The practical heart of markets

McFall, Liz (2011). The practical heart of markets. Journal of Australian Political Economy, 68 pp. 149–168.

Abstract

Opening paragraph:
By addressing the ‘practical heart’ of markets, my aim in this article is to explore the way markets carry on despite the peculiar, mathematically limited and opportunistically versatile, character of human calculation. The abstract theorems of economics may be unreal to practical ‘men’ but the curious thing is they calculate still. In any social world there are vast unknowns compensated by routine, practice and habit, but also by faith, piety and fundamentalisms of all sorts, including religious, market and even liberal secular (see Block, 2010; Thompson, 2006). Viewed from a pragmatist perspective, knowledge is always partial, always shifting and always social. An admission of deficits, of course, is not the same as an admission of complete ignorance. While critics from Thorstein Veblen (1898) through J.K. Galbraith (1954/1975; 1958) to Mark Granovetter (1985) and the 2001 Nobel prize winner Joseph Stiglitz, have lined up to dismiss even the possibility of the perfect information stipulated in neoclassical models of exchange, no-one is claiming that markets run on nothing. So if it’s not perfect information what is driving market calculation? Michel Callon’s influential solution was to propose that the sociological impulse to add a ‘little more soul’ to the economic agent be resisted in favour of research into how ‘framed, formatted and equipped with prostheses’ human beings nevertheless calculate (1998, p51).

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