The Making of Homo Financius and Neoliberal Morality

There is [a] set of qualities ascribed to the actions and conduct of mankind, distinct from their propriety or impropriety, their decency or ungracefulness, and which are the objects of a distinct species of approbation and disapprobation. These are Merit and Demerit, the qualities of deserving reward, and of deserving punishment.

These Adam Smith’s words from The Theory Of Moral Sentiments (2010: 30) imply the constitution of a system of worth relations reflected in the rewards and punishments of everyday life. In line with this argument, Smith depicts in this book the character of a virtuous person. Such a person, he suggests, would embody the qualities of prudence and self-command. Prudence moderates the individual’s excesses and self-command moderates his passions and reins in his destructive actions. Morality, according to Smith, is created by nature.
Daniel Maman and Zeev Rosenhek have recently published in The British Journal of Sociology an interesting paper “Responsibility, Planning and Risk Management: Moralizing Everyday Finance through Financial Education“, which derived from their research project “The Making of “Homo Financius”: The Emergence and Development of Financial Literacy in Israel”. This revealing paper revolves around the question on how the state programmes of financial education define the individuals’ basic qualities that purportedly underpin proper financial conduct, formulating a model of the desired financially literate subject in the age of neoliberalism. The abstract reads as follows:

“The individualization, privatization and marketization of risk management represent a fundamental dimension of the financialization of everyday life. As individuals are required to engage with financial products and services as the main way of protecting themselves from risks and uncertainties, their economic welfare and security are construed as depending largely on their own financial decisions. Within this setting, the concept of financial literacy and accompanying practices of financial education have emerged as a prominent institutional field handling the formulation and communication of the attributes and dispositions that arguably constitute the proper financial actor. This article analyzes financial education programmes currently conducted by state agencies in Israel, examining the notions and principles they articulate when defining and explaining proper financial conduct. The study indicates that moral themes and categories occupy a salient place in the formulation of the character traits that constitute the desired literate financial actor. Notions of individual responsibility, planning ahead and rational risk management are presented not merely as instrumental resources, but as moral imperatives. Through these notions, the programmes moralize a broad array of everyday practices of personal finance such as saving, investing, borrowing and budget management, thereby connecting the sphere of financial matters to the domain of moral virtues. Offering a representation of particular modes of financial conduct as constitutive components of morally virtuous personhood, these practices imbue the financial field as a whole, especially its current generalized logic of individualized and marketized risk management, with moral meanings, hence contributing to the normalization and depoliticization of the financialization of everyday life.”

Now, let us return to Adam Smith. The depoliticizing impetus features most of his economic writings, but it contrasts with other parts The Theory Of Moral SentimentsNot only prudence and self-command, as I mentioned above, he considers as virtues in this book, but also justice and beneficence. Justice limits the harm we do to others and it is essential for the continuation of social life; beneficence improves social life by prompting us to promote the happiness of others. Well, where is THIS Adam Smith when we need him?…
In their paper Maman and Rosenhek made an insightful contribution in shedding light on how the state agencies, institutional actors and mechanisms concoct the neoliberal morality and conduct the moralization of the economic field within particular macro-institutional context. This important research direction should be amplified more in our field. One thing is certain: in (neoliberal) capitalism moral sentiments play a key role in the extraction of economic value.

Maman, Daniel and Zeev Rosenhek. 2019. “Responsibility, Planning and Risk Management: Moralizing Everyday Finance through Financial Education.The British Journal of Sociology 70(5): 1996-2019.

Financial literacy

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