Rethinking ‘Embeddedness’: Law, Economy, Community

Abstract

Ideas (of Karl Polanyi and others) that economies and markets are ‘socially embedded’ are central to recent research in economic sociology, closely paralleling socio‐legal claims for studying law in ‘social context’. But the concept of embeddedness is imprecise and inadequate: a sociology of law and economy cannot rely on it but must address intellectual and moral‐political concerns that its use reflects. Max Weber's writings on law and economy have inspired advocates of a new economic sociology of law, but some of Weber's key claims may be outdated, and he treats law and economy as distinct spheres rather than as facets of the social. Sociological research on law and economy should focus on ‘networks of community’ and their regulation, thus illuminating the social character of both law and economic relations. Viewing the social (including economic life) through a ‘community lens’ makes it possible to analyse cultural factors in regulating markets, while emphasizing links between economic relations and other aspects of social life.