Polanyi, Karl (1886–1964)

Abstract

Karl Paul Polanyi was born in Vienna on October 25, 1886 to Cecile Wohl and Michael Pollacsek, a railroad builder entrepreneur. In the 1890s the family moved to Budapest. In 1908 he became president of recently formed Galilei Circle, a students' body set up to disseminate the scientific world view. In the First World War he was sent to the front and discharged as disabled. He was involved in radical democratic political activities. On the eve of the Hungarian Soviet Republic in 1919, however, he delivered a speech against the dictatorship, then emigrated to Vienna where he married a well-known figure of the revolutionary students' movement, Ilona Duczynska. Here Polanyi first worked for Hungarian papers, then from 1924 to 1933 he contributed to Der Österreichische Volkswirt. Having lost his job because of the rising danger of national socialism, he emigrated to England where he first lived in privation, earning some living by lectures. In 1940 he became a British citizen, but from that year, he was resident lecturer at Bennington College in the USA, working on The Great Transformation first published in 1944. This book earned him the post of visiting professor at Columbia University, New York, in 1947. He lectured in economic history and coordinated research into the origin of economic institutions. These efforts were summed up in the posthumously published The Livelihood of Man. He continued researching with a team after his retirement in 1953, publishing their findings in Trade and Market in the Early Empires. The posthumously published Dahomey and the Slave Trade was another result of the cooperation. In 1963 Polanyi visited Hungary, where he lectured on American economic sociology. He died of a stroke on April 23, 1964 in Toronto. Embeddedness, according to the substantivist view, is related to the fact that an economic actor is a social being, with a mixture of motives, serving to attain social recognition and social goods. His economic efforts are therefore usually subordinated to these goals. Hunger and gain are not universal motives, thus the scarcity postulate, the cornerstone of formal economics, is inadequate. Economy can be interpreted as an ‘instituted process’ in a substantive sense. The term process refers to ‘locational and appropriative movements,’ that is, production and transport on the one hand and transaction and disposition on the other. Institution lends unity and stability to these processes, which can be studied via the forms of integration. Reciprocity presupposes the symmetry of groups, while redistribution is dependent on collecting and distributing goods or disposal over them, hence it implies centricity. Exchange, in turn, depends on the existence of price-making markets. Not every exchange has integrative significance. The simple operational exchange and decisional exchange at a set rate do not integrate the economy, whereas bargained rate exchange does. The market, Polányi sums up, is not so old a phenomenon as are trade and money, and though it may crop up in history, it only integrates into a market system in exceptional cases. Substantivism appears to be integrated in the history of sociology as a standard chapter. Polanyi's posthumous works and the disputes coming to a head in economic anthropology suggest that a school was evolving around Polanyi. Economic historians assessed Polanyi's influence in basically appreciative terms, though criticizing his market interpretation. Polanyi also influenced modern research centering on the inter-relation between state and economy as well as socialist studies.