Academic journal article Journal of Australian Political Economy

The Limits of Transformation: Contemporary Applications of Karl Polanyi

Academic journal article Journal of Australian Political Economy

The Limits of Transformation: Contemporary Applications of Karl Polanyi

Article excerpt

It is no secret that Karl Polanyi's 1944 masterwork The Great Transformation (henceforth GT) has been enjoying a much deserved renaissance for the past two decades. After the ostensible collapse of Marxist economic theory in the early 1990s and the irrational exuberance of neoliberalism, Polanyi's special blend of economic anthropology, social theory, and sweeping history reemerged to offer what appeared to be both a remarkably astute diagnosis of our moment and an approach refreshingly untainted by the doctrinaire disputes of the past. This explains perhaps the ubiquity of Polanyian ideas like 'embeddedness' and 'fictitious commodities' in contemporary debate.

Nevertheless, as Fred Block has suggested (Block 2003), Polanyi's work has generally not been subject to the same sort of intense theoretical scrutiny as other classic works of economic and social theory. This has meant that some of the most interesting questions raised by Polanyi's work do not receive the attention they deserve. Here I am interested in one question in particular. How are we to explain the continued existence of free market fundamentalism, both as a prominent ideology and as a living political project? Polanyi certainly thought that after WWII society was on the verge of moving beyond this particular impasse. What led him to anticipate the demise of market utopianism? Is its persistence a theoretical problem or not? Does it point us toward any other problematic elements in Polanyi's thinking? I argue that the persistence of free market utopianism does indeed represent a theoretical problem for Polanyi, and try to trace its sources in his social theory.

These sorts of broader questions tend to be overlooked because much of the secondary literature associated with GT still follows one of three unfortunate approaches. In the first, Polanyi's most well known ideas and phrases are 'cherry picked' out of his work to serve as needed in another author's theoretical scaffolding. In the second, there is a preoccupation with basic exegetical clarifications. For example: is Polanyi, or is he not, a functionalist? In the third, the emphasis is on resolving a host of basic uncertainties that surround the concept of embeddedness. In particular, does Polanyi mean to suggest, as he sometimes seems to, that the so-called free market economy of the 19th century was disembedded from social norms, or, conversely, that it is impossible to disembed an economy from society? This is still a matter of controversy (Cangiani 2011).

Tellingly, there is considerable disagreement even about what Polanyi means when he refers to the great transformation; the most popular answers range from the first establishment of a putatively free market economy in the 19th century, to its crisis and collapse in the 1920s and 30s, to Polanyi's hope for a utopian transformation-to-come of society that would involve the reintegration of the economy into a fully social life. Other authors, ignoring Polanyi's reference to 'the' great transformation in the singular, claim that each of these events should be understood as a separate great transformation in its own right (Block 2001). (1)

This is all to say that outside the anthropological circles in which his research into archaic and primitive economies has always had a vital presence, Polanyi's influence has been largely confined to the somewhat nebulous idea that the economic sphere is in some way subservient to or embedded in the social. The tendency has been for theorists to adopt this notion and run with it, usually without examining it within the larger context of Polanyi's work, as can be seen from the sheer variety of (often incompatible) uses to which embeddedness is currently put.

Beginning roughly in the early 1980's, Polanyi's once marginal influence began to permeate the collective consciousness of the social sciences. Despite--or perhaps because of--the looming shifts in the international economy, there seemed to be an emerging consensus that Polanyi's genealogy of the market system had something important to tell us there just wasn't much agreement on what it was. …

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