Consentia on Multidisciplinary Research

RELATION OF SOCIOLOGY WITH ECONOMICS: ILLUSTRATIONS AND EXAMPLES

CHAPTER 1:

RELATION OF SOCIOLOGY WITH ECONOMICS: ILLUSTRATIONS AND EXAMPLES

ABSTRACT

This article would focus on the inter-relation between Sociology and Economics in diversified fields. This article commences with the defining Economics in practical sense so as elucidate its scope, which would help in co-relating it with the subject matter of Sociology. Part II of this article deals with the inter-disciplinary approach between Sociology and Economics, which would further contain five major aspects: (1) historical development of the relation between Sociology and Economics, (2) definitions given by different economist and their relation to sociology, (3) definitions given by Sociologists and their relation to Economics, (4) societal forces shaping economic behaviour, like power and institution, (5) problem connected to both Sociology and Economics, like unemployment and child labor. Part III would conclude this article by stating how the two branches of social science are indispensable for each other’s existence.

KEYWORDS: Sociology, Economics, Inter-disciplinary, Development, Relation

 

 

 

 

 

 

 

 

1) Introduction

1.1) What is Economics?

Economics is generally defined as the branch of science which deals with the study of economic goods and welfare associated with them for the betterment of lives. According to the Oxford Dictionary, Economics is the branch of knowledge concerned with the production, consumption, and transfer of wealth and is the condition of a region or group as regards material prosperity. Unlike other social sciences which describe how people will act, economic model is based on the assumption that people are rational (with well-ordered preference), want to maximize something (like profit or satisfaction), and they do their best in order to achieve these means,[1] thereby ensuring welfare of the society as a whole. There are two branches in economics: Normative Economics which deals with things as they ought to be based on value judgment whereas Positive Economics deals with things as they actually are i.e. unlike Normative Economics which deal with idealistic view of thing, it is based on realistic view of thing. As far as society and its functioning is concerned in which people live and works, it based more on positive aspect of economics. Economics also deals with how people allocate their scarce resources for meeting different needs. For e.g. A person having specific some of money wish to buy those goods which satisfy his needs. There are two branches of economics which are Microeconomics and Macroeconomics. According to Professor Ackley,” Macroeconomics[2] deals with economic affairs ‘in the large, it concerns the overall dimensions of economic life. It looks at the total size and shape and functioning of the ‘elephant’ of economic experience, rather than working of articulation or dimensions of the individual parts, It studies the character of the forest, independently of the trees which it composes of.”[3] Whereas Microeconomics[4] is concerned with decision-making by individual economic agents such as firms and consumers[5], i.e. it studies individual rather than the society as a whole.

2) Inter-disciplinary approach between Sociology and Economics

The subject matter of Economics and sociology has an escalating co-relation with each other and are considered as the interdependent portion of social science, though these subjects are studied independently when it comes to teaching owing to their expanding scope in their respective fields. There is demand for division of study corresponding with the different names- Sociology and Economics since there are stages in the accumulation and interpretation of knowledge of the society which calls for differentiated method and complementary processes.[6]However, they should not be regarded as the rival subjects but complementary and interdependent subjects. The presumption that there is special call for the arbitration and conciliation between sociology and economics rests upon the failure to perceive that after economic phenomena are interpreted, only one of many elements in social reactions is thereby approximately explained.[7] For e.g. If we consider the disputes arising in the social institution, say family, we find a deep bond connecting it with economics. The property disputes between the parents and their son is a typical example of how the straining of social relation between the father and the son is a product of economic needs.

2.1) Historical Development of the relation between Sociology and Economics

Economic sociology had undergone a revival from the year 1980. Sociologists have always studied aspects of economic behavior, but in the middle decades of the twentieth century, the social scientist adhered to the Parsonsian division of the world into, mainly society, economy, polity and culture and each were studied as a separate discipline. The study of society became restricted to sociology whereas economist studied the economic behaviour and the institutions. This division was followed by many predicaments in the study of the two disciplines as a result of which sociologist began studying economic institution and their behaviour and economist began studying social behaviour in the society.

Sociologists felt the need to study economic behaviour since they were dissatisfied with the negation of economist’s study about social factors which prevented them from predicting people’s economic decision. For e.g. if a child has a very large bucks of money in his pocket, he often does not spend the entire money on buying different goods just out of interest although human wants are unlimited. It is because a child has learned values from his parents not to spend on unnecessary items and not to incur wasteful expenditure. These values guide the economic activities of a child and studying the economic expenditure in the market with taking into account the social values and customs debars the complete study of the causes of economic expenditure in the economy. Hence, Sociologist saw economic behaviour as an additional example of social behaviour and is shaped by the same forces by which social behaviour is directed, including societal conventions, power forces, and value system.

2.2) Definations given by different economist and their relation to sociology

According to A.C. Pigou,

”Economics studies that pat of social welfare which can be brought directly or indirectly into relationship with the measuring rod of money.”[8]

Here, instead of taking individualistic needs and concerns, he is concerned with the society as a whole which is the basis of the subject of Sociology. Here, he opines that social relations are formed due to the presence of wealth and this has very much relevance in present scenario. If we look at societal relations, we observe that in most of the cases, a rich wish to interact and spend time with rich people only and seem to ignore the presence of the poor. Moreover, the rich people often feel superior over the poor owing to large chunks of money which they possess due to which they fulfill their material needs by buying both cheaper and expensive commodities. In addition, the poor people often feel uncomfortable while interacting with the rich people and develop a feeling of inferiority owing to lack of resources. Hence, Money aspect of economics tends to affect the formation of social groups in the society.

John Stuart Mill (1844) defines the subject of economics in a social context as:-

“The science which traces the laws of such of the phenomena of society as arise from the combined operations of mankind for the production of wealth, in so far as those phenomena are not modified by the pursuit of any other object.”

 Clearly, the concept of societal effect on the economic activities is reflected in the above definition and the laws of nature prevalent in the society which form the basis for the production of economic output.

According to Alfred Marshall, who was a neo-classical economist, he says:-

 “Economics is the study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected with the use and attainment of material requisites of well-being.”[9]

This shows that the Economics is concerned with the study of man and deals with their activities in the social setup i.e. study the activities of human being in the social setup. It is the study of man in one hand and social organization of economic activities on the other hand.[10] He developed an original view of the relation between individuality and societal aspect by saying that,” Perhaps the earlier English Economists confined their attention too much to the motives of individual action. But in fact economists, like all other students of social science, are concerned with individuals chiefly as members of the social organism. As a cathedral is something more than the stones of which it is made, as a person is something more than a series of thoughts and feelings, so the life of society is something more than the sum of lives of its individual members. It is true that the action of the whole is made up of that of its constituent parts; and that in most economic problems the best starting-point is to be found in the motives that affect the individual, regarded not indeed as an isolated atom, but as a member of some particular trade or industrial group.”[11] While including the welfare of the society as a whole, he is rejecting a way of characterizing society as set of isolated and competitive individuals which presupposes the human interaction to take place in the society for people to not have any clashes of interest.

Sir James Steuart (1767) is the premier English economist to use the concept of ‘political economy’ by saying that,

 ‘Oeconomy in general, is the art of providing for all the wants of the family’, so the science of political economy seeks ‘to secure a certain fund of subsistence for all the inhabitants, to obviate every circumstance which may render it precarious; to provide everything necessary for supplying the wants of the society, and to employ the inhabitants… in such a manner as naturally to create reciprocal relations and dependencies between them, so as  to make their several interests lead them to supply one another.’[12]

He introduced many essential elements of society such as family, population, social interaction, exchange, etc. which is a subject matter of sociology. Hence, the relation between Economics and Sociology seems well established.

2.3) Definations given by Sociologists and their relation to Economics

Max Weber defines sociology as

 “The science which attempts the interpretative understanding of social action in order thereby to arrive at a casual explanation of its cause and effects.”[13]

It deals with cause and effect principle which is commonly found in Economics and the various policies related to it. There are many causes that lead to different societal effects. For e.g. The French Revolution which took place evolved due to the atrocities and injustices faced by Russians leading to poor economic welfare and also due to sprouting up of the notion in the minds of the people about the notion of blaming humans for everything injurious they suffered and not finding out probable reason for the same. Thus, the given revolution was a result of economic and behavioral i.e. sociological aspect and both are interconnected to each other leading to a common effect i.e. revolution.

Morris Ginsberg defines sociology in the following way:-

 “In the broadest sense, sociology is the study of human interactions and inter-relations, their conditions and consequences”[14]

 There are many factors that govern this interaction which includes emotional, behavioral, as well as economic factors. For e.g. Parents fulfill all the economic needs of their children (till the time he is competent and able to earn money) in a family i.e. social institution, by making available all the necessary goods and services for their children. Further, a man often looks after all the material needs of her wife which becomes the part of social interaction. Hence, these social interactions include the economic aspect which is of prime importance.

2.4) Societal Forces shaping Economic behaviour

2.4.1) Power

Power plays a very important role in structuring economic policies, as when a powerful firm dictates its powers over the weaker suppliers, and indirectly when a well flourished industries shapes regulation to its own advantage. Karl Marx explained the concept of ‘Primitive Communism’, wherein the people survived by indulging in primitive means of getting food like hunting and all the people lived with equality and peace in a community. But with expansion of society and ownership of private land, the clashes between the rich and the poor arose wherein the rich people often encroached upon poor’s rights because of the power they processed, by denying the poor’s access to the economic resources, leading to the concept of ‘Might is Right’ and the formation of two groups in society-rich and poor. Then, the concept of feudalism arose in which feudal lords (ministers of the King) exploited the surfs (poor people owing small plots of lands) by levying very high taxes on their land and through military control, they created fear in the minds of the poor people to obey their orders. In the later phase, Capitalism arose in which the industrialist exploited the working class people through the economic power they processed and the concept of ‘laissez-faire’ arose, wherein the state won’t look after the economic needs of the people which lead to burgeoning exploitation of the poor by the rich since there was no governing body to look after whether there was equal pay for equal work followed by the rich. This further lead to greater societal clashes between the rich and the poor i.e. class antagonism and increased the hostilities against the state by the poor. These events show how societal forces like power shaped the economic policies in a given society. Even if we look at the present scenario, we find that a powerful person is highly venerated in the society without they themselves asking for such a respect. A common man, on meeting with a civil servant, Police , Rich businessman and other powerful people of the society tends to talk to them in a pleasant manner and do not show any rudeness because of the economic and political power they possess.

2.4.2) Institution

Social Institutions shape economic processes and action by putting up constraints (regulatory institutions) and by establishing behavioral i.e. conventions. The economic needs of the society are generally met through social institutions. These institutions include the economic a governmental systems which are concerned with food supply, property, class and law system. State is also a social institution which has been created to safeguard the interest of its people through the formation of the government, which also includes economic needs of the people. The recent National Food Security Act, 2013 passed by the Parliament in India is a push to meet the economic needs of the Below Poverty Line (BPL) people, living both in rural (75%) as well as urban areas (50%), by providing food grains i.e. rice, wheat and coarse grain at the price of Rs.3, Rs.2 and Rs.1 respectively.

Karl Marx gave the concept of Welfare State by talking about the need for the state to interfere in people’s economic activities to ensure their economic needs are fulfilled. He explained social institutions like Feudalism, Capitalism and Socialism. Even, Law is a social institution i.e. evolved from the society to curb the escalating crimes in the society and to enforce punishment in the form of compensation and imprisonment for those who do not obey the laws. Besides, any economic disputes that arise due to breach of contract, breach of arbitration clause between the companies is to be safeguarded by the law in most of the cases. Family institution teaches us how to distribute wealth among its members and the concept of who will spend wealth to meet the economic needs of the family. For e.g. In most of the families, it is the male person who is the head of the family and looks after the economic needs of his wife, children, etc., thereby participating in the market forces by allocating resources and spending wealth.

2.5) Common Issues concerning both Sociology and Economics

2.5.1) Unemployment

The problem of unemployment is generally defined as economic problem which has its root in sociology as well. The reasons for unemployment in India is due to the increasing population of the country and rate at which it’s increasing has surpassed the rate at which jobs are created, due to which many people in India are left jobless an d are unhappy in the society. It is also leading to declining welfare and human resource in the country.

2.5.2) Child Labor

Child Labor has become a common dismal practice in many developing countries like India wherein thousands of minors are made to work and are therefore devoid of education, health facilities, leisure activities, and basic freedoms, violating their rights. Most often, it is not the children who decide to start working instead of going to schools but there are a host of other socioeconomic factors primarily related to their families or households, to be more specific, that escort them to work.[15] . Moreover, these children generally do not get paid for the work they have been put in by their families,[16] which is a social institution. In most of the families in rural areas, children are often made to engage in agricultural activities and in urban areas, poor families are often send their female child to work as servants in domestic household, feeling them as a burden and thus ignoring them. Thus, the cause of child labor is poor economic resources which force the parents to send their children for work.

3) Conclusion

The relation of sociology with economics has been extensively proved, showing how society is greatly influenced by economic factors and how economic processes are determined by social environment. The conflicts and hatred among the people in the society has its deep route in economics such as the property conflicts between the parents and their son. It has been proved that economic phenomena has been constantly determined by numerous social needs and social status such as excessive spending on goods and resources in order to raise one’s status in the society. For e.g. rich people often buy many luxurious goods for showing off about their superiority in terms of wealth over other individuals.

If one observes different kind of individual social life such as type of his family, education, authority, marriage, structure, etc. one could find their importance in economic factors like family expenditure, credit facilities, expenditure at the time of marriage, etc. It is the economic factor which influences the individual’s life style and needs. The historical development shows how the inter-relation between sociology and economics has increases, since many people found it difficult to study sociology and economics as a separate identity and by studying one subject individually, one tends to leave many aspects of it owing to its relation with other subject. Different economists have given their own definitions of economics which finds very deep relation with sociology and vice versa. Apart from these, there are many societal forces which govern economic behaviour like Power and Social Institutions. The economic needs of the society are generally met through social institutions. Thus, the two subjects are complementary to each other and it is difficult, rather impossible, to study one subject by leaving the other. However, in some of the cases, economics does share its aspects with sociology, owing to excessive dealing of it with only material goods and material welfare, but still sociology and economics are deeply rooted together.

 Author: 

Name- Pravesh Aggarwal

Designation- Student

Name of the Organisation- Rajiv Gandhi National University of Law, Punjab

 

 

 

[1]     Wessels, Walter J. Economics. New York: Barron’s Educational Series, 2006. Print.

[2]     From the Greek word makros, meaning large.

[3]     Ackley, Gardner. Macroeconomic Theory, 15th ed. Michigan: Collier-Macmillan, 1961. Print.

[4]     From the Greek word micros, meaning small.

[5]     Dilts, David A. Introduction to Microeconomics, E201. 1995. Fort Wayne: Indiana – Purdue University – Fort Wayne, 2004. Print.

[6]     Small, Albion W.” The Relation of Sociology to Economics.” Journal of Political Economy 3. 2 (1895), 169-184. Print.

[7]     Ibid.

[8]     Chopra, P.N. Micro Economics. Noida: Kalyani Publishers, 2005. Print.

[9]     Marshall, Alfred. Principle of Economics. 1890. London: Macmillan and Co., Ltd., 1920. Print.

[10]    Chopra, P.N. Micro Economics. Noida: Kalyani Publishers, 2005. Print.

[11]    Marshall, Alfred. Principles of Economics- An Introductory volume, 7th ed. London: Mac Millan, 1916. Print.

[12]    Steuart, J. 1767- An Inquiry into the Principles of Political Economy.Ed. A.S. Skinner, Edinburgh and London: Oliver & Boyd for the Scottish Economic Society, 1966. Print.

[13]    Chopra, J.K. Sociology. New Delhi: Unique Publishers (1) Pvt. Ltd., 2013. Print.

[14]    Ibid.

[15]    Siddiqi, Ahmed F. “Important Determinants of Child Labor: A Case Study for Lahore.” American Journal of Economics and Sociology 72. 1 (2013): 199–221. Print.

[16]    Ibid.

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