‘American Bonds’ by Sarah Quinn — The Best Book in Economic Sociology and Political Economy for 2020

The ES/PE global academic community is pleased to announce the granting of the Best Book in Economic Sociology and Political Economy Award for 2020 to Sarah Quinn‘s superb, enlightening, thoroughly researched and engagingly written American Bonds: How Credit Markets Shaped a Nation. Congratulations!!
The year of 2020 marks an exceptional achievement for Professor Quinn (University of Washington). Her outstanding, insightful, and interdisciplinary  treatise won three additional major prizes: the Zelizer Book Award given by the American Sociological Association’s Economic Sociology section, the Alice Amsden Book Award presented by the Society for the Advancement of Socio-Economics, and Honorable Mention for the Theory Prize by the American Sociological Association’s Theory section. 
Professor Quinn once noted that “part of [her] desire to write the book was always to try to be able to use the tools of sociology to demystify finance.” While reading this excellent scholarly work, one can easily see that this mission was brilliantly accomplished.
Drawing from a mix of original archival research and secondary sources, American Bonds examines the evolution of securitization and federal credit programs in the US from the early post-Revolutionary years to the 1960s, concurrently looking  at the macro and micro levels. The book shows in compelling detail that since the Westward expansion, the US government has used financial markets to manage America’s complex social divides, and  lawmakers and bureaucrats have turned to land sales, home ownership, and credit to provide economic opportunity without the appearance of market intervention or direct redistribution of wealth. Over time, government officials embraced credit as a political tool that allowed them to navigate an increasingly complex and fractured political system, affirming the government’s role as a consequential and creative market participant. Neither intermittent nor marginal, credit programs spurred the growth of powerful industries, have been used for foreign policy and and military efforts, and were promoters of venture capital investment and mortgage securitization. Quinn’s American Bonds astutely demonstrates the intricate ways in which credit has been a powerful tool of the American statecraft and how the state has been intrinsically involved in marketcraft.
At the end of this must-read book (published by Princeton University Press in 2019) Quinn leaves us with important reflections derived from her historic research, which are essentially relevant to our immediate present and upcoming future: 

“With each crisis, Americans face anew the question of how to organize finance. With each crisis, choices are guided by long-esteblished institutions. And with each crisis, there nevertheless exists the potential for something new to emerge. Whatever lies ahead, the organization of credit – and the social bonds that it entails – will be decided on two levels: the specific exchanges we allow and how we delimit the role of finance in the political economy. A cleared-eyed look at both means that in considering any credit policy we must ask: Should this issue be resolved through finance? And if it is resolved through finance, what divisions of profit and risks, and what divisions of opportunities and obligations, should be built into these structures?” (Quinn 2019: 212)


The past Alice Amsden Book Award recipients:

2019: Ching Kwan Lee, The Specter of Global China: Politics, Labor, and Foreign Investment in Africa. University of Chicago Press, 2018

The past Zelizer Best Book Award recipients:

2019: Monica Prasad, Starving the Beast: Ronald Reagan and the Tax Cut Revolution. Russell Sage, 2018

2018: Yuen Yuen Ang, How China Escaped the Poverty Trap. Cornell University Press, 2016

2017: Marc Steinberg, England’s Great Transformation: Law, Labor, and the Industrial Revolution. University of Chicago Press, 2016

2016Gabriel Abend, The Moral Background: An Inquiry into the History of Business Ethics. Princeton University Press, 2014

2016: Debbie Becher, Private Property and Public Power for Eminent Domain in Philadelphia. Oxford University Press, 2014

2015: Martin Reuf, Between Slavery and Capitalism: The Legacy of Emancipation in the American South. Princeton University Press, 2014

2014: Ofer Sharone, Flawed System, Flawed Self: Job Searching and Unemployment Experiences. University of Chicago Press, 2013

2013: Lyn Spillman, Solidarity in Strategy: Making Business Meaningful in American Trade Associations. University of Chicago Press, 2012

2013: Monica Prasad, The Land of Too Much: American Abundance and the Paradox of Poverty. Harvard University Press, 2012

2012: Greta R. Krippner, Capitalizing on Crisis: The Political Origins of the Rise of Finance. Harvard University Press, 2012

2010: Terence G. Halliday and Bruce G. Carruthers, Bankrupt: Global Lawmaking and Systemic Financial Crisis. Stanford University Press, 2009

2008: Donald MacKenzie, An Engine, Not a Camera: How Financial Models Shape Markets. MIT Press, 2006

2006: Olav Velthuis, Talking Prizes: Symbolic Meaning of Prices on the Market for Contemporary Art. Princeton University Press, 2005

2006: James R. Lincoln and Michael L. Gerlach, Japan’s Network Economy: Structure, Presistence and Change. Cambridge University Press, 2004

2004: Harrison White, Markets from Networks Networks: Socioeconomic Models of Production. Princeton University Press, 2002

2004: Sarah Babb, Managing Mexico: Economists from Nationalism to Neoliberalism. Princeton University Press, 2001

2003: Neil Fligstein, The Architecture of Markets: An Economic Sociology of Twenty-First-Century Capitalist Societies. Princeton University Press, 2002

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Corporate Bodies Have No Soul

William Hazlitt (1778 – 1830) was an English essayist, writer, and social commentator. He is considered one of the greatest masters of the English language, but despite his very high standing among historians of literature and art, his work is currently little read. However, the following poignant sentences of this brilliant polemicist and critic of pomp and power are resonant now as they were 200 years ago. 

Corporate bodies have no soul. Corporate bodies are more corrupt and profligate than individuals, because they have more power to do mischief, and are less amenable to disgrace or punishment. They feel neither shame, remorse, gratitude, nor goodwill. [In corporate bodies] the principle of private or natural conscience is extinguished in each individual (we have no moral sense in the breasts of others), and nothing is considered but how the united efforts of the whole (released from idle scruples) may be best directed to the obtaining of political advantages and privileges to be shared as common spoil. […]
The refinements of private judgment are referred to and negatived in a committee of the whole body, while the projects and interests of the Corporation meet with a secret but powerful support in the self-love of the different members. Remonstrance, opposition, is fruitless, troublesome, invidious; it answers no one end; and a conformity to the sense of the company is found to be no less necessary to a reputation for good-fellowship than to a quiet life. Self-love and social here look like the same; and in consulting the interests of a particular class, which are also your own, there is even a show of public virtue. […] In the meantime they eat, drink, and carouse together. They wash down all minor animosities and unavoidable differences of opinion in pint bumpers; and the complaints of the multitude are lost in the clatter of plates and the roaring of loyal catches at every quarter’s meeting or mayor’s feast. The town-hall reels with an unwieldy sense of self-importance; ‘the very stones prate’ of processions; the common pump creaks in concert with the uncorking of bottles and tapping of beer-barrels: the market-cross looks big with authority. Everything has an ambiguous, upstart, repulsive air. Circle within circle is formed, an imperium in imperio: and the business is to exclude from the first circle all the notions, opinions, ideas, interests, and pretensions of the second. Hence there arises not only an antipathy to common sense and decency in those things where there is a real opposition of interest or clashing of prejudice, but it becomes a habit and a favourite amusement in those who are ‘dressed in a little brief authority,’ to thwart, annoy, insult, and harass others on all occasions where the least opportunity or pretext for it occurs. […] The individual is the creature of his feelings of all sorts, the sport of his vices and his virtues—like the fool in Shakespear, ‘motley’s his proper wear’:—corporate bodies are dressed in a moral uniform; mixed motives do not operate there, frailty is made into a system, ‘diseases are turned into commodities.'”

Hazlitt, William. 2016 [1821]. “On Corporate Bodies.” Pp. 123-126 in  Table-Talk: Essays on Men and Manners. HardPress Publishing. 

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Finance under state capitalism: Re-conceptualising capital markets through China’s financial transformation

by Johannes Petry*

When one thinks of China, burgeoning capital markets – the epitomisation of free market capitalism – are certainly not the first thing that spring to mind. By 1989, capital markets did not even exist in China. But fast forward three decades, and China’s financial system has grown into a US$45 trillion industry that boasts the world’s the 2nd largest equity markets, 2nd largest bond markets and 3nd largest futures markets in the world, contributing 9% to China’s GDP. More companies have listed in Hong Kong, Shanghai and Shenzhen than anywhere else, and while China’s markets had been virtually closed from the outside world for decades, they have become connected to both regional and global financial marketsat an unprecedented pace’. Capital markets have become a crucial part of China’s political economy, contributing to the increasing financialization of China’s socio-economic system since the global financial crisis 2007-2009.
A common outcome of such financialization processes is often a loss of power on behalf of the state – even though it might have initiated financial reforms and innovation – as it
increasingly needs to accommodate the growing power of private financial actors and follow financialised logics. China’s financialisation process, however, follows a distinctively different path. As I argue in an article that was recently published in Economy & Society, states can potentially exercise a considerable degree of control over financialization, thereby shaping its very form. What we can hence observe is afinancialization with Chinese characteristicswhere the state actively shapes financialization and its social outcomes. Although finance in China is expanding and permeating evermore aspects of economic and political life, this occurs within the context of China’s socio-economic system of authoritarian state capitalism in which the Chinese Communist Party aims to maintain its control over socio-economic development, in part by managing policy uncertainties through the financial sector. Thereby, the authorities try to actively manage financialization to achieve developmental goals. China’s president Xi Jinping, for instance, repeatedly made clear that the tasks of China’s financial sector were:[to] better serve the real economy, containing financial risks and deepening financial reforms’. Importantly, this is not done through brute force or command-and-control mechanisms, but through ‘pivotal points’ in market infrastructures that enable the management and steering of financialization processes.
To this end, the article analyses the crucial role of China’s state-owned securities exchanges in the development and management of Chinese capital markets. More than just marketplaces, as providers of market infrastructures
exchanges are themselves powerful actors that exercise considerable influence over capital markets. From market data and indices, listing/creation and trading of various securities, commodities and derivatives, to post-trading activities such as central clearing – exchanges decide the ‘rules of the game’ and act as gatekeepers, deciding who gets in, what is traded and how trading is conducted. Thereby, they are crucial to shaping capital markets. Through analysing the policies and practices of exchanges in managing capital markets, we can gain insights in how Chinese authorities aim to steer China’s financialization process. Capital markets can, thereby, be understood as a site where the authorities exercisestatecraft [through] financial controlwhich enables them to govern the socio-economic system. Control in this context should be understood both as exerting control within financialization by monitoring, regulating and intervening into capital markets, as well as exerting control through financialization by directing market outcomes towards the accomplishment of national development policies. As the paper explores, these target different dimensions of China’s authoritarian state capitalism – from financial risk, over social stability concerns, to the reform of Chinese companies.
This investigation reveals that while market-based finance emerged as an important economic governance tool in China, these capital markets function fundamentally different than ‘global’ capital markets. In a second article, recently published in Competition & Change, I therefore propose to re-evaluate common political economy conceptions of capital markets: instead of viewing these as uniform entities, in opposition to the state and interlinked with a neoliberal policy paradigm, to look at an institutionally embedded ‘varieties of capital markets’. In contrast to the premise that markets are uniform, following the likes of Keynes and Polanyi, economic sociology has shown that markets areembedded in distinct sets of social and political institutionsand thatmarkets do not emerge out of a vacuum’. While functionally all capital markets are characterised by market-based mechanisms of coordination between buyers, sellers and investors, applying the concept of institutional logics to capital markets reveals how the institutional embeddedness of markets and market organisers leads to different market dynamics and outcomes. Consequently, how exchanges (i.e. market organisers) are governed and which constraints and incentives they face matters for the types of markets they organise.
In the West, exchanges are publicly traded companies that have to make profitable business decisions to increase shareholder value; they are situated within an institutional setting informed by a neoliberal logic. The ostensible purpose of these capital markets is to create ‘efficient’ outcomes by enabling the generation of (private) profit, which is achieved by the principles of ‘free markets’ and ‘free flows of capital’ that should be responsible for allocating economic resources without state intervention. While the state is not absent, its priority is enabling private profit creation instead of other socio-economic outcomes,
cementing the power of private finance capital. Capital markets organised by these (mainly US-based) global exchanges should therefore be conceptualised as neoliberal capital markets. These markets dominate and perpetuate the contemporary neoliberal global financial order.
Instead of primarily following neoliberal principles, China’s state-owned exchanges meanwhile facilitate the development of what can be called state-capitalist capital markets
capital markets that follow an institutional logic derived from China’s state-capitalist economic system. The institutional logic of China’s state capitalism is not simply one of command-and-control but a combination of top-down state coordination and bottom-up market competition. Of course, millions of profit-driven speculating investors exist in China that create manias, panics and crashes like in any capital market. But whereas profit creation for private finance capital is the primary underlying principle in neoliberal markets, importantly, the Chinese state intervenes into capital markets to steer them into ‘productive’ tracks and facilitate state objectives. The defining difference between neoliberal and state-capitalist logic is not the existence of markets per se but rather the principles that underlie market organisation (profit creation vs state objectives) and the actors that dominate/shape these markets (private finance capital vs state institutions). Consequently, what can be observed in China is the emergence of a fundamentally different way of thinking about, managing and governing capital markets which are permeated by but also reproduce the institutional logic of Chinese state capitalism. By analysing the domestic development of Chinese capital markets, their integration into global markets and their internationalisation, the paper showcases how these markets consequently represent an alternative to, resist pressures to conform with and even actively challenge the neoliberal capital markets that underpin the contemporary global financial order.
This case study hence highlights the need to re-evaluate the conceptual toolbox with which we analyse finance. While capital markets can follow and facilitate neoliberal logic, this is not necessarily the case. Rather, capital markets are embedded within specific institutional settings whose institutional logic shapes how they function. This conceptual point is important when extending such an analysis of capital markets beyond China. Are there other ‘varieties of capital markets’ that are shaped by different institutional logics and differ from a uniform conception of ‘global’, ‘Anglo-American’ or ‘neoliberal’ capital markets in countries where the state maintains a qualitatively different role within the economy? In a new StateCapFinance research project, we seek to address this question by comparatively analysing the relationship between states and capital markets in six increasingly financialised state-capitalist economies (BRICSS) to create a better understand the interplay of models of capitalism, their trajectories of financialisation and how they interact with, integrate into and ultimately shape the global finance and the world economy.
* Johannes Petry is a Postdoctoral Fellow at the SCRIPTS Cluster of Excellence at Free University of Berlin and CSGR Research Fellow at the University of Warwick.
All emphases added by the editor.

Zhengzhou Commodity Exchange (by Johannes Petry)

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Great academic opportunities: 11 calls for papers, 8 jobs, 6 postdocs, 2 PhD fellowships, 2 visiting posts, 2 prizes

Dear ES/PE community member, see below a list of great academic opportunities:call for papers  11 calls for papers for conferences and special issues, 8 job openings, 6 post-doc positions, 2 PhD fellowships, 2 visiting posts, and 2 prizes in various areas of economic sociology, political economy, and related fields, with December 10 — January 15 deadlines. Share this post with your colleagues and students. Best wishes and good luck!

Calls for Papers:

> CfP: “Reconfiguring Labour and Welfare in Emerging Economies of the Global South” workshop, Centre for Interdisciplinary Research, Bielefeld University (Germany), December 6-8, 2021. No registration fees;  meals will be provided; travel and accommodation expenses will be covered. DL: December 10

> CfP: Warwick Critical Finance: manuscript development workshop for early career researchers, online, 18 February 18, 2021. DL: December 18

> Don’t you want to attend the most interesting and promising online talks and webinars on various topics in economic sociology and political economy from all over the world? Of course you do! So follow the ES/PE’s Facebook page and Twitter to have information about these events that are publicized only on our social media several days before they take place.

> CfP: “In Good Company? Personal Relationships, Network Embeddedness and Social Inclusion“, an issue of Social Inclusion. DL for abstracts: December 31

> CfP: “Political Economies of Deprivation“, a special issue of Review of Social Economy. DL for manuscripts: December 31

> CfP: “Workers and Obsolescence“, a special issue of International Labor and Working Class History. DL for proposals: January 5

> CfP: “Migration Worldwide: Left-wing Strategies, Migrant Actors and Capitalist Interests from the 16th Century to the Present“, the 56th International Conference of Labour and Social History, AK-Bildungshaus Jägermayrhof in Linz (Austria) and online, September 23-25, 2021. DL: January 10

> CfP: “Business History in a Changing World”, the 2nd World Congress on Business History and 24th Congress of the European Business History Association, online, September 9-11, 2021. DL: January 15 

> CfP: “Ethnography of Finance” session at the 8th Ethnography and Qualitative Research conference, Trento (Italy) or online, 9-12 June 2021. DL: January 15

> CfP: The 4th Conference of the European Labour History Network and WORCK Conference, Vienna (Austria), August 30-1 September, 202o. DL: January 15

> The BHC Doctoral Colloquium in Business History, online, June 10-11, 2021. Participants will receive a stipend to attend the 2022 Business History Conference. DL: January 15

> Political Economies of Capitalism, 1600-1850, a new Routledge book series to explore the dimensions of early modern political economy and the ways in which this period established foundations for and alternatives to capitalist thought and practice.

PhD Fellowships

> Funded PhD student positions in economic sociology and digital sociology as part of a qualitative research project “Social patterning of economic subjectivities and the digital transformation of retail finance in Switzerland” at the Università della Svizzera italiana (Lugano, Switzerland). DL: January 8

> Doctoral Fellowship in Law and Inequality (in residence), The American Bar Foundation (Chicago, IL, USA) DL: January 15

Postdoctoral Positions: 

> Postdoctoral Fellowships at the Cluster of Excellence “The Politics of Inequality”, University of Konstanz  (Germany). DL: December 13

> Postdoctoral scholar to conduct analyses of policy proposals related to poverty, inequality, economic security, hardship, and mobility, at the Center on Poverty and Social Policy, Columbia University School of Social Work. DL: December 15

> Postdoctoral Research Associate in Economic Sociology (4 years), the Department of Economic Sociology, University of Vienna (Austria). DL: December 21

> Researcher in urban political economy with specialization in real estate (2 years) to join the research group “Urban revolution and the Political”, Research Centre on Technologies, Territories and Societies – LATTS, Paris (France). DL: December 22

> Postdocs on Social Stratification through Population Scale Social Network Analysis, Department of Organization, Copenhagen Business School. DL: January 4

> Postdoctoral Fellowship in Law and Inequality (2 years), The American Bar Foundation (Chicago, IL, USA). DL: January 15

Visiting positions:

> Berggruen USC Fellows to study the Future of Capitalism, the University of Southern California (USA). DL: January 8

> Visiting fellowships at the Center for the History of Political Economy (senior scholars, junior scholars, PhD students), Duke University. DL: January 10


> Journal of Australian Political Economy offers a $2000 prize to encourage young scholars to convert their research work into a publishable article. DL: December 18

> The Future Markets Consultation initiative invites students and young scholars to submit their essay on a sustainable and just market economy for Europe. A prize is available in three categories: bachelor students (€500), master & PhD students (€1.250), and young scholars (€1.750). DL: January 3

Job openings:

> Lecturer in Employment & Organization, Cardiff Business School, Cardiff University (UK). DL: December 11.

>  A senior expert on the topic of sustainable and just economies, the United Nations Research Institute for Social Development – UNRISD (Geneva, Switzerland). DL: December 13

>  A permanent University Lecturer (i.e. Assistant Professor) in the Political Economy of Development, based in the Centre of Development Studies, Department of Politics and International Studies, University of Cambridge (UK). DL: January 1

> Instructor in Heterodox Economics & Political Economy (full-time), University of Manitoba (Canada). DL: January 4

> Assistant Professor in Regulation, Business, and Economic Power, the Dept. of Law & Legal Studies, Carleton University (Ottawa, Canada). DL: January 6

> Professor for Sociology, Transnationalism, and Labour, Ruhr-Universität Bochum (Germany). DL: January 8

> Chair in Social and Political Change, Department of Political and Social Sciences, The European University Institute (Florence, Italy). DL: January 14

> Full Professor of Global Political Economy, University of Bayreuth (Germany). DL: January 15

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B&B: Tax flight myth // Covid-19 and a crisis of neoliberalism // Models, morals and Wall Street // Caste systems persist // Smart City or corporate siege // New Labour’s unions reform

> If taxes rise, the rich will leave! No, they won’t. Contrary to popular opinion, although the rich have the resources and capacity to flee high-tax places, their actual migration is surprisingly limited — a video lecture by Cristobal Young, the author of The Myth of Millionaire Tax Flight: How Place still Matters for the Rich

> How the Covid-19 pandemic and mass protests against police brutality lay bare a crisis of neoliberalism — a podcast featuring Wendy Brown, the author of In the Ruins of Neoliberalism: The Rise of Antidemocratic Politics in the West

> How the use of economic models and the moral disengagement this has created have significantly transformed the global financial industry — a review of Daniel Beunza’s award-winning Taking the Floor: Models, Morals and Management in a Wall Street Trading Room

> Do you want to attend the most interesting and promising online talks and webinars on various topics in economic sociology and political economy from all over the world? So follow the ES/PE’s Facebook page and Twitter to have information about these events that are publicized only on our social media several days before each conference.

> Destabilizing Orders: Understanding the Consequences of Neoliberalism” was the topic of a conference that brought together outstanding economic sociologists and political economists that were asked not to prepare a conventional paper, but a short thinknote. Find here a collection of these thinknotes by Mark Blyth, Will Davies, Wolfgang Streeck, Colin Hay, Marie-Laure Salles-Djelic, Donald MacKenzie, Marion Fourcade, Olivier Godechot, Cornelia Woll, Adam Goldstein, Dorit Geva, and more.

> United States and India have abolished the formal laws that defined their caste systems, but both caste systems live on in hearts, habits, and institutions. In the American caste system, the signal of rank is an enduring racial hierarchy — by

> Are Smart City,  Smart Home and Internet of Things the utilities making our life more convenient? Or do they embody the corporate colonisation of domestic environment and everyday life by information processing and networked services  for commercial purposes? — An extract from Adam Greenfield’s Radical Technologies: The Design of Everyday Life

> Twenty years ago today Tony Blair’s government initiated a reform that promised to lead to widespread union recognition. Now it’s clear that it wasn’t so friendly to labour and didn’t pose a real threat to capital — by Gregor Gall, the author of Handbook of the Politics of Labour, Work and Employment

books on neoliberalism

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Towards a New Political Economy of India: the Formation of Rural Middle Classes

by Maryam Aslany*

For observers of the developing world, the ‘middle class’ has become a key category of economic analysis and forecasting. The discussion suffers, however, from a major oversight, since it assumes that the middle class is exclusively urban. Drawing on a detailed study of two villages in western Maharashtra, India, Contested Capital is the first examination of the developing world’s rural middle classes. Only by putting this novel, dynamic and neglected group into the picture, it argues, can we understand some of the critical transformations in today’s global population and economy.
This requires consideration, first, of some of the most contentious questions in contemporary sociology: who or what constitutes the middle class, and how may we draw boundaries around it? From Marx, Weber and Bourdieu follow three traditions of class analysis, respectively conceptualising classes on the basis of: productive capital (relations of production); social and marketable capital (market situation); and symbolic and cultural capital (accumulation of knowledge and appropriation of cultural awareness). These traditions delineate the middle class in very different ways. Many Marxist scholars deny the existence of the middle class altogether; even when it is recognised, it is treated as an anomaly, situated, as an unproductive class, between the proletariat and bourgeoisie. Followers of Weber define the middle class in terms of marketable capital – such as skills and credentials – but differ greatly when it comes to the role of property and labour markets. Those inspired by Bourdieu identify the middle class by its control of cultural capital, and pay attention to such questions as taste and habitus.
In order to capture the full range of these complexities, Contested Capital draws successively on the perspectives of each of these class theorists. Its multidimensional portrayal of Maharashtrian village society offers three related, but theoretically distinct, accounts of the formation of India’s rural middle classes.
The “Marxian” account suggests that middle-class formation is taking place rapidly in the Indian countryside, and in a way quite unknown in other contexts. Rural middle classes are engaged in a great range of new industrial and service-sector occupations, and there is great complexity and paradox in their labour relations. Their class position is perennially unstable, incorporating features of the industrial working class and the class of capitalist farmers. Although members of this class are engaged in factory work, they use this income to expand agricultural production and accumulate surplus by hiring in agricultural labourers. These forms of ‘awkwardness’ in rural class relations move the analysis beyond polar class rigidities.
The book then shifts to a “Weberian” perspective. Turning away from exploitation as the determinant of class formation, it looks instead at occupational mobility and skill differentials. This section seeks to understand the rural middle classes in terms of ‘life chances’ in the labour market, and examines the great range of methods by which rural households seek upward social mobility and negotiate their entry into the middle-class skilled-labour market.
In the third section, Bourdieu’s concepts of social and cultural capital are applied to rural India and adapted to regional specificities. (Bourdieu himself invited his readers to find equivalents of his social distinctions and habitus in other global contexts.) My interviewees define their new middle-class identity in terms of their social distance from manual work, poverty, and from dependency. Self-sufficiency is crucial: they are adamant that they are not ‘poor’, and that their lives have an adequate material quality. These self-identified rural middle classes also harbour specific aspirations for their children: a private English-medium education, proficiency in the use of the English language, and employment outside agriculture. Proficiency in English is perceived not only as an economic asset for the future, enabling better access to non-farm employment, but also as a prestigious distinction in itself, related to ideas of global connectivity.
This third, Bourdieu-inspired, approach also involves unravelling the complex meanings of cultural goods. The book demonstrates that there has been a rapid and significant transformation in the patterns of consumption in rural India, characterised by new housing styles and interior designs, as well as a large range of consumer goods which were previously absent from rural households but which now are ‘necessary’ for the expression of novel class distinctions.
These three analyses provide a multifaceted portrait of an emerging class whose particular dynamics – since I estimate it to comprise 17% of the rural population, which equates to about 150 million people – are critical for our understanding of the emerging Indian reality. It is notable, for instance, that entry into this class is largely achieved through the efforts of male youths, assisted by acquired informal educational credentials and ascribed caste. Though there have been dramatic shifts in rural employment, these have not necessarily changed the gender division of labour: the new occupations in industry and services are primarily performed by men, while women mostly carry out agricultural work alongside household domestic labour – either on family-owned land or as casual labourers. My findings also suggest striking caste stratifications within rural middle classes. They are primarily constituted by upper and middle castes. Scheduled Castes and Scheduled Tribes are mainly excluded.
The formation of India’s rural middle class rests on a set of economic, social and cultural processes that have unfolded as a result of the liberalisation of the Indian economy. One of the most visible rural consequences of this has been the industrialisation of many village peripheries, to the extent that agriculture is no longer the primary economic focus of rural life. Diversification is now a central feature of the rural economy and society, and as households have simultaneously engaged with both agriculture and industrial employment, they have constructed novel class positions and identities. The resulting rural middle class has economic characteristics, lifestyles, aspirations and consumption patterns that are entirely distinct from its urban counterpart.
Since these processes continue to transform the Indian countryside at a great pace, we can assume that the rural middle class will become more defined and significant over time. Contested Capital argues that its influence will be widely felt, and in ways that could not be predicted from the behaviour of the urban middle classes. The rural middle class will have distinctive demands, for instance, for industrial and agricultural policies – demands that are also quite different from those of rural elites or the rural poor. This emerging class will therefore come to shape processes of state planning, wealth redistribution and rural development.
While there are undoubtedly considerable regional variations, the remarkable economic and social transformations described in Contested Capital are unlikely to be specific to the villages of Maharashtra. Its study of the rural middle class, in fact, can be seen as the first step in a new political economy of India – and perhaps elsewhere.
Dr. Maryam Aslany is a Senior Researcher at the Peace Research Institute Oslo and a part-time Career Development Researcher at Wolfson College, University of Oxford. Email: marasl@prio.org

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Foucault: Neoliberalism Redefined Homo Economicus

Michel Foucault, a lecture at the Collège de France, March 1979:

“The characteristic feature of the classical conception of homo economicus is the partner of exchange and the theory of utility based on a problematic of needs.
In neo-liberalism — and it does not hide this; it proclaims it — there is also a theory of homo economicus, but he is not at all a partner of exchange. Homo economicus is an entrepreneur, an entrepreneur of himself. This is true to the extent that, in practice, the stake in all neo-liberal analyses is the replacement every time of homo economicus as partner of exchange with a homo economicus as entrepreneur of himself, being for himself his own capital, being for himself his own producer, being for himself the source of [his] earnings. (p. 225-6)
[Gary] Becker, for example — the most radical of the American neoliberals, if you like — says that it is still not sufficient, that the object of economic analysis can be extended even beyond rational conduct as defined and understood…, and that economic laws and economic analysis can perfectly well be applied to non-rational conduct, that is to say, to conduct which does not seek at all, or, at any rate, not only to optimize the allocation of scarce resources to a determinate end. Becker says: Basically, economic analysis can perfectly well find its points of anchorage and effectiveness if an individual’s conduct answers to the single clause that the conduct in question reacts to reality in a nonrandom way. That is to say, any conduct which responds systematically to modifications in the variables of the environment, in other words, any conduct, as Beeker says, which “accepts reality,” must be susceptible to economic analysis. (p. 269)
In Becker’s definition which I have just given, homo economicus, that is to say, the person who accepts reality or who responds systematically to modifications in the variables of the environment, appears precisely as someone manageable, someone who responds systematically to systematic modifications artificially introduced into the environment. Homo economicus is someone who is eminently governable. From being the intangible partner of laissez-faire, homo economicus now becomes the correlate of a governmentality which will act on the environment and systematically modify its variables. (Foucault 2008: 270-1).”

Foucault, Michel. 2008. The Birth of Biopolitics: Lectures at the Collège de France, 1978–1979. Palgrave Macmillan.

Foucault The Birth of Biopolitics Neoliberalism

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Human Need vs. Capitalist Greed: a Gastronomic Rebuttal of Mainstream Economics

by Michael Symons*

“A tap of my magic wand… and all you see is money!” With this, the conjurer distracts attention from healthy bodies, happy households, wise governments, and nature. Even the actual market of bread, apples and beer disappears behind the price mechanism. For more than two centuries, capitalism has rewritten economics.
The ancient Greek oikonomia – “household management” – concerned the satisfaction of basic human needs. Economics remained that way until the rise of for-profit corporations in the late-eighteenth/early-nineteenth century. To suit capitalism, modern economists concentrated everyone’s attention on the powerful tool, money.
Mainstream economists celebrated financial rule, and relegated human needs to, at best, incidental beneficiaries. Instead of appetite, the motive became greed. Instead of well-being, wealth meant bullion. Instead of natural growth, it became money’s eternal expansion. Instead of every individual counting, it became each for himself.
Success was measured by market indices, inflation, deficits, GDP, bottom lines, and tax cuts.  Money gained such a hold that it shrank a person to a buyer-seller, merging human-beings with for-profit corporations. The relentless push for profit culminated in crises in health, equity, democracy and nature.

My latest book, Meals Matter: A Radical Economics Through Gastronomy, explores how actual economies put food on the table, and how capitalism up-ended that, neglecting human needs, with unhappy results. Dedicated to gastronomy as the “diner’s sense of the world”, the book rereads Epicurus, Hobbes, Locke, Quesnay, Brillat-Savarin, Marx, Jevons, Weber, Mises, Polanyi, Fisher, and Friedman, among the mix. Taking meals seriously upsets political and economic orthodoxies, as I sketch here.
By “radical” economics, I don’t mean extreme, just getting back to basics – true to the word’s derivation from the Latin radix for “root” (as in “radish”). Such grounded activities as gardening, cooking, drinking, and talking politics might seem “trivial” from some superior vantage-point. However, the “little things” are highly significant at the grass roots, and multiply across humanity. The deterioration of trade relations with China or some militant action might claim “importance”, but only from its links to everyday experience.
Meals Matter shows how such Enlightenment thinkers as Thomas Hobbes, John Locke and Jean-Jacques Rousseau still based their arguments on the fundamental need to eat and drink. For them, the natural law of “self-preservation” called for “subsistence”, “comforts” and “conveniencies”.
Locke’s core right to “life” meant to a living or livelihood, that is, to “food and raiment, and other conveniencies”. Locke quoted Richard Hooker’s statement that, to obtain necessities, “we are naturally induced to seek communion and fellowship with others… in politic societies”.
For Locke, in the Second Treatise chapter “On property”, the plain fact was that people, “once born, have a right to their preservation, and consequently to meat and drink, and such other things as nature affords for their subsistence”. He raised questions about when an apple becomes “one’s own” (that is, property) – is it when digested, chewed, cooked, brought home or picked? The individual also had to be permitted to labour on their self-preservation, within bodily, social and natural limits.
Enlightenment theorists knew several types of household or economy, each based on a different mode of distribution. Only two types used money, and even then it was not essential.
The original oikos or family economy circulates nutriments through communism. Although sometimes distorted through paternalism, the family follows the guideline, “from each according to ability, to each according to need”. Finding parallels with the domestic household, Enlightenment thinkers knew the human body as the “animal economy”, employing digestive and circulatory systems.
In like manner, the “political economy” was a “body politic”. Depicting the head, heart and arms in the frontispiece to his Leviathan, Hobbes saw money coursing around the body politic as preserved food, kept for another time or place. In Chapter 24 of Leviathan, Hobbes explained:

By Concoction, I understand the reducing of all commodities, which are not presently consumed, but reserved for Nourishment in time to come, to some thing of equall value, and withall so portable, as not to hinder the motion of men from place to place; to the end a man maye have in what place soever, such Nourishment as the place affordeth. And this is nothing else but Gold, and Silver, and Mony.

The body politic’s “head” – in charge of collecting and redistributing food (or its substitute) – could be an autocrat or group of people. (My book discusses the political banquet in more detail.)
Thinkers back then spoke of the confining, “natural economy”. Charles Darwin still used the Linnean phrases, “economy of nature” and “polity of nature”, in Origin of Species in 1959; Ernst Haeckel coined “ecology” in 1866.
As well as these economies, a separate market economy, based on exchange, became more visible in the mid-eighteenth century. The French économistes, led by Madame de Pompadour’s physician François Quesnay, found parallels of the œconomie animale in the distribution of grain, hampered by the interventions of the “baker-king”.
Visiting France through 1764-1766, during an experiment in grain-trade liberalization, Adam Smith picked up économiste ideas about leaving the market to its own devices. Nonetheless, Smith still introduced Wealth of Nations in 1776, with the recognition that, through the “co-operation and assistance of great multitudes”, such as the butcher, brewer, and baker, “we expect our dinner”.
Radical ideas supported American, French, and subsequent republics. However, just when the people were successfully contesting autocracy, corporate capitalism muscled in.
Jean-Baptiste Say’s interpretation of Smith as a free marketeer influenced a new generation of business-linked political economists (no longer physicians and philosophers), among them David Ricardo, who found importance in the arithmetical relationships between workers’ wages, business operators’ profits and property-owners’ rents.
Along with that, capitalist authority relentlessly undercut and also, where convenient, appropriated Lockean guidelines. In particular, the confusingly-named “classical” liberalism handed the human right of self-preserving liberty to money, thereby backing “laissez-faire”, then “free enterprise” and eventually “neoliberal” campaigns.
With capitalism picking up pace, radical arguments from below returned with Karl Marx, for whom the “first premise” of society remained “eating and drinking, housing, clothing and various other things”. He found importance in the class struggle over the ownership of the means of production.
With the “marginal revolution” of the 1860-70s, Stanley Jevons, Carl Menger and other economic theorists elevated market exchanges of actual meat, beer and bread into differential equations.
“Political economists” dropped the modifier through the nineteenth century, becoming, imperialistically, “economists”. Self-styled “economists” presented “the economy” as little more than profits and prices, and so tasteless, colourless, unequal, and not alive. For decades, the financial superstructure suppressed radical insights.
The Sixties brought some relief, when the technological sophistication of capitalist industry required a more highly educated workforce, and slicker marketing formed desirous consumers. The counterculture gained gastronomic appetites, with concerns for unprocessed foods, co-ops, communes, “dropping out”, the environment, and, in 1969, the Black Panther free breakfast program for school children.
The now abstract notions of “liberty” and “equality before the law” were employed to free up aspects of society and culture, among the most notable being women’s liberation. Centre-left governments of Bill Clinton, Tony Blair, Paul Keating and others found common cause with neoliberalism’s libertarian tendencies, while remaining ensnared in money’s insistent logic. With a resurgence of conservative reaction, money resorted again to culture wars, with liberals now the dangerous “other”.
Recommending a considerably more intricate, life-centred economics, Meals Matter looks to the everyday activism of growers, cooks, and meal-lovers through a bewildering array of grassroots movements for urban farms, alternative economies, Slow Food, food justice, food sovereignty, agroecology, and more.
Radical economists must call money’s bluff, and prosecute a full agenda, including the freeing of “free” markets, held hostage to corporations. Fundamentally, hope lies in the joyful rediscovery of the “little things” for which all individuals have equal rights, pursuing life, liberty, and happiness in harmony with the rest of nature.
* Dr. Michael Symons’ latest book, Meals Matter: A Radical Economics through Gastronomy, is now published by Columbia University Press. He has been an environmental journalist, run a restaurant, and initiated symposiums of gastronomy. His PhD is in the “sociology of cuisine” from Flinders University. For more: https://mealsmatter.net/

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Great academic opportunities: 13 calls for papers, 12 jobs, 7 post-docs, 3 PhD fellowships, 2 summer schools, a grant

Dear ES/PE community member, see below a list of great academic opportunities:call for papers  13 calls for papers for conferences and special issues, 12 job openings, 7 post-doc positions, 3 PhD fellowships, 2 summer schools, and a grant in various areas of economic sociology, political economy, and related fields, with November 1 — December 1 deadlines. Share this post with your colleagues and students. Best wishes and good luck!
> A reminder: Do you want to attend the most interesting and promising online talks and webinars on various topics in economic sociology and political economy from all over the world? Follow the ES/PE’s Facebook page and Twitter to have information about these events that is publicized only on our social media several days before each event.

Calls for Papers:

> CfP: “Global Labor and Supply Chains“, New Global Studies’ special issue. DL: November 1

> CfP: The First Doctoral Conference on the Social and Political Constitution of the Economy, organized by the International Max Planck Research School (Cologne, Germany), ONLINE, March 24–26, 2021. DL: November 8

> CfP:  Theory, History, Sociology, Philosophy, Methodology, and Policy”, International Symposium on Economic Thought by the Research Platform on Economic Thought, ONLINE, 28-30 November, 2020. Keynoters: Gerald Friedman, James Kenneth Galbraith, Geoffrey Hodgson, Marianne Johnson, Louis-Philippe Rochon. No fee. DL: November 8

>   CfP: “The Politics of Regulation and Central Banking“, The Centre for Economic Policy Research conference series on the political economy of finance, Rotterdam School of Management on ONLINE,  February 12, 2021. Keynote: Francesco Trebbi. No submission fee. DL: November 15

> CfP: “Home- and Community-Based Work at the Margins of Welfare: Balancing between Disciplinary, Participatory and Caring Approaches“, Social Inclusion‘s special issue. DL: November 15

CfP: “Business History: Building for the Future“, Annual Meeting of the Business History Conference, ONLINE, March 11–14t, 2021. DL: November 14

> CfP: “A Transformational Moment? Work, Worker Power and the Workplace in an Era of Division and Disruption“, the 73rd Labor and Employment Relations Association conference, ONLINE, June 3 – 6, 2021. DL: November 15

> CfP: “The ‘new’ social relations of digital technology and the future of work“, New Technology, Work and Employment‘s special issue. DL: November 30

> CfP: The Max Planck Online Workshop in Comparative Political Economy — a new monthly online seminar series in comparative political economy hosted by the Max Planck Institute for the Study of Societies, starting in January 2021. DL: November 30

> CfP:  “Leveraging Chinese dreams and capital: State power dynamics and sub-national industrial manoeuvres” workshop and special issue, City University of Hong Kong and ONLINE. DL: November 30

> CfP: “The Role of the State in the post-COVID 21st Century”, the 15th International Karl Polanyi Conference organized by Karl Polanyi Institute of Political Economy (Concordia University), ONLINE, April 22-24, 2021. Keynoters: Sheila R. Foster, Robert Kuttner, Ann Pettifor, Quinn Slobodian. DL: December 1

> CfP: “A World of Things’: Consumerism, Consumption, and Commodities” virtual conference organized by the World History Association of Texaz and Texas A&M University-Commerce, February 20, 2021. DL: December 1

> CfP: “Making and Breaking Boundaries in Work and Employment Relations“, the 19th  International Labour and Employment Relations Association congress, Lund University (Sweden) and ONLINE, June 21-24, 2021. DL: December 1

PhD Fellowships

> PhD scholarship on platform workers in the project “The Digital Economy at Work”, Dept. of Sociology, University of Copenhagen (Denmark). DL: November 1

> PhD studentship on informal and shadow economies, Tallinn University of Technology (Estonia). DL: November 20

> PhD student in the frame of “Mapping Uncertainties, Challenges and Future Opportunities of Emerging Markets: Informal Barriers, Business Environments and Future Trends in Eastern Europe, The Caucasus and Central Asia”, The Aleksanteri Institute, University of Helsinki (Finland). DL: November 30

Postdoctoral Positions: 

Postdoctoral Social Scientist in the field of Private Wealth Research for a project led by Professor Jens Beckert at the Max Planck Institute for the Study of Societies in Cologne (Germany). DL: November 1

> Unestablished University Lectureship in Economic Sociology, Department of Sociology, University of Cambridge (UK). DL: November 7

> The Hellenic Bank Association Postdoctoral Fellowship in Contemporary Greek and Cypriot Studies to focus on Political Economy, the European Institute at the LSE (London, UK). DL: November 15

> Two Postdoctoral Scholar to work on socio-economic inequality, the Stone Center on Socio-Economic Inequality, The Graduate Center, CUNY (USA). DL: November 15

> Postdoctoral researcher within the framework of a project ‘‘Reconnecting Citizens to the Administrative State?’, the Institute of Public Administration of Leiden University (The Netherlands). DL: November 18

> Inequality in America Initiative Postdoctoral Fellowship, Harvard University. DL: November 20 

> Postdoctoral Research Associate working on international and comparative political economy, international organization and global governance, and globalization, Niehaus Center for Globalization and Governance, Princeton University (NJ, USA). DL: November 27


> The Russell Sage Foundation funding on : Future of Work / Social, Political and Economic Inequality. DL: November 11

Summer Schools:

> CfA: “Sustainable Work” summer academy for PhD students and post-docs, Research Network Working Futures and Centre Marc Bloch,  Caputh (near Berlin, German) , May 26-29, 2021. DL: November 30

> CfA: “On the Political Economy of Digitality“, Lucerne Master Class for PhD Students with Marion Fourcade, University of Lucerne (Switzerland), April 26– 30, 2021. Catering and accommodation expenses will be covered; travel expenses will be partly reimbursed. DL: December 1

Job openings:

> Associate Lecturer/Lecturer in Political Economy, the School of Social & Political Sciences, University of Sydney (Australia). DL: November 1

> A tenure-track Assistant Professor in Economic Inequality, the Department of Sociology, Boston University (MA, USA). DL: November 1

>  A tenure-track faculty position on all levels in Employment / Industrial Relations, the School of Labor and Employment Relations, University of Illinois Urbana-Champaign (USA). DL: November 1

> Three permanent posts of Lecturer or Senior Lecturer in Economics specializing in feminist economics / history of economic thought / critical economics / qualitative research / institutionalism / development economics,  the Business School, University of the West of England, Bristol (UK). DL: November 1

> Assistant Professor in Public Policy focusing on economic and social inequality and stratification, Scrivner Institute of Public Policy – Josef Korbel School of International Studies, University if Denver (CO, USA). DL: November 1

> Endowed professorships at any rank who focus on class and inequality, the Stavros Niarchos Foundation Agora Institute at Johns Hopkins University (MD, USA). DL: November 6

> Assistant Professor of Sociology and Anthropology & Black Studies specializing in Economic Sociology, Providence College (RI, USA). DL: November 13

> Senior Researcher in sociology / social policy / political science, The W.E. Upjohn Institute for Employment Research, Kalamazoo (MI, USA). DL: November 15

> Tenured Associate Professor focusing on risk management / entrepreneurship / health / digital business and analytics / social impact, the Boston University Questrom School of Business. DL: November 30

> Researcher or Senior Researcher with a focus on International Political Economy, the Danish Institute for International Studies (Copenhagen). DL: November 30 

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B&B: Debt is a social construction // Erasure of a black middle class // Miseducation and inequality // Neoliberal quantification in academia // Promoting democracy or “free market” ideas?

> “Debt is a social construction, fundamentally malleable, and what’s unmanageable must eventually be seen as immoral” — Olivia Schwob discusses the long history of debt cancellation and calls to consider taking this path, reflecting on excellent books on debt and credit: Bruce Mann’s Neighbors and Strangers: Law and Community in Early Connecticut and Republic of Debtors: Bankruptcy in the Age of American Independence, Philip Gura’s Man’s Better Angels: Romantic Reformers and the Coming of Civil War, Louis Hyman Debtor Nation: The History of America in Red Ink, David Graeber’s  Debt: The First 5,000 Years, and Strike Debt! movement’s Debt Resistors’ Operations Manual 

> Since the 1980s, the enemies of equal employment and upward mobility for blacks have been the corporate governance and maximizing Shareholder Value ideologies that smashed unionized jobs — by William Lazonick, Philip Moss, Joshua Weitz

> How does the class inequalities persists in education from the transition to secondary school up to university. Natasha Codiroli Mcmaster reviews and Diane Reay’s book that displays the personalisation of everyday working-class experiences and statistics on inequality —  Miseducation: Inequality, Education and the Working Classes

> Do you want to attend the most interesting and promising online talks and webinars on various topics in economic sociology and political economy from all over the world? So follow the ES/PE’s Facebook page and Twitter to have information about these events that are publicized only on our social media several days before each conference.

> How do new forms of digital and mobile money impact people’s everyday financial lives?  How do these technologies intersect with other financial repertoires as well as other socio-cultural institutions? How do they shape the global politics and geographies of  inequality? Smoki Musaraj and Ivan Small present their book (co-edited also by Bill Maurer) Money at the Margins: Global Perspectives on Technology, Financial Inclusion, and Design

> Neoliberal quantification at work: When in 2010 universities incorporated citations in promotion decisions, scholars’ self-citation rates went up by 81-179%, reveals a paper “Self-citations as strategic response to the use of metrics for career decisions” by Marco Seeber, MattiaCattaneo, MicheleMeoli, and Paolo Malighetti (open access)

> Arjun Appadurai contends that one of problems of The Light That Failed: Why the West Is Losing the Fight for Democracy is Krastev and Holmes’ inattention to the US and West’s promotion of their economic interests in the Eastern Europe in the 1990s, making aid and trade conditional on accepting the “free market” ideas

> 740 Park Avenue, Manhattan, is home to the 1% of the 1%. Ten minutes to the north, half the population need food stamps. Park Avenue: Money, Power and the American Dream is an excellent documentary (especially for teaching) about rocketing inequality in the US in the last 30 years (open access on Youtube)

debt credit history

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Polanyi’s Prescience: Covid-19, Market Utopianism, and the Reality of Society

by Margaret Somers and Fred Block *

One of Karl Polanyi’s fundamental concepts is ‘the reality of society’, a term he uses in The Great Transformation (TGT) (Polanyi 1944/2001) to contest the idealised model of the autonomous self-regulating market. Modern economies, he argues, are comprised as much by ‘society’ – our collective social interdependence and political institutions – as they are by ‘market forces’. Polanyi’s concept is both descriptive and normative, macro and micro: at the micro level, not only are we inextricably socially interconnected so that each person’s actions affect the fates of unknown numbers of others; we are also ethically responsible for the far-reaching consequences of our own behaviours. And at the macro, really existing markets, even in a so-called ‘free-market’ regime, are fundamentally constituted by political power and civil society institutions.
The reality of society is Polanyi’s challenge to the two foundational assumptions of today’s market fundamentalism: One, that economic processes are driven by an aggregate of autonomous individuals, each of whom seeks to maximise his or her utility, and for whom freedom depends upon absolute independence and sovereignty. Two, that national prosperity is best served when organised through self-regulating global markets, free of governmental inefficiencies and perverse social conditionalities. If Polanyi’s nemesis in the first instance is Margaret Thatcher’s famous assertion that ‘There is no such thing as society…’, the second is today’s lean ‘just in time’ global supply chain system that invests only in a low-paid ‘flexible’ precariat, designed to avoid costly inventories by producing all commodities on the global cheap in response to immediate market signals, and in defiance of what public health professionals define as the vital social infrastructural needs and public goods essential to the long-term well-being of populations.
For Polanyi, these two precepts – radical individualism and a theology of the ‘self-regulating’ market-centred society – add up to what he calls a ‘stark utopia’. It is utopian because, like all utopias, market fundamentalism represents an imaginary ideal based not on actual human experience, but on a thought experiment. In this case, the ideal is a world dominated by the propertied, free of political, social, and democratic interference, and modelled on the make-believe symmetry between the laws of nature and the laws of the market. For Polanyi this is a fictional delusion. While they are made to appear ‘natural’ human economies are social and political institutions. And while capitalism treats people with the callousness of Thatcherites, in practice it knowingly exploits the care and mutual support people, by necessity, provide to each other.
It is also utopian because commodifying our vital social substances requires massive social and political engineering – the continuous exercise of political and economic power, which conflicts with the market’s claim to being ‘natural’. Among Polanyi’s greatest insights is that the alleged absence of state power in a free-market regime is chicanery. For while government ‘meddling’ in the interest of the public good is said to have perverse consequences, the government is very much the market’s accomplice-in-chief in redistributing wealth and income upward, as, for example, when taxpayers fund vital medical research which, under the guise of public-private partnerships, accrues private gain exclusively to pharmaceutical companies.
And finally, it is utopian because a self-regulating market can never be realised without destroying the society it aims to marketise. The market fundamentalist ideal requires that almost all the social and natural world be commodified and subject to the price mechanism. Yet it is only by removing certain social substances from the market that social life remains viable. The more widespread the commodification, the more destined it is to produce a dystopia that threatens the survival of humanity.
In The Great Transformation Polanyi explains how that dystopian nightmare erupted in the late 1920s and 1930s, first in a world-wide economic collapse that caused untold suffering, and then into fascism, which threatened the future of humanity. Today, Covid-19 has precipitated another global crisis: It has exposed the profound damage that market utopianism has imposed on our collective well-being, producing afflictions that have already taken the U.S. far down the road to dystopia.

Covid-19 has confronted the U.S. with two overwhelming challenges. One, how to contain its exponential spread across the population, and second, how to cope with the overwhelming strain on the nation’s flimsy healthcare system. More than anywhere else, the U.S. has failed spectacularly with each of these, and Polanyi can help us understand why: each of these failures maps precisely onto the micro and macro fault lines of market utopianism.
For forty years we have been told that human freedom depends on absolute autonomy unimpeded by other people or government; that taking risks is a personal matter; and that assuming individual responsibility for whatever suffering we endure is what makes us morally worthy. Pandemics make a mockery of this worldview. Contagion, by its very nature, thrives on the reality of social interconnectedness. So, in the effort to curb the spread, public health experts from the outset mandated a series of critical practices – repeated hand washing, no touching, hugging, or hand-shaking, social distancing, staying at home.
At first it appeared that ‘we’re all in this together’ had overtaken the folly of ‘I’m on my own’. But few would have predicted what happened when public health experts declared that mask-wearing in public settings is essential to stop the spread of the virus. Much to everyone’s surprise, this seemingly innocuous face covering exposed just how deadly is the claim that freedom lies in being only responsible for oneself. For the paradox of masks, like the reality of society, is both sociological and ethical. We wear them not to protect ourselves but to protect others from the airborne particles we may unknowingly transmit, just as others wear them to protect us. Masks, it turns out, embody the truth of Polanyi’s ethics of solidarity. Wearing them indicates a recognition that our de facto interconnectedness inevitably risks infecting others, and mask wearing expresses our understanding that we are implicated in the fates of all those around us.
The consequence has been an extended mask war between conflicting freedoms – the freedom from getting infected by others versus the ‘threat to individual liberty’ many claim its wearing imposes. In Flint, Michigan, a store employee was shot dead for asking a customer to wear a mask. In Tulsa, Oklahoma, where Trump gave a huge indoor rally, the state’s governor refused to require attendees to wear masks because he ‘didn’t want to take sides in a political debate’. In Nebraska, the governor passed an executive order denying critical funding to any municipalities that require mask wearing. A Montgomery, Alabama City Councilman voted against mandatory mask-wearing by declaring ‘[a]t the end of the day, if an illness or a pandemic comes through we do not throw our constitutional rights out the window’. Most prominently of all, and with a boastful defiance of what he calls ‘political correctness’, President Trump triumphantly models his mask-free virility by holding indoor political rallies, corralling thousands of his followers into congested assemblages where they shout and spew particles on one another, all the while celebrating their freedom to refuse masks.
Covid-19 has clearly precipitated a dramatic confrontation between Polanyi’s opposing principles of the reality of society and the putative freedom of radical individualism. Contagion couldn’t hope for a better host than an illusory utopianism that defies the mortal urgency of ethical solidarity. In contrast to most other countries, infection rates in the U.S. continue to rise as the virus free rides on the back of the denial of the reality of society.

Even before the mask wars broke out, the most immediate and shocking impact of Covid-19 was its exposure of the catastrophic weaknesses in the US healthcare system. Everything was in short supply – personal protective equipment, N95 masks, ventilators, hospital beds, and the all-important testing kits. Instead of sanctuaries for the sick, hospitals became nothing short of dystopias as nurses and doctors were forced to reuse contaminated masks and to swaddle themselves in garbage bags. To date, hundreds of healthcare workers have died of the virus, many of whom could have been saved with the right protective gear. And there’s no way to know how many of the approximately 140,000 dead Americans might be alive today had there been adequate medical supplies and care.
How was this possible in the richest country in the world? This is where Polanyi’s macro critique of market utopianism becomes relevant. In a system of production and exchange organised exclusively by short-term market signalling, the needs of public health are systematically undermined. In just-in-time global supply chains, anything not being used is seen as a drag on the system; stockpiles have all disappeared, even those once used for indispensable medical supplies. Why pay for hospital beds that aren’t being used? Or for a back inventory of ventilators if they can be procured whenever the market demands? In a system organised by the assumption that companies should only buy when necessary, manufacturing medical commodities has chiefly migrated abroad to seek the lowest labour costs (and the meanest conditions), leaving the U.S. with virtually no domestic production of medical necessities.
The fragility of such a system is stunningly obvious, and in a matter of weeks from the pandemic’s arrival the global supply chains collapsed so dramatically that it was a crash heard around the world. In the face of overwhelming shortages, the Trump administration followed the market utopian playbook perfectly. The government refused to help provide essential supplies for the states and, pressured by private business, declined to deploy the 1950 Defence Production Act that would have required manufactures to produce necessary supplies. Instead, evoking the chillingly dystopian Hunger Games, Trump watched with perverse amusement as he forced the fifty states to compete frantically against each other to get the urgent medical equipment – by whatever means and at any cost. Denying there was a shortage, Trump even accused hospital workers of stealing masks and equipment. Combined with the absence of any meaningful social infrastructure for health care – counties with no hospitals in the wake of Medicaid cutbacks; ICU’s with insufficient beds; sick Americans without health insurance who simply forego medical care; healthcare workers receiving counterfeit masks and PPE – the American encounter with Covid-19 has proved the truth of Polanyi’s inevitable path from market utopianism to dystopia
The health care crisis exposes the tragic consequences of organising social life around the deadly logic of market utopianism, in which there is no place for public health. Public health treats disease not from the perspective of the healthcare industry but from the understanding that pathogens thrive in the deep webs of interconnectedness that characterise whole populations. Tasked with anticipating and preventing disease, public health work requires removing certain life and death necessities from the commodity regime and disentangling health care from the churn of the global market. This would entail government stockpiling of essential medical supplies as well as public investment in medical research, not only in funding but also in controlling the distribution and pricing of critical medicines and vaccines rather than handing over the work of public innovation to the logic of the marketplace – a logic that too often leads Big Pharma to abandon unprofitable vaccines and antibiotics. Above all, public health requires government planning, an old-fashioned word that was weaponised during the Cold War to evoke Soviet inefficiencies, the perversion of business incentives, and the alleged ‘road to serfdom’ posed by any deviation from Hayek’s free-market spontaneity.
As a democratic public good, public health planning conflicts fatally with market utopianism. Reflecting on the collapse of civilisation in the 1930s, Polanyi wrote: ‘[T]he victory of fascism was made practically unavoidable by the liberals’ [market utopians’] obstruction of any reform involving planning, regulation, or control’ (Polanyi 1944/2001, p. 265). This obstruction does not reflect a conflict between market versus government, for the market always entails state ‘planning, regulation, [and] control’, and Covid-19 demonstrates once again just how much the state is handmaiden to the market. The real question is to what end government control is being exercised and to what kind of power will it be subject-democratic or oligarchic? Is it toward commodifying, defunding and enfeebling the infrastructure of public health in the interest of corporate gain? Or toward strengthening the public good by enhancing solidarities across the whole population by decommodifying and supporting the human right to health care? 
For the dirty little secret of even the most marketised of societies is that none can survive without robust social underpinnings. The problem arises when, with the power of state behind it, the market devours those foundations by turning its elements into commodities. This happens when medically necessary supplies are subjected to the whims of the price mechanism, and when workers are forced by bosses and government mandate (as in the case of the meatpackers) to sacrifice their health and possibly their lives. Add to that the tragedy of African American, Latino, and Native American communities disproportionately dying of the virus–because they make up the predominant share of the low-paid ‘essential’ workforce and cannot work from home, and because the American health care system is riven with systemic racism. While markets are fine for widgets and iPads, ‘To allow the market mechanism to be sole director of the fate of human beings and their natural environment … would result in the demolition of society’ (Polanyi 1944/2001, p. 76).

Covid-19 has revealed how deeply entangled are the deadly trio of market utopianism, the denial of society, and the descent into dystopia. At a similarly dark moment in history, Polanyi praised the progressivism of Franklin Roosevelt’s New Deal to make the point that fascism in Europe was not the only or the necessary response to the contemporary crisis. Many hold out hope that today’s pandemic sets off a similar period of progressive democratic change. Yet the threat of a regressive and authoritarian regime designed to protect the interests of the wealthy remains very real. As Polanyi tried to teach us decades ago, rediscovering the reality of society can lead either to social reform or to fascism.

— Polanyi, Karl. 1944/2001. The Great Transformation: The Political and Economic Origins of Our Time. Boston: Beacon Press.
* Margaret Somers is Professor Emerita of Sociology and History University of Michigan, Ann Arbor; Fred Block is Research Professor of Sociology at the University of California, Davis. They are co-authors of The Power of Market Fundamentalism: Karl Polanyi’s Critique (2014). This article was originally published in Karl Polanyi: The Life and Works of an Epochal Thinker, edited by Brigitte Aulenbacher, Markus Marterbauer, Andreas Novy,  Kari Polanyi Levitt, and Armin Thurnher (2020)

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The ES/PE community on social media

Dear email subscribers and WordPress subscribers to the Economic Sociology and Political Economy community blog, this post is mainly for you. Wouldn’t you like to know and recall, what we talked about the day before the Nobel Prize in Economic Sciences announcement in 2018 or 2015? Wouldn’t you be interested to remember what was the most read post in 2014 and how it foresaw the recent Pope Francis rebuke of capitalism and “market freedom”? Of course you would! So how do you do that? Easily! Just follow the ES/PE community also on FacebookTwitterLinkedInInstagramWhatsapp, Tumblr, Telegram, or Reddit. On these ‘social media’, in addition to new posts, our best and most intriguing past posts are constantly shared. Since the ES/PE community foundation in the turbulent summer of 2011, several thousands entries, links and posts have been aired. In my clearly unbiased opinion, many of them are worth rereading, thinking over and circulating. Others reflect changes the academic and public fields of Economic Sociology and Political Economy have gone through and in this way they show the progress that has been achieved.
To this I will add a fascinating new aspect. The COVID-19 pandemic brought about an evident change: widespread conduct of webinars and lectures on Zoom or similar videoconferencing applications. Any lecture is a click away! So, I recently started to post on Facebook and Twitter announcements of promising and very interesting webinars taking place in universities all over the world. This kind of information will be exclusively publicized on social media because of the dynamic nature of these events. This is another significant reason to join us on Facebook and Twitter.
The ES/PE community is the largest global online scholarly society — we count currently more than 65,000 members on all our platforms. But deliberate algorithm manipulations by Tech giants we rely on decrease the exposure and reduce the virality our posts. So in order to possibly overcome this profit-driven blockage, if you already liked ES/PE on Facebook, you should join also ES/PE on Twitter and LinkedIn — then the probability of missing our contents is likely to lessen. Recently, ES/PE Whatsapp and Telegram channels were launched — and they quickly become popular due to wide distribution of these mobile apps.
So, see you on social media! Of course, feel free to invite your colleagues, students and friends interested to better understand the socio-political foundations and features of the economy and economics. 
Thanks! Oleg Komlik 

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Political Economy After Neoliberalism: A Manifesto for New Thinking

by Neil Fligstein and Steven Vogel*

If anything could have dislodged the neoliberal doctrine of freeing the market from the government, you might have expected the coronavirus pandemic to do the trick. Of course, the same was said about the global financial crisis, which was supposed to transform everything from macroeconomic policy to financial regulation and the social safety net.
Now we are facing a particularly horrifying moment, defined by the triple shock of the Trump presidency, the pandemic, and the economic disasters that followed from it. Perhaps these—if combined with a change in power in the upcoming election—could offer a historic window of opportunity. Perhaps. But seizing the opportunity will require a new kind of political-economic thinking. Instead of starting from a stylized view of how the world ought to work, we should consider what policies have proved effective in different societies experiencing similar challenges. This comparative way of thinking increases the menu of options and may suggest novel solutions to our problems that lie outside the narrow theoretical assumptions of market-fundamentalist neoliberalism.
Neoliberalism implies a one-size-fits-all set of policy solutions: less government and more market, as if the “free market” were a single equilibrium. To the contrary, we know that there have been multiple paths to economic growth and multiple solutions to economic crises in different societies. By recognizing that there is not one single path to good outcomes, that real-world markets are complex human constructions—governed in different places by different laws, practices, and norms—we open up the possibility that policies that seem objectionable in light of neoliberal abstractions may deliver high performance along both social and economic dimensions.
We know about these possibilities from the work of economic sociologists, who stress the political, cultural, and social embedding of real-world markets. From work in comparative political economy, demonstrating how the relationships between government and industry and among firms, banks, and unions vary from one country to another. From political and economic geographers, who place regional economies in their spatial contexts and natural environments. From economic historians, who explore the transformation of the institutions of capitalism over time. From an emergent Law and Political Economy (LPE) movement that aspires to shift priorities from efficiency to power, from neutrality to equality, and from apolitical governance to democracy. And from economistsoften villainized as the agents of neoliberalism—who are exploring novel approaches to the problem of inequality and the slowdown in productivity, and show renewed concern with the economic dominance of a few large firms.
The challenge is to bring these insights together.
As a step in this direction, we will propose three core principles of an alternative political economy. We then illustrate these principles by discussing the dynamics of the American political economy, focusing particularly on the rise of “shareholder capitalism” in the 1980s. Finally, we apply the principles to the ongoing national policy responses to the COVID-19 pandemic, comparing the United States to Germany.
We recognize that these principles do not resolve the very real problem othe dominance of business in U.S. politics and the political gridlock produced by this configuration of power. Still, they point in new and urgent directions.

First, then, governments and markets are co-constituted.
Government regulation is not an intrusion into the market but rather a prerequisite for a functioning market economy. Critics of neoliberalism often make the case for government “intervention” in the market. But why refer to government action as intervention? The language of intervention implies that government action contaminates a market otherwise free of public action. To the contrary, the alternative to government action is not a perfect market, but rather real-world markets thoroughly sullied with collusion, fraud, imbalances of power, production of substandard or dangerous products, and prone to crises due to excessive risk-taking.
Likewise, critics of neoliberalism often adopt the fictional “free market” as a reference point even as they make the case for deviation from it. For example, they follow the standard practice of economists by identifying market failures and proposing solutions to those failures. To be fair, this can be a useful way to see how government action can remedy specific problems, and to assess when action may be helpful or not. But this approach also risks obscuring the fact that market failure is the rule and not the exception. More fundamentally, the government is not a repair technician for a market economy that functions reasonably well, but rather the master craftsperson of market infrastructure.
Thus, governments pacify a territory and centralize the means of violence, making investment safer and trade less precarious. They create ways to write and enforce contracts via the rule of law. They provide public goods like education and transport infrastructure. No neoliberal denies the value of these things.
Beyond these basic functions, governments establish the conditions for the emergence of new markets, provide the architecture to stabilize existing ones, and manage crises to limit damage and facilitate recovery. Historically, governments fostered many of the largest markets, such housing and banking, by designing new market structures that enabled the mass expansion of goods and services. In the case of the housing market, the U.S. federal government created the 30-year fixed interest rate mortgage as the standard mortgage product. It also stabilized the savings and loan industry by creating rules about paying interest on bank accounts and deposit insurance.
In the postwar era, this system helped propel home ownership from around 40 percent to 64 percent. More recently, many policy failures, such as the financial crisis of 2007–2009, occurred because governments shirked their role of making markets work through “deregulation.” Essentially, the U.S. government allowed financial institutions to enter whichever businesses they liked and with little oversight. In the wake of the Great Recession, predictably, the government re-established control and oversight over the banking sector with the Dodd-Frank Act. One of the provisions of that act was to give the Federal Reserve the ability to ask the largest banks to undergo stress tests every year to determine whether or not they could manage a serious downturn.
Governments also support knowledge creation and dissemination and underwrite the cost of innovation in the private sector. They facilitate the organization of market activity by establishing the legal basis for corporations and by setting the rules for fair and efficient trading practices on stock exchanges. A political economy that does not value the role of government along these different dimensions distorts how markets do contribute to society.

Second, real-world political economy hinges on power, both political and market power. Specific forms of market governance—of the kinds we just sketched—do not arise naturally or innocently. They are the product of power struggles between firms, industries, workers, and governments within particular markets and in the political arena. Those with more power and wealth, especially incumbent firms, seek to shape governance in their favor. There is no natural equilibrium point of perfect competition devoid of power, but only a spectrum of power balances between employers and workers, incumbents and challengers, lenders and borrowers, and so on.
For example, we tend to think of labor market regulation as the protection of workers from exploitative employers. But labor market regulation can also protect employers from workers by imposing restrictions on union formation or strike activity. So the balance of power between employers and workers is not inherent to the market, but reflects the historic battles that forged the particular forms of governance in the economy. The fact that there is no “state-of-nature” has important implications for how we analyze labor markets and design policy solutions. For analysis, it means that we should not take any given state as a reference point or a default, but rather try to understand how real-world labor markets are governed, how that governance came to be, and what consequences it has.
In the United States, for example, the Reagan administration confronted public sector unions by firing air traffic controllers who were on strike, appointing more business-friendly representatives to the National Labor Relations Board, and enacting rule changes that made it harder for unions to win elections and easier for companies to decertify unions. And this in turn emboldened managers to engage in more aggressive anti-union strategies.
For policy, since there is no “power-free” solution but only an infinite variety of power balances, we should not be too shy about turning the dial to recalibrate the balance in the public interest.
So political economy should investigate how political and market power interact. For example, we should not take a firm’s market dominance as a given, perhaps needing some corrective action, but investigate how that dominance might itself reflect political influence and social privilege. Likewise, we should understand the political power of a firm or an industry as more than financial contributions or lobbying because a dominant market position—for example, in transportation or information—can generate influence even in the absence of political activity.
This means that political economy needs to integrate multiple levels of analysis, including government, industry, firm, and individuals. Political scientists cannot understand politics without understanding what is happening at the firm level, and how that shapes what businesses lobby for. Business scholars cannot understand corporate strategy without examining how businesses press for regulatory changes that support their business strategies and how they take advantage of those changes once enacted.

Third, there imore than one way to organize society to achieve economic growth, equity, and access to valued goods and services. The balance of power between government, workers, and firms differs greatly across countries and time. And the different power balances in different countries shape distinctive national trajectories of policies. We can expect that the governing institutions will reinforce the status-quo balance of power, particularly in a crisis. It is rare for any one set of actors to have total control in a society, a condition that would lead to extreme rent-seeking behavior. Instead we see constant contestation between different sets of organized actors but a general balance of power that reflects the dominance of one side or another. One of the most reproduced empirical results from comparative political economy is that the same crisis will beget very different policy responses from societies that have different balances of power between the state, labor, and capital. If one takes a long-run view of economic development in the developed world, one can see that a great variety of these arrangements are compatible with innovation and growth.
Abandoning the neoliberal lens of government versus market and the “one best way” perspective opens up the possibility of a profound rethinking of economic policy that seeks to learn from the great variety of capitalisms that actually exist. One intriguing implication of this understanding is that a new political economy implies a turn toward what is sometimes called the “predistribution agenda.” Redistributive policies take the market allocation of income and wealth as a given and devise ways to moderate the inequalities that markets generate. Predistributive policies focus on how market governance—such as corporate governance, labor regulation, financial regulation, or antitrust policy—affects who benefits from economic activity in the first place. We can learn from the experiences of other societies where different policies and institutions have been tried and found to work more equitably. The government could enact reforms in these areas to give workers a more powerful voice in corporations; push financial institutions to deliver more value for the economy and fewer rents to themselves; shift the balance of power between employers and workers; or constrain market power to benefit both workers and consumers. That would not undermine American capitalism but revitalize it.

To illustrate these three general ideas, consider the case of corporate governance. The standard models assume that firms maximize profits by making the right kinds of investments to produce goods at the lowest prices. But there is a lot of evidence that firms actually favor the stabilization of markets or organizational survival over profits.
Incumbent firms are threatened by the possibility that a disruptive challenger could come along and offer a lower price or a better product, or develop a breakthrough innovation that would render the incumbent’s product obsolete. So they deploy a combination of political strategies, such as lobbying, and corporate strategies, such as alliances and mergers, to insulate themselves from such threats. Their efforts to ensure stability include tactics such as setting industry standards—which could be formal, like technical standards, or informal, like industry-specific codes of behavior. In essence, firms can achieve profits and stability via value creation, rent extraction, or some combination of the two. But if they cannot be sure that they will always be able to outrun the competition, they turn to political and business strategies to ensure that they will survive even if they do not.
This perspective on firm behavior is not only more accurate than a profit-maximization model, but it can account for behavior that cannot be explained by that model. It makes sense of much of what we read in the business news, from U.S. big tech firms that buy out tiny rivals at huge premiums to Japanese firms that hold each other’s stocks rather than optimize their investment portfolios. Hence a political economy perspective can be used to explain the outcomes that policy makers, business leaders, and economists care about most, such as corporate profits, economic rents, wages, and investment.
Moreover, this line of inquiry can be usefully applied to variations across countries, regions, sectors, firms, or time. For example, if we look at the gradual transition of the U.S. corporate governance model from a managerial model in the early postwar era to the shareholder model of today, we uncover a long series of lobbying efforts to change laws and regulations, legal strategies to transform the meaning of those laws and regulations, and business practices to shift corporate governance to deliver higher returns to both shareholders and corporate executives. Hence this case illustrates each of the three principles outlined above: the interpenetration of government and market, the centrality of power, and variations across time and space.
The shareholder value system in the United States reflects the long-term dominance of capital over labor and government. In the shareholder value era, this dominance consistently provided ideological and political support for the policy agendas of firms. For example, financial liberalization beginning in the 1980s allowed the financial sector to take more risks with financial innovation and to break down the barriers between banking businesses, such as commercial banking, brokerage, and insurance. This was all done in the name of making markets more “efficient.” The idea was that financial firms should be able to buy and sell risk of any kind, and this would increase the depth and liquidity of financial markets. Financial firms claimed that they would manage risk because they were the ones who would suffer from any bad investments. In the early 2000s, the financial sector with about 11 percent of employment earned almost 40 percent of all of the profits in the American economy. We now know that they were able to do so not because financial innovation produced efficient capital markets, but because they were able to take huge risks without much oversight.
The shareholder value revolution in the United States featured a set of tactics that have increased the share of national income to shareholders and decreased the share going to everyone else. In the 1980s, firms bought out other firms, closed plants, and outsourced production, often to foreign countries. In the 1990s, when these tactics had run their course, firms turned to reducing their layers of management. They fired a whole generation of managers and pushed managers who remained to work 24/7. They invested heavily in computer technology to increase control over remaining employees. Work became more insecure not just for lower-skilled workers but for everyone.
In the past twenty years, firms have constructed global supply chains, thereby making outsourcing more profitable and propelling the rise of China as a manufacturing power. U.S. firms have engaged in mergers with their competitors, raising market concentration. The shareholder model has fueled the unprecedented rise in U.S. income and wealth inequality since the 1980s. It has done so by rewarding top managers with shares, giving them an incentive to manipulate share prices as a major goal of corporate strategy. In the past ten years, American firms have spent massive amounts of money buying back their own shares to raise stock prices.

The COVID-19 pandemic has exposed the fallacies of the neoliberal paradigm especially starkly. It highlights the fact that the government—and not the market—is the only viable solution to some of our greatest challenges. The private sector and market incentives could not manufacture, procure or deliver the key supplies needed to combat the virus, including tests, ventilators, or personal protective equipment. The market could not keep businesses running or people working. And the private sector was not willing or able to make the massive investments required to design new therapies or to develop a vaccine.
Moreover, those countries that had gone the furthest with neoliberal policy reforms—such as the United States and Britain—were the least well equipped to manage the public health and economic crisis. As stressed above, a society with a particular balance of power between labor, capital, and the government is likely to produce policy solutions to a crisis that benefit those who dominate in that society. So what would that mean for the current crisis? Consider a brief comparison of the United States and Germany. We choose the United States as a country where capital dominates over labor and the state and Germany as a country with a more even balance of power among these actors.
We readily concede that the quality of the top leadership in the two countries explains part of the enormous gap between the two countries in containing the pandemic, caring for the ill, and supporting businesses and workers through the economic downturn. By the end of September, the United States had 2,203 cases and 92 deaths per 100,000 people, whereas Germany had 355 cases and 17 deaths. Yet there is also a strong propensity to favor capital over labor in the U.S. government’s approach. The Trump administration’s initial reluctance to confront the pandemic and its later eagerness to reopen the economy revealed a preoccupation with the performance of the stock market and continuation of business activity, even at the expense of the health of workers and citizens.
Meanwhile, the fragmented nature of U.S. health care provision and insurance impeded the delivery of health care services. Some people did not seek care because they were not insured. Others lost health insurance coverage when they lost their jobs. Moreover, the government had excluded huge segments of the population from the circle of care via the carceral state: locking them up in prisons and jails, threatening them with deportation, or throwing them out on the street. Just as before the crisis, the U.S. healthcare system provided less access at a higher cost relative to Germany and most other advanced countries.
The U.S. federal government’s economic packages have favored businesses, especially large businesses. The United States lacked strong public-sector financial institutions or the ability to coordinate private sector financial institutions that could have enabled it to support businesses more effectively. The U.S. government allocated its rescue funds through the Small Business Administration and the private banking system, but this led to inefficiency, inequity, and fraud. The lack of paid leave and job security schemes meant that the stimulus package had to work through corporate subsidies and unemployment insurance rather than job protection.
The U.Sunemployment rate jumped from 3.5 percent in February to 14.7 percent in April, while the German rate rose from 4.7 percent to 5.5 percent. Congress provided an extra $600 per week unemployment benefit under the CARES Act, which passed in late March, but those benefits expired at the end of July. And Congress has not given state governments the support they need to preserve public services. The Federal Reserve provided massive liquidity to financial markets and purchased various kinds of financial assets to support asset prices. The rebound of the stock market can only be read as the government siding with shareholders over everyone else. Business has been protected while citizens have borne the brunt of the virus and the economic downturn.
In contrast, the German government addressed the spread of the virus rapidly with a coordinated program of social distancing, testing, and contact tracing. The German health system had a higher reserve of supplies, an ample supply of intensive care units, and it was able to ramp up testing and ICU capacity quickly. Germany already had a short-term work (Kurzarbeit) program, which had operated successfully through the global financial crisis, to pay most of the lost wages so that firms could retain workers through a downturn. So, the government simply reinforced this program for the new crisis. The government also coordinated with the federal development bank (KfW), the public state-level public banks (Landesbanken), and the commercial banks to mobilize its program of state-guaranteed loans for business. So far the country with a power base that favors workers and citizens more generally over firms appears to have responded to the crisis more effectively than the United States, where the protection of firms and support for the stock market were the priority policy goals.
This example illustrates that policy choices reflected the assumptions leaders made about how the political economy works, and who and what should be promoted and protected. Their options were also powerfully shaped by pre-existing modes of market governance and policy legacies. While both sets of choices may eventually produce an economic recovery, they do so by quite different means, with different values, and with different distributional consequences. We expect that U.S. citizens, particularly those in the bottom 40 percent of the income distribution will experience the negative effects disproportionately, while Germany will encounter less economic dislocation and long-run impact for those most at risk.
Americans have lower trust in government than Germans. Political scientists argue that this lack of trust plays out in supporting the status quo that favors business over everyone else. But we know from polling that Americans favor a wealth tax on the very rich and many of the social programs standard in Europe such as universal health care and a more extensive social safety net. In the coronavirus crisis, polling has shown a great deal of support for government action to support the economy. We should take advantage of that support to search for the best ideas, not an illusory “one best solution.”
* This article was originally published in Boston Review on October 6, 2020, as a part of Rethinking Political Economy project. Emphases here added by the editor.
Neil Fligstein is Class of 1939 Chancellor’s Professor of Sociology at the University of California, Berkeley. He is the author of A Theory of Fields (2012), The Architecture of Markets: An Economic Sociology of Capitalist Societies (2001), and more.
Steven Vogel is Chair of Political Economy, the II Han New Professor of Asian Studies, and Professor of Political Science at the University of California, Berkeley. He is the author of Marketcraft: How Governments Make Markets Work (2018), Freer Markets, More Rules: Regulatory Reform in the Advanced Industrial Countries (1996), and more.

Fearless Girl , a sculpture in front of the New York Stock Exchange  (previously, located in front of the Wall Street Bull)

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Discipline and Punish: The Challenge of Teaching

While I was preparing a syllabus for a new course, two entertaining sayings jumped to my mind.
The first was made by the master — Michel Foucault. During one of his lectures at Victoria University in Toronto in 1982, he nicely remarked:

“Has everyone read these texts? Yes? No? Nobody? Well, I will have to punish you, that’s for sure! I’m not going to tell you how… That’s a surprise for the last day!”
(Dire vrai sur soi-même,
2017, p. 189;  spotted on Stuart Elden’s blog)

The next one is a witty observation by a political scientist Paul Musgrave:

“As a professor, Fox News tells me I can turn my students into Communists and experience tells me I can’t even make them do the readings.” (28 March 2017)

So what is the conclusion? Let’s agree that humor helps in teaching 😏
And what about reading lists? Well, it’s up to you and them.

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Forms of Capital and Moral Legitimation of Capitalism

by Ivan Light*

The class system routinely provides people with resources they need to enact their inherited status. These resources are Pierre Bourdieu’s four forms of capital: financial, human, cultural, and social. A coal miner’s son will not need and is unlikely to receive a college education, uncles on Wall Street, and a trust fund. He will need and will receive expert instruction in use of a pickaxe and in the supreme value of manly strength. With only slight modification, Bourdieu’s “forms of capital” theory can be applied equally successfully to becoming an entrepreneur and, doing so, Bourdieu’s ideas ingeniously generalize Max Weber’s cultural approach to capitalism. Individually and ensemble, the non-monetary forms of capital are resources that enhance a business owner’s chances in the marketplace quite apart from and in addition to financial capital.
Successful business owners start with the most abundant resources already on hand in order to acquire the less abundant. Most commonly, they have all four, but if they have even one resource on hand, they have a superior chance of getting the others. The resources on hand are the ones the class system routinely provides young people like them. A lifetime career progression usually requires business owners to start with non-monetary resources they already have in order to get money rather than the other way around. Indeed, without some supporting non-monetary resources, the wealthy cannot make money in business. After all, a rich person who lacks business skill, business knowledge, business culture, business networks, and business reputation lacks the capability to run a business firm. In Benjamin Franklin’s acid phrase, “a fool and his money are soon parted.” A fool may, of course, invest in someone else’s firm but even that option requires some personal resource. The class system normally (but not invariably) guarantees that those who inherit money are not fools.
The existing literature in both business and sociology contains abundant archival support of the value of  these non-commodity resources in business enterprise. Business owners with education, skill, reputation, social networks, and generalized aptitude outperform those who lack them, and the more resources one has, the better one’s chances for financial success.  From that point d’appui,  Entrepreneurs and Capitalism Since Luther: Rediscovering the Moral Economy addresses two more advanced questions. If they do not contribute equally, which of these non-monetary resources is more important for business owners to control? Putting it very crudely, is ‘who you know’ more important than ‘what you know’, or the other way around? And whatever is the answer now, has it always been that way or did it change?
In order to lodge those novel questions in the entire history of capitalism, rather than only in the fleeting present, the book presents six contrasting case studies that illustrate the importance of business-supporting ideas and business-supporting communities for business owners, now and in the past. Each chapter is an independent case study but together they display suggestive historical continuity. The case studies addresses the economic ethic of Protestant “ethnics” in the Reformation, Jewish merchants in early modern Venice, business-disdaining Aleutiiqs on a remote Alaskan island, an Islamic business caste in metropolitan Karachi, Korean immigrant entrepreneurs in Los Angeles, and the unsuccessful business career of Donald J. Trump. All the chapters converge around that claim that, without both social and cultural capital in place, business owners are handicapped, and their enterprise cannot flourish even when money is abundant. However, the case studies also suggest that, although both resource types are still and always have been important, the balance of relative importance shifted over historic time from business-friendly ideas to business-supporting communities. That is, during capitalism’s start-up phase, the most important business-supporting resource was cultural aptitude for business, which was scarce, whereas community was abundant. That balance historically shifted from aptitude to community because the very success of capitalism diminished the supply of community in society while enhancing the supply of business skill and aptitude. Explaining and illustrating this transition is the main concern of part 1.
Without changing the book’s guiding theoretical orientation, Part 2 expands the book’s focus from business management to the moral legitimation of capitalism now and in the past. The themes are related. Ideas that legitimate entrepreneurs legitimate capitalism; and ideas that legitimate capitalism legitimate entrepreneurs. By legitimation is meant culturally shared ideas that enable people to understand business as a morally acceptable livelihood, which is an essential part of willingness to undertake it. To the surprise of most students, in the history of mankind, business ownership has not usually been understood as morally legitimate. Quite the opposite was usually the case. Capitalism entered the world stage under an inhibiting cloud of moral suspicion which it had somehow to dissipate.
Following Max Weber and Werner Sombart, who pioneered this line of research a century ago, our review starts with religious ideas. Early modern Jews could legitimate profit-making business to their own religious satisfaction but not to the satisfaction of early modern Christians. As a result, primitive resistance to capitalism assumed the form of moralistic anti-Semitism. Capitalism was immoral and its immorality tainted Jews who practiced it. Theorists of the Protestant Reformation, John Calvin and Richard Baxter first convinced skeptical Christians that running a profit-making business was fully compatible with Christian morality and, indeed, exemplified it. Two centuries later, abandoning the religious domain, Adam Smith and Benjamin Franklin, both Enlightenment savants, theorized naturalistic components of action that tended to assure that business owners would understand the advantages of moral behavior and that the resulting market economy would channel human choices into morally acceptable behavior. Greed would supplant war and commerce would replace thievery.
By the late nineteenth century, optimism had vanished from the debate. In the Gilded Age, confronting big business, William Graham Sumner and Thorstein Veblen abandoned all expectation that entrepreneurs would display moral rectitude. Veblen theorized that long-term  cultural change would ultimately extirpate vestiges of barbarism that enabled a dysfunctional “pecuniary culture.” Equally critical of business morality, Sumner was more pessimistic. Sumner believed that a market economy was a realm of nature in which survival of the fittest was enacted. In this realm, fraud, deceit, and violence played as essential and irrevocable a part as they did in real jungles. Therefore, instead of preaching cultural change as had Veblen, Sumner sought to convince readers that the moral misbehavior of big business leaders would result in long-term economic benefit for everyone and so should be tolerated. A generation later, Joseph Schumpeter advanced an economistic version of Sumner’s idea as “creative destruction.” Schumpeter conceded that entrepreneurial capitalism outraged social morality but observed that it also created unparalleled economic growth. Ordinary people rejected capitalism but craved the wealth that trickled down because of it. Either way, in Sumner’s version or Schumpeter’s, twentieth century theorists relieved big business entrepreneurs of the necessity for  moral conformity that still applied to small business owners. As a result, the moral legitimation of capitalism now derives from small business owners who, embedded in the social structure, import conventional moral ideas into their business practice. Lacking that embedded context, big business is tolerated for its results, but morally mistrusted.
This intellectual history is not an exercise in antiquarianism. In contemporary America, one does not have to frequent libraries to access these ideas. In the mid-twentieth century, the moral exoneration and idealization of elite entrepreneurs moved from textbooks into comic books through the Batman superhero. Originally created in 1939, and subsequently released on toys, television, and video games, Batman has been featured in 13 Hollywood movies since 1943 and most recently in Batman: The Dark Knight Rises (2005) and Batman vs. Superman (2012). The Batman thematic depicts the fictional Bruce Wayne as a billionaire entrepreneur obsessed with glamorous women and conspicuous consumption of luxury. Wayne is a playboy celebrity whose meretricious lifestyle the public tracks, envies, disapproves, and tolerates. Unbeknownst to the public, when disguised as Batman, Bruce Wayne uses his vast wealth, superior intelligence, and jungle cunning to destroy evil doers whom the legal order condones. To a startling extent, Donald Trump resembles that billionaire playboy, and there is evidence that Trump consciously promoted his resemblance to Batman during both political campaigns. This resemblance was advantageous to Trump because the American public already understood that immoral billionaires are hidden benefactors of society.
* Ivan Light is professor emeritus of sociology at the University of California, Los Angeles and author, together with Léo-Paul Dana, of  Entrepreneurs and Capitalism Since Luther (2020). Among his previous books are Deflecting Immigration: Networks, Markets, and Regulation in Los Angeles (2006), Ethnic Economies (2000), Immigration and Entrepreneurship: Culture, Capital, and Ethnic Networks (1993), Immigrant Entrepreneurs: Koreans in Los Angeles (1988), and Ethnic Enterprise in America:
Business and Welfare among Chinese, Japanese, and Blacks (1972). 

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