Today, while reading Martha Poon’s excellent piece on how credit scores reshaped the US mortgage market, I re-read a nice, succinct quote that describes much of the recent STS approach to economic sociology. The quote is from Callon, Muniesa and Millo’s edited volume Market Devices, where the editors argue “Calculation is neither a universally homogeneous attribute of humankind, nor an anthropological fiction.” (5) This quote quickly summarizes several important theoretical points by focusing on the existence and historical specificity of actually occurring calculation. That is, people do calculate (or “behave rationally”), but they do so under different conditions in different times and places, using different tools. As Callon writes elsewhere, homo economicus is neither a universal truth, nor an absolute lie, but rather a contingent (and thus fragile, imperfect) accomplishment.
What struck me this morning about the quote was how well it lines up with Herbert Simon’s early work on bounded rationality, at least as interpreted in Bendor’s (2003) review. Simon argued that rationality is an organizational accomplishment because being rational is costly – gathering and analyzing information takes resources, as well as clear goals. Simon was intensely interested in rationality “as process”, not as an assumption. And so on.
Rather than exhaustively pointing out similarities (and in turn, pointing out my own limited knowledge of Simon!*), I just want to note the similarities and say, here there be dragons! Er, or something like that. One clear place to see this sort of connection would be in Beunza and Stark’s work on “reflexive modeling,” the process they identified traders using to determine how others traders see the market and thus to test their own assumptions and look for errors. Here we see both the costs of rationality, and its process – and potential pitfalls. I wonder if making the connections between this sort of research and older inquiries in organizational theory more explicit would help ease the tensions between the science studies approaches and more traditional work.
* Note to self: read more Herbert Simon!