[
xx ] Introduction
for the premier economic and financial weekly of Central Europe,
Der
Osterreichische Volkswirt. During this time he first encountered the ar-
guments of Ludwig von Mises and Mises's famous student, Friedrich
Hayek. Mises and Hayek were attempting to restore the intellectual le-
gitimacy of market liberalism, which had been badly shaken by the
First World War, the Russian Revolution, and the appeal of socialism.
2
In the short term, Mises and Hayek had little influence. From the mid-
19308 through the 1960s, Keynesian economic ideas legitimating active
government management of economies dominated national policies
in the West.
3
But after the Second World War, Mises and Hayek were
tireless proponents for market liberalism in the United States and the
United Kingdom, and they directly inspired such influential followers
as Milton Friedman. Hayek lived until 1992, long enough to feel vindi-
cated by the collapse of the Soviet Union. By the time of his death, he
was widely celebrated as the father of neoliberalism—the person who
had inspired both Margaret Thatcher and Ronald Reagan to pursue
policies of deregulation, liberalization, and privatization. As early as
the 1920s, however, Polanyi directly challenged Mises's arguments,
and the critique of the market liberals continued as his central theoret-
ical concern.
During his tenure at
Der Osterreichische Volkswirt, Polanyi wit-
nessed the U.S. stock market crash in 1929, the failure of the Vienna
Kreditanstalt in 1931, which precipitated the Great Depression, and
the rise of fascism. But with Hitler's ascent to power in 1933, Polanyi's
socialist views became problematic, and he was asked to resign from
the weekly. He left for England, where he worked as a lecturer for the
Workers' Educational Association, the extramural outreach arm of
the Universities of Oxford and London.
4
Developing his courses led
2. For an account of Ludwig von Mises and Friedrich Hayek from the 1920s
through the 1990s, see Richard Cockett,
Thinking the Unthinkable: Think Tanks and
the Economic Counter-Revolution, 1931-1983 (London: Fontana Press, 1995). Cockett
stresses the irony that England, who invented market liberalism, had to reimport it
from Vienna.
3. By coincidence, Polanyi's book was first published in the same year that Hayek
published his most famous book,
The Road to Serfdom (Chicago: University of Chicago
Press, 1944). While Polanyi's work celebrated the New Deal in the United States pre-
cisely because it placed limits on the influence of market forces,
Hayek's book insisted
that the New Deal reforms placed the United States on a slippery slope that would lead
both to economic ruin and a totalitarian regime.
4. Marguerite Mendell, "Karl Polanyi and Socialist Education," in Kenneth Mc-
Robbie, ed.,
Humanity, Society, and Commitment: On Karl Polanyi (Montreal: Black
Rose Press, 1994), pp. 25-42.
Introduction [ xxi ]
Polanyi to immerse himself in the materials of English social and eco-
nomic history. In
The Great Transformation, Polanyi fused these his-
torical materials to his critique of Mises and Hayek's now extraordi-
narily influential views.
The actual writing of the book was done while Polanyi was a vis-
iting scholar at Bennington College in Vermont in the early 1940s.
5
With the support of a fellowship, he could devote all of his time to
writing, and the change of surroundings helped Polanyi synthesize the
different strands of his argument. In fact, one of the book's enduring
contributions—its focus on the institutions that regulate the global
economy—was directly linked to Polanyi's multiple exiles. His moves
from Budapest to Vienna to England and then to the United States,
combined with a deep sense of moral responsibility, made Polanyi a
kind of world citizen. Toward the end of his life he wrote to an old
friend: "My life was a 'world' life—I lived the life of the human
world.... My work is for Asia, for Africa, for the new peoples."
6
While
he retained a deep attachment to his native Hungary, Polanyi tran-
scended a Eurocentric view and grasped the ways that aggressive forms
of nationalism had been fostered and supported by a certain set of
global economic arrangements.
In the years after World War II, Polanyi taught at Columbia Uni-
versity in New York City, where he and his students engaged in anthro-
pological research on money, trade, and markets in precapitalist socie-
ties. With Conrad M. Arensberg and Harry W Pearson, he published
Trade and Market in the Early Empires; later, his students prepared for
publication posthumous volumes based on Polanyi's work of this pe-
riod. Abraham Rotstein assisted with the publication of
Dahomey and
the Slave Trade; George Dalton edited a collection of previously pub-
lished essays, including excerpts from
The Great Transformation, in
Primitive, Archaic, and Modern Economies: Essays of Karl Polanyi; and
Pearson also compiled
The Livelihood of Man from Polanyi's Colum-
bia lecture notes.
7
5. Polanyi wrote the book in English; he had been fluent in the language since
childhood.
6. Letter to Be de Waard, January 6,1958, cited by Ilona Duczynska Polanyi, "I First
Met Karl Polanyi in 1920 .. .," in Kenneth McRobbie and Kari Polanyi Levitt, eds.,
Karl
Polanyiin Vienna (Montreal: Black Rose Press, 2000), pp. 313,302-15.
7. Karl Polanyi, Conrad M. Arensberg, and Harry W. Pearson, eds.,
Trade and Mar-
ket in the Early Empires: Economies in History and Theory (Glencoe, 111.: Free Press,
1957); Polanyi,
Dahomey and the Slave Trade: An Analysis of an Archaic Economy (Seat-
tle: University of Washington, 1966); George Dalton, ed.,
Primitive, Archaic, and Mod-