Speaker Series: Bruce Greenhow Carruthers

Today’s economy depends on promises as borrowers commit to repay their loans: people borrow to buy houses, finance their education, and support household spending. Firms borrow to fund investment, finance inventory, or bridge the gap between revenues and expenditures. How do lenders decide whose promises to believe? Lenders weigh their uncertainty about the borrower’s future with the extent of their own vulnerability. Initially, lenders judged a borrower’s personal character and exploited the social ties that connected them for information and advantage. But starting in the 19^th century, lenders began to use a system of numerical scores and information provided by credit rating agencies. Ratings, which spread from short-term business credit to long-term corporate bonds and eventually to individual consumers, transformed the assessment of trustworthiness. Personal qualitative judgements were replaced by impersonal quantitative measurements, making it possible to lend on a much greater scale. Americans were ambivalent about credit, believing indebtedness to be a kind of subordination but also recognizing its usefulness. Nevertheless, access to credit remained highly uneven. Widespread use of scores and ratings set the stage for current developments in “big data,” and pose important questions about discrimination and algorithmic decision-making.

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Bruce Greenhow Carruthers’ current research projects include a study of the historical evolution of credit as a problem in the sociology of trust, regulatory arbitrage, what modern derivatives markets reveal about the relationship between law and capitalism, the adoption of “for-profit” features by U.S. museums, and the regulation of credit for poor people in early 20th-century America. He has had visiting fellowships at the Russell Sage Foundation, the Radcliffe Institute for Advanced Study, the Wissenschaftskolleg zu Berlin, the Library of Congress, and the Swedish Collegium for Advanced Study, and received a John Simon Guggenheim Fellowship. He is methodologically agnostic, and does not believe that the qualitative/quantitative distinction is worth fighting over. Northwestern is Carruthers’ first teaching position. 

Carruthers has authored or co-authored five books, City of Capital: Politics and Markets in the English Financial Revolution (Princeton, 1996), Rescuing Business: The Making of Corporate Bankruptcy Law in England and the United States (Oxford, 1998), Economy/Society: Markets, Meanings and  Social Structure (Pine Forge Press, 2000), Bankrupt: Global Lawmaking and Systemic Financial Crisis (Stanford, 2009), and Money and Credit: A Sociological Approach (Polity Press, 2010).