Economic Action and Social Structure: The Problem of Embeddedness

[http://www.jstor.org/stable/2780199. Granovetter, Mark. 1985. “Economic Action and Social Structure: The Problem of Embeddedness.” American Journal of Sociology 91: 481-510.]

Abstract
A sophisticated account of individual behavior must consider its embeddedness in ongoing structures of social relations.

The extent to which behavior is embedded, according to the undersocials, oversocials, and Granovetter.
 * Undersocials : (formalists/economists) Economic behavior is independent from one's social spehere. (WRONG)


 * Oversocials : (substantivists) Economic behavior was very embedded in social sphere prior to modernization, but has decreases since. (WRONG)

Both Undersocials and oversocials wrongly assume individuals are atomized indivuduals. Undersocials operate under a false premise that began with Hobbes' inconsideration for social institutions.
 * Granovetter : Econ behavior's embeddedness has not changed over time, and has always been and continues to be more substantial than presummed by formalists/economists.

Granovetter realizes that the relationship between individual and group is dynamic. Individuals do not act in a Rawlsian original position; individuals are not machines following the script of society. Individuals can actively shape the social context that influences them.

Place in Literature
Granovetter makes a theoretical case that individual behavior is best understood by considering both their embeddedness and how they affect their embeddedness. This theoretical justification for contextual analysis was preceded by Schelling in 1978. T his article should be understood in the context of Hauser's argument that Contextual Analysis does not have a sound methodological foundation. While Granovetter makes a compelling theoretical case for understanding behavior as embedded, he is unable to respond to Hauser's complaint that contextual analysis lacks validity within the methodological tools of their time period. Sprague later resolves this dispute by showing valid quantitative methods for measuring contextual effects.