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date: 26 February 2021

Abstract and Keywords

Bankers and politicians have long known that confidence plays an important role in finance. Economists, in contrast, have been slow to realize this. As a result a strong tradition in the economics literature that discusses what confidence is and what role it plays does not exist. Sociology has for natural reasons had even less to say about the role of confidence in finance. Economic sociology has only been around for a few decades and has not produced very many studies of finance. This is true even if we take into account the work by sociologists who are active in the field known as the social studies of finance. This article first introduces the main attempts so far to deal with this topic, in economics as well as in sociology. It then considers the relationship between trust and confidence. It shows that there is no consensus either in economics or in sociology when it comes to what confidence is and what role it plays in finance; and such a consensus is not likely to emerge. What needs to be done is to try to push ahead theoretically, to advance beyond the current discussion by putting forth new ideas on this topic.

Keywords: finance, confidence, trust, sociology, bankers

Richard Swedberg

Richard Swedberg is Professor of Sociology at Cornell University. His two areas of specialization are economic sociology and social theory. His books include: The Handbook of Economic Sociology (edited with Neil Smelser, 1994, 2005), Max Weber and the Idea of Economic Sociology (1998), and Principles of Economic Sociology (2003). He is currently working on a study of Tocqueville and economics.

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