According to A.C. Pigou, “Economics studies that part of social welfare which can be brought directly or indirectly into relationship with the measuring rod of money.” 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 which is the domain of Economics.
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: “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 wellbeing.” This shows that 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. Economic sociology is the application of sociological concepts and methods to analysis of the production, distribution, exchange and consumption of goods and services. Economic sociology is particularly attentive to the relationships between economic activity, the rest of society, and changes in the institutions that contextualize and condition economic activity.
Although traditional economic analysis takes the atomistic individual as its starting point, economic sociology generally begins with groups, or whole societies, which it views as existing independently of and partially constituting the individual. When economic sociologists do focus on individuals, it is generally to examine the ways in which their interests, beliefs, and motivations to act are mutually constituted through the interactions between them. This focus on economic action as social that is, as oriented toward other people allows economic sociologists to consider power, culture, organizations, and institutions as being central to an economy.
The birth of economic sociology in the writings of Karl Marx. Smelser, N, J and Swedberg, R says that the first use of the term economic sociology seems to have been in 1879, when it appears in a work by British economist W. Stanley Jevons. The term was taken over by the sociologists and appears, for example, in the works of Durkheim and Weber during the years 1890–1920. It is also during these decades that classical economic sociology is born, as exemplified by such works as The Division of Labor in Society (1893) by Durkheim, The Philosophy of Money (1900) by Simmel, and Economy and Society (produced 1908-20) by Weber.
In the recent times, especially after 1980’s, economic sociology experienced a remarkable revival. Few sociologists, who were doing rigorous research on the relationship between market and society, contributed a flurry of articles on the networks of market and society, which eventually lead to the revival of economic sociology into an important subfield of sociology. The main contributor of 1980’s was Mark Granovetter, who emphasized on the embeddedness of economic action in concrete social relations.
In the article Economic Institutions as Social constructions, Granovetter argues that institutions are actually congealed social networks, and, because economic action mostly takes place in these networks, social scientists must consider interpersonal relationships while studying economy. Karl Polanyi is another renowned contributor to economic sociology, argued that the birth of the free market was an institutional transformation necessarily promoted by the state. This got a general acceptance in the domain of economic sociology.
Economics is all about the economic life of human beings whereas sociology studies society as a whole with the inclusion of economic life of man as a part of this wide branch of new social science such as the belief system of a particular society, the cultures and traditions, political and legal matters concerned and many other knowledge dealing with the social aspect.
Despite this differences, both sociology and Economics as branches of social science is interdependent on each other. In fact, it is due to these differences that make both the two inter-dependent helping society develop and prosper. The relationship between the two disciplines the two is such that one is considered the branch of the other discipline. This is because economic society is greatly affected by the social aspect of society and society too is greatly impacted by the economic factors.
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