Abstract
Despite signs of recovery in the nation’s housing market and economy generally (home prices have levelled off in many neighborhoods and the stock market has doubled in the past six years), the economic crisis that peaked in 2008 and 2009 persists. Over five million families were underwater (meaning they owed more on their mortgage than their homes were worth) and thus at risk of losing their homes in January 2015, and wage stagnation for middle-class and working families continues. The costs are not just economic. The spike in foreclosures and surging inequality have adversely affected the health of many families and decimated communities targeted by predatory lenders. Economists have dominated the research and policy debates regarding the current crisis. But, as Alain Touraine asserts in After the Crisis, “the sociological approach is the only one capable of throwing light on certain aspects of the crisis” (p. 36). In fact, from his perspective, nothing short of the creation of a new society will significantly respond to the current situation; and this is where a sociological perspective comes in.
What we are experiencing, argues Touraine, is a far more dramatic transformation than occurred in the shifts from a predominantly agricultural society to an industrial and then a post-industrial society. In an often dense (not for undergraduates) critical essay, After the Crisis, though occasionally overstated and even contradictory in parts,offers a valuable perspective beyond what economists and financial journalists provide.
Touraine maintains that the world of global finance has not simply replaced the preceding industrial economy, but that the economy and rest of society have become separate entities. The institutions that managed economic and social life in previous eras (e.g., governments, unions) have simply become irrelevant in the face of dominant global financial institutions. The end result is what he refers to as a post-social society. Similar to what Jacob Hacker argued in The Great Risk Shift, individuals, consequently, are much more on their own.
There are basically two options before us, according to Touraine: (1) continued crises and catastrophes, or (2) the creation of a more open society. The latter calls for “an appeal to universal rights for every human being” (p. 157) where “the most effective response to a crisis is the reconstruction of relations between the economic actors, the establishment of a set of shared values, and new public interventions”(emphasis in original) (p. 158), concluding that “democracy, which transforms workers into responsible citizens, is the essential condition for economic and social recovery, at least in countries which have already chosen political freedom over totalitarianism” (p. 158).
In order to create this new society, no reform within existing institutional frameworks is sufficient, according to Touraine. It is not a question of tighter regulation of banks, creation of jobs that pay a living wage, or establishment of a stronger sense of community. (Touraine points to Putnam’s call in Bowling Alone and subsequent research for greater participation in group life, public and private, as an example of what will not work.) Again, the old institutions that provided some relief for underserved if not exploited populations simply will not work given the separation and domination of global finance. “All chance of an ‘internal’ solution to the crisis is gone” (p.147). Consequently, “we cannot hope to recover from this crisis unless we understand that only an appeal to the universal rights of the human subject can halt the destruction of society by the globalized economy” (p. 154). This is strong stuff.
Throughout the book Touraine refers to the separation of the economy, particularly global finance, from the rest of society. Yet much of the analysis focuses on how global finance has come to dominate not just the economy but all aspects of political and social life. In addition to poverty and inequality he notes a range of other social problems like health and health care, climate change and the sustainability if not survivability of the planet and its inhabitants, war, genocide, and other crises. In many respects, it is the connections between rather than the separation of the economy and society that are so critical for understanding and ameliorating these post-crisis conditions.
More importantly, the banks do not always win. The Dodd-Frank Wall Street Reform and Consumer Protection Act (which, among other things, created the Consumer Financial Protection Bureau that has already secured billions of dollars for victims of predatory practices) was passed over the objection of the financial service industry. The several multi-billion dollar settlements of lawsuits and administrative complaints against JP Morgan Chase, Wells Fargo, Citygroup, Bank of America and other major banks matter. Dodd-Frank was weakened as it worked its way through the legislative process, and industry lobbyists have been able to water down and delay several of the regulations it called for. And it is still the case that no senior executive with any major bank has gone to jail, and bonuses are once again reaching record levels. But these conflicts and policy debates remain contested terrain.
If the future is either one of catastrophe or an open society, Touraine offers little in the way of description of what that society would look like, and less on how we get there. This book is not meant to be just a theoretical treatise. After the Crisis poses all-too-real issues confronting the world today (economists, sociologists, and others) and argues that it is offering a pathway out. This too remains contested terrain for Touraine and many others who are addressing these severe and wide-ranging challenges.
But the larger message should not be lost. In this essay Touraine identifies many, and perhaps the most critical, problems facing the world. It is critical that we raise our sights beyond the purview of economists to examine not just the regulation of banks (whether the answer is more or less) but also the far more fundamental issues that prevail within and across cities and nations. Touraine is right when he says sociology has much to contribute.