The Market Society: Have We Gone Too Far?

By Stella Brambilla.

This article explores how a market economy,  by subordinating society to the laws of the market and by allowing the market to be the sole director of human beings, would result in the demolition of society.

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I have always wondered how society shapes markets; and how human relations interact with the market system.  I have constantly perceived neo-liberal economies to be the cause of breaking down this precious bond that led to the creation of self-destroying societies.

Since considering Karl Polanyi’s concept of embeddedness my conviction has weakened. My understanding of the relation between market and society has now taken another shape. Earlier I envisioned economy and society as separate entities under capitalist economies,  now I assume that market and societies are always embedded, irrespective of the economic system.  Does society shape the market, meaning human needs are reflected and satisfied by the market? Or is it the other way around? A precise answer is almost impossible, bringing us to the classic chicken and egg problem. Reflecting on these dynamics is of fundamental importance in defining the actors,  their role , and how the y interact . Most importantly, these dynamics manifest in different political visions. Building on Karl Polyani’s work, this article explores how a market economy,  by subordinating society to the laws of the market and by allowing the market to be the sole director of human beings, would result in the demolition of society. 

Karl Polanyi’s Idea of Embedded Economy

Polanyi argues that in the pre-modern era, society and market were fully embedded. The exchange system was based on reciprocity, redistribution and householding. In this society, a status society, production, and distribution were not driven by gain, but the motives of exchange were arising from individuals’ social position. The modern society - based on a contract - economic transaction to the free will of individuals, whose exchanges are no longer motivated by their social position, but from motives of hunger and gain. By shifting from pre-modern societies to modern societies, Polanyi acknowledges the creation of fictitious commodities: land,  labour, and money. They are technical names respectively for nature, human beings, and are a token of purchasing power. He defines  labour, land, and money as fictitious commodities because they are not originally and exclusively produced to be sold on the market. With the onset of market economies, they came to be organized into the system of supply and demand. In this way, the market mechanism became the sole director of human beings and nature. With this new dynamic in society, it led to a situation of demolition that no society could stand for a long time. That is: human society has become an accessory of the economic system. 

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At first, I found his argument convincing: an establishment of a self-regulating market leaves humans and nature’s fate to the market. It seems that a free-market economy system reverses the situation by making the market the only organizing power in the economic sphere. Therefore, society and market are no longer embedded, but on the contrary, they are ‘disembedded’. Modern society is then  characterized by economic transactions that are no longer driven by social or kinship  obligations  but by rational  calculations  of individual gain. By a deeper analysis of Polanyi’s argument, I found particularly thought-provoking, how Polanyi evolves his argument by  analysing  society’s opposition to the establishment of  labour, land, and money as fictitious commodities through the creation of new institutional structures. 

While approaching Polanyi, I realized his argument is strongly convincing, but on the other hand, I was struggling in applying it to todays societies. Reading through his lines seems that money has the terrible power to colonise social life, and thus there must be an intervention by the state. In my opinion, current society is so commodified and monetised that the  question  we should ask is no longer about whether there is a relation between market and society, but if there are boundaries that should not be crossed.

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Zelizer and ‘Special Monies’ 

In this vein, Vivian  Zelizer claims that money and commodification do not endanger societies, since culture sets inevitable limits to the monetisation process by introducing profound controls and restriction on the flow and liquidity of monies. I found fascinating how she highlights and make clear, that not only can society transform the meaning of exchange and money transfer, but on the other hand money transaction can transform social life.   Zelizer argues that money does not exclusively belong to the market, but there are also “special monies” that incorporates the social and symbolic significance of money. “Special monies” are shaped by cultural conceptions of money and not only by economic efficiency, as market money. Once created, “special monies” are regulated by invisible boundaries, which emerged by culture and social structures. For example, domestic money is to be considered a very special kind of currency. Once entered in the household money is no more subjected to the rules of the market, but its allocation, calculation and uses are subject to a set of domestic rules. For example, in the case, of married women, their money is set apart from real money by a complex mixture of ideas about family life, and by a changing gender power structure.

 Zelizer argues that money does not exclusively belong to the market, but there are also “special monies” that incorporates the social and symbolic significance of money. “Special monies” are shaped by cultural conceptions of money and not only by economic efficiency, as market money.

Zelizer gives a clear picture of todays society, emphasising the inextricable link that exists between society and money, and vice versa. On the other hand, she never explicitly deals with political issues. Zelizer  claims that restrictions and controls to the commodification process are set by culture and social structure.  

Final Thoughts 

Zelizer’s point of view has helped me clarify the idea that markets and money mingle endlessly with social life. On the other hand, I still cannot elucidate my position on whether there is a limit to be imposed on the process of monetization. If firstly I shared the hope with Polanyi that such a commodified society would have never happened. I now assume that, nowadays, society has gone further to the point he would have imagined. Thus, if we are living in a highly-monetized environment in which money trickles down in all social settings: Is the state responsible to define the boundaries that commodification has not to overcome? Or, as sustained by  Zelizer, can  society introduce controls by itself? 

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By Stella Brambilla

Stella is from Italy. She completed her bachelors in Philosophy, Economics, and International Studies. She is currently studying MA in Globalisation, Business and Development at IDS. She also founded “Barjo Imè” an NGO working in the Omo Valley, in the south of Ethiopia. Her main interests are political economy and how businesses can be development actors.