ECON 001A Lecture Notes - Lecture 17: Interlocking, Embeddedness, Utopia
19 May 2020
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Document Summary
The entire tradition of modern economic thought, rests on the concept of the economy as an interlocking system of markets that automatically adjusts supply and demand through the price mechanism. Expresses the idea that the economy is not autonomous, but subordinated to politics, religion and social relations. Suggests more than market transactions that depend on trust, mutual understanding, and legal enforcement of contracts. Instead of economy being embedded in social relations, social relations are embedded in the economic system . He insists that classical economists did not and could not achieve the goal of creating a society in which the economy had been effectively disembedded. Fully self-regulating market economy was utopia and could not exist & would destroy the human and natural substance of society. Efforts to bring a greater autonomy of the market increase the tension level; leading to either social disintegration or the economy will revert to a more embedded position.
