If the human experience tends toward chaos, then many economists consider it their job to take that chaos and lay bare the rationality underlying it. Especially during the last 70 years, economists have increasingly focused on assumptions that individuals behave rationally by making all kinds of economic calculi; similarly, at the social level, both firms and states operate according to implicit rational principles to minimize loss and maximize gain.

But there are many who challenge that orthodoxy, thinkers who ask: Is this really the case? Among them are many scholars at The New School for Social Research (NSSR), well-known for its focus on heterodox economics.

In the 2019-2020 academic year, NSSR will welcome one of those challengers, Jens Beckert, co-director of the Max Planck Institute for the Study of Societies in Köln, Germany, to the Department of Sociology. He’ll be here as the Heuss Professor, a distinguished visiting professorship that brings a prominent German academic to NSSR each year to conduct research and teach, maintaining the longstanding bond between The New School and the German academic world. Learn more in this RM profile of Hubertus Buchstein, 2018-2019 Heuss Professor.

Relating Economics to Social Structures

Beckert specializes in economic sociology, a subdiscipline that explores the correlation between economic processes and the social and cultural structures in which economic action is embedded. His work focuses on the subtle non-economic and non-rational foundations of economic theory and practice, with a particular interest in markets as the most important mechanisms for the allocation of goods in capitalist economies.

“The economic description of markets would be that these are all hyper-rational actors that have no moral boundaries and just pursue their interests,” he says. “But it is my conviction that actually an economy only based on this would collapse. It needs, in a way, a social addition on which it rests at the same time. If you have only rational actors, no institution could work.”

Beckert was a graduate student at NSSR in the early 1990s, when economic sociology began to emerge as a field. His dissertation considered the way in which classical sociological authors, from Parsons to Giddens, had theorized the economy. For his habilitation at Free University of Berlin, a German qualifying benchmark for university-level teaching, Beckert focused on social inequality and the long-term transmission of wealth. Diving into two centuries of inheritance law history in France, Germany and the U.S., he ambitiously explored how inheritance law had shifted through periods of industrialization, reforms or revolutions, including the emergence of social democracy and the labor movement.

Now, several decades later, Beckert is taking on an even bigger topic: how capitalism shapes our experience of time.

Imagining the Future

In his latest work, Imagined Futures: Fictional Expectations and Capitalist Dynamics, Beckert develops an analysis of capitalism focused on a novel way of thinking about time. “With capitalism, there is a change in the temporal orientation of societies. Societies don’t pursue the future anymore as a repetition of the past, like what you had in agricultural societies. But they see the future as an open field in which they find opportunities but also risks, of course,” he explains. This cultural and psychological shift is supported by specific institutions and practices, from generalized competition to the proliferation of debt and credit, that change our relationship to time in a way that further enables the development of capitalist production.

Beckert argues that this is a crucial and understudied dimension of capitalist development, for which he has offered the notion of “imagined futures,” or “fictional expectations.” “To explain the dynamics of capitalism, we need to put this future orientation of actors front and center,” he says. While capitalism has a foundation in rational calculation, it also encourages daydreaming and speculation as responses to a kind of uncertainty that is not treatable within the standard economic frameworks.

Imagined futures are the outcome of endless modeling and speculation, which also makes use of calculative devices and creates the expectations that generate economic activity despite the incalculability of future outcomes.

Beckert has found that his book has been surprisingly popular also in the business world. “Companies are interested in this. When I give talks there, people know immediately what I’m talking about…They have to make all kinds of plans and projections, often on more or less arbitrary assumptions.”

It’s not just firms that make assumptions; academic economists make them, too. “I’m interested in the function of economic theories for the practices in the economy,” Beckert said. Economic theories have a performative effect: They guide agent behavior and thus may end up having the effect they describe by sheer force of influence. “I don’t want to say that reality becomes like economic theory. But something happens in reality as an effect of the theory, and that is the point,” Beckert clarifies.

For his pioneering work, Beckert was recently awarded the Leibniz Prize, considered the highest scientific research prize in Germany. He hopes to use the 2.5 million Euro award to advance the cause of economic sociology by funding researchers to further develop these ideas.

Thinking ahead at his year at NSSR, Beckert is looking forward to moving from a smaller institute to a bigger university and engaging with colleagues across New York-area university. He’s also “excited about the students and about the teaching part of learning from the students.” In Fall 2019, he will teach Economy and Society, an introduction to the major theories, approaches, and topics in economic sociology. And students in his Spring 2020 class on Imaginaries, Narratives, and Calculation in the Economy, will get a in-depth look at the topics from his latest book, including how actors deal with uncertainty of the future and how calculative instruments and imaginaries are used to shape economic futures.

Lucas Ballestin is a PhD candidate in Philosophy. He specializes in political philosophy and psychoanalytic theory. His dissertation is on psychoanalytic theories of political ideology in the 20th and 21st Centuries.