Pareto, Parsons, and the Boundary between Economics and Sociology

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Introduction

DURING THE LAST 15 YEARS, SCHOLARS HAVE BEGUN DISCUSSING the personalities and ideas that produced an almost complete separation between economics and sociology for a significant part of last century, particularly in the United States (Camic 1987; Swedberg 1987, 1990: 13; Friedland and Robertson 1990; Granovetter 1990; Subrahmanyam 1992; Swedberg and Granovetter 1992; Smelser and Swedberg 1994; Davern and Eitzen 1995; Ingham 1996). The account typically focuses on the conjunction of two events at Harvard University in the 1930s. The first was the foundation of a separate Department of Sociology in 1931 after decades during which sociology had been taught within the Department of Economics, by Edward Cummings from 1893 to 1902 and then by Thomas Nixon Carver (Sorokin 1963; Mason 1982; Homans 1984; Johnston 1986). The second event was the organization by Lawrence Henderson of a seminar group that met between 1932 and 1934 to study the sociological thought of Vilfredo Pareto, the Italian successor to Leon Walras as Professor of Economics at Lausanne University (Homans and Curtis 1934; Henderson 1935; Heyl 1968; Weintraub 1991: 62-66). Common to both events was Talcott Parsons, who was to become "widely regarded as the most significant and influential twentieth-century American sociologist" (Robertson and Turner 1991: 1). Parsons had been in Harvard's Economics Department for more than three years in 1931, but his prospects for tenure were not bright since he was not interested in the more technical developments in economics emerging at that time. He therefore became a charter member of the new Department of Sociology, and was also a member of Henderson's seminar studying Pareto's (1916) Trattato di Sociologia Generale in its (1917) French edition.

At the time, Parsons was already engaged in studying the relationship between economic and sociological theory in the works of Werner Sombart, Max Weber, and Alfred Marshall (Parsons 1928, 1929, 1931, 1932). This research took on additional importance as he sought to legitimize his move from economics to the lower-status field of sociology (Camic 1987, 1991; Hodgson 2001: ch. 13). Pareto's Trattato was very useful for this purpose since "Pareto had been an eminent economic theorist [who] had attempted the formulation of a more comprehensive system of sociological theory" (Parsons 1970: 828). Parsons began writing articles on Pareto (Parsons 1933, 1935a, 1935b, 1936), and devoted three chapters of his (1937) book The Structure of Social Action to Pareto's sociology and its implications. This book was very influential. As Camic (1989: 39) observes, "no sociological work from the period has been so widely discussed, and few theoretical developments in the discipline over the past half century have been launched without an engagement with Talcott Parsons' towering first book."

According to Parsons, Pareto rigidly restricted the discipline of economics to the study of logical or rational behavior: "action is economically explicable only in so far as it is logical; hence all factors responsible for deviation from the norm of intrinsic rationality may be ruled out as non-economic" (Parsons 1949: 265). (1) These nonrational, noneconomic elements were the proper focus of study for analytical sociology. This interpretation of Pareto came to be widely accepted, in economics as well as sociology. Paul Samuelson, for example, who was in the Department of Economics at Harvard from 1935 to 1940, wrote in his famous graduate textbook that "many economists, well within the academic fold, would separate economics from sociology upon the basis of rational or irrational behavior" (1947: 90), a remark that he later agreed did trace to Pareto (Swedberg 1990: 3, fn. 4). This view is still widely accepted, as the following recent statements illustrate: "[Pareto's] basic premise was that economics studies rational action, and sociology studies nonrational action" (Swedberg 1990: 11); "One way of doing this, suggested by the Italian social scientist, Vilfredo Pareto, is to institute a division of labor between the rational and nonrational aspects of social life" (Holton 1992: 14); "Like Pareto, [Parsons] accepted the rational action postulate for economic analysis, but argued that sociology addressed a set of problems left open by economics that required attention to nonrational elements" (Coleman and Fararo 1992: xvii); "Vilfredo Pareto, the only figure who deeply influenced both disciplines, held that economics was the study of rational behavior and sociology the study of nonrational behavior" (Baron and Hannan 1994: 1116); "Economics, Pareto argued, should only deal with 'logical action' and sociology with 'nonlogical action'" (Smelser and Swedberg 1994: 20, fn. …

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