I participated in a conference in Porto Alegre, Brazil, in August 20-21. Under the title “Finanças e Consumo”, it gathered sociologists and anthropologists from Mexico, Brazil and Argentina. The last two countries have experienced a period of high levels of GDP growth, with policies oriented towards sustaining internal demand. Financing low- and low middle-class consumption through credit has been part of this strategy. This raises questions about the sustainability of indebtedness, and about the political uses of the categories of “middle class” or “popular consumption”, which are often used by the economic and political actors involved in the process (be it celebrating or criticizing it), but which may be too broad to be used by social sciences to describe the concrete credit and consumption practices taking place.
On June 28-30, the Society for the Advancement of Socio-Economics held its annual meeting at the Sloan Business School of the MIT, in Boston. The event gathered several hundred of contributors from all over the world. It was a fantastic concentration of researchers coming from the fields of political science, economics, sociology, anthropology and history, and attempting to grasp economic processes in an interdisciplinary dialogue.
My contribution had to do with the notion of “risk free” interest rate (Session on “The Concept of Prudence in Economic Life and Regulation”, organized by Sabine Montagne and Yuri Biondi). This notion is overwhelmingly assumed in financial formulas, but is being explicitly challenged by the IMF and the BIS, as they grapple with sovereign debt crisis in Europe and take into account the impact this has in financial regulation. After the collapse of AAA rated ABS and CDOs, the assumption that AAA rated notes are “risk free” is understandably questioned. This remark may seem historically obvious, but it undermines the concept of there being something “risk free”, in a way that still needs to be explored by regulators and the financial industry. This also challenges the idea that rich states will always pay their debts and be able to bail out financial institutions, i.e. it redefines what is understood by “sovereignty”, in financial matters, but also probably beyond them.