The Legal Construction of Economic Rationalities?

Journal of Law and Society

Volumn 40, Issue 1, 2013, Pages 155-171

  Lang, Andrew T F ^a  

^a LONDON SCHOOL OF ECONOMICS   (United Kingdom)

Author keywords

[No Author keywords available]

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EID: 84874213790     PISSN: 0263323X     EISSN: 14676478     Source Type: Journal    
DOI: 10.1111/j.1467-6478.2013.00617.x     Document Type: Article

References (70)

1. For an account which usefully distinguishes between not only the regulative and constitutive but also the facilitative role of law, see L.B. Edelman and R. Stryker, 'A Sociological Approach to Law and the Economy' in The Handbook of Economic Sociology (2005, 2nd edn.) 527-51.
2. See, for example, R.L. Hale, 'Coercion and Distribution in a Supposedly Non-Coercive State' (1923) 38 Political Sci. Q. 470-94
3. R.L. Hale, 'Bargaining, Duress, and Economic Liberty' (1943) 43 Columbia Law Rev. 603-28
4. R.L. Hale, 'Force and the State: A Comparison of "Political" and "Economic" Compulsion' (1935) 35 Columbia Law Rev. 149-201. See, also, B. Fried, The Progressive Assault on Laissez Faire: Robert Hale and the First Law and Economics Movement (2001).
5. H Hovenkamp, 'The First Great Law & Economics Movement' (1990) 42 Stanford Law Rev. 993-1058.
6. L.B. Edelman, 'Rivers of Law and Contested Terrain: A Law and Society Approach to Economic Rationality' (2004) 38 Law & Society Rev. 181-98.
7. G. Hodgson, The Evolution of Institutional Economics (2004); W.C. Mitchell, 'The Rationality of Economic Activity' (1910) 18 J. of Political Economy 197-216
8. W. Sombart, Der moderne Kapitalismus: Bd. Die Theorie der kapitalistischen Entwicklung (1902).
9. T. Veblen, The Theory of the Leisure Class: An Economic Study of Institutions (1912)
10. T. Veblen, The Instinct of Workmanship: And the State of Industrial Arts (1914)
11. T Veblen, 'The Limitations of Marginal Utility' (1909) 17 J. of Political Economy 620.
12. G. Simmel, The Philosophy of Money (2004, 3rd edn.).
13. G. Hodgson, How Economics Forgot History: The Problem of Historical Specificity in Social Science (2001).
14. See, generally, R.A. Posner, Economic Analysis of Law (2010, 8th edn.).
15. See, generally, C. Jolls, C.R. Sunstein, and R. Thaler, 'A Behavioral Approach to Law and Economics' (1998) 50 Stanford Law Rev. 1471-550;R.B. Korobkin and T.S. Ulen, 'Law and Behavioral Science: Removing the Rationality Assumption from Law and Economics' (2000) 88 California Law Rev. 1051-144.
16. R.B. Korobkin and T.S. Ulen, 'Law and Behavioral Science: Removing the Rationality Assumption from Law and Economics' (2000) 88 California Law Rev. 1051-144.
17. See Hodgson, op. cit., n. 8.
18. See, for example, V. Nee and R. Swedberg, 'Economic Sociology and New Institutional Economics' in Handbook of New Institutional Economics, eds. C. Ménard and M.M. Shirley (2005) 789-818
19. J.N. Baron and M.T. Hannan, 'The Impact of Economics on Contemporary Sociology' (1994) 32 J. of Economic Literature 1111-46.
20. E. Furubotn and R. Richter, Institutions and Economic Theory: The Contribution of the New Institutional Economics (2005), especially ch. 1.
21. M Granovetter, 'Economic Action and Social Structure: The Problem of Embeddedness, ' (1985) 91 Am. J. of Sociology 481-510.
22. M Granovetter, 'The Impact of Social Structure on Economic Outcomes' (2005) 19 J. of Economic Perspectives 33-50.
23. For a different reading of Granovetter, which sees his work as precisely the forerunner of the work that I shall be drawing on in the next section, see M. Callon, 'Introduction: The Embeddedness of Economic Markets in Economics' in The Laws of Markets, ed. M. Callon (1998) 1-57.
24. Granovetter, op. cit., n. 15, pp. 483-87.
25. M Granovetter, 'Economic Institutions as Social Constructions: A Framework for Analysis' (1992) 35 Acta Sociologica 3-11, 4.
26. See Callon, op. cit., n. 18.
27. For example, Korobkin and Ulen, op. cit., n. 11, pp. 1070-74.
28. Ménard and Shirley, op. cit., n. 13
29. Furubotn and Richter, op. cit., n. 14
30. O.E. Williamson, 'The New Institutional Economics: Taking Stock, Looking Ahead' (2000) 38 J. of Economic Literature 595-613.
31. A.T. Denzau and D.C. North, 'Shared Mental Models: Ideologies and Institutions' (1994) 47 Kyklos 3-31.
32. D.C. North, Understanding the Process of Economic Change (2005)
33. Denzau and North, id.
34. D.C. North, Institutions, Institutional Change and Economic Performance (1990)
35. D.C. North, 'Economic Performance Through Time' (1994) 84 Am. Economic Rev. 359-68;D.C. North, 'Institutions, Ideology and Economic Performance' (1992) 11 Cato J. 477-88.
36. D.C. North, 'Institutions, Ideology and Economic Performance' (1992) 11 Cato J. 477-88.
37. North, id. (2005), p. 3.
38. id., p. 64.
39. I take the term from E.D. McCarthy, Knowledge as Culture: The New Sociology of Knowledge (1996).
40. See, for example, K. Knorr-Cetina and U. Bruegger, 'Inhabiting Technology: The Global Lifeform of Financial Markets' (2002) 50 Current Sociology 389-405
41. K. Knorr-Cetina and U. Bruegger, 'Traders' Engagement with Markets: A Postsocial Relationship' (2002) 19(5-6) Theory, Culture & Society 161-85
42. K. Knorr-Cetina and U. Bruegger, 'Global Microstructures: The Virtual Societies of Financial Markets' (2002) 107 Am. J. of Sociology 905-50
43. K. Knorr-Cetina and A. Preda, eds., The Sociology of Financial Markets (2005)
44. D. MacKenzie, Material Markets: How Economic Agents Are Constructed (2008)
45. D. Mackenzie, An Engine, Not a Camera: How Financial Models Shape Markets (2006)
46. D. MacKenzie and Y. Millo, 'Constructing a Market, Performing Theory: The Historical Sociology of a Financial Derivatives Exchange' (2003) 109 Am. J. of Sociology 107-45
47. M. Abolafia, Making Markets: Opportunism and Restraint on Wall Street (2001)
48. Callon (ed.), op. cit., n. 18
49. M. Callon and F. Muniesa, 'Peripheral Vision: Economic Markets as Calculative Collective Devices' (2005) 26 Organization Studies 1229-50
50. M. Callon, 'Actor-Network Theory, the Market Test' in Actor Network Theory and After, eds. J. Law and J. Hassard (1998) 181-95.
51. Callon and Muniesa, id.
52. id., p. 1231 (references omitted).
53. See, for example, P. Miller, 'The Margins of Accounting' in Callon (ed.), op. cit., n. 18, pp. 174-93.
54. MacKenzie, op. cit. (2008), n. 29, p. 91.
55. See id., pp. 13-16
56. Callon, 'Introduction', op. cit., n. 18.
57. Callon, id., pp. 23 ff.
58. Searle makes this point in J.R. Searle, The Construction of Social Reality (1996) 30 ff.
59. See, for example, MacKenzie, op. cit. (2008), n. 29; B.G. Carruthers and A.L. Stinchcombe, 'The Social Structure of Liquidity: Flexibility, Markets, and States' (1999) 28 Theory and Society 353-82.
60. It is worth noting that the opposite view - the 'mentalist' view that locates structures of knowledge exclusively inside the minds of individuals - is perfectly possible, and has the advantage of a kind of common sense: where else can we locate thought other than in peoples' minds? On this view, structures of knowledge are not really structures at all but rather aggregations: they are, in other words, entirely decomposable into a multitude of individual states of mind. This perspective leads us away from enquiry into the social foundations of rationality towards enquiry into its biological foundations. If all thought is subjective, then to understand the process of knowledge construction, it is necessary to peer inside the minds of individual agents. And to understand the origin, nature, and dynamics of knowledge structures, it is necessary first and foremost to understand the structure of the mind, and the ways that the human brain is wired to process the sensory information it receives about the outside world. Mentalist presuppositions of this kind have informed a great deal of work on the structures of knowledge deployed by economic actors, particularly in the contemporary field of behavioural economics.
61. Mackenzie, op. cit. (2008), n. 29.
62. Again, Callon: 'Imposing the rules of the game, that is to say, the rules used to calculate decisions, by imposing the tools in which these rules are incorporated, is the starting point of relationships of domination which allow certain calculating agencies to decide on the location and distribution of surpluses.' (Callon, 'Introduction', op. cit., n. 18, p. 46.)
63. For a vivid example, in the context of transformations of Japanese labour relations after the Second World War, see B. Gao, 'Efficiency, Culture and Politics: The Transformation of Japanese Management in 1946-1966' in Callon (ed.), id., pp. 86-115.
64. Edelman, op. cit., n. 4; Edelman and Stryker, op. cit., n. 1; L.B. Edelman, 'Legal Ambiguity and Symbolic Structures: Organizational Mediation of Civil Rights Law' (1992) 97 Am. J. of Sociology 1531-76
65. L.B. Edelman and M.C. Suchman, 'The Legal Environments of Organizations' (1997) 23 Annual Rev. of Sociology 479-515.
66. Edelman, id. (2004), p. 188.
67. id, p. 187
68. id. See, also, Edelman, op. cit. (1992), n. 43; L.B. Edelman, S.E. Abraham, and H.S. Erlanger, 'Professional Construction of Law: The Inflated Threat of Wrongful Discharge' (1992) 26 Law & Society Rev. 47-83.
69. Edelman et al., id; Edelman, id.; L.B. Edelman, 'Legal Environments and Organizational Governance: The Expansion of Due Process in the American Workplace' (1990) 95 Am. J. of Sociology 1401-40.
70. T Veblen, 'Why Is Economics Not an Evolutionary Science?' (1898) 12 Q. J. of Economics 373-97, at 391.