On Embeddedness

A Word (or Two) on Understanding Economic Action Through Social Reality

The bridge between what constitutes 'economic' action and 'social' reality is a critical concept. By saying this, I do not imply that what is economic and social necessarily constitute separate spheres. Rather than lose the subtlety of the dynamic constituencies shaping any type of action, it is best to view any action as a process. To separate the economics from the social is not necessary and indeed, doing so limits the interwoven webs of meanings that can emerge from the analysis of any action.

As Granovetter (1985) infamously articulated, economic action is embedded in social realities and contexts. By context, I am referring to a multi-faceted and multi-layered concept. Context can be viewed in a number of ways: spatially, in relation to geographical settings (neighbourhoods, communities, cities, countries, regions, nations, and the world); social relationships and networks (friendships, families, workplaces, associations and religious communities); and economic and political frameworks. This notion of context influencing individual action has been a fundamental argument throughout classical and contemporary sociology and has been applied to many areas of social life. In focusing on contextually situated action and meaning, I do not discount the importance of agency. Insofar as certain contexts provide enabling environments for individuals to act, it is clear that an explanation of any economic action would be incomplete if it did not examine the significance of the infrastructure on which it relies.

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