236. "The Socio-Economics of Work," Frederick C. Gamst
(Ed.), Meanings of Work, Considerations for the Twenty-First Century,
SUNY Press, Albany, (1995). pp. 251-260.
Socio-economics is a discipline that combines the perspectives of neoclassical economics
with those of sociology, anthropology, psychology and political science. The synthesis proceeds
along three major axes: instead of assuming that people are maximizing one over-arching utility,
their satisfaction, it is assumed that they respond to two or more irreducible sources of valuation:
their satisfaction and their moral values. (Both are subject to cultural interpretations,
socialization, peer pressures and leadership influences).
Second, instead of assuming that people choose their means rationally, it is assumed that
much of their decision making is affected by emotions and values, and that their ability to
deliberate and process information (to act rationally) is rather limited. Finally, instead of
assuming that the individual is the center of the social universe, it assumes individuals act as
members of groups and hence many variations in their behavior are to be explained on the
collective level. Further details and the ethical implications of the change in perspectives are
spelled out elsewhere. (Etzioni 1988; Etzioni and Lawrence 1990; Coughlin 1991; see also the
new Journal of Socio-Economics).
As the preceding very terse statements suggest, socio-economics is concerned with
evolving a constructive paradigm rather than adding to the voluminous literature critical of
neoclassical economics. Indeed, it seems that one of the main reasons neoclassical economics
continues to reign despite some very telling criticisms of its assumptions, findings and policy
conclusions (Thurow 1983), is that one cannot replace a paradigm with nothing. Critics of
neoclassical economics have been able to come up with numerous observations, case studies, and
statistical findings, based on a rich variety of assumptions and premises but only recently have
those begun to accumulate into one over-arching, explanatory and predictive paradigm, which we
refer to as socio-economics. (It follows that socio-economists have not given up on the "science
thing" and are reluctant to replace neoclassical economics only with narratives, interpretive
writings and other humanistic but not "hard" scientific approaches.)
This essay seeks to launch a systematic overview of work applying the socio-economic
perspective to explicate assumptions, and point to lacuna rather than present new findings or new
theorems. First, it examines the nature of work, noting that the reasons people work derive from
a multitude of rewards, which are psychic, social and cultural, as well as economic. Next it asks
why neoclassical economists continue to advise organizations to offer money as the only work
incentive. Socio-economics seeks to codify an alternative theory of incentives. In particular the
value of work is often deeply rooted in one's culture. The final portions of this essay examine
the normative and culturally based meanings of work and the division of work within the family.
Work Versus Labor
Arendt (1958) captured the difference between work that is sheer drudgery and work that
contains intrinsic rewards, is enjoyable, and builds identity by using the term "labor" to refer to
the first kinds, and "work" to the second. Most neoclassical economists view work implicitly or
explicitly as labor. Because their paradigm is built around the pleasure principle, they typically
assume that work is pain and that people must be provided with external rewards, in order for
them to put up with the travail of labor. (The same narrow view of the psyche is reflected in most
of the labor economics literature wherein only external rewards are discussed, no other rewards
are recognized, and, we shall see, pay-for-performance is preferred over salaries and wages.)
Socio-economics assumes that much work, albeit not all, contains an important (though
varying) amount of intrinsic rewards. One need not travel far to meet such workers. Quite a few
academicians, especially among those who already command tenure, could reduce their work
hours significantly with no, or only little, loss of income. They work, often long and hard,
because of social rewards (e.g. prestige), because they are part of a social group that appreciates
dedicated and extensive work, and because academics build their self-identity around their work
and find inherent pleasures in an essay well written, new findings, a table analyzed and so on.
Many others professions and occupations provide, to varying degrees, similar rewards. Many
"blue-collar" workers are motivated in part by intrinsic rewards of work. In the past, many
locomotive engineers and conductors are reluctant to leave their positions when they reach the
mandatory retirement age of 70. Today, some engineers enjoy their craft, and its tasks, and their
responsibilities so much that aspects of their work is a constant topic of conversation, they
seldom miss a run, and on days off, they operate, gratis, steam, and other locomotives for small
"rail buff" carriers (Private communication with Gamst).
Juster (1986) finds that the average American worker prefers work with some leisure over
full-time leisure (although most would like more leisure). He suggests that there are internal
rewards (e.g. personal satisfaction) associated with all activities, as well as external rewards and
cites data to suggest "that the intrinsic satisfaction from work, which represents an addition to the
extrinsic reward in the form of income, is generally higher than the intrinsic satisfaction from
leisure" (ibid. 16). As Juster points out, this finding is completely incompatible with the
neoclassical approach that assumes not only that leisure is pleasurable and work painful, but that
leisure is the reward a person obtains by working.
Gamst (1984: 58) shows the correlation between work and culture. Anglo-Saxons often
view work as both a moral necessity and a curse. Other societies, such as the Amhara and
Qemant of Ethiopia shun all manual labor. He also challenges the notion that work is limited to
gainful toil. There is also what is called "volitional work," work which receives no payment, but
is beneficial to society. He concludes,
Work gradates into activities marginal to or of no direct relation to earning a
living. Work satisfies not just material need, but social aspiration for status and
organization of community. It satisfies psychological maintenance of self-image
and provides a label for easing interpersonal relations (59).
All said and done, it seems productive to assume that: (a) people work for a variety of
motives; (b) profiles of job motivations differ among individuals (some are more pecuniarily
oriented and some are more attracted by opportunities to express themselves, etc.); (c) jobs differ
in the satisfaction they can provide (some provide more opportunities for developing social
relations on the jobs than others); and (d) it is unproductive, costly and unappealing from a
humanitarian viewpoint, to treat all people in all jobs as if they are laborers rather than workers.
(This approach is of course in line with the multi-utility idea, a core principle of socio-economics.) It is in this paradigm, ideas such as providing opportunities for workers to self-actualize, to identify with their work and so on, find their systematic theoretical home.
Once one begins building from the preceding paradigm, one recognizes the special
significance of matching people to jobs, rather than trying either to change people--in order to
make them more responsive to the preexisting rewards jobs offer, or to change jobs--to enhance
the rewards jobs offer to particular profiles of motivations. Improved matching requires neither
changing personalities nor jobs, and hence is much more efficient. Baker, Etzioni, Hansen and
Sontag (1973: 777-8) showed that "either because of some basic needs, or because they are
formed early in life and are not easily altered, personalities cannot easily adjust to fulfill any and
all organizational role requirements without substantial strain." The authors then develop a
measure of personality dimensions that influence peoples' responses to key aspects of work;
these, in turn, allow for better matching of persons and roles, hence making more of labor into
work. It may be argued, quite appropriately, that such a procedure would lead to discrimination
because of various disadvantages suffered by many minority groups. This may be corrected, at
least in part, by changing the job specs so they become race and gender, etc., neutral. As a result,
the suggested approach will cease to be a pure matching operation.
Neoclassical economists advocate performance-based pay over promotion or other
compensation systems and express surprise that virtually no organizations use pay-on-performance systems, such as paying people for each yard of fabric they weave or ton of coal
they dig. "The potential benefits of tying pay to performance are obvious, and it is surprising to
economists that firms apparently resist introducing bonus-based compensation plans with enough
financial action' to have a major motivational effect." (Baker, Jensen, and Murphy 1988) The
evidence they cite from research by Medoff and Abraham "indicates that explicit financial
rewards in the form of transitory performance-based bonuses seldom account for an important
part of a worker's compensation" (ibid. 595). Lawler also finds that "pay is not very closely
related to performance in many organizations that claim to have merit increase salary systems"
(ibid.). For neoclassical economists, top management in particular "is an occupation where
incentive pay is expected to play an important role, but Baker, Jensen and Murphy point out that
actual executive-compensation contracts look very different from those predicted by economic
theory" (ibid. 610). The data shows that there is little pay difference within firms between those
with low or high performance ratings (ibid. 595), and most organizations use promotion
incentive systems rather than pay-for-performance (ibid. 600). While neoclassical economists
suppose that promotion systems lack incentives for those who have been passed over, and fail to
provide optimum job matching by moving good people up to higher managerial levels, merit-pay
critics note that "while financial incentive schemes improve productivity in principle, in practice
they induce significant adverse side effects that are costly to employee morale and productivity"
Baker, Jensen and Murphy conclude that, "there may be more efficient ways to increase
the level of pay, such as introducing bonuses based on individual performance, but managers and
personnel executives [particularly because they are not principals and do not directly bear the
cost of unwarranted salary increases-A.E.] have little incentive to adopt these economically
efficient alternatives" (ibid. 614).
During a faculty seminar I conducted on socio-economics at the Harvard Business
School, Jensen presented the findings summed up above. At that point I turned to the more than a
dozen other non-neoclassical social scientists present to ask if we had any other systematic
explanation of the amounts of incentives people are given for their work.
Several interesting observations were offered. Some suggested that old fashioned workers
largely sought monetary compensation while the new ones were more preoccupied with self-expression. Some suggested that we pay more for power (hence the system of greater pay for
higher rank, for more control). One colleague proposed that we pay people to reduce their
anxiety so they can focus on their work (hence the benefit of working mostly for fixed incomes
rather than pay-for-performance. Among the studies cited in the seminar discussion was that by
Herzberg, Mausner and Snyderman (1959). However all said and done it seems fair to say that a
systematic socio-economic explanation of compensation for work remains to be worked out.
There are findings, insights, suggestions but so far no cumulative, predictive account.
Work and Society: A Matter of Moral Evaluations
Socio-economics does not hesitate to recognize the moral issues raised by social analysis,
a pivotal issue in the study of work. That is, moral issues are not a segregated matter, another
division like a Sunday religion. They are an integral part of social life and hence central to the
study of human conduct and institutions.
The point was first driven home to me when, as a poor 15 year-old kid, I worked as a part
time plumber's assistant. The work was hard (largely carrying metal pipes) and the plumber's
demeanor was not loving, to put it mildly. At the time I had read The Razor's Edge by Somerset
Maugham, about Larry, the son of an affluent family and a World War I pilot. Shocked by the
war, he lingered somewhere between a nervous breakdown and psychosis, finding himself lost in
peace time. His family was increasingly dismayed that he did not go out and find a job. I had a
hard time understanding why the rich were so anxious for him to go to work.
Socio-economics provides answers to this question--work is in part a moral undertaking.
Different societies and cultures put different moral valuations on work. To draw on well known
examples, in ancient Greece, Rome and during the Middle Ages, Larry would not have been
troubled. Work, especially manual work, was a matter for slaves and serfs and peasants. Free
persons, not to mention privileged citizens, were engaged in different pursuits, at least if they
sought the moral acceptance of their peers and community. These pursuits ranged from an active
civic life to cultural activities, from making war to courtship.
With the onset of modernity in the West, the moral standing of work has changed, though
unevenly. Not all classes, ethnic groups and sub-cultures evaluate work in the same way. As Max
Weber already established, some cultures accord work a much higher moral value than others.
Weber attributed the differences in secular moral evaluations of work and with it achievement,
self-discipline, saving and wealth to differences in religion. This conclusion generated an
enormous debate that remains unsettled. The most recent version of it is found in efforts to
explain differences among various immigrant groups and minorities, especially black Americans,
regarding work (and welfare) (Steele 1990, Williams 1990, Applebome 1990, Nicholson 1990).
Progress in socio-economics will require clearer answers to these questions; what causes
differences in work orientation and achievements--sub-culture, a psychology of victimization, or
lack of opportunities, and what are the effects of past and present discrimination on work habits
The Division of Work Within the Family
Neoclassical economists long treated the family as a unitary structure, as making
decisions unanimously (e.g. what to purchase) and in effect reflecting the decisions of the bread
winner, who was historically in the modern West simply assumed to be the male. As a result
male preferences and family choices were often treated as one and the same.
To the extent that neoclassical economics turned to study the family internally, under the
influence of Becker (1974) and others, it has treated the family as a marketplace in which two
autonomous individuals exchanged income for services (typically, the husband's income for the
wife's services). Becker writes that "the time of different family members is their primary scarce
resource", (317) and the sexual division of the labor force can therefore be described as the
efficient allocation of each family member's time. Men, particularly white married men, earn
more than married women in the labor force and "through the usual substitution effects, [this
would] induce a family to use less of the first member's [the husband's] time in home production
and more of the second member's [the wife's] time."(318). According to Becker, married people
would not seek to trade roles because as each accumulates "human capital" in his or her
respective sector, he or she becomes increasingly productive in that sector and it is in the family's
interest to maximize productivity.
In recent years a significant body of literature on this topic arose under the influence of
the feminist movement and women studies. No attempt is being made here to review this
literature, but I wish to flag the importance of some of its conclusions for the issues at hand.
First, the literature highlighted a major general socio-economic thesis: there are no transactions
among equals (Etzioni 1988: 82). Husbands did not simply trade some of their income for their
wives services, but did so in terms that reflected the husbands' superior power, as established in
law and the marketplace well into the 1950s and 1960s, and in some ways still today. Husbands
had more control of the use of assets, credits and ownership than did their wives. The exchange
was on terms highly favorable to the husbands (as indicated by the costs of the same services
outside the household). Virginia Woolf wrote in 1938, which remained true for years, that the
wife's "spiritual right to a share of half her husband's income peters out in practice to an actual
right to board, lodging and a small annual allowance for pocket money and dress" (56). Today
feminist theorists claim that the concept of "the family" masks inequities and antagonistic
interests including the relative poverty of the wives (since they still are often dependant on their
husbands wages), the contribution of domestic labor in maintaining the work force, and the
unequal distribution of occupations and goods within the family (Hartmann 1981, Hochschild
1989). And, when the family broke up, the husbands used to--and still do, although to a lesser
extent--receive a disproportional share of the family assets. Finally, to the extent that work
outside the household provided more power, prestige and opportunities for self-expression than
in the household, husbands did, and to some extent still do, have a strong advantage. This picture
of structured exchange among the powerful and the weak, rather than unstructured, open and
among equals, should be kept in mind because it is found in all other parts of the economy.
Whether it is in the relations among oil companies and the owners of gas stations, auto
manufacturers and car dealers, large versus small manufacturers and supermarkets (which are
forced to keep shelf space for the larger producers) and so on.
Second, studies of the family hint at the merit of recognizing "I" and "We" zones. That
is, families are not well conceived as bundles of individuals transacting, as equals or not.
Families are best viewed as having a zone of shared identities, commitments and interests, "We"
zones, as well as those of two or more individuals. Thus, while some purchases are clearly
designated for the husband (say, his ties) and for the wife (say, her makeup), others are shared
(purchases for infants). Families differ significantly in the extent of the We vs. I zones. If the We
zone is meager, the family may be on the verge of disintegrating. If the We-ness zone is very
extensive, the needs of the weaker members are likely to be neglected. It is here that the two
ideas combine: the We zone as well as the relations among the I zones is structured, reflecting
the relative power of the members as well as the values they hold and share.
To reiterate: the preceding discussion provides only an outline of ideas and agents for a
socio-economics of work; most of the work in this area remains to be done.
Applebome, Peter. 1990. "At the Heart of Anguish on Getting Past Racism", The New York
Times, April 30, 1990. pp. A18.
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Baker, Sally Hillsman, Amitai Etzioni, Richard A. Hanson, and Marvin Sontag. 1973.
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Steele, Shelby. 1990. The Content of Our Character: A New Vision of Race in America. New
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The author is indebted to Suzanne Goldstein, Cathy Milton, and Sharon Pressner for research assistance
About the Author:
Amitai Etzioni is a University Professor at the George Washington University,
Washington, D.C. He received his doctorate in Sociology from the
University of California, Berkeley. He is currently the editor of
The Responsive Community, a new journal that explores the
balance between individual rights and community responsibilities.
He is also the founder of the Society for the Advancement of Socio-Economics
and the author of The Moral Dimension (Free Press, 1988).