Capitalism at the Crossroads: Next Generation Business Strategies for a Post-Crisis World, Third Edition

9. Re-Embedding Innovation Strategy

In 1944, economic historian Karl Polanyi observed in his landmark book, The Great Transformation, that the birth of industrial capitalism was premised on a radical shift in how people perceived the relationship between the economy and society.¹ Prior to the 1850s, markets were seen as an important but small part of a diverse economic system that was embedded in the social fabric of communities. Beginning in the 1860s, after the American Civil War, Polanyi observed that the new concept of “market economy” began to change this long-standing relationship: Economic life became disembedded from society and viewed as a self-contained system whose greatest potential could be released through the unimpeded operation ...