Technological Economy

Don Slater, Andrew Barry

• Publisher: Routledge
• Year: 2005
• Print ISBN: 9780415336055
• eBook ISBN: 9781134307128
• Topic: Economics
• Subtopic: Economic Theory
• Index: Economics

In this major new collection, leading experts explore the multidisciplinary connections between technology and economy, drawing on new convergences between economic sociology and science and technology studies. Through theoretical and empirical studies, the authors investigate:

* economics and economic knowledges as technologies
* the economies as socio-technical arrangements
* the nature of innovation
* the role of technological mediations in representing and performing economies.

This revealing book, ideal for those with an interest in contemporary social theory, interrogates the evidence for the contemporary claims about the emergence of the 'new economy' and 'knowledge-based economies' and sheds new light on the relationship between economy and culture.

1 The economy of qualities

Michel Callon, Cécile Méadel and
Vololona Rabeharisoa

As Charles Smith, one of the pioneers of “new” economic sociology, so rightly pointed out, forms of organization of economic markets and their modes of functioning are becoming an explicit issue for multiple actors and especially for economic agents themselves (Smith 2000). Markets evolve and, like species, become differentiated and diversified. But this evolution is grounded in no pre-established logic. Nor is it simply the consequence of a natural tendency to adapt. Economic markets are caught in a reflexive activity: the actors concerned explicitly question their organization and, based on an analysis of their functioning, try to conceive and establish new rules for the game.

This reflexivity is evident mainly in the proliferation of hybrid forums in which the functioning and organization of particular markets (e.g. transgenic colza or breast cancer predisposition gene tests) are discussed and debated (Callon et al.
2001).¹

“Forums” because they are public spaces, the specific structuring of which is yet to be defined.

“Hybrid” for two reasons. The first is the variety and heterogeneity of the actors involved. In debate on the organization of markets we find: professional economists from different schools of thought, anthropologists and sociologists; economic actors (industrialists, consumer associations and social movements protesting against the increasing control of certain centres of power, etc.); international or national organizations such as the IMF, IRDB and ERDB which have their say in the structuring of markets; specialists of intellectual property, experts in management techniques and, more and more often, researchers in the life or natural sciences. The second reason they are hybrid is because the questions raised concern the economy,² politics,³ ethics,⁴ law⁵ and, finally, even science.⁶

In these hybrid forums it is impossible to separate or dissociate the different components of the issues, even for the sake of simplifying the analysis. The forms of organization of markets defended by the actors engaged in the controversy vary, depending on those actors’ political or ethical points of view or the way in which they evaluate the reliability of scientific facts or the efficacy of available technology. Isolating problems and solutions that could be considered purely economic would lead to socially illegitimate solutions.⁷

There is nothing new about markets being the subject of debate and their modes of organization depending on (non-commercial!) transactions between groups with differing and sometimes even opposing views and interests. Studies attesting to this are starting to become available, although they are still too few (Dumez and Jeunemaître 1998; Gao 1998; Miller 1998; Cochoy 1998). What seems to be new is the fact that the locus of these debates and resulting decisions is more and more frequently (relatively) open public arenas.

One of the most visible consequences of public debates on questions that tend usually to be monopolized by specialists (or by professional decision-makers who rely on expert opinions) is the resulting redistribution of competencies and the increasing role granted to economic agents themselves. Professional economists no longer have the direct or indirect monopoly (assuming they did ever have it) on authorized and legitimate discourse. This does not mean that they are excluded from the debate. On the contrary, they are cordially invited to participate, but they are no longer alone. Next to them we find not only specialists from other scientific disciplines (anthropologists, sociologists, political scientists and, depending on the nature of the markets under consideration, biologists, chemists or climatologists) but also, and above all, the actors concerned with the markets under discussion. Economists, sociologists and biologists can no longer confine themselves to an outdated form of epistemology. The actors are now colleagues whom they have to take into consideration and who contribute in their own right to the production of knowledge and its transcription in reality which sometimes ends up corresponding to theories about it.⁸ The forum creates an arena in which the great divide between specialists and laypersons is redistributed. It creates material conditions for cooperation between laboratory research performed by experts and specialists, on the one hand, and research “in the wild” that makes it possible for laypersons to be vigilant and sometimes prompts them to propose guidelines for new research (Callon et al. 2001).

As far as it concerns markets and their organization, this reflexive – because collaborative – research should progressively be focused on a small number of questions, including what we suggest calling the qualification of products. Real markets and the agents inhabiting them have in common with the stylized markets of economics textbooks the same core question: the classification of goods offered to consumers. Economic agents devote a large share of their resources to positioning the products they design, produce, distribute or consume, in relation to others. Any theoretical and formal description of a market starts with the inevitable statement: take goods p1, p2, p3, etc., without which no stylized model would be possible. How could we talk about supply and demand, in practical or theoretical terms, if there were no agreement, at least tacit or even imaginable, on the list of products and their characteristics?⁹ How could we describe, in practice and theory, the structures of competition within the same market or between related markets, if relations of similitude or dissimilitude between the goods that circulate could not be established?¹⁰

One of the most visible manifestations of this shared concern (how to classify and position goods?) is reflected in the upsurge in debate on the concept of a service. The distinction between manufactured goods and services, which has generated recurrent and endlessly open debates, is becoming central again, probably because it is at the heart of a set of questions on the transformation of the economic system and/or on the appearance of new models of growth and regulation (Gadrey 2000). Whether one talks about the new economy, the information economy, the knowledge economy or even, more directly, of the service economy, one is expressing the possibility of a profound transformation of the rules by which markets function, a transformation that is thought to be related essentially to radical changes in the characteristics of the goods traded.

Our view in this chapter is that the emerging convergence between the interests of researchers and the preoccupations of economic agents, around the question of services, warrants encouragement and clarification. It is likely, eventually, to promote the constitution of hybrid forums in which new forms of organization of economic activity could be discussed. To show the advantages of such convergence, we shall take a detour via the general question of the definition of goods and products. Then, based on both the economic tradition and on sociological and anthropological work, we shall put forward a product definition that will lead us, in the second part, to show the active and reflexive role of economic agents in the qualification of products. This will enable us to demonstrate the emergence of new forms of competition and to emphasize the advantages of the concept of a service for describing and explaining them we suggest calling this new form of organization of markets the economy of qualities.

The key argument in this chapter is the suggestion that, in the economy of qualities, that can also be called the service economy, because the questions posed by researchers and economic agents are to a large degree identical, cooperation between them is inevitable. The organization of markets becomes a collective issue and the economy becomes (again) political. One of social sciences’ objectives might be to contribute, as far as possible, to that development.¹¹

The product as a variable: conflict and negotiation
around the qualification of goods

What is a product? When one consults political economics textbooks one is struck by the diversity of terms used to denote the objects of commercial transactions.¹²

Faced with this semantic proliferation and resulting imprecision, it is out of the question to try to control the use of concepts, especially since each of them sheds particular light on the reality in question. To better understand the emergence of new forms of organization of markets and new modes of competition, it nevertheless seems useful to make a distinction – necessarily arbitrary but nevertheless rooted in etymology – between a good and a product (two concepts which are often used interchangeably in the vocabulary of economic theory).

Talking of a good means emphasizing the fact that the aim of any economic activity is to satisfy needs (what is good, sought after, wanted). Qualifying these goods as economic means adding that their production and circulation involves the mobilization of necessarily rare resources, or that these goods can be attached to property rights which are transferable from one agent to another. The concept of an economic good implies a degree of stabilization of the characteristics that are associated with it, which explain why it is in demand and why, being wanted as such, it is traded.

A product, on the other hand, is an economic good seen from the point of view of its production, circulation and consumption. The concept (producere: to bring forward) shows that it consists of a sequence of actions, a series of operations that transform it, move it and cause it to change hands, to cross a series of metamorphoses that end up putting it into a form judged useful by an economic agent who pays for it. During these transformations its characteristics change.

The product is thus a process, whereas the good corresponds to a state, to a result or, more precisely, to a moment in that never-ending process. As an economic good a car is an object, a thing with a well-defined shape, which is used to meet specific needs and which has an established value in a market context. But it is more than that. It is also an object that has a life, a career. Seen from the angle of its conception and then production, it starts off by existing in the form of a set of specifications, then a model, then a prototype, then a series of assembled elements and, finally, a car in a catalogue that is ordered from a dealer and has characteristics which can be described relatively objectively and with a certain degree of consensus. Once it is in the hands of its driver the car continues moving, not only on roads but also, later, for maintenance purposes to workshops, then to second-hand dealers. At times it becomes an object on paper again which takes its place alongside other cars in the guide to second-hand car prices in specialized magazines.

The product (considered as a sequence of transformations) describes, in both senses of the term, the different networks coordinating the actors involved in its design, production, distribution and consumption. The product singles out the agents and binds them together and, reciprocally, it is the agents that, by adjustment, iteration and transformation, define its characteristics.

Once the distinction between goods and products has been established, the question of their relations remains. These can be considered from a dual point of view: that of the process of qualification of goods, and that of the product considered as a strategic variable.

To deepen and enrich the proposed distinction between product and good, we shall start with the definition of a good, as given in most economics manuals. “A good can be described as a bundle of characteristics: quality, location, time, availability, consumer’s information about its existence and … so on. Each consumer has a ranking over the mix of variable” (Tirole 1989). In other words, a good can be defined by a combination of characteristics that establish its singularity. This singularity, because it stems from a combination, is relational. In fact, the selected characteristics can be used to describe other goods, with which relations of similitude or proximity are likely to be established. Defining a good means positioning it in a space of goods, in a system of differences and similarities, of distinct yet connected categories.¹³

How are these characteristics established, which make it possible to say that two goods are relatively similar but different or else totally dissimilar and radically incomparable?

First, these properties are not observed; they are “revealed” through tests or trials which involve interactions between agents (teams) and the goods to be qualified. The fact that a wine is syrupy, that it matures with age, that it has a high or low alcohol content, that it comes from the Médoc region or Tourraine, are all properties which will be used to characterize it but which, to be identified and objectified, require the implementation of certified tests and the realization of codified measurements.¹⁴ The same applies to a car. Its road-holding, engine capacity, consumption and comfort, the resistance of its paint to corrosion, and its delivery time are all parameters which, to be appreciated, evaluated and objectified, need a battery of tests, test benches, approved measurement instruments, documents guaranteeing traceability, etc. The characteristics of a good are not properties which already exist and on which information simply has to be produced so that everyone can be aware of them. Their definition or, in other words, their objectification, implies specific metrological work and heavy investments in measuring equipment. The consequence is that agreement on the characteristics is sometimes, in fact often, difficult to achieve. Not only may the list of characteristics be controversial (which characteristics ought to be taken into consideration?) but also, above all, the value to be given to each of them. Once agreement has been reached it will be characterized by a degree of robustness if the procedures used were objective.

Second, the definition of these characteristics is modified as the product develops and changes. The characterization of a vehicle in the research laboratory is obviously not the same as that on the sales brochure distributed by the dealer, even if the two lists of characteristics are related. It is also different from the one proposed to a sub-contractor who designs and manufactures parts.

The notion of a characteristic in its standard sense (and particularly in the definition proposed by Tirole) tends to mask both the existence of progressive metamorphoses of the product and the necessity for successive investment to organize the trials required for characterization. That is why I prefer to talk of qualities and of a (continuous) process of qualification–requalification, for they are simply two sides to the same coin. All quality is obtained at the end of a process of qualification, and all qualification aims to establish a constellation of characteristics, stabilized at least for a while, which are attached to the product and transform it temporarily into a tradable good in the market.¹⁵

A good is defined by the qualities attributed to it during qualification trials. These qualities are therefore twofold. They are intrinsic: the good is engaged in the qualification trial and the result obviously depends on the good in question. But they are also extrinsic: not only are the qualities shaped by the device used to test and measure the good (and therefore depend on the choice and characteristics of that device) but their formulation and explanation also generate evaluations and judgements which vary from one agent to the next. The notion of quality has the advantage of closely binding these two meanings and of including the class...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contributors
• Acknowledgements
• Introduction
• 1. The Economy of Qualities
• 2. From Calculation to Alienation: Disentangling Economic Abstractions
• 3. Externalities In Comparative Guise
• 4. The Anti-Political Economy
• 5. Technology, Politics and the Market: An Interview With Michel Callon
• 6. From Pipes to Scopes: The Flow Architecture of Financial Markets
• 7. Cultural Political Economy, the Knowledge-Based Economy and the State
• 8. Performing Finance: The Industry, the Media and Its Image
• 9. The Objectivity of the Brand: Marketing, Law and Sociology