Towards a historical sociology of financial things. An interview with Bruce Carruthers

I met Bruce Carruthers during his last trip to Copenhagen. He had been invited to participate in a conference in honour of John L. Campbell at CBS. The interview was carried out in the lobby of his hotel, the same place where I met Richard Swedberg a few weeks earlier, but this time the place was busier and noisier (and consequently the quality of the sound is, unfortunately, poorer). This post has the answers (that I edited into sub-answers) to four questions I prepared in advance and two extra issues I asked on the spot. As a researcher interested in financial things, I certainly find all the answers very inspiring, but I would particularly recommend the extra part at the end where Carruthers explains his current research (on early XX century consumer credit and his comparative analysis of two current derivative markets).

Q1. Let’s me ask you first about your article on Liquidity. You and your co-author compare the historical development of capital markets in England and the mortgage bond trade in the US. This article, like many of your papers (for instance: the one about double-entry bookkeeping or the other about the colour of money), is written from a historical perspective. The paper attempts to provide solid archival evidence to prove that you are telling this story right. At the same time, though, the article has a bigger theoretical ambition, which can already be seen in its title: the “social structure of liquidity”. However, my impression is that you do not only want to say “bonds are socially constructed”, but there is something else. My guess is that you are pointing at something rather more fundamental, namely: how is it possible that specific obligations become “tradable things” (an “object” that can be exchanged), which is not so far from trying to understand the “nature” (if we can use this word) of financial commodities. So my first question, is this right? Are you trying to understand the nature of these financial things?

A1. [4.37 mins] 

Q1b. You just used the word “reification”, I guess in this line you could also say “fetish”. Do you think a sociological research of these financial processes should have the “unveiling” character implied in these concepts? You know, the more critical side in Marx’s use of such concepts….

A1b. [2.06 mins]

Q2. Your later work has focused on risk rating agencies, their history and current role, especially after the last financial crisis. In your article for the Market on Trial volume, you developed a very nice argument. Because of their particular history, risk rating companies in the US use these famous ordinal categories to evaluate quite different types of things, which produced the sensation that these were actually comparable things. Then, when the raters downgraded some specific securities everything else lost its value. I don’t remember whether in this paper or in another you use the term “cascades of trust” to understand this process. My second question is more methodological, have you thought what a method to follow these “cascades” could look like?

A2. [3.38 mins]

Q2b. So, in this sense you could think – as you mentioned elsewhere – of some kind of rankings’ regulation. For instance, to avoid using the same scale to evaluate such a variety of things…

A2b.[2.28 mins]

Q3. In your recent review of the sociology of finance you and your co-author say: “Promises form the core of finance. One party promises to pay a sum of money to another. Much financial activity involves, one way or another, the design, production, distribution, evaluation, acceptance (or rejection), enforcement, and modification of promises.” So sociology of finance becomes sociology of “promises”, which leads to the question how we do that? Our last interviewee, Richard Swedberg said that another difficult to grasp but central issue in finance is confidence, but, in his opinion, there have been very few serious attempts to understand confidence yet. Is it the same case with “promises”?  How well equipped is sociology to study “financial promises”?

A3. [1.56 mins]

Q3b. Do you think we, as sociologists or whoever, have the tools to do this task? I mean, what expectations, confidence and promises have in common is their “potentiality”. They all have, in different ways, to do with a future, something that is about to come, which is not easy to observe. How could we research this temporal dimension of promises?

A3b.[2.29min]

Q4. My last question has to do with disciplines. Because of your own historical approach, I guess that you are in dialogue not only with sociologists but also with historians. But re-reading some of your work, I found that your topics of interests are instead very close to another discipline: anthropology. To my knowledge, economic anthropology has very creatively dealt with issues such as: how can a specific thing become a commodity (let’s say: Appadurai or Thomas), the nature of property rights (Strathern), categories (Guyer), money (Hart) and more recently debts (Graeber). So, the last question is: how is your communication with anthropologists and how important do you think it is to build these kinds of multi-disciplinary dialogues in current finance studies?

A4. [4.11 mins]

Q4b. And did you learn the historians’ method? Have you developed your own way of dealing with archives?

A4b.

Extra Question 1. This is not a question I prepared, but something that I was thinking of during our conversation. How do you see your own research with regard to Zelizer’s work. I interviewed her some time ago and we talked about her historical approach. Your work is also about money and your notion of “minting work” could be connected with Zelizer’s “relational work”….

EA1. [2.13 mins]

Extra Question 2. And what are studying these days?

EA2a. Consumer credit regulation in early XX century US [3.47 mins] 

EA2b.Comparing derivatives markets… [5.40 mins]

 

José Ossandón