Karl Polanyi and the reality of society

This essay reconsiders Karl Polanyi's famous thesis about the “embeddedness” of the economy through an examination of two recent books: For a New West, a collection of previously unavailable essays by Polanyi, and Fred Block and Margaret R. Somers's The Power of Market Fundamentalism: Karl Polanyi's Critique. The guiding thread of this analysis is the claim that a constant in Polanyi's thought was his belief in what he called “the reality of society,” that is, that society exists as a social fact over and above the individuals that constitute it. The essay begins by tracing Polanyi's intellectual development, drawing primarily on the essays found in For a New West. Polanyi's quest to reconcile individual freedom with social solidarity led him first, in the years between the First and Second World Wars, to embrace liberal socialism, before his readings in anthropology persuaded him that traditional economies “embed” the economy in social relations and that the nineteenth-century liberal project of a “disembedded” economy (through the so-called free market) is a departure from this anthropological norm. The essay then examines and questions Block and Somers's claim that Polanyi maintained that the economy is always “already embedded,” arguing notably that Polanyi believed that the advent of market society entailed an economy that was actually disembedded from social relations, not merely one that was re-embedded in an alternative set of institutions.