a post-polanyian political economy for our times

PRE-PUBLICATION DRAFT

The definitive version of this article is available inEconomy and Society 43:4

Introduction: A post-Polanyian political economy for ourtimes

Christopher Holmes

Abstract

2014 is the 70th anniversary of the publication of Karl Polanyi’s The GreatTransformation and the 50th anniversary of its author’s passing. Thisspecial issue celebrates these markers by bringing together a collection ofcritical engagements with Polanyi’s work which, whilst sympathetic to hisintellectual aims, ward against any straightforward application tocontemporary issues. In so doing, it suggests that part of the value ofPolanyi’s work lies not in its ability to be recited, repeated and re-applied in itsoriginal form, but rather in its openness and its susceptibility to alterationand transmutation. In this introductory article, I consider the return tointellectual ‘voices from the past’ in the post-2008 landscape. I suggest thatthe distinctiveness of Polanyi’s voice comes from his attempt to problematise,challenge and re-imagine the very notion of ‘economy’ itself, a theme whichunderpins all of his most important ideas, and one which reverberates acrosscontributions to this special issue. I suggest that, beyond his immediatecritique of free-market ideas, the desire to de-centre the notion of anautonomous economic sphere – and to challenge abstract modes of thoughtthat address such a notion, regardless of their political sensibilities – is hismost valuable legacy, and one which might encourage us to seek out newinnovations and engagements in future Polanyian scholarship.

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Our social thinking, focused as it is on the economic sphere,

is for that very reason ill equipped to deal with the economic

requirements of this age of adjustment (Polanyi 1977: xlvi)

Introduction

In times of uncertainty and change, people search for

authoritative bases for explaining events and for

guidance as to how to proceed. It is therefore

unsurprising that, given the sense of crisis that has

framed thought on the global economy since 2008, we have

seen a renewed emphasis on voices from the past. Giants

of the political economy canon, previously restricted to

the fringe of academic discussion, have come to walk

openly in mainstream political economic debate. In the

wake of the sub-prime mortgage crisis, Keynesian

indictments of unfettered financial markets and

endorsements of regulatory and fiscal intervention became

commonly accepted, if not universally enacted, policy

wisdom – it was, as Robert Skidelsky put it, ‘the return

of the master’ (2009). In various guises, Marx’s work

also had something of a renaissance (Elliott 2012). As

the sub-prime mortgage crisis morphed into a more

generalised liquidity crisis, moving on to provoke

sovereign debt crises in Europe, it became increasingly

difficult to think in terms of individual crises, each

with particular exogenous causes. Recognition became

widespread that individual morality tales about greedy

bankers, admonishment of spendthrift nations, or accounts

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of mistaken risk modelling techniques and faulty economic

reasoning, might all be ‘missing the wood for the trees’.

The polyvalence of the financial crisis as a whole forced

people to consider higher planes of abstraction: perhaps

it was finance in general, laissez-faire ideology or the

centrality of markets themselves that needed to be bought

into question.

But what has been just as striking is how the openness

and radicalism of this debate shrank away over the

proceeding years. Marx’s theory of the declining rate of

profits was re-written as ‘therapy for bankers’ (Barker

2012), with the core of his message – the injustice of

private property and class struggle – being replaced by a

set of ideas that might inform better economic policy so

as to ‘make capitalism work better’. Keynes’ more

demanding prescriptions on limiting capital mobility –

designed specifically to challenge the authority of

financial market freedom – were shelved in favour of

limited and crisis-specific stimulus measures designed to

support it (Pettifor 2013; see also contributions to Tily

2010). An open discussion about alternative visions of

how we might go about reconstructing economic relations

differently was superseded by a much more technical

debate about how we might go about restoring the previous

order to a pristine state (Watson, this issue). And what

Keynesian interventions there were soon gave way to

discourses of economic austerity across Europe and

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beyond, which sought to pull back the frontiers of the

state, rather than to extend them so as to exert more

control over financial markets (Blyth 2013).

In this context, there are good reasons for turning back

to the work of Karl Polanyi. His magnum opus, The Great

Transformation (1944), offers us a unique, historical and

conceptually rich account of socio-economic crisis,

explaining it in terms of the social pressures wrought by

the attempt to construct societies on the back of utopian

economic ideas. His famous ‘double movement’ thesis has

been subject to a bewildering array of interpretations

and deployed toward myriad analytical ends (see Dale

2010), but in its rawest state – as a description of

attempts to instantiate the self-regulating market idea

upon increasing spheres of life, and the forms of social

resistance that that process engendered - it is surely at

its most relevant in the post-2008 landscape. In

particular, his account of the politics of nineteenth

century haute finance and of the gold standard between the

World Wars provides a great deal of critical insight

which we might bring to bear on current attempts to set

up, repair and sustain financial markets and their role

in structuring society and polity.

As Kari Polanyi-Levitt, has recently argued (2013), her

father’s wide-ranging mode of enquiry into matters of

finance pushes us far beyond limited debates over the

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relative merits of austerity and stimulus policies,

instead problematising the relationships between finance

and democracy, and between market and society, as a

whole. Moreover, Polanyi’s thesis on global finance was

itself ensconced within a much broader critique of the

costs of commodification upon people, communities and the

environment, which might give us pause as we witness the

extension of market mechanisms into traditionally non-

marketised domains such as public services (Crouch 2011)

and environmental protection (Lohmann 2010). One reason

that Polanyi’s work is attractive today is precisely

because it refuses to consider financial crises as

distinctive and separate from broader economic and social

trends. As Nancy Fraser discusses in her opening

contribution to this special issue, Polanyi eschews

‘critical separatism’, connecting crisis potentialities

in financial, ecological and social spheres of human

engagement. This de-centring of ‘the financial’ – and

indeed of ‘the economic’ – within our understanding of

crisis in general is a valuable move for today because it

provides a critical language through which we can

articulate a challenge to the common separation between

financial, productive and reproductive aspects of the

economic existence (which, as Fraser argues, offers up

scope for a novel Polanyian brand of feminist thought).

Fraser’s piece thus demonstrates how the very

expansiveness of Polanyi’s approach to ‘great economic

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transformations’ matches the profundity of questions of

political economy that need to be asked today.

But none of this potential is un-problematic. Rather,

our own era of transformation comes at the point of an

‘introspective turn’ in the Polanyian literature. Rather

than seeking to apply Polanyi's thought verbatim, or to

work towards establishing the ‘definitive Polanyian

position’, some of the most interesting avowedly

Polanyian research starts from the observation of

problematic aspects of his work, including for example an

uncritical attitude towards non-market forms of economic

integration and a latent determinism evident in his

depiction of economic history (see Sievers 1949 and

Hejeebu and McCloskey 1999 for respectively sympathetic

and unsympathetic critiques). If we are to wrest the

most value from Polanyi’s challenges to the market

society ideal, and to develop its contemporary relevance

to the fullest extent, it is vital that we engage with

these problems, which is exactly what the contributions

to this special issue do. Each approaches Polanyi’s

thought critically, exploring the tensions and

contradictions in his analytical scheme, before using

those explorations as a catalyst for innovation and

engagement on a wide variety of issues. Fraser’s

contribution is a case in point. Recognising a residual

communitarianism in Polanyi’s work she argues that

Polanyi’s single-minded focus on the perils of self-

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regulating markets came at the expense of a consideration

of the harms perpetrated in the name of the social,

however conceived. What about the patterns of social

domination, exclusion and hierarchy that markets

sometimes act to break down (see also Robotham 2009)?

Fraser responds by innovating, suggesting a notion of

‘triple movement’ so as to capture emancipation from

domination in the same analytical scheme as Polanyi’s

opposition between market and society.

All of this leaves us with a question. The remarkable

diversity of uses to which Polanyi’s ideas have been put,

the equally remarkable diversity of interpretations of

those ideas, and the increasing awareness of problematic

aspects of his work begs us to ask, if there is not a

definitive Polanyian position to be unearthed and

applied, then what is it to be ‘a Polanyian’, or to work

from a Polanyian position? If Polanyi is to provide us

with inspiration today, despite problematic aspects, then

we must consider our response to this question carefully.

In what follows, I suggest a response which focuses on

the extent to which Polanyi’s work encourages us to

problematise, challenge and re-imagine the very notion of

‘economy’ itself, a theme which underpins all of his most

important ideas, and one which reverberates across

contributions to this special issue.

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To begin, I explore the contemporary relevance of

Polanyi’s desire to challenge materialist and market-

centric accounts of the economy and how these might

contrast with Keynesian and Marxist responses to

financial crises since 2008. I move on to examine

Polanyi’s notion of the provisioning of livelihood,

discussing how it challenges other conceptions of what

the economy is. I argue that this challenge reflected a

broader suspicion that Polanyi held towards abstract and

universalist modes of thought, which is evident in

various ways across his work. However, along with Dale

and other contributors, I note that this line of thought

was hampered by an attachment to a Marxist teleology

which reproduced aspects of the very abstract modes of

thought that he was attempting to escape from. In the

final section, I suggest that we might move on from these

problems and harness the fullest potential of Polanyi’s

work by considering it in the light of other traditions

of thought to Marxism, which might in turn offer up the

potential for more innovative empirical engagement today.

In sum, this article concludes that, by approaching

Polanyi’s work critically, we can develop a uniquely

‘post-Polanyian’ voice in the post-2008 political

economic landscape which might serve to re-animate the

openness and radicalism of debate that took place in the

immediate aftermath of the sub-prime crisis in 2008.

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Contextualising ‘the economy’

The notion of the ‘real’ economy – set against a

presumably ‘less real’ financial economy – is a routine

basis for challenging the power of the financial sector.

Distinctions between investment and speculation and

between assets and derivatives function normatively

because they suggest that finance is only a good thing

when it explicitly relates to non-financial activity –

the real stuff of actual assets and productivity. The

broader cultural trope of ‘Main Street vs. Wall Street’

also separates out the world of global finance and

denounces it on the basis of a lack of connection to the

day-to-day reality of small businesses turning out

actual, useful goods. Such appeals to economic reality

have also shaped critiques of specific forms of financial

activity since 2008. Valuations of sub-prime mortgage

loans were considered problematic in that they did not

reflect the real value of the collateral. It was argued

that credit rating agencies issued ratings on public and

private debt that were incorrect, reflecting the

subjective interests of the agencies and their clients,

rather than the objective nature of the debt itself

(Sinclair 2010: 91). The euro currency enabled

peripheral European economies to borrow at rates that did

not reflect the underlying reality of their economies.

Distinguishing fictional finance from economic reality in

these ways is a rhetorical device used to enable blame to

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be assigned. Reality is right and fictional is wrong,

and so peddlers of financial fictions are to be

admonished and disciplined. Whether they be over-

exuberant investors, nefarious rating agencies or utopian

dreamers of harmonising eurozone economies, all must

undergo a ‘reality check’.

Whilst, politically, Polanyi was certainly concerned

about the dominating effect of finance upon everyday

life, a Polanyian position might ward against this

argumentative strategy on the basis that, by definition,

such moves reify ‘the economy’ as something in and of

itself. Although such distinctions may serve polemical

ends, by giving the debate ontological grounds, it also

implies the possibility of a set of authentically

‘correct’ rules and policies for financial management

which would reflect the pre-existing reality of

distinctively economic relations. This in turn implies

that financial problems are economic problems and so they

demand economic solutions. But what if financial

problems were discussed first and foremost as social

problems, or ethical problems, as questions of power,

inequality, or justice? Distinguishing ‘bad/fictional

finance’ from ‘good/real economy’ in general might

actually close down the possibility of more open

questions about the economy as a whole and its place in

society. Social, political and ethical questions over

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the purpose of the economy vis-à-vis human experience and

human lives become occluded.

In his contribution, Saiag speaks to the theme of reality

and fiction in Polanyi’s work by elaborating and

contesting his approach to money. Saiag shows how

Polanyi rejected the ‘neutral veil’ description of money,

which is predicated on a dichotomy between the monetary

sphere and some underlying ‘real’ economic sphere, where

money is merely a signifier to some underlying signified.

This dichotomy is implicitly upheld in the populist

oppositions of real and financial economies, whereas, for

Polanyi, money has various characters at various times,

conditioned by particular social contexts, none of which

are more or less real than others. He went to great

pains to illustrate – sometimes successfully, sometimes

less so – that money has been institutionalised in

different ways throughout history, sometimes within the

context of market development, but at other times through

thoroughly un-marketlike practices including marriage,

punishment and a variety of other mechanisms of social

obligation (Polanyi 1968). Similarly, Polanyi’s analysis

of the gold standard did not centre on its internal

contradictions, or on an account of the power of

transnational financial agents tout court. Rather, gold

was, in his analysis, a simultaneously practical and

symbolic object, unifying poor and rich, local and global

in both concrete political economic orders and webs of

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cultural meanings. It was the reification of the gold

standard as the ‘faith of the age’ (Polanyi 1944: 26)

that made it pivotal to the politics of the period. In

my own contribution, I argue that these ideas remain

highly relevant today, offering us a unique and critical

voice on contemporary monetary issues such as the current

eurozone crisis and the politics that has emerged from

it.

But the overcoming of a distinction between financial and

real economies is only one stage in Polanyi’s attempt to

contextualise economic action, for underneath that

intellectual bifurcation lay another: between economy and

society. Like Keynes and Marx, Polanyi viewed the

economy in terms of its ability (or lack thereof) to

serve social ends, but unlike either, Polanyi was not

willing to elaborate any distinctively ‘economic’ theory

at all. Rather, his anthropological persuasion led him

to the famous conclusion that ‘[Man][sic.] does not act so

as to safeguard his individual interest in the possession

of material goods; he acts so as to safeguard his social

standing, his social claims, his social assets. He

values material goods only in so far as they serve this

end’ (1944: 48). To think otherwise – to think of the

world as intelligible in terms of economic principles

first – was to miss the socially embedded nature of

economic interaction.

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But what are these social ends? How do we go about

describing economic behaviour in a social fashion? On

pre- and non-modern economies, this was a straightforward

matter for Polanyi. As he remarked in the edited

collection Livelihood of Man:…human beings will labor for a large variety of reasons so long

as they form part of a definite social group. Monks traded for

religious reasons, and monasteries became the largest trading

establishments in Europe. The Kula trade of the Trobriand

Islanders, one of the most intricate barter arrangements known

to man, is mainly an esthetic pursuit. Feudal economy depended

largely on custom or tradition. With the Kwakiutl, the chief

aim of industry seems to be to satisfy a point of honor. Under

mercantile despotism, industry was often planned so as to serve

power and glory. Accordingly, we tend to think of monks,

Western Melanesians, villeins, the Kwakiutl, or seventeenth-

century statesmen as ruled by religion, esthetics, custom,

honor, or power politics, respectively (1977: 11).

Given this, it is disappointing that Polanyi – ceding

ground to the marginalist vision of human motivation that

he so despised – was often content to consider economic

behaviour in market society in terms of simple material

gain. Betraying an imputation of false consciousness,

genuinely social motivations had been lost to Mammon in

market society. As a consequence, whilst Polanyi desired

to embed our understanding of the economy within the

social, he neglected to undertake precisely that task for

capitalist society (Lie 1991; Zelizer 1988) as, for

example, Max Weber or Thorstein Veblen had. As such, any

sensitivity to the particular motives for particular

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types of market economic action at particular times and

places, conditioned by particular social settings, is

lost.

In his contribution, Matthew Watson recognises something

of these limitations in Polanyi’s reading of the history

of economic ideas. As he discusses, Polanyi tended to

‘flat-line the whole of the history of economic ideas

around Ricardian themes’ – i.e. around an abstract

conception of ‘the economy’ as synonymous with ‘the

market’. By exploring the historiography of Polanyi’s

conception of economy – through Polanyi’s reading of Karl

Marx and both Polanyi’s and Marx’s reading of Adam Smith

– Watson shows that this was a polemically effective, but

hasty generalisation, and one that closed off the

possibility for drawing upon the subtleties in pre-

Ricardian political economic thought. Exemplifying the

aims of the special issue as a whole, Watson sees this

not as a reason to abandon Polanyi’s thesis, but rather

as a cue for innovative engagement, this time with the

thought of Smith. He argues that Smith’s notion of moral

sympathy provides us with precisely the basis that

Polanyi demanded, but did not actually supply, for re-

imagining economic life in social and ethical terms.

This potential for re-imagination which Polanyi’s thought

opens up contrasts markedly with Keynesian and Marxist

economic worldviews as they are traditionally understood.

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For Keynes, the economy was nothing but a large machine

which, if well managed, would serve only to churn out

material satisfaction for members within it. Ideas were

only relevant insofar as they enabled us to coax the

economy to perform this task better. If they did this,

then they were ‘right’ enough. For Marx, ideas were

epiphenomenal to the real, material business of

production – a product of our material economic

conditions and interests, rather than a determinant of

them. And as Havel notes, this easy materialism is a

mode of thought which remains with us today:The majority of our political parties act with a narrow

materialistic focus when, in their programs, they present the

economy and finance first; only then … do we find culture as

something pasted on or as a libation for a couple of madmen.

Whether they are on the right or left, most of them –

consciously or unconsciously – accept and spread the Marxist

thesis of the economic base and the spiritual superstructure

(2011: ix).

Polanyi’s emphasis on the social embeddedness of economic

action reverses this materialism. It suggests that the

language we use to describe the economy, its purpose and

ourselves within it is not neutral, or to be measured by

its correspondence to the underlying reality of the

economy. Rather, the material base of the economy is a

reflection of the sociological and political ideas that

we choose to understand it by (Thomasberger 2013). On

one hand, this functions as a useful analytical tool to

analyse existing economic behaviours in terms of their

social content. But on the other, it has a polemical

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purpose, offering up a basis for thinking through the

purpose of the economy beyond economism and market-

centrism. Developing a sense of what it might mean to

re-embed our understanding of economy within society will

be crucial to developing a distinctively Polanyian voice

in the post-2008 landscape.

Livelihood and rationalisation

Although Polanyi failed to open up the possibilities of

embeddedness within market society, he did so

incidentally through the development of the notion of

‘economistic fallacy’, which is precisely an invitation

to re-imagine the basis of economic relations outside of

market-norms, as expressed in the methodological

assumptions of individualism and acquisitiveness. With

the early marginalists in his sights, Polanyi wrote that

‘the error was in equating the human economy in general

with its market form’ (1977: 6). This gives rise to the

formal meaning of economic (i.e. derived from utility-

maximising/economising behaviour) being confused with the

substantive meaning (i.e. referring to economic interaction

in general). In contrast, Polanyi identifies the

substantive economy as the institutionalised interaction

between humans and their natural surroundings in

satisfaction of their material wants (1977: 32) – in

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other words, the way people go about securing their

livelihood.

On its own terms, this move has a lot of potential in

terms of characterising economic interests in new ways.

In a global economy marked by vast numbers of

economically ‘precarious’ peoples (Standing 2011) – a

precarity which has since 2008 spread greatly in affluent

economies – the key interest is not the maximisation of

wealth, but the achievement of economic security for

self, family and community. What implications might it

have for the way we understand the economy to put this

vision of human rationality at its centre? But equally,

we should be wary of replacing one abstract vision of

rationality with another. Instead, we can think of this

as an empirical question: how do people go about securing

their livelihood, and how does that effort relate to the

discursive structures of ‘the economy’ traditionally

understood?

In his contribution, Chris Hann explores this question.

Hann’s analysis of the Hungarian village of Tázlár

presents us with a history of the economic motives of

villagers through the prism of wider changes in the

socio-economic organisation of rural Hungary.

Significantly, the detail that Hann provides prevents us

from falling into the generalisations that Polanyi was

prone to. Instead of seeing people as fully subjectified

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by market norms, as implied by Polanyi’s failure to

explore embeddedness in market society, we get a picture

of individuals, households and communities responding to

change and adapting their behaviour in ways that cannot

simply be read off from the dominant ideological and

practical regimes of governance surrounding them. Like

Watson and other contributors, Hann thus recognises the

limitations of Polanyi’s anti-marketism, but shows how,

through empirical work, we might find a way to fulfil the

potential of a Polanyi’s sensitivity to the ideas that

shape our understanding of economic interaction whilst

retaining the essence of his critique of market society.

But given an evisceration of Polanyi’s simplistic and

polemic notion of economic behaviour in market society,

what is left that is Polanyian here? Rather than

searching for the basis for a revolutionary return to the

social and a ‘world entirely free of the economistic’

(Hann, this issue), Hann instead implies a more moderate,

sensitive and ultimately more illuminating analytical

manifesto: ‘The challenge is the same in all human

economies: how to institutionalise or (re-)embed the

“formal” or economistic in an encompassing holistic or

“substantive” societal framework’ (ibid.). In other words,

how do people accommodate the economic structures of the

world around them in the provisioning of their own

livelihood?

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Such empirical analysis still serves critical purposes

but the object of critique is different to Polanyi’s

emphasis on laissez-faire ideology. As for the rural English

population that Polanyi wrote of in The Great Transformation,

the important point for the Hungarian villagers was not

their degree of marketisation per se, but the effect that

sweeping changes in the socio-economic landscape around

them – whatever their ideological hue – had upon the

provisioning of livelihood in everyday life. By this

account, the focus in each case is not economism in

itself, but rationalisation, i.e. the way in which

individuals and communities are subjected to, or at least

affected by, external logics, towards higher ends of

efficiency or reason, however construed. Rationalisation

may have been synonymous with marketisation in The Great

Transformation, but Hann’s research demonstrates that the

former is the category, the latter a species within it.

This more general theme of rationalisation – the

subsumption of the autonomous individual and community

within abstract, universalising modes of thought – crops

up throughout Polanyi’s work. Of course, the economistic

vision of humans as driven, by their natural, animalistic

predispositions to exhibit market-conforming behaviour is

the most obvious example to emerge from The Great

Transformation, but he develops similar themes elsewhere.

For example, in his essay on ‘The Essence of Fascism’,

part of a co-edited volume entitled Christianity and the Social

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Revolution published in 1935, Polanyi berated fascist

appropriations of Nietzschean and Hegelian thought on the

basis that they lost sight of the irreducibly autonomous

agency of the individual that was so important to the

original thought of Nietzsche and Hegel, in the process

generating bastardisations of their worldviews:'[Ludwig] Klages is Nietzsche without the Superman. [Othmar]

Spann is Hegel shorn of his dialectic. Both omissions are so

vital that they suggest a caricature rather than a

portrait. ... Nietzsche rid of anarchist-individualism; Hegel

deprived of revolutionary dynamics; the one reduced to an

exalted Animalism, the other to a static Totalitarianism'

(1935).

By this reading, fascism, communism and laissez-faire

ideology were all problematic visions in that they all

generated infinitely applicable ordering principles from

systems of thought alone. None had, by this account,

humility towards human agency: no concession to the

potential for individual autonomy, for resistance and

change – the ‘odd term’, as Foucault put it (2005: 88) –

and no notion of cultural or social specificity. Each

vision extended to infinity both temporally, through the

fulfilment of some essence of human nature, and

spatially, through the globalist narratives that they

shared.

Polanyi’s attempt to escape the spatial aspects of these

absolutist and universalist modes of thought leaps from

the pages of his work. Emphasis upon the value of

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community, nourished in part by a fascination with Robert

Owen’s philosophy and politics, is common throughout. In

The Great Transformation, the metaphor of disembedding is at

its most powerful when it describes the physical

uprooting and relocation of labourers from their

particular communities in the name of market

rationalisation of the English countryside, for example.

And whilst Polanyi was often nebulous in describing his

own hopes for the future, it was evident enough that it

should depend not on abstract principles of order, but on

particular relationships between particular people in

particular communities:Human relationships are the reality of society. In spite of the

division of labour they must be immediate, i.e. personal. The

means of production must be controlled by the community. Then

human society will be real, for it will be humane: a

relationship of persons (1935).

But if Polanyi’s normative tilt towards the personal and

the particular and away from the abstract and universal

was clear in his approach to space, he failed to extend

this way of thinking out temporally. Yes, the moral

worth of the autonomous individual sat at the heart of

Polanyi’s political philosophy at all times, but his

account of the relationship between the individual and

the society within which he or she sits was often wrapped

up in a Marxist narrative of total emancipation from

market society, which betrayed a form of determinism.

Rationalisation from above via market ideology was a

situation that was to be escaped through some sort of

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fundamental transition towards socialism (Lacher 1999),

thus liberating the morally autonomous individual so as

to reflect their genuinely social inner essence and

achieve ‘freedom in a complex society’ (1944: 263; see

also Cangiani 2013; Holmes 2012).

In this issue, Gareth Dale unpacks some of the

intellectual formation that led Polanyi to this

teleological way of thinking. Drawing on unpublished and

little-read writings, he shows that Polanyi identified,

but struggled, with the temporality of Marxist thought,

recognising its limitations, but failing to escape from

them. Dale characterises Polanyi’s critique as follows:The determinism of Marxism … begets something akin to Sartrean

bad faith – the abjuring of responsibility through denial of

the freedom to choose. In its repudiation of moral freedom, the

belief in the inevitability of socialism, Polanyi concludes, is

morally and politically corrosive (Dale, this issue).

But Dale moves on to observe that, despite exposure to

strains of Marxism – particularly the work of György

Lukács – which sought explicitly to transcend the

deterministic and teleological tropes of orthodox Marxist

thought, Polanyi did not incorporate them into his own

work. Instead, he drew himself towards the far more

reductionist and deterministic ‘revision’ proposed by

Eduard Bernstein’s and to the ‘functional theory’ of

G.D.H. Cole and Otto Bauer. In result, as Dale

discusses, the transition to the better society acquires

an air of inevitability in Polanyi’s narrative, an

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inevitability that he appeared to be explicitly

attempting to denounce in earlier work.

Post-Polanyian approaches

Of course a scholar can only speak in the vernacular that

is familiar to them. And so whilst Marxism was very much

the familiar vernacular for Polanyi, one wonders whether

his escape from determinism might have been easier had he

inhabited a different intellectual milieu. I and others

have tried to think through Polanyi’s ideas in relation

to those of later post-modern and post-structural authors

(Holmes 2012, Inayatullah and Blaney 1999; Özveren 2007),

for whom questions of teleology or determinism were not

important. Foucault’s lectures on biopolitics (2008)

speak to immediately comparable themes, for example. In

the lectures, Foucault charts the history of the free

market idea during the eighteenth and nineteenth

centuries, relating it – in much more detail than Polanyi

went into in The Great Transformation – to emergent liberal

rationalities of governance, a discussion which extends

into the post-World War Two period (e.g. 2008: 116).

Drawing on these affinities, the development of a

genuinely ‘post-Polanyian’ position might offer us the

chance to complete Polanyi’s partial escape from

determinism and to liberate his ideas from the

intellectual trappings of Marxist theorising in general.

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Beyond these possibilities, if we accept that Polanyi’s

critique of economism reflects a broader suspicion of the

tendency to reason in terms of universal and abstract

ideas, then we might think about Polanyi’s relationship

to different traditions again. Weber’s rationalisation

thesis offers an obvious antecedent, but there are others

of even closer fit. For example, shortly after the

publication of The Great Transformation, the conservative

philosopher Michael Oakeshott penned his celebrated essay

‘Rationalism in politics’ (1947[1962]), which railed

against the search for abstract, objective and

incontrovertible truths as the basis for political

thought and action. Oakeshott’s concern to defend the

virtue of traditional knowledge against the imposition of

the abstract idea bears immediate similarities to

Polanyi’s defence of the livelihood of communities

against the abstract imposition of economism. Where, for

Polanyi economism sought to disembed the economic from

the social, for Oakeshott rationalism in general sought

to disembed the ethical from the social: ‘Moral ideas are

a sediment; they have significance only so long as they

are suspended in a religious or social tradition, so long

as they belong to a religious or a social life’

(1947[1962]: 41). Where, for Polanyi, economism denied

the variety of springs of human motivation, grinding

people into its economistic mold, for Oakeshott, any

politics founded on the application of universal ideas

24

gave root to a ‘politics of uniformity’ (Oakeshott

1947[1991]: 10). In 1949, Isaiah Berlin also berated

ideologies of every colour for their desire to find

‘fundamental principles’ or ‘truths’ (Berlin 1969: 30),

which need only be rigorously applied so as to resolve

political and social problems, noting how such an

approach paid insufficient attention to ‘the infinite

variety of persons’ (Berlin 1969: 39).

The fact that Oakeshott and Berlin were expressing these

complementary ideas at around the same time as Polanyi

published The Great Transformation may not be a trivial

observation. It suggests that we might think about

Polanyi’s place in the history of ideas beyond his

immediate affiliations and consider how the politics of

the period in general shaped the thought of scholars in

diverse traditions. But seeing the economistic fallacy

as one example of a broader set of critiques of

universalist reasoning might also force us to look beyond

its immediate polemical strength and instead to

interrogate the notion in a more critical and

theoretically rigorous manner. Analytical philosophy,

for example, has been home to characteristically forensic

debates over the virtues of ethical thought predicated on

universalist ideas – ‘generalism’ – as set against those

predicated on ‘moral particularism’ (see Dancy 2004; Raz

2006; Timmons 2013). This is a critical point that we

must consider when approaching Polanyi’s work. As Fraser

25

discusses in this issue, Polanyi’s emphasis on the virtue

of particular social bonds – the community, Owen’s

collectives, the immediate relations between individuals

etc. – may skip over the virtues that come precisely from

those bonds being broken in the name of abstract ideas

such as that of the free market. As she puts it: ‘what

commodification erodes is not always worth defending …

marketisation can actually foster emancipation by

weakening traditional supports for domination’ (this

issue). Interrogating Polanyi’s notion of economistic

fallacy in an analytical manner might at least work to

clarify precisely what is at stake in such debates.

Searching for new engagements such as these might allow

us to deepen our appreciation of Polanyi’s work and also

to broaden it out as well. If Polanyi’s imputation of

economism is a species within a broader genus, then we

might be more creative in identifying the abstract logics

that frame economic understanding today. Scepticism

towards the simplistic economistic vision of human as

homo oeconomicus has perhaps never been more profound than

it is now, and as discussed at the outset of this piece,

the financial crisis has provoked some scepticism towards

‘the market’ as the best solution to all economic

problems. In these limited ways, Polanyi’s critique of

Ricardian economism has been learned. But Ricardian

economism and market-centrism does not function as a

political rationality unmediated. Rather, it is mixed up

26

with other abstract ideas. On one hand, the benefits of

the market have often been sold in terms of their ability

to serve the ends of human freedom, as exemplified in

Robert Nozick’s work (1968). Considering markets and

market ideology without considering their explicitly

ethical and moral content is, again, to fall into the

very trap of economism and materialism that, at its best,

Polanyi’s work encourages us to avoid. On the other

hand, and especially since 1989, explicit ideological

defences of the market have given way to more subtle, de-

politicising modes of pro-market thought (Hay 2007: 98).

Grand narratives of political economy still exist but

they are now also articulated through different

discursive practices. For example, growing demands for

accountability and transparency across all domains of

governance, both private and public, appear to be non-

problematic: who would demand a lack of accountability

and opacity in governance? But such values contain an

implicit preference for particular styles of verification

rooted in market norms of contractual engagement, rather

than, say, those of trust (Power 1999). Similarly, the

neo-liberal notion of the market as the site and fount of

individual freedom may not be trumpeted in the same way

as it was during the Cold War, but such rationalities

might instead now be wrapped up within more subtle idioms

of economic governance. A good example is the current

vogue for policy geared towards producing ‘resilience’

amongst populations (see Brassett et al. 2013). Resilience

27

might seem a good idea in this era of financial, economic

and ecological crisis, but as has been shown (Walker and

Cooper 2011), such ideas smuggle in a form of economism

through an emphasis on the primacy of the individual and

the assumption that society is merely market, i.e. an arena

of risks posed to the individual which they must become

resilient to.

I include these brief examples merely in order to

demonstrate that, if a post-Polanyian approach is to be

relevant, it must go beyond a critique of simple

economism and instead address the complex and subtle

constructions of governmental reason that have emerged

since Polanyi’s time. There are already plenty of

resources in Polanyi’s work that might provide the basis

for doing just that, but, as this special issue

demonstrates that the greatest payoff will result from

critical and innovative applications, rather than from

recitation of Polanyi’s ideas in their original form.

Concluding remarks

Polanyi’s intellectual legacy is rich and varied and this

special issue by no means covers it in its entirety. It

instead seeks to address the intellectual core of

Polanyi’s approach critically so as to work towards what

28

it might mean to adopt a distinctively Polanyian position

today. Polanyi’s most radical intellectual moves – the

challenge to materialist understandings of economic

interaction, the primacy of the social and ethical and

the rephrasing of ‘economy’ as livelihood – must

certainly form elements of such a position. However, his

legacy is problematic. A residual attachment to Marxist

teleology made him prone to precisely the types of

generalisation and abstraction that he sought to

challenge in both Marxist and liberal economic thought.

His resultant desire to denounce market society in its

entirety meant that its subtleties were left untheorised,

limiting the potential for empirical application. These

are limitations that must be overcome. To this end, as I

have argued, there is much to be gained by reconsidering

his conceptual scheme from different theoretical

perspectives. The radical moves listed above have a

theoretical basis which shares affinities with a broad

spectrum of intellectual positions – affinities which

might be exploited so as to produce novel approaches.

And such reconsideration might provoke greater

understanding of the nuances of contemporary economic

ideas in general, including the variety of ways in which

economism might be articulated and the way in which

economism interacts with other types of discourse.

Although these tasks move us far beyond a simple

indictment of laissez-faire ideology, they remain

quintessentially Polanyian in that they are concerned to

29

understand the role of economic ideas in constituting

economic practice, and in so doing to open up the space

for re-thinking what the economy is and how it might best

serve human ends.

30

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