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The Price System and Economic Change, A Commentary on Theory and History
Published online by Cambridge University Press: 03 February 2011
Extract
This paper is intended to provoke a general discussion of the nature and uses of historical sociology and its possible relevance to the work of economic historians. It is not an exhaustive treatment of the topic. Terms of reference merely call for a reconsideration of “the penetrative powers of the price system.”
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- The Penetrative Power of the Price System
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- Copyright © The Economic History Association 1960
References
* The author wishes to acknowledge helpful suggestions received from Alfred Harris, anthropologist at Brandeis University, and Louis Cohn-Haft, ancient historian at Smith College. Neither of these scholars, of course, is responsible for applications made in this paper.
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14 By “reciprocity” is meant a system in which tradition establishes the rights and obligations of individuals and groups in relation one to another, and status governs economic behavior. The symmetry of social organization insures provision for the needs of all, barring emergencies. By “redistribution” is meant a system in which a central agency, and not tradition or markets, determines production and disposition of goods. It is essentially authoritative. See, Polanyi, Trade and Market, passim. Readers interested in taxonomies, including those of Max Schmidt and Walter Eucken, should consult Wagner, P. L., “On Classifying Economies,” in Ginsburg, Norton, ed., Essays on Geography and Economic Development (Univ. of Chicago, Department of Geography, Research Paper No. 62, 1960), 49–62Google Scholar.
15 These social and cultural phenomena influence “prices” and, in market economies, are sometimes influenced by them. For a recent critique of the “self-regulating market mechanism” in these regards, see Ayres, C. E., The Industrial Economy: Its Technological Basis and Institutional Destiny (Boston, Houghton Mifflin, 1952), 320–373Google Scholar.
16 Kuznets, loc. cit., 13–17. This is not to suggest that we do not need more and better data of the kinds produced, for example, by the National Bureau of Economic Research. The point is that, apart from technical limitations of such data, the statistical analysis of economic change only goes so far. A sensible “incrementalist” realizes he can only explain a fraction of the data by macro-techniques. Also, Shannon, L. W., “Social Factors in Economic Growth: A Trend Report and Bibliography,” Cwrent Sociology, VI, No. 3 (Unesco, Paris, 1957)Google Scholar.
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20 A. L. Oppenheim, “A Bird's-Eye View of Mesopotamian Economic History,” and R. B. Revere, “‘No Man's Coast’: Ports of Trade in the Eastern Mediterranean,” in Polanyi, Trade and Market, 27–37, 38–63.
21 Lyon, Bryce, From Fief to Indenture; The Transition from Feudal to Nonfeudal Contract in Western Europe (Cambridge, Mass.: Harvard Univ. Press, 1957);CrossRefGoogle ScholarBaldwin, J. W., The Medieval Theories of the Just Price; Romanists, Canonists, and Theologians in the Twelfth and Thirteenth Centuries (Philadelphia: American Philosophical Society, 1959)Google Scholar.
22 Bailey, F. G., Caste and the Economic Frontier (Manchester: Manchester Univ. Press, 1957), 236–240Google Scholar. The Orissa case is not cited as the prototype of Indian economy. Some sectors and localities have been subject to industrialization since the latter part of the 19th century. One wonders, however, if some of the recent Indian developments are not as much a consequence of “mobilization” by governments as of the penetrative powers of the price system. A major factor in the industrialization of some backward areas is “cold war” competitive co-existence.
23 The fact that prices are quoted, contracts made, and accounts reckoned in money terms does not detract from the point that decisions of authority rather than market bargaining determine many of the actual quantities involved. They did this long before the introduction of a general-purpose medium and the institutions of market economy: see, Quiggin, A. H., A Survey of Primitive Money: The Beginnings of Currency (London: Methuen, 1949), 5–14, 321–323Google Scholar.
24 Jerome, Harry, “The Relation of Custom to Price,” unpublished Ph.D, thesis, Univ. of Wisconsin, 1918.Google Scholar Also, Cooley, C. H., “The Institutional Character of Pecuniary Valuation,” American Journal of Sociology, XVIII (1912–1913), 543–544;Google ScholarEllis, A., “Influence of Opinion on Markets,” Economic Journal, II (1892), 109–116CrossRefGoogle Scholar, suggests that of eight conditions listed by Bagehot for striking a bargain, six are “based upon opinion.”
25 Lampard, E. E., “History of Cities in the Economically Advanced Areas,” Economic Development and Cultural Change, III (1955), 87–92.Google Scholar Also, Schnore, L. F., “Social Morphology and Human Ecology,” American Journal of Sociology, LXIII (1958), 620–634CrossRefGoogle Scholar.
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28 Smelser, N. J., Social Change in the Industrial Revolution: An Application of Theory to the British Cotton Industry (Chicago: Univ. of Chicago Press, 1959)Google Scholar. Quite apart from sociology, Smelser's study involved a first-class job of historical research.
29 See the comments of H. W. Pearson on Parsons and Smelser in Polanyi, Trade and Market, 307–318, and something of a rejoinder by Smelser, N. J., “A Comparative View of Exchange Systems,” Economic Development and Cultural Change, VII (1959), 173–182CrossRefGoogle Scholar. Smelser criticizes the “substantive economics” model and attempts a translation of some of its forms into Parsonsian.
30 C. M. Arensberg, “Anthropology as History,” in Polanyi, Trade and Market, 97–113.
31 Usher, A. P., A History of Mechanical Inventions (Boston: Beacon Paperback, ed., 1959), 1–83Google Scholar, for an economic historian's view of the analysis of social change. Usher's analytical framework rests upon “the sociology of Gabriel Tarde, the gestalt psychology, and the concept of emergent evolution developed notably by C. Lloyd Morgan and other biologists,” (p. viii).
32 The difficulty, from the theorist's standpoint, is that historical writings provide “very few facts of history in the relevant senses”: Lewis, W. A., The Theory of Economic Growth (Homewood, Ill., 1955), p. 15.Google Scholar But see also, Bock, K. E., “The Acceptance of Histories: Toward a Perspective for Social Science,” University of California Publications in Sociology and Social Institutions, III, No. 1 (Berkeley and Los Angeles, 1956)Google Scholar.