The Neoclassical Origins of Polanyi’s Self-Regulating Market

Abstract

This article shows, through a detailed examination of Karl Polanyi’s published works and unpublished writings, that Polanyi relies heavily on the neoclassical economics of his time in his conceptualization of the market in capitalist societies. This approach is instrumental to the thesis of The Great Transformation concerning the destructive impact of the market on society. However, such an analytical perspective neglects the social character of the market economy. This perspective is also deficient in capturing why the market is destructive to the social fabric. By identifying the origins and limitations of Polanyi’s self-regulating market, this article contributes to critical reevaluations of his work that aim to expand the scope of Polanyian analysis. In particular, this article outlines how the analysis of the market’s contradictory place is not predicated on the notion of self-regulation. Polanyi’s own historical work, as opposed to his theoretical articulations, illustrates such an analysis.