The British Sociological Association and The Guardian.
The document below is the formal response of the British Sociological Association to two
articles in The Guardian newspaper.
Aditya Chakrabortty wrote on 16 April 2012 an article criticising sociology in the UK and US
for insufficiently tackling the origins of the current recession in work presented at its annual
conference and in its journals:
www.guardian.co.uk/commentisfree/2012/apr/16/economics-has-failed-us-alternative-voices
The BSA responded to this in a letter published online in The Guardian on 18 April (the final
letter on the page):
www.guardian.co.uk/education/2012/apr/18/alternative-economics-people-mattered
Aditya Chakrabortty wrote an opinion piece on 7 May 2012 saying that academics working in
this area should be more vocal:
www.guardian.co.uk/commentisfree/2012/may/07/academics-cant-answer-criticism-analysis
The BSA replied with an article in The Guardian written in May and published on 6 June 2012:
www.guardian.co.uk/commentisfree/2012/jun/05/response-sociologists-financialcrisis?commentpage=1#start-of-comments
The BSA has put together a longer response, below, which summarises some of the work of
sociologists, almost all in the UK and US, on the financial crisis and its origins, including
books, magazine articles and papers.
The BSA has offered to conduct an email interview with Aditya Chakrabortty on this issue,
which he has not accepted.
Sociologists on the causes of the financial crisis
This document is a summary of the work of a few sociologists on the origins of the
current financial crisis and recession.
Books by sociologists on the origins of the crisis:
MacKenzie, Donald (2009) “Material Markets: How Economic Agents are
Constructed”, Oxford University Press
[Back cover description: “Financial markets, processes, and instruments are often
difficult to fathom; the credit crisis highlights both their importance and their
fragility. Donald MacKenzie is one of the most perceptive analysts of the workings of
the financial world. In this book, he argues that economic agents and markets need
to be analyzed in their full materiality: their physicality, their corporeality, their
technicality. Markets are populated not by disembodied, abstract agents, but by
embodied human beings and technical systems. Concepts and systematic ways of
thinking that simplify market processes and make them mentally tractable are
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essential to how markets function. In putting forward this material sociology of
markets, the book synthesizes and contributes to the new field of social studies of
finance: the application to financial markets not just of economics but of wider
social-science disciplines, in particular science and technology studies. The topics
covered include the development of financial derivatives exchanges (non-existent in
1970, but now trading products equivalent to $13,000 for every human being on
earth); arbitrage; how corporate profit figures are constructed; the crucial new
markets in carbon emissions; and a case-study of a hedge fund (based, unusually, on
direct observation of its trading). The book will appeal to research students and
academics across the social sciences, and the general reader will enjoy the book's
explanations and analyses of some of the most important phenomena of today's
turbulent markets.”]
Gill, Matthew (2009) “Accountants’ Truth”, Oxford University Press
[Endorsed by Richard Sennett, who says this book “makes human sense of one
reason modern capitalism is in trouble. It charts the social influence accountants
have on each other and the deforming results of this mutual influence. More, it
shows a great and perhaps tragic conundrum: that ethics are rendered fragile by
collaboration and cooperation – among people who are no minded to commit crime.
The work of a writer who is both a trained accountant and a sociologist, this is a
landmark study”.]
Brown, Phillip et al ((2011) “The Global Auction: The Broken Promises of Education,
Jobs, and Incomes”, Oxford University Press
[This book “forces us to reconsider our deeply held and mistaken views about how
the global economy really works and how to thrive in it. Drawing on cutting edge
research based on a major international study, the authors show that the
competition for good, middle-class jobs is now a worldwide competition … The
authors urge a ne conversation about the kind of society we ant to live in and about
the kind of global economy that can benefit workers, but without condemning
millions in emerging economies to a life of poverty”. ]
Ingham, Geoffrey (2008) “Capitalism”, Polity Press
[Endorsed by Mike Savage, who says “In this meticulous and superbly crafted book
Geoffrey Ingham dissects the nature of capitalism as a complex economic order in
which money plays a central role. In developing his rich account he draws upon a
remarkable range of theorists and examples which will make the book essential
reading to students not only of sociology but throughout the social sciences.” A key
concepts textbook but covers the great inflation of the 1970s, “dot.com” bubble of
the 1990s, and the 2007-8 “credit crunch”]
Jordan, Bill (2010) “What’s Wrong with Social Policy and How to Fix it”, Polity Press
[“This books argues that the financial crash of 2008-9 has exposed the disastrous
consequences of applying economic theory to the collective life of societies. In
seeking to manage social relationships through incentives for individual gain,
market-like menus of choices and business-style sets of interlocking contracts, the
model adopted by the governments of the UK and USA has subverted the basis for
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social policy in mutuality and membership” “Breaks important new theoretical
ground for a social and community-nurturing vision in the new economic era”]
Centeno, Miguel A. et al (2010) “Global Capitalism: a sociological perspective”,
Polity Press
[“The global financial crisis has challenged many of our most authoritative economic
ideologies and policies. While global capitalism was only recently heralded as a cure
to the world’s ills, it is now held responsible for vanishing wealth and rising
insecurity. After thirty years of reshaping the world to conform to the market,
governments and societies are now calling for a retreat to a yet undefined new
economic order. In order to provide a guide to what the twenty-first-century
economy might look like, this book revisits the great project of global capitalism.
What did it actually entail? How far did it go? What were its strengths and failings?”]
Carruthers, Bruce A. et al (2010) “Money and Credit: a sociological approach”,
Polity Press
[“This book offers a fresh and uniquely sociological perspective on money and credit.
As basic economic institutions, money and credit are easy to overlook when they
work well. When they malfunction, their importance becomes obvious and demands
further investigation … This accessible and engaging book will be essential reading
for upper-level students of economic sociology, and those interested in how bills,
coins, and plastic in our pockets shape the world in which we live.” Carruthers is
Professor of Sociology at Northwestern University]. Endorsement from Mark
Granovetter says …”They treat this complex and difficult subject in a way that is
illuminating, accessible, and concise, yet subtle and sophisticated – the gold
standard of academic writing.”
Babb, Sarah (2009) “Behind the Development Banks: Washington Politics, World
Poverty, and the Wealth of Nations” The University of Chicago Press
[“In an era dominated by a world banking crisis and calls for transparency in
government, Sarah Babb has opened the black box of ‘donor politics’: how financial
institutions are controlled by shareholder governments”]
Latouche, Serge (2009) “Farewell to Growth” Polity Press [Endorsed by Bob Jessop.
[“This little book is a pleasure to read. It is critical, contrarian, informative and
provocative. Latouche advances a coherent set of proposals for reversing the
treadmill of an ever-more insistent growth dynamic in favour of a more serene
existence based on quality of life, solidarity and respect for the environment” ]
Erickson, Mark et al (2009) “Business in Society” Polity Press
[Authors are Mark Erickson, Harriet Bradley, Carol Stevenson and Steve Williams.
Endorsed by Anna Pollert and Paul du Gay. Book looks at 2008 economic crisis on
pp261/262]
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Professor Donald Mackenzie, Sociology, School of Social and Political Science
University of Edinburgh has done a great deal of work on this issue:
He has written five essays in the London Review of Books and two invited articles in
the Financial Times.
Traditionally, research on financial markets has been the domain of economics,
supplemented by ‘behavioural finance’ based on individual-psychological studies of
biases in judgement under uncertainty. Since the late 1990s, however, interest in
financial markets in wider social science disciplines has grown sharply, an enterprise
sometimes known as ‘social studies of finance’. Donald MacKenzie’s contributions to
this field have focused strongly on financial crises and the role in these of modelling
and of other practices by which market participants evaluate financial instruments.
In MacKenzie and Millo (2003) and MacKenzie (2006), he argues that financial
models can be both performative (alter market processes in such a way to make
them ‘more like’ the postulates of the model) and counter-performative (make
market processes less like the postulates of the model). MacKenzie (2011)
demonstrates the role in generating the financial crisis of 2007-8 of models,
organisational practices of evaluation, and especially of the organisational division of
labour in credit rating agencies.
More generally, MacKenzie has employed perspectives from the social studies of
science and technology to investigate processes of knowledge production in financial
markets. For example, MacKenzie (2007) examines the construction of LIBOR
(London Interbank Offered Rate), the crucial interest-rate benchmark in global
financial markets (data from the Bank for International Settlements suggest that
financial derivatives indexed to LIBOR probably total around $350 trillion, the
equivalent of about $50,000 for every human being on earth). He has also, e.g.,
investigated hedge funds, a set of market actors of growing importance: Hardie and
MacKenzie (2007) is the first social-science study of a hedge fund based on direct
observation of its trading-room practices.
The underpinning research was conducted at the University of Edinburgh by
MacKenzie himself (Professor of Sociology since 1992) and his former PhD students
Yuval Millo (PhD student at Edinburgh 1999-2002) and Iain Hardie (MRes/PhD
student at Edinburgh 2003-7; Lecturer in Politics and International Relations at
Edinburgh since 2007).
References:
Hardie, Iain, and Donald MacKenzie (2007), “Assembling an Economic Actor: The
Agencement of a Hedge Fund,” Sociological Review 55/1: 57-80. Korean translation
forthcoming in volume edited by Sungook Hong.
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MacKenzie, Donald (2006), An Engine, Not a Camera: How Financial Models Shape
Markets (MIT Press). Winner, Viviana A. Zelizer Distinguished Scholarship Award of
the American Sociological Association, 2008, and British International Studies
Association, International Political Economy Group Book Prize, 2007.
MacKenzie, Donald (2007), “The Material Production of Virtuality: Innovation,
Cultural Geography and Facticity in Derivatives Markets,” Economy and Society 36:
355-376.
MacKenzie, Donald (2011), “The Credit Crisis as a Problem in the Sociology of
Knowledge,” American Journal of Sociology 116: 1778-1841.
MacKenzie, Donald, and Yuval Millo (2003), “Constructing a Market, Performing
Theory: The Historical Sociology of a Financial Derivatives Exchange,” American
Journal of Sociology 109: 107-145.
MacKenzie has also disseminated the research findings directly to practitioner or
mixed academic/practitioner audiences. Examples include:
i. Talk at conference on the financial crisis at the Centre for Research in the Arts,
Social Sciences and Humanities (CRASSH) at the University of Cambridge, 16 October
2009, attended by participants from the Bank of England, Bank of America, UBS,
Association of Corporate Treasurers, Bank for International Settlements,
PricewaterhouseCoopers, Prudential, and Royal Bank of Scotland.
ii. Keynote address at Columbia University research symposium on “The
Quantitative Revolution and the Crisis”, 4 December 2009. Other speakers included
the Director of Research of Goldman Sachs, the Director of Quantitative Research at
Bernstein & Co. and the Chief Risk Officer of State Street Global Advisors.
iii. Subplenary address at the 64th CFA Institute Annual Conference, 8-11 May 2011.
The CFA (Chartered Financial Analysts) Institute is the world’s largest body of finance
professionals.
There is not yet evidence of MacKenzie’s findings directly affecting public policy or
day-to-day practice in finance. They are therefore “examples of research findings
having been communicated to, but not necessarily acted upon, by the intended
audience, but which nevertheless make a contribution to critical public debate”
(Main Panel C, Draft Criteria and Working Methods, paragraph 80). Evidence of
them performing this role includes:
Public recognition of MacKenzie’s dissemination work
Practical use of MacKenzie’s research
MacKenzie’s research (via item g below) has been drawn on by Landesbank BadenWürttemberg in a suit against Goldman Sachs in the Southern District of New York
(the prime jurisdiction for corporate lawsuits in the US). The suit alleges the
misselling by Goldman to the Landesbank of a collateralised debt obligation (CDO)
based on sub-prime mortgage-backed securities (such CDOs are the primary topic of
MacKenzie’s 2011 AJS article).
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Dr John Bone, Senior Lecturer, Department of Sociology, University of Aberdeen
has written some journal articles on this issue:
No Place Called Home: The Causes and Social Consequences of the UK Housing
'Bubble', British Journal of Sociology, Vol. 61:2, pp. 231-255 (2010) (with Karen
O'Reilly)
Irrational Capitalism: The Social Map, Neoliberalism and the Demodernization of
the West, Critical Sociology, Vol. 36:5, pp. 717-740 (2010) (not directly related to the
financial crisis per se)
The Credit Crunch: Neoliberalism, Financialisation and the Gekkoisation of Society,
Sociological Research Online, Vol. 14 2/3 (2009)
http://www.socresonline.org.uk/14/2/11.html
The Deregulation Ethic and the Conscience of Capitalism: How the neoliberal ‘free
market’ model undermines rationality and moral conduct, Globalizations,
(Forthcoming)
The Neoliberal Phoenix: The Big Society or Business as Usual, Sociological Research
Online, (Forthcoming)
UK Debt Wars: The Rentier Strikes Back?, Contemporary Social Science (Under
Review)
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Dr Alex Preda, Sociology, School of Social and Political Science
University of Edinburgh has done work on this issue:
Research interests
Decision-making and cognitive processes in online anonymous markets
The interaction order of anonymous electronic transactions
The public understanding of finance
Forms of charisma in economic life
Strategic behavior in markets
ESRC-funded research project: Technology, Action and Cognition in Online
Anonymous Markets: A Sociological Study of Non-institutional Traders (RES 062-231204)
Selected Publications
Books
Framing Finance: The Boundaries of Markets and Modern Capitalism (University of
Chicago Press, 2009)
Information, Knowledge, and Economic Life: An Introduction to the Sociology of
Markets, (Oxford University Press, 2009)
AIDS, Rhetoric, and Medical Knowledge (Cambridge University Press, 2004)
The Sociology of Financial Markets (co-edited with Karin Knorr Cetina, Oxford
University Press, 2004)
Colin Crouch, Emeritus Professor, c/o International Centre for Governance and
Public Management, Warwick Business School, The University of Warwick
Research interests
Structure of European societies, with special reference to labour market, gender and
family issues; economic sociology; neo-institutional analysis; local economic
development and public service reform.
Selected publications
Reports to government
Crouch, C. Competitive Cities in the Global Economy. OECD (2006).
Journal articles
Crouch, C. Modelling the Firm in its Market and Organizational Environment:
Methodologies for Studying Corporate Social Responsibility. Organization Studies
27 (2006): 1533-1551.
Books
Crouch, C. Capitalist Diversity and Change: Recombinant Governance and
Institutional Entrepreneurs. Oxford University Press, 2005.
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Saskia Sassen, Professor of Sociology, Columbia University, USA
In the journal Historical Developments and Theoretical Approaches in
Sociology/Social Theory, 37 (2010)
The Subprime crisis and the global financial crisis: a sociological perspective
http://www.eolss.net/Sample-Chapters/C04/E6-99A-33.pdf
Gerald E Davis
2009 Book
Managed by the Markets: How Finance Re-Shaped America. New York, NY: Oxford
University Press.
Jerry Davis is the Wilbur K. Pierpont Collegiate Professor of Management at the Ross
School of Business and Professor of Sociology, The University of Michigan.
Michael Lounsbury is Associate Dean of Research, Thornton A. Graham Chair and
Professor of strategic management, organizations and sociology at the University
of Alberta
Markets on Trial: The Economic Sociology of the U.S. Financial Crisis, Part 2
Emerald Group Publishing, 14 Jul 2010 - 388 pages
Since the mid-20th century, organizational theorists have increasingly distanced
themselves from the study of core societal power centers and important policy
issues of the day. This has been driven by a shift away from the study of
organizations, politics, and society and towards a more narrow focus on
instrumental exchange and performance. As a result, our field has become
increasingly impotent as a critical voice and contributor to policy. For a
contemporary example, witness our inability as a field to make sense of the recent
U.S. mortgage meltdown and concomitant global financial crisis. It is not that
economic and organizational sociologists have nothing to say. The problem is that
while we have a great deal of knowledge about finance, the economy,
entrepreneurship and corporations, we fail to address how the knowledge in our
field can be used to contribute to important policy issues of the day. This doublevolume brings together some of the very top scholars in the world in economic and
organizational sociology to address the recent global financial crisis debates and
struggles around how to organize economies and societies around the world.
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Craig Calhoun, Director-designate of the LSE
Craig Calhoun, Georgi Derluguian (2011) Business As Usual: The Roots of the Global
Financial Meltdown
His book is one of a series that specifically offers a sociological perspective on the
issue.
Sylvia Walby, UNESCO Chair in Gender Research, Lancaster University, UK
Gender and the Financial Crisis
Paper available for download at:
http://www.lancs.ac.uk/fass/doc_library/sociology/Gender_and_financial_crisis_Syl
via_Walby.pdf
Paper for UNESCO Project on ‘Gender and the Financial Crisis’
9 April 2009 2
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Journals - Work, Employment and Society - published by the BSA
Two articles in the WES Dec 2011 Special Issue looked particularly at the causes of
the crisis:
Eileen Appelbaum - Macroeconomic policy, labour market institutions and
employment outcomes
Costas Lapavitsas - Theorizing financialisation
And at the BSA 2012 annual conference, the following presentations (given in
abstract):
Bone, J.
University of Aberdeen
UK Debt Wars: The Rentier Strikes Back?
A great deal of recent political and wider public debate appears almost
'schizophrenic' in its analysis of the causes of the economic current crisis and its
resolution. Where discussion at times has focused on the role of the banking sector
and the exponential expansion of debt in bringing about the 'credit crunch', the UK
public have also been convinced that state spending and, particularly, overspending
on public services and welfare are at the root of the continuing economic malaise.
Thus, fiscal austerity is presented as the route to recovery. This paper argues that
the currently proposed solutions to our ongoing economic turbulence are merely
intensifying its negative effects, given that they have been effectively authored by
the architects of the crisis. This is occurring as those who have benefited greatly
from the finance dominated turbo capitalism of the current era, that has been
exposed as being economically and socially disastrous for the overwhelming
majority, have secured sufficient economic power and influence to garner political
leverage and shape public opinion , sustaining arrangements that currently insulate
them from the ravages they have unleashed. Thus, a rentier/financial elite, whose
activities had been curtailed in the aftermath of the Great Crash, Depression and
War, has re-established itself to become an increasing impediment to economic,
political and social well being and progress, transferring wealth and externalising
risk, whilst constraining the freedoms that it regularly invokes to justify and
perpetuate the system through which it prospers.
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BSA Annual Conference plenary session (one of the three main sessions with an
audience of over 400 in audience)
Professor Rosemary Batt and Professor Stephen Ackroyd: Austerity for some? The
Impact of Financialization on Management and Labor
BSA Conference plenary session (one of the three main sessions with an audience of
over 400 in audience)
Professor Michael Burawoy: On Occupations. This dealt with globalisation and
failure of Marxists to predict the current situations
BSA Stream plenary session - Professor Saskia Sassen - Expulsions: a category for
our age
Among other things this dealt with the sub prime mortgage market collapse and the
role of hedge-funds in a new era of global capitalism.
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