Economic sociology (ES) forms a specific sociological subfield. As with sociology—its genus—itself a multiparadigm discipline, there is some disagreement about what exactly falls under ES’s rubric. To counter this difficulty ES has been defined broadly as “the sociological perspective applied to economic phenomena” (Smelser and Swedberg 2005, p. 3).
While both ES and economics study the economy in its multiple expressions, they are at variance with each other. At the risk of oversimplification, the starting point for economics is the isolated rational economic actor; whereas for ES, actors always operate in social, thus relational, contexts and do so reflexively.
The sociological look upon economic phenomena has marked sociology from its outset, so it is meaningful to distinguish ES into old and new segments. Old ES refers largely to the relevant parts in the work of sociology’s founding fathers, for example, Karl Marx, Émile Durkheim, Max Weber, and Georg Simmel. Indeed, Marx was concerned with the social designation of the commodity and with commodity fetishism. He also analyzed capitalism’s origins as well as capital as a social relation. Durkheim was directly interested in this field, which he—along with Weber—named as such. He was particularly concerned with the development of the division of labor while he criticized economists for their tendency to construct an exclusive economic world, which was arbitrary and one-sided because the social dimensions were excluded or neglected, whereas he linked anomie to modern economic activity. For his part, Weber delved at length in the sociological study of economic institutions and of processes pointing out that economic action is a special form of social action. Weber advocated considering both the meaning with which actors imbue their economic action (e.g., in his Protestant Ethic and the Spirit of Capitalism [1904–1905]) as well as the social dimension of economic phenomena. By contrast Simmel’s work is not systematically concerned with ES and is only dotted with references of an ES concern, such as analyses of interest, competition, and interlinkages between money and modernity.
Sociological interest in the economy subsided during the 1920s, although authors such as Joseph A. Schumpeter, Talcott Parsons, Neil Smelser, and Karl Polanyi offered contributions to the discussion. Since the 1960s, the attempts of some economists to extend economic interpretations into social phenomena—an approach called economic imperialism —challenged the established division of labor between economics and sociology. This provoked sociologists’ response, which culminated in the reemergence of ES. The wider frames of the new ES, as Jens Beckert (1996) pointed out, are delineated by two parameters: It aims towards a sociological understanding of economic processes and structures, and critiques established economic types of analysis. In the meantime, increasingly, mainstream economics has come to accept a role for the social dimension, although conceptualized quite differently than it is in ES.
Mark Granovetter first discussed the new ES in “Economic Action and Social Structure” (1985). Granovetter, a key figure in ES, has pointed out that all economic action and phenomena are embedded in concrete networks of social relations, social structures, normative arrangements, and institutions that constrain and channel them in particular ways. Unlike the view of Karl Polanyi, for Granovetter these actions and phenomena are more thoroughly embedded in modern societies than in premodern ones. The concept of social embeddedness, which is identified with ES, despite some attempts to define it narrowly, remains a general concept.
Granovetter’s own work on how people obtain a job at the local level was an early application of the social embeddedness idea. He argues that getting a job, or accessing the labor market, is intrinsically a social process linked to the job seeker’s social ties in specific social milieus, which are formulated and distributed under the overdetermining impact of social class. This thesis, known as the strength-of-weakties thesis, has found corroboration in a wide range of social contexts in the United States and elsewhere, for instance in Greece and Russia. Recent U.S. research with respect to other social divisions, such as gender, race, and ethnicity, on matters pertaining to employment and work have identified the prevalence of continuities in the transmittance of social inequalities rather than of discontinuities, which highlights the multifaceted social dimension in labor markets.
Another key concept in ES is that of the social construction of economic phenomena, which draws from the theory of constructivism advanced by Peter Berger and Thomas Luckmann in 1966. Social construction refers to the fact that economic arrangements, institutions, and regulations do not have an a priori independent existence. Instead, they are formulated as a result of human social interaction and purposeful intervention that take place in a specific social context. Once, however, an economic structure comes into being it may assume an objectivity that constrains and impacts upon economic action and practices.
Thematically, research in ES has expanded to include analyses at the micro-, mezzo-, and macro-levels of firms, markets, consumption, entrepreneurship, business groups, money, migration, networks, trust, development, formal/informal work, varieties of capitalism, forms of capital, other economic institutions, the role of culture, and other areas, with most interesting results. Such research has contributed to the deciphering of aspects of the economy, and some of the most attractive examples of ES’s fruition are to be found in the work of, among others, Viviana Zelizer on the shifting meaning of money (1994), Richard Swedberg on Weber’s ES (1998), and Neil Fligstein on contemporary market societies (2001).
While the expansion of empirical research continues, ES’s theoretical production is currently not keeping up with expectations and needs to advance. Accordingly, researchers such as Swedberg suggest that elaborations on the sociological concept of interest and on an interest-based concept of institutions may provide new vistas for ES.
SEE ALSO Sociology
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Sokratis M. Koniordos