One of the most influential works in my thinking about the commons has been Karl Polanyi’s 1944 book The Great Transformation: The Political and Economic Origins of Our Times. A Hungarian economic historian and anthropologist, Polanyi argued that world history dramatically changed in the 17th and 18th centuries when “Market Society” arose to displace societies that had been based on kinship, religion and social relationships. Where once people were embedded in communities of reciprocity and redistribution, capitalist markets gradually turned societies into the alienated collectives of rational, utility-maximizing individuals dominated by the market order. The Great Transformation is a brilliant historical account of this transition from a commons-based world to market society.
Polanyi's book had the misfortune to be published at the wrong time, 1944, just as the nations of the world were racing to embrace market economics and soar into modern times. In the 1950s and 1960s climate of the Cold War, go-go economic growth and gee-whiz technology, few serious people wanted to hear about how “the market” should be tamed and made to serve society – Polanyi’s primary theme. The overriding goal of that period was to grow, grow, grow, with little thought for the long-term social and ecological consequences.
As a result, The Great Transformation has been largely exiled from the canon of mainstream economic literature for the past 70 years. Hayek’s The Road to Serfdom, also published in 1944, was far more in sync with the postwar cultural wave and went on to become a foundational book for modern corporatists and conservatives. For decades the curious reader could only find archaic-looking reprint editions of The Great Transformation until Beacon Press came out with a new edition in 2001, with a new introduction by economist Joseph Stiglitz.
All of this is by way of background to the news that Concordia College has just gone live with a massive online archive of Polanyi’s work. Exciting news! The archive is housed at the Karl Polanyi Institute of Political Economy, which was founded in 1988 at Concordia. The archive has an estimated 110,000 documents, which range from correspondence and unpublished papers to lecture notes, articles and manuscripts in Hungarian, German and English. Here is the official announcement of the archive at the Karl Polanyi Institute of Political Economy.
Marguerite Mendell, the institute’s co-founder and director, notes that scholars in the fields of anthropology, sociology and economics are likely to be the most interested in the archive. However, I think that others will welcome the chance to browse Polanyi’s lesser works and learn more about his inner thought processes. He had such distinctive, early insights into the workings of markets and commons that it will surely be interested to consider the lines of thought he rejected, and the subtle ideas and references that captivated him.
Mendell notes that Polanyi’s work “speaks to re-embedding the economy in society, to reflect the needs, capacities and aspirations of citizens and communities. Polanyi’s analysis of financial liberalization in the 1920s resonates with the consequences of financialization today.”
She added that in 2014, “what also resonates in Polanyi’s work is the recognition of the capacity of people to effect change. This has been expressed lately in many ways, including the environmental movement, local organic food movements and fair-trade initiatives and the growth of social finance internationally, as well as in the rise of co-operatives in all sectors around the world. The growing interest in democratizing the economy is inspired by Polanyi’s work.”
Here is how Polanyi's daughter, Kari Polanyi-Levitt, described her father's life and career:
His life spans the period of modern socialism and, through his intellectual heritage, reaches beyond his 77 years which ended on April 23, 1964. All his life a socialist, he was never associated with any political party. Nor did he participate in any political movement. Never doctrinaire, he many times cut across the main trends of debate within the socialist movements of Europe. Although not a Marxist, he was much less a Social Democrat. Although a humanist, he was eminently a realist. Although aware of the reality of society, and the constraints which this reality places upon the action, values and ideas of all of us who inescapably live in society, his life was guided by an inner necessity to exercise freedom of actions and thought and never to give in to determinism or fatalism…
As described by Adrian Pabst in The Guardian in 2008, the trouble with the Marxist critique of capitalism is that it does not go far enough:
“Left to itself, the capitalist economy views land and social relations as commodities that are priced by markets. As such, the free market violates a universal ethical principle that has governed virtually all cultures in the past – nature and human life have almost always been recognised as having a sacred dimension. In subordinating society and the environment to the market, capitalism does not just disrupt traditional cultures, as Marx pointed out. It also causes widespread social disintegration and ecological devastation….
“But now the economic crisis has confirmed the bankruptcy of economic liberalism, the enduring importance of Polanyi's ideas is clear. By rejecting the capitalist view of nature and human relations as mere objects, he anticipated many of the arguments of contemporary environmentalists like George Monbiot and sociologists like Richard Sennett who have highlighted the destructive effects of capitalism on the environment and communal cohesion.
“Moreover, Polanyi was the first to show that the modern habit of placing state and market in opposition to each other is deluded. The market needs the state to remove social barriers that hinder the free flow of capital, and the state needs the market to dissolve communal bonds that limit state control. For example, new regulation of global finance might reduce market failures – such as imperfect information about risk – but it will certainly require greater state surveillance and auditing."
Polanyi should be considered one of the great minds anticipating the re-emergence of the commons and social movements to tame out-of-control markets. He rejected the deep delusions and arrogance of free-market ideology while also rejecting the liberal faith in centralized bureaucracies and the state. By demanding that the economy serve society – rather than demanding that society become a slave to The Market – Polanyi can be seen as one of the first modern-day commoners.
Of course, the big challenge remains HOW to throw off the predatory apparatus of untrammeled markets allied with the nation-state, and how to build a new regime of socially accountable governance and commons-friendly markets. Polanyi is certainly a good place to begin to explore this challenge, so the digitization of his archives is a welcome development indeed.