Lawrence Busch, professor emeritus of sociology at Michigan State University, spoke to University of Michigan students and faculty Monday evening about markets from an economic perspective in his presentation sponsored by the University’s Science, Technology and Society Program.

Busch began his presentation, titled “Back to the Future: An STS Approach to Markets,” by explaining three different ways of examining markets. He said markets can be examined as an economic transaction, as a place where politics are enacted and as an institution. According to Busch, mainstream economics firms focus on the economic transaction approach and ignore political and institutional examinations.

“(Mainstream economics) simply says those approaches aren’t economical. What this allows economics to do, I will argue, is to remove the political from markets,” Busch said. “At the same time, however, as economics does this, is that economics is performative. We need to examine how the theoretical treatment of markets actually influences actual markets.”

Busch discussed five propositions throughout the presentation. In his first proposition, “Markets are impure distributive systems,” Busch described the perfect image of markets. He said in actual markets, corruption is to be found and wages are typically biased in respect to race, ethnicity, gender and class.

“I want to argue that actual markets are always in perfect distributive systems, and that untethered markets lead to massive inequality,” Busch said. “I want to emphasize the point that the vast majority of the population still buy into the idea that markets are a pretty good distributive system.”

In the second proposition, “Markets do not differ in kind from other institutions,” Busch said economists are solely concerned with the efficiency of markets and are influenced by both human and non-human actions.

“Markets don’t differ in kind from other institutions, it’s just that people in mainstream economics decided that they were going to focus on this mathematical aspect of markets and ignore the rest,” Busch said.

In the discussion of his third proposition, “The histories of economics and of economics fail to take standards into account,” Busch explained the history behind economic institutions. He emphasized the importance of learning market history to understand the functions of modern markets.

“The histories of markets and economics fail to take standards into account because each former standard creates a different form of market,” Busch said. “The trend is towards greater concentration and a greater ability to manipulate thoughts.”

The fourth proposition was “Supply chains and financialization create inequalities.” Busch said there has been a massive increase in inequality in the United States within the last 25 years.

“Banks used to invest in order to produce things, and now they invest in order to maximize return in investment,” Busch said. “They’re fickle with respect to firms but they are loyal with respect to capital.”

In Busch’s final proposition, “Economics lies behind changes in actual markets,” he explained the market standardization that makes economics predictable.

“At the same time that economics is performative, it is performative in two ways,” Busch said. “It is performative in the sense that it provides a model for performing firms and markets, and it’s also performative in the sense that it provides a model of public understanding of markets.”

John Carson, STS faculty member and associate history professor, explained the complex nature of the markets Busch described to The Daily after the event.

“Markets are not the simple, easy methods of allocation that they’re sometimes thought to be, but that they are complex social institutions that need to be seen in all the different functions that they do,” Carson said. “They need to be thought about as to how we can use them in ways that are good and what really are all the elements that are a part of them, not just the ways that prices are allocated.”

Rackham student Elana Maloul currently teaches an English 124 course on global capitalization. She said her greatest takeaway from Busch’s presentation was receiving a new understanding of the traditional supply and demand model.

“Abstract models shape market practice and shape public perceptions of markets,” Maloul said. “Probably the largest takeaway that I got was that the models that my students express in class when we talk about market systems — because we talk about market systems a lot — are still those very old models that have zero consciousness of contemporary models, the ones that he described.”

Leave a comment

Your email address will not be published. Required fields are marked *