Article Politics &Society 41(3)323-350 Capitalism as a System of 2013 SAGE Publications Reprints and permissions: Expectations:Toward a sagepub.com/journalsPermissions.nav DO10.1177/0032329213493750 Sociological Microfoundation pas.sagepub.com of Political Economy SAGE Jens Beckert Max Planck Institute for the Study of Societies,Germany Abstract Political economy and economic sociology have developed in relative isolation from each other.While political economy focuses largely on macro phenomena,economic sociology focuses on the embeddedness of economic action.The article argues that economic sociology can provide a microfoundation for political economy beyond rational actor theory and behavioral economics.At the same time political economy offers a unifying research framework for economic sociology with its focus on the explanation of capitalist dynamics.The sociological microfoundation for understanding of capitalist dynamics should focus on the expectations actors have regarding future states of the world.Based on a discussion of what I call the four Cs of capitalism (credit,commodification,creativity,and competition),I argue that under conditions of uncertainty,expectations are contingent and should be understood as"fictional expectations."The capability of humans to imagine future states of the world that can be different from the present is the central basis for a sociological microfoundation of the dynamics of economic macro phenomena.Macroeconomic dynamics are anchored in these "fictional expectations,"which create motifs for engaging in potentially profitable but ultimately incalculable outcomes.This shifts attention to the 'management of expectations"as a crucial element of economic activity and to the institutional,political,and cultural foundations of expectations.The reproduction of capitalism is precarious also because of the contingency of expectations conducive to its growth. Keywords capitalism,political economy,economic sociology,imaginaries,innovation,competition, consumption,economic dynamics,expectations,microfoundation Corresponding Author: Jens Beckert,Max Planck Institute for the Study of Societies,Paulstr.3.50676 Koln,Germany. Email:beckert@mpifg.de Downloaded from pas.sagepub.com at Shanghai Jiaotong University on February 4.2015Politics & Society 41(3) 323–350 © 2013 SAGE Publications Reprints and permissions: sagepub.com/journalsPermissions.nav DOI: 10.1177/0032329213493750 pas.sagepub.com Article Capitalism as a System of Expectations: Toward a Sociological Microfoundation of Political Economy Jens Beckert Max Planck Institute for the Study of Societies, Germany Abstract Political economy and economic sociology have developed in relative isolation from each other. While political economy focuses largely on macro phenomena, economic sociology focuses on the embeddedness of economic action. The article argues that economic sociology can provide a microfoundation for political economy beyond rational actor theory and behavioral economics. At the same time political economy offers a unifying research framework for economic sociology with its focus on the explanation of capitalist dynamics. The sociological microfoundation for understanding of capitalist dynamics should focus on the expectations actors have regarding future states of the world. Based on a discussion of what I call the four Cs of capitalism (credit, commodification, creativity, and competition), I argue that under conditions of uncertainty, expectations are contingent and should be understood as “fictional expectations.” The capability of humans to imagine future states of the world that can be different from the present is the central basis for a sociological microfoundation of the dynamics of economic macro phenomena. Macroeconomic dynamics are anchored in these “fictional expectations,” which create motifs for engaging in potentially profitable but ultimately incalculable outcomes. This shifts attention to the “management of expectations” as a crucial element of economic activity and to the institutional, political, and cultural foundations of expectations. The reproduction of capitalism is precarious also because of the contingency of expectations conducive to its growth. Keywords capitalism, political economy, economic sociology, imaginaries, innovation, competition, consumption, economic dynamics, expectations, microfoundation Corresponding Author: Jens Beckert, Max Planck Institute for the Study of Societies, Paulstr. 3, 50676 Köln, Germany. Email: beckert@mpifg.de 493750 PAS41310.1177/0032329213493750Politics & SocietyBeckert research-article2013 Downloaded from pas.sagepub.com at Shanghai Jiaotong University on February 4, 2015