Reinstituting the Economic Process: (Re)embedding the Economy in Society and Nature

Polanyi argued that the project of creating a fully self-regulating market was utopian, in the sense of impossible. However, movement towards this utopia, the ever greater but never completed process of disembedding the economy from both society and nature, creates growing dislocations and tensions which call forth a counter movement. This double movement may be thought of as successive changes in the way in which the economic process is instituted. The focus of the paper is on the meaning of embeddedness, the ways in which the economy was reinstituted during the Great Transformation and the subsequent counter movements, and alternative approaches to further reinstituting the economy in ways that disembed it further or (re)embed it more firmly in society and nature. It is argued that prior to the creation of the capitalist market the economy was organically embedded in society and nature. However, the creation of separate economic institutions, the institution of the economic process as a distinct system with its own laws of motion, severed these organic links and the economy came to dominate both society and nature. Here, however, the symmetry between society and nature ends. Society has the capacity for conscious, purposeful action; nature does not. For the economy to be reinstituted in ways that create a sustainable organic relationship with nature, it must first be reinstituted in ways that bring it under social control.