The ‘other side’ of embedded ness: A case‐study of the interplay of economy and ethnicity

Abstract

As interest in ethnics and their entrepreneurial activities has grown in recent years, sociologists have come to emphasize the importance of ethnic social structures as the source of actions propelling business growth. In a sign of convergence with the ‘new economic sociology’, recent literature suggests that embeddedness in ethnic networks and communities leads to cooperative, if not conformist, behaviour among ethnic economic actors. This article looks at the ‘other side’ of embeddedness, through a case‐study of African‐American, Caribbean, Korean and white construction contractors in New York City. I argue that, in construction, the embeddedness of economic behaviour in ongoing social relations among a myriad of social actors impedes access to outsiders. Embeddedness contributes to the liabilities of newness that all neophytes encounter, breeding a preference for established players with track records. However, the convergence of economic and ethnic ties has a further baneful effect, since outsiders also fall outside those networks that define the industrial community. While African‐American, Caribbean and Korean outsiders all experience these barriers in similar ways, they differ in the adaptive strategies that they have pursued. African Americans appear to be most disadvantaged, in part because they have been the most exposed to the social closure that results from the mobilization of white ethnics’ social capital. By contrast, Caribbeans and Koreans entered the labour market in societies where racial domination played little or no role in labour market outcomes ‐ a considerable asset since construction skills are transferable from one society to another. The Koreans appear to be the most embedded in ethnic networks, through which they secure jobs and skilled labour, though class factors play a role here as well and even the Koreans must reach out beyond the ethnic community for a clientele. By contrast, ethnic solidarity operates less powerfully among the black contractors, who are tied to a community where intra‐ethnic diversity and internal competition have grown as a result of immigration. In the absence of an ethnic market, black'entrepreneurs turn to the state, whose requirements and dependence on union labour expose black builders to risks from which their Korean counterparts are sheltered.