Question

what does search embeddedness and within-network exchange mean in terms of consumption?

Answer 1

For Polanyi, embeddedness means that the economy is submerged in social interactions, i.e. it can not be a distinct, independent domain vis-à-vis the entire society. Nonetheless, one may point out that the author did not plan to establish a novel term, nor did he appear to be in the least concerned to assign it an clear meaning. Maybe this is why the definition of (dis)embeddedness became the  object of a number of contradictory interpretations.

The formalistic theory is based on an ontological shortage of the resources to provide for human needs, and takes as its object of study the discrete ("rational") person who strives to optimize his profits, i.e., it stays within the predicates of homo economicus. According to Polanyi, the formalistic paradigm – based on the neoclassical model of economic theory – can be extended only to learning of modern capitalist economies, where price-making markets play a crucial role.

In the other hand, the substantivist theory, in its effort to research the role of the economy within society, deals with the structural forms taken by the mechanism of fulfilling human needs in various cultures, past as well as current, its key concern being sufficiency rather than efficacy.

Polanyi defined three key trends, or so-called modes of integration – reciprocity, redistribution and (market) trade – that combine to give the economy its cohesion and stability, that is, the interdependence and recurrence of its parts.

Primitive or territorial cultures are distinguished by reciprocity, and often, to some degree, by redistribution, according to Polanyi's definition. Archaic cultures, in effect, are largely redistributive, though some room for trade can remain. However, one must bear in mind that the structure of self-regulating markets, as the dominant mechanism of integration, is seen only in modern societies.

Under capitalism the economy disintegrated (i.e., loose or, as it is, autonomised), leaving society at the hands of the blind system – the self-regulating market – which dominates and overpowers it. In fact, however, the economy's embeddedness is tantamount to the lack of a price-making trading mechanism.

In Polanyi one will consider two distinct forms of legislation that do not believe in the scientific nature of a disbanded economy, but are, on the contrary, closely connected to its historical implementation: a) the establishment of preconditions for the introduction of a new economy (enclosures, the creation of a "open" labor market, b) security measures against disbandment;primarily to slow down the pace of change brought about by the transformation into a market economy (labor laws)

Market trade as a mode of integration portrays itself as an structural trend created by a network of pricing markets, but it is precisely the (autonomous) behavior of this structural process that disintegrates the economy.

In a post-capitalist world – that is, after the imaginary market existence of labour, land and money has been eliminated – social control will take the form of a collective, participatory administration of the production process, through the participation of organizations such as the Government, the trade unions, the community, the factory, the village, the school, the church, etc.

Polanyi describes the economy in terms of an established cycle containing two stages, one of which relates to the relationship of man with his natural and social world, and the other to the institutionalization of that cycle. All economy shares these characteristics regardless of its prevailing mode of integration.

It also seems clear that Polanyi does not in any way dispute the connection between the human economy and the social system. What happens is that all social factors, interests, and beliefs under capitalism take a back seat to the economy's empirically obtained primacy, which is independent from all (conscious) social power.