Economic Lives: How Culture Shapes the Economy

When it comes to the value of monetary transactions, context is key, Natalie Gold writes

December 23, 2010

After the 11 September 2001 terrorist attacks, the US Congress established a $7 billion fund to compensate the victims and their families. Dividing up the money raised questions about how to value a human life, who was entitled to the compensation and whether it was a proper recognition of loss or a morally corrupting practice. The answers from those distributing the money were: to calculate the economic value of the lives lost, which meant negligible payouts for the death of children; and no recognition of the claims of same-sex partners. Victims' families argued that this approach ignored their emotional loss. The wrangling over compensation led some sections of the media to characterise the bereaved as mercenary and intent on benefiting from the loss of loved ones.

These are exactly the sort of issues that have concerned Viviana Zelizer over the course of her career. She began by investigating how insurance companies in late 19th-century America overcame the prevailing view that it was wrong to value a life in monetary terms, and were able to persuade people that it was only responsible to insure families against the loss of their wage earners.

Not long after, the companies managed the more morally dubious feat of persuading mainly poor, working-class families that their children - who since the introduction of child labour laws had become economically worthless - should nevertheless be insured because they were emotionally priceless. Although this was not in the families' interests economically, it provided symbolic recognition of their children's value.

From the practice of insuring children, Zelizer moved on to consider the selling of children, probing the cultural history of how money changes hands during adoption and surrogacy. From there it was but a short step to examining the social meaning of money and how we negotiate systems of payment for intimate services, ranging from prostitution to the care of elderly relatives. Here, she argues against Georg Simmel's philosophy that money is a totally fungible medium and a destroyer of non-monetary value.

Instead, Zelizer contends, people distinguish different types of "monies" to match the character of different exchanges, using them to create, differentiate and transform social relations. She supplements evidence on how mothers and prostitutes allocate their earnings with the idea, taken from economic psychology, that people have separate "mental accounts" for different types of transaction, and that these separate stores of money are not necessarily interchangeable. The origin of an income constrains what it can be spent on. The connection, she observes, goes both ways. The meaning of money can also be affected by the type of transaction it is associated with, even taking on sacred values when, for instance, it is gained from the death of a child.

Throughout Zelizer's work, common themes emerge. In each area, she counters the assumption of "separate spheres", namely that there are distinct arenas for economic activity and personal relations. She deliberately chooses examples such as economic transactions within the family and the interplay of social relations at work in order to show how common is the intermingling of the economic and the personal in our everyday lives. Her studies provide evidence against the prevailing "hostile worlds" hypothesis, that contamination and disorder necessarily result from close contact between the spheres, as economic rationality corrupts intimacy and intimate relations hinder efficiency.

Zelizer also distances herself from other thinkers who have challenged the notion of separate spheres by asserting the hegemony of a single form of valuation or a single methodology. She calls these "nothing-but" arguments. For some economists, the two spheres are not separate because personal relations are nothing but economic rationality; for some sociologists, markets are nothing but cultural meanings; for some groups, such as Marxists or feminist theorists, the economic and the personal are both the site of power politics. Instead, Zelizer argues, we must recognise both that economic interactions are a part of the traditional personal sphere, and that every market depends on interpersonal relations.

For similar reasons, Zelizer is also critical of some prominent methodologies in her field. She argues that, even though they acknowledge the influence of the personal and the economic on each other, economic sociologists who "extend" the methodologies of economics into the social domain or who "embed" markets into social practices lend support to the view that markets are insulated from the social domain.

For Zelizer there is no separate domain of the market; rather there are multiple "circuits of commerce", economic connections marked by distinct social relations, the creation of special monies and shared understandings concerning the meaning of transactions. Hence, researchers need to supply a more fully social conception of economic activity.

Economic Lives spans more than three decades of work. But even the questions that Zelizer began with are still relevant. We are still struggling to reconcile payments with other, non-economic valuations as we debate the introduction of markets into new arenas of social policy, such as education. Although her work provides evidence that people are often confronted with these issues and that negotiating them is a fact of social life, she does not provide easy answers. If anything, her work raises further questions.

Contamination of valuations does not necessarily result from payments, Zelizer shows, but one reason for this is that we make efforts to differentiate gifts, entitlements and compensation. A policy-relevant question is how we achieve this. For instance, contrast the argument that a carer shouldn't be paid because it would diminish the quality of her caring with our attitude to doctors, whose salaries are well above average and whom we expect to provide a high standard of care. Carers are usually female and doctors are usually male; Zelizer concludes that women are being disadvantaged unnecessarily by doctrines of separate spheres and hostile worlds.

But this also points to a new avenue of enquiry: how do doctors maintain both caring and payment relationships, and can lessons from professional healthcare inform how we deal with caring within the family?

Further, showing that we have ways of marking monetary exchanges according to their social meaning raises a new set of questions relating to how social meanings are formed. While Zelizer investigates particular cases, a challenge for other social scientists is to extract general principles.

Zelizer admits that books are the main vehicle for her research, with articles usually written as offshoots. So what is the value of this collection? In large part, it summarises the content of her earlier books, from Morals and Markets: The Development of Life Insurance in the United States (1979) to The Purchase of Intimacy (2005), although it also articulates directions for future research. There is quite a bit of repetition, both of particular case studies and of her core targets, including the separate spheres, hostile worlds and nothing-but assumptions. However, the repetition allows each article to be free-standing, so the reader can dip in and out of the book.

But those who adopt that approach will miss the dialectic of Zelizer's research, her trajectory from social historian to economic sociologist, and the parallel evolution of the field of economic sociology. This provides the novel interest of Economic Lives. It may not be enough to sustain the attention of anyone who is already familiar with Zelizer's work, but this collection is an excellent introduction to, and summary of, her impressive oeuvre, and makes a strong case for economists studying transactions within their cultural context.


Viviana Zelizer, who was born and raised in Argentina, studied law at the University of Buenos Aires for two years while working part-time as a simultaneous interpreter for international conferences. However, "dreaded Roman civil law texts" put her off the subject.

At 21, she married and moved to the US, where she began to explore in depth an interest in sociology she developed during undergraduate studies at Rutgers, the State University of New Jersey. Zelizer went on to gain an MA, an MPhil and a PhD in sociology from Columbia University and later taught in its sociology department before moving to Princeton University in 1988.

She has been the Lloyd Cotsen '50 professor of sociology since 2002; in 2007, she was joined in the faculty by her son, Julian Zelizer, a professor of history and public affairs, making them Princeton's first mother-son teaching pair.

Zelizer regularly visits Argentina, often travels to France to see family, and remains fluent in Spanish, French, Italian and English. Despite her worldliness, she is still "kidded for her bland taste in food", she says.

Chloe Darracott-Cankovic

Economic Lives: How Culture Shapes the Economy

By Viviana A. Zelizer

Princeton University Press

494pp, £24.95

ISBN 9780691139364

Published 10 November 2010

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