Starting from Granovetter’s seminal 1985 article, the concept of embeddedness has given new life to economic sociology. With it, it has finally been possible to operationalize the idea that factors other than individual, under-socialized choices drive the economy. In addition to people’s own interests and motivations, the social environments of which they are part contribute to shaping their action. With this idea, economic sociology could claim legitimacy as a valid approach to study the market and the firm – beyond the exclusive pretensions of much economics.
The idea of embeddedness and its operationalization were not without their critics, though. After all, one may say that economic sociology has performed better in its analysis of the firm, than of the market. The very meaning of the embeddedness concept has been stretched a lot over time – also getting back, on occasion, to the quite different nuances that Polanyi attached to it back in the 1940s.
In a just-published article, I go back to this concept and challenge it against digital platforms – recently emerged economic coordination devices that, in the view of many, defy the traditional firm/market boundaries. This helps uncover a new idea: extends the economic-sociological concept of embeddedness to encompass not only social networks of, for example, friendship or kinship ties, but also economic networks of ownership and control relationships.
Applying these ideas to the case of digital platform labour pinpoints two possible scenarios. When platforms take the role of market intermediaries, economic ties are thin and workers are left to their own devices, in a form of ‘disembeddedness’. In this sense, I confirm the results obtained by a group of Oxford scholars in a similar setting. But when platforms partake in intricate inter-firm outsourcing structures, economic ties envelop workers in a ‘deep embeddedness’ which involves both stronger constraints and higher rewards.
I show that with this added dimension, the notion of embeddedness becomes a compelling tool to describe the social structures that frame economic action, including the power imbalances that characterize digital labour in the global economy. Granovetter’s original idea can still provide a lot of insight to help us understand the transformations of today’s economy.
The article is available here.