Economic Sociology

Virginia Postrel, a well respected blogger and author, comments on Economic Sociology in the Boston Globe. Economic Sociology is the application of Sociology's tools and frameworks to markets and the topics normally monopolized by economicts. This is only fair, she writes, because economists have been applying their models and theories to social structures for decades now. We might call that Social Economics.

The application of Economic Sociology that immediately leaps into my mind is economic development and growth models. Economists have been stumped for years as to why some countries grow with viral capitalist economies and other have been stagnating for centuries. We have run millions of regressions correllating international trade and openness, labor force education, savings rates and capital investment, and a million other variables with growth. Most recently the focus has been on economic institutions such as stable, uncorrupt government, central banks and monetary institutions, ect... But while we know what a healthy economy looks like, creating one is a different sort of task.

How might understanding culture lead to better solutions? How much better can we explain and predict economic growth when accounting for culture or other socio-economic variables? These are exciting questions. As Robert Lucas says:

The consequences for human welfare involved in questions like these are simple staggering: Once one starts to think about them, it is hard to think about anything else.