The Great Transformation…
Karl Polanyi’s 1944 book “The Great Transformation: The Political and Economic Origins of Our Time” is considered a classic work of economic history… Polanyi argues in this book that the rise of the market economy in nineteenth-century Europe was a deeply political and social process that required significant state intervention, and that the market-led transformation of society has had significant negative consequences for people and the natural world. The major point of Polanyi’s “The Great Transformation” is that the market economy was never a “natural” or “spontaneous” growth, but rather a social construct facilitated by extensive governmental involvement. Historically, markets, Polanyi contends, have always been interwoven inside larger social and political interactions, rather than operating independently of them… Only in the early nineteenth century was the market recognized as a separate entity, separate from society and government. Polanyi contends that the myth of the self-regulating market has influenced economic policy in the intervening years, causing substantial social and environmental harm. As noble as the market may appear on paper, Polanyi cites the elimination of ancient rituals, rising inequality, and environmental degradation as evidence that it eventually causes more harm than good. Polanyi makes his argument in the first section of “The Great Transformation” by contrasting the “embeddedness” of early economies with the rise of a market economy. He then shifts his attention to the social and political ramifications of the early 19th-century emergence of a market economy in the United Kingdom, demonstrating how state action was required to achieve this transformation. This section of the book contains in-depth explanations of the English Poor Laws, Corn Laws, and classical economic ideas. Polanyi investigates the repercussions of the market-led change of society in the nineteenth and twentieth centuries in the second portion of the book. He claims that the commercialization of land, labor, and money has resulted in enormous social and environmental issues, such as the disintegration of traditional social connections and the devastation of nature. One of Polanyi’s most important contributions is his emphasis on the role of the state in shaping economic outcomes. Rather than seeing the state as a neutral observer or reluctant participant in the market, Polanyi contends that governments have always had an important role in shaping economic results. The state has always played a role in influencing the economy, whether through the introduction of minimum wage regulations or the regulation of financial markets.
Through the eyes of Dr. Clark:
Dr. Clarks paper stated that comprehending history, according to Karl Polanyi and Max Weber, is essential for understanding the present. Historical explanations, they believe, can explain their own contexts, anticipate future occurrences, and even offer strategies to restructure markets. However, economists have traditionally dismissed the importance of such historical evidence. This lack of focus was especially noticeable during global financial crises such as the 2007 credit crisis, when alternate economic histories developed. Polanyi’s book presents a thorough account of how religious beliefs initially hampered capitalist markets before being co-opted and redeployed for further capitalist development. It highlights the need of understanding economic systems in relation to religion and human behavior in order to increase the effectiveness of market manipulation.
About the Author
Alana Hayes
Alana is a mother to four beautiful children and wife to a farmer in Texas. She is an avid world traveler with a heart for both the world and education. She is the president of the nonprofit Against the Grain Texas where they focus on providing education to children overseas and at risk adults in the states. To date the nonprofit has given almost $100,000 to individuals around the world. In her free time she loves spending meaningful time with people and reading to further her personal education.One response to “The Great Transformation…”
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Great job in summarizing this text. Do you believe that the control that is exercised over the economy produces the best outcome?