CONCEPT
Embeddedness
Granovetter's 1985 insistence that all economic action is embedded in concrete social relations — demolishing the fiction of disembedded markets and, now, disembedded AI.
Granovetter's 1985 paper Economic Action and Social Structure: The Problem of Embeddedness challenged both classical economics (which treated individuals as atomized rational actors) and the new institutional economics (which treated institutions as impersonal rule-systems). His argument was structural: economic behavior occurs within networks of ongoing social relations, and those relations — not abstract markets or formal rules — are what actually determine outcomes. The framework applies with particular force to AI-mediated knowledge, which appears to offer disembedded information but is in fact deeply embedded in training data, corporate decisions, and the social structures of the institutions that produce it.
In The You On AI Field Guide
Classical economics treats the market as a disembedded mechanism — a neutral coordination device operating above social relations. Granovetter demonstrated, through extensive empirical work on industries, firms, and labor markets, that this picture is fiction. Actual economic behavior is conducted through specific, named relationships with histories, obligations, and expectations. Trust, reputation, and personal loyalty are not frictions on market efficiency; they are the substance of market