A clever turn in Karl Polanyi’s argument in The Great Transformation is that implementation of the market system resulted from intentional government design while reaction to the self-regulating market system arose spontaneously.
The increase in globalization over the last couple of decades, and the Great Recession, has spurred interest and attention in Karl Polanyi’s book, The Great Transformation. Republished in 2001 (and in 1957), scholars such as Nobel Prize winning economist Joseph Stiglitz (who wrote a preface to the 2001 edition), historians of the American “market revolution” and of social thought have pressed the book’s argument once again into service to speak to current economic events. The problem is, Polanyi declared the transformation already ended in the mid 1940s.
In antebellum America, the U.S. underwent what historians call “the market revolution.” This is a movement analogous to the “Great Transformation” Karl Polanyi sketched in England and Europe. (Interestingly, Polanyi himself excepts the American experience from the process he outlines given the availability of land for the taking in the U.S. relative to Europe.) The penetration of the market and market forces into the everyday lives of everyday people separates the period of the market revolution and afterward from the time before it. The rise of wage labor and production for markets, rather than production largely for one’s self and one’s family, created different rhythms and risks in life relative to agrarian life prior to the rise of that system.