Reading the story of law and embeddedness through a community lens: a Polanyi-meets-Cotterrell economic sociology of law?

Abstract

In this article I propose that the role of law in Karl Polanyi’s concept of the “always embedded economy”1 can be enriched by the application of the “lens of community” 2 developed by Roger Cotterrell.3 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 disembedded 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 disembedding movements and of re-embedding countermovements. 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 twenty-first-century cautionary tales: the World Bank’s investment climate programme and the 2008 financial crisis.