Methodology and the Assumption
The way that the book explains human behavior of the social system is to examine the process internal to the system, involving its component parts, or units at a level below that of the system. The approach includes both qualitative and quantitative analyses; he used large parts of the book for the qualitative explanation of his idea, and later came up with mathematical model to describe the essence, although the mathematical attempt would not be as successful as the economists do.
He focused on lower-level approach in analyzing the social system. Prof. Coleman mentioned reasons of this approach:
- The statistics data is limited, and what can be said is limited accordingly
- Lower-level explanation is more useful for intervention into the actual situation than is the general explanation
- The explanation at lower level is more stable, general and fundamental than the explanation of system level
- Explanation at system level cannot treat freedom, equality and the other values, which are parts of the essence of human nature
Professor Coleman applied the framework of micro-macro interaction. In this framework, the macro situation creates micro-level incentives, by which individuals make purposive action, collection of which will bring about macro-level changes. The following is the example.
Subsets of the system
In his lower-level approach, Professor Coleman classified subsets of the whole system, under which people take purposive action. He made the image of the subsets (below picture).
- Private actions: Purposive action that is scarcely social
- Exchange relation: exchange of rights and resources not within a market or other systems of exchange
- Market: exchange within a system but not involving a transfer of rights to control one’s actions
- Disjoint authority relations: exchange in which one actor gives up rights to control his actions. In all sorts of authority relations/systems, subordinate’s action seems to be irrational in light of individual rational behavior (i.e. maximizing one’s utility). The reason is those relations/systems, he is following superordinate’s interest. The example is principal-agency relationship
- Conjoint authority relations: one actor unilaterally gives up to another the rights. An example is charismatic authority relations
- Relations of trust: unilateral transfer of resources
- Disjoint authority system: authority system based on rationality
- Conjoint authority systems: authority system based on charisma
- Systems of trust (collective behavior): system of relations that arise through unilateral transfer
- Norm generating structures: actions with externalities. The condition of existence of norms is (1) there is demand for effective norm and (2) the demand is satisfied by the norms and the associated sanction system. The norm is internalized: individuals come to have an internal sanctioning system which provides punishment when he carries out an action proscribed by the norms or fails to carry out an action prescribed by the norm. The internalization of norms (like children’s development of moral standard) becomes efficient when (1) many people want to control using norms, (2) the people who use norms do not reap all the benefits from their actions, (3) people can increase overall benefit by using norms, (4) correlationship of community members are high, and (5) there exists information asymmetry among the participants
- Collective decision structure: events with consequences for many actors. To be a part of a bureaucratic system or to be involved in panic are the example of collective behavior. The behavior seems to be irrational, but in fact they are out of one’s rational decision making, the author argues. For instance, becoming a member of a corporation means giving up certain rights. The legitimacy would be (1) voice (he/she can participate the decision making process of the organization), (2) exit (he/she can exit from the corporation if it is not what she/he wants), and (3) revoking (he/she can change the structure of the system, whose radical form is revolution)
Change of the social structures in modern society and the needs for new social science
Professor Coleman argues that there are changes in the social structures. The change is so significant that one nation’s legislatures cannot design institution that will satisfactory cope with social changes, and we need new social science, he claims.
The change of the social structure is as follows: the main actors of the society have changed from primordial family-based-organizations to purposive and global companies. In these days, the number and influence of family owned companies are waning, and instead there came gigantic corporations, most of which are purely purposive company, not driven by family ties or bondages of community. Accordingly, the economic system shifted from household economy to closely interrelated economy.
Professor Coleman argues that, under the circumstances, we are losing social capital. Social Capital, originally introduced by Loury (1977;1987), is the set of resources that inhere in family relations and in community social organization and that are useful for cognitive or social development of a child or a young person. Social capital brings about important advantage for the development of human capital.
As community is losing its power, we are also loosing unwritten mutual understanding to be shared by participants of the organization. Essentially, social choice includes certain problems, as especially when some actors have significant power over others, social choice could be less efficient as it works to maximize utilities of those with powers. To ameliorate the problem, people come up with legislature and enact laws. However, the law is not perfect; the effective constitution of a group, organization, or social system is far broader than the written document and includes the unwritten norms and rules, as well as the written ones. Social capital has filled the gap between the scope of the whole social system and the scope stipulated in the laws. In other words, the society works because of certain unwritten mutual understanding is shared among the participants or the organization, but as communities and social capital fade and purely functional companies gain more powers, the communication and collective actions are getting more difficult. He claims new social science must be there to fix the issues.
For many parts of his analysis, the author may be just following what the economists had done many years ago. In fact, he seems to be influenced by economics and applied the methodology of economics in his sociology analysis, but that part may not be worth reading. If you want to know what can be said from the perspective of economics, you can just read the books of economists. Professor Coleman should be a great sociologist, but he is nothing but an amateur economist.
Characteristics of non-institutional social choice
He mentioned the characteristics of non-institutional social choice, which is quite valuable to manage my NGO. He said that, without the intervention of authority, the social choice would be as follows (page 394):
- Individuals in the organization use powers, which are relevant in decision making. Openness doesn’t work when power is highly skewed, as people with less power engage in sycophancy
- Normative pressure toward consensus exists, i.e. the organization will be homogenous
- The decision making is path dependent: past results of the social choice affect the current decision
The implication is huge to me. First of all, my NGO’s guiding principle stipulates radical openness for the sake of fairness and motivation to work, but that alone may not be enough. There should be some rules which curtail someone’s power.
Second, the more an organization continues to make decisions, the more the organization becomes homogeneous, and that will lead to the lack of innovation. Interaction with the outside group is crucial to keep on organization innovative.
Third, to learn from the past is virtue, but that could be the shackle in some cases. There always could be confusions between causal relationship and co-occurrence of the events. Trying to verbalize the reason of the results out of the past social decision could help to avoid the pitfall.
James Coleman, “Foundations of Social Theory”, Belknap Press of Harvard University Press; Reprint Edition (1998/8/19)