Karl Polanyi: The Great Transformation

I foolishly took it upon myself to read not only the assigned chapters but the whole of Polanyi s magnum opus and for the past few days have been lost in the labyrinth of 19th century poor laws and monetary policy in the Weimar Republic But this book was immensely profitable if I may borrow a market based metaphorIn particular three of Polanyi s simplest most commonsensical contentions were extremely illuminating to me and reatly bolstered my ability to criticize capitalist orthodoxyThe first on page 48 is Polanyi s contention that the concept of man that Adam Smith and the economists after him put forth of man as naturally engaging in trade and barter to further his economic interest is pure invention Far from being a simple description of man s nature it is thoroughly unnatural Man is and throughout history has been primarily motivated not by individual economic interests but by social interests His economic decisions as well as all other decisions were determined by his need to preserve his social status and to conform with accepted social norms because man is fundamentally a social being As soon as you state this truth it becomes blindingly obvious Even two centuries of market dominance have been unable to overcome human nature in this respect when we look around at what motivates people s buying and selling choices even in the modern West the chief factor is clearly not economic interest but social status Why on earth do women spend hundreds of dollars on brand name clothing that is no useful than nearly identical clothes that sell for a tenth the price Why do men spend thousands of dollars on sleek sports cars to drive on crowded city roads Clearly not economic interest but desire for social status The same applies to much of what drives the housing market and other huge chunks of the The Barracks Thief and Selected Stories global economy Marketing experts know better than to listen to the claim that man trades primarily for his economic interest it s about time professional economists woke up to the fact as wellSecond is Polanyi s argument that land labor and money are of course not commodities at all they are fictional commodities Land and labor are simply part of the basic fabric of natural human existence only if they are torn completely away from their natural foundations can they begin to function as commodities but even then nature will continually re assert itself and the market will neverain uncontested mastery over them Money is naturally merely a tool to facilitate exchange to exalt it beyond this is to subject it to dangerous pressures which it cannot bear Of course it is not impossible to argue that to treat these as commodities is all in all an advantageous innovation but Polanyi insists that economists be honest and recognize it as an innovation Classical economics must renounce its absurd claim to be simply an objective description of the way the world works which is how Christian conservatives justify submission to it and acknowledge that it is rather a bold and dangerous prescription for how to make the world workThird is Polanyi s argument on p 164 and following that a society may be destroyed and misery may increase even when economically every one is doing better and better This pokes a big hole in the last defense of free market capitalism that in the end it benefits poor and rich alike by causing the wages and economic prosperity of all to increase Far destructive to human well being than simple economic privation Polanyi argues is the destruction of the social structures and norms which Becca and the Prisoners Cross (The Copernicus Legacy give human existence stability and meaning Of course this destruction also has economic conseuences because as capitalism advances and individual prosperity increases the social support systems that will protect each member of society in case of crisis disappear the individual is left to his own resources which though they may have been augmented by economic progress are insufficient for the task This observation of Polanyi s is intensely relevant to the current world situation where capitalist industry is taking complete control of Third World countries often with devastating social conseuences Anti capitalists lament the deprivation poverty and exploitation of the common people while defenders of capitalism insist that on the contrary statistics show that these people s incomes and economic prosperity arerowing The capitalist defense may be partially true but the whole truth is much worse than the anti capitalist lament the people of Kenya Bangladesh or Vietnam may have a higher income but with the result of the destruction of the fabric of society of all in man that cannot be commodified the result in short that CS Lewis calls the abolition of man Foreword by Joseph E StiglitzIntroduction by Fred BlockNote on the 2001 EditionAuthor s Acknowledgments The Great Transformation The Political and Economic Origins of Our Time Notes on Sources1 Balance of Power as Policy Historical Law Principle and System2 Hundred Years Peace3 The Snapping of the Golden Thread4 Swings of the Pendulum after World War I5 Finance and Peace6 Selected References to Societies and Economic Systems7 Selected References to Evolution of the Market Pattern8 The Literature of Speenhamland9 Poor Law and the Organization of Labor10 Speenhamland and Vienna11 Why Not Whitbread s Bill12 Disraeli s Two Nations and the Problem of Colored RacesIndex Polanyi understood economi. In this classic work of economic history and social theory Karl Polanyi analyzes the economic and social changes brought about by the reat transformation.

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This reason my rating is lower than one might expect as I agree ideologically with his conclusions which remain relevant to the modern world particularly in the light of the recent financial crisis and the massive state intervention in markets it reuires I had never read this book in its entirety but in fragments and that was years ago I remember thinking it was interesting at the time years later one of my favorite writers recommended it as the book to read for anyone interested in wrapping their head around the socio economic national shift we might as well call the populist turn My od I couldn t agree This is a very important bookPolanyi s basic argument is that the tenets of the free marketeers rely upon strange assumptions one that all human societies have been barter societies that mankind is many things but is in essence economic first and foremost two that the process of barter benefits both parties concerned Against this Polanyi holds that most societies for millennia have been basic on values such as reciprocity rather than barter and that the nature of mankind is social rather than to seek economic advantage The Dare Mighty Things greatest blows to a person in society are the ones which damage the social standing of the members who live in it not necessarily those which reuire a member to relinuish potential individualains that the member may makeOf course we must bear in mind that Polanyi is not saying that economic issues are not important and that the only thing of any conseuence are social issues He s saying that people who advocated for free markets non interventionalist regulatory policies were uniue insofar as they were the first in the history of all peoples to invariably accord precedence of the economic over the social believing that ideal social conditions would follow clement economic ones Essentially they separated the economic from the social sphere by raising it up as the fulfillment of the The Texas Rangers Heiress Wife greatest duty of one to oneself as a person whose sole task was to seek thereatest amount of ain Before the advent of classical economics no school of thought had separated the economic from the socialThe historical soil in which this outlook took root was the system of enclosures practiced by landowners whose privatization of property uprooted countless families who had been tied to the land for centuries Gradually the feudal social fabric had been upset to the degree that laborers and land began to be looked upon as free agents or commodities another strange interpretation of classical economics one which was certainly novel Polanyi refers to these commodities as fictitious commodities since nothing was done to produce them this truly radical interpretation of commodities did two things one it in a way freed members of a village or state from the bonds social and topographical which held them to the land and two it completely upended communities creating an absurd world of alienation and disintegration Truly I am neither cute nor uniue when I reiterate what many others have said the reatest revolutionizing force in recent history has been the spread of capitalismFurther Polanyi holds that if left unchecked this Eternal Quest great revolutionizing force of free markets not only destroys the bonds of society which help members understand their place within it but destroys the planet Though these forces hold within them areat deal of revolutionary potential they are untenable Polanyi The Widows Little Secret goes so far as to say that they are antithetical to the nature of mankindWriting during the Second World War Polanyi does not see facism and socialism as aberrations from the natural purity of market societies but as countermoves against the inherently dehumanizing currents of capital which know neither moral bounds nor limits which would satiate its demands forrowth Resurrection Year growth which if left unchecked is of benefit to a very small ratio of winners as its disregard of rightsuaranteed by social bodies like the state is in correlation with its infinite appetite for The Fire Within (Rockford Fire Department gain In its course thisrowth would destroy us all As a result countermoves such as socialism and fascism must be understood as efforts to remove fictitious commodities like land and human labor from the market bringing them back into social orbit In this way capital which initially seeks freedom from authorities like the Crown eventually must seek protection from the People Does this sound familiar According to Polanyi this is precisely why despite universal suffrage in America we still seem to be powerless against the owners of capitalPolanyi sees our future as either the complete destruction of society and the planet in a uest for unfettered ain of the few free market capitalism a cynical move towards the elimination of freedom due to our disaffection towards it fostering instead a caricaturesue assertion of the social fascism or taking back the market in the name of the People subordinating it to the Democratic principle socialismI ll stop here there are many other angles to talk about Polanyi s masterpiece Many historical points are made throughout the work which serve to reinforce his argument I ll leave these to the reader For now let me take this opportunity to encourage everyone to read this extremely important and though written roughly 70 years ago relevant piece It will clearly illustrate the choices we must make in what seems to me to be a particularly urgent hour of decision. Ntempered market capitalism New introductory material reveals the renewed importance of Polanyi's seminal analysis in an era of lobalization and free trad.

Cs realistically than most economists and understood that economics does not stand alone but exists within a larger social institutional context I know that sounds a bit stiff But until you et it you will suspect that economists don t know something you don t You might even believe in the almighty market as something that exists outside of culture and politics like the revolutions of the planets Economics is always like religion or politics something we create together in response to the world we live in The people in this book are among other things creating a new economics But the reality is that every society every day for better or worse is creating its own new economics Polanyi s book traces the history of the rise of industrial civilization in England from 1795 through the Great Depression The book was written during World War II but it remains as important as ever to us since the Reagan Thatcher Revolution has resurrected the illusions of an earlier age of naive worship of the free market Now that we are in the midst of our Great Recession perhaps we are in a better position to appreciate his comprehensive critiue of liberal economic theory the theory of laisser faire that arose in the nineteenth century with David Ricardo and subseuent thinkers It would be fair to say that the entire science of economics is founded upon the illusions that Polanyi exposes since his principal thesis is that economic life is not the base of human society but embedded in itPolanyi s critiue is as applicable to the Marxist as the Liberal tradition to the extent that Marx took over from Ricardo the notion that economic life is primary to society and not the other way round as Polanyi insisted Polanyi s thesis is based not on a Keynesian or Marxist critiue of capitalism but on a profoundly basic analysis of the very idea of a self regulating market the idea illusion developed by the founders of the Liberal school Ricardo Malthus Burke and Mill One of its offshoots is the libertarian tradition which in the United States is essentially coeval with the tradition of the Austrian school in economicsFor a detailed review look here I have to admit that I took fifty one weeks to finish this The effect of that is that my take on it is somewhat disjointed Hence no proper review The four stars 35 really are because the author presents some excellent historical analysis and pulls that together to synthesize extremely original ideas of economic development I m surprised we don t see references to Polanyi s theoriesI did have some concerns with his choice of historical events As is often the case he has chosen those which support his arguments over other obvious events Of course he is not the first to do this Over all the history is sound The book is worth reading reading as it demonstrates that there are their options to the leftright analyses to which we are accustomed to Marx is not the only voice on the left I wouldn t think of reading this book without a uide Because Polanyi is an impossible read difficult than Marx he doesn t have Marx s love of language or Marx s humor difficult than Hegel he doesn t have Hegel I read this a few years agoI ve been thinking about it again after reading Streeck s stunning How Will Capitalism EndMaybe the key concept here is embeddedness Capitalist society relies on pre capitalist social formations to sustain itself The market on its own is an insufficient foundation for the spiritual and social bonds that constitute a people as opposed to just an aggregate of individualsThus it may follow the total triumph of capitalism will also be its dissolution Contra most Marxists the end of capitalism does not reuire a revolutionary subject to take its place Just the opposite capitalism will deteriorate after it has eliminated all oppo Just re read this book from start to finish and I could not believe how relevant it is This may be the most important book written this century While some parts are obviously outdated his thorough takedown of neoliberalism myths of colonization and money are essential The fact that we re still only reading Adam Smith or Marx is a tragedy The principle point made by this book is that the attempted transition from a market embedded in society to a society embedded in a self regulating market resulted in the collapse of 19th century civilisation in the form of Treacherous Is the Night (Verity Kent, global conflict and economic recession Polanyi asserts that free markets whereby labour land and capital become fictitious commodities result in massive social dislocation Socialism exists to counter thisiving a double movement as recognisable now as in 1944 In his opinion the establishment of the free market is not an inherent part of human nature but rather a human invention which can and must be extensively controlled and regulated A truly free market could never exist as it would destroy man and nature within a very short amount of time which it reuires to function This is the inherent contradiction of unrestrained capitalismThis book attempts to answer a big uestion how did we A Miracle, A Universe get to where we are An intricate answer such as this profound uestion reuires is neveroing to be an easy read However Polanyi s writing style is at best obfuscatory and at worst unreadable The examples employed seem especially obscure to the modern reader and the book reuires prior knowledge of 19th century British politics and world events For. Of the Industrial Revolution His analysis explains not only the deficiencies of the self regulating market but the potentially dire social conseuences of

Karl Paul Polanyi was an Austro Hungarian economic historian economic anthropologist economic sociologist political economist historical sociologist and social philosopher He is known for his opposition to traditional economic thought and for his book The Great Transformation which argued that the emergence of market based societies in modern Europe was not inevitable but historically conti