Reading the Story of Law and Embeddedness Through a Community Lens: A Polanyi-Meets-Cotterrell Economic Sociology of Law?

Abstract

In this paper I propose that role of law in Karl Polanyi's concept of the 'always embedded economy' (Block 2003) can be enriched by the application of the lens of community (Perry-Kessaris 2008) developed by Roger Cotterrell (1996-present). I begin with Polanyi's suggestion that economic action and interaction are always 'embedded' in wider social life. Reading through the lens of community, we can be more specific: any actor is at once engaged, to different degrees (from fleeting to stable), in multiple types (whether focusing on instrumental, traditional, affective and/or belief-based action) of social life. I then explore a second, implicit, cornerstone of Polanyi's argument: that analytical and normative approaches to economy may become dis-embedded from wider social life. Reading through the lens of community we can again be more specific: In the transformation to a market society, the analytical and normative approaches that are central to economic actions and interactions are confused with, and privileged over, those that are central to non-economic actions and interactions. This confusion and privileging can have what we might call a performative effect on action and interaction. Finally, I explore Polanyi's story of law as a facilitator both of dis-embedding movements and of re-embedding counter-movements. The application of a law-and-community lens suggests some additional details of that storyline and that there are additional plotlines to be pursued. The practical potential of this Polanyi-meets-Cotterrell economic sociology of law is briefly illustrated with references to two 21st Century cautionary tales: the World Bank's investment climate programme and the 2008 financial crisis.

Special Issue on socializing economic relationships.

Keywords: law and community, embeddedness, Polanyi, investment climate

JEL Classification: A13, A14, B31, A12, K00, P00