The Great Transformation: The Political and Economic Origins of Our Time

by Karl Polanyi

Book Overview

In this classic work of economic history and social theory, Karl Polanyi analyzes the economic and social changes brought about by the "great transformation" of the Industrial Revolution. His analysis explains not only the deficiencies of the self-regulating market, but the potentially dire social consequences of untempered market capitalism. New introductory material reveals the renewed importance of Polanyi's seminal analysis in an era of globalization...

• Format: Hardcover
• Language: English
• ISBN: 0807018821
• ISBN13: 9780807018828
• Release Date: July 2025
• Publisher: Beacon Press
• Length: 360 Pages
• Weight: 1.25 lbs.

Customer Reviews

A masterpiece of economic history that is as relevant as ever sixty years on

Although this book was published in 1944, the same year as Hayek's THE ROAD TO SERFDOM, it remains as relevant as ever. Some say that it is dated and it is true that many of the historical references are not the ones that would spring to mind today, but the critique of the myth of the self-regulating free market remains as relevant and to-the-point as ever. One of the main targets of his book was the Vienna school of economics, the central figures of which were Ludwig von Mises and F. A. Hayek. What Polanyi does is help one to see how hopelessly naïve and ahistorical many of their central assumptions are. Though one might question some of the details of Polanyi's thesis, especially regarding the gold standard the causes of the two world wars, he makes two incredibly powerful arguments about the myth of the self-regulating market to which proponents of that theory have offered no convincing reply. More of this is a second. Polanyi's method is multi-disciplinary. He wants to show by a multitude of ways that the central historical contentions of those advocates of the self-regulating market are simply fasle. These people have argued, for instance, that by nature humans engage in market trade and that these markets by nature are self-regulating. If this were, as they insist, true, then wherever one would look in human history one would find markets that were by their nature self-regulating. Remember, Adam Smith's Austrian heirs were making arguments not just about what ought to be, but what naturally is in a state of nature. They are making claims about what is the case if government and others will just get out of the way of the workings of nature. So to this end Polanyi looks at the results of anthropological and historical studies to see what the evidence shows. Overwhelmingly, he finds no evidence that things have been in the course of human history as the self-regulators have claimed. In fact, Polanyi finds little or no evidence of the worldwide prevalence of markets at all. He finds little historical evidence for the kinds of claims about the state of nature that self-regulating free marketers posit. Instead, he finds a world of evidence that free markets were human artifacts, created and maintained entirely by government intervention. The chapters that detail Polanyi's argument can be a bit heavy going, but they are crucial to his overall argument. Polanyi makes two central claims about the myth of the self-regulating free market. The first is that in its essential nature it is utopian and nonhistorical. It is utopian in that it describes not the world as it ever has been or ever could be, but a fantasy that exists only in the minds of its adherents. It is a powerful myth because whenever one points to the failures and shortcomings of attempts to promote free market principles, its adherents reply by insisting that the market hasn't yet been made pure enough. If only we decrease government involvement, further reduce regu

Absolutely Brilliant

Polanyi's The Great Transformation is truly a masterpiece of historical analysis and social theory. Polanyi deftly uses his extensive knowledge of economic history, anthropology, and political theory to demonstrate the failure of "market society" and the myopia of those who believe that the "free" market is the answer to all social ills. He's at his best when he combines his historical analysis of 18th and 19th century capitalism -- an experiment with a free market economy that resulted in the Great Depression and world war -- with anthropological data showing that there is no innate human propensity to engage in trade or accumulate wealth at the expense of others. Conservatives and libertarians hate this book because it thoroughly undermines their claims that markets are natural, spontaneous, and reflect the uncoerced interaction of free agents; the reviewer below who gave it 1 star is a case in point (he argues that "Polanyi fails to understand the essential nature of a free market, voluntary trade for mutual benefit," but the problem isn't that Polanyi doesn't understand such a concept but rather that he shows it isn't true). Other critics like to misrepresent Polanyi's arguments and paint him as a Marxist, a romantic, or an opponent of modernity; in reality, he was merely pointing out how devastating it is when every aspect of human life is left up to the market, with its cold logic of efficiency. The Great Transformation is an exceptionally lucid and well-researched study that should be required reading for anyone interested in economics, social theory, political history, or international relations. Some reviewers have suggested that the book is outdated, but anyone interested in the current debates surrounding free trade, the IMF/World Bank, or Social Security privatization would be wise to pick up a copy of this fascinating book.

Exposes the socially constructed nature of "free markets"

Polanyi challenges the Neoclassical (specifically Hayekian) assertion that humans started out as individuals , and only later grew into societies. Siding with Durkheim and other holists, Polanyi argues that the concept of a freely contracting economic individual is actually a very recent, and very sociohistorically localized, assertion. Put simply, "free markets" are something consciously made and supported by societies, not an a-priori order nor a state of nature. Polanyi beautifully weaves legal, economic, political, and social history into a cogent thread of argument. One doesn't have to oppose free markets upon accepting Polanyi's argument; one just has to become aware of markets' socially constructed and supported nature.

Masterpiece

This is undoubtedly Polanyi's finest work, and an example of the highest quality of scholarship available. This analysis of the rise and influence of "the socially embedded market" is simultaneously lucid and profound; clear and complex; detailed and sweeping. It provides one with a wonderful model for an interdiscipinary approach to the investigation of social phenomena - it is employs political, economic and sociological concepts within a genuinely historical framework to reveal truths about our modern industrial society that no single discipline could fathom. It is, in short, a masterpiece.

Essential reading to understand markets

Athough first published in 1944, this book still has much relevance.Polanyi discusses the development of markets and their impact on society.He shows that throughout most of history economic activity has been subordinate to control by society.Markets only gained importance at the end of the feudal era in Western Europe.They were promoted by centrally organized intervention, they were not a "natural" development, he says.Polanyi argues that markets destroy society, and a telling example he gives is the cycle of war, boom, and bust that they engender.His solution is for society to regain control over markets, and not let them dominate us.This book is a classic in its field, and explains much of what is happening in economics today.