Whereas Marx focused on economic exchange relations at a macro level, subsequent the orists shifted attention to encompass the many non-economic forms of social exchange characterizing interpersonal and group relations. Georg Simmel observed: “Most rela tionships among men can be considered under the category of exchange. Exchange is the purest and most concentrated form of all human interactions in which serious interests are at stake … every conversation, every love (even when requited unfavorably), every game, every act of looking one another over” (1907/1971: 43, 33). In this view, whether in the marketplace, politics, the classroom, or at home, social exchange is the core social process underlying relations between individuals, and within and between groups (cf. Blau 1964: 4); “Two conditions must be met for behavior to lead to social exchange. It must be oriented toward ends that can only be achieved through interaction with other persons, and it must seek to adapt means to further the achievement of these ends” (Blau 1964: 5). GEoRGE HoMANS: INdIVIdUAL AcToRS IN SocIAL EXcHANGE one of the leading theorists associated with social exchange was the Boston-born Harvard sociologist George Homans. In the post-World War II era dominated by a focus on imper sonal social systems and sub-systems (following Parsons; see chapter 4), Homans brought attention back to individual and small-group behavior and away from the macro structures, organizations, and processes that sociologists tended to emphasize. He argued that all elementary forms of social behavior can be explained in terms of the psychological motives of the individual (Homans 1961/1974: 12). For him, individual motives explain why insti tutions exist; they exist only because they enlist and coordinate the motives of individuals in support (or in spite) of the institution’s aims (1961/1974: 372–373). Thus, while durkheim insisted that the behavior of individuals in society (manifest in social facts, e.g., marriage) could (and must) only be explained sociologically, i.e., by other social facts (e.g., migration, education; see chapter 2), Homans took the opposite view. For him, in effect, sociology was a corollary of psychology – of individuals in interaction with other psycho logically motivated individuals, whether in small groups or in organizations. Weber affirmed the significance of individual actors engaged in subjectively meaningful rational action (see chapter 3), but he also highlighted the specific sociological characteristics of groups and organizations (e.g., bureaucracy). By contrast, Homans argued that organizations do not have a sociological character of their own; organizations are simply “shorthand for the persis tent, concerted activities of a number of persons” (1961/1974: 357). For him, all social behavior is a manifestation of individually motivated behavior and, further contrary to Weber, is independent of the historical, cultural, and organizational context in which individuals act. Exchange behavior The elementary basis of all individual/social behavior, Homans argued, has to do with the fact that the individual’s behavior “is a function of its payoffs, of its outcomes, whether rewarding or punishing, and they hold good whether or not the payoffs are provided by the non-human environment or by other human beings” (Homans 1961/1974: 12). In other words, we can only begin to understand human behavior, human interaction, if we consider it exchange behavior (1961/1974: 56). The exchange that occurs in interpersonal face-to-face interaction covers a wide gamut: we exchange opinions about all kinds of topics, we exchange advice, friendship, clothes, favors, etc. In any exchange, “There are two kinds of dimensions along which a person and others who observe him assess his status. He is ranked on what he does himself – that is, on what he gives in social exchange – and on what he gets from others” (1961/1974: 225). Following the behavior conditioning thesis popularized in psychology by B.F. Skinner (1938), Homans outlined a set of deductive propositions that emphasized a basic action–reward/punishment orientation to social behavior. Among other propositions, he argued that For all actions taken by persons, the more often a particular action of a person is rewarded, the more likely the person is to perform that action … If in the past the occurrence of a particular stimulus, or set of stimuli, has been the occasion on which a person’s action has been rewarded, then the more similar the present stimuli are to the past ones, the more likely the person is to perform the action, or some similar action, now … the more valuable to a person is the result of his action, the more likely he is to perform the action. (Homans 1961/1974: 16, 22–23, 25) Power in social exchange Social action and interaction, therefore, are driven by the individual’s experience and learned anticipation of rewards and punishment. This is not, however, a simple calculus. Because social exchange is characterized by power imbalances such that one person within the interaction gets more out of the exchange than the other person (Homans 1961/1974: 70–71), the value of the exchange has to be weighed in relatively subtle ways. Further, the power dynamics shift once a third person is involved in the interaction – a situation typifying small-group interaction. “A difference between men in their capacity to change the behavior of others and to change it in their favor is what we mean by a difference in power” (1961/1974: 73); “what a person … gives in social exchange … deter mines his power” (1961/1974: 223). Because of imbalances in power, in what people give and are able to give, individuals make choices among alternative courses of possible action on the basis of their projected assumptions as to which course of action will yield greater rewards. For example, three of four roommates sharing an apartment may do all of the cleaning chores because they want their apartment to look tidy when other friends visit (the reward of both a tidy apartment and their friends’ approval); they thus invest in this activity even though the fourth roommate gets to similarly enjoy the rewards of the others’ efforts. There is a clear exchange imbalance in the group’s relationship. But this chore imbalance might be offset by other resources the fourth roommate contributes; she may be a good cook who willing prepares a scrumptious meal for her roommates once a week. In all one-to-one or group relationships, Homans argues, “Power … depends on an ability to provide rewards that are valuable because they are scarce … What determines the scar city value of a reward is the relation between the supply of it and the demand for it” (Homans 1967: 55). Thus, the fourth roommate will only retain the power not to be pushed out of the apartment by the others if she cooks things they really like and cannot get or afford elsewhere. If, by contrast, a roommate or friend continues to disappoint, to violate your expectations of how she or he should behave, and to give “nothing” in exchange – not even affirmation of your chore efforts – you will likely engage in depriva tion or punishment behavior by withholding your approval or other symbolic rewards (e.g., your company, by declining to attend a party with her). But you will only engage in such behavior to the extent that it does not simultaneously deprive you of rewards. Therefore, while you might in frustration refuse to tidy the apartment, you too, and not just your roommate, will be deprived of the rewards of your (time and effort) investment in chores. despite power imbalances, “one never gets [or gives] something for nothing” (1967: 73). But why some rewards are given priority and others dismissed, and in what circumstances – key questions of sociological interest – remain unaddressed by Homans. He does not acknowledge the larger societal context and how, for example, it shapes rela tionships (e.g., marriage) and individuals’ expectations of and within relationships. Individuals have different expectations of friends than of work colleagues, and of team mates than of roommates. These varied expectations are also contingent on and mediated by intersecting differences in gender, class, and racial and other social locations. Therefore, while an exchange–rewards logic characterizes social relations, how it unfolds and plays out in interpersonal and group relationships is more complicated than the individual-motives logic outlined by Homans. PETER BLAU: SocIAL EXcHANGE IN oRGANIZATIoNS Homans’s perspective is also of limited use in explaining the behavior of organizations, a challenge taken up by Peter Blau. In his influential book Exchange and Power in Social Life (1964), Blau stated: The core of a theory of society has to explain the complex interdependence between substruc tures of numerous kinds … The foundation required for a systematic theory of social structure is a thorough knowledge of the processes of social association, from the simplest that charac terize the interpersonal relations between individuals to the most complex that pertain to the relations in and among large collectivities. (Blau 1964: 2) Blau studied how social exchange (defined above, p. 246) operates in organizations by investigating workers’ behavior in several different bureaucratic settings. His research find ings showed how the characteristics of organizations, such as occupational rank and status among workers, lead to social exchanges that (contrary to Homans) are not reducible to workers’ individual psychological characteristics. Blau noted that employees in a government agency are required to defer to a hierarchical order of authority (e.g., to consult about a work-task problem with their supervisor rather than with co-workers) and to follow highly specified impersonal rules and procedures for accomplishing tasks (cf. Weber on bureau cracy, chapter 3). But Blau also discovered that employees’ work is dependent too on social exchange and the trust it implies. For example, when work colleagues informally seek advice from one another about a task, this builds esteem among colleagues (flattered that their colleagues recognize their competence) and contributes to the effective completion of the work-task at hand (Blau 1974: 6–8, 157–169) Trust relationships Blau’s insights into social exchange and trust relationships in organizations are supported in today’s corporate workplace. There is much recognition that the effectiveness of teamwork in task accomplishment is dependent not just on everyone following the correct technical procedures, but on worker-team cohesiveness, a point underscored in many corporate advertisements, and in the prevalence of company-financed, team-building employee activities (e.g., outward Bound weekend camps, treasure hunts, etc.) and employee social clubs. Beyond the workplace, politicians have long known the value of developing personal rela tions of reciprocity and trust that encompass but extend beyond strategic interests. Especially in the international political arena, the development of personal trust between potential allies and adversaries is seen as core to building and maintaining inter-country ties. This accounts for the frequency with which political leaders visit each other not just at their official resi dences and offices but also at their personal or family vacation homes; such social exchange creates both the structure and the expectation for future interpersonal and strategic exchanges. However, unlike economic exchange relationships, wherein we typically pay a specified amount of money in return for a specified product or service, the sociological significance (and intrigue) of social exchange lies largely in its diffuseness of expectations: Social exchange … entails supplying benefits that create diffuse future obligations. The nature of the return is invariably not stipulated in advance, cannot be bargained about, and must be left to the discretion of the one who makes it … Generally, a [person] expects some expressions of gratitude and appreciation for favors he/she has done for others, but he/she can neither bargain with them over how to reciprocate nor force them to reciprocate at all … The distinctive significance of social obligations requires that they remain unspecific and the fact that social, as distinguished from economic, commodities have no exact price facilitates meeting this requirement. Since the recipient is the one who decides when and how to reciprocate for a favor, or whether to reciprocate at all, social exchange requires trusting others, whereas the immediate transfer of goods or the formal contract that can be enforced obviates such trust in economic exchange. Typically, however, social exchange relations evolve in a slow process, starting with minor transactions in which little trust is required because little risk is involved and in which both partners can prove their trustwor thiness, enabling them to expand the relation and engage in major transactions. (Blau 1974: 209) Balancing the imbalances in social exchange Moreover, Blau notes: “A paradox of social exchange is that it serves not only to establish bonds of friendship between peers but also to create status differences between persons” (Blau 1974: 210; see also 1964: 88–114), differ ences that invariably revolve around differences in power and rank. Thus “there is a strain toward imbalance as well as toward reciprocity in social associations,” including friendship and marriage (Blau 1964: 26–27). We give birthday presents to our friends with the (unspoken) expectation (or trust) that they will reciprocate and not only give us a present on our birthday but give us one of comparable value to the gift we gave them. This seems like a fairly balanced social exchange. A “strain toward imbalance” emerges, however, when Friend A has more friends than Friend B. This gives Friend A more power in the A–B rela tionship because she has more alternative friends to hang out with (and more birthday presents to buy), and hence may not feel con strained to give B a gift of comparable value to the one received from B. Giving a less expensive (or no) gift may have negative consequences (e.g., losing a friend), but these consequences will be greater for B than for A. Unlike B, A does not have a scarcity of friends. The (less expensive) gift A gives B, therefore, affirms the friend ship, but it simultaneously affirms the power imbalance in the friendship. In short, friendship (and cohabitation/marriage) are exchange relationships, and they tend toward imbalance, given the variation in the resources (of money, skills, popularity, beauty, etc.) that individuals bring to and take from the relationship. The differentiation of power, however, does not necessarily lead to change in the structure of social relationships. change only occurs in circumstances where those involved in the (imbal anced power) exchange perceive that change might enhance their net access to greater rewards (e.g., nicer friends, a promotion, votes). In many relationships – between spouses and friends, in bureaucratic work settings, or in politics – the perceived negatives are neutralized by the perceived advantages. This occurs because of a general overall reciprocity (rather than a unilat eral dependence) in the exchange relationship such that the exchange more or less balances power (Blau 1964: 29) (as we discussed in the roommate example earlier). THE INSTITUTIoNAL REGULATIoN oF TRUST Because power inequalities weaken trust, and because trust is seen as an important element in smooth interpersonal and societal functioning, there are institutional mecha nisms designed to supervise and enforce trust (a development that has parallels with dahrendorf’s democratization of conflict; see chapter 6). For example, the expectation of trust in professional relationships (e.g., doctor–patient, banker–client) is strengthened by external agencies and associations that impose detailed codes of ethics. Additionally, the mistrust that may characterize bankers and their clients is attenuated to some extent by the guarantees of financial security (e.g., Federal deposit Insurance corporation [FdIc]) and oversight (e.g., the Securities and Exchange commission [SEc]) provided by federal agencies. However, investor and public confidence in these institutionalized trust mech anisms is weakened considerably when financial crises occur that are due, in part, to regulators’ failures to exercise the supervision of banking and investment practices that they are entrusted with by the government. during the Wall Street financial crisis of fall 2008, the head of the SEc acknowledged lapses in the agency’s regulatory practices, and again in the summer of 2012, regulators conceded lapses in overseeing the risk management practices at JPMorgan chase (which lost over $5.8 billion dollars in a single high-risk trade; see chapter 14). Belief in the social value of trust as a remedy against crime is so strong in law enforce ment that many police departments invest resources in developing personal relationships between police and residents in crime-prone neighborhoods. Similarly, independent mediating agents are frequently appointed to help cultivate feelings of trust between marriage partners, or among the parties involved in business disputes within countries or in trade disputes between countries. Further, impartial monitors are dispatched to oversee the fairness of elections in fledgling democracies, in the belief that their presence on the ground will increase individuals’ trust in their country’s voting procedures and election outcomes. clearly, trust-nurturing bodies are not always successful in maintaining trust in the relationships in question. And indeed, as cook et al. note, in circumstances of declining trust, “reliance on interpersonal mechanisms for maintaining trust gives way to organizational mechanisms that ensure trustworthiness through increased monitoring and sanctioning, ironically reducing the possibility for ongoing trust rela tions” (2005: 47). NETWoRKS ANd SocIAL cAPITAL cook and other network scholars argue that one reason why networks are sociologically important is because they function effectively even in the absence of trust relations (cook et al. 2005: 103). Trust can play a role in initiating your social contacts and acquaintances, but it does not have to. People can do things for you even if they don’t trust you, and similarly do things to help their neighborhood or community even if they don’t like their neighbors. Such behavior is assured by factors other than trust, such as legal requirements, professional duty, an individual’s concern about their own or their community’s reputation, or for financial (cook et al. 2005: 86–87; cook et al. 2009), or altruistic and compassionate reasons (e.g., dillon and Wink 2007: 158–179). From a net work perspective, the important thing is to have (direct or indirect) connections to peo ple who are willing and able to commit to do things on your behalf. This is social capital. For network scholars, “Social capital enables us to get things done by people with whom we do not have a substantial trust relationship – indeed, people whom we need not even know” (cook et al. 2005: 87). This is what we see, for example, in drug rehabilitation, addiction-companion network programs: paid “sober companions,” whom alcohol and drug addicts may or may not trust, nonetheless help the addicts-in-recovery maintain an alcohol- and drug-free daily routine. THE STRENGTH oF WEAK TIES Thus, sociologists who study social networks are interested not so much in whom we trust or like but who we spend time with (irrespective of whether we trust or like them).1 As underscored by Mark Granovetter (1973; 1974), overlapping interpersonal ties among individuals, even, or especially, when the ties are weak rather than tightly knit, are effective in enhancing individuals’ life-chances (e.g., economic success) as well as community well-being. Granovetter shows that strong ties among a small group of indi viduals (e.g., cliques) may reduce their ties to others outside the group, and hence close off their access to information and opportunities that might be effective for them as individuals or collectively (e.g., in achieving community goals). When individuals have weak ties to several different people (e.g., an old high school friend, a former workmate) who themselves have weak ties to many others, this invariably opens up the individual’s access to new information and opportunities (which may include high-paying jobs in the financial sector or in Silicon Valley’s tightly networked culture; see, e.g., castilla 2003; castilla et al. 2000). Granovetter (1973: 1371) notes that although it might intuitively seem that “those with whom one has strong ties are more motivated to help with job information … those to whom we are weakly tied are more likely to move in circles different from our own and will thus have access to information different from that which we receive [from our close friends].” In short, word-of-mouth information or recom mendations shared across several weakly connected people can create a large domino effect. This, in fact, is how the use of steroids among professional baseball players in the US seems to have expanded, as documented by the Mitchell Report (see Topic 7.2). Trust certainly matters in social relationships, and closed sanctuaries such as locker rooms are certainly conducive to the development of social solidarity (see durkheim, chapter 2) and tight-knit relationships. From a social network perspective, however, what is more crucial is the existence of multiple connections across several different contexts – in the case of steroids, across several different teams. Beyond the relatively confined network of steroid users, weak ties also impact macro level processes – in the steroids case, leading to congressional investigations, public debate, and likely changes in drug policy for both professional and amateur baseball (and for other sports too). Weak ties can also facilitate the development of bridges to several other individuals when there is a need for community activism; bridging ties between loosely connected individuals and groups in the larger society, therefore, can thus produce social cohesion rather than alienation or fragmentation (Granovetter 1973: 1378). In short, weak ties can produce a large number of connections among loosely tied individuals and groups. Members of tightly bonded, closed cliques, by contrast, are strongly tied to one another but may have few ties to individuals outside the group; thus cliques are a likely source of community fragmentation – a society of similarly minded cliques that do not communicate with others. Accordingly, the analysis of networks and of micro-level interpersonal ties illuminates how “The personal experi ence of individuals is closely bound up with larger-scale aspects of social structure, well beyond the purview of particular individuals” (Granovetter 1973: 1377). In sum, inter personal ties – whom you talk to – are important; they are a core component of the social or network capital you (and your community) can use to accumulate additional resources RATIONAL CHOICE THEORY All theories that focus on exchange project a certain utilitarian or self-interested under standing of the individual and of social relationships. It is rational choice theory (RcT), however, that makes utilitarianism (see Introduction, p. 15) – the utility of a course of action to the self – a core axis of explanation. James Coleman, influenced by Homans’s exchange theory (Marsden 2005: 12), and impressed by how economists link micro- and macro-economic behavior (e.g., the translation of micro, individual demands onto macro supply processes), became a leading proponent of RcT for sociology. coleman embraced the micro-economic model of the self-interested individual in his efforts to understand the mechanisms that link individual behavior to larger, macro processes. Although you might be inclined to equate self-interest with selfishness, this is not entirely accurate. Acting on self-interest, as John Stuart Mill (1806–1873) noted long ago, does not necessarily prevent one from serving the interests of others. For example, although we might think of altruism – selfless concern for others – as the opposite of selfishness, altru istic behavior is driven by many different motives, including self-interest (see dillon and Wink 2007). In any case, the behavior of the self-interested individual reverberates far beyond the individual alone, and impacts macro processes across multiple domains (e.g., the economy, family relations, politics, religion). coleman (1961) first highlighted micro–macro connections when he studied how American adolescents’ choices or values – whether they emphasize peer popularity over academic achievement – feed into aggregate, nation-wide patterns of educational and occupational success/failure. It was in his later theoretical work, however, that coleman devel oped his ideas about the economic efficiency or rationality of human behavior and its impli cations for social processes that would seem to have little to do with economics. coleman offers a social theory based on the “purposive action of individuals” (1990: 17). We know from Weber (see chapter 3) that purposive action can have several different motivational sources. coleman, however, narrowly defines it as the maximization of utility – the usefulness of action to advancing the actor’s own interests. He frames it this way, in part, he states, because he wants to minimize psychological complexity so as not to complicate his theory of the linkages between individual actions and their manifestation in social organizational processes (coleman 1990: 19). Although RcT seems far removed from Marxist theory (see chapter 1), some of its micro- economic principles are used by some contemporary scholars working within the Marxist tradition. Known as analytical Marxism, this empirically oriented school of thought emerged in the late 1970s as various neo-Marxist sociologists and economists sought to reconceptu alize some of Marx’s core assumptions (e.g., historical materialism) in the context of late twentieth-century capitalist society (Roemer 1994: ix). Analytical Marxists seek to explain how, for example, occupational mobility and the emergence of an economically strong mid dle class – characteristics of contemporary capitalism that undermine Marx’s stress on class polarization (between the proletariat and the bourgeoisie) – can be nonetheless understood in Marxist terms (e.g., Wright 1997). Scholars associated with analytical Marxism vary in the specifics of the arguments they elaborate; their chosen unit of analysis – individuals (e.g., Roemer 1982), social classes (e.g., Wright 1984), or the state (e.g., Block 1987; Przeworski 1985); and their research methods. John Roemer, one its founding theorists, probes whether workers in modern capitalist soci eties should be considered economically “exploited” (as Marx would aver). Roemer (1982), an economist, draws on game theory models of inter-individual cooperation and competition to hypothesize a general theory of exploitation. He conceptualizes the actors in an economy as “a set of agents, each of whom is characterized as having preferences over goods and leisure, and … an initial endowment of goods which can be used as inputs in the production process” (1994: xi). From experiments that impose varying degrees of difference in individuals’ assets and prefer ences (on “labor market island”), Roemer argues, for example, that individuals basically select their own class position as a result of the asset-allocation decisions they make. In this view, therefore, it is individuals and not the capitalist class structure (as it is for Marx and for Weber too) that lock individuals into unequal relations. Roemer states: “People are not born into classes, so to speak, but choose their own class positions as a rational (i.e., preference maxi mizing) response to their wealth constraints. Thus capitalism induces [produces] a class structure in which those who are poor systematically work for those who are rich and are exploited by them in the classical Marxian sense” (1994: xi; see also 1982: 259–263)