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September 18, 2007


Shannon Oakes

As many people have said, Polanyi is heading in the direction of drawing the line of how much government intervention is required in a “self-regulating market” in order for the economy to not be completely dominated by political objectives. While Polanyi seeks to find the correct amount of regulation, I find it interesting that he continues to use the term “self-regulating” even though he mentions that this entails an “economy directed by market prices and nothing but market prices.”
Regardless, he says that man’s economic drives are all derived from social desires, that is, “he acts so as to safeguard his social standing, his social claims, his social assets” and for this reason, the economy is run on non-economic motives. Polanyi takes the example of a tribal society where people’s motives are in the interest of the survival of their community. This involves maintaining social ties where more resources can be obtained for their own community’s benefit. This is done through gift giving and acts of reciprocity (maybe among a large amount of tribesmen). These acts of reciprocity can be translated today into political favors. When this becomes out of hand, those with the resources to give gifts can essentially control the economy.
In this way, I feel that Polanyi alludes to the fact that the economy of early man was not self-regulating because it was affected by acts of reciprocity. When this becomes out of hand is when intervention is necessary to ensure that wealth is more evenly distributed and not maintained only by the few.

Nicholas DeGroot

Our world is in need of a reinvigoration of Polanyi’s study. Neo-liberal doctrine was used as one of the many excuses to get us entrenched in Iraq. Neo-haute finance continues to burden developing countries with fruitless unending debt. Labor remains an artificial commodity and many workers slave away at multiple jobs to feed their families, and are still barely able to make ends meet. Land remains in the choke hold of private property forcing many to take to dense, poor quarters in environmentally devastated slums. Money is presently such a withheld commodity that average people are in danger of having no livelihood upon retirement; let alone never having sufficient access to finance to accomplish personal investment options.

Polanyi makes it clear that unregulated economy will not lead to utopia, rather it contains built in mechanisms that afflict society and will cause it to collapse. We must consider the best way to subjugate market activity to sustainable social order. Polanyi says we can call our government what ever we like, but we must remove labor, land and finance from the perils of market determination of value. We must institute cleaver ways to plan for these aspects of life. Survival on the global scene would require an increase in tolerance and economic cooperation. Internal and external policy must be framed with the intent of maximizing freedom and sustainability for all.


I believe that in Polanyi's day and age, this alternative, meaning socialism, was the best option. This is coming after a time when people put all of their faith in the free market, and they got burned in the process. If they went into the socialist mindframe, the government would be able to have some look into how the country was doing. The government would have more control, but the risk wasn't as great. But he did not want a socialist market. He knew that some sort of Laissez faire had to be present. The government should not have full control. So I guess that economically people would want a free market to do as they please. They can make as much as they can but have a good risk of not making anything at all. But there may lie the problem with a Laissez faire attitude. The world will turn with the rich. The rich get richer and the poor get poorer. As is happening in this country right now, the gap is growing between the rich and the poor. So what would Polayni say that we should do to alleviate the poor. I believe that he would want some sort of redistribution and more taxes or regulations on corporations or individuals who have so much money. The minimum wage might increase and benefits would be covered by the government

Christine Wang

Polanyi pushes over and over again the idea that market economies drive for more and more profit accumulation—irregardless of the depletion of our natural environment and the energies and hopes of our populace—and challenges that as a goal that we as a society truly want. We like division of labor and production and exchange which allow us to raise our standards of living; we should maintain the market economy as long as these functions are fulfilled. However, the rapid changes that such a system subjects society to if allowed to run amok without check put people through tremendous suffering. The role of government is not to attempt to utterly prevent the tendencies of the market system to constantly innovate and advance; such attempts would be naive and impossible. Rather, Polanyi argues that in the past, the Tudor’s government action was important to SLOW the processes (in this case, of enclosures) so that people would be allowed sufficient time to adjust to new conditions rather than experience sudden, complete annihilations of their livelihoods. And today, we should do the same to slow the devastating effects of rapid economic globalization—it is an imperative role of the governments of developing countries to slow the processes of integration into a global market (indeed, to even be ALLOWED to do so—which would be difficult under the impositions of WTO decisions like GATS).

I think Polanyi is amazingly relevant to our times—yes, as Glory said, the “organizations such as the IMF, WTO, and World Bank were created to be intermediary bodies to control markets and regulate international trade and prevent worldwide economic crises from occurring”— and I think we would all have much to say about their failures in these functions. But the most important feature of these organizations, from which stem their most damaging policies, is their prevailing ideology of free trade and market liberalization—for the sake of promoting economic growth OVER the more noble social goals such as the maintenance of livelihoods. Polanyi’s central argument is exactly what international financial institutions and the WTO need to hear. We aren’t meant to support and grow the economy just for the sake of growing the economy. The economy exists FOR society, to better peoples’ lives. And when we sacrifice the quality of peoples’ lives for the sake of raising the growth of our GDP by a few percentage points, it becomes abundantly clear that there is something seriously wrong with our way of thinking. We need to get our priorities straight.

However, I don’t think that Polanyi would call for a return to the height of haute finance. That was an explanation for why peace between the major powers was maintained, but it had little to do with the standards of living for individuals within the nations themselves—and I believe that Polanyi’s main focus in writing this book is to draw our attention to and prioritize the quality of individual lives as we attempt to shape our society.

So to apply Polanyi’s arguments to the problems of reconciling economic logic to political objectives, I think that a change in how we look at our problems is required. First of all, a willingness to act for the good of society (for humankind!) rather than to maintain the market (for personal economic growth of one’s respective nations) is an important first step for the WTO. Then we can work to slow the processes of the market (remembering that the economy is embedded in society and not the other way around) within the framework of the market system, and ensuring that every step of the way, peoples’ lives are placed first.

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