The Sociology of Markets

 

The Sociology of Markets

 

 Gaurang R. Sahay

 

One of the more important achievements of the new economic sociology is to have opened up the study of markets sociologically. Max Weber had stressed the need for a sociology of the market but his call for studies of this type went unheeded for more than half a century. Parsons and Smelser and Polanyi had made interesting efforts to initiate the study of markets during the mid-twentieth century but did not get very far. From the mid-1970s, however, a number of sociological works have appeared which try to delineate the social structure of various types of markets. As a result, a new topic, which for convenience can be called ‘the sociology of markets’, has come into being.

What characterizes the new economic sociology in relation to markets is basically that it attempts to look at markets as concrete social structures and to figure out the specific sociological mechanisms through which they work. The market is thus broken down into different types such as internal markets, external markets, long distance markets or fair, markets for merchants, national markets, modern mass markets, international markets and labour markets and is thereby brought closer to reality. Contrary to neoclassical theory, the emphasis is on the concrete interaction between real actors and not on the hypothetical intersection of the demand and supply of fictitious actors. Harrison White, who is the leading sociologist in this field, writes:

Neoclassical microeconomics does not look directly at markets. Instead, decisions by typical actors (firms and consumers) are modelled. The theory is unable to specify analytically the boundaries of a market, or to discriminate a production market as such from an entire industrial economy ... l argue that the need instead is to focus on markets as such, as social structures built jointly by interlocking perceptions and decisions of actors .... ( 1990, I-2)

There are four most important and useful attempts by sociologists to understand the workings of markets which have been resulted into four approaches: Max Weber’s approach, Harrison White’s model, networks approach and markets as parts of fields approach. Other possible candidates are the efforts by Parsons and Smelser to provide 'starting-points for a systematic development of a sociology of markets,' Karl Polanyi’s analysis of markets, and the attempt by Zelizer and Abolafia to view markets from a cultural-sociological perspective (Parsons and Smelser 1956, 143–75; Polanyi 1944, 1947, 1957; Zelizer 1979; Abolafia 1996, 1998). All of these approaches have contributed to the sociological analysis of markets.

Max Weber on Markets

Of the early sociologists Max Weber was by far the one of the most interested in markets, and especially during his last years he tried to develop a 'sociology of the market' (1922, 81). As a young scholar, Weber, wrote voluminously on the stock exchange market. It is clear that Weber was convinced that stock exchanges filled a crucial role in the modern capitalist machinery and that they could be organized in different ways, depending on the attitude of the state, businessmen and so on. Weber emphasized the legal and ethical dimension of the dealings in the stock exchanges but was also fascinated by its political role – its role as 'a means to power' in the economic struggle between nations (1894, 369).

Weber followed primarily Menger when it came to markets. Weber, however, added his own distinct touch by emphasizing that 'the price in the market is a result of economic struggle or price struggle' (1898, 45). The struggle over prices, he explained, had two aspects that should be separated. On the one hand, there is a 'struggle of competition' between all those who are potentially interested in selling goods; and on the other hand there is an 'interest struggle' between the two parties who end up by engaging in an exchange. Weber also argued that when 'the empirical price,' as opposite to 'the theoretical price,' was to be determined in an analysis, several new factors had to be taken into account, such as the actors’ lack of perfect information.

When Weber started to define himself as a sociologist in the later part of his career, he reworked his analysis of the market from the viewpoint of social action. Some results of this effort can be found in The Protestant Ethic and Spirit of Capitalism, with its emphasis on the creation of a rational attitude towards profit making, work, and the market more generally. Weber’s sociological theory of markets, however, came to its fullest expression in Economy and Society, where one of the key passages reads as follows:

A market may be said to exist wherever there is competition, even if only unilateral, for opportunities of exchange among a plurality of potential parties. Their physical assemblage in one place, as in the local market square, the fair (the 'long distance market'), or the exchange (the merchants’ market), only constitutes the most consistent kind of market formation. It is, however, only this physical assemblage which allows the full emergence of the market’s most distinctive feature, viz. Dickering. (1922, 635)

Weber made a conceptual distinction between exchange and competition. Social action in the market begins, according to Weber, with competition but ends up as exchange. In phase 1, 'the potential partners are guided in their offers by the potential action of an indeterminate large group of real or imaginary competitors rather than by their own actions alone' (1922, 636). Here, in other words, there is orientation to others rather than direct social interaction. Phase 2, the final phase, is structured differently; and here the only actors involved are the two parties who end up making the exchange (1922, 635). As Weber saw it, exchange in the market was also exceptional because it represented the most instrumental and calculating type of social action possible between two human beings. In this sense, he said, exchange represents 'the archetype of all rational social action' and constitutes, as such, 'an abomination to every system of fraternal ethics' (1922, 635, 637). While classes thrive on markets, they represent a threat to status groups.

In his sociology of markets, Weber also emphasized the element of struggle or conflict. He used terms such as 'market struggle,' and he spoke of 'the battle of man against man in the market' (1922, 93, 108). Competition, for example, is defined as 'a ‘peaceful’ conflict . . . insofar as it consists in a formally peaceful attempt to attain control over opportunities and advantages which are also desired by others.' Exchange, on the other hand, is defined as 'a compromise of interests on the part of the parties in the course of which goods or other advantages are passed as reciprocal compensation' (1922, 38, 72).

Weber was furthermore very interested in the interaction between the market and the rest of society. Weber’s analysis on this point can be approached through his analysis of the role that regulation (including legal regulation) plays. A market, Weber explains in Economy and Society, can either be free or regulated (1922, 82–85). In precapitalistic societies there typically exists quite a bit of 'traditional regulation' of the market. The more rational a market is, however, the less it is regulated. The highest degree of 'market freedom' or 'market rationality' is reached in capitalistic society. In order for the market to be this rational and predictable, however, several conditions have to be fulfilled, including the expropriation of the workers from the means of production and the existence of calculable law (1922, 161–62). Capitalist markets, in other words, are the result of a long historical process. How Weber envisioned the historical evolution of the market can be gleaned from Economy and Society as well as from General Economic History.

Polyani, Parsons and Smelser on Markets

The most important texts on markets in economic sociology just after World War II are Karl Polanyi’s The Great Transformation and his essay ‘The Economy as Instituted Process’ and Parsons and Smelser’s Economy and Society. Important advances were made in these works, and they challenged the economists’ monopoly of the topic of markets and their belief that economic behaviour can be seen in terms of markets (’the economistic fallacy’). Polanyi, Parsons and Smelser also tried their hands at developing a sociological alternative to the neoclassical theory of the market. For Polanyi this meant analysing markets in terms of ‘market elements’ such as ‘demand crowd’, ‘supply crowd’ and ‘the element of equivalency’. Parsons and Smelser suggested that a market could be conceptualized as a ‘social system’, centered around the idea of boundary interchanges according to the AGIL-scheme. After Polanyi and Parsons and Smelser analysis of the market in the 1950s there was a long gap and sociologists showed little interest in the topic.

Harrison C. White on the Market: The W(y) Model

Since the mid-1980s sociologists have become more interested in the market than they have ever been before, and if one person deserves credit for having helped to ignite this interest, it is Harrison White (White 1981; White and Eccles 1987). The most ambitious effort in developing a general sociological theory of markets has been made by Harrison C. White. White’s research on markets began in the mid-1970s. His research represents a bold attempt to create a totally new sociological theory of markets, the so-called W(y) model. This theoretical model has been shaped by White’s deep dissatisfaction with contemporary or neoclassical economics. Contemporary economics, according to White, has no interest in concrete markets and is mainly preoccupied with exchange markets, as opposed to production markets (or markets where the actors produce goods). As a result, White says, 'there does not exist a neoclassical theory of the market—only a pure theory of exchange' (1990, 3). Differing from neoclassical economics understanding of markets, he writes, ‘My view, rather, is that a market is a role structure of differentiated firms linked together through an equilibrated set, W(y), of interacting observations. Producers see each other’s volume/revenue decisions, and whether or not these observations congeal determines whether or not a market is maintained.’

But even if White breaks with economists’ theory of the market, he has been deeply influenced by a few select economists. He refers repeatedly to the analyses of Marshall, Chamberlain, Rothschild and Stiglitz and he makes extensive use of Michael Spence’s theory of signaling. Spence influences one of the key features of White’s theory, namely the notion that markets consist of social structures that are partly produced and reproduced through signaling between the participants. In a production market, firms constantly check what the other firms do and adjust their actions accordingly. Chamberlin’s main contribution, in White’s mind, was his realization that the neoclassical assumption of homogeneous products in a market must be replaced with a theory which acknowledges that each producer’s product is distinct and is valued differently by the consumers.

White is mainly interested in production markets because they constitute the backbone in an industrial economy. In a production market the actor is either a buyer or a seller of a specific good, while in an exchange market the actor is both a buyer as well as a seller. The stock exchange is the archetype of an exchange market. Being a seller or a buyer versus a buyer and a seller has, according to White, important consequences, both for the social structure of the market and the identities of the market actors. The exchange market, for example, is much closer to the neoclassical idea of a market in which demand and supply decide the price. Production markets, on the other hand, typically consist of about a dozen of firms that view each other as constituting a market and are also perceived as such by the buyers. The central mechanism in the social construction of a market is its 'market schedule,' operationalized by White as W(y), where W stands for revenue and y for income. This schedule, according to White, is considerably more realistic than the economists’ demand-supply analysis. Businessmen know what it costs to produce something and try to maximize their income by determining a certain volume for their product. On the other hand, they do not know how the consumers view their product—all they know is what items sell in which volumes and at which price. If businessmen are correct in their calculations, they will be able to locate a niche in the market for their products, which their customers acknowledge by buying a certain volume at a certain price. The closest to a definition of a (production) market that can be found in White’s work may well be the following: ‘Markets are tangible cliques of producers watching each other. Pressure from the buyer side creates a mirror in which the producers see themselves...’ (1981, 543)

In Identity and Control (1992), White opines that production markets are seen as an example of 'interfaces,' defined as a certain way of achieving control in a 'social molecule' (White 1992, 41–43). In the interface, the individual identities of the actors (such as firms) come into being through continuous production. Exchange markets are typical examples of what White here terms 'arena markets' (1992, 51–52). In a recent work entitled Markets from Networks White further develops his theory of production markets and also broadens its scope. Instead of focusing exclusively on individual production markets, White attempts to see how they fit into the larger whole of an industrial economy. Three different 'layers of action' are distinguished: 'upstream,' 'producers,' and 'downstream' (White 2001). The upstream firms basically supply the input to producers whose output goes to the downstream firms. According to White, there also exists a dynamic relationship between markets with goods that can substitute for each other.

Markets as Networks

Using networks to analyze markets appears to be more popular than any other perspective in current economic sociology. The main reason for this may well be that analysis of networks is a very flexible method, which allows the researcher to both keep close to the empirical reality and to theorize freely. The networks approach does not come with a theory of markets, but constitutes a general method for tracing market relationships. Harrison White’s W(y) model, with its explicit focus on terms of trade that decide whether a market can exist and under what conditions an actor can become part of a market, can be used as a contrast to markets as networks.

Mark Granovetter’s Getting a Job (1974) may be the most successful networks study of a market and constitutes, more generally, an exemplary study in economic sociology. It is innovative, meticulously researched, and analytically sharp. Although Getting a Job was written in the 1970s, its author has claimed it for 'new economic sociology' with the following motivation: 'In retrospect, Getting a Job was one of the first exemplars of what has been called the ‘new economic sociology,’ which differed from older work in its attention to a core rather than a peripheral aspect of the economy, and in its willingness to challenge the adequacy of neoclassical economic theory in one of its core domains' (Granovetter 1995, vii).

Getting a Job represents an attempt to analyze the social mechanisms through which people find employment, and is based on a study of professional, technical, and managerial workers in Newton, a small suburb to Boston. A random sample was taken; some 280 people filled in a questionnaire, and of them 100 were interviewed. The questions tried to establish the source of information that led to new employment. Are economists correct in seeing the labor market as a place where information about jobs reaches all the participants? Is the person who gets a new job best understood as someone who engages in a job search, according to utility-maximizing principles? Granovetter’s conclusion is that 'perfect labor markets exist only in textbooks' and that the idea of a rational job search does not capture what actually happens when people find jobs (1974, 25). Some people do indeed engage in a job search, but this is not necessarily the key to getting a job. For example, a sizable number of people apply for a job only if they are approached by someone with a concrete proposal. Furthermore, those who actively look for a job are not the ones who are likely to end up with the best jobs. The job search theory of the economists misses one very important fact, namely that 'much labor-market information actually is transmitted as a byproduct of other social processes' (1974, 52). What matters in many cases is contacts—so much so, the author concludes, that 'regardless of competence or merit, those without the right contacts are penalized' (1974, 100).

What Granovetter’s research showed is the following: Almost 56 percent of the respondents got their jobs through contacts, 18.8 percent through direct application, 18.8 percent through formal means (half of this portion through advertisements), and the rest through miscellaneous means. The economists’ assumption that information about new jobs spreads evenly throughout the labor market was clearly invalidated (39.1 percent got information directly from the employer, 45.3 percent got it via one contact, 12.5 percent through two contacts, and only 3.1 percent through more than two contacts). Of special importance to Granovetter was also the fact that in the great majority of the cases, the person who got the job associated only 'occasionally' or 'rarely' with the person who supplied the information (27.8 percent 'rarely,' 55.6 percent 'occasionally,' and 16.7 percent 'often'). This situation was theorized by Granovetter in the following way: people whom you know intimately ('strong ties') tend to share the same limited information and are therefore rarely able to help you. But people you know casually ('weak ties'), on the other hand, have by definition access to much more distant and varied information—and can therefore be of much more help in finding a job. People who stay very long in one job, Granovetter also noted, have much more difficulty in finding a new job than those who change jobs often.

Granovetter’s analysis of the labor market differs quite a bit from that of his thesis adviser, Harrison White, in Chains of Opportunity (1970). White’s argument is that when someone gets a new job, an opening is created that has to be filled, and so on. When a person gets a new job, in brief, a movement is set off that traverses the labor market and which the individual is unaware of. Tested against Granovetter’s results in Getting a Job, it is clear that White’s ideas about 'vacancy chains' do capture some of the dynamics in the labor market—but by no means all (in 44.9 percent of all cases, the person who got a new job was replacing a particular person; in 35.3 percent, on the other hand, the position was totally new, and in 19.9 percent the job was new but of a type that had existed before).

It should also be mentioned that in 1995, when Granovetter’s study was reissued, the author noted that new evidence was now available that confirmed his assessment from 1974 that finding a job via information supplied in a network was widespread (one figure from the United States is 45 percent, one from Japan 70–75 percent; cf. Granovetter 1995, 139–41). He also noted that economists during the last few decades have continued to ignore this fact and stuck to their theory of the job search.

Among the early network studies of markets one by Wayne Baker deserves to be singled out. In his doctoral dissertation, called 'Markets as Networks' (1981), Baker presented both a general theoretical argument for a sociological theory of markets and an empirical analysis. Economists, according to Baker, have developed an implicit rather than an explicit analysis of markets: 'Since ‘market’ is typically assumed—not studied—most economic analyses implicitly characterize ‘market’ as a ‘featureless plane’' (Baker 1981, 211). In reality, however, markets are not homogenous but socially constructed in various ways. To analyze this structure constitutes the main task for 'a middle-range theory of ‘markets-as-networks’' (Baker, 1981, 183).

How this can be done with the help of networks analysis is clear from the empirical part of Baker’s thesis, which has been published separately (1984). Using empirical material from a national securities market, Baker showed that at least two different types of market networks could be distinguished: a small, rather dense network and a larger, more differentiated and looser one. On this ground Baker argued that the standard economic view of the market as an undifferentiated whole was misleading.

But Baker also wanted to show that the social structure of a market has an impact on the way that the market operates; and to do this he looked at volatility in option prices. He found that the fragmented, larger type of network caused much more volatility than the smaller, more intense networks. 'Social structural patterns,' he concluded, 'dramatically influenced the direction and the magnitude of price volatility' (Baker, 1984, 803). Baker’s study also contradicted the idea in mainstream economics that a huge number of actors results in a perfect market.

A third important network study of the operation of markets can be found in Brian Uzzi’s 'Social Structure and Competition in Interfirm Networks: The Paradox of Embeddedness' (1997). Drawing on an ethnographic study of some 20 firms in the apparel industry in New York, the author found that the firms tended to divide their market interactions into what they call 'market relationships' and 'close or special relationships' (Uzzi 1997, 41). The former more or less matched the kind of relationships that can be found in standard economic analysis, while the latter were close to Granovetter’s notion of embeddedness. Market relationships tended to be more common than close or special relationships, but also to be considerably less important. Embedded relationships were especially useful in the following three cases: when trust was important, when fine grained information had to be passed to the other party, and when certain types of joint problem-solving were on the agenda.

Uzzi interpreted his results in the following manner. For a business to operate successfully, it cannot exclusively rely on market ties (as the economists claim), or exclusively on embedded ties (as some sociologists claim); it needs a mixture of the two. The ideal is a balance between market ties and embedded ties—an 'integrated network.' Too many market ties makes for an 'underembedded network,' and too many embedded ties for an 'overembedded network.' A firm with an over embedded network, for example, has difficulty in picking up new information.

Uzzi’s interpretation of his findings, in terms of interest analysis, is that the actors in his firms were neither selfish nor altruistic; they rather switched forward and backward between self-interest and cooperation. '[S]tringent assumptions about individuals being either innately self-interested or cooperative are too simplistic, because the same individuals simultaneously acted ‘selfishly’ and cooperatively with different actors in their network' (Uzzi, 1997, 42). The author adds complexity to this analysis by arguing that cooperative behavior can sometimes be a way of satisfying interests that are difficult to satisfy in arm’s-length deals: 'multiplex links among actors enable assets and interests that are not easily communicated across market ties to enter negotiations' (Uzzi, 1997, 50). This does not mean, however, that the actor simply can switch from one way of satisfying her interests to another, from market ties to embedded ties. One of the cases Uzzi discusses, in which the owner of a firm that had decided to move his business to Asia nonetheless carried out his contractual obligations in New York, clearly shows that embedded ties can acquire a dynamic of their own in which self-interest is held back.

Another important study is by Ronald Burt who has made an especially important contribution to the sociology of markets in Corporate Profits and Cooptation. Through a sophisticated network Burt convincingly shows that ‘market constraint’ affects the level of profit. When an industry sells its products to a small number of consumer industries or purchases supplies from just a few supplier industries, there is a fall in the profit level. Another of Burt’s interesting findings is that consumer/supplier constraint is about twice as important as constraint due to intra-industrial competition. The common notion that vigorous competition in an industry is all that is needed for the market to work efficiently, is thus incorrect.

Markets as Parts of Fields (Bourdieu and Others)

One theory of how markets behave that has not received the discussion it deserves is that of Pierre Bourdieu, most succinctly outlined in 'Principles of an Economic Anthropology' (2000, 233–70). Bourdieu’s key idea is that economic life is largely the result of the encounter between actors with a special disposition (habitus) in the economic field; and that the market is deeply influenced by the nature of the field. The economic field can be a firm, an industry, a country, or the whole world. Its structure consists of the power relations between the firms, which are maintained through capitals in various combinations (financial capital, technological capital, social capital, and so on). There are dominant firms as well as dominated firms, and a constant struggle goes on between them. What happens outside the field also plays an important role in the struggles within the field; the state especially has the power to influence what happens in a field.

The market is conceptualized as part of a field and dominated by its dynamic. Prices, for example, are determined by the structure of the field, and not the other way around. 'The whole is not the result of prices; it is the whole that decides the prices' (Bourdieu 2000, 240). Mark Granovetter’s and Harrison White’s theories of the market are mistaken, according to Bourdieu, because they ignore the impact of the structure of the field on the market; they express an 'interactionist vision,' as opposed to a 'structural vision.' Bourdieu’s own view of the market is well captured by the following statement from 'Principles of an Economic Anthropology':

What is called the market is the totality of relations of exchange between competing agents, direct interactions that depend, as Simmel has it, on an 'indirect conflict,' or, in other words, on the socially constructed structure [of the field] of the relations of force to which the different agents engaged in the field contribute to varying degrees, through the modifications they manage to impose upon it, by drawing, particularly, on the state power they are able to control and guide. (2000, 81)

In 'Principles of an Economic Anthropology' Bourdieu refers to the work of Neil Fligstein, and there exist significant parallels between their views. In 'Markets as Politics', Fligstein writes that 'my view of markets is roughly consistent with the idea of organizational fields, in that a market consists of firms who orient their actions toward one another' (Fligstein 2001, 67–78). Fligstein also agrees with Bourdieu that the attempt to use networks analysis to study markets is unsatisfactory since it exclusively focuses on social interaction. Networks analysis fails to consider the role of politics, the view of the actors, and what characterizes markets as social institutions.

In Fligstein’s view, markets are social situations in which goods are exchanged for a price in money; and these situations can only come into being if three elements exist: 'property rights,' 'governance structures,' and 'rules of exchange.' Property rights are defined as social relations that determine who is entitled to the profit of a firm; governance structures consist of rules for how to organize a firm as well as competition and cooperation; and rules of exchange determine under what conditions exchange can take place and who can participate in it.

Like Bourdieu and Weber, Fligstein emphasizes the role of struggles in the market. But Fligstein adds to this analysis by proposing that what drive individual firms and characterize modern production markets are 'attempts to mitigate the effects of competition with other firms' (1996, 657). This search for stability represents the basic principle of Fligstein’s theory of markets. In 'Markets as Politics' Fligstein suggests a number of propositions for empirical verification, all related to this principle. He proposes, for example, that the state typically tries to stabilize markets and eliminate competition—but also that its actions can inadvertently bring about disorder (and restore competition). When the largest firms in a field fail to reproduce themselves, a market crisis ensues, with interorganizational power struggles as a result. Existing markets can also be transformed through exogenous factors, such as economic crises and invasions by other firms.

The theories of Bourdieu and Fligstein may seem somewhat schematic as described here; and it should therefore be noted that these authors have made empirical studies of concrete markets. Bourdieu has, for example, analyzed the markets for individual homes in France (Bourdieu 2000). In thestudies of both of these writers, the relevant field is presented in rich empirical detail, which makes Bourdieu’s scheme come alive and show its potential as a tool to analyze markets. Fligstein has shown the importance of looking at property rights, governance structures, and rules of exchange, by using the Single Market of the European Union as a case study (Fligstein and Mara-Drita 1996; Fligstein and Stone Sweet 2001). How firms try to control competition and how the state can shape the market also come out with great force in Fligstein’s study of the evolution of the huge firm during the twentieth century in the United States (Fligstein 1990).

Concluding Remarks

There are also a number of important sociological studies of markets which do not follow above listed approaches. Amitai Etzioni (1988) has written mainly on competition in the markets, and his contribution is centred on the concepts of ‘encapsulated competition’ and ‘interventionist power’. For competition to exist, Etzioni argues, it has to be ‘encapsulated’ by ‘ethical’, ‘social’, and ‘governmental’ rules — an idea which is quite similar to that of ‘embeddedness’ in Polanyi. ‘Interventionist power’ — defined as ‘the use of governmental power by economic actors for their (own) ends’ — is more refreshing since it tries to introduce the notion of political power into that of economic power. Etzioni points out that analyses of industrial organizations usually look only at economic factors such as, for example, the number and nature of economic actors in a study of oligopoly. Oligopolies are also shaped, however, by political factors, and this has to be taken into consideration for the analysis to be realistic. Likewise, a similar study ‘A Theory of Markets: Their Social Structure and Performance Properties’ has been carried out by Tom Burns and Helena Flam. The strength of this essay, which is an attempt to develop a theory of social rule system, lies mainly in the emphasis that it puts on the fact that every market is regulated by some specific rules. Susan S. Shapiro ’s Wayward Capitalists looks at financial markets from the perspective of trust in economic life. Mitchel Abolafia’s most fascinating work is ‘Market Crisis and Organizational Intervention’, view the market in terms of power struggles between various groups. Conflicts are endogenous and hence to be expected. The historical context is also taken into consideration, and the market is seen as a kind of system of interlocking organizations. Abolafia opines that ‘market crises are fundamentally interorganizational phenomena’.

There are a few other topics such as various forms of ethnic or racial market, reciprocal exchange in market and informal markets which are also important to the sociology of markets. According to Gershuny, the informal market consists of three sectors — ‘the household market’, ‘the communal market’ and ‘the under-ground market’ — which all interact with each other as well as with the official formal market. Empirical research on the reciprocal exchange of labour between households has also recently been conducted by the Hungarian sociologist Endre Sik (659).

Another topic which is of much interest to the sociology of markets is that of human values and the market. An early and important work in this genre is Richard M. Titmuss’ The Gift Relationship: From Human Blood to Social Policy (1971), which is a study of blood donors and transfusion services primarily in Great Britain and the US. The main point that Titmuss wants to make is that certain problems in human societies are best handled outside the market. The British way of supplying blood for transfusions on a voluntary basis is actually more efficient than the mixed system of commercial and non-commercial blood banks in the US. The Gift Relationship is a sociological work which raises important questions for the economist as well, as is clear from the fact that Kenneth Arrow has devoted an article to it.

A study which is very much in the tradition of Titmuss’ book is Viviana A. Zelizer’s ‘Human Values and the Market: The Case of Life Insurance and Death in Nineteenth-Century America’. Her topic is the attempt during the nineteenth century to introduce life insurance in the US, which met with fierce resistance for several decades before it finally succeeded. Zelizer describes the reason for the failure as follows:

Putting death on the market offended a system of values that upheld the sanctity of human life and its incommensurability. It defied a powerful normative pattern: the division between the nonmarketable and the marketable, or between the sacred and the profane. (p. 594)

Zelizer’s article also contains interesting sociological observations on the changing function of wills and the symbolic relationship between money and death in funerals. ‘Human Values and the Market’ is highly recommended as an introduction to the more profound questions that can be asked within the context of a sociology of markets.