in other words 33 years after the book was first published. In the same year, the first German translation of Polanyi’s magnum opus appeared. We present some annotated excerpts from the book, which provide us with an insight into Karl Polanyi’s thinking, ideas that have been the inspiration for so much research and scholarly debate. A map of the world provides an overview of Polanyi Institutes across the globe. We also include information about how to become a member of the Vienna-based Karl Polanyi Society.
THE LIMITS OF A MARKET SOCIETY
Or: Why ‘Polanyi ought to be considered the (most influential) personality of our century’.
BRIGITTE AULENBACHER, VERONIKA HEIMERL, ANDREAS NOVY
In his appraisal of Karl Polanyi’s works, internationally renowned French economist Robert Boyer states that ‘Polanyi ought to be considered the (most influential) personality of our century’. What makes his cultural, social and economic history of capitalism so relevant for today? In his magnum opus, The Great Transformation, published in 1944, Polanyi studied 19th-century economic liberalism, the stock market crash of 1929 and the Great Depression, as well as the struggle between communism, fascism and democracy for a new social order. Why was there a rediscovery of these reflections from the late 1980s onward – and especially following 1989 – in the context of a new phase of globalisation? And is it legitimate to speak of a veritable Polanyi renaissance today? There are four aspects in particular that highlight why Polanyi’s critique of capitalism is so unique.
The destructive power of the market
Karl Polanyi was not only a pioneer of the critique of capitalism, but also an unconventional thinker. As a journalist, popular educator, and scholar, his style was in part essay-like, which makes his writings as comprehensible as they are emphatic. Informed by a profound knowledge in the areas of law, economic and social sciences, philosophy and anthropology, his work as a whole covers a wide range and his magnum opus, too, traverses the specialisations of the various scholarly disciplines. As a result, he successfully redefines the relationship between economy and society.
In an elaborate historical reconstruction, he shows how economic activity in pre-industrial societies was part of social and cultural life. Economic interests (such as the drive for profits and price-setting) were usually subordinated to social and political motives (such as status and the stabilisation of an existing social order). The exchange on markets represented only one of many economic institutions. Redistribution via a central power continues to exist today in the form of social security and the tax system; but even in agrarian communities some sort of central storage of goods (i.e. crops) was fundamental for the economy. Reciprocity was part of family life and the household economy, even extending into neighbourhoods and the community. And yet, to this day, reciprocity still underpins the bond in fraternities and forms the basis of nepotism and partisanship.
According to Polanyi, the emergence of industrial capitalism changes the subordinate status of economic matters. For the first time in the history of liberal (economic) thought, the idea of a ‘self-regulating market’ becomes the guiding concept for structuring the relationship between the economy and society. The relations are reversed: market principles and mechanisms begin to dominate first the economy and ultimately society as a whole. 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.’ (Polanyi 1944/2001, p. 60) However, Polanyi does not set out to present a comprehensive critique of the market perse. He appreciates the accomplishments resulting from technological advance and the liberal canon of values, which in turn establishes the right to nonconformity and the rule of law. He does, however, put forward a very strident critique of a development in which markets come to determine social life.
In financial market capitalism – as it emerged after 1989 and survived even the 2008/9 crisis – this power of the market has asserted itself to an unprecedented extent, encroaching upon just about all areas of human life. Everything is for sale, everything can become a commodity: financialisation and its consequences for the health-care sector, the housing sector, and many other areas has come to affect everyday social life as a whole. Commodification – i.e. turning something into a commodity – extends to all ‘elements’ that might be relevant in economic terms, including those which are not intended for such a purpose: land as a metaphor for nature, labour as the epitome of human activity, money as a means of exchange – they are all just ‘fictitious commodities’ (Polanyi 1944/2001, p. 71). When subordinated and subjected to the dynamics of the ‘market economy’ in a ‘market society’, they thereby threaten the very substance of society. When work is simply a commodity among others, collective bargaining agreements become obsolete and precarisation inevitable. When short-term business interests are more important than climate protection, the ecological foundations of our civilisation are at risk. Yet it is not only the immediately discernible developments that affect the substance of society, but also the more subtle mechanisms by which human beings are forced to adjust to ‘market society’. For these mechanisms suggest a new level of individual freedom for those who successfully play along: self-employed ‘entrepreneurs’, or rather, one-person companies, e.g. as so-called ‘Me Inc.’ (in German: ‘Ich-AG’), Best Agers, etc. Finally, there are other elements to which Polanyi’s concept of ‘fictitious commodities’ can be applied: knowledge becomes a commodity when universities are increasingly run as businesses whose quality is measured by the marketability of their research and teaching results, or when indigenous knowledge is patented and becomes a resource for pharma-industrial production.
The reorganisation of society
History does not repeat itself. In this sense, the current social struggles around law and order and the restructuring of society cannot be compared to the upheavals resulting from economic crisis, fascism and war which Polanyi witnessed in his time. That said, the current crisis has certainly intensified as a result of the financial crisis of 2008/9 and the subsequent compensation for private losses with public resources. After progressive forces initially formed worldwide protest movements, namely in the form of Occupy Wall Street and many others, for some time now we have been witnessing right-wing populist parties becoming stronger, illiberal democracies emerging and authoritarian regimes consolidating. Once again – as in Polanyi’s day – the failure of the free-market ideology is being followed by the reorganisation of society. The direction of this reorganisation, however, remains contested. Its potential scope ranges from a social-ecological transformation that transcends capitalism and establishes a society based on solidarity without the compulsion for growth all the way to very real developments towards an authoritarian capitalism in dynamic emerging economies, but also even within the European Union. Reactionary law-and-order concepts and the return to traditional gender relations and national identities can coincide with both neoliberal approaches and those critical of globalisation.
Karl Polanyi sought to capture such developments with the concept of the ‘double movement’ (Polanyi 1944/2001, pp. 79, 137–138, 148 ff.). In his view, social history from the 19th century onward is the result of a ‘double movement’, that is to say, one ‘movement’ through which the concept of the ‘self-regulating market’ was asserted, and a ‘counter-movement’ in which social groups and state institutions sought to protect themselves in different ways against the negative dynamics of the market economy. The fear of a commodification of land, labour, money and knowledge turns into a diffuse fear for the future. This can be harnessed to create new progressive alliances, as exemplified by Bernie Sanders in the United States and Ada Colau in Barcelona. That said, a nationalist policy of stricter border control can also be read as a reaction to the competition on global labour markets. Karl Polanyi’s
