The Sociology of Economic Life.

• Author: Cate, Tom

This book, a collection of fifteen essays, is divided into four parts prefaced by an editors' introduction. This introduction provides the reader with an overview of the basic principles of the New Economic Sociology, of the differences between the New Economic Sociology and the New Institutional Economics, and of the plan of the book. According to the editors, the three suggested central propositions of the New Economic Sociology are: "1. Economic action is a form of social action; 2. Economic action is socially situated; and 3. Economic institutions are social constructions" and the central theme of the New Institutional Economics is that ". . . |an~ institution exists because it is efficient . . . as a solution to a certain problem in the market". The work of Becker and Buchanan are cited as being examples of the New Institutional Economics. In addressing these topics the editors state that "|this~ book is part of a recent and very exciting development: the opening up of the academic debate about the economy to include a genuinely social perspective" |p. 1, emphasis in original~. Prior to reviewing the contents of this collection of essays, let us spend a few moments examining the context of this debate.

Recall that Ward |3~ suggested that the discipline of economics could be divided into four classes:

A: Microtheory, macrotheory, econometrics

B: International trade, money and banking, public finance

C: Industrial organization, labor, economic history

D: Economic development, history of economic thought, comparative economic systems,

and that the ". . . fields are classified in terms of the extent to which practitioners actually make use of the Class A framework of problems and procedures in their research |3, 10~. The New Economic History with its emphasis on hypothesis testing has increased the standing of economic historians because they have adopted the Class A approach to the discipline of economics and have given less play to the methodology of the discipline of history. Two examples of the New Economic History are The Rise of the Western World by North and Thomas |1~ and Did Monetary Forces Cause the Great Depression? by Temin |2~. The New Institutional Economics, on the other hand, is an example of Class A research. One of the topics within microtheory is the difference between "market failures" and "public sector failures". If the market can in some sense fail to perform effectively the duties which have been assigned to it...