《国际政治经济学》文献资料（Use of History and Sociology in International Political Economy）Capitalism as a System of Expectations. Toward a Sociological Microfoundation of Political Economy

328 Politics Society 41(3) approaches ofpolitical economy,I focus on the level ofsocialinteraction.Understanding this process from the perspective of social interaction demands close attention to the expectations actors form with regard to the future.It is from expectations of the"future present"30 that decisions are made.Hence,attention shifts to the creation(and destruc- tion)of actors'expectations,expectations that are necessary for the four Cs of capital- ism to operate in a manner conducive to economic growth but occasionally also lead to profound crises.To understand actors'expectations also requires attention to insti- tutional,cultural,and social conditions and to the agency processes that I refer to as the“management of expectations..” In the following sections,I will discuss each of the four Cs of capitalism,showing the role of fictional expectations and their precariousness. Creativity (Innovation) Innovations are the cornerstone of the uniqueness of capitalist dynamics.31 Growth in capitalist economies is based on the application of the creative poten- tial of actors in the production of goods and services.32 Through innovation new factor combinations are introduced into the market,which-if successful-sat- isfy previously unattended needs,create new needs,or enhance efficiency in the production process.They provide profit opportunities through the competitive advantages they lead to.The dynamics of capitalist economies cannot be explained through the slow enlargement of productive capacities but only based on the introduction of genuine novelty.33 The""high road'to development passes through innovation."34 Looked at from the perspective of social interaction,innovations are based on a utopian vision at the outset,which shows a pretended future reality.I refer to such technological visions as imaginaries of the future.The imaginaries allow actors to move beyond inherited thought patterns and categories by bringing them into an as-if world in which given reality is surpassed and a different one consid- ered.35 In this sense,imaginaries are fictional.They take the form of predictions, forecasts,and projections.36 "Technological predictions and forecasts are in essence little narratives about the future.They are not full-scale narratives of uto- pia,but they are usually presented as stories about a better world to come.The most successful of these little narratives are those that present an innovation as not just desirable,but inevitable."37 As in the case of the other elements,the manage- ment of these expectations plays an important part in innovation processes and the market success of new products.It takes the form of a"management of imaginar- ies"(see table 1). Joseph Schumpeter highlighted the central role of imaginaries in innovation.38 Schumpeter's analysis sets out from the observation that new combinations initially exist only in the consciousness of the actor.While most actors are caught up in rou- tines,some actors"with more acute intelligence and a more active imagination envis- age countless new combinations."39 Hence,innovations begin with imaginaries that lead the entrepreneur to "adapt his economic activities accordingly."40 The Downloaded from pas.sagepub.com at Shanghai Jiaotong University on February 4.2015

328 Politics & Society 41(3) approaches of political economy, I focus on the level of social interaction. Understanding this process from the perspective of social interaction demands close attention to the expectations actors form with regard to the future. It is from expectations of the “future present”30 that decisions are made. Hence, attention shifts to the creation (and destruc￾tion) of actors’ expectations, expectations that are necessary for the four Cs of capital￾ism to operate in a manner conducive to economic growth but occasionally also lead to profound crises. To understand actors’ expectations also requires attention to insti￾tutional, cultural, and social conditions and to the agency processes that I refer to as the “management of expectations.” In the following sections, I will discuss each of the four Cs of capitalism, showing the role of fictional expectations and their precariousness. Creativity (Innovation) Innovations are the cornerstone of the uniqueness of capitalist dynamics.31 Growth in capitalist economies is based on the application of the creative poten￾tial of actors in the production of goods and services.32 Through innovation new factor combinations are introduced into the market, which—if successful—sat￾isfy previously unattended needs, create new needs, or enhance efficiency in the production process. They provide profit opportunities through the competitive advantages they lead to. The dynamics of capitalist economies cannot be explained through the slow enlargement of productive capacities but only based on the introduction of genuine novelty.33 The “‘high road’ to development passes through innovation.”34 Looked at from the perspective of social interaction, innovations are based on a utopian vision at the outset, which shows a pretended future reality. I refer to such technological visions as imaginaries of the future. The imaginaries allow actors to move beyond inherited thought patterns and categories by bringing them into an as-if world in which given reality is surpassed and a different one consid￾ered.35 In this sense, imaginaries are fictional. They take the form of predictions, forecasts, and projections.36 “Technological predictions and forecasts are in essence little narratives about the future. They are not full-scale narratives of uto￾pia, but they are usually presented as stories about a better world to come. The most successful of these little narratives are those that present an innovation as not just desirable, but inevitable.”37 As in the case of the other elements, the manage￾ment of these expectations plays an important part in innovation processes and the market success of new products. It takes the form of a “management of imaginar￾ies” (see table 1). Joseph Schumpeter highlighted the central role of imaginaries in innovation.38 Schumpeter’s analysis sets out from the observation that new combinations initially exist only in the consciousness of the actor. While most actors are caught up in rou￾tines, some actors “with more acute intelligence and a more active imagination envis￾age countless new combinations.”39 Hence, innovations begin with imaginaries that lead the entrepreneur to “adapt his economic activities accordingly.”40 The Downloaded from pas.sagepub.com at Shanghai Jiaotong University on February 4, 2015

Beckert 329 Table I.The four Cs of capitalism. Management of Expectations Motivating Belief Underlying Structures(Examples) Creativity Management of imaginaries Belief in imaginary Social myths (Innovation) Social inequality Legitimation of success seeking through risk taking Social networks Credit Management of confidence Belief in promise 。Economic ethics Calculation technologies (e.g. credit rating.scoring models) Legal system Social networks Power Commodification Management of value Belief in performance Private property rights of good Legitimation of profit-oriented exchanges Classification of goods Competition Management of strategic Belief in strategy 8 Position in market expectations outcome Economic theories Power Entrance barriers entrepreneur will,based on the imaginary of a new factor combination,change the value assessment of the goods offered in the market and change product demand.The late Steve Jobs is the exemplification par excellence of the creation of successful inno- vations through the communication of imaginaries,captivating the computer industry and large consumer groups. Schumpeter insists that innovation is incompatible with the calculative behavior assumed by economic theory because innovations cannot be rationally deduced from existing knowledge.Instead,the expectations regarding the outcome of the innovation motivate and guide an inherently incalculable process41 based on the belief in the imagined new combination as a"future present."42 The openness of the future implies that the expectations regarding innovations must necessarily be contingent and helps to explain why it is possible to predict the expansion of capitalism without being able "to predict the actual direction of future logics."43 Schumpeter has rightly been criticized for providing an overly individualistic account of the motivation to engage in innovative activity.Entrepreneurs'expectations must be understood also as socially constituted.Studies of innovation processes have repeatedly shown that the "voicing of promises,"which show the way to the future,are in fact collective projections,44 and are thus bound to cultural patterns and social structures. Expectations regarding innovative activities have further social preconditions. "Capitalist entrepreneurs do not fall from heaven but can grow only in a particular structural,institutional,and cultural environment."45 Robert Merton46 showed that innovative activities are anchored in the normative structure of modern societies that value inner-worldly transcendence through success seeking by risk taking.Another Downloaded from pas.sagepub.com at Shanghai Jiaotong University on February 4.2015

Beckert 329 entrepreneur will, based on the imaginary of a new factor combination, change the value assessment of the goods offered in the market and change product demand. The late Steve Jobs is the exemplification par excellence of the creation of successful inno￾vations through the communication of imaginaries, captivating the computer industry and large consumer groups. Schumpeter insists that innovation is incompatible with the calculative behavior assumed by economic theory because innovations cannot be rationally deduced from existing knowledge. Instead, the expectations regarding the outcome of the innovation motivate and guide an inherently incalculable process41 based on the belief in the imagined new combination as a “future present.”42 The openness of the future implies that the expectations regarding innovations must necessarily be contingent and helps to explain why it is possible to predict the expansion of capitalism without being able “to predict the actual direction of future logics.”43 Schumpeter has rightly been criticized for providing an overly individualistic account of the motivation to engage in innovative activity. Entrepreneurs’ expectations must be understood also as socially constituted. Studies of innovation processes have repeatedly shown that the “voicing of promises,” which show the way to the future, are in fact collective projections,44 and are thus bound to cultural patterns and social structures. Expectations regarding innovative activities have further social preconditions. “Capitalist entrepreneurs do not fall from heaven but can grow only in a particular structural, institutional, and cultural environment.”45 Robert Merton46 showed that innovative activities are anchored in the normative structure of modern societies that value inner-worldly transcendence through success seeking by risk taking. Another Table 1. The four Cs of capitalism. Management of Expectations Motivating Belief Underlying Structures (Examples) Creativity (Innovation) Management of imaginaries Belief in imaginary •• Social myths •• Social inequality •• Legitimation of success seeking through risk taking •• Social networks Credit Management of confidence Belief in promise •• Economic ethics •• Calculation technologies (e.g., credit rating, scoring models) •• Legal system •• Social networks •• Power Commodification Management of value Belief in performance of good •• Private property rights •• Legitimation of profit-oriented exchanges •• Classification of goods Competition Management of strategic expectations Belief in strategy outcome •• Position in market •• Economic theories •• Power •• Entrance barriers Downloaded from pas.sagepub.com at Shanghai Jiaotong University on February 4, 2015

330 Politics Society 41(3) element of this environment is social inequality,without which there cannot be a motive to engage in activities that lead to social rise.Moreover,social mobility through entrepreneurial effort must be possible.A motivation to engage in innovative activity can emerge only if the structural polarization of classes does not create expectations (at least not in a critical number of actors)that assume that the barriers to upward mobility are individually insurmountable.47 Capitalism is historically unique also in being an economic formation that determines social status not by social origin but based on market success ascribed to effort.This holds true even if there are strong real barriers to social mobility and large social groups have historically been factually excluded from entrepreneurial activities and upward mobility. Expectations regarding the opportunities emerging from entrepreneurial activities must not be held by all actors but by a critical number.Here institutional,network,and cultural factors are important:the education system must be open to meritocratic prin- ciples,networks in the family or the (ethnic)community must be conducive to indi- vidual success-seeking,48 and cultural or religious traditions must support entrepreneurial orientations.49 To create beliefs in the possibility of status enhance- ment at least in some parts of the population is a necessary condition of capitalist dynamics.Failure in that respect deprives capitalism of one of its central preconditions of growth on the level of actors. The Management of Imaginaries Expectations in innovative processes are subject to management of expectations, which takes the form of"management of imaginaries."By this,I mean the deliberate influencing of expectations of third parties regarding the prospects of innovations.An example of this was provided by Sophie Mutzelso in a study investigating the innova- tion process in biotechnology firms aiming to develop genetically engineered medica- tion for treating breast cancer.In this highly uncertain environment,the success of firms'research strategies cannot be foreseen and hopes of successful product develop- ment are often disappointed.Actors try to influence the expectations of others-and the decisions following from them-through the communication of stories providing accounts of which development strategy they expect to succeed.The stories are imagi- naries that send signals to competitors and the financial community.Because decisions hinge on expectations,the manipulation of expectations becomes a means in the com- petitive struggle for resources for research and the strategies pursued.This is a power struggle to determine how the "present future,"i.e.,the present image of the future, looks.Along with the different economic power of firms the regulative power of the state also plays a crucial role in explaining expectations and their shifts. Credit Credit is the second indispensable element of capitalist economic growth.The accu- mulation of capital and the growth of the economy depend on a higher level of demand than that which the owners of capital create through their own payments.5 The source Downloaded from pas.sagepub.com at Shanghai Jiaotong University on February 4.2015

330 Politics & Society 41(3) element of this environment is social inequality, without which there cannot be a motive to engage in activities that lead to social rise. Moreover, social mobility through entrepreneurial effort must be possible. A motivation to engage in innovative activity can emerge only if the structural polarization of classes does not create expectations (at least not in a critical number of actors) that assume that the barriers to upward mobility are individually insurmountable.47 Capitalism is historically unique also in being an economic formation that determines social status not by social origin but based on market success ascribed to effort. This holds true even if there are strong real barriers to social mobility and large social groups have historically been factually excluded from entrepreneurial activities and upward mobility. Expectations regarding the opportunities emerging from entrepreneurial activities must not be held by all actors but by a critical number. Here institutional, network, and cultural factors are important: the education system must be open to meritocratic prin￾ciples, networks in the family or the (ethnic) community must be conducive to indi￾vidual success-seeking,48 and cultural or religious traditions must support entrepreneurial orientations.49 To create beliefs in the possibility of status enhance￾ment at least in some parts of the population is a necessary condition of capitalist dynamics. Failure in that respect deprives capitalism of one of its central preconditions of growth on the level of actors. The Management of Imaginaries Expectations in innovative processes are subject to management of expectations, which takes the form of “management of imaginaries.” By this, I mean the deliberate influencing of expectations of third parties regarding the prospects of innovations. An example of this was provided by Sophie Mützel50 in a study investigating the innova￾tion process in biotechnology firms aiming to develop genetically engineered medica￾tion for treating breast cancer. In this highly uncertain environment, the success of firms’ research strategies cannot be foreseen and hopes of successful product develop￾ment are often disappointed. Actors try to influence the expectations of others—and the decisions following from them—through the communication of stories providing accounts of which development strategy they expect to succeed. The stories are imagi￾naries that send signals to competitors and the financial community. Because decisions hinge on expectations, the manipulation of expectations becomes a means in the com￾petitive struggle for resources for research and the strategies pursued. This is a power struggle to determine how the “present future,” i.e., the present image of the future, looks. Along with the different economic power of firms the regulative power of the state also plays a crucial role in explaining expectations and their shifts. Credit Credit is the second indispensable element of capitalist economic growth. The accu￾mulation of capital and the growth of the economy depend on a higher level of demand than that which the owners of capital create through their own payments.51 The source Downloaded from pas.sagepub.com at Shanghai Jiaotong University on February 4, 2015

Beckert 331 for this higher level of demand is credit."Without the foundation of borrowing and lending,the economic history of our world would scarcely have got off the ground."52 Credit needs to be explained based on the (speculative)expectations of future profits (investment credit)and the desire for a higher living standard in the present(consumer credit).Through credit,an investor obtains purchasing power in the present against a promise-the promise to repay the loan at a specified point in time,together with an additional sum called interest.While in the case of consumer credit,interest can be covered through the reduction of future consumption levels,credit for investment pur- poses must be utilized to produce a surplus.The value of the goods produced in t must be larger than the value of factor inputs in to to cover the costs of interest.Hence credit puts pressure on the economic system to expand.Profit maximizing actors will use credit to the extent they expect that their investments render higher profits than the costs for interest.Seen from the perspective of the creditors,the investment of wealth through credit provides the opportunity to gain additional wealth and is necessary to avoid the depreciation of money over time through inflation. Credit as a form of social relationship can be traced back 5,000 years in history,53 but in no other system did it have the scope it has in modern capitalism.Schumpeters4 even defined capitalism as a system of indebtedness.55 Credit relations,however depend on expectations.For credit relations to come into existence,creditors must hold the expectation that they will be repaid the loan and the agreed-upon interest at the point in time stipulated in the contract.Hence credit relations are anchored in the credibility of the borrower's promise to repay the loan,which has its basis in an assess- ment of the debtor's trustworthiness.56 The term"credit"stems from the Latin credere, meaning "to believe."The "belief'is the expectation that the debtor will repay the loan.Credit is essentially a relationship of trust and confidence.57 The central role of trust extends to the monetary system as such."[T]he value of a unit of currency is not the measure of the value of an object,but the measure of one's trust in other human beings."58 It is not incidental that banknotes were originally called "promissory notes."The acceptance of money,which as such is worthless,is based on the contingent expectation that everybody else will accept the pieces of paper as pay- ment.59 Trust is conferred in the promise of the issuer of the money-today the state or its central bank-that the issuer will not increase monetary supply at a rate that leads to the devaluation of the money through inflation.60 What makes credit and money so interesting from a sociological perspective is that the expectation that a debtor-whether a private person,an organization,or the state- will indeed live up to the promise to repay the loan can never be rationally calculated because the future cannot be foreseen.Since the ability and willingness of the debtor to repay the loan are ultimately uncertain,the expectations of creditors are fictional in the sense that they are based on beliefs (credere!)of the risks associated with the credit.61 Creditors must act as ifthey could anticipate the future outcome.Viewed from the macro perspective,the trust entailed in credit is justified only if the economy grows and repayment of the credit can be enforced.Viewed from the actor level,the promise to repay a loan depends on the debtor being able to utilize the production factors pur- chased with the loan in a way that enough revenue is generated from selling the Downloaded from pas.sagepub.com at Shanghai Jiaotong University on February 4.2015

Beckert 331 for this higher level of demand is credit. “Without the foundation of borrowing and lending, the economic history of our world would scarcely have got off the ground.”52 Credit needs to be explained based on the (speculative) expectations of future profits (investment credit) and the desire for a higher living standard in the present (consumer credit). Through credit, an investor obtains purchasing power in the present against a promise—the promise to repay the loan at a specified point in time, together with an additional sum called interest. While in the case of consumer credit, interest can be covered through the reduction of future consumption levels, credit for investment pur￾poses must be utilized to produce a surplus. The value of the goods produced in t1 must be larger than the value of factor inputs in t0 to cover the costs of interest. Hence credit puts pressure on the economic system to expand. Profit maximizing actors will use credit to the extent they expect that their investments render higher profits than the costs for interest. Seen from the perspective of the creditors, the investment of wealth through credit provides the opportunity to gain additional wealth and is necessary to avoid the depreciation of money over time through inflation. Credit as a form of social relationship can be traced back 5,000 years in history,53 but in no other system did it have the scope it has in modern capitalism. Schumpeter54 even defined capitalism as a system of indebtedness.55 Credit relations, however, depend on expectations. For credit relations to come into existence, creditors must hold the expectation that they will be repaid the loan and the agreed-upon interest at the point in time stipulated in the contract. Hence credit relations are anchored in the credibility of the borrower’s promise to repay the loan, which has its basis in an assess￾ment of the debtor’s trustworthiness.56 The term “credit” stems from the Latin credere, meaning “to believe.” The “belief” is the expectation that the debtor will repay the loan. Credit is essentially a relationship of trust and confidence.57 The central role of trust extends to the monetary system as such. “[T]he value of a unit of currency is not the measure of the value of an object, but the measure of one’s trust in other human beings.”58 It is not incidental that banknotes were originally called “promissory notes.” The acceptance of money, which as such is worthless, is based on the contingent expectation that everybody else will accept the pieces of paper as pay￾ment.59 Trust is conferred in the promise of the issuer of the money—today the state or its central bank—that the issuer will not increase monetary supply at a rate that leads to the devaluation of the money through inflation.60 What makes credit and money so interesting from a sociological perspective is that the expectation that a debtor—whether a private person, an organization, or the state— will indeed live up to the promise to repay the loan can never be rationally calculated because the future cannot be foreseen. Since the ability and willingness of the debtor to repay the loan are ultimately uncertain, the expectations of creditors are fictional in the sense that they are based on beliefs (credere!) of the risks associated with the credit.61 Creditors must act as if they could anticipate the future outcome. Viewed from the macro perspective, the trust entailed in credit is justified only if the economy grows and repayment of the credit can be enforced. Viewed from the actor level, the promise to repay a loan depends on the debtor being able to utilize the production factors pur￾chased with the loan in a way that enough revenue is generated from selling the Downloaded from pas.sagepub.com at Shanghai Jiaotong University on February 4, 2015

332 Politics&Society 41(3) products at a later point in time to allow the repayment of the principal and interests. "If the expectations are not sufficiently fulfilled the whole system becomes destabi- lized."62 Whether the expectations associated with a credit are justified can only be known with hindsight. The fictional character of the expectations regarding the risks involved in credit holds also for the operation of the monetary system.Philip Mirowski has called the assumption that the value of money will not have deteriorated at the point in time when the holder wants to use it for the purchase of goods a"working fiction of a mon- etary invariant."63 It is a fiction because monetary stability depends on the actual com- mitment of central banks to low inflation,64 on banking regulation,and on future macroeconomic development,65 all of which are uncertain.As the history of monetary crises shows,the devaluation of money is a recurrent phenomenon.Nevertheless,in a money economy actors must act as if the value of money were invariant in order to accept money as means of payment and abstain from wage and price increases in anticipation of inflation.Because the future is open,the expectation of the stability of money requires,as Georg Simmel argued,an element of"supra-theoretical belief'or "social-psychological quasi-religious faith.66 Therefore,if capitalist expansion depends on credit,societies must succeed in cre- ating the expectation in capital owners that the promise entailed in the credit relation will indeed be honored.On the side of debtors,the expansion of credit relations pre- supposes the willingness to become indebted in order to increase monetary wealth in the future.This can also not be taken for granted:borrowing money for investment has a social precondition in a life plan of individuals that is directed toward upward social mobility and entails the willingness to engage in risks and speculation to increase one's wealth.67 Once a person is indebted-be it for investment or for consumption purposes-credit has a disciplinary effect by pressuring the debtor to act in ways con- ducive to his ability to repay the loan together with interest.68 Through this pressure, credit itself has a motivational effect relevant for capitalist growth.If,however, incomes stagnate,consumer credit creates reduced purchasing power in the future, leading to austerity and lack of demand. Viewed from a historical perspective,the ability to expand credit relations by expanding expectations of trustworthiness has been one of the most important-but often unnoticed-preconditions for the unfolding of capitalism.How was this unprec- edented expansion of trust achieved?The foundations of trust in credit are social in character.They can be cultural as in,for instance,the prevalence of a shared univer- salistic ethic,a commitment to rules of conduct on the part of the "respectable mer- chant,"or classification technologies that seek to guide expectations.39 They can be based on social networks,as they are,for instance,in ethnic communities.For the most part,however,they are institutional:they are based on the existence of a legal system able to effectively enforce property rights,on accounting and bankruptcy laws, the risk regulation of banks,and on laws on the independence of the central bank These are all institutional devices supporting the trust and trustworthiness of actors in the credit system.Without them,the expansion of credit relations over the past 200 years would have been impossible. Downloaded from pas.sagepub.com at Shanghai Jiaotong University on February 4.2015

332 Politics & Society 41(3) products at a later point in time to allow the repayment of the principal and interests. “If the expectations are not sufficiently fulfilled the whole system becomes destabi￾lized.”62 Whether the expectations associated with a credit are justified can only be known with hindsight. The fictional character of the expectations regarding the risks involved in credit holds also for the operation of the monetary system. Philip Mirowski has called the assumption that the value of money will not have deteriorated at the point in time when the holder wants to use it for the purchase of goods a “working fiction of a mon￾etary invariant.”63 It is a fiction because monetary stability depends on the actual com￾mitment of central banks to low inflation,64 on banking regulation, and on future macroeconomic development,65 all of which are uncertain. As the history of monetary crises shows, the devaluation of money is a recurrent phenomenon. Nevertheless, in a money economy actors must act as if the value of money were invariant in order to accept money as means of payment and abstain from wage and price increases in anticipation of inflation. Because the future is open, the expectation of the stability of money requires, as Georg Simmel argued, an element of “supra-theoretical belief” or “social-psychological quasi-religious faith.”66 Therefore, if capitalist expansion depends on credit, societies must succeed in cre￾ating the expectation in capital owners that the promise entailed in the credit relation will indeed be honored. On the side of debtors, the expansion of credit relations pre￾supposes the willingness to become indebted in order to increase monetary wealth in the future. This can also not be taken for granted: borrowing money for investment has a social precondition in a life plan of individuals that is directed toward upward social mobility and entails the willingness to engage in risks and speculation to increase one’s wealth.67 Once a person is indebted—be it for investment or for consumption purposes—credit has a disciplinary effect by pressuring the debtor to act in ways con￾ducive to his ability to repay the loan together with interest.68 Through this pressure, credit itself has a motivational effect relevant for capitalist growth. If, however, incomes stagnate, consumer credit creates reduced purchasing power in the future, leading to austerity and lack of demand. Viewed from a historical perspective, the ability to expand credit relations by expanding expectations of trustworthiness has been one of the most important—but often unnoticed—preconditions for the unfolding of capitalism. How was this unprec￾edented expansion of trust achieved? The foundations of trust in credit are social in character. They can be cultural as in, for instance, the prevalence of a shared univer￾salistic ethic, a commitment to rules of conduct on the part of the “respectable mer￾chant,” or classification technologies that seek to guide expectations.69 They can be based on social networks, as they are, for instance, in ethnic communities. For the most part, however, they are institutional: they are based on the existence of a legal system able to effectively enforce property rights, on accounting and bankruptcy laws, the risk regulation of banks, and on laws on the independence of the central bank. These are all institutional devices supporting the trust and trustworthiness of actors in the credit system. Without them, the expansion of credit relations over the past 200 years would have been impossible. Downloaded from pas.sagepub.com at Shanghai Jiaotong University on February 4, 2015