**2. Talcott Parsons: Some solutions and further problems**

In the 1930s, Talcott Parsons set out a theoretical construct designed to integrate, render compatible and simultaneously overcome various of the aforementioned contributions as well as other still unresolved problems. Firstly, Parsons sets out a clear dividing line separating economics from sociology, thereby guaranteeing a conceptual role and corresponding academic recognition for the latter. In this context, he establishes how the mission of economic science is supposed to consist of studying the allocation of means to ends, particularly ends of an intermediary level. This allocation takes place within a hierarchy of means and ends which at their base, the *ultimate conditions*, refers to the natural surroundings corresponding to geography, biology and psychology that Parsons (1934: 523- 4) denies the statute of social science. Three other subjects are identified by Parsons as forming the intermediary sections of this great chain of means-ends: technology (at a somewhat lower level and referring to the relationships between man and environment), economics and politics. While the latter two are eminently social, economics is assumed to deal with rational and non-violent action whereas politics is bound up with the presence, to a greater or lesser extent, of physical violence and coercion or at least their threat (Parsons, 1932: 337 and seq.; 1934: 523–4, 529–30, 543, 545; 1935a: 421; 1935b: 662, 665–6; see also Graça, 2008b). At the top of the chain, and as *ultimate ends*, come the guiding cultural values, integrating and providing meaning to action and which Parsons defends as the true subject matter of sociology.

form of social ethic or "ethicality". This social ethic, or the values associated, proves crucial in particular in terms of the stabilisation effect on consumer preferences, that is, demand. Schmoller also highlights aspects that economic sociology would later take up, such as the general importance of traditions in economic life or the supposed crucial role played by the entrepreneur, with his celebrated "teleological" virtues: leadership, orientation, unification, regeneration, etc. (cf. Schmoller, 1905-08 III: 277-9, 349, 371-2; see also Koslowski, 1995;

The theoretical writings of Schmoller, occurring in a context of concern over Socialist trends within the academic world corresponding to the Prussian state and the "Wilhelmine" Germany of the Second Empire, influenced the ideas later developed by disciples such as Werner Sombart. However, Schmoller had also clear and explicitly recognised repercussions on the works of Émile Durkheim, and correspondingly on French sociology (cf. Giddens, 1976), and of Thorstein Veblen and what is termed North American "institutionalism" (cf. Veblen 1990). As with the "institutionalist" tradition, Schmoller doubts the universal validity of economic categories and favours an approach of an "inductivist" type, which accordingly (as with Werner Sombart, but running counter to Max Weber) leans to the rejection of a considerable part of mainstream neoclassical processes and thus tends to attract the hostility of its followers. Within the work of Schmoller there is a compound emphasis in the specificity of each event and in contrast to aspects easily includable into laws and general trends, as well as a purpose at determining the greater or lesser weighting of materially conditioning factors, in particular the economic, but also the cultural factor in the life of societies. Correspondingly, his work may be approached as an interface between

In the 1930s, Talcott Parsons set out a theoretical construct designed to integrate, render compatible and simultaneously overcome various of the aforementioned contributions as well as other still unresolved problems. Firstly, Parsons sets out a clear dividing line separating economics from sociology, thereby guaranteeing a conceptual role and corresponding academic recognition for the latter. In this context, he establishes how the mission of economic science is supposed to consist of studying the allocation of means to ends, particularly ends of an intermediary level. This allocation takes place within a hierarchy of means and ends which at their base, the *ultimate conditions*, refers to the natural surroundings corresponding to geography, biology and psychology that Parsons (1934: 523- 4) denies the statute of social science. Three other subjects are identified by Parsons as forming the intermediary sections of this great chain of means-ends: technology (at a somewhat lower level and referring to the relationships between man and environment), economics and politics. While the latter two are eminently social, economics is assumed to deal with rational and non-violent action whereas politics is bound up with the presence, to a greater or lesser extent, of physical violence and coercion or at least their threat (Parsons, 1932: 337 and seq.; 1934: 523–4, 529–30, 543, 545; 1935a: 421; 1935b: 662, 665–6; see also Graça, 2008b). At the top of the chain, and as *ultimate ends*, come the guiding cultural values, integrating and providing meaning to action and which Parsons defends as the true subject

Krabbe, 1996: 22, 63–4; Nau, 2000: 511-12; Graça, 2008b: 473 and seq.).

the fields of sociology, historiography and economics.

matter of sociology.

**2. Talcott Parsons: Some solutions and further problems** 

From this proposed subject division, we may retain certain aspects of particular importance to our theme. Firstly, the criteria enabling the identification and separation of sociology from the other subject fields, especially economics, is essentially subjective and bound up with an analytic perspective. This is not about portraying the economy as a separate or distinct sphere of society as a whole, or some "department of business" corresponding to a differentiated and specific range of facts and that would be, in these terms, the object of a different subject (Parsons, 1934: 530). What characterises economics is, Parsons counterargues, a particular approach assuming: 1) agents with a multiplicity of goals and 2) facing a scarcity of resources, 3) striving to optimise the results obtained within generic restrictions, for which he postulates 4) decreasing marginal productivity of factors of production, and 5) for consumers, decreasing marginal utility of goods, within the general framework of 6) possibilities of reciprocal substitution both of production factors and final goods, hence tradeoffs.

This was, in sum, the definition of economic science proposed around that time by Lionel Robbins, to which Parsons broadly subscribed while nevertheless pointing out (1934: 344) this was an analytical device and nothing more and should not be assumed as a means of globally approaching and understanding effective realities. As regards factual reality, *la verità effettuale della cosa*, other recognisable factors enter the stage, in particular value orientations, the aforementioned ultimate ends, that orient and provide meaning and themselves represent the appropriate object for sociological scientific analysis.

Regarding those researchers considered economists, characterised by a "historicist" or "institutionalist" approach ― taking into consideration cultural facets, the diversity of circumstances and the complexity of economic facts, and so refusing for these very reasons to adopt the analytical framework that had become predominant in economics, the "marginalist" theoretical scheme according to the writings of the aforementioned Lionel Robbins ― as is basically the case with Schmoller, Sombart and Veblen, Parsons maintains that such authors assume deficient analytical perspectives and therefore tend to fall into the trap of what he termed the "fallacy of misplaced concreteness" (Parsons, 1935a: 439). Unquestionably, the "marginalist" framework does not correspond to factuality. That is clear, but does not confute it as the most appropriate approach for economic science. Striving to set it aside, in the name of realism and a broader scope of action, amounts to "economic imperialism", or an "encyclopedic economics" ― meaning the intent to an ever more wide reaching economic science ― which Parsons explicitly condemns (1932: 337; 1934: 522-4, 532; 1935b: 666). Beyond the theoretical failures and excessive "inductivism", Schmoller and Sombart are also accused of excessive "idealistic" inclinations, that is, overvaluing unique features of the realities studied and their *Geist* component, as simultaneously, and in a contradictory fashion, Parsons maintains that they over-emphasise the theoretical importance of recognisably objective circumstances, the "ultimate conditions", and at the cost of the cultural values, or "ultimate ends" (1928: 643–6; 1932: 333, 344; 1934: 531; 1935a: 423, 446 and seq.; 1935b: 656–7, 661–5; 1961: Part III, Ch. XIII; on this issue see also Graça, 2008b: 472-6).

Notwithstanding the fact that he rejects such approaches seated within official economic science but contrary to its mainstream, Parsons indeed reprocesses and utilises a good proportion of the theoretical legacy they provide, albeit on condition of committing it to a different subject field, rendering unto Cesar that which is Cesar's in the field of recognising

theory of media, hence, placed in parallel or analogy with other social institutions, that is, involving identification of functional substitutes or equivalents (cf. Beckert, 2006, Zafirovski,

Meanwhile, in the 1950s, and in works written in partnership with Neil Smelser and Alfred Kroeber, Parsons returns to various of the themes dealt with and/or alluded to in his works in the 1930s. In summary, he explains how, in the 1930s he had posited a sharing with economics that would lead to aspects approached by each of the disciplines as parameters being assumed by the other as variables: the "background assumptions" of sociology would thus be the problems and issues for economics, and vice-versa. This idea is recognised as directly attributable to Pareto and had previously been accepted as sound, but Parsons now decides to consider it with reservations. Should it make sense within the narrow range of economics to approach a significant set of themes as parameters, such an assumption held little validity for sociology. To the Parsonian sociology of this period, nothing of the social is alien: in practice, all the variables deemed relevant are considered its defining subject (cf.

For the sake of clarity: the majority of what the economics academy had thus far pronounced was, according to Parsons, fundamentally true. This held at least for the then most renowned economists with Keynes and Schumpeter leading the way. However, it was also highlighted how this was only one perspective, or "a certain way of seeing things", relative to which a more general vision would prevail capable of identifying, for the various problems considered, concordances, deep reaching and fundamental compatibilities in the theses handed down by these consecrated economists ― even while always insisting in adding that these same affirmations would be true only *in a certain sense.* And it was exactly here that Parsons comes onto the scene, basically meta-theorising what had previously been theorised by economics. His intervention actually proves, within the context of the disputes ongoing within the scope of academic economic science, simultaneously inducing perspective and conciliation: the oppositions, the dilemmas, the indeterminations left open by "orthodox" economics, ranging from the reasons for the inelasticity of wages posited by Keynes to the notion of "entrepreneurialism" *à la* Schumpeter, and taking in the intrinsic difficulties to cycle theories, the problems of investment and/or consumption functions, and the question of differentiating between property and control or the foundations to the distinction between goods and services ― everything was subject to clarification alongside a recognition of the partial truth to the then most famous theories, after being referred by Parsons and Smelser to the fundamental analytical framework of social systems, the much referenced AGIL device (cf. Parsons & Smelser, 1956: 11-12, 65, 87, 114-23, 186, 263-70;

In fact, while dealing in the 1930s with the division between economics and sociology, Parsons now explicitly refers to the division between sociology and anthropology, leaving the "cultural system" and the functional requisite of "latency" to the latter within the framework of a "general action system". Similarly, within the official context of appeal to "systemic analysis," sociology is deemed to correspond to the "social system" and to "integration". As regards the economy, a concrete structural set is assumed within the "social system". Applying the AGIL scheme to the latter, economy is committed to "adaptation", the functional requisite corresponding to lesser information and greater

Parsons & Smelser, 1956: 5-6; Dalziel & Higgins, 2002: 14-15).

2006).

Graça, 2008b: 482-3).

energy.

the validity of economic science. As regards his actual variety of sociology, conceived within the scope of the aforementioned chain of ends and means, he begins by praising Alfred Marshall for his emphasis on culture in forming consumer preferences, before going contradictorily onto recognise that, as economists, researchers consciously and appropriately assume these to be simple data and deliberately refuse to speculate on their origins or formation (Parsons, 1931: 107, 111, 113, 115, 119, 128; 1932: 330–1; 1935a: 443; Graça, 2008b: 471-2).

Vilfredo Pareto is considered an official precursor of sociology, allegedly for having underlined the importance of the "something else" that decisively impacts on actor activities and corresponds to the core of the renowned "residues of instincts" and also for having made relative the importance of "derivations" and accepted their boundless variability. Parsons is particularly generous towards the Italian author, overlooking how his sociology is openly biologically based and in fact not extending beyond a study of these residues of instincts, awarded the status of fundamentally unchangeable. Parsons highlights the regulatory or "systemic" role performed by these residues, whatever the correspondent derivations and thus placing Pareto alongside Durkheim in a pantheon of authors supposedly inclined to recognise the importance of "something more" in economic activities ― in the case of Durkheim famously highlighting the non-contractual element present in all contracts ― and the allegedly regulatory or "systemic" role of this facet (cf. Parsons, 1932: 339-42; 1934: 515, 531; 1935b: 651-4; see also Graça, 2008b: 476-80). Without these coming into effect, no social order would be either possible or even conceivable, driving towards a chaotic diversity and randomness in objectives, and so succumbing to shortages and generalised conflict, thereby falling within the renowned analytical spectrums of Hobbes and Malthus.

As regards Max Weber, Parsons is attracted by how the former highlights the importance of cultural specificities, in particular, the celebrated thesis on the relevance of the Calvinist ethic to the origins of the "spirit of capitalism" while managing to forget how this Weberian thesis is itself susceptible to accusations of "idealism" ― the analytical supremacy of cultural values and considered the pinnacle of the prevailing *Geist*, thus from the perspective of its respective uniqueness ― and in practice to a far greater extent than happened with Schmoller or Sombart. In fact, and even though Parsons makes no confession, Weber is primarily recovered as he is user-friendly on exactly those aspects that Schmoller and Sombart had of "unapproachable", that is, by recognising the analytical validity of "marginalist" economic methods and even the universality of their application whenever restricted to "ideal-type" aspects. This absence of "objection of principle" vis-à-vis what eventually became mainstream economics led to Weber's benevolent treatment by other high profile academic figures, especially Joseph Schumpeter (cf. Schumpeter, 1986: 819; Graça, 2008b: 475). Naturally, subscribing such points of view, Parsons indeed guarantees a sharing of the subject field in consecrating a position for sociology even if in a junior academic position, via an attitude seeking to appease the hostility stemming from the already far more influential field of economics. Far and away, academically the most convenient option…

Having obtained institutional recognition, Parsonian sociology was subsequently characterised by the almost complete disappearance of economic themes even with the big exception of a treatment of money as a means of communication and within a general

the validity of economic science. As regards his actual variety of sociology, conceived within the scope of the aforementioned chain of ends and means, he begins by praising Alfred Marshall for his emphasis on culture in forming consumer preferences, before going contradictorily onto recognise that, as economists, researchers consciously and appropriately assume these to be simple data and deliberately refuse to speculate on their origins or formation (Parsons, 1931: 107, 111, 113, 115, 119, 128; 1932: 330–1; 1935a: 443;

Vilfredo Pareto is considered an official precursor of sociology, allegedly for having underlined the importance of the "something else" that decisively impacts on actor activities and corresponds to the core of the renowned "residues of instincts" and also for having made relative the importance of "derivations" and accepted their boundless variability. Parsons is particularly generous towards the Italian author, overlooking how his sociology is openly biologically based and in fact not extending beyond a study of these residues of instincts, awarded the status of fundamentally unchangeable. Parsons highlights the regulatory or "systemic" role performed by these residues, whatever the correspondent derivations and thus placing Pareto alongside Durkheim in a pantheon of authors supposedly inclined to recognise the importance of "something more" in economic activities ― in the case of Durkheim famously highlighting the non-contractual element present in all contracts ― and the allegedly regulatory or "systemic" role of this facet (cf. Parsons, 1932: 339-42; 1934: 515, 531; 1935b: 651-4; see also Graça, 2008b: 476-80). Without these coming into effect, no social order would be either possible or even conceivable, driving towards a chaotic diversity and randomness in objectives, and so succumbing to shortages and generalised conflict, thereby falling within the renowned analytical spectrums of Hobbes

As regards Max Weber, Parsons is attracted by how the former highlights the importance of cultural specificities, in particular, the celebrated thesis on the relevance of the Calvinist ethic to the origins of the "spirit of capitalism" while managing to forget how this Weberian thesis is itself susceptible to accusations of "idealism" ― the analytical supremacy of cultural values and considered the pinnacle of the prevailing *Geist*, thus from the perspective of its respective uniqueness ― and in practice to a far greater extent than happened with Schmoller or Sombart. In fact, and even though Parsons makes no confession, Weber is primarily recovered as he is user-friendly on exactly those aspects that Schmoller and Sombart had of "unapproachable", that is, by recognising the analytical validity of "marginalist" economic methods and even the universality of their application whenever restricted to "ideal-type" aspects. This absence of "objection of principle" vis-à-vis what eventually became mainstream economics led to Weber's benevolent treatment by other high profile academic figures, especially Joseph Schumpeter (cf. Schumpeter, 1986: 819; Graça, 2008b: 475). Naturally, subscribing such points of view, Parsons indeed guarantees a sharing of the subject field in consecrating a position for sociology even if in a junior academic position, via an attitude seeking to appease the hostility stemming from the already far more influential field of economics. Far and away, academically the most

Having obtained institutional recognition, Parsonian sociology was subsequently characterised by the almost complete disappearance of economic themes even with the big exception of a treatment of money as a means of communication and within a general

Graça, 2008b: 471-2).

and Malthus.

convenient option…

theory of media, hence, placed in parallel or analogy with other social institutions, that is, involving identification of functional substitutes or equivalents (cf. Beckert, 2006, Zafirovski, 2006).

Meanwhile, in the 1950s, and in works written in partnership with Neil Smelser and Alfred Kroeber, Parsons returns to various of the themes dealt with and/or alluded to in his works in the 1930s. In summary, he explains how, in the 1930s he had posited a sharing with economics that would lead to aspects approached by each of the disciplines as parameters being assumed by the other as variables: the "background assumptions" of sociology would thus be the problems and issues for economics, and vice-versa. This idea is recognised as directly attributable to Pareto and had previously been accepted as sound, but Parsons now decides to consider it with reservations. Should it make sense within the narrow range of economics to approach a significant set of themes as parameters, such an assumption held little validity for sociology. To the Parsonian sociology of this period, nothing of the social is alien: in practice, all the variables deemed relevant are considered its defining subject (cf. Parsons & Smelser, 1956: 5-6; Dalziel & Higgins, 2002: 14-15).

For the sake of clarity: the majority of what the economics academy had thus far pronounced was, according to Parsons, fundamentally true. This held at least for the then most renowned economists with Keynes and Schumpeter leading the way. However, it was also highlighted how this was only one perspective, or "a certain way of seeing things", relative to which a more general vision would prevail capable of identifying, for the various problems considered, concordances, deep reaching and fundamental compatibilities in the theses handed down by these consecrated economists ― even while always insisting in adding that these same affirmations would be true only *in a certain sense.* And it was exactly here that Parsons comes onto the scene, basically meta-theorising what had previously been theorised by economics. His intervention actually proves, within the context of the disputes ongoing within the scope of academic economic science, simultaneously inducing perspective and conciliation: the oppositions, the dilemmas, the indeterminations left open by "orthodox" economics, ranging from the reasons for the inelasticity of wages posited by Keynes to the notion of "entrepreneurialism" *à la* Schumpeter, and taking in the intrinsic difficulties to cycle theories, the problems of investment and/or consumption functions, and the question of differentiating between property and control or the foundations to the distinction between goods and services ― everything was subject to clarification alongside a recognition of the partial truth to the then most famous theories, after being referred by Parsons and Smelser to the fundamental analytical framework of social systems, the much referenced AGIL device (cf. Parsons & Smelser, 1956: 11-12, 65, 87, 114-23, 186, 263-70; Graça, 2008b: 482-3).

In fact, while dealing in the 1930s with the division between economics and sociology, Parsons now explicitly refers to the division between sociology and anthropology, leaving the "cultural system" and the functional requisite of "latency" to the latter within the framework of a "general action system". Similarly, within the official context of appeal to "systemic analysis," sociology is deemed to correspond to the "social system" and to "integration". As regards the economy, a concrete structural set is assumed within the "social system". Applying the AGIL scheme to the latter, economy is committed to "adaptation", the functional requisite corresponding to lesser information and greater energy.

The "rational choice theory" (RCT) basically attempted to transport the "rational actor" of economics into the centre of the entire sociological problematic (cf. Boudon, 1977, 1979; Coleman, 1990, 1994). While recognising that, as an alternative proposal to Parsonian thinking, RCT represents an experience with at least the merit of striving for unification through logical coherence of the different academic fields, we also need to register that the very foundations of the project were simultaneously being submitted, and at its very disciplinary core, to criticism of currents of economics that had recuperated various forms and themes mostly within the scope of traditional "institutionalism": imperfect and asymmetrical information, agent-principal relationships, interdependence and the endogenous character of preference-functions, the dynamics of social networks, "strong reciprocity" and thus the themes commonly associated with names such as Richard Titmuss (1997), Oliver Williamson (1985, 1993), Herbert Simon (1957), Joseph Stiglitz (1994), Ronald Burt (1992), Samuel Bowles and Herbert Gintis (2004), among others. In truth, even within economic analysis in its strict sense the weighting of simplifying hypotheses associated to the "rational actor" model (as is the case in particular with the independence of actor functions-utilities and with perfect information) overwhelms the rational core with a series of "as ifs*"* that point to the supreme irrelevance or "autism" of the intellectual effort (cf. Hodgson, 1994). The alleged theoretical rigour of the reasoning is combined with the utter arbitrariness of the results in practical terms and which all becomes so much clearer in case we seek to generalise that analytical framework to the broader extent of human existence. The emergence of "New Economic Sociology" (NES), primarily associated with names such as Mark Granovetter (1973, 1982, 1985, 1987, 1990) and Richard Swedberg (1987, 1990a, 1990b, 1994a, 1994b, 1996, 2000, 2003, 2006), is a fact of primordial relevance and meaning. This is an officially sociological current and, even while partially based upon the Parsonian tradition, NES broke away from the strict tradition of the "grand theory" whether due to the diversity of approaches that it assumes and seeks to incorporate or due to the irreverence displayed regarding dialogue with economic science. Contrary to any mere division of tasks scrupulously respecting disciplinary competences as Parsons recommended, NES threw itself into directly challenging, even if on a limited scope, some of the assumptions and methods of academic economics. However, NES was also swift to establish guidelines on the extent of its conceptual disagreement, once again tending to return to the traditional selflegitimating allegation of the existence of diverse perspectives or angles of analysis, with its own representing nothing more than another to juxtapose over, rather than contradict,

NES is above all based upon the idea, certainly reasonable while also openly doctrinal and simultaneously somewhat vague, of a "middle-of-the-road" or a "third way" between the utilitarian behaviour of the "rational actor" of mainstream economics ― and RCT, its sociological corollary ― and the cultural determinism of Parsonianism (cf. Marques, 2003). Returning to questions of order generally associated with the studies of Mark Granovetter, who may be said to have indeed founded NES: do agents operate within "pure" environments? No, they are intensely embedded in social networks (Granovetter, 1973, 1983, 1985). Hence, it is neither accurate to suppose a "rational actor" proceeding in a "market" that is in turn completely disembedded from the rest of social existence nor to go to the opposite extreme and assume the "cultural dopes*"* corresponding to the "cultural determinism" of Parsonian tradition. In attempting to derive a methodologically *juste milieu* 

economics.

The meta-theoretical intent of Parsons in this period above all relates to the undeniable problem deriving from a fundamentally *post festum* theoretical position: Parsons and Smelser enable us to perceive to what extent this or that consensus makes sense, how this or that problem necessarily results from a diversity of particular perspectives susceptible to concerting. However, in no way do they seem able to pre-empt genuine theoretical development or significant changes in the problematic issues and this thus restricts them to following the current of facts while rising above them to proclaim their allegedly superior vision. If we compare the theoretical economic panorama on which the two authors report in the 1950s with that now prevailing, we easily understand the truth of this. As regards economic issues, the usual criticism concerning the works of Parsons proves particularly valid, seeing in it little more than an immense general framework for classification and categorisation and furthermore fundamentally insusceptible to testing due to its incapacity to generate predictions even while also endlessly inclined towards reformulations designed to nurturing the impression of some "global synthesis"…

Furthermore, and of equal importance, his partial *mea culpa* in the 1950s is based upon the still only implicit recognition of the essential lack of validity of the criticism he previously made of "heterodox" authors, when accusing them of idealism and anti-analytical tendencies (misplaced concreteness) or of any other "sins". These repeated accusations above all reflect the trend for Parsons himself to engage in abusive simplification of the theoretical range of problems faced by sociology and reducing them to the famous "Hobbesian problem of order", while at the same time aiming at a reconciliation with mainstream economic science through symbolically "serving up the heads" of representatives of "heterodox" or "dissident" trends of this latter field (see Graça, 2008b: 483 and seq.).

This state of play resulted in an unfortunate relative under-development of economic sociology within the scope of Parsonian theoretical thinking. As recognised by authors who nevertheless remain very charitable towards the overall project, the main initiative of Parsons in this and subsequent periods falling within the scope of economic issues did not extend much beyond the aforementioned attempt to produce a sociological theory of money as a component of a general theory of media (cf. Beckert, 2006, particularly section IV; Zafirovski, 2006: 81 and seq.). Indeed, and according to Zafirovski, "Parsons conceives of economic sociology in terms of a sociological analysis of the economy, including markets (...) In general, his economic sociology is an analysis of the relations between economy and society (…) especially of the impact of the latter on the former. Adopting socioeconomic holism exemplified in a systems approach to these relations, the hallmark of Parsonian economic sociology is treating the economy as a particular social system in relation to the other, noneconomic subsystems of a society" (2006: 75). Nevertheless, and as the same author candidly adds, "Curiously, Parsons rarely uses the term economic sociology and seldom explicitly defines its subject and scope, usually defining it by implication", etcetera.
