Introduction to the Systems of Exchange
The Systems of Exchange (SOE) framework is a theoretical alternative to the dominant “free market” logical model of classical economics. Sociologists have long argued that this model is inadequate for representing the wide range of empirically observed economic actions and organizations. Economists assume this idealized market and treat deviations from the ideal as “market imperfections.” But Biggart and Delbridge, like many social scientists, argue that this fictional ideal is a poor basis for understanding the wide variety of empirical economic phenomena.
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Instead of positing a logical model, the authors developed an empirically grounded typology of exchange that organizes systems according to actors’ logics of action and the structure of social relations between actors.
The Typology
Borrowing from Weber’s distinction between instrumental and substantive logics of actions and Parson’s distinction between universalistic and particularistic social relations, the authors created a classification scheme that results in four qualitatively distinctive types: Price, Associative, Moral, and Communal Systems of Exchange. The authors argue that these four different Systems of Exchange should be viewed as substantively different, rational systems rather than deviations from an idealized market.
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The SOE typology offers research advantages for the empirical analysis of economic action. It neither assumes that all exchange relations are variations of a single model, nor each economic system a historically unique arrangement.
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Each of the four systems of exchange assumes a particular economic logic that, in turn, supports complementarities between the social construction of normative economic actors, social relationships of a particular type, pricing systems, and regulatory–organizational schemes. The typology supports analysis at multiple levels, including individual and corporate actors. It can be used to develop hypotheses about the conditions under which various systems emerge, as well as causal explanations of how systems change from one type to another.