performativity + political economy

There’s a lot of confusion about the “performativity of economics” and along with that confusion a healthy dose of critique. The main line of argument is that the performativistas ignore politics and power, and thus lose the insights of traditional political economy. Benjamin Braun has a nice article in New Political Economy that offers a very nice overview of these debates, and a very savvy summary of the value of the performativity approach for questions of political economy.

Braun argues that the fine-grained, technical approach of performativity scholars is essential for understanding the “diversity of capitalism,” and thus how new sociotechnological assemblages offer new political economic possibilities. As an example, Braun looks at the emergence of passive investment strategies and exchange-traded index funds. These funds, inspired by financial economics in the 1960s-1970s and made possible by institutional and technological innovations in the 1990s, might enable a more patient, less short-term, financial system. As Braun concludes:

Certainly, ‘impatient capital’, epitomised by high-frequency traders and activist hedge funds, continues to thrive. At the same time, however, an economy dominated by asset managers seeking low-cost exposure to the market portfolio may, in principle, open up the possibility for the internalisation of externalities, the formation of long-term orientations and the provision of ‘patient capital’. This article has argued that staying on top of such changes in the macro-structure of capitalism requires a solid microfoundation for political economy – an approach well-versed in the micro-level devices and meso-level practices of, in this case, the investment intermediation market.

Highly recommended.

Author: Dan Hirschman

I am a sociologist interested in the use of numbers in organizations, markets, and policy. For more info, see here.

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