Notes on society and economy

1, mark granovetter: Sociologist, Professor Stanford, is a candidate with high voice for the Nobel Prize in Economics every year. He is the founder of the new economic sociology and an advocate of the theory of "weak relationship" and "embeddedness".

Theoretical proposition: Emphasize the influence of social factors on economy.

2. This book criticizes economic imperialism, systematically expounds the influence of social factors on economic activities, and puts forward a set of research methods and theoretical propositions based on social networks from micro, meso and macro perspectives, and challenges traditional economics from the perspective of sociology around topics such as human nature, trust, power and system.

3. People engaged in economic activities

Economic hypothetical person: a person who is essentially isolated and atomized.

Granovett: Not only a rational person, but also a person embedded in social relations. People live in social relations, and social relations stipulate various rules. These rules tell people what is appropriate and what is forbidden.

For example, buy a seat by bus. If no one is willing to pay for seats, it is a market failure in economics, but the allocation of resources has not reached the optimal level. Seats should be allowed to buy and sell; Sociologically, it is not in line with human nature, and social rules require us to give our seats to the old, the weak, the sick and the disabled for free.

4. How are economic activities carried out?

Economic theory: stripping off all social relations, in the view 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: Economic activities do not happen in isolation, but in social networks. Trust and power are two particularly important social relations.

① "weak relationship" theory: finding a job seems to be a market phenomenon and an economic behavior. But in this process, social relations are very important. According to the survey, 60% of good jobs are introduced by acquaintances, not through recruitment channels. In this process, what you need to ask for help is not friends and relatives, but friends who only know us briefly. Friends and relatives are similar to our circle and have similar information. Those friends who know each other a little can bring us fresh information. Looking for a job, the purest economic activity, needs to pass.

Trust: Put yourself in a position where others can hurt you.

Results: Promote cooperation and save a lot of transaction costs.

Example: family business. More than one third of Fortune 500 companies are family businesses, including Wal-Mart, Michelin, Louis Vuitton, BMW and Berkshire Hathaway. In the Standard & Poor's 500 Index, the performance of family enterprises is better than that of non-family enterprises. It is found that the expansion of family business does not depend on the continuous growth of its own scale, but on the establishment or acquisition of many subsidiaries, and the control of 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. In subsidiaries, family members are actual controllers, professional managers are loyal to family members, and family members are loyal to the whole family. In such a social network, it is family and trust, not legal contracts, that maintain cooperation. East Asian civilization, which emphasizes family unity and acquaintance society, can transform small-scale trust into the ability to build large-scale economic organizations through social networks.

5. How did society evolve?

Economic point of view: All social changes are the result of individual rational choice.

Theory: rational choice theory, such as demand is the simple addition of goods that everyone is willing to buy; System is a method invented by individuals to solve specific problems.

Granovett: The evolution of society is the result of the interaction among individuals, networks and society. Society provides a background for individual actions, and individuals influence and change society through social networks.

The "rational choice theory" made the mistake of "reductionism" (explaining the reductionism mistake of society with individuals)

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. It is a mistake of reductionism to explain social phenomena categorically with personal factors.

Example: medici family (14-17th century famous European family, which not only controlled European banking, but also produced four popes and two French queens).

① Reason: medici family occupies a special position in the social network called "structural hole".

Structural hole is a concept in sociology, which means that two groups of people do not communicate with each other, and the gap between the two groups is called structural hole. Whoever occupies the position of the structural hole will enjoy a special bonus. Medici family is good at doing business, making friends with the new bourgeoisie (nouveau riche), and winning the support of the nobility through aristocratic marriage.

Medici family connected the two circles, so that the power of the nobility was used by the nouveau riche, and the wealth of the nouveau riche served the nobility. These two kinds of people can't live without him.

② Power: Medici left a deep impression in history. More importantly, he sponsored the Renaissance (including artists such as Ma Saqiao, Leonardo da Vinci, Michelangelo, Raphael, political scientist Chiavelli and scientist Galileo) because he mastered power.

Power in society (1, primary form: individual's possession of resources, especially means of production; 2. Advanced form: legal power, such as the power of position and the power obtained after election; 3. The highest form: agenda setting, that is, influencing people's thoughts and ideas)

Medici family was good at setting the agenda and transforming money into great works of art, aesthetic preference and cultural soft power, which accelerated the new trend of secularization of religion and created a new culture of Renaissance.

6. Grana Witt pointed out that sociologists love to make mistakes-"cultural determinism"

Sociologists use society to explain individuals and think that everything about people is determined by society, which is also a mistake of reductionism, that is, "cultural determinism" Granovitt thinks that the influence of institutions and culture is not decisive, and institutions and culture are not so much scripts of individual actions as menus to choose from.

7. Criticize economic imperialism

Economic imperialism means that all phenomena can be explained by economics.

Traditional economics has a characteristic, assuming that all people are rational people, and they do everything in order to minimize costs and maximize benefits, which is the most basic proposition of economics. In recent decades, economists have found that there is a big problem with the hypothesis of rational man, so they began to patch it. Among them, "behavioral economics" specializes in the loopholes of rationality, that is, irrational behavior that does not conform to the maximization of income.

Granovett believes that behavioral economics is a minor repair, and the hypothesis of human nature in economics does not conform to the real world in which we live.

Granovett's mantra: not wrong, but not enough "is correct, but incomplete."