With Special Guest Georg Rilinger, MIT Sloan School of Management
Economic sociology bridges economics and sociology, exploring how social dynamics influence the creation and operation of markets. From the early works of Durkheim and Weber (Episode 6), economic sociology originally began as an examination of the interactions between institutions and society, particularly emanating from religious influences (e.g., the so-called “Protestant work ethic” presented by Weber (1905)). Contemporary streams of literature in this field are exploring the formation and exercise of markets, emergence of private sectors organizations such as small businesses to international corporations, and some of the constraints placed on those entities such as property rights, laws, and government regulations. Of particular interest for this episode, the question of how markets assign monetary value to intangible objects has much to do with how societies shaped the market in the first place.
This episode considers the subfield of economic valuation, in which researchers have been studying how the monetary worth of something is formed or constructed. One influential work is Marion Fourcade’s “Cents and Sensibility: Economic Valuation and the Nature of ‘Nature’,” published in the American Journal of Sociology in 2011. The article accomplishes two things. First, it explores the economic valuation of peculiar goods, things that are intangible or otherwise cannot be exchanged in a market yet have a social value that under certain circumstances is converted into a monetary value. Second, it presents a case study of the legal proceedings following oil spills in the US (the Exxon Valdez) and France (the Amoco Caldez) where the two lawsuits results in outcomes that were disproportionate to the amount of oil spilled.
The explanation shows how political, cultural, and professional dynamics shaped the very meaning of nature and monetary compensation in the two legal systems . For example, the US’s social narrative of manifest destiny and taming the wilderness, along with the strong Progressive-era in valuing nature (e.g., through its park system) led to nature being sanctified, whereas in France where there is no wilderness, the natural environment held less value by comparison. The legal frameworks also differ due to the presence of punitive damages in the US legal system which is nonexistent in the French. This led to two very different assignments of monetary values to the harm caused by the respective oil spills and therefore the awards granted to the plaintiffs.
The work has had a tremendous impact as contemporary societies continue to wrestle with how to properly assign value to intangible things such as non-fungible tokens and other cryptocurrencies.
You may also download the audio files here: Part 1 | Part 2 | Supplement
Read with us:
Fourcade, M. (2011). Cents and sensibility: Economic valuation and the nature of “nature”. American journal of sociology, 116(6), 1721-1777.
To know more:
Fourcade, M. & Healy K. (2024). The Ordinal Society. Harvard University Press.
Rilinger, G. (2024). Failure by Design. University of Chicago Press.
