Karl Polanyi about The Great Transformation (1944)

Approaching Polanyi’s book “The Great Transformation: The Political and Economic Origins of Our Time” (1944) I was seeking an understanding of the term “the great transformation” according to Polanyi’s interpretation.  As with other theorists that we read in class, while reading a text I attempt to set myself in the social and economical context of the author – in Polanyi’s case – a former Austro-Hungarian officer, an economic-political journalist and an intellect who examined “the market” after witnessing World War I, the Russian Revolution, revolution and terror in his native Hungary, hyperinflation in Austria and Germany in the 1920s, the collapse of the international gold standard, the Great Depression, the rise of Nazism, the New Deal, and World War II — an era of unrest unprecedented in the modern world (Professor Clark about Polanyi, 2008).  It is understandable, according to present economic theorists that Polanyi believed that free markets would lead to political and social collapse.

Are we experiencing a similar threat today in the era of globalization?

Polanyi refers to the idea of “fiction” as a product of the industrial revolution. Man and land have been reduced to a money-making instrument:  “Production is interaction of man and nature; if this process is to be organized through a self-regulating mechanism of barter and exchange, then man and nature must be brought into its orbit; they must be subject to supply and demand, that is be dealt with as commodities, as goods produced for sale”. (p. 136).

How do (wo)men and labor fit in today’s self-regulating system dictated by new technologies?  Are we once again reduced to a money-making instrument driven by ever-renewed definitions of commodity?  Such ‘dis-empowerment’ of the role of a human being in the social-economic fabric is tough to swallow.

This brings to mind other theorists that we read who also argued that the value of a commodity dictates the way we think and act politically and economically.  For example, Benjamin claims that the work of art has turned into a commodity and had lost its original “aura” and traditional form of communication.  Appadurai asserts that the information revolution produces new types of wealth and financial markets driven by “mysterious and almost magical forms of wealth”.  Nevertheless, the tone of both Benjamin and Appadurai is one of potentiality related to human development, whereas I find the tone in Polanyi’s text detrimental.


March 17, 2010. Columbia University Doctorate.

One Comment

  1. Ruth Palmer replied:

    I’m not sure I fully understand your final observation about Polanyi’s text being “detrimental,” but I find your observations, especially regarding Polanyi’s used of the term “commodity fiction” very interesting. Regarding the question of how this term applies today, perhaps differently than in Polanyi’s era, we might consider the fact that many web 2.0 technologies allow users to actually use their labor to create tools and platforms that are then used by companies to advertise products to those same users. And often users provide the labor for free. So they provide free labor to companies that then profit from that labor AND use it to sell the workers something. Is this a new degree of commodification of humans or something qualitatively different?

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