Studying Sociology at University is where I learnt about the importance of social construction and deconstruction for understanding how society works. Social construction, as defined by the Sociology Dictionary, means:
The principle or theory that all reality and meaning is subjective and created through dynamic interactions with other individuals and groups. The social constructionist perspective advocates that individuals and their differences are created or constructed through social processes (e.g. political, religious, and economic) rather than an innate quality within the individual. Furthermore, the categorization of individuals into groups explains more about how society functions than about individuals.
Social construction is opposed to biological, essentialist arguments that view social actors as being independent to and acted upon by their environment. Compared to biological, essentialist arguments, social constructionism can be utilised to critically challenge the status quo, and thus power relations and related inequality and social injustice as it relates to how social, political and economic reality is not a given, it is something we as people are central to creating and recreating.
For my MA Dissertation, I fused a neo-Gramscian and strategic-relational approach (see Colin Hay sources at the end of this article for more) to analyse the connections between the rise of neoliberalism and the development and options for the social enterprise sector in Sheffield, UK and Pittsburgh, PA, US. The research illustrated how the strategic context (otherwise known as structure) of social enterprise support in the UK has limited the opportunities for restrictively defined social enterprises’ (in terms of profit distribution and ownership structure) strategic choices/action (otherwise known as agency), with the move from government and European grant and contract based resources to loan-based, social finance, non-statutory, voucher scheme funding relating to the intensifying neoliberalism and associated austerity. I argued that neoliberalism is a central mediator between such choices and context for actors.
Typically, structure is defined as referring to the context and ordering of social, economic and political relations; whereas agency refers to practices such as reflexivity, choice and rationality (Hay 2002). Simplifying the argument, the key is to see structure and agency as operating dialectically, where people’s choices of action are influenced by their structural context and their action influences the structural context – whether intended or unintended – with hegemonic ideas, such as neoliberalism, mediating this. People’s action can have intended and unintended consequences in terms of transforming structure, with actors also understanding more about the structure from their action and which then influences their action in the future. Context in relation to the structure is important, as different people – depending on their position in relation to the structure – have different choices available to them, also linking with different knowledge and understanding of structure, relating to the importance of power within the structure and agency debate. Key to mediating structure and agency is ideas, especially hegemonic/dominant ideas, which are also dialectically intertwined with the material (our environment).
This can be applied to the finance sector. In the 1970s/80s saw the rise of a neoliberal project, where think tanks – such as the Mont Pelerin Society – were created by actors through strategic action responding to their strategic context, with a focus on reconstructing hegemonic economic arguments and interdependent material circumstances. This saw a move away from a John Maynard Keynes demand side economics to a Milton Friedman (and to some extent, Fredrick Hayek) supply side economics. This reconstruction of the dominant economic argument was central to helping with the boom of the finance sector. Whilst ‘free market’ actors argued this was a ‘natural’ process, this was something that was shaped by key economic and political actors, with the financialisation of the economy aided by corporate, capital and political power and interests in a dialectical interplay between strategic context and action and reconstruction of hegemonic ideas.
This reconstruction was key to the creation of financial instruments such as Collateralized Debt Obligations and Credit Default Swaps that were central to the international financial crisis of 2007/8. Neoliberalism was constructed by key corporate and capital class interests; it is a class project. This change in hegemonic conception of economics and politics, driven by key capital and corporate interests (agency) related to a backlash to demand side economic ideas (once hegemonic) and human and workers’ rights victories before the 1970s that the capital classes saw as threatening them (structural). Here we see how ideas, structure and agency all interplay.
From the 1980s onwards, the rise of neoliberal ideas, as the hegemonic political and economic conception of how the ‘system’ works, was central to mediating the strategic action (use of financial instruments that resulted in unprecedented amounts of toxic bonds flooding the system, for instance) and strategic context (the reduction in regulation of the finance sector, removal of gold standard, lack of capital controls) and how actors – whether as politicians (Margaret Thatcher, Ronald Reagan), think tanks, corporate and capital entities such as businesses, banks and hedge funds – are central to navigating this strategically alongside intentionally (buying Credit Default Swaps to bet against the system and help cause the 2007/8 crisis, for instance) and unintentionally (not understanding/caring how these financial products would create the 2007/8 financial crisis, for instance!) affecting the structure and further action.
Thus social construction, when viewed dialectically, is important for us to understand how much power we have as people when we work together to create a better system for the many, not the few. The structure, mediated by neoliberal ideas, isn’t one that encourages mass political action/agency and engagement but with the increasing legitimacy crisis of neoliberalism – as discussed in a previous article – democratic socialist ideas are being increasingly utilised as a different way of mediating agency and structure. Look at the rise of Jeremy Corbyn’s Labour Party in the UK and Bernie Sanders and Alexandria Ocasio-Cortez in the US, alongside the diversification of non-corporate, independent media. There is a change in what is considered politically possible, with a consistent narrative of how an alternative would work. These ideas can mediate agency and structure, with the rise of alternative economic models such as cooperatives that bring the means of production under public control, but also encourage actors to take on power and tackle injustice. It illustrates the importance of counter-power structures and discourses for challenging hegemonic ideas.
Social construction helps us understand how important we are to reconstructing our own reality, and whilst there are real political, economic and social relations – mediated by hegemonic neoliberal ideas – that interplay with the action and choices of actors, we are not passive objects, and we have the opportunity to work together, promote new ways of thinking and doing things and help influence different action, choices and contexts available for us, especially by furthering alternative ideas of how politics and the economy works.
Hay, C. (1995). “Structure and Agency”. In: D. Marsh., and G. Stoker, (eds). Theory and Methods In Political Science. First Edition. London: Palgrave Macmillan.
Hay, C. (2002). Political Analysis: A Critical Introduction. Basingstoke: Palgrave Macmillan.
Hay, C., and Smith, N.J. (2010). “How Policy-Makers (Really) Understand Globalization? The Internal Architecture of Anglophone Globalization Discourse In Europe.” Public Administration. 88(4) 903-927.