Professor Philippe Steiner, of the Groupe d’Etudes des Méthodes de l’Analyse Sociologique de la Sorbonne, thinks that these days sociology and economics may be coming closer to each other than they have for some time.
New economic sociology and economic theory by Philippe Steiner, Acta Oeconomica 72 (2022) S1, 23–40 DOI: 10.1556/032.2022.00017
"Abstract: The paper begins with a brief reminder of the origin of economic sociology. It then surveys research by economic sociologists from the 1980s to the present, with a focus on their relation to political economy, which ranges from close to arm's length. Finally, beyond any differences between economic theory and economic sociology, the paper considers how both approaches can be connected in the socio-historical and economic study of economic inequalities by Thomas Piketty, and the use of matching markets by Alvin Roth."
"In the final part the paper seeks to show that economists have developed approaches that permit a fruitful combination of sociology and political economy, even using some of the more technical aspects of modern economics.
"After the 1930s economic sociology lost its appeal for economists, as well as sociologists, and gave way to the “Parsonian peace” according to which economists deal with value, while sociologists deal with values (Stark 2009: 7).
"There was a revival of economic sociology during the 1970s on both sides of the Atlantic. In the United States, this began with Mark Granovetter’s work on the labor market (Granovetter 1974), and then with a new interpretation of the social embeddedness of the market (Granovetter 1985). This was something that Polanyi had stressed in his book, noting the catastrophic consequences that follow the management of humanity, nature and politics as if they were market goods (labor, land and money) regulated by “supply and demand” in their respective markets. In the same period, Viviana Zelizer (1979, 1985) brought the sociology of culture closer to the sociology of economic life. In Europe, Pierre Bourdieu proposed a new interpretation of the market for cultural goods (or symbolic goods), to explain the functioning of the art market (Bourdieu 1971).
"As regards the relation to economic theory, the new economic sociology unfolds along four axes: (i) Granovetter established a close and direct relationship between economic sociology and the neo-classical theory of job search, together with the theory of transaction costs; (ii) Zelizer distanced herself completely from economic theory, although her sociology of economic life deals with central economic phenomena such as insurance, money, and law; (iii) Neil Fligstein developed an economic sociology close to institutionalist political economy, focusing on key institutions of the market, notably those regulating competition; finally, (iv) Bourdieu employed an original conceptualization of fields in order to explain the functioning of the markets of symbolic goods (fashion, painting, literature), while at the same time developing a methodological criticism of economic theory.
"In the case of the creation of the life insurance market in the United States, Zelizer started from the following paradox: while changes in social structure – fewer landowners, less mutual aid between neighbors – made it increasingly rational to insure one’s life to avoid leaving one’s wife and children destitute in the event of premature death, the life insurance market remained sluggish during the 19th century compared to what it was in Great Britain and in France. How do we explain this apparent lack of self-interested behavior in American male breadwinners? Zelizer’s answer employed several cultural arguments, including one based on the relationship to religion. During this period there was a widespread idea that to insure oneself against premature death was to oppose the will of God, even to not trust his wisdom. This was the reason for the reluctance to accept this new market product, the life insurance contract. A strength of her argument is also that she is careful not to oppose social behavior and self-interested economic behavior head-on. In fact, two phenomena directly linked to religion intervene to modify this cultural relationship to life insurance. First, she points to the fact that the religious sects that sent pastors to frontier regions took out life insurance on them so that the sect would not have to take care of their families if they died – a financial interest played its part in religious institutions. Second, she notes a reversal in the religious discourse on life insurance. In the beginning of the 20th century not only preachers, but also the rhetoric of insurance salesmen emphasized that the good father is he who takes precautions against premature death, hence this good father must be insured. Both culture and the economy began to structure behaviors that promoted a developing insurance market.
"While economists continued to employ the hypothesis of rationality, this is no longer central to the discourse of economic sociologists; the idea that economists are remote from the historical and social dimension has also lost its intensity. Instead, other criticisms have emerged, especially associated with the idea of performativity. At present there is neither conflict, or mutual indifference. Indeed, in several fields there are signs of an explicit or implicit rapprochement. I would like to mention two in particular.
"First of all, given the capacity of modern computers to process large databases, economists can deploy econometric tools in ways that accurately account for historical and social facts, as Thomas Piketty (1998, 2013, 2019) does. Second, by pursuing the strategy of economic engineering proposed by Alvin Roth (2002), economists take up the practical work of constructing institutions of exchange, exemplified by design economics and matching markets economists, developing what sociological economists have called the economic performation of the economy by economics (Callon 1998; MacKenzie et al. 2007)"