Deciphering Markets and Money by Gronow, Jukka

CHAPTER 1
Introduction: Making the Incomparable 
Comparable
Economic sociology has experienced a remarkable revival during the last cou-

ple of decades, and it has become one of the most innovative fields of sociologi-

cal research. The drastic recent economic developments—the financial crises 
above all—took many analysts and experts by surprise. Changes in economic 
policy in Europe, the United States, and the world at large have also contrib-

uted to the increasing interest in the sociological analysis of economic phe-

nomena and institutions by offering new, challenging research questions and 
demonstrating some of the limits and problems inherent in standard economic 
thinking and reasoning. For example, the various new instruments which have 
appeared quickly in financial markets, from subprime loans and loan swaps 
to futures trading and hedging, have become important new objects of study. 
Financialization and the numerous new forms of financial markets are in many 
ways a good test for the relevance and validity of both economics and economic 
sociology. More often than not these analyses have, however, been rather con-

crete and historical, undoubtedly of great value as such, in trying to come to 
terms with the new economic world. At the same time, rather few attempts 
to develop any more general theoretical understanding, for instance about the 
causes, conditions, forms and consequences of financialization, deregulation 
of markets, or other important developments in modern economy, have been 
on offer.
It has been a commonplace in the introductions to the general treatises, text-

books, and anthologies of economic sociology to admit that economic sociol-

ogy has not had all that much to offer since the classics of sociology active at the 
turn of the 20th century, in terms of theoretical inventions and developments 
of its own and even fewer contributions to the sociological thinking in general. 
In the opinion of many of its advocates, sociology has been good at criticizing 
standard economics and its basic postulate of rational economic action char-

acteristic of economic activity in general, also referred to as the postulate of 
Homo Oeconomicus. It has admittedly also offered quite a great deal of inter-

esting empirical and historical studies of all kinds of economic phenomena, 
new financial markets included. In a sense, it looks like economic sociology—
or sociology in general—has not yet passed over the old dilemma of choosing

between abstract theory (in Weber’s times presented by Marginalism, and 
later Neoclassical economics) and economic history (or the historical study of 
concrete economic phenomena, in the spirit of the German historical school), 
which Max Weber, one of the acknowledged classics of sociology, posed explic-

itly in his writings some hundred years ago.
In the introduction to their influential Handbook on Economic Sociology 
(2005: 6), Smelser and Swedberg wrote that
economic sociology has usually concentrated on three main lines of in-

quiry: 1) the sociological analysis of economic processes; 2) the analysis 
of the connections and interactions between the economy and the rest 
of the society; and 3) the study of changes in the institutional and cul-

tural parameters that constitute the economy’s societal context.
Other authors have expressed similar thoughts of the achievements and tasks 
facing sociological analyzes of economy. Zelizer (2003: 15), for instance, talks 
about the importance of the social context in which economic decisions are 
made. However, in her opinion it is important to shift attention from context 
to content, to the variability of markets, and ‘identify the shared understand-

ings that occur within and behind every market, shared understandings that 
underlie the very possibility of market activity’ (Zelizer 2003: 108). At the same 
time, Zelizer admits that the second alternative is the most demanding and 
challenging one, with fewer promising examples to show. She also reminds her 
readers about the parallel approach of extending the economic paradigm of 
rational behavior to such areas of society that economists have usually largely 
ignored. In doing so, Zelizer has Gary Becker’s (1976, 1998) exemplary stud-

ies of, among other things, the family institution and addictions in mind. One 
could characterize Becker as a representative of intellectual imperialism of eco-

nomics that purports to make economic thinking all inclusive, while taking 
some of its more obvious limitations into account.
Portes’ (2010)—who has also actively promoted economic sociology—view
of the real progress done in the sociological analysis of economy is rather skep-

tic. As he suggested, each field of sociological study should be able to show 
three specific contributions of its own: metatheoretical principles, explana-

tory mechanisms, and strategic objects of research. In his opinion, economic 
sociology has, in fact, quite convincingly presented some metatheoretical 
principles of its own. Among them, one could name in particular the critique 
of the rational choice paradigm as well as the thesis of the social embedded-

ness of economic phenomena. In addition, it has a great amount of sugges-

tions to the strategic objects of empirical research. However, what economic 
sociology research is mostly lacking, according to Portes, are systematic ideas 
and well-argued-for suggestions to the explanatory mechanisms which could 
seriously complement and compete with the standard explanations of the 
functioning of economic markets offered in the textbooks of economics. Such 

Deciphering Markets and Money by Gronow, Jukka