Prediction and economic sociology: Fligstein vs. Zimmerman
March 6, 2010
There is an interesting exchange between Neil Fligstein and Kenneth Zimmerman in the European Economic Newsletter issued by the Max Planck Institute.
In a previous issue, Fligstein took his economic sociology peers to task for not having predicted the financial crisis. He argues that the field, himself included, failed to recognized how firms have organized new into financial markets. Responding to Fligsten’s comments, Zimmerman gives a alternative, science studies based explanation for for why economic sociologists failed to foresee the unraveling of finance.
After presenting an a somewhat Bourdieusian picture of Roubini as an example that prediction was indeed possible, Zimmerman critiques the social sciences for being locked into models that obscured financial transformation. His critique includes Fligstein’s own career long emphasis on firms. Zimmerman then suggests that by escaping entrenched models and following what financial actors were doing, social scientists and economists alike would have been better equipped to foresee financial disaster.
Fligstein’s second round response is telling of what is at stake in the introduction of science studies to economic sociology. He writes: “I am skeptical that someone studying financial transactions by studying trading rooms in Latour’s sociology of science style would ever have grasped that the financial system had in fact evolved in a new and suddenly different direction. […] The actor network approach with its extreme micro focus will not carry us to analyze the real relationships between the state and the banks which were at the core of the crisis.”
Fligstein’s response is based on a common misreading of ANT. ANT is not a micro approach and it has never been a micro approach to social action. To the contrary, it simply insists that before things get macro, they start off as micro phenomenon. This emphasis on starting small, should not be conflated with a methodological injunction to use tools drawn from ethnomethodology, ethnography and participant-observation as a means of tracing social action and social change. (Thus, when I ask a financial actor in a consumer credit risk center of a bank on how their unit interprets and uses credit scores, I am inquiring about action that occurs locally, but we are discussing a macro- object that all financial institutions use, and which, therefore, is an agent in coordinating markets more broadly.)
In a final comment, it is noteworthy that what both Zimmerman and Fligstein agree upon is that the test of good social sciences is its ability to predict. But I wonder, is prediction the central stake of the social sciences, or is an obsession with the value of prediction precisely what has been brought into being by a financial regime that views the world in terms of risk…? Perhaps an emphasis on prediction is what needs to be explained.