ABSTRACT
The previous chapter introduced the idea of embeddedness as a way of understanding the relationship that economic processes have to both the ecological environment and the social environment – recall Polanyi’s (1957a: 243) generic definition of the ‘substantive economy’ as an instituted process of interaction arising out of ‘man’s dependence . . . upon nature and his fellows’. Dependence in provisioning compels ‘integration’, and it was argued that capitalist economic processes are embedded in both ‘economic’ and ‘non-economic’ institutions that have distinct patterns of integration: exchange in the market system and redistribution in the state and household. Beyond their political and familial roles, the latter also perform key ‘economic’ functions without which the market’s apparently ‘self-regulating’ status could not be maintained.1 The concept of embeddedness captures not only the idea that economic processes are given form and predictability through their ‘institutional vestment’ (1957: 249), but that such processes also ‘cut across’ different institutional forms, invoking pressures for change as they do so. However, the integration at the core of the embeddedness concept is not the product of institutional form alone, but of meaning too, because ‘free’ economic agents are integral to the provisioning process. The patterned order in locational and appropriational movements therefore comprises both, institutional and ideological elements: integration requires ‘forms’ and ‘norms’. Systematising substantive economic processes, as well as the socialisation and acculturation of
economic agents, derives from the ‘values, motives and policy’ that produce and animate the institutional framework (Polanyi 1957a: 250). Hence, rather than a ‘naturally’ or ‘spontaneously’ occurring form of order, economic arrangements are, according to Polanyi (1977: 35), ultimately determined by the ‘political and cultural spheres of society at large’.2 In signalling the importance of these spheres, Polanyi (1957a, 1977) laid the basis for bringing liberalism – and in the current milieu, neo-liberalism – into the ambit of embeddedness concerns. Although liberalism is commonly understood to eschew the embedded character of economic processes in favour of a ‘compartmentalised’ worldview, such an understanding serves to obfuscate its deep connection to the substantive capitalist economy. Liberalism brings a paradoxical quality to embeddedness in capitalism which is both ‘stable’ and ‘precarious’, expressing order and stability on the one hand, but flexibility and change on the other. There are two aspects here: the basic ‘structure’ and the various institutional ‘patterns’ overlaying that structure. The basic liberal ‘structure of embeddedness’ provides a consistent but responsive foundation for the institutional variations characterising capitalism in practice. These variations evince the shifting ‘patterns of embeddedness’ under capitalism, where the institutions garnering order and stability in provisioning processes are themselves vulnerable to pressures for change emanating from those very processes. The partially anarchic and structurally dynamic character of capitalist economic processes generates tensions that propel change, and the flexibility of liberalism with regard to the contradictions and crises of capitalism has been a critical element in the latter’s longevity. The embeddedness framework captures this systemic yet ‘organic’ aspect of provisioning under capitalism, which is constituted by ecological, economic and political processes that are dialectical as well as synergistic. It can therefore also be harnessed for understanding the changing, albeit ‘path-dependent’, character of institutional patterns immanent to substantive capitalist systems, neo-liberalism being a contemporary case in point. In exploring the political dimensions of embeddedness, the first section of this chapter reflects on the nature of ‘the political’, looking beyond formal political theory in order to engage with the substantive character of liberalism. It explores the latter as an evolving multi-dimensional ideology (Freeden 1996) and also as a rationality of government (Foucault 1991), both of which shape the institutional fabric within which provisioning processes are embedded. The second section examines that institutional base: the basic liberal ‘structure of embeddedness’ in capitalism, which has its origins in the historical differentiation of economic and political functions that marked the transition out of feudalism. Those events transformed the structures for social provisioning and radically altered the basis of ‘man’s’ interaction with ‘nature and his fellows’ (Polanyi 1957a: 243). However, that basic structure also underpins considerable institutional variation, and the final section will therefore shift to a consideration of neo-liberalism as an evolving ‘pattern of embeddedness’ that reflects a ‘restructuring’ of contemporary liberal-capitalism. The emergent ideas about sustainability had to
contend with this context of institutional reconfiguration, and its consequences for environmental policy and governance will be examined in Chapters 4 and 5.
