Donald MacKenzie, An Engine, Not a Camera. How Financial Models Shape the Markets, Cambridge (Mass.), MIT Press, 2006, 377 pp.

When Milton Friedman presented economic theories as engines for the analysis of concrete markets, he probably had in mind more what he was denying (the epistemological relevance of descriptive realism) than the many implications that can be drawn from such a metaphor. It certainly captured the instrumentalist core of Friedman’s own methodological stance: theories are tools to obtain predictions and, like any other instrument, they can be assessed in terms of their successful performance –i.e., predictive accuracy. Yet, STS scholars have argued for long that the intellectual charm of tools lies in the many uses they can be put to. For instance, why should economists restrain themselves to predict the course of markets, if they could use their theories as engines to build them? It is thus for a good reason that Donald MacKenzie’s latest book appears in the Inside technology collection of the MIT Press, where three other essays by him already feature (on nuclear missile guidance, technical change and mechanized mathematical proof). MacKenzie is indeed one of the finest sociologists of science of our time and shows it by making us rethink the methodological status of many economic models in the light of his analysis of the performativity of finance theory.

To use again a Friedmanian distinction, methodologists have so far focused mostly on positive theories, as opposed to normative ones. Expected utility theory (EUT), for instance, can be used to positively predict how economic agents will decide among uncertain prospects. But we can also use it as a rule to make our own decisions, thinking it wise. In this latter case, EUT will certainly deliver successful predictions but of not much methodological interest. Economists care about general patterns of market decision-making, not about particular individuals who choose to behave in accordance to their theories. But what if everyone in a given market chooses to do so?

Between 1976 and 1987, the Black-Scholes-Merton (BSM) option-pricing model proved to be an excellent fit to market prices –in the words of Stephen Ross «the most successful theory not only in finance, but in all of economics» (cited in p. 177). Yet, there were many option markets in which the traders carried with them sheets displaying arrays of Black-Scholes prices for the stock under exchange to assess their opportunities for arbitrage. These sheets were sold, among others, by Fischer Black himself. It seems thus as if we needed something more than the usual instrumentalism vs. realism dichotomy to account for the success of the underlying theory. What MacKenzie puts forward here is a sociological concept of philosophical ascent: performativity. It is aimed at capturing the role played by economics when it becomes «an intrinsic part of economic processes» (p. 16); i.e., an engine, rather than a camera portraying them. According to MacKenzie, economics can be performative at three levels (pp. 16-19). There is, first, generic performativity, when some of its elements are used by the participants in the process. Effective performativity occurs when as a result of that use, something happens in the economic process. Finally, Barnesian performativity refers to those instances in which «practical use of an aspect of economics makes economic processes more like their depiction in economics» (p. 17). If the opposite happens, we will talk instead of counterperformativity. These set of concepts serves thus to analyse the various degrees in which financial markets are socially constructed through economic theories. But rather than taking this construction for granted, the purpose of MacKenzie’s book is to verify whether it actually took place in certain markets. Moreover, the reader is warned that observation alone will not reveal it (p. 18) and its very existence is disputable as such: the ultimate evidence is provided by the prices finance theory is about and these are elaborated in various degrees, not allowing for a direct comparison to the theory (pp. 23-24).

In this respect MacKenzie is very cautious: Barnesian performativity is only affirmed regarding the effects of the BSM model, namely as it was used in the Chicago Board Options Exchange (and analogue markets) in the period mentioned above. The statement is qualified as a plausible conjecture, since «the available evidence does not permit certainty» (p. 165). Yet, the amount of evidence gathered by the author is certainly impressive. The first four chapters after the introduction constitute, in a way, a preamble for the analysis of this case of stronger performativity. Chapter 2 provides a concise discussion of how finance theory was incorporated into mainstream economics in the 1950s and 1960s. Chapter 3 explores the sociology of this emerging profession, showing how their approaches diverged from the theoretical culture of traders. Despite their initial reluctance, the crisis of the stock markets in the 1970s favoured the adoption of the Capital Asset Pricing Model (CAPM), first as an external check of investment performance, and then to develop index funds. Once the CAPM became standard both in academia and the markets, several anomalies were observed. As chapter 4 shows, some of these were namely methodological (the empirical specification of the market portfolio); many other were empirical and more or less persistent (the small firm effect, etc.). Yet, most of them constituted opportunities for arbitrage and their elimination, unlike other Kuhnian anomalies, could deliver gains or losses: at this stage, there were many academics simultaneously involved in the development of the model and in its practical exploitation. In this context, MacKenzie discusses the statistical analysis of price distributions advocated by Mandelbrot in the 1960s, when the Gaussian assumptions incorporated in the CAPM were questioned. Mandelbrot showed that the distribution of prices was difficult to handle with conventional statistical tools (namely those that depend on a finite variance). Though MacKenzie does not take sides between these two concurrent paradigms, it seems as if Mandelbrot’s approach made explicit the practical urgencies associated to the development of financial models: an alternative theory that could not deliver ready-to-use theoretical or investment tools was not welcome by the profession at that point.

In chapter 5, MacKenzie presents the origins and articulation of the BSM option pricing model, whose performative effects are studied in chapter 6. The former is mainly focused on the mathematical tinkering that yielded an equation featuring the prices of stocks and options as well as time in a way that allowed the user to hedge her portfolio against any arbitrage. In the latter, it is shown how under the guidance of Leo Melamed a market for derivatives was created in Chicago. Here we have political tinkering supported again by academics (Milton Friedman, no less) and a trading floor culture in favour of a project, whose ultimate intellectual legitimation came from the BSM. Their model allowed to differentiate it from gambling and make it legally viable. It worked and not only for the regulators, but for the traders themselves, who saw their market practices transformed in accordance to the model: they talked about options using its vocabulary and justified their decisions concordantly; software implementing it was used at various levels to calculate prices; new financial products were created, etc. For MacKenzie, this would be a case of Barnesian performativity: «The “practice” that the BSM model sustained helped to create a reality in which the model was indeed “substantially confirmed”.» (p. 166)

Yet, it seems as if performativity had its own dialectics: after the performative rise of a BSM world in the stock markets, the two following chapters tell us its fall. The seventh one addresses the October 1987 crash as a possible instance of counterperfomativity, after which the BSM model fit with the actual prices became again poor, as it had between its creation and 1976. The eight one tries to explain the social mechanisms underlying the bankruptcy of the hedge fund Long Term Capital Management in 1998. In both chapters, MacKenzie illustrates how the use of BSM-related models by a particular set of traders sparked reactions in their fellows that prevented its proper functioning and led to their replacement.

The ninth and final chapter surveys the central topics of the book. One we have not mentioned so far is the application of the concept of epistemic culture to economics, in which economic methodology plays quite a prominent role. Hypotheses such as the irrelevance of capital structure or the efficiency of the markets were equally dismissed as irrealist by economists and practitioners alike. Against these, Friedman’s instrumentalist stance was often invoked to justify the acceptability of the CAPM or the BSM. Assuming the independence of academic research was no less crucial ingredient in this culture: even if «the majority of the finance theorists discussed in this book» became involved in business, their main goal in developing the model was intellectual. Their practical success (or that achieved by traders without theoretical foundations) never counted much for them. Yet, as the Mandelbrotian challenge showed, analytical tractability was a methodological commitment that turned out to be decisive when it came to practical implementation. I would have liked to read more about the various degrees in independence that apparently coexisted among finance theorists.

It is interesting to note here how MacKenzie reconstructs their epistemic culture through an extensive series of interviews (with 67 theorists and practitioners). Though several archives were punctually visited, oral history allows the author to come very close to the intentions of the performers. The use of an engine is necessarily intentional and the quotes that appear in the book show very precisely the traders’ beliefs and desires about financial models. Indeed, in my opinion, much of the plausibility of MacKenzie’s conjecture about Barnesian performativity it is gained here. It also constitutes a nice example of the kind of conversation that MacKenzie, in a McCloskeyan spirit, intends to promote (p. 25): the interviews show financial models and markets in the making, in a way that makes them easier to understand and discuss in terms of the sort of world that we would want «to see performed». Yet, in this respect, the reader is equally indebted to MacKenzie’s own literary style that, together with the glossary and the collection of appendixes explaining the models under discussion make the book a very accessible reading. If the Social Studies of Finance are pursued along these lines, we certainly may expect the best from this conversation.

To contribute to it, let me just add a few critical remarks. One is regarding the explanation of the success of the financial engines here discussed. MacKenzie is very clear as to the performative limitations of authority: he denies that «any arbitrary formula for option prices, if proposed by sufficiently authoritative people, could have “made itself true” by being adopted. » (p. 20). Yet, I cannot help wondering what the precise contribution of the BSM formula to the performative success of its adoption was. The usual methodological response is not very promising, since its predictive accuracy or purported realism were, in this framework, more a result of adopting it than intrinsic epistemic properties of the model. The author’s own answer as to «Why BSM?» (pp. 162-64) relies on a combination of academic authority, simplicity to grasp by the practitioner and public availability. But, since we are talking about an engine, shouldn’t it capture some sort of causal mechanism in the market? MacKenzie certainly assumes that technology is socially dependent in many different ways, but not to the point of making it causally inert. Some material efficacy should be thus granted to economic theories. However, for many, these are not still cold as facts, to use Latour’s terms, but still warm under discussion: as of yet, we cannot take the markets, in general, to be the cause of any accurate description of themselves. Given that the combination of explanatory factors considered by MacKenzie is also present in other markets, what is so particular about the financial marketplace that made the BSM engine performative? This remains an open question.

A second remark is about the perspective assumed in the analysis. In my view, MacKenzie’s account points out more to rules than to technology. It seems as if the adoption of the BSM as a benchmark to calculate prices in stock markets was due to a sort of imitative process propelled by normative concerns. As Friedman and Savage once put it in respect of expected utility theory, the success of any particular decision model depended not only on its empirical verification, but «on its acceptability to individuals who are particularly concerned with such decision, as a rule guiding “wise” behaviour in the face of uncertainty». Apparently, the traders in Chicago were eager to build their decision rules upon BSM models, considering it wiser than their own pre-theoretical criteria –whose authority, as MacKenzie illustrates, had been empirically undermined by their practical failure in the 1970s. Since the normative force under these rules is purely consequentialist (i.e., depends only on the attainment of one’s purported goals), their performativity is necessary to adopt them: if their use did not make economic processes more like their depiction in economics, they would be ineffective and therefore ungrounded as rules. Yet, unlike engines, the effectivity of rules can be often transient. It seems possible to experiment in the coordination of agents who coincide in adopting similar decision criteria and see what their performative effect on prices is (until they opt for something different).

MacKenzie’s book shows that performativity is a formidable conceptual engine for the analysis of concrete markets. Let us take as much advantage of it as we can.

{August 2006}
{Journal of Economic Methodology 15:4 (2008), pp. 429-433}

Harro Maas, William Stanley Jevons and the Making of Modern Economics, Cambridge, Cambridge University Press, 2005, 330 pp.

La economía es una disciplina cuya Historia es tradicionalmente sensible a las disputas metodológicas –baste con pensar en manuales clásicos como los de Schumpeter o Blaug como ejemplo. Algo tuvieron que ver en ello las disputas acerca del propio estatuto de la economía como ciencia, pues cabía obtener un buen argumento a favor de la escuela neoclásica a partir de la convergencia que se produjo sobre su formulación matemática en el último cuarto del siglo XIX. Que autores de muy diverso origen y formación coincidieran en enunciar un mismo cálculo de utilidad para analizar las decisiones subjetivas debía probar algo sobre su veracidad (o, al menos sobre su potencia como programa de investigación, para decirlo con Blaug). No obstante, hace ya más de una década que esta convergencia paradigmática se viene interpretando no como prueba de la autonomía disciplinar de la economía, sino como ilustración de su dependencia respecto de otros saberes. El acierto de los primeros neoclásicos consistiría en servirse de una misma analogía con la mecánica newtoniana, y en su proceder no serían distintos de los propios físicos del XIX. Pero de ello no se siguen necesariamente consecuencias a favor o en contra de sus resultados: simplemente, se ilumina su contexto de descubrimiento. Aparecen, como veremos, otros dilemas.

El ensayo de Harro Maas que aquí comentamos sirve precisamente como ilustración de esta nueva manera de escribir la Historia de la economía como Historia general de la ciencia. Es decir, a la luz de intereses comunes a muy distintas disciplinas. Formalmente, por ejemplo, el amplio uso de archivos, la atención a temas tales como las representaciones visuales, instrumentación científica, etc. Y en cuanto a sus contenidos, se aprecia también aquí una voluntad de que el análisis se extienda allí donde vaya su objeto, sin atender a su demarcación disciplinar o al gusto de sus intérpretes canónicos. William Stanley Jevons es un personaje que se presta a este tratamiento, y el éxito de Maas en la empresa se vio avalado recientemente (2006) por el premio que le concedió la History of Economics Society.

Jevons fue, en efecto, un personaje singular: tras cursar estudios de química, se interesó por materias tales como el estudio de las nubes, la lógica y la construcción de autómatas, la psicología fisiológica, la estadística y sus representaciones gráficas. Y esto por mencionar solamente los temas abordados en este ensayo –de la dimensión épica de Jevons, se ha ocupado, entre nosotros, Juan Urrutia. Y obsérvese que en este índice no aparece la economía, cuando el título del ensayo alude precisamente a the making of modern economics. En parte, el lector interesado en la contribución específicamente económica de Jevons dispone ya de otras monografías recientes (como las de Schabas o Peart). Lo que Maas reconstruye en su ensayo es su gestación extradisciplinar, en la que adquiere un sentido diríamos que sorprendente.

Suele objetarse contra la teoría de la utilidad marginal su carencia de contenido psicológico. Pues bien, este ensayo nos descubre en qué condiciones pudo adquirirlo cuando Jevons la enunció y lo que encontramos es un argumento filosófico sumamente complejo que Maas reconstruye desde sus fuentes. Por una parte, los experimentos del autor sobre la formación de nubes le introdujeron en el principio de que la imitación era un procedimiento de análisis perfectamente aceptable allí donde se carecía de acceso inmediato (cap.4). Por otro lado, pudo aplicar este principio al análisis de la mente a través sus estudios de lógica que le condujeron, de la mano de Babbage, a la construcción de autómatas (caps. 5 y 6). Esta inspiración mecanicista se proyectó sobre la psicología, al defender Jevons su reducción a la fisiología corporal (cap. 7). Desde esta perspectiva, la utilidad, como cálculo de placer y dolor, debía interpretarse como una aproximación funcional a los procesos cerebrales, como prolongación de las disputas de la época sobre el trabajo como inversión de energía física, al modo de las máquinas, por oposición a quienes defendía su carácter de realización espiritual (cap. 8). En otras palabras, el cálculo económico se apoyaba en lo que hoy calificaríamos como una posición eliminativista en filosofía de la mente, arraigada en la pasión de sus contemporáneos por las máquinas (de vapor, claro: el Jevons de Harro Maas es un perfecto ejemplo de steampunk).

Una segunda objeción no menos recurrente contra el paradigma neoclásico es su falta de contenido empírico. Y otro acierto de este ensayo es el de presentarnos el programa de Jevons dentro de las disputas sobre el inductivismo de la Inglaterra del XIX (cap. 3), a las que nuestro autor contribuye con sus trabajos sobre la normalización de datos estadísticos a efectos de su representación gráfica (cap. 9). El tema de la medición como clave en el progreso de la ciencia, y en particular de la economía, es uno de los motivos dominantes en la obra de Jevons, tal como Maas nos las presenta. De hecho, la división entre ciencias sociales y naturales queda disuelta, pues los procedimientos de medida se justificarían de idéntica manera en ambas (la metáfora de la balanza es particularmente pregnante a este respecto: cap. 10).

Tenemos pues una reconstrucción de la obra de Jevons desde sus raíces culturales, cuyo mérito (dejando aparte el virtuosismo y erudición del análisis) radica en mostrarnos desde qué supuestos resultaba viable el programa marginalista en economía. Justamente aquellos cuya ausencia denunciaron después más encendidamente sus críticos. El dilema abierto entonces es qué ocurrió después de Jevons para que se eclipsaran los debates que justificaron este programa en su contexto de descubrimiento. Cabe sospechar que su resurgimiento hoy (a propósito de trabajos como los de Don Ross o Marcel Boumans) no es ajeno al ensayo del propio Maas. Sólo cabe reprocharle que no los abordase explícitamente, al menos en la conclusión. Muchos pensarán que quizá así estropease un magnífico ejercicio de Historia intelectual. Pero les responderemos que si el éxito de esta consiste aquí en cuestionar la demarcación convencional de otras disciplinas, ¿por qué habría de detenerse ante la suya propia?

{Septiembre 2006}
{Asclepio 59.1 (2007), pp. 321-323.}

Serena Olsaretti, ed., Preferences and Well-Being [Royal Institute of Philosophy Supplement: 59], Cambridge, Cambridge University Press, 2006.

In 2004 a conference took place in Cambridge sponsored by the Royal Institute of Philosophy on preferences and well-being. Drawing on the papers presented therein, Serena Olsaretti has prepared with great care a volume that, according to her, is structured around three different sets of questions. Namely, the formulation of normative and descriptive accounts of preference-formation; whether preferences conform with requirements of rationality and what reasons can support them; and finally the normative significance of those preferences that do not meet such requirements, in particular for policy-making purposes. Five papers deal with the first topic, and there are three more for each of the remaining two. So far for the unity of the collection. Its most interesting aspect lies, as usual, in the divergencies. Let me try then another classification.

First, there seems to be quite a divide regarding the theoretical approach to preferences. Whereas the first four papers (by Arneson, Rosati, Brännmark and Qizilbash) apply pure conceptual analysis almost without positive asides, the rest of them stay more or less close to Rational Choice Theory (RCT) in their discussion of preferences. The first set of papers provide a good sample of an ongoing disciplinary debate among moral philosophers about the human good and whether this should be defined in terms of preferences satisfaction or rather by a list of objectively valuable goods –or something hybrid. Central to this debate is the proper formation of preferences: under which conditions our desires will be able to match our conception of well-being. Depending of our conception of the latter different issues will gain or loose prominence. By way of example let us just mention a few ones discussed in this set of papers: information as to the alternatives, motivational force, parental guidance, authorship as to one’s own life, etc. Though informative and interesting, given the formation of my own preferences, I find quite problematic the assumption that these four papers more or less take for granted: that the empirical processes of desire formation are somehow congruent with their normative discussion.

A good measure of the difficulties with this assumption is the contrast between this array of papers and a second one in which the discussion turns around RCT, exploring its conceptual foundations as to the concept of preference. First of all, Hausman and Pettit take issue with one or another aspect of our common understanding of RCT. The former addresses a default principle implicit in game theory, that individuals prefer a comprehensive outcome (in Sen’s terms: the outcome as seen from the path through a game in extensive form that yields it) to the same extent that they prefer its actual result (dissociated from that path). When this principle collapses, consequentialism fails. Pettit argues for a more complex idea of preference based in deliberation. In this account, RCT appears as dealing with a rather restricted case (self-interested tastes, as exhibited by our species and many others).

In other words, if an intendedly positive theory (RCT) only empirically meaningful under such constraints, we may wonder why do we expect better of an abstract examination of the concept of preference, such as the one attempted in the first set of papers. Piller and Broome illustrate a more parsimonious approach to conceptual analysis in continuity with the idea of preference exhibited in RCT. Piller explores the desirability of having a desire and whether we have any reasons to justify it. Broome argues instead that we should reason over our preferences in terms or their content rather than on any second-order requirements on their desirability.

Yet, RCT can be equally contested as an approach to preferences on a purely empirical basis. Here is a third divide, represented in this volume by the papers of Sugden, on the one hand, and Sunstein and Thaler, on the other. They all take issue with the experimental failures of RCT, though with a different aim. Sugden proposes a model of unconsidered (neither coherent nor stable) preferences trying to capture the normative value of satisfying them as they are. Sunstein and Thaler defend a libertarian paternalism, in which the empirical failures of individual rationality would justify the framing of public choices in a way that would paternalistically favour the interests of the agents, despite their incapability to grasp it at first (for instance, opting in or out of insurance schemes). Finally, Voorhoeve draws also on preference change to contest those conceptions of welfare based on preference satisfaction.

Therefore, given that this wonderful conference brought together all these approaches, I would have expected a more explicit discussion of these theoretical divides. Whether RCT provides a better (or worse) framework for the normative discussion of preferences than pure conceptual analysis. Whether we should try to improve the formation of our preferences through RCT, given its experimental failures. And whether we can attribute any normative significance at all to these failures. But these are just my preferences, not a list of objectively valuable questions. Yet, the list of papers compiled is valuable enough to be widely read and discussed.

{April 2007}
{Metapsychology online reviews}

Arjo Klamer, Speaking of Economics. How to get in the conversation, London, Routledge, 2007.

“How to do” books are not often reviewed in academic journals, neither in philosophy nor in economics, perhaps because most of them are aimed at doing things that are of not much relevance for the audiences of these journals. Arjo Klamer’s new book is an exception though. A journal that promotes the mutual enrichment of economics and philosophy surely will attract a number of philosophers interested in engaging in fruitful conversation with economists. Philosophers, though, are just a subset of the vast readership targeted by Arjo Klamer in Speaking of Economics (the list covers three pages: xiv-xvi), so they should not expect a preferential treatment. Klamer takes nothing for granted and constructs the book in the best tradition of the “How to” genre. The sections are short, with punchy titles, very few notes and not many more references. Readability is secured by avoiding technical jargon, adding illustrational personal anecdotes and intercalating boxes to clarify or expand difficult points. And it is only 185 pages long: an easy read or, at least, significantly less demanding than most other titles in the “Economics as social theory” series, where it is published. The book is personal, warns the author, and it is written in a conversational style (xvii). This is something that cannot be captured in a review, but may explain the sketchy nature of the following summary.

In chapter one, Klamer reviews the strangeness of economics as a discipline, which can be appreciated through the suspicion and derision it often causes outside academia. Its subject is perceived as strange and its methodology is often considered peculiar. Against this popular view, the author claims that if addressed through the metaphor of the conversation, economics does not seem strange anymore: it is as much a conversation as any other. In the following chapter alternative metaphors drawn from the philosophy and sociology of science are pondered (e.gr., “research program”, “logic and mirror”, etc.). The different constraints which define a scientific conversation are then briefly reviewed (from the physical surroundings to its topoi and ethos) and, in view of these, the strangeness of economics is reinterpreted. For instance, against those who consider it a dubious science, Klamer proclaims: “the scientific tenor of a conversation may be disturbing, but instead of focusing on its unscientific character, it might be better to simply acknowledge a desire to change it, or to participate in another conversation altogether” (35).

In chapter three, Klamer introduces an expansive notion of culture, inspired by Clifford Geertz, that allows the author to address the oddities of academic conversation and its circumstances. “Not convinced that academic culture is different?” —concludes Klamer— “Read David Lodge’s novels”.

In chapter four, with a bit of help from bibliometry, Klamer studies why so few academics get read and cited, the effects that the skewed distribution of attention has on the social organization of scientific communities and how this impinges on their conversations. “The giving and receiving of attention is the mechanism by which the conversation lives and grows” (55). It does so, however, according to a certain normative standard which is stated in the title of the subsequent chapter: “A good scientific conversation, or contribution thereto, is truthful and meaningful and serves certain interests”. These values are then shortly justified in the form of imperatives. Klamer adds though an appendix to this chapter as a ten-pages primer on philosophy and sociology of science. The message this appendix conveys is, apparently, that there are no better criteria than his imperatives to assess the quality of a scientific conversation.

Chapter six introduces the rhetoric approach through a combination of short sections, a few boxes (often longer than the sections), and a glossary at the end. The chapter covers the usual topoi in the rhetoric of economics plus two brief tutorials on the structure of argumentation and the use of metaphors in science. The final section (and the subsequent box) presents divergences among economists in terms of the stories they tell and how these stories contribute to the cogency of their argument.

These disagreements are further analysed in the following chapter. On the one hand, Klamer warns us about the differences between ongoing kinds of conversations in economics and the difficulties to master more than one. On the other hand, conversations change over time and even though the current one is dominated by modernism (defined in eight points in a separate box), it seems to be in a late stage making way, perhaps, to alternative conversations. “The current state is worrisome”, states Klamer, “late modernist economics is aloof from interested in finding out about and making sense of economic processes” (151). Worried as he is with the deconstructive turn in postmodernism, Klamer holds out for a revival of classicism, reintroducing values and virtues, traditions and interpretative approaches in economic conversation.

This revival is not a topic covered in this book, whose eighth and final chapter discusses the gap between mundane and academic conversation. Klamer argues here that the influence from the latter to the former is never direct: the stories will change in the process, and therefore no economist can expect to control them to best serve her purposes. This leads to an epilogue in the form of a peroratio: a good ending can save a dull argument, warns Klamer. The criterion to evaluate the success of his own argument: “if going through the preceding pages has produced an Aha Erlebnis now and then, or moments of recognition and identification, or the feeling that one’s experience is quite different from the one describe here, the argument has been successful” (183)

For anyone involved in one way or another with economists it will be easy either to identify or to disagree, now and then, with the many stories told in this book. In this respect, the success of the argument is guaranteed, even if a modest one. It would be a bit more impressive, if the metaphor caught on and we all started speaking of economics as a conversation. However the author is well aware that no academic can engineer the adoption of a metaphor by a given community, so perhaps the modesty of Klamer’s goals is justified here.

Yet this awareness may explain a few things about the structure of the book: the author cannot control the fate of the metaphor, but he knows that this reviewer cannot either. Many readers of this journal, such as myself, are using metaphors different from Klamer’s to address economics, and the sort of conversation we are engaged makes it very difficult to accept the arguments advanced in this book. They seem most often quick and inconclusive. But, as I said before, we are just a subset of the audience, quite a small one indeed, and a negative review pointing out these faults will not prevent the metaphor to catch on if most economists felt moved by Klamer’s book and decided to adopt it. So there is no point in trying to please analytically-minded philosophers.

Yet independently of our intellectual inclinations, “How to do” books can be assessed with a very simple criterion: do we learn to do what they teach how to? In this particular case, are we better qualified to get in the economists’ conversation after reading it? If a majority in the profession decided to adopt Klamer’s metaphor, independently of the merits of his argument, the book will surely be a must. But this is just a performative effect, using Donald MacKenzie’s terms: if a community reads a certain code and decide to behave according to its prescriptions, it will become a compulsory reading for anyone who wants to interact with its members. If, on the other hand, economists decide to ignore this essay for whatever reason, I don’t think it will help us much to improve our communication with them, given that their conversation is currently far from satisfying Klamer’s expectations. A better title for the book would then read: “Speaking of economics. How to get in the metaphor of economic conversation”. It is up to the reader to decide whether to join Klamer in spreading the word and make the conversation with economists what he wants it to be or find alternative ways to get into it.

{April 2008}
{Economics and Philosophy 25.1 (2009), pp. 122-124}