Economic sociology

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Economic sociology is a special sociology . It deals with the sociological analysis of economic phenomena in a social context.

History and development of economic sociology

Max Weber (1894)
Vilfredo Pareto

The politics and the Nicomachean ethics of Aristotle are the first known systematic representations of a unified social science. Their main interest lies in the field of political sociology, to which economic sociology and economics are subordinated. For Vilfredo Pareto , Ferdinand Tönnies , Émile Durkheim , Georg Simmel and Max Weber , who are among the “sociological classics”, understanding and explaining economic facts and relationships are part of the scientific task of sociology. In particular, the question of the character, the causal causes and the social consequences of the modern capitalist economic system is at the center of many works of classical sociology. Economic action is seen as a special form of social action. This makes it possible to interpret economic activity as the result of social aggregation and construction processes.

For several reasons, the subject of economics increasingly differentiated itself in the first half of the 20th century

Formed a branch to this

One of the main reasons for the separation of economics and sociology is the development of a “pure economy” that was limited to “exact” modeling that made use of mathematical functions . The ground for such a mathematical analysis of the form had been prepared by William Stanley Jevons , Carl Menger and Léon Walras . In the Verein für Socialpolitik it came to the so-called method dispute with representatives of a historically oriented national economy. This led to a further controversy in the so-called value judgment dispute about the extent to which it should be part of the task of science to make value judgments, for example in socio-political issues. In the 1920s, theoretical economics with its mathematical approach became widely accepted within economics. In addition to this, Schumpeter then considered economic sociology as a stylized history of economic institutions to be useful.

But this separation can also be observed in sociology itself. Talcott Parsons criticized the economists' individually utilitarian model of action and classified the economic area as one of the essential subsystems of society in his action and system theory.

The critical theory refers to the consequences of the capitalist economy, but mostly works in terms of cultural sociology , without taking the economic processes themselves into account. In particular, industrial and organizational sociology endeavors to take an integrated view of sociology and economics. However, the main focus is on the internal processes and the micro-analyzes of the working relationships and conditions in production. With the emigration of German sociology from economics and social sciences to the philosophical faculties and departments, there are fewer and fewer young sociologists with knowledge of economics and law. One of the professors who deal with sociological and economic issues is Sighard Neckel , a sociologist who has been teaching at the University of Hamburg since 2016.

Richard Swedberg bundles and holds together economic sociology, which researches in many directions, and thus contributes significantly to the order and structure of the various research directions in economic sociology and their results. Swedberg sees himself as a representative of Weber's “understanding economic sociology”, which adheres to the concept of interest. With his "Handbook of Economic Sociology", Swedberg creates the basis and an internationally recognized standard work in economic sociology.

Economic sociology as a sub-discipline (or "hyphenated sociology") is an important research area in sociology as a science in modern, globalized society. Max Weber, an important founding father of sociology, dealt with the effects of the economy on society in the late 19th and early 20th centuries. One of Weber's standard works is the book Economy and Society , which, through comparative analyzes, laid the foundation for further research in the sociology of economics and domination. Weber represents the 'concept of interests', which sees actors as exchange partners who act rationally in order to maximize their own benefit. For this purpose Weber conceived the ideal types of purposeful and value-rational action (see social action ). Economic research, whose neoclassical branch regards man as Homo oeconomicus , is based on this idea .

Alongside Weber, the economist Alfred Marshall is considered to be another founder of early economic sociology. In his main works "Principles of Economy" (1920) and "Industry and Trade" (1919) Marshall deals with the investigation of industrial districts in Sheffield / England and Solingen / Germany, which he regards as an organizational form of production through the general model of capitalism. The results of his studies are that it is advantageous for industries to settle close to other industries and that specialization and cooperation are more possible due to the spatial proximity. Marshall extends the concept of the market and establishes the supply-demand curve (1890) in economic research, which shows that markets arise when prices are adjusted. However, in the course of his research, Marshall changed his view of markets. At the end of his work he also illuminates the social dimensions of markets. When looking at Marshall's oeuvre, five factors for understanding markets emerge. Space and time are important for generally formally regulated markets, formal rules, informal rules and familiarity, on the other hand, are important for specific, formally unregulated markets.

New economic sociology

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Since the 1980s, the newer economic sociology has developed with selective reference to classical texts by (only) Marx and Weber with the aim of not leaving economic action to economic theory, but (again) placing it in the broader context of social action and to understand the market as a social place or as one of many social institutions. The criticism of economic sociology can be reduced to three central points of criticism of economic theory, the

  1. affect the logic of action of economic actors such as companies or organizations (cf. Homo oeconomicus ), but
  2. the order of the market itself or
  3. the exchange between market and state actors .

The New Economic Sociology replaces the neoclassical view, which describes markets as “perfect markets” with perfect competition and information, and regards the creation of the price as a result of supply and demand. But economic sociology has always paid little attention to the problem of price formation in the market. According to Weber, prices arise through struggle and compromise. Granovetter and Yakubovich (2001) also share this idea. In their study, they investigate pricing in the American energy supply industry in the 19th century. With the study you confirm Weber's thesis that the price is the result of power constellations.

Economic research has so far been primarily interested in the price formation process, but sociological research focuses more on the market as an institution. Market should then mean a place where interests meet. The “break with modernity” that resulted from the Second World War and the subsequent years of development and upswing leave a gap of almost 50 years in intensive sociological research. At the end of the 1970s, the new economic sociology began. Due to the critical demarcation from classical and neoclassical economic economic theory, which presupposes a perfect state of the market (complete competition / information), in which rational and self-interested behavior is only slightly influenced by social relationships, structural sociology emerges with an independent sociological theory of the market. The explanation regarding the function of markets with the neoclassical market equilibrium of classical economics is viewed by Harrison C. White among others as inadequate. The focus of his research is the investigation of markets with regard to the structure of social relationships between market actors. White differentiates between two types of markets, those in which actors change roles (switch role markets) and those in which the actors have fixed roles (fixed role markets). According to White, the latter market form is dominant in the economy. The market identity is tied to one side of the market. The actor is either a buyer or a seller. Thus, the New Economic Sociology was founded in the mid-1980s, creating a new niche for itself, particularly in US sociology. Due to the critical demarcation from neoclassical economic theory, the embedding approach based on network theory is established within sociological research. The aim of this approach is to work out the positive effect of social relationships on economic activity. The new economic sociological research replaces the neoclassical logic of argumentation that has dominated since then and establishes at this point the concept of structural sociology, which, with the network approach, offers an analytical method for investigating the relationships between and within actors.

Harrison C. White advocates network theory in his studies, which assumes that social structures in which actors are embedded have significant effects on economic social action. He puts confidence-building effects in the foreground. As a structural sociologist, White develops a new theoretical approach based on the notion that social relationships between people and positions are decisive for social processes. White breaks with the economy because it has no interest in specific markets and mainly deals with foreign exchange markets as opposed to producer markets. Nevertheless, White seems to be influenced by economic work, because he refers to Marshall and uses signal theory. The key to the theory of the market is that markets are made up of social relationships; H. Markets reproduce and are established through signals between the participants. Producers observe producers and adjust their actions in a reciprocal manner.

In his article “Where do Markets come from” White restricts himself to the analysis of producer markets (fixed role markets), since he regards these as typical and these are typical in the economic industry. In his study, in which White analyzes 12 companies, he comes to the conclusion that markets are not structured and stabilized through the coordination of supply and demand, but rather through the reciprocal observation of all market participants, especially producers. His model: W (y) is based on a market plan as the central market mechanism, which is operationalized as revenue (quantity). This model, according to White, is more realistic than Marshall's (1890) demand-supply curve. White observes the behavior of companies in the market as follows: Entrepreneurs know how much production costs and maximize their income by setting a production volume. They don't know how consumers will judge the product, they only know which product they can offer at what price. Now if companies are right, it is possible to find a niche for a product in the market that consumers will then recognize by buying certain quantities at certain prices. Depending on the structure, there are 4 market types, paradoxical, tough, overcrowded, explosive. The claim of the embedding concept based on the network approach ( social embeddedness ) is to work out the positive effect of social relationships on economic activity. The social structure in which the actors are embedded has a strong influence on economic action and thus also has an impact on economic success. Mark Granovetter, a student of White, also refutes the assumption of classical economics that actors make decisions independently of one another. He calls this the "atomized decision maker". Granovetter postulates that economic activity is embedded in social, concrete and lasting relationship structures. Networks of social relationships permeate all areas of economic life.

With the groundbreaking article “Economic Action and Social Structure. The Problem of Embeddedness ”by Mark Granovetter, however, began in the 1980s, especially in the USA, and in the 1990s in Germany as well, an intense debate about analyzing the core problems of business from a sociological perspective. With its embedding concept, which is based on the network approach, Granovetter makes an important contribution to the new economic sociology. Granovetter differentiates between immediate and distant relationships. Immediate relationships are relational and distant and thus structurally embedded. Another study by Granovetter "Getting a Job: A Study of Contacts and Carreers" (1974) examines which social relationships lead to a new job. The result, internationally recognized and replicated: "The strength of the weak ties". It is not the relational embedding that helps to find a new job, but the distant, structural relationships.

Brian Uzzi continues Granovetter's concept of embedding. He finds that companies tend to divide market interactions into market relationships and close / specific relationships. Market relationships are more widespread and less important, with closer / specific relationships important for trust, information exchange and problem-solving processes. For successful business management it is not worthwhile to rely on market relationships alone, but also not solely relying on close / specific relationships is sufficient. A mixture of market relationships and close / specific relationships, i.e. an equilibrium, constitutes an integrated network. Too many market relationships constitute an under-embedded network, too many specific / close relationships constitute an over-embedded network.

Even Wayne E. Baker criticized classical economics, indicating the market theory implicit rather than explicit. In reality, markets are not homogeneous, but rather socially constructed. Baker also describes markets as networks. In his study, he examines a securities market and comes across two different market networks: a small, more dense network (xyz) and a larger, more differentiated network (ABC). Baker's primary focus is on the volatility of option prices. He comes to the conclusion that a larger network causes more volatility than a smaller one.

Criticism 1: Concept of economic activity

The rationally acting economic actor does not decide on the basis of his individual benefit calculation, but orientates himself on his social environment.

Mark Granovetter has worked out that the decisions of the economic actor are not made individually, but are integrated into specific networks. In view of overly complex interrelationships and systematically inaccessible information, the actor orients himself to the behavior of network contacts, where his own calculations are not only costly, but impossible and the risk of being “cheated” by the other party is hardly manageable. Harrison C. White describes that companies do not primarily watch their customers, who can hardly be identified, but rather their market competitors in their pricing and production strategies in order to find their own niche in which they can hope for economic survival. Other authors such as Michel Callon point to the ambiguity of the interaction situation for the purchase decision . Preferences are often not individual and formed before the purchase process, but are subject to influences such as marketing strategies or the identity of certain social groups with certain products. Paul DiMaggio and other authors also emphasize the importance of emotions for economically efficient action: Wherever a calculation would be far too expensive and tedious, or not even achievable, positive feelings help overcome concerns, for example in the dangerous interaction on the capital market that can be generated by certain social settings.

Criticism 2: The stability of markets

Markets tend to equilibrate and develop stable orders only under certain non-market conditions.

The most important attack on the equilibrium assumptions of the neoclassical era lies in the argument that expected values ​​of benefit gains for economic actors cannot be calculated. Even with the most complicated mathematical calculations, it is not possible in many economic contexts to evaluate the probabilities of different outcomes. In contrast to the calculable risk, Jens Beckert speaks of a fundamental uncertainty in which it is not even possible to rationally estimate the probabilities of certain events. The marginalist argumentation of neoclassics, however, needs the assumption of perfect information or at least the calculability of information costs , since this is the only way to explain why equilibrium strategies can develop. Without this calculability, Hobbes' problem of order returns, which already preoccupied the sociological classics for the question of capitalism. Economics itself answers this problem in institutional economics, for example in Douglass North d. H. Efficiency and stability problems are overcome with the establishment of institutions that force the actors to take the efficient path or provide the appropriate incentives. On the other hand, it can be argued that institutions mostly do not arise where they would be efficient, on the contrary, they can be very inefficient. If, on the other hand, one does not understand institutions in a functionalist way, but sees them as historically grown elements of social order, it can also be explained that actors often follow institutions even though an economic benefit calculation would suggest deviations: Norms, routines, culture or even power structures can enable the coordination of economic activity, which is not necessarily efficient, but offers stable orientations and expectations or expectations for economic interaction. The market result systematically deviates from what a hyperrational calculation would predict assuming perfect information, without this being due to a lack of rationality: Intentional rational actors (Beckert) have to deal with their uncertainty, and social structures from the most diverse range of products help them non-economic areas. This creates a market order that allows stable economic activity without ever being fully explainable on the basis of individual benefit considerations.

Criticism 3: The emergence of markets

Economic rationality and markets do not arise from the spontaneous order of benefit-calculating individuals, but are generated socially, politically and culturally.

Organizational sociologists such as Neil Fligstein, Frank Dobbin, Paul DiMaggio, but also political economists such as Peter Hall and David Soskice have worked out that the formation of markets or the formation of certain market actions is not spontaneous, but mostly takes place with strong participation by state structures. Companies and organizations in the market strive to reshape the state and social regulations of the market in their favor and the market is thus not only a place of exchange, but also of political struggle. Viviana Zelizer has shown that the emergence of life insurance markets was not possible because of the profitability of this new product, but only after redefining the meaning of dying and caring for loved ones as an important moral duty. Accordingly, markets can only arise where the state or cultural traditions allow or make economic strategies “conceivable”. In a similar way, Lynne G. Zucker and Guido Möllering describe the importance of trust between producers, consumers or financiers for a stable course of economic processes.

In recent years, important studies of the capital market, such as the work of Donald MacKenzie, Michel Callon or Frank Dobbin, have radicalized this insight by pointing out that economic actors often promote rational action in the sense of economic models through influence learn economic theory yourself first (performativity thesis). The rational equilibrium models of economic theory work through advice and training in the economic events themselves and thus generate the behavior that they are supposed to explain in the first place. Studies show that graduates of economics act much more according to the predictions of the economic models than other people. Studies also show that on the capital market, the formulas of economic theory often serve as a guide for the actors in view of the growing complexity and uncertainty.

Central argument of the new economic sociology

The common goal of all economic sociologists is to empirically research economic phenomena as well as other social phenomena and to pose the question of the stability of the social order also for markets, companies and economic areas. At the same time, the homo oeconomicus is not paradigmatically presupposed as a type of action, but economic action is a form of social action that is based on values, norms, institutions and social identities and can only assume the form axiomatically set by economic theory under very specific structural conditions.

The keyword “embedding” has established itself as a common reference point for this. The aim of economic sociology as social theory, however, is not to name the “conditions of efficiency”, but to describe the implementation of the specific rationality of capitalist modernity as a permanent restructuring of society in the direction of a pure market society, which necessarily has to fail because market action never is conceivable without non-market conditions and a full implementation would generate enormous instability and permanent crises. In this respect, the new economic sociology is closely related to Karl Polanyi .

At the same time, however, the insight of the classical sociologists is retained that the historical development of capitalist market society should not be seen as a growing assertion of anthropologically given economic rationality, but that the analysis must start from a historically open concept of action. The homo oeconomicus, precisely where it shows itself in purity, is socially enormously full of prerequisites and describes only one of many possible rationalization paths that are based on the political, social and cultural conditions surrounding them and that change permanently with them. The modern market society is to be seen as a social order that is not the result of the economic rationality of actors, but the modern economic rationality is the result of the social implementation of certain values, norms and internalized dispositions for action, which is by no means without alternatives or even only permanently determined.

Systems theoretical economic sociology

In contrast to economic sociologies, which use the term “social”, purposeful or value-rational or affective or traditional, or which also require the economy to fulfill “social” tasks, is Niklas Luhmann's system-theoretical approach . He does not criticize “the economy”, but bases his largely value-free analysis on a theory of money as a communication medium . In “Die Wirtschaft der Gesellschaft” (1988), Luhmann describes the social and economic levels separately, but takes interdependencies into account. In contrast to Max Weber , who ascribes a superordinate function to the economic system, Luhmann classifies it as synonymous with other social functional systems of sociological systems theory .

According to Luhmann, economic processes are only those to which payments can be assigned. Money is the communication medium symbolically generalized through socialization , the binary coding of the economy 'pay / not pay'. With regard to this medium, the economy is a closed functional and also a sub-system; Communication with the environment only takes place insofar as the economy and its environment are structurally linked to one another, called interpenetration by Luhmann . Although the systems follow their autopoietic , self-referential logic, they are also mutually dependent.

Economic sociology in Germany

In the German academic landscape, the field of economic sociology, which was cultivated by numerous scientists after 1945 (for example by Helmut Schelsky , Burkart Lutz , Friedrich Fürstenberg ), has found fewer and fewer representatives, since the subject "sociology" has moved from the economic and social sciences to the Philosophical faculties was incorporated. She soon lacked the specialist representatives who had previously often also been trained in economics and business administration.

After a delayed reception of the American "New Economic Sociology" (Granovetter), which was also caused by this, the subject has regained attention in Germany since the late 1990s. Important, but internationally little received, recent contributions to economic sociology have included a. Dirk Baecker , Jens Beckert , Hanno Pahl , Steffen Roth , Johannes Berger , Norman Braun , Christoph Deutschmann , Kai-Uwe Hellmann , Susanne Lütz, Andrea Maurer , Sophie Mützel, Jörg Rössel and Michael Schmid. The institutional focus of German economic sociology is the Max Planck Institute for Social Research in Cologne with its research area “ Sociology of the Market ” and the universities of Munich, Hamburg, and Erfurt.

Discourse on economic sociology

Many of the objections raised by economic sociology are now being accepted and processed by economists : behavioral economics explore the limits of individual economic rationality and institutional economics increasingly includes the importance of elements of order for the functioning of markets. Progress has also been reported in the area of network economics in the last few decades.

From the point of view of economics, the special point of view of economic sociology is based on the fact that social structures in their linguistic, political and / or normative intrinsic logic are included in the development of explanatory models. The logic of such a concept of social interest cannot be broken down into individual utility concepts, since values ​​and institutional orders cannot be mapped using the formal logic of mathematics, but can have grown historically and be logically contradictory. Economists, however, rarely leave the groundwork of that formal logic, which they understand as a normativity- based contrast to the logic of sociology. Normativity, on the other hand, is not a property but, together with the analysis of economic dogmas, is also one of the research subjects of modern economic sociology.

See also

literature

Introductions, general presentations

Works of classical economic sociology

Newer posts

  • Jens Beckert: The limits of the market. The social foundations of economic efficiency. Campus, Frankfurt am Main 1997.
  • Jens Beckert, Christoph Deutschmann, (ed.): Economic sociology. Cologne journal for sociology and social psychology , special issue 49/2009. Wiesbaden: VS-Verlag für Sozialwissenschaften, 2009. ISBN 978-3-531-15726-9 . [1]
  • Johannes Berger : The discreet charm of the market. On the social problems of the market economy . VS-Verlag, Wiesbaden 2009.
  • Neil Fligstein: The Architecture of Markets. An Economic Sociology of Twenty-First-Century Capitalist Societies. Princeton University Press, Princeton / Oxford 2001.
  • Maria Funder : Sociology of the economy . Oldenbourg Verlag, Munich 2011.
  • Andrea Maurer, Uwe Schimank (Hrsg.): The society of companies - The companies of society. VS, Wiesbaden 2008.
  • Andrea Maurer: Social Embeddedness Viewed from an Institutional Perspective . In: Polish Sociological Review 4/180, 2012, pp. 475-496.
  • Dieter Prokop: Critical Sociology of the Economy. How oligopoly corporations, power complexes and gambling banks market people's feelings and exclude their minds. Tectum Verlag, Marburg 2013.

Web links

Individual evidence

  1. ↑ Joseph A. Schumpeter, (Elizabeth B. Schumpeter, ed.): History of economic analysis. First part of the volume. Vandenhoeck Ruprecht Göttingen 1965. p. 97
  2. ↑ Joseph Schumpeter : The essence and the main content of theoretical economics. Berlin 1970, p. 32; "... to be exact means to use all the necessary and only the necessary words." (P. 76)
  3. ↑ Joseph A. Schumpeter / Elizabeth B. Schumpeter, ed .: History of economic analysis. First part of the volume. Vandenhoeck & Ruprecht Göttingen 1965, p. 51 f.
  4. ^ Talcott Parsons: Economics and Sociology: Marshall in Relation to the Thought of His Time. Quarterly Journal of Economics, 46, 1932, pp. 316-347.
  5. ^ Talcott Parsons, Neil J. Smelser: Economy and Society. New York 1956.
  6. ^ Richard Swedberg: The Critique of the 'Economy and Society' Perspective During the Paradigm Crisis: From the United States to Sweden. Acta Sociologica, 29: 91-112 (1986).
  7. ↑ Ulrich Beck's answer in the lecture Social Structure of the Federal Republic of Germany in the 2005 summer semester at the Ludwig Maximilians University in Munich to a student's question as to how the 13 years of National Socialism fit into the theory of reflexive modernization.
  8. ^ Jens Beckert: The Great Transformation of Embeddedness: Karl Polanyi and the New Economic Sociology. (PDF; 914 kB) MPIfG Discussion Paper 07/1.
  9. ↑ (a) Dirk Baecker, Walter Benjamin, Norbert Bolz, Christoph Deutschmann: Capitalism as Religion , 2002, ISBN 3-931659-27-5 ; (b) Robert H. Nelson: Economics as Religion - From Samuelson to Chicago and Beyond , 2003, ISBN 0-271-02284-1 and (c) Michael Dellwing: Globalization and Religious Rhetoric: Salvation History Aspects in the Globalization Debate , 2008, ISBN 978-3-593-38583-9