Liberalism, Social Disembedding, and Managed Dependency

Executive Summary Link to heading

A defensible version of the social-disembedding thesis does not claim that liberalism simply destroys community or that modern people are more dependent than people in older social orders. Pre-liberal societies were saturated with dependence: on kin, landlords, churches, guilds, patrons, villages, husbands, local status hierarchies, and inherited authorities. Liberal political economy often weakens or makes exit from some of those relations easier. At the same time, market society, welfare administration, mass education, professional credentialing, and digital platforms can move dependence into more impersonal systems.

The central question is therefore not dependence versus independence. It is which dependencies are displaced, which new dependencies are created, and how contestable they are.

This report uses disembedding for the movement of activities away from durable local or customary relations and into more portable market, legal, or administrative arrangements. It uses managed dependency for conditions in which access to important goods—income, health care, education, housing, status, social insurance, occupational permission, or platform-mediated work—is substantially routed through impersonal systems that classify, price, credential, monitor, or adjudicate individuals. The phrase is descriptive before it is normative. A universal pension and an opaque algorithmic labor platform are both impersonal systems, but they create very different forms of dependency.

The historical and empirical record supports several parts of this framework.

• Marketization can reduce dependence on inherited status while increasing dependence on wage income, prices, and formal contract. Karl Polanyi’s classic account of labor, land, and money as “fictitious commodities” remains a useful theoretical description of this transition, although contemporary economic sociology cautions against treating embeddedness as a single measurable variable or assuming that markets ever become literally detached from social institutions. Polanyi, The Great Transformation; Krippner and Alvarez, 2007
• Welfare states can decommodify access to important goods by reducing dependence on market earnings, and can defamilialize people by reducing compulsory dependence on relatives. These are genuine forms of emancipation. They also move entitlement into legal and administrative systems that define eligibility, contribution, documentation, and service access. The resulting dependence is institutional rather than simply personal. Jacques and Noël, 2022; Lohmann and Zagel, 2021
• Modern states and firms expand legibility: standardized identities, records, credentials, metrics, classifications, and data make large populations governable and organizations manageable. James C. Scott’s analysis of state legibility and Michel Foucault’s analysis of liberal government through incentives and competitive conduct illuminate this mechanism, but neither establishes that legibility is uniquely liberal. Some of Scott’s strongest cases are authoritarian. Scott, Seeing Like a State; Foucault, The Birth of Biopolitics
• Digital and workplace management deepen this mediated form of coordination. A 2025 OECD employer survey covering more than 6,000 firms across six countries found widespread use of algorithmic tools to instruct, monitor, or evaluate workers, alongside reported efficiency benefits and concerns about accountability, explainability, surveillance, and worker health. OECD, 2025
• Social connection has changed in ways consistent with some forms of disembedding, but not with a simple story of social collapse. OECD data for 21 European countries show daily face-to-face contact with non-household family falling from 17% in 2006 to 11% in 2022 and daily contact with friends from 21% to 12%, while remote contact rose over the same period. That is evidence of changing modes of association, not proof that liberalism caused loneliness or destroyed community. OECD, 2025
• U.S. generalized social trust declined substantially between the 1970s and 2018. Longitudinal work finds that unemployment scarring, satisfaction with income, and confidence in institutions explain a meaningful portion of that decline, while the full change remains only partly explained. Again, the outcome is real; ideological attribution is much harder. Mewes et al., 2021

These findings support a conditional thesis: modern liberal-capitalist societies frequently shift dependence from inherited persons and communities toward markets, formal organizations, public administration, credentials, and digital infrastructures. Whether this constitutes domination depends less on the mere existence of mediation than on its design. Universal, transparent, portable, appealable institutions can increase substantive freedom. Opaque, monopolistic, highly conditional, or noncontestable systems can make nominally free individuals intensely dependent on organizations they cannot meaningfully challenge.

The strongest critique of managed dependency is therefore a critique of uncontestable mediation, not of modern institutional life as such.

1. From Atomization to Dependency Shift Link to heading

The inherited version of this argument often appears as an atomization story: liberalism emancipates individuals from family, church, guild, village, or customary hierarchy; those bonds weaken; isolated individuals then become dependent on markets and bureaucracies. That story captures a real possibility but hides the most important comparison. Older solidarities were not only sources of belonging. They were also systems of discipline, exclusion, obligation, and unequal bargaining power.

A tenant embedded in a paternal estate, a worker dependent on a guild, a woman legally or economically dependent on relatives, or a dissenter subject to a confessional community may possess thick belonging without possessing much exit. Conversely, a modern worker may possess formal rights and geographic mobility while depending on an employer, landlord, insurer, credentialing authority, benefit agency, or software platform.

The analytically useful variable is therefore not the amount of dependency. It is its structure.

The thesis becomes more precise when it asks how societies move between these forms and which combinations increase or reduce practical autonomy.

2. Liberalism, Markets, and Disembedding Link to heading

2.1 Liberal philosophy is not identical to market society Link to heading

Liberal philosophy contains commitments to legal equality, individual rights, freedom of conscience, contract, and protection against arbitrary authority. A liberal society can also contain unions, churches, cooperatives, families, municipal institutions, public welfare systems, and strong voluntary associations. It is therefore a category error to infer the social consequences of every capitalist or bureaucratic institution directly from philosophical liberalism.

Communitarian critics nevertheless identify a genuine tension. Michael Walzer argued that liberal theory can portray people as radically separate choosers while relying on social relationships and histories that make choice possible. Charles Taylor’s critique of “atomism” similarly targets theories that treat individual rights or purposes as conceptually prior to the social conditions that form persons. These are philosophical critiques of an image of the person, not empirical demonstrations that liberal rights cause civic decline. Walzer, 1990

The empirical question begins when rights-bearing individualism is combined with historically specific institutions of industrial capitalism, national administration, mass schooling, welfare provision, and digital markets.

2.2 Polanyi: commodification and the double movement Link to heading

Polanyi’s Great Transformation provides the most influential vocabulary for social disembedding. His argument was not that economic activity can literally exist outside society. It was that the nineteenth-century project of a self-regulating market attempted to subject labor, land, and money to market coordination as though they were ordinary commodities. Because labor is human activity and land is the natural and social environment, full exposure to market fluctuation threatened social reproduction and generated protective countermovements.

The concept is useful because it makes marketization a two-sided process. Markets can break inherited monopolies and allow exit from local hierarchy. They can also make livelihood depend more directly on employment, prices, credit, and market access. Protective institutions then re-embed market life through labor law, social insurance, public services, collective bargaining, or regulation.

Economic sociology has since used “embeddedness” in several different senses. Krippner and Alvarez emphasize that Polanyi’s project differs from later network accounts such as Granovetter’s. For this reason, the present report does not treat “disembedding” as a single numerical index. It is a family of institutional transitions that must be specified by domain. Krippner and Alvarez, 2007

2.3 Dependence on markets is still dependence Link to heading

Wage labor illustrates the change clearly. Formal freedom to sell labor to different employers can increase exit from hereditary occupations and personal masters. Yet a person without independent wealth remains dependent on obtaining income through labor markets. The dependency is less personalized but not absent.

This distinction matters for political theory. A system can increase formal exit while also increasing exposure to market fluctuations. Conversely, a protective institution can reduce market dependence while increasing dependence on public administration. The relevant welfare question becomes: which dependency exposes a person to less arbitrary power?

3. Welfare: Re-Embedding, Decommodification, and Administrative Mediation Link to heading

The welfare state is a decisive counterexample to any claim that modern liberal orders simply push people into markets. Social insurance, public health systems, pensions, unemployment protection, disability support, family benefits, housing assistance, and public education can weaken the link between immediate market success and access to basic goods.

3.1 Decommodification Link to heading

In welfare-state research, decommodification describes the degree to which people can maintain an acceptable livelihood without relying entirely on market participation. The concept is contested and difficult to measure, but it captures a real institutional effect: unemployment insurance makes temporary job loss less catastrophic; public health coverage can make medical access less dependent on employer choice; pensions reduce the need to sell labor at advanced age.

Jacques and Noël analyze 21 OECD countries from 1971 to 2010 and report a positive relationship between welfare generosity and population health, framing decommodification as one pathway by which welfare states can protect people from harmful market exposure. This observational evidence does not by itself prove every causal step, and the comparative-welfare literature disputes how best to measure decommodification, but it is strong evidence against the simple equation more public provision = more harmful dependency. Jacques and Noël, 2022

3.2 Defamilialization Link to heading

Public provision can also reduce compulsory reliance on relatives. Comparative social-policy research uses defamilialization to describe arrangements that allow individuals to maintain socially acceptable living standards independently of family relationships. Childcare, individual entitlements, pensions, disability support, and care services can reduce vulnerability to a spouse, parent, or adult child.

That change may weaken some family obligations, but it can also make intimate relationships less coercive. The normative effect therefore cannot be inferred from a decline in family dependence alone. Lohmann and Zagel, 2021

3.3 Administration is the price of impersonal entitlement Link to heading

At the same time, universal or means-tested programs require rules. Someone must define legal categories, establish eligibility, process evidence, adjudicate disputes, and allocate scarce resources. The person who becomes less dependent on a relative or employer may become more dependent on an entitlement system functioning correctly.

This is the strongest version of the managed dependency insight. Modern welfare can be simultaneously emancipatory and administrative:

market or family dependence decreases → formal entitlement increases → access becomes mediated by rules, records, agencies, and professional judgment.

The key question is not whether mediation exists. It is whether the system is predictable, universal or fairly targeted, accessible, transparent, appealable, and insulated from arbitrary retaliation.

4. Political Domestication as a Subordinate Mechanism Link to heading

The separate report Liberalism as Political Domestication developed a closely related argument around Weber, Foucault, and Scott. That material is better treated as a mechanism inside the broader disembedding framework than as an independent thesis.

4.1 From personal authority to legal-rational authority Link to heading

Modern administration increasingly coordinates people through general rules, offices, records, standardized procedures, and technical expertise rather than through personal loyalty or hereditary status. This resembles Weber’s familiar distinction between traditional and legal-rational authority. The shift can reduce personal arbitrariness while producing a dense institutional environment in which access depends on being correctly classified by formal systems.

The result is not necessarily “domestication” in the pejorative sense. Standardized law can protect individuals from local prejudice and patronage. But formalization also makes persons more legible to large organizations.

4.2 Scott: legibility Link to heading

Scott’s Seeing Like a State shows how states increase governing capacity by simplifying complex local realities into administratively usable categories: names, maps, property records, standardized measures, censuses, cadastral systems, planned settlements, and other forms of legibility. His warning concerns high-modernist interventions that mistake simplified representations for the full social reality and suppress local practical knowledge. Scott, Seeing Like a State

Scott should not be recruited as proof that liberalism uniquely produces legibility. His cases include authoritarian and revolutionary regimes. Legibility is a feature of modern state capacity more generally. Its relevance here is that liberal orders also require it to administer rights, taxes, benefits, contracts, education, and regulation at scale.

4.3 Foucault: government through freedom and competition Link to heading

Foucault’s lectures on liberal and neoliberal governmentality emphasize forms of rule that operate through incentives, markets, norms, risk, and the structured field in which formally free subjects make choices. In his discussion of neoliberalism, competition is not simply a natural fact discovered by government; it becomes an institutional principle that policy can actively construct. Foucault, The Birth of Biopolitics

This provides a useful vocabulary for management without direct command. But it remains a theoretical interpretation. Showing that a workplace uses metrics or that a benefit program classifies recipients does not by itself prove a Foucauldian causal story. The value of governmentality theory is to generate questions about how nominal freedom can coexist with intense institutional steering.

5. Credentials, Professions, and Portable Status Link to heading

Disembedding is not only a market/state transition. Modern societies also replace some locally known reputations with standardized credentials.

A village or guild can evaluate a person through long-term familiarity, lineage, apprenticeship, or local testimony. Large anonymous societies need more portable signals. Degrees, licenses, examinations, certifications, professional memberships, credit files, and standardized records allow organizations to evaluate people who are strangers to one another.

This can increase mobility. A portable credential may let a person leave a local patron and prove competence elsewhere. It can also create closure. If a credential becomes a mandatory gate to work that could otherwise be learned or demonstrated directly, access to livelihood becomes dependent on the credentialing institution.

The same institutional form can therefore be both anti-parochial and gatekeeping. The relevant empirical questions are whether the credential predicts needed competence, whether alternative demonstrations of competence are accepted, how costly entry is, and whether incumbents control the gate.

6. Platforms and Algorithmic Management Link to heading

Digital systems intensify the movement from interpersonal coordination to impersonal mediation because they can make allocation, evaluation, surveillance, and enforcement continuous.

The OECD’s 2025 employer survey on algorithmic management covered more than 6,000 firms in France, Germany, Italy, Japan, Spain, and the United States. It found widespread employer use of algorithmic tools to instruct, monitor, or evaluate workers, although prevalence varied sharply by country. Managers reported benefits in decision-making and efficiency while also reporting concerns about responsibility, explainability, worker health, and the effects of monitoring. OECD, 2025

This is strong evidence for increased organizational mediation and legibility. It is not evidence that liberal ideology caused algorithmic management. Similar technologies can be deployed under many political regimes. Their relevance to managed dependency lies in the structure of power they create: a worker may formally be free to leave, yet while participating in the labor market may depend on rankings, schedules, productivity measures, or allocation systems whose rules are difficult to inspect or appeal.

The same problem appears in platform work, online marketplaces, credit scoring, automated fraud systems, admissions systems, and recommendation infrastructures. Digital mediation becomes domination when high dependence combines with opacity and weak contestability.

7. What the Social-Connection Evidence Actually Shows Link to heading

The inherited report treated several trends—declining trust, less face-to-face contact, family change, mental-health distress—as cumulative evidence that liberalism produces atomization. That inference is too strong.

7.1 Face-to-face contact has declined while remote contact has increased Link to heading

The OECD’s 2025 Social Connections and Loneliness in OECD Countries provides a more careful picture. Across 21 European OECD countries, daily face-to-face contact with non-household family declined from 17% in 2006 to 11% in 2022. Daily face-to-face contact with friends fell from 21% to 12%. Over the same period, daily remote contact increased: for non-household family from 23% to 29%, and for friends from 24% to 28%. OECD, 2025

This is evidence of a shift in mode as well as frequency. It is compatible with a disembedding interpretation because social interaction moves toward mediated, portable communication. But the same evidence is also compatible with geographic mobility, digital substitution, pandemic effects, changing work patterns, and ordinary technological adoption.

The OECD report also shows that most people still report substantial support and connection. It should not be cited as evidence that modern societies have become uniformly isolated.

7.2 Trust decline is real but causal attribution is difficult Link to heading

Mewes and colleagues use U.S. General Social Survey data from 1973 to 2018 and find a substantial decline in generalized social trust. Their longitudinal models identify unemployment scarring, income satisfaction, and confidence in institutions among important individual-level contributors and estimate that measured changes explain roughly half of the aggregate decline. Mewes et al., 2021

The finding is useful precisely because it complicates a single “loss of community” story. Economic insecurity and institutional confidence matter. Social trust is affected by labor-market experience and perceptions of institutions, not simply by the number of associations to which a person belongs.

7.3 Social outcomes cannot identify an ideology by themselves Link to heading

Marriage change, secularization, union decline, suburbanization, mass education, women’s employment, demographic aging, migration, housing markets, television, automobiles, smartphones, and deindustrialization all overlap historically with liberal-capitalist development. Many also occur in societies with different ideological histories.

An outcome trend cannot establish liberalism as its cause merely because it occurred in liberal societies. Strong causal claims require variation: policy changes, institutional discontinuities, cross-national contrasts, cohort differences, or other designs that distinguish liberal rights, marketization, welfare administration, technology, and demographic change from one another.

8. Public Institutions Can Support Trust Rather Than Crowd It Out Link to heading

The strongest form of the managed-dependency thesis predicts that replacing local reciprocity with impersonal public provision should erode social trust. Comparative research does not justify that universal prediction.

Rothstein and Uslaner argue that high-quality, impartial public institutions and economic equality are closely connected to generalized trust and that universalistic social policies can avoid some of the stigmatizing and discretionary features associated with narrowly targeted programs. The causal relationships among equality, welfare institutions, corruption, and trust are contested; later work has shown that trust can itself help produce supportive welfare institutions. The important point is that large public systems and high generalized trust can coexist. Rothstein and Uslaner, 2005

This is a major boundary condition. Administrative mediation is not equivalent to atomization. Institutions can create reliable expectations among strangers, reduce exposure to arbitrary private dependence, and make cooperation possible beyond local communities.

The distinction is between impersonal and arbitrary, not between impersonal and human. A well-designed impersonal institution can be less dominating than an intimate but unaccountable patron.

9. When Managed Dependency Becomes Domination Link to heading

The phrase “managed dependency” is normatively meaningful only when it is connected to institutional properties. Six dimensions are especially useful.

9.1 Contestability Link to heading

Can a person challenge a decision, obtain reasons, introduce evidence, and receive review by an institution with authority to correct errors?

9.2 Portability Link to heading

Can benefits, credentials, reputation, health coverage, or work history travel with the person, or does exit from one organization destroy accumulated claims?

9.3 Universality and rule stability Link to heading

Are similarly situated people governed by predictable rules, or does access depend on discretionary favor, opaque exceptions, or status relationships?

9.4 Exit and alternatives Link to heading

Does formal exit lead to a realistic alternative, or does monopoly, geographic constraint, licensing, network effect, or poverty make exit merely nominal?

9.5 Transparency and legibility in both directions Link to heading

Modern systems make individuals legible to institutions. Freedom is greater when institutions are also legible to individuals: rules can be inspected, data use can be understood, decisions can be explained, and responsible officials or procedures can be identified.

9.6 Preservation of intermediary capacity Link to heading

Does the system leave room for families, unions, cooperatives, congregations, mutual-aid associations, municipalities, professions, and voluntary organizations to retain meaningful capacity, or does every problem become routed through a small number of centralized public or corporate systems?

These dimensions distinguish empowering infrastructure from domination better than a simple state-versus-community or market-versus-family binary.

10. A Better Empirical Research Program Link to heading

The disembedding thesis can be made testable by studying transitions rather than simply assembling modern malaise indicators.

10.1 Marketization tests Link to heading

Identify reforms that move a service from household/community/public provision toward market provision or vice versa. Measure effects on labor supply, family obligation, geographic mobility, bargaining power, social support, and perceived autonomy.

10.2 Decommodification and defamilialization tests Link to heading

Compare changes in benefits or public services that reduce dependence on employers or relatives. Ask whether beneficiaries gain exit options, whether family relationships become weaker or simply less compulsory, and whether administrative burden offsets part of the gain.

10.3 Legibility and contestability tests Link to heading

For credentialing, welfare, and algorithmic systems, measure both institutional information about the person and the person’s information about the institution. A one-sided system—high surveillance of individuals, low explainability of decisions—should predict a different experience of dependency than a transparent, appealable system.

10.4 Social-capital effects Link to heading

Measure bonding, bridging, and cross-class ties separately. A policy can weaken one kind of tie while strengthening another. The relevant question is not whether “community” rises or falls as a single quantity but which networks become more or less necessary and which resources flow through them.

10.5 Cross-regime comparison Link to heading

Because bureaucracy, surveillance, markets, and family decline are not unique to liberal democracies, comparative tests should include nonliberal and mixed regimes. If the same institutional tendencies appear under very different political philosophies, the causal theory should assign them to modernization, capitalism, state capacity, technology, or demographic transition rather than liberalism itself.

11. Synthesis Link to heading

The original disembedding critique contains an important insight but overstates it when it treats liberalism as a machine that destroys natural community and manufactures dependent individuals.

Modern liberal-capitalist development has often broken inherited status orders and expanded exit. That is not a trivial achievement. The same development has also expanded wage dependence, administrative classification, credentials, expert systems, and digital mediation. Welfare institutions then complicate the picture further by reducing dependence on employers and relatives while making access to resources more administratively mediated.

The result is best understood as a recomposition of dependency.

• Some personal dependencies become contractual.
• Some market dependencies become social rights.
• Some local reputations become portable credentials.
• Some face-to-face interactions become technologically mediated.
• Some direct managerial commands become metrics, rankings, incentives, and algorithms.
• Some private obligations become publicly administered entitlements.

None of these transformations is automatically emancipatory or dominating. Their normative meaning depends on whether people can contest decisions, carry claims across institutions, understand the rules governing them, exit without catastrophic loss, and maintain alternative centers of association and power.

Conclusion Link to heading

The strongest version of the thesis is therefore narrower than “liberalism atomizes society” and more institutionally precise:

Modern liberal-capitalist orders often replace inherited personal dependencies with market, legal, administrative, credentialed, and digital dependencies. These replacements can increase freedom when they reduce arbitrary personal power and provide portable, universal, contestable rights; they become forms of managed domination when essential access is concentrated in opaque, nonportable, weakly contestable systems.

This formulation preserves the insight behind social-disembedding and political-domestication critiques while incorporating their strongest counterevidence. Welfare can decommodify. Public institutions can support generalized trust. Digital mediation can maintain connection as well as thin it. Markets can enable exit as well as create exposure. Families and communities can nurture as well as dominate.

The relevant political problem is not how to return to a world without dependency. No such social world exists. It is how to construct dependencies whose rules are visible, whose power is contestable, whose benefits are portable, and whose existence does not eliminate the intermediary institutions through which people can organize independently of both market and state.