A Talk on the Habit of Capitalization

“Setting the habit of capitalization: the pedagogy of earning power at the Harvard Business School, 1920-1940″ is the titled of a PERFORMABUSINESS paper currently prepared by Fabian Muniesa in collaboration with Liliana Doganova. From the abstract:

“The quandaries of business valuation have marked the pedagogy of business administration since early attempts at institutionalizing the managerial discipline. It is however now commonly admitted, at least in legitimate financial and entrepreneurial circles, that the value of a business (that is, the monetary assessment of a functioning enterprise established in a competitive environment) resides primarily in its earning power or, in other words, that what a business is worth equals its capacity to generate a stream of revenues for the investor or investors that provide it with funding. How did this idea take shape and how did it permeate the business mind? An examination of early pedagogical materials at the Harvard Business School (an influential reference for the socialization of the businessperson) and, in particular, of the vagaries of the idea of capitalization and its exercising in the classroom, provides a fine occasion to advance understanding of the meaning of such ideals of business and business value, and of their institutionalization. This empirical study can, in turn, be employed in order to discuss and refine our interpretation of what a convention of economic valuation is and how it operates.”

The research is based in part on an examination of archival materials collected from the Cecil E. Fraser Papers, which are located at the Baker Library, Harvard Business School. An audio file from a presentation on the paper is available here from the Max Planck Institute for the Studies of Societies in Cologne, who kindly invited Fabian Muniesa to give a talk in January 2015 (further files from the conference series are available here).


Performativity, Valuation and Social Sciences in Santiago de Chile

An exciting event on “Cómo las ciencias sociales moldean la realidad que vivimos”, to be held tomorrow, 16 February 2015, in Santiago de Chile (Universidad Alberto Hurtado / Fondecyt), presented by Claudio Ramos, and with the participation of Liliana Doganova (program here, announcement here). And on Monday 19 February 2015, same place, an equally exciting talk by Liliana Doganova on the “Historical sociology of valuation methodologies” (information here).

The Performative and the Capitalistic

On 16 an 17 October 2014 the Centre de Sociologie de l’Innovation hosted an international event with a slightly provocative title: “Capitalizing on Performativity: Performing on Capitalization”. The purpose consisted in gathering together a number of colleagues that have played an inspirational role for PERFORMABUSINESS, a research project directed by Fabian Muniesa and funded through an ERC Starting Grant. What was this supposed to be about, anyway? An ex-post interrogation follows.

[Florence:] Why “Capitalizing on Performativity”?

[Fabian:] Well, we can interpret this title in two ways. One is, tongue-in-cheek, as a cynical pun. Yes, we are in the midst of a regime of competition in research, we need to abide by the rules of “value creation”. The very vocabulary put forward by public funding agencies (ERC, ANR, ESRC, etc.) is cluttered with calls for “capitalization”: a particular repertoire of valuation that asks that all what we do which we consider of value ought to be treated as an “asset”, that is, as something that ought to provide “return” (financial or otherwise, including “impact”, “reputation”, and so forth) and therefore serve an investment rationale. We are obsessed with this, as an object of inquiry in PERFORMABUSINESS – an obsession that can be followed through some recent publications (see here, here, here, here, here or here) and a book in preparation. What is PERFORMABUSINESS but an attempt at capitalizing on the notion of performativity?

[Florence:] Funny. But I hope you had a better reason to invite all these people to give a talk. Did you?

[Fabian:] Yes, sure, there was also a serious reason (although somewhat related). The spirit of the event was about gathering, in a very liberal and catholic way, a number of colleagues whose work and preoccupations have played a role in our thinking. We had the chance to count on Laure Cabantous, Eve Chiapello, Kimberly Chong, Barbara Czarniawska, Daniel Fridman, Martin Giraudeau, Penny Harvey, Sarah Kaplan, Andrew Leyshon, Javier Lezaun, Peter Miller, Paolo Quattrone, Michele Spanò and Signe Vikkelsø. Looking at things from different perspectives (economic anthropology, the philosophy of law, the history of science, organization studies, accounting, etc.), these authors bring contrasted light to the understanding of the practices that constitute the stuff of business. The idea of performativity, quite fuzzy indeed, served as an entry point.

[Florence:] Fuzzy performativity?

[Fabian:] Yes. We start from a loose sense of that notion, which we consider as some sort of an intellectual atmosphere rather than as a technical concept: an atmosphere that is partial to a pragmatist intuition (that of signification as act and reality as effectuation) that may be recognized in innumerable guises. This is the standpoint defended in The Provoked Economy (a recent project “deliverable”, now out with Routledge). That said, we thought that all these works could serve to reestablish in new light the link first formulated by Jean-François Lyotard and then reworked by others (Jon McKenzie for example) between managerial, semiotic and dramaturgical understandings of “performance”. We also thought that we could obtain there the materials that would allow reflecting on the connection between, on the one hand, the performative understood as the very matter of the “postmodern condition” (performativity is for Lyotard the condition of postmodern knowledge) and, on the other, the fact that this matter becomes the object of capitalization (postmodern knowledge is “par excellence” financialized knowledge).

[Florence:] So this means that the idea of “capitalizing on performativity” should be taken seriously, as a way to describe something like the financialization of signification.

[Fabian:] Absolutely, spot on: financialization of signification. Signs are considered, on the one hand, through their performative dimension, and, on the other hand, as the object of capitalistic investment. Most of the talks could actually be interpreted in that perspective. Many dealt with the managerial configuration of organizations, which relies heavily on rhetoric crafts and which also contributes to the transformation of such organizations into financial assets. The pedagogy of finance, we also saw, often requires an intimate transformation of the self through participatory, experiential means, and translates accordingly into the intimate experience of “become capital” oneself. The performative becomes “value creation” in a very financial sense of the term.

[Florence:] And did participants agree with that?

[Fabian:] Hard to tell, but I would tend to say: yes, to quite a large extent – and definitely yes on a telepathic level, since that idea was clearly in the air when we thought about them!



Quick Report on Team Movements

After a remarkable doctoral research at the CSI and post-doctoral contribution to PERFORMABUSINESS, Alaric Bourgoin flew to Canada to join the department of mamangement at HEC Montréal as an assistant professor. Congratulations! Horacio Ortiz recently concluded his 3-years post-doctoral engagement at the CSI, which he spent in Shanghai for PERFORMABUSINESS. He is now an assistant professor at the Research Institute of Anthropology, East China Normal University, Shanghai. Congratulations too!




The full team gathered together at the “Capitalizing on Performativity” event. From left to right: Horacio, Alvaro, Fabian, Liliana, Florence and Alaric.

Capitalizing on Performativity, 16-17 October 2014

“Capitalizing on Performativity: Performing on Capitalization” is the titled of the forthcoming PERFORMABUSINESS symposium, to be held in Paris, 16-17 October 2014.

The purpose?

A cogent appraisal of the spirit of contemporary capitalism and its problems calls for renewed attention to the performative. Business schools, consultancy firms, corporations, investment banks, start-up companies, market research agencies, public administrations and other sites of business life are characterized by the presence of habits, idioms and apparatuses that constitute a significant part of the reality of business. These include techniques for the simulation of business situations, methods for the explanation of business problems, instruments for the valuation of business endeavours, and tools for the presentation of business outcomes. But simulation, explanation, valuation and presentation are not only about accounting for external states of affair. They are, at least in part, about moulding, enacting, provoking and effecting the business realities they signify.

Many things have been said indeed, from a large variety of angles, about the performative condition of capitalist business existence. The point now is to think about where to go from here. Contributors to this workshop are addressing this challenge from their own particular blends of intellectual concerns and research undertakings. The workshop aims at providing an occasion to discover and discuss what they have to say. Topics covered range from the anthropology of financialization to the critique of management, from the sociology of accounting to the politics of organization and the philosophy of law.

The participants?

Invited speakers include Laure Cabantous, Eve Chiapello, Kimberly Chong, Barbara Czarniawska, Daniel Fridman, Martin Giraudeau, Penny Harvey, Sarah Kaplan, Andrew Leyshon, Javier Lezaun, Peter Miller, Paolo Quattrone, Michele Spanò and Signe Vikkelsø, also with the participation of PERFORMABUSINESS associates Alaric Bourgoin, Liliana Doganova, Fabian Muniesa, Horacio Ortiz and Alvaro Pina-Stranger.

Practical details?

This symposium is sponsored by PERFORMABUSINESS (Performativity in Business Education, Management Consulting and Entrepreneurial Finance), a project funded by the European Research Council (Starting Grant No. 263529) and located at the Centre de Sociologie de l’Innovation (Mines ParisTech/ARMINES).

The event takes place on 16 and 17 October 2014, 9:00 to 18:00, at Mines ParisTech, 60, Boulevard Saint-Michel, 75006 Paris, France. Public transportation include rapid transit train (RER B Luxembourg Station) and bus (lines 21, 27, 38, 82, 84, 85, 89).

Attendance is free within the limit of available space, and reservation is required. If you want to attend, or inquire about aspects of the symposium, please contact Pr. Fabian Muniesa.

The full program?

Available here.


(De)valuing the Future: The Discounted Cash Flow Formula and the Investing Manager

The second installment of the special issue on the sociology of financial agency for Sociétés Contemporaines is now out. It includes a key PERFORMABUSINESS contribution by Liliana Doganova, titled “Décompter le futur: la formule des flux actualisés et le manager-investisseur”. From the abstract:

The discounted cash flow formula (DCF) is one of the investor’s key tools. It derives the value of a good from the cash flows that this good will produce in the future, reducing them by a factor that is all the higher as they are distant in time. This paper examines the foundations of the DCF formula and identifies three different configurations – ensembles of problems, actors and objects – in its development. A solution to the practical problem of valuing and managing forests in the calculations of German foresters in the middle of the 19th century, then the expression of a universal definition of value in economic theory in the beginning of the 20th century, the formula has become, since the 1950s, an instrument for governing investment and has spread in firms’ practices. The paper sheds light on the role played by the state, economists and consultants in the constitution of this formula as the main tool for assessing investments. It describes the effects that the DCF formula induces on the objects to which it comes to be applied, and the figure of the user – an “investing manager” – that it sketches and equips.

Unpacking Performativity Processes in Organizations

PERFORMABUSINESS would like to thank the organizers of “Unpacking Performativity Processes in Organizations”, a research seminar held last week in Paris and convened by Franck Aggeri, Laure Cabantous, Emmanuel Coblence, Liliana Doganova and Jean-Pascal Gond. This was a fantastic occasion to test some ideas from the project and to expand the conversation on the fate and scope of “performativity studies”.

Financial Value and Truth

Horacio Ortiz‘s new book is now out from Presses de Sciences Po: Valeur financière et vérité: enquête d’anthropologie politique sur l’évaluation des entreprises cotées en bourse.

From the editor’s website:

“Depuis une trentaine d’années, dans un espace global, l’industrie financière s’est imposée au centre de la collecte et de la distribution des ressources monétaires, jouant ainsi un rôle politique sans avoir presque à rendre des comptes. Les prix des actifs financiers (la bourse, la dette de l’Etat, entre autres) semblent s’imposer aujourd’hui comme un verdict sur la réalité sociale, constituant une donnée incontournable du débat politique et économique.
Dans le contexte bureaucratique et procédural de l’industrie financière, quelles sont les logiques sociales des pratiques quotidiennes selon lesquelles on considère, comme le fait la réglementation financière et la théorie financière standard, que les entreprises cotées en bourse devraient avoir une « valeur financière », résultant de la rencontre d’« investisseurs » agissant dans des « marchés efficients », et relevant ainsi d’une double « vérité », à la fois celle des calculs financiers et celle de la justice de la hiérarchie sociale dans l’accès au crédit ?
A partir d’une enquête de terrain de longue durée auprès d’analystes financiers, de traders, de gérants de fonds et de brokers, à Paris et à New York, cet ouvrage permet de comprendre que la valeur financière des entreprises cotées est le produit d’épistémologies multiples et contradictoires, portées par des employés dans des relations de concurrence et de complémentarité entre eux et entre les entreprises qui les emploient, dans une réalité très éloignée de l’utopie libérale à laquelle appartient l’idée d’une « vérité de la valeur financière ». L’analyse permet ainsi un questionnement critique profond du fondement, pratique et théorique, du régime de vérité dont les pouvoirs publiques donnent aujourd’hui la charge à la finance.”