Polanyi, Karl
Karl Polanyi (1886–1964) was born in Vienna on October 25 of Hungarian parents and became a leading economic historian of the twentieth century. His understanding of the Industrial Revolution as dependent on a disembedding of the economy from the broader culture offers an important perspective on globalization and suggestive insights relevant to relationships between science, technology, and ethics. After studies in Budapest, work as a lawyer, radical political activity, service in World War I where he was imprisoned on the Eastern front, and postwar convalescence and work as a journalist, he immigrated first to Great Britain (1933) and then to the United States and Canada (1940s), where he taught first at Bennington College and then at Columbia University. Because of past involvement with Marxist radicalism, his wife, Ilona Duczynska, was denied the right to live in the United States and Polanyi was forced to live in Canada and commute to New York. He died in Pickering, Ontario, on April 23. He was survived by his younger brother, the scientist and philosopher Michael Polanyi.
The Great Transformation
Polanyi's The Great Transformation (1944) has been recognized as a central contribution to economic sociology. The basic argument of this analysis of the Industrial Revolution is that capitalism is historically unique in its separation of economic relationships from other social interactions. All previous human economies were embedded in the sense of being integrated into familial, kinship, social, religious, and other interactions and obligations. The great transformation was not simply the development of new sources of power (steam), machines, and systems of production (division of labor), but the disembedding of production and market distribution from all other modes of interaction.
One key feature of the disembedding process was turning land, labor, and capital into what Polayni calls fictitious commodities. In reality neither land (nature) nor labor (people)—and only to a limited extent capital (whether liquid or fixed)—can ever have their price freely determined by market relations in the same way as industrial products. The self-regulating market as conceived by neoclassical economics nevertheless requires such an assumption. What Polanyi's analysis seeks to demonstrate is the fictitious character of these assumptions, both in relation to previous historical practices and as revealed in the failures of market economy in the early twentieth century.
For Polayni the great transformation of his concern was actually two quite different historical events: the collapse of nineteenth century civilization associated with World War I and the creation of the self-regulating market economy through the collaboration of industrialists, neoclassical economists, and liberal politicians. In the first sense his diagnosis of the great transformation was precisely the opposite of that of his contemporary Friedrich von Hayek in The Road to Serfdom (1944). For von Hayek the collapse that terminated the nineteenth century was caused by a failure to extend the market system to its logical conclusion and more fully remove state regulation of the economy. For Polanyi the reactions of communism, fascism, and Keynesian economics were legitimate efforts to reaffirm the proper subordination of industrialist economics to society and culture.
Polanyi's argument has been subject to criticisms by both anthropologists and economists, each raising essentially the same question: Does Polanyi not romanticize premodern economic orders? Is there really any alternative to the market economy, which is a natural historical development? Following The Great Transformation Polanyi undertook extensive studies of premodern economic practices in order to further substantiate his claims about the historical uniqueness of neoeconomic assumptions. One of the more influential results of this research was the collaborative publication of Trade and Market in the Early Empires: Economies in History and Theory (1957).
Application and Assessment
From Polayni's perspective the market economy is a historical anomaly. Although forms of trade and exchange can be found in all human societies, economic exchange had never previously been so independent of all other relations. The pattern found in modern economies is, of course, also that exhibited in analogous ways in science and technology: the development of autonomous communities of practitioners operating according to sets of rules that apply only to quite limited aspects of human behavior (as in the practice of the scientific method). Under such conditions rationalist ethics is forced to play a more important role in criticizing and moderating disembedded behaviors (economic, scientific, and technological) than ever before—while at the same time disembedding creates conditions that make ethics ever more ineffectual. Ethics is thus forced to adapt policy as its handmaid in order to overcome its own impotence.
But is it not the case that Polanyi was fundamentally mistaken, if not about the past then about the collapse of the free market system that supported the civilization of the long nineteenth century? As his daughter Kari Polanyi Levitt admits, "Polanyi was certainly premature in dismissing 'market economy' and 'market society' from the stage of history" (McRobbie and Polanyi Levitt 2000, p. 10). From the end of the Cold War and into the beginning of the twenty-first century, neoliberalism reemerged with the forces of globalization stronger than ever before. But this world was also one in which, as Polanyi Levitt notes, "disasters of famines, wars, new diseases and environmental degradation threaten the destruction of the social, cultural and ecological fabric which sustains life on earth." Under such conditions, is it not possible that Polanyi's "analysis of the dangers inherent in the elevation of 'the economic instance' over all other aspects of human endeavor" deserves continuing consideration? (McRobbie and Polanyi Levitt 2000, p. 10).
Governance of Science;; Merton, Robert K.;; Science Policy.
Bibliography
McRobbie, Kenneth, and Kari Polanyi Levitt, eds. (2000). Karl Polanyi in Vienna: The Contemporary Significance of "The Great Transformation." Montreal: Black Rose Books. Thirty papers from a conference in Vienna on the fiftieth anniversary of the publication of The Great Transformation.
Polanyi, Karl. (1944). The Great Transformation. New York: Rinehart. Reprint, Boston: Beacon Press, 1957. Second edition, Boston: Beacon Press, 2001.
Polanyi, Karl. (1968). Primitive, Archaic, and Modern Economies: Essays of Karl Polanyi, ed. George Dalton. Garden City, NY: Doubleday Anchor.
Polanyi, Karl; Conrad M. Arensberg; and Harry W. Pearson, eds. (1957). Trade and Market in the Early Empires: Economies in History and Theory. Glencoe, IL: Free Press.
Stanfield, J. Ron. (1986). The Economic Thought of Karl Polanyi: Lives and Livelihood. New York: St. Martin's Press. The last chapter connects Polanyi's economic history to an assessment of industrial technology and the alternative technology response present in E. F. Schumacher, Wendell Berry, and others.
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