Skip to main content

30% Off New Releases: Explore the List

Harvard University Press - home
Making Markets

Making Markets

Opportunism and Restraint on Wall Street

Mitchel Y. Abolafia

ISBN 9780674006881

Publication date: 10/30/2001

In the wake of million-dollar scandals brought about by Michael Milken, Ivan Boesky, and their like, Wall Street seems like the province of rampant individualism operating at the outermost extremes of self-interest and greed. But this, Mitchel Abolafia suggests, would be a case of missing the real culture of the Street for the characters who dominate the financial news.

Making Markets, an ethnography of Wall Street culture, offers a more complex picture of how the market and its denizens work. Not merely masses of individuals striving independently, markets appear here as socially constructed institutions in which the behavior of traders is suspended in a web of customs, norms, and structures of control. Within these structures we see the actions that led to the Drexel Burnham and Salomon Brothers debacles not as bizarre aberrations, but as mere exaggerations of behavior accepted on the Street.

Abolafia looks at three subcultures that coexist in the world of Wall Street: the stock, bond, and futures markets. Through interviews, anecdotes, and the author’s skillful analysis, we see how traders and New York Stock Exchange “specialists” negotiate the perpetual tension between short-term self-interest and long-term self-restraint that marks their respective communities—and how the temptation toward excess spurs market activity. We also see the complex relationships among those market communities—why, for instance, NYSE specialists resent the freedoms permitted over-the-counter bond traders and futures traders. Making Markets shows us that what propels Wall Street is not a fundamental human drive or instinct, but strategies enacted in the context of social relationships, cultural idioms, and institutions—a cycle that moves between phases of unbridled self-interest and collective self-restraint.


  • [This is] a great must-read. Abolafia’s central thesis is that markets cannot be viewed simply as anonymous fora where nameless economic forces work their mysterious ways to determine equilibrium price-quantity outcomes. Instead, they are better seen as stages on which diverse groups of actors seek to further their own, often conflicting, interests… The view that markets are social constructs has a particularly significant consequence for understanding and reacting to the phenomenon of manipulation. Abolafia’s view that manipulation ‘arises out of a conflict between buyers and sellers where one side is pressing its advantage’, rather than being either a legal definition or an economic phenomenon, is extremely convincing… It is impossibly infuriating that one’s assumptions about how the financial world works should be overturned by a mere sociologist.

    —Ruben Lee, London Financial News


  • Mitchel Y. Abolafia is Professor at the Rockefeller College of Public Affairs and Policy, University at Albany, State University of New York. He has taught at Cornell’s Johnson School of Management and MIT’s Sloan School of Management and is the author of Making Markets: Opportunism and Restraint on Wall Street.

Book Details

  • 240 pages
  • 6 x 9-1/4 inches
  • Harvard University Press

From this author