A Note on Gambling and the Disembedded Economy

What Reading Polanyi Tells Us About New Market Logics of Social Dislocation

I’m not the first to note the explosion of betting in popular culture, but the scale and saturation of the recent shift merits attention. Gambling has always existed, yet its integration into ordinary life has accelerated dramatically. What was once a legally constrained and socially stigmatized pastime, confined to specific jurisdictions or dim back rooms, is now a frictionless component of everyday digital life. Today, you can place bets live, not only in your own home, but from the device in your pocket, not just on sports, but any event you can think of.

Sports betting was the first wave, led by giants like FanDuel and DraftKings, lobbying to uproot the existing legal barriers to digital gambling. But prediction-market platforms such as Polymarket and Kalshi represent a second wave that is categorically different. Their ambition is not only to price the outcome of a game, but to financialize politics, news, culture, really anything subject to uncertainty. As Kalshi’s CEO Tarek Mansour put it recently, the goal is to “create a tradable asset out of any difference in opinion.” A newly announced partnership between Kalshi and CNN only underscores the point: informational media and speculative markets are becoming intertwined, with reporting recast as probabilistic fodder for wagers.

What does any of this have to do with the early-twentieth-century Austro-Hungarian economic sociologist Karl Polanyi? In his 1944 book, The Great Transformation, Polanyi offered a theory of markets usurping social relations in the wake of the Industrial Revolution, a logic of market transactions that helps us understand what is happening now.

The Disembedded Economy

Polanyi’s theory of disembeddedness centers on the idea that market relations, historically and anthropologically, were embedded within social relations, shaped and constrained by norms, obligations, moral expectations, and communal institutions. In such arrangements, economic activity served broader productive social purposes. The Industrial Revolution, in Polanyi’s account, disrupted this arrangement. Markets were reorganized to operate as self-regulating systems, governed by supply, demand, and price signals alone. The economy came to be treated as an autonomous sphere, separate from and often dominant over social institutions. This is what Polanyi refers to the disembedding of the economy, and the creation of market society.

In most pre-industrial societies, economic activity was embedded within, and constrained by, social institutions. Exchange was governed by norms of reciprocity, familial duty, religious custom, or civic responsibility. The “economic” was not a separate sphere; it was an expression of broader social and political life (see the field of ‘political economy’). Industrial capitalism upended this arrangement. Instead of being shaped by social relations, market logic came to dictate social relations by necessity. Institutions that once served communal or political purposes were reinterpreted through a market lens. Polanyi’s point is not nostalgic but analytical: when markets become primary and society secondary, the organizing logic of collective life shifts in profound ways, and social dislocation becomes pathologized.

Polanyi argues that industrial capitalism depends on constructing three factor inputs as commodities that, by nature are not: labor, land, and money. None of these are produced for sale per se, and yet a self-regulating market system requires they be standardized, and bought and sold like any other good. This mismatch, necessary for a market of readily available inputs, creates structural tensions, spilling over into social life. When labor is priced purely as a market input, human welfare becomes contingent on fluctuations in demand; when land is priced as real estate, ecological limits become externalities; when money is priced through speculative markets, financial volatility threatens real productive economies. The result is in Polanyi’s view systemic instability, not occasional dysfunction but chronic dislocation embedded into the design of the economy. Dramatic political swings and extremist movements emerge from this setting, in response to the markets encroachment on society and existing institutions.

Against a neoclassical view that present market arrangements are the expression of timeless economic truths, Polanyi insists that the economy is historically contingent, created through law, institutions, and political choices. Markets do not emerge spontaneously wherever individuals pursue self-interest; they are constructed, maintained, and policed. When societies forget this and treat market structures as natural or inevitable, they disable their own ability to adapt or reform them. Crises then appear as acts of nature rather than predictable outcomes of institutional design. Polanyi’s warning is that misunderstanding markets as “natural” and pervasive invites the very instability societies must then struggle to contain.

Polanyi’s critical insight is that the push toward a self-regulating market is never one-sided. Society, facing the disruptions caused by disembedded markets, generates a counter-movement. These responses, ranging from trade unionism and welfare policies to regulation and market interventions, are not accidental additions but necessary social protections. The “double movement” is the oscillation between market expansion and social-institutional defenses. As markets attempt to commodify ever more domains of life, society mobilizes (politically, culturally, institutionally) to reassert boundaries. The outcome is dynamic, disembedding and re-embedding are ongoing, contested, dialectical processes.

Disembeddedness with Real Time Odds

Polanyi warned that when market logic escapes the constraints of social relations, it does not merely occupy new domains of life it reshapes them. Relationships, identities, even communal rituals are gradually reinterpreted in transactional terms. What had been shared meaning becomes market exposure. Disembeddedness is not the absence of social relations; it is the reconfiguration of those relations around price.

The expansion of gambling is a particularly vivid example of this process. It is not that people suddenly want to gamble, people have always gambled, but with the removal of legal barriers and social stigmas, gambling now represents an encroaching market logic that seeks to upend social meaning. Sports betting markets demonstrate this first. Team affiliation, which has long been a point of of identity, community, and civic pride, is reframed as a probabilistic position. Team loyalty becomes an asset, tied to performance. What was once shared fandom becomes a ledger of expected value and hedgeable risk with monetary buy-in, analogous to the of enclosure of a public commons.

While this was always true at the team-owner level or venues that allowed for this sort of activity, individual fans now have ready access to a financial stake in the likelihood that their team wins on Sunday. Exposure is unavoidable, broadcasters report on the parlay odds during the play-by-play and it seems like every other add is for one of the major sportsbooks. Whether or not your team has a bad season can have direct financial consequences for any number of fans now placing bets from their phone. The relationship with fandom has fundamentally changed under these conditions, such that one may choose not to ride out multiple bad season for their team, or even bet habitually against them. This is precisely the kind of dialectic Polanyi had in mind: market structure dictating the social relation, rather than being shaped by it.

Prediction markets push this logic further still. In their quest to invent new things to bet on they invent new forms of disembeddedness. When any difference of opinion becomes a “tradable asset,” the very nature of disagreement shifts. Interpretation ceases to be a social activity, an exchange of perspectives, a deliberative process. It becomes a speculative holding that must resolve in a binary outcome. We do not merely bet on events; we bet on the meanings we assign to events. The markets come to stand in for the process of knowing, not just the process of wagering. Companies like Kalshi are not simply financializing uncertainty; they are commodifying interpretation itself, hence the concern around a newsroom partnership.

Polanyi could imagine markets defining labor, land, and money as the inputs of production. What he could not have anticipated is the commodification of belief, identity, and social understanding as markets unto themselves. The speculative calculus that once applied to oil futures now applies to the identity of the next Pope, whether a political candidate will win their election, or even a random weather event like whether a hurricane will hit Florida next week. At each margin, the logic that governs the market becomes increasingly the logic that governs the way the event is understood and consumed.

In Conclusion

If Polanyi was concerned that disembedded markets would destabilize livelihoods and ecologies, he would likely be alarmed that they now destabilize the social and epistemic fabric itself. We no longer merely live alongside growing markets; we can increasingly live as portfolios of probabilistic positions. The interpersonal becomes transactional, not only such that our lives are mediated by markets, it is rather that our social relations are being reconstructed in the image of markets.

Polanyi warns the more thoroughly markets disembed themselves from the social relations that make collective life possible, the more those relations fracture, similar to Schumpeter’s prophecy of the death of capitalism at the hands of it’s own instability. In the face of commodified relationships, the search for solidity veers in radical directions, puritanical attempts to restore moral certainty, pessimistic narratives of historical decline, growing illiberal and reactionary political movements. The more markets hollow out the bases of social cohesion, the more society responds with moral absolutism, nostalgic restoration, and pessimistic worldviews that interpret instability as civilizational decay rather than failing institutional design.

Companies like Kalshi are busy inventing new levels of disembededness that pervade every corner of our lives to an extent that Polanyi could never dream of. The commodification we see now has not yet generated a robust institutional counter-movement; instead, the response is largely individual. The simple question is ultimately over the role of markets in our daily life and what kind of social world we wish to inhabit.