The failed revolution of Karl Polanyi

We are in the midst of yet another “great transformation” — but the future it heralds couldn’t be farther from the democratic, co-operative international order he envisioned

I’ve written for UnHerd about the legacy of Karl Polanyi, one of the 20th-century’s most influential socialist thinkers, and the lasting legacy of his masterpiece, The Great Transformation. Even though sixty years have passed since his death (on 23 April 1964), and eighty years since the publication of the book, Polanyi’s ideas remain as fresh as ever. Indeed, if anything, their relevance and importance have continued to grow over time.

Polanyi set out to explain the massive economic and social transformations that he had witnessed during his lifetime: the end of the century of “relative peace” in Europe, from 1815 to 1914, and the subsequent descent into economic turmoil, fascism and war, which was still ongoing at the time of the book’s publication. He traced these upheavals back to a single, overarching cause: the rise of market liberalism in the early 19th century — the belief that society can and should be organised through self-regulating markets. For him, this represented nothing less than an ontological break with much of human history. Prior to the 19th century, he insisted, the human economy had always been “embedded” in society: it was subordinated to local politics, customs, religion and social relations. Land and labour, in particular, were not treated as commodities but as parts of an articulate whole — of life itself.

By postulating the allegedly “self-regulating” nature of markets, economic liberalism turned this logic on its head. Not only did it artificially separate “society” and “the economy” into two separate spheres, it demanded the subordination of society, of life itself, to the logic of the self-regulating market. For Polanyi, this “means no less than the running of society as an adjunct to the market. Instead of economy being embedded in social relations, social relations are embedded in the economic system”.

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Thomas Fazi

Website: thomasfazi.net

Twitter: @battleforeurope 

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