Chapter One THEPROBLEM

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1 Chapter One Neoclassical economics,eveninitslatestversions,ignoresoneparticularcategoryofmarkets.ithereforeproposeasetoftoolsandreasoningsto describethisrealityandtoexplainitsfunctionaswellasitsevolution. Theseoverlookedmarketsaremarketsofsingular,incommensurable products.farfrombeingrestrictedtomarginalrealities,theyencompass thoseexchangesgovernedbythesearchfora good orthe right... finewine,novel,doctor,lawyer,orconsultant.moregenerally,thesemarkets include works of art, haute cuisine, movies, fine wines, recorded music,luxurygoods,literature,tourism,certainhandcrafteditems,personalizedprofessionalservices,andparticularkindsofexpertise. Neoclassicalanalysisignoresthesesingularproductsassingularproducts.Notdeliberately,ofcourse;thisblindspotisthelogicalconsequence ofatheoreticalframeworkwhoseuniversalismimpliesadefinitionofexchangeproducts(goodsandservices)that,in the end,excludesalldifferential features but price. 1 For example, with the central distinction betweenstandardizedanddifferentiatedproducts,singularitiesarelostin themassofdifferentiatedgoodsandthereforeremaininvisible.butonce defined,theycanbeseparated,andtheirexchangeisregulatedbyaparticularformofeconomiccoordinationirreducibletotheorthodoxmarket.wemustthereforeexploretheterra incognitaofthemarketofsingular products,orwhatiwilltermthemarket of singularities,andconstructthe theorythatwillaccountforit:namely,theeconomics of singularities. Thisapproachispartofacollectivehistorythathasspawnedadiversificationofmarketanalysesoverthelastthirtyorfortyyears.Toneoclassicaltheoryanditsoffshoots whichinclude,amongothers,transaction cost theory,agencytheory,andproperty rightstheory mustnowbeadded heterodoxeconomics thetheoryofregulation,thetheoryofconventions, andneoinstitutionaltheory andthedevelopmentoftheneweconomic Sociology.Inthisbook,Iwilldrawsomecomparisonswiththesetheoreticalperspectives. 1 Forthecomparisonbetweensingularitiesanddifferentiatedproducts,subgroupslike experience goods,search goods,andcredence goods,seechapter3.

2 4 CHAPTERONE Asitspositioniscentral,neoclassicaltheorywillbeourprincipalterm of reference. 2 Simplified comparison of its concepts and principles remainstheeasiestwaytohighlightthedifferencesandbringoutthechanges inthestakesandargumentsassociatedwithsingularproducts.tobesure, neoclassicaltheoryisavastuniversethatisbothdiversifiedandsophisticated, but as long as our use of the term does not occasion misunderstandings aslongaswedonotmistakeforaglobaljudgmentwhatis merelyapresentationthatpointsoutdiscrepanciesandnewelements this rhetoricaldevicecanbeuseful;moreover,itdoesnotexclude,whenthe occasionarises,acloser,criticallookatoneoranotherspecificargument. Intheusualinterpretationofthechangesobservedintheeconomyandsociety,theapparentlyirresistibleextensionofthemarketcanoccuronlyat theexpenseofallthatbordersonitssphere.thisevolutionwasclearlyoutlinedbymarx: Exchangehasahistoryofitsown.Ithaspassedthrough differentphases...finally,therecameatimewheneverythingthatmen had considered as inalienable became an object of exchange, of traffic andcouldbealienated.thisisthetimewhentheverythingswhichtill thenhadbeencommunicated,butneverexchanged;givenbutneversold; acquired but never bought virtue, love, conviction, knowledge, conscience,etc. wheneverything,inshort,passedintocommerce.itisthe time...wheneverything,moralorphysical,havingbecomeamarketablevalue,isbroughttothemarkettobeassessedatitstruestvalue. 3 Andelsewherehecontinued, Objectsthatinthemselvesarenotcommodities,suchasconscience,honour,etc.,arecapableofbeingoffered forsalebytheirholders,andofthusacquiring,throughtheirprice,the formofcommodities. 4 Themarketencountersitslimit,andrelentlesslypushesitback,inan exteriority that encompasses mainly in French law gifts, inalienable goods,andfreethings.thoughthecirculationofobjectsfollowsitsown specificlogicinthefirstcase,itissubjecttotheprohibitionofcommercialityintheothertwo.thiscommontabooonthe capacitytocirculate fromoneagentoractortoanother 5 shouldnotbeallowedtohidethe 2 Iwillalsocallneoclassicaltheorymainstream economicsororthodox economicsand willusethetermstandard marketforthehomogeneous/differentiatedmarketwhichcorrespondstothattheory. 3 K.Marx,The Poverty of Philosophy,trans.InstituteofMarxismLeninism(Moscow: ProgressPublishers,1955), /povertyphi losophy/index.htm,chapter K.Marx, Money,orthecirculationofcommodities, chap.3incapital,vol.1,trans. S.MooreandE.Aveling,ed.F.Engels(Moscow:ProgressPublishers,n.d.),MarxandEngelsInternetArchive, 5 I.Moine,Les choses hors commerce(paris:lgdj,1997),p.11.

3 5 differences:evenwiththeconsentofthosewhocontroltheirattribution, unlikefreethings,inalienablethings,whethertangibleorintangible,cannot be the object of a commercial transaction that would necessarily downgradethem.thisabsoluteprohibitionappliesmoreparticularlyto thehumanbodyandtoitsdetachableparts(organs,gametes),tosubjectiverights(thoseapplyingtotheprivatecitizen,suchastherighttoprivacy and image rights), and to cultural creations, language, ideas, and worksofart.theunityofthisuniverse,oftendesignatedbythegeneric termculture,residesnowhereelsethaninthehumanperson.thisconnection singularizes, whereas commerce leads to the system of equivalences.legalsystemsvaryaccordingtotimeandplace,buttheprinciple ofaseparationbetweenmarketandcultureisfoundeverywhere,evenas pastprohibitionsaretodaybeingcalledintoquestion. 6 Thedividingline iscontingent. Theconflictbetweencultureandthemarketismorealivethanever. KarlPolanyinoticedit. 7 Andmorerecently,theanthropologistIgorKopytoff gave it a theoretical framework: things and people are not simply physicalorbiologicalentities,theyarealsoculturalconstructions,and thevariationsintheirstatuscomposeveritablebiographies.theseprocesses are part of the general opposition between commodities and singularities. Thefirstfallintothecategoryofgeneralizedequivalence; thesecond,whethertheyaregoods,services,orpersons,are uncommon, incomparable, unique, singular, incommensurable in sum, and consequentlyexcludedfromthesphereofexchange.the career ofthesegoods istiedtotheextensionofthemarket,andsingulargoods publicmonuments, museum art collections, the public patrimony, and a restricted form of exchange of end products such as medical care can be preservedonlybysafeguardingtheminstate protected enclaves. 8 Infact, assoonasweconcernourselveswithvalues,agreatvarietyofreasons canbeadducedtojustifyrejectingthemarket. 9 The anthropological model, which underpins the antinomy between marketandculture,hasalonghistoryandisstillfullyaliveintoday s socialsciences.becauseitisbinary,itisalsoradical:singularity is preserved in culture and lost in the market.inpassingfromtheformertothe latter, it can only be dequalified. This model lends intelligibility to the 6 P.Steiner,La transplantation d organes: Un commerce entre les êtres humains(paris: Gaillimard,forthcoming). 7 What nature makes different, the market makes homogeneous. K. Polanyi, The economyofinstitutedprocess, ink.polanyi,c.arensberg,andh.w.pearson,(eds.), Trade and Market in the Early Empires (NewYork:FreePress,1957),p I. Kopytoff, The cultural biography of things: Commoditization as process, in A. Appadurai(ed.),The Social Life of Things: Commodities in Cultural Perspective(Cambridge:CambridgeUniversityPress,1986),pp M.Walzer,Spheres of Justice: A Defense of Pluralism and Equality (NewYork:Basic Books,1983),p.97.

4 6 CHAPTERONE longstanding struggle between commoditization and singularization. It favorsarepresentationdominatedbythetendencytowardthe boundless market 10 and, by its corollary, the inevitable impoverishment of cultureandhenceoftheworld.nothingseemsabletostemthisdynamic, since all powers state, administrative, scientific, and economic join forcestorelentlesslyextendthesphereofcalculativenessinthenameof order,truth,technology,andeconomicwealth. 11 Themarketgrowsunremittingly,drivenbytheconversionofincommensurabilitiesintogeneralizedequivalence. FromMaxWebertoOliverWilliamson,AlfredChandler,andTheodorePorter,notforgettingGeorgSimmelandmanyothers,theextension ofcalculativenessgoesonunabated.weberremindsusthatthispractice hasexistedsincetimebeganandthatitisaconstituentfeatureofcapitalism,sinceitmakesitpossibletoassessprofitability,isrootedinaccountingaswellasintheseparationbetweenprofessionalandpersonalpatrimony, and becomes generalized with the rational organization of free labor, the progress of science and technology, and the development of rationallaw. 12 Simmel advances that money that purely arithmetical addition of value units, indifferent to the ends pursued, abstract and capable of unlimitedreutilization, themostterribledestroyerofform 13 incessantlyexpandsthespaceinwhichquantitiescirculate.chandlerdetails theinventionanddevelopmentofthemethodsandtechniquesofcalculationthat,appliedtoproductionandsales,haveenabledlargecorporations to calculate their costs, ensure their organizational coordination throughbudgetarytechniques,forecastchangingdemand,andsimulate thelikelyeffectsofpricing. 14 Porterenlargesthestudyof thecultureof objectivity fromthemarkettoscienceandpubliclife, 15 whilewilliamsonexemptsonlyrelationsbetweencloserelativesandfriendsfromthe 10 V.Zelizer, Beyondthepolemicsonthemarket:Establishingatheoreticalandempiricalagenda, Sociological Forum3 4(Fall1988): O. E. Williamson uses the notion of calculativeness in his article Calculativeness, trustandeconomicorganization (Journal of Law & Economics36[April1993]: )withoutformallydefiningit.Hereitdesignatestheconstructedqualitiesthatmakeit possibletobringgoodsandserviceswithincalculation. 12 M.Weber,The Protestant Ethic and The Spirit of Capitalism, trans.p.baehrand G.C.Wells(London:PenguinBooks,2002),pp G.Simmel,The Philosophy of Money,trans.T.BottomoreandD.Frisby(Londonand NewYork:Routledge,2004),p A.D.Chandler,Strategy and Structure(Cambridge,MA:MITPress,1962);andThe Invisible Hand: The Managerial Revolution in American Business(Cambridge,MA:HarvardUniversityPress,1977). 15 T.M.Porter,Trust in Numbers: The Pursuit of Objectivity in Science and Public Life (Princeton:PrincetonUniversityPress,1995).

5 7 calculativenessoftheworldthatisthebasisonwhichtheuniversalityof theeconomicscienceisgrounded. 16 Thisrationalizationprocesshasnotalwaysbeenregardedasbeneficial. Afterexaminingitseffectsoneconomicefficiency,Webervoiceshisfears astotheextentoftheaccompanyingchange,whichhesuperblychristens the disenchantmentoftheworld :thedisappearanceofmagicandreligion,thelossofthesacred,thevanishingofthemeaningofsocialexistence. 17 Simmel,forhispart,depictstheriseofthis measuring,weighing and calculating exactness of modern times, which is the reflection of onewhocalculatesinanegoisticsense, 18 andhemakesitthebearerof impersonalrelationsdominatedbyindifferencetoothers.asqualitiesare gradually converted into quantities, the world becomes more homogeneous,moreimpersonal,andmoreofathreattotheaesthetic,sensitive, and moral richness of humankind. And as the density of calculating agentsandcalculatingmachinesisforeverincreasing,mostoftheauthors do not conceal their pessimism: the loss of singularities is seen as the consequenceofextendingthemarket spurview. Butwhatifthisanthropologicalorhistoricalmodelisconsideredtobe unacceptable? Why should culture be kept outside the market? Why shouldweconcentratesolelyonthepassagefromthenonmarketableto themarketable?whyshouldsingularities not be part of the market? 19 Is it so certain that the contradiction between the two terms is absolute? Andthattheyaresoeasilyseparated?Afterall,thesocialhistoryofart showsjusttheopposite,butthenitdealswithonlycertaincategoriesof activities,works,andactors.andyetitisfromageneralperspectivethat wemustinquireintothemodesofrelationbetweensingularitiesandthe market. Onecouldbeinfavoroftheexclusionoftrade,ofthecertaintiesof inalienability,and/orofthewaysandmeansbywhichthestaterefuses commercialexchange.butthesechoicesdonotjustifyconfusingfiction with reality and, consequently, accepting the generalized and radical metamorphosisofskillsandqualitiesastheyenterthemarket.itisnota matterofdenyingthetransformationsassociatedwiththepassageofculturetomarketorofchoosingbetweenwhatshouldorshouldnotbesold; it is a question of understanding how the market comes to ensure the 16 Williamson, Calculativeness. 17 Weber,Protestant Ethic,pp Simmel,Philosophy of Money,p ThesameremarkismadebyA.AppaduraiintheintroductiontoAppadurai(ed.), Social Life of Things,p.17.

6 8 CHAPTERONE circulation of incommensurable entities and thereby restores a reality thathasbeenoverlooked. Ifsingularitieslooklikelytobeswallowedupbythemarket,independentlyofanyexaminationoftheworkingsandoutcomeoftheconcrete process,thatisalso,andperhapsaboveall,themechanicalconsequence ofamainstreameconomicsthatreasonsintermsofhomogeneousordifferentiatedproducts.giventhisdichotomy,singularitiescanonlybeengulfedinthesphereofdifferentiation.andsinceitisthenimpossibleto identifythemaswhattheyare,itisobviouslyimpossibletofollowtheir concretetransformations. Knowledge of the relationship between singularities and the market willescapeusaslongastheconceptofsingularityhasnotbeensystematicallyconstructed,thatis,aslongasatheoreticalbodyhasnotbeen developedanditsrelationshipwithconcreterealitybeenorganized.the classicaloppositionbetweenmarketandcultureisnotunjustified,but, farfrombeingconfusedwiththeseparationbetweeninsideandoutside themarketonly,this opposition is also located within the market.andat themomentwedonotpossessthemeanstoobserveandexplainit.a new analysis is needed, one capable both of recognizing singularities withoutnecessarilydisqualifyingthemandofmakingsenseofaformof economiccoordinationignoredbyneoclassicaltheory.themarketofsingularproductsshouldbeadded tothemarketsofhomogeneousanddifferentiatedgoods.itjustifiestheelaborationofaspecifictheorythatalso entailsethicalandpoliticalconsequences. Notonlymustthistheoryallowustoseparatewhatispresentlyinterwoven,tomakevisiblearealitythatispresentlyconcealedinthesphere ofdifferentiation,itmustalsoleadtoidentifyingthediversecausesthat affectsingularities.byabandoningtheconceptionofaconflictcentered solely on the relationship between market and nonmarket spheres and which,forthisreason,conjuresupsuchpowerfulglobalforcesthathumansaredisarmed,thenewtheoryrestorestheircapacitiesforaction. Internalmarkettransformationsareineffectlinkedtoarrangementsand actorsthatbelongtoordinaryeconomicandsociallife;theyarenolongerbeyondthescopeofacollectiveactionthatwouldaspiretokeepthe singularitiesintheworld. Thefollowingpresentationoftheeconomicsofsingularitiesincludesa constructionoftheconceptualsystemadjustedtotheeconomiccoordination of singular products and a comparison of the coordination regimes supportedbystudiesofconcretemarkets.

7 9 Part1introducestheconceptofsingularity,withoutwhichthisspecific sphereofexchangecannotbedelimited,andstudiesitsrelationswiththe oldandnewversionsofneoclassicaltheory. Part 2 presents the tools of analysis, which, taken together, describe andexplaintheeconomiccoordinationofsingularproducts. Part3testsaclassificationofcoordinationregimesbyusingitinthe studyofseveralconcretemarkets:finewines,luxuryproducts,movies, popular music, professional services, and some others. Part 3 also includesachapteronpricetheory. Part4isdevotedmainlytosomesociohistoricalprocesseslikedesingularizationandtherelationshipbetweentheeconomicsofsingularitiesand democraticindividualism.