Moral View of Market Society

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Moral Views of MarketSociety

Marion Fourcade1 and Kieran Healy2

1Department of Sociology, University of California, Berkeley, California 94720-19email: [email protected]

2Department of Sociology, University of Arizona, Tucson, Arizona 85721;email: [email protected]

Annu. Rev. Sociol. 2007. 33:285311

First published online as a Review in Advance onApril 5, 2007

The Annual Review of Sociology is online athttp://soc.annualreviews.org

This articles doi:10.1146/annurev.soc.33.040406.131642

Copyright c 2007 by Annual Reviews.All rights reserved

0360-0572/07/0811-0285$20.00

Key Words

markets, capitalism, moral order, culture, performativity,governmentality

Abstract

Upon what kind of moral order does capitalism rest? Conversedoes the market give rise to a distinctive set of beliefs, habits, asocial bonds? These questions are certainly as old as social scien

itself. In this review, we evaluate how todays scholarship approachthe relationship between markets and the moral order. We be

with Hirschmans characterization of the three rival views of market as civilizing, destructive, or feeble in its effects on society. W

review recent work at the intersection of sociology, economics, apolitical economy and show that these views persist both as theorof market society and moral arguments about it. We then arg

that a fourth view, which we call moralized markets, has becomincreasingly prominent in economic sociology. This line of reseasees markets as cultural phenomena and moral projects in their o

right, and seeks to study the mechanisms and techniques by whsuch projects are realized in practice.

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INTRODUCTION

In 1982, a soft-spoken economist with a self-diagnosed propensity for subversion (and self-subversion) published a short article on a big

topic (Hirschman 1982): How have intellec-tual elites understood and judged market so-

ciety throughout history? Somewhat contraryto his expectations, Hirschman (1977) foundthat themarketwas initially seen as a civilizing

force. For most of the eighteenth century, the

douxcommerce thesis heldthat market relations

made people more cordial and less inclined tofight one another. By the late nineteenth cen-tury, however, this harmonious vision faced a

challenge. Marx, among others, argued thatcapitalist society tends to undermine its own

moral foundations, to the point at which

it will ultimately self-destruct. In responseto this gloomy prediction, the defenders of

the market revised the doux commerce thesis.The market was still an essentially good

force but a too feeble one. According to thisfeudal shackles thesis, the persistence ofcultural and institutional legacies from the

past hampered the markets beneficial effects.Conversely, the absence of such a heritage

in the U.S. case was seen as a blessing anda critical element in explaining the countrys

moral character and economic success.Markets, Hirschman suggested, have thus

been cast as civilizing, destructive, or feeble in

their effects on society. In the 25 years sincethe publication of his article, there has beenan explosion of research on markets in sociol-

ogy. In this article, we begin with Hirschmansconceptual scheme and show how a good deal

of this recent work fits within its categories.First, economists still endorse the doux com-

merce thesis and generally emphasize the pos-

itive effect of market institutions on civil soci-ety, politics, and culture. We call the modern

version of this view the liberal dream. Second,public intellectuals and critics from variousdisciplines continue to critique the market.

The autodestruction thesis that Hirschmanidentified, however, has evolved into more

specific claims that markets undermine social

relations, corrupt political life, and corrocharacter. We call this view the commo

fied nightmare. Finally, economic sociologihave leaned toward Hirschmans third ca

gory: markets as relatively feeble comparedculture and society. The dominant paradig

of embeddedness implies that culture and stitutions mediate,and often trump,the moimplications (good or bad) of capitalist m

kets. In this view, markets do not have a monature outside the particular social and conitive arrangements from which they emer

and that sustain them.Despite the value of Hirschmans fram

work, we also seek to go beyond it. In scheme, the causal relationship between tmarket and the moral order is straightforwa

Markets can exert a huge direct effect for goor do tremendous damage. Alternatively, t

arrow points the other way, and fragile mkets are overwhelmed by the moral order (more rarely, nurtured by it). We argue tha

body of important work, most of it quite rcent, rejects this clean division between t

moral order and the market. Instead, researon the classification of exchange relations, tperformativity of economics, and the regu

tion of countriesand corporations in theint

national economy is united by a view of mkets as intensely moralized, and moralizinentities. We suggest that this new emphareflects not simply a shift in scholarly fashio

but also trends in the public justificationthe contemporary economic order itself.

CIVILIZING MARKETS:THE LIBERAL DREAM

Economists need no convincing that comp

itive markets constitute the best possible rangement for the satisfaction of individuneeds and the efficient allocation of resourc

Both these arguments were made long ago Adam Smith and Leon Walras, respectiveand have generally withstood the test of tim

withinthe discipline. At both micro and maclevels, so it seems, economic theory eleva

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egoism to paradigmatic status. It is not from

the benevolence of the butcher, the brewer,or the baker, that we expect our dinner, butfrom their regard to their own self-interest.

We address ourselves, not to their human-ity but to their self-love, wrote Smith (1994,

p. 15) in one of the most cited passages of theWealth of Nations. Today, the neoclassical ap-proach that formalized modern economicthe-

ory generally posits that individuals maximizetheir utility in all social relations. Principal-

agent theory, for instance, is predicated onthe notion that actors will retain informa-tion and cheat organizational demands. Pub-

lic choice theory hypothesizes that corrup-tion, rather than benevolence in some degree,

is the natural condition of the government.

And an infamous leaked World Bank memoabout the comparative advantage of develop-

ing economies in attracting dirty industrieshas become a canonical example of the po-

tential gap between moral questions of justiceand cold-blooded considerations of allocativeefficiency (Economist1992).

If economists exclusively made narrowclaims about theallocation of resources, an ar-ticle about markets and morals would feature

them only as a negative case. Yet the relation-

ship of economic theory to morality is morecomplex than this. First, economic theory isbuilt on assumptions whose implicit moralcontent can be drawn out in detail (Hausman

& McPherson 2006). Second, and more im-portantly for our purposes, there is a long tra-

dition within economic discourse of explicitpraise for themoral benefits of market society.The precise benefits vary. The doux commercetradition is carried forward by arguments thatthe market nourishes personal virtues of hon-

est behavior, civility, and cooperation. Oth-ers have seen markets as a necessary condi-tion for freedom in other aspects of life, most

prominently in politics and in the culturalrealm. A final tradition, represented today by

the bulk of prescriptive macroeconomics, em-phasizes economic growth as a condition forhuman progress, and it is best encapsulated

by Keyness comment that economists are the

trustees, not of civilization, but of the possi-bility of civilization.

A Virtue Ethics of the Market

The reason morality seems a priori irrele-

vant to economics is that, as Smith discov-ered, a system may be virtuous and harmo-nious as a whole no matter how selfish its con-

stituent parts are. But here is the twist: Eachindividuals hunger for profit will be kept in

check by a similar drive among other individ-uals. Rather than producing ruthless greed,self-interest will tend to make people polite,

serviceable, and honest. Thus, Smith (1978,p. 538; cited in Stigler 1981, pp. 17273) also

wrote that whenevercommerceis introduced

into any country, probity and punctuality al-ways accompany it. . . . Of all the nations of

Europe, the Dutch, the most commercial, arethe most faithful to their word.

Markets, then, not only produce eco-nomic harmony (the satisfaction of individ-uals desires and needs), they also create

social harmony. McCloskey (2006) is todayperhaps the most prominent defender of

the view that markets encourage not onlypublic but also personal virtue. Like other

virtue ethicists, she seeks to identify both thevirtues that comprise good moral characterand the individual habits and social institu-

tions that cultivate such virtues in people.In broad outline, we may contrast this ap-proach with the Kantian and consequential-

ist traditions, which offer competing theoriesfor judging the morality of actions (whether

through the application of deontologicalprin-ciples of moral duty or a utilitarian calcu-lation of the good and bad consequences

of ones choices). For McCloskey, marketsnurture a long list of bourgeois virtues,

including integrity, honesty, trustworthiness,enterprise, respect, modesty, and respon-sibility. Commerce teaches ethics mainly

through its communicative dimension, thatis, by promoting conversation among equals

and exchange between strangers. We canbring out the distinctive nature of this

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view by comparing it with Habermass

(1985) critique of systematically distortedcommunication. For Habermas, the marketis one of the rationalizing forces that inhibit

proper, unforced communicationbetweencit-izens, whereas for McCloskey the market-

place is the fount of habits of civil discourse.Moderneconomic theory has room for this

kind of argument, but the idea that the market

encourages the cultivation of certain virtues(and thus the implication of a fairly thick the-

ory of the individual) has been replaced bythe more utilitarian notion that any repeatedeconomic interaction or game makes it ratio-

nal to strategically develop ones credibility orreputation. In a situation in which economic

agents have little, if any, information about

one another, honesty is simply good businesspolicy.

Commerce Fosters Cooperation

The central claim of the original doux com-

merce thesis is that the market encourages civ-

ilized conduct. It is almost a general rulethat wherever manners are gentle, de Mon-

tesquieu wrote, there is commerce. Andwherever there is commerce, manners are

gentle (cited in Hirschman 1982, p. 107).The same is supposed to be true of relation-ships between nations. Commercial society

makes people more cooperative by bindingthem to one another, thereby reducing so-cial tensions, although de Montesquieu (1989

[1749], pp. 33839) noted that this is achievedby creating traffic in all human activities and

all moral virtues; the smallest things, thoserequired by humanity, are done or given formoney.

At root, the market creates a bond throughthe mediation of goods. As Boltanski &

Thevenot (2006, p. 48) point out in their dis-cussion of the justificatory logic of market-based arguments, not only does the estab-

lishment of the market bond presuppose thatindividuals are subject in a concerted way

for a common penchant for exchange; it isalso sustained by the common identification

of external goods. Objects of desire that afully detachable from the human body a

thus suited for use in exchanges, these gooprovide the underpinnings for interperson

relations. The market, then, presuppowhat we may call a shared intersubjective o

entation (first toward exchange, and secotoward goods).

How consequential is this orientatio

Most market relations remain anonymoparticularly in modern society. Echoing vHayek (1945), Seabright (2004, p. 15) argu

that the market can be described as humcooperation with nobody in charge. St

there is some evidence that this companystrangers miraculously produces greater coperation and even altruism.A series of exp

iments done in 15 small-scale societies aroutheworldfoundthatinsocietieswithmoree

posure to the market, people were more geerous with exchange partners when dividimoney in ultimatum games (Henrich et

2004). As for the relationship between mket and cooperation betweensocieties, follo

ing de Montesquieu, the reigning paradigminternational relations holds that a civiliznation has to be a trading nation (Wats

2006, p. 45). Membership in the World Tra

Organization, for instance, is widely seena sign of civilization [although some schoars dispute that the relation between interntional commerce and peace holds empirica

(Martin et al. 2006)]. Finally, between indivuals the civilizing effects of market relatio

is more mixed: Experimental results (moscarried out in the developed world) suggunequivocally that market-like situations

duce self-regarding behavior (Bowles 199p.89)butalsothatthemarketitselfmaynot

the preferred mode of exchange. Social pschologists, for instance, have found that eperimental subjects were much happier w

reciprocal (i.e., gift-like) rather than anonmous negotiated (i.e., market-like) forms

exchange, even when disparities in power aresources were taken into account (Moet al. 2006). The structural transparency

negotiated exchanges indeed seems to crea

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a framework in which injustices and inequities

are more keenly felt.In practice, many exchanges defined as for-

mally market-like fall somewhere on a contin-

uum between the paradigmatic poles of directbargaining and serial reciprocity. The pure,

abstract, and anonymous common sense ofthe market situation is routinely transformedinto an actual social relation as people seek

to reduce the problems posed by informa-tion asymmetries and opportunism. Anthro-

pologists studying local markets have longestablished that people overcome informa-tion problems in practice by personalizing

exchange. Most bazaar interactions, for in-stance, end up transiting through small net-

works of trusted relations and involve intense

bargaining (e.g., Geertz 1978). Sociologi-cal analyses of risky transactions, business-

to-business relations, and ethnic economiesmake a similar point (DiMaggio & Louch

1998, Portes & Haller 2005, Whitford 2005).Studies of online markets also offer a strikingvindication of this argument. Analyzing the

way online traders overcome the problem oftrust, Kollock (1999) found that sites such aseBay are replete with conversational features

such as bulletin boards and discussion groups,

and thereby exhibit a much greater person-alization of exchange than one might haveanticipated. In the economics literature, bycontrast, the tendency is to argue that infor-

mation asymmetries will either cause marketsto fail (Akerlof 1970) or require remediation

by some more formal institutional supportsuch as hierarchical organization (Williamson1985) or state regulation (Glaeser & Shleifer

2003).

Capitalism Makes You Free

In the postwar period, the most potent argu-ment for market capitalism has come fromits association with freedom, whether per-

sonal freedom (choice) or political freedomwithin society. Von Hayek (1944) drew the lat-

ter connection with great force. The centralorganization of production and distribution,

von Hayek argued, incrementally leads to the

use of coercive measures. Little by little, theimplementation of economic planning bringsabout increased oppression and ends in full-

blown tyranny.Written during the war, at the height of

Nazi and Soviet totalitarianism, The Road toSerfdom was an instant success and is todayone of the best-known social science books

of the twentieth century. Yet it was not vonHayek himself, but oneof his colleagues at theUniversity of Chicago who popularized the

argument that political and economic free-doms are inseparable, thereby reviving the

gospel of laissez faire in modern politics. Onthe one hand, Friedman (1962, p. 8) wrote,freedom in economic arrangements is itself

a component of freedom broadly understood,so economic freedom is an end in itself. In the

second place, economic freedom is also an in-dispensable means toward the achievement ofpolitical freedom.

Two ideas are critical to the liberal the-sis as formulated here. The first is that free

markets allow needs and desires to be satis-fied and therefore help make people happy.Economists have found some empirical sup-

port for this assertion. Frey & Stutzer (2001),

for instance, show that doing well in the mar-ket(in terms of incomeand employment)doesmake people happier (although not as muchas the ability to participate meaningfully in

the political process). A natural corollary isthe idea that empowering markets empowers

people. Market protection, whether by statesor by producers eager to preserve their profitmargin, is not only inefficient but antidemo-

cratic as well. Fettering the market preventspeople from choosing what they really want.

Consumer sovereignty is thus political free-dom in another guise. As Lerner (1972, p.258) argues, as an economist I must be con-

cerned with the mechanisms for getting peo-ple whattheywant, no matter how these wants

were acquired. This view I find very closeto the idea of democracy or freedomtheidea of normally letting each member of so-

ciety decide what is good for himself, rather



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than having someone else play a paternal

role.The second idea is that competitive eco-

nomic arrangements are the best defense not

only against arbitrary interference by thestate, but also against the concentration of

economic power in the hands of a few. (Thetwo are related by the possibility of politi-cal coercion by vested interests.) This is the

rationale behind antitrust laws: Market com-petition can be difficult to maintain in the

face of the constant work by market actors toconcentrate power to stabilize their environ-ment (Fligstein 1990). Although economists

tend to agree that unfair practices by corpo-rations should be monitored, they often dif-

fer in their assessment of the severity of the

problem and the need for sanctions. Many, infact, are quite satisfied with a lenient enforce-

ment of antitrust laws and a relatively high de-gree of concentration in practice (Galbraith

1956), arguing that economic concentrationis generally an efficient response to marketconditions (Kovacic & Shapiro 2000). But

this is not true across the board. Rajan &Zingales (2003) argue that truly free capital-ism cannot exist without a strong dose of in-

stitutional and political support. (Rajan was

appointed director of economic research atthe International Monetary Fund shortly af-terpublishing thisbook.) Freeenterprise, theyargue, is not the natural state of the economy.

Rather, it is better thought of as a delicateplant, which needs nurturing against con-

stant attacks by the weeds of vested interests(Rajan & Zingales 2003, p. 277). (This antic-ipates the feeble markets or voluntarist view

we discuss below.) They thus advocate freeingfinancial markets by opening borders, estab-

lishing strong standards of transparency andaccountability, and even maintaining a socialsafety net so that powerful actors cannot ex-

ploit economic downturns to restrict compe-tition. Writing for the developing world, they

argue that access to finance will empower thepoor, allow them to take advantage of oppor-tunities, and thereby keep vested interests in

check through the existence of countervail-

ing political power. As for the rich, they wonly stay rich if they are able to remain pr

ductive and prove their competence time aagain.

Markets Liberate Creativityand Innovation

Curiously, the strongest emphasis on the pr

tean creativity of market systems has ten come from outside the mainstream

economic theory. Alongside thinkers in tHayekian and libertarian traditions, Marsketch of bourgeois capitalism in the Commnist Manifesto and Schumpeters characteritionof capitalisms pathof creative destructi

are classic versions of this idea, rediscover

by Romer (1986). Market systems are suposed to provide incentives and opportun

ties for innovation in all sectors of the ecoomy. For our purposes, the close associati

between aesthetic taste and moral judgmemakes cultural goods an important speccase of this general argument. Intellectu

have often regarded the market as inimicalhigh culture and good taste. Following the

guments about choice and freedom discussabove, economists have often rejected su

judgments as mere snobbery. But more cently, others have sought to directly refuthe charge. If the market can be shown to p

duce cultural goods of all sorts, and encourainnovation and creativity besides, then an important pillar of antimarket rhetoric will

toppled. Cowen (2002) argues that markmake a staggering variety of work in art, l

erature, and music available to a wide varieof consumers cheaply. As a consequence, tmarket exchange of cultural goods (especia

in large, globalizing markets) feeds back inthe process of cultural production, encouraing the hybridization of genres and the em

gence of new forms. In other words, wheresociologists of culture have emphasized t

proliferation of identities and the techniquby which consumption choices act as statdifferentiators (Bourdieu 1984, Bryson 199

economists point out that it is the mark

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that provides the very basis for this activity

by generating the fecund and varied supplyof consumer goods on which the process ofdistinction feeds.

The doux commerce thesis has become theliberal dream of market society, with market

exchange variously seen as a promoter of in-dividual virtue and interpersonal cooperation,the bulwark of personal liberty and political

freedom, and the mechanism by which hu-man creativity can be unleashed and its prod-

ucts made available to society at large. Thestory for most economists usually ends there,with minor adjustmentsbut not for critics,

who relentlessly warn that the dream can turnnightmarish on all three counts.

DESTRUCTIVE MARKETS: THECOMMODIFIED NIGHTMARE

The doux commerce thesis argues for the gen-

tly civilizing effects of bourgeois commer-cial activity. The harshest critics of the mar-ket present a radically different view. Many

of these critiques build on Marxs analysisof alienation and exploitation in the capital-

ist production process, although others (e.g.,Veblen 1994 [1899]) have found capitalist

consumption to be just as morally corro-sive. These critiques challenge each aspect ofthe doux commerce thesis. Instead of enrich-

ing our individual characters, critics argue,markets reduce our justifications for action tothe narrowest kind of self-interest. Instead of

encouraging cooperation and altruism, theymake these impulses unintelligible or crowd

out the motivation to engage in them (Frey1997). Promising liberty they deliver only asmuch freedom as ones money can buy, and

in place of authentic diversity they provideersatz, commodified alternatives.

Instead of Virtue, Envy and Wants

People, Veblen argued, do not consume goodsto satisfy hedonistic needs, as economists be-

lieve, but instead to impress others by demon-strating their wealth. Capitalism thus plays

on a debased competitive instinct, inherent to

human nature, and pushes individuals, eventhose withlittle money, to consume wastefullyas a means to acquire honor and reputability.

It is a gigantic waste-producing engine, whichcontinuously encourages and supports social

rivalry. This drive for conspicuous consump-tion,inturn,hasaprofoundlydegradingeffecton individual judgment and conduct. It trans-

forms the canons of ethics, aesthetic taste, andthe sense of devotion by replacing them witha general respect for wealth and pecuniary

expense.Although it would be difficult to find as fe-

rocious a stylist as Veblen in todays scholarlydiscourse, the substance of his critique per-sists. The work of Schor, for instance, particu-

larly her documentation of middle-class con-sumption in The Overspent American (1998),

echoes The Theory of the Leisure Class. UnlikeVeblen, however, Schor draws direct politi-cal conclusions. Just as class conflict brought

about the critique of capitalist production,Schor argues, anxiety over the constant ratch-

eting of lifestyles, looming indebtedness, andthe social and ecological costs of goods oughtto generate a potent political critique of con-

sumption. Just as we saw the morally bene-

ficial aspects of markets extolled in terms ofboth personal virtue and macroeconomic de-velopment, the countervailing moral critiquealso proceeds on both fronts. For example,

at the level of personal or family consump-tion, we see moral critiques of the absorp-

tion of childhood and personal identity bythe marketing process (Schor 2004), at thesame time that activists work to tie corporate

brandidentities to unfair or exploitative child-labor practices in developing countries (Klein

2002).Two mechanisms lie behind the social

critique of affluence. Firstat the individual

levelis the competitive instinct emphasizedby Veblen and reconceptualized by Bourdieu

(1984) as the result of individuals un-consciously positioning themselves vis-a-visothers through their lifestyles. Tastes produce

anxiety because of their relationship to the



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recognition we expect from others. Second

at the macro levelis the acknowledgmentthat our wants and tastes are not simply in-ternally driven. Lane (1991, 2001), a political

theorist, makes a strong case that it is the mar-ket that creates wants, rather than the other

way around. More generally, critics of theview that markets are the best way to discoverand satisfy the latent wants of individuals

argue that wants are, in fact, endogenousto market processes. In making this claim,

the critical view disputes the economistscase that the preferences of individuals shouldbe treated as exogenous and largely unchang-

ing, with the dynamics of apparent changes intastes really explained by changes in relative

prices and incomes (Stigler & Becker 1977).

But it also contests the identification that theeconomics literature generally draws between

want, satisfaction, and happiness. It is not forpurely hedonistic reasons that we consume

or consume in particular ways. Perhaps thebest empirical evidence for this is that therelationship between affluence, choice, and

happiness is not at all clear (Easterbrook2004, Frey & Stutzer 2001, Schwartz 2005).

Instead of Cooperation, Coercionand Exclusion

Sandel (2000) suggests that ethical arguments

against commodification tend to take one oftwo forms.An argument from coercion claimsthat market exchanges are often involuntary,

and severe inequality or dire economic ne-cessity makes a mockery of the formally

free nature of market exchange (Sandel 2000,p. 94). Alternatively, an argument from cor-ruption claims that some kinds of goods

especially moral or civic goods, but also, po-tentially, things such as human organs or

embryosare corrupted or degraded by mar-ket exchange. Because of their intrinsic char-acter, some goods ought not to be bought

and sold. Another way of phrasing this ob-jection is to say that the market has only one

mode of valuing thingspricewhereas inreality goods may be valued (and valuable) in

ways that price cannot capture (AckermanHeizerling 2005, Anderson 1996). Argume

from corruption have stronger implicatiothan arguments from coercion because th

suggest that some transactions should nevbecommodified,eveniftheexchangepartne

are substantively as well as formally equal.We can view Marxs analysis of alienati

and commodity fetishism as a distinctive va

ant of the second kind of argument. In adtion to beingexploitative,thanks to theprivappropriation of the surplus, capitalism f

Marx also distorts social relations. The powof money to override the essential prope

ties of individuals and things is central this process. In a characteristically dialeccal contrast, Marx (1992, p. 165) argues th

the paradox of commodification is that socrelations between persons and material re

tions between things come to be perceivedmaterial relations between persons and scial relations between things. Thus, wher

in the markets logic the exchanged goodthe medium through which the social relati

between market actors gets established, in tMarxist framework it is the good itself thatthe (crystallized) social relation between a

tors in the production process.

In contemporary work, the reformattiof traditional social relations that results frothe progress of market capitalism has beparticularly well analyzed by Bourdieu (200

who documented the new temporal habclass, and gender relations that followed co

nial Algerias entry into economic moderniElyachar (2005) and Mitchell (2002) haoffered sobering accounts of the efforts

well-intentioned international experts to tudeveloping societies such as Egypt into lab

ratories of neoliberal capitalism, showing hsuchinnovative techniques as microenterprand titlization often end up dispossessi

the poor further from the few resources thhave. The pervasiveness of commodificati

is well documented (e.g., Strasser 200and its potentially corrupting effects aexplored in Radin (1996), Hochschild (200

and Scheper-Hughes & Wacquant (200

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Arguments in Appadurai (1986) and Zelizer

(1988), however, have pushed anthropologistsand sociologists away from the idea that themarket is a straightforward, irresistible force

that reprocesses whole tracts of society intothe commodity form. Interestingly, this shift

in theoretical emphasis has occurred duringa period of undeniable growth in the com-mercialization of certain goods and services,

notably in the areas of domestic labor, carework services, and human goods, such as

human tissue and reproductive technologies.The question is less whether commodifiedexchange is proliferating and more whether

this form carries with it a reliably negativeset of effects. Recent work tends to be more

nuanced in its assessment of the meaning of

these trends (Ertman & Williams 2005).If corruption-type arguments are less

in fashion, coercion-type arguments againstmarket exchange have proved more robust.

Historically, Polanyi (2001)providedthe mostforceful expression of the idea that the mar-ket thrives on formal equality combined with

brutal inequities in practice. Polanyis workcaptures the widespread transformation ofthe moral order that accompanied the rise

of modern industrial capitalism. Following

nineteenth-century critics, Polanyi empha-sized the dehumanizing effect of moderncapitalism on personality and social rela-tions, whereby individuals come to be seen

as commodities, rather than ends in them-selves. The pivotal moment in this Great

Transformation, he argued, was the re-form of the English Poor Laws in 1834.This institutionalized the idea of the self-

regulating labor market, thereby transform-inglaborintoacommodityanddismissinghu-

man solidarity as a legitimate basis for socialorder.

Two points are worth noting about

Polanyis thesis. First, morality was om-nipresent in the debates that led to the Great

Transformation: Much of the indictmentof the Old Poor Law relief system, whichled to the 1834 reform, was formulated in

moral, rather than strictly economic, terms.

Reformers maintained, in particular, thatpoor relief discouraged demographic and

moral restraint among the poor. Comparingthe English episode to the welfare reform of

the mid-1990s in the United States, Somers& Block (2005) find a similar ideational story.

In both cases, they show, reformers mobilizeda perversity thesis, which attributed theblame for poverty to the corrosive effects

of welfare policies on poor peoples moralcharacter. Welfare support, the argumentwent, encourages laziness and illegitimacy

and prevents any meaningful form of socialrecognition. By contrast, incorporation into

the market encourages dignity, opportunity,responsibility, and social solidarity.

Second, Polanyis account of the effects

of the New Poor Law sharply undercutsthe political economists optimism regarding

the causal connection between markets andmorality. The 1834 law offered relief belowthe lowest paid and least attractive jobs avail-

able on the market; the poor were confined tojail-like workhouses and segregated by gen-

der. To ensure labor mobility and the freeadjustment of wages, it was deemed neces-sary to make poor relief materially unattrac-

tive and morally degrading. Thus, a limited

and highly repressive social policy emergedas the natural counterpart of free-marketcapitalism. A number of scholars of neolib-eralism see the same logic at work today,

for instance, in the concomitant transforma-tion of economic, social, and penal policies

in the modern era. Wacquant (1999, 2007)draws an explicit link between welfare re-trenchment, neoliberal economic policy, and

mass imprisonment: [I]n all the countrieswhere the ideology of submission to the free

market has spread, we observe a spectacu-lar rise in the number of people being putbehind bars as the state relies increasingly

on police and penal institutions to containthe social disorders produced by mass unem-

ployment, the imposition of precarious wagework and the shrinking of social protection(Wacquant 2001, p. 404; see also Western

2006).



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Instead of Freedom, MarketPopulism

Friedman forcefully argued for the close con-nection between markets and liberty. One in-

terpretation of this argument is that the mar-ket is akin to democracy and allows people

to freely express and satisfy their choices. Tosome extent, this view builds on the Amer-ican preference for popular taste over high-

brow snobbery (de Tocqueville 2003 [1835]).But this ideal of participatory market democ-

racy, critics retort, is a sad parody of truedemocracy. For instance, Frank (2001, p. 30)analyzes how, during the economic expan-

sion of the 1990s, Friedmanite ideas of mar-ket liberalism and anti-elitism about culture

were fused with the rhetoric of the new econ-

omy to promote the argument that free mar-kets are fundamentally democratic, or rather,

that they are democracy: [S]ince markets ex-press the will of the people, virtually any crit-

icism of business could be described as anact of despicable contempt for the commonman.

Frank takes pains to show that this ideol-ogyof marketpopulism is not newin America.

Much the same thing happened at the end ofthe nineteenth century. What is remarkable,

he argues, is the intellectual unanimity thatthe equation between the market and democ-racy has received since the 1980s. (Frank

traces this back to the anti-elitist backlash fol-lowing the post-1960s culture wars.) Maga-zines celebrate the successes of businessmen

as democratic achievements. Business tropespenetrate deeply into everyday life, carried by

management gurus, public opinion experts,and marketers of all stripes who extend theparadigm of consumer choice to everything

from clothing tastes to policy choices and po-litical affiliations. The language of individual-

ism (i.e., the idea that people make decisionsfor themselves and that at least in economicmatters these are the best decisions) serves as

a powerful legitimation for free-market liber-alism. The irony is that this profoundly anti-

expert, anti-elitist,democratic ideologyhas its

ownexpert class, itsprofessionalsof marketgitimation, and has been the vehicle of a cl

polarization far greater than at any other timsince World War II.

Much less polemical but no less trechant, Thrift, a British geographer, captu

the power of the popular imagery of moern capitalism in somewhat different termCapitalism, Thrift argues, is an ongoing p

formance, constantly propped up by theries it tells itself about itself. Again, nowheis this character more obvious than in t

relationship between discursive and materchange in the so-called new economy. Ech

ing Franks critique, Thrift argues that trhetoric of the new economy was producedand for the benefit of a small number of k

stakeholdersincluding, most prominenwhat he calls the cultural circuit of ca

tal: business schools, management consutants, and management gurus. Together wthe media, governments, business economis

managers, and the information-technolosector, they feed not only on the fascinati

that the new economy discourse creates in tpublics mind, but also on the frenzy of tprofoundly new experiment in capitalism t

economy represents and carries out throu

a widespread expansion of its financial auence. As Thrift (2005, p. 112), citing Komisputs it: [I]ts the romance that produces tfinance that makes the business worth pu

suing. The intellectual move in these woris similarexcept Frank treats the logic

work in the neoliberal market as a travestytrue freedom and real democracy, which onserves to further political alienation and ec

nomic dispossession, whereas from Thrifmore postmodern stance the question of tru

is somewhat beside the point.

Instead of Creativity, Copyright

The counterpart to the thesis that markenhance cultural creativity and innovationthe claim that markets instead cater to t

publics most basic shared tastes, driving o

294 Fourcade Healy


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personal style and eliminating diversity.

Adorno & Horkheimers (2002) critique ofthe culture industry as mass deception isthe classic articulation of this view. Under

capitalism, they argue, the production of cul-ture is organized in an industrial manner and

follows the logic of profit rather than aes-thetics. Cultural objects are designed to pro-vide instant and easy gratification to those

who consume them. In addition to being ofpoor quality, they rely on a form and sub-

stance that are not conducive to critical think-ing and thereby ultimately help reproducethe status quo. Cowens (2002) description of

the modal Hollywood blockbuster as formu-laic, focused on action (rather than dialogue),

and unchallenging fits this description quite

well.The Frankfurt schools thesis had fallen

out of favor by the 1970s, but received re-newed attention with the explosion of the lit-

erature on globalization. In a manner simi-lar to Horkheimer and Adorno, critics likeJameson (1991) emphasize the idea that the

free trade of goods and ideas leads to stan-dardization in cultural practices on a worldscale, dominated by American images, prod-

ucts, and models. Against the arguments

put forward by economists, many also showthat the supposed diversity of modern con-sumption is deceptive and nourishes a de-bilitating obsession with choice, which only

breeds anxiety and dissatisfaction (Schwartz2005).

Rather than freeing up creativity, then, themarket would artificially constrain it. It mayeven block it altogether. A good example is

the recent expansion and strengthening ofintellectual property rights since the 1980s.

The tremendous cultural vitality of capital-ism, scholars have argued, is based on its abil-ity to draw from a vast cultural commons of

freely available material and the capacity tobalance the need for this commons with in-

centives for individuals to innovate (Lessig2004, Vaidyanathan 2003). The rise of restric-tive copyright laws threatens to dam up the

streams that replenish this reservoir of com-

monly shared material. A world with highlyrestrictive property rights on cultural goods

might well come to have the kind of atrophiedculture envisaged by theFrankfurtschool. But

this would be caused not by the mechanical(or digital) mass production of cultural goods,

nor their distribution via the market, but byrestrictions governing the use of these prod-ucts in the creation of new cultural forms. As

with the concentration of ownership and thewave of corporate mergers, critics of the mar-ket argue that although markets promote cul-

tural innovation and creativity in principle, inpractice they may well lead to the opposite

result.

FEEBLE MARKETS: SHACKLESAND BLESSINGS

The liberal dream and the commodifyingnightmare views share the conviction that,

for good or bad, markets have astonishinglypowerful effects on the social order. Againstthis, the axial position in economic sociology

is that markets are not such powerful institu-tions after all. Perhaps as a result of efforts to

distinguish itself from both promarket enthu-siasts and Marxist or Veblenian critics, eco-

nomic sociology has consciously avoided tak-ing an explicitly normative position on themarket as such. Following the terms of the

debate as set by economists (Fourcade 2007,Zelizer 2005b), thefield has emphasized ques-tions of market structure and economic devel-

opment over questions of moral order. Thelatter only come up to the extent that eco-

nomic sociologists have sought to evaluate thecontribution of a countrys (or a regions) cul-ture and institutions to the performance of

its markets, sometimes with an explicitly pre-scriptive angle. The theme throughout is that

markets are embedded in, entangled with, orotherwise dependent on other parts of society(Beckert 2002). Hence, the problem of moral

order remains relevant, but as an independentratherthanadependentvariable.Thisismuch

in line with what Hirschman calls the feu-dal shackles/feudal blessings thesis, the idea



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that the development of markets depends on

the institutional legacies of the past. We referto contemporary scholarship in this vein aspromoting the feeble markets thesis, and we

argue that it comes in three main variants:(a) From a realist view, capitalism thrives in

certain cultures, whereas other cultures re-main stuck; (b) in a voluntarist understanding,the conditions that will help capitalism thrive

can be implemented as a package by way ofpolitical intervention; and (c) from a differen-

tiated perspective, capitalismfollows differentpaths in different places.

The Realist View: Cultural Legacies

Webers studies of the relationship between

religious doctrines and economic life are aclassical source of the claim that culture has

an independent effect on economic organiza-tion. Each worldreligion, Weber argued, hasa

particular economic ethic associated with itthat is, it encourages or discourages a particu-lar set of economic practices in everyday life.

But the relationship between religion and theeconomy is not straightforward. For instance,

Weber (1958) was careful to show that the ra-tional search for profit he observed among the

protocapitalist Calvinists did not follow log-ically from their religious worldview. Rather,their actions made psychological sense as a

way to relieve the salvational anxiety theirharsh religious doctrines tended to produce.By contrast, Weber argued, the religions of

Asia could not independently help evolve cap-italistic attitudes (still, he believed these re-

gions were perfectly capable of assimilatingcapitalism once it had developed elsewhere).Although Asian soteriologies shared ascetic

Protestantisms commitment to self-control,they were directed at a contemplative with-

drawalfrom theeveryday world. These beliefsinhibited the development of the vocationalconception of economic activity that was crit-

ical to the rise of rationalized capitalism in theWest (Weber 1951).

In light of modern scholarship on com-parative religion, Hamilton (1994, 2006; also

see Hamilton & Biggart 1988) reformulathe Weberian argument by focusing on t

way civilizational (and particularly religioelements came to shape the structure of a

thority in different cultures. In the Wethe Protestant heritage means that indiv

ual compliance to authority relies mainly self-control. In the Confucian world, by cotrast, compliance to authority relies on ob

dience to a higher order. Hence, wherthe West came to place a high value individual jurisdictions (e.g., individuals a

granted the active mastery of their world),China the emphasis was on individuals a

justing to the world by finding their plain a harmonious status ordering of rolFor Hamilton, however, this political-cultu

trait suggests a different path for China incapitalism,through filial piety and familial e

terprise, rather than an intractable cultuobstacle.

Even close followers of WeberHamilt

or Collins (1997) for exampledo not argfor the strong thesis that major religio

ethics such as Confucianism or Buddhism aantithetical to the development of capitalisMost sociologists today subscribe to t

differentiated view we discuss below. By co

trast, economists understanding of the effof culture on development has been morigid and realist. Landes (1998), for instanmakes the bold argument that industr

revolutions are unsustainable without certacultural traits, which he thinks of as nor

that express themselves in personal virtuThe argument has some qualifications, bnevertheless, if we learn anything from t

history of economic development, he arguit is that culture makes all the differenc

(Landes 1998, p. 516).The work of another economist, Gr

(1994, 2006), stands out as a sophisticat

attempt to delineate the microlevel mechnisms whereby cultural worldviews give r

(or not) to market institutions. In his comparative study of commercial life in tlate medieval period, Greif contrasts the s

cially heterogeneousmakeup and individua

296 Fourcade Healy


13/30

culture of Genoese merchants with the me-

chanical solidarity and collectivist culture ofMaghribi traders. Using a game-theoreticapproach, he shows how different expecta-

tions with respect to others actions in eachcultural context shaped principal/agent rela-

tionships, attitudes toward the circulation ofinformation, and sanctions for deviant be-havior andultimatelygave rise to diver-

gent paths of economic development. Greifargues that the two groups evolved differ-

ent economic systems as efficient responsesto the problem of moral hazard under strongcultural constraints. The alternative institu-

tional solutions, however, were not equalin terms of their economic performance in

the long run. Whereas the Genoese traders

and their Western descendants could capi-talize on the blessings of formal contract-

ing and go on to dominate the world, theMaghribi traders and their successors in the

developing world, although fairly efficient athome, got stuck by the shackles of infor-mality and highly personalized social rela-

tions and were unable to extend their tradingactivities.

What these views have in common is

the argument that the moral order of soci-

eties constitutes a precondition for the de-velopment of market capitalism, althoughthe mechanisms can be quite differentpsychological in Webers case, rational and

game theoretic in Greif s. But the point is thatcapitalism thrives in certain cultural contexts

and stumbles in others.Finally, others have extended this argu-

ment to sticky institutional legacies whose

effects hamper the development of effi-cient institutions. Since Evans (1989) pop-

ularized the distinction between predatoryand developmental states, for instance, schol-ars across the social sciences have attended

to the effect of political structures on eco-nomic development or failure. Among the

best in this vein in economics is an in-fluential article by Acemoglu et al. (2001),which demonstrates the long-lasting impact

of the worst, extractive type of colonialism

(in which colonizers economically exploit thecolony but do not themselves settle there)

on the quality of contemporary economicand political institutions and thus economic

performance.

The Voluntarist View: Good and BadInstitutions

The position that there are right and wronginstitutions when it comes to thedevelopment

of markets has been a powerful instrument inthe hands of would-be advisers to economicpolicy makers. Among the best practice,

market-friendly institutions economists havevariously identified are strong property

rights (De Soto 2003, North 1990, North

& Thomas 1973), a common law system(La Porta et al. 1998), well-developed and

transparent financial markets (Rajan & Zin-gales 2003), and specific models of corporate

governance (Hansmann & Kraakman 2001).Realists and voluntarists differ mainly in theirdegree of optimism about the malleability

of pre-existing economic, social, cultural,and political conditions. For voluntarists,

the set of right institutions for growth anddevelopment is available as a package to be

implemented more or less anywhere, perhapswith a few small tweaks to adjust for local id-iosyncrasies. Realists, by contrast, believe that

success depends on some key institutionalor cultural ingredients but are more likelyto emphasize the burden of history or the

inescapability of basic aspects of a societysculture. Roland (2004) recently brought this

debate home in economics by establishinga distinction between slow-moving (e.g.,culture, social norms) and fast-moving (e.g.,

legal systems or electoral rules) institutions.A sharp critic of the shock therapies applied

in Eastern Europe and Russia, he arguesthat the interaction between the two types ofinstitutions explains why the transplantation

of best practice institutions (or institutionalmonocropping) does not work. . . . Coun-tries with different cultural and historical

paths must find within their slow-moving



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institutions the roots for changes in their

fast-moving institutions (Roland 2004,p. 120).

Such arguments point toward another

form of voluntarism. If economic volun-tarism often amounts to a naturalization of

American models as best practice institutions,sociological work provides a good illustrationof a softer, or hybrid, form of voluntarism,

which relies more explicitly on the detailedknowledge of local institutions and culture.

In his influential statement on industrialstrategies in Third World developmentalstates, for instance, Evans (1995) argues that

a successful industrialization must rely on acombination of state capacity (e.g., a cohesive

and legitimate bureaucracy, autonomous

from political pressure) and a workingconnection between public administration

and private capital. Criticizing not only thestate-bashing proclivities of much of con-

temporary economic advice, but also whatwe may call the statist fervor of the earlierdevelopmentalist literature, he shows that

state capacity without connection will not dothe job (Evans 1995, p. 244). Chibber (2003)complements this argument by suggesting

that state autonomy is insufficient in another

way: If the culture of bureaucratic rationalityis squandered in the competitive processamong state agencies with no proper dis-ciplinary oversight, development strategies

are unlikely to be successful. Finally, Evans(2004, p. 31), making an argument somewhat

similar to Putnams (1993), has recentlysuggested a further mechanism for improvingeconomic performance, deliberative institu-

tions founded on a thick democracy of publicdiscussion and exchange, for which he finds

empirical illustrations in the state of Kerala,India, and in the city of Porto Allegre, Brazil.The key, then, is the combination of a volun-

tarist principle having to do with the generalform of political and administrative insti-

tutions (embedded autonomy, bureaucraticcohesiveness, deliberative democracy) and ofthe sociological attention to its specific artic-

ulation within the local context. Once these

general principles are established, indeed, trange of possible blueprints remains qu

open.

The Differentiated View: Varieties

of CapitalismIn contrast to both realists and voluntariststhird group of scholars argues that the ran

of viable pathways to growth is in fact quwide. Some version of this more differentiat

view is the dominant position within sociogy. For our purposes, its proponents can distinguished by how close a causal conne

tion they see between institutions or cultuon the one hand, and economic growth,

the other. Some argue that different cultu

or institutional configurations directly suport different types of capitalisms or indu

trial strategies. How many types is a matterdebate. Hall & Soskice (2001) posit two ba

varieties of modern capitalism (liberal and cordinated, modeled after stylized versionsthe United States and Germany, respectivel

each of which is organized around compmentarities among the different institution

domains and is capable, in its ideal typiform, of yielding high growth rates. Othe

(e.g., Amable 2003) see a broader rangepossible institutional combinations and ecnomic outcomes.

At the opposite end of the scale are thowho see a much weaker link between ctural and institutional arrangements and ec

nomic performance. Dobbins (1994) coparative analysis of the development of t

railway sector in the nineteenth century iparadigmatic case. In their efforts to achieeconomicgrowth, he argues, public officials

three countries chose different paths becauof their differentmoral perceptions about hto maintain social order. In the United Stat

they strove primarily to protect communself-determinationand prevent public corru

tion; in France centralized coordination the state was deemed necessary to avoid gistical chaos; and in Britain they were co

cerned withprotecting individual sovereign

298 Fourcade Healy


15/30

Three different economic orders emerged in

these countries, each efficient at performingsome tasks and less so at performing others.All three of these orders could plausibly be

understood as rational responses to the waythese officials perceived the problems to be

solved and the ultimate goals of their action.That each country built a functioning nationalrailway network was taken, by those involved

in each case, as a confirmation of this point.For Dobbin, the performance of the railway

networks he studies is of interest mainly in anegative sense: Despite their differences, alldid well enough to justify their planners faith

in them, which helps reject thehypothesis thatsome basic competitive laws described the de-

velopment of each system.

It is not just sociologists of culture who areskeptical of strong claims about the economic

efficacy of institutional arrangements, how-ever. Advocates of multiple paths such as Hall

and Soskice argue that there is more thanone way to organize an effective, productiveeconomy, but they retain the conviction

that there is a relatively tight connectionbetween institutional coherence and eco-nomic performance. Like Hall and Soskice,

Kenworthy (2004) argues that different sorts

of capitalisms can thrive without having toconverge on a single model in the long run.But, like Dobbin, he is not convinced that thelink between institutional complementarities

and economic performance is tight. Policyoptions typically presented as economically

inevitable trade-offs are in fact more similarto political choices that might or mightnot be pursued without strong effects on

economic performance. Dobbin sees thisdecoupling as evidence that differences

between models of political order drownout the effects of economic laws, whereasfor Kenworthy it provides opportunities to

implement alternative social policies withoutthe fear of crashing the economy.

On its face, the feeble markets view cannotmatch the liberal dream view for zealous ad-vocacy nor the commodifed nightmare view

for damning critique. Yet a reading of this lit-

erature makes it clear that each of the realist,voluntarist, and differentiated views is often

proposed as a moral or ideological project.Most realist readings are the latest version of

the long-standing idea that West is best.Optimistic voluntarists urge that the king-

dom of God lies within us, requiring only theright ingredients and the political resolve toput a plan into action. And the differentiated

view amounts to a robust defense of alterna-tive models of economic success: A thousandflowersor some number between two and

sevenought to be allowed to bloom.

MORALIZED MARKETS:MARKETS AS SCIENTIFIC

AND MORAL PROJECTSHirschman identified a progression in intel-

lectual history from doux commerce argumentsto autodestruction to feudal shackles (or

blessings). We converted this sequence toa typology and used it to organize our dis-cussion thus far. In the spirit of Hirschmans

historical perspective, we link classic state-ments of each view to counterparts in the

contemporary literature, while emphasizingthat the three positions have differentiated in-

ternally or shifted their emphasis over time. Inbroad outline, however, a picture of how theseparate worlds of the market and the moral

order interact is clearly visible within eachview. In the doux commerce and corrosive mar-ket versions, thecausal line runs strongly from

market to morality, for good or bad. The fee-ble markets view is more sanguine. Different

social and moral orders may foster the marketor inhibit it, or simply give it a particular localflavor.

Are these the only choices? We think that abody of recent work strikes out in a new direc-

tion, one not so well captured by Hirschmanstypology. Its characteristic move is to ar-gue that markets are culture, not just be-

cause they are the products of human prac-tice and sense making (Abolafia 1997, Knorr

Cetina & Bruegger 2002), but because mar-kets are explicitly moral projects, saturated



16/30

with normativity. We see three areas in which

this idea is being developed. First, there isthe role of markets in the creation of moralboundaries between persons or societies. On

the surface, this work recalls McCloskeys ar-guments about the bourgeois virtues or Fried-

manite arguments about the importance ofmarkets to individual liberty, but on the sur-face only. The sociologists we discuss below

are typically concerned with the social sourcesof moral ideas and not the development of

a positive moral theory. Second, at the levelof particular markets, sociologists of sciencehave begun to treat the social technologies of

market making in the same way that they ex-amine life in laboratories. In this work, the

persistent tension in economics between nor-

mative and descriptive theory is shown to beresolved in practice through the development

of social technologies that bring the behaviorof markets in line with the demands of the-

ory. Third, at the macro level, economic rulesturn out to be filled with explicit moralizing,whether concerning the creditworthiness of

nations, their degree of corruption and crony-ism, or theextent of corporate social and envi-ronmentalresponsibility. All these approaches

aim to show that market exchange is saturated

with moral meaningthat is, that it involvesmore or less conscious efforts to categorize,normalize, and naturalize behaviors and rulesthat are not natural in any way, whether in the

name of economic principles (e.g., efficiency,productivity) or more social ones (e.g., justice,

social responsibility).

Markets and the Making of MoralPersons

Anyone who has read The Protestant Ethic andthe Spirit of Capitalism knows that in modern

societies money is central to the evaluation ofthe moral worth of individuals. The carefulmanagement of ones wealth is not just eco-

nomically rational but an index of ones moralresponsibility. The earmarking of money for

different social uses relies on, and supports,systems of moral classification (Zelizer 1994).

Similarly, different kinds of payments (pierates, wages, salaries, stock options, and

on) do not simply reflect specific incentivor bear only a technical relation to the wo

being paid for. They also incorporate spcific status signals, cultural representatio

(Biernacki 1995), and codes of moral worWe can clearly see this moralizing aspectpayment systems, for instance, in research

the evolution of welfare provision. Cultucategories of worth are institutionalizedsystems of benefits and entitlement (Mo

2005) and provide the basic set of meaings and tropes available to actors seeking

reform or reorganize existing arrangemen(Steensland 2006).

The same processes can be seen with

kinds of market exchange as well as at tborder between market and nonmarket act

ity. In fact, the intertwining of market activand moral valuation is so pervasive that rcent studies have argued that the image

a clean division between market and nomarket spheres is of limited utility. Zelize

work consistently emphasizes how markand moral boundaries shift and recombiin practice. Her early study of life insu

ance(Zelizer 1979)showed howsacrilegiou

profiting from death could be recategorizas a morally responsible form of investmewith the help of deliberate efforts to rialize the purchase of insurance at the sam

time as marketizing it. In this case, she lustrates that successful commodification (t

spread of the insurance market) requires sustantial moral and cultural work. Her susequent (Zelizer 1985) analysis of the elim

nation of the child labor market in the lnineteenth century shows a similar proc

of sacralization moving in the opposite dirtion, as children were removed from the mket and became priceless objects of sentime

Most recently, Zelizer (2005b) has examinthe careful ways that different kinds of in

mate relationships are differentiated from oanother. Sheemphasizes thecrucial role moetary exchanges play (as they are interpret

variously, as payments, gifts, or entitlemen

300 Fourcade Healy


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in defining and signaling the substance of par-

ticular social ties.Collins (2000, p. 18) argues that Zelizers

work shows how superficially homogenous

markets often disguise quite separate re-stricted circuits of exchange (Zelizer 2005a),

in which prices and money carry particularinformation about the moral status and socialpositions of participants. From this point of

view, markets cannot be conceived as morallyimproving institutions in the sense put for-

ward by McCloskey. But they play a powerfulmoralizing role in practice by defining cate-gories of worth and, through variation in the

form and timing of payments, signaling thekind of transaction taking place. For instance,

Velthuis (2005) provides a detailed study of

the highly symbolic nature of prices in the artmarket. The division between art and money

is reflected in the physical structure of gal-leries (art at the front, commerce at the back).

Understanding the price of a piece of art de-pends on knowing many other facts about thesocial organization of the art world. Prices for

art vary depending on whom artworks are ex-changed with, as practicesof discounting serveto mark particularistic relationships between

dealers. The pricing of art itself is a highly

scripted process, dependent on the position ofdealers, the setting of the sale, and narrativesabout the arc of the particular artists career.

The approach is broadly Durkheimian.

Morality does not refer here to some univer-sal ethical standard; rather, it means what a

society, or a group, defines as good or bad,legitimate or inappropriate. The moral val-uation or appropriate classification of par-

ticular goods, or even of the market itself,is therefore not fixed but empirically vari-

able. From this point of view the study of ex-change relations brings about an analysis ofhow moral categories (defined in this socio-

logical way) are formed, contested, and trans-formed. Zelizers approach allows for consid-

erable analytical nuance, for example, in herreadings of the complex fightsoften playedout in legal casesthrough which people seek

to define transactions as falling into one cat-

egory or another, depending on the sort ofpeople and types of relationships involved.

This focus on conflict over meaning opens theprospect of linking local battles over particu-

lar transactions with large-scale shifts in cate-gories of worth, something that Zelizer does

not deal with directly.The appropriate classification of goods (as

exchangeable or not, as gifts or commodities,

and so on) is often the subject of conflict.Objects or relationships may move back andforth across boundaries in responseto techno-

logical change, the mobilization of interestedgroups, or the efforts of moral entrepreneurs.

For instance, blood donation shifted from agift-based to a partially marketized system andback again in the United States between the

1960s and the 1980s, whereas the status oforgan donation is presently highly contested,

with both supporters and opponents of mar-ket exchange claiming that theirs is the prop-erly moral position (Healy 2006). The suc-

cessful classification of certain exchanges asgifts may act as a channel for power or ex-

ploitation as easily as the process of commod-ification. Feminist scholars have argued thisis often the case for many sorts of care work

(Folbre & Nelson 2000). How gift and market

exchange relate to moral worth is, ultimately,an empirical question.

Declaring that moral boundaries are soci-ological phenomena does nothing to resolve

practical struggles over their definition. Whatmakes the question of the relationship be-

tween markets and morality particularly diffi-cult to study from this dispassionate viewpointis thatas we demonstrate in the first and sec-

ond parts of this reviewsocial scientists havethemselves been deeply involved in the moral

evaluation of markets and their alternatives.Critics remind us that the market is a pro-foundly political institution and routinely use

the language of commodification and powerto convey moral outrage. Advocates of mar-

kets deny this and suggest more or less ex-plicitly that the rationale of the market isdeeply ethical, either because efficiency itself

is a vital moral criterionor because the market



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enables some other, higher principle to be ful-

filled. It is in this agonistic sense that marketsparticipate in the construction of categoriesof moral worth. People constantly mobilize

moral principles and views of the commongood to talk about the effects of market pro-

cesses (Boltanski & Thevenot 2006, Lamont& Thevenot 2001). As such, markets are thesite of moral conflicts between social actors

committed to different justificatory principlesand the locus of political struggles between

various interests (Fligstein 1996, Schneiberg& Bartley 2001, Yakubovich et al. 2005). Thisheterogeneity should not blind us to the fact

that some actors are considerably more pow-erful than others, just as some justificatory

logics (and the economic technologies asso-

ciated with them) are more effective instru-ments than others in practice. The logic of ef-

ficiency seems to depoliticize social relations,for example, by masking the political conflicts

inherent in many kinds of economic policy,and this apparent objectivity helps reinforceits legitimacy (Amable & Palombarini 2005).

Economists and the Constructionof Calculative Agencies

The view of markets and morality discussedabove is necessarily reflexive. It acknowledgesthat all social actors, including social scientists

themselves, participate in the process of defin-ing markets as moral things. Social scientistsdraw on various forms of evidence to weigh in

on the moral evaluation of markets, define thecategories through which we understand mar-

ket processes (e.g., public/private, rational/nonrational), and help frame the policies thatapply to them. Their arguments are repro-

duced in the broader public sphere and im-plemented in policy.

More than any other academic profession-als, economists actively shape market institu-tions. Partly this is because economists are

less embarrassed by beliefs about the rigid-ity of institutions and culture, as we suggest

above. Constantly solicited for their exper-tise, economists have taken the lead in in-

stitutional designi.e., in providing recipfor creating a framework for national dev

opment, corporate management, or orgazational reform. As such, their contributi

to the production of particular moral uderstandings and behaviors deserves spec

scrutiny, hence the relevance, for our analycal purpose here, of the recent science-studliterature that preoccupies itself withwheth

and how, economists (and economic modemake markets, or, rather, make markets woas they should. (See Callon 1998a, Call

& Muniesa 2005, MacKenzie et al. 2007 fgeneral statements. For more specific studi

see Beunza & Stark 2004, MacKenzie 200Zaloom 2006 on finance; Mitchell 2005 land titles; and Guala 2001, Mirowski

Nik-Khah 2007 on auctions.)Much of this work tries to demonstrate

critically evaluate what Callon (1998b) cathe performativity of economics. This is tidea that economic technologies do not ju

describe the world, but are profoundly ivolved in shaping itto the point of maki

real agents behave in the way theory says thshould. Economics emphasis on incentivfor instance, is explicitly directed at aligni

the behavior of actors (whether individuals

corporations) so they will perform a desiroutcome, not out of compliance with a cocive order, but simply out of self-interest. Iworld saturated by economic thinking, acto

are thus progressively turned into calculatagencies. Homo economicus, as Callon (1998

puts it, is made flesh by economic technogies; economic models, formulated throua process of abstraction and disentangleme

from reality, thus get entangled again.As MacKenzie (2006, pp. 1525) not

however, the concept of performativity allofor both weaker and stronger interpretatioand the strongertheinterpretation, the hard

it is to show conclusively. He distinguishthree kinds of performativity, in increasi

order of interest. With generic performatity, the concepts and language of economare used by participants in the economy. E

fective performativity happens when the to

302 Fourcade Healy


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of economics materially affect the outcome

of the process. The strongest case is Barnes-ian performativity (after Barnes 1988), whenenacting the theory or model alters the eco-

nomic actors or process so that they bettercorrespond to the model (MacKenzie 2006,

p. 19).Clearly, under empirical scrutiny, weaker

varieties of performativity might easily be

mistaken for stronger ones, and the weakest,generic sort might just be window dressing for

processes that might have happened anyway.Here students of performativity echo theirorigins in the sociology of science. Research

in that field has been criticized for equivo-cating between strong claims about scientific

knowledge that turn out to be false (or hard to

establish) and weaker claims that are sustain-able but much less interesting. The method-

ological reaction of the performativists issimilar to the response within science stud-

ies: emphasize the incorporation of theoret-ical principles not just in the minds of ac-tors, but also in the algorithms, procedures,

routines, and material devices (MacKenzie2006, p. 19) used in the field. In responseto critics (Miller 2002), Callon (2005, pp. 1

4; see also Callon & Muniesa 2005) makes

the same point: Talking of the performativityof economics means . . . that concrete marketsconstitute collective calculative devices . . . .

These agencies, like Hobbes Leviathan, aremade up of human bodies but also of prosthe-ses, tools, equipment, technical devices, algo-

rithms, etc.This (mostly European) work on perfor-

mativity connects with two lines of (mostly

American) sociology focusing on how cat-egorical consistency and comparability are

achieved in practice. First, the social tech-nologies of performativity are related to thetechniques of quantification and commensu-

ration reviewed in Espeland & Stevens (1998)and analyzed in, for example, Carruthers

& Stinchcombe (1999), Sauder & Espeland(2006), or Chan (2004). Second, the way inwhich these technologies disentangle objects

recalls Whites (1992, pp. 1213, 18084) no-

tion of decoupling, in which agents simplifytheir settings and (in the process) achieve

comparability between identities or prod-ucts. Economic sociologists in the network-

structuralist tradition have drawn on Whitesideas to show the costs (in terms of status or

legitimacy) to actors or products that are noteasily compared to others or cannot be lo-cated in an available category (Podolny 2005,

Zuckerman 1999). Across these research pro-grams, we repeatedly encounter the idea thatpractical techniques for quantifying, com-

mensurating, or screening create and sustainstable categories that then legitimate statuses,

which in turn allow for stronger moral regu-lation of the actors being categorizeda re-entanglement.

The Governmentalizationof the Economy?

Economic exchange and policy making aresaturated with moral statements. Today, con-cepts such as transparency and corruption,

and the complex techniques that performthem, are routinely used to monitor corpo-

rations, international institutions, and evencountries. In both their commonsensical and

more elaborated forms, ideas about fair prices,fairwages,faircompetition,andnowfairtradeare predicated on moral views about what

things are really worth or how much poweris too much. The conditions under whichcertain economic behaviors will be defined

as moral or immoral are always socialevenwhen they are rationalized and formalized

by expertise. Japan before World War II, forinstance, did not view cartels as illegitimatearrangements. To the contrary, they were per-

fectly normal modes of operation in a busi-ness world dominated by networks of mutual

obligation (Gao 2001). What has changed be-tween then and now is that such practices havebeen redefined as illegitimate by experts act-

ing in the name of a different value: efficiency.Similarly, few people cared about coffee-

growing practices just a few decades ago.Now these practices are classified as either



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conventional or ethical. The latter are the tar-

get of strict standards of certification and evenclaim a separate market. Consumers, businessactors,andpolicymakershaveattheirdisposal

elaborate technologies and theories to definethe moral criteria against which prices and

wages are compared, the degree of compet-itiveness in a particular industry is evaluated,andtheextentofcorruptioninanationismea-

sured. Clearly, it is time to combine the anal-ysis of the moral discourses reviewed above

with arguments about their cultural basis andthe performative techniques that enact them.In this way, we see how markets are being ac-

tively moralized by the deployment of prac-tical techniques, whether self-consciously (as

in the case of social responsibility) or in the

name of neutrality and objectivity (as in thecase of efficiency). Indeed, many of the per-

spectives discussed above can now be under-stood not only as discursive arguments about

the market, but also as practical dispositifs(touse a Foucauldian term) that work to bringmarkets in line with moral ideals so the pro-

cesses that go on inside them can be regardedas legitimate (Seabrooke 2006).

As demonstrated above, much of the ratio-

nalization and moralization that takes place

is dominated by economists and often relieson the elevation of purely economic crite-ria such as efficiency or profit making to thestatus of a moral rule. The proliferation of

agencies that monitor the behavior of indi-viduals, corporations, or nations with respect

to debt, transparency, or honesty is an in-tensely moral project carried out in the nameof rationalizing and expanding economic ex-

change and democratizing society. (Politicaland economic liberalism are often two faces

of the same cultural process.) The neoliberaleconomy is thus a governmentalized economy(Foucault 1979, Gordon 1991, Rose & Miller

1992)1 shaped by a myriad of surveillance or-ganizations entitled to (but also with obvious

1Foucault named this phenomenon but did not analyzespecific instances or mechanisms in detail (Gorski 2003,pp. 2426).

material interests in) the rational applicati

of technical means to govern the conducteconomic actorsbe they small or large. Rcent research thus elaborates the dramatic e

pansion of individual credit reporting (Guse& Rona-Tas 2001), the new politics of tran

parency (Best 2005), therise of corruption rings (Bukovansky 2006, Larmour 2006), acounting techniques (Miller 2001), financ

analysis (Zorn et al. 2004), and bond rati(Sinclair 2005). These are not only inform

tional devices that grease the wheels of commerce, but profoundly disciplining oneswell. Indeed, consistent with the original Fo

cauldian concept, the diffusion of these prcedures embodies a profoundly new sociop

litical view in which the behavior of actors

regulated internally through self-monitorinrather than externally through coercion.

As mentionedabove, not all economicgoernmentalization has its origins in the eco

omy. For instance, new systems of private reulation via certification have also emerged aconsequence of bottom-up protests by soc

movement activists working within the prvailing neoliberal climate to extend the ntions of accountability and transparency

corporate policy on environmental and lab

questions (Bartley 2003, Goldman 2005). Oviously, one can see these developments motivated solely by narrowly economic cosiderations: After all, ethics is good busine

too, both for those who comply (e.g., the rof organic farming) and for those who impo

the standards (e.g., the expansion of certifyiagencies). However, to reduce the moraliztion of markets to economics would be to m

entirely the meaning and shape of the moenterprise at work and its profound differen

from earlier eras, in both institutional struture and direction.

MORALITY AND MODERNITY

Models of economic development and ganization always rely on particular unde

standings of the basis of the moral ordthat get universalized through hegemo

304 Fourcade Healy


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processes (Bourdieu & Wacquant 1999). No

such model, then, is ever free of moral judg-ments. Still, these judgments may be articu-lated more or less openly, or simply remain

buried below the surface of material relations.A number of authors (e.g., Best 2005) have

suggested that the current period is unusu-ally rich in explicit moral statements (most ofthem about self-control and self-regulation)

that support the neoliberal project, in inter-national economic relations and elsewhere.

The discourse of the market is increasinglyarticulated in moral and civilizational terms,rather than simply in the traditional terms of

self-interest and efficiency. There is a sensein which technocratic expertise is no longer

sufficient to generate legitimacy and that it

must be shored up by loftier ideals and prac-tices. In our effort to understand this phe-

nomenon, we should perhaps take a cue fromBourdieus (1977, p. 169) remark that the ar-

bitrary principles of the prevailing classifica-tion never need as much explicit articulationas when they come under direct attack, as the

neoliberal project has in recent years. In suchcircumstances, these principles are defendedby condemning alternatives (e.g., tampering

with property rights) as morally evil.

The obvious corollary to this argument iswhat Polanyi (2001) called the double move-ment, that is, the societal backlash againstthe advance of self-regulating markets. Many

of the social movements that articulate a cri-tique of the modern economy may be under-

stood from this point of view, for instance.The systemic demand for legitimacy may evenhelp fuel these reactions in an effort to en-

compass them (see, for instance, the rise ofgreen neoliberalism at the World Bank in

Goldman 2005).Butit is importantto remem-ber that the ways in which these heterodoxies

get formulated, transposed, and implementedare themselves constrained by the existing in-

stitutions and the rules of the game, in whichthey are inevitably embedded and on whichthey sometimes directly depend. The result

is that much of their critique of the existingeconomic order is itself technified and com-mensurating, diffused across a wide range ofgoverning institutions, and often premised onself-discipliningin other words, it is no less

governmentalized a vision of the moral or-der of the market than the prevailing view it

opposes.

In summary, for most of its history, in-tellectuals have variously praised, reviled, or

downplayed the moral consequences of mar-ket capitalism. These positions remain well

represented in todays literature. Still, the dis-tinctive quality of contemporary scholarshipis that it goes much further in opening the

black box of morality and dissecting the cul-tural and technical work necessary to produce,

to sustain, orconverselyto constrain themarket. In doing so, it also reveals the role

social scientists play in this process. As thelast section of the paper suggests, continuingthis task, then, implies a reflexive approach,

in which theorists in economics, political sci-ence, and sociology critically consider theirown participation in the definitionof the mar-

kets moral categories and in the construc-tionof competing moralizing instruments and

techniques.

ACKNOWLEDGMENTS

We thank the participants of the 2006 Summer Institute on Economy and Society at theCenter for Advanced Study in the Behavioral Sciences for a discussion of a previous draft, as

well as Len Seabrooke and Viviana Zelizer for helpful advice.

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Documents

Moral View of Market Society