Economic Persuasions
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Economic Persuasions

Stephen Gudeman, Stephen Gudeman

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eBook - ePub

Economic Persuasions

Stephen Gudeman, Stephen Gudeman

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As the transition from socialism to a market economy gathered speed in the early 1990s, many people proclaimed the final success of capitalism as a practice and neoliberal economics as its accompanying science. But with the uneven achievements of the "transition"—the deepening problems of "development, " persistent unemployment, the widening of the wealth gap, and expressions of resistance—the discipline of economics is no longer seen as a mirror of reality or as a unified science. How should we understand economics and, more broadly, the organization and disorganization of material life? In this book, international scholars from anthropology and economics adopt a rhetorical perspective in order to make sense of material life and the theories about it. Re-examining central problems in the two fields and using ethnographic and historical examples, they explore the intersections between these disciplines, contrast their methods and epistemologies, and show how a rhetorical approach offers a new mode of analysis while drawing on established contributions.

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Year
2009
ISBN
9781845459260
CHAPTER 1
INTRODUCTION
Stephen Gudeman
figure
AS THE TRANSITION FROM SOCIALISM to market economy gathered speed in the early 1990s, many people proclaimed the final success of capitalism as a practice and neoliberal economics as a science. But with the uneven achievements of the “transition,” the deepening problems of “development,” the continuation of boom and bust cycles in market societies, persistent unemployment, widening of the wealth gap, and expressions of resistance, the discipline of economics is no longer seen as a mirror of reality or as a unified science. How should we understand economics and, more broadly, the organization and disorganization of material life?
In the meanwhile, economists are crossing disciplinary boundaries in impressive numbers and attempting to apply their models to an ever-increasing range of social phenomena. Some economists also have discovered anthropological notions such as culture and figurative speech. Today, economists speak about social and cultural capital, as well as signals and information. Even the hallowed and notoriously ambiguous anthropological term, “gift,” (as well as “reciprocity”) has been encompassed within the rationalistic rhetoric of economics; however, anthropologists and economists use the terms very differently. For their part, anthropologists have not reached into this cross-disciplinary space nor fully used their ethnographic and analytical tools to offer alternative interpretations. Given its notion of culture, what does anthropology contribute to our understanding, explanation, and “predictions” about economies and economics?
In this book, we have approached these issues by asking a new question. Why is economics persuasive? How does it convince us? Or, what persuades us to participate in everyday economic life? We are not asking about the persuasions given by market incentives or about individuals balancing rewards and costs in their decisions, as in the language of economists, but about the persuasions of economy that stimulate, focus, cajole, and invite us to act in certain ways. This rhetoric is public and private, as well as spoken, written, and acted. Such persuasions often lie hidden in the gap between economics and anthropology.
Our essays were first presented within a set of conferences on “rhetoric culture,” the meaning of which was discussed through all of the prior sessions. The preceding volumes in this publication series explore the idea in depth. A central thread in all of these conversations to which we responded is that language and actions are performances that we deploy to move others and ourselves in action and conceptually. Rhetoric, as in political speech, can be used to lead, align, beckon, and bring people to a particular perspective. These performances are rooted in culture, context, memory, and shared (and not so shared) understandings. But the task of addressing economy in terms of rhetoric posed a special challenge. Other sessions in the conference series addressed everyday poetics, politics, religion, and kinship. Most of us can envision a link between these parts of life and rhetoric. Addressing the connection between rhetoric and economy, however, created a challenge for both the anthropologists and the economists who contribute to this book. If anthropologists had always been aware of the rhetorical aspects of social life, where had they written about economy? And if economists had always been talking about and writing down graphs, curves, and equations, where was the rhetoric? As if to underline the challenge, our conference on economy was the ultimate session in the larger conference series. Could anything fruitful emerge?
We used the occasion to bring together anthropologists and economists (as well as a sociologist) to speak to the puzzle and to engage in a conversation across the disciplines. Because we were in a dialogue, we were trying to persuade each other, both our fellow disciplinarians and our counterparts, of the power of our views. On the idea of persuasion as the theme, we agreed at the outset. But as the work proceeded, it proved to be increasingly profitable, because—as the essays demonstrate—the toolkit of rhetoric smartly aligns with much of economic theory and practices, and with economic anthropology as well (although that may be because we are all voices within a long “Western” conversation). The reader will find that by “thinking rhetorically,” the contributors to this volume find shared ground and open exciting spaces for exploration as they show how their different approaches have more in common than is usually supposed.
We use the word, “rhetoric,” in the original (Platonic and Aristotlean) sense of persuasion. But what makes an analysis of material life in economics or in anthropology persuasive? And what makes a form of material life persuasive to its practitioners and to others? In economics, the Chicago-trained Deidre McCloskey (1985, 1994) was the pioneer in the study of economic rhetoric, and her writings have been influential outside of the field.1 Others have pursued a broadly rhetorical line, such as Arjo Klamer (1983), who has written on conversations, and Philip Mirowski (1989), who has explored the metaphors of general equilibrium theory that were drawn from physics. Related as well are writings in feminist economics, postmodern economics, and a variety of heterodox approaches in economics. Anthropology, with its emphasis on culture, semiotics, pragmatics, language, myth, ritual, and everyday life, has long displayed an interest in rhetoric, as the other volumes in this series attest. In the past decades, some anthropologists (Bird-David 1992; Gudeman 1986; Sahlins 1976) have tried to bring the culture concept to ways of thinking about economics, but the idea of developing a rhetorical approach has been slower to develop.
But what does the word, rhetoric, really mean? Some people associate rhetoric with the use of tropes, such as metaphor or metonymy; on this view, it may be opposed to deduction or logic. Some use rhetoric to refer to modes of presentation in speech and gesture; others link rhetoric to dialogue, interaction, and communication. More broadly, rhetoric can be seen as a way of bringing about a feeling or emotion in others. Of course, rhetoric sometimes means just the opposite: it is hot air, sophistry, and just talk, if not misdirection. The philosophically inclined might claim that through rhetoric the “real” is constructed, while others offer the perspective that rhetoric has to do with multiple and unstable meanings that require interpretation by both speaker and listener. Still others may prize a rhetorical perspective because it leads to the analysis of a speaker and listener’s positions.
We draw on some of the traditional divisions that the concept of rhetoric evokes. For example, in rhetorical studies, the form of an expression may be separated from its content, or how something is said may be separated from what is said. Some of the classical terms used to capture this division are res or substance, and verba or expression, as well as logos (content) and lexis (style). Today, we might talk about figures of speech and the subject being conveyed. In Marshall McLuhan’s words, we could also speak about medium and message. But the divisions are arbitrary, because the two aspects overlap and interact, and they are emphasized differently by disciplines and cultures. In the West, we often prize the substance or meaning of discourse over its form, but it is the interaction or dialectics of the two that provides an important thread in this volume. In economics, as the reader will find, the form of a presentation conveys a good part of its meaning and persuasive power; in a word, form becomes content. For example, when metaphoric associations tell us about the local meaning of money, are we not looking at the impact of how something is said on its content? And when supply and demand curves specify price, are we not defining price through a mode of expression? It works in reverse as well, because we could see graphs and metaphors as outcomes of struggles to express something we experience or think we know. These struggles to express and to use expressions to formulate knowledge are common to both anthropology and economics. And they lead us into perplexing issues about epistemology, methodology, history, and ethnography. The reader thus will find that we weave reflections about these issues into our consideration of economic persuasions. We want to persuade the reader that “thinking rhetorically” is a profitable way to think about economy.

THE CAST OF ESSAYS

If the study of rhetoric begins with Aristotle’s discussion of political persuasion, James Carrier’s essay ends with the way political power and control are achieved through rhetoric. Rhetoric, says Carrier, is about the devices we use to persuade others and concerns the form as opposed to the substance of a communication. To invoke Marshall McLuhan again, it is the medium and not the message. Carrier admits that this division is “formal,” but it is persuasive. We rely on the form of a communication, suggests Carrier, for its simplicity, which makes for good aphorisms and understandable public policy, as in the neoliberal wave that has swept Britain and the United States. Simplicity lends itself to prescribing and controlling world events, just as it offers clarity and consistency.
With this view of rhetoric, Carrier turns to the most well known dispute within economic anthropology, which is that between the “formalists” and the “substantivists.” The terms repeat the crucial division in rhetorical studies and suggest why the formalists claimed “victory” in the debate, because by focusing on the “medium,” they were more persuasive. But it was never this simple. For one part, the debate replicated a long-standing division between anthropology and economics as disciplines. For another, as William Milberg discusses in this volume, economics may be undergoing a change that brings it closer to the concerns of anthropology. I might add that several generations of students have found the formalist/substantivist debate to be “rhetorical” as well, although in the pejorative sense of the term.
Carrier leads us through the main points of the debate. Is economy the product of individuals choosing through the exercise of calculative reason, or is it a set of social relationships and institutions? Are economic processes forged in local and historical contexts or are they transcendent forms? The formalist approach is persuasive for its universalism, because it presumes that humans across cultures are alike in their mental predisposition. The substantivists are more particularistic with their insistence on the importance of variation and context. This difference in methodologies and epistemologies reflects broader debates infecting many disciplines, such as that between lumpers and splitters, or between anti-relativists and relativists.
The formalist/substantivist debate is dialectical because each side actually employs both faces of rhetoric, although with different emphases. Substantivists start with the substances of economy, which are land and labor. The two make up the content and the context of their discourse. But these substances assume different forms in different societies, according to the transaction type (or form) in which they are exchanged, which include reciprocity, redistribution, and markets, and the transaction forms are institutionally framed. For substantivists, it might be said, every economy is typologically or “formologically” different. In contrast, formalists are looking at the invariant form of the individual who is a purposeful actor, or homo economicus. So far, so good, but this rational actor operates by drawing on the subjective content of preferences, which are distinct to him. For formalists, the form may be comparable across all human beings, which is the claim of many economists, but the substance of that action, which is made up of preferences, is not, otherwise why would rational calculators exchange? Thus, the dialectical terms of rhetoric are echoed in the debate between formalists and substantivists. One finds form in transactions that are institutionally framed; the other finds form in the acts of individuals. Formalists must presume substances just as the substantivists presume form, even if their contents and forms are differentially emphasized.
Carrier offers us a punch line to this debate: the idea of simplicity. Not all forms, he suggests, are alike; some are more persuasive than others. The formalists’ “form,” he suggests, is simple and abstract. The substantivists’ form, which is transaction types, is threefold and linked to institutions. On the ground, these transactions also are mixed and not always clearly discernible. The substantivist approach does draw on the device of simplicity, at the social if not the psychological level, but it is a more complex simplicity. Thus, are we left with an ambiguity? Was the great debate between formalists and substantivists in economic anthropology about content or form? We have always considered it to be a controversy concerning the content of economy, but perhaps it was truly rhetorical. At the least, a rhetorical approach that looks at how we persuade helps us understand the issues at stake.
Richard Swedberg’s account of our shifting uses of the word, interest, reprises many of our themes, but in a different language and with a more philosophical and sociological turn. Swedberg argues that disciplines appropriate words for their own purposes, and these meanings dominate other possible uses, especially as they spread across several disciplines. Why do some uses become more persuasive than others? For many of us, the word “interest” means the return we pay for the use of someone else’s money, however, Swedberg uncovers other uses of the word in economics and sociology, which reveal some of the rhetorical differences between the disciplines. Tracing the history of these uses, he suggests that their reconsideration may offer fresh ways of thinking about economy.
Swedberg first recounts the stillborn use of the concept of interest in sociology. Paying special attention to Simmel’s work, he suggests that Simmel drew on the Kantian distinction between form and content in which interest, referring to content, provided the driving force or motive for interactions that took different forms. According to Simmel, sociology was to leave the exploration of the content of interest to other disciplines. Although his notion of content was broader than economists entertained, Simmel subordinated it to the relationships or form in which it was expressed; and he thought that the same interest might have a different form in different associations (which is not unlike exercises in rhetoric that call for variations in style while preserving meaning). Conversely, the same social form might rest on different interests. In contrast to Simmel, Weber argued that interests lend stability to actions and that interest-driven behavior pervades all domains of life and is vital to the form of social action and organization. For Weber, interests covered almost the entire range of human experience and were seemingly more stable than the obligations and expectations of formal groups in which they were expressed.
Swedberg contrasts these multifaceted notions of interest in earlier sociology to the narrow use of the word “interest” in economics. After Adam Smith, the term was cleansed of explorations into the subjective states of actors and replaced by the concepts of homo economicus and preferences. But preferences or interests could be known only when revealed in choices, so even socially shaped actors dropped out in the abstract theory. With this development, the difference between sociology and economics sharpened. For Simmel, interest was motive or content, while form was the shape of the interactions in which it appeared; for Weber, interests were sturdy, but varied by context. In economics, however, interest became a form, whereas the contexts within which it was realized were elided. Swedberg’s analysis points us to the interesting dialectical transformation that what began as shifting content or substance in early sociology became the invariant form in economics. His analysis of the word, interest, also suggests why the formalist/substantivist debate in economic anthropology became so heated, because it had much to do with how we conceive humans in society. The formalists in anthropology took the position of economists; the substantivists were like sociologists. They splintered the dialectics of rhetoric.
But nothing stands still, and the form versus content debate may be long in the tooth given changes in economics and anthropology. William Milberg returns us to the general topic of persuasion in his survey of changes in the methodologies and theories in economics. He asks how and why economics has become so persuasive, despite its sometimes-indirect relevance to what actually happens. His argument crosscuts, if not confounds, some of the traditional classifications in rhetoric. Milberg shows how economics has moved from a view of economy as an ordered and complete system (or form), which was an assurance against uncertainty, to a more pragmatic sense of incompletion, although the yearning for simplicity persists.
Focusing on his discipline’s shifting questions, Milberg shows how the criteria of persuasion and “progress” in economics have changed and moved slightly closer to some of anthropology’s traditional ones. Milberg identifies three phases or paradigms in economics during the past century. First, practitioners relied on a hypothetico-deductive method that involved the notions of partial equilibrium (Marshall), general equilibrium (Arrow and Debreu), optimization, the first welfare theorem, and scarcity. In this paradigm, progress was judged by the elegance of the formulation and its robustness in the sense that if the same results could be achieved by using less restrictive assumptions than before, the new model was considered to be more persuasive. The deductive rigor of this rhetoric brought it closer to physics (and persuaded us to support capitalism).
A transition—often contested within the discipline—occurred with the rise of the “New Economics” in which the possibility of achieving general equilibrium was abandoned, although the anchor of rational choice was retained. As the search for overall systematicity and completeness was forsaken, new subfields in economics arose. In this period, the discipline shifted toward a more inductive approach, and with it, results contrary to the earlier deductions were found in the analysis of international trade, monopolistic competition, increasing returns to scale, and growth. Rational choice played a role in explaining these findings, but the vision of consistency shifted from the overall economy to the subfields. Robustness was no longer so prized, although the problem of allowing for contingency, given the ad hoc hypotheses, was avoided by assuming rational choice. Assessing progress in the discipline became more difficult. For anthropologists, the shift from deduction to induction as a mode of persuasion in economics is ironic, because this distinction was the central theme in the 1941 Frank Knight–Melville Herskovits debate.2 Knight, the well known economist, accused Herskovits, and other anthropologists, of practicing induction as opposed to the rigorous deductive methods employed in economics.3 Fifty years later, the tables have turned, except that most anthropologists have abandoned induction (which is the other side of the coin to deduction) in favor of constructivism, narratives, and other ...

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