Karl Polanyi

Works

• 1944The Great Transformation

  The nineteenth-century attempt to create a self-regulating market society was utopian; its social consequences led to the countermovements and catastrophes of the twentieth century.

Position

In “The Great Transformation” Polanyi argued that markets had always existed, but that only in nineteenth-century Britain was society subordinated to a self-regulating market. Labour, land and money, which are not produced for sale, were treated as “fictitious commodities”; the resulting dislocation provoked a “double movement” of social protection – factory laws, trade unions, tariffs, central banks – and the deadlock between market and protection culminated, in his account, in the collapse of the gold standard and in fascism. With Conrad Arensberg and Harry Pearson he then studied ancient and non-European economies (“Trade and Market in the Early Empires”, 1957), distinguished reciprocity, redistribution and exchange as forms of integration and held that the economy was usually “embedded” in social relations; in Aristotle he found the first analysis of an economy beginning to disembed. This “substantivist” position opened a long debate in economic anthropology with “formalists” who applied neoclassical theory to all societies. Economic historians such as Mark Blaug (1963) disputed his account of the Speenhamland system of poor relief, and liberal economists in the tradition of Mises and Hayek rejected his claim that the free market was itself a planned creation. Since the 1980s embeddedness has been a key concept of economic sociology, and Nancy Fraser has widened the double movement into a “triple movement” that includes emancipation.

Life & context

Karl Polanyi was born on 25 October 1886 in Vienna and grew up in Budapest; Michael Polanyi was his younger brother. He studied law and philosophy in Budapest, became the first president of the Galileo Circle, a student society of the progressive intelligentsia, in 1908 and took his doctorate in law at Kolozsvár in 1909. In the First World War he served as an officer in the Austro-Hungarian army. After the fall of the Hungarian revolutions he moved to Vienna in 1919, where in 1922 he took part in the debate on socialist economic calculation against Ludwig von Mises; in 1923 he married the revolutionary Ilona Duczyńska, and from 1924 he was an editor of the weekly “Der Österreichische Volkswirt”. In 1933 he emigrated to England and taught courses for the Workers’ Educational Association. From 1940 to 1943 he was at Bennington College in Vermont, where he wrote “The Great Transformation” (1944). From 1947 to 1953 he taught economic history at Columbia University in New York; because his wife was refused entry to the United States on account of her communist past, the family lived in Pickering near Toronto. He died there on 23 April 1964.

Further main works

• Our Obsolete Market Mentality (essay, 1947)
• Trade and Market in the Early Empires (ed. with C. Arensberg and H. Pearson, 1957)
• Aristotle Discovers the Economy (essay, 1957)
• Dahomey and the Slave Trade (posthumous, 1966)
• The Livelihood of Man (posthumous, 1977)

Appears in

• Debate ‘Green Growth or Degrowth?’