part0011

In this chapter, I will switch gears, as it were, in order to focus on the disembedding of markets as seen from the perspective of social theory, asking: what is the place of disembedded markets in society as a whole? So far, the essence of the historical discussion of the previous chapters can be summarised in two points. First, disembedded markets are clearly a sub-system of society , not a quasi-technical system invading society from the outside. Second, disembedded markets are clearly a sub-system of society and should not be identified with society as a whole. As we have seen, the expansion of markets beyond given territorial, social, material and temporal borders, which characterises the development of modern capitalism, clearly meets its limits and cannot go on infinitely. A ‘society’ consisting of nothing but markets would indeed be a ‘stark utopia’. Even the ‘economic’ system in the narrow sense does not depend solely on markets, but also on different forms of social coordination, such as organisations, hierarchies and networks. Economic actors, in their turn, cannot do without a variety of functionally different institutions, which differ in their social and territorial reach. The state, for example, takes responsibility for guaranteeing external and internal security; for setting and executing legal norms; and for caring for material and social infrastructure, including education, science, welfare, and health care. Beyond political governance, society can hardly do without families, local communities, and institutions providing an environment for the rearing of children. Churches and professional, cultural and political associations are further sub-systems performing vital social functions on a non-market basis.

What is the precise location of markets within this mix of different albeit interdependent systems? It is a commonplace of sociology that modern society is made up of a plurality of functionally different social sub-systems. The general answer to the above question provided by the two main versions of the functional differentiation approach (as expounded by Talcott Parsons 1951 and Niklas Luhmann 1984) is well known: markets constitute a key part of a functionally differentiated economic sub-system, which specialises in the requirements of material ‘adaptation’ (Parsons), or on the management of the problem of ‘scarcity’ (Luhmann). This discussion, however, gives rise to the following question: can markets and their particular codes – given their disembedded character in modern capitalism – still be understood sufficiently as only one sub-system amongst others on the same level as politics, science, art or love? Considering the vast extensive and intensive expansion of markets in contemporary capitalism, and their apparent dominance over society, this appears doubtful (Paul 2012; Schimank 2013, 2015). Likewise, the system-theoretical conceptualisation of money as a medium specialised in the functional requirements of an economic sub-system can no longer convince, given the universality and inexhaustibility of the options embodied in the capital form of money, which apparently bypasses all attempts at a ‘functional’ definition. Not without reason, therefore, did Georg Simmel suggesthis paradoxical formula of money as an ‘absolute means’ – a means incorporating all ends in itself. In the following, I will take up and discuss these concerns with the aim of developing an alternative to the functional differentiation approach.

A key problem, first, seems to lie in the precise meaning of the term ‘functional differentiation’ itself. It is at this point where differences between the two main schools of system theory emerge. On the one hand, there is the structural-functionalist approach going back to Parsons; on the other hand, there is Luhmann’s radical system functionalism, which he circumscribed with the term ‘systemic autopoiesis ’ (Luhmann 1984). At first glance, the difference between the two approaches is related to the ambiguities in the term ‘function’, which have been highlighted prominently by Robert Merton and Jon Elster (1985). In his critique of functional analysis, Merton (1968: 73–74) lists a set of methodological postulates which sound enquiry has to observe. According to his first postulate, the units of functional analysis should be defined properly. The statement ‘x fulfils function y for z’ is meaningless, unless the subject unit ‘x’ as well as the reference unit ‘z’ are defined clearly in analytical as well as in operational terms. As Merton argues, anthropological studies have often violated this criterion when introducing holistic terms like ‘society’ or ‘the cultural system’ as a reference unit of functional analysis. The diffuse holism of such studies reveals itself also, as Merton notes, in a widespread overestimation of the integrative power of religion while neglecting its conflict-generating potential. This may lead to false conclusions even in the case of primitive societies, let alone in the case of modernity, where the ‘integrative’ power of religion is anything but self-evident.

In Parsons’ approach, the reference unit of functional differentiation is the pattern maintenance system constituting the cultural identity of society. In his emphasis on the centrality of the institutionalised value pattern even for modern societies, Parsons follows Emile Durkheim and his theory of organic solidarity. Distancing himself from the liberal idea of decentralised, bottom-up institution-building by contract, Durkheim had characterised institutions as a collective reality sui generis exerting a particular kind of moral force on private contracts (Durkheim 1982 [1895], 2014 [1893]; see especially Tenbruck 1981). Durkheim devoted almost his entire scientific life to a closer enquiry into the nature of the ‘reality’ of institutions. Drawing on anthropological studies on Australian totemism, he finally detected religion as the ultimate basis of social integration (Durkheim 1995 [1912]). For Durkheim, the integrative power of religion arises from the encompassing character of religious belief, which goes beyond particular (primordial or political) group identities and which marks the utmost general level of collective identity. Differently from particular groups, religious communities form not only one amongst other communities of a similar kind (e.g. families, tribes, nations), but are perceived as singular by their believers (see also Brubaker 2012). As Durkheim tried to show in his studies on the social division of labour, not only primitive, but even modern societies depend on a set of institutionalised collective values to maintain their cohesion.

Parsons, as the originator of structural functionalist system theory, followed Durkheim this far, putting the religion-based cultural value system into the centre of his model of modern society. Aiming at a larger synthesis of contemporary social theory, however, he tried to combine Durkheim’s approach with Max Weber’s idea of different social value spheres. In his well-known AGIL concept, he took the institutionalised cultural value system (L) as a reference basis to define a set of four functionally specialised social sub-systems, each of them managing a particular type of boundary relationship between the culturally constituted core system and its social and non-social environments. Within that frame, the economy took the function of ‘adaptation’ (A) (Parsons 1951). Nevertheless, Parsons agreed with Durkheim in his focus on the issue of social cohesion. Pre-modern societies, like modern ones, depend on an institutionalised value system which provides a basic framework in which to solve the problem of the double contingency of action, and which buffers society against existential uncertainty. In modern societies, the paramount value system emerges from a process that Parsons calls the ‘generalisation’ of religious values. Culmination points of that process are the American ‘civil religion’ of constitutional democratic, humanistic and universalistic values (Parsons 1999), or the ideology of socialism, which Parsons interprets as the secularised offspring of religious traditions. 1 Due to the centrality of the nation-state as the institutional basis of civil religion, Parsons’ as well as Durkheim’s approaches end up with a state-centered conception of society that does not take account of the phenomenon of globalisation in a systematic way. 2

Different from Parsons, Luhmann did not see any need for a common reference unit for functional differentiation. He commented on the idea of a supreme social value system with subtle irony: ‘Values are no longer like fixed stars, but they resemble balloons which one keeps at home in order to inflate them on occasion, in particular on festivities’ (Luhmann 1998: 342, my translation). Given the vast complexity of modern society, values are by far too general to guide concrete decisions and actions, as Luhmann argues. In his understanding, functional differentiation does not depend on an overarching institutional framework. Modern society, which he understands as a world-society, does not need an encompassing value system to maintain its cohesion and to manage its encounter with the complexity of the world. Rather, the key mechanism to manage complexity is nothing but functional differentiation itself. Functionally differentiated social sub-systems, though factually being dependent on each other, are autonomous, self-referential units controlled by nothing but their special media and codes. This emphasis on functional differentiation did not prevent Luhmann from elaborating a highly sophisticated functional analysis of religion as a social system, focusing on the problem of transforming an indeterminate amount of complexity into a determinable one (Luhmann 1992, 2000). In his account, however, religion appears only as one more social sub-system amongst others that is specialised in its internal code of immanence and transcendence, but that has no clear place in the overall structure of modern society (Luhmann 2000: 317–318). Unlike Parsons, Luhmann takes account of Merton’s critique of holistic concepts of society. At the same time, Luhmann’s position about religion is closer to Weber’s than to Parsons’, though Luhmann builds his theory on system- and not on action-theoretical premises, as Weber does. Weber’s well-known concept of ‘secular rationalisation’ culminates in the interpretation of modernity as a force of cosmological disenchantment, attributing the institution of ‘last’ values no longer to society but to the responsibility of the autonomous individual. With regard to his sceptical assessment of the place of religion in modern society, Luhmann’s position is close to Weber’s.

Do societies require a sub-system that is focused on the representation of collective identity and on the management of existential uncertainty? Concerning pre-modern stratified societies, there is little disagreement about religion fulfilling this very function – ‘function’ in the sense of religion having the intended or unintended effects of generalising collective identity and creating a universal social nexus beyond kinship affiliations. Anthropologists as well as sociologists have concentrated their studies on the role of religions in the integration of society as well as in its contribution to coping with experiences of the unknown and uncertainty (for an overview, see Riesebrodt 2007). As these studies have made clear, the emergence of a separate institutional sphere of ‘religion’ itself had been the product of a long and complex social evolution. Contrary to Durkheim’s assumptions, there seems to have been still no marked difference between the spheres of the profane and the sacred in many primitive societies. Rather, as already Weber had noted (Weber 1972: 245–246), ‘magic’ or ‘religious’ actions formed an integral part of everyday practice, the relevant distinction first being only that between ‘ordinary’ and ‘extraordinary’ experiences. To cope with the irregular and unknown, elaborated cognitive theories, spirit belief systems, experts (e.g. magicians, sorcerers), and rituals played a key role (see Geertz 1960; Dux 1982).

If we follow Weber’s interpretation, the later evolution was characterised by two trends.

The first is an increasing intellectualisation and systemisation of spirit beliefs. Gradually, animate but volatile and unreliable spirits gave way to invisible but perennial and accountable gods. Behind the visible world, a second, invisible one emerged – the world of the gods, and, finally, of the one, almighty God; at the same time, the cleavage between immanence and transcendence became deepened. Jan Assmann (2003) has characterised this transition as a step from ‘primary’ to ‘secondary’ religions. While the primary ones include historically grown local cults and national religions, secondary religions – typically the monotheistic ones – are based on historical acts of prophecy and revelation. Though in fact building on the local religious legacies, secondary religions distanced themselves from the former, which became subject to the verdict of ‘paganism’. The characteristics of secondary religions were their universal claims, their categorical distinctions between the ‘true’ and the ‘false’, and their reliance on holy scripts and written sources of revelation. To manage their encounter with God, the believers could no longer take recourse to magic practices, but had to rely on symbolically based communication via prayers, sacrifices and rituals, though magic practices often persisted informally in everyday life.

This leads to the second secular trend described by Weber: the intellectualisation of religious belief was associated with processes of social differentiation, division of labour and political centralisation. These processes culminated in the institutional separation of religion from political power and other profane spheres of society, and in the emergence of a new class of priests and religious experts managing the encounter with God in a professional way. Historically, these changes reached a preliminary climax in the so-called ‘axial age’ between the eighth and third centuries BCE, to cite the well-known term coined by Karl Jaspers (1949) and Shmuel Eisenstadt (1986). In Greece as well as in Palestine, Persia, India and China, new religious prophets and philosophers became influential, whose teachings, despite their vast differences, culminated in the discovery of the spiritual foundations of human existence. The new universal beliefs transcended the legitimacy of given political regimes and opened a horizon for intellectual discourse and critique based on a sharp disjunction between the mundane and a trans-mundane world. 3 A system of ‘institutionally specialised’ religion developed (Luckmann 1967), which monopolised the exchange of society with the ‘holy cosmos’ beyond the traditional association of religion with political power.

As a ‘symbolic universe’ (Berger and Luckmann 1966), religion gave meaning and coherence to an opaque reality, and hence became able to take a hegemonic position over society and to constitute the legitimation for centralised systems of political rule. Under such conditions, religion could take on the function of a self-representation of society in a two-fold, internal and external sense. First, religion represented the internal boundary of society, as it marked the most encompassing level of sociality beyond particular, local, kinship and national affiliations, allowing humans to relate themselves to each other as humans . Excommunication from the religious community, in other words, was equivalent to social exclusion. Second, by defining the utmost general level of collective identity, religion also marked the interface of society with extra-social, natural and cosmic realities. A basic distinction was set up between the realms of the knowable and observable, open to human reason, on the one hand, and of the transcendent and unknowable, being accessible only via divine revelation, on the other. As Luhmann never got tired of emphasising, defining collective identity means fixing a distinction, and a distinction always has two sides to it: an internal and an external one. This implies that the two functions of religion to identify society and to cope with transcendence are not at odds with each other, but, on the contrary, are complementary to each other.

This interpretation of religion as a symbolic self-representation of society, which I have recapitulated here only briefly, is widespread in most classic and contemporary sociological studies of religion; nevertheless, it is an extremely stylised one. In a strict sense, it applies only to the monotheistic religions of Judaism, Christianity and Islam, and even with regard to each of these religions it would require extensive modifications. Here I am concerned only with the general empirical limitations of the concept. A first, obvious limitation lies in the bounded character of the social universality claimed by the monotheistic religions, each of them being confined largely to the particular civilisations which they created. None of them have ever reached mankind as a whole. While Judaism can be characterised as a religion of conscious ethnic ‘self-demarcation’ (Assmann 2003: 30, my translation), relying on the myth of the ‘Chosen People’, Christianity as well as Islam took recourse to expansive missionary or military activities to promote their universal claims. As a result, they did not only generate a higher level of social integration, but intolerance and exclusion were deepened and generalised too (e.g. in Christian anti-Semitism, or in the Islamic wars against the ‘unbelieving’). Moreover, the capacity of the monotheistic religions to prevent internal conflicts, factions and divisions has likewise proven very limited, as the numerous schisms in the history of Christianity as well as the history of Islam have shown.

The hegemony of religion over society, however, is contested not only with regard to social integration, but also with regard to its monopoly over the encounter of society with extra-social environments, the ‘holy cosmos’ according to Luckmann (1967). The institutional separation of religion is not without risk, however, because of its position in society and its legitimacy as a superior instance of social and political governance. Where religion no longer permeates everyday life in its totality, but emerges as a separate sphere, the need to draw a clear demarcation between the spheres of the sacred and of the profane arises. It becomes vital to distinguish profane knowledge, justified by its practical success, from religious faith, to be administered by the Church. At the same time, it remains important to link both spheres with each other to maintain the overall legitimacy of faith. Therefore, theology and religion came under continuous pressure to define their proper domains and to reinterpret the meaning of faith vis-à-vis mundane concerns. These needs were reinforced by the processes of functional differentiation evolving within the profane sphere itself as early as in the European Middle Ages (such as the conflict between the Pope and the Emperor arising in the Investiture Controversy of the eleventh century). The Reformation of the sixteenth century in Europe meant a further push of functional differentiation; it played a key role in redefining the position of the Church vis-à-vis the state and in giving the Christian message a more credible profile (Gorski 2000). As a consequence of these redefinitions, religious faith took on increasingly abstract, reflexive and subjective traits, with only God’s ‘pure’ transcendence remaining in the final instance. A divine being, however, whose sovereign will is completely transcendent and unknowable (or accessible only to virtuoso believers), can no longer rule the profane world and its institutional order. Functional differentiation does not only undermine the institutional hegemony of religion over society, but it also results in an individualisation of religious faith; here Luhmann’s diagnosis meets with the interpretations of Max Weber and Hans Blumenberg.

Thus, the model of institutionally specialised religion can be applied to stratified societies only with great caution. The legitimacy of religion as an ultimate framework for social and political governance was contested even under pre-modern conditions in manifold ways. This applies all the more to modern, capitalist society. Hence, we are back at the above-discussed question: do modern societies require a sub-system that is focused on the representation of collective identity and the management of existential uncertainty? And we must also ask: can society do without reflecting its own unity and – pari passu – its encounter with its extra-social environments?