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Socio-Economic Review Current Issue

Published: Mon, 11 Sep 2017 00:00:00 GMT

Last Build Date: Mon, 11 Sep 2017 03:46:49 GMT


The fly and the cookie: alignment and unhingement in 21st-century capitalism


This SASE Presidential address given at UC Berkeley in 2016 discusses the entanglement between morality and capitalism. Moral sentiments—and especially what Adam Smith called the sense of propriety, the sense of merit and the sense of justice—play a productive role in organizing the extraction of economic value. Conversely, relative valuations in the economy (prices, for instance) can be thought of as moral engines that reward or sanction certain behaviors, and are presumed to index underlying moral differences. Economic value is produced both when individuals are morally aligned with the rational goals of capitalism, and when they perform unhinged deviations from the moral standard. I show how modern digital capitalism organizes profit extraction through these twin processes of alignment and unhingement, building new economic moralities in the process—moral sentiments that are the result of people’s interactions with opaque but powerful forms of behavioral fine-tuning, surveillance and manipulation.

Finance, inequality and the varieties of capitalism in post-industrial democracies


Despite recent studies showing the impact of finance on rising income inequality in the USA, few studies examine this effect from a comparative perspective. Drawing on the ‘Varieties of Capitalism’ literature, we contend the relationship between finance and income inequality is amplified in countries with liberal market economies (LME). Based on a panel analysis of 17 OECD countries from 1980 to 2007, we find that growth in financial sectors and the financial labor force is associated with higher income inequality, greater wage disparities and a greater concentration of income in the most affluent households. More importantly, we find the magnitude of these effects are stronger in LME and LME-like countries. Specifically, the effect of finance on income inequality is greater in countries with weak collective bargaining, few labor protections and shareholder corporate governance. Overall, the results indicate the importance of national institutions in the relationship between finance and inequality.

Fear of robots at work: the role of economic self-interest


There is a lively ongoing debate about the effects of the widespread introduction of robots in work environments. Many people in the labor market worry about inequality and possible job loss that robot technology may create. However, large-scale studies on the determinants of these perceptions are thus far lacking. This article assesses which members of the labor force are most fearful of the introduction of robots at work by using the 2012 Eurobarometer Public Attitudes towards Robots dataset, covering 11 206 respondents in 20 European countries. Our study shows that those (a) in economic positions that are more likely to be negatively affected by robotics are more likely to be fearful of robots at work, along with, to some extent, those living in countries (b) with adverse economic conditions and (c) where employees are less protected from market forces. The theoretical and practical implications of these findings are discussed.

Financial markets as production markets: the industrial roots of the mortgage meltdown 1


The 2007–2009 financial crisis was centered on the US mortgage industry. This article develops a distinctly sociological explanation of that crisis by focusing on the organization of firms in the production of mortgage-backed securities. We use archival and secondary sources to show that the industry became dominated by an ‘industrial’ conception of control whereby financial firms vertically integrated in order to capture profits in all phases of the mortgage industry. The results of multivariate regression analyses show that the ‘industrial’ model drove the deterioration in the quality of securities that firms issued and significantly contributed to the eventual failure of the firms that pursued the strategy. Among large banks globally, those which were more vertically integrated also experienced greater investment losses. The findings challenge existing conventional accounts of the crisis and provide important theoretical implications for the social-scientific study of financial markets.

Challenging varieties of capitalism’s account of business interests: Neoliberal think-tanks, discourse as a power resource and employers’ quest for liberalization in Germany and Sweden


This article contributes to the debate on employer preferences. It challenges varieties of capitalism’s argument that manufacturing employers in Coordinated Market Economies (CMEs) will tend to defend non-liberal institutions because of the comparative institutional advantage that they provide. It examines Germany and Sweden, two critical cases in this debate. It is based on interviews with key officials and an in-depth examination of the Initiative Neue Soziale Marktwirtschaft (INSM) and Timbro, think-tanks sponsored by German and Swedish employers to shape public opinion. In line with power resource theory, I find that both German and Swedish employers have a strong preference for liberalization. In both cases, they responded to left-wing threats, institutional constraints and situations of ‘crisis’ by launching a counteroffensive and promoting welfare state reform, labor market flexibility and deregulation. Employers have used discourse as a power resource to pursue an aggressive liberalizing agenda and to attack institutions that required active deregulation on the part of the state. Whether employers in CMEs seek to dismantle existing institutions altogether or soften and reengineer these institutions from within, one thing is clear: their use of radical neoliberal discourse is incompatible with the claim that they defend traditional institutions in any meaningful sense.

‘Si vis pacem, para bellum’—the construction of business cooperation in the Swiss machinery industry


This article addresses the historical emergence of business cooperation. We resort to Höpner’s (2007) concepts of organization and coordination in order to analyze how firms progressively engaged in Business Interest Associations (BIAs) and interlocking directorates during the first part of the 20th century. Our inquiry is based on a network analysis on large firms of the Swiss machine, electrotechnical and metallurgy (MEM) sector. Our results show that before the First World War, only major firms were promoting coordination and organization through, respectively, interlocking directorates and BIAs. Although many firms were reluctant to cooperate in the first place, interests beyond the firm level (organization) and the economic needs of firms (coordination) had cumulative effects, and most firms progressively engaged in both mechanisms of cooperation from the interwar period. We argue that differentiating between organization and coordination contributes to a more nuanced understanding of the emergence of non-liberal capitalism.

Routine-biased technical change and job polarization in Europe


In this article, we critically discuss the hypothesis linking routine-biased technical change and job polarization. First, we put it in the context of earlier debates on the impact of technology on the employment structure and job quality, discussing the difficulties of the concept of routine used in this new literature and its operationalization. Then, using our own operationalization of tasks, we argue that routine tasks are not associated with skills in the non-linear polarized way predicted by the discussed hypothesis, nor to the observed cases of job polarization in Europe in 1995–2007. Routine and cognitive task content are similarly (albeit in reverse) linked to the relative expansion of higher-paid occupations recently observed in most European economies. This suggests that the occupational effects of Routine- and Skill-Biased technical change are similar, and that the phenomenon of job polarization observed in some European countries is not primarily the result of technological factors.

Mechanisms of neoliberal resilience: comparing exchange rates and industrial policy in Chile and Estonia


The global financial crisis has stimulated much research about the resilience of neoliberalism. However, concrete mechanisms of neoliberal resilience are yet to be elaborated. This article elaborates such mechanisms by incorporating Amable’s notion of institutional hierarchy into Mahoney and Thelen’s gradual institutional change theory. In doing this, it provides a dynamic and politically grounded framework to analyze institutional resilience. Neoliberalism is maintained over time because dominant social blocs defend those policies and institutions that they perceive as more favorable to their interests (high-hierarchy institutions), while allowing degrees of freedom in those that matter less (low-hierarchy institutions). Four mechanisms account for the resilience of high-hierarchy institutions: marginal adjustment, solidification, accommodation and compromise. I explore the potential of this framework by comparing the trajectory of two related policy domains, exchange rates and industrial policy, in countries with a long history of neoliberal policymaking: Chile and Estonia.