Recent work on the relationship of economics to economic institutions has argued that economics is constitutive of economic institutions, and of markets in particular. In opposition to economic sociology, which has treated economics as a competing disciplinary frame or an ideology, the ‘performativity’ literature takes economics seriously as a set of market-building practices. This article demonstrates the compatibility of these perspectives by analyzing the role of economics in the politics of market formation. It presents a case study of the formation of a new institution: capacity markets connected to wholesale electricity markets in the United States. The case demonstrates how economic framing shapes the politics of markets by imposing a specific set of terms for the legitimate conduct of the struggle over market rules.