Karl Polanyi on Ethics and Economics

Daniel M. Kolos is president of Benben Books, a company publishing
scholarly works.

In this powerful book, Gregory Baum not only pays homage to Karl
Polanyi, but also summarizes his more obscure works in admirably simple
language.

Do ethics and economics overlap? Mainstream economists and free-market
proponents would deny it. Baum devotes a full chapter to Polanyi’s
thinking on each of these topics; he then shows, in the final two
chapters, that there is both historical evidence and philosophical
validity for looking at the two subjects holistically. Polanyi’s
economics consist of a critical analysis of existing mainstream
economies prior to World War II. The self-regulating market transformed
labor and land into market commodities; these “were bought and sold,
used and destroyed, as if they were simply merchandise, even though they
were in no sense the products of human industry.” A countermovement
arose, but Marxism stressed value-free scientific laws working in the
social and economic life of nations (“value-free” meaning that
people act out of necessity). Both systems fragment cultural experience.
Polanyi’s new socialism aims to overcome the domination of market
forces and introduce people to the freedom and capacity to shape their
own society. It is concerned with “the spiritual dimension of human
existence [and] is ethical in nature.” Polanyi’s ethics focus on
“civil conscience,” a sense of people’s self-responsibility for
deciding “what is the good” for themselves and being co-responsible
for what happens to society.

Baum points to a major fault in the self-regulating market system: it
has a devastating impact “on traditional communities, even if they
should experience some economic growth. The poverty Polanyi studied and
measured was not principally the economic one, but rather the isolation,
depression, and cultural debasement produced by the separation of work
from people’s social relations.” A countermovement against this
trend already exists at a community level. Whether or not it will
succeed remains to be seen.