Economics influenced markets through personal networks, not impersonal persuasion alone.

Evidence

The networks of connections to personally known others on which the economic sociologist Mark Granovetter (1973, 1985) has focused are also in evidence in respect to the legitimatory role of economics in facilitating the emergence of derivatives markets. The persuasive power of economics did not on its own create the Chicago Board Options Exchange and the Merc’s International Monetary Market. That persuasive power flowed through a network of interpersonal connections: in the case of the Options Exchange, from Baumol, Malkiel, and Quandt, via Edmund O’Connor and Nathan Associates, to Milton Cohen, and, crucially, to William Casey; in the case of the Mere, from Milton Friedman to Arthur Burns, George Shultz, Bill Simon, and others in Washington. — Donald MacKenzie, An Engine, Not a Camera, 1192

Categorization

• XREF: Connects to Granovetter’s embeddedness argument and to economic sociology literature on networks; parallels Milgrom’s institutional analysis where personal relationships underwrite market mechanisms. — connects to: Economic institutions depend on personal networks that generate trust and enforce norms — Coleman, SocialCapitalCreation-1988, 28; Economic transactions are governed by their embeddedness in social networks — TOMASZ OLEJNICZAK, Development of Trust in Low-Trust…, 17; A market model can shape markets actively rather than merely describing them — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1165 (+2 more)

Broader Connections

• Economic transactions are governed by their embeddedness in social networks #exemplifies (0.82) — TOMASZ OLEJNICZAK, Development of Trust in Low-Trust…, 17
• Economic institutions depend on personal networks that generate trust and enforce norms #corroborates (0.80) — Coleman, SocialCapitalCreation-1988, 28
• Global impersonal markets rest on personal trust and telephone networks #exemplifies (0.80)
• Markets can be performatively constructed by agents who are not atomistic homo economicus #expands (0.80) — Donald MacKenzie & Yuval Millo, Constructing a Market, Performing Theory, 25
• A market model can shape markets actively rather than merely describing them #expands (0.78) — Donald MacKenzie, An Engine, Not a Camera, 1165