Humanity, Society and Commitment: On Karl Polanyi

Barbara Lenes is an Edmonton-based economist.

This fourth volume on political economic issues from the Karl Polanyi
Institute is the most comprehensive yet in its description of the man
and his work. Karl Polanyi (1886-1964) was a Hungarian-born educator,
sociologist, economist, philosopher, and anthropologist who lived in
Vienna, London, New York, and eventually Toronto. He actively
encountered the great movements of his day—the Bolshevist experiment,
British Christian Socialism, Austrian capitalism, European fascism, and
liberal capitalism—

all with a basic sympathy for attempts by societies to protect
themselves from the depredations and lack of human purpose underlying
both unfettered-market and centralist-planned economies.

Coming from a background of highly developed working-class
organizations in Austria and his own socialist educational efforts in
Hungary, Polanyi based his study of markets on the history of economic
development in Europe since Antiquity. This culminated in his best-known
book, The Great Transformation, which provided justification for
intervention into market affairs to prevent their destructive effects on
communal values. Basically, he saw democracy as a phase in the
development of the more long-lasting capitalist system, which,
unfettered, tended first to the denial of free political agents and then
to fascism or communism, and war. His socialism focused on the
subjugation of the economy, including ownership, to human needs, work,
and effort. In this he argued a third way apart from the absolute
materialism of both laissez-faire markets and centralist planning.

Polanyi explained that fascism is the logical outcome when markets are
made absolute over the state and the individual, an observation that is
timely with respect to current rightist political agendas. Under
fascism, the economy becomes a thing in itself, social life is built on
vocation, and people are viewed solely as producers, with representation
according to their economic function. Failure of the self-regulating
market then results in authoritarianism, as the state has been robbed of
its ability to regulate in the name of a smooth-functioning market.

Karl Polanyi’s writings are relevant to current economic debate: this
is a mature theory of political economy for those who fear capitalist
threats to democracy and who seek to move beyond simple utopianism.