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In the past several years, economic sociology has grown into a new speciality within sociology. Numerous edited volumes, survey articles and handbooks herald its arrival and mark out its place in the sociological firmament (see, e.g. Granovetter and Swedberg, 1992; Swedberg, 1991; Smelser and Swedberg, 1994). Although classic social theorists like Karl Marx, Max Weber, Emile Durkheim and Georg Simmel frequently pondered the structure and conditions of industrial society and the problems its emergence generated, it was not until neoclassical economists recently began to study nonmarket social phenomena that sociologists reacted by taking up the market as an object of study.

Interest in developing institutional explanations of political and economic behavior has blossomed among social scientists since the early 1980s. Three intellectual perspectives are now prevalent: rational choice theory, historical institutionalism and a new school of organizational analysis. This paper summarizes, compares and contrasts these views and suggests ways in which cross‐fertilization may be achieved. Particular attention is paid to how the insights of organizational analysis and historical institutionalism can be blended to provide fruitful avenues of research and theorizing, especially with regard to the production, adoption, and mobilization of ideas by decision makers.

It is fascinating to think about the growth of the literature on the informal economy since Hart and Ferman and Ferman first considered the problem in very different contexts in the early 1970's. In fact some intellectual history would probably be appealing for students of this literature. Irrespective of the knowledge gained from conducting an intellectual history, social scientists should be aware that many, if not most, of the empirical and theoretical problems they study have roots in different philosophical problems (Leaf, 1979). The “informal” economy is no exception. To situate the following collection of articles on the informal economy in one useful philosophical context, I will discuss in this introduction two distinct strategies of social science investigation. Having spelled out these strategies, I will then consider how each of the papers stands in relation to them.

Financial service institutions design commercial lending mechanisms for small businesses with specific kinds of business owners in mind, that is, owners who already own or have access to both capital and productive resources. Given the conventional mechanisms devised by traditional lenders, individuals without productive capital appear to be costly, high risk borrowers. Today a new financial service institution called micro‐lending offers credit to just these high risk borrowers by constructing alternative lending mechanisms based on peer networks. These alternative mechanisms reduce the costs of lending to a higher risk population while providing access to business information and human capital skills, creating opportunities to build productive capabilities and other, less tangible resources, such as community networks. Using a case study of a neighborhood‐based inner‐city micro‐loan program in New England, I investigate how micro‐lending operates to reduce the costs of lending, as well as examine the group interaction that emerges among program participants.

In this paper, I demonstrate an alternative explanation to the development of the American electricity industry. I propose a social embeddedness approach (Granovetter, 1985, 1992) to interpret why the American electricity industry appears the way it does today, and start by addressing the following questions: Why is the generating dynamo located in well‐connected central stations rather than in isolated stations? Why does not every manufacturing firm, hospital, school, or even household operate its own generating equipment? Why do we use incandescent lamps rather than arc lamps or gas lamps for lighting? At the end of the nineteenth century, the first era of the electricity industry, all these technical as well as organizational forms were indeed possible alternatives. The centralized systems we see today comprise integrated, urban, central station firms which produce and sell electricity to users within a monopolized territory. Yet there were visions of a more decentralized electricity industry. For instance, a geographically decentralized system might have dispersed small systems based around an isolated or neighborhood generating dynamo; or a functionally decentralized system which included firms solely generating and transmitting the power, and selling the power to locally‐owned distribution firms (McGuire, Granovetter, and Schwartz, forthcoming). Similarly, the incandescent lamp was not the only illuminating device available at that time. The arc lamp was more suitable for large‐space lighting than incandescent lamps; and the second‐generation gas lamp ‐ Welsbach mantle lamp ‐ was much cheaper than the incandescent electric light and nearly as good in quality (Passer, 1953:196–197).

Agee, Philip. White Paper Whitewash: Interviews with Philip Agee on the CIA and El Salvador. Edited by Werner Poelchau. New York: Deep Cover Books (Box 677, New York 10013), 1981. $8.00. Written by a former CIA agent, author of Inside the Company. Critique of Communist Interference in El Salvador, cited below.

In recent discussions on social entrepreneurship, there have been calls for the discipline to make better use of general theories of entrepreneurship. This article seeks to argue that while the literature may not be explicitly theoretical, it often draws upon taken‐for‐granted concepts inherited from Joseph Schumpeter.

The text seeks to identify Schumpeterian assumptions within the social entrepreneurship literature, and introduce alternative perspectives on “the social” and “entrepreneurship”, drawn from the social theory of Gabriel Tarde. These are then discussed in the context of the social entrepreneurial initiative Hand in Hand.

The article identifies and re‐assesses three assumptions: that of the social as container; that of capitalism‐specific societal dynamism; and that of the atomistic, non‐inventive entrepreneur.

By re‐imagining “the social” and “entrepreneurship” through the work of Tarde, the article suggests that scholars can develop new conceptualisations of social entrepreneurship.

On September 15, 2008, Lehman Brothers filed for bankruptcy and nearly caused a meltdown of the financial system. This article looks at the situation before Lehman went bankrupt and how this event came to trigger a financial panic during the fall of 2008 and early 2009. Two key ideas inform the analysis. The first is that what triggers financial panics are typically hidden losses. The second is that confidence plays a key role in financial panics and that confidence can be conceptualized as a belief that action can be based on proxy signs, rather than on direct information about the situation itself.

These commentaries, from five of the sharpest minds in sociology, confirm our belief that economic sociology is developing a coherent and powerful set of concepts and methods for analyzing major economic and business trends. Economics as a field has not done much to address the most important changes in corporate strategy and structure over the course of the 20th century. The business historian Alfred Chandler recounts the history of the modern firm in a framework that is broadly consistent with the tenets of neoclassical economics, but that is as close as we get to an explanation based in economics. Ever since economic sociologists began to reapply their concepts and methods to the topic, in the late 1970s, we have seen the promise of the discipline to fill a gaping intellectual hole – a comprehensive understanding of where the main trends in corporate behavior come from.