Major traditions of economic sociology

Major Traditions of Economic Sociology Author(s): Richard Swedberg Source: Annual Review of Sociology, Vol 17 (1991), pp 251-276 Published by: Annual Reviews Stable URL: http://www.jstor.org/stable/2083343 Accessed: 22/10/2014 02:26 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at http://www.jstor.org/page/info/about/policies/terms.jsp JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive We use information technology and tools to increase productivity and facilitate new forms of scholarship For more information about JSTOR, please contact support@jstor.org Annual Reviews is collaborating with JSTOR to digitize, preserve and extend access to Annual Review of Sociology http://www.jstor.org This content downloaded from 121.33.190.134 on Wed, 22 Oct 2014 02:26:30 AM All use subject to JSTOR Terms and Conditions Annu Rev Sociol 1991 17:251-76 Copyright ? 1991 by Annual Reviews Inc All rights reserved MAJOR TRADITIONS OF ECONOMIC SOCIOLOGY Richard Swedberg Departmentof Sociology (B-933), University of Stockholm, S-10691, Sweden KEYWORDS: capitalism,politicaleconomy,market,business,economics Abstract Not only sociologists but also economists have made importantcontributions to economic sociology Which particularworks by economists are relevantin this context is indicatedwith the help of Schumpeter'sHistory of Economic Analysis, a work unique in that it traces not only the history of economic theory but also that of economic sociology Three main traditionsappearin economic sociology, which are still fairly unexplored:the Germantraditionof Wirtschaftssoziologie(1890-1930), the Frenchtraditionof sociologie e'conomique (1890-1930), and the US traditionof "economy and society" (1950s) Since the 1970s a revival of interest in economic institutions has occurred especially in the United States, and a new economic sociology has come into being Both economists and sociologists helped to create this new economic sociology Economists have developed an approach known as New InstitutionalEconomics The main idea here is to explain the emergence and functioning of economic institutions with the help of microeconomics Sociologists have developed an approachto economic sociology, sometimes referredto as the "new sociology of economic life." This approachattemptsto analyze core economic problems, as opposedto the problemstraditionallyleft over by the economists for the sociologists to solve Today's sociologists have done importantwork, particularlyon the role of networksin the economy, on the structureof economic organizations, and on the role of culture in economic life Though some weaknesses hamper both new institutional economics and the new sociology of economic life, they have breathednew life and vigor into economic sociology 251 0360-0572/91/0815-0251$02.00 This content downloaded from 121.33.190.134 on Wed, 22 Oct 2014 02:26:30 AM All use subject to JSTOR Terms and Conditions 252 SWEDBERG INTRODUCTION Economic sociology is currentlygoing throughsomething of a revival New and exciting studies of such topics as marketsand firms are proliferating,and a numberof sociology departmentshave introducedeconomic sociology into their curricula.This developmentmakes it imperativeto try to establish what has already been accomplished and what remains to be done in economic sociology In this review essay we argue that there exist several major traditions of economic sociology, and that economic sociology has an uncommonly rich and diverse backgroundto draw on First of all, there are the threemajorattemptsby sociologists themselves to launcheconomic sociology: (a) the Germantraditionof Wirtschaftssoziologie with its origin in the HistoricalSchool of Economics and with Weber's work as its magnificent centerpiece; (b) the French traditionof sociologie &conomique, which has its roots in Saint-Simon's analysis of "industrialsociety" and which culminated in the work of the DurkheimianSchool in the early twentieth century; and (c) the attempt by a few sociologists in the United States in the 1950s (especially Talcott Parsons and Neil Smelser) to bring "economy and society" closer together But even though economic sociology was mainly created by sociologists, it should be noted that economists also have made importantcontributions.According to Joseph Schumpeter, who was himself very interested in sociology, it would be a serious mistake to identify economic sociology exclusively with sociology-it is equally much a part of economics As he once phrasedit: "thereis nothing surprisingin the habit of economists to invade the sociological field A large part of their work-practically the whole of what they have to say on institutionsand on the forces that shape economic behavior-inevitably overlaps the sociologist's preserves In consequence, a no-man's land or everyman's land has developed that might convenientlybe called economic sociology" (Schumpeter 1951:134; emphasis added) To give a full pictureof the majortraditions of economic sociology, we therefore include a section on the economists' contribution Before concludingthis review essay, we shall, finally, take a look at a new kind of economic sociology in the process of constituting itself today Schumpeter'sidea that economic sociology is a meeting place for economists and sociologists seems confirmedby recent developments, during which we have seen many interestingcontributionsfrom sociologists (such as Harrison White and Mark Granovetter)as well as from economists (such as Oliver Williamson and GaryBecker) Whatthe new traditionin economic sociology will look like more precisely is, however, not yet clear There exist, as we shall see, several competing perspectives, and what happensduring the next few years will probably be decisive This content downloaded from 121.33.190.134 on Wed, 22 Oct 2014 02:26:30 AM All use subject to JSTOR Terms and Conditions MAJOR TRADITIONS OF ECONOMICSOCIOLOGY 253 THE TRADITION OF ECONOMICSOCIOLOGYAMONG THE ECONOMISTS To map out the contributionby the economists to economic sociology is no doubt a very complex and demandingtask Not only is there an enormous amountof materialto go through,but there is also the addeddifficulty of first specifying what one means by "economic sociology" and then extracting exactly this material.And dependingon how one defines "economic sociology", one will obviously get different results, something which makes the whole thing even more problematic.To undertakean enterpriseof this type is also a researchproject in its own right and not suitable for a review article We shall therefore take a short-cut and follow Schumpeter's account of economic sociology in his massive History of EconomicAnalysis This work is unique for our purposesin that it explicitly set itself the task of tracingnot only the history of economic theory (defined as the analysis of "economic mechanisms")but also that of economic sociology (defined as the analysis of "economic institutions"-Schumpeter 1954c:14-21) Unfortunately,Schumpeter's work does not include a section on the institutionalists,and we shall thereforehave to complementthe History of EconomicAnalysis on this point We shall also say a few words about some other economists' contributionsto economic sociology during the twentieth century Schumpeter'sbook on the history of economic analysis is divided into four parts, all of which cover fairly long time periods The first part begins, for example, with the Greeks and ends in 1790; and Schumpeterhere discusses the contributionsto economic sociology by such people as Aristotle, Cantillon, and Adam Smith Aristotle, Schumpetersays, looked at slavery, property, and the state, while Cantillon tried to introducethe class struggle into economic analysis as well as to analyze the role that marketshave played in the emergenceof the modem city Schumpeterwas not particularlyimpressed by Adam Smith's analysis of economic institutions As a matterof fact, he clearly preferredthe works by the scholastics, especially their analysis of property Adam Smith had in Schumpeter'sopinion unduly exaggeratedthe importanceof the division of labor Book III of The Wealthof Nations ("Of the Different Progressof Opulencein DifferentNations")could have become a starting point for a "historicalsociology of economic life"; but for some reason Smith chose not to develop his ideas on this topic (Schumpeter 1954c:186-87) History of Economic Analysis is particularlyuseful in that it contains an authoritativediscussion of the contributionsto economic sociology by the majorEuropeaneconomists duringthe nineteenthand early twentiethcentury During the classical period (1790-1870), according to Schumpeter, little progress was made in economic sociology since most economists took the This content downloaded from 121.33.190.134 on Wed, 22 Oct 2014 02:26:30 AM All use subject to JSTOR Terms and Conditions 254 SWEDBERG existing economic institutions for granted This was especially true for the British economists, many of whom were strongly influenced by utilitarianism And in Schumpeter's opinion, utilitarianismhad had a very negative impact on economic sociology: "As regardseconomic sociology, utilitarianism can only be describedas a complete failure since its rationalisticconception of individual behavior and of social institutions was obviously and radically wrong" (Schumpeter 1954c:409) The classical economists, for example, just assumedthat the state must not intervenein the economy They also assumed, without any discussion whatsoever, that there should be free competition But behind all their assumptionsthere existed a specific reality, which was not openly acknowledged By "corporations"the classical economists usually meant medium-sized corporations;to them, the owner and the manager were always the same person; and so on The classical economists also ignored the impact by the nation and by social class on the economy It is true, Schumpeterargued,that we can find a class concept in, for example, Ricardo's work But Ricardo used class in a purely theoretical and nonsociological sense Indeed, one of the great intellectual mistakesof the classics was precisely thatthey had failed to develop a sociological concept of class: "they did not work out a theory of social classes, insert it into their economic sociology, and then constructeconomic categories for use in economic analysis: this procedurewould have required an awareness of the problems involved from which they were far removed Insteadthey took a shortcut: they simply turned,with little modification, the social groupings that are known to the popular mind into categories of economic analysis" (Schumpeter 1954c:552) It is true, Schumpetercontinued, that John StuartMill had tried to analyze the role of a few economic institutions,such as propertyand inheritance(see Mill 1987:218-37, 889-96) Schumpeteralso pointedto Mill's famous analysis of the role of tradition in price-setting (Mill 1987:242-48) In the last analysis, however, Mill always judged institutionsin terms of whether they favored or impeded a certainideal; and this preventedhim from developing a sophisticatedeconomic sociology The only economistduringthis periodwho was also a good sociologist was Karl Marx, accordingto Schumpeter.Marx had made two greatcontributionsto economic sociology: his concept of social class and his theory of how economic factorsinfluencethe social structureand the social attitudes(what Schumpetercalled Marx's "EconomicInterpretation of History") Schumpeter's analysis of Marx on this point may be complementedby the section on "Marxthe Sociologist" in Capitalism, Socialism and Democracy, which contains a much fuller discussion of Marx's contribution than does the History of Economic Analysis (Schumpeter 1976:9-20) Schumpeterwas very enthusiasticaboutMarx's economic sociology; he says at one point that "the so-called Economic Interpretationof History is doubt- This content downloaded from 121.33.190.134 on Wed, 22 Oct 2014 02:26:30 AM All use subject to JSTOR Terms and Conditions SOCIOLOGY 255 MAJORTRADITIONS OF ECONOMIC less one of the greatest individual achievements of sociology to this day" (Schumpeter 1976:10) Schumpeter, however, also warns that Marx had pushed economic theory and economic sociology so close togetherthat they practically merged And this was unacceptable to Schumpeter:Economic theory should deal with economic mechanismsand economic sociology with the institutionalframework;and these two tasks should be kept separate During the thirdperiod which Schumpetercovered in History of Economic Analysis, 1870-1914, several important discoveries were made Jevons, Menger, and Walras invented marginalutility analysis, and their work was continuedby such outstandingscholarsas Pareto, Wicksell, and Marshall.In terms of economic sociology, however, these years were a disappointment Sociology took great strides forward, but none of this researchwas used by the majoreconomists who simply took over the institutionalassumptionsfrom the classical economists The result was the following: "Nations remained amorphousagglomerationsof individuals Social classes were not living and fighting entities but were mere labels affixed to economic functions (or functional categories) Nor were the individualsthemselves living and fighting beings: they continued to be mere clotheslines on which to hang propositions of economic logic And, with improvingvigor of presentation,these clotheslines stood out even more visibly than they had in the works of the preceding period" (Schumpeter 1954c:885-87) It was also duringthe 1870-1914 periodthatAmericaninstitutionalismwas born Schumpeterhad originally plannedto include a section in his book on the three founders of American institutionalism:Thorstein Veblen, Wesley Clair Mitchell, and John R Commons He died, however, before he got aroundto writing this section; we shall thereforehave to leave Schumpeterat this point of our overview (see, however, Schumpeter1950) It is often noted that the three founders of American institutionalismwere quite dissimilar, both in terms of their interests and in their style of analysis This is indeed true:Mitchell was mainly concernedwith finance and business cycles, Commons with law and labor, while Veblen wrote on the most diverse topics such as the leisure class, the theory of the firm, and ImperialGermany (Veblen 1899, 1904, 1915; Commons 1919-1935, 1924; Mitchell 1941; for Veblen, see also Dorfman 1934) Still, the institutionalistsdo have certain things in common which set them apartfrom neoclassical economists and which show their affinity to economic sociology There is first of all their attempt to develop a different and much broader type of economic theory-a theory which was to include not only economics but also elements from the other social sciences, such as psychology, history, and sociology Veblen, Commons, and Mitchell were also very interestedin analyzingchange over time, a topic which was impossible to handlewith marginalutility theory in the early twentiethcentury, but which lent itself very nicely to the sociological type of This content downloaded from 121.33.190.134 on Wed, 22 Oct 2014 02:26:30 AM All use subject to JSTOR Terms and Conditions 256 SWEDBERG analysis Their interest in institutionswas to a large extent an outgrowthof their fascination with change as well as of their attemptto deal with other units of analysis than those that are commonly used in neoclassical theory The institutionalists'critiqueof mainstreameconomic theory was basically that it was too narrowand individualistic,and unable to deal with empirical reality Mitchell, for example, felt thateconomic theorywas a hindranceto an effective understanding of business cycles What was needed was a straightforwardempiricalapproach,as exemplifiedby the work of the National Bureau of Economic Research (which Mitchell helped to found in 1920) Commons said that economic theory should be able to deal with "collective economic behavior,"not only with individualeconomic behavior Economics would, for example, well to incorporatethe concept of "transaction"from legal science and to view economic action as a "process." As Commons (1924:7) phrased it in The Legal Foundations of Capitalism: "While the economists startwith a commodity or an individual's feeling towards it, the court starts with a transaction Its ultimate unit of investigation is not an individual but two or more individuals-plaintiff and defendant The transactionis two or more wills giving, taking, persuading, coercing, defrauding,commanding,obeying, competing, governing, in a world of scarcity, mechanism and rules of conduct." This concept of transaction is, no doubt, very close in spiritto economic sociology (it was also to inspire some of the analysis in Oliver Williamson's Marketsand Hierarchies, 1975) The most biting critique of marginal utility theory came, however, not from Commonsor Mitchell but from Veblen, who arguedthatthe neoclassical type of economic theory failed to incorporatethe latest developmentsin psychology as well as history As a result, the economic actor was reduced to something of a caricature.In an oft cited quote by Veblen: "The hedonistic conception of man is thatof a lightningcalculatorof pleasuresand pains, who oscillates like a homogenousglobule of desire of happinessunderthe impulse of stimuli that shift him about the area, but leave him intact" (Veblen 1898:389) The emphasis on change in the work of the American institutionalistsis particularlyclear in Veblen's argument that economics must become an evolutionaryscience In Veblen's "evolutionaryeconomics," institutionsare defined as "settled habits of thoughtcommon to the generalityof men," and this means that they are historicallyformed (Veblen as cited in Gruchy 1947, p 68) To Veblen, it was simply inconceivable that one could analyze economic behavior without taking history into account and the changes that societies display over time Commons was basically of the same opinion, as his massive History of Labor in the United States testifies (Commons 19181935) And so was Mitchell Indeed, in Business Cycles the past and the presentare organicallyconnected to one another-"prosperitybreeds crisis," to cite a famous line by Mitchell (1941:153) Mitchell's concern with change This content downloaded from 121.33.190.134 on Wed, 22 Oct 2014 02:26:30 AM All use subject to JSTOR Terms and Conditions MAJORTRADITIONS OF ECONOMIC SOCIOLOGY 257 is also clear from his work as the chairmanof the committee which in 1934 published the famous interdisciplinaryvolume Recent Social Trends (President's Research Committee on Social Trends 1934) To trace the contributionsby economists to economic sociology from, let us say, the mid-1930s and onwardsis a complicatedtask It must first of all be noted that there was practicallyno communicationbetween economists and sociologists afterthe triumphof neoclassicaltheoryover the HistoricalSchool in Europe and over institutionaleconomics in the United States This means thatpracticallyall "sociological"work, which was done by economists during the rest of the twentiethcentury,was producedwithoutany contactwhatsoever with the sociological tradition.At the risk of simplifying things too much, we can say that economists have followed two different routes in their attemptsto tackle sociological problemsduringthe years after 1930 There is first of all the small minorityof economistswho have continuedto work in the traditionof the original type of institutionalism.They basically explain the emergence and workings of economic institutions through a very broad conception of economic theory, which also includes a sociological perspective This older type of institutionalismhas been kept alive since the 1930s throughthe works of a small numberof well-known economists such as John Kenneth Galbraith,GunnarMyrdal and Raoul Prebisch (see e.g Galbraith 1952, 1955, Myrdal 1957, 1968, Prebish 1962, Samuels 1988) Then there are those economists who have developed a novel type of institutionalism known as "new institutionaleconomics." These latterexplain the emergence and workings of economic institutionsthroughthe principle of maximizing utility The new type of institutionalismhas had much more of a following in mainstreameconomics It startedto bloom in the 1970s but can in some sense trace its intellectual roots to the 1930s, especially to Ronald H Coase's classic article "The Nature of the Firm"(1937) Coase here makes an argument that lays the foundationfor transactioncost economics (includingOliver Williamson's Markets and Hierarchies), namely that the decision to use a market or, alternatively, a firm, depends on the transactioncosts involved Though Coase does not explicitly say that non-economicinstitutionscan also be explained throughthe principleof maximizing utility, it is clearly only a short step to this position-a step which, however, would not be taken until some time after World War II(see e.g Coase 1960) Though we now leave new institutionaleconomics, we returnto it later THE SOCIOLOGICALTRADITIONSIN ECONOMIC SOCIOLOGY Unfortunatelyno sociological equivalent to Schumpeter'sHistory of EconomicAnalysis exists; andthe historyof economic sociology, as developed by This content downloaded from 121.33.190.134 on Wed, 22 Oct 2014 02:26:30 AM All use subject to JSTOR Terms and Conditions 258 SWEDBERG sociologists, is still very much virgin territory (but see Swedberg 1987) Three importantattemptshave been made in mainstreamsociology to create a viable economic sociology: in Germany, France, and the United States The attempts in Germany and France paralleled each other in time but were nonetheless independent of one another They both started in the 1890s, culminatedjust before WorldWar I, and died off in the 1930s The attemptin the United States, on the other hand, began first in the 1950s and peteredout in the 1960s Each of these three traditionsin economic sociology display a different profile They are all fairly unexploredand, more importantly,they are all relativelyunexploited.This is especially truefor the richestof them all, the German tradition The Tradition of German Economic Sociology (1890-1930) What characterizesthe Wirtschaftssoziologie,which emerged aroundthe turn of the century, is first of all that it was profoundlyhistoricaland comparative in nature An attemptwas also made in this type of economic sociology to show that the study of economics belongs to the "culturalsciences," which basically means that an interpretiveapproachhad to be used In terms of the objects it studied, German economic sociology focussed primarily on two topics: economic development and the role of the state in the economy In both areas it left behind magnificent achievements, such as the works by Weber, Sombart, and Schumpeter That Germaneconomic sociology was historicaland comparativein nature primarilymeans that it drew much of its inspirationfrom historicalresearch and that it made use of comparisons-comparisons between institutions, between nations, and between civilizations The idea that economics is not a naturalscience but a "culturalscience" and thereforemust deal with culturally constructedmeanings, came from philosophy, especially Dilthey According to Weber (1975:151-52), it was an economist called FriedrichGottl who first stressedthat Verstehenmust be systematicallyintroducedinto economics To avoid any misunderstandings,it should be noted thatwhat people like Weber and others had in mind was not so much subjective opinions about some aspect of economic life (as in, say, contemporarysurvey research), but culturallyconstructedmeanings These could take the form of institutionsbut could also be embodied in the "spirit"of a whole economic system The two major topics that the German economic sociologists chose to focus oneconomic developmentand the role of the state in the economy (e.g Hoselitz 1960, Bicher 1968)-were both much related to the problems surrounding the industrializationof Germany German economic sociology owes much of its strengthto the Historical School in Economics and to Marx' masterfulanalysis in Capital (Marx 1967) The pioneeer in this whole development, however, was FriedrichList, who This content downloaded from 121.33.190.134 on Wed, 22 Oct 2014 02:26:30 AM All use subject to JSTOR Terms and Conditions MAJORTRADITIONS OF ECONOMIC SOCIOLOGY 259 introduced the notion of nation into economics in 1841 in The National Systemof Political Economy Schumpeter(1954b:100) writes:"Inthis context List's contributiontowards an economic sociology is of first importance, [especially-RS] his conception of the naturaleconomy in the setting of its historicalcauses as the embodimentof historicallyunique circumstances."A few years later, in 1843, Wilhelm Roscher(1895:101) took the importantstep of announcingthat economics must use "the historical method." "It will be seen," he wrote, "thatthis method aims at much the same result for political economy as the method of Savigny and Eichhorn has attained in jurisprudence"(Roscher 1895:103) Roscher emphasized that a comparative approachmust be used as partof the historicalmethod Schmoller(1952:375) has summarized Roscher's methodology in the following way: "There is everywhere the same aim and the same method: a number of collective entities and their characteristicsare comparedand placed side by side They are orderedin historical series The attemptis made to identify the causes of institutions,which prevailedunderparallelcircumstances.This should lead to laws of historical development and producebenchmarksfor the appraisalof economic policies and of old and modern institutions." (For a critique of Roscher's methodology-especially his idea that it was possible to establish economic laws-see Weber 1975) The greatest achievements in historical economics cannot, however, be attributedto the so-called Older HistoricalSchool (whose three key members were Roscher, Knies, and Hildebrand) These achievements were instead produced by Gustav von Schmoller and his followers, who soon became known as the "younger historical school." In the 1880s Schmoller got embroiled in a very bitter fight with Carl Menger-the so-called Methodenstreit-which he lost and which has cast a dark shadow on Schmoller's accomplishmentsever since (see e.g Bostaph 1976, JITE 1988) As opposed to what is commonly thought, however, Schmoller was not hostile to economic theory and was exclusively interested in historical details As Schumpeter (1926) has pointed out in one of his key essays, written to rehabilitatethe founder of the Younger Historical School, much of what Schmoller wrote actually contains a healthy mixture of analytical generality and historical facts Indeed, this mixture is also typical of Wirtschaftssoziologie; and, accordingto Schumpeter(1926:181), "Schmoller'swhole lifework was to a large extent devoted to the founding and development of economic sociology." Schumpeteralso stressed that no other economist had takenthe task so seriously as Schmollerconcretelyto describeand analyzethe economic process Othersmay have proclaimedthis to be their goal, but only Schmollermade a serious attemptactuallyto carrythis programout Schmoller gathered statistics and historical documents; he produced specialized monographsand he tried to synthesize all of his immense knowledge in a This content downloaded from 121.33.190.134 on Wed, 22 Oct 2014 02:26:30 AM All use subject to JSTOR Terms and Conditions 262 SWEDBERG role in Germaneconomic sociology and also in Otto Hintze's work, especially in his fine study of mercantilistpolicy in eighteenthcentury Prussia (Hintze 1987) While Hintze had primarilybeen concernedwith the role of the state in the constructionof national markets, Schumpetertried to analyze its budget and its involvement in various imperialist ventures (Schumpeter 1954a, 1971) In Capitalism, Socialism and Democracy one can also find an attempt by Schumpeter-inspired more by Marx than by Weber-to sketch the structuralcontradictionsof the capitalist system (Schumpeter 1976) Two other classics in economic sociology from these years are Karl Btcher's Industrial Evolukionand Simmel's The Philosophy of Money (Bucher 1968, Simmel 1978) With its theoryof stages and engaging institutionalistaccount, Bucher's work was a great success, not only in Germany but also in the United States Simmel's work, finally, contains an importantcontributionto the sociology of money, especially throughits pioneeringanalysis of the role of trust in the economy (see in this context also Schumpeter 1970) The Tradition of French Economic Sociology (1890-1930) There exist many similaritiesbetwen Frencheconomic sociology and German economic sociology Both emphasizedthe role of institutionsin the economy, and both stressedthat the methodof economic sociology must be comparative and historical Both also assigned a central place to the cultural-symbolic dimension:in Germaneconomic sociology, throughthe conceptof Verstehen, and in Frencheconomic sociology, throughDurkheim'snotion of "collective representations.""Economicphenomena,"to cite Marcel Mauss (1967:123), "are not only material phenomena;they are also collective representations which dictate the attitudes of the members of society towards material objects " But some importantdifferencesclearly exist between the two traditions as well While theorists like Weber, Sombart, and Schumpeterspoke about "capitalism"and its struggles, the group aroundDurkheimpreferredto talk about "industrialsociety" and its lack of cohesion And while in Germanythe sociologists tried to find a place for economic sociology alongside economic theory (or at least not in open opposition to the economists), the Durkheimians fought the economists and wanted to replace economic theory with economic sociology These differencesare to a large extentdue to the fact thatGermaneconomic sociology and French economic sociology come from different intellectual traditions While the formergrew out of the HistoricalSchool in Economics and Marxism, Frencheconomic sociology was primarilyinfluencedby SaintSimon and Comte Saint-Simon (1966) was the first to analyze "industrial society;" indeed it was he who coined or at least popularizedthis term His portrayalof contemporaryEuropeansociety as in a painful transitionfrom feudal society to industrialsociety was extremely influential It inspired, for This content downloaded from 121.33.190.134 on Wed, 22 Oct 2014 02:26:30 AM All use subject to JSTOR Terms and Conditions MAJORTRADITIONS OF ECONOMIC SOCIOLOGY 263 example, Comte's famous "law of three stages" and Durkheim'sDivision of Labor in Society with its analysis of modem society as anomic and without rules to regulatethe economy (Durkheim1964a) To deal with the problemof industrialsociety, Comte argued, a general theory of society was needed as opposed to economic theory, which dealt with only one sector of society His Cours de Philosophie Positive, a very influential work, contains a scathing attack on economic theory for being scholastic, ideological, and sterile (Comte 1869:193-204; see also Maudit 1928) This critiquewas later echoed by Durkheim, most prominentlyin Rules of Sociological Method but also in other writings (e.g Durkheim 1887, 1908, 1964b, 1970; Aimard 1962) FranqoisSimiand, whom Durkheimappointedto be in charge of the section on "sociologie economique"in Anne'eSociologique, also made many attacks on economic theory "The mathematicaleconomists," as he wrote in La Me'hodePositive en Science Economique,"do not hesitateto call what they for science, even before they have controlled if their hypothetical constructions are supportedby the facts; even if they are not supportedby the facts; and even if they are contradictedby the facts It is not too much to say that this constitutes a methodological scandal since we are dealing with a science which after all pretends to explain reality" (Simiand 1912:130) The major French economic sociologists consisted of Durkheim and his collaborators, first of all Mauss and Simiand but also Halbwachs and the Bourgin brothers(see e.g Bourgin 1924, Halbwachs 1940) Durkheimhimself made a suggestive analysis of the origin of the respect for property (tracingit to fear inspiredby religious taboos), but was otherwise not particularly interestedin economic sociology (Durkheim1983) Marcel Mauss' The Gift is a brilliantstudy, not only of gift-giving but of exchange in general and of the role that the economy plays in preindustrialsocieties (Mauss 1969) At one point Mauss startedto study the origin of money, but he never completed this work (Mauss 1974; see Simiand 1934 for an elaborationof Mauss's ideas on this topic) Like Durkheim, Mauss believed that many modem economic institutionshave their origin in religious behaviorand that economic sociology thereforeneeds to be complementedby anthropologicalresearch.Scattered throughoutMauss' work one can also find the most interestingcommentson a variety of economic topics At one point Mauss, for example, suggests that money can be seen as a way of "adjusting"the process of production and consumptionto one another;and at another,that the essence of the economy consists in "collective waiting" (Mauss 1967:132; 1974:117-18) FranqoisSimiand is little read today but exerted, interestinglyenough, an importantinfluence on the Annales School throughhis insistence that social -science should deal with the long waves of history ratherthan with single, spectacularevents Simiand (1932) made this point most forcefully in a giant statistical study of French salaries between 1790-1930, entitled Le Salaire, This content downloaded from 121.33.190.134 on Wed, 22 Oct 2014 02:26:30 AM All use subject to JSTOR Terms and Conditions 264 SWEDBERG l'EvolutionSociale et la Monnaie Simiand'sown brandof economic sociology-which he referred to as "the positive method in economics" (e.g Schumpeter 1952, Besnard 1983, Cedronia 1987)-differed radically from the work of the Annales School, primarily through its insistence that all subjective elements should be excluded from the analysis But as Marc Bloch (1934:30) has noted a propos Simiand: "to only see numbers as 'objective' would restrict economic sociology in a fatal way." Indeed, some of the very best works on the economy, which have been producedby the members of the Annales School, have drawnmore on Durkheim'snotion of "collective representations"than on Simiand's "positive method"(e.g see Duby 1974, Braudel 1985) The US Tradition of "Economyand Society" The development of economic sociology in the United States has been quite differentfrom that in Germanyand France No vigorous economic sociology emerged aroundthe turnof the century;and no majorworks on the economy were producedby the foundingfathersof Americansociology Indeed, it was not until the 1950s that a serious attempt was made to launch economic sociology as a distinct researcharea And even when this was done, a certain hesitation was involved: one ratherspoke of "economy and society" than of "economic sociology" (e.g Moore 1955, Parsons & Smelser 1956) Why economic sociology had such difficulty coming into being in the United States is not clear One reason was probably the hostility (later replaced by indifference) of the economists In the 1890s the American economists, for example, made it clear to the sociologists that they should stay away from economic topics and exclusively focus on "social"topics, such as marriage, deviance, and poverty (e.g Furner 1975) The alienation that many economists felt toward sociology was furtherintensified in the 1940s when mathematicaleconomics became popular,and the last of what was still "social"was squeezed out of economics Several interesting contributions were nevertheless made to economic sociology during the pre-1950 period Around the turn of the century there developed, for example, a lively debate between economists and sociologists about the relationshipbetween the two sciences (e.g Giddings 1888, 1895, Ward 1899) Of the early sociologists, it may also be noted, CharlesHorton Cooley was interestedin economic topics Cooley got a PhD in economics in 1894 and his thesis, The Theoryof Transportation,is an imaginativecontribution not only to human ecology but also to economic sociology (Cooley 1930b) What makes Cooley's analyses of economic topics particularlyinsightful is his insistence on the centralityof communicationin the economic process The contemporarysociologist has also much to learn from Cooley's analysis of such topics as the marketandthe process of evaluation(see Cooley 1918, 1930a, 1930b) This content downloaded from 121.33.190.134 on Wed, 22 Oct 2014 02:26:30 AM All use subject to JSTOR Terms and Conditions OF ECONOMIC SOCIOLOGY 265 MAJORTRADITIONS In mentioningCooley's analysis of transportationit should be addedthat a steady streamof work on transportationand communicationwas producedin the social ecology movement in the first half of the twentiethcentury Some of this work was carriedout by people connectedto the Chicago School, such as RobertParkand W F Ogburn(see e.g Park 1950, Ogburn1946) On the whole, however, the Chicago School did not contributevery much to economic sociology (Swedberg 1987:54-57) There were basically two reasons for this: the Chicago sociologists were not very interestedin economics, and they respected the social division of labor between economists and sociologists, which assigned "economic" problems to the economists and "social" problems to the sociologists (for an exception, see e.g Ogburn 1964:34960) The Chicago sociologists did, however, make importantcontributionsto two new subfields in sociology, which are of interestto economic sociology, namely the sociology of professions and industrial sociology Everett C Hughes practicallycreatedthe formersubfield on his own (see Hughes 1971 as well as his imaginativeanalysis of the real estate business in Hughes 1979) Industrialsociology, on the other hand, has its origins in the studies by Elton Mayo and his Harvardassociates of the HawthorneWorks of the Western Electric Companyin the late 1920s and 1930s (see Roethlisberger& Dickson 1939, Homans 1950) But even if it was Mayo's work thatlaid the foundation for much laterwork in industrialsociology on productivityand morale, it was the Chicago sociologists who added the techniqueof participantobservation as well as the recognitionthat the relationshipbetween workersand management is often conflictual (see e.g Blumer 1947, Whyte et al 1955) Anotherperson who made an interestingcontributionto economic sociology during the pre-1950 period was Talcott Parsons His doctoraldissertation from 1927 was Der Kapitalismus bei Sombart und Max Weber (Parsons 1927) At the time when Parsons wrote his thesis, he was still an institutionalist Later, however, he became convinced that institutionalism representeda dead-end and that neoclassical theory was far superior In a series of articles, which culminatedin TheStructureof Social Action, Parsons argued that while economists look at reality from one particularviewpoint (that of "alternativeuses of scarce means to the satisfaction of wants"), sociologists look at it from another viewpoint (that of values or "ultimate common ends"-Parsons 1934:526-29) Parsons called this new approach "the analytical factor view," and it representsto a certain extent an early version of the economy-and-societyperspective(see also e.g Parsons 1932, 1935) During the 1950s the debate about economy and society became much more lively in the United States; and if this were a book ratherthan a review article, it would have to include discussions of Karl Polanyi's work in economic anthropology,George Katona'swork in economic psychology, and Herbert Simon's work in behavioral economics-as well as analyses of This content downloaded from 121.33.190.134 on Wed, 22 Oct 2014 02:26:30 AM All use subject to JSTOR Terms and Conditions 266 SWEDBERG modernizationtheory and industrialsociology in the 1950s (see e.g Katona 1951, Polanyi et al 1957, Simon 1957, Schneider 1957, Dalton 1959, Hoselitz 1960) A self-conscious economic sociology made its first appearancein the United States at this time The first stirringscame in 1951 when Francis X Sutton, a studentof Parsons, and James Duesenberry,a young economist who had become interestedin sociology throughHans Gerth at Wisconsin, started to teach a course at Harvardcalled "Sociological Analysis of Economic Behavior"(see e.g Duesenberry1949, 1950) Sutton soon galvanized some other economists into action, such as Carl Kaysen, James Tobin, and Seymour E Harris As a result of their cooperative efforts, The American Business Creed would be publishedin 1956 (see Suttonet al 1956) The basic thesis of this work is thatthe "creed"or ideology of Americanbusinessmenis largely a result of the strainin their social role (for a critique, see e.g Geertz 1973) Parsons' first contributionto this new field came in 1953 when he delivered the Marshall Lectures in Cambridge(see Parsons, forthcoming) The thesis of the book that eventuallyresultedfrom these lectures-Economy and Society, co-writtenwith the young Neil Smelser-differed considerably from Parsons' earlier "analyticalfactor view" (Parsons & Smelser 1956) Economic theory, Parsons & Smelser now argued, constituteda special case of "the general theory of the social system," and the economy itself was seen as a "subsystem"of its own (for a critiqueof Parsons' economic sociology, see Pearson 1957 and Gerschenkron1962) Economy and Society was no immediatesuccess, and Parsonsseems more or less to have lost interestin economic sociology afterits publication(for his later work on money as a "generalizedmedium,"see e.g Ganssmann1988) Neil Smelser, however, continuedfor some years to work in the new field In his thesis, Social Change in the IndustrialRevolution, Smelser drew attention to the importance of change in the sociological analysis of the economy (Smelser 1959) In 1963 he also published the first textbook in economic sociology and in 1965 the first reader (see Smelser 1963, 1965) After that Smelser turned his attention to other topics NEW ECONOMICSOCIOLOGY During the 1960s the separationbetween economics and sociology in the United States reached its peak: sociologists were very little interested in economic topics and economists stayed away from social topics This artificial division of laborbegan to breakdown in the 1970s; and since thattime, a tentative dialogue between economists and sociologists has started up (see e.g Swedberg 1990) Exactly what the result of this dialogue will be is not clear Some economists feel, for example, that certainpartsof economics can be improved with the help of sociology, while others think that many This content downloaded from 121.33.190.134 on Wed, 22 Oct 2014 02:26:30 AM All use subject to JSTOR Terms and Conditions SOCIOLOGY 267 OF ECONOMIC MAJORTRADITIONS problemsin sociology can be solved by using an economic approach(see e.g Akerlof 1984, Olson 1965, 1982, Becker 1976) Also the sociologists have their differences Such scholarsas JamesColemanand Michael Hechteragree with economists such as GaryBecker and MancurOlson that a rationalchoice perspective is needed in sociology (e.g Hechter 1987, Coleman 1990) This is a propositionthat, for example, Amitai Etzioni has criticizedvery severely (Etzioni 1988) Some sociologists-perhaps a majority-however, are stimulated by the prospect of a mixture of both economic and sociological perspectives (see e.g Winship & Rosen 1988, Fligstein & Dauber 1989) This is, for example, true for the situationin today's labor marketsociology and stratificationtheory (see e.g Berg 1981, Farkas & England 1988) Of all that is happeningin the borderareabetween economics and sociology, two approachesare of particularinterestto economic sociology and can be said together to constitutea new economic sociology These two approaches are sometimes referredto as "new institutionaleconomics"and "new sociology of economic life"; and a few words shall be said abouteach of them New institutionaleconomics has basically been developed by economists, although a few sociologists have also expressed their interest The key idea is that microeconomicscan be used to explain social behaviorand social institutions In principle, this approachis considerablybroaderthan economic sociology, but in practice it often deals with this field as defined by Schumpeter (economic sociology being the analysis of "institutionsthat are relevant to economic behavior, such as government,property,inheritance,contract, and so on"-Schumpeter 1954c:21) It must, however, immediatelybe addedthat new institutionaleconomics has little if anythingin common with American institutionalismas developed by Veblen, Commons, and Mitchell As an intellectualmovement, new institutionaleconomics has its roots in the 1950s, althoughit did not really come into its own until the 1970s Between 1950 and 1970 it was tried out on various legal, political and social institutions.In the 1970s, however, some economists also began to propose provocative new theories of organizational behavior with the help of such concepts as asymmetricinformation,transactioncosts, and agent-principal(see e.g Williamson 1975, Barney & Ouchi 1986; for a game theoretical approach, see Schotter 1981) Each of these theories explains the emergence and/or structure of organizationssomewhat differently In agency theory the emphasis is on how the principalcan controlanddirectthe agent, while in transactioncost economics, it is on how to minimize transactioncosts Usually, however, all of these approaches agree that efficiency is central to the choice of one organizationalform ratherthan another This sharply distinguishes new institutionaleconomics from the new sociology of economic life, which claims thatthe notion of efficiency cannotbe used to explainthe existing institutions, in the economy or elsewhere (e.g Granovetter1985, Oberschall & Leifer This content downloaded from 121.33.190.134 on Wed, 22 Oct 2014 02:26:30 AM All use subject to JSTOR Terms and Conditions 268 SWEDBERG 1986, Bradach & Eccles 1989, for some self-doubt among the economists, see e.g Furubotn& Richter 1989) Sociologists were considerablyslower thaneconomists in respondingto the challenge of a new division of laborbetween economics and sociology While the term "new institutional economics" became popular in 1975 (through Oliver E Williamson's Marketsand Hierarchies), it was not until 1985 that the term "new sociology of economic life" was first used (by MarkGranovetter at a luncheon roundtablediscussion at the ASA) In 1985 a key article in the new economic sociology was also published:Mark Granovetter's"Economic Action and Social Structure:The Problemof Embeddedness."True, it was HarrisonWhite who had given the initial impulse to revive economic sociology througha series of pioneeringstudies of marketsin the late 1970s (see White 1981; see also Barber 1977, Stinchcombe 1983) Still, Granovetter's article was immediately recognized as a trendsetterby economists as well as sociologists For one thing, the article contained a sophisticatedand elegant argumentfor the use of networks in the analysis of the economy "Networksof social relations,"we read, "penetrateirregularlyand in different degrees different sectors of economic life" (Granovetter 1985:491) The networksapproachcan help us to understandthe role of trustin the economy and how economic institutions work in reality, as opposed to in economic theory Secondly, Granovetter'sarticle contained a very knowledgable and sharp critique of new institutionaleconomics Granovetterbasically argued that the economists' idea that the existing economic institutionshave come into being because they representthe most efficient solution, is simplistic and wrong: "the main thrustof the "new institutionaleconomists"is to deflect the analysis of institutionsfrom sociological, historical, and legal argumentation and show instead that they arise as the efficient solution to economic problems This mission and the pervasivefunctionalismit implies discouragethe detailed analysis of social structurethat I argue is the key to understanding how existing institutions arrived at their present state" (Granovetter 1985:505) And, third, Granovetter's article strengthenedconfidence that sociologists could solve a number of problems that by tradition only the economists had done work on As he phrasedit in an interviewfrom aboutthe same time: "I think that economic sociologists can go in and wonderful things today I think that the place to look is the place that sociologists have typically avoided looking, namely at all those kinds of argumentsand all those kind of subject mattersthat have been looked at almost exclusively up till now by economists" (Granovetter1987:19) Since the early 1980s American sociologists have looked at a number of economic institutions,such as insurance,finance, transferpricing, the organization of salespeople, and so on (see e.g Abolafia 1984, Eccles 1985, Heimer 1985, Baker 1987, Biggart 1989) Interestingwork has also been This content downloaded from 121.33.190.134 on Wed, 22 Oct 2014 02:26:30 AM All use subject to JSTOR Terms and Conditions SOCIOLOGY 269 OF ECONOMIC MAJORTRADITIONS done on economics as a discourse and on the economic situationin socialist countries (Nee & Stark 1989, Block 1990) If one were to summarize the major intellectual innovations in economic sociology during the 1980s one could say that they have been centeredaroundthree majorthemes or topics: (a) the role of networks in the economy (especially in markets), (b) the structureof different economic organizations, and (c) the role of culture in economic life Interesting contributionshave no doubt also been made to areasthatpartiallyoverlapwith economic sociology but which have theirown distinct traditions.This is particularlytrue for labor marketsociology, which today is in a very creative stage, and stratificationtheory, which is increasingly turning toward economic insight and approaches (see e.g the literature cited in Kalleberg & S0rensen 1979, Gagliani 1987, Farkas & England 1988, Althauser 1989) The networkapproachbecame popularat Harvardin the 1970s throughthe teaching of HarrisonWhite, who was also very interestedin economic topics (see e.g White 1970) White's students, however, have been very independent and used the network approach in their own distinct ways Granovetter,for example, has analyzedthe role that networksof information play when people get jobs (Granovetter1974); Michael Schwartzhas looked at interlocksbetween banks and corporations(e.g Mintz & Schwartz 1985); and Robert Eccles has studied buyer-seller interactionsbetween and within firms (e.g Eccles 1981; see also Eccles & Crane 1988) Ronald Burt (who is a student of James Coleman, but influenced by HarrisonWhite as well) has producedseveral studies of marketsand is currentlyinvolved in developing a general theory of competition(Burt 1983) The latterwork is centeredaround the idea that certain individuals("tertiusgaudens")exploit "structuralholes" in networks (Burt, forthcoming) Other importantnetworks studies include Donald Palmer's work on "brokenties" and Wayne Baker's analysis of buyers and sellers in a national securities market (Palmer 1983, Baker 1984) Some of the sociologists who have studied networks have also been interestedin the structureof economic organizations.This is, for example, true for Robert Eccles (1981) who has developed the notion of "quasi-firm"(a network type of relation with a high degree of stability) and Walter Powell (1985) who has drawn attention to a similar phenomenon, called "hybrid organizationalarrangements."But other sources of inspirationexist besides network analysis; quite a few studies in economic sociology have, for example, emerged as a reaction to Williamson's transactioncost-theory and Chandler's work on the multidivisional firm (e.g Fligstein 1985, 1990, Stinchcombe & Heimer 1985, Bradach & Eccles 1989) There also exist excellent works in industrialsociology and organizationtheory to draw on in this context (see especially Hirsch 1972, Stinchcombe 1959, 1974) A few sociologists have also raised the question of the role of culture in This content downloaded from 121.33.190.134 on Wed, 22 Oct 2014 02:26:30 AM All use subject to JSTOR Terms and Conditions 270 SWEDBERG economic life This has been done most forcefully by Viviana Zelizer in her studies of what she calls "the historical interplaybetween humanvalues and the market" (Zelizer 1983:ix; for a more programmaticstatement on economics and culture, see Zelizer 1988) As of today Zelizer has studied three topics from this perspective:life insurance,the social value of children, and special types of money (Zelizer 1983, 1985, 1989) Throughthis focus on human values and the market, coupled with an interestinguse of qualitative and historicalmaterial,Zelizer has addeda new and exciting dimensionto the economic sociology of the 1980s How far one can go with a cultural perspective in economic sociology is, however, not clear; and argumentsfor as well as against relying mainly on a cultural explanation can already be found (see e.g Hamilton & Biggart 1988, DiMaggio 1990) That economic sociologists need to take cultureinto account, and that economic anthropology has much to teach on this accountis, however, obvious (for an overview of recent economic anthropology, see Orlove 1986) Most observers would probablyagree that the new sociology of economic life has breathedvigor and life into a topic that was leading a ratherbleak existence in the 1960s andthe 1970s A numberof importantstudies-on new topics and with the help of new methods-were producedin the 1980s Yet, some weaknesses also appearin this new form of economic sociology For one thing, sociologists are still somewhat loath to take on traditionaleconomic topics, and as a result we today lack a sophisticated sociology of money and of markets.Second, far too little comparativework has been done (see, however, Hamilton & Biggart 1988, Stinchcombe 1983) Third, it is unclear how to assimilate the insights from such independent intellectual traditions as world systems theory, institutionaleconomics, feminism, and neo-marxism(see e.g the literaturecited in Wallerstein1974-1989, Chirot& Hall 1982, Swedberg 1987:65-104, Hodgson 1989) And last but not least, little attempthas been made to mine the riches of economic history, from the superb German works from the nineteenth century to the studies by the Annales School of later date Some of these weaknesses are no doubt due to the limitations inherentin the conventionalview that economic sociologists shall only deal with peripheralaspects of the economy and stay in their own corner of academia Hopefully, the time will soon come when sociologists directly challenge this doctrine, attackeconomic topics straighton, and open up a dialogue not only with economists but also with economic historians Finally, it should be emphasizedthat in the last part of this article, which has been devoted to the most recentdevelopmentsin economic sociology, we have focussed exclusively on the situation in the United States There are some good reasons for this, especially that the two major types of new economic sociology have developed most forcefully here Still, it is also true that much interesting work has been produced in other parts of the world This content downloaded from 121.33.190.134 on Wed, 22 Oct 2014 02:26:30 AM All use subject to JSTOR Terms and Conditions MAJOR TRADITIONSOF ECONOMICSOCIOLOGY 271 Europeaneconomists who are interestedin economic institutions have, for example, for a long time found a platformin the Journal of Institutionaland TheoreticalEconomics (JITE), which is publishedin West Germany And if we turn to sociologists, it is clear that many interestingEuropeanand Third World sociologists have been active in InternationalSociological Association's Economy and Society-section (for a sample of this committee's work, see e.g Makler, Martinelliand Smelser 1982, Martinelli& Smelser 1990) It is also true that some of the most creative sociologists in continentalEurope have been interested in the intersectionof economy and society during the 1980s (see e.g Boltanski 1982, Boltanski& Thevenot 1987, Luhmann1982, Bourdieu 1984, 1990) Finally, there is currentlya very strong interest in economic sociology in EasternEuropeandthe Soviet Union (see e.g Lengyel forthcoming) All in all, we can thereforeconclude this overview by saying that economic sociology has definitely come alive again and that its future looks bright Literature Cited Abolafia, M 1984 Structuredanarchy:formal organizationin the commoditiesfutures market In The Social Dynamics of Financial Markets, ed P A Adler and P Adler, pp 129-50 Greenwich, Conn: JAI Aimard, G 1962 Durkheim et la Science Economique Paris: Presses Univ France Akerlof, G 1984 An Economic Theorist's Book of Tales Cambridge: Cambridge Univ Press Althauser,R P 1989 Internallabor 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Am J Sociol 87:514-47 Whyte, W F et al 1955 Money and Motivation: On Analyses of Incentives in Industry New York: Harper& Row Williamson, E 1975 Markets and Hierarchies: Analysis and Antitrust Implications New York: Free Press Winship, C., Rosen, S., eds 1988 Organizations and institutions:sociological and economic approachesto the analysis of social structure.Suppl Am J Sociol 94:S1-S268 Zelizer, V A 1983 Morals and Markets:The Developmentof Life Insurancein the United States New Brunswick:Transaction Zelizer, V A 1985 Pricing the Priceless Child: The Changing Social Value of Children New York: Basic Zelizer, V A 1988 Beyond the polemics on the market: establishing a theoretical and empirical agenda Soc For 3:614-34 Zelizer, V A 1989 The social meaning of money: 'special monies' Am J Sociol 95:342-77 Zukin, S., P DiMaggio, eds 1986 Special double issue: structuresof capital Theory& Society 15(1-2):1-313 ADDED IN PROOF Barber,B 1977 Absolutizationof the market: some notes on how we got from there to here In Marketsand Morals, ed G Dworkin, G Bermant, P Brown Washington, DC: Hemisphere Hirsch, P 1972 Processing fads and fashion: an organization-setanalysis of cultural industry systems Am J Sociol 77:639-59 This content downloaded from 121.33.190.134 on Wed, 22 Oct 2014 02:26:30 AM All use subject to JSTOR Terms and Conditions [...]... importantcontributionto the sociology of money, especially throughits pioneeringanalysis of the role of trust in the economy (see in this context also Schumpeter 1970) The Tradition of French Economic Sociology (1890-1930) There exist many similaritiesbetwen Frencheconomic sociology and German economic sociology Both emphasizedthe role of institutionsin the economy, and both stressedthat the methodof economic sociology. .. today's labor marketsociology and stratificationtheory (see e.g Berg 1981, Farkas & England 1988) Of all that is happeningin the borderareabetween economics and sociology, two approachesare of particularinterestto economic sociology and can be said together to constitutea new economic sociology These two approaches are sometimes referredto as "new institutionaleconomics"and "new sociology of economic life";... Durkheimians fought the economists and wanted to replace economic theory with economic sociology These differencesare to a large extentdue to the fact thatGermaneconomic sociology and French economic sociology come from different intellectual traditions While the formergrew out of the HistoricalSchool in Economics and Marxism, Frencheconomic sociology was primarilyinfluencedby SaintSimon and Comte... greatpity because huge partsof Weber's work containextremelyvaluable contributionsto economic sociology Throughouthis career Weber, for example, made studies of such topics as medieval trading corporations, the stock exchange, the economic history of Antiquity, the Historical School in Economics, German agriculture,the productivityof industrialworkers, and the economic ethic of the majorreligions (see especially... were producedby the foundingfathersof Americansociology Indeed, it was not until the 1950s that a serious attempt was made to launch economic sociology as a distinct researcharea And even when this was done, a certain hesitation was involved: one ratherspoke of "economy and society" than of "economic sociology" (e.g Moore 1955, Parsons & Smelser 1956) Why economic sociology had such difficulty coming... division of labor between economists and sociologists, which assigned "economic" problems to the economists and "social" problems to the sociologists (for an exception, see e.g Ogburn 1964:34960) The Chicago sociologists did, however, make importantcontributionsto two new subfields in sociology, which are of interestto economic sociology, namely the sociology of professions and industrial sociology. .. that certainpartsof economics can be improved with the help of sociology, while others think that many This content downloaded from 121.33.190.134 on Wed, 22 Oct 2014 02:26:30 AM All use subject to JSTOR Terms and Conditions SOCIOLOGY 267 OF ECONOMIC MAJORTRADITIONS problemsin sociology can be solved by using an economic approach(see e.g Akerlof 1984, Olson 1965, 1982, Becker 1976) Also the sociologists... members of the Annales School, have drawnmore on Durkheim'snotion of "collective representations"than on Simiand's "positive method"(e.g see Duby 1974, Braudel 1985) The US Tradition of "Economyand Society" The development of economic sociology in the United States has been quite differentfrom that in Germanyand France No vigorous economic sociology emerged aroundthe turnof the century;and no majorworks... the challenge of a new division of laborbetween economics and sociology While the term "new institutional economics" became popular in 1975 (through Oliver E Williamson's Marketsand Hierarchies), it was not until 1985 that the term "new sociology of economic life" was first used (by MarkGranovetter at a luncheon roundtablediscussion at the ASA) In 1985 a key article in the new economic sociology was... the major intellectual innovations in economic sociology during the 1980s one could say that they have been centeredaroundthree majorthemes or topics: (a) the role of networks in the economy (especially in markets), (b) the structureof different economic organizations, and (c) the role of culture in economic life Interesting contributionshave no doubt also been made to areasthatpartiallyoverlapwith economic ... Terms and Conditions MAJOR TRADITIONS OF ECONOMICSOCIOLOGY 253 THE TRADITION OF ECONOMICSOCIOLOGYAMONG THE ECONOMISTS To map out the contributionby the economists to economic sociology is no doubt... only the history of economic theory but also that of economic sociology Three main traditionsappearin economic sociology, which are still fairly unexplored:the Germantraditionof Wirtschaftssoziologie(1890-1930),... and functioning of economic institutions with the help of microeconomics Sociologists have developed an approachto economic sociology, sometimes referredto as the "new sociology of economic life."