A Latourian inquiry into value in equity markets

Abstract

Arguably, shareholders, asset managers, economists and businesses are more concerned than ever about the erratic value of their investments in 2020’s turbulent equity markets. While these concerns had materialised in the years before the COVID-19 pandemic, they have been exacerbated by the virus’ global effect. These investor insecurities have proven to emphasise an enduring uncertainty relating to how we ascribe value in our markets and the limits of the prevailing Neoclassical School of thought, as applied within financial and investment modelling. In contributing towards a reassessment of the prevailing thought, this dissertation explores the work of Bruno Latour into the philosophy of economy. This research proposes that Latour’s Actor-Network Theory, amongst other contributions, may help us better understand and assess the concept of value within equity markets, particularly in South Africa. By employing the diacritical hermeneutical method of Richard Kearney, this dissertation firstly develops a brief narrative of the development of the Neoclassical School of Economics, the School’s understanding of value, and then engages this narrative with Latour’s critique of the Economic Sciences. Secondly, the unique contributions of Latour are considered through his formulation of the Modern Constitution, his Actor-Network Theory and Actor-Network Theory’s existing applications to market environments. Beyond emphasising the existing limitations of the Neoclassical School of Economics, Latour’s treatment of, and suggested approach to, assessing overlooked factors toward value are considered. Throughout, Latour’s contributions are considered and paralleled with existing Sustainable and Responsible Investment practices which, alongside Latour’s work, will be used to reinforce this alternative concept of value within equity markets. In achieving these aims, this dissertation does not give an exhaustive or comprehensive review of the Neoclassical School of Economics or the works of Latour. While such surveys deserve their place, this dissertation is more interested in how Latour’s work can have a praxiological contribution to our evaluation within equity markets. The works of Latour are also only considered insofar as they contribute towards his critique of Economics or his understanding of value. In so doing, this dissertation provides a novel application of Latour to the Neoclassical School of Economics as considered within equity markets. It then situates Latour’s existing critique of the Economic Sciences within this sphere specifically and articulates Latour’s critique within this environment. Beyond framing greater application of Latour’s philosophy in equity markets, his contributions and critique are considered in supporting existing Sustainable and Responsible Investment approaches.