Interpreting Society and Economy —— Reading Feng.

Society and Economy, an obscure sociological work, was recommended to me by a friend, but it is really difficult to read. Fortunately, I saw Mr. Feng's interpretation and shared it.

The author of this book is mark granovetter, a professor at Stanford University. Grana Witt is a sociologist, but in the annual Nobel Prize in Economics, Grana Witt is a very popular candidate. Moreover, economists especially like to quote his words when writing papers, so he also won the "citation laurel award" in economics.

Why is a sociologist so valued by economists?

This is because Grana Witt has been doing one thing all his life, that is, arguing with economics. But also went to the site of economics and confronted economics in the fields of production, distribution and consumption. Because of the posture and level of leverage, Grana Werther not only has high prestige in sociology, but also some economists were taken away by him and began to conduct economic research according to his method.

So, what did Granovett say that caused an uproar in two disciplines? The answer lies in his new book, Society and Economy.

As we all know, the great sociologists Weber and Parsons published a great book called Economy and Society, which talked about the influence of economic activities on society. Granovett's book is upside down, putting "society" before "economy" and calling it "society and economy". It emphasizes the influence of social factors on economy, and puts forward a set of research methods and theoretical propositions from the micro, meso and macro perspectives. If you want to know about this topic, this book is the most systematic and authoritative entrance.

The brushwork of this book is not what we usually say, but the other four words: arduous. Granovett wrote the first draft 23 years ago. Then in 23 years, it was revised repeatedly. It can be said that every sentence has a source, and there is no source.

Duan Yongchao, a senior media person, made an analogy with the teacher, which is very vivid. He said that Grana Werther, like a geologist, used a shovel, a pickaxe and a brush to carefully identify the trunk and branches of past theories in rock faults. The purpose is to make his theory original and build on a solid foundation.

After introducing the creative background of this book, we enter the content of this book. Three Encounters in Grana Witt's Works.

first part

In the book, Grana Witt first set a goal, that is, economic imperialism.

The so-called "economic imperialism" means that all phenomena can be explained by economics. For example, why do modern people not want to have children? Because in an agricultural society, children are investment goods, and one more child means one more labor force, so people are willing to live; Now that children are consumer goods, it is not cost-effective to raise children, so the fertility rate has decreased.

For another example, why do people like to listen to pop music instead of classical music? Economists explain that the time cost is different. Pop music is short and fast, and it can get pleasure immediately; As for classical music, you have to take time to learn and distinguish. Therefore, in today's fast-paced era, classical music is not so popular.

You see, what are the characteristics of traditional economics? Assume that all people are rational people, and they do everything in order to minimize costs and maximize benefits. This was originally the most basic proposition of economics. However, in recent decades, economists have found that there are great problems in the hypothesis of rational man, so they began to repair it.

Among them, the most famous school is called "Behavioral Economics", which specializes in studying the loopholes of human rationality, that is, irrational behavior that does not conform to the maximization of income. Such as endowment effect. If you lose 100 yuan in your pocket, you will feel very distressed; Even if you find 100 yuan again, you can't make up for this heartache. There is also the psychological account effect. Bargain when buying clothes 10 yuan. If you buy a car, it may be cheaper to talk to the salesman more 1000, but it doesn't matter if you don't think it's cheap. It's all money, but you look at it in a very different way. This is the mental account effect. The money for buying clothes and the money for buying a car are in different psychological accounts. Behavioral economics is a prominent school today. If you pay attention to the Nobel Prize in Economics in recent years, you will find that many awards have been awarded to behavioral economists.

However, in Grana Witt's view, what behavioral economics has done is at best minor repairs. After patching, the hypothesis of human nature in economics still doesn't conform to our real world.

Just like in 15 and 16 centuries, Ptolemy's geocentric theory went wrong. If you add 800 rounds or more to get the correct number, it's no use. We must come up with a concept similar to Heliocentrism to change our view of the world at once.

This is about to talk about the first confrontation of the book "Society and Economy": What are people like in economic activities?

In Granovett's view, people in the economic hypothesis, whether rational or irrational, are essentially isolated and atomized people. You see, those behavioral economics experiments are all about finding a random person and putting it in the laboratory, stripping away all the social relations of a person, and then investigating him.

But in fact, people live in social relations, and social relations stipulate various rules. These rules tell people what is appropriate and what is forbidden.

For example, in the eyes of many economists, when a store starts to line up, it means that the price is not set high enough and it should be raised immediately. You see, this is in line with the assumption of rational people, right?

But what about the actual situation? Maybe we shouldn't raise the price, and we can't raise the price. For example, when a typhoon comes and food is in short supply, can supermarkets raise prices? If the price rises, this supermarket will not be able to mix in the community in the future. Community residents will think that you are morally flawed, taking advantage of people's danger and hitting people when they are down. Even in extreme cases, people may smash your shop and take things from it because it is fair and just.

For another example, take a bus and there are no seats. Can you take out your money and tell the people next to you that I can buy you a seat? I don't think anyone would do that. But in the view of traditional economics, this is a market failure, that is, the allocation of resources is not optimal and seats should be allowed to be bought and sold. However, from a sociological point of view, this is too unnatural. Social rules require us to give seats to the old, the weak, the sick and the disabled for free, but it is no good selling seats on the bus. What will others think of me? You see, this is another example that transcends rational and irrational dimensions.

You may say that in these two examples, people did not maximize their own interests in order to escape punishment, and behind escaping punishment, it was also a rational choice. Let's look at another example.

We all know a word called "local tyrants and evil gentry", which means that local tyrants and landlords are rich and heartless, exploiting and squeezing tenant farmers. But in fact, the so-called "local tyrants and evil gentry" is a phenomenon that only appeared in modern times. In an agricultural society, the relationship between landlords and tenants is relatively harmonious and not as tense as we thought. The landlord is the protector of the tenant farmers. If there is a disaster this year and the grain harvest is not good, the landlord will collect less rent and even give some food to the tenant farmers to help them tide over the difficulties.

So, when did the relationship between landlord and tenant start to deteriorate? In Grana Witt's view, it is because of urbanization. When the living conditions in the city were good, the landlord moved to the city. What about rural land? Leave it to the agent. Once there is an agent, the relationship between the landlord and the tenant will change. We used to be neighbors and villagers, so we should take care of each other. Since I don't know you, this sense of morality has been lifted. The agent collects rent, which is to carry out the task. No matter what natural or man-made disasters you encounter, I will accept a penny.

You see, in this example just now, what is at work? It is the relationship between people, the sense of identity shaped by the relationship, and the moral concept of identity. They are not external and mandatory, but exist in people's hearts without rational thinking and calculation. This is the first confrontation between Grana Witt and economics.

the second part

Let's look at the second confrontation: how does economic activity unfold?

Just now we said that social relations are very important for us to understand human behavior. But strangely, social relations have never been a topic of concern in economics. Even if it is mentioned, it is a contemptuous and disdainful attitude.

For example, Adam Smith said: People in the same trade seldom meet each other. If they meet, there must be no good intention, in order to collude with the price increase. Adam Smith even suggested that the government should not open the trading register, because it would let people in the transaction find other traders.

You may ask, why do economists hate social relations so much? This is because in the eyes of traditional economists, only a perfectly competitive market is the most perfect market. The premise of perfect competition is that everyone is atomized, makes decisions independently and is not affected by social relations.

Granovett, however, doesn't see it that way. One of his most famous theories, which you may have heard of, is called the "weak relationship" theory. It is said that looking for a job seems to be a market phenomenon and an economic behavior, but social relations are very important in the process of looking for a job. He did a survey and found that 60% of good jobs were introduced by acquaintances, not formal recruitment channels.

So, what kind of social relations can help us? Granovett found that you don't want to ask for help from relatives and friends, but from those who only know us once. Relatives and friends are similar to our circle, and their information is similar to ours. You know the job opportunities they know. Instead, they are friends who only know each other once. They can bring us fresh information and more job opportunities. This is the "weak relationship" theory.

In fact, it is not only looking for a job, but also enterprise recruitment. Now a popular word is called "internal recommendation", which means internal recommendation. Bosses like to recruit new employees through the recommendation of old employees. There is a simple reason. Since employees work in the company, they dare not fool the boss. References must be well-informed and very reliable. After the new employee joins the company, the old employee also feels obligated to help him integrate into the company. It would be a pity if something happened to the person you introduced.

You see, one is to recruit employees and the other is to find a job. These purest economic activities need acquaintances to achieve the highest efficiency.

So Grana Witt said that economics excludes social relations, which is wrong. Because in the real world, many economic activities are carried out between acquaintances. You go to see those economic crimes, fraud, pyramid schemes and illegal fund-raising, most of which are carried out through acquaintances. Legal business, that's more. People will do business together because they are friends. When doing business, people will also say that they want to make friends instead of making money wholeheartedly.

Therefore, to understand how the economy works, we must study social relations. Then study the relationship network between people, which is what sociologists often call "social network".

In order to make this problem clear, Granovett devoted a chapter to a topic, that is, the phenomenon of trust.

What is trust? I saw a classic definition in this book: the so-called trust is to put yourself in a position where others can hurt you. Is it reasonable for you to taste it?

Under what circumstances would you trust a person? It is this matter that is obviously risky, but you entrust it to him regardless. It's called trust. For example, if you leave your child in the care of your parents, it is a kind of trust, and you believe that he will be good to the child. Also, you lend money to others, which is also a kind of trust. You didn't sign a contract with him, and you didn't send someone to watch him every day, but you believed that he would pay back the money.

You see, trust can promote cooperation and save many transaction costs. However, traditional economics rarely discusses the topic of trust. Because we all think that trust is only a small-scale phenomenon, and acquaintances only talk about trust. Now is a stranger's society, we have to talk about interests, and only interests are the basis of all cooperation. As for trust, it doesn't matter whether it exists or not. It can be replaced by other means, such as setting up a third-party supervision account or developing a credit rating.

What about the acquaintance society? For example, our East Asian civilization loves to engage in relationships and divide people into relatives and friends. Is it difficult for this civilization to establish large-scale cooperation?

Francis Fukuyama, a political scientist, said in a book called Trust that it is difficult to develop large-scale private enterprises in places where family businesses are prevalent, such as French, Italian, China, Taiwan Province and Hongkong. There is only one way for a place to develop, that is, western market economy and democratic politics. This is the famous "final conclusion of history". Fukuyama's point of view has been recognized by many people. Therefore, scholars and business journalists have been singing down the family business.

But what is the real situation? Hard facts tell us that the role of family in enterprises has not declined in the past half century. If you don't believe me, look at the list of Fortune 500 companies. Companies with more than13 are family businesses, including Wal-Mart, Michelin, Louis Vuitton, BMW and Buffett's cash cow Berkshire Hathaway. You can also look at the Standard & Poor's 500 Index again, and you will find that the performance of family enterprises is much better than that of non-family enterprises, and the scale is also larger than that of non-family enterprises.

Is that weird? We are talking about "family". How many people can a family have? How can these people manage enterprises with tens of thousands or even millions of people?

Don't tell me that some scholars have really done this research. For example, some people have studied China enterprises in Singapore, and found that these family enterprises were concentrated in small-scale service industry, retail industry and import and export trade industry in the early days, and then expanded to manufacturing, banking and rubber collection industry, becoming multinational and cross-industry super giants. How did this expansion happen?

The researchers found that the expansion of family business does not depend on the growing scale of the enterprise itself, but on the establishment or acquisition of many subsidiaries, and then the control of these subsidiaries is mastered through holding and cross-holding, forming a pyramid structure. Outsiders can invest, but they have no right to speak and will not dilute the family's control.

More interestingly, in these subsidiaries, family members are the actual controllers and hold important positions in the board of directors. Around these family members, a circle of professional managers has been formed, serving as the top manager of the company. These professional managers are loyal to family members, and family members are loyal to the whole family. In such a social network, it is affection and trust that maintain cooperation, not any legal contract.

You see, the new understanding and discovery of family business has broken Fukuyama's "trust theory" and "historical conclusion". In different countries and regions, the development path can be varied. East Asian civilization, which pays attention to family unity and acquaintance society, can also transform small-scale trust into the ability to build large-scale economic organizations through social networks.

More importantly, we should realize that trust plays a vital role in economic activities. From the trust between friends, to the trust between employees and bosses, and then to the trust between family members, trust is the lubricant of market transactions. Trust works because each of us is not atomized, but embedded in social networks.

This is the second encounter in the book Society and Economy.

the third part

Let's look at the third confrontation: how did society evolve?

Economics believes that all social changes, whether good or bad, are the result of individual rational choice. You think, what is society? Society is just an empty name, and what really exists is just one person after another. Therefore, all social phenomena can be inferred and understood by individuals.

Such as demand. The so-called demand is the simple addition of goods that everyone is willing to buy. And the system. The so-called system is a method invented by individuals to solve specific problems. This view can be called "rational choice theory". Many economic models can be classified into this theory.

However, Granovett said, no, this way of thinking made the mistake of "reductionism". What's wrong with reductionism? That is, according to the truth, the phenomenon at the social level can only be explained by society, and the phenomenon at the personal level can only be explained by individuals. There is an insurmountable gap between personal behavior and social fashion. If we don't fill this gap and categorically explain social phenomena with personal factors, we will make the mistake of reductionism.

How to fill this ditch? You need to build a bridge in the middle, and that's social networking,' Mr. granovett said If the individual is a micro concept and the society is a macro concept, then the social network is a meso concept, which connects the society and the individual.

So, it's still a bit abstract. Let's look at an example, medici family.

Medici family, as you may know, is a famous family in14-17th century Europe. They not only controlled European banking, but also produced four popes and two French queens. Why is this family so powerful? We have heard all kinds of explanations. The most common explanation is that a clever and great man changed the course of history. For example, Giovanni Medici transferred his family business from wool processing to banking and accumulated a lot of wealth; Another example is that Cosimo Medici seized power and became the ruler of Florence; Also, the famous Lorenzo Medici burned a Renaissance with money.

These explanations, in Grana Witt's view, all made the reductionist mistake of using individuals to explain society, ignoring the middle layer, that is, social network.

Medici family occupies a special position in the social network, which is called "structural hole". Structural hole is a concept in sociology. It tells us that there are two kinds of people who don't communicate with each other. Then, there is a vacancy between the two groups, which is called "structural hole". Whoever occupies the position of the structural hole will enjoy a special bonus.

So what kind of structural hole does medici family occupy? If you are familiar with history, you will know that medici family naturally straddles two social networks. On the one hand, aristocrats. Medici family was born in a noble family, and he won the support of the noble family by marrying it. On the other side is the emerging bourgeoisie, which is the nouveau riche. Medici family is good at business. He is willing to make friends with these nouveau riche and get along well with them.

Noble and nouveau riche, these two kinds of people are incompatible. Nobles dislike nouveau riche without culture and status; In the eyes of the nouveau riche, the nobility is declining and poor. The two groups do not communicate with each other, so they do not interfere with each other. However, medici family has the ability to connect the two circles, so that the power of the nobility can be used by the nouveau riche and the wealth of the nouveau riche can serve the nobility. These two kinds of people can't live without him. Therefore, for a period of time, medici family's limelight can be said to be unparalleled.

However, this is not the whole story. Medici family was able to leave a deep impression in history, and more importantly, it did something that no one had done before, that is, sponsored the Renaissance. Medici family sponsored many artists, including Ma Saqiao, Leonardo da Vinci, Michelangelo and Raphael, as well as political scientist Machiavelli and scientist Galileo. Then why did medici family sponsor the Renaissance? Is it because you love art and science? Is it for love and charity? None of them are right. It did this in order to seize power.

In the past, when we discussed "power", we all talked about the possession of resources by individuals, especially the possession of means of production. But in fact, in the eyes of sociologists, you have resources and others depend on you and listen to you. This is only the most basic form of power. The higher form of power is legal power, that is, the power brought to you by your position and the power you get through election or appointment by your superiors. The highest form of power is agenda setting, which affects people's ideas and concepts. For example, the concepts of "what resources are important" and "how people view these resources". It is actually a force to influence these ideas.

For example, if you obey your boss, because you expect him to pay you, it is based on the power of dependence. You have to obey the words of the department leader, because the leader is appointed by the company, which is based on the power of legitimacy. However, there is also the third force mentioned just now, that is, agenda setting, in other words, changing everyone's understanding of one thing, thus changing the direction of history.

Medici family is very good at setting the agenda. It is not just as simple as owning money. It has turned money into great works of art, aesthetic preference and cultural soft power, accelerated the new trend of secularization of religion and created a new culture of Renaissance.

Back to the previous question, how did society evolve? Locally, it is easy for us to draw a conclusion and attribute it to the efforts of specific individuals. But in fact, we still need to see the meso-social network, the position of medici family's structural hole in the network, and the background of the rise of the bourgeoisie and the secularization of religion. From micro to meso and then to macro, like gears, it is an interlocking and progressive relationship. Without any link in the middle, our understanding of the facts will be incomplete.

After criticizing economics, Grana Witt pointed the finger at sociology itself. He said that the mistake economists like to make is to explain society with individuals. The mistake sociologists love to make is to explain individuals with society and think that everything about individuals is determined by society. This is also a mistake of reductionism, which has a name called "cultural determinism".

There are various versions of cultural determinism. For example, the "national character" that we China people like to talk about is a kind of cultural determinism. Because our nation has what kind of personality, each of us has what kind of behavior.

Some scholars have studied the global distribution of the automobile industry chain, and found that the automobile assembly industry in South Korea is very strong, and the automobile parts industry in Taiwan Province Province of China is very developed, so Argentina can do nothing. Why?

Scholars explained that because automobile assembly requires large-scale capital investment, Korean cultural tradition is more suitable for establishing such a super-large enterprise; The auto parts industry needs a group of small companies with sensitive response, and this manufacturing method has a deep cultural foundation in Taiwan Province Province. As for Argentina, there is neither a cultural tradition of building a large enterprise nor a cultural tradition of building a small supply chain, so it is impossible to establish an automobile industry.

You see, the so-called "cultural determinism" actually vaguely contains the shadow of "the end of history". It is believed that the system and culture in some places are more advanced and more suitable for industrialization and modernization; In some places, the system culture is backward, and your industrialization and modernization will never be realized. However, Grana Witt said that the influence of system and culture is not decisive. Institution and culture are not so much scripts of personal behavior as menus to choose from.

Granovett gave an example, that is, South Korea. Is Korea's industrial development due to cultural traditions? No, half a century ago, South Korea was still a poor and backward country, which was precisely the representative of backward system and culture in the eyes of cultural determinists. However, in 196 1, park chung-hee came to power and implemented a series of iron-fisted policies in the economic and political fields. For example, the government borrows money to develop capital-intensive industries, supports the export-oriented export-oriented economy, builds large industrial parks and infrastructure, and vigorously develops national education. Finally, these measures led to the rapid development of the Korean economy.

In South Korea, you can see all kinds of shadows: there are Soviet-style five-year plans, Japanese-style export-oriented economy and family chaebol with Korean characteristics. It is not the result of a certain nation, nor is it determined by a certain culture. It is a seed, carrying its own information, and then absorbing the sunshine and rain, blossoming and bearing fruit.

abstract

To sum up, we have talked about it three times before.

The first confrontation, what are people like in economic activities? Granovett's answer is that he is not only a rational person, but also a person embedded in social relations.

How did the economic activities unfold in the second confrontation? Granovett's answer is that economic activities do not occur in isolation, but in social networks, and trust and power are particularly important social relations.

How did society evolve in the third confrontation? Granovett's answer is that the evolution of society is the result of the interaction between individuals, networks and society. Society provides a background for individual actions, and individuals influence and change society through social networks.

Look at these three sentences, it's not that simple. It is neither concise nor beautiful. However, it conforms to the real world.

The real world is complicated. Only complexity can explain complexity.

Before, we pursued a simple explanation, not because it was perfect, but because there was no way to calculate and measure complex economic and social phenomena.

Now, with the help of big data and computer simulation technology, we can draw a city's interpersonal relationship map, dynamically track the rise and fall of an industry, and restore all economic activities and social phenomena to a real complex network. Therefore, both economics and sociology should adopt new theories and methods.

Granovett has a mantra: "There is nothing wrong, but it is not enough. This explanation is correct, but it is incomplete. "After listening to the interpretation of the book" Society and Economy ",I hope you remember this sentence.