Challenges of balancing scholarly engagement and critique: A reflection on social studies of finance

By Suhaib Riaz. *

“Socializing finance” has become shorthand to describe the research that several scholars (including me) are engaged in related to social studies of finance. This stream of work involves: bringing finance into the realm of social studies; but also making the industry aware of other ways of thinking and doing, beyond their current status quo; this also often has an element of (social) interaction with the industry thrown in. All these are consistent with various meanings of ‘socializing’ and are much needed efforts.

But there is a flip side to this aspect. How critically aware are we that finance is also on a mission to socialize us – in the sense of influencing our thinking – even as we may attempt to ‘socialize’ it?

In my work (in collaboration most prominently with Sean Buchanan, Trish Ruebottom, Madeline Toubiana) and that of a few other scholars, this seems to be a theme too powerful and important to ignore.

Finance is indeed at work to socialize us – to influence our ways of thinking about it through various means. At the peak of the financial crisis, various categories of elite actors seemed bounded by these ways of thinking about the financial industry resulting in configurations of positions often in favor of status quo (see Riaz et al., 2011). More specifically, financial industry leadership may well see it as their task to defend the institutional framework in which the current version of their industry thrives; and accordingly work to ‘socialize’ the rest of us – all stakeholders- to accept their view of finance and its role in society as the ultimate one by claiming epistemic authority in this domain (see Riaz et al., 2016).

Why is it so difficult to rein in Wall Street?

Suhaib Riaz, University of Massachusetts Boston; Sean Buchanan, University of Manitoba, and Trish Ruebottom, Brock University.

Reforming Wall Street has become a key issue in the ongoing presidential primaries.

Bernie Sanders in particular has used his rival’s close ties to the financial industry, including speaking fees and political donations, to suggest Hillary Clinton wouldn’t rein in Wall Street. At the same time, Sanders has tried to highlight his own independence, declaring:

If I were elected president, the foxes would no longer guard the henhouse.

Clinton has tried to dispel the notion that Wall Street donations affect her judgment or independence, claiming her regulatory plan is actually tougher than Sanders’.

These exchanges underscore a crucial point: almost a decade after the 2008 financial crisis, the reforms that many Americans have demanded remain incomplete. Claims of independence, including by Republicans such as Donald Trump, are one way for candidates to suggest that they would be able to bring about real change.

Who would be the best candidate to do so is an important question. But first we must understand this underlying dilemma: why has it been so difficult to reform Wall Street following the worst financial crisis since the Great Depression?

This led us to a more fundamental question: whose voice matters most in determining how the financial industry should be run?

Given how much anger there still is at Wall Street, the answer may be surprising.

Blogging Highlights: Higher Education, Lehman Brothers, Microfinance

This week we would like to draw your attention to three interesting debates in the blogosphere as well as a new book release.