• In market societies, in contrast, economic activities have been rationalized, and economic action is “disembedded” from society and able to follow its own distinctive logic,
    captured in economic modeling.

  • [1] Subsequently, the term “embeddedness” was further developed by economic sociologist Mark Granovetter, who argued that even in market societies, economic activity is not
    as disembedded from society as economic models would suggest.

  • Polanyi argued that in non-market societies there are no pure economic institutions to which formal economic models can be applied.

  • For example, religion and government can be just as important to economics as economic institutions themselves.

  • (Granovetter 1985:487)[2] Granovetter applied the concept of embeddedness to market societies, demonstrating that even there, “rational” economic exchanges are influenced
    by pre-existing social ties.

  • The market is only one amongst many institutions that determine the nature of economic transactions.

  • Economic decision-making in such places is not so much based on individual choice, but rather on social relationships, cultural values, moral concerns, politics, religion
    or the fear instilled by authoritarian leadership.

  • A substantivist analysis of economics will therefore focus on the study of the various social institutions on which people’s livelihoods are based.

  • Granovetter argued that the neoclassical view of economic action which separated economics from society and culture promoted an ‘undersocialized account’ that atomises human


Works Cited

[‘1. Plattner, Stuart (1989). Economic Anthropology. Stanford, CA: Stanford University Press. pp. 11–15.
2. ^ Jump up to:a b c Granovetter, M. (1985). “Economic action and social structure: the problem of embeddedness”. The American Journal of Sociology.
91 (3): 487. doi:10.1086/228311. S2CID 17242802.
3. ^ Jump up to:a b Polanyi, K. (1968). The Economy as Instituted Process. in Economic Anthropology E LeClair, H Schneider (eds) New York: Holt, Rinehart and Winston. p. 126. ISBN 978-0-03-071795-6.

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