Rethinking Markets

Felix Salmon’s blog at Reuter’s is consistently the best financial journalism blog I read. It’s rather depressing, in a way – his work so good and topical, and timely, it takes the steam out of what I might write here. The activity on RM is a little bit inversely proportional to the quality of economic-ish writings elsewhere. I guess it turns out I am at least somewhat driven by, well, the same impulses driving many other bloggers.

And Salmon has been prescient on the decline of public stock markets, if not in the world, at least in the US (see, for example, here, here, here, here, here, Oh for goodness sake, just go subscribe to his blog already, will you?). The listing of public companies on US exchanges has been in a gliding secular decline, since the dot-com bubble of 2001. Exciting, and giant, private companies like Facebook and Twitter, are traded privately, with shares transacting among a small enough number of investors that they don’t trigger an automatic requirement to ‘go public’. Though FB presumably will at some point go public. Maybe. Maybe not.

This has had me thinking quite a bit about, of all things, Marx/Weber/Durkheim. The triumvirate of sociological patriarchs set the terms of the discipline, and they did so in response to the concerns of modernity. The contemporary edifice of Sociology is built on attempts to understand the shift from pre-modern to modern societies, and all that entails: growth of industrial capitalism, movement from small, rural towns to urban centers, decline of traditional society, increase in secularism, movement away from farms and towards factories. The theoretical tools we still use today are not completely derived from these empirical concerns; but I would nevertheless argue that there is a strong legacy effect in our theoretical tools that come from their usefulness in describing the rise of modern social life.

The work in organizations/occupations/work, likewise, was (and is, still) largely based on factory floor work. The lingering influence of Harry Braverman’s Labor and Monopoly Capital, and Michael Burawoy’s Manufacturing Consent are another demonstration. The point is obviously not that theory has not moved forward since Burawoy’s conception of ‘making out’ – but new work uses existing classics as touchstones and foundations, and Rachel Sherman’s examination of interactive service work in hotels (in Class Acts an excellent workplace ethnography) mobilizes ‘making out’ for service work. The theory survives, in modified form, still foundationally tied to factory work, in turn foundationally tied to the shift from pre-modern to modern, etc. Yes, yes, there are post-modern theorists, and I read them carefully. A good measure of post-modernity is a self-conscious attempt to rethink the empirical bases for the theoretical categories we use (see, e.g., Castells’ work on post-modernity as a historical moment defined by globalization, new information technology, real-time management of the economy, and the like). Yet, the point remains: there are no theoretical greenfields.

And so I am left wondering how much of our conception of finance, and of the economy, and of work, is based on the empirical fact of the public corporation. And as that empirical reality erodes, how long our theoretical models of the so-called ‘new’ economic sociology will be so quickly out of date. The decline of the public corporation is certainly not the last shift we will see in the empirical landscape (oh, and futures markets disappear too, you know).