The PhD…

An Economic Sociology of Law, Embeddedness… (and why this does not work)

So, what was your PhD on? This is still a tricky one. Of course I know what I’ve been studying, thinking about and writing for the past eight years, but to answer that question I have to know how much you know before I can give you a decent answer. It’s all in the pitch. And here are a few answers I’ve perfected over the past few years:

  1. It’s about the social sciences; how we do them, think about them, and talk about them, and how we can do these better, responding to events like the financial crisis more innovatively
  2. It’s about economic and legal aspects of interactions, and seeing these through a sociological lens
  3. It’s about bringing economics and law back into the social sciences and refocusing them on real life and real people
  4. I’m writing about an Economic Sociology of Law and how this can frame empirical research in the social sciences, specifically how the concept of embeddedness is holding us back

Even if you’re still reading by now, I’m pretty sure you have no more clue about my research than you did at the top of this post? Am I right?

And this has been a problem when coming up with the “elevator pitch” for my thesis. After all, as a PhD student, you’re frequently told that “if you can’t explain your thesis to a non-specialist in one sentence, then you probably don’t understand what you’re doing”. But I do! The problem is that my thesis is conceptual, although applied to the real world through a series of case studies. And unless you happen to have a passion for fringe approaches in the social sciences (law, economics and sociology), you’re probably not going to “get” my thesis in its academic, PhD-ish form.

(I should add here that I passed my viva without corrections, so I really do understand this stuff).

But it’s really important! Why? Well, look, we’re ten years on from the financial crisis and the political response: austerity. But what’s changed? Bank regulation has been tightened (a bit), fiscal rules have been strengthened (a bit), but generally we’re all poorer. Why? Because the current economic rules say so (along with a large dose of “political choice” here). Why does economics teach us to focus on GDP, on growth, on “maximizing our utility”? What would happen if we changed the economics models we were working with to prioritize justice, equality, and fairness instead? If you’re rolling your eyes by now, you probably assume that economics (and the economy) exist by some rules of nature and that “it is just so”. Wrong. The economy is structured and directed the way it is because a few people (Hayek, Keynes) have had some good ideas (and some bad ones) that politicians have made happen. The same is true for law; parliamentary sovereignty, the rule of law, separation of powers and independence of the judiciary all started out as someone’s “good idea”. And we are all living with the consequences.

But economics is not like physics. It is not about atoms that behave consistently. It is about real, fallible, inconsistent people who change their minds. By assuming otherwise, we are doing ourselves a disservice. And by thinking differently about economics – and law (but more on that later) – we can change the way society does economics (what we tend to call “the economy”). It’s all about the ideas.

And that’s what my thesis is about.

Ok, so there’s a bit more to it than that… Actually rather a lot.

So to the main arguments:

Is the economy embedded in society?

There has been a lot of debate recently about the type of economy we want (and the type of economics we need to teach in universities if we want to make this happen). And most of the literature falls into one of two categories: either the economy is said to be embedded in society, or society is said to be embedded in the economy.

In my thesis, I trace the heritage of embeddedness from Karl Polanyi, through economic sociology, to its current incarnation. Unfortunately though along the way, no-one really seems certain what is embedded, and in what it is embedded, which makes this all rather circular and frustrating. Even some really eminent scholars have called embeddedness “meaningless” now.

We’re talking in metaphors…

But why is this a problem? It matters because we are still talking about “the economy”, “the law” and “society”. Can you point to “the economy”? Can you describe it? Of course not, because it doesn’t exist. “The economy” is a metaphor, or title we give to a collection of human behaviour that tends to involve money, exchange, etc. And this is the important point – it’s about human behaviour as this occurs through social interaction. This is called social constructivism and basically says that human knowledge is constructed through social interactions.

It’s obviously nuts, then, to talk about “the economy” being embedded in “society” when it is actually part of that society to begin with. Embeddedness as a term separates out economy, law and society into separate spheres, whereas in reality they’re all part of the same thing.

Great, but why does this matter?

The books that describe the economy as embedded (or society as embedded) are trying to reshape economics and society following the financial crisis of 2008. But they cannot succeed in doing this if the tools we use to describe these – the linguistic tools – are broken. We need linguistic tools to be strong, robust, coherent, and consistent if we are going to challenge the way we do and think about economics, law and society. Describing these as embedded within each other is not just miles away from real life, but actually distinguishes them further and stops us being able to reassess them.

And we will not be able to change economics, law and society without being able to reassess them first.


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