Embeddedness

Embeddedness is the idea that economic and other forms of action are not carried out by isolated individuals but are shaped by ongoing social relations, networks, institutions, and culture. Karl Polanyi introduced the term in The Great Transformation, arguing that before the rise of the self-regulating market, economies were embedded in social and religious institutions, and that the market economy tried to disembed itself, provoking a protective countermovement. Mark Granovetter’s 1985 article revived the concept, criticizing both undersocialized economic models, which treat actors as atomized, and oversocialized sociological accounts, and showing how trust and networks structure markets. Sharon Zukin and Paul DiMaggio distinguished structural, cognitive, cultural, and political embeddedness, and Brian Uzzi studied how embedded ties help firms by promoting trust and information sharing while overembeddedness can create rigidity. Viviana Zelizer examined how people mark and separate monies according to social relationships, and Neil Fligstein analyzed markets as fields shaped by political and social structures. Fred Block has argued that markets are always embedded in states and norms. Embeddedness remains central to research on economic sociology, networks, trust, markets, and organizations.