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The Sociology of Economic Life.

This book, a collection of fifteen essays, is divided into four parts prefaced by an editors' introduction. This introduction provides the reader with an overview of the basic principles of the New Economic Sociology, of the differences between the New Economic Sociology and the New Institutional Economics, and of the plan of the book. According to the editors, the three suggested central propositions of the New Economic Sociology are: "1. Economic action is a form of social action; 2. Economic action is socially situated; and 3. Economic institutions are social constructions" and the central theme of the New Institutional Economics is that ". . . |an~ institution exists because it is efficient . . . as a solution to a certain problem in the market". The work of Becker and Buchanan are cited as being examples of the New Institutional Economics. In addressing these topics the editors state that "|this~ book is part of a recent and very exciting development: the opening up of the academic debate about the economy to include a genuinely social perspective" |p. 1, emphasis in original~. Prior to reviewing the contents of this collection of essays, let us spend a few moments examining the context of this debate.

Recall that Ward |3~ suggested that the discipline of economics could be divided into four classes:

A: Microtheory, macrotheory, econometrics

B: International trade, money and banking, public finance

C: Industrial organization, labor, economic history

D: Economic development, history of economic thought, comparative economic systems,

and that the ". . . fields are classified in terms of the extent to which practitioners actually make use of the Class A framework of problems and procedures in their research |3, 10~. The New Economic History with its emphasis on hypothesis testing has increased the standing of economic historians because they have adopted the Class A approach to the discipline of economics and have given less play to the methodology of the discipline of history. Two examples of the New Economic History are The Rise of the Western World by North and Thomas |1~ and Did Monetary Forces Cause the Great Depression? by Temin |2~. The New Institutional Economics, on the other hand, is an example of Class A research. One of the topics within microtheory is the difference between "market failures" and "public sector failures". If the market can in some sense fail to perform effectively the duties which have been assigned to it, then it seems reasonable to assume that the public sector of the economy can also fail to perform effectively the duties which have been assigned to it. Out of this examination of the topic of public sector failure comes the theory of public choice and the work of Buchanan.

So, where does the New Economic Sociology fit into this scheme of things? I suggest that, like the New Economic History, the New Economic Sociology is an example of Class C research. The collection of essays include articles which may be classified as being research in the areas of business history, economic history, and economic development. This type of research provides the community of scholars with important insights as to how and why particular institutions evolved in the ways that they did and to provide some insight as to how these institutions may affect policy proposals. Class A research assumes that institutions are efficient while Class C research, in the course of examining the historical record, find that alternative explanations are quite possible.

The two essays of Part I, "The Economy as Instituted Process" by Polanyi and "Economic Action and Social Structure: The Problem of Embeddedness" by Granovetter, deal with sociological approaches to the economy. Both essays are quite interesting and should be read with care. The five essays of Part II, "Weber's Last Theory of Capitalism: A Systematization" by Collins, "Economic Backwardness in Historical Perspective" by Gerschenkron, "The Emergence of Managerial Capitalism" by Chandler, "Goodwill and the Spirit of Market capitalism" by Dore, and "Market, Culture, and Authority: A Comparative Analysis of Management and Organization in the Far East" by Hamilton and Biggart, examine the historical and comparative perspectives of the economy. The four essays of Part III, "The Bazaar Economy: Information and Search in Peasant Marketing" by Geertz, "The Sociological and Economic Approaches to Labor Market Analysis: A Social Structural View" by Granovetter, "Non-Contractual Relations in Business: A Preliminary Study" by Macaulay, and "Human Values and the Market: The Case of Life Insurance and Death in 19th-Century America" by Zelizer, examine economic institutions from the point of view of the sociologist. The four essays of Part IV, "Group Dynamics and Intergroup Relations" by Strauss, "Men Who Manage" by Dalton, "Bureaucratic and Craft Administration of Production: A Comparative Study" by Stinchcombe, and "Processing Fads and Fashions: An Organization-Set Analysis of Cultural Industry Systems" by Hirsch, examine the sociology of the firm and the topic of industrial organization. After each essay there appears Editors' Notes on Further Reading, a brief annotated bibliography about the theme and the issues raised by each essay. For those readers who are interested in this area of research these editorial notes are of particular interest. While the essays are well known to researchers in these areas, it is the Editors' Notes which make the book worthwhile.

Tom Cate Northern Kentucky University


1. North, Douglas C. and Robert Paul Thomas. The Rise of the Western World. New York: Cambridge University Press, 1973.

2. Temin, Peter. Did Monetary Forces Cause the Great Depression? New York: W. W. Norton, 1976.

3. Ward, Benjamin. What's Wrong with Economics? New York: Basic Books, 1972.
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Author:Cate, Tom
Publication:Southern Economic Journal
Article Type:Book Review
Date:Apr 1, 1993
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