“Capitalism as a System of Expectations: Toward a Sociological Microfoundation of Political Economy” by Jens Beckert
What the Article is About
This article is about how capitalism thrives by managing expectations. Beckert develops an approach he calls sociological fictionalism. According to sociological fictionalism it is the future that shapes the present. Images of the future shape present decisions. It focuses its attention on the role of imaginaries of future states of the world as an important element in explaining present action. The relationship between society and markets is that of managing expectations.
Methods
This article relies on the theoretical method. It uses literature research. It is a theory building paper that relies on literature from several disciplines including literature and sociology. There is no empirical evidence or data to support the sociological fictionalism approach. This is mostly understandable because Beckert is concerned with building a theory than testing it.
Most Significant Finding
The most significant finding is that in economics, there are also fictions and these help with the success of the capitalist system rather than hinder it. The concept of fictionality is new to the study of the global economy in particular the study of developing economies It seeks to provide an alternative not only to calculation-based models in economics but also to the focus on social macrostructures prevailing in sociological approaches to the economy. As Beckert argues the concept of fictional expectations develops a microfoundation of economic action by making fictionality an essential element of a theory of intentionally rational decision-making and providing the vantage point for the understanding of the microfoundations of the dynamics of capitalism and the sources of economic growth (Beckert 346). As Beckert argues, to include in a theory of decision-making provides tools for understanding the dynamics of the economic from a micro perspective.
Interesting Things Learned
I learnt that even though markets and society rely mostly on data to make decisions, they also rely on stories and fictions. Trust in the market stems from the understanding that an individual’s story is legitimate. I also learned that rational approaches to the economy are not sufficient in explaining the internal workings of capitalist systems.
Why this Topic Was Interesting
I am interesting in knowing how markets function and their relations to society. The capitalist system is the most dominant economic system to date. An understanding of the general premise of capitalism is essential to understanding all the other facets of society. Issues like political violence, cronyism and poverty are difficult to understand if one does not have a genuine grasp of the concept of capitalism. This topic is also interesting because it is socially relevant today. As the gap between the poor and the rich grows, people need to come up with solutions to address this disparity and this begins by understanding markets and society.
Why I would Recommend this Reading
I would recommend this reading because it provides a fresh perspective on the internal dynamics of a capitalist society. It looks at the four elements that are critical to capitalist success. These are credit, commodification, creativity and competition. It is also helpful in knowing how to manage economic expectations. I would not recommend the reading to someone looking for an empirical paper. This paper is theoretical and provides little evidence of the applicability of the theory.
Works Cited
Beckert, Jens. “Capitalism as a System of Expectations: Toward a Sociological Microfoundation
of Political Economy.” Politics & Society 41.3 (2013): 323-350.
