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  • Author: Patrik Aspers
  • Publication Date: 02-2009
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: The purpose of this paper is to analyze the making of markets. The paper identifies two ideal-typical processes in which markets are made – organized making and spontaneous making – which are often combined in reality. Organized making is defined as a process in which at least two actors come together and decide on the order of the market. There are two ways of organized making of markets, called “state-governed market making” and “self-governed market making.” Spontaneous making is defined as a process in which the market is an unintended result of actors' activities. The attention sociologists have paid to the issue of market making has been directed largely at organized market making. This paper develops a sociological approach that integrates both spontaneous and organized market making, and identifies three phases of market making. This involves a discussion of empirical cases, and seven hypotheses are presented that make predictions for the two types of market making. The paper provides theoretical tools for studying the making of markets in history, as well as in our own time. Finally, a number of conditions are presented that must be in place if there is to be a market.
  • Topic: Economics, Markets, Political Economy, Political Theory
  • Author: Jens Beckert
  • Publication Date: 04-2009
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: What alternatives to rational choice theory do exist to explain economic phenomena? I argue that American pragmatism presents a viable alternative for the explanation of key economic incidences. First I illustrate the foundations of pragmatism using three problems regularly encountered in action theory. Then I show how innovation, institutional change, price formation and actors' preferences can be analyzed based on pragmatist premises. I conclude by reflecting on why pragmatism has found so little recognition in economics.
  • Topic: International Relations, Economics, Political Economy, Political Theory
  • Political Geography: United States, America
  • Author: Christoph Deutschmann
  • Publication Date: 05-2009
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: I address the "growth miracle“(William Baumol) of modern capitalism. The central point is that the historically unique social dynamics of modern capitalism cannot be conceptualized satisfactorily by theories of “economic growth”; instead, the explanation requires a genuinely sociological approach. The first part of the paper gives a critical summary of the existing modernization-theoretical approaches and outlines an alternative theoretical perspective which is based largely on the interpretations of money by Simmel and Marx. The second part delivers a multi-level approach of capitalist dynamics which culminates in the construction of three growth scenarios, one positive and two negative ones. These scenarios could contribute to illuminating the background of the actual economic crisis.
  • Topic: Economics, Political Economy, Political Theory, Sociology
  • Author: Wolfgang Streeck, Sandra Mitchell
  • Publication Date: 12-2009
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: The object world of the social sciences is complex, historical and self-reflexive. It generates nonlinear effects, it is unique, and it is able to understand the theories developed about it and respond to them intentionally. Recognizing the emergent, historically contingent and self-organizing nature of the social world, and developing responsive policy vehicles for managing its complexity, requires a shift in our conception of science in general and of economics in particular.
  • Topic: Economics, Political Economy, Science and Technology, Political Theory
  • Author: Guido Möllering
  • Publication Date: 02-2008
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: The paper explores conceptually the relationship between trust and deception. The author advances five main propositions, which concern deceptive signals of trustworthiness, the suspension of uncertainty in trust, the moral implications of trusting and deceiving, the trustor's self-deception, and the reversibility of trust. The overall conclusion is that trust and deception both enable and prevent one another and that this ambivalent relationship is due to the leaps and lapses of faith that characterize trust and distrust. Beyond implications for further research on trust and deception, the trust–deception ambivalence is practically relevant for making better sense of cases of deception in private and public life against the background of trust relationships that enable, prevent, require, and prohibit deception – all at the same time.
  • Topic: Civil Society, Education, Political Economy
  • Author: Wolfgang Streeck
  • Publication Date: 07-2008
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: The paper is an expanded and revised version of a lecture given at the 2008 Annual Colloquium of the Max Planck Institute for the Study of Societies (MPIfG). Its subject is the relationship between social theories and political-economic change. The paper's central claim is that theories of society can by nature be fully understood only if related to and interpreted in the horizon of action of a virtual user located in the social world that is being explained. This is illustrated with reference to the development of political macrosociology since the Second World War. Next, five tendencies in today's social sciences are briefly discussed, all of which seem to indicate growing uncertainty about the practical usefulness of basic research in social science, in light of the demise of the democratic nation-state: the transition from Steuerungstheorie to research on “governance”; the departure from participatory models of democracy; the rise of economics to academic and political hegemony; a functionalist, efficiency-theoretical turn in theories of social policy; and growing doubts about the usefulness of a scientistic model of theory. In the final section it is suggested that the social sciences might find new theoretical orientation and practical self-confidence by defending in public discourse its fundamental insights on the limits of a market-driven organization of social life.
  • Topic: Democratization, International Political Economy, Political Economy, Political Theory
  • Author: Wolfgang Streeck
  • Publication Date: 06-2008
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: The dissolution of the standard employment relationship since the 1970s has been paralleled by a destabilization of family relations. The paper, which is a slightly revised version of a plenary lecture at the 2008 Meeting of the German Sociological Association, discusses possible connections between the rise of more flexible labor market and family structures, and explores how they might tie in with the declining birth rate. The co-evolution of labor markets and family relations can be explained by both the attractions and the constraints of free markets. The current shift toward a new social policy aimed at increasing fertility is presented as an example of how expanding market relations and the uncertainty to which they give rise in personal life cause demands for state intervention. The logic seems remarkably similar to that of the current banking crisis, where the liberation of financial markets from traditional constraints and the progressive commodification of money have ultimately issued in irresistible pressures on the state to step in and restore the social commons of stable expectations and mutual confidence. In both cases, and perhaps generally, capitalism seems to imply a need for a public power capable of creating substitutes for social relations invaded by market relations and as a consequence losing their capacity to perform some of their previous functions.
  • Topic: Government, Markets, Political Economy, Political Theory
  • Political Geography: Germany
  • Author: Christoph Deutschmann
  • Publication Date: 05-2008
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: The paper views the current financial crisis in light of long-term structural socioeconomic changes in advanced industrial societies. In Western Europe, the United States and Japan, the period of economic prosperity after the Second World War led to a remarkable accumulation of wealth among the middle class that had surprisingly little effect on the substantial fortunes of the wealthiest upper class. This affluence gave rise to pension and investment funds emerging as a new type of collective actor in global financial markets, while the economy was marked by increasing instability, declining growth rates and financial crises. The paper tries to clarify the interconnections between these phenomena using the framework of a multilevel analysis that culminates in a model I call the “collective Buddenbrooks effect” (“Buddenbrooks” being a family saga by Thomas Mann): Structural upward social mobility will lead to an increasing imbalance in capital markets, since the volume of financial assets looking for profitable investment will rise as the social reservoir of solvent debtors and promising investment opportunities decline. Advanced industrial economies are thus characterized by a bias towards capital export and excessive financial liquidity, with the well-known consequences of low economic growth rates and the danger of speculative bubbles on global capital markets. The middle class that originally benefitted from postwar prosperity is negatively affected, too. I argue that the current crisis cannot be understood sufficiently without taking this structural socioeconomic background into account.
  • Topic: Economics, International Political Economy, International Trade and Finance, Political Economy, Political Theory
  • Political Geography: United States, Japan, Europe
  • Author: Jens Beckert, Wolfgang Streeck
  • Publication Date: 04-2008
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: The paper presents some of the ideas underlying the current research program of the Max Planck Institute for the Study of Societies (MPIfG). It begins with a discussion of how the institute's programmatic orientation has evolved since it was founded in 1984. Programmatic change over the years involved (1) recognition of a secular decline in the capacity of the nation-state to organize and guarantee social order, and of the growing significance of self-regulating, “free” national and international markets for social life; (2) increased attention to issues of meaning and to “culture” and cultural symbolism, as well as to normative questions; (3) a gradual shift in emphasis from policy to politics; and (4) more explicit recognition of history and of the historicity of the questions posed and the observations analyzed in social science. The second part of the paper argues that Gesellschaftsforschung today is most appropriately conceived as the study of the economy and society of contemporary capitalism. It is suggested that the most promising approach is close cooperation between the scholarly traditions of political economy and economic sociology, with the former standing to benefit from a more explicit micro-foundation in a sociological theory of action and the latter from more systematic consideration of politics and the state. Third, the paper shows how the approach that has evolved at the MPIfG differs from mainstream economic sociology, from the so-called new institutional economics, and from behavioral economics. The paper concludes by enumerating four subject areas that are likely to be of particular importance for research at the MPIfG: (1) the nature of rational-economic action, (2) the constitution of markets, (3) the emergence and change of institutions, and (4) the relationship between capitalism and democracy.
  • Topic: Economics, International Political Economy, Political Economy, Political Theory
  • Author: Wolfgang Streeck
  • Publication Date: 03-2008
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: The paper was presented as a keynote lecture at the 10th anniversary of the Amsterdam Institute for Advanced Labour Studies (AIAS) in April 2008. It surveys the trajectory of scholarly work on labor after 1945, from its initial emphasis on rights of industrial and social citizenship to its present preoccupation with “flexibility” and “flexicurity”. It recalls the dissolution of the “Fordist” compromise in the 1970s and the subsequent gradual expansion of markets as the dominant mechanism for the allocation of life chances and the governance of society. Marketization encountered surprisingly little resistance, in real life as in the evolving conceptual apparatus of scholarly work. Liberalization proceeded and continues to proceed regardless of the social dislocations it causes, on a scale wholly unimaginable and indeed unacceptable under the postwar settlement. The paper ends with speculation on what if at all might be the forces today that could trigger a Polanyian counter-movement to the progress of capitalist social and economic relations. In particular it discusses whether demographic change, in terms of both a declining birth rate and increasing life expectancy, might bring about a new wave of market-containing social policy.
  • Topic: International Political Economy, International Trade and Finance, Markets, Political Economy, Political Theory