Where did this issue on relational work come from?

Fred Block,  Sociology,  UC Davis

The idea to convene a workshop around the theme of relational work came to me after teaching The Purchase of Intimacy in my graduate economic sociology class.   But some of the credit goes to a recent Ph.D. student, Jesus (Jesse) Hernandez, who was writing a dissertation (now completed) about subprime lending in Sacramento.  His main focus was showing how concentrated subprime lending was in the same neighborhoods that had historically been redlined—denied access to mortgage lending because the population was largely black and brown.   Jesse documented the predatory practices by which subprime brokers targeted minority homeowners, offered them attractive deals for refinancing that gave them immediate cash payouts, but did not disclose that the low teaser rate would reset to a much higher rate in 24 months or sooner if they had an adverse credit incident.  The consequence was that many hardworking minority homeowners lost both their homes and the equity that they had accumulated over the years.

It occurred to me that these predatory lenders were rational economic maximizers like other mortgage lenders, but their behavior was still quite different.  This difference could best be understood with Viviana Zelizer’s concept of relational work—which highlights the aspects of economic exchange that are usually ignored by economists, especially when they assume that both parties to a transaction have “perfect information”.   The reality, of course, is that both differential information and different resource endowments are pervasive in economic exchanges and have huge consequences for the relative gains and losses in any particular exchange.  Viviana’s concept of relational work makes it possible to bring these differences directly into the analysis of transactions.  In other words, even economic sociologists tend to default to the ideology of equal exchange and start with the assumption that the two parties are meeting at the table as equals.  But the trick is to be able to recognize the simultaneous presence of structured inequalities—gender, class, race, and so forth– and the legal fiction of equal parties voluntarily signing a contract.   Looking at the ways that parties do relational work can help us to see both these things at the same time.

Or to put it in other terms, we know that economic transactions are embedded in social, legal, cultural and ideational structures.  But the concept of relational work can help us to understand how this embedding process works.  It points us to the different resources—material, cultural, and legal—that the parties bring to the transaction, the representations that the two parties make either implicitly or explicitly, and the nature of the resulting relationship.  These factors then help us to understand the character of the resulting exchange.

My idea was that bringing together a group of people to explore these ideas both theoretically and empirically could jump start an important conversation for economic sociologists.  At the workshop, we had intense discussion of nine papers.  After revisions, six of those papers are included in the special issue of Politics & Society.   But these papers are just a beginning.  The hope is that by generating a body of work that interrogates relational work in a wide variety of economic exchanges, we will begin to see significant patterns and commonalities that will help us to build more robust theories about both the causes and consequences of different ways of doing relational work.


Written by fredthesociologist

August 28, 2012 at 12:31 pm

6 Responses

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  1. Fred Wherry, Sociology, Columbia

    What makes your example of predatory lending especially appropriate for our discussion of relational work is that buying a home is one of those moments when a person’s relationships with others come to the fore: the children, in-laws, neighbors, guests. If there is any, the money used for the down payment has rested in an earmarked account; if not, a HELOC (home equity line of credit) or some other category of loan has placed the purchase within reach. The buyers can focus on the good part of the deal, convincing themselves that their intentions are morally sound (for the family, for stability, for the normal life). Besides, the bad interest rate is segregated from the good one, called by a different name, marked with other practices of initiation. The good interest rate links most immediately to the good of the family, who surely deserve stability and care. In other words, social relations are critical to the earmarked mortgage monies because socially relevant others have some say in which home will be purchased and some input into how much of a priority home ownership should be given. The source of funds and the manner of payment may different dramatically for the HELOC versus the ARM versus the other categories of mortgage expenditure, and those within the family (and among the family’s lenders) deemed appropriate to pay into these earmarked categories is likely to be intensely felt and incessantly negotiated. Some of these questions match up well with work on mental accounting, but as Fred Block points out, the sociological perspective enables us to think through the different resources that various parties bring to the table and the cultural codes associated with what it means to be female head of household or in a two-parent household, what it means to be tenuously middle class, what role race or class are not longer supposed to play, and how these structured inequalities help structure collectively held narratives about home ownership. Perhaps these kinds of examples (subprime mortgages, household budgeting, etc.) will bring mental account into a sustained dialogue with the relational work involved in social accounting. Perhaps.



    August 28, 2012 at 2:48 pm

  2. the aspects of economic exchange that are usually ignored by economists, especially when they assume that both parties to a transaction have “perfect information”. … even economic sociologists tend to default to the ideology of equal exchange …

    They say… it is said… it is commonly believed… most people… The fallacy of the unnamed collective is just one of many problems.

    In 2003-2004, I held a real estate license and I assure you that everyone knew that the bubble was going to burst. The home buyers taking huge and wildly-structured debt were not hard-working people hoodwinked by evil financiers, but, were, themselves, hoping to cash in and cash out.

    The Freddie Mac and Fannie Mae mortgages were driven to minority applicants by Congressional mandates authored by liberals Barnie Frank and Christopher Dodd. Of course they betrayed minorities. You can only betray your friends: your enemies don’t trust you. (Republicans prosecuted Michael Milken and Martha Stewart.)

    Some academic economists teach the theory of perfect knowledge along with the theory of one price and other silliness. Friedrich von Hayek taught a different view, of individual actors and unpredictable outcomes. Trade is never supposed to be “equal.” That is a primitive idea. You buy a loaf of bread for a dollar (actually closer to $5 now) not because it is “worth” a dollar, but because it is worth more. Trade is bilaterally profitable and often in disproprotionate returns. I value what you offer differently than you value my service or good, but each of us intends to gain. In fact, there exists a mathematical proof of Ricardo’s Law of Association showing that the only way this works is if the parties are unequally unequal… which we mostly all are.


    Michael E. Marotta

    August 29, 2012 at 12:54 am

  3. the good thing, I think, with Zelizer’s relational work is to push, even if it’s not so explicit and intended, econ sociologists towards ethnographic fieldwork (by contrast with one-shot formal static interviews).



    August 29, 2012 at 1:54 am

  4. Michael, so you lived in and dealt with a neighbourhood that was usually redlined? I find the story that is funfolded very very interesting and relevant, since they for some reason have not been out int he open to the extent I think they should have been – people in the financial world of London certainly know this happened (that’s at least what I am being told by several people I know in that world), but the regular home-owner who is annoyed about his government certainly doesn’t.
    And Michael, try to count how many economic textbooks actually mention “bounded rationality”. Beinhocker lists quite a few that don’t in his “Origin of Wealth” – it seems like you will be surprised.



    August 29, 2012 at 12:32 pm

  5. Michael, I wish I had had the foresight to embed myself with a group of real estate agents *before* the crash. [This would have better bridged the gap between the experiencing and the remembering self.] I wonder what kinds of discourse helped potential buyers take the leap of faith that they could now cash in and cash out like other good capitalists. Trade is about gain, and it is also about impressions. We trade impressions of the self as we make different kinds of purchases. And we perform a financial self that is more confident than circumstances merit. The dramatic irony is thick.

    Jens Beckert presented a paper at the 2012 ASA Annual Meetings on the imaginings of the future self and its effect on financial decision making. We have these imaginings of cashing in and out, of acting like the big boys. But we also have a number of unrecognized audiences for these financial acts. To whom were these performances directed? Now the time comes for leaving the individual and discovering her tangled in social relations.

    This is not to deny public policies and the opportunities they structured, but it is to address a comprehensive situation that policies, betrayals, and miscalculations alone cannot illuminate.



    August 29, 2012 at 4:20 pm

  6. […] Fred Block, Nina, Kieran and Fred Wherry have already outlined some basic stakes to the claim that an economic sociology more attentive to “relational work” might “succeed Granovetter’s ‘embeddedness’ framework.” Those stakes are pretty straightforward: the character of exchanges are negotiated by parties in ways that cannot adequately understood absent reference to the cultural, organization, and institutional structures that enable and constrain peoples’ abilities to get what they want out of those exchanges. This makes my task here easier. I’m one of the folks who contributed to the special issue of Politics and Society that Fred Block (and others) mentioned, so I’ve obviously got a view on matters. By coming in after them, I get to avoid some preliminaries. I can just react to/follow up on things that have been said. […]


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