Are we witnessing the birth of a new type of economist-engineer (in charge of steering markets devised to deal with collective concerns)?

[A fines de febrero tuve la suerte de asistir a un workshop llevado a cabo en Copenhagen Business School para discutir los capítulos sobre la economía del libro An Inquiry into Modes of Existence: An Anthropology of the Moderns (AIME) de Bruno Latour, quien también participó en el taller. Para participar debíamos enviar un breve texto respondiendo o complementando alguno de los aspectos del proyecto iniciado en el libro. En este post comparto mi contribución, la que construí a partir del uso que Latour hace, de la idea propuesta por Timothy Mitchell, de que la economía es un invento reciente. A su vez, el post continúa varios de los temas que se han ido discutiendo en este blog]

Timothy Mitchell has made a thrilling suggestion: “The Economy” was not born until the mid XX century. With this he doesn’t deny, as shown for instance by Foucault in his Security, Territory and Population, that economists and political economy existed well before, but suggests that it was only in the mid XX century that the economy started to be seen as a whole that could be counted and called that way. Playing with Michel Callon’s terms, with the amazing growth of economic statistics that enabled counting, summarizing and inscribing the millions of transactions carried out in a given country, economists performed a calculable “Economy”.

The Economy described by Mitchell however does not correspond to any “economy” but mostly to mid-century post Keynes economic policies. This Economy did not follow but questioned the assumption of a pre-existing equilibrium or meta-dispatcher. It was, no doubt, a technocratic dream, but a dream that needed and acted through the visible hand of the economist. The Economy was understood as a system that could be quantitatively modeled and steered by economists turned managers-engineers that became experts in balancing things like inflation, unemployment or exchange rates. In the terms used in An Inquiry into Modes of Existence, the Economy was an act of organizing.

The dream of a calculable Economy, however, is quite different than what could be called the utopia of the market. Actually, this is where Mitchell’s story in Carbon Democracy ends. In his words:

“In the 1970s, the trader who handled the Israeli pipeline oil, Marc Rich, used it to break the contract system for oil sales and create the spot market in oil, which could end the method of pricing oil through agreements within and among the large oil companies and allow the development of speculative markets in oil futures. Previously part of the Bretton Woods mechanism for limiting the global threat of financial speculation, oil would itself become a medium of financial speculation. Daniel Amman, The King of Oil… 65-84” (Mitchell 165, n56).

As the quotation shows, since the seventies the idea of the Economy as a machine that can be steered by an educated technocracy was increasingly contested, especially by the members of that very influential “though collective” reunited around the Mont Pelerin Society (Mirowski & Plehwe, 2009).The most radical version was developed by the group of Austrian economists lead by Mises and Hayek and continued by the like of Buchanan and the Public Choice school (Gane 2013, Peck 2008).

As it is well known, Hayek delivered a very strong critique of the technocratic self-image in economics, but he didn’t stop there but helped too to produce an object that would end up replacing the Economy, the market. In his words:

“The confusion that prevails here can be ascribed above all to the false idea that the order which the market brings about can be regarded as an economy in the strict sense of the word, and that the outcome must therefore be judged according to criteria that in reality are appropriate only for such an individual economy. But these criteria, which hold for a true economy in which all effort is directed toward a uniform order of objectives, are to an extent completely irrelevant for the complex structure consisting of the many individual economies that we unfortunately designate with the same word “economy.” An economy in the strong sense of the word is an organization or an arrangement in which someone consciously uses means in the service of a uniform hierarchy of ends. The spontaneous order brought about by the market is something entirely different. But the fact that this market order does not in many ways behave like an economy in the proper sense of the word—in particular, the fact that it does not in general ensure that what most people regard as more important ends are always satisfied before less important ones—is one of the major reasons people rebel against it. It can be said, indeed, that all socialism has no other aim than to transform catallaxy (as I am pleased to call market order, to avoid using the expression “economy”) into a true economy in which a uniform scale of values determines which needs are satisfied and which are not.” (Hayek 13-14, 2002 [1968])

In Hayek’s view, the economy would be far too complex to be summed or modeled up with the help of aggregated statistics of trade, demand or inflation. This limitation would not only be a matter of lack of the right tools or methods to deal with complex systems, but more fundamentally, it would be about the nature of the market itself. Markets would be knowing systems that are not only able to simultaneously process more information than any aggregate statistic but would also be a sort of distributed cognition mechanism able to find new innovative solutions to existing problems (see also Buchanan & Vanberg 1991).

But, it is not only that the mid XX century utopia of The Economy differs from the more recent utopia of the Market, but also, that within neoliberal thought is possible to distinguish very different notions of the market. Hayek and followers’ far from equilibrium creative markets did not only contest technocratic Keynesianism but also challenged the neo-classical conception, based on equilibrium and informed rational choice agents, assumed for instance by most of the economists of the Chicago School. The next quotation by Arnold Harberger, an influential economist in the University of Chicago in the second half of the XX century, nicely summarizes the less romantic and slightly more technocratic conception of the market defended by this latter group:

“The forces of the market are just that: They are forces; they are like the wind and the tides; they are things that if you want to try to ignore them, you ignore them at your peril, and if you understand that they are there, working their way, if you find a way of ordering your life that is compatible with these forces, indeed which harnesses these forces to the benefit of your society, that’s the way to go.” (Harberger, A. 2002)

All this is important, and not only but for the history of economic thought. It is relevant because, as Mitchell explains for the Economy, none of these notions are only ideas or ideologies. As Foucault (2010) realized earlier than anyone, in the work of Chicago economists like Gary Becker or Theodor Schultz there wasn’t only a new type of economics but a whole new way of governing, where the neo-classical market (with private firms in competition and choosing consumers) was actively mobilized as a model to understand and organize areas such as education, immigration or criminal justice. And, more recently, Hayek’s ideas have been traced in markets enacted around the world to deal, or even to find solutions, for collective concerns, such as pollution, waste, development or housing (Elyachar 2012, Fischer 2009).

But, as exiting recent research is starting to show, in each of these new policies the Market enacted is not the same. Not only because different conceptions of what is a market are mobilized for each case, but also because it is simply very different to make a spot market for oil than one for electricity, school education, electronic waste, pollution rights or collateral debt (Neyland & Simakova 2012, Riles 2011, Ureta 2013). At the same time, new unexpected problems –or to use Callon’s nice metaphor (1998) – new overflows have appeared. But, unlike the double movement expected by Polanyi, these problems have not necessarily opened the development of non-market policies- neither the civilizing process expected by Callon (2009)- but have been framed as market failures. Accordingly, a new industry of experts in nudging, repairing and designing markets is blossoming (Breslau 2013, Cooper 2011, Ossandón & Ureta 2012). Maybe, it is that similarly to the rise of the economist as the manager of The Economy described by Mitchell, today we are witnessing the proliferation of a new type of economist-engineer, but now in charge of steering markets devised to deal with collective environmental and social concerns. In AIME’s terms: markets have moved from meta-dispatchers to practical arrangements (organized by economists).

José Ossandón


Callon, Michel. “An essay on framing and overflowing.” In Callon, M. eds. The laws of the markets 1998.

Callon, Michel. “Civilizing markets: Carbon trading between in vitro and in vivo experiments.” Accounting, Organizations and Society 34.3 (2009): 535-548.

Breslau, Daniel. “Designing a market-like entity: Economics in the politics of market formation.” Social Studies of Science 43.6 (2013): 829-851.

Buchanan, James M., and Viktor J. Vanberg. “The market as a creative process.” Economics and philosophy 7.02: 167-186. 1991.

Cooper, Melinda. “Complexity theory after the financial crisis: The death of neoliberalism or the triumph of Hayek?.” Journal of Cultural Economy 4.4 (2011): 371-385.

Elyachar, Julia. “Before (and After) Neoliberalism: Tacit Knowledge, Secrets of the Trade, and the Public Sector in Egypt.” Cultural Anthropology 27.1 (2012): 76-96.

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Foucault, Michel. Security, Territory, Population: Lectures at the College de France 1977–1978. Macmillan, 2009.

Gane, Nicholas. “The emergence of neoliberalism: Thinking through and beyond Michel Foucault’s lectures on biopolitics.” Theory, Culture & Society ahead-of-print, 2013.

Harberger, A. “Interview with Arnold Harberger” Commanding Heigh., 2002. Page visited: 28/4/2010.

Hayek, F. “Competition as a discovery procedure.” Quarterly Journal of Austrian Economics 5.3. 2002

Neyland, Daniel, and Elena Simakova. “Managing electronic waste: a study of market failure.” New Technology, Work and Employment 27.1 (2012): 36-51.

Mitchell, Timothy. Carbon democracy: Political power in the age of oil. Verso Books, 2011.

Mirowski, Philip, and Dieter Plehwe, eds. 2009. The road from Mont Pèlerin: the making of the neoliberal thought collective, Harvard University Press.

Ossandón, José & Ureta, Sebastián “From performing to taming markets. Economics making health and transport.” The Second ISA Forum of Sociology (August 1-4, 2012). 2012.

Peck, Jamie. 2008 “Remaking laissez-faire.”, Progress in Human Geography 32.1: 3-43.

Riles, Annelise. Collateral knowledge: legal reasoning in the global financial markets. University of Chicago Press, 2011.

Ureta, Sebastián. “‘Because in Chile [carbon] markets work!’ Exploring an experimental implementation of an emissions trading scheme to deal with industrial air pollution in Santiago.” Economy and Society ahead-of-print (2013): 1-22.

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