Economists, sociologists and the crisis

Oh dear. Oh dear. I’m going to have to say unkind things about a book I’d been rather looking forward to reading. The book is [amazon_link id=”0199658412″ target=”_blank” ]Aftermath: The Cultures of the Economic Crisis[/amazon_link], edited by Manuel Castells, Joao Caraca and Gustavo Cardoso.

[amazon_image id=”0199658412″ link=”true” target=”_blank” size=”medium” ]Aftermath: The Cultures of the Economic Crisis[/amazon_image]

When they first came out, I read eagerly Castells’ three books in The Information Age trilogy and found them enlightening (if quite heavy-going)  – my copies still have lots of bookmarks sticking out of the pages. I’ve also been keen to find some good sociological analysis of the financial markets. Gillian Tett, an anthropologist by training, wrote the terrific [amazon_link id=”0349121893″ target=”_blank” ]Fool’s Gold[/amazon_link]. John Lanchester, a novelist, gave us [amazon_link id=”014104571X” target=”_blank” ]Whoops! [/amazon_link] But (like Aditya Chakrabortty in The Guardian) I’ve been wondering about the absence of careful sociological study of the markets (in fact, Mark Granovetter was asking long before the crisis why sociologists left important domains of study to economists).

[amazon_image id=”1405196866″ link=”true” target=”_blank” size=”medium” ]The Rise of the Network Society: Information Age: Economy, Society, and Culture v. 1 (Information Age Series): The Information Age: Economy, Society, and Culture Volume I[/amazon_image]

So, I was pleased when Aftermath arrived. But I’ve given up part way through. The introduction is just a summary of the main events since 2008. The first chapter is about budget cutting and protests at Berkeley, mildly interesting but a touch navel-gazing. Subsequent chapters are unexpectedly abstract. This is a typical passage:

“The key analytical observation is that the current crisis has produced strong resistance identities against not only the measures used to treat the crisis but more deeply against the development model that led to the crisis and from which the current attempts to rectify the situation derive. Therefore, there is an explicit tension between identity and the global network society as it is expressed in its currently dominating form. …. We can make a further argument: the root of the current crisis is the fact that the generally dominant model for development has been based on systematic debt-taking.” (p159)

In other words, a statement of the the unintelligible followed by a statement of the obvious. Now, I do know that every discipline has its own jargon so ‘resistance identities’ may well be a piece of it. But I don’t know what the first bit of the quotation means.

To be fair, a couple of later chapters (on Catalonia, on China) look more empirical so I’ll give them a go. But what I’d really hoped for was some insight into questions like: Why did it become normal for so many people to take on debts they would never repay to buy cars and clothes and houses? What was it about our societies and governments that mean the only way many people could find a home of acceptable standard by lying about their incomes to a dodgy mortgage broker? Why or how did people working in the financial markets lose all their sense of everyday ethics, their connections to the rest of society? Who are the people who went into flogging sub-prime mortgages?  How did it come about that regulators were content to take hundreds of pages of complicated and unread documentation as proof of adequate risk-management? And many more.

Now, I certainly am not going to get on my high horse about how wonderful economics is – having written so much about economists’ need to acknowledge its flaws and fix them (see eg [amazon_link id=”1907994041″ target=”_blank” ]What’s The Use of Economics[/amazon_link]) – and as sociology is not my discipline, maybe there are new pieces of research into such questions by sociologists and other social scientists, and I’d be grateful for the references. But I have a sneaking suspicion that it isn’t the kind of work sociologists have been doing.

12 thoughts on “Economists, sociologists and the crisis

  1. Many very good questions here, thank you.

    Maybe I can mention however that, as a trained sociologist, I would regard issues such as relative deprivation and, say, underachievement – and a whole lot more – as very much ‘sociological’, and very much relevant to economic behaviours?

    I have a feeling it’s more language and frameworks, rather than always neglect of matters regarded by both economists and sociologists as important, that make it ‘feel’ as though neither is addressing the issues which concern the other. There is not necessarily high ground in this; language is sometimes the problem. And so, in some instances, is methodology – not all research need be strictly quantitative, so maybe sometimes the economists miss significant findings because (unfortunately) they’re not looking at qualitative or narrative stuff, just as some sociologists miss things because they sometimes (inadvisedly) gloss over the figures.

    That said, I’d love to see more explicit and well publicised collaboration between sociologists and economists on these issues. What’s stopping it?

    And that last is a serious question….

    • That’s a good question, to which I don’t know the answer, especially as funders like the idea of interdisciplinary research.
      You must be right about language and frameworks (as the post only half-acknowledges).
      Maybe somebody is or should be looking into a joint social science conference or project on the crisis and its aftermath, to start us speaking across disciplinary boundaries?

  2. I think one of the problems is that a great deal of relevant sociological work has not been explicitly connected to economic issues (by sociologists or by economists). For instance, your question about “Why did it become normal for so many people to take on debts they would never repay …” is partly answered by the role of the media and marketing in inculcating an individualistic consumer identity and the associated status seeking behaviour. Many sociologists and political economists (there is a large overlap) have written about the process whereby a competitive ‘treadmill of production’ has also require policies and strategies to develop the necessary ‘treadmill of consumption’. I think the distinction between ‘the economic’ and the social and cultural, made not least by certain interpreters of Marx, has led to the conceptual removal of social processes and people from much economic thought and theory. There is evidence that the people are once more being put back into economics – Keynes had a go at this and Marx’s Capital was originally dedicated to Keynes. Once people are added to the mix issues of structure and agency are opened up and if economists can get beyond crude forms of behaviourism and really work collaborative with sociologists, that would be helpful and valuable. I’m retired now but my hope is this is seen as the way forward and some of the old false distinctions and disciplinary boundaries will start to disappear and we gain a much more realistic understanding of how economies, as made up of people and embedded in societies, work. This require a lot more than better maths!

  3. Before anyone else corrects me, Marx did not try to dedicate Capital to Keynes! I was thinking of some one else.

  4. I might take Diane up on the relative contribution of economists to understanding the world around us since 2008 and specifically to remaking the ‘explanatory’ models still widely taught to undergraduates. I’d also reject the maths for its own sake approach that has led many economists into sterility and non-explanation. BUT one of the greatest problems with (UK) sociology – and a possible reason sociology has said so little about markets and economic behaviour – is their lack of quantitative skills. People can graduate as sociologists without numbers, methodological understanding or the capacity to handle quantitative data; sociology departments can be rated without teaching any quantitative methods. That’s a scandal.

  5. Hi Diane,

    “Why or how did people working in the financial markets lose all their sense of everyday ethics, their connections to the rest of society? ”

    Do you know about the work of Olivier Godechot ? He did some socilogical research on traders and financial markets and wrote these books (but, unfortunatetly, in french)
    Les traders : Sociologie des marchés financiers (Traders : A sociological perspective of financial markets)
    Working Rich : Salaires, bonus et appropriation du profit dans l’industrie financière

    Here are some links with his other works :
    His personal page :

    Alexandre Delaigue talks about his work in this blog post :

    He has some published work in english. I hope these links help.


  6. I hesitate to contribute to this discussion again after my anachronistic reference to Keynes and Marx. However, I’ll risk it as I have taught quantitative methods on undergraduate and post graduate degrees in sociology and supervised PhDs that have used quantitative and statistical methods. This is a response to David Walker’s comment with which I have some sympathy, with caveats.There was a time when sociological research was dominated by quantitative methods, particularly in the US, and there has been a resurgence in the UK in recent years as part of the government’s attempt to get more value out of the massive and expensive data sets produced by tax payer funded large scale surveys. The problem today (as in the past) is that statistical sophistication passes as an alternative to adequate theoretical frameworks. Variables are naively abstracted from complex multi-layered processes that are artificially delimited as disciplinary domains with resulting partial and often distorting theories and models. The ‘reality’ that is represented by mathematical models is far from the actual complexity and contingency of social processes and results in a poor understanding as a basis for prediction or policy. All I’m saying is that more quants. in sociology (and I would argue economics as a genuinely social science as opposed to a putative natural science) is not the answer. Sociologists, and social sciences generally, do indeed need to know more about the whole process of correlational and statistical research with social data including the way concepts and variables are historical and socially constructed (for instance ‘the economy’, ‘GDP’, ‘society’, ‘class’, ‘deviance’, ‘neoliberalism’, etc.). But this is in order to understand the problems and limits of this sort of analysis as well as its appropriate uses and strengths.

  7. So the place to go for good, path-breaking, empirical work on the economic crisis is not the work of “meta-theorists” like Castells. Instead, I’d direct you to stuff that falls more generally under the heading of “the sociology of finance.”

    A good dipping in point can be found here:

    I’d argue that work in SocFin is probably some of the best sociology currently going on today. But it is very different than the work Castells and Co. are doing.

  8. I find it odd when economists accuse sociologists of producing ‘unintelligible work’. I regularly seek out papers from economics journals, only to discover that I can understand the introduction and the conclusion, but that everything in between is written in mathematical code. The rule for economists seems to be: keep it simple, except where you can impress your colleagues by making it fiercely complicated. The difference is that sociologists rarely aspire to simplicity in the first place, which is a shame, but at least they’re honest about that.

    I wonder if ‘resistance identities’ is that much more murky than (say) ‘information assymetries’. The main difference is that economists congregate tightly around certain conventions of jargon, whereas sociologists head off in endless new directions. Again, I can see the perils of sociologists doing this, but economists do not speak a vernacular public language either, as you admit.

    Of course sociologists have been doing this work. Economic sociology is a booming field. I’ve just read Greta Krippner’s quite brilliant Capitalizing on Crisis, and recommend that as a starting point, for how sociologists are examining the origins of the credit crisis. Or read Martha Poon’s work on consumer credit-rating. Or Neil Fligstein’s work on the sub-prime crisis. Or Donald MacKenzie’s work on derivatives valuation. I could go on.

  9. Many, many thanks to everyone who commented and suggested useful reading material for me to follow up. This not being my field, there’s obviously work I’m not aware of (apart from Donald McKenzie and CREST, I have referred to both here before), which makes me think it’s a shame that the big names who are hyped up for a wider audience are not the people doing the most interesting work in this domain. Oh, and I’m certainly not making any claims for economists in this post, & definitely not for their/our average clarity of writing. And yet – as Will points out in the last comment – economic jargon is highly standardized so one can acclimatise reasonably quickly. Whether it means anything useful is another matter….

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