Capitalism as a System of Expectations

• Author: Jens Beckert
• Date: 01 September 2013
• Published date: 01 September 2013
• DOI: 10.1177/0032329213493750
• Subject Matter: Articles

Politics & Society

41(3) 323 –350

© 2013 SAGE Publications

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DOI: 10.1177/0032329213493750

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Article

Capitalism as a System of

Expectations: Toward a

Sociological Microfoundation

of Political Economy

Jens Beckert

Max Planck Institute for the Study of Societies, Germany

Abstract

Political economy and economic sociology have developed in relative isolation from

each other. While political economy focuses largely on macro phenomena, economic

sociology focuses on the embeddedness of economic action. The article argues that

economic sociology can provide a microfoundation for political economy beyond

rational actor theory and behavioral economics. At the same time political economy

offers a unifying research framework for economic sociology with its focus on the

explanation of capitalist dynamics. The sociological microfoundation for understanding

of capitalist dynamics should focus on the expectations actors have regarding future

states of the world. Based on a discussion of what I call the four Cs of capitalism

(credit, commodification, creativity, and competition), I argue that under conditions

of uncertainty, expectations are contingent and should be understood as “fictional

expectations.” The capability of humans to imagine future states of the world that can

be different from the present is the central basis for a sociological microfoundation

of the dynamics of economic macro phenomena. Macroeconomic dynamics are

anchored in these “fictional expectations,” which create motifs for engaging in

potentially profitable but ultimately incalculable outcomes. This shifts attention to the

“management of expectations” as a crucial element of economic activity and to the

institutional, political, and cultural foundations of expectations. The reproduction of

capitalism is precarious also because of the contingency of expectations conducive

to its growth.

Keywords

capitalism, political economy, economic sociology, imaginaries, innovation, competition,

consumption, economic dynamics, expectations, microfoundation

Corresponding Author:

Jens Beckert, Max Planck Institute for the Study of Societies, Paulstr. 3, 50676 Köln, Germany.

Email: beckert@mpifg.de

493750PAS41310.1177/0032329213493750Politics & SocietyBeckert

research-article2013

324 Politics & Society 41(3)

The economy has long ceased to be the exclusive domain of economists. Political

economy and economic sociology have both become important subfields in their

respective academic disciplines over the past two decades, bringing the economy into

the focus of political science and sociology.

Although both subfields share important premises, they have developed in relative

isolation from each other. Research in political economy focuses on the varieties of

capitalism and on the transformation of the institutional configurations of contempo-

rary capitalism in the process of economic liberalization. Researchers are interested

primarily in the explanation of macroeconomic outcomes, such as economic growth

rates, inflation rates, aggregated demand, changes in the sector-composition of the

economy, or accumulation crises.1 Economic sociology, by contrast, focuses on the

“embeddedness” of economic action, showing in often-meticulous case studies how

economic outcomes depend on the structure of social networks, institutional configu-

rations, and cultural frames.2

At first glance, this disconnection of the two subfields seems to become even

more pronounced with the recent move in political economy to shift interest from

the varieties of capitalism to the “commonalities of capitalism.”3 With this shift,

political economy starts to abstract from historically specific institutional contexts

and their complementarities and focuses interest on the general logics of capitalist

reproduction.4

Contrary to the initial assumption of a further divide between political economy

and economic sociology, I argue that the shift toward the investigation of the common-

alities of capitalism opens up avenues for a closer alignment of the two subfields. This

holds true because economic sociology, with its focus on the micro and meso levels of

analysis, offers a complementary perspective to political economy by providing a

sociological foundation for understanding economic phenomena from the actor per-

spective. At the same time, political economy offers a unifying research framework to

economic sociology with its focus on the explanation of capitalist dynamics.

While the strength of political economy has been the focus of the institutionalist

explanation of macroeconomic outcomes, including social structures such as inequality

and skill distribution, its underdeveloped part has been the microfoundations explain-

ing the concrete processes underlying the phenomena observed on the macro level.5 For

the most part, political economists have either rejected the need for a microfoundation6

or have made use of rational actor theory.7 Although some accounts by political econo-

mists show interest in action theories beyond rational choice,8 these have not been

systematically integrated into the analysis of the dynamics of capitalism.

I follow the work done in the field of economic sociology and pursue a micro per-

spective. By micro perspective I mean an analysis of the economy from the perspec-

tive of actors and their cultural, social, and political embeddedness, with a particular

eye to the action process. However, in contrast to most work being done in the new

economic sociology, I will apply this perspective to an analysis of the dynamics of

capitalism. How do the dynamics of capitalism unfold, when considered from the

perspective of the social interactions of the actors who are enacting, reproducing, and

changing the economic system through their actions? What are the connections