Jocelyn Pixley

Emotions and economics

This chapter examines approaches to emotions in orthodox and various Keynesian-influenced economics, with regard to ‘interest’ and expectations, and compares it to sociological emotions research. First it shows how economics ignores ‘passions’ like greed or avarice by transmuting them to the allegedly more predictable, less emotional and completely ‘rational’ motives of interests. Interest, in contemporary orthodox accounts, is said basically to account for expectations but the accounts are derived from the Renaissance view that ‘interest will not lie’. In contrast, the less orthodox economic view argues that expectations are merely imagination and hope, however much data, expertise and information are used, and are thus far from predictable. The chapter then compares Keynesian concepts of emotions such as ‘animal spirits’ with sociological understandings of them. The contribution that emotions research can make to emotions in economic decision-making is then considered. Financial organizations, in particular, are obsessed with the future, hence the future-oriented emotions of confidence, optimism, pessimism, fear and trust are unavoidable, but this is an endlessly unlearned and regenerative process. Finally, the chapter touches on the policy implications of an alternative understanding of the typical emotions deployed in decision-making by financial organizations.

IMPERSONAL TRUST IN GLOBAL MEDIATING ORGANIZATIONS

The concept of impersonal trust in indirect social relationships is often treated as analogous to the personal trust of direct interpersonal relationships (whether “primary” or “secondary”). Studies in economic sociology of personal networks and overlapping trust relations among directors of major corporations, however, regard trust (or mistrust) as more exclusively a “property” of direct relationships. Personal trust relations, this study argues, are qualitatively different from impersonal ones, such as global mediating organizations of trust that give institutional promises to guard investments against future risk. They attempt to fulfill the claims of economic rationality in the face of the insuperable problem of temporality. Impersonal trust organizations include multinational accountancy firms and credit-rating agencies that provide allegedly reliable and objective ratings of firms and governments to financial speculators. Although a director of Moodys Investors Services argues (with reference to the 1997 East Asian “crisis”) that “markets are made up of atomised individuals, outside the controls of even the most vigilant governments,” this neglects the mediating trust organization itself, an “authority” that not only constantly tries to maintain its trustworthy appearance but one that unintentionally gives rise to increasing constraints and lack of agency. The implications of paying greater attention to impersonal trust in such global organizations are discussed.

Central bank independence : a social economic and democratic critique

The advent of quantitative easing by the world’s major central banks invites renewed questions about the meaning and role of central bank independence in an age of economic crisis. This article draws together insights from economic sociology, history and democratic theory to engage in further discussion about the proper role of central banks in democratic society. We stress some related themes. Our brief history of central banks aims to show how these banks have always been embedded in economic and political coalitions and conflicts, therefore qualifying the term independence; our study also aims to show that in satisficing between conflicting tasks, central banks need to maintain a balance between cognitive competences and normative expectations. Independence is better understood as a form of dependence on the coalition of interests that supported the financial climate prevailing before the global crisis of 2008, one of low wage-price inflation, high borrowing and debt, and loss of prudential control. We argue that independence amounts to a form of re-privatisation of central banks, and that they are increasingly suborned to the pressures of financial markets. At the same time, asset price inflation has sacrificed growth and employment and therefore prolongs the crisis. The economic measures now demanded by the financial crisis prompt new doubts about the independent central bank experiment, potentially in favour of the ex ante model of governmental oversight of central banks.

Decency in Anglo-American Financial Centres?

How can a partial, revisable utopia of ‘decent society’ be used as a yardstick for assessing today’s impersonal forms of social integration? In economic life — this essay’s focus — Polanyi’s hopes that the ‘economic system’ might cease ‘to lay down the law to society’ is a start. Recently, financial firms sold commodified promises and obligations on the allure of democratizing credit and providing financial ‘choice’ to millions. Yet these ‘civilities’ exploited people’s hopes for a dignified life. Any new, partial utopia (as Keynes’s was too — to remove the egregious, humiliating features of ‘the society in which we live’) is yet to be devised. Maria Markus’s concept is useful to ask whether the instrumental-ism of macro-economic concepts is a distortion of the institutions of money or intrinsic to them. Could solidaristic compromises through civil society minimize disrespectful relationships embedded in money to create decent institutions?

'The Current Crisis of Capitalism': What Sort of Crisis?

Keeping an open mind on the severity of the financial crisis and its implications for capitalism, this article focuses on the role of the state and financial institutions in monetary regulation. Questioning whether orthodox economic theorists and policy-makers share the same world view as professional and central bankers, it argues that the monetary system has in the past twenty years been stabilised through trust relations, rather than by markets. Furthermore, in this process, which was not sufficiently recognised by the practitioners, such trust relations were unable to cope with the impersonality of money. The nub of the question about a ‘crisis of capitalism’ is how nation-states can possibly control money — the most anarchic and global social relation in the world today. The article questions Keynesianism and economic liberalism alike, by asking if it is possible for states to force global banks to take the risks of lending for development. It argues that the real focus of attention needs to be the practices of complex international banking networks and the way ‘banks march in step’.

A New Financial Infrastructure to Recover the Loss of Trust

This paper examines four sets of proposals for a new financial infrastructure in the wake of the global financial crisis. It is argued that two concerns should inform us about the way forward. First, uncertainty cannot be ignored because money relies on trust. Second, we live in an increasingly impersonal world with many diverse peoples now involved in the global financial industry. Each proposal is assessed in terms of sociological worries about the decline of trust.

Unemployment and Democracy—at an Impasse?

Abstract This article examines some aspects of Working Nation: The White Paper on Employment and Growth, and the related policy formulation process, noting several anti-democratic aims and practices. It also returns to the pessimistic conclusions I drew from recent work on ‘postindustrial’ or ‘post-employment’ strategies. Although intended to result in effectively expanding the democratic process, these strategies are flawed and in practice have ended in further marginalisation and exclusion of unemployed people from existing processes. Such exclusion is barely distinguishable from the effects of neo-classical prescriptions. I conclude with a brief discussion of a few grounds for optimism.

The Economy and Emotions

This chapter has three parts. It first identifies what the sociology of emotions offers to understanding economies and how that understanding might be extended. It then considers prominent figures in both sociology and economics—Smith, Spencer, Durkheim, Veblen, Weber and Marshall as well as Keynes and various contemporaries—and their treatment of emotional factors. There are key points here which are often overlooked: the role of macro-processes in generating emotional states; the place of emotion-generating uncertainty in economic life; and closely related, the state of disequilibrium and change as “normal” in economies. The chapter concludes by extending this discussion to the place of emotions in four areas of finance: the role “emotion rules” play in financial markets; money itself; periods of inflation and deflation; and trust and confidence in the economy. To guide the discussion, the chapter adopts as basic distinctions on the one hand, macro and micro approaches and on the other, orthodox and heterodox positions.

Introduction to Positive Trespassing

This volume is a joint venture — a debate about the basics of a sociology and economics of money. It is unique in being written by scholars from both disciplines who are committed to this task, and in starting from the highly original groundwork of Geoffrey Ingham’s writings that prompted this mutual endeavour. The volume takes a critical look at money’s institutions and shows that crises arise from money’s unresolved tensions. It demonstrates the centrality of money to capitalism and considers the implications of this dominating institution. There is an examination of the further looming worries about the crisis since 2007, which has made this dialogue about the understandings of money particularly timely. Both disciplines have far too much to offer to remain in their present damaging standoff. While we are thankful to see it reducing, remnants are maintained by orthodox economic and sociological theorists who, in spite off all of the crises of the past 30 years, and many before these decades, still argue that money really does not matter, that it is just a mere commodity or symbol of other trends or that, at least in the long run, it is neutral. We suggest that since money is a promise, an understanding of this social relation must be a joint endeavour between economics and sociology.

Wowser and Pro-Woman Politics: Temperance against Australian Patriarchy

The temperance movement in Australia has been regarded for some time now by historians as a significant feminist lobby. This paper explores the implications of this revisionist historiography for sociological debates, in particular the literature on the modern family and on the patriarchal welfare state. The assumptions that women passively acquiesced in the changes in Australia at the turn of the century and played no part in the construction of the breadwinner are regarded as untenable. They became historical actors who achieved gains and suffered losses that were then embedded in state policies and domestic relations.