From Credit to Crisis: Max Weber, Karl Polanyi, and the Other Side of the Coin

The predicament of modern capitalism, and of contemporary finance capitalism in particular, is the fine line between credit and crisis. Recent developments from the US subprime mortgage crisis to the European sovereign debt crisis revived debates about the nature of money and all sorts of derivatives. Money is a social phenomenon which has always two sides: an economic and a legal one. As an economic commodity, it hinges on the market; as a legal relation, it depends on the state. The resulting tension features prominently in the works of Max Weber and Karl Polanyi. Both studied the market society of the late nineteenth and early twentieth century, including its monetary institutions. Moreover, both were also aware of the political function of their related writings. The following review allows us to establish links between law, economy, and society and thus exemplify the economic sociology of law as it is foreshadowed by the sociological classics.