Granovetter Embeddedness Summary

1. In his essay, “Economic Action and Social Structure: The Problem of Embeddedness,” Mark Granovetter reintroduces Karl Polanyi’s idea of embeddedness and discusses how embeddedness, as a more descriptive and accurate tool, should be implemented in the study of economic action and behavior.
Granovetter first discusses how neoclassical economists and modern sociologists misinterpret economic action and behavior. He explains that economists tend to “undersocialize” economic action while sociologists tend to oversocialize it. Economists, as Granovetter argues, “atomize” economic actors in which their sole purpose is to maximize utility. Furthermore, economists assume that all actors have access to perfect information, are rational and are engaged in perfect competition. Sociologists, on the other
Sociologists overgeneralize and overestimate social influence, once actors are defined by their class or status, their behavior is more or less assumed, because of the “power” socialization has on individuals. Mark Granovetter, begs to differ, stating that there is a “middle ground” which can explain economic action much more accurately than sociology or economics. Granovetter discusses that economic action should be studied through the embeddedness perspective. The embeddedness framework highlights how social relations and social networks influence economic action. Granovetter posits that embeddedness maintains a “middle ground,” because it isn’t as sweeping as the economic/sociological perspectives. Social relations are not implanted between individuals, but rather they are developing and dynamic. Embeddedness avoids the extremes provided by the previous two frameworks, because it doesn’t exaggerate an actor’s