Pierre Bourdieu’s Paradigm for Economic Sociology

Gaurang R. Sahay

 

New economic sociology is primarily a U.S. phenomenon and has only recently begun to spread to Europe or other areas of the world. Now there is a number of European sociologists who have contributed to new economic sociology by writing on the economy as part of their general concern with society. This is not only true of Raymond Aron, Michel Crozier, and Ralf Dahrendorf, but also of sociologists with notable contemporary influence, such as Niklas Luhmann, Jürgen Habermas, Anthony Giddens, and Pierre Bourdieu. Of the major European sociologists, Pierre Bourdieu (1930–2002) has contributed more to new economic sociology, from his studies of Algeria in the 1950s to a recent work on the housing market. Bourdieu has also devoted issues of his journal Actes de la recherche en sciences sociales to economic sociological topics, such as “social capital” (no. 31, 1980), “the social construction of the economy” (no. 65, 1986), and “the economy and the economists” (no. 119, 1997). Most importantly, however, he has developed an important theoretical perspective, namely the idea of the economy as a field, with all that this implies.

In 1997 Bourdieu published a very rich article in which he summarized the way that he thought economic topics should be analyzed. Title of the article was ‘The Economic Field’ and it appeared in Bourdieu’s journal, Actes de la i echerche en sciences sociales. The article was later included in book The Social Structures of the Economy (2005) with some very minor revisions, now under the title ‘Principles of an Economic Anthropology’. Both versions of Bourdieu’s programmatic text analyse the way ‘economic reason’ is being understood and should be understood. According to him there are two views of understanding economic reason: the economists’ view and a realistic view. Bourdieu argues in favour of the realist view in his paradigm for economic sociology.

Bourdieu summarizes the realistic view as follows: ‘We must attempt to construct a realist definition of economic reason as an encounter between dispositions which are socially constituted (in relation to a field) and the structures, themselves socially constituted, of that field’ (2005: 193). Bourdieu’s programmatic text follows this statement very closely. Its first part is devoted to an analysis of ‘the economic field’, and its second to ‘the economic habitus’. Bourdieu’s third key concept — capital, in its many versions — is closely linked to the concept of field and discussed in conjunction with it.

Fields encompass the relations among the totality of relevant individual and organizational actors in functionally differentiated areas of society, such as education, health, politics, economy, etc. Within a field, actors are assumed to compete for social positions. This competition gives rise to social structure understood as a social topology, which positions actors relative to each other according to the overall amounts and relative combinations of capital available to them. The topology is so constructed that actors who posses similar capital and accordingly occupy similar or neighboring positions are placed in similar conditions, which in turn makes such actors more likely to develop similar dispositions, interests, and habits or habitus. Bourdieu's paradigm assumes that differences in capital endowments are in fact related to the social topography (social structure) of fields in a significant and meaningful way. In analytic terms, Bourdieu defines the structure of a field as a "network, or a configuration, of objective relations" among positions (Bourdieu and Wacquant 1992, p. 97). Bourdieu and Wacquant (1992, p. 105) suggest that we "map out the objective structure of relations" among positions before analyzing the habits and dispositions of actors in a given field.

The economic field consists of firms; they are its key actors. For Bourdieu, the role of the state is also crucial to the structure of the economic field and elaborated upon, especially since the economists tend to ignore the state. The structure of the economic field is determined by the volume and structure of capitals. Bourdieu's concept of "capital" is broader than the monetary notion of capital in economics; capital is a generalized "resource" that can assume monetary and non-monetary as well as tangible and intangible forms. There are four usual different types of capital that are part of the economic field: cultural, symbolic, social and economic capital.

Cultural capital exists in various forms. It includes long-standing dispositions and habits acquired in the socialization process, the accumulation of valued cultural objects such as arts or paintings, and formal educational qualifications and training. Symbolic capital refers to the ability or capacity to define and legitimize social, cultural, political and economic values, standards, and styles through branding, advertising, etc. Social capital is the sum of the actual and potential resources which are achieved through membership in social networks of actors and organizations. Economic capital refers to monetary income as well as other financial resources and assets and finds its institutional expression in property rights.

Symbolic capital can legitimise economic products in the economic field through such things as ‘goodwill’ advertising and ‘brand name’. Social capital can bring about development in the economic field throgh networking. Cultural capital can bring about technological or other kinds of innovation in the economic field. Economic capital is the fundamental base of economic field. There also exist some types of capital that are specific to the economic field, such as technological capital and commercial capital. The former includes a firm’s science and technology resources, and the latter such items as distribution network, marketing resources and sales power.

The types of capital differ in liquidity and convertibility and in their potential for loss. Economic capital is the most liquid, most readily convertible form for transformation into social and cultural capital. By comparison, the convertibility of social capital into economic capital is costlier and more contingent; social capital is less liquid, stickier, and subject to attrition. While it is difficult to convert social into cultural capital, the transformation of cultural into social capital is easier.

The differences in the liquidity, convertibility, and loss potential of capital entail different scenarios for actors occupying different positions in economic fields. Some positions are characterized by high volumes of economic capital, yet lower volumes of cultural and social capital; others will rank high in terms of social capital, yet somewhat lower in other forms. The new riches, for example, are typically well endowed with economic capital relative to a paucity of cultural capital. International business consultants rely on high levels of social capital, relative to cultural and economic capital, and intellectuals or innovators typically accumulate higher amounts of cultural and symbolic capital than they do economic and social endowments.

Each of the four forms of capital implies a basic distinction in economic field. Economic capital focuses on commercial success versus failure with money as the major currency and economic status as the major indicator. Social capital distinguishes between membership and non-membership in professional organizations and informal networks with "contacts" as the major currency and differences in membership affiliation as the major indicator. Cultural capital marks a distinction between recognition and indifference in the perception and reception of goods with prestige as the major currency and reputation as indicators; symbolic capital makes a distinction between high and low legitimation of goods or economic products as the major currency and acceptance of branding as the major indicator. Besides, economic capital will result in a social structure in the economic field characterized by low segmentation and strong hierarchies. Social capital by itself leads to high segmentation and weak hierarchies, and cultural and symbolic capitals produce strongly segmented and hierarchical social structures in an economic field.

The most important quality of a field, including the economic field, is that it determines the actions that take place within it in important respects. This is something that an individualistic approach totally misses. One of Bourdieu’s most striking examples of this is prices. According to Bourdieu, prices are not determined through competition and exchange between individual actors, as the economists argue, but through the field. ‘It is not prices that determine everything, but everything that determines prices’ (Bourdieu, 2005: 197).

The firms that make up an economic field all fight with each other, even if the struggle is not always direct. Some firms are dominant and decide how things should be done, while firms with little power have to go along. Huge firms are typically powerful, and small firms often find some special niche. Medium sized firms, in contrast, often have to do what the huge firms decide.

As in any field, there is both a certain freedom to act and constraints that have to be followed. Due to the strong emphasis on choice in economic matters, the freedom to act in the economic field is more emphasized than in other fields. This is what is theorized as ‘strategy’ in the business schools. That prices are so central to the economic field turns it into one of ‘brutal objectivity and universality’ decided by strategy (Bourdieu, 2005: 200).

Despite the emphasis on choice and freedom in the economic field, it nonetheless constitutes a stable configuration and is quite resistant to change. Small firms rarely challenge dominant firms with success. When change does occur, it is often the result of forces from outside the field — in the form of, say, new technology, demographic change or invasion from another nation or field. A redefinition of the boundaries or opening up the boundaries can also open up the field to important changes in the field; and the same can happen if some firm is able to mobilize the state for its purposes.

Bourdieu points out that this way of analyzing the economy differs from neoclassical economics on a number of important points. It emphasizes the role that power plays in the economy; it is historical in nature; and it takes the determining role of social structures into account. As opposed to game theoreticians (as well as someone like Mark Granovetter), it also goes well beyond what Bourdieu terms the interactionist vision (Granovetter, 1985). It does this by not only attaching importance to interactions, but also — crucially — to the structural power of the field.

 

Another interesting aspect of Bourdieu’s theory of the economic field is that it determines the operations of the market. The closest that Bourdieu comes to a definition of a market is probably the following statement:

What is called the market is the totality of relations of exchange between competing agents, direct interactions that depend, as Simmel has it, on an ‘indirect conflict’ or, in other words, on the socially constructed structure of the relations of force to which the different agents engaged in the field contribute to varying degrees through the modifications they manage to impose upon it, by drawing, particularly, on the state power they are able to control and guide. (Bourdieu 2005: 204)

Bourdieu, in other words, does not think that repeated acts of exchange are enough to produce a market; you have to add the impact of the structure of the field. As a consequence, he severely criticizes Harrison White’s (1981) model of markets for only looking at actors who signal to one another. The same critique is leveled at Max Weber’s model of a market, which consists of sellers and buyers who first compete with each other and then enter into exchange with each other (Weber, 1978).

The individual firms that make up the economic field, Bourdieu says, also constitute fields in their turn. This means that what matters to a firm is primarily its structure, not the individuals who are part of it. The field of the firm is embedded in the field of the economy, Bourdieu specifies, but it also has its own relative autonomy. The key actors in the firms are the owners and the managers; and their systems of habitus (dispositions) are crucial for understanding who decides on the strategy of the firm.

Habitus is one of Bourdieu’s most influential concepts. It refers to the deeply ingrained habits, skills, and dispositions that we possess due to our life experiences. So, it is the physical embodiment of cultural capital. Bourdieu often used sports metaphors when talking about the habitus, often referring to it as a “feel for the game.” Just like a skilled baseball player “just knows” when to swing at a 95-miles-per-hour fastball without consciously thinking about it, each of us has an embodied type of “feel” for the social situations we regularly find ourselves in. In the right situations, our habitus allows us to successfully navigate social environments. Habitus also extends to our “taste”. In one of his major works, Distinction, Bourdieu links French citizens’ tastes in art to their social class positions, forcefully arguing that aesthetic sensibilities are shaped by the culturally ingrained habitus. Upper-class individuals, for example, have a taste for fine art because they have been exposed to and trained to appreciate it since a very early age, while working-class individuals have generally not had access to “high art” and thus haven’t cultivated the habitus appropriate to the fine art “game.” The thing about the habitus, Bourdieu often noted, was that it was so ingrained that people often mistook the feel for the game as natural instead of culturally developed. This often leads to justifying social inequality, because it is mistakenly believed that some people are naturally disposed to the finer things in life while others are not.

In his discussion of economic habitus, Bourdieu keeps close to his usual definition of habitus. Economic habitus is consequently presented as a system of dispositions that operates as a kind of cultural and social screen between the actor and reality. The economic habitus of an economic actor can be hard to detect, because it usually fits the economic structure of society very closely. That there exists a difference between the two, however, becomes obvious in certain situations, such as when the actors have an economic habitus that does not fit the economic realities under which they live. The Algerians who in the 1950s migrated to cities, in which the colonial authorities had introduced a capitalist structure, represent one example of this. Old people may also have acquired their economic habitus at a time when the economy was different from what it is today. Throughout his discussion of habitus, we notice that this concept draws as much on Bourdieu’s cultural and anthropological approach as on his more traditional sociological type of study.

It is in his discussion of economic habitus that one also can find Bourdieu’s most sustained attempt to explain how his own view of ‘economic reason’ differs from that of the economists. Homo economicus, in Bourdieu’s famous formulation, is ‘a kind of anthropological monster’ (Bourdieu, 2005: 209). Economic man is also an example of what Bourdieu calls ‘the scholastic fallacy’, by which he means an imaginary construct that the analyst has invented and invested the actor with, in order to explain his or her behavior.

In addition to the three concepts of field, capital, and habitus, there exists a fourth concept that is equally important but often ignored in Bourdieu’s paradigm: interest, or that which drives the actor to participate in a field. “Interest is to ‘be there,’ to participate, to admit that the game is worth playing and that the stakes that are created in and through this fact are worth pursuing; it is to recognize the game and to recognize its stakes” (1998a, 77; Bourdieu and Wacquant 1992, 115–17). The opposite of interest (or illusio) is indifference (or ataraxia). Each field has its own interest, even if it masquerades as disinterestedness. Bourdieu criticizes the economists’ version of interest as ahistorical—“far from being an anthropological invariant, interest is a historical arbitrary” (Bourdieu and Wacquant 1992, 116). The economists are also wrong in thinking that “economic interest” drives everything; “anthropology and comparative history show that the properly social magic of institutions can constitute just about anything as an interest” (Bourdieu and Wacquant 1992, 117).

The error of assuming that the laws of the economic field are applicable to all other fields in society Bourdieu terms “economism” (1998a, 83). Bourdieu (2005: 6) severely attacks Gary Becker for trying to universalize the theory of economic man, by applying it to areas outside of the economic field or ‘the economic economy’ (cf. Bourdieu, 1998a). He also attacks Herbert Simon’s notion of bounded rationality, on the grounds that Simon trivially argues that the human brain lacks an unlimited capacity for calculation, while ignoring the way that social structures influence the way that people carry out their calculations. Tversky and Kahneman are similarly criticized for their failure to take social structures into account and for relying on artificial experiments.

Bourdieu (2005) also presents what type of ‘economic reason’ is needed to carry out a proper analysis. In the real world, he suggests, economic actors come to develop ‘reasonable expectations’, not ‘rational expectations’ (p. 214). They do this by drawing on their habitus, something that helps them to master practical situations that involve uncertainty. As always, it is through a mixture of constraint and spontaneity that Bourdieu’s actors confront reality, not through ‘a rational calculus of risk’ as economists believe (p. 215). In economic matters, to sum up, actors tend to act in a reasonable way, not a rational way.

While most sociologists know about Bourdieu’s study Distinction (1986) and its magnificent analysis of consumption, linking it fimily to the economic, social and cultural structure of French society, there is less awareness of the fact that Bourdieu himself, towards the end of his life, said that he had sociologically studied three major economic topics. These are: his work in Algeria on ‘the economy of honour and “good faith”’ ( 1950s and 1960s); his study of credit (Bourdieu et al., 1963); and his study of the economy of single-family houses (Bourdieu et at., 1999). These three studies were seen by Bourdieu as economic, but it is important to note that Bourdieu’s concept of what constitutes ‘the economy’ is very broad and cuts across the conventional boundaries of what we these days call cultural, social, political and economic. His concept of economy takes into account not only social, political and economic factors, as conventional economic sociology tends to do, but also cultural factors.

Bourdieu’s foremost economic sociological study—Travail et travailleurs en Algérie (Work and workers in Algeria; 1963)—can be described as a rich ethnographic study. Some of its strength comes from the author’s juxtaposition of the traditionalistic worldview of the Algerian peasants with the capitalist worldview of modern people. While the peasant in Algeria has an intensely emotional and nearly mystical relationship to the land, this is not the case in a society dominated by wage labor and capital. Work is not directly related to productivity in Algeria; one tries to keep busy all the time. Institutions such as money and credit are seen in a different light. Exchange in terms of money is seen as inferior to barter; and credit—which, as opposed to assets, is tied to the person—is resorted to only in rare circumstances such as personal distress. In Algeria commercial ventures are preferred to industrial ones, since the risk involved is much smaller.

Bourdieu did not yet use the concepts of habitus, field and different types of capital in his study of Algeria. While the emphasis in this study is primarily on ‘the economy of honor and “good faith”’ that was part of the culture of pre-capitalist Algeria, Bourdieu’s focus is mainly on the clash between the old way of thinking about the economy and the new capitalist type of thinking that the French had introduced. Bourdieu draws on ethnographic data (mainly in the form of interviews) as well as on statistics; and the mixture of the two is very successful.

His study is centered around the idea that Algeria is undergoing a change in the direction of capitalism that is forced upon the country by colonialism, and the result of this, which is a sharp disjunction between people’s cultural attitudes and economic structures. While people can be said to be objectively working under capitalist conditions (i.e. working for money), subjectively they do not yet have the cultural attitudes that can make sense of it. The result is mental disorientation and a strong sense of alienation.

While work in Algeria used to be something that everybody did in their capacity as members of an extended family, and as part of their responsibility to that family, work is conceived in a very different way in capitalism. In the latter type of economic system the only activity that qualifies as ‘work’ is activity that brings in money. If you cannot find an activity of this type, it does not matter what you do, because you are by definition ‘unemployed’ — a situation that was chronic at the time when Bourdieu was carrying out his study in Algeria.

Bourdieu refers to this aspect of the transition to the economic culture of capitalism as ‘the discovery of work and unemployment’ (Bourdieu et al., 1963: 303; see also Bourdieu and Sayad, 1964). He observes that in the southern part of Algeria where the traditional economy is relatively intact, most peasants say that they work (76.5%), and only a few that they are unemployed (6.3%). The Kabyle peasants in northern Algeria, in contrast, have adopted the new way of looking at work due to capitalism; and more of them therefore say that they are ‘unemployed’ (48.3%) than that they ‘work’ (26.8%) (Bourdieu et al., 1963: 303a).

The main theme in Ti avail et travailleurs is that the Algerians need to move in the direction of economic rationality, in order to close the gap between their old cultural-economic attitudes and their new economic behavior. By (formal) economic rationality Bourdieu means, following Weber, a capacity to methodically and accurately carry out calculations. But Bourdieu also adds to and expands on Weber’s analysis of formal calculation. In order for the Algerian workers to be able to carry out rational calculations, Bourdieu argues, they first have to be in a position to look at their own life in rational terms.

Economic necessity, Bourdieu shows with his data, will not produce economic rationality among the workers who are very poor. It is only when the workers have left the worst poverty behind, he shows, that they are in a position to arrange their lives in rational terms. There exists what Bourdieu calls a ‘threshold’ of income; and it is only when the worker has reached this threshold that he is able to conceive ‘a plan for his life’ in economic rationality terms(e.g. Bourdieu et al., 1963: 307-8, 359). Accordingly, Bourdieu et al. (1963) criticize the notion of homo econorniciis. Bourdieu’s argument is that this notion is superficial, because it fails to take into account that a dramatic social and cultural change is necessary for people to become rational economic actors. There is, he says, a subjective-cultural as well as an objective element to the capitalist economy.

Bourdieu introduces a number of innovative ideas in his study of Algeria. He says that in a traditional society future is the repition of present and present is repition of past. In a capitalist society, in contrast, the future is to be conquered and controlled.

Another important idea that Bourdieu introduces is the idea of suffering. He says that the poorest urban workers do not only suffer from economic deprivation, but also from a lack of personal relations and from living a disorganized everyday life. To counter this, they glorify the past and retreat into what Bourdieu terms ‘forced traditionalism’ (Bourdieu et a1., 1963: 366). Again, what in a conventional analysis is kept apart as ‘culture’ and ‘the economy’, are closely joined in Bourdieu’s analysis.

The poorest workers also respond to their difficult situation with hope — another interesting idea that Bourdieu et al. (1963) introduce. But it is an unrealistic type of hope, a ‘hope full of dreams’. What prevents them from engaging in ‘realistic hope’, Bourdieu suggests, is their lack of economic stability in the age of capitalism. Because of the traditional outlook of peasants Bourdieu sees little future for the development of entrepreneurship in Algeria. In the eyes of the Algerians, modern entrepreneurship is closely associated with the colonizers, therefore, Algerians view bureaucracy as superior to entrepreneurship, for their country as well as for themselves.

It would, however, be incorrect to give the impression that Bourdieu is the only economic sociologist of interest in contemporary France. Luc Boltanski and Laurent Thévenot’s work ([1987] 1991) on the different ways that an action can be justified or legitimized is of potential relevance to economic sociology (e.g., Stark 2000). Their ideas about the way that people legitimize their actions by referring to different “worlds” of justification are hard to summarize, and one example will have to suffice. A person who works for a firm may justify his behavior by referring either to efficiency (“the world of the market”) or to loyalty (“the domestic world”)—with very different results (Boltanski and Thévenot [1987] 1991). Boltanski has also criticized the network approach as ideological and procapitalistic (Boltanski and Chiapello 1999). In speaking of networks, it must also be mentioned that Michel Callon has added to network theory by arguing that not only individuals and organizations, but also objects, can be actors (e.g., Law and Hassard 1999; cf. Callon 1998). A machine, for example, can determine what kinds of actions a machine operator has to perform and also how she is connected to other people in the process of production. According to another important argument of Callon, economic theory often fits reality so well because it has helped to create this reality in the first place (so-called performivity).

Outside of the United States, France has become something of a center for innovative economic sociology, and to the work just mentioned one should also add the studies of Frédéric Lebaron on French economists, Emmanuel Lazeaga on work in a law firm, and Philippe Steiner on different types of economic knowledge (Lebaron 2000; Lazega 2000; Steiner 1998, 2001, 2004). There is considerable research in economic sociology in other European countries as well. Sociology of money and finance has, for example, several skillful practitioners in England and Spain (e.g., Dodd 1994; Ingham 1998, 2004; Izquierdo 2001). An innovative study of inheritance has just been published in Germany, where the sociology of finance is also very strong (Beckert, forthcoming; see also Beckert 2002; Knorr Cetina and Preda, forthcoming; cf. Zuckerman 1999). Industrial districts are being studied in Italy (e.g., Trigilia 2001). Finally, Knorr Cetina in Germany and Aspers in Sweden have independently of one another embarked on the project of applying phenomenology to economic sociology (Knorr Cetina and Brügger 2002; Aspers 2001b). A few general introductions to economic sociology have been published in Europe; there also is a newsletter exclusively devoted to economic sociology in Europe (Steiner 1999; Trigilia 2002; see Economic Sociology: European Electronic Newsletter, 1999–; see http://econsoc.mfipg.de).