In their paper titled “Economic Worlds of Work” (2006), Tom Beamish and Nicole Woolsey Biggart argue that insights drawn from economic sociology can help organize and enrich theories from the sociology of work. They use the Systems of Exchange framework to demonstrate how the features of different exchange systems influence the organization and conceptualization of labor. In the following paragraphs, I will briefly summarize their findings on labor arrangements within each System of Exchange. To learn more about their research and the connections between economies and work settings, you can view the full paper here.
In the Price System of Exchange (which the authors refer to as the “Market System”), labor is conceptualized as a commodity. Laborers establish a contractual relationship with their employers, and they exchange labor for wages. The Price System is marked by universalistic social relations and instrumental rationality, and workers are expected to abide by these principles on the job; they are expected to conduct exchanges on the basis of instrumental criteria such as price and efficiency, and they shouldn’t allow social or moral factors to influence their choice of exchange partners. Of course, very few markets are pure reflections of this ideal type, and sociologists recognize that rationality and self-interest are shaped by the social and cultural context of markets. For example, Mitchel Abolafia (1996) studied three Wall Street markets (stock, bond, and futures markets) and demonstrated that local market cultures constrain workers’ utility-maximizing behaviors and ultimately help to stabilize market interactions. Abolafia’s work does not diminish the role of instrumental behavior in Price Systems, but it acknowledges that the meaning of rationality is subject to social and cultural influences.
Although social ties are eschewed in the Price System of Exchange, they are the foundation of exchanges in the Associative System. Actors in this system assume that over the long term, partnership will produce better economic outcomes than “going it alone.” In this way, Associative Systems demonstrate a commitment to instrumental rationality through particularistic social relations. Associative Systems are organized as networks of social ties, and both work and exchange are arranged through these ties. These networks can exist both at the level of the individual and the level of the firm. Work relations in Associative Systems rely on cooperation and skill-sharing. In associative industries (e.g. medical practice and law firms), members begin as apprentices and are gradually accepted into the professional network and promoted up the hierarchy; members earn their status not only through demonstration of skill but also through their connections to other members and their capacity to serve the collective. Remuneration does not necessarily reflect the number of hours spent on a given task but also accounts for the individual’s skills and status in the network. Examples of Associative labor relations include unions, guilds, alliances, and cottage industries.
Work relations in the Communal System are organized around obligation to a shared identity or common membership in a group. These social ties are not established for primarily instrumental reasons (as in the Associative System) but for the substantive value of the relationships. Examples of Communal Systems include kinship or ethnic groups and common membership in a social order. In these systems, the substantive nature of social relations determines the conditions for exchange, including whether the exchange occurs at all and the prices that are paid (if any). Labor in Communal Systems reflects common identity and shared bonds with the group; indeed, membership in the group determines whether someone is even allowed to participate. The Communal logic of mutual obligation is reflected in remuneration, which is based on reciprocity and redistribution. Each Communal System has its own set of customary rules for exchange and remuneration, and the group decides how actors can ascend the social hierarchy. One example of a Communal System is the mafia, which is substantively organized around blood relations and family honor. Exit from a Communal System (especially a kin group) is difficult, and might be achieved only through exile or death.
Moral Systems of Exchange are organized around shared substantive beliefs or values. Actors in Moral Systems are rational, but only insofar as their actions are oriented toward their ultimate values or ethics. Moral Systems can be organized around values such as justice, environmentalism, and even repugnant values like ethnic superiority. Workers within these systems are motivated not by wages or payments but by a higher purpose, and many Moral Systems even rely on volunteer labor. Instead, morally motivated workers receive honor and recognition for their work. Social relations within Moral Systems are universalistic; that is, actors are judged based on their commitment to shared values rather than their social connections or identity. Moral Systems are often organized as collectives, and examples include monasteries, communes, and religious orders. Members of these groups pursue work that is guided by moral principles in a collective (and often utopian) context.
- Beamish, Thomas D. And Nicole Woolsey Biggart. (2006). “Economic Worlds of Work: Uniting Economic Sociology with the Sociology of Work.” In Social Theory at Work. Marek Korczynski, Randy Hodson, and Paul Edwards (eds.). Oxford University Press.: 233 - 271.
- Biggart, Nicole Woolsey and Rick Delbridge. (2004). “Systems of Exchange.” Academy of Management Review 29(1): pp. 28-49.
- Abolafia, Mitchel. (1996). Making Markets: Opportunism and Restraint on Wall Street. Cambridge, MA: Harvard University Press.
Image by Rafael Matsunaga.