The narrative and the algorithm: Genres of credit reporting from the nineteenth century to today

Credit reporting is a contested process whereby parties with distinct interests (borrowers, lenders, and intermediaries) jointly construct the form, method, and style of credit assessment. In contrast to theories that argue information should grow more secure and credit relationships more transparent over time, the conflicted struggle over representation produces different styles or “genres” of credit evaluation that are compromises between the interests of the different parties. Thus, in the United States, trade credit reporting in the nineteenth century evolved an enduring narrative reporting style, incorporating heterogeneous forms of information not easily reducible to a single quantitative score. Lack of institutions for sharing information between creditors, legal precedents, and strong resistance among borrowers to overly intrusive surveillance made the narrative report the best means to handle the diverse business credit market. By contrast, lenders in the consumer credit market established information sharing capabilities, which were enhanced after World War II when banks developed the credit card and card verification systems. Fair credit laws in the 1960s and 70s actually reinforced the move to quantitative scoring based on information shared among creditors, eventually institutionalizing the FICO score as the prime method of consumer credit evaluation.credit score; credit reporting; credit; information economy; surveillance; FICO

Rethinking the Separation of Ownership from Management in American History

In <em>The Modern Corporation and Private Property</em>, Adolf Berle and Gardiner Means would use AT&T as a prime example of what they saw as a dangerous new trend, the replacement of ownership-based capitalism with giant corporations controlled by a small group of propertyless managers. Indeed, AT&T became Berle and Means’ favorite example. . . . As we shall see, however, the claim that AT&T was a leading example of the separation of ownership from management is incomplete. More importantly, the common interpretation of Berle and Means’ work is mistaken, placing the emphasis incorrectly on the number of shareholders and reading modern concerns over conflict between principals (owners) and agents (managers) into the past. . . . Berle and Means brought popular attention to an issue of power in the modern corporation that continues to be debated until the present. Yet, over time, their insights were lost in economic theories that placed almost exclusive emphasis on efficiency rather than power. The results were, by the 1970s, corporate policies that sought to correct the problem of principal-agent conflict in ways that greatly exacerbated the problem that Berle and Means had warned was far larger—the ability of insiders to control corporate property and use it in ways detached from issues of social responsibility

The narrative and the algorithm: Genres of credit reporting from the nineteenth century to today

Credit reporting is a contested process whereby parties with distinct interests (borrowers, lenders, and intermediaries) jointly construct the form, method, and style of credit assessment. In contrast to theories that argue information should grow more secure and credit relationships more transparent over time, the conflicted struggle over representation produces different styles or “genres” of credit evaluation that are compromises between the interests of the different parties. Thus, in the United States, trade credit reporting in the nineteenth century evolved an enduring narrative reporting style, incorporating heterogeneous forms of information not easily reducible to a single quantitative score. Lack of institutions for sharing information between creditors, legal precedents, and strong resistance among borrowers to overly intrusive surveillance made the narrative report the best means to handle the diverse business credit market. By contrast, lenders in the consumer credit market established information sharing capabilities, which were enhanced after World War II when banks developed the credit card and card verification systems. Fair credit laws in the 1960s and 70s actually reinforced the move to quantitative scoring based on information shared among creditors, eventually institutionalizing the FICO score as the prime method of consumer credit evaluation

The Economy of Surveillance

Surveillance is integral to modern societies. This paper considers the economic forces behind surveillance, the use of surveillance in the private sector, and the social consequences for the continued growth of surveillance over the past several centuries. It argues that the demand for surveillance of people will grow, while the cost of providing surveillance continues to fall. As a result, surveillance will feed upon itself, with detrimental social consequences

The narrative and the algorithm: Genres of credit reporting from the nineteenth century to today

Credit reporting is a contested process whereby parties with distinct interests (borrowers, lenders, and intermediaries) jointly construct the form, method, and style of credit assessment. In contrast to theories that argue information should grow more secure and credit relationships more transparent over time, the conflicted struggle over representation produces different styles or “genres” of credit evaluation that are compromises between the interests of the different parties. Thus, in the United States, trade credit reporting in the nineteenth century evolved an enduring narrative reporting style, incorporating heterogeneous forms of information not easily reducible to a single quantitative score. Lack of institutions for sharing information between creditors, legal precedents, and strong resistance among borrowers to overly intrusive surveillance made the narrative report the best means to handle the diverse business credit market. By contrast, lenders in the consumer credit market established information sharing capabilities, which were enhanced after World War II when banks developed the credit card and card verification systems. Fair credit laws in the 1960s and 70s actually reinforced the move to quantitative scoring based on information shared among creditors, eventually institutionalizing the FICO score as the prime method of consumer credit evaluation

The Economy of Surveillance

Surveillance is integral to modern societies. This paper considers the economic forces behind surveillance, the use of surveillance in the private sector, and the social consequences for the continued growth of surveillance over the past several centuries. It argues that the demand for surveillance of people will grow, while the cost of providing surveillance continues to fall. As a result, surveillance will feed upon itself, with detrimental social consequences