The Global Sociology Blog

Over at the great Economic Sociology blog, Brooke Harrington has a very interesting post comparing the unfolding of the current economic crisis with the advent of the AIDS epidemic.

The Plague « Economic Sociology via kwout

More specifically, Doctor Harrington is concerned here with social epidemiology: the social processes and factors that facilitate (or slow down) the spread of an epidemic, be it of a viral or economic nature. In the case she examines, she identifies three processes that turned things from bad to worse:

The Plague « Economic Sociology via kwout

This is one of the most frustrating aspects of both the AIDS epidemic and the current financial meltdown. Neither happened out of nowhere or overnight. A few people raised the alarm but were ignored for a variety of reasons, which themselves have to do with social processes and dynamics which may include the structure of the power elite – the incestuous relationships between governmental economic elite and Wall Streeters – beliefs about the markets (something Thomas Frank described powerfully in One Market Under God) or group dynamics. In the case of AIDS, the fact that the initial victims belong to deviant and stigmatized categories of the population was a major factor as well.

The Plague « Economic Sociology via kwout

Indeed, ideology played a major role in the Reagan administration’s "wait and see if it kills all the gays and junkies" attitude regarding AIDS. As for the financial crisis, it has been well established by now that it is partially the product of deregulation in the name of laissez-faire capitalism and the belief that the market can do no wrong. In both cases, the results were devastating.

The Plague « Economic Sociology via kwout

So, Congress coughs up a big chunk of money for the banks to start lending again, and they keep it instead or buy other stuff with it. Possibly, it was because of the lack of trust that this would solve the problem or that these loans would be repaid at all.

This erosion of social capital contributes to making things worse when it is needed the most. Indeed, the damage done might have a long-lasting impact on the trust in government (helping big financial groups but not homeowners) and financial institutions. Contrary to Margaret Thatcher’s pronouncement that there is no such things as society, this reveals how individualism is not enough and that trust and cooperation are essential glues to social arrangements (shall we call that social solidarity? Who should I invoke, Durkheim or Veblen?).