Reflections on economic life under conditions of liquid modernity

Introduction

Zygmunt Bauman's concept of ‘liquid modernity’ (Bauman, 2000) can be understood as a critique of the current stage of modernity. It is a diagnosis, an attempt to reveal the underlying dynamics of contemporary society and the unintended consequences these dynamics have for the social fabric we call society. Following Marx's famous assertion that ‘all that is solid melts into air,’ which succinctly captures the nature of early capitalist societies, the ongoing and intensifying capitalist ‘melting’ cannot but result in today's ‘liquid modernity.’ Bauman more specifically spells out what this means and argues that the ‘solid’ world of classical modernity, with its stable careers, predictable life trajectories and durable social structures, has dissolved into a liquid form marked by constant change, uncertainty and fragility. This transformation creates new insecurities and anxieties, and it is these outcomes that his analysis critically illuminates.

Perhaps most importantly, Bauman draws attention to the paradox of freedom in liquid modernity (Bauman, 2000: 5). While individuals enjoy expanded opportunities for choice, movement and self-realisation, these freedoms are accompanied by deepened uncertainty and risks. Freedom without stability becomes an exhausting ‘search for a centre that holds’ (Bauman, 2000: 18–20); choice without guidance produces anxiety or anomie; and mobility without protection leaves people vulnerable and exposed to risks. In this sense, liquid modernity burdens individuals with freedoms they must manage; they become a mixed blessing (Bauman, 2000: 18). Freedom, choice and mobility are just some of the characteristics of liquid modernity. What they share is a sense of existential precarity. To better understand Bauman's diagnosis and liquid modernity it is worthwhile looking at what I describe as the transformation of the human condition into social conditions.

In ‘Searching for a Centre That Holds’ (Bauman, 1995), Bauman offers a perspective on the nature and paradoxes that fundamentally define societies by referring to what we can call ‘the human condition.’ A hallmark of that condition is the:

‘underdetermination, underdefinition of the human being, robbed of the instincts nature so lavishly bestowed on other species, [which] makes that being into a “bunch of possibilities” which need to be sorted out so that some of them might solidify into the reality of existence; it also makes the habitus of the human being into a cistern full of fluid chances that need to be inventoried …. The anxiety would be lessened, tensions allayed, the total situation made more comfortable, were the stunning profusion of possibilities somewhat reduced; were the world a bit more regular, its occurrences more repetitive, its parts better marked and separated; … One may say that because of their “fundamental constitution” human beings have inborn (hereditary) vested interests in an orderly, structured world free of mysteries and surprises. They also have similar vested interests in being more clearly defined themselves, and having their inner-possibilities pre-selected for them, turned into the source of orientation rather than being a cause of confusion and distress.’ (1995: 141, emphasis mine)

At the core of the human condition are two sociologically significant features: in comparison to other animals, humans suffer from Instinktarmut (a lack or deficiency of instincts) (Bauman, 1995: 141; Berger and Luckmann, 1971: 65–66; Gehlen, 1975: 125–126). Ibn Khaldūn already observed that humans survive because ‘the human species, … [has] freedom of choice and their actions are the result of thinking and reflection, not of natural instinct’ (Khaldūn, 2015: 305). Lacking instinctual guidance, humans have to think about how to meet fundamental needs such as food, shelter and clothing.

The second defining feature of the human condition is the lack of physical strength. ‘In physical strength,’ writes Xun Kuang, humans ‘are not as good as an ox, in swiftness they do not equal the horse’ (Xunzi, 1990: 104). Again Ibn Khaldūn reinforces this when he notes that many animals possess greater natural powers than humans (Khaldūn, 2015: 45–46). Yet, as he explains, humans compensate through ‘the ability to think, and the hand. … The crafts … procure for [humans] the instruments that serve him instead of limbs’ and thus lances replace horns, claws become swords and thick skins take the shape of shields (Khaldūn, 2015: 46). Lacking physical strength, humans need to not only think about what to do, but do it.

But thinking and doing alone are not enough. Individuals cannot survive on their own; more socially oriented abilities are required. Drawing again on Ibn Khaldūn, it becomes ‘absolutely necessary for man to have the co-operation of his fellow men. As long as there is no such co-operation, he cannot obtain any food or nourishment, and life cannot materialize for him …’ (Khaldūn, 2015: 46). To this, we can add a further crucial human ability with which humans socially respond to the human condition, namely coordination: the social organisation of thinking, doing and cooperating. Coordination legitimises political structures, which arise to ensure that cooperation takes place and that collective life is organised toward survival and improved quality of life. Cooperation does not occur automatically; coordination makes it possible and aims to ensure the longevity of social conditions by establishing routines, structures and institutions. The transformation of the human condition into social conditions is the result of humans combining four essential abilities, namely thinking, doing, cooperating and coordinating, with which what is liquid and fluid is solidified.

We could leave it at the insight that humans need and create solid social conditions. But can we ever say that the social conditions we create are solid enough to keep the fluid and liquid nature of the human condition, the existential precarity at bay? How solid is solid enough and what are the forces that melt or erode hard won solid social conditions so that we end up in Bauman's liquid modernity?

Social conditions and the satisfaction of needs

A brief clarification of the concept of needs is warranted here which will help us further define what we mean with ‘social conditions,’ where they come from, but also what we mean with the idea of ‘economic life.’ We can distinguish between two types of needs: material needs; and social needs. Material needs refer to the necessities required for human survival, such as food, housing and clothing. Given the absence of guiding instincts, the satisfaction of these needs depends in the broadest sense on work as the activity through which humans relate to nature and secure their means of existence. As György Márkus notes, ‘[w]ork constitutes the real, historical relation of man to nature and at the same time it determines the fundamental relations between man and man, so it forms the basis of all human life’ (Márkus, 1988: 15). Work is at once a quintessentially human activity and the solidifying activity from which social conditions emerge, the very conditions with which we ensure the material satisfaction of needs and with which we overcome existential precarity. Under capitalism, however, alienation and exploitation of work is also the driving force that melts all that is solid into air. This requires us to ask how effectively the social conditions we ourselves create enable the material satisfaction of needs for all members of society. Where they do, questions of inequality are mitigated; where they do not, economic inequalities, and in the most severe cases existential precarities, come into view. When it comes to liquid modernity, it is the latter that seems to be the case.

Social needs are more difficult to define. Social needs encompass the fundamental requirements for social connection, recognition, validation and inclusion that enable individuals to function and flourish. At the interpersonal level, the recognition and satisfaction of social needs contribute in distinct ways to reducing, for example, loneliness, enhancing happiness and supporting emotional well-being, indicating that well-being depends on diverse and meaningful social relationships. Social needs can also be understood as a matter of social justice and human rights. A lack thereof undermines human dignity and constitutes injustices, destabilising social inclusion and depriving us of the emotional and interpersonal resources necessary to sustain social relationships. Social needs take the form of inclusion, personal distinctiveness and collective identity, all of which support motivation, commitment and social well-being, not only of individuals but of society as a whole.

Building on ideas from the Budapest School, we can be more specific about social needs. Individuals are ‘rich in needs’ (Heller, 1982), meaning individuals have an unlimited number of diverse and plural needs, dreams, wishes and desires about life and the societies we would like to live in. Vajda refers to this as the ‘pluralism of power’ (Vajda, 1981: 68) which stands in contrast to cultural and economic homogeneity and conformity.

The first point to make here is about the equal recognition of diverse and plural individual needs recognising the abundance and richness of individuals’ needs. It is, to be clear, not the individual needs that are equal, but the recognition of their diversity. Second, every individual rich in needs, has the equal right to articulate these needs and bring them into public debates. This is what Maria Márkus refers to as ‘the politisation of needs’ (Márkus, 1995: 168). This includes the equal right to not just express but to pursue the satisfaction of needs economically and politically, meaning ‘need articulation and fulfilment are likewise at the root of self-determination’ (Brown, 1988: 129). Third, because of the limited resources to fulfil all needs, the equal right to participate in the social decision-making processes regarding which needs are to be satisfied, which ones might have to wait and which ones will never be addressed becomes an important dimension of the social conditions we live in.

Three important points emerge here for our understanding of economic life under conditions of liquid modernity. First, our existentially necessary attempts to create solid social conditions that shield us against existential precarity seem to result in the opposite, namely liquid social conditions. Second, the ultimate test for the social conditions we create has to be how well they enable and ensure the ongoing satisfaction of material and social needs. Ideally, we achieve a maximal satisfaction of material and social needs with a minimum of social inequalities. And third, economic life can be defined beyond a mere and strict economic understanding as the combined satisfaction of material and social needs, that is, not a separation of economy and society, but their ‘embeddedness’ in each other to use Polanyi's term.

Economic life and three bad habits of economic sociology

Economic life can be further defined as the organised set of activities and processes through which societies manage the production, distribution and exchange of goods and services in order to satisfy material and social needs. Most importantly, rather than being limited to financial transactions or market exchanges, economic life is embedded in social relationships, institutional arrangements and environmental conditions. This includes a broader understanding of the term economic as householding that goes beyond maximising wealth accumulation. It needs to include the management of households and communities with the aim of meeting material and social needs and sustaining collective life (Helmer and Auerbach, 2024).

Contemporary approaches further expand this view by emphasising the systemic and multi-dimensional nature of economic activity. Frameworks such as Life Cycle Sustainability Assessment (see Neugebauer et al., 2016) highlight that economic life generates a wide range of effects beyond monetary costs, including social and environmental consequences across different stages of production and consumption. The goal is to capture these broader economic impacts at both micro-levels and macro-levels, moving beyond narrowly cost-driven evaluation. At the same time, system economic theory and resource-based analyses underscore that economic life operates through interconnected entities whose stability depends on the balance between resource inputs and returns over time. Decision-making about allocation of resources or generally the satisfaction of needs, often imperfectly and in a reductionist way, portray the complexity and dependence of economic relationships on social contexts.

Taken together, economic life is best understood as a dynamic relationship between economic and political processes addressing human needs, shaped by social organisation, institutional choices and sustainability or environmental concerns. It is not merely a sphere isolated from society, but a core dimension of collective life whose impacts unfold across social, environmental and economic domains. Based on this very brief sketch of the term ‘economic life,’ three bad habits of economic sociology which indicate that economic sociologists tend to not fully grasp the complexity and paradoxical nature of liquid modernity.

The first bad habit could be labelled ‘quantitative reductionism’ and can be described with the aid of the Physiocrats and key figures such as François Quesnay, Victor Riquetti (marquis de Mirabeau), and Pierre Samuel Du Pont de Nemours who integrated insights from mental processes, science, politics and the arts into their economic writings (Vardi, 2012). Norbert Elias, in an essay entitled ‘On the Sociogenesis of Sociology’ (Elias, 2009), discusses how the Physiocrats were the first to statistically show how income circulates invisibly through various parts of a society, much like blood flows through the human body (Elias, 2009: 46). While the Physiocrats can be seen as pioneers in the social sciences using quantification to numerically make economic as well as social processes visible, they also lay the foundations for today's overreliance on quantitative descriptions of economic processes be it inflation, interest rates, unemployment rates or gross domestic product (GDP). Following Elias, we can say that these quantitatively inspired images of the economy have led to a change in the meaning of what is called ‘economic’ ‘… from a reference to household management of individual persons to the “household” management of a country as a whole’ (Elias, 2009: 44–46).

All too easily these aggregate numbers and economic indicators obscure the complexities of everyday life. In short, the numbers conjure up an image of something that does not exist as such. Marilyn Waring, for example, explains how economic success relies on women's unpaid work which is not comprised in the usual economic indicators such as GDP (Waring, 2004, 2018). A similar critique, but also a suggestion to count things differently, is offered by Kate Raworth's Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist (Raworth, 2017). The quantitative reductionism is very much taken for granted today without asking what we do not count. Starting with the Physiocrats, this shift towards narrow perceptions of the economy in numbers only, has dramatically altered the flow of money, income and wealth, with the state emerging as a key ‘economically relevant’ actor in terms of taxation and policy.

The second bad habit of economic sociology follows from the first one, namely an ‘analytical separation of economy and society’ when in everyday life they are messily intertwined. Karl Polanyi, in The Great Transformation: The Political and Economic Origins of Our Time (Polanyi, 2001), very much critiques the separation of economy and society, particularly the idea of treating markets as independent from social contexts. Polanyi warns that allowing the market mechanism to dictate the fate of human beings and the environment would ultimately lead to, in his words, ‘the demolition of society’ (Polanyi, 2001: 76–79). One of the most severe consequences of this analytical separation are approaches that believe that fixing the economy or the market, will also fix social issues where in fact it is one of the driving forces behind the melting and liquifying of social relations.

The third bad habit of economic sociology is the individualising of social issues highlighted by Bauman, Ulrich Beck and Elizabeth Beck-Gernsheim. According to Bauman, individualisation is one of the hallmarks of liquid modernity. Individuals feel as if they are personally responsible for the solution of all their issues in the face of enormous structural concerns which are beyond their control. Systemic problems such as unemployment, inequality or financial risks are reframed as personal shortcomings. And thus, individuals feel compelled to manage themselves, adapt continuously and shoulder responsibilities for conditions they did not create and cannot control. This shift places an enormous burden on the individual, who must navigate a world that no longer provides stable frameworks of support for the satisfaction of their material and social needs. With this, Bauman points out a well-known sociological task that C. Wright Mills originally captured in The Sociological Imagination (Mills, 1959) and essentially defined as structural issues that cause personal problems, but that are caused by public issues and hence cannot be solved individually (Mills, 1959: 8–9). In those terms, Bauman's critique is that the liquid nature of contemporary social conditions is a structural issue that causes individual problems that despite the glorification of individual choice and agency cannot be individually solved.

Bauman argues that ‘individualisation’ transforms identity from a given into a task, where individuals are compelled to shape their own lives rather than accepting predetermined social roles (Bauman, 2002: xv). Beck and Beck-Gernsheim stress that individualisation leads people to seek biographical solutions to systemic contradictions, which is exactly the tension between solidifying and liquifying. ‘Constantly changing between different, partly incompatible logics of action, they [individuals] are forced to take into their hands that which is in danger of breaking into pieces: their own lives’ (Beck, 2000: 165).

To reiterate, much of economic sociology fails to fully grasp economic life under conditions of liquid modernity because of at least three ‘bad habits.’ First, quantitative reductionism reduces complex social and economic realities to aggregate quantitative indicators obscuring everyday life and unpaid or invisible forms of work. Second, the analytical separation of economy and society treats markets as autonomous from social contexts and ignores how economic processes are dependent on social and cultural processes. Third, individualisation reframes structural problems such as inequality, unemployment and insecurity as personal failures, placing responsibility on individuals for conditions that they cannot control.

Economic life: back to a Weberian approach

At this point, I return to one of the founding figures of economic sociology to sketch a more integrated perspective that economic sociology could develop in order to understand economic life under conditions of liquid modernity. To start with, Weber also refers to needs when he writes, ‘in order to satisfy […] needs, we must make planned provision, labour, struggle with nature and establish social relations with other human beings’ (Weber, 1949: 108). In order to sociologically analyse these social relations, Weber sketches a framework for economic sociology that potentially allows a more integrated analysis of economic life under conditions of liquid modernity without getting bogged down in the bad habits mentioned above.

Weber approaches economic life as a blend of three interconnected phenomena that together shape how economic life unfolds: purely economic; economically relevant; and economically conditioned (Swedberg, 2003: 13; Weber, 1949: 109). This distinction allows Weber to capture the complexity of economic life without reducing it to markets or monetary transactions alone. First, Weber describes economic phenomena in a narrow sense. These include institutions and processes that are deliberately created or primarily used for economic purposes, such as markets, stock exchanges, banks and for-profit organisations. As Weber explains, these are ‘processes (simple and complex), norms, institutions etc., whose cultural significance for us is principally rooted in their economic aspect[s], and which – like, for instance, processes in the stock exchange and banking world – are primarily of interest to us only from that point of view’ (Weber, 1949: 109).

Second, Weber introduces economically relevant phenomena. These are processes that are not primarily economic but acquire economic significance through their influence on social behaviour. Religious beliefs, legal systems, political decisions, or cultural values may not initially appear economic, yet they can profoundly shape economic behaviour and outcomes. Policies about taxation or incentives would be a prime example. Weber notes that these are processes ‘which do not (or, at the very least, do not primarily) interest us because of their economic significance … but which may [nevertheless] under certain circumstances acquire an importance in that perspective because they have effects which interest us from economic points of view’ (Weber, 1949: 109). The Protestant Ethic and the Spirit of Capitalism (Weber, 1965) exemplifies this by showing how religious ideas influence the development of a capitalist conduct of life.

Finally, Weber speaks of economically conditioned phenomena. These refer to aspects of social and cultural life such as artistic styles, lifestyles, or aesthetic preferences that are not primarily economic and whose economic effects are of little direct interest. However, their form and development may still be shaped by economic factors. As Weber puts it, these are phenomena ‘which are not “economic” … whose economic effects are of little or no interest to us … but which have on the other hand in concrete cases been more or less strongly influenced … by economic motives’ (Weber, 1949: 109). Artistic tastes or lifestyles, for example, may reflect the economic composition of its audience without being reducible to economic logic.

Together, these three phenomena demonstrate Weber's broad and nuanced understanding of economic life. Rather than treating the economy as a separate sphere, Weber shows how economic processes are embedded in, influenced by, and intertwined with social, cultural and political life. This also goes for conditions of liquid modernity.

Conclusion

What, then, can be taken from these reflections on economic life under conditions of liquid modernity? The central claim advanced here is that what appears to dissolve does not simply vanish. All that is solid does not merely melt into air; once melted, it flows, and flows can change direction. It is the task of sociology to make sense of these movements, to explain how economic and social relations are reshaped as they lose their solidity without becoming entirely formless.

Three points are particularly important for an economic sociology informed by Bauman's notion of liquidity. First, liquid modernity is marked by a fundamental existential paradox. Processes of solidification and liquefaction are not opposites but mutually dependent forces. Stability and instability, order and uncertainty, are continuously produced together, shaping economic life in ways that are simultaneously enabling and disorienting.

Second, dominant habits within economic sociology often obscure this paradox. An overreliance on quantitative indicators, the analytical separation of economy and society, and the tendency to individualise structurally produced problems all limit our ability to grasp the complex and contradictory social conditions of liquid modernity. These approaches risk presenting economic life as more coherent, autonomous, or manageable than it actually is.

Finally, returning to Weber's conceptual framework, this paper has argued for a broader understanding of economic life as an interweaving of economic, economically relevant and economically conditioned phenomena. Such a perspective highlights how economic processes are inseparable from social, political and cultural dynamics, an interdependence that becomes more visible and more consequential under liquid conditions.

The aim, therefore, is not to resolve the paradox of liquid modernity but to interpret it sociologically. Economic life in liquid modernity is characterised by shifting flows rather than stable structures, by fragile solids that may harden again in new forms. Sociology's task is to trace these flows, to analyse their directions and consequences, and to understand how new forms of order, inequality and possibility emerge from them.