Karl Polanyi (1886–1964) returned to public discourse in the 1990s, when the Soviet Union imploded and globalization erupted. Best known for The Great Transformation, Polanyi’s wide-ranging thought anticipated twenty-first-century civilizational challenges of ecological collapse, social disintegration and international conflict, and warned that the unbridled domination of market capitalism would engender nationalist protective counter-movements. In Karl Polanyi and Twenty-First-Century Capitalism, Radhika Desai and Kari Polanyi Levitt bring together prominent and new thinkers in the field to extend the boundaries of our understanding of Polanyi's life and work. Kari Polanyi Levitt's opening essay situates Polanyi in the past century shaped by Keynes and Hayek, and explores how and why his ideas may shape the twenty-first century. Her analysis of his Bennington Lectures, which pre-dated and anticipated The Great Transformation, demonstrates how Central European his thought and chief concerns were. The next several contributions clarify, for the first time in Polanyi scholarship, the meaning of money as a fictitious commodity. Other contributions resolve difficulties in understanding the building blocks of Polanyi's thought: fictitious commodities, the double movement, the United States' exceptional development, the reality of society and socialism as freedom in a complex society. The volume culminates in explorations of how Polanyi has influenced, and can be used to develop, ideas in a number of fields, whether income inequality, world-systems theory or comparative political economy. Contributors: Fred Block, Michael Brie, Radhika Desai, Michael Hudson, Hannes Lacher, Kari Polanyi Levitt, Chikako Nakayama, Jamie Peck, Abraham Rotstein, Margaret Somers, Claus Thomasberger, Oscar Ugarteche Galarza.
Europe underwent in his time is so original in its components and their configuration that even those versed in history and interdisciplinary studies approach its full
meaning only gradually. And it is so suggestive that it has kept generations trying.
This collection contains many contributions, by established and new Polanyi scholars, that push back the bounds of our understanding on many fronts, whether
the ideas of fictitiouscommodities, particularly money, and the double movement, of socialism or of the different historical evolution of continental, British and
Commodified money and
Polanyi’s ‘great transformation’ refers to the ‘collapse’ of ‘nineteenth century
civilization’ and the emergence from it of a vastly different one. The story revolved
around the unfolding consequences of the commodification of three fictitiouscommodities: land, labour and money. However, the consequences of the commodification of the last structured the dramatic plot of The Great Transformation (TGT).
Though the gold standard, the apex structure commodifying money, was only one
of four institutions
Money as a fictitiouscommodity
This lasted until the demise of the dollar/gold standard (1971) when the dollar’s
gold backing was withdrawn and liberalized currency markets were introduced.
Later, in 1980 general financial deregulation began to disembed the financial sector
once again. Soon after, with the Latin American debt crisis, the concept of ‘Too
Big to Fail’ was operationalized and broke through the usual boundaries between
politics and economics. A group of banks were re-embedded to protect them from
bankruptcy in 1984. It
gold standard was re-imposed after the First World War, economies
were starved of money in order to reduce prices and wages in a futile attempt to
pay their debts. Rueff, Ohlin and Hayek claimed that imposing this deflation and
poverty on debtor economies would (and should) represent a stable equilibrium.
Everything – including money, land and labor – was viewed as a commodity
DESAI 9781526127884 PRINT.indd 61
Money as a fictitiouscommodity
whose price would be set fairly by supply and demand, subject to ‘demand’ being
eroded by debt service
-movement. The factors of production – or the ‘fictitiouscommodities’, as Polanyi calls them – are the obvious starting points of the
counter-movement. There are three characteristics which distinguish the fictitiouscommodities from ordinary goods:
• They are indispensable for the working of the self-regulating market system.
Without the factors of production, no self-regulating market system is possible.
• The prices of the fictitiouscommodities form the incomes of the principal classes
of society. Wages, interest and rent derive directly from the sales of labor, money
particular place, is the result of social struggles by different groups with different and often opposing interests has a great deal in common with Karl Polanyi's thinking in The Great Transformation (Polanyi, 1944 [1957 ]) despite the fact that he was not, strictly speaking, in the historical materialist tradition. Polanyi coined the term the “double movement” to describe two contrasting trends in capitalism. The first is to strip away the social relationships that protected what he termed fictitiouscommodities to make them subordinate to the laws of self
Where anthropology and sociology share metaphors as analytical tools
Polanyi’s considerations regarding the regulatory measures implemented to control the action of the market
as labour, land and money are transformed into fictitiouscommodities. The
institutionalisation of the labour market, the extinguishing of the commons
to the advantage of private property, and the expansion of all-purpose
money all brought about social tensions that called for the intervention
The transformations of global capitalism
of ‘powerful institutions’ designed to curb the disruptive actions of these
special commodities (1944: 79).
). All actual markets are
constituted and sustained by government actions, especially the markets in the key
inputs into the economy, or what he calls the ‘fictitiouscommodities’ of land, labor
and money – fictitious because they are non-economic in origin.
Indeed it is because they are fictitious and not actual market commodities (they
were not produced for the purpose of buying and selling) that they must be politically and economically coerced into the market and subjected to being bought and
sold as if they were in fact commodities. Like Marx, Polanyi understood
An investigation of the theoretical lineage to Giovanni Arrighi
thrown as prey to misery and degradation’ (ibid.:
Just as his focus on the market organisation of society, particularly the three fictitiouscommodities, contested the Marxist conception of exploitation, so Polanyi
also privileged market organisation as the explanation for India’s suffering. He
considered the theory of exploitation an economistic prejudice. While Polanyi’s
focus remained on the rise and decline of world capitalism, his analysis did not
neglect backward regions and the general structure and character of capitalistic
domination. As we shall examine