Trade and Market in the Early Empires: Economies in History and Theory

Development Theory and the Constitution of Market Society: A Polanyian View
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Trade and Market in the Early Empires Economies in History and Theory by Karl Polanyi

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US Economic History 1 — How Mercantilism Started the American Revolution

Satisfaction Guaranteed! Book is in Used-Good condition. Pages and cover are clean and intact. Used items may not include supplementary materials such as CDs or access codes. May show signs of minor shelf wear and contain limited notes and highlighting. The outstanding discovery of recent historical and anthropological research is that man's economy, as a rule, is submerged in his social relationships.

He does not act so as to safeguard his individual interest in the possession of material goods; he acts so as to safeguard his social standing, his social claims, his social assets. He values material goods only in so far as they serve this end. Neither the process of production nor that of distribution is linked to specific economic interests attached to the possession of goods; but every single step in that process is geared to a number of social interests which eventually ensure that the required step be taken.

These interests will be very different in a small hunting or fishing community from those in a vast despotic society, but in either case the economic system will be run on noneconomic motives. Polanyi, 65, emphasis added.

A self-regulating market demands nothing less than the institutional separation of society into an economic and a political sphere. Such a dichotomy is, in effect, merely the restatement, from the point of view of society as a whole, of the existence of a self-regulating market. It might be argued that the separateness of the two spheres obtains in every type of society at all times.

Such an inference, however, would be based on a fallacy. True, no society can exist without a system of some kind which ensures order in the production and distribution of goods. But that does not imply the existence of separate economic institutions; normally, the economic order is merely a function of the social order.

Karl Polanyi and the Law of Market Society | SpringerLink

Neither under tribal nor under feudal nor under mercantile conditions was there, as we saw, a separate economic system in society. Nineteenth-century society, in which economic activity was isolated and imputed to a distinctive economic motive, was a singular departure. According to Polanyi, there is a set of assumptions regarding the state and its policies, and all measures or policies that interfere with the workings of the market are to be avoided.

Prices, supply and demand — none of these should be stipulated or regulated; the only valid policies and measures will be those aimed at ensuring that the market regulates itself, thus creating the conditions for it to be the sole organizing power in the economic sphere Polanyi, ; Stanfield, Conversely, separation between politics and the economy is the very proof of disembeddedness. I believe this is what happened with NES. But more on this later. Swedberg [, ] does not make a single reference to Polanyi in his bibliography.

Let us look at a long but telling — actually the most telling — quote regarding the concept of dis embeddedness :. The conceptual tool with which to tackle this transition from namelessness to a separate existence [of the economy] we submit, is the distinction between the embedded and the disembedded condition of the economy in relation to society.

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The disembedded economy of the nineteenth century stood apart from the rest of society, more especially from the political and governmental system. In a market economy the production and distribution of material goods in principle is carried on through a self-regulating system of price-making markets.

It is governed by laws of its own, the so-called laws of supply and demand, and motivated by fear of hunger and hope of gain. Not blood-tie, legal compulsion, religious obligation, fealty or magic creates the sociological situations which make individuals partake in economic life but specifically economic institutions such as private enterprise and the wage system. The vast comprehensive mechanism of the economy can be conceived of working without the conscious intervention of human authority, state or government.

This, then, is the nineteenth century version of an independent economic sphere in society. It is motivationally distinct, for it receives its impulse from the urge of monetary gain. It is institutionally separated from the political and governmental center. It attains to an autonomy that invests it with laws of its own.

In it we possess that extreme case of a disembedded economy which takes its start from the widespread use of money as a means of exchange. Polanyi, , my emphasis. The economic or productive system was here entrusted to a self-acting device. And the author further contrasts capitalist society with primitive and archaic societies:. As long as these latter forms of integration [ i. The elements of the economy are here embedded in noneconomic institutions, the economic process itself being instituted through kinship, marriage, age-groups, secret societies, totemic associations, and public solemnities.

Polanyi, This is precisely the context within which the emergence of the New Economic Sociology has to be understood Swedberg, NES dared to refute, if only in part, some of the assumptions and methods of academic economics. At the same time, however, it hastened to delimit the scope of the refutation, and again and again tended to retrace its steps and revert to the traditional, self-legitimizing allegation that there are a number of points of view or analytical angles and that its own view is just one among several, in juxtaposition with — rather than in opposition to — that of economics.

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Swedberg, It should be stressed, however, that contrary to modern economics, economic sociology still lacks a central core of ideas and concepts resulting from a process of shaping, mixing and refining over a considerable period of time. Instead, economic sociology — very much like what happens in the field of sociology — consists of a set of competing perspectives, some more coherent than others Swedberg, 3.

Among these is the concept of embeddedness and the related concept of social networks. Second, he gave the concept of embeddedness greater analytical precision by insisting that all economic actions are embedded in networks of social relations. Because it relies heavily on visual representation, network theory gives the researcher an instrument whereby complex social relations can be quickly rendered and interpreted Swedberg, According to Swedberg,. Economic sociology, as it exists today, can be described as a well established subfield in sociology with a distinct identity of its own […].

Swedberg, , emphasis added. Stanfield, Both explanations are paradoxically similar in their neglect of the ongoing structures of social relations Granovetter, Actors do not behave or decide as atoms outside a social context, nor do they adhere slavishly to a script written for them by the particular intersection of social categories that they happen to occupy. Their attempts at purposive action are instead embedded in concrete, ongoing systems of social relations. Granovetter, , emphasis added.