mind, have been an ingredient of recent economic sociology (see Dobbin, chap. 2 in this volume). A few of the works already mentioned draw on historical material (e.g. Granovetter and McGuire 1998; Zelizer 1979, 1985, 1994). To this list should be added Bruce Carruthers’s study of fi- nance in seventeenthand eighteenth-century England, and several attempts by economic sociologists to challenge Alfred Chandler’s account of the rise of the large industrial corporation in the United States. Carruthers is interested in showing that not only do economic interests influence politics, but also the opposite: “political interests influence economic action” (1996, 7). Using primary material on the trade in shares in the East India Company in the early 1700s, he establishes that political ambitions clearly influenced the choices of buyers and sellers. The critique of Chandler has similarly emphasized the state’s role in the emergence of the large industrial corporation. Chandler’s key idea—that recent advances in technology had made it necessary around the turn of the last century to reorganize the large corporation as a multidivisional unit—has also been criticized (e.g. Fligstein 1990; Roy 1990, 1997; Freeland 1996, 2001).
Explicitly comparative studies are fewer in number. One notable work is Forging Industrial Policy: The United States, Britain, and France in the Railway Age (1994) by Frank Dobbin (see also Evans 1995). The author argues that industrial policy in these three countries between 1825 and 1900 differed on important points. In the case of the United States, local self-rule and a weak federal state meant that railway regulation translated into antimonopoly policy and attempts to safeguard private initiatives. The tradition of a centralized state in France inspired strong interference from the authorities in the planning and running of the railroads. And the tradition of safeguarding elite individuals in Britain helped to bring about an industrial policy that shielded the small, entrepreneurial firm.
Introduction 17
ever, Coleman 1994). It should be mentioned, however, that in the same year Granovetter’s essay on embeddedness appeared, Coleman published a brief article in which he developed the parallel argument that economists have failed to introduce social relations into their analysis (1985, 85).
The key theoretical chapter in Foundations of Social Theory is entitled “Actors, Resources, Interest, and Control” (chap. 2); it attempts to reconceptualize interest theory and to make it sociological. Coleman’s point of departure is that it is not sufficient to speak of actors and their interests; “resources” and “control” must be considered. Coleman argues that if an actor has something of interest to another, the two will interact and thereby create a social system. In Coleman’s terminology, if actor A has control over a resource that is of interest to actor B, they will interact.
Foundations, as well as other works by Coleman, contains a number of analyses of much relevance to economic sociology. Three subjects of particular importance are trust, social capital, and the modern corporation. Trust is conceptualized by Coleman in a manner very different from Simmel. While the latter emphasized trust as unthinking belief, Coleman characterizes trust as a conscious bet: you calculate what you can win and lose by trusting someone. Social capital is any social relation that can be of help to an individual in realizing an interest. “The function identified by the concept ‘social capital’ is the value of those aspects of social structure to actors, as resources that can be used by the actors to realize their interests” (Coleman 1990, 305). A firm represents, for example, a form of social capital—even if social capital is usually the unintended result of some action, undertaken for a different purpose. Finally, Coleman emphasizes that once people have created a firm to realize their interests, the firm can develop interests of its own (see especially Coleman 1974). To Coleman, the firm is basically a social invention, and agency theory is particularly useful for analyzing it.
The Contribution by James Coleman and Interest-Based Sociology
The most radical attempt during the last few decades to develop a sociological interest analysis is that of James Coleman (1926–1995). His efforts were initiated in the early 1960s and found final expression in Foundations of Social Theory (1990). Coleman’s intention was to use interest as the foundation for all of sociology, and initially he paid little attention to economic sociology (see, how-
Bourdieu and Other European Contributions to Economic Sociology
New economic sociology is primarily a U.S. phenomenon and has only recently begun to spread to Europe. Many of the major European sociologists have, however, written on the economy as part of their general concern with society. This is not only true of Raymond Aron, Michel Crozier, and Ralf Dahrendorf, but also of major sociologists with notable contemporary influence, such as Niklas
18 Smelser/Swedberg
Luhmann, Jürgen Habermas, and Pierre Bourdieu (cf. also Giddens 1973, 1987). Luhmann (1927– 1998), for example, has written a number of essays on the economy, which, however, have been somewhat neglected in the current debate. His consistent thesis is that “economic sociology can only develop if its approach is overhauled and it sets out . . . from the concept of the economy as a subsystem of society” (Luhmann [1970] 1982, 221– 22; cf. 1988; Beckert 2002, 201–40). Habermas has written much less on the economy than Luhmann and has not shown any interest in economic sociology. Nonetheless, his general thesis that in modern society the lifeworld of the individual has been uncoupled from the system world, including the economic subsystem, has been much discussed (e.g. Habermas 1984–87; cf. Sitton 1998; for knowledge-constitutive interests, see Habermas [1968] 1971).
Of the major European sociologists Pierre Bourdieu (1930–2002) has shown the most interest in the economy, from his studies of Algeria in the 1950s to a recent work on the housing market in Les structures sociales de l’économie (2000b). Bourdieu has also devoted issues of his journal Actes de la recherche en sciences sociales to economic topics, such as “social capital” (no. 31, 1980), “the social construction of the economy” (no. 65, 1986), and “the economy and the economists” (no. 119, 1997). Most importantly, however, he has developed an important theoretical alternative to the model of embeddedness and its offshoots, namely the idea of the economy as a field, with all that this implies.
Bourdieu’s foremost empirical study of interest to economic sociology—Travail et travailleurs en Algérie (Work and workers in Algeria; 1963)—can be described as a rich ethnographic study (for a shortened version in English, see Bourdieu 1979). Some of its strength comes from the author’s juxtaposition of the traditionalistic worldview of the Algerian peasants with the capitalist worldview of modern people. While the peasant in Algeria has an intensely emotional and nearly mystical relationship to the land, this is not the case in a society dominated by wage labor and capital. Work is not directly related to productivity in Algeria; one tries to keep busy all the time. Institutions such as money and credit are seen in a different light. Money and exchange are seen as inferior to barter; and credit—which, as opposed to assets, is tied to the person—is resorted to only in rare circumstances such as personal distress. In Algeria commercial ventures are preferred to industrial ones, since the risk involved is much smaller.
In economic sociology Bourdieu has also developed a general approach; an application of his general sociology, which is centered around the concepts of the field, habitus, and different types of capital. In 1997 he published an article entitled “The Economic Field,” which was revised and given the new title of “Principles of an Economic Anthropology” a few years later (Bourdieu 1997, 2000a; see chap. 4 in this volume). Since Bourdieu is very critical of Granovetter’s approach—for ignoring the structural dimension embodied in the notion of the field—one may well be justified in speaking about two different approaches in contemporary economic sociology: that of embeddedness and that of fields.
According to Bourdieu, the economy can be conceptualized as a field (as can an industry and a firm), that is, as a structure of actual and potential relations (Bourdieu and Wacquant 1992, 94–120; Bourdieu 1997; cf. Fligstein 2001). Each field has its own logic and its own social structure. The structure of a field can also be understood in terms of its distribution of capital. Besides financial capital, three other forms of capital are especially important: social, cultural, and symbolic. Social capital is one’s connections of relevance to economic affairs; cultural capital comes from one’s education and family background; and symbolic capital has to do with various items with a cognitive basis, such as goodwill and brand loyalty (Bourdieu 1997; for a general account of the different types of capital, see Bourdieu [1983] 1986). The individual actors in the economic field bring with them their “economic habitus” (or “economic predispositions”), which relates their future actions to their past experience. Homo economicus, Bourdieu says, is “a kind of anthropological monster” (1997, 61). Bourdieu’s economic actor does not act in a rational way but in a reasonable way.
In addition to the three concepts of field, capital, and habitus important in Bourdieu’s general sociology, there exists a fourth concept that is equally important but often ignored: interest, or that which drives the actor to participate in a field. “Interest is to ‘be there,’ to participate, to admit that the game is worth playing and that the stakes that are created in and through this fact are worth pursuing; it is to recognize the game and to recognize its stakes” (1998a, 77; cf. Bourdieu and Wacquant 1992, 115–17). The opposite of interest (or illusio) is indifference (or ataraxia). Each field has its own interest, even if it masquerades as disinterestedness. Bourdieu criticizes the economists’ version of interest as ahistorical—“far from being an anthropo-
logical invariant, interest is a historical arbitrary” (Bourdieu and Wacquant 1992, 116). The economists are also wrong in thinking that “economic interest” drives everything; “anthropology and comparative history show that the properly social magic of institutions can constitute just about anything as an interest” (Bourdieu and Wacquant 1992, 117). The error of assuming that the laws of the economic field are applicable to all other fields in society Bourdieu terms “economism” (1998a, 83).
Bourdieu’s analysis has been discussed in only limited ways in contemporary economic sociology. Distinction (Bourdieu [1979] 1986), for example, has much to say on preference formation and also contains a new approach to consumption. Bourdieu’s emphasis on economic suffering and his attempt to tie it to the problematic of theodicy is also of much interest (e.g., Bourdieu et al. 1999). So is his related effort to discuss the normative aspect of economic sociology, for example, in his recent little book on “the tyranny of capital” (1998b; see also Bourdieu 2002).
It would, however, be incorrect to give the impression that Bourdieu is the only economic sociologist of interest in contemporary France. Luc Boltanski and Laurent Thévenot’s work ([1987] 1991) on the different ways that an action can be justified or legitimized is of potential relevance to economic sociology (e.g., Stark 2000). Their ideas about the way that people legitimize their actions by referring to different “worlds” of justification are hard to summarize, and one example will have to suffice. A person who works for a firm may justify his behavior by referring either to efficiency (“the world of the market”) or to loyalty (“the domestic world”)—with very different results (Boltanski and Thévenot [1987] 1991). Boltanski has also criticized the network approach as ideological and procapitalistic (Boltanski and Chiapello 1999). In speaking of networks, it must also be mentioned that Michel Callon has added to network theory by arguing that not only individuals and organizations, but also objects, can be actors (e.g., Law and Hassard 1999; cf. Callon 1998). A machine, for example, can determine what kinds of actions a machine operator has to perform and also how she is connected to other people in the process of production. According to another important argument of Callon, economic theory often fits reality so well because it has helped to create this reality in the first place (so-called performivity).
Outside of the United States, France has become something of a center for innovative economic sociology, and to the work just mentioned one should
Introduction 19
also add the studies of Frédéric Lebaron on French economists, Emmanuel Lazeaga on work in a law firm, and Philippe Steiner on different types of economic knowledge (Lebaron 2000; Lazega 2000; Steiner 1998, 2001, 2004). There is considerable research in economic sociology in other European countries as well. Sociology of money and finance has, for example, several skillful practitioners in England and Spain (e.g., Dodd 1994; Ingham 1998, 2004; Izquierdo 2001). An innovative study of inheritance has just been published in Germany, where the sociology of finance is also very strong (Beckert, forthcoming; see also Beckert 2002; Knorr Cetina and Preda, forthcoming; cf. Zuckerman 1999). Industrial districts are being studied in Italy (e.g., Trigilia 2001). Finally, Knorr Cetina in Germany and Aspers in Sweden have independently of one another embarked on the project of applying phenomenology to economic sociology (Knorr Cetina and Brügger 2002; Aspers 2001b). A few general introductions to economic sociology have been published in Europe; there also is a newsletter exclusively devoted to economic sociology in Europe (Steiner 1999; Trigilia 2002; see Economic Sociology: European Electronic Newsletter, 1999–; see http://econsoc.mfipg.de).
A CONCLUDING NOTE
Space has constricted our review of both historical developments and contemporary highlights (the latter are amply covered in the chapters that follow). We have seen enough, however, to permit a few, equally brief, evaluative comments on the field of economic sociology today, and more particularly on the relations between economics and sociology.
What is unique about the situation, as it has developed through the 1990s, is that for the first time since the nineteenth century, mainstream economics has begun to analyze economic institutions again. This has already led to a number of interesting developments within economics proper as well as to a tentative dialogue with sociology and other social sciences, such as psychology and history. It is important that efforts be made, by sociologists as well as by economists, to deepen this dialogue since both disciplines are needed to fill the void created by nearly a century of neglect of economic institutions. As an example of cooperation between the economic and the sociological approach that has occurred since the first edition of the Handbook, we cite the important work of Avner Greif (e.g., 1994, forthcoming).
20 Smelser/Swedberg
The “imperialistic” mode, whether in its sociological form or in its economic form, seems unpromising as a way of dealing with either economic behavior or economic institutions (or for that matter, behavior and institutions in general). The complexity of determinants bearing on every kind of behavior suggests the greater scientific utility of approaches that are less monolithic. It is true that “imperialistic” works have greatly stimulated the debate over economy and society. Eventually, however, this approach becomes counterproductive scientifically, tending to excite territorial battles rather than dispassionate inquiry.
Correspondingly, it is, in our opinion, more fruitful to pursue the kind of approach to economic sociology taken by Weber and Schumpeter in their social economics, or Sozialokönomik. Such an approach is broad-based and multidisciplinary. Economic sociology, in other words, should have its own distinct profile as well as cooperate and coexist with economic theory, economic history, and economic anthropology. We also hope that departments of economics will include economic sociology among their courses and hire economic sociologists, as business schools currently do in the United States.
While the current pluralistic approach has given economic sociology richness and vitality, the bolder, creatively synthesizing efforts of the classics are notably missing. Without that complementary line of theorizing, the field of economic sociology— like any area of inquiry that specializes and subspe- cializes—tends to sprawl. Continuing efforts to sharpen the theoretical focus of economic sociology and to work toward synthetic interpretations of its findings are essential.
One promising model of relating the fields of economics and sociology might be termed “complementary articulation.” Of necessity, any line of disciplined inquiry focuses on certain operative variables and determinants, and “freezes” others into parametric assumptions. Often the ground thus frozen is that very territory which is problematical from the standpoint of some other line of social science inquiry. This dialogue about the precise role of operative variables and the conceptual status of parameters holds out the promise for communication and theoretical development in both economics and sociology. This strategy appears much more engaging than several others we have identified in this overview—imperialism, polemical hostility, mutual separation and toleration, or shapeless eclecticism.
Given the void after a century’s neglect of eco-
nomic institutions, we also expect that new questions will be raised that cut across the conventional boundaries between economics and sociology. For this reason it is essential that economists as well as sociologists be willing to entertain new and unfamiliar ideas. An opportunity, such as the current one, to pull economics and sociology closer to each other is rare and should not be neglected.
NOTES
1.While this chapter covers much of the same ground as our chapter in the first edition of the Handbook (“The Sociological Perspective on the Economy”), it has been completely rewritten and revised for the current edition. We have also introduced a new theme: the need to pay more attention to interests in economic sociology. For helpful comments we would like to thank Fred Block, Robyn Dawes, Frank Dobbin, and Viviana Zelizer.
2.The field has been called “the sociology of economic life,” as in Smelser 1976 and in Granovetter and Swedberg 1992, 2001; Fred Block’s (1990) preferred term is sociology of economies. We find little if any difference in denotation between these terms and economic sociology. For convenience we stay with the term that emerged in the classical literature. As a term for all social science analysis of the economy—economic theory plus economic history, economic sociology, and so on—we agree with Weber, Schumpeter, and Etzioni (1988) that social economics (Sozialökonomik) is an appropriate term.
3.The term economic sociology has also been used to denote a rational choice perspective as applied to social behavior in general (see Becker 1990). This usage is, to us, too broad since it encompasses practically all of sociology (minus the analysis of the economy proper).
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