Although Karl Polanyi's life was one of virtual nomadism - he never achieved a comfortable academic appointment - this maverick economic historian nonetheless exerted a powerful influence on his ivory tower contemporaries. Polanyi was born in Vienna and raised in Budapest, joining, in his student days, the circle of such luminary radicals such as Georg Lukacs and Karl Mannheim. During World War I, he was imprisoned on the Russian front, and upon release, returned to Vienna as a journalist. He immigrated to Britain in 1933, where he lived hand-to-mouth as a tutor. In 1940, during a lecture tour in the US, Polanyi decided to accept an offer by Bennington College. It was then that he wrote his magnum opus - The Great Transformation (1944).
Polanyi's central thesis is well known among sociologists and economic historians: namely, that capitalism is a historical anomaly because while previous economic arrangments were "embedded" in social relations, in capitalism, the situations was reversed - social relations were defined by economic relations. In Polanyi's view, in the sweep of human history, rules of reciprocity, redistribution and communal obligations were far more frequent than market relations. However, not only did capitalism not exhibit them, its ascendancy actually destroyed them irreversibly. The "great transformation" of the industrial revolution was to completely replace all modes of interaction with the other.
The details of this "ascendancy" was Polanyi's other main contribution. Far from a "natural" or "necessary" outcome, Polanyi argued that capitalism evolved from the demands placed by new mercantile and then bourgois classes upon the State to protect their fledgling enterprises and precarious social status. In this way, governments became the handmaiden of capitalism, helping to advance it with the necessary legislation and execution by virtual force of arms.
In some ways, Polanyi's thesis had a kinship to that of Marx, but one might also argue that it exhibited more fully the stamp of the German Historical School - particularly the latter-day versions of Weber and Simmel. Much, of course, was also owed to sociologists and economic anthropologists such as Durkheim, Malinowski and Thurnwald. Polanyi's work is still held as a classic in these fields. In contrast, the New Economic History of North and Fogel argues the precise opposite of Polanyi's - namely, of the universal applicability of market theory to different eras in economic history.
In 1947, Columbia invited him into their sociology department on the strength of his 1943 book. However, because his radical wife, Ilon Duczynska, had a prominent role in the failed Hungarian Revolution of the early 1920s, she was denied an entry visa into the United States. As a consequence, Polanyi was forced to move to Canada and commute to New York from Toronto for the rest of his career. Although he benefited much from his interdisciplinary work at Columbia - it was during this time that he put together his second great book, Trade and Markets in the Early Empires (1957) - Polanyi only held a visiting position as an adjunct at Columbia for the rest of his career. His extraordinary cross-continental commute and his political and intellectual uniqueness led him to select himself out of Columbia's academic milieu. Unlike his better-established brother, the chemist and philosopher Michael Polanyi, Karl Polanyi was never able to set down roots. He remained in perpetual exile - from Hungary, from Austria, from America and finally, from academia as a whole.
Major Works of Karl Polanyi
Resources on Karl Polanyi