Abstract
Ethnographies of Financial Capitalism: On Daniel Fridman’s Research on the Making of Contemporary Neoliberal Selves
This book symposium discusses Daniel Fridman’s Freedom from Work: Embracing Financial Self-Help in the United States and Argentina, which appeared in 2016. Our interest emerges from a workshop on economic sociology that took place in Santiago, Chile, where we, the three present reviewers, realised that we had all been reading Fridman’s book. The common influence of José Ossandón and the blog ‘estudios de la economía’, which links our interest on Fridman’s book, should also be mentioned. In what follows, our three perspectives on the book and Daniel Fridman’s response to our comments are presented.
Tomás Undurraga: A Fine Ethnography and a Strong Sociological Analysis of the Financial Self-Help System
This book is about how ordinary people aim to change their economic thinking, adopt new business practices and thereby reach financial freedom. Freedom from Work investigates the expansion of neoliberalism not at a structural level, but rather at the micro level where self-governance is shaped. It follows financial self-help groups, artefacts and actors, paying attention to the philosophy and materiality of their actions such as forums, board games and interactions. The book is based on two years of ethnographic fieldwork (2007–2009) with financial self-help fans in New York and Buenos Aires. Specifically, it focuses on the cult-like influence of Robert Kiyosaki’s books and how devoted readers adopted their views, aiming to do business and change their lives.
According to Fridman, the popularity of Kiyosaki’s books can be explained by a powerful combination of motivational elements, engaging tools for the development of rational thinking, and his sociological interpretation of late capitalism changes. Kiyosaki’s books promote an anti-corporate discourse that challenges readers to develop new ways of thinking and to acquire new accounting practices: for example, a suggestion to quit their traditional jobs and search for investment opportunities that produce passive income. This programme is not only about making money, but is also concerned with helping people gain financial freedom. ‘“Getting out of the rat race” means having all one’s expenses covered by an income that does not require work. That is “financial freedom”’ (p. 95). The conversion that followers need to adopt involves not only gaining new bookkeeping tools, but also shifting their own self-conception, with the aim of overcoming their fear of financial risk-taking. This would be the path of making money work for you, rather than the other way around.
Fridman’s research elaborates on three bodies of literature. First, it studies how contemporary financial self help is an instance of the production of capitalist economic subjects, and in this regard is obviously indebted to Weber’s work on the spirit of capitalism. Second, from Foucault and Miller’s governmentality programme, it explores how the financial self-help literature functions as a technology of the self, transforming followers into individuals who actively strive for financial freedom. Third, from Callon’s performativity programme, it studies the role played by calculative tools, such as workshops and the Cashflow board game, in helping to forge this new economic mentality.
The book is structured in five chapters. Chapter 1 explores the connection between the rise of the financial self-help literature and the neoliberal era. It introduces the main framework of Kiyosaki’s philosophy – the cashflow quadrant – and proposes a sociological explanation of why his call to financial freedom is seductive for so many. Chapter 2 describes the core promise of Kiyosaki’s books – financial freedom – and the type of persons that followers are advised to become: financially informed, risk-taking entrepreneurs who are liberated from dependency on external institutions such as bosses, corporations and governments. Chapter 3 explains the performative role that the Cashflow board game has on users: fans formulate new economic goals, acquire calculative tools, and work on their inner selves to develop an entrepreneurial mindset. Chapter 4 explores the collective aspect of financial self-help groups. Rather than discovering an individual endeavour framed exclusively in terms of self-interest, Fridman instead uncovers a world where self-interest and other-regarding interest are seen to be in balance. Chapter 5 focuses on how Kiyosaki’s self-help philosophy, which is largely rooted in US economic culture, travels to Argentina. In describing the way in which Argentinean followers adapt the Cashflow game to their own circumstances, the author shows how these American products are made global by active local engagement.
Freedom from Work has multiple virtues. First, it offers a thorough study on the place of ideas in the making of neoliberal subjects. Fridman unveils the psychological and economic conversions that ordinary people experience in searching for financial freedom, from the realisation that Kiyosaki’s description of the neoliberal world matches their own experiences – they are indeed trapped in the ‘rat race’ of financial dependency on corporations and the state – to the ‘realisation’ that they have the power to break this trap through economic self-discipline and personal transformation.
Second, elaborating on Callon and Actor Network Theory, the book seriously explores the place of materiality in the making of the entrepreneurial self, and the performativity of workshops, forums and board games. By playing Cashflow, users acquire calculative tools to distinguish between different forms of income, expenses, assets, liabilities, learning to organise this information on a balance sheet. This board game is not about winning per se, but is presented as a tool for learning how to create financial habits that the players don’t yet have.
Third, Freedom from Work is a fine piece of ethnographic research, providing strong sociological analysis for deciphering the logic of the financial self-help system. Multiple analytical layers accompanied by thick descriptions invite the reader to understand not only the motivations of financial self-help fans, but also the way in which they constitute themselves as communities of practice in New York and Buenos Aires. Fridman offers multiple insights about the relational character of ethnographic studies, about the back and forth relationship between fieldwork notes and theory, of data collection and analysis. The author shares his own experiences in dealing with these ‘natives’, while bracketing out his political and moral stances.
Although I personally reject many of the ideas espoused by financial gurus, the concerns of participants of financial self-help were about issues that are not exclusive of that world … [but of] … capitalist societies: our personal finances, our money, our jobs, our retirement, and our freedom … Those ideas may have been different from my own, but my job was not to contrast them with mine … [but] to understand the internal coherence of those ideas and practices. (p. 189).
The book thus sharply raises the age-old ethnographic question: What do we do with our own normative stand on the ‘natives’ we are studying? How do we reconcile our own normative position on the phenomena studied with the ideal, non-judgemental starting point that much ethnography requires?
What I missed in Fridman’s book, however, is an aftermath chapter seriously assessing the implications of this financial philosophy on fans and society. In leaving the reader to come to her or his own normative conclusions about this world, the author misses the opportunity to engage with the many controversies that make financial self-help so intriguing, attractive and repellent at the same time. In particular, I missed an empirical, a normative and a biographical critique of Kiyosaki’s philosophy and its followers.
First, I missed an empirical critique assessing the gap between what financial self-help promises and its real life impact on followers, measured in material terms. Of course, increasing economic understanding, acquiring calculative tools and participating in communities of practice herald real changes. But an empirical contrast point would have allowed the reader to assess the material impact of Kiyosaki’s programme. Kiyosaki proposes four ways to escape the ‘rat race’: (1) investing in the stock market; (2) starting a business; (3) investing in real estate, and (4) getting involved in network marketing. Of these four routes, however, only the last is easily achievable for most members of financial self-help groups, especially in Argentina. Thus, the promise of financial freedom for most of them generally ends up materialising through the adoption of network marketing strategies, with little material pay-off. This might suggest that the promise of financial freedom turns out to be less comprehensive, and therefore more illusory, than the life change promised. I wonder about the extent to which the industry of financial self-help is a placebo, promising economic transformation that tends to work only under certain special conditions. How many of the fans truly change their economic situation following Kiyosaki’s recipes? And how many remain poor fans? That is, for whom, and on what scale, does this programme actually work to deliver changed material conditions? By not addressing this empirical aspect of the financial self-help programme, Fridman leaves us with this important empirical question unresolved.
Second, I missed a normative critique that would have discussed the moral and social implications of Kiyosaki’s philosophy. Fridman does a terrific job of unveiling the libertarian assumptions of financial freedom’s promise. Where the author falls short, in my view, is in not discussing the social and political implications of expanding this type of mindset more broadly in society – e.g. antagonism to taxation and state institutions, erosion of political and economic institutions, and other consequences of dividing the world between winners and losers. Fridman here misses an opportunity to problematise the foreseeable consequences of implementing these sorts of libertarian ideas at a mass scale. For instance, widespread acceptance of the idea that you can be rich without working implies a social world in which it is widely agreed that ‘someone else’ has to do the job – whatever that job may be. Further, there is Kiyosaki’s call to make money out of crises and disasters. Crises are portrayed as opportunities for an entrepreneurial self to take advantage. While Kiyosaki’s descriptions of post-industrial society might be accurate in some regards, his solutions strike one as profoundly socially unsustainable. By not problematising the normative aspects of the financial self-help programme for society, Fridman ends up giving us an oddly thin picture.
Third, I missed a biographical critique that takes into account the trajectories of financial self-help fans. What happens when the Kiyosaki fan is effectively transformed and the promise of self-discipline, richness and financial freedom is reached? Fridman could have tested this case using Weber’s argument about the secularising aspect of richness as a comparison point – that once richness was acquired, the austerity of life promoted by the protestant ethic was largely abandoned by early entrepreneurs. I wonder what happens to the disciplined life of Kiyosaki’s followers if and when they achieve the sought after financial freedom. Do they largely maintain their methodical habits once they manage to make money work for them? To what extent do the passions unleashed by money erode the inner discipline that, in some cases, helped make financial freedom possible? Fridman’s book focuses on the moment of conversion, on the making of the financial free spirit. It would have been enriching if he had followed these ‘transformed’ selves describing the aftermath of their transformation.
Despite these criticisms, the book’s many contributions and achievements far outshine the missed opportunities I have noted. Freedom from Work is an insightful and well-researched book that shows one way in which neoliberal subjects are nowadays produced. Any researcher interested in economic sociology, neoliberal governmentality, the materiality of the financial world and ethnographic research, should definitely read it.
Tomás Ariztía: A Compelling Empirical Sociology of Neoliberal Subjects ‘In the Making’
Fridman’s book presents a compelling and original version of how neoliberalism is enacted in social life. Unlike many books on this topic that have often focused on exploring either the unfolding of neoliberal policies or the link between neoliberal ideology and expert knowledge, Freedom from Work presents an empirical sociology of neoliberal subjects ‘in the making’. The book can be situated therefore alongside other similar works that, inspired by Foucault, have explored how the neoliberal self is enacted (such as the entrepreneurial self or the business self). This is done by presenting a detailed ethnography of the financial self-help world, particularly about how ordinary people embrace the rules, worldview and calculative tools of financial self-help to transform themselves and to achieve financial freedom.
I found the book very compelling for several reasons. First, it offers a welcome counterbalance to the dominant account of neoliberalism, which has often focused on a ‘bigger’ scale, such as the work that focuses on the role of government and/or regulations, or the works that map the economic global transformations. The focal point of this book, however, is how mundane people deal with and take neoliberal values, practices and technologies. In this sense, the book constitutes a valuable addition to an increasing corpus of research interested in situating neoliberalism in relation to specific practices and technologies. In doing so, the book follows the tradition of a more culturally oriented economic sociology (in particular, the sociologies of money and the sociologies of consumption), with interest on researching economic phenomena from the point of view of the actors and their experiences.
However, what I found particularly remarkable about the ‘bottom up’ culturally oriented approach to neoliberalism presented here is that it complements the material of people talking and practising financial self-help, with an analysis of the discourses and activities of the financial self-help industry. This is done, for instance, by analysing the roots and premises of the financial self-help discourse. The result is a work that offers a symmetrical approach that grasps both people’s engagement with and the expert operation of financial self-help. Following this symmetrical vein, however, the addition of a more detailed description regarding the commercial and professional organisation of the financial self-help industry would have been perfect. For instance, it would have been great to unpack how different products of the financial self-help industry are designed, produced and sold.
A second element that I found particularly interesting is that this book shows a detailed account of the different empirical forms in which (economic) value and (non-economic) values are enacted and interweaved in neoliberal times. In fact, financial self-help, as a programme of individual transformation, works by conflating economic value – expressed as financial gains – with different types of non-economic values.
Two versions of this conflation are particularly interesting. The first one is the detailed description of how financial success and individual achievement are intertwined. In financial self-help, the adoption and use of different techniques for making money and the drive for individual freedom are interconnected and inseparable. The second one is the description of how in the ‘world of abundance’ pursued by financial self-help there are no differences between individual economic interest and the pursuit of collective interest. In fact, as it is well detailed in the analysis of the multilevel marketing activities that the participant develops, economic interest is not the opposite but the basis of a genuine interest for others: generosity and self-interest are interconnected.
In my view, the description of these two conflations between value and values is particularly interesting as it illustrates a key aspect of the neoliberal moral grammar, which is the critical place of self-interest and economic value as the organising principle of all moral and (increasingly) political value. From this point of view, the financial self-help world described by Fridman does not differ much from other economic cultural circuits, such as the world of management and marketing or the practice and values that organise the work in a firm. In this sense, we can see how this book is situated in a long tradition of critical thinking in sociology about the colonisation of social life by economic and market values.
However, and this is another strength of the book, this process is not analysed or presented in an abstract manner but as situated and rooted in specific socio-material practices. Achieving financial freedom involves mastering a series of practical financial skills and techniques, as well as being involved in specific experiences such as collective games, meetings and encounters. The process of self-transformation and the attainment of financial freedom is neither a result of the imposition of a pre-existent normative framework nor the pure performative effect of calculative tools, but the practical outcome of people’s engagement in discourses, exercises, games, meetings, affects and tools, among other elements.
To sum up, I believe that we need more of this type of bottom up sociology examining how neoliberal moral grammars are produced, mobilised and lived in contemporary times.
Felipe González: An In-Depth Research of the Broad Cultural Transformations Triggered by Financial Literacy
The book tells the stories of common citizens who strive to become free from work, reflecting their struggles to tame themselves and their desire to master their own economic life. As an instance of the production of capitalist economic subjects (p. 5), the topic of financial self-help has a global scope that Fridman captures through ethnographical fieldwork in the USA and Argentina. It thus approaches the everyday life of neoliberalism, as it takes place in the encounters between neoliberalism’s cultural products and ordinary people pursuing their dreams and dealing with their anxieties. The result of this encounter is a slow but steady transformation in their habits, values and cognitive frames. In this way, Fridman’s book invites the reader to assist the birth of new entrepreneurial subjects, a subtle and seemingly irreversible cultural transformation ‘from below’.
The final revelation of the book, exposed over 150 pages of a detailed and fascinating ethnographical account, may have been expected by some readers: What do we learn about the economy and society from studying the embracing of financial self-help? In this respect, one of the book’s virtues is that it addresses different audiences, ranging from economic sociologists to researchers of governmentality. However, instead of drawing broader theoretical considerations for any of these sub-fields, Fridman decides to bring the reflection to a less conventional level: the public implications of ‘financial literacy’ policies, which have become a subject of public discussion in Argentina. The merits of this strategy depend on what readers are looking for in the book. In my view, a crucial point comes to light in this discussion: financial literacy policies are not only about equipping citizens to help them make the right decisions and become responsible subjects. It is also about the ideological orientations that underlie the technical and educational content of these cultural products. Thus, cultural dispositives such as financial literacy policies – and by extension, financial self-help – contain economic mind-sets, values and schemata of perception, that remain hidden in calculative tools.
Fridman leads the reader through the micro-dynamics of a broad cultural transformation: the embrace of neoliberal values. As such, the author invites the audience to reflect further on the social and cultural spirit of the times. At a time when one main focus of the social sciences is to uncover the social mechanisms that lead to the accumulation of wealth, Fridman is showing us how the pervasive dream of becoming renters (free from work) transforms people and legitimizes the distributive outcomes of markets. In this regard, I found particularly powerful the idea that, by shaping the beliefs and cognitive maps of its users, financial self-help provides a powerful formula for the justification of social order: it makes individuals responsible for their economic situation, decoupling their individual trajectories from ongoing structural changes. In this way, I would have liked a more systematic treatment of the social and economic background of Kiyosaki’s followers, sketching the conditions that led them to embrace neoliberalism while also being, probably, among its victims. This is one of the paradoxical results of financial self-help.
In addition, as the book is full of clever insights, I would have expected a deeper discussion of the theoretical implications that can be drawn from the ethnographical description, especially from a sociological and political point of view. In sociological terms, the book provides a rich description of the socialization processes through which financial self-help followers re-tool themselves. Nevertheless, these insights are not discussed in the light of the economic sociology of habits, cognitive frames and culture – to mention a few – all of which may have benefited from the rich empirical data presented in the book. In political terms, I would have expected the conclusions to present a stronger discussion of financial self-help as a cultural device moralising the life-worlds of Kiyosaki’s followers. In the end, financial self-help has profound effects on the way people perceive themselves, proximate others and the distribution of wealth in society. The moral dimension is normally missing within the social studies of finance, and this book has a lot to say about it.
Finally, a methodological point is in issue. I struggled through my reading to understand the role of the comparison between Argentina and the USA, and if the methodological strategy is at all consequential for the argument. There are only a few references to the comparative dimension of the book and how these cases shed light on the nuances of a global cultural product that is consumed locally. Only Chapter 5 tackles the issue of how financial self-help is translated into a local culture, but it does not reflect directly on the transnational character of economic cultural products. In this sense, I would have expected the author to provide more discussion around the advantages that one gains when drawing on these two cases. By pointing out that the differences are those of form, rather than nature, one wonders whether the comparative dimension yields major results.
Daniel Fridman’s Response: On Authorial Decisions and the Learnings of Fieldwork that Drive our Research
It is an honour to have Freedom from Work discussed in this symposium. I thank Tomás Undurraga, Tomás Ariztía, and Felipe González for taking the time for such a careful reading of my book and for their generous insights, and the editors of Cultural Sociology for providing the space for this conversation.
The three reviewers highlight some of the central contributions of the book – the focus on ordinary people setting out to transform themselves; micro-processes of self-shaping aided by material tools; the morality embedded in becoming an economic actor; and the need to look at neoliberalism beyond the lens of imposition from above.
Undurraga, Ariztía, and González also raise some interesting critiques, particularly things that they would have liked to see in the book. I will borrow here Undurraga’s neat categorization of critiques, which fits with almost all comments made by the three reviewers: (1) Normative critique: the book does not provide a strong normative stance on the object of study and its consequences. (2) Biographical critique: we do not know what happens to people’s conduct after they reach the pinnacle of financial freedom. (3) Empirical critique: we do not know if Kiyosaki’s programme effectively delivers a change in material conditions for fans.
It is very possible that some or all of these suggestions would have made a positive impact, although each may also have associated costs of various kinds. Without trying to address every criticism in the three pieces, I will take the opportunity to reflect on the thought process that led to decisions I made throughout the research and writing for Freedom from Work. My response also roughly fits in three categories: (1) Authorial decisions: issues where another author could have easily made a different choice, with a different result; (2) Method: constraints that the methodology I chose imposed on the questions I could ask; (3) Nature of the object of study: issues for which my own discoveries during fieldwork defined the way I addressed the object.
I will start with the problem of normativity addressed by both Undurraga and González. It is a truly fascinating discussion to me not just in relation to my own work, but as a broader issue in ethnographic research with normatively controversial objects. As Undurraga recognizes, how to reflect the values of the researcher in a project like this is not an easy task. This was something I thought a lot about while conducting the research and writing the book. Here the normative and empirical critiques meet each other. There was surely another way of writing this book, where my normative views on financial self-help would have driven the narrative. In that version, the focus would have been more on whether financial self-help delivers riches or not. But I became convinced that a research project aiming at this would have made for a weaker contribution (as I will show later), and actually one that social science did not need.
Ethnography demands a certain empathy with subjects, regardless of one’s normative position. Of course, empathy does not mean agreement, and that is what makes the job of the ethnographer both exciting and difficult. Empathy means being able to link phenomena that subjects may or may not fully see with the way subjects engage in a practice that may or may not make sense to outsiders but surely does to them. I did not approach this object of study with the mission of finding out what readers of financial self-help were doing wrong or assuming some kind of deception. I thought it would be more revealing to my readers to understand why anyone would engage in financial self-help and take it seriously.
I realized then that embracing a normative voice would be an obstacle. I could have switched to a normative voice in a separate chapter, but a final ‘reveal’ would have been odd, perhaps a betrayal of the book’s project. Interestingly, while discussing potential book titles with my editor, the term ‘illusion’ popped up several times. To me, using ‘illusion’ meant discrediting subjects, treating them as cultural dopes, getting in the way of the narrative strategy of the book, equivalent to embracing a normative voice. There were dangers, of course. Some readers might be inclined to read the book as being in favor of the object of study, which it is obviously not. I decided I could live with the risk, which would indeed be minor. In fact, I would argue that the book does a service to those who oppose the financial self-help ethical project: they should be aware of its allure and rationale and avoid dismissing it as a simple trick. Whoever the readers are, I prefer that they make of my findings what they can and want in the light of their own preferences about the world, more than of mine. I agree with Undurraga and González that it is worth assessing normatively the political and social implications of the story the book tells. I just think it was not a task this particular book could take effectively without significant loss.
Authorial decision therefore helps explain the issue of normativity and not focusing on whether the Kiyosaki programme eventually brings the promised material rewards or not (the empirical critique). But the latter is also a consequence of the research method. Ethnography and interviews can help answer some questions but not others. I only made claims that I deemed strongly supported by consistent patterns in the data. I conducted my research over two years in two locations, so I did not make claims on long-term consequences. It would be interesting to know the long-term material effects of financial self-help on fans by different levels and lengths of engagement. It would also be, however, a fairly hard task not just because of the amount of time someone can realistically devote to a multi-sited ethnographic study, but even if I could have stayed for many more years in the field. It would be challenging even with a longitudinal quantitative design, given how many variables intervene in economic outcomes, including not only structural ones purposefully ignored by best-selling gurus, but also quite simply luck.
Thus, method also explains why I couldn’t address the case of fans having once ‘made it’, for then, they would maintain the conduct that arguably took them there (the biographical critique). However, it is interesting that the Cashflow game somehow reflects the question Undurraga poses. Much of Robert Kiyosaki’s advice is that fans should ‘think like the rich’. Yet, the game has two tracks, not one (the rat race and the fast track). Cashflow portrays the rich as existing in a different environment than others. It acknowledges that those out of the rat race (living off investment) are subject to other rules and conditions, and that they can safely ignore things that those in the rat race cannot. Yet, the alleged virtues of the rich are still portrayed as what working people ought to cultivate. ‘How the rich think’, a notion disembedded from social conditions is, like the breakthrough moment of financial freedom, more imagined than real. How much is imagined and how much is real does not necessarily determine how powerful these ideas and practices are as a platform for self-transformation.
This leads to a crucial reason why material effects are not prominent in the book. At the beginning of my research, I thought that financial self-help essentially told people that they should change in order to make money. It does to some extent. But as I conducted more fieldwork, I increasingly came to realize, and it took me a while to embrace it, that the goal was really self-transformation, and money was a vehicle for it. Empirical assessments of long-term material effects constitute an elusive question because identifying an exact material endpoint at which the project of financial self-help should be assessed is something fans avoid. Ironically, the Kiyosaki project was rarely framed as a simple promise of material reward, even if financial freedom could be measured in terms of income and expenses. Buying a property or starting a business was more valued for the step taken and for what it meant for one’s relation to risk and self-making than for the financial reward itself. Financial self-help is more about the journey than the destination.
I would like to finish by speculating a little bit. What happens if after years in that journey, a financial self-help enthusiast simply finds that in the end it is a better deal remaining employed rather than becoming financially free as an investor? This may be a perfectly rational decision in economic terms, but in the world of financial self-help it would still be framed in moral terms. The poor mentality won, you are too risk averse, you do not want to invest in your financial intelligence, you are simply too comfortable to change. Financial self-help is less about finding the best method to make money than about engaging in practices around income generation that reflect a morally desirable neoliberal self. Of course, those forms of income generation will always involve ‘money working for you’. The elephant in the room of financial self-help is that when money seems to be working, there is likely another human being paying costs for those benefits. Financial self-help’s promise of self-transformation may make sense from the point of view of users, as I showed in the book, but is still in the end an exploitative promise.