LOCATING THE DOMAIN OF CALCULATION

Economic science generally takes as its model system the results of uncoerced market transactions, and the application of economic rationality to the state is often understood as an effort to make public institutions behave more like private firms. This requires the explicit formulation of calculations that entrepreneurs are presumed to make implicitly. Yet a formal system of calculation can never be the same as a set of unarticulated practices, and economic projects such as cost-benefit analysis led quickly to the measurement of objects undreamed of by the private economy. Also, the relentless advance of economic quantification has created systems of oversight and regulation that tend to centralize rather than diffuse power. Historically, the methods of economic calculation did not follow from a quantified theory of individual market behavior, but, quite the contrary, were articulated as instruments of economic management and then applied back to individuals. As economics worked out a theory of market behavior, it simultaneously gave new meaning to the very idea of economic rationality.