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New Financialization and Inequality Syllabus

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This is the latest version of my “Financialization and Inequality” undergraduate course, as taught this Fall 2017 in Sociology at UC Merced:

From Occupy Wall Street to the Bernie Sanders movement, we have seen persistent anger at big banks and the U.S. financial sector over economic inequality. But is finance really to blame? And if so, what can we do about rising inequality?

To tackle these questions, this course will use economic sociology and organizational perspectives to cover the latest sociological research on financialization – a term for the increasing dependence of diverse social groups and organizations on financial markets.

The first half of the course will look at how financialization has contributed to huge increases in wealth and power to financial elites. At the same time, financialization has deprived disadvantaged groups of social power and economic security. This rising inequality involved a transformation of organizational identities and strategies in different areas of social life. We will read works about how financial ideologies and resource dependencies have transformed corporations and work along with homes and daily life. We will also discuss how financialization interacts with race and gender inequalities.

The second half of the course will turn to scholarship on public policies and how they can either reduce or reinforce inequalities related to financialization. Several readings will develop the insight that public policies – from health insurance and pensions to education and tax policies – are central to the organization of economic markets, including financial markets. From this perspective, financialization is an intrinsically political process that has involved major policy fights. Organizations from hedge funds and investment banks to labor unions, universities, and political parties have played major roles in these struggles as social units for both the implementation of policy and for political combat. We will even see that financial ideologies and markets have been increasingly used in social policies themselves, including student loans, mortgages, and 401K retirement plans. The readings will offer varying accounts of the prospects for public policy to reverse or mitigate inequality related to financialization.

Grading:

Grading will be based on 3 components:

  1. Attendance: 20%
  2. Weekly 150-word reading memos: 40%
  3. Research proposal paper: 40%

 

Assignments. All assignments will be marked down 10% for each day they are late.

  1. Weekly Memos

A primary goal for this course is to help students improve their ability to read and analyze sociological texts. I advocate a purposeful approach to reading. The memos are tools for this approach. In a paragraph of about 150 words, the memos have 1 or 2 sentences addressing each of the following items:

  • Identify a main sociological question of the author. For example: Max Weber’s Protestant Ethic famously asked, what is the relationship between Protestantism and the emergence of capitalism in Europe and the U.S.? If there is more than one major question in the reading, you only need to identify one for the memo. Here is a good guide from Krippner on how to formulate good sociological questions and arguments: http://www.asanet.org/introtosociology/Documents/MethodsDocuments/KrippnerMakingSociolArgument.html.
  • What different theories are reviewed that offer different answers to the question? Questions are sociologically important if their answers will help resolve disagreements in existing ideas and theories. For example, the answer to Weber’s Protestant Ethic questions would help resolve longstanding debates about why capitalism first emerged in the West.
  • To evaluate different potential answers to the author’s research question, what data is used for what kinds of comparisons and why? All description and explanation requires comparisons – between different sensory perceptions, different concepts, different moments in time, different organizations, different nations, different social groups. What data does the author gather to make comparisons and for what social units – a person, a group, a country? What quantitative or qualitative method does the author use to analyze that data? For example, consider the question – did household debt increase comparably for white households and black households since the 1980s? A research design to answer this question could be to use multi-wave cross sectional statistical analysis to compare household debt data over time from the Consumer Finance Survey. This compares between different moments in time and between white and black racial groups.
  • What comparative evidence does the author provide for her preferred answer to the research question?
  • Is there something about the reading that is interesting or useful for your own research proposal paper for this course?

 

  1. Research proposal paper

Students will be required to complete a research proposal paper that is between 15 and 20 pages, double-spaced, Times New Roman 12-point font, 1-inch margins. Tracing the structure of the weekly reading memos, the papers will need to:

  • Define a clear research question relating to inequality, social policy, and/or an aspect of financialization. In class, we will discuss how to formulate good research questions. All students will need to submit a 1-paragraph idea for a research question in class on October 3rd (in hard copy). In addition, it will be helpful to review Krippner’s writing guide (see above link).
    • To preview what you should expect, there are three types of questions I could imagine:
      • “Causal relationship” questions. For example, did the increasing political power of Wall Street contribute to the U.S. Congress expanding federal subsidies for privately financed student loans in the early 1990s?
      • “How” or “why” questions. These questions involve understanding mechanisms and processes. For example, how do students and their parents interact with college financial aid offices when making student loan borrowing decisions? Do financial aid offices promote financialized ideas for thinking about education, connections, and skills as assets to invest in?
  • Explain what you think the answer to the research question is based on existing alternative theories, ideas, and research by others. To do this, you will need to refer to readings from the course and other works related to your question. This is sometimes called a literature review.
    • You should cite at least 3 works on financialization.
    • Your paper will likely ask questions about financialization in a given field like healthcare, private prisons, household finance, or a particular nation. Potential answers are likely to depend in part on the organizational structure, politics, and culture of the field prior to the arrival of financialization. So you will need to cite at least 3 works on the field in which you are studying financialization.
    • More important, you should use the works you cite to theorize alternative answers to your research questions.
    • You may need to say why some of the althernative answers might be wrong and some might be right. Or you might explain why the ideas of others can be combined to answer your question.
  • Propose a research design to evaluate your argument. Your research design should be clear about:
    • what data you will gather in order to make comparisons that test your alternative theories; and
    • why those comparisons will help to answer your research question.
      • Some of you may compare the objects of your study prior to financialization and after financialization. This is a historical analysis. Comparative historical analysis looks at multiple cases of similar social units like nations or organizations where a process like financialization occurs in one case but not the other. This helps you look for what factors were necessary for the process to occur.  For further help, see the excerpt in our course files from James Mahoney’s 2003 book on comparative historical analysis.
      • Qualitative interviews, archival materials, and ethnography and quantitative textual, survey, experimental, and administrative data are other forms of data that you can analyze.
      • You should cite at least two academic sources about the method you would use to analyze your data. You could use readings from a methods course you have taken. Or you could cite the methods section of a reading from this course. I have also provided seminal readings for some of the major methods of sociological analysis in the supplementary files for this course.

Readings

Part 1: Finance and Inequality

August 24 – Week 1 – Introduction

Overview of course, sociological questions, theories, and research designs.

August 29 – Week 2 – Finance and Inequality in Historical Perspective

  • Piketty, Thomas. 2014. “Introduction” in Capital in the 21st Century (Harvard University Press: Cambridge, MA), pp. 20-27.
  • Brandeis, Louis D. “Our Financial Oligarchy” in Other People’s Money and How the Bankers Use It. 1913. – https://louisville.edu/law/library/special-collections/the-louis-d.-brandeis-collection/other-peoples-money-chapter-i

September 5 – Week 3 – What is Financialization?

  • Krippner, Greta. 2011. “What is financialization?” Ch. 2 in Capitalizing on Crisis, (Harvard University Press: Cambridge, Ma).

September 12 – Week 4 – Financialization and Inequality: Work

  • Kalleberg, Arne L. “Financialization, private equity, and employment relations in the United States.” Work and Occupations 42.2 (2015): 216-224.

September 19 – Week 5 – Financialization and Inequality: Home

  • Fligstein, Neil, and Adam Goldstein. “The Emergence of a Finance Culture in American Households, 1989-2007: Some Preliminary Evidence.” Socio-Economic Review 13, no. 3 (2015): 575–607.

September 26 – Week 6 – Financialization and Inequality: Race

  • Addo, Fenaba R., Jason N. Houle, and Daniel Simon. “Young, black, and (still) in the red: Parental wealth, race, and student loan debt.” Race and Social Problems 8.1 (2016): 64-76.

October 3 – Week 6 – Financialization and Inequality: Gender

  • Roth, Louise Marie. 2004. “Engendering Inequality: Processes of Sex Segregation on Wall Street.” Sociological Forum 19:203–229.

**1 paragraph paper proposal due October 3.

 

Part 2: Social Policy and Inequality

October 10 – Week 7 – What is Social Policy?

  • Polanyi, Karl. 1945. “Man, Nature, and Productive Organization” Ch. 11 in The Great Transformation, pp. 136-140.
  • Weir, Margaret, Ann Shola Orloff and Theda Skocpol, “Introduction: Understanding American Social Policies” The Politics of Social Policy in the United States (Princeton University Press, 1988), pp. 3-27.

October 17 – Week 8 – Immigration and Citizenship in Social Policy

  • Cybelle Fox, 2016, “Unauthorized Welfare: The Origins of Immigrant Status Restrictions in American Social Policy.” Journal of American History 102(4):1051-1074

October 24 – Week 9 – Finance and the Politics of Social Policy

  • Hacker, Jacob S., and Paul Pierson. “The Politics of Organized Combat.” Winner-Take-All Politics (Simon & Schuster, 2010) pp. 116 -136.

October 31 – Week 10 – What is the Private-Public Welfare State?

  • Hacker, Jacob S. “Introduction: American Exceptionalism Revisited” in The Divided Welfare State: The Battle over Public and Private Benefits in the United States (Cambridge University Press, 2002).

**2-page paper outline due November 7.

November 7 – Week 11 – Finance in Social Policy: Student Loans

  • Eaton, Charlie, “Debt by Design: How a Slow Motion Fiscal Crisis Led to a New Dependency on Student Debt.”

November 14 – Week 12 – Finance in Social Policy: For-Profit Colleges

  • Cottom, Tressie McMillan. Chapter 1: The Real in Lower Ed: The Troubling Rise of For-Profit Colleges in the New Economy. The New Press. Kindle Edition.

November 21 – Week 13 – The Research Proposal

No reading. In class discussion of research proposal outlines and how to move from an outline to a full proposal.

November 28 – Week 14 – Taxes as Social Policy

  • Piketty, Thomas. 2014. “Rethinking the Progressive Income Tax” Ch. 14 and “A Global Tax on Capital” Ch. 15 in Capital in the 21st Century, Harvard University Press: Cambridge, MA.

December 5 — Week 15 – Labor and Social Policy in the Era of Finance

  • Fletcher Jr, Bill, and Fernando Gapasin. “Preface”. Solidarity Divided: The crisis in organized labor and a new path toward social justice. University of California Press, 2008.
  • Lerner, Stephen and Saqib Bhatti. “Organizing in a Brave New World.” New Labor Forum. August 1, 2016.
  • Greenhouse, Steven. “How to Get Low-Wage Workers Into the Middle Class”. The Atlantic. August 19, 2015. http://www.theatlantic.com/business/archive/2015/08/fifteen-dollars-minimum-wage/401540/
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