What is Economic Sociology?
Economic sociology is one of the hot developing areas in sociology. In the wake of increasing globalization of the economy and transformations in the relationship between states and markets, many scholars have become increasingly aware of the need for systematic analyses of the social dimensions of economic institutions and practices. Joseph Stiglitz (chief economist of the world bank in 1999 and former head of the President’s Council of Economic Advisors) has argued that the formal models developed by economists for understanding the economy are inadequate for understanding the dilemmas faced by the world economy today, and must be supplemented by a variety of more sociological and institutional approaches. Few economists have either the taste or academic preparation for this endeavor, which has largely been pursued by sociologists and political scientists under a variety of rubrics: economic sociology, comparative political economy, studies of economic regulation, economic geography. Expressed in different ways, their central project is to understand the ways in which various kinds of institutions and social processes ¾ the state and political power, social networks, social norms, unions and secondary associations ¾ play an essential role in explaining the actual functioning of real economies.
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.
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.
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.
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.
Political Science 611: Comparative Political Economy. Modern capitalist economies are organized in different ways in both their market and their political dimension. Understanding how economic and political institutions and processes interact with one another is central to understanding the economy and evaluating current policy debates about inflation, employment, trade, and economic productivity and growth. The course approaches the interdependencies between economics and politics through comparative and historical analysis. It looks at economic institutions, state structures and capacities, and economic polity-making from the 1870s to the 1980s in six nations: Britain, France, Germany, Sweden, Japan, and the United States. Faculty: Leon Lindberg
Sociology and Industrial Relations 628 and 629: Comparative Industrial Reals in Developed Countries I and II. The first course, following an introduction to some general aspects of the comparative study of industrial relations as an economic institution, is devoted to an in-depth discussion of the cases of Britain, Germany, Sweden and Japan. Readings and lectures offer descriptive detail as well as attempts to explain the wide variations in the industrial relations systems of advanced industrialized countries. Particular attention is paid to differences and similarities between the countries studies and the United States. The second course explores a number of topics in a comparative perspective--among others, union structure, union growth, industrial conflict, industrial democracy, and economic performance at micro and macro level. Faculty: Jonathan Zeitlin.
Sociology 630: Sociology of 'Developing Societies'. This course examines the political economy of uneven development. It covers major approaches to the political economy of development, including modernization, dependency, world systems, and varieties of Marxian approaches; class and state in global capitalism and the "third world"; transnational corporations and interstate institutions; trade and development; and development regimes (export-oriented and import-substitution development. Faculty: Seidman, Middleton, Bunker
Industrial Relations 729: Changing Industrial Relations in advanced Capitalist Countries: Labor and Management Under Organizational Flexibility. This course explores the effects of current political, economic, and technological changes on industrial relations. In particular, it looks at the development of product markets, technologies, industrial organization, the organization of work, and skills as they affect unions, industrial relations, and political-economic institutions. Students are made familiar with recent literature in political economy, economics, production theory, industrial organization, the sociology of work and industrial relation proper relating to the ongoing worldwide transformation of the post-war, "pluralist" model of labor-management relations.
Political Science 840: Institutional Political Economy. The course examines in detail the theoretical issues and debates involved in constructing institutional models of public policy and the economy. It asks how economic performance, effective state intervention, and dynamic changes in the trajectories of national political economies can be explained by interactions of economic, social, and political institutions and processes. Faculty: Leon Lindberg.
History 901: Graduate Seminar: Comparative Political Economy. The course deals with the political and economic institutions of Germany, Japan, the United States and Sweden in the twentieth century, and their consequences for the performance of the respective national economies. Faculty: J. Rogers Hollingsworth.
Sociology 927: Seminar: Sociology of Contemporary Institutions. This course has occasionally been used for advanced teaching of core subjects of economic sociology, such as "Corporatism, Post-Corporatism, Disorganized Capitalism" and "Social Institutions and Economic Performance". Faculty: J. Rogers Hollingsworth.
Industrial Relations 928: Seminar in International and Comparative Industrial Relations. The seminar examines recent and ongoing advanced research and theory in international and comparative industrial relations. Its content changes to include new work and accommodate instructors' and students' current research. Faculty: Jonathan Zeitlin.
Sociology 940: Seminar on Development Theories. This seminar covers major debates in development theory, including the sources of capitalist development and underdevelopment; exchange vs. production centered theories; theories of exploitation; property, technology, and productivity; and the nature of global political and economic structures.
Economics 365: Comparative Economic Systems. Analysis of present-day functioning of different systems of economically advanced countries: comparison of principles of operations, social conditions and objectives.
Agricultural Economics 461: Structure of American Industry. The course examines the structure, competitive behavior and performance of markets and industries. The major objective is to understand how markets work, drawing on the theory and empirical literature of industrial organization economics. Ten industries, ranging from beer to computers, will be examined as case studies. Instructor: Marion.
Agricultural Economics 577: Economics of Growth and Class Structure in Low Income Countries; The course analyzes the relationship between growth and the changes in land access, employment, and class and household structures which shape the welfare effects of growth in contemporary low income countries. Methodologically, the course explores the interface between neoclassical economics and Marxian Analysis. Instructor: Carter.
Agricultural Economics 635: Applied Microeconomic Theory. Microeconomic theory applied to consumers, producers, markets and welfare analysis. The emphasis is on the mathematics of duality and optimization methods. Instructor: Coggins.
Agricultural Economics 707: Institutional Economics. Comparative analysis of neoclassical and institutional economics, with emphasis on economic epistemology, agency theory, transaction costs, firms and markets, property rights, externalities, welfare economics, efficiency, and rules of social choice. Prerequisite; Ag Econ 635 or equivalent. Instructor: Bronley.
Agricultural Economics 720; Community Economic Analysis. Economic theory (location and growth) applicable to community economic development; the role of private and public sector in local economic development; techniques for economic analysis of community. Prerequisite: Ag Econ 635 or equivalent. Instructor: Shaffer.
Economics 744/Agricultural Economics 761: Public Expenditure and Regulatory Analysis. Theoretical and applied issues in benefit-cost analysis; government control of production through direct provision or through regulation (for example, education, safety, health, and environmental impacts). Instructors: Bishop, Havemen.
Economics 750: Labor Economics. Theoretical and empirical analysis of labor markets, labor mobility, the determination of earnings and employment, and labor supply of the household unit: emphasizes recent research on current issues in public policy. Instructors: Cain, Kennan, Voos, Walker.
Economics 751: Survey of Institutional Aspects of Labor Economics. Taught on a modular basis: Labor Theories and Labor History; Union Political Activities; Collective Bargaining and Public Policy. For use in analysis of problems in areas of labor markets, wages and human resources. Instructor: Cain, Kennan, Voos, Walker.