Contemporary Austrian Economics and the New Economic Sociology

Economic sociology, the study of how economic phenomena affect and are affected by social forces, is a field that arguably dates back to classical economists and social thinkers such as Adam Smith. Arguably, however, Emile Durkheim and Max Weber did the most to systematize and outline the field (see Steiner 2010; Swedberg 2010). Durkheim ([1909] 1978), for instance, described economic sociology as the application of the sociological perspective to economic phenomena. Similarly, Weber (1949, 65) has suggested that the field ought to concern itself with pure economic phenomena along with economically conditioned phenomena. The new economic sociology, which builds on the writings of these earlier thinkers, begins with the observation that all economic action is embedded within a context of ongoing social relations and seeks to trace out the impact of these social structures on economic behavior and outcomes (Swedberg 1997, 165). As Granovetter (1985, 483-484) explains, while neoclassical economics tends to advance an undersocialized conception of economic actors and traditional sociology tends to advance an oversocialized conception of economic actors, the focus on embeddedness avoids presenting economic actors as social eunuchs or social automatons. The new economic sociology also advances the proposition that economic institutions are socially constructed; that is, they are brought into being through the social action of individuals and are given force as a result of the meanings that individuals come to ascribe to them (Swedberg 1997, 165; Granovetter 1992, 7).