Karl Polanyi’s Great Transformation and the Countermovement to Capitalism
Media pundits hail the economist Karl Polanyi as a brilliant theorist of capitalism and a thinker for our time. In order to understand Polanyi’s ideas, however, we need to see him in the context of his own time: Europe’s "age of catastrophe" in the early twentieth century.
Karl Polanyi was born in Vienna, Austria in the last decades of the nineteenth century. Pictured here is the destruction of the Schönbrunn Palace in Vienna during World War II, during which his book The Great Transformation was published. (Photo by ullstein bild via Getty Images)
Financial Times columnist Martin Wolf recently noted the enduring political influence of two books published during the Second World War by men who were born in Vienna in the late nineteenth century: Friedrich Hayek’s The Road to Serfdom and Karl Polanyi’s The Great Transformation.
Hayek was, of course, one of the progenitors of neoliberalism, the dominant economic philosophy of our time. Yet for Wolf, despite his own long-standing neoliberal inclinations, Polanyi seemed “much the better guide” to understanding the present. His Financial Times colleague Jonathan Derbyshire nominated Polanyi as a fantasy dinner guest to accompany the philosophers Michel de Montaigne and David Hume. Meanwhile, the New York Times published a comic inspired by The Great Transformation.
Polanyi is more than a fashionable reference point for liberal pundits, however. His name has been linked to a variety of socialist projects. Most recently, and with good reason, media commentary has identified him as a “democratic socialist” precursor of Jeremy Corbyn and Bernie Sanders. Long before that, The Great Transformation had become a touchstone for left critics of neoliberalism.
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