Product Details

• Amazon Sales Rank: #23490 in Books
• Published on: 2002-05-10
• Original language: English
• Number of items: 1
• Binding: Paperback
• 317 pages

Customer Reviews

The best explaination for the modern history of mankind.
Karl Polanyi has provided us with a cut-throat explaination as to how the market system has shaped and formed our person and existance. From the demolition of community to modern business and personal ethics, Polanyi explains who we are, our present Darwinistic purpose, and, not to mention, the price each of us carries with us. Absolutely a must-read for those who truly demand to know what has happened to mankind since the industrial revolution.

A glimpse of what economics could have been
This book, occasional hyperbole notwithstanding, presents a form of economics more nuanced and embedded in material life and social reality than that which is practiced in most of academia today. This form of economic thought, known as substantivism, suggests how economic activity can be understood as emerging from social practices based around material provisioning, and pre-exists the increasing domination of monetarised, market modes of exchanges from the mid-Nineteenth century onwards. If, as Polanyi suggested, mainstream economics had taken into account the relevance of anthropological and historical accounts of how households and communities (and not simply individuals) have engaged effectively in economic, 'provisioning' activities for millennia before the widespread adoption of monetarised market practices from the mid-Nineteenth century onwards. The substantivism of The Great Transformation suggests that conventional economic theory has 'inverted' reality, with social and human essences seen as subservient 'commodities' to be traded and exchanged within a market economy, and has lost sight of the insight that economic practices should serve social interests.

The satanic mill
Polanyi's great transformation starts in the 19th century with the installation of a self-regulating market system ('the satanic mill') for labor, land and money and by letting the whole society be run by the system without any intervention. It provoked a wholesale destruction of the `traditional fabric of society'.

Attack on the market economy and democracy
In fact, this book is not only an attack against `laissez-faire', but also against a `regulated' market system and against, for Polanyi, the main cause of this great transformation (democracy). His book is not less than a plea for a return to the `Ancien Régime', for Polanyi the Golden Age of mankind, `the traditional unity of the Christian society', `the social fabric of the village under the supremacy of squire and parson', the society of `the benevolent gentlemen of England with their compassion from the heart', when economics where `embedded' in the whole society.

What was this Ancien Régime?
A disaster for 999 out of 1000 individuals. The poor had only one option: 'steal to be hanged' (J. Swift, D. Defoe, E.J. Burford). But for Polanyi, `under the regime of feudalism and the village community, noblesse oblige, clan solidarity, and regulation of the corn market checked famine'.
The kings owned the salt mines and sold (!) as a monopoly their salt (a necessity for survival) dearly: one block of about 5 kg was worth a whole village, population included (the ancient salt mines of Krakow are well worth a visit). For Polanyi, `it is the absence of the threat of individual starvation which makes primitive society more humane.'
Polanyi defends the guild system, feudalism and mercantilism: `Feudalism and landed conservatism were only seemingly contrary to the general interest of the community' and `neither under tribal nor under feudal nor under mercantile conditions was there a separate economic system in society'. But the guild system was an antidemocratic closed shop and mercantilism (F. Colbert) was a system for strengthening the Nation, in other words, the power of one man (`L'Etat, c'est moi').

What is the cause of this great transformation?
`The democratization of the political State which caused the separation of the economic and political sphere', `the transition to a democratic system and representative politics'.

What is Polanyi's solution?
`The passing of the market-economy can become the beginning of an era of unprecedented freedom.' What we need is planning, control, power and compulsion to ensure conformity which is needed for the survival of the group. Contradictio in terminis? Absolutely not: `the individual person should not fear that power and planning will turn against him'.

Of course, submitting the whole society to a pure self-regulating market system (e.g., the gold standard) is asking for disaster. The market system, a must for democracy, should be regulated and parts of the fabric of society should be managed by the State under a democratically elected government (R. Kuttner, J. Stiglitz). Indeed, `The economic order is merely a function of the social order'.

This book is an extraordinary reactionary and naïve defense of a `black' past.
However, the introduction by J. Stiglitz is excellent and justifies a modest outlay.