Capitalism is undoubtedly the dominant economic system in today’s world. For sociologists in particular, capitalism has mainly been of interest for its social effects. These include how it has lead to class struggle, anomie, inequality and the implications of these.
The division of labor between economists and sociologists in studying capitalism, has not gone unchallenged in the past few decades. We already have dozens of valuable economic theories of capitalism, and need one which adequately takes into account the social dimension of the capitalist machine.
Many classic sociologists argue that capitalism not only produces individual wealth but also social wealth (Adam Smith). It also not only advances for some, but creates setbacks and hard times for others (Karl Marx, Max Weber).(1)
Contemporary economic sociologists make the proposition that interests drive the actions of the individuals, and that these interests come together in a very specific way in capitalism. Interests of the same type, as well of different types, may reinforce each other, counterbalance each other, block each other and so on.(1) These interests are what supply the force in the economic system and what makes millions of people get up in the morning and work all day. These can explain why banks, financial markets and other institutions are so powerful.(1) The interests in question can also mobilize masses of people into action to control economic resources.
Institutions are often defined in sociology in exclusively social terms. From this perspective, everything can be an institution. In contrast, economic sociologists define institutions as “durable lock-ins or amalgamations of interests and social relations,”(1)
What is unique about capitalism, as compared to economic systems based on redistribution and reciprocity, is that it alone is primarily driven by the profit motive.(1) The two most important social mechanism in capitalism are consequently exchange and the feedback of profit into production.(1)
There exists an important precondition for this exchange to take place in the first place: private property. From a sociological perspective, Weber explains, property can be conceptualized as a specific form of a closed social relationship and also represents a relationship that allows the actor to exclude other actors from the opportunity.(1)
Sociologists emphasize the role of social relations and institutions in markets. Today’s sociologists will typically analyze the networks which are created by interacting market actors.(1) These markets consist not just of repeated acts of exchange, but also of competition among the actors for who will be the one to sell and who will be the one to buy.(1)
Although prices drive many economic changes in capitalism, they do so via a social structure in which interests are embedded.