Where Callon and I Disagree: The History of the Economy

“The economy obviously existed before economics became a formal academic discipline, but this does not mean that we went from a state of non-reflexivity to one of intense reflexivity, monopolized by a small number of academic researchers.” – Callon (2005), “Why Virtualism Paves the Way to Political Impotence: A Reply to Daniel Millers Critique of the Laws of the Markets.” in the Economic Sociology newsletter.

I have thus far found no evidence of any object called “the economy” before perhaps 1930, nor have Emmison (1983) or Mitchell (1998). Perhaps Callon simply meant that people produced, distributed, exchanged and consumed goods before the rise of formal economics. If so, then we have no disagreement. But, while I am no longer continually surprised at how casually sociologists throw around the terms “economy” and “market” as if these were simple, ahistorical constructs, I am a bit more surprised at such language from Callon himself. So, in case you are out there, why do you keep talking about “the economy” and what do you mean by it, M. Callon?

Edit: This post came off as snarkier than I intended it. That’s what happens when you post things on the internet half-asleep, I suppose. My last question is a serious one, trying to be a little silly, but not snarky. I really don’t understand why Callon shifts between the language of markets (a term he spends a fair bit of time defining and discussing) and the language of economy/economies (which, as far as I can tell, he does not). What is the difference for Callon between “markets” and “the economy”? I don’t know. Maybe it is somewhat nitpicky, but given how important the term “economy” is in contemporary discourse, and his carefulness with the term market, I expected a bit more than “obviously existed…”



  1. So, in case you are out there, why do you keep talking about “the economy” and what do you mean by it, M. Callon?

    I don’t know that this is the kind of snark that helps much. While you are most likely right on the merits, I think it’s not worth overstating the case. I recall when TM was making precisely this case to MC in 2005 or so, at the NYU ICAS seminar, and it was not a make-or-break argument for Callon. I’m not a very strong ANT adherent myself, but it seems to be hanging a lot on a little here.

    For instance, in 1899, Henry Crosby Emery was making the argument in defense of speculation, where he talks about the shift from local, to national, to international markets in grain:

    “Even as late as 1850 the markets for grain were local markets, and in the main prices were determined by local conditions. With the growth of the world-market of to-day the price n each locality came to be determined by the conditions of demand and supply in all parts of the world. A sudden change in the crop conditions of India had an immediate effect on the price of wheat in Birmingham and San Francisco…The unpredictable forces in the market – the Konjunktur – became increasingly important…The growth of organised speculative markets was in direct response to these conditions.” [Emery. 1899. Futures in the Grain Market. The Economic Journal 9(33): 45-46]

    So true, yes, this is not an ‘economy’ separate from society and manageable by economists and other specialists; but it is not just ‘market activities’, and it is an argument for recognizing a specialized class of speculators who are managing it. These are not economists (maybe economists in the wild if you believe that kind of muck). But they are something. (Inter)national markets that have specialists, a theory, connection to politics, society.

    In other words, you are technically right but not overwhelmingly so. I imperfectly recall that there’s a special issue of the Annals of Political Science something or other from the time period (maybe 1911?) devoted to speculation and futures as well, with similarly argued papers.

  2. Thanks for the citations, and the snark warning. You are right to worry about me (and others) overstating the case – I think Mitchell does so, especially in his early versions of the argument (e.g. “Fixing the Economy”). That’s part of why Callon’s use is interesting but problematic for me – I just can’t tell if he is using “economy” to mean something specific I can’t grasp, or if he is just using it generically to mean sort of markets plus. Callon provides several excellent discussions of what precisely he means by a market, which are both helpful and significantly more thoughtful than most such discussions. But I’ve never seen (or perhaps have willfully forgotten) a definition of “economy” in his work. So it’s mostly an honest question – I do not understand why he uses both terms and what if anything he means to distinguish.

    In terms of the overstating the case – the argument I make in my ASA paper is that we are hanging too much on the emergence of the word “economy” and need to dig deeper to find out what precisely changed in the 1930s when we start using that word. I argue that the economy comes to take on two new meanings in that period, one older, one new. The older meaning is something like “the economic sphere”, “the totality of relationships of production, distribution, and exchange”, or “the set of all economic relationships”. While we did not use the word economy to describe those things before, we did us other terms (economic system, economic sphere, economic life) for at least a few decades, and somewhat similar terms for maybe 150-200 years, I don’t really know.

    What seems to be new about the way “the economy” is used in the 1930s is the way it sometimes refers to a much more bounded and concrete object, what I call “the macroeconomy”, a structured, ordered, measured subset of economic relationships that can be both an object of knowledge and an object of intervention in a way that the economic sphere is too amorphous to be. So, when we say “the economy grew 1% in 2009”, we aren’t talking about the totality of economic relationships, but some specific measured subset (measured, and thus to some extent defined, by GDP/GNP/National Income). As far as I can tell, this meaning is quite novel and makes possible certain kinds of intervention (Keynesian economics, for one).

    Does that make sense? I apologize for snarkily overstating my case, I was just a bit surprised to see Callon refer to the economy “obviously exist[ing]” before economics (I had not read that particular essay until last night). It made (and makes) me wonder about how he is using the term.

  3. No need for apologies (this is the internet after all). I agree with you about the ability to bundle a set of activities into an objectified entity and the subsequent abilities to then manage that entity. I think of this same question in a slightly broader sense. Marc Ventresca wrote his dissertation on the spread of censuses, which enabled governmentality (in the Foucault sense) to a greater degree. Theodore Porter’s Trust in Numbers captures similar features. And I’m in the midst of teaching Wendy Espeland’s book about the Struggle for Water, where a new technology and conception of rationality – broadly speaking, environmental impact statements and assessments of environmental quality – made possible a new range of activities around the building of dams (and environmental projects more generally).

    So I tend to think about this as a form of commensuration or something like it, or to use Callon’s ‘formatting’ economic activities. Both to me capture the fact that markets require antecedent activities to make them appear as objects, which can then be manipulated (or which defy manipulation if you’re a free-market-maven). Your point of entry is fairly macro, which is an interesting approach.

    So I’m on board with your agenda, and probably the specifics. But the devil is in the details. The difference between ‘an economy’ that grows by 3% and a system of national markets that can also be measured, regulated, contested can be a fine one, IMHO.

  4. Re: Apology – Well, you never know what might go wrong if you don’t make yourself clear.

    Thanks for the clarification also. Do you know if Marc ever published any of that dissertation? Some brief google scholar-ing revealed the dissertation itself (submitted to the department of Electrical Engineering?!), but nothing more.

    I agree completely that the devil is in the details. I’m focusing right now on the history of national income accounting, as I think that’s going to be something I can cleanly point to and say look, this did not exist and was not used before, and is everywhere after. Something has changed. But I need to do a lot more legwork to pin down the precise changes that happened, and how big they were. It may well turn out to be a slower, more gradual shift, starting in the late 19th century. I do think (hope?) it will turn out to pick up a lot of speed post WWI with the rise of many of the official statistics we know and love today (inflation in the 1920s, national income in 1934, monthly unemployment not until 1940, etc.).

    A large part of my story hinges on unpacking the difference between a system of markets and an economy, to the extent that there is one, which is part of what triggered this post. It seemed as if Callon was assuming that difference away, but I think there is something there. For example, macroeconomic management starting in the late 1930s seems to solve the “liberal dilemma” – how do you regulate economic life without taking away individual freedom and becoming socialist? The answer is to act on aggregates, and not on markets directly. Replace wage, price and output controls with a fiscal stimulus. Force people to save, or encourage them to spend, by raising or lowering income tax withholding. Etc.

    Thanks again for the comments!

  5. limitations and shortcomings

     /  February 26, 2009

    “I’ve never seen (or perhaps have willfully forgotten) a definition of “economy” in his work.”

    I am not sure that you will ever see a definition of anything in Callon’s work *as* his own definition (I am saying this without thinking about it, and might want to qualify that statement). What I am trying to say is that he does not have a metalanguage but only an infralanguage (or at least that is the idea – I don’t think he has, incidentally, because I think he confuses methodology with ontology, or actually because I think he does ontology whereas he tries to argue he doesn’t).

    Also: if we are to take that quote – “The economy obviously existed before economics became a formal academic discipline, but this does not mean that we went from a state of non-reflexivity to one of intense reflexivity, monopolized by a small number of academic researchers” – in the context of a Miller’s criticism of his work, it might make more sense. Indeed, Callon seems to be trying to make sure that he is not getting interpreted as an idealist, or at least as somebody who thinks that it its discourse that matters in the final instance. I am not sure that he means it in any real or enduring sense. My first rule of reading Callon is to always place more emphasis on what he is *doing* and what problematics he is responding to than what he is explicitly saying. Callon, as I am sure you know, says many things he does not necessarily mean…

    Sorry for the rambling. Tired. Can hardly think here.

  6. William R Strent

     /  March 3, 2009


    I’m trying to develop a unit on Economics, Justice and Theology. As part of my introduction to it I’ve written:

    The Economy and Economics

    It is important to make quite clear that when talking about ‘economics’ we are not talking about the ‘economy’. The economy is the sum of the set of processes that produce and distribute goods and services amongst the members of a society. Economics is the study of how those processes operate. That is, it is the study of:
    • What is produced,
    • How it is produced, and
    • How it is distributed.

    The Economy

    Definitions are always tricky. Philosophers sometimes amuse themselves by asking students to define a ‘table’, or possibly a ‘tiger’. Simple answers to such questions are impossible. (Is a table a flat surface with four legs? or three? or more? Does a ‘tiger’ have four legs and stripes? Can there be an albino, three legged tiger? So it is with a definition of an ‘economy’. Maybe the only answer is that while I can’t define it, I at least know one when I see it.

    But if you can’t describe something, how on earth can you analyse it?

    Let me have a go.

    Firstly we can say that an economy requires that it involves more than one person. In other words we cannot say that there was a Robinson Crusoe economy until Man Friday turned up.

    Secondly we can say that an economy involves relationships between its participants. Of course the form of those relationships may vary from society to society and, indeed, from time to time within the one society. Their varying forms have been the subject of study by many anthropologists and sociologists.

    Fundamental to an economy, therefore, are the exchanges of goods and services that, ostensibly, increase the well-being of those who participate in those exchanges. In the absence of such exchanges there is no economy and so it was only after the arrival of Man Friday that an ‘economy’ commenced on Robinson Crusoe’s desert isle. In that case the economy was extremely simple, involving only two participants. More complex is a ‘household economy’. But, of course, we now talk of a ‘global economy”.

    Whatever the case, the economic historian Karl Polanyi insisted that:

    The human economy [is] . . . embedded and enmeshed in institutions, economic and non-economic. The inclusion of the non-economic is vital. For religion or government may be as important for the structure and functioning of the economy as monetary institutions or the availability of tools and machines themselves that lighten the toil of labour.
    According to his theory, the actors in the economy are constrained by the social relations within which they are enmeshed.

    For him, the key factors in an analysis of an economy are:
    • Reciprocity, which he defines as movements between correlative points of symmetrical groups. These ‘vice versa’ typically take place between two “parties”.

    Redistribution – movements towards a centre and out again. This is “pooling’ or “redistribution” These redistributive exchanges occur between a central authority (chief, lord-of-the-manor, or state) which then re-allocates them back to its various ‘subjects’.

    and finally there are
    • Exchange-relationships. These are the vice versa movements which take place as between ‘hands’ in a market system.

    My ultimate argument is thqat neo-classical economics only relates to what Polanyi terms the self-regulating market.

    I could go on., But I’m more interested in your comments.

  7. @William – W.r.t. Polanyi, I think for him “actors in the economy” are not just “constrained by the social relations” but rather the economy itself is a produce of social relations and consists of social relations. I would agree that it neo-classical economics focuses primarily on systems organized by exchange (although they do analyze public finance and other taxation policies using ideas like public goods and externalities, even if these ideas are not entirely emphasized). But exchange itself is a kind of social relation, governed and enabled by various social arrangements. For example, in The Great Transformation, Polanyi discusses how the government created and dispensed with various labor systems, eventually creating the modern labor market (by eliminating the old poor laws), and similarly worked to create the market for land. In other words, free markets don’t pre-exist social arrangements (and thus don’t exist at all, ever). Check out Krippner (2002). Here’s my favorite quote:

    But every transaction, no matter how instantaneous, is social in the broader sense of the term: congealed into every market exchange is a history of struggle and contestation that has produced actors with certain understandings of themselves and the world that predispose them to exchange under a certain set of social rules and not another. In this sense, the state, culture, and politics are contained in every market act; they do not variably exert their influence on some kinds of markets more than others.

    But, to perhaps a more important point – for Polanyi, every society has some sort of economy, organized around some set of principles (e.g. redistribution, reciprocity or exchange). But Polanyi’s notion of the economy is complicated (and I don’t claim to fully understand it). For Polanyi, the economy is not simply the set of all economic relationships – in some sense, his work explodes th economic/non-economic dichotomy. So.. my warning would be to be careful. I think our everyday usage of the word economy is quite different from his, and also itself somewhat messy (as we use the word to mean both something concrete and measurable, i.e. that which the GDP measures the size of, and something amorphous, i.e. the set of all economic relationships. But those two are quite different).

  8. Have you looked at the OED entry for ‘economy’? (I just took a glance.) It looks like the word has had the sense of “ordering and management” of resources and systems for a long time.

    Here a bit from the etymology of ‘economy’ from the OED:

    “[< Middle French yconomie, economie, French économie, oeconomie management of a household or of its expenses or of domestic or familial matters (c1370), order according to which things are administered or organized (15th cent.), good use of a thing (15th cent.), economy or restraint in expenditure (c1510), good order in conduct and administration with regard to production and consumption (17th cent.), harmonious disposition of the parts of a whole (17th cent.), harmony in the different parts of an organized body (1671) . . . (administration or management of a) household (from c1356 in British sources), husbandry (from 1436 in British sources) < ancient Greek management of a household or family, husbandry, thrift, arrangement, in Hellenistic Greek also administration, principles of government, arrangement of a literary work, stewardship (Septuagint, New Testament), plan, dispensation (New Testament), prudent handling or explanation of doctrine < house-steward (see OECONOMUS n.) + – -Y suffix3. Compare Italian economia (a1540).”

    Now, I haven’t read any of the body of work your referencing. Everything I know comes from discussions with you. But isn’t it tautological that the economy as an object to be managed with modern economic “technologies” couldn’t exist before those technologies were developed?

    That fact does not foreclose people from thinking about ways to order and manage systems like their household, city, or empire. That people did not think about ordering and management using modern economic technologies does not mean they were simply producing, distributing, exchanging, and consuming goods without reflecting on the ordering and management of the systems they were using.

    They did think about ordering and management of those systems. If you have Aristotle’s Politics handy scan though Book I Chap 3-13 where he discusses household management. He begins: “Seeing then that the state is made up of households, before speaking of the state we must speak of the management of the household.”

  9. @Adam – You are right that the word “economy” has had an older meaning relating to efficient management going back to the Greeks (for a full elaboration, see Singer 1958). But that older meaning referred to the management, not the object being managed. So, in 1933, during his first 100 days, FDR proposed and signed into law “The Economy Act” which reduced certain government expenditures by cutting salaries and whatnot. The economy referred to was the quality of thrift, efficiency, effective management – but it was not an object of action, or of knowledge, in the modern sense. That older use still exists, but it faded somewhat as the modern usage came to dominate in the 1930s-1940s.

    I agree with your statement: “That people did not think about ordering and management using modern economic technologies does not mean they were simply producing, distributing, exchanging, and consuming goods without reflecting on the ordering and management of the systems they were using.” completely. One of my next tasks is to figure out exactly what that understanding looked like in the period before the 1930s. For example, the idea of a business cycle (and attached to it, the term recession) pre-exists the modern suite of technologies. But there is not an object called the economy there, but rather an amorphous notion of business doing well or doing poorly in some sort of cyclical fashion (as far as I can tell).

    So the issue is not that people did not think about ordering and managing certain kinds of relationships, but rather that they packaged them up in different ways. For example, there was a great deal of thought about markets, and what you needed to do to make sure markets were competitive (e.g. break up monopolies or bust trusts). What I am looking at is a change in the way we understand that system we are managing, and how it changed what sorts of actions we think made sense. What I think is particularly interesting about this modern macroeconomy is how measured and measurable it is – “the market” and “business” do not have a clear size and shape the same way the economy does. Does that make sense?

    As to the issue of tautology.. I struggle with that, but I’m hoping that a more detailed chronology will help resolve issues. By figuring out what order things happened in, I’m hoping to show a process of mutual construction rather than a tautology. But there is an element of that.

  10. William R Stent

     /  March 4, 2009

    (In the earlier post I mis-spelled my own name!)

    I guess that what I’m really driving at is that it is essential that we recognise the difference between ‘the economy’ and ‘economics’. Following Polanyi we can agree that the economy entails social as well as market relations. Analysing the economy demands that we have some sort of theoretical framework. Which framework we use is essentially a matter of choice. However, for reasons that we need not go into here, neo-classical economics in one or other of its manifestations has come to dominate both the profession and the debate. One consequence is that the definitions and assumptions of neo-classical economics now define the way in which we look at the economy. I am sure that that is not a good thing. Certainly it has had the effect of belittling – or even disempowering – commentators who would choose to use, implicitly or otherwise, a different analytical framework.

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