Weird Karl Polanyi: The Great Transformation

Karl Polanyi’s celebrated The Great Transformation: The Political and Economic Origins of Our Time (1944 and reprinted many times) would have to be one of the weirdest books on economics. It has some searing insights, such as:

A self-adjusting market … could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness (p. 3).

No less a thinker than Adam Smith suggested that the division of labor in society was dependent upon the existence of markets, or, as he put it, upon man’s ‘propensity to barter, truck and exchange one thing for another’. This phrase was later to yield the concept of homo economicus. It retrospect it can be said that no misreading of the past ever proved more prophetic of the future (p. 45).

But then he goes on to make some massive blunders. The one that interests me has been deeply influential in the study of ancient economies: the distinction between reciprocal, redistributive, household and market economies (the third one is often forgotten in accounts of Polanyi). The distinctions should be obvious: reciprocity involves the complex patterns of gift-exchange, based on the principle of symmetry in organisation; redistribution assumes a centralised authority that distributes the goods gathered, the chieftain to which the hunter gives the kill bleeding all over his shoulder and back; householding is just that, taking care of the members of one’s group and operating on the lines of organisational autarchy; and markets he assumes to be profit-making ventures that operate according to barter.

So what’s wrong with all of this? Apart from the smaller point that most markets throughout history have not operated in terms of profit, he assumes that all economies up to capitalism are basically the same. From the grunting hunter to the feudal lord, from the penetrating slave master to the peasant in the village-commune, deep down all operate on the same economic basis. One groans when reading it now, wondering how such a position could have produced the insights that it has, how it has influenced so many. The second major problem is one shared by David Graeber’s book on debt: anthropology provides the secret to an unchanging human nature. His deepest debts are to Thurnwald and Malinowski, but the trap is that these flawed works on far-clung, exotic and supposedly ‘primitive’ societies show us what we are all like, with the accretions of civilisation stripped back. Much like Adam and Eve, I guess.


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