Karl Polanyi: The Place of the Economy in Society

In the last few decades, the work of Karl Polanyi has become an indispensable point of reference not only for activists and critical minds but also for economists and social scientists who feel uncomfortable with the current trends of economic globalization, commodification, liberalization and privatization. Notions such as 'embeddedness', 'double movement', 'fictitious commodities', 'liberal utopia', 'self-regulating market system', 'transformation', 'patterns of integration' have conquered a crucial place in the critical discourse about globalization and neoliberalism. Polanyi's increasing relevance to popular discourse could already be noted in connection with a World Trade Organization (WTO) meeting in 1999 in Seattle, when environmental, labor and civil rights advocates protested against the commodification of nature, the dominance of the profit motive and economic globalization, i.e. the topics which are at the heart of his writings. Since the financial crisis of 2008, predatory financialization, increasing inequality of income and wealth, the rise of right-wing political movements and the crisis of democracy parallels between the current situation and the conditions in the interwar period that Polanyi analyzed have moved into the focus of scientific debate. In this chapter, we will begin with a short overview of Polanyi's life, which will be followed by a look at his most famous publication, The Great Transformation (Polanyi, 1944 [2001]). Polanyi's approach will be compared with two other approaches which share the vision that the market system, left to itself, produces results which are in conflict with the aims of society: Marx's critique of political economy on the one hand, and Keynes's theory on the other hand. This will then allow for the introduction of the well-known categories 'double movement', 'embeddedness', 'self-regulation' and 'market utopia'. Section 3 will give an overview of his comparative research on primitive, archaic and modern economies. In the final section, we will discuss the relevance of Polanyi's work for the 21st century.