Embedding Polanyi's Market Society

TLDR: A sociological alternative to the neoclassical conception of the market has been proposed in this paper, where a sociological foundation is laid for the core of economic theory, the concept of market.

Abstract: Karl Polanyi remains one of the most trenchant critics of neoclassical economics. His "embeddedness" thesis, which holds that all economic activities and institutions are enmeshed in social relations and institutions, offers a sound theoretical basis for economic sociology. None- theless, he fails to embed the market concept. This theoretical lacuna man- ifests itself in his classic account of the rise of market society in England, The Great Transformation ((19441 1957), where he neglects to consider institutional diversity and discontinuities in English commercial develop- ment. Polanyi's embeddedness thesis can be taken to its logical conclusion; that is, even the market can be embedded. "Markets" can be treated as social networks or organizations constituted by traders. I offer as an empiri- cal illustration a brief case study of the rise of "market society" in England. Karl Polanyi remains one of the most cogent critics of neoclassical economics.1 He emphasizes the embeddedness of economic activities and institutions and the historical relativity of economic concepts. Nonetheless, he leaves the core concept of the market unchallenged. Despite his embeddedness thesis, market exchange remains a disembedded concept. In this paper, I propose that his argument should be taken to its logical conclusion-that all economic activities and institutions are embedded in social relations. A sociological foundation should be laid for the core of economic theory, the concept of the market. The project is to analyze the nature of markets, hitherto an unquestioned assump- tion, as historically variable social organizations constituted by traders. Thus, my critical examination of Polanyi's economic sociology serves as a step toward constructing a sociological alternative to the neoclassical conception of the mar- ket. The organization of this essay is as follows. First, I delineate the main contours of Polanyi's economic sociology. I stress that he accepts the neoclassical concept of the market and thereby cedes the analysis of contemporary "market" econo-