Hungarian-British sociologist Karl Polanyi (1886-1964) in the book The Great Transformation (1944), developed substantivism, a theory of economics in which the economy is viewed as in the state of "embeddedness", that is, the view that the economy is interconnected and constrained by wider social relations. In pre-industrial societies, the economy was organized through socially regulated relations of reciprocity and redistribution. He believes that two parallel processes are taking place in modern capitalism, on the one hand, market logic is spreading to all areas of social life, while, on the other hand, social protection mechanisms are being developed to protect society from the most harmful consequences of the self-regulatory market system. Free-market capitalism seeks to destroy relations of reciprocity and redistribution, but social protection mechanisms, such as those that emerged in England in the early 19th century, act as a resistance to that intention. Although Polanyi was inspired by Marxist theory and ideology, he believed that social protection measures would prevent the whole society from being divided into two clearly separated and opposing classes, as Marxist theory assumed.

Author: Polanyi, Karl.

Books:

Polanyi. The Great Transformation (1944);

     -     Trade and Markets in the Early Empires (1957);

     -     Dahomey and the Slave Trade (1966);

     -     Economy and Society: Selected Writings (2018).