Ebook: Markets as Social Structures

Smelser, Neil J., and Richard Swedberg (eds.). The Handbook of Economic Sociology. Princeton: Princeton University Press; New York: Russell Sage Foundation, 1994. pp.255-282THE MARKET represents one of the most important economic institutions in contemporary society.1 It has also become a key word in political discourse all over the world. Given this centrality, it is no wonder that there exists a huge literature on the concept of the market, the major works of which will be reviewed and commented on in this chapter. My main emphasis, however, will be to look at markets from a particular perspective, namely as a specific type of social structure. Social structure can be defined in a number of ways, but what is usually meant by this term is some kind of recurrent and patterned interactions between agents that are maintained through sanctions. In a discussion of markets as a specific kind of social structure, it is consequently not very helpful to define them simply as price-making mechanisms (as is often done in economic theory), since this tells us little about the basic interaction involved. A more useful approach in this context is to view markets in terms of exchange, especially if exchange is conceived of in a broad sense, as Ronald Coase does when he defines the market as a "social institution which facilitates exchange".