The Enigmatic Impact of Human Interactions on Society
“Ours is not a historical work; what we are searching for is not a convincing sequence of outstanding events, but an explanation of their trend in terms of human institutions.” Karl Polanyi [1]
“The Great Transformation: The Political and Economic Origins of Our Time” is a seminal work by Hungarian-American economist and social theorist Karl Polanyi, first published in 1944. The book provides a comprehensive analysis of the rise of market-based capitalism in the 19th and early 20th centuries and its profound impact on society. In Fred Block’s introduction, I found his discussion of Polanyi’s argument particularly insightful. Block distinguishes between two key aspects of Polanyi’s argument. The first level, as described by Block, is a moral argument, emphasizing the ethical perspective that it is fundamentally unjust to view nature and human beings as mere commodities, subject solely to market forces when determining their value. The second centers on the state’s role in the economy. [2]
The central thesis of the book is the idea that the market economy is not a natural or self-regulating system but is, in fact, a human-made institution with far-reaching political and social consequences. [3] It is based on markets, where goods and services are bought and sold and is not something that occurs naturally in the world like a force of nature. Instead, it is a system created and structured by humans through various rules, laws, and institutions. Polanyi challenges the notion that markets are inherently self-regulating and will automatically lead to the best outcomes for society, also arguing that markets don’t exist in isolation but are embedded in social and political contexts. The choices made in regulating and managing the market have significant implications for society’s well-being and stability. In this view, the market is not an end in itself but a means to achieve certain economic and social goals, and how it is structured and managed is a matter of human decisions and societal values.
A few key points from “The Great Transformation” include:
- Double Movement: Polanyi argues that the development of laissez-faire capitalism led to a “double movement.” On one hand, society embraced the free market system, but on the other hand, there was a counter-movement that sought to protect society from the destructive effects of unbridled capitalism. This counter-movement included efforts to regulate labor conditions, create social safety nets, and enact various protective measures. [4]
- Commodification: Polanyi emphasizes the process of “commodification,” where things that were previously not subject to market exchange, such as land, labor, and money, were now treated as commodities. This transformation had significant social and ecological consequences, often causing harm to individuals and communities. [5]
- The Role of the State: Polanyi highlights the central role of the state in managing and regulating the market. He argues that the state has historically played a key role in protecting society from the disruptive effects of the market and ensuring social welfare. [6]
- Market Society vs. Embedded Economy: Polanyi distinguishes between the “market society” characterized by the dominance of the market mechanism and an “embedded economy,” where economic activities are integrated into social and cultural structures.
- The Great Transformation: The book’s title refers to the shift from an embedded economy to a market society. Polanyi argues that this transformation, driven by the forces of laissez-faire capitalism, had profound implications for the way people lived and organized their societies. [7]
“The Great Transformation” has had a lasting impact on economic and political thought. It provides a critical perspective on the development of modern capitalism and the role of government in managing the market for the benefit of society. Polanyi’s work is often cited in discussions of economic history, political economy, and the relationship between market forces and social well-being. [8] While delving into a little more research to gain a greater understanding of Polanyi and those engaged in discussions about his work, a prominent theme that strongly stood out is the significant impact of society on individuals and, conversely, the influence of individuals on society. Dr. Clark in his research notes similar trends of influence in terms of Capitalism. He states, “Ultimately, this allows me to explore how Evangelicals have acted in response to the forces at work within the development of Capitalism in terms of co-creation, co-option, and resistance. [8] The dynamic between human interactions and cultural dynamics holds a wealth of considerations. The mutual influence of one upon the other follows an intriguing yet somewhat unsettling path.
As Polanyi states, “In a sense, this is an impossible undertaking, since history is not shaped by any single factor. Yet in spite of all its wealth and variety, the flow of history has its recurrent situations and alternatives which account for the broad similarity in the texture of the events of an age. We need not trouble about the fringe of unpredictable eddies, if we can account to some degree for the regularities which governed currents and countercurrents under typical conditions.” It is the great enigmatic impact of human interactions on society.
[1] Polanyi, Karl. 2001. Great Transformation: The Political and Economic Origins of Our Time. (Boston: Beacon Press, 2001), 4.
[2] Ibid, xxvi.
[3] Ibid, 1.
[4] Ibid, 79.
[5] Ibid, 75.
[6] Ibid, 22.
[7] Ibid, xxviii.
[8] Block, Fred, and Margaret Somers. The power of market fundamentalism. Karl Polanyi’s critique. (London: Harvard University Press, 2014).
[9] Clark, Jason. Evangelicalism and Capitalism: A Reparative Account and Diagnosis of Pathogeneses in the Relationship, 2018, 122.
[10] Polanyi, Karl. 2001. Great Transformation: The Political and Economic Origins of Our Time. (Boston: Beacon Press, 2001), 228.
About the Author
Cathy Glei
Cathy Glei brings more than 25 years of experience in teaching, leading and coaching. She currently is an Instructional Coach and loves to support individuals in discovering who God has made them to be, both professionally and personally. She has led a variety of professional development opportunities, trainings and workshops both in the fields of education and ministry. Cathy desires to support individuals in discovering the Creator's design and image within. Cathy and her husband, Steve, live in Michigan with their seven year old Springer, Otis. They have three adult daughters and two son-in-laws. Together, they enjoy the company of friends (both old and new) in their home, as well as cycling, camping, backpacking and hiking. They can be found hiking and enjoying the outdoors with Otis right alongside them.10 responses to “The Enigmatic Impact of Human Interactions on Society”
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Cathy, you highlighted Polanyi’s central thesis — “that the market economy is not a natural or self-regulating system but is, in fact, a human-made institution with far-reaching political and social consequences.” The key term there, I think, is “human-made.” While humans are made in the image of God, they are also broken and marred by sin. The work of their hands can be marvelous and helpful — their work can certainly promote human flourishing — but their work, and the systems they produce, can produce a great deal of injustices, harm, and division. Given our current socio-economic context, what redemptive pathways forward do you think are possible, particularly in what Polanyi believes to be the double movement of market forces?
Thanks, Travis for your question. For me, the beginning of redemptive pathways begins in the choices I make and how I live within my apprenticeship to Jesus. As the Spirit, does his work in me and I follow Jesus more closely, Jesus leaks. I love the wisdom literature in the Bible. The admonition from Proverbs 4 (MSG translation), “Keep vigilant watch over your heart; that’s where life starts. Don’t talk out of both sides of your mouth; avoid careless banter, white lies, and gossip. Keep your eyes straight ahead; ignore all sideshow distractions. Watch your step, and the road will stretch out smooth before you. Look neither right nor left; leave evil in the dust.” Vigilant watch. . . Father, show me your paths; guide me in your truth.
You hint at something interesting that has been hanging around in the background of our cohort’s discussions these past few weeks. Let’s see if I can work it out here. Humans and culture mutually influence one another. As humans we are shaped by what we value. Christians are shaped by their desire to honor God. Secular culture is shaped by a variety of values, be it capitalism or individualism or something else. But then that emerging and ever-changing culture shapes us all, Christian or not. Rinse and repeat, the cycle is endless. Our outworking of that is maybe what it means to be in the world but not of it.
That was maybe a bit of a down-the-rabbit-hole moment. What are your thoughts?
Kim, your musings are helpful as I try to bring all our readings and discussions together. The most clarifying sentence is this: “But then that emerging and ever-changing culture shapes us all, Christian or not.”
Secular or Christian (evangelical specifically) all will feel the wrath and wonder of culture around us.
I join Borg from Star Trek and Cyberman from Doctor Who in saying: “Resistance is futile!”
However, we should still try.
Wow, John, one simple phrase but I think you just changed the direction of my thinking and calmed some of my inner angst around this topic. Even if we know “resistance” will not ultimately change the system, the act of resistance itself is still valuable, noble even, dare I say could be an act of worship?
Yes, the act of resistance itself!! We know to Whom we belong. We are not fighting against flesh-and-blood enemies, but against evil rulers and authorities of the unseen world, against mighty powers in this dark world. (Eph. 6:12)
This is a great thread… I’m teaching through the passage from Eph 6 on ‘the spiritual struggle’ (warfare), and it’s interesting that it doesn’t tell us we have to ‘win’ but to ‘stand’.
Maybe that’s how we work out this call to resist knowing not much, if anything, will change in culture. But the act of resisting changes us, and reminds us who we ultimately serve.
Thanks for reminding me of this in context of economic forces (which ARE part of the principalities and powers).
I appreciate Kim’s comment, “As humans we are shaped by what we value.” It makes me consider what I value and how what I value is, “mutually influenced” by what I am seeing and experiencing in the culture. How much of what we do today as “church” is really culture and how much of what culture does today has been influenced by Christians/Christianity?
Cathy, as always, your summaries and observations are profoundly helpful and clarifying to me.
I want to be you (minus the gender aspect) when I grow up! 🙂
When Polanyi intones that “this is an impossible undertaking” I feel hopeless that things can nor could change. Do you feel the same? Is there any hope?
John, I hear you!
This struggle we (followers of Jesus) is not against people (flesh and blood). I love how The Message expresses the reminder in Ephesians 6:10-12, “God is strong, and he wants you strong. So take everything the Master has set out for you, well-made weapons of the best materials. And put them to use so you will be able to stand up to everything the Devil throws your way. This is no afternoon athletic contest that we’ll take away from and forget about in a couple of hours. This is for keeps, a life-or-death fight to the finish against the Devil and all his angels.”