The New Economic Sociology: A Reader (review)

This volume is designed to ease the entry of advanced sociology students into the growing literature in their discipline about markets and the organizations and individuals who operate within them. It can serve this useful function for business historians as well, although it will take some tenacity on the part of "splitters" to make sense of what the "lumpers" are getting at.

The collection's twenty chapters include articles from leading journals and book excerpts and are organized around four "core mechanisms": institutions, networks, power, and cognition. Frank Dobbin links contemporary research with classic sources by beginning each of the four sections with a selection from Max Weber, Emile Durkheim, or Karl Marx. Most of the remaining chapters were published in the 1980s and 1990s. None were published in the 2000s, and three predate 1980, which Dobbin identifies as the founding moment of the revival in economic sociology. The title's "new" is thus a relative term.

Dobbin's introduction, while mainly descriptive of the chapters to come, briefly advances the thesis that his field is "undergoing an unusual sort of paradigm shift," in which the four mechanisms are congealing into a unified schema (p. 41). Networks of economic actors, in this view, deploy power in order to maintain or transform the institutions that govern economic life, and the dominant network at any given moment rationalizes its position by deploying a "compelling cognitive model" (p. 39). One need not share Dobbin's position that such a schema yields better predictions than economics, much less embrace his hostility to that ever-present "other" discipline, to accept the value of moving beyond the neoclassical assumptions of narrow self-interest, perfect information, and homogeneous goods to understand economic life.

Each section is organized chronologically, an approach that reveals economic sociology's emerging ambition. Older pieces tend to address settings in which many economists would willingly admit a significant role for nonmarket causal forces; more recent ones frequently make frontal assaults on the commanding heights of the neoclassical view. "Institutions," for instance, begins with John W. Meyer and Brian Rowan's brilliant 1977 rendition of bureaucratic behavior as "myth and ceremony," applied primarily to public organizations like schools and hospitals. Later chapters in this section consider child labor (Viviana A. Zelizer), Asian business groups (Richard Whitley), and finally, capital markets in the contemporary United States (Gerald F. Davis, Kristina A. Diekmann, and Catherine H. Tinsley).

Davis, Diekmann, and Tinsley provide solid evidence that corporate conglomeration came to an abrupt end in the 1980s. They are less convincing, however, in ascribing this shift to the acceptance of the "nexus of contracts" conception of the firm. Their chapter extends a line of thought represented elsewhere in the volume by excerpts from books by William G. Roy on the merger movement of the 1890s and Neil Fligstein on management strategies from the late nineteenth century to the 1970s. These authors challenge Alfred D. Chandler, Jr.'s argument that the emergence of big business in the United States should be ascribed to economies of scale and scope and, more broadly, reject the view that changes in business organization reflect efficiency advantages. This argument is not unknown among business historians, and those who are unfamiliar with their sociological fellow travelers (especially Fligstein) may benefit from making their acquaintance.

The "new economic sociology," if this volume is taken to be representative, focuses to a surprising degree on American managers. Marx is present, but labor and the poor are largely absent. Absent, too, are socialism, communism, and any other alternative to capitalism. The world beyond the United States appears only briefly, slighting (with the exception of Whitley) cross-national comparisons of capitalism that have proven very fruitful in helping American scholars understand the system in which we live.

I found the "Networks" section to be the most novel and useful. Mark Granovetter's 1985 critique of Oliver Williamson is a...