Talcott Parsons, The Structure of Social Action:
Marshall, Pareto, Durkheim
This is Parsons' first book, and arguably his greatest. Parsons began thinking about the
relationship between sociology and economic in about 1930, and he wrote a few papers on the
topic in the Quarterly Journal of Economics in the early 1930's. He was an instructor in the
Harvard economics department at the time, but he recoiled at the mathematical turn economics
was taking (Samuelson et al), and he did not like the only plausible alternatives, Marxism
(Parsons was a mildly left-liberal throughout his life), and Institutionalism (Parsons believed
that understanding society required a dialog between theory and
evidence, whereas the
Institutionalists rejected the idea of theory in favor of a compilation and recitation of the facts--a position Parsons refers to as "positivism," although the term is widely used in that period to
cover a variety of purported sins).
This book has a long, discursive, and painful section on scientific methodology, the purpose of
which is to reject institutional economics (which he was taught by the masters) on the grounds
of what Alfred North Whitehead
terms "the fallacy of misplaced concreteness." The
institutionalists critiqued the abstract methods of the Marshallian and Edgeworthian traditions
in favor of detailed description of institutional diversity. Parsons will have none of it.
His critique of economic theory is that it cannot solve the problem of order and it has no room
for normative elements. His own theory of action, of course, does not suffer from misplaced
concreteness. Parsons participated in the early stages of the formation of Sociology as a
discipline, and his preoccupation in writing The Structure of Social Action (SSA) was how to
retain the theoretical orientation of economic theory, but carve out an area of "non-economics,"
where Sociology could live in harmony with Economics. His solution in SSA was (a) to
broaden the rational actor model to the "theory of action," which retained the centrality of
choice under conditions of constraint, but broadened the concept of choice to deal with
normative and ethical concerns; and (b) to suggest that the "utilitarian" rational actor model
could not "solve the problem of order" in society, because it embodies no principles leading
rational individuals to share enough values and expectations to cooperate effectively and with
sufficient harmony to allow society to persist. Parsons called his alternative "voluntarist," in
contrast to "utilitarian," although I have not come to understand why he uses this term.
Parsons' theory of action is in sharp contrast to the suppression of individual rationality in
Institutionalism, and the reductivist conception of choice in the behaviorist psychology of the
day (Skinner being Harvard's eminent representative). Sociology was to supply the theory
behind important social parameters that economic theory just assumes as given. For instance,
economic theory assumes a supply of labor dependent upon individual preferences for income
over leisure, and for some types of employment over others. Where do these preferences come
from? The first step in answering this is to turn to the great economist, Alfred Marshall, who
dealt insightfully with the relationship between values and markets. Parsons uses Marshall in
SSA to show that economic theory is compatible with a serious analysis of social norms and
personal ethics.
However, Parsons turns to Weber for a systematic treatment of culture and economic theory.
Following Weber's analysis of the role of Protestantism in the growth of capitalism, Parsons
argues that these preferences come from a cultural system that had emerged in England that
was appropriately geared towards hard work and material reward (as a symbol of proximity to
God and salvation). Many studies since SSA attest to the fact that values underpin labor
productivity (see, for instance, Herbert Gintis, "The Nature of the Labor Exchange and the
Theory of Capitalist Production", Review of Radical Political Economics 8,2 (1976):36--54;
George A. Akerlof, "Labor Contracts as PartialGift Exchange", Quarterly Journal of Economics
97,4 (1982): 543--569; and Ernst Fehr and Simon Gaechter, "Cooperation and Punishment",
American Economic Review 90,4 (2000): 980-994). Similarly, the taste for entrepreneurship
on which growth and innovation depend derived from Weber's Protestant Ethic.Parsons also
was deeply impressed with the stress laid by Emile Durkheim on the "conscience collective"--a communality of beliefs among all members of society, even under circumstances of an
organic division of labor that threatens social upheaval through extensive class differences. In
SSA, Parsons stresses that modern economic theory takes class harmony for granted (there are
not classes, only persons in orthodox economics), but in fact, when there is class harmony, this
is the product of specific social institutions and
practices.Parsons has two personal
characteristics that limited his ability to turn his two insights into a successful paradigm on
which sociological theory might rest. One was his limited writing skills. Parsons is almost
always verbose, prolix, and imprecise. Perhaps he inherited his approach to writing from the
Continental (especially German) writers, for whom lucidity is a sign of superficiality. The
other was is lack of mathematical sophistication. When Parsons uses algebra (as he does at one
point in SSA), it is painful and grotesque. Together, these weaknesses prevented Parsons from
using the theory of action analytically to forge a general theory of action from which
economic and sociological aspects would fall out naturally. Parsons, so to speak, knew how
to talk the talk, but he never figured out how to walk the walk.
Parsons was also handicapped by the fact that game theory had not been invented when SSA
was published, and the economics of Marshall was being replaced by that of Samuelson and
Walras. These models assume complete, costless contracting, so it is difficult to see where
room for values and norms might fit in. When Parsons and Smelser wrote Economy and
Society, a second attempt at integrating sociology and economics, this time based on Parsons'
structural-functional AGIL system, game theory had been invented but was in the doldrums
(1956), and it was the high point of enthusiasm for the Walrasian general equilibrium model.
Not surprisingly, this effort was widely rejected by economists and sociologists alike.
The game-theory revolution in economics and biology, which began in the 1980's has been
much more fertile ground for Parsons' ideas. Ironically, by this time Parsons' was virtually
discredited in sociology, along with the rational actor model, the theory of action, and even
game theory. Contemporary sociological theories today generally roundly criticize economic
theory, and have become almost impervious to new ideas. This is a pity because what they
peddle as social theory is descriptive and interesting at best, and drivel most of the time.
I believe behavioral game theory, which started with the ultimatum game experiment of Gueth
et al.) in 1982, provides ample evidence that Parsons' general approach was correct. In
particular, we have found that individual preferences are not irrational, but neither are they
purely selfish. Rather individuals incorporate ethical values in their preferences, and trade off
among various normative and self-regarding goals. Moreover, we have found that under
conditions of incomplete contract, character virtues such as honesty and integrity, as well as
other-regarding preference, lead real-life individuals to enjoy far more cooperation, and higher
payoffs, that are possible using standard principal-agent models (for a summary, see Ernst Fehr
and Herbert Gintis, "Human Motivation and Social Cooperation: Experimental and Analytical
Foundations", Annual Review of Sociology 33 (2007): 43-64).It is curious as to why Parsons
did not see immediately that the rational actor model could be expanded into a (proto) theory
of action by (a) enriching the model's treatment of "beliefs;" and (b) by introducing otherregarding objectives and character virtues into the individual preference function. I think (a)
was not open to Parsons because economic theory at the time only used a truncated form of
the rational actor model in which preferences are defined directly over choice sets. With the
advent of game theory, economics shifted to an enriched notion in which preferences are over
"lotteries" whose outcomes are valued. As Savage (1954) showed, this leads to the individual
have a "subjective prior" that is naturally interpreted as the individual's "beliefs." A correct
theory of action merely (!) extends beliefs to an inter-subjective setting that is naturally
affiliated with sociological theory.
As for (b) above, economists were so adamant in identifying "rationality" with "self-interest,"
that Parsons never had the temerity to suggest otherwise. The closest he comes in SSA is to
say that ethical issues could be a "constraint" on rational behavior. It was not until behavioral
game theorists showed clearly that "rationality" is completely compatible with altruism and
other forms of inherently ethical behavior that a theory of action that bridges economics and
sociology could be productively contemplated. I hope that sociologists today will participate in
such a project.