Orthodox economics corresponds to the formal definition of economy, according to which scarcity determines the relationships between means and ends. A heterodox economic framework is provided by substantive economics; this theoretical approach introduced by Karl Polanyi replaces the focus on the market with an openness to the plurality of economic principles including:
• Redistribution, according to which central authority is responsible for allocating what is produced, which presupposes procedures defining the rules of levy and their use. A relation has become established over time between the central authority that imposes an obligation and the agents who submit to it.
• Reciprocity, corresponding to relations established between groups or persons through actions that only make sense insofar as they express a will to demonstrate a social link among the stakeholders. The cycle of reciprocity contrasts with market exchange in that the former is inseparable from human relations involving the desire for recognition and power. Reciprocity also differs from redistribution, insofar as it is not imposed by a central authority.
• Householding, which does not involve relations between groups but concerns the basic group in the society under consideration (the oikos, the nuclear family, etc.). It refers to the production and sharing that takes place within this group in order to satisfy its members’ needs.
This pluralist approach emphasizes the process of disembedding through which public authorities promote the formal economy while hiding this support through the naturalization of the self-regulating market. By destroying social bonds and exercising violence towards nature, this disembedding threatens the substance of society. For this reason, disembedding generates a need for re-embedding, but this can take two directions: one authoritarian, the other emancipatory. Crises – dangerous periods – are at once fraught with the risk of totalitarian regression and charged with democratic potential.
On an epistemological level, substantive economics also converges with feminist analyses questioning the reductionism of formal economics, which values production and neglects reproduction.