A technical academic fix was later read as a political normative claim

Evidence

There is no reason to think that in emphasizing the maximization of market value Modigliani and Miller saw themselves as acting politically. They (Modigliani in particular) were exercised, rather, by an academic issue: the incoherence of the traditional criterion of profit maximization in a world of uncertainty. If “profit outcome” is “a random variable,” they wrote, “its maximization no longer has an operational meaning” (Modigliani and Miller 1958, p. 263). However, as Jack Treynor (for whom this aspect of Modigliani and Miller’s work was central) realized, the assertion of the centrality of market-value maximization could be read as a statement of how things ought to be. — Donald MacKenzie, An Engine, Not a Camera, 1172

Categorization

• XREF: The core performativity mechanism: an academic solution to an internal theoretical incoherence drifted into a normative shareholder-value mandate — parallels the book’s broader argument about economics doing rather than merely describing. — connects to: Academic success can convert a political-intellectual project into a depoliticized abstraction — Hall, Stuart, Essential Essays, Volume 1, 127; Seemingly technical teaching choices are politically and economically embedded — James D. Kirylo (ed.), Reinventing Pedagogy of the Oppressed:…, 192
• DEFINE: Explains why profit maximization ‘no longer has an operational meaning’ under uncertainty, the technical motivation behind M&M’s criterion.

Broader Connections

• Academic success can convert a political-intellectual project into a depoliticized abstraction #expands (0.80) — Hall, Stuart, Essential Essays, Volume 1, 127