To appear in Annual Review of Sociology 33 (2007). Please do not cite or quote without permission.

Moral Views of Market SocietyMarion FourcadeDepartment of Sociology, University of California, Berkeley.

fourcade@berkeley.edu.

Kieran HealyDepartment of Sociology, University of Arizona.

kjhealy@arizona.edu.

Abstract: What kind of moral order does capitalism rest upon? Conversely, does themarket give rise to a distinctive set of beliefs, habits, and social bonds? %ese questions arecertainly as old as social science itself. In this review, we evaluate how today’s scholarshipapproaches the relationship between markets and the moral order. We begin with AlbertHirschman’s characterization of the three rival views of the market as civilizing, destructiveor feeble in its e&ects on society. We review recent work at the intersection of sociology,economics and political economy and show that these views persist both as theories of marketsociety and moral arguments about it. We then argue that a fourth view, which we call“moralized markets,” has become increasingly prominent in economic sociology. %is worksees markets as cultural phenomena and moral projects in their own right, and seeks to studythe mechanisms and techniques by which such projects are realized in practice.

Key Words: markets, capitalism, moral order, culture, performativity, governmentality

In 1982, a so*-spoken economist with a self-diagnosed propensity for subversion(and self-subversion) published a short article on a big topic (Hirschman 1982): Howhave intellectual elites understood and judged market society throughout history?Somewhat contrary to his expectations, Albert Hirschman found that the market wasinitially seen as a civilizing force (Hirschman 1977). For most of the eighteenth cen-tury, the doux commerce thesis held that market relations made people more cordial

We thank the participants of the 2006 Summer Institute on “Economy and Society” at theCenter forAdvanced Study in the Behavioral Sciences for a discussion of a previous dra*, as well as Len Seabrookeand Viviana Zelizer for helpful advice.

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and less inclined to ,ght one another. By the late nineteenth century, however, thisharmonious vision faced a challenge. Marx, among others, argued that capitalist so-ciety tended to undermine its own moral foundations, to the point where it wouldultimately self-destruct. In response to this gloomy prediction, the doux commercethesis was transformed. %e market was still an essentially good force, its defendersthought, but a feeble one. According to this “feudal shackles” thesis, the persistenceof cultural and institutional legacies from the past hampered the market’s bene,ciale&ects. Conversely, the absence of such a heritage in the U.S. case was seen as a bless-ing, and a critical element in explaining that country’s moral character and economicsuccess.

Markets, Hirschman suggested, have thus been cast as civilizing, destructive, orfeeble in their e&ects on society. In the twenty ,ve years since the publication of hisarticle, there has been an explosion of research on markets in sociology. In this arti-cle, we begin with Hirschman’s conceptual scheme and show how a good deal of thisrecent work ,ts within its categories. First, economists still endorse the doux com-merce thesis and generally emphasize the positive e&ect of market institutions on civilsociety, politics and culture. We shall call the modern version of this view the “liberaldream.” Second, public intellectuals and critics from various disciplines continue tocritique the market. %e “auto-destruction” thesis that Hirschman identi,ed, how-ever, has evolved into more speci,c claims that markets undermine social relations,corrupt political life and corrode character. We shall call this the “commodi,ednightmare” view. Finally, economic sociologists have leaned toward Hirschman’sthird category: markets as relatively feeble compared to culture and society. %edominant paradigm of embeddedness implies that culture and institutions mediate,and o*en trump, the moral implications (good or bad) of capitalist markets. Onthis view, markets do not have a moral “nature” outside of the particular social andcognitive arrangements from which they emerge and that sustain them.

Despite the value of Hirschman’s framework, we also seek to go beyond it. In hisscheme, the causal relationship between the market and the moral order is straight-forward. Markets can exert a huge direct e&ect for good, or do tremendous damage.Alternatively, the arrow points the other way and fragile markets are overwhelmed bythe moral order (or, much more rarely, nurtured by it). We shall argue that a body ofimportant work, most of it quite recent, rejects this clean division between the moralorder and the market. Instead, research on the classi,cation of exchange relations, onthe performativity of economics, and on the regulation of countries and corporationsin the international economy is united by a view of markets as intensely moralized,and moralizing, entities. We suggest that this new emphasis re-ects not simply a shi*in scholarly fashion, but also trends in the public justi,cation of the contemporaryeconomic order itself.

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civilizing markets: the liberal dreamEconomists need no convincing that competitive markets constitute the best possiblearrangement for the satisfaction of individual needs and the e?cient allocation of re-sources. Both of these arguments were made long ago by, respectively, Adam Smithand Leon Walras, and have generally withstood the test of time within the discipline.At both micro and macro levels, so it seems, economic theory elevates egoism toparadigmatic status. “It is not from the benevolence of the butcher, the brewer, orthe baker, that we expect our dinner, but from their regard to their own self-interest.We address ourselves, not to their humanity but to their self-love,” wrote Adam Smithin one of the most cited passages of the Wealth of Nations (Smith 1994:15). Today,the neoclassical approach that formalized modern economic theory generally positsthat individuals maximize their utility in all social relations. Principal-agent theory,for instance, is predicated on the notion that actors will retain information and cheatorganizational demands. Public choice theory hypothesizes that corruption, ratherthan benevolence in some degree, is the natural condition of the government. Andan infamous World Bank leaked memo about the comparative advantage of develop-ing economies in attracting dirty industries has become a canonical example of thepotential gap between moral questions of justice and cold-blooded considerations ofallocative e?ciency (!e Economist 1992).

If economists exclusively made narrow claims about the allocation of resources,they would ,gure in an article about markets and morals only as a negative case. Yetthe relationship of economic theory to morality is more complex than this. First,economic theory is built on assumptions whose implicit moral content can be drawnout in detail (Hausman andMcPherson 2006). Second, andmore importantly for ourpurposes, there is a long tradition within economic discourse of explicit praise for themoral bene,ts of market society. %e precise bene,ts vary. %e doux commercetradition is carried forward by arguments that the market nourishes personal virtuesof honest behavior, civility and cooperation. Others have seen markets as a necessarycondition for freedom in other aspects of life, most prominently in politics and inthe cultural realm. A ,nal tradition, represented today by the bulk of prescriptivemacroeconomics, emphasizes economic growth as a condition for human progress,and is best encapsulated by Keynes’ comment that economists are the “trustees, notof civilization, but of the possibility of civilization.”

A Virtue Ethics of the market

%e reason morality seems a priori irrelevant to economics is that, as Smith discov-ered, a system may be virtuous and harmonious as a whole no matter how sel,sh itsconstituent parts are. But here is the twist: each individual’s hunger for pro,t will

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be kept in check by a similar drive among other individuals. Rather than producingruthless greed, self-interest will tend to make people polite, serviceable, and honest.%us the same Adam Smith also wrote that “whenever commerce is introduced intoany country, probity and punctuality always accompany it. ... Of all the nations ofEurope, the Dutch, the most commercial, are the most faithful to their word” (Smith1978: 538, cited in Stigler 1981: 172-173).

Markets, then, not only produce economic harmony (the satisfaction of individu-als’ desires and needs), they also create social harmony. Deirdre McCloskey (2006) istoday perhaps the most prominent defender of the view that markets encourage notonly public, but personal virtue. Like other virtue ethicists, she seeks to identify boththe virtues that comprise good moral character and the individual habits and socialinstitutions that cultivate such virtues in people. In broad outline, this approach maybe contrasted with the Kantian and consequentialist traditions, which o&er compet-ing theories for judging the morality of actions (whether through the application ofdeontological principles of moral duty or a utilitarian calculation of the good andbad consequences of one’s choices). For McCloskey, markets nurture a long list of“bourgeois virtues” including integrity, honesty, trustworthiness, enterprise, respect,modesty, and responsibility. Commerce teaches ethics mainly through its commu-nicative dimension, that is, by promoting conversation among equals and exchangebetween strangers. %e distinctive nature of this view can be brought out by compari-sonwith the critique of systematically distorted communication formulated by JürgenHabermas (1985). For Habermas, the market is one of the rationalizing forces thatinhibit proper, unforced communication between citizens, whereas for McCloskeythe marketplace is the fount of habits of civil discourse.

Modern economic theory has room for this kind of argument, but the idea thatthe market encourages the cultivation of certain virtues (and thus the implication of afairly “thick” theory of the individual) has been replaced by themore utilitarian notionthat any repeated economic interaction or “game” makes it rational to strategicallydevelop one’s credibility or reputation. In a situation where economic agents havelittle, if any, information about one another, honesty is simply good business policy.

Commerce fosters cooperation

%e central claim of the original doux commerce thesis is that the market encour-ages civilized conduct. “It is almost a general rule that wherever manners are gentle,”Montesquieu wrote, “there is commerce. And wherever there is commerce, mannersare gentle” (cited in Hirschman 1982:107). %e same is supposed to be true of rela-tionships between nations. Commercial society makes people more cooperative bybinding them to one another, thereby reducing social tensions, though Montesquieunoted that this is achieved by creating “tra?c in all human activities and all moral

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virtues; the smallest things, those required by humanity, are done or given formoney”(Montesquieu 1989:338-339).

At root, the market creates a bond through the mediation of goods. As Boltanskiand %évenot point out in their discussion of the justi,catory logic of market-basedarguments, “not only does the establishment of the market bond presuppose thatindividuals are subject in a concerted way for a common penchant for exchange; it isalso sustained by the common identi,cation of external goods. Objects of desire thatare fully detachable from the human body and thus suited for use in exchanges, thesegoods provide the underpinnings for interpersonal relations” (Boltanski &%évenot2006:48). %e market, then, presupposes what we may call a shared intersubjectiveorientation (,rst toward exchange, and second toward goods).

How consequential is this orientation? Most market relations remain anony-mous, particularly in modern society. Echoing Hayek (1945), Seabright (2004:15)argues that the market can be described as human “cooperation with nobody incharge.” Still, there is some evidence that this “company of strangers” miraculouslyproduces greater cooperation and even altruism. A series of experiments done in15 small-scale societies around the world found that in societies with more expo-sure to the market, people weremore generous with exchange partners when dividingmoney in ultimatum games (Henrich et al. 2004). As for the relationship betweenmarket and cooperation between societies, the reigning paradigm in internationalrelations is very much based (following Montesquieu) on the idea that “a civilizednation has to be a trading nation” (Watson 2006: 45). Membership in the WTO, forinstance, is widely seen as a sign of civilization (although scholars disagree that the re-lation between international commerce and peace holds empirically (Martin, Mayer&%oenig 2006)). Finally, between individuals the “civilizing” e&ects of market rela-tions is much more mixed: experimental results (mostly carried out in the developedworld) suggest unequivocally that “market-like situations induce self-regarding be-havior” (Bowles 1998:89), but also that the market itself may not be the preferredmode of exchange. Social psychologists, for instance, have found that experimentalsubjects were much hap pier with reciprocal (i.e., gi*-like) rather than anonymousnegotiated (i.e., market-like) forms of exchange, even when disparities in power andresources were taken into account (Molm et al 2006). %e structural transparencyof negotiated exchanges seems indeed to create a framework in which injustices andinequities are more keenly felt.

In practice, many exchanges de,ned as formally market-like fall somewhere on acontinuumbetween the paradigmatic poles of direct bargaining and serial reciprocity.%e pure, abstract and anonymous “common sense” of the market situation is rou-tinely transformed into an actual social relation as people seek to reduce the problemsposed by information asymmetries and opportunism. Indeed, anthropologists study-ing local markets have long established that people overcome information problems

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in practice by personalizing exchange. Most bazaar interactions, for instance, endup transiting through small networks of trusted relations and involve intense bar-gaining (e.g. Geertz 1982). Sociological analyses of risky transactions, business-to-business relations, and ethnic economies make a similar point (DiMaggio & Louch1998, Whitford 2005, Portes & Haller 2005). Studies of online markets also o&er astriking vindication of this argument. Analyzing the way online traders overcomethe problem of trust, Kollock (1999) found that sites such as e-Bay are replete withconversational features such as bulletin boards and discussion groups, and exhibit amuch greater personalization of exchange than one might have anticipated. In theeconomics literature, by contrast, the tendency is to argue that information asymme-tries will either cause markets to fail (Akerlof 1970), or require remediation by somemore formal institutional support such as hierarchial organization (Williamson 1985)or state regulation (Glaeser & Shleifer 2003).

Capitalism makes you free

In the postwar period, the most potent argument for market capitalism has comefrom its association with freedom, whether personal freedom (choice) or politicalfreedom within society. Hayek (1944) drew the connection with the latter with greatforce. %e central organization of production and distribution, Hayek argued, incre-mentally leads to the use of coercivemeasures to select and implement plans. Little bylittle, this process brings about increased oppression and ends in full-blown tyranny.Written during the war, at the height of Nazi and Soviet totalitarianism, !e Roadto Serfdom was an instant success and is today one of the best-known social sciencebooks of the twentieth century. Yet it was not Hayek himself, but one of his colleaguesat the University of Chicago, who popularized the argument that political and eco-nomic freedoms are inseparable, thereby reviving the gospel of laissez faire inmodernpolitics. “On the one hand,” Milton Friedman wrote, “freedom in economic arrange-ments is itself a component of freedom broadly understood, so economic freedomis an end in itself. In the second place, economic freedom is also an indispensablemeans toward the achievement of political freedom” (Friedman 1962, 8).

Two ideas are critical to the liberal thesis as formulated here. %e ,rst is thatfree markets allow needs and desires to be satis,ed, and therefore help make peoplehappy. Economists have found some empirical support for this assertion. Frey &Stutzer (2002), for instance, show that doing well in the market (in terms of incomeand employment) does make people happier (though not as much as being able tomeaningfully participate in the political process does). A natural corollary is theidea that empowering markets empowers people. Market protection, whether bystates or by producers eager to preserve their pro,t margin, is not only ine?cientbut anti-democratic as well. Fettering the market prevents people from choosing

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what they really want. Consumer sovereignty is thus political freedom in anotherguise. As Lerner (1972: 258) argues, “as an economist I must be concerned withthe mechanisms for getting people what they want, no matter how these wants wereacquired. %is view I ,nd very close to the idea of democracy or freedom— the ideaof normally letting each member of society decide what is good for himself, ratherthan having someone else play a paternal role.”

%e second idea is that competitive economic arrangements are the best defensenot only against arbitrary interference by the state, but also against the concentrationof economic power in the hands of a few. (%e two are related by the possibility of po-litical coercion by vested interests.) %is is the rationale behind anti-trust laws: mar-ket competition can be di?cult to maintain in the face of the constant work by mar-ket actors to concentrate power in order to stabilize their interests (Fligstein 1990).%ough economists tend to agree that “unfair” practices by corporations should bemonitored, they o*en di&er in their assessment of the severity of the problem and theneed for sanctions. Many, in fact, are satis,ed by lenient enforcement of anti-trustlaws and a quite high degree of concentration in practice (Galbraith 1956), arguingthat economic concentration is generally an e"cient response to market conditions(Kovacic & Shapiro 2000). But this is not true of all. Rajan & Zingales (2003) arguethat “truly free” capitalism cannot exist without a strong dose of institutional and po-litical support. (Rajanwas appointed director of economic research at the IMF shortlya*er publishing this book.) Departing from the Chicago tradition they otherwise as-sociate themselves with, they argue that free enterprise capitalism is not the naturalstate of the economy. Rather, it is “better thought of as a delicate plant, which needsnurturing against constant attacks by the weeds of vested interests” (277). (%is antic-ipates the “feeble markets” or voluntarist view we discuss below.) %ey thus advocate“freeing” ,nancial markets by opening up borders, establishing strong standards oftransparency and accountability, and evenmaintaining a social safety net so that pow-erful actors cannot exploit economic downturns to restrict competition. Writing forthe developing world, they argue that access to ,nance will empower the poor, allowthem to take advantage of opportunities, and thereby keep vested interests in checkthrough the existence of countervailing political power. As for the rich, they will onlystay rich if they are able to remain productive and prove their competence time andagain.

Markets liberate creativity and innovation

Curiously, the strongest emphasis on the protean creativity of market systems hasalways come from outside the mainstream of economic theory. Alongside thinkersin the Hayekian and libertarian traditions, Marx’s sketch of bourgeois capitalism inthe Communist Manifesto and Schumpeter’s characterization of capitalism’s path of

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“creative destruction” are classic versions of this idea, rediscovered by Romer (1986).Market systems are supposed to provide incentives and opportunities for innova-tion in all sectors of the economy. For our purposes, the close association betweenaesthetic taste and moral judgment make cultural goods an important special caseof this general argument. Intellectuals have o*en regarded the market as inimicalto high culture and good taste. Following the arguments about choice and freedomdiscussed above, economists have o*en rejected such judgments as mere snobbery.But more recently, others have sought to directly refute the charge. If the marketcan be shown to produce cultural goods of all sorts, and encourage innovation andcreativity besides, then an important pillar of anti-market rhetoric will have beentoppled. Cowen (2002) argues that markets make a staggering variety of work inart, literature and music available to a very wide variety of consumers very cheaply.As a consequence, the market exchange of cultural goods (especially in large, glob-alizing markets) feeds back into the process of cultural production, encouraging thehybridization of genres and the emergence of new forms. In other words, while soci-ologists of culture have emphasized the proliferation of identities and the techniquesby which consumption choices act as status di&erentiators (Bourdieu 1984, Bryson1996), economists point out that it is themarket which provides the very basis for thisactivity by generating the fecund and varied supply of consumer goods upon whichthe process of distinction feeds.

%e doux commerce thesis has become the liberal dream of market society, withmarket exchange variously seen as a promoter of individual virtue and interpersonalcooperation, the bulwark of personal liberty and political freedom, and the mecha-nism by which human creativity can be unleashed and its products made availableto society at large. %e story for most economists usually ends there, with minoradjustments — but not for critics, who relentlessly warn that the dream can turnnightmarish on all three counts.

destructive markets: the commodified nightmare%e doux commerce thesis argues for the gently civilizing e&ects of bourgeois com-mercial activity. %e harshest critics of the market present a radically di&erent view.Many of these critiques build on Marx’s analysis of alienation and exploitation in thecapitalist production process, though others (e.g. Veblen 1899) have found capitalistconsumption to be just as morally corrosive. Each aspect of the doux commerce thesisis challenged. Instead of enriching our individual characters, critics argue, marketsreduce our justi,cations for action to the narrowest kind of self-interest. Instead ofencouraging cooperation and altruism, they make these impulses unintelligible, orcrowd out the motivation to engage in them (Frey 1997). Promising liberty they de-

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liver only asmuch freedom as one’s money can buy; and in place of authentic diversitythey provide ersatz, commodi,ed alternatives.

Instead of virtue, envy and wants

People, Veblen argued, donot consume goods to satisfy hedonistic needs, as economistsbelieve, but instead to impress others by demonstrating their wealth. Capitalism thusplays on a debased competitive instinct, inherent to human nature, and pushes indi-viduals, even those with little money, to consume wastefully as a means to acquirehonor and reputability. It is a giant waste-producing engine, which continuouslyencourages and supports social rivalry. %is drive for “conspicuous consumption”,in turn, has a profoundly degrading e&ect on individual judgment and conduct. Ittransforms the canons of ethics, aesthetic taste, and the sense of devotion, by replacingthem with a general respect for wealth and pecuniary expense.

%ough it would be di?cult to ,nd as ferocious a stylist as Veblen’s in today’sscholarly discourse, the substance of his critique persists. %e work of Juliet Schor, forinstance, particularly her documentation of middle-class consumption in !e Over-spent American (1998), descends fromVeblen. Unlike him, however, Schor draws di-rect political conclusions. Just as class con-ict brought about the critique of capitalistproduction, Schor argues, anxiety over the constant ratcheting of lifestyles, loomingindebtedness and the social and ecological costs of goods ought to generate a po-tent political critique of consumption. Just as we saw the morally bene,cial aspectsof markets extolled in terms of both personal virtue and macroeconomic develop-ment, the countervailing moral critique also proceeds on both fronts. For example,at the level of personal or family consumption we see moral critiques of the absorp-tion of childhood and personal identity by the marketing process (Schor 2004), at thesame time that activists work to tie corporate brand identities to unfair or exploitativechild-labor practices in developing countries (Klein 2002).

Twomechanisms lie behind the social critique of aEuence. First— at the individ-ual level — is the competitive instinct emphasized by Veblen, and re-conceptualizedby Bourdieu (1984) as the result of individuals unconsciously positioning themselvesvis-a-vis others through their lifestyles. Tastes produce anxiety because of their rela-tionship to the recognition we expect from others. Second — at the macro level — isthe acknowledgement that our wants and tastes are not simply internally-driven. Po-litical theorist Robert Lane (1991, 2001), for instance, makes a strong case that it is themarket that creates wants, rather than the other way around. For most economists,markets are the best way to discover and satisfy the latent wants of individuals. Crit-ics argue that wants are endogenous to market processes rather than given a priori.In making this claim, the critical view disputes the economists’ case that the prefer-ences of individuals should be treated as exogenous and largely unchanging, with the

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dynamics of apparent changes in tastes really being explained by changes in relativeprices and incomes (Stigler & Becker 1977). But it also contests the identi,cation thatthe economics literature generally draws between want-satisfaction and happiness. Itis not for purely hedonistic reasons that we consume, or consume in particular ways.Perhaps the best empirical evidence for this is that the relationship between aEu-ence, choice and happiness is not at all clear (Frey & Stutzer 2001; Easterbrook 2004;Schwartz 2005).

Instead of cooperation, coercion and exclusion

%e philosopher Michael Sandel suggests that ethical arguments against commodi,-cation tend to take one of two forms. An argument from coercion claims that marketexchanges are o*en involuntary and “severe inequality or dire economic necessity”makes a mockery of the formally free nature of market exchange (Sandel 2000:94).Alternatively, an argument from corruption claims that some kinds of goods — es-pecially “moral or civic goods,” but also, potentially, things like human organs orembryos— are corrupted or degraded by market exchange. Because of their intrinsiccharacter, some goods ought not to be bought and sold. Another way of phrasingthis objection is to say that the market has only one mode of valuing things — price— whereas in reality goods may be valued (and valuable) in ways that price cannotcapture (Anderson 1996; Ackerman&Heizerling 2005). Arguments from corruptionhave stronger implications than arguments from coercion because they suggest thatsome transactions should never be commodi,ed, even if the exchange partners aresubstantively as well as formally equal.

Marx’s analysis of alienation and commodity fetishism can be thought of as a dis-tinctive variant of the second kind of argument. Certainly capitalism is exploitativefrom Marx’s point of view, thanks to the extraction of surplus value in the produc-tion process. But it is not clear whether Marx saw this exploitation as unjust in thesense we usually use the term (Wood 2004). His emphasis is more consistently onthe distorting e&ects of the market on human -ourishing and social relations. %epower of money to override the essential properties of individuals and things is cen-tral to this process. In a characteristically dialectical contrast, Marx argues that theparadox of commodi,cation is that social relations between persons and material re-lations between things come to be perceived as material relations between personsand social relations between things (Marx 1992: 165). %us whereas in the market’slogic the “exchanged good” is the medium through which the social relation betweenmarket actors gets established, in the Marxist framework it is the good itself that isthe (crystallized) social relation between actors in the production process.

In contemporary work, the reformatting of traditional social relations that re-sults from the progress of market capitalism has been particularly well analyzed by

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Bourdieu, who documented the new temporal habits, class and gender relations thatfollowed colonial Algeria’s entry into economic modernity (Bourdieu 2000). Ely-achar (2005) and Mitchell (2002) have o&ered sobering accounts of the e&orts bywell-intentioned international experts to turn developing societies such as Egypt intolaboratories of neo-liberal capitalism, showing how micro-enterprise and titlizationo*en end up dispossessing the poor further from the few resources they had. %epervasiveness of commodi,cation is well-documented (e.g., Strasser 2003) and itspotentially corrupting e&ects are explored in Radin (1996), Hochschild (2003) andScheper-Hughes & Wacquant (2002). Arguments in Appadurai (1986) and Zelizer(1988), however, have pushed anthropologists and sociologists away from the ideathat the market is a straightforward, irresistible force that reprocesses whole tracts ofsociety into the commodity form. Interestingly, this shi* in theoretical emphasis hasoccurred during a period of undeniable growth in the commercialization of certaingoods and services, notably in the areas of domestic labor, “care work” services, andhuman goods such as human tissue and reproductive technologies. %e question isless whether commodi,ed exchange is proliferating and more whether this form car-ries with it a reliably negative set of e&ects. Recent work tends to be more nuanced inits 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 most forceful expression of the idea that the market thrives on formal equalitycombined with brutal inequities in practice. Polanyi’s work captures the widespreadtransformation of the moral order that accompanied the rise of modern industrialcapitalism. Following nineteenth century critics, Polanyi emphasized the dehuman-izing e&ect of modern capitalism on personality and social relations, whereby indi-viduals come to be seen as commodities, rather than ends in themselves. %e pivotalmoment in this “Great Transformation,” he argued, was the reform of the EnglishPoor Laws in 1834. %is institutionalized the idea of the self-regulating labor market,thereby transforming labor into a commodity and dismissing human solidarity as alegitimate basis for social order.

Two points are worth noting about Polanyi’s thesis. First, morality was om-nipresent in the debates that led to the Great Transformation: much of the indict-ment of the Old Poor Law relief system, which led to the 1834 reform, was for-mulated in moral, rather than strictly economic, terms. Reformers maintained, inparticular, that poor relief discouraged demographic and moral restraint among thepoor. Comparing the English episode to the welfare reform of the mid-1990s in theUnited States, Somers & Block (2005) ,nd a similar ideational story. In both cases,they show, reformers mobilized a “perversity” thesis, which attributed the blame forpoverty to the corrosive e&ects of welfare policies on poor people’s moral character.Welfare support, the argument went, encourages laziness, illegitimacy and prevents

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any meaningful form of social recognition. By contrast, incorporation in the marketencourages dignity, opportunity, responsibility, and social solidarity.

Second, Polanyi’s account of the e&ects of theNewPoor Law sharply undercuts thepolitical economists’ optimism regarding the causal connection betweenmarkets andmorality. %e 1834 law o&ered relief below the lowest paid and least attractive jobsavailable on themarket; the poorwere con,ned to jail-likeworkhouses and segregatedby gender. To ensure labor mobility and the free adjustment of wages, it was deemednecessary to make poor relief materially unattractive and morally degrading. %us, alimited and highly repressive social policy emerged as the natural counterpart of free-market capitalism. A number of scholars of neo-liberalism see the same logic at worktoday, for instance in the concomitant transformation of economic, social and penalpolicies in the modern era. Wacquant (forthcoming, 1999) draws an explicit linkbetween welfare retrenchment, neo-liberal economic policy and mass imprisonment:“in all the countries where the ideology of submission to the ’free market’ has spread,we observe a spectacular rise in the number of people being put behind bars as thestate relies increasingly on police and penal institutions to contain the social disordersproduced by mass unemployment, the imposition of precarious wage work and theshrinking of social protection” (Wacquant 2001:404; also see Western 2006).

Instead of freedom, market populism

Milton Friedman forcefully argued for the close connection between markets andliberty. One interpretation of this argument is that the market is akin to democracyand allows people to freely express and satisfy their choices. To some extent, thisview builds on the American preference for popular taste over highbrow snobbery(Tocqueville 2003). But this ideal of participatory “market democracy,” critics retort,is a sad parody of true democracy. For instance Frank (2001) analyzes how, during theeconomic expansion of the 1990s, Friedmanite ideas of market liberalism and anti-elitism about culture were fused with the rhetoric of the “new economy” to promotethe argument that free markets are fundamentally democratic. Or rather, that theyare democracy: “since markets express the will of the people, virtually any criticismof business could be described as an act of despicable contempt for the commonman”(Frank 2001:30).

Frank takes pains to show that this ideology of “market populism” is not new inAmerica. Much the same thing happened at the end of the nineteenth century. Whatis remarkable, he argues, is the intellectual unanimity that the equation between themarket and democracy has received since the 1980s. (Frank traces this back to theanti-elitist backlash following the post-1960s culture wars.) Magazines celebrate thesuccesses of businessmen as democratic achievements. Business tropes penetratedeeply into everyday life, carried by management gurus, public opinion experts, and

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marketers of all stripes who extend the paradigm of consumer choice to everythingfrom clothing tastes to policy choices and political a?liations. %e language of indi-vidualism (i.e., the idea that people make decisions for themselves, and that at leastin economic matters these are the best decisions) serves as a powerful legitimationfor free market liberalism. %e irony is that this profoundly anti-expert, anti-elitist,“democratic” ideology has its own expert class, its professionals of market legitima-tion, and has been the vehicle of a class polarization far greater than at any other timesince World War II.

Much less polemical but no less trenchant, British geographer Nigel %ri* cap-tures the power of the popular imagery of modern capitalism in somewhat di&erentterms. Capitalism, %ri* argues, is an ongoing performance, constantly proppedup by theories it tells itself about itself. Again, nowhere is this character more ob-vious than in the relationship between discursive and material change in so-callednew economy. Echoing Frank’s critique, %ri* argues that the rhetoric of the “neweconomy” was produced by and for the bene,t of a small number of key stakehold-ers — including, most prominently, what he calls the “cultural circuit of capital”:business schools, management consultants and management gurus. Together withthe media, governments, business economists, managers, and the information tech-nology sector, they feed not only on the passionate new economy discourse and thepowerful impressions it creates in the public’s mind, but also on the frenzy of theprofoundly new experiment in capitalism this economy represents and carries outthrough a widespread extension of the ,nancial audience. As%ri*, citing Komisar,puts it: “it’s the romance that produces the ,nance thatmakes the business worth pur-suing” (%ri* 2005: 112). %e intellectual move in these works is similar — exceptFrank treats the logic at work in the neoliberal market as a travesty of true freedomand real democracy, which only serves to further political alienation and economicdispossession, whereas from%ri*’s more postmodern stance the question of truth issomewhat beside the point.

Instead of creativity, copyright

%e counterpart to the thesis that markets enhance cultural creativity and innovationis the claim that markets instead cater to the public’s most basic shared tastes, driv-ing out personal style and eliminating diversity. Adorno and Horkheimer’s (2002)critique of the culture industry as “mass deception” is the classic articulation of thisview. Under capitalism, they argued, the production of culture is organized in anindustrial manner and follows the logic of pro,t rather than aesthetics. Cultural ob-jects are designed to provide instant and easy grati,cation to those who consumethem. In addition to being of poor quality, they rely on a form and substance that arenot conducive to critical thinking, and thereby ultimately help reproduce the status

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quo. Cowen’s (2002) description of the modal Hollywood blockbuster as formulaic,focused on action (rather than dialog), and unchallenging ,ts this description quitewell.

%e Frankfurt school’s thesis had fallen out of favor by the 1970s, but receivedrenewed attention with the explosion of the literature on globalization. In a mannersimilar to Horkheimer and Adorno, critics like Frederic Jameson (1991), emphasizethe idea that the free trade of goods and ideas is leading to standardization in culturalpractices on a world scale, dominated by American images, products and models.Against the arguments put forward by economists, many also show that the supposeddiversity of modern consumption is deceptive, and nourishes a debilitating obsessionwith choice, which only breeds anxiety and dissatisfaction (Schwartz 2005).

Rather than freeing up creativity, then, the market would arti,cially constrain it.It may even block it altogether. A good example is the recent expansion and strength-ening of intellectual property rights since the 1980s. %e tremendous cultural vitalityof capitalism, scholars have argued, is based on its ability to draw from a vast “cul-tural commons” of freely available material, and the capacity to balance the need forthis commons with incentives for individuals to innovate (Lessig 2004, Vaidyanathan2003). %e rise of restrictive copyright laws threatens to dam up the streams thatreplenish this reservoir of commonly shared material. A world with highly restric-tive property rights on cultural goods might well come to have the kind of atrophiedculture envisaged by the Frankfurt School. But this would be caused not by the me-chanical (or digital) mass production of cultural goods, nor their distribution via themarket, but by restrictions governing the use of these products in the creation of newcultural forms. As with concentration of ownership and the wave of corporate merg-ers, critics of the market argue that although markets promote cultural innovationand creativity in principle, in practice they may well lead to the opposite result.

feeble markets: shackles and blessings%e Liberal Dream and the Commodifying Nightmare share the conviction that, forgood or bad, markets have astonishingly powerful e&ects on the social order. Againstthis, the axial position in economic sociology is that markets are not such power-ful institutions a*er all. Perhaps as a result of e&orts to distinguish itself from bothpro-market enthusiasts andMarxist orVeblenian critics, economic sociology has con-sciously avoided taking an explicitly normative position on the market as such. Fol-lowing the terms of the debate as set by economists (Zelizer 2005a, Fourcade 2006),the ,eld has emphasized market structure, economic development and growth overthe moral order. %e latter only comes up to the extent that economic sociologistshave sought to evaluate the contribution of a country’s (or a region’s) culture and in-

15

stitutions to the performance of its markets, sometimes with an explicitly prescriptiveangle. %e theme throughout is that markets are embedded in, entangled with orotherwise dependent upon other parts of society (Beckert 2002). Hence, the prob-lem of moral order remains relevant, but as an independent rather than a dependentvariable. %is is very much in line with what Hirschman calls the “feudal shackles/ feudal blessings” thesis, the idea that the development of markets depends on theinstitutional legacies of the past. We refer to contemporary scholarship in this veinas promoting the “feeble markets” thesis, and we argue that it comes in three mainvariants. On a realist view, capitalism thrives in certain cultures while others re-main stuck; in a voluntarist understanding, the conditions that will help capitalism tothrive can be implemented as a package by way of political intervention; and from adi#erentiated perspective, capitalism follows di&erent paths in di&erent places.

!e realist view: cultural legacies

MaxWeber’s studies of the relationship between religious doctrines and economic lifeare a classical source of the claim that culture has an independent e&ect on economicorganization. Each world religion, Weber argued, has a particular “economic ethic”associated with it — that is, it encourages or discourages a particular set of economicpractices in everyday life. But the relationship between religion and the economy isnot straightforward. For instance, Weber (1958) was careful to show that the rationalsearch for pro,t he observed among the proto-capitalist Calvinists did not follow log-ically from their religious worldview. Rather, their actions made psychological senseas a way to relieve the salvational anxiety their harsh religious doctrines tended toproduce. By contrast, Weber argued, the religions of Asia could not independentlyhelp evolve capitalistic attitudes (still, he believed these regions perfectly capable ofassimilating capitalism once it had developed elsewhere). Although Asian soteriolo-gies shared ascetic Protestantism’s commitment to self-control, they were directedat a contemplative withdrawal from the everyday world. %ese beliefs inhibited thedevelopment of the vocational conception of economic activity which was critical tothe rise of rationalized capitalism in the West (Weber 1951).

In the light ofmodern scholarship on comparative religion, GaryHamilton (1994,2006; also see Hamilton & Biggart 1989) reformulates the Weberian argument by fo-cusing on the way civilizational (and particularly religious) elements came to shapethe structure of authority in di&erent cultures. In the West, the Protestant heritagemeans that individual compliance to authority relies mainly on self control. In theConfucian world, by contrast, compliance to authority relies on obedience to a higherorder. Hence while the West came to place a high value on individual jurisdictions(e.g., individuals are recognized the active mastery of their world), in China the em-phasis was on individuals adjusting to the world by ,lling their place in a harmonious

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status ordering of roles. For Hamilton, however, this political-cultural trait suggestsa di&erent path of China into capitalism, through ,lial piety and familial enterprise,rather than an intractable “cultural” obstacle.

Even close followers of Weber, such as Hamilton or Collins (1997), do not arguefor the strong thesis that major religious ethics like Confucianism or Buddhism areantithetical to the development of capitalism. Most sociologists today subscribe tothe di#erentiated view we discuss below. By contrast, economists’ understandingof the e&ect of culture on development has been more rigid and “realist.” DavidLandes (1998), for instance, makes the bold argument that industrial revolutionsare unsustainable without certain cultural traits, which he thinks of as norms thatexpress themselves in personal virtues. %e argument has some quali,cations, butnevertheless, “if we learn anything from the history of economic development,” heargues, “it is that culture makes all the di&erence” (Landes 1998:516).

%ework of another economist, AvnerGreif (1994, 2006), stands out as a sophisti-cated attempt to delineate the micro-level mechanisms whereby cultural worldviewsgive rise (or not) to market institutions. In his comparative study of commerciallife in the late medieval period, Greif contrasts the individualist culture of Genoesemerchants with the collectivist culture of Maghribi traders. Using a game-theoreticapproach, he shows how di&erent expectations with respect to others’ actions in eachcultural context shaped principal/agent relationships, attitudes toward the circulationof information, sanctions for deviant behavior, and — ultimately — gave rise to di-vergent paths of economic development. Greif argues that the two groups evolveddi&erent economic systems as e?cient responses to the problem of moral hazardunder a strong cultural constraint. %e alternative institutional solutions, however,were not equal in terms of their economic performance in the long run. While theGenoese traders and their Western descendants could capitalize on the blessings offormal contracting and go on to dominate the world, the Maghribi traders and theirsuccessors in the developing world, though fairly e?cient at home, got stuck by theshackles of informality and highly personalized social relations and were unable toextend their trading activities abroad. What these views have in common is the argu-ment that themoral order of societies constitutes a pre-condition for the developmentof market capitalism, though the mechanisms can be quite di&erent — psychologicalin Weber’s case, rational and game-theoretic in Greif’s. But the point is that capital-ism thrives in certain cultural contexts and stumbles in others. Others have extendedthis argument to sticky institutional legacies whose e&ects hamper the developmentof “e?cient institutions.” Since Peter Evans (1989) popularized the distinction be-tween “predatory” and “developmental” states, for instance, scholars across the socialsciences have attended to the e&ect of political structures on economic developmentor failure. Among the best in this vein in economics is an in-uential paper by Ace-moglu, Robinson & Johnson (2001), which demonstrates the long-lasting impact of

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the worst, extractive type of colonialism (where colonizers economically exploit thecolony but do not themselves settle there) on the quality of contemporary economicand political governance and thus economic performance.

!e voluntarist view: good and bad institutions

%e position that there are “right” and “wrong” institutions when it comes to thedevelopment of markets has been a very powerful instrument in the hands of thosewould-be advisers to economic policymakers. Among the “best practice,” market-friendly institutions economists have variously identi,ed are strong property rights(North &%omas 1973, North 1990, De Soto 2003), a common law system (La Portaet al. 1998), well-developed and transparent ,nancial markets (Rajan & Zingales2003), and speci,c models of corporate governance (Hansmann & Kraakman 2001).Realists and voluntarists di&ermainly in their degree of optimism about themalleabil-ity of pre-existing economic, social, cultural, political conditions. For voluntarists,the set of right institutions for growth and development is available as a package tobe implemented more or less anywhere, perhaps with a few small tweaks to adjustfor local idiosyncrasies. Realists, by contrast, believe that success depends on somekey institutional or cultural ingredients, but are more likely to emphasize the burdenof history or the inescapability of basic aspects of a society’s culture. Roland re-cently brought this debate home in economics by establishing a distinction betweenslow-moving (e.g. culture, social norms) and fast-moving (e.g. legal systems or elec-toral rules) institutions. A sharp critic of the “shock therapies” applied in EasternEurope and Russia, he argues that the interaction between the two types of institu-tions explains why “the transplantation of ’best practice’ institutions (or ’institutionalmonocropping’) does not work. ... Countries with di&erent cultural and historicalpaths must ,nd within their slow-moving institutions the roots for changes in theirfast-moving institutions.” (Roland 2004:120).

Such arguments point in the direction of another form of voluntarism. If eco-nomic voluntarism in practice o*en amounts to a naturalization of American modelsas “best practice institutions,” sociological work — on the developmental state, forinstance (e.g. Evans 1995, Chibber 2003) — provides a good illustration of a so*er,or hybrid, form of voluntarism, which relies much more explicitly on the detailedknowledge of local institutions and culture. In his in-uential statement on industrialstrategies in%irdWorld developmental states, for instance, Evans (1995) argues thata successful industrializationmust rely on a combination of state capacity (e.g. a cohe-sive and legitimate bureaucracy, autonomous from political pressure) and a workingconnection between public administration and private capital. Criticizing not onlythe state-bashing proclivities ofmuch of contemporary economic advice but alsowhatwemay call the “statist” fervor of the earlier developmentalist literature, he shows that

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“state capacity without connection will not do the job” (1995:244). Chibber (2003)complements this argument by suggesting that state autonomy is insu?cient in yetanother way: if the culture of bureaucratic rationality is squandered in the competi-tive process among state agencies with no proper disciplinary oversight, developmentstrategies are unlikely to be successful. Finally, Evans (making an argument somewhatsimilar to Putnam [1993]), has recently suggested a further mechanism for improv-ing economic performance: “deliberative institutions founded on a thick democracyof public discussion and exchange,” for which he ,nds empirical illustrations in thestate of Kerala, India, and in the city of Porto Allegre, Brazil (Evans 2004:31). %ekey, then, is the combination of a voluntarist principle having to do with the generalform of political and administrative institutions (embedded autonomy, bureaucraticcohesiveness, deliberative democracy) and of the sociological attention to its speci,carticulation within the local context: once these general principles are established,indeed, the range of possible blueprints remains quite open.

!e di#erentiated view: varieties of capitalism

In contrast to both realists and voluntarists, a third group of scholars argue that therange of viable pathways to growth is in fact quite wide. Some version of this moredi&erentiated view is the dominant position within sociology. For our purposes, itsproponents can be distinguished by how close a causal connection they see betweeninstitutions or culture, on the one hand, and economic growth, on the other. Someargue that cultures or complexes of institutions directly support di&erent types of cap-italisms or industrial strategies. Howmany types is amatter of debate. Hall & Soskice(2001) posit two basic varieties of modern capitalism (”liberal” and “coordinated”,modeled respectively a*er stylized versions of the United States and Germany), eachof which is organized around complementarities among the di&erent institutionaldomains and is capable, in its ideal typical form, of yielding high growth rates. Oth-ers (e.g. Amable 2003) see a broader range of possible institutional combinations andeconomic outcomes.

At the opposite end of the scale are those who see a much weaker link betweencultural and institutional arrangements and economic performance. Dobbin’s (1994)comparative analysis of the development of the railway sector in the nineteenth cen-tury is a paradigmatic case. In their e&orts to achieve economic growth, Dobbinargues, public o?cials in three countries chose very di&erent paths because of theirvery di&erent moral perceptions about how to maintain social order. In the UnitedStates, they strove primarily to protect community self-determination and preventpublic corruption; in France centralized coordination by the state was deemed nec-essary to avoid logistical chaos; and in Britain they were concerned with protectingindividual sovereignty. %ree very di&erent economic orders emerged in these coun-

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tries, each of them e?cient at performing some tasks and less so at performing others.All three of these orders could plausibly be understood as rational responses to theway these o?cials perceived the problems to be solved and the ultimate goals of theiraction. %e fact that each country built a functioning national railway network wastaken, by those involved in each case, as a con,rmation of this point. For Dobbin,the performance of the railway networks he studies is of interest mainly in a negativesense: despite their di&erences all did well enough to justify their planners’ faith inthem, which helps reject the hypothesis that some basic competitive laws describedthe development of each system.

It is not just sociologists of culture who are skeptical of strong claims about theeconomic e?cacy of institutional arrangements, however. Advocates of multiplepaths such as Hall and Soskice argue that there is more than one way to organizean e&ective, productive economy, but they retain the conviction that there is a rela-tively tight connection between institutional coherence and economic performance.Like Hall and Soskice, Kenworthy (2004) argues that di&erent sorts of capitalismscan thrive without having to converge on a single model in the long run. But, likeDobbin, he is not convinced that the link between institutional complementaritiesand economic performance is very tight. Policy options typically presented as eco-nomically inevitable tradeo&s are in fact more like political choices that might ormight not be pursued without strong e&ects on economic performance. Dobbin seesthis decoupling as evidence that di&erences between models of political order drownout the e&ects of economic laws, while for Kenworthy it provides opportunities toimplement alternative social policies without fear of crashing the economy.

On its face, the Feeble Markets view cannot match the Liberal Dream for zealousadvocacy nor the Commodifed Nightmare for damning critique. Yet a reading of thisliteraturemakes it clear that each of the realist, voluntarist and di&erentiated views areo*en proposed as moral or ideological projects. Most realist readings are the latestversion of the long-standing idea that “West is Best.” Optimistic voluntarists urgethat the Kingdom of God lies within us, requiring only the right ingredients and thepolitical resolve to put a plan into action. And the di&erentiated view amounts to arobust defense of alternative models of economic success: A thousand -owers — orsome number between two and seven — ought to be allowed to bloom.

moralizedmarkets: marketsas scientificandmoral projectsHirschman identi,ed a progression in intellectual history from doux commerce argu-ments to auto-destruction to feudal shackles (or blessings). We have converted thissequence to a typology and used it to organize our discussion thus far. In the spirit ofHirschman’s historical perspective, we have linked classic statements of each view to

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their counterparts in the contemporary literature, while emphasizing that the threepositions have di&erentiated internally or shi*ed their emphasis over time. In broadoutline, though, a picture of how the separate worlds of the market and the moral or-der interact is clearly visible within each view. In the doux commerce and “corrosivemarket” versions, the causal line runs strongly from market to morality, for good orbad. %e “feeble markets” view is more sanguine. Di&erent social and moral ordersmay foster the market or inhibit it, or simply give it a particular local -avor.

Are these the only choices? We think that a body of recent work strikes out in anew direction, one not so well captured by Hirschman’s typology. Its characteristicmove is to argue that markets are culture, not just because they are the products ofhuman practice and sense-making (Abola,a 1997), but because markets are explicitlymoral projects, saturated with normativity. We see three areas where this idea is be-ing developed. First, there is the role of markets in the creation of moral boundariesbetween persons or societies. On the surface, this work recalls McCloskey’s argu-ments about the bourgeois virtues or Friedmanite arguments about the importanceof markets to individual liberty. But on the surface only. %e sociologists we dis-cuss below are typically concerned with the social sources of moral ideas and not thedevelopment of a positive moral theory. Second, at the level of particular markets,sociologists of science have begun to treat the social technologies of market-makingin the same way that they examined life in laboratories. In this work, the persis-tent tension in economics between normative and descriptive theory is shown to beresolved in practice through the development of social technologies that bring thebehavior of markets into line with the demands of theory. %ird, at the macro-level,economic rules turn out to be ,lled with explicit moralizing, whether concerning thecreditworthiness of nations, their degree of corruption and cronyism, or the extentof corporate social and environmental responsibility. All of these approaches aim toshow that market exchange is saturated with moral meaning— that is, that it involvesmore or less conscious e&orts to categorize, normalize and naturalize behaviors andrules that are not natural in any way, whether in the name of economic principles(e.g. e?ciency, productivity) or more social ones (e.g. justice, social responsibility).

Markets and the making of moral persons

Anyone who has read!e Protestant Ethic and the Spirit of Capitalism knows that inmodern societies money is central to the evaluation of themoral worth of individuals.%e careful management of one’s wealth is not just economically rational but an indexof one’s moral responsibility. %e earmarking of money for di&erent social uses relieson, and supports, systems of moral classi,cation (Zelizer 1994). Likewise, di&erentkinds of payments (piece rates, wages, salaries, stock options, and so on) do not simplyre-ect speci,c incentives or bear only a technical relation to the work being paid

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for. %ey also incorporate speci,c status signals, cultural representations (Biernacki1995) and codes of moral worth. %is moralizing aspect of payment systems can beclearly seen, for instance, in research on the evolution of welfare provision. Culturalcategories of worth are institutionalized in systems of bene,ts and entitlement (Mohr2005) and provide the basic set of meanings and tropes available to actors seeking toreform or reorganize existing arrangements (Steensland 2006).

%e same processes can be seen within kinds of market exchange as well as at theborder between market and non-market activity. In fact, the intertwining of marketactivity and moral valuation is so pervasive that recent studies have argued that theimage of a clean division between market and non-market spheres is of very lim-ited utility. Viviana Zelizer’s work consistently emphasizes how markets and moralboundaries shi* and recombine in practice. Her early study of life insurance (1979)showed how sacreligiously pro,ting from death could be re-categorized as a morallyresponsible form of investment, with the help of deliberate e&orts to ritualize thepurchase of insurance at the same time as marketizing it. In this case, successfulcommodi,cation (the spread of the insurance market) is shown to have required sub-stantial moral and cultural work. Her subsequent (1985) analysis of the eliminationof the child labor market in the late nineteenth century shows a similar process ofsacralization moving in the opposite direction, as children were removed from themarket and became priceless objects of sentiment. Most recently, Zelizer (2005a) hasexamined the careful ways that di&erent kinds of intimate relationships are di&eren-tiated from one another. She emphasizes the crucial role that monetary exchangesplay (as they are interpreted, variously, as payments, gi*s or entitlements) in de,ningand signaling the substance of particular social ties.

Collins (2000:18) argues that Zelizer’s work shows how super,cially homogenousmarkets o*en disguise quite separate “restricted circuits of exchange” (Zelizer 2005b),where prices and money carry particular information about the moral status and so-cial positions of participants. From this point of view, markets cannot be conceived asmorally improving institutions in the sense put forward byMcCloskey. But they playa powerful moralizing role in practice by de,ning categories of worth and, throughvariation in the form and timing of payments, signaling the kind of transaction thatis taking place. For instance, Velthuis (2005) provides a detailed study of the highlysymbolic nature of prices in the art market. %e division between art and money isre-ected in the physical structure of galleries (art at the front, commerce at the back).Understanding the price of a piece of art depends on knowing many other facts aboutthe social organization of the art world. Prices for art vary depending on whom art-works are exchanged with, as practices of discounting serve to mark particularisticrelationships between dealers. And the pricing of art itself is a highly scripted process,dependant on the position of dealers, the setting of the sale, and narratives about thearc of the particular artist’s career.

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%e approach is broadly Durkheimian. “Morality” does not refer here to someuniversal ethical standard; rather, it means what a society, or a group, de,nes as goodor bad, legitimate or inappropriate. %e moral valuation or appropriate classi,cationof particular goods, or even of the market itself, is therefore not ,xed but empiricallyvariable. From this point of view the study of exchange relations brings about ananalysis of how moral categories (de,ned in this sociological way) are formed, con-tested and transformed. Zelizer’s approach allows for considerable analytical nuance,for example in her readings of the complex ,ghts — o*en played out in legal cases —through which people seek to de,ne transactions as falling into one category or an-other, depending on the “sort of people” and “types of relationships” involved. %isfocus on con-ict over meaning opens up the prospect of linking local battles overparticular transactions with large-scale shi*s in categories of worth, something thatZelizer does not deal with directly.

%e appropriate classi,cation of goods (as exchangeable or not, as gi*s or com-modities, and so on) is o*en the subject of con-ict. Objects or relationships maymove back and forth across boundaries in response to technological change, the mo-bilization of interested groups, or the e&orts of moral entrepreneurs. For instance,blood donation shi*ed from a gi*-based to a partially marketized system and backagain in the United States between the 1960s and the 1980s, while the status of organdonation is presently highly contested, with both supporters and opponents of mar-ket exchange claiming that theirs is the properly moral position (Healy 2006). %esuccessful classi,cation of certain exchanges as gi*s may act as a channel for poweror exploitation as easily as the process of commodi,cation. Feminist scholars haveargued is o*en the case for many sorts of care work (Folbre & Nelson 2000). Howgi* and market exchange relate to moral worth is, ultimately, an empirical question.

Declaring that moral boundaries are sociological phenomena does nothing toresolve practical struggles over their de,nition. What makes the question of therelationship between markets and morality particularly di?cult to study from thisdispassionate viewpoint is that — as we demonstrated in the ,rst and second partsof this review — social scientists have themselves been deeply involved in the moralevaluation of markets and their alternatives. Critics remind us that the market is aprofoundly political institution and routinely use the language of commodi,cationand power to convey moral outrage. Advocates of markets deny this, and suggestmore or less explicitly that the rationale of the market is deeply ethical, either becausee?ciency itself is a vital moral criterion or because the market enables some other,higher principle to be ful,lled. It is in this agonistic sense that markets participatein the construction of categories of moral worth. People constantly mobilize moralprinciples and views of the common good to talk about the e&ects of market processes(Boltanski &%évenot 2006; Lamont &%évenot 2001). As such, markets are the siteof moral con-icts between social actors committed to di&erent justi,catory princi-

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ples, and the locus of political struggles between various interests (Fligstein 1996;Schneiberg and Bartley 2001, Yakubovich et al. 2005). %is heterogeneity should notblind us to the fact that some actors are considerably more powerful than others, justas some justi,catory logics (and the economic technologies associated with them) aremore e&ective instruments than others in practice. %e logic of e?ciency has thee&ect of seeming to de-politicize social relations, for example, masking the politicalcon-icts inherent in many kinds of economic policy, and this apparent objectivityhelps reinforce its legitimacy (Amable & Palombarini 2005).

Economists and the construction of calculative agencies

%e view of markets and morality just discussed is necessarily re-exive. It acknowl-edges that all social actors, including social scientists themselves, participate in theprocess of de,ningmarkets as “moral things.” Social scientists draw on various formsof evidence to weigh in on the moral evaluation of markets, de,ne the categoriesthrough which we understand market processes (e.g. public/private, rational/non-rational), and help frame the policies that apply to them. %eir arguments are repro-duced in the broader public sphere and implemented in policy.

More than any other academic professionals, economists actively shape marketinstitutions. Partly this is because economists are less embarrassed by beliefs aboutthe rigidity of institutions and culture, as we suggested above. Constantly solicitedfor their expertise, economists have taken the lead in “institutional design” — i.e.in providing recipes for creating a framework for national development, corporatemanagement, or organizational reform. As such, their contribution to the productionof particular moral understandings and behaviors deserves special scrutiny. Hencethe relevance, for our analytical purpose here, of the recent science studies literaturethat preoccupies itself with whether, and how, economists (and economic models)“make markets”, or, rather, make markets work as they should. (See Callon 1998a;Callon &Muniesa 2005, MacKenzie, Muniesa & Siu 2007 for general statements. Formore speci,c studies, see Beunza & Stark 2004, MacKenzie 2006, on ,nance; Mitchell2005 on land titles; and Guala 2001, Mirowski & Nik-Khah 2007 on auctions.)

Much of this work tries to demonstrate or critically evaluate what Callon (1998b)calls the “performativity of economics.” %is is the idea that economic technolo-gies do not just describe the world, but are profoundly involved in shaping it — tothe point of making real agents behave in the way theory says they ought to. Eco-nomics’ emphasis on “incentives,” for instance, is explicitly directed at aligning thebehavior of actors (whether individuals or corporations) so that they will performa desired outcome, not out of compliance with a coercive order, but simply out ofself-interest. In a world saturated by economic thinking, actors are thus progres-sively turned into “calculative agencies.” Homo Economicus, as Callon (1998b) puts

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it, is made -esh by economic technologies; economic models, formulated througha process of abstraction and disentanglement from reality, thus get entangled again.As MacKenzie (2006:15-25) notes, however, the concept of performativity allows forboth weaker and stronger interpretations, and the stronger the interpretation theharder it is to show conclusively. He distinguishes three kinds, in increasing order ofinterest. With “generic” performativity, the concepts and language of economics areused by participants in the economy. “E&ective” performativity happens when thetools of economics materially a&ect the outcome of the process. %e strongest case is“Barnesian” performativity (a*er Barnes [1988]), when enacting the theory or modelalters the economic actors or process “so that they better correspond to the model”(MacKenzie 2006:19).

It is clear that, under empirical scrutiny, weaker varieties of performativity mighteasily be mistaken for stronger ones, and the weakest, generic sort might just bewindow-dressing for processes that might have happened anyway. Here students ofperformativity echo their origins in the sociology of science. Research in that ,eld hasbeen criticized for equivocating between strong claims about scienti,c knowledge thatturn out to be false (or very hard to establish) and weaker claims that are sustainablebut much less interesting. %e methological reaction of the performativists is similarto the response within science studies: emphasize the incorporation of theoreticalprinciples not just in theminds of actors, but in the “algorithms, procedures, routines,and material devices” (MacKenzie 2006:19) used in the ,eld. In response to critics(Miller 2002), Michel Callon makes the same point: “Talking of the performativityof economics means ... that concrete markets constitute collective calculative devices... %ese agencies, like Hobbes’ Leviathan, are made up of human bodies but alsoof prostheses, tools, equipment, technical devices, algorithms, etc” (2005:1-4; alsoCallon and Muniesa 2005).

%is (mostly European)work onperformativity connectswith two lines of (mostlyAmerican) sociology focusing on how categorical consistency and comparability areachieved in practice. First, the social technologies of performativity are related to thetechniques of quanti,cation and commensuration reviewed in Espeland and Stevens(1998) and analyzed in, e.g., Carruthers & Stinchcombe (1999), Sauder & Espeland(2006) or Chan (2004). Second, the way in which these technologies “disentangle”objects recalls Harrison White’s (1992:12-13, 180-184) notion of decoupling, whereagents simplify their settings and (in the process) achieve comparability between iden-tities or products. Economic sociologists in the network-structuralist tradition havedrawn on White’s ideas to show the costs (in terms of status or legitimacy) to actorsor products that are not easily compared to others or cannot be located in an avail-able category (Podolny 2005, Zuckerman 1999). Across these research programs, werepeatedly encounter the idea that practical techniques for quantifying, commensu-rating or screening create and sustain stable categories that then legitimate statuses,

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which in turn allow for stronger moral regulation of the actors being categorized —a re-entanglement.

!e Governmentalization of the economy?

Economic exchange and policy making are saturated with moral statements. Today,concepts such as “transparency” and “corruption,” and the complex techniques thatperform them, are routinely used to monitor corporations, international institutions,and even countries. In both their commonsensical and more elaborated forms, ideasabout fair prices, fair wages, fair competition and now fair trade are predicated onmoral views about what things are really worth, or how much power is too much.%e conditions under which certain economic behaviors will be de,ned as moralor immoral are always social — even when they are rationalized and formalized byexpertise. Japan beforeWorldWar II, for instance, did not view cartels as illegitimatearrangements. To the contrary, they were perfectly normal modes of operation ina business world dominated by networks of mutual obligation (Gao 2001). Whathas changed between then and now is that such practices have been rede,ned asillegitimate by experts acting in the name of a di&erent value: e?ciency.

Similarly, few people cared about co&ee-growing practices just a few decades ago.Now these practices are classi,ed as either “conventional” or “ethical.” %e latter arethe target of strict standards of certi,cation, and even claim a separate market forthemselves. Consumers, business actors and policy-makers have at their disposalquite elaborate technologies and theories to de,ne the moral criteria against whichprices and wages are compared, the degree of competitiveness in a particular industryis evaluated, and the extent of corruption in a nation is measured. Clearly, it is time tocombine the analysis of the moral discourses reviewed in the ,rst three parts of thisarticle with arguments about their cultural basis, and the performative techniquesthat enact them. In this way we shall see how markets are being actively moralizedby the deployment of practical techniques, whether self-consciously (as in the caseof social responsibility) or in the name of neutrality and objectivity (as in the caseof e?ciency). Indeed, many of the perspectives we discussed earlier can now beunderstood not only as discursive arguments about the market, but also as practicaldispositifs (to use a Foucauldian term) that work to bring markets in line with moralideals, so that the processes that go on inside them can be regarded as legitimate(Seabrooke 2006).

As we saw above, much of the rationalization and moralization that takes place isdominated by economists, and o*en relies on the elevation of purely economic crite-ria such as e?ciency or pro,t-making to the status of a moral rule. %e proliferationof agencies that monitor the behavior of individuals, corporations, or nations withrespect to debt, transparency, or honesty, is an intensely moral project carried out in

26

the name of rationalizing and expanding economic exchange and democratizing soci-ety. (Political and economic liberalism are o*en linked rhetorically.) %e neo-liberaleconomy is thus a “governmentalized economy,” (Foucault 1979, Gordon 1991, Rose& Miller 1992) that is put in shape by a myriad of commensurating organizationsentitled to (but also with obvious material interests in) the rational application oftechnical means to “govern” the conduct of economic actors— be they small or large.Foucault named this phenomenon but did not analyze speci,c instances or mecha-nisms in detail (Gorski 2003:24-26). Recent research, on the other hand, elaboratesthe dramatic expansion of individual credit reporting (Guseva & Rona-Tas 2001), thenew politics of transparency (Best 2005), the rise of corruption ratings (Bukovansky2006, Larmour 2006), accounting techniques (Miller 2001), ,nancial analysis (Zornet al 2004) and bond rating (Sinclair 2005). %ese are not only informational devicesthat grease the wheels of commerce, but profoundly disciplining ones as well. Indeed,consistent with the original Foucauldian concept, it is important to realize that thedi&usion of these procedures embodies a profoundly new socio-political view wherethe behavior of actors is regulated internally through self-monitoring, rather thanexternally through coercion.

Not all economic governmentalization has its origins in the economy. For in-stance, new systems of private regulation via certi,cation have also emerged as aconsequence of “bottom-up” protests by social movement activists working withinthe prevailing neoliberal climate to extend the notions of accountability and trans-parency to corporate policy on environmental and labor questions (Bartley 2003,Goldman 2005). Obviously, one can see these developments as motivated solely bynarrowly economic considerations: a*er all, ethics is good business, too, both forthose who comply (e.g., the rise of organic farming) and for those who impose thestandards (e.g., the expansion of certifying agencies). However, to reduce the moral-ization of markets to economics would be to miss entirely the meaning and shape ofthe moral enterprise at work, and its profound di&erence from earlier eras, in bothinstitutional structure and direction.

morality and modernityModels of economic development and organization always rely on particular under-standings of the basis of the moral order that get universalized through hegemonicprocesses (Bourdieu & Wacquant 1999). No such model, then, is ever free of moraljudgments. Still, these judgments may be articulated more or less openly, or simplyremain buried below the surface of material relations. A number of authors (e.g.Best 2005) have suggested that the current period is unusually rich in explicit moralstatements (most of them about self-control and self-regulation) that support the neo-

27

liberal project, in international economic relations and elsewhere. %e discourse ofthe market is increasingly articulated in moral and civilizational terms, rather thansimply in the traditional terms of self-interest and e?ciency. %ere is a sense inwhich technocratic expertise is no longer su?cient to generate legitimacy, and thatit must be shored up by lo*ier ideals and practices. In our e&ort to understand thisphenomenon, we should perhaps take a cue from Bourdieu’s remark (1977:169) thatthe “arbitrary principles of the prevailing classi,cation” never need as much explicitarticulation as when they come under direct attack, as the neo-liberal project has inrecent years. In such circumstances, these principles are defended by condemningalternatives (e.g. tampering with property rights) as morally evil.

%e obvious corollary to this argument is what Polanyi (2001) called the “doublemovement,” that is, the societal backlash against the advance of self-regulating mar-kets. Many of the social movements that articulate a critique of the modern economymay be understood from this point of view, for instance. %e systemic demand forlegitimacy may even help fuel these reactions in an e&ort to encompass them (see,for instance, the rise of “green neoliberalism” at theWorld Bank in Goldman [2005]).But it is important to remember that the ways in which these “heterodoxies” getformulated, transposed and implemented, are themselves constrained by the exist-ing institutions and “rules of the game,” which they are inevitably embedded in andsometimes directly depend upon. %e result is that much of their critique of the ex-isting economic order is itself techni,ed and commensurating, di&used across a widerange of governing institutions, and o*en premised upon self-disciplining— in otherwords, it is no less governmentalized a vision of the moral order of the market thanthe prevailing view it opposes.

In summary, for most of its history, intellectuals have variously praised, reviled,or downplayed themoral consequences of market capitalism. %ese positions are stillvery well represented in today’s literature. Still, the distinctive quality of contempo-rary scholarship is that it goes much further in opening the black box of morality anddissecting the cultural and technical work necessary to produce, to sustain or — con-versely — to constrain the market. In doing so, it also reveals the role social scientistsplay in this process. Continuing this task, then, implies a re-exive approach, whereeconomists, political scientists and sociologists critically consider their own partici-pation in the de,nition of the market’s moral categories, and in the construction ofcompeting moralizing instruments and techniques.

28

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