Our attention this month returns to economic sociology where we examine a different, more recent literature stream that emerged in the beginning of the 21st century as an alternative to the economic models that dominated the field. We start with a 2012 book chapter by Viviana Zelizer titled, “How I became a relational economic sociologist and what does that mean?” where the term relational work was coined to encompass the marriage of economic transactions with social relationships and medias of exchange, applying in cases where the parties to a transaction are intimately involved with each other.
The results are economic transactions that differ in character from what a purely economic view would predict. For example, a family managing a budget is likely to make decisions about major purchases to the needs of family members very differently than how a business may view similar investments. The breadwinner of the family may divide the budget (“earmarking” different slices of money) based not only on utility of the good or service purchased but also on maintaining harmony within the family. If one child receives too much benefit, there may be arguments among other siblings about unfairness. If the father was a pure rational economist, the budgetary decision would likely be made on the value of the good being considered without concerns over which family member would benefit most or whether the risk of disappointment and resentment.
In a seminal review article in 2020, Nina Bandelj published “Relational Work in the Economy” that directly contrasts relational work from the embeddedness perspective which we covered in Episode 127 on the works of Granovetter. In that perspective, the “structure of relations [influences] economic outcomes. In contrast, relational work [predicts] whether an economic transaction is accomplished and how depends on the viable matches of relation, transactions, meanings, and medias of exchange” (Zelizer, 2012: 255). Within the relational perspective, economic actors make distinctions about classes of money (sometimes referred to as “colors of money”) that determine social and cognitive ways that money is utilized. Sometimes, the exchange may be disreputable or morally objectionable, such as for the purchases of vices or illegal goods, in which cases the exchange may occur in a hidden (“obfuscated”) fashion such as bundled with other legitimate purchase or brokered through third parties. Emotions are also important as some actors try to influence the mind of the other party to make (or not make) a purchase, such as how real estate agents or used car salespersons attempt the hard sell – invoking the client or customer’s emotional responses to convince them that they want to buy that house or car even when it is not in their best interests to do so.
We also include a discussion of another article from Bandelj on the state of competition between the embeddedness and relational perspectives. The former has remained as the dominant perspective in economic sociology despite increasing evidence that the relational perspective has much more explanatory power and a more robust research agenda. Bandelj proposed several reasons why this is the case including that embeddedness scholarship is deeply institutionalized and continued across generations of senior faculty mentors and their protégés (academic familism), that established economists dominated the initial field of economic sociology and therefore biased the newer field (“spillover prestige”), and that gender segregation has played a significant role with women (who are more likely to be relational scholars) remaining severely underrepresented. We offer another perspective that despite the shortcomings of the embeddedness approach, it remains dominant in part due to its utility in modeling decision spaces and plans of action, whereas these capabilities do not yet appear to have emerged from the relational work perspective.
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You may also download the audio files here: Part 1 | Part 2 | Supplement
Read with us:
Zelizer, V. A. (2012). How I became a relational economic sociologist and what does that mean?. Politics & Society, 40(2), 145-174
Bandelj, N. (2020). Relational work in the economy. Annual Review of Sociology, 46(1), 251-272.
Bandelj, N. (2019). Academic familism, spillover prestige and gender segregation in sociology subfields: the trajectory of economic sociology. The American Sociologist, 50(4), 488-508.
Related episodes from the Talking About Organizations Podcast:
Episode 127. The problem of embeddedness — Mark Granovetter
Episode 123. Markets as politics — Neil Fligstein
Episode 117. Economic sociology & valuation — Marion Fourcade
Episode 44. Transaction costs & boundaries of the firm — Williamson & Malone