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CALLON, M. (1998) – An Essay on Framing and Overflowing: Economic Externalities Revisited by SociologyIn Callon M. (ed.), The laws of the markets, Oxford, Blackwell Publishers, p. 244-269.

Summary:In his essay Michel Callon, a French professor of sociology and a leading proponent of the controversial Actor-network theory, argues that the time has come to set a new agenda for the joint venture of economists and sociologists of science.

In a gesture of grace Callon – more of a sociologist himself – chooses the concept of externality, long known to economists, as a suitable point of departure. Externalities may be positive or negative and do not necessarily have to be confined to the sphere of economic life in the usual sense. Callon defines externality as follows: “Let A, B, C etc. be agents involved in a commercial transaction, or more generally in the negotiation of a contract. In the course of the transaction or contract negotiation, these agents express their preferences or interests and then evaluate the various possible decisions arising from them. The decision they finally take has positive or negative effects, here referred to as externalities, on another set of agents X, Y and Z (as distinct from A, B, and C; the latter are not involved in this transaction or negotiation, either because they have no way of intervening or because they have no wish to do so”.

The concept of externality has been traditionally nested within the wider category of market failure, which can be described as suboptimal allocation of resources in a certain situation with regard to collective efficiency. Rather than moral grounds it is collective efficiency and the optimization of resource allocation, as indicated, that maintains the grounds on which the existence of externalities is approached and evaluated. The economic theory maintains that the equilibrium resulting from the equalization of marginal costs and income is an optimal one. Externalities, whether positive or negative, distort the working of the market prize mechanisms and render the market (partially) inefficient, because they are responsible for a gap between private marginal income and marginal social costs. If externalities are present, the calculation, which is supposed automatically to guarantee a social optimum, is biased and the market – as a device for obtaining the social optimum – is therefore deficient.

Externalities, within the context of indirect effects of commercial activities in a framework of market relationships, have been traditionally approached as burdensome leaks by economists. It has been so for good reasons. While negative externalities imply social costs that are not taken into account by private decision-makers, positive externalities discourage private investment by socializing the benefits. Again, externality within this context causes problems as due to the fact that it is excluded from the calculation it is produced more or less than would be efficient from the global point of view. Much of the economic expertise had therefore been dedicated to delineating methods of containing externalities within appropriate frames to restore the proper functioning of the market mechanism.

Beneath the concept of externalities lies a more fundamental concept of framing, which implies the possibility of identifying overflows and containing them. The concept of framing was introduced by Goffman as an aid to his theory of ways in which interpersonal relationships work. Frames are crucial in interpersonal relationships as they set contexts within which interaction may happen. These include rules and norms and guide expectations of the actors involved. Frames establish boundaries within which interactions take place more or less independently of their surrounding context. Frames are agreed by actors and are rooted in the outside world of physical and organizational devices. Goffman maintains that the tangibility of the frames is

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substantial. There he resorts to the metaphor of a theatrical play: the proceeding of the social happening is aided by systematic distribution of bodies and objects within the premises of a theatre and by extensive use of symbols in guiding the process. Framing puts the outside world in brackets, as it were, but does not actually abolish all links with it. Callon argues that the concept can be applied to economic relations, which presuppose framing in order to engage in a transaction or negotiation.

There are two fundamentally opposed ways of conceiving the framing – one which emphasizes the closure of interactions within, and one which highlights the omnipresence of connections with the outside world.

The former, based on the belief that framing is the norm (desirable and statistically predominant) and that overflows are exceptions, which must be contained, is popular within microsociology and the economic theory. In the economic theory, we can trace this sort of thinking all the way to Coase’s theorem. Coase maintains that transaction costs being nil, an efficient outcome follows a dispute over an externality regardless of the initial allocation of property rights. As an optimal solution for problems arising from the existence of externalities Coase proposes the existence of an institutional framework which allows negotiations over externalities to take place. Translated to framing/overflowing terms, Coase asserts that the costs of framing being nil, overflows would be seamlessly contained within frames regardless of who will take the initiative in doing so. The limited utility of the theorem becomes clear as we develop the opposing view, which maintains that overflows are the norm.

The latter view holds that overflows are the norm, and that framing is expensive and always imperfect. It stresses that something being framed is a fragile, artificial result based upon substantial investments, and requires expensive physical and symbolic devices to stay intact. It is always incomplete and must incomplete be in order to enable functioning clusters of relations. This view is popular within constructivist sociology and has been related to the notion of embeddedness championed by Karl Polanyi and Mark Granovetter. Frames are being continuously compromised by the actors’ meshes of relations with other contexts (worlds) from which they cannot be wholly detached.

Callon holds that this point can be best illustrated on the case of a research contract. A research contract between two subjects binds together legal entities, which comprise of a set of human beings, equipment, resources, etc. Contract contains definitions of objectives, frequently couched in terms of concepts and ideas borrowed from accepted scientific theory. Each of those items or terms constituting the core of the contract has connections with the outside world. While the aim of the contract is to frame the interaction in as unambiguous a fashion as possible and formulate an agreement on any rearming procedures, which may have to be implemented, by introducing such a series of tangible and intangible elements it also spawns links to various hitherto not implicated spheres of human conduct. In other words: “The very same elements that ensure that the actions within the frame are not scattered or dispersed are also potential conduit for overflows”. The elements are simultaneously resources and intermediaries; they frame the interactions and represent openings onto wider networks, to which they give access. It is therefore illusory to suppose that one can internalize every externality by drawing up an all-embracing contract.

But the trouble doesn’t end there. In order to be contained within a frame, overflows must be made measurable. The definition of externality implies that it is possible to identify not only actors, but also the effects produced by their activities. Only once this double identification has taken place is it possible to draw up a list of those who benefit or suffer from these externalities and arrange remedy. At this point it is important to highlight that for an externality to exist, there have to be entities present – for which Callon coins the term ‘intermediaries’ – that cross a boundary of a frame. These always have to be tangible. But

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identifying actual intermediaries is anything but straightforward. Another issue follows from the fact that providing a proof of tangible existence of overflows is inextricably linked to the identification of their sources and impacts. It is only once the overflows and source and target agents have all been correctly identified and described, and once measuring instruments for quantifying and comparing them have been set up, that it becomes possible to reframe the interactions. Only then it is possible to internalize the externalities (i.e. rearm hitherto uncontained overflows).

We can imagine that all the above steps can be undertaken in case of fairly straightforward, uncontested an issue. Callon labels such ones as ‘cold’. In a cold situation definition is swiftly achieved, actors identified and transactions consensually undertaken. In these situations one-sided scientific knowledge is regarded as sufficient and legitimate. It is however the case that these situations are becoming all but more common. Situations are increasingly heating up instead.

In ‘hot’ situations everything is contested. As the ‘techno-sciences’ permeate society, interdependencies proliferate and radical uncertainties arise everywhere. It is expert knowledge that is often required to locate overflows. To locate and identify an externality, appropriate instruments might have to be designed, and these devices play a crucial part in formation of interested groups. Externalities have to be literally performed. In hot situations the experts increasingly often find their claims open for contention by laypeople/counter-experts. As the experts become just other agents, the absence of a stabilized knowledge base is pronounced. Identities of groups – which often come into existence as the externality in question emerge – will fluctuate, and incompatible descriptions of future world states are put together. For these situations Callon pioneers the term of ‘hybrid forums’: facts and values become entangled to such an extent that it is no longer possible to distinguish between the phases that calculative agent undertakes. Overflow is constant and the markets are caught in a constant process of emerging and re-emerging.

From this development, presumably following from the post-modern condition, we can see the new base for cooperation of sociologists and economists emerge: the Anthropology of science and techniques (AST). AST has developed tools for analysis of hybrid forums. According to Callon it has the potential to “keep track of controversies and the experiments they engender without giving precedence to any one point of view, whilst at the same time revealing the socio-technological maps produced by the actors involved as well as the progressive development of instruments for making world states calculable” [Ibid].

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