms have become contested. Why is it that algorithmic technologies intended to simplify enrollment and create a fairer application process can instead contribute to the perception they are reproducing inequality? Analyzing narratives about the UE system in New Orleans, Louisiana, USA, we show that experts designing and implementing algorithm-based enrollment understand fairness differently from the education activists and families who use and question these systems. Whereas the former interpret fairness in narrow, procedural, and ahistorical terms, the latter tend to evaluate fairness with consequentialist reasoning, using broader conceptions of justice rooted in addressing socioeconomic and racial inequality in Louisiana, and unfulfilled promises of universal access to quality schools. Considering the diffusion of “economic styles of reasoning” across local public education bureaucracies, we reveal how school choice algorithms risk becoming imbued with incommensurable meanings about fairness and justice, compromising public trust and legitimacy. The study is based on thirty interviews with key stakeholders in the school district’s education policy field, government documents, and local media sources."
"Designing and implementing algorithm-based UE systems entails complex moral and political considerations, including questions about how to operationalize what is fair when giving priority to some students over others. The designers and supporters of these systems argue that, by automating and randomizing assignments to oversubscribed schools, UE algorithms are not only efficient, but also impartial and, therefore, value-neutral. Yet as policy instruments, their use is explicitly predicated on normative grounds: centralized enrollment platforms seek to make choice more transparent and fair, which in practice means weakening the influence of social privileges in access to educational opportunities. But even if UE systems constitute powerful technologies that deliver simple and efficient enrollment across the board, providing greater access to school choice, is it possible that they still end up eroding public trust and contributing to the perception they are reproducing inequality? And if so, why?
,,,
"We argue that a crucial reason why technically irreproachable policy instruments like UE algorithms may fall short of eliciting sufficient moral consensus and become enmeshed in political disputes is that core values like fairness are defined and interpreted differently across the contexts where such instruments are created and used.
...
"We examine the multivalent meanings of algorithmic fairness through a study of OneApp, the unified enrollment system developed more than a decade ago in New Orleans, Louisiana (NOLA).Footnote1 Well-known as a national exemplar of market-based school reform, New Orleans is unique in that all the city’s public-school students now attend charter schools, a radical experiment widely celebrated by the school reform movement that has nevertheless elicited heated debate. Our study shows that a paradigmatic clash has emerged between how fairness in the enrollment process is understood “from above” and “from below.” Fairness tends to be interpreted in narrow, procedural, and ahistorical terms by education experts who design and shepherd UE through implementation, even if many do imbue UE with the normative purpose of limiting the influence of social privilege in access to school choice. By contrast, education activists tend to evaluate fairness with consequentialist reasoning and in terms of broader conceptions of justice rooted in addressing the history of socioeconomic and racial inequality in New Orleans, and the unfulfilled promise of access to quality schools for all. From a top-down perspective, then, UE algorithms are seen as a positive step towards making the school system a more equitable marketplace. In this view, an algorithm-based enrollment system plays a critical role in the democratization of choice. Seen from below by those left out, however, the same algorithms legitimize an inherently unjust market system where chance still determines (unequal) access to educational opportunity. Moreover, the fact that parents need to participate in an algorithmic process instead of directly enrolling their kids in a good-quality neighborhood school signals the absence of real equity.
...
"promoting choice options such as charter schools has yielded benefits to both students who enroll in them and—via competitive effects—those who attend schools nearby (Berends 2015; Jabbar et al. 2022) in some (but not all) cases. On the other hand, researchers have also warned that choice policies can exacerbate existing inequalities, insofar as access to valued information, social networks, and resources are crucial for capitalizing on the new opportunities that become available in a more competitive marketplace
...
“market design” is perhaps the specialization area that most enthusiastically embodies the “performative” aspect of economics practice—the idea that economists not only describe markets but also perform them through sociotechnical devices (Caliskan and Callon 2009; Callon 1998; MacKenzie and Millo 2003). ... For too long, the design of “fair”, “efficient”, and “transparent” UE algorithms has remained a technical matter in the hands of experts, not an object of study worth analyzing from sociological, political, or even philosophical standpoints.
...
"Interviews consisted of a semi-structured component following an interview guide and a component relying on vignettes designed to compare how our interviewees conceptualize fairness across the same four scenarios. After the first part of the interview, we typically took turns reading vignettes aloud and asking the same set of follow-up questions to our respondents. For example, the first scenario describes Malcolm, a hypothetical student whose family uses OneApp to apply to elementary school and he gets his fifth-choice school, which is rated a C. We then ask respondents to evaluate whether Malcolm has been treated fairly, gradually adding new information about his socioeconomic status, racial background, and disability status.
...
"In this study, we do not rely on statistical sampling logic and do not seek to make generalizable claims about perceptions of fairness regarding OneApp among all administrators or all NOLA families using this UE system. Instead, we aim to show how studying an algorithmic tool reveals how experts and community leaders embedded in the same education policy field have different ways of conceptualizing and talking about fairness.
...
"For instance, when we described the experience of a hypothetical student, Malcolm, whose parents used OneApp to apply to elementary school last year, many respondents rejected the notion of procedural fairness outright. In the scenario, Malcolm and his family had secured a spot in a school with the letter grade C that was their fifth preference. When we asked our respondents whether Malcolm had been treated fairly, one respondent from an education justice organization replied, “No, I don’t think it’s fair and it makes me wonder what is a better way because [the explanation we hear is], ‘We need more quality seats.’ I’m like, ‘Oh really? How are we going to get there?’ Because we want more quality seats”
#########
The article goes on to point out that the school district hasn't published the algorithm code or flow charts, which adds to suspicions of unfairness. My inclination is that such things should be in the public domain, which might help the discussion focus on the very different issues of how schools are assigned, and why not all schools are first rate.
Friday, August 12, 2022
Are sociology and economics coming closer together? Philippe Steiner in Acta Oeconomica
Professor Philippe Steiner, of the Groupe d’Etudes des Méthodes de l’Analyse Sociologique de la Sorbonne, thinks that these days sociology and economics may be coming closer to each other than they have for some time.
New economic sociology and economic theory by Philippe Steiner, Acta Oeconomica 72 (2022) S1, 23–40 DOI: 10.1556/032.2022.00017
"Abstract: The paper begins with a brief reminder of the origin of economic sociology. It then surveys research by economic sociologists from the 1980s to the present, with a focus on their relation to political economy, which ranges from close to arm's length. Finally, beyond any differences between economic theory and economic sociology, the paper considers how both approaches can be connected in the socio-historical and economic study of economic inequalities by Thomas Piketty, and the use of matching markets by Alvin Roth."
...
"In the final part the paper seeks to show that economists have developed approaches that permit a fruitful combination of sociology and political economy, even using some of the more technical aspects of modern economics.
...
"After the 1930s economic sociology lost its appeal for economists, as well as sociologists, and gave way to the “Parsonian peace” according to which economists deal with value, while sociologists deal with values (Stark 2009: 7).
...
"There was a revival of economic sociology during the 1970s on both sides of the Atlantic. In the United States, this began with Mark Granovetter’s work on the labor market (Granovetter 1974), and then with a new interpretation of the social embeddedness of the market (Granovetter 1985). This was something that Polanyi had stressed in his book, noting the catastrophic consequences that follow the management of humanity, nature and politics as if they were market goods (labor, land and money) regulated by “supply and demand” in their respective markets. In the same period, Viviana Zelizer (1979, 1985) brought the sociology of culture closer to the sociology of economic life. In Europe, Pierre Bourdieu proposed a new interpretation of the market for cultural goods (or symbolic goods), to explain the functioning of the art market (Bourdieu 1971).
"As regards the relation to economic theory, the new economic sociology unfolds along four axes: (i) Granovetter established a close and direct relationship between economic sociology and the neo-classical theory of job search, together with the theory of transaction costs; (ii) Zelizer distanced herself completely from economic theory, although her sociology of economic life deals with central economic phenomena such as insurance, money, and law; (iii) Neil Fligstein developed an economic sociology close to institutionalist political economy, focusing on key institutions of the market, notably those regulating competition; finally, (iv) Bourdieu employed an original conceptualization of fields in order to explain the functioning of the markets of symbolic goods (fashion, painting, literature), while at the same time developing a methodological criticism of economic theory.
...
"In the case of the creation of the life insurance market in the United States, Zelizer started from the following paradox: while changes in social structure – fewer landowners, less mutual aid between neighbors – made it increasingly rational to insure one’s life to avoid leaving one’s wife and children destitute in the event of premature death, the life insurance market remained sluggish during the 19th century compared to what it was in Great Britain and in France. How do we explain this apparent lack of self-interested behavior in American male breadwinners? Zelizer’s answer employed several cultural arguments, including one based on the relationship to religion. During this period there was a widespread idea that to insure oneself against premature death was to oppose the will of God, even to not trust his wisdom. This was the reason for the reluctance to accept this new market product, the life insurance contract. A strength of her argument is also that she is careful not to oppose social behavior and self-interested economic behavior head-on. In fact, two phenomena directly linked to religion intervene to modify this cultural relationship to life insurance. First, she points to the fact that the religious sects that sent pastors to frontier regions took out life insurance on them so that the sect would not have to take care of their families if they died – a financial interest played its part in religious institutions. Second, she notes a reversal in the religious discourse on life insurance. In the beginning of the 20th century not only preachers, but also the rhetoric of insurance salesmen emphasized that the good father is he who takes precautions against premature death, hence this good father must be insured. Both culture and the economy began to structure behaviors that promoted a developing insurance market.
...
"While economists continued to employ the hypothesis of rationality, this is no longer central to the discourse of economic sociologists; the idea that economists are remote from the historical and social dimension has also lost its intensity. Instead, other criticisms have emerged, especially associated with the idea of performativity. At present there is neither conflict, or mutual indifference. Indeed, in several fields there are signs of an explicit or implicit rapprochement. I would like to mention two in particular.
"First of all, given the capacity of modern computers to process large databases, economists can deploy econometric tools in ways that accurately account for historical and social facts, as Thomas Piketty (1998, 2013, 2019) does. Second, by pursuing the strategy of economic engineering proposed by Alvin Roth (2002), economists take up the practical work of constructing institutions of exchange, exemplified by design economics and matching markets economists, developing what sociological economists have called the economic performation of the economy by economics (Callon 1998; MacKenzie et al. 2007)"
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Earlier
Thursday, January 6, 2022
Thursday, January 6, 2022
The design and performation of markets: a discussion, by Michel Callon and Alvin Roth in the AMS Review
The AMS Review, a journal of the American Marketing Society, has put together an issue on the theory of markets. When I was approached by Professor Hans Kjellberg to contribute a paper, I replied that I would rather engage in a dialog with one of the other proposed contributors, the great French economic sociologist Michel Callon. Professor Kjellberg conveyed that proposal to Professor Callon, and so it was that we corresponded by email, over a pandemic year and a half. Professor Kjellberg edited the emails to make an article of them, and also wrote an introduction. Here they are (still behind a paywall).
Kjellberg, H. Market expertise at work: introducing Alvin E. Roth and Michel Callon. AMS Rev (2021). https://doi.org/10.1007/s13162-021-00217-9
Callon, M., Roth, A.E. The design and performation of markets: a discussion. AMS Rev (2021). https://doi.org/10.1007/s13162-021-00216-w
"This discussion between Alvin Roth and Michel Callon is the result of a series of e-mail exchanges over the course of 18 months. It was triggered by an invitation extended to both authors to contribute to this special section of AMS Review on theories of markets. The discussion starts off with direct responses to the question put by Hans Kjellberg in his preceding commentary, which introduces the work of Roth and Callon, respectively. Then follows a discussion that touches upon, develops, and clarifies a number of issues related to the two authors’ respective positions on and approaches to markets and their organizing."
********
Professor Kjellberg asked each of us to begin the exchange by answering the question "Why and how did you come to work on market design and the performativity of economics, respectively? "
Here are some paragraphs excerpted from the first and last paragraphs of my answer:
"I received my Ph.D. in Operations Research (OR) in 1974. (That "7" makes it sound as if it were a long time ago…) I studied game theory, and in those days, before game theory blossomed in economics, it seemed that it would find a natural home in OR. I’ve sometimes been asked how I switched from OR to ECON, and my answer is that I just stayed where I was as the disciplinary boundaries shifted around me.
"Even though market design (or marketplace design) wasn’t yet recognized as a part of economics, game theory was its natural starting place.
...
"I was privileged to be involved in the first kidney exchange between the United Arab Emirates and Israel in the summer of 2021 (della Cava, 2021; Roth, 2021). That exchange shows that kidney exchange, and markets more generally, can do more than save lives and promote health and welfare, and are not just the fruits of peace: they can also help make and solidify peace. (Perhaps Michel would say that peace is one of the social arrangements that promote markets, and well-designed markets are among the social arrangements that promote peace.)
"The Covid pandemic shed light on the fact that even when in normal times there is social support for using money as a primary way to allocate many scarce goods, in an emergency this social support can be strained. When masks, ventilators, and vaccines were in short supply, there was no widespread attempt to allocate them within countries primarily to those who could pay the most. That is, in emergencies it can be both operationally difficult and socially repugnant to rely on prices to allocate scarce goods, and so markets sometimes need to shift from their normal design to an emergency mode (Cramton et al., 2020). Thus after natural disasters, we often see rationing, price controls, subsidies and other temporary interventions.
"This should help us keep in mind that marketplaces are human artifacts: they are tools. When well designed to meet the needs of the larger environment in which they operate, they may work well, and when they are not, they may need to be redesigned. So, market design, and “design economics” more generally, can be thought of as the engineering part of game theory. Michel’s work on “performativity” in economics can help expand on this distinction between science and engineering.
"In short, market design, which is an ancient human activity, is naturally studied by economists, engineers, sociologists, and marketers, and is intimately involved with the human experience. I hope you can see why I couldn’t resist being drawn in."
***********
On related matters:
Professor Callon has a book newly translated into English:
Markets in the Making: Rethinking Competition, Goods, and Innovation, by Michel Callon, Translated by Olivia Custer, Edited by Martha Poon, Princeton University Press, Published (US): Dec 7, 2021.
Here's my blurb for the book:
"“In Markets in the Making, Michel Callon explains the unique view of markets he has distilled from his long career observing markets, in detail, from the perspective of an engineer-sociologist. In a book that will fascinate economists as well as sociologists, he introduces us to a new vocabulary to help us think about markets whose participants may be collectives, and whose infrastructure helps participants determine what they want, and calculate what they need.”—Alvin Roth, Nobel Memorial prize winner for economics and Craig and Susan McCaw Professor of Economics, Stanford University"
***********
And here are some of my other posts on sociology and economics from the point of view of performativity. Here's one of those that may have first planted the seed for my desire to correspond with Michel Callon, it's a link to a blog post of Jose Ossandon:
Thursday, April 11, 2013
************(this post "The design and performation of markets: a discussion, by Michel Callon and Alvin Roth in the AMS Review" appeared for a few hours as if published on 6 December rather than 6 January, due to a keyboarding error...:(
Tuesday, August 28, 2018
Blockchain and legal but repugnant markets--a guest post by Stephanie Hurder
Below is a guest post, by Stephanie Hurder — a Harvard Economics Ph.D. (who I've blogged about
before, here,
and here)
and a founder of blockchain economics startup Prysm Group (that
I’ve blogged about here). She discusses
how blockchain may impact repugnant markets.
As Al has written about for years, repugnance -- the distaste
for certain kinds of transactions -- can be a serious constraint on markets. Repugnance can stem from numerous sources,
such as a fear of coercion or of a slippery slope. And while the constraints created by
repugnance sometimes end up incorporated in to law, they do
not need to be legal to have significant impact. Businesses may voluntarily choose not to
provide services that some set of consumers might find repugnant, in order to
maintain their brand reputation and prevent a loss of those customers.
Firms that engage in legal, adult activities
-- such as pornography and the sale of sex toys -- have significant issues
accessing financial services due to the constraints imposed by repugnance. Most commercial banks include “morality clauses”
forbidding service of businesses engaging in adult activities, for reputational
reasons. Newer
payment services that would like to serve “repugnant” industries are
constrained by these more conservative organizations, with whom they must do
business in order to effectively process payments and offer services.
Stripe, the payments processor, has publicly discussed this phenomenon
on their blog. Stripe was approached by OMGYes, a website that provides actionable,
research-backed information on sex. They
write:
The business
approached us and we were eager to work with them, but after a month of
deliberations, our financial partners did not agree. Instead, because the
website has explicit tutorials, it still falls under the umbrella of
unsupportable businesses. While we were not able to persuade our financial
partners this time around, we will continue to holistically look at and
advocate for businesses that sell adult products and services.
- - -
By now, almost all industries are exploring
how to leverage the economic benefits of blockchain, especially those arising
from blockchain’s ease of verification and decentralization. One type of use case with significant
potential is using blockchain to provide services to markets constrained by
repugnance.
Cryptocurrencies such as Bitcoin are a
potential payments solution for industries not served by traditional financial
service providers. However, a payment
system by itself is not enough -- the anonymity of some cryptocurrencies can
increase the probability that genuinely coercive or even illegal activities
will take place. Effective platforms
serving repugnance markets will need to combine the decentralized benefits of
blockchain and cryptocurrencies with more traditional levers of market design,
such as reputation.
An example of a company doing exactly this is intimate.io. intimate.io is an Ethereum-based platform for
individuals engaged in the adult industry.
It provides secure, decentralized transfer of payments for adult
services. It also includes pseudonymous
reputation and user information (such as age verification and relevant health
information) to help service providers vet customers and vice versa. Two-party escrow provides financial
incentives for users to behave cooperatively.
intimate.io CEO, Leah
Callon-Butler, writes:
Blockchain
is a technology crying out for a use-case and intimate.io brings together
several different blockchain-based technologies, to demonstrate unprecedented
real-world utility through application to an industry that is sorely in need of
emancipation from centralised bodies who have assumed the role of moral arbiter
for too long.
While platforms like intimate.io open the
possibility for market participants to work around roadblocks imposed by repugnance,
they face many of the same market design
and data management challenges as other industries. How will sensitive information (such as
health data) be verified and provided to the market, while preserving
privacy? How will the platform ensure
that users banned for poor behavior do not create new identities? Innovative solutions to these issues can
inform market design more broadly.
It will also be interesting to see how the
“traditional” financial system reacts to blockchain platforms like intimate.io. Luke Coffman at Harvard has shown
that introducing an intermediary in a business transaction can lessen the
punishments for “immoral” behavior that consumers give to companies. How many steps of separation -- and of what
kind -- will be required between traditional banks and platforms like
intimate.io so that markets constrained by repugnance can finally be served?
Thursday, April 11, 2013
The economics of designing markets, and the sociology of "civilizing" them
Jose Ossandon emailed me to alert me about his thoughtful blog post comparing some developments in market design and in the sociology of markets. In particular, he draws connections between market design and some of the work of Michel Callon.
Ossandon's blog post is called Are markets matching Callon and Roth?
He begins:
"The last meeting of our “Copenhagen market group”[i] was devoted to an increasingly influential stream within current economics, namely “market design”. The discussion left me with the somehow perplexing puzzle I am trying to unfold in this post: isn’t this type of economics almost too close to the ‘markets as calculative collective devices’[ii] approach developed by Michel Callon and colleagues so influential among us -non-economists market researchers- in the last years?
I haven't yet had a chance to do more than glance at the links he provides: it's clear that some translation will be needed between econ and soc, in order for me to try to understand all the connections that he sees.
Ossandon's blog post is called Are markets matching Callon and Roth?
He begins:
"The last meeting of our “Copenhagen market group”[i] was devoted to an increasingly influential stream within current economics, namely “market design”. The discussion left me with the somehow perplexing puzzle I am trying to unfold in this post: isn’t this type of economics almost too close to the ‘markets as calculative collective devices’[ii] approach developed by Michel Callon and colleagues so influential among us -non-economists market researchers- in the last years?
During the meeting we discussed two articles (here and here) written by the 2012 Nobel Prize winner Alvin Roth. As Roth explains, see also his very clear Nobel Prize speech, his and his colleagues’ work has been dedicated to very practical problems."
"Are the new2 economic sociology and market design the same? Avoiding the obvious methodological splits that separate a highly formalized and a rather descriptive-reflexive ethnographic approach, there are still important conceptual differences. The ideal situation for Roth’s designers seems to be “give me some choosing things[iii] to match and I will rise a technologically equipped market”, while for Callon - especially in his work connecting his thoughts on technical democracy, hybrid forums and markets- the ideal situation is where what is traded, who can participate in the exchange, and who and what is equipping the market encounter are collectively and heterogeneously defined. Civilizing (Callon) and engineering (Roth) markets are therefore two different programs of market design. More practically, for instance, in school choice, for Roth et al. what a good school is or who can choose or what is chosen while matching school places is defined before the market. In Callon et al.’s view such an arrangement would not only match pre-calculating families and schools but it would include the consequence of making the involved agents calculative, changing accordingly the way they understand and deal with education. In other words, in Callon’s view markets are never only about matching, or matching would need to beunderstood also as a mode of per-formatting new agencies and things.
But, despite these differences, it seems like finally engineer economists and engineer sociologists are finding a common starting point. Isn’t that scary? I don’t think so. This is a much better place to start and try a dialogue that is not so limited by pre-existing disciplinary boundaries (see also Callon here). Let’s agree: markets are not pre-social metaphysical forces that need to be left alone, but they are practical arrangements that can be more or less, better or worse, designed[iv]. In those cases where there is an already functioning market or quasi-market mechanisms (for instance: school choice or carbon trade) let’s try to make them work the best we can. In other words, social researchers should not only criticize marketization but also spend time, energy and knowledge onengineering and/or civilizing these complex arrangements. This is, I think, a nice pragmatic starting point for market researchers at large.
But is this just good? No it isn’t, there is also a serious flaw. These two streams of market research seem to share a somewhat excessive optimism about markets as devices that can solve social and environmental issues. As a product of neoliberal Chile, I would happily pay for not having to make choices in areas like health insurance, pension funds, schools or long distance phone carriers. And certainly many people have argued that these and other sectors (have you heard about trains in the UK?) are not necessarily working better years after features such as competition, choice and providers able to select or exclude their potential users have been introduced. Market design risks becoming the face of the latest round of social and environmental reforms (for instance: emissions trading or the announced Job Match interface in the UK). And the new reformers seem to believe something like: it is not that markets were necessarily a bad social policy but that they were not properly designed. But, shouldn’t we also be experimenting with other ways of doing things? I am not saying that markets are always bad, but that the same brilliant ideas currently oriented at designing better markets could also be spent devising other forms of solving our common problems. In my opinion market civilizers and engineers will become fully respectable technicians the day they are also able to advise something like: “thank you for contacting me, but here you don’t need a market”."
Wednesday, February 20, 2013
Performativity as a critique of economics and market design
Yesterday's prize to Paul Milgrom for his work in market design (among other things) brings to mind a curious critique (and criticism) of economics in the economic sociology literature, namely that economics is "performative," in the sense that economic theories influence the real economy to become more like economic theory. (I blogged about one such paper here.)
As far as I am aware, the term originated in linguistics to distinguish those cases in which saying is also doing. Thus saying "it will rain tomorrow" is not performative, but saying "I apologize" is: when you say it, you have done it, saying it makes it happen. So the basic idea applied to economics is that e.g. creating an option pricing formula might change the way options are priced. Designing a kidney exchange might change the number of patients who get kidney transplants. Or in Paul's case, designing auctions might change the way the FCC sells radio spectrum licenses.
The criticism, such as it is, seems to take two forms. The first is that, since economics is performative, it isn't a 'real' science which describes things as they are. The second, often more between the lines, is that this is just part of the way that economics has been sucking the meaning out of life ever since the invention of agriculture and trade.
Of course, that economics is performative is a criticism that economists, especially market designers, might take as a compliment. (It's a little like criticizing body builders for working hard to have big muscles, and not just settling for the ones they could get without cheating by exercising.)
I was reminded of this on reading Brett Christophers, "Games and prizes in the economic (and geographical?) performance of markets: Nobel, Shapley, and Roth," in Environment and Planning A 2012, volume 44, pages 2542 – 2545, a critique and criticism of the 2012 Nobel economics prize. Market designers may be interested in (and either annoyed, puzzled or flattered by) what he has to say...
He writes:
"Talk of markets being ‘designed’ and of economists engaging in ‘engineering’ will undeniably strike a chord with many economic sociologists and with students of social studies of finance. The past fifteen years have seen the emergence amongst such scholars of a broad and expanding critique of the so-called ‘performativity’ of economics—a literature interested in, precisely, how economics designs, formats, and otherwise engineers real-world economic configurations in general and markets in particular. While economic ‘performativity’ means different things to different commentators, the central gist of the approach is captured in Donald MacKenzie’s (2006, page 12) assertion that economics is “an active force transforming its environment, not a camera passively recording it”; or that economics, in Michel Callon’s (2007, page 316) words, “contributes to the construction of the reality that it describes.” Notably, one of the most intensively discussed ‘successes’ of the market design or ‘design economics’ field—the Federal Communications Commission’s (FCC) auctions of US radio spectrum (eg, Roth, 2002)—is also one of the most heavily analyzed and debated ‘exemplars’ of economic performativity purportedly in action (eg, Guala, 2006; Nik-Khah, 2006; Santos and Rodrigues, 2009). Indeed, not for nothing does Ana Santos (2011, page 719) argue that “the efficacy of design economics ultimately hinges on determining the extent to which economists are able to implement their models in the real world and make reality conform to their theoretical constructs, that is, on determining the performativity of economics.”
...
He further writes of the
"profound ethical concern—over the penetration of market and market-like mechanisms into more and more areas not only of social life per se but also of society–nature relations. Such interests and concerns, distilled in a range of connected critiques of ‘neoliberalization’, ‘commodification’, and ‘marketization’, are of the utmost relevance in the context of the “economic engineering” lauded by the Swedish Academy. For, as Santos (2011, page 721) observes, Roth and other proponents of design economics “actually”—explicitly and overtly—“aim at inculcating economic calculus in human deliberation and introducing market-like forms of social interaction where they have been absent.”
Chistophers then goes on to suggest that the very idea of markets is so flawed that probably they don't really even exist...
"it is vital ... to be aware that the notion of economic performativity is a highly contested one. The mobilization of this concept has attracted often biting critique, both in relation to examples directly connected with ‘Rothian’ market design, and those not. Daniel Miller (2002), for instance, claims that capitalist economic transactions are so entangled in social relationships, and actual economic agents are so resistant to the type of economic rationality presumed in economists’ market models, that it is simply incorrect to think of real-world exchange practices in terms of ‘markets’—despite the attempts of economists, consultants, and others to (re)make the world in the image of their theories. Philip Mirowski and Edward Nik-Khah (2007) attack the performativity thesis from a related angle. As for Santos (2011), market design ultimately belongs, for Mirowski and Nik-Khah, to the realm of neoclassical economics; it retains the core principles of rationality and efficiency, notwithstanding its appeal to some elements of heterodox economics (such as the recognition that economic agents sometimes engage in opportunistic behaviours). This is crucial because, say Mirowski and Nik-Khah, neoclassical economics is so flawed that it simply cannot be made practically to ‘work’—to ‘perform’ markets, that is to say—other than in the most partial and ephemeral of senses.
As far as I am aware, the term originated in linguistics to distinguish those cases in which saying is also doing. Thus saying "it will rain tomorrow" is not performative, but saying "I apologize" is: when you say it, you have done it, saying it makes it happen. So the basic idea applied to economics is that e.g. creating an option pricing formula might change the way options are priced. Designing a kidney exchange might change the number of patients who get kidney transplants. Or in Paul's case, designing auctions might change the way the FCC sells radio spectrum licenses.
The criticism, such as it is, seems to take two forms. The first is that, since economics is performative, it isn't a 'real' science which describes things as they are. The second, often more between the lines, is that this is just part of the way that economics has been sucking the meaning out of life ever since the invention of agriculture and trade.
Of course, that economics is performative is a criticism that economists, especially market designers, might take as a compliment. (It's a little like criticizing body builders for working hard to have big muscles, and not just settling for the ones they could get without cheating by exercising.)
I was reminded of this on reading Brett Christophers, "Games and prizes in the economic (and geographical?) performance of markets: Nobel, Shapley, and Roth," in Environment and Planning A 2012, volume 44, pages 2542 – 2545, a critique and criticism of the 2012 Nobel economics prize. Market designers may be interested in (and either annoyed, puzzled or flattered by) what he has to say...
He writes:
"Talk of markets being ‘designed’ and of economists engaging in ‘engineering’ will undeniably strike a chord with many economic sociologists and with students of social studies of finance. The past fifteen years have seen the emergence amongst such scholars of a broad and expanding critique of the so-called ‘performativity’ of economics—a literature interested in, precisely, how economics designs, formats, and otherwise engineers real-world economic configurations in general and markets in particular. While economic ‘performativity’ means different things to different commentators, the central gist of the approach is captured in Donald MacKenzie’s (2006, page 12) assertion that economics is “an active force transforming its environment, not a camera passively recording it”; or that economics, in Michel Callon’s (2007, page 316) words, “contributes to the construction of the reality that it describes.” Notably, one of the most intensively discussed ‘successes’ of the market design or ‘design economics’ field—the Federal Communications Commission’s (FCC) auctions of US radio spectrum (eg, Roth, 2002)—is also one of the most heavily analyzed and debated ‘exemplars’ of economic performativity purportedly in action (eg, Guala, 2006; Nik-Khah, 2006; Santos and Rodrigues, 2009). Indeed, not for nothing does Ana Santos (2011, page 719) argue that “the efficacy of design economics ultimately hinges on determining the extent to which economists are able to implement their models in the real world and make reality conform to their theoretical constructs, that is, on determining the performativity of economics.”
...
He further writes of the
"profound ethical concern—over the penetration of market and market-like mechanisms into more and more areas not only of social life per se but also of society–nature relations. Such interests and concerns, distilled in a range of connected critiques of ‘neoliberalization’, ‘commodification’, and ‘marketization’, are of the utmost relevance in the context of the “economic engineering” lauded by the Swedish Academy. For, as Santos (2011, page 721) observes, Roth and other proponents of design economics “actually”—explicitly and overtly—“aim at inculcating economic calculus in human deliberation and introducing market-like forms of social interaction where they have been absent.”
Chistophers then goes on to suggest that the very idea of markets is so flawed that probably they don't really even exist...
"it is vital ... to be aware that the notion of economic performativity is a highly contested one. The mobilization of this concept has attracted often biting critique, both in relation to examples directly connected with ‘Rothian’ market design, and those not. Daniel Miller (2002), for instance, claims that capitalist economic transactions are so entangled in social relationships, and actual economic agents are so resistant to the type of economic rationality presumed in economists’ market models, that it is simply incorrect to think of real-world exchange practices in terms of ‘markets’—despite the attempts of economists, consultants, and others to (re)make the world in the image of their theories. Philip Mirowski and Edward Nik-Khah (2007) attack the performativity thesis from a related angle. As for Santos (2011), market design ultimately belongs, for Mirowski and Nik-Khah, to the realm of neoclassical economics; it retains the core principles of rationality and efficiency, notwithstanding its appeal to some elements of heterodox economics (such as the recognition that economic agents sometimes engage in opportunistic behaviours). This is crucial because, say Mirowski and Nik-Khah, neoclassical economics is so flawed that it simply cannot be made practically to ‘work’—to ‘perform’ markets, that is to say—other than in the most partial and ephemeral of senses.
Sunday, December 11, 2011
A heterodox economist looks (disapprovingly) at market design
Ana Santos writes, not-entirely-unsympathetically, about choice architecture and market design, based on her reading of Thaler and Sunstein's book "Nudge...," and my survey article "The Economist as Engineer..." Her remarks include a novel (to me) objection to creating institutions in which individual goals don't conflict with social welfare: in the absence of such conflict, your "ethical muscles" would grow lax from not needing to be used. (Really; see the end of this post...)
Ana C. Santos, "Behavioural and experimental economics: are they really transforming economics?," CAMBRIDGE JOURNAL OF ECONOMICS 35, 4, 705-728, JUL 2011
"The purpose of choice architecture is to prepare contexts of choice to help individuals make better choices, as judged by individuals themselves, or by society as a whole (Thaler and Sunstein, 2003, 2008). Design economics is in turn devoted to the conception of specific allocation mechanisms that aim at coordinating individual actions for the accomplishment of the goals set by the designer (Roth, 2002). Rather than assuming that markets emerge spontaneously and automatically generate efficient allocations of resources, design economics puts at the forefront the complex social engineering processes involved in the building of markets and market-like allocation mechanisms that determine individual outcomes and the aggregate results that are obtained by having people interacting under those mechanisms."
...
"Not only do these proposals retain the fundamental principles of neoclassical economics—rationality and efficiency—they also continue to promote their expansion to various domains of social life. Through the architecture of contexts of choice and the design of market mechanisms, economists are putting their expertise at the service of individual rationality and economic efficiency, within and beyond the traditional domain of economics.
"Choice architecture and design economics promote a particular version of economics imperialism that goes beyond the mere export of its concepts to territories traditionally occupied by disciplines other than economics. They actually aim at inculcating economic calculus in human deliberation and introducing market-like forms of social interaction where they have been absent. In other words, what is at stake here is the deliberate attempt to make society more like its description in neoclassical economic theories, i.e. the performativity of economics (Mackenzie, 2006; Callon, 2007; Mackenzie et al., 2007). Whether or not they have succeeded in this endeavour is an empirical question that cannot be addressed here. For now, it is suffice to note that while taking into account predictable behavioural irrationalities and the opportunistic behaviour of economic agents in their policy proposals, both choice architecture and design economics retain and promote the expansion of the neoclassical concepts of rationality and efficiency in their market-based solutions."
The article includes a novel argument against aligning individual incentives with social welfare:
"In markets people are less compelled to follow non-market norms and values. By aligning self-interest with the interests of others, market mechanisms moreover obviates the need for ethical reasoning; as a result, individuals no longer have the opportunity, as Steve Turnbull puts it, to ‘flex their ethical muscles’ (Frohlich and Oppenheimer, 2003, p. 290). Individuals’ ability to behave in accordance with non-market norms and values, then, will be seriously compromised. On the contrary, living with the tension between the best strategy from a rational, self-interested point of view and the ethically best strategy keeps the ethic imperative active."
Ana C. Santos, "Behavioural and experimental economics: are they really transforming economics?," CAMBRIDGE JOURNAL OF ECONOMICS 35, 4, 705-728, JUL 2011
"The purpose of choice architecture is to prepare contexts of choice to help individuals make better choices, as judged by individuals themselves, or by society as a whole (Thaler and Sunstein, 2003, 2008). Design economics is in turn devoted to the conception of specific allocation mechanisms that aim at coordinating individual actions for the accomplishment of the goals set by the designer (Roth, 2002). Rather than assuming that markets emerge spontaneously and automatically generate efficient allocations of resources, design economics puts at the forefront the complex social engineering processes involved in the building of markets and market-like allocation mechanisms that determine individual outcomes and the aggregate results that are obtained by having people interacting under those mechanisms."
...
"Not only do these proposals retain the fundamental principles of neoclassical economics—rationality and efficiency—they also continue to promote their expansion to various domains of social life. Through the architecture of contexts of choice and the design of market mechanisms, economists are putting their expertise at the service of individual rationality and economic efficiency, within and beyond the traditional domain of economics.
"Choice architecture and design economics promote a particular version of economics imperialism that goes beyond the mere export of its concepts to territories traditionally occupied by disciplines other than economics. They actually aim at inculcating economic calculus in human deliberation and introducing market-like forms of social interaction where they have been absent. In other words, what is at stake here is the deliberate attempt to make society more like its description in neoclassical economic theories, i.e. the performativity of economics (Mackenzie, 2006; Callon, 2007; Mackenzie et al., 2007). Whether or not they have succeeded in this endeavour is an empirical question that cannot be addressed here. For now, it is suffice to note that while taking into account predictable behavioural irrationalities and the opportunistic behaviour of economic agents in their policy proposals, both choice architecture and design economics retain and promote the expansion of the neoclassical concepts of rationality and efficiency in their market-based solutions."
The article includes a novel argument against aligning individual incentives with social welfare:
"In markets people are less compelled to follow non-market norms and values. By aligning self-interest with the interests of others, market mechanisms moreover obviates the need for ethical reasoning; as a result, individuals no longer have the opportunity, as Steve Turnbull puts it, to ‘flex their ethical muscles’ (Frohlich and Oppenheimer, 2003, p. 290). Individuals’ ability to behave in accordance with non-market norms and values, then, will be seriously compromised. On the contrary, living with the tension between the best strategy from a rational, self-interested point of view and the ethically best strategy keeps the ethic imperative active."
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