Many academic discourses in social sciences talk about interdisciplinary research. But it becomes very difficult to initiate conversations across established disciplinary paradigms. One such dialogue concerns what sociology and economics can learn from each other. Economists have often critiqued sociology for its perceived lack of objectivity, methodological rigour, and for issues such as relativism and conceptual ambiguity (Lazear, 2000; Stigler, 1984). In this article, however, we will focus on how theoretical insights from sociology can substantially enrich the discipline of economics.

Economics: its influence and limits

Across the world, economics has become a highly technical field of study and practice. Economists influence nearly all sectors – shaping monetary policy, evaluating government programs, advising courts and legislatures, consulting firms, and designing market rules (Fourcade, 2009). This also means that the discipline and its practitioners determine the trajectory of the lives of millions of people and often the most downtrodden among them. Yet, despite its prominence, political economists, philosophers, and even well-known economists themselves have issued scathing critiques of the discipline, highlighting both its methodological shortcomings and the way its social authority has been legitimised as an ideological paradigm. Ha-Joon Chang, Steve Keen, Tony Lawson, and Yanis Varoufakis are among such people.

One of these critiques, and perhaps the most important one, concerns the lack of scientific causal frameworks in the discipline. Much of the methodological approach in economics involves using mathematical-deductive (Lawson, 2003) or deductive-nomological (Reiss, 2013) ways of thinking about explaining things. This involves deriving meaning and conclusions from theoretical hypotheses using logical reasoning, which is substantiated by sound empirical evidence. From a careful look at the rigorous methodology employed in econometrics (which I believe is today at the heart of the discipline of economics), which utilises statistical methods in studying the economy, it might appear that there is a coherence between the method, the usage, and the empirical data. The growing use of causal inference methods as part of the proclaimed “credibility revolution” (Angrist and Pischke 2010) also pushes for the perception that there is a tight link between experience, method, and measurement today. Yet, econometric models remain sensitive to small changes in the model specifications, and the community of econometricians continues to accept inconsistent models (Maziarz, 2019). In fact, the “golden standard” of economics research, the Randomised Controlled Trials (RCTs), have been heavily criticised for their ‘black-box’ evaluations of government policies, in which the crucial task of uncovering the mechanisms that explain why and under what conditions they work is neglected (Deaton, 2010). The discipline is in dire need of help, and this is where sociology comes in.

What can sociology offer to Economics?

Undoubtedly, there is no shortage of academic opinion asserting that sociology has little to offer economics. Nothing could be further from the truth. On the contrary, sociology has the potential to meaningfully transform the very ontology of economics, that is, its fundamental assumptions about existence and reality. To achieve this, however, sociologists must make bold efforts to move beyond their traditional approaches and comfort zones and actively challenge economics. Simplifying somewhat, one can distinguish two broad approaches within the sociology of science and knowledge. In the first and earlier approach, sociologists examine the measurable outputs of science (such as publications, citations, or institutional growth) rather than its substantive content. By contrast, the latter, more ethnographic approach, exemplified by Bruno Latour’s Laboratory Life, interrogates the social processes, cultural norms, and material practices through which scientific knowledge is produced. I argue here for a third approach, one in which the sociologist immerses herself in the technical content of the discipline she seeks to question. Ideally, this would involve independently studying the technicalities of that discipline and then drawing on insights from classical sociological theories to suggest meaningful innovations within economics. Let me explain how this can be done.

Sociological theories and how they can improve economics

The methodological assumptions in economics include rational and self-interested agents, equilibrium-seeking markets, stable and well-defined preferences, optimisation under constraints, efficient allocation of resources, etc. Yet none of these assumptions can be said to accurately reflect the realities of human decision-making within social environments. Economics has misconstrued the ontology, that is, the existential nature of social beings. This existential nature is still awaiting discovery by those committed to establishing a genuine science of society, something the founder of sociology, Émile Durkheim, sought to achieve.

Unfortunately, Economics, the discipline considered at the helm of the social sciences, does not even engage with questions of a social-ontological nature. Perhaps the most important of these questions is the relationship between the social whole and the individual human agent, and the dilemma of which of the two holds primacy. Despite the absence of resolution and consensus on this potentially dialectical problem, modern economics continues to rely on reductive, universalistic characterisations such as that of the representative, optimising individual agent (Lawson, 2003). Because of such a false representation, the whole of economics is alien to how human beings can act beyond their individual self and implement decisions which not just they themselves believe in but the society in which they live compels them to believe in. Even when economists bring in elements of social nature in their models, they do not let go of unrealistic assumptions about individuals.

On the other hand, certain sociological theories provide crucial insights into the ontology of the social that economics cannot afford to ignore. Durkheim’s (1894) notion of the collective conscience shows how individuals orient their behaviour in relation to shared moral frameworks that exist outside them, yet bind them as if from within. Bourdieu’s theory of habitus highlights (1977) how durable dispositions, shaped by historical and structural conditions, guide practice in ways that transcend conscious calculation. The agency-structure debate, elaborated by Giddens (1979) and Archer (1995, 2003), further demonstrates that social life is constituted through the continuous interplay between constraining structures and human agency. Finally, theories of ideology, from Marx and Althusser to more contemporary accounts, reveal that ideology is not merely an external system of power but the very unconscious framework through which individuals perceive reality and act upon it. These insights, when taken together, point toward a richer social ontology that can help economics move beyond abstract individualism by recognising how agents calibrate their actions in relation to collective norms, dispositions, structures, and ideological coordinates.

Sociologists who train themselves in mathematical applications can contribute far beyond just examining how economics operates within the logic of capitalism. They can critique, interrogate, and even transform its very foundations. Advanced causal inference techniques in econometrics/economics, such as randomised controlled trials (RCTs), instrumental variable methods, and the difference-in-differences method, could be modified significantly if sociologists engaged critically with their underlying ontological assumptions.

This article aims to emphasise that sociology offers conceptual resources which, if integrated, can help economics develop a more rigorous and precise understanding of social reality.

References

Angrist, J. D., & Pischke, J.-S. (2010). The credibility revolution in empirical economics: How better research design is taking the con out of econometrics. National Bureau of Economic Research Working Paper Series, 15794.

Archer, M. S. (1995). Realist social theory: The morphogenetic approach. Cambridge University Press.

Archer, M. S. (2003). Structure, agency and the internal conversation. Cambridge University Press.

Bourdieu, P. (1977). Outline of a theory of practice. Cambridge University Press.

Deaton, A. (2010). Instruments, randomisation, and learning about development. Journal of Economic Literature, 48(2), 424–455.

Durkheim, E. (1894/1982). The rules of sociological method. Free Press.

Fourcade, M. (2009). Economists and societies: Discipline and profession in the United States, Great Britain, and France, 1890s to 1990s. Princeton University Press.

Giddens, A. (1979). Central problems in social theory: Action, structure and contradiction in social analysis. University of California Press.

Lazear, E. P. (2000). Economic imperialism. Quarterly Journal of Economics, 115(1), 99–146.

Lawson, T. (2003). Reorienting economics. Routledge.

Maziarz, M. (2019). The unrealistic realist philosophy: The ontology of econometrics revisited. Journal of Philosophical Economics, 14(1), 39–61.

Reiss, J. (2013). Philosophy of economics: A contemporary introduction. Routledge.

Stigler, G. J. (1984). Economics: The imperial science? The Scandinavian Journal of Economics, 86(3), 301–313.

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Sankalp Jayant has received training in chemical engineering, sociology, and economics. He is interested in working on the foundational philosophical and sociological aspects of social sciences.