Economic Theory and Sociology: A Critique of P. M. Blau's `Exchange and Power in Social Life'

In Exchange and Power in Social Life Blau uses the concept of exchange to develop the basis for a theory of social association. To show that his approach can provide predictions he uses aggregate supply and demand curves to analyse the exchange of advice for compliance within a work group, and from this derives predictions about status differentiation. However, his use of aggregate supply and demand curves requires, first, that what is being exchanged should be additive; second, that actors should evaluate exchanges by universalistic criteria; and, third, that they should act atomistically. The third assumption seems implausible within a work group, but, if it is valid, it follows that predictions cannot be made about status. This is because status differentiation can be said to occur only when there is both social distance and differential esteem between actors, and because differential esteem is likely to arise only within solidary groups.