M/market frontiers

Beyond the Market/markets divide

This quote pointedly summarizes Talcott Parsons’ pact with the discipline of economics more than half a century ago. This informal agreement established a disciplinary division of labour between economics and the wider social sciences, an agreement that was to last until the late 1970s and early 1980s, when it was eventually revoked by the likes of Viviana Zelizer, Harrison White and Mark Granovetter, eventually culminating in the so-called ‘new economic sociology’ (Peck, 2005). We contend that this pact represents more than a historic demarcation of disciplinary territories: it is also an expression of the significant divide between an orthodoxy that defines itself around the utopian, self-regulating Market, and an alternative bundle of disparate heterodox perspectives that in their different ways engage with the question of actually existing markets. It is this intellectual divide, and the near hegemonic position that the capital-M occupies on both sides, that has permitted the neoclassical Market to continue to do its ideological work, provoking theoretical counter-movements that in many ways have further deepened the rift. A key task for an alternative project, as a result, is the need to tackle head-on the thorny question of how to think differently the relationship between the unified capital-M Market and the plurality of lower-case-m markets. In order to do this, let us briefly look back and reconstruct how this ontological rift emerged in the first place and how the market was naturalized as a benchmark for economic reality.

With its focus on the sphere of production, classical or ‘bourgeois’ political economy did not pay much attention to the market. Where it did, it was in relation to a particular market place or a geographically demarcated area, as in Adam Smith’s dictum that the division of labour is limited by the extent of the market (Pirker et al., 2015: 1762). Thus, a divide emerged in the wake of the utilitarian turn and the emergence of neoclassical economics. While classical political economy approached value from the perspective of production, utilitarianism reversed this logic: ‘The former makes value an outcome of the process of production: the latter makes production the outcome of a valuation process’ (Veblen, 1899: 413), giving primacy to the market in determining the character and orientation of production. This utilitarian shift was underwritten by a methodological individualism that prioritized individual gain, imagining society as the sum of individuals and their (inter)actions, a situation whereby ‘in serving his own interest in the way of acquisition, the individual serves the collective interest of the community’ (Veblen, 1899: 419). Following from these assumptions, Marshall claimed that uninhibited exchange between buyers and sellers saw to it ‘that the prices of the same goods tend to equality easily and quickly’ (cited in Pirker et al., 2015: 1763). Subsequently, Walras’ general equilibrium model further naturalized the perfect, competitive market that academic economists, economic practitioners and also the wider public would eventually take for granted. As Veblen succinctly put it:

In this consummate situation the pecuniary motive has its perfect work, and guides all the acts of economic man in a guileless, colorless, unswerving quest of the greatest gain at the least sacrifice. Of course, this perfect competitive system with its untainted ‘economic man,’ is a feat of the scientific imagination, and is not intended as a competent expression of fact. It is an expedient of abstract reasoning … But, as happens in such cases, having once been accepted and assimilated as real, though perhaps not as actual, it becomes an effective constituent in the inquirer’s habits of thought, and goes to shape his knowledge of facts. It comes to serve as a norm of substantiality or legitimacy. (Veblen, 1899: 422)

The widening gulf between the ideal Market of mainstream economics and concrete markets has become a preoccupation in heterodox attempts to think the economy otherwise. Different schools of thought have tended to find their own characteristic solutions to this problem. Marxian political economists point to the ideological work that the neoclassical model of the Market does, unmasking the internal inconsistencies of its positive representation of market outcomes (invisible hand, efficient allocation of resources, equilibrium) and showing how it contributes to the reproduction and exacerbation of the very problems that it promises to overcome in the first place. Socio-economists reject the neoclassical Market model as unrealistic and turn instead to real markets, their logics and characteristics, highlighting the embeddedness of economic behaviour. The powerful, omnipotent giant mobilized by neoclassical economics (the market as the generator of economic growth and societal wealth) and political economy (the market as a destructive force) fades from view, while real markets are viewed as weak, frail and in need of support. A third perspective, poststructuralist cultural economy, is interested in the performative nature of markets, recognizing that the neoclassical Market script has a life of its own, not in the way that is stipulated in orthodox economics, but as a template that is capable of creating what it is naming. Ultimately, despite important advances that each of these perspectives make in their critical engagements with neoclassical orthodoxy, some variant of the M/market dualism tends to prevail, while efforts to overcome this entrenched binary have been little more than partial.

In recent years, there has been an interdisciplinary movement towards a critical study of markets that seeks to transcend the stubborn binary of the overbearing Market and the multitude of ordinary markets. As incomplete as this still may be, there is nevertheless a sense of an emerging heterodox project, an alternative spirit with which the papers comprising this theme issue variously engage. Here we highlight some of the transversal themes running through the following articles that speak to the actual and potential contributions of such a project. We begin with the scripting of markets before turning to the ‘de-fetishization’ of markets, the idea of ‘overflowing’ processes of marketization, and finally, the ordering and bordering of markets. We conclude with some brief comments on directions for ‘market research’.

Market scripts

An important step for overcoming the Market/markets divide is to recognize the heterogeneity within mainstream economics and to acknowledge that there is no uniform orthodox understanding of the market. Close to the orthodox core, there is a difference, for instance, between the neoclassical ‘rocking horse’ that moves towards an equilibrium driven to and fro by supply and demand dynamics, and the conception of the market as a processor of knowledge and information under conditions of uncertainty, as advocated by members of the Austrian school. Neoclassical hegemony has long co-existed with – and been challenged by – other approaches within mainstream economics, among which experimental and behavioural economics are prime examples. Experimental economics became influential during the 1950s as a combination of the experimental method used in psychology and advances in economic theory, above all the rise of game theory, which set new standards for mathematical rigour in economics (Guala, 2008; Leonard, 2008: 7–8). Economic behaviourism emerged during the same time and – after being initially sidelined by the neoclassical mainstream – was reinvigorated by advances in the neighbouring discipline of cognitive psychology during the 1970s. In contrast to the anti-empirical bent of neoclassical orthodoxy, experimental and behavioural economics draw on experimental methods in psychology and probabilistic game theory to better understand the economic decisions of individuals and why such decisions (so often) deviate from neoclassical expectations. Some advocates of these approaches wield significant political influence today. As market designers and ‘choice architects’, they have helped to transform parts of economics into a ‘practice field’, one that engages in the active engineering of markets. From this perspective, the problem is information, a question of how markets can be designed in such a way that they are capable of processing ever-larger quantities of data, as well as ‘nudging’ deficient human subjects in accordance with their real preferences, and socially optimal outcomes, under conditions of incomplete knowledge (Frankel et al., 2019; Lash and Dragos, 2016; Nik-Khah and Mirowski, 2019).

The growing prominence and influence of experimental and behavioural economics is captured in several of the contributions to this theme issue. Analysing a local affordable housing project in South Africa, Butcher demonstrates how an epistemic community composed of financiers and developers seeks to enact a market that ostensibly ‘works for the poor’. From the perspective of the local affordable housing industry, the key to a working and effective market duly becomes the provision and circulation of information, along with the closure of data gaps. In other words, this is a market that cannot work without the intervention of experts, whose interventions are framed within a logic of experimentation that seeks to steer the behaviour of deficient market participants in the ‘right’ direction. Similarly, in the following contribution by Christophers, Bigger and Johnson, a parallel framing of deficient individuals ‘at risk’ is shown to inform climate change mitigation efforts, which utilize financial market instruments to compensate for perceived deficiencies.

But experimental and behavioural economics are not the only approaches providing market scripts that diverge from the prevailing worldview of neoclassical economics. Another influential template for the performance of market exchange originates from those disciplines of economic practice that in various ways operationalize the idea of ‘markets as chains’, understood as chains of interactions between a wide range of actors. These include the global value-chain approach, the logistics ‘industry’, supply-chain management and a range of related socio-technological fields. Rather than representing the market as a ‘flat’ interface where supply meets demand, these chain-like perspectives invoke a much more complex picture of landscapes of exchange and distribution. This includes, inter alia, large-scale representatives of monopoly capital and a sensitivity to variegated conditions across the terrains of production and distribution, a greater acknowledgement of the role of the state, and a more sophisticated treatment of consumption – with obvious geographical manifestations. A critical engagement with this perspective is present in Cahill’s agent-centred approach, with its emphasis on interactions between powerful players, such as large capitalist firms. In their paper on Argentina, Berndt, Werner and Fernández similarly emphasize how the global market for soybeans and its derivatives is structured by a logic of markets as chains, exploring what this means for market participants to operate in, and be subjected to, this logic. There is also a connection here with Cochoy’s contribution, which creatively develops a ‘micro-geographical’ account of the retail sector, focusing on the way in which the arrangement of food in the form of open display revolutionized consumer experience. Here, the practice-discipline of marketing is shown to have performed what came to be understood as ‘self-service’, located at the ‘final’ or downstream end of food chains, variously materialized in industry magazines and mobilized by industry experts, which in turn enabled enormous productivity increases in retailing, driving the ‘supermarketization’ of the sector.

De-fetishizing markets

In addition to moves to ‘provincialize’ the neoclassical Market, there is a concomitant need for a richer and more nuanced understanding of actually existing markets, including their geographies. There is always a wide range of economic and non-economic logics at work in market settings, an insight that was at the heart of Polanyi’s project to engage the economy as an ‘instituted process’ (Polanyi, 1957), that is, as a domain organized by institutionalized modes of integration – classically classified as reciprocity, redistribution, exchange and householding (Peck, 2013: 1556). Concrete markets are formed at the crossroads of a host of different logics and rationalities, among which the capital-M Market is but one. Therefore, in much the same way that an actually existing corporation cannot be reduced to a machine for hierarchical governance, and a community is not only about symmetrical relations of reciprocity, actually existing markets should not be read one-sidedly, as if singular expressions of the institutional logic of the Market (Berndt and Wirth, 2019: 295).

Seeking to overcome stylized representations, such as those that resort to mechanical measurements of more (or less) market and less (or more) state, as if this were merely a matter of zero-sum quantification or relative weights, a number of contributions to this theme issue turn their attention to the question of ‘how’ markets and states are articulated in the context of different marketization processes. Making the case for a ‘de-fetishization’ of the neoclassical Market script – a script that has also been recirculated through critique, in the case of Polanyi – Cahill calls attention to the institutional constitution of markets and the role of ‘rule-making’ actors, such as the state, in giving shape to actually existing markets. In a parallel manoeuvre, Bryant and Spies-Butcher take inspiration from Polanyi’s more finely grained ‘quadrinity’ of institutional forms in their comparative analysis of state-issued, income-contingent loans for financing the costs of higher education in three English-language countries. In a fascinating ethnographic account, Hann represents the history of a region in rural Hungary as a succession of different forms of market integration, positioned on the periphery of Western European capitalism, analysing their variable patterns of association with different modes of state intervention. These modes of intervention range from an active colonization policy during the Habsburg era, linked to the region’s positioning at the frontier of the Empire; an early socialist period that involved demarketization through collectivization; a phase of hybrid development, from ‘market socialism’ to state-driven remarketization during the post-1990 neoliberal era; through to the current trajectory of right-wing populism under the Orban administration. In charting these layered and interacting movements for marketization and demarketization, Hann insists that they cannot be read as a mechanical ‘double movement’, whereby one institutional form simply displaces another, but rather as a more nuanced set of responses associated with both cumulative and disruptive effects. A similar conceptualization of de/marketization – as a process that is always institutionally diverse, entailing shifts in the relative importance of the various logics – informs the critical analysis by Berndt, Werner and Fernández of Argentina’s long, post-millennial decade as one of ‘institutional recalibration’. Also using Argentina as her case study, Potts provides a fascinating account of the complex ways in which international law moulds seemingly frictionless financial markets, functioning as a regulatory whip that is ultimately wielded in the name of US interests.

But it is not only the heavy hand of legal regulations and state-sponsored actions that give actually existing markets their institutionally diverse form. Contrary to the apparent purity of market exchange, as stipulated by the models of neoclassical economics, there is always an array of social values, moral considerations and emotions at work in market arrangements. This is particularly visible in Langley’s account of the increasing prominence of interventions seeking to mobilize financial market instruments in attempts to ‘do good’. The new practice field of social finance illustrates particularly well how markets always encompass more-than-economic registers of value, and how the lines between profit seeking and societal improvement are never easily drawn. This represents a challenge for those seeking to engage critically with this current late-neoliberal moment, in instances where capitalism assumes a seemingly ‘civilizing’ and ‘caring’ face. Ouma’s discussion of the multifaceted ways in which land has come to be valued as an ‘asset class’ likewise demonstrates the complex and integral role of the ‘non-economic’ in processes of financial valuation. Informed by the ‘sociology of conventions’ (see Boltanski and Thévenot, 2006), his research provides insights into the way in which, beyond the more obvious framings such as Fama’s (neoclassical) efficient market ‘hypothesis’, moral considerations concerning what is considered the ‘right’ thing to do, what is considered ‘good’ and so forth, both underwrite and set limits to decision-making processes in global land markets. These arguments can be held alongside the critique of moral claims to be ‘doing good’ in Butcher’s study of affordable housing markets in South Africa.

Overflowing markets

When markets are conceptualized as diverse, idealized Market scripts can never completely eclipse other extant logics and rationalities, even if their presence is rarely erased altogether. Instead, actually existing markets must be conceptualized as a result of the articulation of these variegated logics and practices, a process that may happen in relative harmony, but more often involves struggles between antagonistic rationalities, strategies and values. An example can be found in social finance projects, with their manifest contradictions between financial or ‘for-profit’ rationalities, moral expectations concerning wider societal benefits, the fiscal constraints of austerity states and the concern to engage in the micro-management of ‘deviant individuals in need’. This can be observed in the case of so-called social impact bonds (Rosenman, 2018; Wirth, 2020). It is also present in Langley’s contribution on social finance in this theme issue. Here, markets are afforded a decidedly incomplete and malleable character, demonstrating how the emphasis in critical market studies should be on markets as always ‘in the making’, that is, on the processes and practices of marketization, rather than markets as self-contained entities. Such a processual understanding of actually existing markets, with markets in a persistent state of (re)production, provides a means to map more carefully the oscillating boundaries between markets and their outsides, or as Mitchell once put it, to explore the market as a ‘frontier region’:

The distinction between market and nonmarket or capitalist and noncapitalist should be considered not as a thin line but as a broad terrain, in fact a frontier region that covers the entire territory of what is called capitalism. The region is the scene of political battles, in which new moral claims, arguments about justice, and forms of entitlement are forged. (Mitchell, 2007: 247)

A further way in which marketization often transgresses established market borders can be found in the case of what have come to be known as ‘markets for collective concerns’ (Frankel et al., 2019; Ossandón and Ureta, 2019) or ‘markets for public purposes’ (Nik-Khah and Mirowski, 2019). Markets have always been adventurous, rarely demonstrating timidity when it comes to the exploration or colonization of previously unchartered terrains. In late-neoliberal times, colonizing impulses such as these have arguably become (even) stronger, as an increasing number of policy domains are being actively marketized, or occupied in the name of markets, stretching from healthcare and public transportation to education and environmental pollution (Frankel et al., 2019: 154; Fraser, 2014). These experiments in marketization and market-making projects have a recurrent presence across the papers in this theme issue. Christophers, Bigger and Johnson give an insightful account of how new markets of risk, such as sovereign catastrophe insurance pools and green bonds, utilize novel financial market instruments in the service of the adaptation or mitigation of climate change. In their mapping of the financialization of higher education, Bryant and Spies-Butcher focus on the formation of markets for low-income loans, rendered as hybrid policy instruments. And through her research on the marketization of affordable housing in South Africa, Butcher provides a graphic example of how marketization projects habitually overflow into terrains previously considered the preserve of the state. Taking their inspiration from different heterodox approaches to marketization, these contributions all provide insights into the shifting of market boundaries, the exclusions and inclusions that these moves entail and, crucially, into the necessary limits, misfires and failures of marketization.

B/ordering markets

One of the ways in which the critical marketization approaches advanced here seek to transcend the M/market divide is by taking into account the performative nature of Market scripts, or how the ‘model of the world becomes the world of the model’, as Thrift once put it (Thrift, 2000: 694). From such a perspective, an important dimension of such ‘worldings’ of the Market model is their geographies. In light of the fact that there are many different Market scripts, while actually existing markets are formed through the articulation of a diversity of economic and non-economic logics (each with their own spatiality), there is always a host of geographies at work in marketization processes. These geographical orders may complement one another, but more often they are found to be in conflict, leading to spatial frictions and challenges to hegemonic market settings.

Take the example of the North American Free Trade Organization (NAFTA), as a project of transnational regional integration. Public debates in the NAFTA countries during the 1990s were rife with contradictory geographical framings. Common across these was the pervasive fantasy of an emerging but unstoppable global market, something like a force of nature against which resistance was futile. The best that could be hoped for, apparently, was to ‘maximize its benefits and minimize its risks’, in the manner in which wind might be harnessed to fill a sail, or the power of water captured to generate energy (Clinton, 2000). Other representations conjured up the spectre of infinitely footloose capital, restructuring ‘at will’ its globalizing supply chains and offshoring production and jobs in a unidirectional manner, to Mexico and beyond (see Peck, 2017). At the time, US Secretary of State Madeleine Albright offered legitimizing discourses for this combination of asymmetrical regional integration (mobile capital, coupled with hardened migration controls at the USA–Mexico border), with entrenched territorial socio-economic differences (apparently both pushing and pulling Mexican migrants northwards), while holding onto the promise of a flat neoclassical world, since in that theoretical future-time when trade liberalization has yielded its beneficial effects, and Mexico closed the development gap, there would be reduced incentives to migrate and border controls could be relaxed (see Reuters, 2000). Of course, this promise was not fulfilled. Mexico remained on the threshold of the ‘first world’, as did so many of the female workers that came to constitute the devalued industrial labour force on the Mexican side (see Wright, 1999). This is a clear example of how struggles over marketization are at the same time struggles over the drawing and blurring of spatial boundaries. It could be that this kind of geographical translation of Market scripts is a necessary element of marketization.

The framing of markets, that is, the ordering process that draws a line between logics, actors and activities that are variously included and excluded (see Callon, 2007), can be at its most effective when it is accompanied by spatial bordering and debordering processes. The term b/ordering seeks to take account of this, including the frictions and challenges caused by ‘overflows’, such as unwanted connections, resistance and so forth (see Berndt and Boeckler, 2011). The work of b/ordering that is entailed in the framing of markets cannot but operate on deeply uneven socio-spatial terrains; as a result, rather than overcoming it will more often than not reinscribe social difference (across racial, gender or class lines), along with spatial inequities, both within and across jurisdictions (Bair and Werner, 2011).

B/ordering is a theme that emerges in several of the following papers. Potts’ paper, for instance, illustrates how – despite conventional readings of finance as the quintessential borderless activity – financial payments are still typically regulated in ways that benefit the financial interests of certain countries over others, in this case the USA over Argentina. Potts develops the argument that contemporary regimes of financial payment, far from being predicated on some borderless world, make active and ‘strategic use’ of borders. Socio-spatial b/ordering processes such as these are also apparent in analyses of finance, funding and risk. In their examination of climate finance, Christophers, Bigger and Johnson call attention to significant and enduring forms of variegation in the manner in which the bundle of risks ‘managed’ by climate finance are being ‘stretched’, such that even those risks that are being ‘rescaled’ away from individuals are engendering conditions of ‘social and spatial patchiness’. In a similar fashion, in her research on affordable housing markets in South Africa, Butcher foregrounds the significance of social geographies of race in the spatial segmentation of these markets.

Others approach these questions of framing and b/ordering from a Polanyian perspective. Here, the focus turns to those ‘elements of industry’ that are ‘obviously not commodities’ (Polanyi, 2001: 75; original emphasis). It is on the terrain of what Polanyi called fictitious commodities, in particular, that the boundary zone between market and non-market is (re)defined, negotiated and struggled over. Hann offers a compelling account of this in his historical analysis of ambivalent de/marketization trajectories across his case study region in the Hungarian Great Plain. And Berndt, Werner and Fernández analyse de/marketization processes in ‘postneoliberal’ Argentina through the constitutive contexts of institutional struggles over labour, land, finance and socio-nature, mapping the contradictory landscapes of ‘exclusion–inclusion’ produced by the soy commodity boom turning the extant industrial agricultural heartland upside down, colonizing new territories in violent processes of dispossession and devaluation.

Power relations may have central roles to play in the framing, b/ordering, and constitution of markets, but this does not mean that power flows in a singular or unidirectional fashion. In fact, several of the articles in this theme issue highlight how these processes are always contingent and contested. This can be seen in Hann’s account of how recurrent tensions around de/marketization have been unevenly impacting different sectors and regions in Hungary, and in Berndt, Werner and Fernández’s examination of contestations over land and labour in Argentina. Furthermore, the history of such power struggles tends to become inscribed in patterns of institutional diversity, as Bryant and Spies-Butcher demonstrate in their comparative analysis of income-contingent loans. Indeed, many of the ‘overflows’ referred to in the previous section are triggered by power struggles, often in ways that become integral to processes of market formation and reproduction. This offers supports to the argument that, in contrast to the neoclassical Market (which is conventionally assumed to be omnipresent, universal and ‘placeless’), small-m markets are associated with distinctive and consequential spatialities, constructed in and through difference, which must be subjects of empirical investigation rather than theoretical predetermination (see Peck et al., 2020; Rantisi et al., 2020).

‘Market research’

Markets and marketization have become increasingly important sites of inquiry for heterodox and critical economic scholarship over recent years. This has given rise to a plethora of highly suggestive accounts concerning specific and situated small-m markets, and of markets behaving sometimes according to the script, sometimes ‘badly’, but in all of these instances differently. Yet a criticism that might be levelled at this body of work, in aggregate, is that the diverse particularities of these accounts of real markets in action could be said to add up to so much cacophonous noise, in rather stark comparison to the meticulous orchestration of the abstracted, ‘pure’ Market. There are many, to be sure, who have tired of this same old tune, but it retains a certain appeal, if only by virtue of its simplicity. In the critical tradition, on the other hand, markets tend to be objects of reflexive scepticism, if not outright political recoil; they are often examined obliquely if not euphemistically, with the aid of a parallel vocabulary of privatization, primitive accumulation, financialization, neoliberalization and so forth. The papers collected here suggest that, when it comes to the conceptualization and empirical investigation of real or actually existing markets, there is undeniably a better and more credible story to tell. There is a different tune to be found.

The papers collected in this theme issue speak to an emerging research agenda – the critical study of markets and marketization – marked by an insistent concern with spatiality and uneven spatial development. Crucially, there is not only one (orthodox) script or logic that all actually existing markets follow. Rather, it is important to recognize that markets (in the plural) are constituted through a range of logics and practices, both economic and non-economic. Experiments in ‘social finance’, for example, are enacted through tangled logics of societal improvement and profit seeking, with complex implications for the disruption and (re)formation of markets. There is also a need to problematize the uneven geographies of marketization, which in some instances will include and privilege certain actors or regions (for example, ‘less risky’ socio-economic neighbourhoods in the case of green bonds), while in others will exclude and marginalize (for instance, racialized neighbourhoods in the case of affordable housing). The regulatory reach of state, in its multifarious forms, is a crucial factor here, as in the case of the US state exerting various forms of financial power over Argentina. The specific configuration of logics, values and practices – with their associated spatialities – that define a given market is ultimately an empirical question, but also a political one too.

The papers collected here variously seek not only to de-fetishize markets, but to specify and situate markets as assemblages and social institutions ‘in the making’, continuously (re)shaped by contradictions and contestations. They break with the prevalent orthodoxy and its associated binaries, while at the same time indicating new directions for a positive research agenda strategically focused on the critical study of markets and marketization.