Economics, Sociology, and the "Professional Complex": Talcott Parsons and the Critique of Orthodox Economics

Beginning of article

A number of recent commentaries point to a renewed interest in the relationship between economics and sociology (Swedberg 1991; Smelser and Swedberg 1994). What is also evident is that this relationship is uneasy and, seemingly, contradictory. Economists, for example, have shown an interest in applying economic models to phenomena more usually addressed by sociologists, such as the family, crime and deviance, and the like. This has extended to the application of economic analysis to what might be regarded as the quintessential object of sociology, institutions, and the elaboration of a "new" institutional economics on neoclassical foundations (Williamson 1981). At the same time, some sociologists and economists have sought to unify economics and sociology within a single framework of rational choice (Hirshleifer 1985; Coleman 1990). Other sociologists have returned the favor, arguing that the quintessential object of economics--exchange--should be approached from a sociological perspective, emphasizing its character as an institution (Granovetter 1985, 1990). Here sociologists have found an alliance with "heterodox" economists for example, contemporary advocates of "old" institutional economics, radical economists, and Marxist economists--to challenge the utilitarian assumptions of the neoclassical framework and to argue for a "new" economic sociology (Swedberg and Granovetter 1992; Ingham 1996).

It is evident that economics and sociology are not neatly distinguished, with some sociologists accepting assumptions that are strongly associated with economics and, vice versa, with heterodox economists accepting what are often regarded as sociological assumptions. Nonetheless, there seems to be an underlying division, and it is one that is frequently used to characterize the two disciplines. Baron and Hannan, for example, comment that:

Economics, then, utilizes a simple model that claims general relevance, while sociology tends to be particularistic and descriptive.

I do not wish to go into all the nuances associated with this distinction, except to say that it also gives rise to confusion over terms. For example, from the perspective of economics, sociology is often argued to be "not theoretical" and to be "empiricist, " while sociologists typically vehemently deny that charge and accuse the former of "positivism." These misunderstandings, or ways of talking past each other, have characterized debates across the years, going back to the 19th-century Methodenstreit between proponents of the general theory in economics and the German historical school; they have determined the reception of Parsons's critique of orthodox economics; and they continue into the present. (1)

In this article, I will address these issues of the theoretical form of economics and sociology in discussion of the work of Talcott Parsons. I shall suggest that his arguments remain significant, but are also frequently misunderstood. For example, some advocates of the "new" economic sociology have argued that Parsons contributed to the dominance of orthodox economics by his acceptance of its categories and his rejection of "old" institutional economics (Camic 1992; Swedberg and Granovetter 1992; Velthuis 1999; Hodgson 2001). For Swedberg and Granovetter, and for Velthuis, this reinforced disciplinary boundaries between sociology and economics and set back the cause of a proper sociology of economic phenomena (see also Brick 2005). In contrast, Gould (taking issue with Camic 1989) argues for the contemporary relevance of Parsons's early writings precisely because he believes that Parsons provided an effective critique of orthodox economic categories, writing:

What is it that can make sense of these contrasting views? I shall argue that Parsons's critique of orthodox and institutional economics is intimately associated with his claims for his action frame of reference as a means of overcoming and synthesizing dualisms in the epistemological foundations of social science (Adriaansens 1979), including those indicated by the division between sociology and economics. Indeed, his early characterization of the problem is very similar to that of Baron and Hannan, with several important qualifications. He accepts that when sociological elements are introduced in the application of economic theory to concrete reality, this is frequently done in an empiricist way (Parsons [1935] 1991: 186). Moreover, when this is combined with an emphasis on the "unreality" of economic assumptions, this tends to the radical and dismissive critique of economic orthodoxy that is found in institutional economics (perhaps especially Veblen). (3) However, he also argues that a similar empiricism characterizes orthodox economics itself insofar as it is held that "the principles of economic theory ... are directly, without essential qualifications for other factors, applicable to concrete 'economic activities, ' to 'business'" ([1935] 1991: 186). For Parsons, what is necessary is for the sociological "factors" to be theorized with an equivalent rigor to those of economics. It is only when this is done that an analytical theory that incorporates all relevant factors can be applied to concrete circumstances without an empiricist confusion of analytical factors with corresponding concrete domains, or what he calls "the fallacy of misplaced concreteness." The concrete domain of the "economy" is no less subject to the operation of sociological factors, but the latter need to be stated within an abstract social science comparable to orthodox economics (once it, for its part, is properly understood outside the constraints of a positivist epistemology).

In this way, Parsons sought to retain some of the substantive insights of the institutional critique of orthodox economics, while providing a theoretical framework that would transcend the limits both of orthodox economics and the institutionalist critique. At the same time, this framework was to secure the professional status of sociology in its relation to economics and other disciplines. Central to this ambition is the problem of a proper understanding of the institutionalization of activities (including economic activities), for which the role of the professions represents a test case.

If I disagree with some part of the interpretation put forward by commentators like Camic and Granovetter, I have considerable sympathy with their conclusion. As I shall show in a subsequent section of the article, Parsons's theory does contain serious flaws, and these flaws allow the impression that he has simply carried over the deficiencies that sociologists typically associate with neoclassical economics into his general theory (for example, by transposing the economist's concern with market equilibrium to the wider social system itself, and in his evident difficulties in providing an empirical reference for his theory). (4) However, this was not his initial intention, and any understanding of the current problems facing "economic sociology" requires a proper appreciation of how Parsons's critique of orthodox economics was integral to his argument for an action frame of reference. (5)

I

The "Professional Complex"

FOR CAMIC AND OTHERS (Camic 1992; Wearne 1989; Granovetter 1990; Velthuis 1999; Brick 2005), Parsons was seen as initially sympathetic to institutional economics but later rejecting it. Part of their explanation of why Parsons turned away from institutional economics is to do with his appointment at Harvard in 1927 and the lower status accorded to sociology when compared with economics. (6) This had both a particular expression, in the dominance of orthodox economics within Harvard itself (compared with Parsons's alma mater Amherst, where he had imbibed institutional economics), as well as a general expression. Institutional economics was on the wane (Yonay 1998), and sociology itself was experiencing greater problems of public acceptance than economics (evidenced by much later acceptance into university teaching and research arrangements). To some degree, being seen to be closer to the accepted form of science was to have greater status, and the emulation of economics was a potential route to the successful institutionalization of sociology, as well as serving Parsons in terms of his personal career.

However, there is no reason to believe that Parsons's reasons were simply self-serving, as Hodgson (2001) suggests. As we shall see, as befits someone who was concerned with the integration of self-interest and altruism (and their explanation in terms of "social structure"), rather than their expression as opposites, Parsons had clearly articulated reasons for this shift. If Parsons turned away from institutional economics in particular (Camic 1992; Velthuis 1999), and economics in general (Brick 2005), at least in his own mind, it was because he had transcended the limits of orthodox economics in his general frame of reference, the further elaboration of which was the primary focus of his attention after the writing of The Structure of Social Action. Moreover, he regarded its sociological aspect not to be in direct opposition to institutional economics, but to be its more adequate successor (in the sense of providing a better theoretical account of the very processes of the institutionalization of activities, including those deemed to be "economic").

Parsons's concern with the professions (including the profession of sociology) coincides with his engagement with the problem of the relation between economics and sociology. (7) Two general themes emerge: first, concerning how capitalism is to be characterized and the importance of an understanding of the professions in reframing the standard characterization; second, concerning changes in the complexity of the institutional evolution of capitalism as the context for the emergence of sociology as a discipline.

In his earliest article on the professions, Parsons argues that capitalism is frequently associated with the rise of "free enterprise" and associated motives of acquisitiveness and self-interest. "By contrast with business in this interpretation, " Parsons writes, "the professions are marked by 'disinterestedness'" ([1939] 1954: 35). Although the business economy received greater empirical emphasis, Parsons believes that the professions are equally significant. Thus, Parsons writes that "it seems evident that many of the most important features of our society are to a considerable extent dependent on the smooth functioning of the professions. Both the pursuit and the application of liberal learning are predominantly carried out in a professional context" ([1939] 1954: 34).

Nonetheless, the general dominance attributed to pecuniary motives within the modern capitalist economy creates an apparent tension where any social structures organized in terms of professional disinterestedness are either thought to be really determined by the operation of self-interest, or where those distinctive structures are held to be becoming increasingly commercialized so that they are likely to disappear (Parsons [1939] 1954). (8) In contrast, Parsons writes that "the fact that the professions have reached a uniquely high level of development in the same society which is also characterized by a business economy suggests that the contrast which has been mainly stated in terms of the problem of self-interest, is not the whole story" ([1939] 1954: 36).

According to Parsons, the professions exhibit a particular kind of authority, one based not on social status, but on a functionally specific technical competence. The advice offered by a professional has the form of a "command" in the sense that the professional person's expertise entails knowing the best interests of the client. This technical competence is based upon general university learning and is associated with universalistic values. Despite a profession's monopoly of expertise, Parsons suggests that the corporate form of professional organization provided an ethical …