A review of “The Great Transformation” by Polanyi
This book looks at how we used to live before we turned everything into something that has a price.
The great transformation of the title refers to the before and after of the industrial revolution and the transition from a society based on householding (living off your own land, slaughtering the family pig and so on), reciprocity (sharing and bartering) and redistribution (by a squire, a King or a Bishop) to a “market society”, a juxtaposition of a modern nation state and a modern market economy. It deals with the destruction of the traditional fabric of society as was by the “satanic mill” and the creation of the fictitious commodities of land, labour and money.
It is an examination of the social and political changes that took place during the rise of the market economy.
People now became commodities, rather than simply inherently valuable human beings. A labour market was developed and labour was transformed into a commodity. There was a human and environmental cost to allowing people and nature to be included as a part of the production process and social dislocation followed as a result of the spread of market forces.
This resulted in the so-called “double movement”. As market forces spread, there was a backlash from society and attempts at social protectionism. This was marked by the ongoing political struggle of the “dis-embedding” force of the free market, and the “re-embedding” efforts at social protection.
This can be seen as a useful way of understanding the current day politics of modern capitalism and the poles of social welfare and protectionism on the one hand, and the proponents of free market forces and unrestricted capitalism on the other.
There are, of course, some very interesting modern-day equivalents and similarities. The global financial crisis of recent years and the Eurozone crisis are reminiscent of the Gold Standard of earlier times. The problems with the Euro, the financial and devastation to southern European countries such as Greece, and the resulting social costs are all plain to see.
Equally, the fightback that we are witnessing against unfettered globalisation and free market forces are self-evident. We are now seeing attempts at social protectionism in the United States (American jobs for American people and Trump) and Great Britain (British jobs for British workers and Brexit) as people react to the social and environmental disintegration and costs of the market society and commodification of people.
The book is a consideration of the impact of the economy on society and the side effects of a free market society. It is an argument against the sustainability of such a society and its destructive effects on human nature.
In our day, we are certainly seeing such an upheaval and a reaction to unfettered globalisation, the enrichment of a very small section of society at the expense of large swathes of the workforce and social disintegration.
It will be very interesting to see what happens next.