Introduction

“Nineteenth century civilization has collapsed,” declares Karl Polanyi in the opening sentence of The Great Transformation. His ensuing analysis focuses on the emergence of the self-regulating market as a world-historical aberration, contrasting both with the great agrarian empires and with the non-literate societies studied by anthropologists. Yet the work remains full of ambiguity: did Polanyi mean the “self-regulating” as a realistic descriptor or did he mean the idea of such a market? It is in any case a very Eurocentric narrative. It is concerned in particular with Britain, where Polanyi conceived his study of “the political and economic origins of our time” in the late 1930s.

“Our time” today is quite different. It is tempting now to proclaim the collapse of twentieth-century civilization, but this collapse demands a more complex explanation than the Polanyi prototype. Such an account would need to address, first, the attrition of that “embedded liberalism” (Harvey 2005a, following Ruggie 1982) which came to characterize the advanced capitalist countries in the decades after Polanyi's dramatic indictment of pre-welfare state “disembedding.” As Keith Hart and I point out in our Introduction to this volume, this metaphor has been a continuous source of confusion. I distinguish here between general moral embedding and political embedding. Polanyi shows in his magnum opus that the conditions for the catastrophic existential moral and social disruption of human communities in industrial communities were the work of the capitalist state.

Market and society

Markets are networks constituted by acts of buying and selling, usually through the medium of money. For most of history they were kept marginal to the mainstream institutions on which societies were built. But not long ago, and at first only in some parts of the world, markets came to be accepted as central to society, leading to a vigorous political debate, which is ongoing, about the appropriate relationship between the two. It is widely acknowledged that the publication of Adam Smith's The Wealth of Nations in 1776 provided a charter for “the market” (now often singular) to assume its place as the dominant institution of modern societies. The idea of economy, which started out as a principle of rural household management, now became closely identified with markets, as did the profession of economics which grew up to study them. One man, however, made the modern history of the relationship between market and society his special concern: Karl Polanyi (1886–1964), whose The Great Transformation, published during the Second World War, remains the most powerful indictment of what he considered to be the utopian and ultimately destructive attempt to build society on the basis of self-regulating markets. Our authors therefore consider the relevance of this Central European polymath for their work.