ABSTRACT
Karl Polanyi (1886-1964), a representative of the great central European culture between the two world wars, emigrated in 1933 to England and then to the United States in 1940. He is well known above all for his book, The Great Transformation. The political and economic origins of our time, published in 1944. The book is an extensive original analysis of classic bourgeois market society, its internal conflicts and the transformation undergone by the liberal economic institutions in the 1930s. The thesis of the book is that the market society of the nineteenth century was not the natural evolutionary point of arrival of human history, but rather an extraordinary historical case whose basis consisted of “extraordinary assumptions”:
A market economy is an economic system controlled, regulated, and directed by markets alone; order in the production and distribution of goods is entrusted to this self-regulating mechanism. An economy of this kind derives from the expectation that human beings behave in such a way as to achieve maximum money gains. It assumes markets in which the supply of goods (including services) available at a definite price will equal the demand at that price. It assumes the presence of money, which functions as purchasing power in the hands of its owners. Production will then be controlled by prices, for the profits of those who direct production will depend upon them; the distribution of the goods also will depend upon prices, for prices form incomes, and it is with the help of these incomes that the goods produced are distributed amongst the members of society. Under these assumptions order in the production and distribution of goods is ensured by prices alone. Selfregulation implies that all production is for sale on the market and that all incomes derive from such sales . . . [Moreover] no measure or policy must be countenanced that would influence the action of these markets.
