The Great Transformation

The Great Transformation is a seminal work by Karl Polanyi that examines the rise of the market economy in the 19th century. Polanyi argued that this economic system was inherently divisive and unsustainable in the long term. He posited that before the 19th century, economies were embedded within social customs and norms, but the advent of capitalism sought to separate the economy from its social environment.12

This separation involved treating essential aspects of social life as commodities and redefining individuals as purely profit-maximizing actors. Polanyi believed these attempts to embed society within the market, rather than the market within society, were doomed to fail, potentially leading to societal backlash like fascism. He termed this dynamic the "double movement". The book explores how to reconcile market expansion with social order.2