A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Gronow, Jukka Book — Published Version Deciphering markets and money: A sociological analysis of economic institutions Provided in Cooperation with: Helsinki University Press (HUP) Suggested Citation: Gronow, Jukka (2020) : Deciphering markets and money: A sociological analysis of economic institutions, ISBN 978-952-369-001-1, Helsinki University Press (HUP), Helsinki, http://dx.doi.org/10.33134/HUP-1 This Version is available at: http://hdl.handle.net/10419/233551 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. 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Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ www.econstor.eu Jukka Gronow Jukka Jukka Gronow ukka Gronow’s book Deciphering Markets and Money solves the problem of the specific social Jconditions of an economic order based on money Deciphering and the equal exchange of commodities. Gronow scrutinizes the relation of sociology to neoclassical andDeciphering Markets Money economics and reflects on how sociology can contribute Markets and to the analyses of the major economic institutions. The question of the comparability and commensuration of economic objects runs through the chapters of the book. Money The author shows that due to the multidimensionality and principal quality uncertainty of products, markets A Sociological would collapse without market devices that are either procedural, consisting of technical standards and measuring Analysis of instruments, or aesthetic, relying on the judgements of taste, or both. In his book, Gronow demonstrates that in Economic this respect, financial markets share the same problem as Institutions the markets of wines, movies, or PCs and mobile phones, and hence offer a highly actual case to study their social constitution in the process of coming into being. Jukka Gronow is professor emeritus of sociology at Uppsala University, Sweden, and docent at the University of Helsinki, Finland. He has published on sociology of consumption, history of sociology and social theory. Deciphering Markets and Money A Sociological Analysis of Economic Institutions Jukka Gronow Published by Helsinki University Press www.hup.fi © Jukka Gronow 2020 First published 2020 Cover design by Ville Karppanen Print and digital versions typeset by Siliconchips Services Ltd. ISBN (Paperback): 978-952-369-000-4 ISBN (PDF): 978-952-369-001-1 ISBN (EPUB): 978-952-369-002-8 ISBN (Kindle): 978-952-369-003-5 https://doi.org/10.33134/HUP-1 This work is licensed under the Creative Commons Attribution 4.0 International License (unless stated otherwise within the content of the work). To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/ or send a letter to Creative Commons, 444 Castro Street, Suite 900, Mountain View, California, 94041, USA. This license allows for copying any part of the work for personal and commercial use, providing author attribution is clearly stated. The full text of this book has been peer reviewed to ensure high academic standards. For full review policies, see http://www.hup.fi/ Suggested citation: Gronow, J. 2020. Deciphering Markets and Money: A Sociological Analysis of Economic Institutions. Helsinki: Helsinki University Press. https://doi. org/10.33134/HUP-1. License: CC BY 4.0 To read the free, open access version of this book online, visit https://doi.org/10.33134/HUP-1 or scan this QR code with your mobile device: Contents Acknowledgments v Preface vii Chapter 1. Introduction: Making the Incomparable Comparable 1 Chapter 2. Economic Sociology in a Theory-historical Perspective 19 Classical sociology and economics 19 The advent of Weber’s Economy and Society and the tasks of economic sociology 26 Weber’s critique of the theoretical postulates of Marginalism 28 The historical validity of theoretical economics 34 Weber’s own sociological concepts of economy 37 Formal rationality and the importance of accounting 41 Economy and society once again—35 years later 44 Chapter 3. What is Money? 51 The functions of money 51 The secret of the social form of money—or ‘moneyness’ 58 Chapter 4. Sociological Theories of the Market 69 Market identities and status hierarchies 69 Quality uncertainty and market devices 79 Regimes of market coordination 96 Market regimes and the price formation 99 Chapter 5. The Three Social Formations of Taste in Economic Markets 105 Fashion 105 Social worlds 108 Fields of culture 112 Chapter 6. The Aesthetization of Everyday Consumption 119 Chapter 7. Finance Capital and the New Financial Markets 127 Financialization of almost everything 127 Market devices and the commodification of risk 137 Chapter 8. Conclusion 145 Notes 163 Literature 171 Index 185 Acknowledgements This work would not have been possible without the support, encouragement, and critical feedback of colleagues and friends. I am grateful in particular to Ilkka Arminen, Patrik Aspers, Arto Noro, Keijo Rahkonen, Aino Sinnemäki, Petri Ylikoski, and Alan Warde, who all read and commented—many of them quite thoroughly—the manuscript at various stages of writing. I also remain indebted to Uskali Mäki, who gave me valuable advice concerning some basic issues of economic theory. I found the suggestions and critical comments of the publisher’s two anonymous reviewers extremely useful in trying to make my arguments more coherent and convincing. I have noted the smaller shortcom- ings and inconsistencies in the text that they pointed out as best as I could. As always, I alone am responsible for the final result. The Eminentia grant that The Finnish Cultural Foundation generously awarded me was not only welcome as an economic support but also as a sign of others having faith in my project. The faculty of the social sciences at the Uni- versity of Helsinki has generously provided me with office space and facilities during the years that I have been working on this project. Last but not least, I am very glad that my book has been accepted in the publication series of the new Finnish academic publishing house, Helsinki University Press. The publishing director, Leena Kaakinen, and the publishing manager, Aino Rajala, have been supportive and very helpful during the whole process of editing and publication. Preface This book is an attempt to give at least a provisional answer to two questions that have occupied my mind during the best part of my academic career: What is the relation of sociology to economics, and what can sociology contribute to the analyses of the major economic institutions? From its very beginning, at the turn of the 19th and 20th centuries, sociology’s relation to economics and to the study of economic institutions has been rather complicated and ambigu- ous. Sociologists have repeatedly criticized what they consider the problematic presumptions of economic theory; they have also argued that one should take the historical specificity and the social embeddedness of the economic rela- tions and institutions seriously into account. At the same time, sociology has made, with some remarkable exceptions, only relatively modest contributions to the analyses of modern economic institutions. It has not succeeded seri- ously in challenging economics’ conception as the standard interpretation of economic life. More recently, however, the situation has changed with growing interest among the sociologists in economic phenomena that has already led to many valuable new theoretical insights and empirical results. The growing impor- tance of economic sociology has certainly many causes. The recent economic crises, the increasing importance of the financial markets and the globaliza- tion of economy are certainly among the most evident ones. The neoliberal regime of governance, which has dominated political thinking in Europe, North America, and the world at large during the last decades, has led also to viii Deciphering Markets and Money a situation in which the economic discourse has gained an almost hegemonic position in politics as the interpreter of the economic and political reality. As such, it poses an obvious challenge to the other social sciences and sociology in particular. The present study takes up this challenge. With the help of the classics of sociology as well as modern economic sociologists, it presents a con- tribution of its own to developing genuinely sociological concepts and theoreti- cal understanding of the functioning of the modern economic institutions. As argued here, economic sociology is in need of a specific sociological