Restoring constitution: saving performativity from Mäki’s critique

ABSTRACT

This paper aims to solve a fundamental critique of the research project of the performativity of economics. The critique by philosopher Uskali Mäki strikes the concept of performativity in a weak spot – its utilization of the notion of constitution, drawn from John Austin’s philosophy of language. Accepting Mäki’s critique implies a deterioration of performativity to a marginal field in economics studies, the opposite of the substantial stance it enjoys today. Using Brian Epstein’s unique account of constitution’s role in the ontology of social groups, this paper suggests an original solution to the critique that restores the legitimacy and importance of using constitution as part of performativity research. Furthermore, it offers a novel ontologically nuanced definition of performativity.

KEYWORDS:

• Performativity of economics
• social ontology
• constitution of social groups
• Black-Scholes
• economic institutions
• economic models

Acknowledgements

This paper benefited from a thorough review of a preliminary version by Yossef Schwartz and Ori Belkind, as well as from valuable comments made by the anonymous reviewers. I would also like to thank Ehud Lamm and Yuval Yonay for introducing me to some of the basic notions that ground this work.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes on contributor

Mickey Peled is a PhD student at the Cohn Institute for the History and Philosophy of Science and Ideas at Tel Aviv University. His research focuses on the affects of the architecture of models in macroeconomics on the macro-phenomenon and in particular on the role of abduction as a cognitive constraint in the construction of monetary policy.

ORCID

Mickey Peled http://orcid.org/0000-0002-1809-0476

Notes

1 By ‘economics studies’ I mean the common denominator of research projects from different scholarly fields, such as philosophy, sociology, history and political science, which all deal with the study of the economic discipline and economists’ practice.

2 The distinction between illocutionary and perlocutionary is not an obvious one, see for example (Cohen, 1973). This paper would assume a clearer distinction, the same as Mäki assumed in his critique.

3 For simplicity’s sake, this is a slightly different division of time periods than the one offered by MacKenzie and Millo (MacKenzie & Millo, 2003, p. 130).

4 For a slightly different version of the coordination device, see (Brisset, 2016).

5 For further reading see (Guala, 2016b) and (Guala & Hindriks, 2015).

6 Guala himself notes that Epstein’s account of constitution is an exception from the common account of constitution in philosophy.

7 Barnesian performativity is defined by MacKenzie as ‘practical use of an aspect of economics makes economic processes more like their depiction by economics.’ It is a sub-mode of effective performativity, defined as ‘the practical use of an aspect of economics has as effect on economic processes’ (MacKenzie, 2007, p. 55).

8 From now on, ‘performativity’ in this paper refers to MacKenzie’s modes of performativity. While Callon has a wide stance on economics and its practices, MacKenzie differentiates between performativity in general and what he calls the ‘interesting’ kind of performativity (MacKenzie, 2007, p. 60), meaning the kind of performativity that the research program should try to identify, clarify and understand. This kind of performativity is the effective mode and its sub-mode of barnesian performativity (see note 7).

9 This aspect of performative models is especially relevant to barnesian performativity, but to some extent also to the more general effective mode.

10 Constitution in the case of social groups is not a unanimous view. For critical accounts, see (Effingham, 2010) and (Thomasson, 2016).

11 Epstein has different reasons for focusing on social groups. One of them is to debunk ontological individualism, see (Epstein, 2015, pp. 129–131). This is not the aim of this paper, nor is it to say that social groups are the sole object of research in economics.

12 The idea that social groups are made of sets is not uncontested, if only because the intuitive notion about sets is that a set cannot change its members and still remain ‘that set’ while a social group can (Ritchie, 2013).

13 This list is not an exhaustive and exclusive list of such a set, but given only as an example.

14 The fact ‘the AS Roma squad exists in the Italian Serie A 2018–2019 season’ is essential for the constitution of the AS Roma squad. Facts about the existence of social groups are among the disagreements that Epstein has with Searle’s constitutive rules (Epstein, 2015, p. 161).

15 One possible fallacy is to interpret this preposition as arguing that facts like the assumptions in the model are the ones who ground the parallel facts in the structure of the phenomenon. Though it might happen it is not imperative. Other facts in the model might be the grounding of facts about the phenomenon, as the example given in Section 4 will demonstrate.

16 This is not the only reason why transactions costs fell. MacKenzie and Millo find that regulatory changes and technological advancement had significantly lowered the costs (MacKenzie & Millo, 2003, p. 123). For a more elaborate history of the incentives that high-volume trading investment banks received, see (MacKenzie, 2006, pp. 73–75).