"There is very little intrinsic value in Coco’s physique that would set her apart from any number of other similarly-built teens," writes Mears, setting the stage for her lengthy exploration of the dismal science of economics and the glamorous world of supermodels.
Rather, social processes are at work in the fashion modeling market to bequeath cultural value onto Coco. The social world of fashion markets reveals how market actors think collectively to make decisions in the face of uncertainty. And this social side of markets, it turns out, is key to understanding how investors could trade securities backed with 'toxic' subprime mortgage assets leading us into the 2009 financial crisis.Mears goes on to present a sophisticated analysis of the economic sociology underpinning both financial markets and modeling:
Like dozens of fashion producers I spoke with, [Prada casting director] Russell [Marsh] doesn’t really know what it is about a kid like Coco Rocha that excites him. He “just knows” if a model is right for him, and further, he “knows it when he sees it.” ...The entire essay is quite detailed, and certainly worth the read.
But while fashionistas express this 6th sense as an internal thing, they feel it together. Here we have a paradox: Despite an abundant labor supply and uncertain criteria, there is enormous inequality in who gets to participate in Fashion Week. ...
So our plot thickens: What’s at the center of this collective “gut feeling” that happens to land on Coco, ratcheting up her popularity and hence, her economic value? The answer holds parallel lessons for how traders in finance markets were able to assign so much inflated value to relatively worthless mortgage assets now known as “toxic assets.”