Karl Polanyi as a theorist of disembedded markets

Polanyi’s well-known theorem of the “double movement†shows an analytical asymmetry: While Polanyi puts all his emphasis on explaining why a regime of self-regulated markets, once established, cannot be sustained, and will provoke political and social countermovements aiming to protect societies against the risks of unlimited market exposure, he paid comparatively little attention to the prior disembedding process of markets itself. His analysis suffers from an inclination to mix up the levels of socio-historical analysis with that of economic model construction, and from an economistic misunderstanding of the liberal message, which is focused one-sidedly on the utilitarian and Social Darwinist sidelines of liberal thought. The chapter shows how a revised version of Polanyi’s theorem could open an encompassing view on the socially disruptive and ecologically destructive consequences of disembedded markets.