church had condemned as greed. The invisible hand of the market was the proper
solution for facilitating this natural rewiring efficiently and for punishing those who
were not contributing valuable assets or skills.
By spanning the differences and similarities in the work of thinkers of the period,
Polanyi found that the common new imaginary for progress had become what he
called the “stark utopia of a market system” or the “matrix of the self-regulating
market” (Polanyi 1957: 57). He offers many quotes from key philosophers and
politicians of the time when describing how, inspired by this new vision for progress, both economic theory and policymakers occupied themselves with seeking
out and resolving the barriers standing in the way of the efficient and profitable
running of market societies. Some of the leading thinkers even established factories
or other institutions to that end. Another important theme involved outwitting the
limitation that nature had put on production by applying increasing amounts of
energy, machinery and capital.
Polanyi does not describe these changes as a smooth rolling out of a blueprint,
but as a conflict-ridden process which involved multiple changes in technology,
social groupings and regulation, all influencing each other in a paradoxical pairing
of unprecedented material production capacity with unprecedented poverty. He
describes intricate correlations between technological developments, new sources
of energy and the introduction of big machinery and factories, land enclosures for
mass wool production and a new financier class providing capital for those
investments while brokering increasing international trade, which in turn incentivized even more mass production.
Instrumental in all this were state and local government regulations that either
accelerated or slowed down certain trends and developments. These concerned, for
example, land enclosures, definition and protection of private property, poor protection laws or their abolition, or allowing capitalist merchants access to local
markets. Important also was the invention of the gold standard behind the emerging
monetary system, which in turn fuelled the trend of internationalization.
Polanyi’s historical observations describe how societal relationships became
increasingly focused on profit in the form of money as the general expression of
value. Increasingly, processes of collaboration were governed by newly created
monetary tokens, social relationships, payments and newly calibrated ownership
structures. Eventually most income was derived from the sale of something or
other. This, combined with the structural developments of mass production,
impelled a highly differentiated division of labor that would be more efficient in
terms of the generated output.
So in line with the big philosophers of the period, constant economic gain
became the new image for successful societal organization, supplanting culture,
custom and religion. The effect was indeed transformational: ‘Ultimately,’ Polanyi
sums up, “that is why the control of the economic system by the market is of
overwhelming consequence to the whole organization of society: it means no less
than the running of society as an adjunct to the market. Instead of economy being
embedded in social relations, social relations are embedded in the economic system” (Polanyi 1957: 57).
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2 What Political Economy Adds to Transformation Research
solution for facilitating this natural rewiring efficiently and for punishing those who
were not contributing valuable assets or skills.
By spanning the differences and similarities in the work of thinkers of the period,
Polanyi found that the common new imaginary for progress had become what he
called the “stark utopia of a market system” or the “matrix of the self-regulating
market” (Polanyi 1957: 57). He offers many quotes from key philosophers and
politicians of the time when describing how, inspired by this new vision for progress, both economic theory and policymakers occupied themselves with seeking
out and resolving the barriers standing in the way of the efficient and profitable
running of market societies. Some of the leading thinkers even established factories
or other institutions to that end. Another important theme involved outwitting the
limitation that nature had put on production by applying increasing amounts of
energy, machinery and capital.
Polanyi does not describe these changes as a smooth rolling out of a blueprint,
but as a conflict-ridden process which involved multiple changes in technology,
social groupings and regulation, all influencing each other in a paradoxical pairing
of unprecedented material production capacity with unprecedented poverty. He
describes intricate correlations between technological developments, new sources
of energy and the introduction of big machinery and factories, land enclosures for
mass wool production and a new financier class providing capital for those
investments while brokering increasing international trade, which in turn incentivized even more mass production.
Instrumental in all this were state and local government regulations that either
accelerated or slowed down certain trends and developments. These concerned, for
example, land enclosures, definition and protection of private property, poor protection laws or their abolition, or allowing capitalist merchants access to local
markets. Important also was the invention of the gold standard behind the emerging
monetary system, which in turn fuelled the trend of internationalization.
Polanyi’s historical observations describe how societal relationships became
increasingly focused on profit in the form of money as the general expression of
value. Increasingly, processes of collaboration were governed by newly created
monetary tokens, social relationships, payments and newly calibrated ownership
structures. Eventually most income was derived from the sale of something or
other. This, combined with the structural developments of mass production,
impelled a highly differentiated division of labor that would be more efficient in
terms of the generated output.
So in line with the big philosophers of the period, constant economic gain
became the new image for successful societal organization, supplanting culture,
custom and religion. The effect was indeed transformational: ‘Ultimately,’ Polanyi
sums up, “that is why the control of the economic system by the market is of
overwhelming consequence to the whole organization of society: it means no less
than the running of society as an adjunct to the market. Instead of economy being
embedded in social relations, social relations are embedded in the economic system” (Polanyi 1957: 57).
38
2 What Political Economy Adds to Transformation Research