Karl Polanyi as Social Ecology

Karl Polanyi as Social Ecology

Introducing Karl Polanyi and his contribution to social ecology

Karl Polanyi was an Austrian economic historian and political economist who wrote extensively about the role of markets within societies. He contributed the essential critique of the construction and deficiencies of a market society, the forerunner to contemporary economic globalization. As such, he is important to economic history and to economic anthropology.

Why Polanyi? 1. He offers a masterful critique of market society; 2. He offers a framework for alternatives.

Polanyi masterfully deconstructs the making of market society and, if you read closely. provides a framework for its reconstruction. Polanyi provides an alternative to neoclassical economics useful for World Sustainability.

Substantivism in economic thought supports social ecology and provides an alternative from Neo-liberalism and an opening for sustainability.

The substantivist position, first proposed by Karl Polanyi in his work The Great Transformation, argues that the term 'economics' has two meanings: the formal meaning refers to economics as the logic of rational action and decision-making, as rational choice between the alternative uses of limited (scarce) means. The second, substantive meaning, however, presupposes neither rational decision-making nor conditions of scarcity. It simply refers to study of how humans make a living from their social and natural environment. A society's livelihood strategy is seen as an adaptation to its environment and material conditions, a process which may or may not involve utility maximisation. The substantive meaning of 'economics' is seen in the broader sense of 'economising' or 'provisioning'. Economics is simply the way society meets their material needs. (Wikipedia, Substantivism

Critique of market society as commodification

Karl Polanyi provided an insightful critique of market society, a society dominated by socially disembedded markets. He focused on England in the second half of the 19th century. His lament was that humans and nature were treated as commodities, things produced for sale within markets.

Markets are constructions which, in Neo-liberalism, destroy the social fabric and the natural environment within which markets are embedded.

Markets are made and even manipulated for profit. The Invisible Hand is a myth. Examine the substantive economy embedded within social relationships and within nature. Make concrete decisions and policies, not based on reification, the confusion of abstract theory for concrete reality.

How does Polanyi contribute to Strategic Sustainability?

Our alchemy requires an inversion of economics, locating specific historical economies within society, culture, and nature. Thus, Polanyi can help define appropriate globalization, if you will allow a new term. This will be tackled during the articulation of aspects of Strategic Sustainability, a bit later.


Wayne Hayes, Ph.D. | Initialized: 3/27/2007 | Last Update: 3/28/2007