The concept of market (Part 1)

[El nombre de esta sección es “artículos en cuotas”. La idea es, como en una novela por entregas, ir subiendo partes de papers a medida que vayan saliendo. El texto abajo es un borrador de la introducción de un artículo en el que trabajo. Presenté la primera versión en EGOS este año y esto que estoy subiendo acá es una segunda versión, pero aun, borrador y sin edición del inglés. Además de la introducción, el artículo se compondrá de cuatro partes. Cada parte será una entrega que iré subiendo a medida que tenga las nuevas versiones listas. Como siempre, sugerencias son muy bienvenidas]

The concept of Market

José Ossandón, draft 30/11/2017

Introduction

The emergence of the broad set of practices and techniques grouped under the label of ‘market design’ makes apparent a challenge that has been avoided for too long in organizational and sociological studies of markets. The challenge can be illustrated with the example of school place allocation.

School allocation is a policy instrument increasingly popular among governments and policy makers. It consists in implementing algorithms to match two set of priorities; families’ preferred schools and schools’ available vacancies. School allocation is also one of the most recognized examples of ‘market design’ (Cantillon 2017). Markets designers label situations such as school place allocations, which do not feature some of the basic elements included in traditional social scientific definitions of markets (for instance: money, prices, or the transference of property rights), as market. In this context, social researchers interested in inspecting a situation like school place allocation are pushed to ask themselves a basic question: should the social researcher follow the definitions of markets accepted in their academic fields or they should take the definitions of market designers? In the following pages, I expect to demonstrate that school allocation is not merely a marginal example. It is “an extreme case” (Flyvbjerg 2006) that can be productively used as a provocation to initiate a broader discussion about the concept of market.

Although market design is a relatively new phenomenon, the challenge it poses is in fact not very different from a similar problem but in relation to the concept of organization discussed five decades ago. I revisit Egon Bittner’s 1965 piece ‘The concept of organization’ to introduce a distinction between two different stances in relation to the concept of market. Researchers can take the market either as a term that has to be defined by the social scientists that study it, or, as a concept whose uses and definitions are part of the social scientist’s empirical object. The main aim of this paper will be fulfilled if, at the moment of approaching a situation like the case of school choice, organization theorists and economic sociologists understand that what they have in front of them is not a choice between different definitions of market, but that they can pick between two fundamentally different conceptual stances. From the first stance, a situation like school choice, which does not feature the elements that constitute a market in existing definitions, is simply not a market. From the second stance, the concepts of markets used by relevant practitioners are part of the object of study; the social researcher studies native definitions and their consequences in existing semantics of market.

Overall, the discussion elaborated in this paper expects to contribute to two main discussions. This paper continues work in organization studies and economic sociology in which markets have been theorized on the basis of a comparison with organization (Callon & Muniesa 2005, Ahrne et al 2015, Fligstein 1996). What this paper does, in this context, is shifting the level of the comparison. Instead of theorizing markets on the basis of identifying features that markets and organization share (for instance, norms and membership rules, Ahrne et al 2015); markets are theorized on the basis of a comparison of the challenges both, the concept of market and the concept of organization, pose to social researchers. This level of theorizing helps to better equip social researchers to deal with the challenges posed by situations in which the work of practitioners involves conceptualizing markets. The second expected contribution of this paper is to update the path opened by Bittner. This paper expects to re-connect organization studies and the tools developed in the rich but dispersed recent social research (see for instance, Borch (2013), Cordero (2016), (Tribe 2014), and Somers (1995)) where concepts are studied as empirical objects.

The argument of the paper unfolds in four sections. The first section uses the example of school allocation and the work of market designer Alvin Roth to illustrate how market design disrupts existing understandings of markets in sociology and organization studies. The second section uses Bittner’s work to introduce a distinction between two stances in relation to the concept of market. The third section organizes recent social studies of markets in relation to how they approach the concept of market. The revision shows that, so far, the best known interventions in social studies of markets -for instance articles published in Organization Studies by Callon and Muniesa (2005), and by Ahrne, Aspers and Brunsson (2014), or older and influential contributions by Richard Swedberg (1994) and Harrison White (1981) – follow the first stance. They take the definition of the concept of market as their task. There is, however, a set of lesser known interventions – for instance Depeyre & Dumez (2008), Onto (2016), Frankel (2011), and Ossandón & Ureta (2017) – where concepts of markets –different definitions and their uses – are taken as objects of empirical study. The fourth part closes by coming back to the dilemma presented by market design and by discussing the possible consequences of the analysis here conducted for future studies of markets and organization.

José Ossandón

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