Journal article 1181 views 330 downloads
Turning financial markets inside out: Polanyi, performativity and disembeddedness
Environment and Planning A, Volume: 45, Issue: 7, Pages: 1625 - 1642
Swansea University Author: Christopher Muellerleile
PDF | Accepted ManuscriptDownload (280.1KB)
DOI (Published version): 10.1068/a45610
In light of the spread of markets across the globe and deeper into daily life, thispaper argues for a more robust analysis and application of Karl Polanyi’s conception of(dis)embedded markets coupled with the performativity thesis authored mainly by MichelCallon. It suggests that while disembeddedne...
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In light of the spread of markets across the globe and deeper into daily life, thispaper argues for a more robust analysis and application of Karl Polanyi’s conception of(dis)embedded markets coupled with the performativity thesis authored mainly by MichelCallon. It suggests that while disembeddedness as a concept is necessary for an analysisof contemporary financial markets that are increasingly self-referential, it is not sufficient.Despite the suggestion of a gulf between Polanyian and Callonian economics, there areimportant similarities in the two frameworks. The similarities are considered along withthe considerable difference, all in an attempt to develop a more robust methodologicalframework for analyzing financial markets. Performativity, it is argued, can help fill thegaps in Polanyi’s embeddedness framework, albeit only when that concept’s tendencyto produce aspatial and apolitical arguments are taken seriously. The paper uses anabbreviated case study of the development of US financial derivative markets in the 1970sand 1980s to argue that markets must be considered in light of both their institutional andgeographic entanglements as well as their (dis)embeddedness in systems of calculativenessand mathematical modeling. Specifically the paper analyzes the tension between thederivative origin story authored by Donald MacKenzie, which focuses on neoclassicalpricing models like the Black–Scholes–Merton option pricing formula, and my ownempirical research, which suggests the urban-economic geography of Chicago played akey role in the development of these instruments.
Faculty of Science and Engineering