Karl Polanyi
Sociology 3
Contemporary Social Theory
Karl Polanyi
Karl Polanyi (1886-1964), a native Hungarian and political émigré who wrote his novel and thesis with a backdrop of two world wars (Birchfield, 2005) is an increasingly influential figure as the neo-liberalism’s market fundamentalism has gathered pace into the 2000s (Devine, 2010). He writes in order to understand the historical and cultural roots of the collapse of the nineteenth century civilisation (Birchfield, 2005). In his thesis he writes about how the international system, which is made up of the balance of power, the gold standard and the liberal state all self-destructed because each of these components was developed under the utopian idea of a self-regulating market system (Birchfield, 2005).
In this essay, I will be discussing why he argued that the market potentially undermines the existence of a market society. Markets are made up of institutions that allow individuals or collective agents to be able to exchange goods and services. The medium of exchange is usually money which is what leads to the formation of prices and how they fluctuate. There are also different ways of distinguishing markets. You can define them according to what goods or services are traded within them (financial and housing markets are examples), according to their scope (be it regional, national or international), or according to its structure (for example a competitive market) (Stanford Encyclopaedia of Philosophy, 2013). It was industrial production, the states intervention and the liberal market ideology that elevated the otherwise simple and isolated ‘meeting place of sorts,’ used to trade, to an entire sphere of economic activities which lead to the creation of one big market (Gemici, 2008).
Polanyi distinguishes between ‘market economies’ and ‘market societies’ by describing ‘market societies’ as societies where “instead of the economy being embedded in social relations,
Contemporary Social Theory
Karl Polanyi
Karl Polanyi (1886-1964), a native Hungarian and political émigré who wrote his novel and thesis with a backdrop of two world wars (Birchfield, 2005) is an increasingly influential figure as the neo-liberalism’s market fundamentalism has gathered pace into the 2000s (Devine, 2010). He writes in order to understand the historical and cultural roots of the collapse of the nineteenth century civilisation (Birchfield, 2005). In his thesis he writes about how the international system, which is made up of the balance of power, the gold standard and the liberal state all self-destructed because each of these components was developed under the utopian idea of a self-regulating market system (Birchfield, 2005).
In this essay, I will be discussing why he argued that the market potentially undermines the existence of a market society. Markets are made up of institutions that allow individuals or collective agents to be able to exchange goods and services. The medium of exchange is usually money which is what leads to the formation of prices and how they fluctuate. There are also different ways of distinguishing markets. You can define them according to what goods or services are traded within them (financial and housing markets are examples), according to their scope (be it regional, national or international), or according to its structure (for example a competitive market) (Stanford Encyclopaedia of Philosophy, 2013). It was industrial production, the states intervention and the liberal market ideology that elevated the otherwise simple and isolated ‘meeting place of sorts,’ used to trade, to an entire sphere of economic activities which lead to the creation of one big market (Gemici, 2008).
Polanyi distinguishes between ‘market economies’ and ‘market societies’ by describing ‘market societies’ as societies where “instead of the economy being embedded in social relations,