Chapter1: Introduction: Sociological Theory

Early Exchange Theory

from its very beginnings, sociological theory focused on the market forces that were transforming the modern social world. Adam Smith was of course, the first to formulate the "laws of supply and demand," but what is often forgotten is that Smith also presented to sociology one of the key questions that guided all nineteenth century sociological theory: What force or forces are to hold modern societies together as they differentiate and as actors pursue their narrow and specialized interests? His answer was a combination of moral and symbolic forces along with the "invisible hand of order" that comes when rational actors pursue their self-interests in open and free markets.

Much of early sociology represented an effort to elaborate on this answer, or to formulate an alternative. In either case, social scientists of the nineteenth and twentieth centuries soon found themselves developing exchange-theoretic ideas.

EXCHANGE THEORY IN CLASSICAl. ECONOMICS

Given Smith's influence on sociology, and the impact of other British Isle thinkers, most of whom were Scottish, on nineteenth century social thought, it is perhaps best to begin with the ideas that come from this tradition. All these early classical economists considered themselves "moralists" and, hence, were concerned with broad ethical issues like justice, freedom, and fairness. The label, utilitarianism, was meant to capture the broader moral concerns of these early moralists, but the term now tends to be associated with narrow economic models of the marketplace that have filtered into social theory. Today, these classical economic theorists portray humans as rational persons who seek to maximize their material benefits, or utility, from transactions or exchanges with others in a free and competitive marketplace. Free in the marketplace, people have access to necessary information; they can consider all available alternatives, and. on the basis of this consideration, rationally select the course of activity that will maximize material benefits. Entering into these rational considerations are calculations of the costs involved in pursuing various alternatives, with such costs being weighed against material benefits in an effort to determine which alternative will yield the maximum payoff or profit (benefits less costs). This view of the early utilitarians is narrow and ignores their concerns with morality, but this portion of their ideas endures today and inspires theory in economics and political science as well as in sociology.

With the emergence of sociology as a self-conscious discipline, there was considerable borrowing, revision, and reaction to this conception of humans. In the end, many sociologists muted extreme utilitarian assumptions in the ways enumerated here:

1. Humans do not seek to maximize profits, as utilitarians argued, but they nonetheless attempt to make some profit in their social transactions with others.

2. Humans are not perfectly rational, but they do engage in calculations of costs and benefits in social transactions.

3. Humans do not have perfect information on all available alternatives, but they are usually aware of at least some alternatives, which form the bails for assessments of costs and benefits.

4. Humans always act under constraints, but they still compete with one another in seeking to make a profit in their transactions,

5. Humans always seek to make a profit in their transactions, but they are limited by the resources that they have when entering an exchange relation.

In addition to these alterations of utilitarian assumptions, exchange theory removes human interaction from the limitations of material transactions in an economic marketplace, requiring two more additions to the previous list:

6. Humans do engage in economic transactions in clearly defined marketplaces in all societies, but these transactions are only special cases of more general exchange relations occurring among individuals in virtually all social contexts.

7. Humans do pursue material goals in exchanges, hut they also mobilize and exchange nonmaterial resources, such as sentiments, services, and symbols.

Aside from this revised substantive legacy, some form of modern exchange theory have also adopted the strategy of the utihtarians for constructing social theory. In assuming humans to be rational, utilitarians argued that exchanges among people could also be studied by a rational science, one in which the "laws of human nature" would stand at the top of a deductive system of explanation.Thus utilitarians borrowed the early physical-science conception of theory as a logico-deductive system of axioms or laws and various layers of lower-order propositions that could be rationally deduced from the laws of "economic man" Most exchange theories are thus presented in a propositional format, as we will appreciate when more contemporary approaches are reviewed.

EXCHANGE THEORY IN ANTHROPOLOGY

Sir James Frazer

In 1919, Sir James Frazer (1854-1941), in his second volume of Folklore in the Old Testament, conducted what was probably the first explicit exchange theoretic analysis of social institutions.3 In examining a wide variety of kinship and marriage practices among primitive societies, Frazer was struck by the clear preference of Australian aborigines for cross-cousin over parallel-cousin marriages: "Why is the marriage of cross-cousins so often favored? Why is the marriage of ortho-cousins [that is, parallel cousins] so uniformly prohibited?"

Although the substantive details of Frazer's descriptions of the aborigines' practices are fascinating in themselves (if only for their inaccuracy), the form of explanation marks his theoretical contribution. In a manner clearly indebted to utilitarian economics, Frazer launched an economic interpretation of the predominance of cross-cousin marriage patterns. In this explanation Frazer invoked the "law" of "economic motives": By having "no equivalent in property to give for a wife, an Australian aborigine is generally obliged to get her in exchange for a female relative, usually a sister or daughter." Thus, the material or economic motives of individuals in society (lack of property and desire for a wife) explain various social patterns (cross-cousin marriages). Frazer went on to postulate that, once a particular~ pattern emanating from economic motives becomes established in a culture, it constrains other social patterns that can potentially emerge.

Frazer believed that the social and structural patterns that typify a particular culture reflect economic motives in humans, who, in exchanging commodities, attempt to satisfy their basic economic needs. Although Frazer's specific explanation was found to be sadly wanting by subsequent generations of anthropologists, especially Bronislaw Malinowski and Claude Levi-Strauss, modern exchange theory in sociology invokes a similar conception of social organization:

1. Exchange processes are the result of efforts by people to realize basic needs.

2. When yielding payoffs for those involved, exchange processes lead to the patterning of interaction.

3. Such patterns of interaction not only serve the needs of individuals but also constrain the kinds of social structures that can subsequently emerge.

In addition to anticipating the general profile of modern explanations about how elementary exchange processes create more complex patterns in a society, Frazer's analysis also foreshadowed another concern of contemporary exchange theory: social systems' differentiation of privilege and power. Much as Karl Marx had done a generation earlier, Frazer noted that those who possess resources of high economic value can exploit those who have few such resources, thereby enabling the former to possess high privilege and presumably power, Hence, the exchange of women among the aborigines was observed by Frazer to lead to the differentiation of power and privilege in at least two separate ways. First, "since among the Australian aboriginals women had a high economic and commercial value, a man who had many sisters or daughters was rich and a man who had none was poor and might be unable to procure a wife at all." Second, "the old men availed themselves of the system of exchange in order to procure a number of wives for themselves from among the young women, while the young men, having no women to give in exchange, were often obliged to remain single or to put up with the cast-off wives of their elders.'' Thus, at least implicitly, Frazer supplemented the conflict theory contribution with a fourth exchange principle:

4. Exchange processes differentiate groups by their relative access to valued commodities, resulting in differences in power, prestige, and privilege.

As provocative and seemingly seminal as~ Frazer's analysis appears, it had little direct impact on modern exchange theory. Rather, contemporary theory remains indebted to those in anthropology who reacted against Frazer's utilitarianism.

Bronislaw Malinowski and Nonmaterial Exchange

Despite Malinowski's close ties with Frazer, Malinowski developed an exchange perspective that radically altered the utditarian slant of Frazer's analysis of cross-cousin marriage. Indeed, Frazer himself, in his preface to Malinowski's Argonauts of the Western Pacific, recognized the importance of Malinowski's contribution to the analysis of exchange relations. In his now-famous ethnography of the Trobriand Islanders--a group of South Seas Island cultures--Malinowski observed an exchange system termed the Kula Ring~ a closed circle of exchange relations among tribal peoples inhabiting a wide ring of islands. What was distinctive in this closed circle, Malinowski observed, was the predominance of exchange of two articles-armlets and necklaces--that the inhabitants constantly exchanged in opposite directions. Armlets traveling in one direction around the Kula ring were exchanged for necklaces moving in the opposite direction around the ring. In any particular exchange between individuals, then, an armlet would always be exchanged for a necklace,

In interpreting this unique exchange network, Malinowski~ distinguished material" or economic from nonmaterial or symbolic exchanges. In contrast with the utilitarians and Frazer, who did not conceptualize nonmaterial exchange relations, Malinowski recognized that the Kula was not only an economic or material exchange network but also a symbolic exchange cementing a web of social relationships: "One transaction does not finish the Kula relationship, the rule being 'once in the Kula, always in the Kula,' and a partnership between two men is a permanent and lifelong affair." Although purely economic transactions did occur within the rules of the Kula, the ceremonial exchange of armlets and necklaces was observed by Malinowski to be the Kula's principal function.

The natives themselves, Malinowski emphasized, recognized the distinction between purely economic commodities and the symbolic significance of armlets and necklaces. However, to distinguish economic from symbolic commodities does not mean that the Trobriand Islanders failed to assign graded values to the symbolic commodities; indeed, they made gradations and used them to express and confirm the nature of the relationships among exchange partners as equals, superordinates, or subordinates. But, as Malinowski noted, "in all forms of [Kula] exchange in the Trobriands, there is not even a trace of gain, nor is there any reason for looking at it from the purely utilitarian and economic standpoint, since there is no enhancement of mutual utility through the exchange.'' Rather, the motives behind the Kula were social psychological, for the exchanges in the ring were viewed by Malinowski to have implications for the needs of both individuals and society. From his functionalist framework, he interpreted the Kula to mean "the fundamental impulse to display, to share, to bestow [and] the deep tendency to create social ties." Mafinowski, then, considered an enduring social pattern such as the Kula Ring to have positive functional consequences for satisfying individual psychological needs and societal needs for social integration and solidarity.

This form of functional analysis presents many logical difficulties (see the Wadsworth Web site on functionalism), Nevertheless, Malinowski’s analysis made several enduring contributions to modern exchange theory:

1, In Mahnowski's words, "the meaning of the Ku/a will consist in being instrumental to dispel [the] conception of a rational being who wants nothing but to satisfy his simplest needs and does it according to the economic principle of least effort.''

2. Psychological rather than economic needs are the forces that initiate and sustain exchange relations and are therefore~ critical in the explanation of social behavior.

3. Exchange relations can also have implications beyond two parties, for, as the Kula demonstrates, complex patterns of indirect exchange can maintain extended and protracted social networks.

4. Symbolic exchange relations are the basic social process underlying both differentiation of ranks in a society and the integration of society into a cohesive and solitary whole.

With tiffs emphasis, Malinowski helped free exchange theory from the limiting confines of utilitarianism. By stressing the importance of symbolic exchanges for both individual psychological processes and patterns of social integration, he anticipated the conceptual base for two basic types of exchange perspectives, one emphasizing the importance of psychological processes and the other stressing the significance of emergent cultural and structural forces on exchange relations.

Marcel Mauss and the Emergence of Exchange Structuralism

Reacting to what he perceived as Malinowski's tendency to overemphasize psychological instead of social needs, Marcel Mauss (1872-1950) reinterpreted Malinowski's analysis of the Kula. In this effort he formulated the broad outlines of a "collectivistic" or structural-exchange, perspective. Mauss believed the critical question in examining an exchange network as complex as that of the Kula was, "In primitive or archaic types of societies, what is the principle whereby the gift received has to be repaid? What force is there in the thing which compels the recipient to make a return?" The "force" compelling reciprocity was, Mauss believed, society or the group. As fie noted, "It is groups, and not individuals, which carry on exchange, make contracts, and are bound by obligations. "is The individuals actually engaged in an exchange represent the moral codes of the group. Exchange transactions among individuals are conducted in accordance with the rules of the group, thereby reinforcing these rules and codes. Thus, for Mauss, utilitarians' overconcern with individuals' self-interests and Malinowski's overemphasis on psychological needs are replaced by a conception of individuals as representatives of social groups. In the end, exchange relations create, reinforce, and serve a group morality that is an entity sui generis, to borrow a famous phrase from Mauss's mentor, Emile Durkheim. Furthermore, in a vein similar to that of Frazer, once such a morality emerges and is reinforced by exchange activities, it regulates other activities in the social life of a group, beyond particular exchange transactions.

Mauss's work has received scant attention from sociologists, but he was the first to forge a reconciliation between the exchange principles of utilitarianism and the structural, or collectivistic, thought of Durkheim. In recognizing that exchange transactions give rise to and, at the same time, reinforce the normative structure of society, Mauss anticipated the structural position of some contemporary exchange theories. Mauss's influence on modern theory has been indirect, however. The French collectivist tradition of Durkheim and Mauss has influenced the exchange perspectives of contemporary sociological theory through Levi-Strauss's structuralism.

Claude Levi-Strauss and Structuralism

In 1949, Levi-Strauss launched an analysis of cross cousin marriage in his classic work, The Elementary Structures of Kinship. In restating Durkheim's objections to utilitarians, Levi-Strauss took exception to Frazer's utilitarian interpretation of cross cousin marriage patterns. And, similar to Mauss's opposition to Malinowski's emphasis on psychological needs, Levi-Strauss developed a sophisticated structural-exchange perspective.

In rejecting Frazer's interpretation of cross-cousin marriage, Levi-Strauss first questioned the substance of Frazer's utilitarian conceptualization. Frazer, he noted, "depicts the poor Australian aborigine wondering how he is going to obtain a wife since he has no material goods with which to purchase her, and discovering exchange as the solution to this apparently insoluble problem:'men exchange their sisters in marriage because that was the cheapest way of getting a wife.'" In contrast, Levi-Strauss emphasizes, "it is the exchange which counts and not the things exchanged." For Levi-Strauss, exchange must be viewed by its functions for integrating the larger social structure. Levi-Strauss then attacked Frazer's and the utilitarians' resumption that the first principles of social behavior are economic, Such an assumption contradicts the view that social structure is an emergent phenomenon that operates according to its own irreducible laws and principles.

Levi-Strauss also rejected psychological interpretations of exchange processes, especially the position advocated by behaviorists (see next section). In contrast with psychological behaviorists, who see little real difference in the laws of behavior between animals and humans, Levi-Strauss emphasized that humans possess a cultural heritage of norms and values that separates their behavior and societal organization from that of animal species. Human action is thus qualitatively different from animal behavior, especially in social exchange. Animals are not guided by values and rules that specify when, where, and how they are to carry out social transactions. Humans, however, carry with them into any exchange situation learned definitions of how they are to behave--thus ensuring that the principles of human exchange will be distinctive,

Furthermore, exchange is more than the result of psychological needs, even those that have been acquired through socialization. Exchange cannot be understood solely through individual motives because exchange relations are a reflection of patterns of social organization that exist as an entity, sui generis.

Exchange behavior is thus regulated from without by norms and values, resulting in processes that can be analyzed only by their consequences, or functions, for these norms and values.

In arguing this view, Levi-Strauss posited several fundamental exchange principles. First, all exchange relations involve costs for individuals, but, in contrast with economic or psychological explanations of exchange, such costs are attributed to society to those customs, rules, laws, and values that require behaviors incurring costs. Thus, individuals do not assign the costs to themselves, but to the "social order." Second, for all those scarce and valued resources in society--whether material objects, such as wives, or symbolic resources, like esteem and prestige--their distribution is regulated by norms and values. As long as resources are in abundant supply or are not highly valued in a society, their distribution goes unregulated, but, once they become scarce and highly valued, their distribution is soon regulated Third, all exchange relations are governed by a norm of reciprocity, requiring those receiving valued resources to bestow on their benefactors other valued resources. In Levi-Strauss's conception of reciprocity are various patterns of reciprocation specified by norms and values. In some situations, norms dictate "mutual" and direct rewarding of one's benefactor, whereas in other situations the reciprocity can be "univocal," involving diverse patterns of indirect exchange in which actors do not reciprocate directly but only through various third (fourth, fifth, and so forth) parties. Within these two general types of exchange reciprocity mutual and univocal--numerous subtypes of exchange networks can be normatively regulated.

Levi-Strauss believed that these three exchange principles offer a more useful set of concepts to describe cross-cousin marriage patterns because these patterns can now be viewed by their functions for the larger social structure. Particular marriage patterns and other features of kinship organization no longer need be interpreted merely as direct exchanges among individuals but can be conceptualized as univocal exchanges between individuals and society. In freeing exchange from the analysis of only direct and mutual exchanges, Levi-Strauss offered a tentative theory of societal integration and solidarity. His explanation extended Durkheim's provocative analysis and indicated how various subtypes of direct and univocal exchange both reflect and reinforce different patterns of societal integration and organization.

This theory of integration is, in itself, of theoretical importance, but it is more significant for our present purposes to stress Levi-Strauss'ss impact on current sociological exchange perspectives. Two points of emphasis strongly influenced modern sociological theory

1. Various forms of social structure, rather than individual motives, are the critical variables in the analysis of exchange relations.

2. Exchange relations in social systems are frequently not restricted to direct interaction among individuals but are protracted into complex networks of indirect exchange. On the one hand, these exchange processes are caused by patterns of social integration and organization; on the other hand, they promote diverse forms of such organization.

Levi-Strauss'ss work represents the culmination of a reaction to economic utilitarianism as Frazer originally incorporated it into anthropology. Malinowski recognized the limitations of Frazer's analysis of only material or economic motives ha direct exchange transactions. As the Kula Ring demonstrates, exchange can be generalized into protracted networks involving noneconomic motives that have implications for societal integration. Mauss drew explicit attention to the significance of social structure in regulating exchange processes and to the consequences of such processes for maintaining social structure. Finally, in this intellectual chain of events in anthropology, Levi-Strauss began to indicate how different types of direct and indirect exchange are linked to different patterns of social organization. This intellectual heritage has influenced both the substance and the strategy of exchange theory in sociology, but it has~ done so only after considerable modification of assumptions and concepts by a particular strain of psychology: behaviorism.

PSYCHOLOGICAL BEHAVIORISM AND EXCHANGE THEORY

As a psychological perspective, behaviorism began from insights derived from observations of an accident. The Russian physiologist Ivan Petrovich Pavlov (1849-1936) discovered that experimental dogs associated food with the person bringing it) He observed, for instance, that dogs on whom he was performing secretory experiments would salivate not only when presented with food but also when they heard their feeder's footsteps approaching. After considerable delay and personal agonizing, Pavlov undertook a series of experiments on animals to understand such "'conditioned responses)' From these experiments he developed several principles that were later incorporated into behaviorism. These include the following:

(1) A stimulus consistently associated with another stimulus producing a given physiological response will, by itself, elicit that response. (2) Such conditioned responses can be extinguished when gratifications associated with stimulus are no longer forthcoming. (3) Stimuli that are similar to those producing a conditioned response can a/so elicit the same response as the original stimulus. (4) Stimuli that increasingly differ from those used to condition a particular response will decreasingly be able to elicit this response. Thus, Pavlov's experiments exposed the principles of conditioned responses, extinction, response generalization, and response discrimination. Although Pavlov clearly recognized the significance of these findings for human behavior, his insights came to fruition in America under the tutelage of Edward Lee Thorndike (1874-1949) and John B, Watson (1978-1958)--the founders of behaviorism.

Thorndike conducted the first laboratory experiments on animals in America. During these experiments, he observed that animals would retain response patterns for which they were rewarded For example, in experiments on kittens placed in a puzzle box, Thorndike found that the kittens would engage in trial-and-error behavior until emitting the response that allowed them to escape. And, with each placement in the box, the kittens would engage in less trial and-error behavior, indicating that the gratifications associated with a response allowing the kittens to escape caused them to learn and retain this response. From these and other studies, which were conducted at the same time as Pavlov's, Thorndike formulated three principles or laws: (1) the "law of effect," which holds that acts in a situation producing gratification will be more likely to occur in the future when that situation recurs; (2) the "law of use," which states that the situation-response connection is strengthened with repetitions and practice; and (3) the "law of disuse," which argues that the connection will weaken when practice is discontinued.

These laws converge with those presented by Pavlov, but there is one important difference. Thorndike's experiments involved animals engaged in free trial-and-error behavior, whereas Pavlov's work was on the conditioning of physiological--typically glandular-responses in a tightly controlled laboratory situation. Thorndike's work could thus be seen as more directly relevant to human behavior in natural settings.

Watson was only one of several thinkers~ to recognize the significance of Pavlov's and Thorndike's work, but he soon became the dominant advocate of what was becoming explicitly known as behaviorism. Watson's opening shot for the new science of behavior was~ fired in an article entitled "Psychology as the Behaviorist Views It":

Psychology as the behaviorist views it is a purely objective experimental branch of natural science. Its theoretical goal is the prediction and control of behavior. Introspection forms no essential part of its methods, nor is the scientific value of its data dependent upon the readiness with which they lend themselves to interpretation in terms of consciousness. The behaviorist, in efforts to get a unitary scheme of animal response, recognizes no dividing line between man and brute.

Watson thus became the advocate of the extreme behaviorism against which many vehemently reacted. For Watson, psychology is the study of stimulus response relations, and the only admissible evidence is overt behavior, Psychologists are to stay out of the "Pandora's box" of human consciousness and to study only observable behaviors as they are connected to observable stimuli.

In many ways, behaviorism is similar to utilitarianism because it operates on the principle that humans are reward-seeking organisms pursuing alternatives that will yield the most reward and the least punishment. Rewards are simply another way of phrasing the economist's concept of "utility," and "punishment" is somewhat equivalent to the notion of "cost" For the behaviorist, reward is any behavior that reinforces or meets the needs of the organism, whereas punishment denies rewards or forces the expenditure of energy to avoid pain (thereby incurring costs),

Modern exchange theories have borrowed the notion of reward from behaviorists and used it to reinterpret the utilitarian exchange heritage. In place of utility, the concept of reward has often been inserted, primarily because it alIows exchange theorists to view behavior as motivated by psychological needs. However, the utilitarian concept of cost appears to have been retained in preference to the behaviorist's formulation of punishment because the notion of cost allows exchange theorists to visualize more completely the alternative rewards that organisms forego in seeking to achieve a particular reward.

Despite these modifications of the basic concepts of behaviorism, its key theoretical generalizations have been incorporated with relatively little change into some forms of sociological exchange theory:

1. In any given situation, organisms will emir those behaviors that will yield the most reward and the least punishment.

2. Organisms will repeat those behaviors that have proved rewarding in the past.

3. Organisms will repeat behaviors in situations that are similar to those in the past in which behaviors were rewarded.

4. Present stimuli that on past occasions have been associated with rewards will evoke behaviors similar to those emitted in the past.

5. Repetition of behaviors will occur only as long as they continue to yield rewards.

6. An organism will display emotion ifa behavior that has previously been rewarded in the same or similar situation suddenly goes unrewarded.

7. The more an organism receives rewards ~from a particular behavior, the less rewarding that behavior becomes (because of satiation) and the more likely the organism is to emit alternative behaviors in search of other rewards.

These principles were discovered in laboratory situations where experimenters typically manipulated the environment of the organism; so, it is difficult to visualize the experimental situation as interaction. The experimenter's tight control of the situation precludes the possibility that the animal will affect significantly the responses of the experimenter. This has forced modern exchange theorists using behaviorist principles to incorporate the utilitarian's concern with transactions, or exchanges. In this way, humans can be seen as mutually affecting one another's opportunities for rewards. In contrast with animals in a Skinner box or some similar laboratory situation, humans exchange rewards. Each person represents a potentially rewarding stimulus situation for the other.

As sociological exchange theorists have attempted to apply behaviorist principles to the study of human behavior, they have inevitably confronted the problem of the black box: Humans differ from laboratory animals in their greater ability to engage in a wide variety of complex cognitive processes. Indeed, as the utilitarians were the first to emphasize, what is distinctly human is the capacity to abstract, to calculate, to project outcomes, to weigh alternatives, and to perform a wide number of other cognitive manipulations. Furthermore, in borrowing behaviorists' concepts, contemporary exchange theorists have also had to introduce the concepts of an introspective psychology and structural sociology. Humans not only think in complex ways; their thinking is emotional and circumscribed by many social and cultural forces (first incorporated into the exchange theories of Mauss and Levi-Strauss). Once it is recognized that behaviorist principles must incorporate concepts denoting both internal psychological processes and constraints of social structure and culture, it is also necessary to visualize exchange as frequently transcending the mutually rewarding activities of individuals in direct interaction. The organization of behavior by social structure and culture, coupled with humans' complex cognitive abilities, allows protracted and indirect exchange networks to exist.

When we review the impact of behaviorism on some forms of contemporary exchange theory, the vocabulary and general principles of behaviorism are evident, but concepts have been redefined and the principles altered to incorporate the insights of the early utilitarians as well as the anthropological reaction to utilitarianism. The result has been that proponents of an exchange perspective employing behaviorist concepts and principles have abandoned much of what made behaviorism a unique perspective as they have dealt with the complexities introduced by human cognitive capacities and their organization into sociocultural groupings.

THE SOCIOLOGICAL TRADITION AND EXCHANGE THEORY

The vocabulary of exchange theory clearly comes from utilitarianism and behaviorism. Anthropological work forced the recognition that cultural and social dynamics need to be incorporated into exchange theory. When we look at early sociological work, however, the impact of early sociological theorists on modern exchange theory is difficult to assess for several reasons. First, much sociological theory represented a reaction against utilitarianism and extreme behaviorism and, therefore, has been reluctant to incorporate concepts from these fields. Second, the most developed of the early exchange theories—that provided by Georg Simmel in his The Philosophy of Money-was not translated into English until the 1970s. (German-reading theorists, such as Peter Blau and Talcott Parsons, were to some degree influenced by Simmel's ideas.) Third, the topics of most interest to many sociological exchange theorists-differentiations of power and conflict in exchanges--have more typically been conceptualized as conflict theory than as exchange theory. But, as will become evident, sociological theories of exchange converge with those on conflict processes, and Marx's and Max Weber's ideas exerted considerable influence on sociologically oriented exchange theories.

Karl Marx's Theory of Exchange and Conflict

Most contemporary theories of exchange examine situations where actors have unequal levels of resources with which to bargain. Those with valued resources are in a position to strike a better bargain, especially if others who value their resources do not possess equally valued resources to offer in exchange. This fact of social life is the situation described in Marx's conflict theory. Capitalists have the power to control the distribution of material rewards, whereas all that workers have is their labor to offer in exchange. Although the capitalist values labor, it is in plentiful supply, and thus no one worker is in a position to bargain effectively with an employer. As a consequence, capitalists can get labor at a low cost and can force workers to do what the capitalists want. As capitalists press their advantage, they create the very conditions that allow workers to develop resources--political, organizational, ideological--that workers can then use to strike a better bargain with capitalists and, in the end, to overthrow them.

Granted, this is simplifying Marx's implicit exchange theory, but the point is clear: Dialectical conflict theory is a variety of exchange theory. Let us list some of these exchange dynamics more explicitly:

1. Those who need scarce and valued resources that others possess hut who do not have equally valued and scarce resources to offer in return will be dependent on those who control these resources.

2. Those who control valued resources have power over those who do not. That is, the power of one actor over another is directly related to (a) the capacity of one actor to monopolize the valued resources needed by other actors and (b) the inability of those actors who need these resources to offer equally valued and scarce resources in return.

3. Those with power will press their advantage and will try to extract more resources from those dependent on them in exchange for fewer (or the same level) of the resources that they control.

4. Those who press their advantage in this way will create conditions that encourage those who axe dependent on them to (a) organize in ways that increase the value of their resources or, failing this, to (b) organize in ways that enable them to coerce those on whom they are dependent.

If the words capitalist and proletarian are inserted at the appropriate places in the previous list, Marx's exchange model becomes readily apparent. Dialectical conflict theory is thus a series of propositions about exchange dynamics in systems in which the distribution of resources is unequal. And, as will become evident in the next chapters, sociological exchange theories have emphasized these dynamics that inhere in the unequal distribution of resources. Such is Marx's major contribution to exchange theory.

Georg Simmel's Exchange Theory

In The Philosophy of Money, Simmel analyzed Marx's "value theory of labor' and, in its place, provided a clear exposition of exchange theory. The Philosophy of Money is, as its title indicates, about the impact of money on social relations and social structure. For Simmel, social exchange involves the following:

1. The desire for a valued object that one does not have.

2. The possession of the valued object by an identifiable other.

3.The offer of an object of value to secure the desired object from another.

4. The acceptance of this offer by the possessor of the valued object.

Contained in tiffs portrayal of social exchange are several additional points that Simmel emphasized. First, value is idiosyncratic and is, ultimately, tied to an individual's impulses and needs, Of course, what is defined as valuable is typically circumscribed by cultural and social patterns, but how valuable an object is will be a positive function of(a) the intensity of a person's needs and b) the scarcity of the object. Second, much exchange involves efforts to manipulate situations so that the intensity of needs for an object is concealed and the availability of an object is made to seem less than what it actually is, Inherent in exchange, therefore, is a basic tension that can often erupt into other social forms, such as conflict. Third, to possess an object is to lessen its value and to increase the value of objects that one does not possess. Fourth, exchanges will occur only if both parties perceive that the object given is less valuable than the one received. Fifth, collective units as well as individuals participate in exchange relations and hence are subject to the four processes listed. Sixth, the more liquid the resources of an actor are in an exchange-that is, the more that resources can be used in many types of exchanges--the greater that actor's options and power will be. For if an actor is not bound to exchange with any other and can readily withdraw resources and exchange them with another, then that actor has considerable power to manipulate any exchange.

Economic exchange involving money is only one case of this more general social form, but it is a very special case. When money becomes the predominant means for establishing value in relationships, the properties and dynamics of social relations are transformed. This process of displacing other criteria of value, such as logic, ethics, and aesthetics, with a monetary criterion is precisely the long-term evolutionary trend in societies. This trend is both a cause and effect of money as the medium of exchange. Money emerged to facilitate exchanges and to realize even more completely humans' basic needs. But, once established, money has the power to transform the structure of social relations in society.

Thus, the key insight in The Philosophy of Money is that the use of different criteria for assessing value has an enormous impact on the form of social relations. As money replaces barter and other criteria for determining values, social relations are fundamentally changed. Yet, they are transformed in accordance with some basic principles of social exchange, which are never codified by Simmel but are very clear, ln Table 12.1, these ideas are summarized as abstract exchange principles.

Table 12.1 Georg Simmel's Exchange Principles

Ⅰ. Attraction Principle: The more actors perceive as valuable one another's respective resources, the more likely an exchange relationship is to develop among these actors.

Ⅱ. Value Principle: The greater is the intensity of an actor's needs for a resource of a given type, and the less available is that resource, the greater is the value of that resource to the actor.

Ⅲ, Power Principles:

A, The more an actor perceives as valuable the resources of another actor, the greater is the power of the latter over the former.

B. The more liquid are an actor's resources, the greater will be the exchange options and alternatives and, hence, the greater will be the power of that actor in social exchanges.

Ⅳ. Tension Principle; The more actors in a social exchange manipulate the situation in an effort to misrepresent their needs for a resource or conceal the availability of resources, the greater is the level of tension in that exchange and the greater is the potential for conflict.




CONCLUSION

Curiously, despite Adam Smith's influence on sociological theory hi the nineteenth century, and behaviorists' impact on early social psychology, a clear sociological approach to exchange theory did not emerge until the 1960s. When it finally arrived, this approach has remained prominent within the sociological canon since the midcentury, and today, it is one of the most important perspectives within sociological theorizing. In the next group of chapters, we see how economic and behaviorist ideas were brought back into sociological theory and blended with the discipline's concern with social structure,power, and inequality. In particular, we can emphasize the two surviving variants of this midcentury burst of creative activity, primarily the exchange network approaches and rational choice theories,

Behavioristic Exchange Theory: