The great transformation and progressive possibilities : the political limits of Polanyi's Marxian history of economic ideas

Abstract

Polanyi's The great transformation remains one of the stand-out texts of twentieth-century political economy, yet it contains important conceptual ambiguities. Perhaps most significantly, the later chapters reveal the influence of Polanyi's own notion of an ‘always embedded economy’, whereas the earlier chapters are constructed around a much more abstract notion of ‘economy’ derived from an essentially Marxian history of economic ideas. Marx worked within the basic Ricardian conception of economy as a method of immanent critique, but then proceeded also to project that same conception backwards onto pre-Ricardian traditions of economics. Polanyi did likewise, I argue, consequently missing the opportunity to connect his own ideas about the non-market influences on all market outcomes to pre-Ricardian studies of the substantive basis of functioning economic relations. I use the following pages to try to restore one such link, in this instance to Adam Smith's account of the moral ‘sympathy’ underpinning the process of market co-ordination. This reconstruction also has implications for progressive possibilities today. Polanyian responses to the ongoing crisis have tended to be framed by the basic Ricardian conception of economy and have accordingly been restricted to a discussion of more market or less, more social protection or less, more austerity or less. By contrast, tracing the lineage from pre-Ricardian concerns to Polanyi's notion of an always embedded economy allows the potentially much more radical question to be asked of what sort of economic relations today best serve essential human needs