Chapter 7: Performance Indicators and the State of Economy

The last chapter before the conclusion of The Provoked Economy (“Indicating economic action”) is about something scholars with an interest on the vagaries of public management in France recognize through a funny acronym: LOLF. That stands for a huge reform of public finance and public management carried out in the early 2000s, often presented as the vehicle of the modernization of the state, i.e. its entrance into a state of performance. And the prime fixtures in the vehicle are, as expected, performance indicators:

“Performance targets and indicators: these are the demons of today’s impulses towards a transparent, cost-efficient, governable, rational handling of economic things. We find them in all kinds of organizations. In the private sector, they usually serve management accounting and strategy precepts. In the public sector, they often accompany the orientation referred to as ‘new public management’. They are almost always involved in some movement of ‘reform’, ‘change’, ‘rationalization’ or ‘modernization’, that is, they are meant to prompt or help prompt the modification (the improvement, their advocates would say) of the things they refer to. They are certainly linked, as critical commentators like to emphasize, to the political expectations of neoliberalism (at least sometimes), but you can see them informed also by quite different ideological ventures. Their performative capacity is now perhaps a commonplace among practitioners and researchers alike: performance indicators are meant to describe things, but through the describing, the things are transformed (sometimes unintentionally, sometimes intentionally). They offer a quite fertile ground for disputes and quandaries on their semiotic purpose and efficacy.” (p. 108)

The chapter locates in the “semiotic haze” that resulted from these masses of performance indicators the particularly salient thread of “economic indication”:

“Something important in the LOLF movement had to do with the economic reality of the action of the state: its economic costs and rationales, its economic impacts and effects. Many of the struggles and quandaries that animated the semiotic haze were about the interpretation and implementation of an economic template for the state to express itself. The reform altogether was, in one way or another, about economizing. But what does this mean? Some interpreters put an emphasis on economic rationing and budgetary control while others cared more about economic drive and the provision of incentives.” (p. 113)

Some critical interpreters of the reform see indeed in it a threat. A threat to what? Not to the economic nature of the state (if it ever had one); rather to its political nature (it’s true one, some would say). The chapter contemplates these critical accounts with sympathy (the chapter refers, for example, to Albert Ogien). But it also insinuates how gloomy a praise for the political nature of the state can be, especially in the face of today’s revival of the apostle of trenchant decision against the menace of democratic softness and political emasculation — yes, that is Carl Schmitt (and here the chapter rather issues a warning). In order to tackle the complicated moral tension that there can exist between “economization” and “politicization” (a tension already pointed out here), the chapter points the reader to the problem of “politics of economization” as signaled by Michel Foucault.

The chapter examines, for example, what does “political” mean when some state practitioners talk about performance indicators that would signal and assess the “political” orientation of scientific research. It treats these sorts of semiotic situations as what Dominique Linhardt has aptly called “trials of state”. It also obeys a concern once defended by Alain Desrosières for the detailed examination of the producers of quantification (for instance, this one and this one, in the case of the assessment of the state’s performance in the scientific domain). It asks how science and innovation indicators intervene in this “semiotic haze” and how they connect or not with a certain vision of political or economic conduct:

“The LOLF’s trial of explicitness was in part about what it meant to quantify scientific production and about who was better equipped to do that. Styles of statistical work were put to the test, all with slightly different views of what quantification, science and also the state were about, and their roles in the economy. Without much surprise, indeed the state’s ‘role in the economy’ was a paramount concern in the semiotic haze, and this touched the role of scientific research, in the form of debate over state-sponsored or state-conducted scientific research and its consequences. Considering science in terms of economic effects is, of course, problematic. The name often put on that problem is ‘innovation’, a brilliant but obscure concept that conveys, sometimes hesitantly and sometimes explicitly, the idea of translating something from an area called ‘science’ (laboratories, universities, etc.) to another one called ‘the economy’ (firms, industry, technological applications, etc.). The thing that undergoes translation (knowledge?) is hard to define, but what counts are the accounting instruments that allow it to be shown that some kind of translation (or ‘transfer’ as practitioners put it) is going on: patents, revenues, those types of things which are recurrently taken as quantifiable proxies for economic effects.” (p. 121)

Finally, and linking back to the main conceptual tenets of The Provoked Economy, the chapter asks what kind of a state — a “state of economy” — is provoked through the crafts of economic indication.

“Calls for a neat distinction of outputs from outcomes generate indeed, in a performative fashion, a whole set of novel concerns, procedures and ideas of what the state is that simply did not exist as such beforehand, in my opinion. Imagine, for example, a position for which the idea of the state would be characterized, precisely, by outputs and outcomes being indistinguishable. This is a position that seems to me to be quite classical on the political identity of the sovereign state and its function in the constitution of reality, a position that is not quite sustainable now, if one is to make the state’s action explicit in line with an ‘inside/outside’, ’cause/effect’ template.” (p. 124-125)

Quite naturally, the chapter ends with a reflection on how The Provoked Economy, itself a scientific publication that enters the edifice of publicly funded research assessment, is or ought to be considered in the terms of a performance of the state.

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Capitalizing on Performativity: Performing on Capitalization

The Provoked Economy is happy to claim association with “Capitalizing on Performativity: Performing on Capitalization”, a PERFORMABUSINESS symposium to be held next week, 16-17 October 2014, at the Ecole des Mines de Paris. The program is available here. The program’s opening paragraph actually seems to be a quote from the book…:

“A cogent appraisal of the spirit of contemporary capitalism and its problems calls, I believe, 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.” (p. 127)

Foregrounding References: Materiality

One of the most compelling critiques of the interpretation of performativity in terms of “the power of words” — a critique with which The Provoked Economy should side enthusiastically from the outset — is from Karen Barad: “Performativity, properly construed, is not an invitation to turn
everything (including material bodies) into words; on the contrary, performativity is precisely a contestation of the excessive power granted to language to determine what is real” (in “Posthumanist Performativity: Toward an Understanding of How Matter Comes to Matter”, p. 802 — see also her Meeting the Universe Halfway). Signification and matter considered together, aptly escaping the separation between words and things: that is the name of Barad’s pragmatist game.

Foregrounding References: Discipline

There is a hole in The Provoked Economy that should have been filed up with the help of Jon McKenzie‘s Perform or Else: From Discipline to Performance (hat tip to Stevphen Shukaitis and to Ephemera): not just because of the connections the author establishes between cultural, organizational and technological repertoires of performance, but also, most importantly, for the link between all these and the crafts of pressure. The hole, yes, is that of discipline and precipitation. Why did not The Provoked Economy start with this beautiful piece of work? Answer: no time.

Foregrounding References: Expression

This is a (first) report on missing references for The Provoked Economy. There is nothing in the book really fully explicit about the notion of expression, but the rapprochement with the notion of explicitness (to which the author devoted more energy) is evident, as indicated in the first chapter:

“But the philosophical debate is not settled, and the concept of explication (explicatio in Latin, perhaps best translated as Explikation in German, or explicitation in French) is a tricky one that is also linked in a rather complex way to the concept of expression.” (p. 25)

Instead of going straight to a Deleuzian disquisition, the author should have made a pause there and referred to Emmanuel Didier. His take on the performative understanding of expression (or vice-versa), especially in “Do Statistics ‘Perform’ the Economy?” (but also in his book En Quoi Consiste l’Amérique?), stood as a fundamental input for the thoughts that led to whatever can be found there. That path has led Didier himself to some most remarkable developments, especially on the notion of “consistency”, which should stand high in the “to-read” list of anyone interested in these kinds of provocations.

 

 

Chapter 6: Earning Power and the Anthropology of Capitalization

After having looked at the medium of the pedagogy of business, chapter 6 of The Provoked Economy moves into the content proper of the act of business valuation. The vehicle here is again Arthur Stone Dewing, author of The Financial Policy of Corporations, a widely used textbook in corporate finance from the early 1920s to the 1940s. The chapter follows Dewing in his clarification of the nuts and bolts of capitalization:

“Is the value of the business only the value of what the businessperson has ready to sell right away, for example, a warehouse and some stored merchandise, plus some cash in a bank account? No, at least not entirely nor substantially. The value of the ‘going business’ is rather obtained by examining its ‘earning power’, that is, its capacity to meet the purpose for which business is intended: to earn a profit. ‘Earning power’: that is Dewing’s telling expression. The businessperson, Dewing told students, is ‘buying earning capacity’.” (p. 104)

The chapter sides in part with the “anthropology of capitalization” that the authors of Capital as Power have sketched out — a proposal that considers capital as the nexus of social relationships produced by the capacity of capitalization. It also contains a premonition of something that fine analysts of the provoked economy such as Tim Mitchell seem to be working on right now — intriguing! It is also very much inspired by the anthropology of investment developed by Horacio Ortiz — and on his focus on financial imagination. And it is also importantly stimulated by a wider project that should give birth to a collective publication sometime soon — the working title is Elements for a Social Inquiry into Capitalization. The chapter’s conclusion:

“Capital is a claim on earnings, and its value is a measure of the power to hold to that claim – earning power, as pedagogue Dewing would simply end up stating. My hypothesis is that getting just that, in one way or another, is what the business self is about. And that contemporary financial business culture consists, substantially, in the massive accumulation of simulacra that attempt to realize it.” (p. 107)