Origins:  Structural Anthropology (Levi-Straus)
    Behavioral Psychology  (B.F. Skinner, Albert Bandura)
    Utilitarian Economics (D. Ricardo, Adam Smith, J. S. Mill)
    Sociology (George Homans, Peter Blau),
    Social Psychology (Thibaut & Kelly)

 Focus:  Individuals interact for profit or the expectation of it.  Remember that behavioral psychology (a.k.a. operant conditioning, stimulus- response psychology) explains all behavior in terms of its reward seeking/punishment avoiding motivation.  Out of a very basic desire to seek rewards and avoid punishments, individuals (a.k.a. organisms, subjects, units) create sets of strategies that they believe will increase the odds in their favor.  We learn what is rewarding by emitting an array of behaviors until one of them results in a positive reinforcement.

Thus, throughout life, but beginning in infancy, we are trained (i.e., we learn, our behavior is modified) so that our behavior and thought processes are consistent with the goals of the persons doing the socializing.  The fact that those socialization agents are working for the State (i.e., the society, the culture, the larger set of values) brings the psychology of this developmental theory into the social world.

Basic Assumptions of Social Exchange Theory

  1. People who are engaged in interaction are rationally seeking to maximize profits (Could this be a  selfish and hedonistic view of human nature?). Thus, Social Exchange (SE) theory is  Subjective and Introspective.
  2. Most gratification among humans is located in others. Dyads or small groups are the unit of analysis.
  3. People have access to information about social, economic, and psychological aspects of interaction that allows them to consider alternative, more profitable situations relative to their  present   condition.
  4. People are rational and calculate the best possible means to compete in rewarding situations.  The same is true of punishment avoidance situations.  SE is organismic mechanistic to the extent that the individual is not in control of the expectations for his/her behavior.  Individual reactions are narrowly defined as acceptable.
  5. People are goal oriented in a freely competitive system.  SE is a Formal Theory.
  6. Exchange operates within cultural norms.
  7. Social credit is preferable to social indebtedness. SE is Nomothetic.
  8. The more deprived the individual feels in terms of an act, the more the person will assign value to it. Again, SE is nomothetic--based on general laws.

Concepts:  The language of Social Exchange theory betrays its self-interest assumption that we are all in it for ourselves.
The basic formula for predicting the behavior for any properly socialized individual in any situation is: Behavior (Profits) = Rewards of interaction  - Costs of Interaction.

Distributive Justice refers to an individual's perception of the reward structure and his/her rightful portion of it.  Thus, it is possible for privileged individuals to feel slighted or punished because their rewards for behavior are smaller than another persons. In an academic setting, for example, salary raises are usually given according to job performance. A publication in a refereed science journal will be worth some percentage amount of salary increase--say .25%.  Faculty who have higher salaries will receive a higher dollar raise (.25% of a large chunk salary) compared to faculty who have lower salaries (.25% of doodly-squat).  Doodly-squat salaried folk will feel righteous indignation over this arrangement until their salaries approach the large chunk level.

The Principle of Least Interest was invented by Waller and Hill during their research on the Princeton man back in the 1930s.  They were interested in the college male's perception of women they dated. They found that, in a dating relationship, the person who had the least interest in continuing the relationship (usually the male) also had the most power in that relationship. Thus, the one most interested in continuing the relationship had to work much harder to maintain it:

 Most Interested: "I made you a wonderful meal, darling. May I serve you your evening cocktail before we dine?"
 Least Interested: "Thanks, but I decided to go out with my friends tonight."
 Most Interested: "Oh, that sounds wonderful. You don't get out enough.  Should I put dinner    away for later?"
 Least Interested: "No - We'll find something."
 Most Interested: "O.K. - I love you!  Be careful out there.  I'll be here when you get home."

Research Topics:

Some Nice Things about Social Exchange Theory: You will remember that a theory is a general principle that interrelates a series of events allowing a broad range of predictions with a degree of accuracy not otherwise possible (well, maybe you didn't remember theory that way).   Social Exchange theory has all this:

 These are all good things for a theory to possess.  However, there are some disadvantages. Social Exchange explains away all altruistic behavior or motives. Sweetness and kindness for their own sake are not possible!  Watch the 1960 movie  "The Rat Race"  and see Debbie Reynolds' hard bitten style that she learned on cold city streets melt away, as she encounters the bumpkin Tony Curtis' sheer faith in love and honesty.

SE would have us believe that love is simply a means to an end.
SE is also a tautology in that a reward is defined as that which increases behaviors.
Behavior is that which increases rewards (or cost avoiding).

The Roots of Social Exchange Theory
Social exchange can be traced to a variety of scholars.  From their study of the economy, Adam Smith and David Ricardo, the architects of modern caplitalism, suggested that any philosophy promoting any principle other than hard work for money was dangerous for the nation.  Everyone must harbor strong beliefs in their own ability to generate income.  Some, such as John Malthus argued against any form of public welfare, since the coddling of the poor would enable them to generate more of their pitiful kind (It is actually a kinder act to simply let them die away).  John Stuart Mill's Utilitarianism was more humane, suggesting that every act of every human being should be classified according to its utility.  Useless activities were scorned.  All these philosophies, upon which American capitalism and our economy is centrally based,  emphasized the economic or personal value of behavior.  The idea  was that hard work benefits the individual and the nation, while frivolity benefits no one. The idea flourished from the turn of the century until the late 1960s (see Figure 13).

Until the early 1960s life in our society was  perceived as a rat race, literally a behavioral experiment in producing narrowly socialized functionaries. Betty Friedan's The Feminine Mystique is a terrifying report on the stiflingly anti-intellectual social environment in which women were supposed to live their lives in the 1950s (I doubt that anyone reading this text can explain what she meant by the title of her book). After the publishing of her book and the thoughts of other feminists, important revisions to the capitalist line by John Kenneth Galbraith, and Michael Harrington among others, academic views of life in America began to change somewhat.

Figure 13. -  Social Exchange Theorists by Area of Emphasis.

                                             ECONOMIC                           SOCIAL
        INDIVIDUAL              Levi-Straus 1                          Malinowski  /  Homans 2
        INFLUENCED BY     19th Century                           19th Cent.  /    20th C.
        COLLECTIVE            Anthropologist                        Anthropologist/Sociologist

        COLLECTIVE             Smith/Ricardo 3                     Peter Blau / O.D. Duncan 4
        INFLUENCED BY      J.S. Mill                                 Late 20th Century
        INDIVIDUAL             18th-19th Century                  Quantitative Sociologists

Levi-Straus, in his study of the Nambikwara natives of the Brazilian jungle, found economic motives tended to create a pattern of interaction impervious to revolution or alterations. While revolutions may change the superficial organization of a society, the individual's motives remain forever selfish.

Malinowski's discovery of the Kula Ring Ceremony was evidence of human need to exchange.  Members of the Trobriand Island tribes exchanged arm bands and necklaces in opposite directions around a ceremonial circle.  Anthropologists saw only one function of this ritual--to solidify the society emotionally through exchange.  The assumption is that man is rationally seeking to maximize benefits and minimize costs of social relationships.  Among all alternatives, humans will select the most profitable course of action.

Adam Smith was the first great figure in economics. Author of the free enterprise system,  his formula for economic progress was written in An Inquiry into the Nature and Causes of the Wealth of Nations, and was simple.   Wealth was found through the workings of the liberal economic society in which regulation was by competition and the market, and never by the state.  Each man was left to his own resources, laboring effectively for the enrichment of the society (thereby laboring for the enrichment of himself).  Smith had little hope that the have-nots would ever rise above their circumstances, given the economic stronghold of those with bargaining wealth. But the chance of achieving was the motivation to try.  I'm going heavy on economics because it is the one area of social exchange theory that most family social scientists seem to overlook.  For example, our family system is based on an economic model (Smith's) that actually asserts the maintenance of the working class at just above subsistence levels as a necessity for the good of the entire society.

 Smith's Iron Law of Economics states: "A man must always live by his work, and his  wages must at least be sufficient to maintain him.  They must even upon most occasions  be somewhat more; otherwise it would be impossible for him to bring up a family, and  the race of such workmen could not last beyond the first generation."

David Ricardo (1772-1823) was the first scholar to analyze the factors determining prices, rents, wages, and profits with a sense of system.  He noted that nothing  but stark need limits the numbers of people who are propagated and who endure.  As a result, humans will forever live on the verge of starvation and the inevitability of mass poverty.  In Ricardo's view, profits and wages were in flat conflict for the rest of the product.  An increase in profits, other things being equal, meant a reduction in wages; an increase in wages must always come out of profits. Increasing profits necessarily meant an increase in population, leading to an increase in the price of things.  The producer/landowner/capitalist must necessarily reap the rewards.  The natural price of labor is that price which is necessary to enable the laborers, one with another to subsist and perpetuate their race, without either increase or decrease.  Thirty years after Ricardo, John Stuart Mill arrived with his ideas of social utilitarianism. His Principle of the Greatest Good for the Greatest Number of People states: The greatest good is promoted by allowing citizens to criticize their government, to  worship as they please, to choose their own mode of life, and to think and to act as  they choose.

Individually put, the Principle of Utility suggests that utility defines the impact of actions on the individual's happiness.
When people do not find in life sufficient enjoyment to make it valuable to them, the cause of this development is generally because people are caring for nobody but themselves.  Next to selfishness, the principal cause which makes life unsatisfactory is want of mental cultivation.  Mill writes:

Pretty refreshing stuff, in this discussion of selfish human nature.

Blau and Duncan, being the statistically minded sociologists that they were, attempted to quantify equitable social relationships into equations--something like:        Rewards - Costs for A = Rewards - Costs for B

All of the assumptions for Social Exchange still hold here, even though a socialization scheme is at work--the ideas of functional conflict and symbolic conflict used to motivate and teach the individual appropriate behaviors.  Social Norms are gradually created and maintained (evolved) so that the special interests of the individual are largely the same as social interests.

George Caspar Homans - General Propositions of Social Exchange

1. Success proposition - For all actions taken by persons, the more often a particular action of a person is rewarded, the more likely the person is to perform that action.

2. Stimulus Proposition - If, in the past, the occurrence of a particular stimulus, or set of stimuli, has been the occasion on which a person's action has been rewarded, then the more similar the present stimuli are to the past ones,  the more likely the person is to perform the action, or some similar actions.

 3. Value Proposition - The more valuable to a person is the result of his action, the more likely he is to perform the action (positive or negative value).

 4. Aggression/Approval Proposition - When a person's action does not receive the expected reward, or receives unexpected punishment, he will be angry and is more likely to perform aggressive action.  Likewise, when unexpected reward occurs, or expected punishment does not occur, he will be pleased and is more likely to perform approving behavior.

 5. Rationality Proposition - In choosing between alternative actions, a person will choose that one for which, as perceived by him, the value (v), of the result multiplied by the probability
(P) of getting the result is greater.  "If it is rational of pigeons to LEARN to take the shorter of two paths, so it is of men and women" (B.F. Skinner).

 The Self (Person) could interact or not, and so could the Other.  If Self perceives possible reward or profit, he will push toward interaction.  Unrewarding or costly interactions of the past bear on Self's decision. Reciprocity is central to social exchange theory.  Your mother always called it "sharing".  It is the Golden Rule, which states, "if you want someone to do something for you, then do something for them first".  It is also the cornerstone of courtship in the United States and other capitalist economies.  Homans' idea of distributive justice (reciprocity) suggests that when a person gets slighted in interaction, it isn't a really big problem as long as everybody else always gets slighted too.  It is when others do not share in the costs that interactions become unbearably costly.  This also illustrates the basic flaw in socialism, and the amazing popularity of capitalism - basic human greed!

Peter Blau speculates on the idea of Functional Conflict and Symbolic Interaction, as it relates to Social Exchange theory.  Blau is famous for saying, Exchange is a tool of the powerful to extract compliance of others.  Compliance was the same as coercion, or force.

With this kind of calculus in mind, some of the testable principles of Social Exchange theory are revealed:

1. The more services supplied in return for receipt of some valued service, the more power held by those providing valued services.   Translation: In terms of teen lust, the more flowers, declarations of love, affection and  promises supplied by the boy in return for precious few sexual favors supplied by the  girl, the more power held by the girl.
This makes complete sense to teenage boys.

2. The more alternative sources for reward possessed, the less those providing reward can extract compliance.
Translation: In terms of teen lust, the more alternative sources of sexual favors (or reasonable   facsimiles thereof) at the disposal of the boy, the less the girl can extract compliance  (i.e., She: "Why didn't you call me like you said?" He: "I was busy!")

3. The more those receivers can apply force and coercion, the less those providing can extract compliance.
Translation: In the case of the housewife and mother who expends countless hours of personal time in the service of her husband and children, she may have very few options to exercise.     She continues to provide valued service to nappreciative family members because she has no other place to market her services.

 4. The more receivers can do without, the less providers can extract compliance.
Translation: This works for nations, states, corporations, economies and FAMILIES - The one who has the resources is the one with the power.  Conflict is inevitable, as each person's selfish interests cannot simultaneously be met.
Therefore, a constant, and quite functional, power struggle characterizes many marriages.

The Principle of Least Interest is another way of stating the four principles above.  The interaction partner least interested in maintaining a relationship will have the most power in that relationship.  In business relationships, as well as marital ones, rewards and costs are a function of each actor's negotiation skills--both verbal and physical.

Consider the nature of parenting.  Parents do the dictating and ordering around.  Children do the complying. Children are much less interested in compliance than we are. Thus exists the helpless mother or father who is manipulated by children, in spite of superior intellect - until the threat of physical punishment is made.

Collective Exchange and Social Motive refers to a  "latent" function of social exchange in which cultural norms are stabilized as the society evolves into a normal pattern of give and take.  The collective/culture operates out of social/symbolic exchange.

NOT only are things exchanged, such as money, fishes, and beads; but also exchanges of attitudes, values, social conceptions (symbols), all of this serving to integrate the social structure.

The Principle of Social Scarcity and Societal Intervention
Scarcity of any product promotes intervention by society to regulate its distribution on a collective level.  Customs, laws, and rules govern the distribution and trade of scarce resources - all dictating the cost of each item.  The relative worth (in social terms) is embedded in the culture.  How much is love worth, or alienation of affection?

According to Nye's work with SE theory and family relationships, the strategic concepts of social exchange theory are:
Rewards--the pleasures, satisfactions, and gratifications that come from an intimate relationship.
Costs--the pains, dissatisfactions, missed or frustrated gratifications that are perceived as being part of an intimate relationship.

     Typical Costs                           Typical Rewards
     1. Punishments                           1. Praises
     2. Negative reinforcements         2. Positive reinforcements
     3. Uncertainty over the               3. Assurances over the
          nature and extent of                   nature and extent of
          rewards and costs of                 rewards and costs of
          involvement.                              involvement
 + 4. Many, many other costs.     + 4. Many, many rewards.
Add ______________                     _____________
Profit  =  Total Costs          +                Total Rewards

Because of the uncertainty built into human relationships, we tend to compare our relationships to others in proximity and in the culture.  Comparison Level is a standard by which the person evaluates the rewards and costs of a given relationship in terms of what he or she feels is deserved.  Level of Alternatives is the lowest level of outcomes that a partner will accept in light of alternative opportunities to engage in relationships with people other than his or her partner.

The Norm of Reciprocity means that there is a cultural norm in most societies that maintains the importance and correctness of returning the favor.  It is a  form of indebtedness. If a person extends their hand in friendship, except in very narrow and specific circumstances we are bound by the norm of reciprocity to return the gesture by extending our own hand.
Some statements that follow from the Norm of Reciprocity are:

General Sources of Rewards and Costs

If no profitable alternative is perceived as available, the one promising the least cost or highest negative profit, will be chosen for interaction.

Back to Syllabus
Forward to Chapter 8