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

By Holmwood, John | The American Journal of Economics and Sociology, January 2006 | Go to article overview

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


Holmwood, John, The American Journal of Economics and Sociology


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. …

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