On Unifying the Fields of Economics and Sociology
For centuries now the fields of economics and sociology have been wrongfully considered separate fields. This approach has contributed to a broad confusion and misunderstanding of both fields. In reality these fields usually operate together and closely interact. Considering economics and sociology separate fields of knowledge is meaningless and misleading.
The influential and brilliant economist Adam Smith (in 1776) coined the term “the invisible hand” because he did not understand sociology well enough. Granted back then sociology, as a field, did not exist yet and hence was not well understood. Consequently, economists following his footsteps maintained this confusion and failed to incorporate in-depth sociological understanding into their analysis.
After the French Revolution August Comte and Karl Marx began to study society as a whole and created the field of sociology (then also called social physics). Comte attempted to unify history, psychology and economics by studying the social realm but garnered limited success.
The influential and creative sociologist Karl Marx (in 1867) coined the term “Das Kapital” because he did not understand economics well enough. Granted, Marx was one of the few sociologists (another being Max Weber in 1922), who even attempted to understand sociology’s full interaction with economics. Among other ideas Marx proposed the concept of historical materialism. Yet his economic research misled him and was misguided mainly by wishful thinking. He was equally affected by the lack of economic understanding in his contemporaries.
Consequently, future sociologists stayed away from trying to incorporate in-depth economic understanding into their analysis and remained in the dark.
John Maynard Keynes (in 1936) led the idea that free markets are not always positively guided by “the invisible hand” and that they can sometimes become hostage to more complex human phenomena. He pushed macro economic thinking towards aggregate demand and maybe was one of the first who thought beyond rational agent economics.
Today’s economists have started to research behavioral economics by incorporating some behavioral aspects into their economic thinking. This is a first step to really understand economics, but a small step, even if some economists have received the Nobel Prize for their progress in behavioral economics. What economists today call behavioral economics is “a sad parody” of the actual level of interaction between sociological and economic phenomena in the real world. Today’s behavioral economics is actually much more an interaction with psychology. This interaction is far less dominant and less complex than the interaction with sociology.
Today’s sociologists, fairing even worse, have remained in complete confusion without any attempt to really incorporate economics, and the field of sociology has remained superficial, mostly incomplete and mostly useless in its scope. It also did not help that the two sociologists who had attempted to incorporate economics, Marx and Weber, stand in the dark shadows of the failed Soviet Union and Weimar Republic. The real lesson should have been that although one should try to understand the socio-economic interactions, implementing broad socio-economic policies should be done with caution, as these interactions are very complex and probably still misunderstood.
Today’s sociologists have stayed away from economics and have failed to appreciate “the role that money plays” in everything that happens in the world. They failed to give sufficient weight to the ways economic incentives/actions affect sociological phenomena and institutions.
The portion of the world/life covered by today’s fields of economics and sociology is densely interconnected and overlapping. These fields closely interact with each other on so many levels. Among them the most fundamental interaction is the interconnected marketplace for value(s), which affect(s) both fields.
Value theory is the foundation for this interaction. It operates at the intersection of sociology, economics, psychology and some philosophy. In a sense value theory is the operating system of economics and sociology, although it also incorporates some psychology and philosophy. Although it is a complex field, the future “Social-economist” needs to carry the wisdom of value theory in mind and notebook.
Fundamentally, each individual’s conscious actions (and maybe some unconscious actions) are guided towards perceived outcomes, that are valued based on each individual’s value system. But what an individual values (the most), is shaped by the values of the groups and society, a specific individual is part of.
The way a society selects its value system, especially in democratic societies, is shaped by cultural, media and entertainment phenomena (part of sociology), as well as, related and unrelated, but heavily interacting production and consumption phenomena (part of economics). And both of these operate on top of the complexity of human psychological structure.
So the value system a society selects has several feedback loops both from sociology and economics. And these values then shape individual value systems and guide actions, which collectively give rise to new sociological and economic phenomena, and future value systems. Hence the feedback loop continues.
Friedrich Nietzsche (in 1883) was one of the philosophers who tried to shine some light on the field of value theory, during his attempt to re-evaluate his contemporary values. But Nietzsche had limited success in a social-economic context. Although he had an understanding of sociology, psychology and philosophy, he lacked depth in economics, partially because of limited time spent on it (economic concepts are better acquired by observation and not just studied). Similarly, he was also affected by his contemporary’s lack of economics understanding.
Yet Nietzsche still greatly drove forward the field of value theory as one of the first to incorporate psychological concepts in his analysis of sociology and philosophy. Although Nietzsche was a philosopher, in my opinion he was one of the best sociologists of all time! Not his philosophical views, but his depth of understanding humans was so profound - it was second to none.
His work inspired Sigmund Freud (in 1929) to push forward in the field of social psychology. Psychology has no little role in value theory, since all of us are aware of the economic term “psychological value”. Many of Freud’s findings about social psychology are used today to direct consumer behavior.
However, psychology’s interaction with both sociology and economics is more uniformly distributed, and in many places one-directional and therefore relatively speaking less crucial. Although combining all social sciences would be useful, psychology is currently not dominant enough in the interaction with economics to participate in this proposed field merger.
Sociology and economics on the other hand are more similar to each other as fields of knowledge and therefore interact in more complex ways. Therefore they are much harder to separate without disrupting understanding!
What economists today call behavioral economics is closer to psychological-economics and does not yet incorporate the much more crucial aspect of sociology.
Interestingly enough, led by the above mentioned brilliant and profound thinkers, our understanding of human nature has increased significantly over the centuries. And ironically this additional knowledge has connected economics and sociology even closer to each other. Because nowadays where there is knowledge of human nature soon there will be money in its place.
Value theory is not the only important area where economics and sociology interact. Many sociological markets are heavily influenced by economic factors. Also sociological institutions encapsulate the scopes of many economic markets.
In this pair interaction, I like to think of economics as a game of life: a game where individual incentives and actions affect the flow of a large river (while also affecting sociological institutions). And I like to think of sociology as the river of life, a flow (including its sociological institutions) that conditions individual incentives and guides individual desires. As a sum these dynamic interactions affect and guide what is happening both in economics and sociology. So both can only be understood if examined together.
This close interaction becomes most visible during times of drastic change as economic disruption/revolution is followed by sociological disruption/revolution and sociological disruption/revolution is followed by economic disruption/revolution.
In the real world economics and sociology are just different sides of the same coin. Separating them from each other is unnatural and meaningless.
As long as each party is looking at just one side of the coin, economists and sociologists will misunderstand what is really happening and will come to confused conclusions.
Today’s economists need to develop an in-depth understanding of sociology and today’s sociologists need to develop an in-depth understanding of economics. Even further, there needs to be a new unifying framework that combines these fields.
To clear the confusions in both fields, we need to combine them into one single field and maybe call it “Social-Economics” or something more creative. We should also discontinue separate analysis of the two obsolete fields. We should break the two old frameworks and build a single, new, unifying framework.
In other words these two fields need to be merged with each other, completely and at every level, for future findings in these fields to be more meaningful!
Disclaimer:
Since I am a dyslexic, I am prone to spelling and grammar mistakes. Hopefully it does not distract from the substance of the article.
Thank you for reading this article :)
