Economics of Conventions in labour

An important early preoccupation was the empirical study of how labour was qualified through the application of rules, norms and conventions. The insight obtained in these studies led to a generalisation of the importance of the qualification of all goods before they can be exchanged on the market. Qualifications of persons and of products are then a key notion as they form the basis for the emergence of rules, or conventions. Following this perspective, the analysis of economic transactions cannot dispense with an explicit consideration of the institutional framework qualifying the goods exchanged.

Uncertainty and the Problem of Social Coordination Economics of convention argues that neoclassical economics have encountered severe methodological problems regarding the understanding of coordination based on the analyses of isolated individual actors. It is proposed that in order to understand the problem of social coordination it is necessary to rethink the concept of human action.

The Economics of Conventions programme incorporates, in a new perspective, three issues that have been dissociated by a century and a half of economic thinking: the characterisation of the agent and his/her reasons for acting; the modalities of the coordination of actions; and the role of values and common goods. If we agree that the coordination of human actions is problematical and not the result of laws of nature or constraints, we can understand that human rationality is above all interpretative and not only or immediately calculative. The agent first has to apply conventional frameworks to understand others’ situations and actions before he/she can coordinate him/herself. This understanding is not only cognitive but also evaluative, with the form of evaluation determining the importance of what the agent grasps and takes into account. We aim for an integration that concerns the economic, social and political sciences equally. In this way, they should be brought closer together, rather than each one expanding separately at the expense of the others.

The economics of conventions approaches the diversity of the human daily co-ordinations in markets, production and work through an analysis in comprehension. The elementary unit for observation is no more exchange or regulation, but situated coordination through mutual expectations based on conventions. Elabourating a pragmatics of economic action focuses on the relationship between uncertainty and work as an activity based on conventions. The institutions are viewed as collective practices, aiming at guarantee the achievement of the common good and justice expectations. Some concepts are developed with regards to the convention of the State, common knowledge and the informational bases supporting institutions.

The notion of organisation is related to "investments in forms" that make equivalencies and contribute to broad-scope coordination. Power is related to a plurality of "forms of worth" which govern the qualification of persons on things, in the perspective of a critical test for legitimacy and justice. Work activity unfolds in a second kind of pluralism, that of "regimes of engagement" which support unequally extensive modes of coordination, from close to distant and public, and refer to hardly compatible notions of the good, from familiar ease to the public good. This framework has played a significant role in the development of the "Economics of convention" and has contributed to the elaboration of a political and moral sociology, developed with Luc Boltanski.

According to the “conventionalist” approach, wages are not prices but rules. Some rules, being informal, arbitrary and customary, are called “conventions”. In this article, the view of wage rules as conventions is examined and rejected. Recalling the neglected fact that all rules are incomplete, and so need interpretation to be used, we build an alternative analytical model of convention. Convention becomes a social representation of the relevant collective entity in which a particular rule (e.g. wages) is seen to function adequately. Conventions in this sense are used by economic agents to go through the well known diversity/opacity of firms’ wage policies, and interpret them. Four basic ways of criticizing/justifying wage policies are distinguished: market, industrial, domestic and civic.

The exchange of goods and labour is conditioned by a consensus on the principles of quality, the quality conventions. After presenting this approach and seeing how it relates to neoclassical theory, we show that unemployment results from selection processes that refer to work quality conventions. Contrary to the standard economic approach, which postulates that the quality of work (its productivity) is a substantive feature, we presume that it varies with the evaluation framework, e.g. the quality conventions. One important variation concerns the transition from the enterprise to the market. An analysis of current unemployment must also incorporate transformations over the last thirty years in the principles of work quality.

Conventions consist of conventionally accepted reasons for dereliction, deviation, distinction, or good fortune. Their use facilitates coordination of interpersonal effort through appeal to shared understandings that emerge from the push and pull of social interaction, but then constrain further rounds of that interaction. The use of conventions differs from three other well defined and widely used forms of reason giving: codes, technical accounts, and stories. All four do relational work, but conventions operate most easily and effectively when participants in social relations are simply confirming the character of those relations rather than establishing them anew, contesting them, terminating them, or transforming them. In those cases, participants are more likely to employ codes, technical accounts, or stories.

Date: 2016-03-03; view: 641