Economic sociology has long established that people belonging to different social classes make financial decisions differently. They have a different approach to money, use different financial logics, have different risk and time preferences. These differences in financial behaviours have been attributed to the different socialization influences and economic conditions of people belonging to different social groups.
Today, financial decisions are rarely taken by the individual alone. It is a commonplace that algorithms play an increasing role in our choices. This is particularly true for financial decision-making. We use apps and websites to find the best deal for mortgages, use algorithm-generated charts, advice or even robo-advisors to manage our investments and when buying a new phone, we often simply rely on the credit offered to use by the algorithm of the shopping website.
If the algorithms of financial apps and websites play such a big role in our financial choices, what happens to the social differences in financial behaviour? Will they disappear as the algorithms impose the same financial rationality on everyone and our ingrained differences will no longer matter? Or, on the contrary, they will increase as algorithms offer options to users that match their existing preferences - and will thus amplify existing social differences? Or will they produce new differences, which no longer follow class divisions?
This project looks at this question through examining how financial algorithms are developed, how they aid choices and how they are used by consumers of different social groups.
While economic theories of the homo economicus assume an innate, universal sense of rationality, sociological and anthropological research suggests that economic subjectivities and actions are shaped by socio-cultural and material processes. Rationalities, in the plural, are produced, rather than innate. Indeed, a long tradition of economic sociology theorizes the processes that produce differences in economic subjectivities (economic habituses, to use Bourdieu’s term) across social groups and over time. In the context of everyday financial practices, recent studies in the financialization of everyday life, market studies, the French sociology of conventions, digital sociology, economic anthropology and geography have suggested that contemporary economic subjectivities are increasingly co-produced by digital devices (such as financial apps, websites, and the algorithms that underpin them), by prefiguring rational subjects and even making ‘rational’ choices on their users’ behalf. While these studies provide key insights into how digital financial devices perform specific economic subjectivities, they have paid less attention to how they shape social patterns of economic subjectivities - a question that has been central to the sociological tradition on the topic. One notable exception is sociological research on credit scoring and eligibility algorithms, which suggests that by delineating who gets access and who is denied particular credits, mortgages and investments, these devices produce social groups with different objective financial chances – and thus become a new structuring force of society. This research explains how digital financial devices structure society by producing groups with different financial opportunities; however, it says little about how they shape groups with different economics subjectivities, habituses and rationalities. The project fills this important gap by unpacking the processes – not limited to eligibility - through which the digitalization of financial services reproduces, deepens, flattens or rearranges social differences in economic subjectivities.