Authors:    I. Nazarov, PhD in Economics, Associate Professor, ORCID ID: 0000-0002-5118-8416
Taras Shevchenko National University of Kyiv, Kyiv, Ukraine

Annotation:  This article based on the works of Karl Polanyi (1886-1964), the famous American and Canadian economist, one of the founders of economic anthropology, explores two conceptual approaches to identifying the place of economy in society – societal and economistic. The article examines the substantive definition of economics (as an institutionally formalized process of interaction between man and the environment aimed at satisfying needs) given by K. Polanyi, as opposed to its formal definition by representatives of neoclassical economics (as a process of satisfying needs by choosing alternative options for managing scarce resources). 

It analyses the core idea of K. Polanyi’s societal approach, i.e. the idea of “embeddedness” of the economy into society as a more complex and polystructural system, that gives economic processes different institutional forms for different societies. The article exposes the fundamental nature of the economistic approach implying a separation of the economy from a set of social ties into a separate sphere, operating according to its autonomous laws. This approach, typical for market fundamentalists, results in the inevitability of submission of all social life spheres to the logic of price forming markets. The author considers Polanyi’s arguments against the economistic approach, which (just like the formal definition of economics), in his opinion, is applicable only for a short historical period of the formation of the industrial system, when the main factors of production – labor and land – become goods and their flow is subject to the market laws not being mitigated by any social “shock absorbers”. This situation threatens with serious social cataclysms and to avoid them the society, in the next stages of its development, blocks the effects of spontaneous market forces by the means of social and labor legislation, strong trade unions, state regulation of money-and-credit relations, and the land market, environmental legislation and other institutional regulators.

Keywords: economistic approach, societal approach, institutional formalization, production factors market.

Received: 08/12/2021
1st Revision: 15/12/2021
Accepted: 25/12/2021



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