**5. References**

96 Sociological Landscape – Theories, Realities and Trends

The integrative perspective of this approach is to elaborate upon variations of the named main situations and their underlying problems and to show when institutions are established to solve the problem and what social effects these institutions can have. Thus, the main thesis is that different kinds of social institutions matter in economic life because they provide mutual expectations in general and thereby solve various problems of social actions in particular. Mass product markets and privately-owned large firms are seen as a result of both the decline of small and morally integrated groups as well as that of formally free and rationally acting individuals that try to improve their lives. One major task for sociology in the future is to conduct analytical and empirical research on understanding the change of social structure brought about by the spread of the named economic institutions. In other words, we do not only need more knowledge about the rise of modern western economy, but also about the way economy is changing and thereby disabling or enabling

One of the mostly discussed problems in sociology is that of bridging individuals and social structure and hence taking into account social, cultural, and economic aspects when explaining and analyzing society. Because of this the development of multi-level and mostly action-based explanations turned out to be one of the most important developments in sociology in general and in economic sociology in particular. In this regard, institution theories are very helpful because social institutions in a broad sense as socially constituted expectations can be explained as a result of individual actions and, in particular, social situations. Furthermore, the intended as well as the unintended by-products of such institutions can be analyzed according to the underlying problem structure as well as to individuals' capabilities and motivations. On this basis, I have argued that the rise of both business firms and mass markets can be explained as attempts of formally free individuals to improve their living conditions by the coordination through central hierarchies as well as decentralized market exchange, both, however, going along with the need for further institutions. While the large firm is predominantly characterized by its conflict structure that has to be framed by collective ideas or bargaining mechanisms, markets always need social definitions about goods, sellers, and buyers, and most of the time trust-building institutions that help running exchange relations by strangers when competition fails or when there is a lack of information. Due to the logic of the underlying problem, social institutions like cultural symbols, tacit knowledge, networks, or even – in more problematic cases – formal rules and hierarchies are helpful in stabilizing or substituting market mechanisms. In doing so, we can now not only state that institutions matter in economy, but we can more precisely formulate theses about when and why which sorts of institutions might be helpful and also possible. That means that the market can no longer be seen as the most effective coordination mechanism in economy, but only as one of many that works most efficiently

when functioning by defining prices that state the resource structure.

Some additional work has to be done to widen the action theory so that interests as well as duties or customs be integrated, in the sense that we can give theoretical arguments about economic actions that are interest-based as well as governed by normatively or habitually founded institutions. Also, some more work has to be done to pay more attention to specific human abilities, especially rationality and creativity, which help to describe problem

social institutions.

**4. Conclusion** 


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The first problem found when attempting to define the field of economic sociology results directly from the fact of the pre-existing reality of ― both academically consecrated but diverse ― disciplines of sociology and economics. Within this context, we need to, even if only briefly, consider the processes of academic institutionalisation that economics and sociology underwent as from the 19th century, and also the discourses that were

As is known, the term "sociology" may be traced back to the first half of the 19th century and Auguste Comte. The correspondent tradition regarding economy-society relationships attributed the economy the mere role of social subsector within the framework of what has been called a "fundamental epistemological principle of the unity of knowledge, especially of social science" (Zafirovski, 2005: 123), or indeed methodological monism. Economic facts would thus be no more than a variation on social facts, and "economic analysis proper should not be conceived or cultivated apart from the whole of sociological analysis" (idem: 126), even while Comte left unresolved the question corresponding to which extent it is acceptable to consider the existence of "internal subdivisions" to sociology. Within this context, mention is due to the efforts of among others the Portuguese positivist jurist and sociologist Manuel Emídio Garcia, who postulated that the economic sphere corresponded to a particular variety of social facts he identified, and based upon a biologically inspired analogy, as "facts of vitality and nutrition" (Garcia, 1882: 9 and seq.; Graça, 2005: 114).

In general, and without overlooking the divergences between the different authors, various sociologically minded jurists of this period, generically of a positivist inspiration, followed the trajectory set out by Garcia and ― in accordance with the teachings of Comte ― considered greater or lesser generalities in symmetry with complexity as the fundamental criteria for "classifying" or "internally dividing up" social reality, and hence also sociology. In this ambit, the more general economic facts were supposed to have correspondingly lesser complexity. Furthermore, the "facts of production" within were assumed the base of an ideal "pyramid" thus interrelating their greater generality with lesser complexity in addition to a tighter level of determinism. Simultaneously, the "facts of distribution", whose lesser generality was deemed to correspond to greater complexity, were by contrast accepted as partially the result of deliberate human actions and hence not susceptible to analysis in strictly determinist terms. This is how, shortly after Garcia, in 1891, another Portuguese positivist academic, José Frederico Laranjo proposed that distributive realities

**1. Introduction** 

predominantly bound up with such processes.

João Carlos Graça

*Portugal* 

*SOCIUS, ISEG-UTL, Lisbon,* 

Zelizer, V. (2005). Culture and Consumption. In: Smelser, N. J. & Swedberg, R. (Ed.), *The Handbook of Economic Sociology*, pp. 331-354. Princeton, Princeton UP **6** 

João Carlos Graça *SOCIUS, ISEG-UTL, Lisbon, Portugal* 
