The Great Transformation



In This Classic Work Of Economic History And Social Theory, Karl Polanyi Analyzes The Economic And Social Changes Brought About By The Great Transformation Of The Industrial Revolution His Analysis Explains Not Only The Deficiencies Of The Self Regulating Market, But The Potentially Dire Social Consequences Of Untempered Market Capitalism New Introductory Material Reveals The Renewed Importance Of Polanyi S Seminal Analysis In An Era Of Globalization And Free Trade.The Great Transformation

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

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  • Paperback
  • 360 pages
  • The Great Transformation
  • Karl Polanyi
  • English
  • 12 August 2017
  • 9780807056431

10 thoughts on “The Great Transformation

  1. says:

    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 metaphor.In particular, three of Polanyi s simplest, most commonsensical contentions were extremely illuminating to me and greatly bolstered my ability to criticize capitalist orthodoxy.The 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 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 well.Second 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 never gain 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 work.Third 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 give human existence stability and meaning Of course, this destruction also has economic consequences, 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 consequences 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 are growing 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 C.S Lewis calls the abolition of man.

  2. says:

    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 Sources 1 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 Systems 7 Selected References to Evolution of the Market Pattern 8 The Literature of Speenhamland9 Poor Law and the Organization of Labor10 Speenhamland and Vienna11 Why Not Whitbread s Bill 12 Disraeli s Two Nations and the Problem of Colored RacesIndex

  3. says:

    This is a fascinating book, I m astonished I haven t heard of it earlier.Polanyi is not your run of the mill economist he does not use equations he uses context and does not describe events in a vacuum, integrating various disciplines from the social sciences He describes four elements which comprised 19th century civilization, and which have all been swept away by the great bloodbaths of the early 20th century the gold standard, the international balance of power, the classical liberal state, and the self regulating market The first three are elements of the final element.That is, Polanyi posits that the free market is not free, nor is it self perpetuating, nor is it a natural state of affairs instead, governments have had to act in order to create economies on a national scale Before this, there were community markets, and some distant trade, but nothing uniquely like this The free market is a creation of states and interests.The free market revolution was staged The government has had to act in order to create the free market Economy and society are inextricably linked, an apparatus which he calls the Market Society Massive societal extraction and mass upheavals are necessary Vast populations are moved around, forced to work, thrown out, in ways which were wholly alien to our experience, and still crack and grumble at the bottom of society Labour is an abstract term used to treat persons as commodities Polanyi uses historical examples and some abstract thinking to reach his conclusions He is disappointing in his advocacy of the Soviet model of centralization, and some of his lines of reasoning Some might go after his characterization of the pre industrial era, calling it a rehash of the noble savage He does not deny that on a simple level of raw productivity or GDPs, the free market system works But that, of course, is not the whole story.This book is not easy to read or simple as Ayn Rand or Hayek or Mises are It is perhaps even turgid than Marx His complexity makes it far too difficult to slap an ideological label onto him He shares some things with John Maynard Keynes and the Christian socialists and the Humanists He does, however, provide a stunning criticism of the ideas of the free market, and of some of the ideas of neoliberalism People should be treated as than statistics or economic figures, these cannot possibly tell the whole story.

  4. says:

    I wouldn t think of reading this book without a guide 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 s pointed sense of knowing that his prose is torturing the poor reader If you have ever tried to read Aristotle, then you have some idea of how Polanyi writes tear duct vaporizing dry But you get something here you won t get in hegel or marx in part because he is building on them What you get is this the claim that markets and socialism are simultaneous in their emergence Not markets against socialism, but markets AND socialism from the beginning and always The bold claims is that without socialism of various types a pure market society couldn t exist for than 20 years Markets would destroy the very elements they thrive upon human beings.What we get from Polanyi is that the temporal separation of stages that the Scottish Enlightenment figures Smith, Hume, Ferguson, etc , hegel, and marx deployed, is replaced in Polanyi by the overlaps of stages The past, present, and future coexist in simultaneous determinacy Its a revolutionary move There is Much, much The Great Transformation is a book that one reads over and over through a lifetime Its mix of theory, history, and wisdom is unparalleled in any other book I have read Hegel s and Marx s theoretical insights are deeper and perhaps precise But Polanyi is superior I believe in one important dimension he treats the third world with reverence, as a fount of knowledge, as a living resource His honoring of the third world comes across in other works see, Primitive, Archaic, and Modern Economies Essays of Karl Polanyi Trade and Market in the Early Empires and Dahomey and the Slave Trade An Analysis of an Archaic Economy.I mention all this about Polanyi because the current popular heir to his work is Naomi Klein s excellent The Shock Doctrine.So read Klein, then get your hands on some secondary literature on Polanyi You might start with chapter 5 of my book with David Blaney International Relations and the Problem of Difference Or you could start with a short and excellent overall sketch in The Economic Thought of Karl Polanyi Lives and Livelihood, by James Ronald Stanfield.

  5. says:

    I read this a few years ago.I ve been thinking about it again after reading Streeck s stunning How Will Capitalism End Maybe 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 individuals.Thus it may follow the total triumph of capitalism will also be its dissolution Contra most Marxists, the end of capitalism does not require a revolutionary subject to take its place Just the opposite, capitalism will deteriorate after it has eliminated all opposition Chaos reigns This book was actually published the same year as Road to Serfdom.Polyani Hayek Marx to me, that seems like an open question at the moment it almost seems equally radical to call for a new New Deal as a second Bolshevik revolution Hayek contended in The Road to Serfdom that even democratic forms of state planning were bound to end in the totalitarianism of a Stalin or a Hitler But 70 years later, there is not a single case of social democracy leading to dictatorship, while there are dozens of tragic episodes of market excess destroying democracy TRUTH What starts with free markets does not end in freedom.

  6. says:

    Polanyi understood economics 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 get 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.

  7. says:

    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 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 this, giving 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 requires to function This is the inherent contradiction of unrestrained capitalism.This book attempts to answer a big question how did we get to where we are An intricate answer, such as this profound question requires, is never going 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 requires prior knowledge of 19th century British politics and world events For 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 requires.

  8. says:

    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 critique of liberal economic theory, the theory of laisser faire that arose in the nineteenth century with David Ricardo and subsequent 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 it.Polanyi s critique 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 critique 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 economics.For a detailed review look here.

  9. says:

    Reading this book was a truly enjoyable experience It was also than a little uncanny that the moment in which Polanyi wrote the book was first published in 1944 resonates so strongly with today, inasmuch as we are still in thrall to the utopian vision of the free market On Adam Smith s vision of Economic Man, Polanyi writes In retrospect it can be said that no misreading of the past ever proved prophetic of the future That misreading lingers.While Polanyi s analysis of the nature of the origins and implications of the struggle between the market and society remains as incisive as ever, I cannot be assured by the optimistic note upon which he tries to close He remarks in conclusion that the worst of the transformation is already behind us This is perhaps only true for the United States and Europe rural China is still undergoing a Great Transformation Professor Guobin Yang of Barnard brought this to my attention , and feeling the friction Also, the ecological effects of industrialization everywhere have hardly been addressed, let alone resolved, and may prove to be the absolutely insurmountable limit to the market and the survival of society.

  10. says:

    I really didn t like this book, mostly because I felt that it was poorly formulated and based on a lot of incomplete examples Every time Polanyi tried to prove something he d give 4 examples of random indigenous populations in which the event occurred All of his examples seemed like exceptions rather than base cases for a rule, and his strange statements like previously to our time the 1940s Industrial Revolution period in general no economy has ever existed that, even in principle, was controlled by markets made me question if we were even living in the same world Because of this I wasn t able to accept any of his statements, even when they seemed logical, and the book generally fell flat.

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