The limits of Karl Polanyi's anti-market approach in the struggle for economic democracy

I am a fully paid-up member of the Karl Polanyi fan club. In the past few years I have published, with my collaborators, a collection of essays on the significance of The Great Transformation for understanding our times (Blanc 2011, Holmes 2012) and have made him a canonical figure for my versions of economic anthropology, the human economy and the history of money. I have also published two short biographical articles on him. I have contributed in this way to the recent outpouring of new work on Polanyi to which this book is a significant addition. I am a believer, but some believers also have doubts. I still have reservations about a Polanyian strategy for achieving economic democracy and these are linked to his historical vision of “market society”.  Theories are good for some things and not for others and, in my view, the plural economy would be best served by a plural approach to theory and politics. But first let me summarise what I most value personally in what I have learned from Polanyi.

Most anthropologists take their lead from the academic work done by Polanyi and his collaborators at Columbia University after the war. Trade and Market in the Early Empires (1957) established the “substantivist” school of anthropologists and historians who were committed to analysing the economies of “non-industrial” societies. I reject that division of economic anthropology’s subject matter and so did Polanyi when he wrote The Great Transformation (1944). I love his masterpiece for its vivid, erudite and passionate writing. It is truly a work of literature as well as being visionary. I know of few works of any kind with similar power to make such an impact on first-time readers. His discussion of money there is a source of endless inspiration for me and I have recently drawn on a late paper, “Money objects and money uses” (1964), to explain the collapse of the twentieth-century money system. Polanyi, with Georg Simmel, is the key figure for me in helping to explain the current world economic crisis. Polanyi sees money and markets as ways of extending societies beyond their local insularity, thereby introducing a permanent tension between their external and internal dimensions. If nature, humanity and society should not be treated as “fictitious commodities” (land, labour and capital), Polanyi implies that money is the most inclusive means of our social interdependence and must not be bought and sold like a sack of potatoes.

I have never found much use for Polanyi’s typology of modes of transaction as a set. But his vision of human economies as being articulated by a limited number of institutional forms found widely across human history is an essential part of how I think now. So too is his reminder that the social solidarity embodied in associational life is as vital for economic democracy as the interaction of states and markets. The concepts of “solidarity economy”, “plural economy” and “human economy” overlap considerably and find common inspiration in Polanyi’s work, possibly more than any other single author. This undoubtedly accounts for his current popularity at a time when many people around the world are seeking to move beyond the sterile contrast between “revolutionary” and “reformist” approaches to improving the economy.

The core of a “human economy” approach (Hart, Laville and Cattani 2010), in my view, is not just its emphasis on local institutional particulars or its humanism, reflecting what people concretely do, think and want wherever they live, but also on the need for an economic vision to bridge the gap between everyday life and humanity’s widest associations which are inevitably impersonal and lie beyond the actor’s point of view. It is urgently imperative (a “new human universal”) for all humanity to learn how to live together in world society. Polanyi, writing towards the end of what has been described as “the second thirty years war”, epitomises this idea in his masterpiece, where the word “human” crops up repeatedly in the context of economy. The question is how far opposition to large-scale bureaucracies, whether governments or business corporations, along with a preference for initiatives grounded in local social realities, can take us when our aspirations for economic democracy must somehow embrace the movement of the world we live in. And here Polanyi’s theoretical framework shares some deficiencies with other strands of the socialist tradition.

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