DR JULIANE REINECKE

‘GOLD IS GOLD IS GOLD IS GOLD’ – IS IT? THE POLITICS OF VALUES AND ECONOMICS OF WORTH
EARLY CAREER FELLOW: JANUARY 2013 – DECEMBER 2013
Juliane Reinecke

Abstract

Drawing on the “Economies of Worth” approach (Boltanski and Thévenot 2006; Dodier 1995; Breviglieri et al. 2009), the proposed research seeks to investigate the “politics of values”, that is the struggle for the institutional definition and maintenance of ‘value’, or ‘worth’.

The empirical case is the struggle for gold as an institution, in particular, with regards to “conflict gold” emanating from the Democratic Republic of Congo (DRC). The case illustrates the unfolding struggle among state, civil society actors and the market for the definition of ‘what value is’ in the context of a humanitarian crisis. Here, the question of value becomes interlaced with ethical and political questions. It almost is paradoxically that now that gold is traded at historically highest prices, and seen as the ‘last’ safe form of investment, its “worth” is equally challenged from alternative economies of worth put forward by both state and civil society actors. Not least in response to new legislative requirements of the Dodd-Frank Act in the U.S., the global gold industry is waking up to this threat. In order to protect and preserve the status of “gold is gold is gold”, it is beginning to establish new norms, conventions and procedures to protect the uniformity of gold as purely defined by economic worth.

Theoretically, the research seeks to challenge conventional economic approaches to the question of value by developing the notion of the ‘politics of values.’ Drawing on the anthropologist Appadurai (1986), it conceptualizes the ‘politics of values’ as the political process of establishing what and whose values matter in defining (economic) value. This refers to the political processes to influence and control the conventions (Eymard-Duvernay et al. 1989; Favereau 1989; Thévenot 1989) that come to be the governing regimes of value, or a “government of norms” (Thévenot, 1997; Boltanski and Thévenot, 2006). The ultimate political struggle then “is not even the struggle to appropriate value; it is the struggle to establish what value is” (Graeber, 2001:88). In the case of gold: Is gold just gold? Or can politically established norms and conventions establish different categories of gold associated with different values?

The Research Idea

Drawing on the “Economies of Worth” approach (e.g., Boltanski and Thévenot 2006;), the proposed research seeks to investigate the “politics of values” — the struggle for the definition and maintenance of ‘value’, or ‘worth’. The “Economies of Worth” approach highlights how the value of something is not just shaped by economic, but also by other orders of worth that embody different sets of values. This collapses what, arguably, is an artificial distinction between value and values, the former in an economic sense and the latter in a political-ethical sense (Stark 2009).

The Focus

“Gold is gold is gold is gold” – a key premise for the global gold market. Although the precious metal might have ceased to be an official form of money almost 40 years ago, it is still considered the ultimate commodity. Despite different uses (investment, jewellery and industry), meanings and origins of gold, “gold is gold is gold is gold.” But is it?

Section 1502 under “Miscellaneous Provisions,” of the Dodd-Frank Wall Street Reform and Consumer Protection Act (signed into law on July 21, 2010) is now threatening this fundamental market premise. This legislation requires all US listed firms to report the sources of conflict minerals, including gold to the US Securities and Exchange Commission (SEC).

Section 1502 reflects the U.S. Congressional concern that “the exploitation and trade of conflict minerals originating in the Democratic Republic of the Congo [DRC] is […]contributing to an emergency humanitarian situation.” Various NGOs, in particular the EnoughProject have for many years fought desperately to get the international community to intervene. Now, arguably, the private sector is being cast responsible for the political conflict.

Several actors, including the OECD, Fairtrade, the Responsible Jewellery Council, and the World Gold Council, are designing standards for ‘fair,’ ‘responsible’ or ‘conflict-free’ gold – and competing to gain moral authority over which values should be associated with gold. But due to gold’s materiality, being highly malleable, fungible, and practically indestructible, the issue of ‘conflict gold’ may have wide-ranging ramifications for gold.

The case raises a number of intriguing  questions along the state-civil society-market triangle:

  1. How did the state become implicated in the conflict gold issue? How will other legislators, e.g. EU react?
  2. How do civil society actors mobilize resources to differentiate gold, e.g. “conflict free” or “Fairmined” gold?
  3. How does the global gold market respond to protect the convention; “gold is gold is gold”?

Background

Recent years have seen increasing interest in the concepts of value and valuation (e.g. Karpik 2010; Beckert and Aspers 2011). Scholars build on sociological approaches that emphasise that what is seen as valuable is constituted by cultural norms (Zelizer 1983; Fourcade 2011). However, most existing explanations depict this process as culturally driven, where culturally embedded beliefs, codes and norms play a key role in constructing meaningful representations of worth (Khaire and Wadhwani 2010) and defining “how things are done in the market” (Beckert and Aspers 2011: 9). This has largely neglected the role of politics in the creation and maintenance of value.

While early social movement theory has looked at contentious politics targeting the state (e.g. Soule and Zylan 1997), more recent work has focused on how social movements challenge markets and market conventions (Weber et al. 2008; Rao 2008). Markets are depicted as an arena for political contentiousness (King and Pearce 2010). However, this tends to downplay how the interdependencies among state, civil society and markets re-draw the boundaries between economics and politics (Callon 2007). In particular, the way private companies are cast responsible for ‘conflict-gold’ calls for conceptualizing this new relationship between state, civil society, and private sector and its implication for transnational governance.

Theory & Evidence Base

By bringing together the question of value (central to economics and economic sociology) and the question of politics (central to social movement theory) the proposed research seeks to theorize the political construction of value.

The question of how to value things is essential to the functioning of economic exchanges and markets.  While economists have emphasized the competitive price mechanism as the principal measure of value, sociologists and organizational theorists have focused more on the influence of social, cultural and ethical values on value. Few studies however, focus on the ‘politics of values’ that is, the political process of establishing what and whose values matter in defining valuation and value. Drawing on the “Economies of Worth” approach and empirical research on definition of “worth” in the case of gold, this research challenges both the economic and the ‘cultural’ views by highlighting the political and philosophical constructions of worth.

To address the political dimension, the research examines changing governance in the global economy and, in particular, how the state, civil society and markets struggle to establish ‘what value is.’ The chosen empirical case is particularly revealing in this regard. In line with recent trends of conspicuous consumption, NGOs and other civil society actors together with the state are trying to “qualify” the precious metal (see Figure 1; see also Callon et al. 2002) by creating distinctive categories of “conflict gold,” “conflict-free gold” and “Fairmined gold.” While we have witnessed this change from commodity to a “singularity good” (Karpik 2009) in the case of coffee, in gold the “de-commodification” of gold as the ultimate commodity is seen as a threat to the status of “gold is gold is gold.” By examining the standards to certify various values of gold, the research also pays attention to how socio-material devices, metrics and conventions that enact certain values are established.

Methodology

Following Langley’s (1999), the research will be driven by the theoretical question of value while deriving data inductively from original data. It will develop a qualitative case study of conflict gold, particular useful for investigating novel and relatively unexplored phenomenon (Eisenhardt, 1989).

During extensive field work, I plan to conduct approximately 45 interviews with actors taking a stake in the conflict gold issue, including

  • NGOs (e.g. the Enough Project, Oxfam, Fairtrade, Alliance for Responsible Mining)
  • Market Actors (e.g. World Gold Council, London Bullion Market Association, Refiners, Gold mining companies, Artisanal miners, Investors, Jewellery Manufacturers, Electronic manufacturers)
  • State (e.g. politicians involved in Section 1502 of Dodd-Frank Act)

Starting from existing contacts with Fairtrade and the World Gold Council, an initial list will be generated and expanded using snowball sampling techniques.

2/3 interviews will be conducted in person, 1/3 over the phone

A variety of archival materials will be used, including memos and minutes collected from informants.

Output

Conferences and paper publications

While the research is interdisciplinary in nature, I have identified particular audiences.

First, I intend to present the results to a sociological focused conference such as the American Sociological Association and British Sociological Association.

Second, I seek to build new theory at the intersection of Organizational Theory/Social Movement/Transnational Governance and present results at the European Group of Organization Studies conference.

Third, I seek to (re-)connect with the research community in France and, in particular, the EHESS, Paris, where I seek to present research results at a departmental seminar.

I also intend to develop at least three papers to be submitted to top-tier journals, such as American Sociological Review and Organization Studies.

Interdisciplinary workshops

Using existing cross-disciplinary networks, I seek to organize workshops at, and in collaboration with, the Centre for Research in the Arts, Social Sciences and Humanities (CRASSH), University of Cambridge, or at the EHESS, Paris

Teaching

I will write a case study for teaching purposes, for example my 3rd year course “Critical Issues in Management” (350 students) at Warwick Business School.

Relevance

The proposed research is problem rather than paradigm driven (Davis and Marquis 2005) as it seeks to critically engage with a phenomenon that connects a variety of disparate actors and geographies and links the abstract question of ‘value’ to the struggle for the meaning of gold in the face of social and environmental concerns over its production and trade.

Rather than drawing on established conventional theoretical frameworks (e.g. neo-institutional theory) the study seeks to leverage the “Economies of Worth” framework that has, to date, found little application with few exceptions (Patriotta et al. 2011). I seek to bring a fresh theoretical lens to the question of “value” with the aim to promote theoretical plurality and highlight the political struggle of defining the “worth” of entities.

The research aim was to use the “Economies of Worth” approach (Boltanski and Thévenot 2006) to investigate the “politics of values”. Empirically, the project focused on how uniform commodity value, as exemplified by the premise of “gold is gold is gold is gold,” has become qualified through the efforts and counter-efforts of state, civil society and industry actors to stigmatize and challenge the moral worth of “conflict gold” emanating from the Democratic Republic of Congo (DRC).

Since the start of the Fellowship in January 2013, I have collected a range of data on the qualification of conflict gold from the DR Congo, focusing on interactions between states, human rights activists and industry actors. Given the real-time nature of the project, the process of data collection is still ongoing to capture ongoing events and changes within the field, such as changes in and challenges to regulatory initiatives in the US and EU. I conducted 29 semi-structured, open-ended interviews with respondents from the US government, NGOs, ILO and gold and electronics industries, which took place in London, Brussels, Geneva, Washington D.C. and over the phone (e.g. respondents located in the DR Congo). Interviews lasted between 30-180 minutes and were taped and transcribed. I collected archival data ranging from 2005 to 2014 related to conflict minerals, including reports and press releases by human rights NGOs, companies, industry associations, official US congressional records, and draft versions of the evolving legal text (Dodd Frank Act). I searched newspapers and blogs for coverage of the Congolese crisis and conflict minerals and collected UN documents including Security Council resolutions. I also collected comment letters, meeting notes and transcripts related to the implementation of Section 1502 by the US Securities and Exchange Commission (SEC). The SEC engaged in a two year consultation with investors, companies, and NGOs to implement the legislation into disclosure requirements. The process lasted from July 2010 (the signing of Dodd Frank Act into law) to August 2012 (adoption of SEC Final Rule). I collected all 525 public comment letters (88 in Phase 1, July-December, 2010; 437 in Phase 2, December, 2010-August, 2012) that stakeholders submitted to the SEC, meeting documentations (155 meetings) and the transcript of a public roundtable in October, 2011 (>45,000 words).

Future steps include further tracking of field changes, data analysis and the refinement of theoretical arguments emerging from the case. In terms of the latter, a range of different theoretical arguments has emerged focusing on the original notion of the qualification of gold but also interrogating the construction of corporate responsibility for human rights abuse in global value chains more broadly. Associated achievements to date include invitations and acceptances to present research findings at various disciplinary and interdisciplinary conferences and workshops, publications (in process) and use of research findings in my teaching.

Workshops & Conferences

Academy of Management, 1.-5. August 2014, Philadelphia, USA.“The Process Of Responsibilization. Linking Business to Conflict Minerals and Human Rights Abuse.”

ISRF-ReCSS Workshop: Critique & Critiques, 12 May 2014, University of York, UK, “Critiquing the Logic of Capital. From Quantification to Qualification.”

LAEMOS 2014, Havana, Cuba,Subtheme 12: Valuation  devices  and  processes  of  organizing, “The Politics of Value and Economies of Worth: A Case Study of “Conflict-free” Gold.”

Leuven Centre for Global Governance Studies, 20 February 2014, KU Leuven, Belgium, Fostering Labor Rights in the Global Economy Multidisciplinary Perspectives on the Effectiveness of Transnational Public and Private Policy Initiatives, “Understanding the process of responsibilization. Linking business to conflict minerals and human rights abuse.”

Workshop on International Law, Natural Resources and Sustainable Development, 11 – 13 September 2013, University of Warwick, UK, “The Construction of Private Responsibility for Human Rights in Conflict Zones: The Case of Conflict Minerals.”

GPP-Global Governance Roundtable, 30 January 2013, University of Warwick, UK, “Enlisting Industry Actors to Protect Human Rights. The Case of Conflict Gold.”