Social Institutions and Economic System
the perspective of Karl Polanyi
Keywords:
institutions, economicism, Karl PolanyiAbstract
For Karl Polanyi, the economic system cannot be analyzed in isolation from social institutions. The economicism fallacy neglects social variables that are fundamental for determining economic action and systemic transformations. This implies that the rise of the self-regulated market system and its dominance over social institutions are not a natural movement when analyzed in the light of the entire history of human societies. For the author, what happened was a kind of uprooting of the economy, although this movement has been supported in a very specific institutional context in the past, and with no possibility of sustainability. As the economy is a by-product of social institutions, the Polanyian approach understands that any analysis, whether of economic dynamics or its transformations, must be carried out taking into account the needs of society as a whole.
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