The Practice of Defining Markets a Comment on Charles W. Smith

Abstract

Charles Smith in the Market It is with great pleasure that I take this opportunity write a short comment based on Charles Smith's article, Markets as Definitional Practices (2007). This is also an opportunity present and discuss how markets can be understood. Smith, as is known, has written many interesting texts (e.g., Smith 1981; 1989) that deal with markets, and the current one is no exception. Them are many things that I like with Smith's work. I agree that the market is the most central institution of the economy, that the larger aim of economic sociology is develop a theory of markets, and that ethnography is an indispensable strategy in this undertaking. He should also be praised for addressing markets in relation money, which is all too rare in economic sociology. Moreover, Smith has, in a way that resembles Weber, combined hands on knowledge of financial markets with an analytic outlook. Max Weber wrote two pamphlets (Weber [1893-98] 1999) for the Library of Workers in Gottingen on Die Borse (the stock exchange), which show many sociological insights, but as he grew older, Weber further developed his sociological thinking (cf. Swedberg 2000). Smith's view on markets, if I may, has also become more sociological time. However, my comment is not, and should not be, merely a celebration of Smith's work; that would be demean it, as well as the important issue being researched. The issue at stake, as I see it, is markets. I want point out some issues of disagreement, or where I think one should go further or, in some cases, in a different direction. Before I discuss Smith's contribution I make a short summary of how I understand his arguments. Summary of the Arguments Today few economic sociologists disagree with the central statement of Smith, that markets are part of society. Put in the parlance of economic sociology, markets are embedded, not only in other markets (White 2002), but in the environment at large. This almost self-evident insight must be seen in the light of the differentiation of subsystem, in the words of Luhmann, or spheres, in the words of Nietzsche, Simmel, or Weber. These changes took place in the 17th and 18th century (cf. Luhmann [1984] 1995:461). Regardless of the concepts used, it is clear that the economy has become more independent. Thus, though the economy has always been embedded, it has time become less embedded. The theoretical framework Smith develops aims to, frame markets as evolving in a wide range of more encompassing practices (2007:4). In Smith's text, markets are presented as units, in which actors define themselves and their activities by generating shared meaning as a result of actors taking on each others' roles. This co-activity of market actors generates narratives of markets. A point made by Smith that he shares with Simmel, Weber, and Habermas, is that market activities, as Smith says, over other parts of life. What is meant hereby is not only the idea of market externalities, which economists as well as, more recently, Michel Callon (e.g. 1998) have addressed, but what is called marketization, or the logic of the market. This idea is common in economic sociology, and I do not think it is wrong, but it must be put in perspective. One should remember that also non-market activities spill in markets. Markets, it has been shown, may also become more ethical (Aspers 2006). The literature suggests flows in both directions (Hirschman 1986:105-141), i.e., to and the market economy. What is a Market? This is a straightforward question, and though I agree with much of what is said in Smith's text on markets, I fail see a definition or a description, which sets markets apart from other social practices. I therefore propose the following definition of a market: a structure for exchange of rights, which enables people, firms and products be evaluated and priced. …