SASE Network Spotlight: Interview with Alya Guseva of Network N: Finance and Society

The editorial team is delighted to publish an interview with Alya Guseva, Associate Professor in the Department of Sociology at Boston University (USA) and one of the Network N: Finance and Society organizers. She is famous for her original cutting-edge research in economic sociology. One of her main scholarly interests is the development of credit- and debit-card markets, as well as the nurturing of mass-consumer culture across different post-communist states. Her books Into the Red (2008) and Plastic Money: Constructing Markets for Credit Cards in Eight Postcommunist Countries (2014), co-authored with another Network N organizer (and current SASE President) Professor Akos Rona-Tas (University of California, San Diego, USA), have significantly enhanced our understanding of institutional change in transitional markets. In recent years, Guseva has been working with conceptual tools from the disciplines of sociology of medicine and health. More specifically, she has studied the emergence of commercial surrogacy as a practice in Eastern Europe. The study of this economic phenomenon includes the investigation of its accompanying institutional aspects such as its legitimization by state actors and the more general puzzle surrounding surrogacy’s commodification in the first instance. The issues that Guseva raises in her scholarship are centered around the mechanisms of socio-economic control and prediction. In other words, they strongly reverberate with the topic of this year’s SASE Annual Meeting, “Fathomless Futures: Algorithmic and Imagined.”

Interview conducted by SASE Newsletter Editor Kostiantyn Ovsiannikov.

Why is it important to study the social embeddedness of finance? In a recent interview, you mentioned that “financial globalization has been fracturing along national lines.” Does one also observe a countermovement to this trend, for instance, towards a unification of financial practices?

Akos Rona-Tas and I have addressed this question about globalization of financial markets in our book Plastic Money, and more recently, in the Annual Review of Sociology piece “Consumer Credit in Comparative Perspective”. The answer to the question of whether financialization is fracturing along national lines (or instead, if there is a unification of financial practices) is that it depends on a few things, but mainly on the level of your analysis. For instance, from a bird’s-eye view, it looks like both credit cards and mortgages are now fairly common in Eastern and Central Europe, and at least some of the countries of the former Soviet Union. This is a big change from the early 1990s, and something that makes these countries similar to Western Europe, North America, and East Asia (Japan, South Korea). Moreover, household indebtedness is growing everywhere, too, suggesting a certain degree of convergence. And there are good reasons to expect this, given the spread of lending technologies and the global nature of the financial industry. But if you look closer, you actually see a lot of variation in household financial cultures, in the kinds of financial instruments offered to households, and in the way they are used. Consumer finance does not really work across national borders—at least not yet. It is still mostly impossible to get a mortgage or a credit card in a country where one does not reside, because credit histories are collected and stored on a national level, and financial services are regulated nationally, as well. In fact, many nation-states now want to take control over their payment and financial systems. This trend is not only limited to authoritarian regimes like China and Russia, but is a symptom of a more general political backlash against globalization.

In your 2014 book Plastic Money: Constructing Markets for Credit Cards in Eight Postcommunist Countries, co-authored with Akos Rona-Tas, you conclude that the mere spread of credit cards in the postcommunist states of Eastern Europe did not lead to a transition from a predominantly cash- and check-based payment system. Have the things changed since then?

The transition is ongoing everywhere, not only in the former Soviet bloc. For instance, most Western countries are still far behind Sweden, which is trying to become the world’s first cashless society. And postcommunist countries introduced non-cash payments much later. According to the most recent World Payments Report, the fastest growth of non-cash transactions is in emerging markets, including Central and Eastern Europe. They are leapfrogging forward (mainly as a result of the push for more cards), while mature markets are slowing down. Russia is a champion of this trend with 36.5% growth in card transactions in 2016 compared to 2015. This is no doubt a direct consequence of the Russian state efforts to promote the new national card brand, Mir, underscoring the key role of states in building markets. According to the World Cash Report, Russia now has close to 2 cards per capita, while the Czech Republic, Hungary, and Poland are hovering right below or slightly above 1. China is in the lead in the group of countries we studied with 4.5 cards per capita, compared to about 4 in the US. (I do not have comparable data on Vietnam or Ukraine). The number of POS terminals per 100,000 residents in Russia reached 1,200 in 2016, about the same as in the Czech Republic, Hungary and Poland, and behind China’s almost 1,800 per 100,000 residents (for a comparison, in the US this number is almost 4,500 per 100,000 residents). Cards are not alone in nudging cash aside: mobile payments—particularly useful for people with cell phones but no bank accounts—are growing, too (but I will leave it at that for the sake of space).

The “Finance and Society” Network of SASE renders particularly important the issues pertaining to governmentality. Michel Foucault, who coined this term, referred to it as follows. In the published edition of his lectures at the Collège de France 1977-78 (Security, Territory, Population), he wrote that “the fundamental objective of governmentality will be […] ensuring the security of the natural phenomena of economic processes, or processes intrinsic to population.” In this regard, your focus on predictive algorithms related to personal credit history on the one hand, and on the management of reproductive mechanisms on the other, seems to highlight these aspects of governmentality. Do you yourself regard these two streams of your scholarship as interconnected?

I think they are connected in several ways: both are about the construction of entirely new markets, and sometimes women become surrogate mothers to pay off or avoid taking on debt. You are pointing to another interesting connection between the two: surveillance and individuals’ control of their financial and reproductive selves. I have recently written about consumer credit surveillance using credit scores and electronic transaction information. Reproductive surveillance, too, has a rich and troubling history—from the more extreme cases, like the infamous control of clandestine abortions in Ceaușescu’s Romania, and China’s one-child policy, to the more mundane but still pervasive ones like the medical professional surveillance of pregnancy and childbirth (things like genetic tests, fetal monitoring, etc.) When it comes to assisted reproduction and surrogate pregnancies, surveillance gets particularly intensified, starting at the preconception stage—the “fourth trimester,” as it has been recently called—all the way to childbirth.

In relation to the previous question: one of your major academic interests is in the sociology of health and medicine. Why, in your view, is it important for socio-economics scholars to pay attention to this area of research? How does it correlate with the topics engaged in the “Finance and Society” Network?

Healthcare is the largest single industry in the US (and in some other countries, as well): it is currently at 18% of the GDP, but is projected to grow to 32% by 2030. It is the biggest employer—it employs 16.2 million people—more than retail. It is also one of the fastest growing industries, projecting to add 18% more jobs by 2026. The pharmaceutical industry has been consistently more profitable than either oil or finance! The healthcare sector is recession-prone, because of both aging and medical innovation. Together, these ensure that demand is strong and that both employment and costs are growing. Moreover, at least in the U.S., with its complex public-private for-profit system, both medical education and health services are very expensive, and both medical students and patients frequently incur substantial amounts of debt. Recent research finds that more than half a million American families file for bankruptcy because of medical issues or bills. This accounts for nearly two-thirds of all bankruptcies. The last point is a particular American problem, as medical education and health services in other high-income countries are publicly funded (fully, or to a greater degree than in the U.S.). So, I hope it is clear why healthcare should be a topic of great interest to the study of socio-economics. SASE does not have a separate research network dedicated to the health industry, but healthcare-related research is dispersed across several networks, such as: “Professions and Professionals,” “Knowledge, Technology and Innovation and Markets,” and “Firms and Institutions.” The featured network of which I am a part, “Finance and Society,” too, receives an occasional health-industry-related paper.

How does your research resonate with this year’s SASE conference theme “Fathomless Futures: Algorithmic and Imagined?” Could you tell us more about ongoing research projects of yours?

Markets for assisted reproduction sell hopes for the future, so yes, they are very much connected to the theme of this year’s SASE meeting: perhaps more so the imagined part, rather than the algorithmic. My current project examines commercial surrogacy—gestating babies for other people for compensation—in three post-Soviet countries of Eastern Europe and Central Asia (Russia, Ukraine and Kazakhstan). These are legal and flourishing markets serving the needs of both local and foreign prospective parents. Specifically, I ask (1) how surrogacy as a practice is morally framed by various actors—fertility clinics, surrogacy agencies, legal professionals, policymakers and the media, and (2) how these moral frames shape and structure the economic exchange of surrogacy services. I conducted dozens of interviews with surrogacy market actors in the three countries mentioned above and I attended several conferences for medical and legal professionals in the assisted reproduction field. My preliminary analysis underscores the key role played by fertility doctors in constructing the dominant frame of surrogacy. In all the three countries, surrogacy is legally available only to heterosexual married couples with a medically proven diagnosis of infertility. Framing surrogacy as a medically-necessary and doctor-prescribed treatment, as opposed to a market commodity, is a moral claim that separates deserving patients from market consumers and surrogate medicine from surrogate commerce. So, the argument is as much about the morality of surrogacy as it is, more generally, about the morality of market involvement in the provision of medical services.

* This article is taken from the SASE Summer Newsletter 2019 – Click here to go back to the Contents Page *