Posted: April 3rd, 2015

Assessing the working of modern liberal economy: the level of embededness of the economy with political and social systems

Assessing the role and impact of social and political structures in the working of modern liberal markets

Introduction

Social theory has for a long time focused on the impact of social relation on the working of social and economic institutions prevailing in the society. This field has been the focus of many social theorists; classical and neoclassical theorists (Granovetter 481). The interaction between different structures of the society is becoming intense with most of the structures depended on others. In modern market economies, interaction between social and economic structures is further narrowed to individual influences in each system or structure.  The growth of the society has resulted in into the need for the opening up of economics. This is called economic liberalization. The liberalization of economies and the development of competitive markets raise many questions concerning the embeddedness of political, social and economic structures in society. Competitive market economies are often controlled by generative market force. These forces are demand and supply. These market forces continue to take force in the society raising questions on whether political and social structures still have a strong force in the working of free and competitive markets. This forms the main topic of research; assessing the role and impact of social and political structures in the working of modern liberal markets.

The research problem

This research seeks to ascertain the level of interplay and contribution of political structures in shaping the working of modern economies. This topic of research has been motivated by the continued argument of the embeddedness of political, economic and social structures. With more demand and direction towards completely liberalized economies, the level of embeddedness of these structures seems to go down. However, many researchers still hold to the view that these structures are embedded. They fail to produce real findings that indicate that the structures are still embedded as was argued by classical theorists and now neo-classical theorists. Another aspect that warrants the attention of researchers is the impacts of detachment of one structural function from the working of another structure. An example is the elimination of political structures of societal functioning from the working of economies. The difficult question that is posed to social theorists as it appertains to this subject is the establishment of the most important structure that carries all the others. Does a social structure prevail within the larger economic structure or is the vice versa true?

Many economic theorists continue to argue for the essence of political influence on the working of economies. They base their argument on number economic crises that have occurred and the role that political structures have played in remedying such situations. This seems to be a logical argument, but attention should also be given to how such situations develop. It cannot be denied that social and political structures impact on economic structures. The level of influence of these structures has to be given much attention too. Economic structures are argued to have strong foundations in political structures. Free market economies otherwise known as Laissez-faire are outcomes of political economies. As economies are set and keep working in the social environment, they are controlled by forces within them with the influence from the social environment. Can social and political structures be separated from the working of economic structures or is it only the influence that can be reduced. This is an ignored concern in the modern economic operation where many people are used to associating the working of the three main societal structures.

Differences continue to be seen in terms of the changes that are taking place in each structure of component. The modern society is undergoing transformation. Transformation comes with many changes. Most of the changes result in the removal of faceting points of linkages between one system and other systems. The changing structure of economy in the society has an impact on the embeddedness of the critical systems of the society. This is being sidelined with the emphasis on the existence of extensive relations between societal systems. This research fills this gap by tackling this ignored dimension of social research.

Main purpose of research

Most arguments of social theory have argued for the embeddedness of the three structures of the society. The organization of the society is however changing with changes in the economic patterns in society. The world is adopting a liberalized market economy. The main purpose of this research is to prove the difference in the level of embeddedness between economic structure and the social and political structures.

Research objectives

This research is based on three main objectives. These objectives will open up the research subject by streamlining the path taken in the research.

• The first objective is to define the term enmbeddedness in relation to the three systems of society work: social, political and economic.
• The second objective is to establish the rate at which economies in the world are being liberalized.
• The third objective of this research is to ascertain the level at which economic systems are still embedded to the political and social structures.
• The fourth objective is to assess the contribution of economic liberalization and the emergence of free market economic to embeddedness of societal systems.

Research questions

This research will be guided by three main research questions.

• What does the term embeddedness of societal systems mean in the modern society? Is the meaning of the term the same as compared to its meaning in the classical times?
• What is the trend of economic liberalization in the current society? Is economic liberalization a subject of concern in the society?
• Are the modern economic systems influenced by the political and economic systems? Is the level of influence the same as was in the last 50 years?
• What is the contribution of the liberation of economies to the present level of embeddedness between economic systems and the social and political structures?

Review of literature

Social theory research seeks to exploit the relationship between different structures and the way they interact to make a functional society. From the ancient social theories to the recent or neoclassical theories, there is evidence that the society is built around different structures: political, social and economic structures. These structures interact with each other to bring about a functional societal environment. The survival of any of the systems is based on the support that is received from other systems. The theories are backed by real experiences in the society where political decisions are used in shaping economic relations. Social functions also back the working of the economy in one sense or another. According to research, it is difficult to separate on system of society from other systems. The elimination of any of the systems leaves significant weaknesses to other system denoting a dysfunctional society.

The trend towards the liberalization of economic functions is a reality and a focus of economic researchers. The subject of economic liberalization is not a new subject. It is one of the subjects that dominated trade development debates from the early times and gained more ground in the mid 1950s. This debate has dragged to the prevailing times. The center point of the argument for free economy is the entanglement of the economy from political affairs. Political systems have to give space to give space to the economy to work for itself. This is not an easy practice to attain but there are pointers of development towards that direction. Detaching of economic functions from social functions is a hard thing to attain.

Research methodology

Research design

This is purely a secondary research which will heavily borrow information from secondary resources. An explanatory research method will thus be used. This research will utilize information from two main categories. These categories of information will seek to give two independent categories of data which will be analyzed to give findings. The two categories of information to be used in this research are: information from ancient sources which present information on embeddedness. The second source of information that will be used in this research will be collected from up-to-date material that tries to establish the picture of embeddedness in the prevailing context.

Sampling technique

Systematic sampling will be applied in the research. This will begin by the categorization of material on embeddedness in two main categories; those authored before 1980 and those authored from 1980 to date. This will be followed by a search for relevant information from each category of materials. The information will be sought using tittle search.

Data collection methods and tools

Data will be collected from different secondary sources through a critical look at the literature. Important points will be record during a critical look into literature. Data will be collected through library research and backed by information from other authentic sources on the internet. The diversity of sources in critical to the quality and authenticity of the findings of this research, thence the range of data sources will be widened as much as possible.

Data analysis and findings

Data will be analyzed using different analytical tools. Data analysis tools that will be used in this research include graphs and charts which will help in synthesizing the data into meaningful information. The findings will be derived from a through analysis of all the data collected. The findings will be used as feedback to the research subject.

Conclusion and recommendations

A conclusion will be given at the end of this research. The conclusion will give a summary of the process and research findings by borrowing into theory. The conclusion will ascertain the outcome of the research; whether it will be positive or negative. This will be enabled by the findings if the research. The research will also give a pointer of the research to future researches in the same field.

Recommendations will also be made. Recommendations will be based on the conclusion and will act as pieces of advice for interested researchers in a similar lane of research. The recommendations will give points that will be critical in improving the course of advanced research on the subject.