Crossing the Boundary of Economics and Sociology: The Case of Vilfredo Pareto

The aim of the paper is to present the economic sociology of Vilfredo Pareto. We argue that Pareto represents a mode of thinking that has not been used in economic sociology and barely considered in the other branches of sociology. We reject the habitual bifurcation of Pareto into "the economist" and "the sociologist." Pareto stresses the non-logical parts of human life, and he provides empirical examples of this in his writing. He was occupied with the dynamics in society as a result mainly of non-logical actions. We show how one may speak of a distinctly Paretian economic sociology, which primarily has its origin in his theoretical discussions. We also show that Pareto conducted empirical studies drawing from his version of economic sociology. Included is finally a presentation, as well as a discussion of Pareto's idea of rentiers and speculators, which is followed up by a more general discussion of economic types in the market.     

Max Weber

A bstract .   This paper argues that Weber's outline and research program is only of limited relevance for present-day economic sociology and heterodox economics because Weber had a rather narrow and static understanding of rationality and the economy. Uncertainty, both as a basic fact of economic life and in the interpretation of what rational action means in specific contexts, is missing in his approach. After a short discussion of the secondary literature on Weber's methodology, the paper focuses on the most important writings of Weber on methods and economics (e.g., his outline and some parts of Economy and Society ). The result of our investigation is that Weber shared a rather narrow, neoclassical understanding of the Austrian variant of economics. His important construction of goal-oriented behavior as the major methodological advice to analyze human action presupposes the idealized assumptions of perfect knowledge. His understanding of the market exchange process, price setting, and the functioning of full competition are rather conventional and elementary. Weber's genius did not materialize in the field of economics, but in his sociology of religion and law and in his sociology of domination.     

Economics, Sociology, and the "Professional Complex"

A bstract .   This article discusses the relationship between economics and sociology in the context of Parsons's analytical theory of action and systems and his criticisms of orthodox and institutional economics. The article also addresses his view of the importance of the professions to an understanding of the nature of advanced capitalism. The professions are discussed as both an illustration of his theoretical argument and a substantive problem that stimulated the development of his theory. The "professional complex" is an emergent phenomenon in capitalism that modifies its operation and points to the complexity of systems of social action that require to be analyzed without being reduced to one of their elements. This reductionism is evident in orthodox economic theory and also in the more sociologically-oriented approach of institutional economics. Parsons argues that each is a form of what, following Whitehead, he calls the "fallacy of misplaced concreteness." Although Parsons offers a significant critique of dominant approaches in economics, major flaws within his own theory create the appearance that he has simply carried over the deficiencies of orthodox theory into his own general statement of theory. These flaws contribute to major misunderstandings of Parsons's project and, therefore, indicate continuing problems in the relation between economics and sociology.     

A Socio-Dynamic Understanding of Markets

A bstract    Economic sociology furthers a healthy alternative to price-theory–oriented economics as it sets out to remedy the invisibility of the market within the latter. There is, however, no doubt that such a market-oriented sociology is still in its infancy, given among other issues its inability to shoulder market change. The void thus recognized opens up the potential for a market idea with both social and dynamic properties. There is good reason to believe that such an endeavor would benefit from the constructive blending of economic sociology and Austrian economics. This paper argues that such a "socio-Austrian" connection is in the position to enrich the socioeconomic discourse in general and its market conception in particular.     

Parsonian Economic Sociology

A bstract .   This article focuses on Parsonian economic sociology and its actual or potential bridges and contributions to contemporary economics. These bridges are methodological or epistemological and theoretical or substantive ones. A relevant instance of the methodological bridges is socioeconomic holism, epitomized in the systems approach to economy and society. An important case of the theoretical bridges is sociological institutionalism. The holistic systems approach is a pertinent methodological bridge in that it treats the economy as an integral element of society as a larger system, and consequently treats economics as part of the complex of social sciences. Sociological institutionalism is an important theoretical bridge to (especially institutional) economics by virtue of its emphasis on social institutions and their economic significance. Some other methodological and theoretical bridges of Parsonian economic sociology to contemporary economics are also identified and discussed.     

Uncertainty, Conventional Behavior, and Economic Sociology

A bstract    This paper addresses the problem of the conceptualization of social structure and its relationship to human agency in economic sociology. The background is provided by John Maynard Keynes's writings on uncertainty and conventional behavior on the stock market, and the analysis consists of a comparison of the social ontologies of the French Intersubjectivist School and the Economics as Social Theory Project in the light of these observations. The theoretical argument is illustrated with concrete examples from a prominent study of the stock market boom of the 1990s.     

Max Weber and Economic Sociology

A bstract .   Peukert (2004 ) argues that Weber's work is only of limited relevance to present-day economic sociology because it incorporates "a rather narrow and static understanding of rationality and the economy." This article disputes that claim. It is argued that Weber differentiates between economic and sociological perspectives on the economy through incorporating uncertainty into the latter. Hence Weber's economic sociology develops the distinction between "before" and "after" perspectives on action, incorporates expectations, and defines capital with reference to time and uncertainty. Furthermore, Weber's analysis of formal rationality presupposes uncertainty. Weber's economic sociology thus assumes a dynamic economy, where uncertainty is prevalent, and formal rationality can reduce uncertainty. Peukert's analysis thus (a) fails to consider Weber's differentiation between economic and sociological investigations, and (b) does not engage with Weber's knowledge of Austrian economics.     

Wicksell's Unaminity Rule

A bstract    This paper identifies the extent to which James Buchanan's interpretation of Knut Wicksell's unanimity rule, as spelled out in the second essay in Finanztheoretische Untersuchungen (1896), has come to dominate the public economics literature despite competing with the interpretation offered by Richard Musgrave. A brief summary of the differing interpretations is offered. Citation analysis is used to examine the frequency with which Wicksell is cited and by whom. The sociology of the economics profession and avenues for the dissemination of ideas are examined to understand the dominance of Buchanan's particular interpretation and application of the unanimity rule.     

Conceptualizing Professionalism

A bstract The main argument presented here is that economics provides a necessary but not sufficient analysis of professionalism. A sufficient analysis can only be generated by recognizing the sociological significance of professionals, and in particular the institutionalization of a professional ethic. In this way we suggest that economics needs sociology to provide an effective conceptualization of professionalism as a form of organization and as a mode of behavior. Equally, however, sociology needs economics, because while the sociological context provides an explanation of the way power is institutionalized, an economic focus is necessary to maintain a role for individual agency. These arguments are illustrated with a discussion of the historical and institutional complexities of professional organization; we look particularly at nursing and certain routinized areas of legal work and accountancy.     

Interpenetration Versus Embeddedness

A bstract .   The economy and economics are important fields in Talcott Parsons's work. Parsons's contributions on this subject were, however, mostly critically received in the new economic sociology. In this article, main points of criticism of Parsons's economic sociology will be discussed and the question asked whether the importance of Parsons's works in economic sociology was adequately treated. It will be demonstrated that the critical assessments was based for the most part on theoretical conceptions Parsons developed during his structural-functionalist period. Hence the assessments neglected to discuss the theory of expressive-symbolic communication of affect that Parsons developed in his later systems-functionalist period. However, precisely these later theoretical developments correlate directly with the concept of social embeddedness as a key concept in the new economic sociology. A stronger linking with this development in Parsons's theory could bring economic sociology closer to finding a foundation in action theory, which has been missing up to the present.     

Constructing a World Fit for Marxism: Utopia and Utopistics of Professor Wallerstein

A bstract .   World system theory, founded and developed by Immanuel Wallerstein, continues Marx's original vision of modern economy as a zero-sum game based on exploitation. Ignoring convincing criticism of Marx's economics, Wallerstein broadens spatial confines of the applicability of Marxist economics to include the whole world. Imaginatively combining Marxist and postmodernist frames of reference, Wallerstein constructs a future economic and social system reminiscent of a classical Marxist utopia. This endeavor, which Wallerstein calls "utopistics," provides a logical conclusion to world system theory, as it finalizes a practice of defending Marxian analysis of the past and the present in terms of an imagined future.     

Schumpeter's Challenge to Economists: History,Theory, and Statistics as Key Competencies and Sociology as a Vision for the Future

Schumpeter wrote that a “scientific” economist is competent in three “techniques”: economic theory, economic history, and statistics. In addition, he mentions economic sociology. The current interpretation is that theory, history, and statistics refer to aspects of research that can emerge in any field of science. Their content and relations can be clarified with Mach's writings. Economic sociology is not a technique within economics, but a part of general sociology. The rationale of economic and general sociology becomes clear by considering Schumpeter's interpretations of Marx's ideas. Schumpeter's ultimate ambition may have been a grand theory following Marx's vision.     

Homo Economicus Meets G. H. Mead: A Contribution to the Critique of Economic Theory

A bstract .   The relation between economic behavior and morality remains a live issue within economics and cognate disciplines. The standard view among economists themselves has been that while moral positions (understood broadly) may motivate our behavior, they do not capacitate or enable it. On this view the figure of Homo economicus , representing the how as against the why of our actions, must be understood as resolutely amoral. In this article, we attempt to recover the logic of this position, as well as those of critics who would modify the standard view in some way. Although also critical of the conventional economics-and-ethics divide, we argue that Homo economicus would benefit from a more fundamental rethinking, one that takes account of the theory of the self and its acts, as developed by the social psychologist G. H. Mead. On a Meadian view the economic actor would neither have to grow additional capacities in order to coordinate with his or her fellows, as the evolutionary games theorist's agent has to do, nor depart or deviate from purposeful behavior, as does Homo sociologicus . On a Meadian view, economic capacity has to be more richly endowed than standard Homo economicus in order to do what it is supposed to do, but it is recognizably still a single, purposeful capacity.     

The Changing Relationship Between Economic Sociology and Institutional Economics

A bstract In his early work. Talcott Parsons severely criticized Old Institutional Economists like Thorstein Veblen and Clarence Ayres. Parsons'main objection was that institutional economics had a misconceived view on the scope of economics: institutions, being the embodiment of values, were the proper subject of sociology rather than economics. By arguing for a clear-cut division of labor between economics and sociology. Parsons legitimated the divide between the two disciplines that came into being in the years to follow. Recently however, the relationship between economic-sociology and institutional economics has changed dramatically. New Economic Sociology (advocated by scholars like Mark Granovetter and Richard Swedberig) rejects the division of labor proposed by Parsons. By-providing substitutes rather than just complements to economics, it tries to counter economic imperialism. This creates significant similarities between New Economic Sociology, Old Institutional Economics and the recent return of institutionalism in economic theory. However, the quest for a division of labor between economics and sociology remains unfinished.     

The Sociology of Knowledge as a Tool for Research Into the History of Economic Thought

A bstract . Hill and Rouse's formulation of Mannheim's framework for the sociology of knowledge as a means of examining the history of economic thought is rejected although it is held that they render an important service to economics by arguing the need for employment of the sociology of knowledge as a research tool. They have not appropriated Mannheim's categories authentically and they apply them in an overly simplified and undialectical manner. Even Mannheim's authentic formulation of the sociology of knowledge suffered limitations which more recent work enables us to overcome. What is believed to be a superior sociology of knowledge framework for investigating the evolution of economic thought is constructed by joining the Berger-Luckmann model of legitimation with Habermas's philosophical anthropology. Increasingly economists are recognizing that their discipline is in a state of crisis. The crucial issue is how we can better understand the sociological nature of economic thought—its social functioning—to enable us to formulate our own economic theory so as to maximize human welfare.     

Max Weber as an Economist and as a Sociologist

A bstract In this article I first give a picture of Weber as an economist, mainly by focussing on a text which he distributed to his students when he taught economics in the 1890s. From this text it is, for example, clear that Weber was positive to the use of marginal utility theory in theoretical economics, but also felt that this approach was insufficient, by itself, to analyze empirical phenomena. I then outline Weber's work in economic sociology, relying primarily on Economy and Society and its central Chapter 2 ("Sociological Categories of Economic Action"). The differences between the approaches of economic theory and economic sociology, as seen by Weber, are summarized, and an account is given of some of Weber's most suggestive concepts in economic sociology. In the concluding section the question is raised as to when the analyst, according to Weber, should use economic sociology rather than economic theory, and vice versa. Weber's ideas about a broad economic science–what he termed Sozialökonomik or social economics–are also presented.     

Economic Sociology in Retrospect and Prospect

A bstract Theory and research in the field of economic sociology have seen steady advancements in recent years. Economic sociology has become a legitimate branch of sociology as well as of economics. Nonetheless, the treatment of economic sociology in both modern economics and sociology leaves much to be desired. Various formal-terminological confusions and theoretical-substantive misconceptions are still present in the field. The present article advances some proposals for remedying this situation. In particular, it provides clarifications of and amendments to the current treatment of issues, such as the relationship between economics and sociology, the character of economic sociology, its links to economic theory, socio-economics, and rational choice theory, as well as the question of the old versus the new economic sociology. Special emphasis is placed on the relationships between economic sociology and rational choice theory, given the latter's claims to universality. It is hoped that the article will thereby redress certain inconsistencies found in some previous treatments of economic sociology as well as stimulate further refinements.     

How to be a Value-Free Advocate of Laissez Faire

A bstract .   Ludwig von Mises is often regarded as a "champion" of laissez faire. This characterization seems to contradict Mises's clear statement that economics is value free. The aim of this paper is to resolve this apparent contradiction. We accomplish this by distinguishing, as Mises did, between the advocacy of specific laissez-faire policies and the advocacy of a laissez-faire ideology vis-à-vis the alternative ideologies of socialism and interventionism. Mises argued that the logic of a value-free economics could be used to show that socialist and interventionist policies would not achieve a goal that the socialists and interventionists implicitly or explicitly aim to achieve, that of progress in terms of material wealth for the members of society. Thus, Mises resolved the contradiction by shifting the debate from the welfare analysis of particular policies to a logical analysis of the ends of a particular ideology and the means available to achieve those ends.
In a seminal paper in neo-Austrian economics, Murray Rothbard criticized Mises. We analyze Rothbard's argument partly as a means of elucidating Mises's views and argue that Rothbard misinterpreted Mises and quoted him out of context. Rothbard failed to adequately support his claim that Mises held the beliefs that Rothbard attributed to him. Moreover, Rothbard's paper undermined the value freedom that Mises regarded as a crucial characteristic of economics.     

Beyond Twin Deficits

A bstract This paper outlines new developments in the sociology of money. It highlights certain aspects of Post Keynesian monetarism and explores Keynesian concepts of emotions relative to economics and economic sociology. Gunnar Myrdal's work on time and money contributes to the discussion. Underdeveloped areas of discourse in both sociology and economics are identified and the resulting superficiality of references to money are examined. Sociology, for example, has historically neglected concepts of future time and money, while economics has paid little attention to emotions and organizations. Removing these orthodox barriers allows economics to be informed by concepts previously relegated to sociology, such as emotions of trust and confidence. This process may induce the disaffected from both disciplines to draw from each other, creating an alternative, and ultimately more satisfactory understanding of money.     

Health, Government, and Irving Fisher

A bstract    This paper provides a few historical notes on government involvement in health, followed by a summary of the theoretical arguments that economists offer in its support. Irving Fisher's views and recommendations about health are examined in the light of today's perceptions concerning health, health economics, and health policy. The wide variety of roles that the U.S. and other governments currently play in health is reviewed, and the ability of economics to explain these roles is assessed. The consequences of government involvement for the health of populations, for expenditures on health care, and for political and social stability are examined. The paper concludes with an overview of new worldwide trends in health policy and some probable explanations for these trends.