Do We Need a New ‘Great Transformation’? Is One Likely?

Abstract

In his path-breaking book The Great Transformation: The Political and Economic Origins of our Times,¹ Polanyi analyzed what he called the Great Transformation in Europe in the nineteenth and twentieth centuries. Indeed, he actually describes a ‘double movement’: one from the pre-market, pre-industrial system to the market-dominated industrialization of the nineteenth century. The second — which was what he termed the Great Transformation — consisted in the succession of changes that were provoked by the predominance of the market model. When he wrote the book, in 1944, it seemed that this second transformation was here to stay. Yet, there has been a huge resurgence of the market since the 1970s — many of the changes which Polanyi described have been rolled back, especially in developing countries. Indeed, in developing countries, it appears that the situation may be back to one resembling the pre-transformation situation of nineteenth-century Europe. This chapter considers the types of change documented by Polanyi for Europe in contemporary developing countries, and in the light of these explores, first whether a new Great Transformation is needed, and second whether, in a Polanyi-style reaction to the market model, such a transformation is likely.

Undoubtedly, our age will be credited with having seen the end of the self-regulating market. (Polanyi 1944: 148)

It appeared then [in 1995] that that the idea of an integrated world economy, founded on market relationships, had been reborn after a long collectivist hiatus. (Wolf 2004: xvii)