Economic Sociology & Political Economy
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Economic sociology Ilan Talmud University of Haifa, Israel abstract This article surveys contemporary trends in economic sociology, detailing how the emergence of the social embeddedness metaphor has led to various sub-disciplines in the field. Economic sociology depicts the market as a socially constructed feature, (a) structured by networks of social actors who com - pete, imitate, exploit, and cooperate with one another, (b) enabled and reproduced by social and political institutions according to (c) the basic rules of capitalist political economy, and (d) perceived and enacted by cognitive procedures and normative regimes entailing ideal types, professional language games, myths, and ritualistic processes. keywords economic sociology ◆ embeddedness ◆ markets ◆ uncertainty Introduction Economic sociology applies a ‘sociological perspective economic values and procedures? These are but a few to economic phenomena’ (Smelser and Swedberg, of the questions that arise from the rich, diverse, 2005: 3), arguing that economic life is embedded in developing, and vibrant field of economic sociology. the larger social structure. Economic sociology is a The link between the economy and society has broad based endeavor to contextualize economic attracted analytical attention since the founding of actions, processes and structures in the wider societal sociology. The discipline’s forerunners and founding context. While they use different emphases, theories, fathers formulated analytical schema and theoretical and methodologies, all economic sociologists argue problems to determine the relationship between social that economic phenomena have to be understood in institutions and economic behavior. For example, relation to the social mechanisms that facilitate, form, Marx was mainly interested in the systemic causes and and maintain them. These practices include shared consequences of economic inequality. Weber’s theory meanings (culture), institutions, political structures, was centered on economic ideas and structures. and social networks (Guillén et al., 2005; Zelizer, Durkheim’s division of labor was about the pre-con - 2010). Economic sociologists also reject the notion tractual elements of exchange, while Simmel dealt that the social, political or cultural dimensions of soci - with capitalist life and the emergence of calculability ety ‘interfere’ with the smooth functioning of the in social relations (see Granovetter, 1990; Guillén et economy (Zelizer, 1985, 1989). Rather, social mecha - al., 2005; Swedberg, 1994, 1997 for reviews; for a nisms routinely promote effective economic operation review of political economy see Caporaso and Levine, (Beckert, 2007). 1992). Economic sociology deals with a variety of research Classic sociologists studied economic phenomena questions such as how are markets possible? What are in terms of social classes, status groups, institutional the social mechanisms that facilitate cooperation in analysis, work and occupations, and economic devel - the economic sphere, especially under conditions of opment (see Guillén et al., 2005; Swedberg, 1994 for uncertainty? To what extent are social relations impor - a review). The dominant Parsonian paradigm advocat - tant to cooperation and competition in economic ed a division of labor in the social sciences that left exchanges? How do political regimes, national institu - most aspects of the investigation of economic phe - tions, business networks, and conventions shape local nomena to the discipline of economics. This division business strategy? What are the social mechanisms has led to the emergence of the economy and society that determine economic values? To what extent do paradigm in which the economy is perceived as a self- the moral order and public perceptions affect regulating sub-system (Beckert, 2007: 4; Guillén et Sociopedia.isa © 2013 The Author(s) © 2013 ISA (Editorial Arrangement of Sociopedia.isa ) Ilan Talmud, 2013, ‘Economic sociology’, Sociopedia.isa , DOI: 10.1177/2056846013121 1 Talmud Economic sociology al., 2005). Subsequent theoretical developments led constrained by structural arrangements such as insti - scholars away from a holistic approach and into nar - tutions, power relations, or networks (Burt, 1983; rower research areas with key methodological Friedman and Hechter, 1988; Hechter and advancements. Throughout this period, different Kanazawa, 1997; Zafirovski, 1999). The latter view subfields within sociology studied economic phe - economic action as using phenomenological or prag - nomena from narrow, specialized foci such as com - matic assumptions, where actors interpret their envi - plex organizations, work and occupations, social ronment to ‘make sense’ of their economic action. stratification, professions, economic development, Proponents of the ‘culturalist school’ treat the and culture. Arguably, the segmentation of econom - economy as a cultural endeavor and even a moral ic sociology into specialized subfields was a key fac - project in which actors are constantly engaged in tor in preventing the possible construction of a intersubjective, symbolic interactions, which in turn systematic, comprehensive sociological theory of are shaped by cultural scripts. In other words, the economic phenomena (Guillén et al., 2005; culturalist school views the economy as an outcome Swedberg, 1997). of the social construction of reality (Swedberg, Since the 1980s, however, the ‘new economic 1997). According to this view, symbolic interaction sociology’ has gradually embarked on a novel and sense-making devices play a crucial role in form - research agenda: an explicit attempt to create a sys - ing economic actions. Furthermore, constructivists temic sociological inquiry into economic phenome - typically claim that the distinction between func - na. This significant step forward was essentially tional and symbolic values is somewhat blurred facilitated by the publications of White’s model of (Beckert, 2013), and that even modern rational cal - the market as social relations (White, 1981), Burt’s culability is viewed as a cultural and historical proj - analysis of production markets (Burt, 1983), and ect, maintained by institutional devices and social Baker’s (1984) and Abolafia’s (1996) studies of finan - carriers (Fourcade and Healy, 2007; Guseva and cial markets as social relations and cognitions. These Rona-Tas, 2001). publications were formulated as a novel research Moreover, because methodological tools stem agenda in Granovetter’s (1985) seminal program - from epistemic assumptions, there is a general asso - matic paper on social embeddedness. Granovetter ciation in economic sociology between the epistemic framed these and other relational studies into an communities and the methodological style each ambitious, meso-level, structural research agenda. camp uses. Researchers who support the structuralist Nevertheless, there was no unified approach to theory, which accepts the postulates of rationality contextualize economic actions within society. The implicitly and explicitly, are more likely to use quan - new economic sociology was split into specialized titative network models. By contrast, scholars who research questions and theoretical schools, often adhere to the interpretative viewpoint tend to adopt using diverse and even divergent theoretical lenses. a qualitative, hermeneutical methodology designed While some analyzed the structure of the market as to decipher symbolic meanings in the field. As Rona- a social network using a structural approach with Tas (2011: 598) succinctly articulates: ‘Our foremost quantitative network models, other scholars studying job as sociologists is not to iron out the wrinkles of the relationship between economic markets, cultural reality with our theories. Our key task is to see how frames, and the moral order utilized neo- actors deal with those wrinkles, how they manage Durkheimian and culturalist theories in ‘soft,’ quali - what they see as inconsistent, uncertain or incompat - tative investigations. By contrast, the main tool for ible and how that dissonance can force them to come studying the effects of political regimes and power up with new solutions.’ relations on economic performance was a compara - tive historical approach. The multiplicity of diver - gent analytical lenses and methods has intensified The problem of social order and the theoretical split of the new economic sociology uncertainty in economic exchange into ‘theory camps’ (Fligstein and Dauter, 2007), thus thwarting attempts to construct a solidified, Durkheim and Malinowski already showed that eco - integrative sociological theory of economic life. nomic exchange could be facilitated only through More importantly, behind the division of eco - ‘pre-contractual elements’ of exchange, or by embed - nomic sociology into different research agendas, ding economic relations in a sacred, Kula alliance. there is an epistemic split. The major divide is Similarly, Jens Beckert argues that social devices are a between instrumental (or structuralist) and con - necessary condition for the smooth operation of eco - structivist, interpretative approaches to economic nomic exchange (Beckert, 2003, 2007). In his prag - action. The former regard economic actors as purpo - matist approach, Beckert explicitly negates the sive, rational utilitarian agents whose horizons are established distinction in the economic and business 2 Talmud Economic sociology literature between risk and uncertainty, where the characteristics of contemporary economies