Karl Polanyi in Hungary, 1900–19

Abstract

In the last decade, social scientists have become increasingly aware of Karl Polanyi's achievement. From 1944, when he published his classic, The Great Transformation, until his death twenty years later, Polanyi laid the groundwork for a challenging new approach to the study of primitive, archaic, and modern economies. Convinced that the economistic prejudice, the assumption that man is driven by his very nature to sacrifice every human value on the altar of mammon, had distorted modern thought and misdirected social research, he immersed himself in the study of comparative economic systems. His years of patient investigation seemed to confirm his original hypothesis: 'Aristotle was right: man is not an economic, but a social being'.1 And for Polanyi, as we shall see, a 'social being' is one responsible for the fate of his fellows. The study of archaic and primitive societies, Polanyi argued, compels us to conclude that economic motives are not 'natural' to man; on the contrary, in societies other than those organized in the wake of the Industrial Revolution, the economy was always 'embedded' in the social system. Except in a 'market economy', that is, economic organization was made to serve the interests of the community, rather than vice versa. Hence, to view pre-nineteenth-century societies through the spectacles of an economic theory that was designed to examine market economies, is anachronistic and distortive. A market economy, because it is 'disembedded' from society, takes on an existence of its own, indifferent to the commonweal; man and nature become commodities