Dr Maciej Kassner

Faculty of Hummanities,
Nicolaus Copernicus University in Toruń
maciej.kassner@gmail.com

Karl Polanyi and Socio-economics: The

Problem of Embeddedness.
The problem of embeddednss

1. Karl Polanyi and the origins of the term embeddeness

1944 The Great Transformation
1957 Trade and Market in Early Empires
1975 Livelihood of Man

2. the problem of embeddedness:

Concept of embeddedness is being used to indicate what is
disinctive in sociological or socio-economics apporach to
economic matters but different and conflicting interpretations of
the term casts doubts as to whether any consensus on
methods and purpose has been achieved.
Solution to the problem of
embbeddness
• different understandings of embeddedness should be
seen as alternative tools
(and not as an alternative ontological claims about the
nature of economy in general or contemporary
capitalism in particular)

• common critical intention: criticism of mainstream

economics and contemporary market society
Structure of the presenation

1. Embeddedness in different social disciplines

a) work of Polanyi group in economic antrhopology

b) new economic sociology

c) institutional political economy

2. New conflict of faculties?

3. Attempts at reconciliatin
a) cultural vesrsus institutional embeddedness

b) pragmatic interventions: concepts as tools of inquiry

4. Conclusion: Embeddedness and socio-eocnomics

Formal versus substantive meaning of
economics
1. Fromalist approach to economy: neoclassical economics. It can
be applied only to modern or „disembedded” economy.

2. Susbstantive approach to economy: institutional analysis. It can

be applied to premodern or „embeddded” economies.

Result: confusion between mehtodology and theory of

modernity.
Polanyi, K. (1957) ‘The Economy as Instituted Process’. In Polanyi, K., Arensberg, C. M. and Pearson, H.
W. Trade and Market in the Early Empires: Economies in History and Theory, Glencoe, IL, The Free
Press.
Economic Anthropology: Cultural
Precondtions of Market Society
1. Polanyi Group: Paul Bohannan, George Dalton, Walter Neale, Daniel Fuseld,
Marshal Sahlins and others

2. Main claims:

a)forms of integration: redistribution, reciporcity and contracted exchange

b)market place vs market system

c)factors of production (land, labour, money) outside markets

3. Capitalism as disembedded economy (embeddedness as historical and ethical

concept)
 Economic Sociology: Social Construction of
the Market
1. Key theorists: Jens Beckert, Bernard Barber, Greta Krippner,
Kurtuluş Gemici,

2. Main claims:

a) all economies are embeddeded

b) markets as embedded social constructs

3. Conclusion: always embedded economy (embeddedness as

methodological concept)
Institutional Political Economy: Political
Dynamics of Capitalism
1. Key theorists: Mark Blyth, Wolfgang Streeck, Fred Block,

2. Main claims:

a) double movement: economic liberalism vs social protection

b) always embedded economy (Block) vs dialectics of dis-

embedding and re-embedding (Streeck)

3. Conclusion: fluctuations of embeddedness (embeddedness

as political variable)
New Conflict of Faculties I: Embeddedness
and Modernity
The physical notion of a ‘sphere’ is a misleading way of thinking about
economy and society because neither is a physical entity with a definite
shape and boundary; rather, they are the accumulation and patterning
of social relationships in a given time-space regionalization (…) Strictly
speaking, economy and society as bounded ontic entities do not exist.
As a result, one cannot be embedded in the other, nor can the
embeddedness level change over time.

Source: Gemici, K. (2008), ‘Karl Polanyi and the Antinomies of Embeddedness’, Socio-
Economic Review, 6,
New Conflict of Faculties II:
Sociologistic Fallacy
This same result is obtained by the “sociologistic fallacy” consisting in
the thesis of the “always embedded economy.” Again, the “specific
difference” characterizing the market system, and therefore the most
general institutional traits of our society and its dynamics, tend in this
way to be excluded from the horizon of social sciences. Will future
historians consider this elusive attitude, and the misunderstanding
concerning Polanyi’s theoretical achievements, as a revealing aspect of
our age of neoliberal consensus?
Source: Cangiani, M. (2011), ‘Karl Polanyi’s Institutional Theory: Market Society and Its
“Disembedded” Economy’, Journal of Economic Issues, vol. 45, issue 1,
Embeddedness and process metaphor
Economy as instituted process:

a)Veblenian legacy: metaphor of process as an alternative to

equilibrium

b)holistic institutionalism: all economies and all types of

economic action are embedded
Veblen, T. (1898), ‘Why Economics is not an Evolutionary Science? ’, The Quarterly Journal of
Economics.
Institutional Embeddedness of Modern
Capitalism
a. broad vs narrow meaning of embeddedness

b. expansion of markets at the expense of other social forms

of integration

c. valid distinction: market-system versus market place

Cultural Embeddedness of Modern
Capitalism: The Idea of Market Culture

a.the idea of market culture (a.k.a. obsolote market mentality

or economistic fallacy)

b.neoclassical economics can be both culturally specific and

wrong about markets
Pragmatic Intervetion: Concepts as
Tools of Inquiry
a. different interpretations of embeddedness are tools for
differrent inquiries rather than quasi-ontological statements
about the character of economy in general or contemporary
capitalism in particular

b. different meanings of embeddedness can not be reconciled

into a single theoretical framework (but there is no need for
that)
Conclusions

A. EMBEDDEDNESS: DIFFERENT TOOLS,

COMMON PERSPECTIVE

B. MORE DIALOGUE BETWEEN VARIOUS SOCIO-

ECONOMIC TRADITIONS IS NEEDED
Thank you