Some rambling notes on entanglement

In 1991, an anthropologist, Nicholas Thomas, wrote a book entitled “Entangled Objects” in which he proposed that other dimensions of commodity exchange exist outside of what is usually analyzed in terms of production and circulation. That is, objects are entangled with other objects and situations to a degree that confounded both the theory of revealed preference and the Marxist analysis of surplus value, the latter of which held production and circulation too far apart, the former of which had forgotten production and overlapping markets altogether. 

 The idea of entanglement was taken up by two different economic sociologists, Daniel Miller and Michel Callon, who have clashed about just what it means. Callon, who is better known, is one of the architects of Actor Network Theory, has made field studies of fishermen and stock brokers to study markets and producers. His theory of markets, based in this research, accords a great role to what he calls the performativity of economics models – that is, economists model transactions according to theories of rational choice and then real markets are molded to adhere to the model. It is a sort of para-Dorian Gray effect, with the wickedness of the economist showing up in the way market participates in a particular market identify themselves. Miller has developed what he calls a virtual theory of markets – by which he means that transactions that are framed as exchanges in a market are so framed by the abstractions of economics, which paints a virtual picture of economic reality and works to make the latter conform to the former. 

Miller, unlike Callon, does not give the market framing any ontological privilege. Thus, he resists the whole idea that the market describes anything more than a locale in which commodities are exchanged.

 For both thinkers, the way objects are entangled in production and the symbolic realm make the neo-classical claim about the exchange of commodities unrealistic. Both writers are engaged in what Mill called ethology; unlike Mill, however, both Miller and Callon think that there is an experimental dimension to economic theory, which is enacted or performed in real transfers of objects.

The polemic between Miller and Callon has crystallized around an example, introduced by Miller - a transaction that does not, as it happens, involve the cowry shells beloved by economic anthrologists: the buying of a Renault automobile. 

 That it is a Renault instead of a Honda or a Ford is a sign that this is, among other things, a transatlantic debate. The French car gives us a vaguely French buyer – in Miller’s example, a woman named Sophie, who accrues a profile that would make her ideal for an Oprah interview: “So let us imagine the case of Sophie buying a Renault. What are the factors that determine Sophie’s selection of this car and the price she is prepared to pay for it? Sophie is recently divorced and, while she has kept possession of the family house, her ex-husband kept the car. Her income is now much restricted so the Renault will be a small one. This is an important decision for her, one of the most signicant purchases she has made for a while. For one thing she is suddenly redefining her image as an individual as against being a ‘partner’ in a relationship. So the aesthetics and the image of the car are important as a decision about her outward appearance, and many of her friends are very stylish. She is quite proud of that element of nationalism that leads her towards buying a French car, with a confidence bolstered by recent victories in football. So she is clear that she wants a Renault as opposed to say a Fiat or Toyota. Also the car is becoming ever more important to her since her two children are growing to an age where much of her parenting consists of chauffeuring them around to friends and activities, so the car must function well to facilitate her daily responsibilities (Maxwell 2001). Also she has realized that car journeys are actually the main time when she listens to loud music so the sound system in the car is perhaps more important than the hi-fi. in her home (Bull 2001). Sophie is also (to an admittedly rather mild degree) a bit of an environmentalist so that some of the ‘costs’ of the car, which are normally regarded as externalities, are internal to her equation. She wants an efficient engine principally to save her own petrol costs but also she is happy that this is for the sake of the earth as well as for the sake of her budget.” [“Turning Callon Right side up” ] 

 I will overlook the oddly sappy terms in which Sophie’s character is described, although they have the glaze of self-help psychology – Sophie is, as E.M. Forster might put it, a thin character, and she is all the thinner for being “confident”, or ‘happy for the sake of the earth’, that her car has good gas mileage,etc. Oddly, Miller, who has done ethnographic fieldwork, seems uninterested in saying exactly what the ‘earth’ means to Sophie. However, aside from Sophie’s cartoonishness, Miller’s portrait is distinguished by a lack of noticing both the material situation in which his purchaser makes her purchase – where does Sophie live, anyway? – and a blind spot so large as to be puzzling: Sophie is not ‘purchasing’ a car, if she is a normal car buyer – she is taking out a loan. That new cars are big ticket items for most drivers, and that they are entangled, at both ends of the market transaction (that is, the ends designated by the seller and the buyer) is, one would think, one of the primary entanglements of this transaction. It is one of the reasons that the disentanglement is so doubted by Miller and so easily imagined by Callon: 

"As noted elsewhere, the object of the transaction may be a service, irrespective of how ‘immaterial’ it may seem. For example in Sophie’s case the sale may include a leasing contract or after-sales services. But since all that is specified and qualified, salespersons and buyers are quits once the transaction has been completed. In other words... the disentanglement of the car from the seller’s complicated and heterogeneous world is accomplished. And this is because the goods are detached and reattached that the two agencies become quits: the two processes are strongly intertwined. In other words it is quite impossible to separate the two issues of the embeddedness and of the alienation of (commercial) goods.” 

 Callon’s borrowing of the term agencement from Deleuze is one way to grasp the fact that choice or consumption is only one dimension of the economy – production is the other. Marx and the classical economists knew this well; the neo-classicals have erected an entire science on forgetting it. Yet Callon, too, envisions a checkbook and the alienation of property, as though Sophie were buying a steak. The checkbook brings into this transaction a bank; it should also bring into this transaction the seller’s terms, which will certainly include an interest rate. Callon mentions the lender's terms, but doesn't seem to understand that alienation here is a highly conditioned term. Sophie operates, as we all do, in a world in which purchase is not a matter of being endowed with a supply of funds equal to one’s desire for goods, but rather in a world in which one’s continuing supply of income makes one suitable for funds flowing from other parties – banks, credit card companies, the automaker’s own lending unit – which in turn leads to secondary transactions – the bundling of loans into larger financial products that can be sold amongst parties in such derivative markets – and so on. At the time Callon published his refutation of Miller, in 2005, there was something like 300 trillion dollars of derivates contracts being traded “out there” . The entanglement of supposedly separate markets impinged, virtually, on every big ticket transaction. If Sophie were living in Dublin and buying a Range Rover, in 2011 the taxes she paid would be going to pay off bad bets made by bad Irish banks who had plunged into the credit markets that, at some point, serviced the big ticket purchases of people like Sophie – as well as the small credit card purchases. This makes it all the more interesting that economists model a market – rather than the tangle of markets that actually exist – and insist on a highly unrealistic notion of the individual revealing preferences in these simple to disentangle, recognizable markets, when of course they are operating in ways they are not sure of in markets that they cannot overview to make purchases that they ‘prefer’ due to the existential structures in which they are embedded. To trust, then, that they reveal a preference, here, is like understanding the Pickett’s charge at Gettysburg by assuming that a number of soldiers from a number of Southern states had decided, on their own, that it was a good time to take a stroll across a Pennsylvania meadow. 

The notion of entanglement helps us see how circulation and production in capitalism have, over the nineteenth and twentieth century, shaped certain ‘ideal types’: producers, middle persons, clerks and lawyers and doctors,  consumers, etc.  One of the characteristics of those types is that they have learned to navigate the hyperconnectivity of capitalism. But they have not learned, even on the level of economics, to understand it. Take someone who is supposedly much more sophisticated than Sophie: Larry Summers. I was struck by one of Summer’s responses in the brief interview with him in the NYT Sunday magazine. You have been cast as the heavy in documentaries like “Inside Job” and on “Frontline” for sowing the seeds of the economic crisis during the Clinton administration. You were against regulating derivatives and in support of repealing the Glass-Steagall Act, which significantly relaxed how banks do business. Did they miss the mark by casting you in this light? 

"Oh, these are much more complicated issues than those kinds of movies can suggest. Canada, for example, is generally pointed to as a major regulatory success. But it’s got universal banking that goes considerably beyond the Glass-Steagall reforms that happened in the United States. The major accidents in the United States — Bear Stearns, Lehman, Fannie and Freddie — had nothing to do with Glass-Steagall. Did we 10 years ago foresee everything that happened with respect to derivatives? Absolutely not." 

Summer’s is right that these are complicated issues. Unfortunately, he doesn’t understand their complication. The question that is posed, here, is: is there an entanglement between deregulating banks and allowing them to expand their services in all directions so that any crisis they experience will be violently transmitted through the economy and deregulating mortgage markets and derivatives so that they will be free to make riskier investments? And behind this, the larger question: why even have banks if the capital they mobilize is invested, incestuously, in a pyramid of bets about the capital they mobilize? Does this create a perverse incentive to keep the financial services sector from investing in longer range projects – thus creating a huge barrier to long term Research and Development by making it an unattractive investment? 

 Summers, of course, might have some inkling of these things. But he really can’t connect two things that are modularly separated by his models. Over here we have the separation between investment banks and commercial banks, and over here we have a market in financial instruments that, on the consumer end, deregulates the process of mortgage lending, and, on the other end, creates unregulated opportunities for derivatives of ‘real’ financial instruments to be traded back and forth for profit, but no real social gain. Every economist gets trained, through modeling, to bracket and separate factors that the economist knows, in reality, are interrelated. This is done, firstly, in order to build and make models work. But somewhere along the way, they begin to think that these separations and divisions actually reflect reality. Hence, their policymaking is always done on the principle that the economy is a modular system, without any thought about the fact that it is also a highly interconnected system. Summers simply can’t think through the proposition that he was the architect of a malign coupling – big banks, stinking financial instruments – and thus reverts to the logic of analogy beloved by those pushing bad policy. Analogy pushing has evidently moved on from the glory days, in which our occupation of Iraq was just like occupying Germany after WWII. It is now an excuse for turning a blind eye to the essential and massive dysfunction of financial markets. And this, in turn, manufactures a bigger blind eye, in which our supposedly ‘neo-liberal’ government, virtuously shunning central planning and ‘industrial policy’, actually operates a very intense industrial policy that is centered on promoting financial services.  

I wrote the bulk of this in 2012. And in this year, 2021, we still don't see entanglement taken very seriously, even as we live in its virtues and vices. This is where a training in Marx is a virtue, and an ignorance of Marx is a vice - for Marx, at least, had a systematic view of capitalism, while the orthodox political economist has only a mythical monster called a market. And so we go into our world-changing future with this primitive intellectual tool, which is scary.