Great Transformation
Classic, must read book for its critique of self-regulating markets.
Book. Karl Polanyi. The Great Transformation. (1944)
Commentary
David Bollier:
"Yet that is precisely what I find so appealing about Polanyi and what makes him so relevant today: He understood that the modern market economy is a special, historically rooted form of social organization. It is not a natural, universal system for organizing societies, as its champions assert. It is, in fact, an historical aberration in the long sweep of human history – one that has produced many benefits, to be sure, but it has also introduced deep structural tensions that always threaten to overwhelm human societies.
Prior of the rise of “the market” as an ordering principle for society, politics, religion and social norms were the prevailing forces of governance. Land, labor and money itself were not regarded chiefly as commodities to be bought and sold. They were “embedded” in social relationships, and subject to the moral consideration, religious beliefs and community management.
When the Great Transformation occurred, Polanyi argued, markets became regarded as autonomous forces in their own right. The presumption was that “market forces” should organize all of society. We have been dealing with its consequences ever since.
The basic dilemma is that the free market cannot self-regulate itself. A laissez-faire economy is, in fact, planned. It necessarily needs government management and social control. In addition, because markets treat nature as essentially limitless and human beings as commodities, they are always pushing human societies and nature to the breaking point. Invariably, crises erupt that require societal interventions. The relentless imperatives of markets cannot prevail indefinitely against the irreducible needs of human beings and nature.
Polanyi is too rich a thinker to summarize fully here, but suffice it to say that he is worth reading for his critique of self-regulating markets, the “embeddedness” of markets in society, and the importance of the non-market gift economy based on social reciprocity and sharing. There are several nice introductions to Polanyi. One is an introduction to The Great Transformation written by Fred Block. Another is the Wikipedia entries for Polanyi and for The Great Transformation. You can also consult websitie for the Karl Polanyi Institute of Political Economy at Concordia University in Montreal.
A parting quotation by Polanyi helps explain why he has so much to say about the commons in a time of neoliberal enthusiasm and crisis: “The social history of our time is the result of a double movement: The one is the principle of economic liberalism, aiming at the establishment of a self-regulating market; the other is the principle of social protection aiming at the conservation of man and nature as well as productive organization.” " (http://www.onthecommons.org/content.php?id=2390)