Profit as Social Rent: Embeddedness and Stratification in Markets
Abstract
This article shows how research on the social structure of markets may contribute to the analysis the growing income inequality in contemporary capitalist economies. The author proposes a theoretical link between embeddedness and social stratification by discussing the role of institutions and networks in markets for the distribution of economic profits between firms. The author claims that we must understand profit and free competition as opposites, as economic theory does. In the main part of the article the author illustrates six typical mechanisms of rent extraction from networks or formal and symbolic rules that embed markets. They emerge from material as well as symbolical access to and influence on the orientation of other market actors. Social structures in markets lead to unequal chances for rent extraction, even if actors produce them for coordination rather than for accumulation purposes. This is how market sociology and theory of capitalism can be linked more closely.
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Biographies
Sascha Muennich is professor of sociology at Georg August University in Göttingen, Germany. Previously, he was a senior researcher at the Max Planck Institute for the Study of Societies in Cologne. In 2014 and 2015 he was granted a John F. Kennedy Memorial Fellowship at the Center for European Studies of Harvard University. His primary research fields are economic sociology, political sociology, institutional theory, comparative methods, international political economy, and global capitalism and welfare state research. He is currently working on the social legitimacy of financial profits and its influence on the historical evolution of divergent financial systems and their public critique in market societies. His dissertation on the role of ideas and interests in the evolution of labor market policy in Germany and the United States has been awarded the Otto Hahn Medal for academic excellence by the German Max Planck Society.
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Article first published online: June 25, 2019
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