Calculating failure: the making of a calculative infrastructure for forgiving and forecasting failure

Liisa Kurunmaki and Peter Miller

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper examines how the category of failure was economised and made calculable. It explores the preconditions for this shift in three stages. First, it explores how failure came to be ‘forgiven’ in both the U.S. and the U.K. across the nineteenth century, how it came to be defined as something that is economic or financial, rather than personal or moral. Second, it explores the rapid growth of narrating and rating failure in the mid nineteenth century, with particular attention to the formation of credit rating agencies from the 1840s onwards. We consider also the roles played in this process by two fortuitous technological developments – the typewriter, and carbon paper for copying. Third, we examine the emergence of the calculative infrastructure which has helped to establish an industry of attempts to forecast failure from the beginning of the twentieth century, initially on the basis of financial ratios, and more recently through the use of risk indexes. We use the term ‘calculating failure’ to describe this transformation and economisation of both the ideas and the instruments of failure, and suggest that this has significant implications for the study of strategy.

Keywords: accounting; bankruptcy; calculative infrastructure; calculative technologies; credit rating; economisation; failure; insolvency; marketization (search for similar items in EconPapers)
JEL-codes: M40 (search for similar items in EconPapers)
Date: 2013-10-10
New Economics Papers: this item is included in nep-acc and nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Published in Business History, 10, October, 2013, 55(7), pp. 1100-1118. ISSN: 0007-6791

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