Framing Finance
The Boundaries of Markets and Modern Capitalism
Bibliographic Data
| ID | 4020949 |
|---|---|
| Authors | David Hochfelder (0000-0003-4129-9363, corresponding author) |
| Year | 2010 |
| Volume | 51 |
| Issue | 4 |
| Pages | 1023-1024 |
| Publication date | 2010-01-01 |
| Peer Reviewed | Yes |
| Open Access | No |
| Type | ARTICLE |
| Venue | Technology and Culture (JOURNAL) |
| Journal identifiers | ISSN: 0040-165X • E-ISSN: 1097-3729 |
| Publisher | Project MUSE (PUBLISHER • US) |
| DOI | 10.1353/tech.2010.0059 |
| OpenAlex | W1594548478 |
| Language | EN |
| Citations received | 6 |
Reviewed by: Framing Finance: The Boundaries of Markets and Modern Capitalism David Hochfelder (bio) Framing Finance: The Boundaries of Markets and Modern Capitalism. By Alex Preda. Chicago: University of Chicago Press, 2009. Pp. vii+318. $65/$25. Widely dispersed ownership of financial securities is a fundamental characteristic of modern capitalism. More than half of American households own stocks through retirement plans, mutual funds, or holdings in individual corporations. Although percentages are lower in Europe, they are still significant. About one of every six Germans over the age of fourteen owns stock, for instance. Indeed, as Alex Preda correctly asserts, "economic identities are nowadays defined by financial markets," and these markets "have become enmeshed with our daily lives" (p. 1). Writing from the perspective of economic sociology, Preda seeks to understand how this identification and penetration came about. He does not attempt a business or economic history of financial markets, nor of the technologies that undergird them. Instead, he investigates how market participants have constructed cultural meanings about their activities. In other words, his purpose is to show "how financial markets gain legitimacy and how they set their boundaries" from other economic activities (p. 236). Preda takes as his main proposition that price is "the central element which makes transactions possible and around which other knowledge features evolve." He then discusses three key features of "the boundaries of finance." The first feature is "the observation of prices without physical co-presence," what he labels the "microscopic." However, observation of prices alone does not yield very useful information. Market participants must assemble prices into larger entities like time series or market sectors for them to be useful, an exercise Preda labels the "telescopic." Finally, the role of markets in the larger world of the economy and society depends on what [End Page 1023] he calls the "kaleidoscopic" perspective, making sense of how financial markets interact with larger economic, social, and political entities (pp. 17–18). Historians of technology will be most interested in Preda's discussion of the stock ticker and its successors, a topic to which he devotes a full chapter. He convincingly shows that the technology of "price data recording and display ... has real consequences with respect at least to market access, market memory, and market definition" (p. 242). Before the stock ticker, price information was firmly tied to speech acts that occurred on exchange floors, actual transactions between traders who knew each other's characters and reputations. Exchange outsiders had access to prices only long after the transactions had been completed, typically in the form of reports like lists of current prices published in newspapers. The stock ticker, invented in 1867, changed how prices were reported and how trades occurred. The ticker liberated market participants from the necessity of being present at exchange floors and shifted the key element of information from price to price variation. This shift had two important effects. First, by producing a continuous flow of quotations, the ticker exerted a profound psychological hold on market participants, tying them more closely to the tickers and chalkboards in brokers' offices. Second, by liberating price data from individual speech acts on exchange floors, the ticker helped to make financial markets objects of scientific study. Technical chart analysis, for example, would have been impossible without continuous price data. While Preda's story is wide-ranging, covering the United States, Great Britain, France, and Germany over the past 250 years, his approach is resolutely that of the sociologist. Historians may have some difficulty contending with the presuppositions and jargon of the field. Still, this book is indispensable to any historian seeking to understand how financial markets came to occupy a central place in the modern economy. David Hochfelder Dr. Hochfelder, assistant professor of history at the University at Albany, SUNY, is finishing a book on the American telegraph industry. Copyright © 2010 The Society for the History of Technology
Capitalism · Economics · Financial market · Framing (construction) · Legitimacy · Market economy · Political science · Politics · Economic Theory and Institutions · Economic Theory and Policy · Economic, financial, and policy analysis · Finance · Law
| Unique citing works | 6 |
|---|---|
| Citations per year | 0.5 |
| Citation span | 2014 - 2023 (10) |
| Citation velocity | historical |
| Highly cited | No |
| Citation types | Neutral: 3 |