In my opinion, Karl Polanyi’ book The Great Transformation, is a great resource for anyone who desires to understand the crisis of capitalism in the twenty first century. According Stiglitz, Polanyi’s book describes the great transformation of European civilization from the preindustrial world to the ear of industrialization and the shifts in ideas, ideologies, and social and economic policies accompanying it. Because the transformation of European civilization is analogous to the economic transformation in the developed world and the economic crisis confronting developing countries around the world today, it seems as if Polanyi is speaking directly to present-day issues.
Polanyi’s classic, brings the reader up to speed with the multifaceted angles that where at play during the industrial revolution. The politics and socioeconomic elements characteristic of Europe’s industrial transformation according to Polanyi:
…rested on four institutions. The first was the balance-of-power system which for a century prevented the occurrence of any long and devastating war between the Great Powers. The second was the international gold standard which symbolized a unique organization of world economy. The third was the self-regulating market which produced an unheard-of material welfare. The fourth was the liberal state. Classified in one way, two of these institutions were economic, two political. Classified in another ways, two of them were national, two international.
I do not claim to understand the intricate details of how exactly all the above institutions neatly worked, but I am curious about the working grasp on their policies, the implementation attempts and consequences. Polanyi suggests, “the nineteenth century produced a phenomenon unheard of in the annals of Western civilization, namely, a hundred years’ peace- 1815-1941.” At first glance, I questioned what kind of peace the author might be reminiscing about? Could this be peace for the most powerful and a peace for instance of survival for the fittest? But Polanyi also shows that while peace might have been for a few powerful states, it was:
Apart from the Crimean War…. During the first part of the century civil wars, revolutionary and antirevolutionary interventions were the order of the day. In Spain a hundred thousand troops under the Dcu d’Angouleme stormed Cadiz; in Hungary the Magyar revolution… a Russian army fighting on Hungarian soil. Armed interventions in the Germanies, in Belgium, Poland, Switzerland, Denmark, and Venice marked the omnipresence of the Holy Alliance. During the second half of the century the dynamics of progress were released; the Ottoman, Egyptian, and the Sheriffian empires broke up or were dismembered; China was forced by invading armies to open her door to the foreigner, and in one gigantic haul the continent of Africa was partitioned”
I was ambivalent about Polanyi reference to “a hundred years’ peace” due to my familiarity of the changes the African continent experienced during the last decades of the nineteenth century. Some of these changes in Africa had to do with famine, disease, territorial and internal conflict. But other significant events where the coming of merchants, European missionaries; and eventually the scramble and partition of Africa by Western colonial governments of which British imperialism took the lion’s share.
Overall it seems to me that Polanyi’s book, seeks to provide a critique on not only the capitalistic systems logic of the industrial revolution but also an assessment of the neoliberal capitalistic doctrine today. The book provides a much needed multifaceted understanding of how the global economic systems got to here it is today. In fact, The Great Transformation will be one of the noble collections in my library for regular consultation. There are many take homes for me in Polanyi’s work, for example notion of the satanic mill, “fictitious communities” the “concept of Embeddedness’ and “double movement” et cetera. I was intrigued by Polanyi’s take on the struggle against market forces as a social and ecological process. “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 natural environment.” Polanyi’s emphasis on society as the recipient of market based dominance, also left me wondering about injustices that might be found in fallibility of society.