Costly Thy Habitus . . .

November 12, 2011
Posted by Jay Livingston

From Liquidated, by Karen Ho

 Massive corporate restructurings are not caused so much by abstract financial models as by the local, cultural habitus of investment bankers, the mission-driven narratives of shareholder value and the institutional culture of Wall Street.

Yes, you read that correctly: habitus, narratives, and culture trump finance. 

Here’s more from the Financial Times review by Gillian Tett (she’s the FT reporter with a Ph.D. in cultural anthropology who called the crash two years before it happened).

It has become painfully clear that bankers placed far too much faith on their quasi-scientific models. It has also been evident that a grasp of cultural dynamics is critical in understanding how modern finance works – or doesn’t.

Ho’s central argument borrows heavily from the work of Pierre Bourdieu . . . [and] the concept of the “habitus” – the idea that a society develops a cognitive map to order its world, a map that is usually based on its physical experience, albeit in ways the participants are only dimly aware of.

In the case of Wall Street, Ho argues that the “habitus” is shaped by bankers’ educational experience and employment history. Modern financiers live in a world where jobs are insecure, and where bankers are paid by trading things or cutting deals. They tend to project their experience on to the economy by aspiring to make everything “liquid”, or tradeable, including jobs and people.