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Turning Financial Markets inside Out: Polanyi, Performativity and Disembeddedness

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  • Chris Muellerleile

    (Department of Geography, University of Wisconsin-Madison, Science Hall, Room 160, 550 N. Park Street, Madison, WI, 53706, USA)

Abstract

In light of the spread of markets across the globe and deeper into daily life, this paper argues for a more robust analysis and application of Karl Polanyi's conception of (dis)embedded markets coupled with the performativity thesis authored mainly by Michel Callon. It suggests that while disembeddedness as a concept is necessary for an analysis of contemporary financial markets that are increasingly self-referential, it is not sufficient. Despite the suggestion of a gulf between Polanyian and Callonian economics, there are important similarities in the two frameworks. The similarities are considered along with the considerable difference, all in an attempt to develop a more robust methodological framework for analyzing financial markets. Performativity, it is argued, can help fill the gaps in Polanyi's embeddedness framework, albeit only when that concept's tendency to produce aspatial and apolitical arguments are taken seriously. The paper uses an abbreviated case study of the development of US financial derivative markets in the 1970s and 1980s to argue that markets must be considered in light of both their institutional and geographic entanglements as well as their (dis)embeddedness in systems of calculativeness and mathematical modeling. Specifically the paper analyzes the tension between the derivative origin story authored by Donald MacKenzie, which focuses on neoclassical pricing models like the Black—Scholes—Merton option pricing formula, and my own empirical research, which suggests the urban-economic geography of Chicago played a key role in the development of these instruments.

Suggested Citation

  • Chris Muellerleile, 2013. "Turning Financial Markets inside Out: Polanyi, Performativity and Disembeddedness," Environment and Planning A, , vol. 45(7), pages 1625-1642, July.
    • Handle: RePEc:sae:envira:v:45:y:2013:i:7:p:1625-1642
    DOI: 10.1068/a45610
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    References listed on IDEAS

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    8. Dick Bryan & Michael Rafferty, 2006. "Capitalism with Derivatives," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-50154-6, March.
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    Cited by:

    1. Matthew Zook & Michael H Grote, 2017. "The microgeographies of global finance: High-frequency trading and the construction of information inequality," Environment and Planning A, , vol. 49(1), pages 121-140, January.
    2. Brett Christophers, 2015. "Constructing and deconstructing markets: making space for capital Introduction: Market works," Environment and Planning A, , vol. 47(9), pages 1859-1865, September.
    3. Damien Cahill, 2020. "Market analysis beyond market fetishism," Environment and Planning A, , vol. 52(1), pages 27-45, February.
    4. Emre Tarim & Arie Gozluklu & Gulnur Muradoglu, 2023. "The American spirit: The performativity of folk economics in global financial markets," Environment and Planning A, , vol. 55(8), pages 1906-1927, November.
    5. Eric Nost, 2015. "Performing nature's value: software and the making of Oregon's ecosystem services markets," Environment and Planning A, , vol. 47(12), pages 2573-2590, December.
    6. Chris Muellerleile, 2015. "Speculative boundaries: Chicago and the regulatory history of US financial derivative markets," Environment and Planning A, , vol. 47(9), pages 1805-1823, September.
    7. Perkins, Richard, 2021. "Governing for growth: standards, emergent markets and the lenient zone of qualification for green bonds," LSE Research Online Documents on Economics 107483, London School of Economics and Political Science, LSE Library.
    8. Chris Muellerleile & Joshua Akers, 2015. "Making Market Rule(s)," Environment and Planning A, , vol. 47(9), pages 1781-1786, September.
    9. Marta Cuesta-González & Julie Froud & Daniel Tischer, 2021. "Coalitions and Public Action in the Reshaping of Corporate Responsibility: The Case of the Retail Banking Industry," Journal of Business Ethics, Springer, vol. 173(3), pages 539-558, October.

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