The Great Transformation of Embeddedness: Karl Polanyi and the New Economic Sociology

Over the last 25 years, economic sociology has developed into one of the fastest growing fields of sociology and became an important subfield of sociological scholarship (Smelser and Swedberg 2005; Beckert and Zafirovski 2006). This does not mean that sociologists during the postwar era did not study economic phenomena, but they did so either selectively by focusing primarily on issues of the organization of the industrial work process, labor markets, and industrial relations, or by focusing on the societal and cultural effects of capitalist economies. An example of this is the concentration of critical social theory on issues of alienation and the “colonization of the life world” (Habermas 1981). Class theory was primarily interested in the distributional effects of capitalism and various phenomena of exploitation of the industrial worker. What was lost in these sociological approaches to the economy in the postwar period was the comprehensive study of the social preconditions of capitalist economies and their core institutions, especially markets. This broad approach had been developed by the classical sociological authors in their studies of the economy. For Max Weber, Émile Durkheim, and Georg Simmel, the exploration of the institutions of modern capitalism was an important part of their respective social theories, and the neglect of this issue left a void in sociological scholarship during the postwar period. It is not easy to understand this decline of economic sociology and its reemergence in the late 1970s, but there is widespread agreement on several contributing factors