The Culture of Markets

Frederick F. Wherry

• Publisher: Polity
• Year: 2013
• Print ISBN: 9780745647456, 9780745647449
• eBook ISBN: 9780745656809
• Edition: 1
• Topic: Social Sciences
• Subtopic: Sociology
• Index: Social Sciences

What are the logics of pricing, and why do some pricing schemes defy standard economic expectations? What explains the different labor market outcomes of people who receive the same training from the same place and who have similar grades? Why do national governments issue statements about the country's history and personality when developing economic policies, and why are struggles over the images pictured on money so hard fought?

This engaging book locates the answers to these and other questions in the cultural logics and dynamics that constitute and guide markets. Using clear prose and illustrative examples, Frederick F. Wherry demystifies what culture is, and how it can be identified both in the way that markets are organized and in the way that people operate within them.

The Culture of Markets offers a comprehensive introduction to the puzzles found in studies of markets and to the ways that cultural analyses address those puzzles. The clarity of the arguments will make this a welcome resource for upper-level students of cultural sociology, economic sociology, and business/marketing.

1

The Cultural Roots of Market Demand

Why do groups of people want similar things? Shared meanings, social contexts, and common strategies of action influence what people do, including what they buy. A style of dress becomes wildly popular then utterly passé. To be popular is to be adopted by groups of people; and to have market appeal (even if it is a small market of buyers operating in their own niche of taste) is to have an audience that feels it has meaningful ties to a good or service. This chapter elaborates three ways that market demand is generated and maintained.

(1)	People come to understand what they want through their interactions with others (social networks) and through their commitment to the values of their brand communities. Social networks form among people sharing common stories and understandings about why they are tied together; and consumption behaviors get distributed through these social networks like a virus with the taste for fatty foods, for instance, spreading obesity among friends and family; moreover, people interact with one another in ritual-like ways generating a sense of community around objects, including commercial goods. For people in brand communities, shared stories, symbols, and meaningful gatherings reinforce their commitment and desire to protect the integrity of their treasured brand.
(2)	Accidents of history generate consumer demand; for example, government policies make goods easier (or harder) to obtain; political struggles over acknowledgment and over the direction a company takes affect the availability of a product or service; and ingrained habits make switching to other (technically better) products more difficult. These acts generate collective myths about why a good is popular with a particular population, such as beer for the British but wine for the French; the hearty American breakfast versus light Continental fare. Historical accidents get locked into the consumption habits of subpopulations and entire societies.
(3)	Marketers and business owners manipulate consumers into buying goods by focusing on the meanings, images, and symbols that make a product or service appealing for different demographic groups. Marketers take culture seriously and conduct on-the-ground research to identify how consumers use goods creatively to mark their identities and to differentiate themselves from members of other groups; moreover, department stores are designed to take into account how people see the world, what meanings they imbue in spatial layout, and how people place themselves in selling spaces so that their shopping experiences help them to become their imagined selves.

After reviewing these three pathways to generating and maintaining demand, the chapter will examine how people account for their purchase decisions. What people are willing to pay for what they want follows cultural and social logics that defy common sense: a dollar is not simply a dollar that can be used in any way that an individual pleases. Thinking about what ought to be done and how the money became available in the first place constrain individual calculations about what constitutes “a good buy.” To these insights we now turn.

Social Ties, Brand Communities, and Market Demand

This section begins with a description of networks that allow consumer demands to spread through contagion. This depiction of tastes as moving like viruses through intimate contact does not privilege the culture of these network configurations; therefore, these depictions of networks as conduits of taste will be followed by explicit examples of how culture cements these social ties and orients people to want different things in circuits of exchange, in ritual like interactions, and in brand communities.

Paul DiMaggio and Hugh Louch (1998) have demonstrated the importance of social ties for consumers who look to people they know to search for goods and services. Although they bracket why people demand the goods and services that they do, the authors offer evidence that people generally talk to people they know about the purchases they should make. Informal social ties function as a form of insurance against the risks buyers incur in an otherwise seemingly anonymous marketplace. Informal social ties rank along side of brand names and warranties as devices on which consumers rely to protect themselves while making transactions, for they minimize the cost of information and thereby reduce the likelihood of malfeasance on the part of the seller.

DiMaggio and Louch suggest not only that “birds of a feather flock together” but also that if one bird coughs, her network neighbors will catch a cold. Other social scientists have gone further in demonstrating the viral nature of consumer preferences within the network structure. Along these lines of research, Nicholas Christakis and James Fowler (2007) studied over 12,000 people and their networks from 1971 to 2003 and found that when one’s spouse, sibling, or friend became obese, the linked individual also became at risk for obesity. These findings suggest that the revealed preference for fatty foods versus exercise spreads through network ties like any other epidemic might. In a similar size study (2008), the authors found that the decision to quit smoking is a collective one that affects others within the network by virtue of being tied directly or indirectly to individuals expressing a changed consumption preference.

Eating fatty foods at fast-food restaurants and smoking cigarettes are behaviors that spread through network ties, but the emergence of these activities as appropriate for particular networks is not random. French sociologist Pierre Bourdieu (1984) has shown that the tastes that people have for different types of art, movies, houses, and food depend on both their economic and cultural capital. When people are asked to rank images that they found beautiful or to comment on less versus more abstract forms of art, they tend to converge in their taste according to their accumulations of economic and cultural capital. In other words, people with lots of education (embodied cultural capital) have different tastes from those of people with less; and in these two groups, there is another split between people with higher and lower wealth/income (economic capital). On the one hand, one needs to have money (economic capital) in order to afford some luxury goods and to be able to travel to exclusive vacation destinations. On the other hand, one needs to know how to behave when consuming the luxury good or when staying for the weekend in a fifteenth-century palace in Venice. A person may be able to afford a house in the south of France with a wine cellar, but will that same person know how to talk about and entertain with the wine cellar in a way that her socially significant others deem appropriate? If the American restaurant’s menu is written only in French, will the patron show a sense of ease in ordering from it?

It is often in the existing social network that an individual learns how to use goods properly and why those goods are so enjoyable. Take the example of marijuana smoking. According to Howard Becker (1953), marijuana smokers use their social ties with other smokers to learn why smoking is enjoyable, in part, because the pleasure is neither always obvious nor always physically based. From one’s coevals one learns what the physical indications of pleasure might be and because socially relevant others are seen enjoying themselves, a first time user of marijuana is more likely to try the substance in the future even if she does not enjoy her first or second experience with the substance. Because marijuana is not physically addictive like cigarettes are, it offers a strong case in favor of social (versus physical) bases of taste.

Building on the work of Pierre Bourdieu, sociologist Omar Lizardo (2006) examines how acquired tastes and niche tastes are generated through network ties but depend on shared understandings among members of the network. Acquired and niche tastes correspond to strong social ties; dominated tastes, a combination of strong and weak ties. Acquired tastes require cultivation and the help of knowledgeable insiders so that those acquiring the taste can learn how to enjoy what might otherwise be un-pleasurable. Similarly, niche tastes require great investments of time to become familiar with symbols and usage customs not widely understood outside of the niche.

These investments of time and the acquisition of specialized knowledge mean that these goods and services have high levels of asset specificity. Asset specificity refers to particularities Oliver E. Williamson (1981: 555) is a transactions costs economist who writes about asset specificity, and he explains it this way: “The issue is less whether there are large fixed investments […] than whether such investments are specialized to a particular transaction. Items that are unspecialized among users pose few hazards, since buyers in these circumstances can easily turn to alternative sources and suppliers can sell output intended for one buyer to other buyers without difficulty.” Lizardo translates these insights about asset specificity to mean that highbrow cultural tastes should correspond with high asset specificities (specialized understandings about usage norms, symbols, and shared stories) and be susceptible to a person’s strong social ties. By contrast, popular tastes correspond with low asset specificities and are therefore subject to a person’s weak (arm’s-length) social ties. Presumably, knowledge about how to use a good or service properly and what the narratives are about why its use is worthwhile are so widespread that special investments of time and energy are not needed.

Paul DiMaggio (1990) notes that Thorstein Veblen understands tastes as a function of status competition with individuals looking up to see what those with more prestige consume but also looking down to avoid consuming what those with less status enjoy. This “vertical interdependence” of tastes, however, does not take social structure into account: “[P]eople embedded in durable and close-knit social networks need fewer status cues than those whose interactions are characteristically more fleeting, and therefore are likely to invest less in status commodities or cultural capital” (DiMaggio 1990: 126). This leads DiMaggio to consider the dynamics of people within the same status group looking at one another to gather cues about what to consume (horizontal interdependence).

A qualitatively different way of looking at tastes and social ties is through the concept of circuits. Viviana Zelizer developed the concept of the circuit in order to understand how people interact with one another, using different forms of currency and different consumption goods to mark themselves as being in particular types of relationships or in a particular type of community. A circuit differs from a network in that the latter is a set of sites connected to one another through one- or two-way exchanges, while the latter is a set of dynamic, meaningful, and constantly negotiated relations. Circuits require qualitative investigation into meanings whereas networks can be investigated quantitatively. By qualitative investigation, I am referring to the nicknames that people in circuits give the things they exchange, the categories of relationships they believe themselves to be in, and the negotiations they have around what types of money, goods, and services are appropriate for exchange among what categories of persons within the circuit.

In bounded family circuits, for example, how the demand for different types of goods emerges manifests itself as a means to maintain and honor interpersonal relations. Zelizer shows, for example, why an individual may decide to purchase a “fancy coffee maker” capable of compressing espresso ground beans and steaming whole milk foam although a regular coffee maker has satisfied the individual’s needs thus far. She draws on Christopher Carrington’s interviews with gay and lesbian households in the San Francisco Bay Area to demonstrate how purchases become justified as a way to make a loved one feel cared for. In the example, Federico Monterosa had resisted buying a fancy coffee maker because the cheap one they owned worked fine, but Federico’s domestic partner convinced “Freddy” to do so as a way of working on his relationship with his parents, especially his mom.

Freddy’s parents were coming to San Francisco and were planning to stay with us. Freddy’s mom likes coffee, and so I made the case that we should buy a nice coffee maker to make her feel at home… because it was kind of hard on her when Freddy came out to her and all. With that, he agreed and we went to Macy’s and bought a decent coffee maker. (Carrington 1999 in Zelizer 2005: 236)

The individual has oriented his action not only toward his own needs or tastes but also toward the different social relations that will be built, maintained, or honored through the particular purchase. In this way, his demand for the fancy coffee maker is socially situated and would not be intelligible outside of the relationships he holds dear, the informal sanctions that his family might impose on him for not making his mother feel at home (disapproving remarks, the “cold shoulder,” the “cold bed,” etc.), and what he thinks the coffee maker will symbolize for his mother.

On the dating circuit, we see even more qualitative distinctions being made among different categories of relationship. The seriousness of the relationship corresponds with the types of gifts the lovers exchange. Their demand for these gifts depends not only on their idiosyncrasies but also on what one “ought” to give a person categorized as a fiancé versus an individual who functions as a friend-with-benefits (a sexual relationship with friendship but without the expectation of a long-term or exclusive commitment). If a man, for example, gives a ring to a friend-with-benefits, he might discover that the friend is shocked and that his friends and family are outraged. One does not make that type of purchase for this type of thing: the relationship category does not match the canon of goods purchased and exchanged. In this way, markets are moral because consumers have a sense of some matches being right but others wrong for people like themselves (Fourcade and Healy 2007).

Even the demand for commercial sex work relies more on how that work is categorized than on the physical attributes of the worker and the corresponding prices for services rendered. In The Purchase of Intimacy a commercial sex worker describes how her clients responded negatively to the offer of a discount and a “free ride.”

They pretend to be flattered, but they never come back … There was one client I had who was so sexy, a tai-chi practitioner, and really fun to fuck. Since good sex is a rare thing, I told him I’d see him for $20 (my normal rate is $250). Another guy, he was so sexy, I told him “come for free.” Both of them freaked out and never returned. (Zelizer 2005: 128)

In the world of supply and demand, one would think that if the services one enjoyed previously from the same supplier had suddenly fallen in price, one would enjoy more of the service. The category of commercial sex work, however, offers such an impermeable boundary within the context of a socially legitimate relationship, that such reductions in price disrupt demand by mismatching the category of relations with a different bundle of exchange media; in other words, commercial sex work for the customer in question involves the exchange of money (legal tender) for sex; it does not involve the exchange of discounts, gifts, pendants, rings, or other exchange media. Her mismatch of the exchange media with the category of relationship dissolves his demand for her services.

While Viviana Zelizer focuses on circuits, sociologist Randall Collins hones in on interaction rituals and how they build up, generating an emotional attachment between individuals engaged in the rituals and the objects used in the ritual process. Collins does not use the term ritual to describe a religious event, but instead notes that there are many interactions that people have that seem to follow a script and that veering away from the script often has consequences as the believers and participants in the ritual sanction the wrongdoer.

Interaction Ritual Chains (IRCs) are an observable process in which individuals generate emotional energy, group symbols, and symbolic boundaries (see Goffman 1967). Collins (2004: xiii) implies that differences in emotional energy from one buying situation to the next make the buyer perceive a good or service as more attractive than its potential substitute. Emotional energy itself is “a strong steady emotion [sentiment, or affect], lasting over a period of time … [that] gives the ability to act with initiative and resolve, to set the direction of social situations rather than to be dominated by others in the micro-details of interaction … [and] to be self-directed when alone” (Collins 2004: 134). These differences in emotional energy lead to such distinctions as the sacred and the profane as well as the boundaries between in- and out-groups.

The Interaction Ritual Chains perspective embeds the demand for goods and services in the social situations where those goods and services are consumed. To the extent that these consumption contexts take on a character of their own, the consumer engages in a dynamic circuit of commerce. Some cigar smokers, for example, wear smoking jackets, retire to their smoking room, and relax with other smokers at an informally designated time of day. These leisure rituals generated the emotional energy that helped sustain the desire for smoking beyond any physiological craving for tobacco. Therefore, to understand the demand for goods and services one has to take into account the patterned interactions where consumers use, discuss, or eye these goods and services.

The ritual-like behaviors that generate and maintain demand for particular goods and services have been theorized as responsible for the formation of brand communities. Albert Muniz and Thomas O’Guinn are marketing and advertising professors trained in sociology. They define brand communities as “specialized, non-geographically bound [groups], based on a structured set of social relationships among admirers of a brand … Like other communities, it is marked by a shared consciousness, rituals, and traditions, and a sense of moral responsibility” (Albert M. Muniz and O’Guinn 2001: 412).

One of the ways that they demonstrate the consciousness of kind among members of a brand community is through their interviews with Mac computer users. A forty-year-old academic defined herself as an outsider, unlike the “IBM people” who wore boring suits and voted Republican. She and others felt that their use of a Mac pushed against a dominant Microsoft, like a David fighting Goliath, and they employed a language of purity and pollution when describing the differences between a Mac and a PC: the former is pure, free from viruses; the latter is impure, susceptible to hacker violations, viruses, and crashes.

Muniz and O’Guinn find that loosely scripted rituals “perpetuate [a] consciousness of kind” (422) among the users of a brand. Saab drivers engaged in greeting rituals when they encountered other Saab drivers, for example:

GEORGE If you drove a Saab, whenever you passed someone else driving a Saab on the road, you beeped or flashed your lights. MARK Or you’d wave at each other. I did it today, I was driving around downtown Kenosha, and it was a four-door, nothing special, but that’s OK, He, how you doing? Yeah I still flash my headlights at people. (Muniz and O’Guinn 2001: 422)

Saab drivers also passed along stories that became captured in commercials about harrowing, near-death e...

Table of contents

• Cover
• Half Page
• Dedication
• Title Page
• Copyright
• Contents
• Acknowledgments
• Introduction: Culture, Markets, and Economic Life
• 1 The Cultural Roots of Market Demand
• 2 The Cultural Dimensions of Market Supply
• 3 The Culture of Money and Prices
• 4 How to Conduct Cultural Analyses of Markets
• Conclusion: Toward a Cultural Sociology of Markets
• References
• Index