The “Reputation Approach” and the Justificatory Function of Economic Calculation. Some Critical Reflections on Monika Pohle Fraser’s Analysis of Risk Management Techniques in the Nineteenth Century

In this article, Sebastian Knake gives an interpretation of formal risk calculations as a source of justification for industrial investment decisions in the case of fundamental uncertainty. Monika Pohle Fraser’s historical analysis of the risk management practices of German and French banks in the nineteenth century provides a basis. Knake first presents the central results of Pohle Fraser’s unpublished dissertation and discusses the theoretical implications of her conclusions. Knake then compares her approach with the theoretical assumptions of the justification theory included in the ‘Économie des Conventions’. He proposes the analysis of justification discourses as a way to better understand the processes that lead to investment decisions. Finally, Knake tests his proposal on a short example from his own empirical work on the Braunschweigische Staatsbank in the 1950s.