All Economies Are "Embedded": The Career of a Concept, and Beyond Author(s): BERNARD BARBER Reviewed work(s): Source:

Social Research, Vol. 62, No. 2, The Power of Metaphor (SUMMER 1995), pp. 387-413 Published by: The New School Stable URL: http://www.jstor.org/stable/40971098 . Accessed: 07/08/2012 19:08
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AllEconomies Are "Embedded": The Careerof / a Concept, and Beyond* / BY BERNARD BARBER
Introduction

A his account of thecareerof theconcept of embeddedness in economic has twointerrelated sociology purposes.The first is to make a contribution to the sociology of social scienceby a history of thisconceptthatsuggests1 some of the presenting severalculturaland social structural elementsof the social that have influenced that The second theme, system history. interwoven withthe first the text,is to make a throughout contribution to thetheory ofeconomic and sociology sociology, more generally, to advance towarda by using this history better definition ofwhatembeddedness shouldmean.We shall see thattheconceptof embeddedness is now muchused even economic To take beyond sociology. only four of many availableexamplesfromquite different areas of sociology, it has been usedjust recently, in regardto theexplanation first, of immigration processesin the United States; second, in of social change and the lifecourse; regardto the problems
* A paperprepared forpresentation at thesessions byRichard arranged Swedberg on Embeddedness at theAugust1994American Association I am Sociology meetings. indebtedfor help to ElinorG. Barber,MustafaEmirbayer, Alex Inkeles,Neil J. Richard CharlesTilly, and VivianaA. Zelizer. Smelser, Swedberg, SOCIAL RESEARCH, Vol. 62, No. 2 (Summer 1995)

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in connection of networks withthe analysis and social third, and in an fourth, movements; study of the illuminating in recent of civilsociety Spanishhistory.2 emergence of embeda better theoretical Thus, understanding general dedness should be of wide usefulnessin contemporary To anticipate our mainproposition, such sociological analysis. a bettertheoretical understanding requireshaving a social out below. model such as is system spelled
and theMarket Embeddedness

fromthe factthatembeddedness can be, and has It follows of social and to a considerable been, used variety explain itselfis culturalphenomenathatthe idea of embeddedness in or of cultural and social a context embedded system The centralculturalconceptwithwhichthat of structures. is the conceptof "the market." is interrelated embeddedness can be Indeed, the career of the conceptof embeddedness to correct, thecommon to overcome, seen as one longstruggle I to what have called and others economists tendency among 3 of the market" "theabsolutization (Barber,1977). occurs in two interacting to absolutization This tendency Toand the ideological.4 the intellectual culturalcontexts, an of the market the two contexts these concept give gether, thatmaintain it stillas forceand polemicurgency intellectual economicconcept,even in a modern the primeexplanatory at least, several large societies world where,until recently and anti-market. claimedto be socialist the conceptof the or sciencecontext, In the intellectual to to reification, to absolutization, market sharesthetendency that established concreteness the fallacyof misplaced paraThe adherents. for their have conceptsand digms always are economic of mainstream analysis a magnifipropositions cent intellectual creation,to be admired no less for their for theirconsiderable than powerin understanding elegance

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and controlling the economicstructures and processesof the real world. But these concepts and propositions assumea market economy and its accompanyingrationalizing(or behavior in suchan economy; these economizing) bytheactors have come to be taken for no assumptions entirely granted, no offered as only one longer questioned, longer being alternative different of possible among types economyand different of behavior. It of tends, course,alwaysto be types this way with the basic assumptions of established, highly successful scientific paradigms.The greaterthe success,the morethosewho adhereto the paradigm are caughtup in the excitement and rewardsof using,extending, it, and refining the concomitant blindnessto alternatives. This situation of excitementand high reward has been characteristic of mainstream economicsfor some timenow. When anomalies are pointed in othertimes and placesor evenin the out,either in market are ignored economies, present predominantly they or brushedaside,as "mere"anomaliesusuallyare, untilsome is offered and proveduseful.5 superior paradigm So powerful have the scientific of the market and concepts theeconomizing actorbecomethatwe have seen themspread to othersocial sciences.Here are two notableexamples:An convert was GeorgeHomans,Harvardsociologist, whoin early 1961 applied general"rationalizing" and "market" modelsto all social behavior(Homans, 1961). More recently, the much admiredChicagosociological researcher and theorist, JamesS. a magisterial treatise thatall Coleman,has published claiming behavior can be explainedin terms of "rational choice"theory (Coleman,1990).6 This critical discussion of the absolutization of the market in the intellectual or scientific concept sphere should not be takenas a statement of theabsolutization of theoppositeview, that behavioris never rationaland that the marketis an illusion. Markets existand so does rational but both behavior, in the context of what should be social and only specifiable cultural conditions. Of course,othertypesof economiesand

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behaviors similarlyneed to have their supportingand conditions and cultural socialstructural specified. constraining below. We shallexaminethesealternative types of theabsolutization context thescientific To turnnowfrom we notethatfrom the to itsideological of the market context, intoour present and continuing onward nineteenth era, century in theideological has also been powerful theidea of themarket theinstitutional towhich context. This is thecontext economist, market and ideas about the whose theoretical KarlPolanyi (with in a little we shallbe muchconcerned of economy othertypes TheGreat in times his several refers book, while), very important (1944),as "themarket utopia." Transformation Karl Mannheim the In Ideology and Utopia (1946), sociologist belief thatjustifiesthe defined "ideology"as conservative beliefthat as and order social "utopia" revolutionary existing in order to justify distorts aspectsof social reality important socialchange.UsingMannheim's definitions, Polanyisaysthe a utopia,but now it has was formerly conceptof the market as The becomean establishment powerofthemarket ideology. in times and places.Verypowerful variesin different ideology it became in the twentieth societies century, especially capitalist after WorldWar societies theriseof socialist with lesspowerful Worldduringthe 1930s Western I and also in the capitalist withthefallof the RussianUnion, Veryrecently, Depression. it has become powerfulagain. But not in all quarters.In in hisbook of themarket, to theideology opposition polemical RichardM. Titmusstendsto absolutize on blood donations, alternathe conceptof "altruistic exchange"as the preferred In more tiveto market explicitly exchange(Titmuss,1971). of the market character the ideological quarters, sociological A. of Viviana and research the not blinded has theory concept and money.In all three Zelizeron life insurance, children, and non-market of market the interaction shows Zelizer areas, factors.9 and cultural socialstructural The marketas ideologyjustifiesa numberof important values in our culture, including efficiency, equity, and,

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freedom.However,freedomcan be forand perhapschiefly, and obligations. different People in the opportunities from socialistsocietiesnow have at least mixed feelings formerly to finda job and seek socialsecurity abouttheirnew freedom in a market economy.The marketmay not give themwhat in theirnon-market societies. guaranteed theywere formerly as Polanyi function of theidea of the market, The ideological function. as itsscientific pointedout,can be as important
SomeNoteson theHistory oftheMarketConcept

evidence on the evolutionof the market Some historical the tendency we have is concept helpfulin understanding How did the conceptof tization. describedtowardsits absolu as it is today?Does its the marketcome to be as powerful Have economists shed any lighton its development? history in thishistory, and have theysoughtto see been interested to make the whatsocial and cultural changeswere necessary of market the established the concept paradigm? and thiseffort at understandWhenwe look forthishistory that we find neither the northe history ingamongeconomists, effortexist. The evidence on this point is extensiveand (I.E.S.S.), which prides itselfon general surveysof social sciencefieldsand basic conceptsas well as on discussions of morespecific and wherethelistof economic topics, topicshad members of thefield, been made up bytwodistinguished one, AlbertRees, addressing to economics in general,the himself to econometrics moreparticularly, there other,RobertStrotz, is not a singlegeneralarticleon the conceptof the market. Wherever market is indexedin theI.E.E.S., the reference is to an articleon a technical analysisof some aspect of market structure or process,forexample,to conceptssuch as perfect
or oligopoly, never to the marketas one form of monopoly compelling. In the International Encyclopedia oftheSocial Sciences

institutionalized social exchange.The only treatment of the market as an institution occurs in anthropologist Helen

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Codere'sarticle on "Exchangeand Display."In sum,it is clear fromthe I.E. S.S. that contemporary economists assume the take the market as theirestablished their market, paradigm, "normal"science,and do not raise questionsabout eitherits theoretical connections to otherpartsof the social system or or pastanomalies.10 aboutcurrent of someof thegreatfigures in thedevelNor do biographies of economic more to thegenattention analysis opment payany of themarket. This pointis borneout in suchartieralconcept clesintheI.E.S.S. as those Viner(himself a distinguished by Jacob contributor to economic and the of economics) analysis history on AdamSmith, or byMarkBlaugon Ricardo, and elsewhere in an editedvolume of Marx'swritings two Marxist by sympathetic Rubeland Tom Bottomore Maximilien and scholars, (Bottomore n Similarly in theauthoritative bookbythesocialRubel,1956). ofMarxon themarket. there is no discussion The three volumes on exitself have onlyone ten-page of Marx'sCapital chapter in word "market" is used and that the twice, only chapter change, and thenin passing(Marx,1906). Of course,Marx was interon themarket, and processes estedin manystructures bearing ofvalueand ownership ofthemeansof suchas thelabortheory as a but of the market itself generalformof exproduction, changehe saysnothing. ofeconomics, Adam The sameis trueofthegreatprogenitor in onlyone chapthemarket Wealth (1937),mentions ofNations "ThattheDivision ofLaboris Limited entitled ter, bytheExtent it division of In thisfive-page is the of the Market." chapter, as a formof social not the market labor thatinterests Smith, "Law Of Markets" so-called Even JeanBaptiste Say's exchange. as an institution. nottobe aboutthemarket turns outon scrutiny and said that "market" not use the term himself did simply Say forproducts," areexchanged inexchange, apparently "products in was a market that thereby participating everyone meaning merof thethen-established off.This was contradictory better
intoThe Natureand Causes of the Smith. His long tome, Inquiry ist, Paul M. Sweezy, The Theory (1942), of Capitalist Development

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inexchange, cantilist economics that one gainedonly proposition whatsomeoneelse lost.In present terminology, Say was assertis nota zero-sum ingthatmarket exchange game. One lastpiece of evidenceforthispattern of neglect of the can be found in the concept of the marketby economists economist/social theoristJoseph Schumpeter'senormously detailedand immensely scholarly History of Economic Analysis In all of its there is no sectionon "the 1200 pages, (1954). and theconcept is notevenindexedin a subject index market," thatis 30 pages long. accountforthisunexpected theabsence How,then, finding, of the conceptof the marketfromthe history of economic A and fresh intensive look scholars of thishistory analysis? by is necessary, The presentcannot simplybe read obviously. back intothe past. For now,onlysome suggestions towardan from thesociology of science, are possible. explanation, The economictheorists and ideologists of the period from the late eighteenth and nineteenth centuries did not have a visionof the marketsystem thatwas graduallycominginto of whichlay in the future. It beingbut the fullestablishment was not forthemtheexplicit, full-blown that "utopia" Polanyi called it whenit had alreadyreachedthatstate(indeed,when felt that it had collapsed). Since the Polanyi mistakenly socio-historical process created what we now know as the marketsystem in a bits-and-pieces, unintended incremental, way, the theoristsand ideologistswho were among the actors in that process likewise created only significant theoretical of whatgradually coalesced into a bits-and-pieces structured intellectual creation that still has itsscientific highly and ideological functions. theeconomists from Adam Smith forward had to Moreover, on the ideologicalas well as on the scientific front. struggle Much of theirwork had to be negative, criticalof the old established and paradigms. Old ideologies die hard, ideologies sometimes evenin thefaceof massive evidence to thecontrary. The nineteenth-century economists had notonlyto arguefora

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new theory of rent,forexample,as Ricardodid, or proclaim virtues of the the divisionof labor,as Adam Smithdid, or fortheglories of freedom and laissez-faire, as a propagandize greatmanyof themand theirallies did; theyhad to combat mercantilist theories and ideologiesand variousotherpowerful social ideologiesthatwere not quickly or easilygivenup. in and Structural vast new changes society ideologicaltides werein favorof the economists, of course,but the history of the times shows how slow and hard social, scientific, and were thenthe "new ideologicalchangesare. The economists in in revolutionaries ideas and men," society. Theyhad to fight all theway,and their victories werehardwon.They mayhave more time backward" at theirintellectual and spent "looking adversaries and lesstime"looking forward" to some ideological of market new the grand Utopian reality system. the term"market" Somewhere the along way( post-Marx?), came to be more and more used. It remainsfor historical of as historians scholarshipto describe this development, natural science have described the evolution of various modernchemicaland biologicalideas duringthe eighteenth willhave to look to and nineteenth centuries. Such a history theories thatmade up boththe ideologicaland the scientific of sciencefinally12 have had to thisdevelopment, as historians do for accountsof the work of Lavoisier,or Darwin, or the connections between Pasteur.Such a history, by showing and various otherintellectual, and processes market structures and structures and processes could sociological political, all and powerful socialscience to a moresatisfactory contribute and itself but also economics not around, sociology only too. science political to look at othersourcesof it is important In the meantime, We of themarket in our understanding concept. improvement turn firstto the theoriesand research of an economics Karl economist the CentralEuropeaninstitutional "outsider," of field at the will look later we and briefly burgeoning Polanyi, whathas come to be called "economic sociology."

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theconcepts of the market and of It willhelp in improving if we now and disembeddedmess thereof the embeddedness A better of therelationship understanding proceedindirectly. on the one hand, and social between marketexchange,13 exchange more generally,on the other, is essential for to the both concepts.We can then come directly clarifying and to how it emergedin economic conceptof embeddedness and socialdiscourse. While it has its own special characteristics, economic of the is one type general process of social exchange only All social interaction is determined in part,but interaction. and values.14 Each in norms only part, by type of social witha whole interaction is also and alwaysinterdependent of culturalvariety partly independent social-structural, and personality-structural variablesof the social structural, has both positiveand negative system."Interdependence" means that It any typeof social interaction may be aspects. in the social or hindered either supported byseveralvariables For our all this is to say that concerns, system. present in different economicexchangeis affected social systems not their values and norms but for also, onlyby varying example, by such other social and cultural variables as kinship stratificational institutions, institutions, organizationaland communication institutions, institutions, "knowledge" religious institutions Weber most (as only notably argued), and institutions. As a result, economicinstitutions, governmental that is, those that produce the "material" and "immaterial" of a society wantto use forliving in the goods thatmembers established and changing of the can be structured ways society, in different ways. There are,then, twoproblems thatconfront thesociology of economics.One, what are the different typesof economic that occur not in different historical timesand exchange only in different societiesbut also very much withinthe same

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at different timesand evenat thesametime, and, two, society mixof thedifferent in a whatis therelative types givensociety thatrelativemix. We at a giventime,and whatdetermines of the marketthe have seen in our notes on the history in these havenotbeen muchinterested mainstream economists has been their attention two problems; usefullyengaged elsewhere.Those who have dealt withthese two problems, which on the whole have not been attended to by the and a few are some anthropologists, economists, sociologists, Chief among the institutional economists.15 institutional to whosevaluableand pioneering is Karl Polanyi, economists workwe nowturn.16
Karl Polanyi:The FatheroftheEmbeddedness Concept

In theinterest bothof economic scienceand of anti-market more valuesand ideologies later), (ofwhich, Polanyi proposed, an analytic typology in his major work, Transformation, of three typesof economicexchange: reciprocal, consisting The reciprocaltype of exchange and market. redistributive, of a whole either valuesand norms, occurswhenthe relevant who have thatindividuals or some partof it,prescribe society of virtue their statuses to one another by obligations reciprocal collectivities of particularistic in any one of a variety -family, or communitiesstructures, clan,tribe, give friendships, fealty to and receive fromone another materialand immaterial status virtue ofthese ways, justby patterned goodsin traditionally of reciprocal Classicdescriptions exchangecan be relationships. how of the mother's account found in Malinowski's (1946) in the such as theTrobriands in a matrilineal brother society, South Seas, has economicexchangeswithhis sisterand her son, or how the men of the Trobriands exchange the ceremonial gifts of necklaces and armbands with their in nearbyislands.Reciprocal "kula ring"partners traditional to be is predominantin societieswhere exchange likely are the foci for a such as kinship, structures, particularistic

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economic, religious,and great deal of social interactionSince such structures have been very particularistic political. foci for social in interaction all societies around the important itis clearthat, and now,reciprocal world, historically exchange has been of primesignificance. In the modernworld, in the reciprocal exchange, especially formof gifts, flourishes market Marcel alongside exchange. and a student of Durkheim, in Mauss,the Frenchsociologist his pioneeringand classic work on giftexchange (1925;,17 was one of first to materials, usingprimarily anthropological to the attention of modern social bringreciprocal exchange It is to Mauss,rather scientists. thanPolanyi, thatTitmuss, in his influential The his book, (1971), expressed Gift Relationship intellectual and argument wouldnothave debt,buthisanalysis been changedmuchif he had used Polanyias his intellectual guide. Especiallywithregard to his primary subject,blood but in to all donations, actually regard exchange,Titmuss would like to see reciprocalor giftexchange have much world.He wants that worldtobe enlarged scopein themodern boundtogether, a brother and sister toeveryone else, everyone a and that comes from by community feeling solidarity and not from market he wants reciprocal exchange.In effect, all strangers to be brothers and sisters, each othernot owing free of untainted blood but also, only gifts presumably, else people ned to live a reciprocalexchangesof whatever ofcourse, in this work is beingbothUtopian good life.Titmuss, and social scientist. Indeed, not only in the area of blood but elsewhere, as Zelizer'sbooks show,thereis a donations, deal more good reciprocal exchangein theworldthanmarket absolutists noticeor try to explain. second of theredistributive Polanyi's type economic exchange, exists wherenorms or valuesprescribe thatmembers of type,18 a collectivityor even make contrilocal, national, imperialbutionsof taxesor goods or services to some centralagency, thegovernment butalso charitable like primarily organizations theRed Cross,whichhas theresponsibility either of allocating

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to some common enterpriseof the these contributions or returning like defense or road construction, collectivity, measure and in somewhat them in somewhat different to the originaldonors. Redistributive different proportions but in be seen can manyrelatively simplesocieties, exchange of labor and the public wherethe division also in any society are large and publicwelfare as defense in suchmatters interest tocollect and pool is required somecentral agency enoughthat and the individualresourcesto make the public enterprises possibleand efficient. publicwelfare is redistributive there Thus, exchange in the community describesin the Trobrithat Malinowski enterprises fishing ands. There is also redistributive exchange, as well as Indian in theNorthwest CoastAmerican exchange, reciprocal and have fascinated which anthropologists laymen potlatches alike (Rosman and Rubel, 1971).19 Certainlythere was redistributive exchangein whathas been called the hydraulic in the of ancient Egypt and China. And, finally, empires called "welfare modernworld,not onlyin whatare explicitly like like Sweden,but even in centersof capitalism societies," deal of there is a Britain Great and States the United great sense all redistributive exchange.Indeed, in some important with now welfare societies are countries worldindustrial first It is not without exchange.20 large amountsof redistributive on his own form with his concentration thatTitmuss, interest theredistributive aboutexchange, of utopianism type neglects market and on the and concentrates types, praising reciprocal thelatter. and damning theformer There is, finally,the third of Polanyi's types, market exchange. In this type of exchange,the values and norms in economic each of thepartners that exchangemust prescribe that is, as an economizing, behave like homoeconomicus, individual,consideringonly price, not other rationalizing all buyers dear; treating cheap and selling buying obligations; and honestly.While there has and sellers impersonally the conceptof to psychologize been a disposition sometimes

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of personality, a to treatit as a phenomenon homo economicus, to assume thatwhen Adam Smithspoke of class of motives, to truck,barter,and exchange,"he was "man's propensity motivesor even biologicalinstincts imputingpsychological it is essentialto ratherthan speakingmerelydescriptively, understandthat marketexchange behaviorin the relevant is prescribed situations by values and norms,regardlessof on a definite that it and motivation, dependsforitspossibility in the social and cultural setof socialstructural arrangements from Durkheim forward the Thus, greatsociologists system. have stressed that the market cannot exist withoutthe of contract, and that what Durkheimcalled "the institution element in contract"is an indispensable non-contractual and processes. of market exchange structures component is institutionalized and Market onlyifhonesty exchangeworks in either or the ifdeviations from itare sanctioned, informally whole law of contract. Maine was at the courts getting through the same pointin his dictumthatprevioussocietaltypeshad that is, of particularistic ties and been societiesof status, is a society of contract. and thatthemodernsociety obligations, and redistributive Status prescribes typesof exreciprocal the market. prescribes change;contract market witha exchangeis interdependent Beyond values, and cultural variables that whole set of social structural constitute modernsocialsystems: universalequity, efficiency, of person and group, widespreadeducation, ism, mobility rules of property, a government to regulate specified willing economic viable exchange just farenoughto makethemarket and so forth. There is no need to go intoall and no farther, thisin detailhere. A good deal of thisanalysis existsalready, but what is lackingis systematic and explicitsocial system based on empirical research. It is also whatis necessary analysis for the other types of economic exchange presented by Polanyi. It shouldbe clear fromwhathas been said about Polanyi's different analytic typesof economicexchangethateven the

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modern world is not exclusivelya world of markets. itis a mixof all threetypes, becauseeach typehas Concretely, and its place in the differentsets of social-structural elementsthat make up our actual social cultural-structural butvery difficult to It wouldbe an interesting exercise systems. what the amounts of the to calculate even different rough try in of countries economic exchange variousfirst-world types How dominant is market are. exchange? actually of the different WhilePolanyi's analysis typesof economic as we have is seen, he is less helpful, exchange veryvaluable, of whenhe goes on to discussthe matter indeed misleading, describes the market their differential embeddedness. Polanyi the othertwotypesof economicexchange as "disembedded," and as more "embedded" in the other social-structural As shouldnowbe clear, elements of society. cultural-structural the connection of all three has been said about after what types and of economicexchangewithsome set of social structural in which in thesocialsystems elements cultural occur,our they to Polanyi's, is thatall economies contrary strong proposition, embedded. are inescapably Whilethe modernmarket may appear to be more system somewhat fromothersocial system differentiated structures, from the diverts attention this moreconcretely separate, image with and complexinterdependence basic factof its multiple "disembedded" the market therestofthesocialsystem. Calling attention leads analytic away from just whatthisinterdepenwith coterminous is considered as themarket denceis. Insofar from it leads attention all economicexchange, away,further, and of reciprocal amount of some existence for the looking and economies market redistributive exchange in so-called and how the threetypesco-exist away fromunderstanding* as as well kind of a false market It givesthe interact. analytic concreteindependence.And this image of the marketmay is notonly error:thatthemarket common lead toyeta further but also thatit is the part of and independent disembedded of the This absolutization the rest. all determines which society

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thisimplicit leads on to the analytical market, reductionism, of concrete errors the market and its close and seeing rational theoretical choice,as thesole explanations companion, of socialbehavior. AlthoughPolanyi'swork is probablythe most frequently socialscienceusage of theconcept citedsourceforpresent-day of embeddedness, it shouldbe notedforthe historical record did notfeature of howthisidea has developedthatPolanyi the in his The term is not Transformation. concept masterpiece, indexed and, indeed, is used on onlytwo occasions.At one point, in his chapter on "The Evolutionof the Market," "Instead of typeof economy, Polanyisays about the market in embedded social social relations relations, economybeing are embeddedin theeconomicsystem" 1944,p. 57). (Polanyi, was concerned about the between Basically, Polanyi difference the older historicaleconomic systemsof reciprocity and and theemerging redistribution not about market, developing and highlighting a new concept like embeddedness.A few pages later,in his secondand lastuse of the termembedded, he again emphasizesthe difference betweenthe old and the "In new economic the vastancient of emerging system: systems acts of barteras well as local marketswere redistribution, but no more thana subordinate trait. The same is true usual, where reciprocity prevails:acts of barter are here usually embedded in long range relations implyingtrust and ..." (Polanyi, confidence as evidenceof 1944,p. 61). Finally, thelackof centrality of theembeddedness conceptin Polanyi's a fewpages later, whenhe might have used theterm, analysis, insteadhe says"absorbed":"... neverbeforeour own time weremarkets morethanaccessories of economic life.As a rule the economic systemwas absorbed in the social system" (Polanyi, 1944, p. 68). CertainlyPolanyi had no explicit of a socialsystem in which theeconomy was always conception in one, but only one, part,a part that was interdependent different with the several other essential social structural ways and cultural socialsystem. partsof anyparticular

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In his secondvolume,Trade, a collaborative and interdisciwith two other editors and several volume contributors, plinary the situationis somewhatdifferent. Although the distinR.M. in hisenthusiastic Columbia Maclver, sociologist, guished Foreword ("Here is a book thatmakesmostbooksin itsfield seem obsoleteor outworn"), says nothingabout embeddedand is ness,thatconceptis used byseveralof thecontributors no there is indexed. However, conceptualimprovecarefully to mentin theseuses. As an exampleof the lack of attention the concept of embeddedness,we note that one of the ConradArensberg of Columbia, theanthropologist co-editors, of to a different scheme devoteshis essay analysisof quite fromPolanyi's. The second co-editor, the economicsystems attention to the book economist HarryPearson,paid major thathadjust appearedbyTalcottParsonsand NeilJ. Smelser,
A Studyin theIntegration and and Society: of Economic Economy

Parsons and Smelser for SocialTheory (1956). Pearsoncriticized butacknowledged that and a-historicity, abstractness excessive had takenvery it was a volumethatthe Polanyienterprise from Columbiaand a variety The other contributors, seriously. in theUnitedStates and Canada, academic institutions ofother but in brief not in embeddedness interested were primarily of "tradeand empire"economicsystems accounts substantive in such diverse earlier social systemsas the Babylonian, Greek, Aztec-Maya, Dahomey,Berber, and Mesopotamian, had any large (Asian) Indian. None of these contributors and about economic in systematic interest largersocial theory systems. in The one verydefinite exceptionto thislack of interest but still theorywas containedin the important systematic then a K. Terence contribution young Hopkins, by neglected latera long-time at Columbia, of Sociology Professor Assistant in his work on world colleague of Immanuel Wallerstein of of branch the State University at the Binghamton systems New York. Hopkins' little treatise, "Sociology and the and View of the Economy"(Polanyi, Substantive Arensberg,

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and unique in the Pearson,1957,pp. 271-306), was analytical volume. He stressed that all societies had institutions to theessential economicfunction of providing, distribperform and but that this function took a allocatinggoods, uting, of institutional forms.21 This variety was limitedand variety with of was inter-related other the essential of functions always the social system.Hopkins was the only contributor to the of a social analytical importance emphasize generalized He his intellectual debts to Talcott acknowledged system. whomhe was also in some disagreement22) Parsons(with and to RobertK. Merton, his Columbiamentor, who, along with Paul F. Lazarsfeld, also of the Columbia SociologyDepartment,had strongly encouraged the Polanyi Trade project. of the economythatsaw it as a Hopkinsrejecteddefinitions result of the division of labor.He also rejected whathe called actionposition" and insisted the "rational on the importance for sociologicalanalysisof the economyof the concept of "cultural values,"here callingon Max Weberas his authority, notParsonsto whomhe might also have referred. In general, he criticized the commonpractice of absolutizing the market and thereby all other of economic as treating types system meredeviations from or appendagesto themarket. There is a in deal more good Hopkins' chapter, though not on embeddednessdirectly, that should be of great interest to current workin economic sociology.
SomeSocial Structural and CulturalSourcesofPolanyi s Work

An adequatedetailedaccountof thevarioussocialstructural and culturalsourcesof Polanyi'sworkawaitsits sociological historian. The presentaccount is only a beginningeffort. Polanyi(1886-1964) was a CentralEuropean,bornin Vienna but raised and educated in Budapest.23 He was part of that remarkable cohortof Hungarianswho became distinguished and social scientists mathematicians, philosophers, physicists,

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in the 1920s but in to the West,starting whentheymigrated Hitler's and in the 1930s numbers 1940s,after large especially rise to power in Germanyand his takeoverof the various of this Like the othermembers CentralEuropean countries. cohort,Polanyiwas eruditein ancientand modernhistory, variation. senseof historical witha strong changeand societal about the marketin the way many He was not provincial and were.Fromexperience economists and British American from Karl Mannheim'swork on the subject (Mannheim, withthe ideologicalaspectsof social he was familiar 1946),24 to analyze fromMannheim's he borrowed sociology thought: and of nineteenththe the "utopian"aspectsof development and actionaboutthe market. twentieth-century thought as his fellowCentralEuropean In the 1930s, foreseeing, he Hans Zeisel putsit,"the Europeancataclysm," biographer and the in at touch Oxford wentto England,wherehe was the personsor work witheither London Schoolof Economics and oftheanthropologists Radcliffe-Brown, Firth, Malinowski, Thurnwald,all of whose books had strongand extensive economiesof their"primitive" accountsof the non-market influenced He was especially societies. by Malinowski. in Transformation, tellsus, in his Acknowledgements Polanyi in Englandbut mostly thatthisbook was begun and finished in the United States,where he went in 1941 after written he was World War II actuallybegan. During the writing, in located from 1941-43 at Bennington Vermont, College that FoundationFellowship to a Rockefeller thanks Program was set up to rescue Germanand CentralEuropeanJewish scholarsfromHitler.As a ResidentScholar at Bennington, In 1943, was freeto devotefulltimeto Transformation. Polanyi in 1947 to be a Visiting he wentbackto Englandbutreturned His mission of Economicsat ColumbiaUniversity. Professor he was to extendthe workdone in Transformation. Although he was Economics to the attached was nominally Department, and received encouragedby his sociologist warmly especially Paul Lazarsfeld,and Robert colleagues, Robert Maclver,

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Merton. He was supported, in part, during the period Behavioral Sciences 1947-1953 by the newly-established whichwas directed at The Ford Foundation, by the Program whowasattracted BernardBerelson, bytheexplicit sociologist, had that set Polanyi up fortheTrade interdisciplinary program of the BehaviorSciencesProgram officer project.The staff was thesociologist, for the Polanyi project directly responsible fromHarvard,where X. Sutton, who had just arrived Francis of TalcottParsons' under the influence he had come directly in economicsand sociology, co-authored The stronginterest and a with course American Business Creed (1956) taught joint that was of the EconomicsDepartment James Duesenberry in and economics. The one of the first sociology probably economistshad mostlyleft their interestin institutional who were its new economicsbehind; it was the sociologists limitedthemselves to sponsors.However,most sociologists as behavior and such work-place organization; specialtopics, they showed little interestin the more general place of in largersocialsystems. economic systems
Back to Embeddedness Briefly,

Two examples of the different responses to Polanyi's of embeddedness can to of the concept help bringthe history careerof thisconcept up to date.The first exampleis from my own work.In the mid-1970s, I was invited to a conference on "Markets and Morals"forwhichI preparedthepaper citedin footnote different it made thetwomain 2. In somewhat form, of economic pointsof the presentpaper: (1) thatthe history a revealed even lack thought surprising, stunning, of attention to theinstitutional character and socialsystem of the supports and (2) in a section with embeddedmarket; dealingexplicitly ness,thatthereare different typesof economiesbut thatall economiesare embedded,thoughin different ways,in the different socialsystems in whichtheyoccur.Perhapsbecause

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thisarticledid not appear in a major sociology journal, but I think, because sociologists are not receptive moreprobably, thisarticle has not been muchcited, to socialsystem analysis, the few occasions whenithas been with critical intent. On even cited, the citationhas been to its firstpoint, the lack of in the history of the marketto its institutional attention and culturalsupportsand characterand social structural constraints.25 The second example is the 1985 articleby the veryable "EconomicActionand Social Mark Granovetter, sociologist Structure:The Problem of Embeddedness"(1985), which work.Knownin his early Polanyi's immediately acknowledges in recentyears to network workforhis contribution theory, and prolific has becomean important contributor Granovetter to the rapidly developing field of economic sociology. article has been much cited in this newly Granovetter's field.26 developing article thathe insists on It is surely a virtue of Granovetter's the embeddednessof all economicaction in non-economic thatGranovetter It is also a virtue socialrelations. knowledgewho of some economists nowcall criticizes the keywritings ably economists"but are not at all themselves"institutional in However,fromthe satisfactorily sociological theiranalysis. has Granovetter's article, analysis pointof viewof the present of the no It shows defects. imporunderstanding important in whichall economiesare tanceof the largersocial systems modelsof economic located.It does not deal withalternative and such as thosethatPolanyicalled "redistributive" systems, redistributive not deal with the It does systems. "reciprocity" market behaviors existalongside that behaviors and reciprocity his As is not surprising, in modernsociety. earlyand given Granovetto network and commitment basictraining analysis, of ter argues that"mostbehavioris embedded in networks 27 relations..." (Swedberg,1990, p. 504). interpersonal Granovettersays that economic Phrasing it differently. and forhimsocial is embeddedin "socialstructure," behavior

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means only networks of interpersonal structure apparently There is no specification of the several different relations. thatmake up the largersocial social and culturalstructures of kinship, Where have the social structures stratificasystem. tion, gender, age, the economy,the polity,organizations, and communications education, disappearedto?And itis even thatGranovetter has no independent moreimportant analytic in nor for the several different for culture place general thatcombinewiththe socialstructural cultural structures and to make structures the social To up larger system.28 personality as science,ideology, where have such idea/symbol systems and art language,law,values,literature, philosophy, religion, in sociology, ecodisappeared?Like many other sub-fields willdo better withsucha socialsystem nomicsociology model than with the limitedusefulnessofferedby Granovetter's model. "network of interpersonal relations"
Conclusion

The careerof Polanyi's conceptof the variableembeddedness of economicsystems showshow difficult it oftenis for to make theirway. Polanyi's useful theoretical innovations workcould long since have been applied, tested,extended, have been too involved and refined. in Economists, however, recentdecades with their own rationalchoice models and econometric to pay muchattention to Polanyi. methodologies there has been a mostvisibly in Indeed, trend,exemplified theworkof Nobel Prizewinner to extend these Becker, Gary absolutizedeconomic models to what have formerly been establishedas mostlynon-economic areas like the family. have been more favorable to Polanyi's Sociologists generally stilldo not, as he did, see economic ideas, but theymostly in a social context. Their work, oftenvaluable systems system nonetheless,is limited to bits and pieces of the going economicsystem.It is the strongtheoretical thesisof this

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paper thatthe mostdesirablenew stagein the careerof the should be to see thatall typesof conceptof embeddedness economiesare embedded in complex larger social systems; culturaland personality thatthe social-structural, structural, should be specified;and that of such systems components withthe economicsystems that are but theirinterrelations one part of the social systemtherebyshould be better or changed. understood and, as desired,eitherstabilized Notes:
1The word "suggests"is used, advisedly,to indicate the character of thishistory. non-definitive preliminary, see Portesand Stepic,1993. In an interview On immigration, in TheChronicle Education with Portes 1, 1993,p. ofHigher (September the Portes and Stepic book as the interviewer describes A-ll), of values, how economicactionis embeddedin "a context showing such choices more than a that makes and loyalties, relationships is rational decision Portes himself of quoted making." process simple of economic as saying,"Nowhereis this kind of 'embeddedness' of seen as in the processof economicadaptation actionso clearly immigrants." see Elder,1994.On networks On socialchangeand thelifecourse, Adam and Paulsen, 1993. see Me and social movement analysis, 1993. see Perez-Diaz, from the field of sociology, political Finally, laterin our ofthispaperwillbe useful substance The theoretical accountof thecareerof theconceptof embeddedness. present I am following In thisand some of the succeeding discussion, in Barber,1977. theanalysis and materials in scientific Of course,on anomaliesand paradigms work,the classicsourceis Kuhn,1962. 6 In the choice see the rational sociology, specialfieldof political 1987. of theory Hechter, It is worth specialnoticethatalthoughPolanyiis perhapsthe he did citedsourceforthe idea of embeddedness, mostfrequently and did not devote much not considerit his centralcontribution was paid to it by his to it in his book. More attention attention followedThe Great that book in Trade and the Empire colleagues
Transformation.

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For a good discussion lies elsewhere. contribution really Polanyi's and majorcontributions to socialscience, see of Polanyi's important Blockand Somers,1984. and processes ofthefunctions, Fora different structures, theory for of ideology,see Barber, 1971. (This volume was a festschrift TalcottParsons.) 9 See Zelizer, 1979; 1985; 1994. 10For an excellent, of several account recent diverse atup-to-date see Zelizer,1988. Zelizerdisabout"themarket," to theorize tempts to thisliterature as Jean-Christophe contributions cussessuch recent Louis Fred Granovetter, Dumont, Block, StephenGudeman, Agnew, Donald Robert Albert Holton, Sen, Hirschman, McCloskey, Amartya and Harrison White. Lester Thurow, Swedberg, ofthis kind isSwedberg, 1993a. contribution Another very important is especially valuable. Its sixteen page bibliography 11In Bottomore's of Marxism, thereis no listing of Dictionary in theindex. "market" indicates thatfora long time,indeed until The word"finally" of like the history of economic the science, quite recently, history of its In both radical view of the asserted a autonomy subject. analysis, to was this claim to radical cases, autonomy, "non-embeddedness," and For a fuller their used to validate extension, legitimacy, power. discussionof the science case, see Barber, 1990, especiallythe and PartI, Section1. Introduction 13 of sociology Exchangeis,of course,onlyone partof a complete institutions. economic willhelpto putto resttheoft this statement It is tobe hopedthat analysisassumes that values and repeated error that functional of socialinteraction, norms are theonlydeterminants and thatitalso For a recentexample only of this now assumes value-consensus. see Favell,1993,especially ancient error, pp. 591-92. 1D For the anthropologists, see Codere, 1968; Firth,1929; and 1946. For the sociologists, see Parsons and Smelser, Malinowski, 1956. Parsonswas much influenced withwhomhe by Malinowski, studiedat the London School of Economicsin the 1920s,and he and Firth'sworksas reading to the assigned both Malinowski's in his Harvardcourseon Comparative students Institutions during the 1930s. On Polanyi, see Polanyi, 1944 (hereafter citedas Transformation) and Polanyi, and 1957 citedas Trade). (hereafter Arensberg, Pearson, For an up-to-date, and based theoretically superior, empirically

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discussion of gift exchangein the modernworld,see Zelizer,1994, 3. Chanter 18For a usefulelaboration of thistypeof exchange, see Smelser, 1959. 19This is an excellent and summary of materials aboutthe analysis potlatch. 20There of of welfare is, course,now,in responseto the growth an social science literature notonly redistribution, exceedingly large in generalbut also about specific on welfare societies examplesand features of thegenus. specific also stressed theimportance ofinstitutions in hisconcept Polanyi of "instituted For a recent elucidation and use of thisterm process." in hervery socio-historical account of the of interesting development see 1993. citizenship, Somers, The concept of "institution" is central forTalcottParsons.See his previously unpublished paper (1990) witha prologueby Charles Camic and commentaries C. by James Coleman and Jeffrey Alexander. Forexample, he felt thatParsons had come"perilously close"to the differences between economics and and away defining sociology, thathe tendedto limit theforms of economic to the market process form. See Polanyi, and Pearson,1957,especially Arensberg, p. 274. 23For thematerial thatis availableon Polanyi's lifeand socialand intellectual see Hans Zeisel's1968 article on Polanyi in background, Block and Somer's 1984 article,which has further biographical references.Finally,see Drucker, 1979, chapter entitled "The Polanyis." 24This is,of course,a translation of theearlier, German-language book thatPolanyi knew. beforehis death,Talcott Duringa visitI had withhimshortly Parsons warmapprovalof thisarticle. expressed 26For one inclusive and generalviewof the field,see Swedberg, 1993b. This book is the product of a seminar organized by at the RussellSage Foundationunder its programin Granovetter workis citedmanytimes economics and socialscience. Granovetter's in in thesixteen the volume. different essays interviewed See also Swedberg,1990. One of the sociologists so anotherstatement of his ideas on hereinis Mark Granovetter, is available. embeddedness
the International Encyclopedia of the Social Sciencesand, better still,

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27For a butalso powerfully critical discussion generalappreciative and 1994. see of network Goodwin, Emirbayar 28For a analysis, of the forsucha modelof thesocial necessity presentation with some thirty essaysexemplifying examplesof together system, of theoretical and empirical how it has been helpfulin a variety see Barber,1993. problems, on embeddedness and generalsocial statement recent For another a include substantive modelof the which does however, not, theory, see Fararo,1993. socialsystem,

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