Classification Situations: Life-Chances in the Neoliberal Era

Abstract

Classification Situations: Life-Chances in the Neoliberal Era Marion Fourcade & Kieran Healy ∗ Abstract: »Klassifikations-Lagen. Lebenschancen in der neoliberalen Ara«. This article examines the stratifying effects of economic classifications. We argue that in the neoliberal era market institutions increasingly use actuarial tech- niques to split and sort individuals into classification situations that shape life- chances. While this is a general and increasingly pervasive process, our main empirical illustration comes from the transformation of the credit market in the United States. This market works as both as a leveling force and as a con- denser of new forms of social difference. The U.S. banking and credit system has greatly broadened its scope over the past twenty years to incorporate pre- viously excluded groups. We observe this leveling tendency in the expansion of credit amongst lower-income households, the systematization of overdraft pro- tections, and the unexpected and rapid growth of the fringe banking sector. But while access to credit has democratized, it has also differentiated. Scoring technologies classify and price people according to credit risk. This has allowed multiple new distinctions to be made amongst the creditworthy, as scores get attached to different interest rates and loan structures. Scores have also ex- panded into markets beyond consumer credit, such as insurance, real estate, employment, and elsewhere. The result is a cumulative pattern of advantage and disadvantage with both objectively measured and subjectively experienced aspects. We argue these private classificatory tools are increasingly central to the generation of „market-situations“, and thus an important and overlooked force that structures individual life-chances. In short, classification situations may have become the engine of modern class situations. Keywords: Market classifications, market sociology, market order, categoriza- tion, credit scores. Marion Fourcade, Department of Sociology, University of California, Berkeley, CA 94720- 1980, USA; fourcade@berkeley.edu. Kieran Healy, Department of Sociology, Duke University, Durham, NC 27708, USA; kjhealy@soc.duke.edu. The article is reprinted with the kind permission from Elsevier B. V. Reprint of: Fourcade, Marion, Kieran Healy. 2013. Classification situations: Life-chances in the neoliberal era. Ac- counting, Organizations, and Society 38 (8): 559-72. doi: 10.1016/j.aos.2013.11.002. Historical Social Research 42 (2017) 1, 23-51 © GESIS DOI: 10.12759/hsr.42.2017.1.23-51