A TRANSFORMING WORLD
GREAT TRANSFORMATION by POLANYI
Transformation – We all experience change. The world has experienced change. We communicate, dress, worship, and shop differently from the nineteenth century due to technology.
Polanyi focused in his book on the challenges of politics and economics on society from the nineteenth-century through the twentieth century according to reviewer Anne Mayhew. Blogger Asad Zaman wrote that Polanyi “central theme was a historical description of the emergence of the market economy as a competitor to the traditional economy.”[1] These two reviewers have similar and different viewpoints on Polanyi’s approach and his effect on how the world views the effect on the economy.
“Polanyi argues that creating a fully self-regulating market economy requires that human beings and the natural environment be turned into pure commodities, which assures the destruction of both society and the natural environment.” (Location 409, Kindle) Mayhew states Polanyi provided “’four institutions which were crucial to the economic and political order that had characterized the North Atlantic Community and its periphery in the nineteenth century: a balance of political power, the international gold standard, a self-regulating market system, and the liberal state. The SRM (self-regulating market) was ‘the fount and matrix of the system,’ the ]innovation which gave rise to a specific civilization’ (p. 3).” [2] “Polanyi assumed the forms to be founded on different human motives: the SRM on self-interest and rational calculation and reciprocative systems on kindness and generosity. “[3] Mayhew states Polanyi “created a way of thinking about economies and societies that have had a substantial impact on economic history, anthropology, and the study of the ancient Mediterranean.”[4] She believes, “The Great Transformation remains important as a highly original contribution to the understanding of the Western past; it has been and is important in methodological debates in the social sciences. Beyond that, as the double movement continues, the book is likely to remain one of the best guides available to what brought us to where we are.”[5]
Zaman states, “Polanyi’s book is crucial to understanding both HOW and WHY we need to re-structure economic education today. Unfortunately, the book is quite complex, a bit dry and technical at times, and consequently hard to follow. Although many leading economists have praised it, I did not see any glimmer of understanding of its central arguments anywhere in the orthodox arena. This is not a good development. The value of human life has been degraded to their earning power.”[6]
I agree with Zaman that this book was difficult to read and understand, at least for me. I believe the market dictates the path of the country. If the economy is flourishing, the large business owner profits from this, increase their salary and benefits, while ignoring the hard work of the lower paid employees. The poor remain poor. If the economy is failing, the large business owners decrease its workforce to prevent loss in their profits which therefore creates unemployment and increasing the poor population. The market regulates the dollar value and interest rates. The scripture states that the love of money is evil. The value of money energizes the world, one’s personal life, and our society. Polanyi stated, “No one should have claimed that moving workers from low-productivity jobs to unemployment would either reduce poverty or increase national incomes.” (Location 153, Kindle) He continues, “For capitalists who thrive off of low wages, the high unemployment may even be a benefit, as it puts downward pressure on workers’ wage demands. But for economists, the unemployed workers demonstrate a malfunctioning economy, and in all too many countries we see overwhelming evidence of this and other malfunctions.” (Location 155, Kindle)
We have seen in the past years how the politics can affect the society and economics. As a country, we have experience depression, recession, and prosperity because of the economy and our politics. American banks have crashed “Wall Street, ” and the government bailed them out. American Automobile Industry was in a financial devastation and was bailed out by the government. The city of Detroit went bankrupt, no government financial bailout. What does this say about our political values in this country? Those who influence the market are valuable. Society is expendable.
Many in the world are promoting health by eating fresh vegetables. Adam and Eve lived off the land. What would the world be like if we just lived off the land where money was invaluable.
[1] Asad Zaman, WEA Pedagogy Blog, accessed February 1, 2017, http://tribune.com.pk/story/876240/ Polanyi-and-the-great-transformation.
[2] Anne Mayhew, The Great Transformation: The Political and Economic Origins of Our Time, accessed February 1, 2017, https://eh.net/book_reviews/the-great-transformation-the-political-and-economic-origins-of-our-time/.
[3] Ibid.
[4] Ibid.
[5] Ibid.
[6] Zaman, WEA Pedagogy Blog.
About the Author
Lynda Gittens
6 responses to “A TRANSFORMING WORLD”
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Funny Lynda, I thought about the concept of a self-sustained life too. I had thoughts of planting my garden, having a greenhouse, and tending my herb garden….then I remembered I’m in this doctoral program. Just like that, my dreams went up in smoke.
Yes, I agree, this was a tough read! I limped through the pages and kept hoping I would get a stronger picture of what the author was trying to paint. It took sheer endurance for me before I could find some interesting points and thoughts to ponder. Thanks for the reviews. They helped to bring more clarity.
“Those who influence the market are valuable. Society is expendable. Many in the world are promoting health by eating fresh vegetables. Adam and Eve lived off the land. What would the world be like if we just lived off the land where money was invaluable.”
Well put.
While you may have thought the book difficult (I did, too), you touch on the foundation of Polanyi’s argument: the fictional commodities of labor (humans), land (creation), and money. When these are added to the market– treated as commodities– the market cannot sustain itself.
Great post, Lynda! I really enjoyed the video. Why did we have to struggle through the book?
There are so many things to talk about, but just one example may suffice to point out that neither the socialists nor the secular capitalists have the answer.
Who owns the land? If you are a socialist you would say the government (the people?) owns or at least should control the land. Free market people pride themselves on a chief tenet that individuals should own land.
But my Father owns the land. God created it. He told us to be stewards of it. If we see land, labor, and capital as coming from God, maybe we will use it better. If it’s God’s land, maybe I won’t pollute it. If those neighbors are people made in God’s image, maybe I will treat them well. And my money all belongs to Him; He generously only asks for 10% of it back.
There were so many good things in your post, but I’d just like to add that as a farmer I get to grow my own vegetables and praise the Lord for it everyday!
Lynda,
Thanks for the post. I enjoyed the video. But more than that, I found the question you ask towards the end of your post: Our government bailed out the banks on Wall Street and the Big 3 auto makers, but we let the city of Detroit go bankrupt…… Now, to be clear I believe that each of these decisions are far from simple – and each one drastically affected thousands of real people’s lives….. But your question still forces us to ask: what are our values? Or to put a finer point on it, what do we value more people of money?
There was a British sitcom in the seventies called “The Good Life” where a couple opted out of the rat race and decided they were going to grow their own food and live a simple, self-sustained life. This is the life that Polanyi describes as being lost as a result of the Great Transformation and the Industrial Revolution. There is certainly something in me that thinks this is a great shame – the loss of this simple and self-sustained and local life in community.
Not dissimilar to Adam and Eve!
Oh my gosh, Lynda! I wish I had seen this video when I was reading the book. So helpful.
Your comment about society being expendable is right on. I was looking at information about lobbyists last night and I became so discouraged by the way everything is commodified and votes are traded for favors.
I like the idea of living the simple life you mention, but I also like my cell phone and my computer, both of which have parts built by “cheap” labor. I do my best to buy fair trade and local, but am I willing to give up the things that make my life easier?