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Money and
Society: An Introduction to Economic Sociology - Spring 2006
Economic
Sociology at Rutgers
Graduate Program in Economic Sociology -
Department of Sociology - University of Wisconsin-Madison ssc.wisc.edu/~wright/econsoc.htm
Economic Sociology at Wisconsin
UW Sociology’s graduate program in economic sociology was founded in 1990 by
Joel Rogers and Wolfgang Streeck, with Erik Olin Wright joining them shortly thereafter as
a core member of the program. While Streeck subsequently left Wisconsin to head a Max
Planck Institute in Germany, Rogers and Wright remained, and several other faculty have
joined the effort: John Logan and Mark Suchman (Sociology), Jonathan Zeitlin (History and
Industrial Relations), Gary Greene and Leanne Tigges (Rural Sociology). Under a special
grant from the University awarded to centers of excellence within it, we expect two new
assistant professors this fall.
Given the quality of these faculty, UW’s economic sociology program rapidly became
recognized as one of the premiere programs of its kind in the country, and one of the core
programs in the Wisconsin Sociology Department. In a recent report of reputational
rankings of Sociology Departments in U.S. News & World Report, for example, economic
sociology was singled out as one of the fields in which Wisconsin was ranked among the top
three departments in the country.
Simultaneous with their founding of the economic sociology program, Rogers and Streeck
founded the Center on Wisconsin Strategy (COWS), a research center focusing on improving
living standards in Wisconsin as well as developing and testing new models of industrial
governance, labor market administration, human capital formation, and other ingredients of
"high road" industrial policy. Recognized internationally, COWS has become an
important fixture on the Wisconsin political scene, and the source of a host of federal
initiatives. (See detailed discussion below).
As originally hoped by their founders, a productive symbiosis has emerged between the
economic sociology program and COWS. The former provides systematic theoretical and
methodological training of graduate students. The latter provides them financial support
and hands-on research opportunities on a wide range of substantive problems. |
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The Broad Agenda of the Wisconsin Economic Sociology Program
Unlike most economic sociology programs, the Wisconsin program does not define
its intellectual agenda as fundamentally opposed to Economics, but rather as a
conversation with it. Such a conversation is essential, we believe, if we are to deeply
understand the institutions governing the economy, the social bases of those institutions,
and the possibilities of their transformation in ways that advance the quality of life and
social justice.
In the academy, for much of this century, economists and sociologists talked past one
another. While both groups often studied the same phenomena ¾ inequalities of wealth and
income, patterns of economic development, the structure of labor markets, the impact of
changing technologies on skills, and so on ¾ each was skeptical of the other’s
approach. Economists characteristically dismissed sociological theory as insufficiently
parsimonious, deductive, and precise to qualify as genuine theory. Sociologists
characteristically dismissed economic theory as a caricature of what theory needs to be,
regarding the assumptions needed to generate the formal models as so wildly implausible
and unrealistic that they robbed the resulting deductions of any explanatory value.
In recent years, however, this situation has begun to change. Sociologists have widely
embraced more formal modeling of behavior. Game theory and rational choice models, for
example, are now staples of those disciplines. Economists, meanwhile, have become
increasingly aware of the shortcomings of the traditional neoclassical model of how market
economies work. While the model of perfect competition, with complete markets and costless
information, remains a salient ideal-type, much of the most important new work in
economics has revolved around such notions as bounded rationality, imperfect or asymmetric
information, incomplete contracts, missing markets, transactions costs, network
externalities, and path dependency, and their resulting production of non-linear growth
dynamics and multiple equilibria. The view of the economy opened by such notions is one in
which institutions, power and norms ¾ the mainstays of sociologists ¾ often play a
decisive role in economic behavior. In combination, these disciplinary movements permit a
more serious and sustained dialogue between sociology and economics. |
In
politics, similarly, debates over economic governance were long transfixed on a polarized
choice between unregulated markets and public hierarchy as cardinal and competing means of
ordering economic life. Proponents of the first view assigned a marginal role to
government, effectively confining it to enforcing the terms of private contracts and
supplying the minimal array of public goods needed for market operation. While recognizing
that actual markets depart substantially from the free-market ideal ¾ with market
imperfections and failures coextensive with market operation ¾ they argued that
government intervention typically creates more problems than it solves, with government
"failures" simply succeeding market ones. Proponents of the second view observed
that unregulated markets tend to undermine their own conditions of stability, generating a
host of problems ¾ unemployment, poverty, socially disruptive levels of inequality,
negative externalities of all kinds ¾ that only centralized political authority could
solve. While recognizing that government failures in intervention did occur, they argued
that those failures could be mitigated through more informed politics, and were in any
case preferable to the maladies of unregulated markets.
Here too, however, recent experience has prompted some self-reflection. Proponents of
centralized government intervention, in particular, are far less confident than in the
past. Partly this is due to international economic integration, which has qualified the
most important sort of traditional government intervention in the economy: Keynesian
macro-economic steering. But declining confidence in the state also arises from the
shifting nature of economic problems and rising public expectations of firm performance
with respect to a range of nontraditional criteria (e.g., pollution reduction,
non-discrimination, "family friendly" policies, etc.). Inside firms or labor
markets, the state commonly lacks the local knowledge needed to determine appropriate
standards of behavior, or to monitor and enforce regulation across massively
heterogeneous, numerous, and dispersed sites of economic activity. Even more broadly, to
solve the cooperation and mixed-motive problems that beset inter-firm cooperation in
pursuing "high road" economic performance requires a degree of situated capacity
that states simply do not have.
It is in this context that attention has recently turned to forms of economic regulation
and governance that are alternative or complementary to traditional states and markets.
Sometimes this simply takes the form of "smarter" regulation ¾ better
information-gathering systems for bureaucrats, more room allowed for experiment and
competition in solving problems, more pin-pointed use of state power to
"contest" dysfunctional markets at the margin. Sometimes it takes the form of
constructing "fair" markets ¾ for example, through equalization of the assets
different actors bring to them ¾ in what were once state-controlled areas of social
choice. Sometimes it takes the form of encouraging alternative forms of corporate
governance (e.g., different forms of worker ownership, or community or worker
representatives on boards of directors) or daily operation (e.g., through new mechanisms
of worker voice inside firms) that might be thought more responsive to democratic norms.
Perhaps the most instructive and generalized new learning, however, is that well-run
economies typically require a social infrastructure of production ¾ non-state and
non-market institutions, rooted in the economy, able to coordinate otherwise competing
market actors to realize gains from cooperation, extend state regulatory capacity, and
tutor the state on the real needs of the economy. Of particular importance here are
secondary associations ¾unions, neighborhood associations, parent-teacher organizations,
business associations, environmental groups, etc. Defined both by their organizational
autonomy from the state and their role in representing and shaping the interests of
individual actors, such associations can play a critical and constructive role in defining
and enforcing performance standards (e.g., wage rates, environmental sensitivity, etc.)
and organizing productive inputs to meet them (e.g., effective training systems,
modernization services, joint marketing capacity, cross-firm learning). Supplementing
public hierarchies and private markets, they can counter a range of market failures while
avoiding the "all thumbs no fingers" heavy-handedness of state regulations and
interventions.
The central focus of the economic sociology program’s training and research agenda is
understanding the social infrastructure of the economy. From sociology we draw the
enduring insight that there are indeed non-economic foundations for all economic behaviors
¾ Durkheim’s famous insistence on the "non-contractual bases of contract."
From economics we take the core notion of optimizing behavior, and lessons in the ways in
which it is baffled by imperfect information and existing production regimes and their
requirements. From political science we take knowledge of different strategies of public
regulation, their interaction with non-public actors, and notice of the political process
itself. Our goal, drawing on the contributions of these varied disciplines, is to
understand what it takes to improve the "performance" of the economy, both in
terms of its effectiveness in conventional capitalist terms – competitiveness,
innovation, efficiency – and in terms of more controversial issues of the quality of
life and social justice.
COWS: Active Research & A Laboratory of Experiment
The economic sociology program benefits from its close association with COWS (Center on
Wisconsin Strategy). Based in Madison and Milwaukee, COWS is a "think/do tank"
that both conducts research and provides policy guidance on high-road economic development
and develops and evaluates model institutions to support it. COWS regularly surveys and
analyzes area wage, labor relations, and economic development trends, and works with
policy-makers to define and enact high-road paths of development. Through its model
projects, it seeks to implement and test that path directly. They include:
Wisconsin Regional Training Partnership (WRTP): Organized in 1991, the WRTP is now the
largest sectoral training/modernization consortium in the country. Covering some 40 firms
and 60,000 workers in Southeastern Wisconsin’s metalworking industry, the WRTP is a
cooperative effort to modernize the industry through better training, technical
assistance, and inter-firm cooperation. It provides a superb site for the study of the
role of deliberately created secondary associations in transforming the social
infrastructure of economic performance.
Campaign for a Sustainable Milwaukee (CSM): CSM is one of the nation’s premiere
efforts at metropolitan-wide community economic planning. It involves more than two
hundred community, labor, and business organizations now united around support for a
multi-year, multi-pronged implementation of a high-road strategy for the greater Milwaukee
metro region.
Milwaukee Jobs Initiative (MJI): One of six local implementers of the Annie E. Casey
Foundation-led national urban "jobs initiative," MJI is pioneering sectoral
strategies for job preparation and placement. These strategies involve organizing groups
of employers to specify conditions of job entry, and working with public training
providers and community groups to find and prepare central city residents for identified
jobs.
Jobs With a Future (JWF): JWF tests whether the assumptions underlying the WRTP ¾ that
most firms face collective action problems only solved collectively, are willing to forego
the autonomy needed to do so, and willing to concede to labor in the means of that ¾ are
generally applicable. Centered in Dane County, in the manufacturing, finance and
insurance, and health care industries, the answer appears to be "yes."
Such projects, along with COWS’ ongoing research, provide economic sociology graduate
students a vast range of research and employment opportunity.
Core Course Offerings
With the addition of new faculty, we plan to expand and diversify the range of course
offerings in economic sociology. At present, the courses are as follows:
Conceptual Foundations of Economic Sociology (Sociology 651): This course is designed to
provide students with a rigorous and systematic sociological interrogation of the core
concepts of economics. The point here is not primarily a sociological attack on the
assumptions of economic models (although there will be some criticisms), but rather an
investigation of the ways in which sociological themes around power, norms, networks,
associations and institutions can be linked to the repertoire of concepts within economic
theory: rationality, utility, markets, property, contracts, information, uncertainty,
production, technology.
Economic Institutions (Sociology 652): The second course uses the concepts from the first
course to look more empirically at a number of important economic institutions and
processes: labor markets, credit markets, firms and corporations, land, skills and skill
formation, the labor process, technical change and innovation, and the role of
associations in economic governance.
Comparative Capitalisms (Sociology 927): The final course in the sequence, taught as a
seminar, explores the most important variations across the family of developed capitalist
countries, focusing both on the salient structural features of these economies and the
historical trajectories that produced their differences. Particular attention is given to
Japan, the U.S., Germany and Britain, but there is also discussion of Italy, Scandinavia
and France.
Research Workshop in Economic Sociology (Sociology 875): This seminar is in some ways the
most important educational forum of the economic sociology training program. In this
workshop both students and faculty present their work-in-progress. Papers are generally
distributed a week in advance and all participants prepare written comments which are
distributed by email to everyone in the workshop by the day before the workshop session.
The person who wrote the paper then prepares 20 minutes or so of responses to the comments
which are presented at the beginning of the session. The workshop provides students from
the very beginning of the graduate program exposure to a very wide range of research and
an intellectual community of mutual support and constructive feedback. |
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Economic Sociology at Rutgers
- rutgers.edu/undergraduateprogram/undergrad_courses/375.htm
The economy--the interaction among individuals, groups, institutions, societies, and
their natural and social environment in making their livelihood--is one of the most
complex and intellectually exciting of all social phenomena. It has been a prime subject
of sociological inquiry ever since the birth of sociology as a discipline, and it is
certainly one of the most dynamic fields of sociology today. This course (1) summarizes
the rich history of economic sociology along with the most important contemporary
perspectives it has produced, and (2) discusses some fundamental economic processes and
institutions as sociological problems. Wherever appropriate, the course employs a
historical and comparative perspective, drawing on material from "developed" and
"underdeveloped," capitalist and state "socialist" societies.
Readings:
For a bibliography of the readings--including alternative sources for pieces that have
been published several times--consult the last pages of this handout. You will notice that
many are from two collections: Swedberg, Richard and Mark Granovetter (eds.) 1992. The
Sociology of Economic Life, (Westview Press, Boulder), and A. Douglas Kincaid and
Alejandro Portes (eds.) 1994. Comparative National Development: Society and Economy in the
New Global Order, (University of North Carolina Press, Chapel Hill). We will also read a
short little book: Ritzer, George. 1993. The McDonaldization of Society, (Pine Forge
Press, Thousand Oaks) as one of the weekly assignments. For your convenience, a course
package has been prepared which includes all of the readings not in the books above.
1/22 LECTURE: intro + what economic sociology is all about (key propositions)
1/27 LECTURE: history of economic sociology I: beginnings + uses of Marx (exploitation,
critical political economy, class struggle, models of history)
1/29 LECTURE: history of economic sociology II: uses of Max Weber, Durkheim, Mauss,
Sahlins, Schumpeter
2/3 DISCUSSION: dirty hands AND clean models, etc.
Hirsch, Michaels, and Friedman (39-56)
2/5 LECTURE: history of economic sociology III (contemporary perspectives): "Economy
& Society," feminist critiques, contemporary "conflict-oriented" and
Marxist critiques, institutionalism debates + macro-processes I: transition from feudalism
to (industrial) capitalism
2/10 DISCUSSION: exchange, redistribution, reciprocity:
Polanyi (29-51), and embeddedness:
Granovetter /a/ (53-81)
2/12 LECTURE: macro-processes II: transitions within capitalism: Taylorism --> Fordism
--> "postindustrialism" + modernization theory
2/17 DISCUSSION: development:
Gerschenkron (111-30)
Evans (84-111)
Kincaid & Portes (1-25)
2/19 LECTURE: macro-processes III: dependency, development of underdevelopment +
world-system formation + transition to state "socialism"
2/24 DISCUSSION: informality
Portes & Sassen-Koob (30-61)
Portes & Böröcz (17-28)
2/26 LECTURE: institutions I: the state (in and vs. the economy, social insurance, state
regulation, taxation, ownership, social partnership, developmental state)
3/3 DISCUSSION: value and money
Zelizer /a/ (342-77)
Zelizer /b/ (285-304)
3/5 LECTURE: tying loose ends, overview before the midterm
3/10 MIDTERM in-class, closed-books, closed-notes
3/12 LECTURE: institutions II: labor (commodification, standardization, normalization,
commercialization, labor as imperfect commodity, organizing from guilds to unions,
segmented labor "markets")
SPRING RECESS
3/24 DISCUSSION: labor "market" --> Granovetter/b/ (233-63)
3/26 LECTURE: macro-processes IV: the economic sociology of state socialism and its demise
(dual dependency, its collapse and property change)
3/31 DISCUSSION: out of state socialism
Böröcz (81-107)
Stark (169-98)
4/2 LECTURE: institutions III: power and economic knowledge, ideology, rhetoric,
domination, the politics of economics
4/7 DISCUSSION: economics as knowledge
Nelson and Sheffrin (157-65)
4/9 LECTURE: institutions IV: commodity, conspicuous consumption, shortages vs. abundance,
scarcity and shortage,
4/14 DISCUSSION: mcdonaldization
Ritzer (1-188, whole book!)
4/16 LECTURE: institutions V: exit, voice, loyalty and their applications
4/21 LECTURE: institutions VI: identity and advertizing, media, the political economy of
the sign, leisure practices
4/23 DISCUSSION: your couch is your shop (analysis of ads and/or commercials)
4/28 LECTURE: institutions VII: "what we do when we're not doing anything..."
4/30 LECTURE: topic TBA
5/5 DISCUSSION: review session before the final
--------------------------------------------------------------------------------
List of Readings:
Böröcz, József. 1993. "Simulating the Great Transformation: Property Change under
Prolonged Informality in Hungary." Archives européennes de sociologie / European
Journal of Sociology / Europäisches Archiv für Soziologie. XXXIV,1(May):81-107. OR:
COURSE PACKAGE!
Evans, Peter. 1994 (1990). "Predatory, Developmental, and Other Apparatuses: A
Comparative Political Economy Perspective on the Third State.' Pp. 84-111. in Kincaid, A.
Douglas and Alejandro Portes. (eds.) Comparative National Development. Society and Economy
in the New Global Order. University of North Carolina Press, Chapel Hill OR: Sociological
Forum, 1990.
Gerschenkron, Alexander. 1992(1952). "Economic backwardness in historical
perspective." Pp. 111-130. in Swedberg, Richard and Mark Granovetter (eds.) The
Sociology of Economic Life. Westview Press, Boulder. OR: in Hoselitz, Burt (ed.) 1952. The
Progress of Underdeveloped Countries. University of Chicago Press, Chicago.
Granovetter, Mark. /a/ 1992(1985). "Economic action and social structure: The problem
of embeddedness." Pp. 53-81. in Swedberg, Richard and Mark Granovetter (eds.) The
Sociology of Economic Life. Westview Press, Boulder. OR: 1985. American Journal of
Sociology, 91,3,(Nov):481-510.
Granovetter, Mark. /b/ 1992(1988). "The sociological and economic approaches to labor
market analysis: A social structural view." Pp. 233-63. in Swedberg, Richard and Mark
Granovetter (eds.) The Sociology of Economic Life. Westview Press, Boulder. OR: in Farkas,
George and Paula England (eds.) 1988. Industries, Firms, and Jobs: Sociological and
Economic Approaches. Plenum Press, New York.
Hirsch, Paul, Stuart Michaels, and Ray Friedman. 1990. "Clean models vs. dirty hands:
Why economics is different from sociology." Pp. 39-56. in Zukin, Sharon and Paul
DiMaggio (eds.) Structures of Capital. The Social Organization of the Economy. Cambridge
University Press, Cambridge. OR: COURSE PACKAGE!
Kincaid, A. Douglas and Alejandro Portes. 1994 (1989). "Sociology and Development in
the 1990s: Critical Challenges and Empirical Trends." Pp. 1-25. in Kincaid, A.
Douglas and Alejandro Portes. (eds.) Comparative National Development. Society and Economy
in the New Global Order. University of North Carolina Press, Chapel Hill. OR: Sociological
Forum, 4,4:479-503.
Nelson, Julie A. and Steven M. Sheffrin. 1991. "Economic Literacy or Economic
Ideology?" Journal of Economic Perspectives. 5,3(Summer):157-65. OR: COURSE PACKAGE!
Polányi, Karl. 1992(1957). "The Economy as Instituted Process." Pp. 29-51. in
Swedberg, Richard and Mark Granovetter (eds.) The Sociology of Economic Life. Westview
Press, Boulder. OR: in Karl Polanyi, Conrad M. Arensberg and Harry W. Pearson (eds.) 1957.
Trade and Market in the Early Empires. Economies in History and Theory. The Free Press,
Glencoe, Ill.
Portes, Alejandro and József Böröcz. 1988. "The Informal Sector under Capitalism
and State Socialism." Social Justice, 15,3-4:17-28. OR: COURSE PACKAGE!
Portes, Alejandro and Saskia Sassen-Koob. 1987. "Making It Underground: Comparative
Material on the Informal Sector in Western Market Economies." American Journal of
Sociology, 93,1(July):30-61. OR: COURSE PACKAGE!
Ritzer, George. 1993. The McDonaldization of Society. An Investigation into the Changing
Character of Contemporary Social Life. Pine Forge Press, Thousand Oaks.
Stark, David. 1994 (1992). "Path Dependence and Privatization Strategies in East
Central Europe." Pp. 169-98. in A. Douglas Kincaid and Alejandro Portes (eds.) 1994.
Comparative National Development: Society and Economy in the New Global Order. University
of North Carolina Press, Chapel Hill.
Zelizer, Viviana. /a/ 1990. "The Social Meaning of Money: 'Special Monies'."
American Journal of Sociology, 95,2(Sept):342-77. OR: COURSE PACKAGE!
Zelizer, Viviana. /b/ 1992(1978). "Human values and the market: The case of life
insurance and death in 19th-century America." Pp. 285-304. in Swedberg, Richard and
Mark Granovetter (eds.) The Sociology of Economic Life. Westview Press, Boulder. OR: 1978.
American Journal of Sociology, 84:591-610.
Money
and Society: An Introduction to Economic Sociology - Spring 2006
Sociology 107. Professor Brooke Harrington
Brooke_Harrington@brown.edu
COURSE SUMMARY
Money makes the world go round. Money talks. Show me the money.
This course will address the many ways in which money pervades social life. As a medium of
both symbolic and material exchange, it reflects and reproduces social arrangements. The
readings in this course will treat the role of money in a wide variety of arenas, from
politics, history and finance, to gender, religion and art. Thus, this course will be
relevant to undergraduates majoring in any of these fields, while at the same time
exposing them to a critical perspective that is particular to the social sciences.
ESSAY QUESTIONS AND DUE DATES:
Please submit a 5 to 7 page paper (double-spaced, 12 point font, 1” margins) on any
two of the following three topics; you may only submit two papers for a grade.
Question 1: Due February 23
An acquaintance of yours comments that government systems and free markets are
fundamentally at odds with one another. Based on what you’ve learned so far in Soc
107 about economic history (including, but not limited to the readings from Polanyi,
Galbraith, and Bell), how would you respond?
Question 2: Due March 23
In what ways do the operations of the informal economy pose a challenge the assumptions of
classical economic theory? Can you identify commonalities across the case studies of the
cocaine trade in Bolivia, numbers gambling in the U.S., and the Moroccan bazaar?
Question 3: Due April 23
How do Frank, England, DuBois, Aldrich and Alger characterize the relationship between
money and status? Is status determined by money? How does the status system intersect with
other dimensions of social position, such as race, class and gender?
PART I—ECONOMISTS ON ECONOMICS
In this section of the class, we will attempt to define our terms by taking a brief and
nonmathematical look at the foundational assumptions and purposes of economics. This is
not intended as an “objective” view of economics; rather, the articles showcase
the assumptions and claims that sociologists question in economic theory.
January 25:
• Von Hayek (1974), “The Pretence of Knowledge,” Nobel Prize Address,
Stockholm.
An interesting critique of economics from a famed economist on the occasion of his
acceptance of the Nobel Prize in that field.
January 27:
• Hirsch, Paul, Stuart Michaels, and Ray Friedman (1990), “Clean Models Versus
Dirty
Hands: Why Economics Is Different from Sociology,” pp. 39-56 in Sharon Zukin and Paul
DiMaggio (Eds.), Structures of Capital: The Social Organization of the Economy,
Cambridge: Cambridge University Press.
This article defines economics in contrast to sociology, a theme to which we will return
many times.
• Optional:
Conant, Jennet (1998), “School for Glamour,” Vanity Fair, February.
The affluent society as experienced at Brown. According to this report, money and
conspicuous consumption are the hallmarks of our campus. What do you think?
January 30:
• Galbraith, John Kenneth (1998 [1958]), Chapters 3-5 of The Affluent Society,
Mariner Books
These chapters lay out the history of classical economic thought from Adam Smith to the
present. Galbraith argues that economic theories are stuck in the assumptions of
18th-century, pre-industrial England, where they were forged.
• Optional:
Olin, Dirk (2003), “Prospect Theory,” New York Times Magazine, June 8, pp.
33-34.
A quick tour through the history of financial speculation, and the ways that economists
have tried to make sense of it all.
February 1:
• Galbraith, John Kenneth (1998 [1958]), Chapter 6 and 7 of The Affluent Society,
Mariner Books
February 3:
• Nelson, Julie (1992), “Gender, Metaphor and the Definition of Economics,”
Economics and Philosophy, 8: 103-125.
This is an unusual take on the definition of economics, arguing that the field is based on
gendered assumptions. This is related to what J.K. Galbraith is saying about economics
being rooted in 18th century pre-industrial assumptions. The larger point is, economics,
like all academic disciplines, is an artifact of history and human behavior.
• Bell, Daniel (1981), “Models and Reality in Economic Discourse,” in
Daniel Bell and Irving Kristol, The Crisis in Economic Theory, New York: Basic Books, pp.
46-81. Bell traces the history of economic theory in brief and argues for its
reintegration with the other social sciences.
• Optional:
Collingwood, Harris (2003), “The Sink or Swim Economy,” The New York Times
Magazine, June 8, pp. 42-45.
An essay on the difference between what the numbers say about our economy and how we
experience it as individuals.
PART II—THE SOCIOLOGICAL PERSPECTIVE
The following four articles look at the development of economic sociology through the lens
of both classical economics and sociology. Of these, you should pay special attention to
Granovetter’s ideas about the social embeddedness of economic behavior.
February 6:
• Smelser, Neil and Richard Swedberg (1994), “The Sociological Perspective on
the Economy,” in Neil Smelser and Richard Swedberg (Eds.) The Handbook of Economic
Sociology, Princeton, NJ: Princeton University Press.
• Chart from Swedberg, Richard, Ulf Himmelstrand, and Goran Brulin (1987), “The
Paradigms of Neo-Classical Theory and Economic Sociology,” Theory and Society, 16:
174.
• Granovetter, Mark (1990), “The Old and the New Economic Sociology: A History
and An Agenda,” in Roger Friedland and A.F. Robertson (Eds.), Beyond the Marketplace,
New York: Aldine de Gruyter.
February 8:
• DiMaggio, Paul (1990), “Cultural Aspects of Economic Action and
Organization,” in Roger Friedland and A.F. Robertson (Eds.), Beyond the Marketplace,
New York: Aldine de Gruyter.
• Hart, Keith (1990), “The Idea of Economy: Six Modern Dissenters,” in
Beyond The Marketplace, Roger Friedland and A.F. Robertson (Eds.), New York: Aldine de
Gruyter.
• Optional:
Twain, Mark. 1893. “The Million Pound Bank Note.” From The Million Pound Bank
Note and Other New Stories. Leipzig: Bernhard Tauchnitz.
PART III—MONEY AND MARKETS: A SOCIAL, POLITICAL AND CULTURAL HISTORY
February 10:
• Polanyi, Karl (1944), Chapters 4 and 5 from The Great Transformation, Boston:
Beacon Press
Polanyi argues persuasively that the free market is both a recent and artificial
innovation, contrary to the assumptions of classical economics. Economies take many forms
(see Part IV of the class), and Polanyi argues that the modern market economy is the
siamese twin of the nation-state. In other words, strong state governments are not opposed
to free markets, but coeval and necessary to the market’s survival.
February 13:
• Polanyi, Karl (1944), Chapter 6 from The Great Transformation, Boston: Beacon Press
• Hirschman, Albert (1982), “Rival Interpretations of Market Society:
Civilizing, Destructive, or Feeble?” Journal of Economic Literature 20: 1463-1484
Hirschman reviews the historical interpretations of the impact of markets on social life.
• Optional:
Dubner, Stephen (2003), “Calculating the Irrational in Economics,” New York
Times, June 28, Section 2, p. 7.
This article reviews the state of the art in economics, which is actually heading toward
sociology and psychology!
February 15:
• Galbraith, John Kenneth (1995), Chapters 1-3 of Money: Whence It Came, Where It
Went, 2nd Edition, Boston: Houghton-Mifflin
This is an overall social history of money and its role in shaping political events; given
Galbraith’s former role as a policy maker, this book is infused with the policy
perspective.
February 17:
• Galbraith, John Kenneth (1995), Chapters 4 and 5 of Money: Whence It Came, Where It
Went, 2nd Edition, Boston: Houghton-Mifflin
• Zelizer, Viviana (1996), “Payments and Social Ties,” Sociological Forum
11: 481-495
Zelizer argues that all dollars are not equal; even within a single currency system,
“value” depends on how money is exchanged -- either as gift, compensation or
entitlement.
Each mode of exchange implies different ties between the parties, and different
assignments of value.
February 22:
• Finlay, Moses (1973), Chapters 1 and 6 in The Ancient Economy, Berkeley: University
of California Press
Finlay, a professor of Ancient History, reviews the origins of the term and concept of
“economy” and shows what it meant in practice in the ancient world. A good
companion piece to Polanyi.
PART IV—THE CLASSIC TEXTS: MARX AND WEBER
February 24:
• Marx, Karl (1978), Communist Manifesto, in Robert Tucker (Ed.) The Marx-Engels
Reader, New York: W.W. Norton
In the Manifesto, Marx explains most simply how labor is converted into money.
February 27:
• Weber, Max (1946), The Protestant Sects and the Spirit of Capitalism, in H.H. Gerth
and C. Wright Mills (Eds.) From Max Weber, New York: Oxford University Press
This classic essay lays out the classic connections between money and culture, in the form
of religion.
• Optional: Kolbert, Elizabeth. 2004. “Why Work: A Hundred Years of "The
Protestant Ethic.” New Yorker, November 29.
A useful take on Max Weber and his work from a national magazine, written for a general
audience.
• Optional:
Simons, Marlise (2003), “Sister Nicole Fights the Good Fight as Financier,” New
York Times, 14 April, Section 1, p. 4.
How one person (a nun in Paris) sought to reconcile the conflicts between being an
investor and a moral person. Call it “The Catholic Ethic and the Spirit of
Capitalism.”
March 1:
• Marx, Karl (1978), selections from Das Capital, in Robert Tucker (Ed.) The
Marx-Engels Reader, New York: W.W. Norton
In Das Capital, Marx defines capitalism as the process of turning money into more money.
This reading will be particularly relevant to students with an interest in government or
history.
• Cvetkovich, Ann (1992), selections from Mixed Feelings: Feminism, Mass Culture and
Victorian Sensationalism, New Brunswick, NJ: Rutgers University Press
This essay views Marx from the perspective literary criticism, and classifies Capital as a
mystery and as a Gothic horror story, along the lines of Shelley’s Frankenstein.
March 3:
• Weber, Max (1946), Class, Status and Party, from H.H. Gerth and C. Wright Mills
(Eds.) From Max Weber, New York: Oxford University Press
This famous essay explains how money is related to social position, a theme to which we
shall return.
PART V—POPULAR ECONOMICS I: THE INFORMAL SECTOR
March 6:
• Portes, Alejandro (1994), “The Informal Economy and Its Paradoxes,” in
Neil Smelser and Richard Swedberg (Eds.) The Handbook of Economic Sociology, Princeton,
NJ: Princeton University Press.
Portes lays out the basic contours of the informal economy, then compares and contrasts it
to the formal sector.
• Jimenez, Jose Blanes (1989), “Cocaine, Informality and the Urban Economy in La
Paz, Bolivia,” in Portes, Castells and Benton (Eds.), The Informal Economy: Studies
in Advanced and Less Developed Countries, Baltimore, MD: The Johns Hopkins University
Press.
This article looks at drug trafficking as a mode of informal economic activity, and how it
is embedded in the social fabric of one country.
March 8:
• Light, Ivan (1977), “Numbers Gambling Among Blacks: A Financial
Institution,” American Sociological Review, 42: 892-904.
This fascinating article looks at gambling as a form of savings among the poor, who are
otherwise excluded from the formal financial sector.
• Geertz, Clifford (1978), “The Bazaar Economy: Information and Search in
Peasant Marketing,” American Economic Review 62: 28-32.
This famous article is another anthropological look at markets—this time in Morocco,
where social ties between buyers and sellers are the foundation of the bazaar economy.
• Radford, RA (1945), “The Economic Organization of a POW Camp,” Economica
12: 189-201.
This article by a former prisoner of war in Germany during WWII shows what markets look
like in their most elementary form: the cigarette-based economy of the POW camp.
Participants developed a fully-fledged currency market, including arbitrage!
PART VI—POPULAR ECONOMICS II: GIFT EXCHANGE
This section of the class draws on anthropological accounts of gift-based societies and
countries where people shut out of the institutionalized, formal economy have developed a
parallel economic system of their own. The larger theme is the embeddedness of economic
relations in social life.
March 10:
• Schwartz, Barry (1967), “The Social Psychology of the Gift,” American
Journal of Sociology, 73:1-11.
This article is a great introduction to alternative to market forms of organizing economic
relations, particularly the ancient and very common mode known as gift exchange. This sets
up the issues in the next reading.
• Titmuss, R.M. (1970), Chapter 5 of The Gift Relationship: From Human Blood to
Social Policy, London: Allen and Unwin.
These excerpts from a large study of blood donation in the U.K. and U.S. show that markets
are in some ways much less efficient than altruistic or gift-based distribution systems.
This is especially true when trust in the quality of a product is at stake, as in blood
transfusions. His larger point is similar to Polanyi’s: markets are not separate from
societies, and we divide them at our peril.
March 13:
• Titmuss, R.M. (1970), Chapters 12 and 13 of The Gift Relationship: From Human Blood
to Social Policy, London: Allen and Unwin.
• Optional:
Elliott, Andrea (2004), “Inviting the Public’s Embrace, One by One,” New
York Times, May 10, Section 3, p. 3.
Speaking of gifts, this article relates what happens to one brave fellow who tried to give
away free hugs in a Manhattan park last spring.
March 15:
• Sahlins, Marshall (1972), “On the Sociology of Primitive Exchange,” in
Stone Age Economics, Aldine: Chicago
This article reviews the cross-cultural evidence on economic transactions within societies
based on gift exchange rather than markets. These forms of economic organization
fundamentally challenge the assumptions of classical economics that humans are
rational-self maximizers, and that the greatest good for the greatest number is achieved
by pursuing rational self-interest.
March 17:
• Galaskiewicz, Joseph (1985), Chapters 1 and 7 in Social Organization of An Urban
Grants Economy, Orlando, FL: Academic Press
These chapters summarize the findings of a larger study of corporate philanthropy. It
finds a strong relationship between “gifts” and social status, for organizations
as well as individuals.
PART VII—MONEY AND SOCIAL STATUS
March 20:
• Frank, Robert (1985), Chapters 1 and 2 of Choosing the Right Pond: Human Behavior
and the Quest for Status, New York: Oxford University Press
Frank discusses the role of money in conferring social status, with a fascinating sideline
on the physiology and biochemistry of status among primates.
• Optional:
Barry, Ellen (2003). “Humiliations by a Cruel Ex-Lover Can Spark Depression.”
Boston Globe. August 14, p. 1.
In support of Frank’s article, further evidence that loss of status has a profound
physiological, biochemical impact.
March 22:
• Galbraith, John Kenneth (2005), The Economics of Innocent Fraud, New York:
Houghton-Mifflin
A short treatise that reviews recent instances of corporate accounting fraud and corrupt
governance, illustrating how status has been used to generate wealth: essentially, how and
why the rich get richer.
• England, Paula (1992), selections from Comparable Worth: Theories and Evidence, New
York: Aldine de Gruyter
This is a more contemporary organizational take on status and money; England argues that
the “gender gap” in pay is an expression of the generally devalued social status
of women.
• Optional:
Veblen, Thorstein (1899), The Theory Of The Leisure Class: An Economic Study Of
Institutions. Mineola, NY: Dover Publications.
The excerpts here are Chapter 4, the classic text that coined the term “conspicuous
consumption,” and Chapter 7, which concerns clothing as a mode of expressing social
status.
March 24:
• Alger, Horatio (1990 [1863]), 1st half of Ragged Dick, or Street Life in New York
with the Boot-Blacks, New York: Signet.
We will analyze this, the first rags-to-riches novel in American literature, in terms of
its assertions about social status and money.
April 5:
• Alger, Horatio (1990 [1863]), 2nd half of Ragged Dick
• Optional:
Sanneh, Kelefa (2004), “Pray and Grow Rich: Dr. Creflo Dollar’s Ministry of
Money,” The New Yorker, October 11, p. 48.
As if the name “Creflo Dollar” isn’t reason enough to read this article, it
is a fascinating study of the continuing association of virtue with wealth. It shows that
the kind of beliefs that made Alger so popular in his time are alive and well over a
century later.
April 7:
• DuBois, W.E.B. (1953), selections from The Souls of Black Folk: Essays and
Sketches, New York: Blue Heron Press
DuBois presents his thoughts on the relationship between race, social status and money in
these essays.
April 10:
• Aldrich, Nelson W. (1988), chapters 2 and 3 in Old Money: The Mythology of
America’s Upper Class, New York: Vintage Books
Aldrich, the scion of one of New England’s wealthiest families, writes in this
semiautobiographical social history about the attempts of American elites to maintain a
ladder of social status independent of financial status.
• Optional:
Veblen, Thorstein (1898), “On the Barbarian Status of Women,” American Journal
of Sociology, 4.
Veblen on the women of the Gilded Age as trophies and consumers.
April 12:
• Aldrich, Nelson W. (1988), chapters 4 and 8 in Old Money
• Optional:
Trebay, Guy (2003), “At Bailey’s Beach, The Ruling Class Keeps Its Guard
Up,” New York Times, July 20, Section 2, p. 1.
A story that strikes close to home: Old Money shoring up its status in Newport, RI.
PART VIII—MONEY AND FINANCIAL MARKETS
April 14:
• Galbraith, John Kenneth (1990), Chapters 1-4 in A Short History of Financial
Euphoria, New York: Whittle
This is a witty book on the history of speculative bubbles: defined by Galbraith as
“the mass escape from sanity by people in pursuit of profit.” The historical
scope covers three centuries, from the Dutch tulip bulb craze of the mid-1600s to the
Ponzi schemes of the 1960s. This material offers a useful way of teaching about the role
of money in social movements.
• Reed, Christopher (1999), “The Damn’d South Sea,” Harvard Magazine,
May-June: 36-41
This short history of the South Sea Bubble gives an even better and more detailed account
than Galbraith’s, and uses photographs from Harvard’s collection of manuscripts
from the event.
April 17:
• Chapters 5-8 in Galbraith
• Ingrassia, Catherine (1995), “The Pleasure of Business and the Business of
Pleasure: Gender, Credit, and the South Sea Bubble,” Studies in Eighteenth-Century
Culture 24: 191-210
This fascinating article documents the role of gender in the South Sea Company speculative
frenzy described in detail in Galbraith. The study adds substance to the overall claim of
this class that markets are both shaped by and reproduce the social identity of
participants.
April 19:
• Baker, Wayne (1990), “Market Networks and Corporate Behavior,” American
Journal of Sociology 96:589-625
This empirical study of Wall Street investment banks exemplifies Granovetter’s point
about the social embeddedness of markets. Baker demonstrates that trust and network ties
rather than economic efficiency, dictate corporations’ banking choices.
• O’Barr, William and John Conley (1992), “Managing Relationships: The
Culture of Institutional Investing,” Financial Analysts’ Journal Sep-Oct: 21-27
This article is based on interviews with pension fund managers, who candidly discuss the
social dynamics underlying their financial work.
April 21:
• Shiller, Robert (1993), “Stock Prices and Social Dynamics,” in Richard
Thaler (Ed.) Advances in Behavioral Finance, New York: Russell Sage
An internationally-recognized finance scholar argues economic heresy: the stock market is
driven by fads and fashions -- social phenomena—rather than efficiency.
This is economics blending into sociology.
April 24:
• Lewis, Michael (1989), chapters 1-3 in Liar’s Poker: Rising Through the
Wreckage of Wall Street, New York: Penguin
This is one of the best-written first-person accounts of life on Wall Street ever written.
The author was an art history major at Princeton who worked as a bond trader at Salomon
Brothers during the boom years of the mid-1980s.
April 26:
• Lewis, Michael (1989), chapters 4-6 in Liar’s Poker
April 28:
• Lewis, Michael (1989), chapters 6-9 in Liar’s Poker
May 1:
• Lewis, Michael (1989), chapters 10-Epilogue in Liar’s Poker
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