Karl Polanyi's Argument Analysis

In 1968, Karl Polanyi argued that ‘ the human economy... is embedded and enmeshed in institutions, economic and noneconomic’. To some extent, this argument can be used to support the issues raised in an article published in ‘the Guardian’. The article was in relation to the slowing down of china’s economy, and the implications that would inevitably affect developing and emerging markets around the world. Polanyi’s argument can assist in understanding why a Chinese slow down has occurred, and the extent in which it will affect global economies. The article raises many questions such as why china’s economy is so important in global economics, and what implications could take place if china’s economy gets worse.

The aim of this essay is to provide

Economic liberalism is described as ‘the belief that both national societies and the global economy can and should be organized through self-regulating markets’ (Block 2001, xviii). Other aims of economic liberalism are using ‘laissez faire’ methods and the principle of free trade . Polanyi somewhat pushed for a more humane and rational structure and sought to rebuild the market society from its foundations . He reasoned that a society could fall victim to economic downturns with the rapid rise of a market economy (Litao 2013, 158). The article supports this view as it stated that china’s annual growth rate is at 6.8%, which may seem impressive for other global economies, but is however the weakest it has been in 25 years. This demonstrates that overtime, a economy cannot continually achieve certain targets. The increase of weak exports, slow investment and overcrowding in factories are a major concern for global investors .

Polanyi’s book is important in understanding the factors for China’s slow down as it provides insight into Polanyi’s concept of embeddedness. Polanyi argued that an economy needed to be understood alongside the social world in which it was embedded . He believed that an economy was made up of specific organisations, institutions and social structures, and thus need to be analysed as a whole. The term embeddedness

249). The article illustrates this point with the mention of various institutions that have become embedded and connected within china. The article mentions an institution called ‘Davos’ in which the global elite gathered to discuss the future of china’s slowing economy. Another institutions worth mentioning is the politburo, which is a committee mainly involved in creating policies for communist parties. These institutions are important as they support Polanyi’s view of institutions becoming enmeshed within a society. The mention of many institutions throughout the article emphasises the way in which institutions become embedded within a