The Great Transformation
"In this classic work of economic history and social theory, Karl Polonyi analyzes the economic and social changes brought about by the "great transformation" of the Industrial Revolution. His analysis explains not only the deficiencies of the self-regulating market, but the potentially dire social consequences of untempered market capitalism. New introductory material reveals the renewed importance of Polanyi's seminal analysis in an era of globalization and free trade."--BOOK JACKET.
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12recommend
30mentions
17people
2013–2026years
63% recommend37% neutral
Mentions per year
What Hacker News says
- We have state supported pension plans in most developed countries, unemplyment insurance, these large welfare states with extensive public education, national health and so on, so while the means of production mostly haven't been socialized, the fruits often have, through taxation. Now, some of this existed before the Industrial Revolution -- I wasn't aware how much until I read Karl Polanyi's The Great Transformation, which is a more important book now than ever, I humbly propose, but the scale is dwarfed by what we have now. And as Polanyi points out, we did get socialism as a response, as well as fascism, which was often btw called corporatism (as in the nation as a single body, not having to do with companies). Liberal democratic capitalism won out, for a while, and in large part because it became social democracy, or so goes a claim to which I subscribe. Without the social welfare aspects of modern democracy, the system would likely have broken politically.
- Capitalist ownership is enshrined in law which is defined in rule (written clearly down), and is enforced via the State's monopoly on violence. All distribution of private property is outlined in contract. This includes the means of production.
When land is owned in common, the "private" ownership of a cow is less clear - after all, the cow doesn't eat without the land. The resource is thus available to be used for dowry by the individual during times of plenty, but during times of hardship, hey your cow was eating the grass of our land, we all need it, let's eat! Capitalism doesn't have this kind of fluidity. Hardship or no, private property is enforced through law, not vibes.
But regardless, focus less on the cows ("bro imagine you have two cows" is a bit of a meme outside the Chicago school of economics cult) and more on the land, which is the actual means of production here. That's the bit that's been owned in common basically universally for, as far as we can tell, the last two hundred thousand years. There's not been evidence otherwise and for eras we actually do have history for, it's absolutely the case that societies were organized along primitive communism. It's continued today in e.g. some indigenous Taiwanese tribes, possibly elsewhere as well.
Redefining a village as a corporation to fit your theory that capitalism is forever is another example of capitalist hypernormalization. It's simply not the case. Capitalism genuinely is a very new human invention, not a natural socioeconomic force emergent from human relations.
But, it sounds like you are really interested in this subject. If you want to read a much more cited and intelligent opposition to what you're proposing, I recommend Ellen Meiksins Wood "The Origin of Capitalism," historical analysis of capitalism emerging around specific property relations. Or Karl Polanyi "The Great Transformation" which discusses how though ancient markets existed, these are distinct from capitalist markets since they were more organized along kinship, religious, or redistributive lines.
- It's probably more useful to look both at how our modern technological society did evolve, and at groups which are seriously considering existential risk, complexity, and potential paths to a reboot.
Among the latter is the Long Now Foundation, which has proposed a Manual for Civilization (02010):
<https://longnow.org/ideas/manual-for-civilization/>
I've my own disagreements with LNF, but the concept is worth consideration and the effort to compile useful knowlege worth studying for both points of agreement and difference.
The question of how, why, where, and when the Industrial Revolution (writ broadly, ~1700 to present) emerged has filled books. The so-called Needham Question asks why it was the British Isles and not China which saw the IR take off. Needham's exploration of this topic, begun in 1954, has produced 27 books to date and remains underway. Wikipedia's article gives a good overview, as well as the general organisation of the work and its contents to date:
<https://en.wikipedia.org/wiki/Science_and_Civilisation_in_Ch...>
I've been partial to histories of the world through the lens of history, most notably Vaclav Smil's Energy and Civilization: A History (2017) and Energy in World History (1994), and Manfred Weissenbacher's Sources of Power (2009).
<https://en.wikipedia.org/wiki/Vaclav_Smil#Books>
<https://www.bloomsbury.com/us/sources-of-power-9780313356278...>
Smil has also looked at many other elements of technological history, material usage, and energy transitions, see the publications section of his Wikipedia bio above.
What's notable is that most of the material and energy ingredients of the modern world have been known since antiquity, but were not, or could not be, usefully employed, for various reasons. There's endless speculation as to why, with theological, technical, scientific, social, political, geographical, and other justifications given. I suspect it's many of these inter-operating, and that the bootstrapping process is a sensitive and delicate one.
Many of these elements are covered in the series the Princeton Economic History of the Western World:
<https://press.princeton.edu/series/the-princeton-economic-hi...>
There are of course other books which touch on this topic (and I'd strongly recommend Polanyi's The Great Transformation), but if you want one-stop shopping over many dimensions of the question, this is an excellent place to start.
My own thinking leads me to believe that there are nine fundamental dynamics to technological mechanisms:
- Fuels
- Materials
- Power transmission and transformation (simple machines, electromagnetic, etc.)
- Process knowledge (technical)
- Causal knowledge (scientific)
- Networks (nodes and links, physical or logical, experience "network effects" and network contagion)
- Systems (feedback)
- Information (input, parsing, storage/retrieval, logic, transmission)
- Hygiene (addressing unintended / unanticipated consequences)
In particular, the availability or discovery of new fuels and materials has typically resulted in widespread societal changes and progress, though also in other areas (e.g., information technologies, from speech to writing to maths to printing to digital IT). At the same time, each mechanism has limitations and consequences which also affect capabilities and impose limits.
By way of outlining a specific answer: the shape of a solution or reboot will depend tremendously on what materials and fuels are available, how they're accessed (our own waste dumps are likely to be major sources moving forward), and the consequences of past and present industrialisation on that landscape. Fundamental requirements of food, housing, and basic production capital will establish general capabilities. Transportation, over land and sea, possibly air, will determine requirements for self-sufficiency or possibilities of trade. Our ability to address basic production and distribution (whether through market or other means) general living conditions within and between specific societies and polities.
I'd additionally strongly recommend the work of William Ophuls and Thomas Homer-Dixon.
- > global economy, backing up his arguments with data. That's his job. Your ascribing malice
Only thinking about the economy while ignoring its societal by-effects is malicious by definition, unfortunately there's no need to "ascribe" anything. Time and again people tend to forget this. Related to this I highly recommend Karl Polanyi's "The Great Transformation" [1] which sort of addressed this phenomenon back in the 1940s:
> On a broader theoretical level, the Great Transformation argues that markets can not solely be understood through economic theory. Rather, markets are embedded in social and political logics, which makes it necessary for economic analysts to take into account politics when trying to understand the economy.
[1] https://en.wikipedia.org/wiki/The_Great_Transformation_(book...
- He has been consistently wrong for 15 years, if he was right, it was a half truth by accident. Let’s look harder at his theses since 2007 or so:
1. US Equity Markets Crash.
Okay, that happened in 2008. But, did it he get the reason why?
He claims it is all about Debt and easy money. That interest rates should be up and ultimately we should be tethered to hard currency. That’s a really, really simplistic and ahistorical take. It’s like saying, let’s cause issues with the financial economy to completely wipe out the real economy because it is “healthier that way”. Seems to be a big price to pay for a very nebulous benefit. Thoughts like that led to World War 1. (I highly suggest “Lords of Finance” from Liaquat Ahmad and “The Great Transformation” by Polanyi).
As opposed to what we ARE doing loosening the liquidity strings to allow the real economy to continue to function, albeit damaged by the lack of regulations + greed in the financial economy causing it to make terrible risk exposure decisions.
Yes there was plenty of bad behaviour in the housing market and in the whole Lon trading and mortgage trading market (which I was a part of in the past, as a wall st software dev). The interaction of mortgage backed securities and collatorized debt obligations propped up too many balance sheets and weren’t properly valued for systemic risk, and amassing credit default swaps as a hedge quickly unravelled the institutional insurers like AIG .... requiring a massive liquidity injection by the Fed and Congress so that everyone from Wall St to Main St didn’t wind up completely broke. Ultimately it was the only practical solution available given the political will.
2. US Dollar will crash (Hyperinflation)
Completely false and made him and his investors lose their shirts
3. Decoupling of foreign economies from the US slowdown
Also false, the US rebounded far quicker due to a variety of Obama era policies, the world still is not really decoupled as Eurozone troubles and Trump’s trade wars showed.
4. Foreign equities and commodities (gold) will grow and are where you should invest.
Except foreign equities crashed worse than US equities back in 2008! And austerity policies prolonged their suffering.
My criticism isn’t “overboard”, this is public record. If you are an investor and listened to Peter Schiff, you’ve lost a lot of money.
- He was not right about 2008. Saying that “US stocks will crash because of [WRONG REASON]” doesn’t make you right. Anyone that listened to Schiff or invested with him wound up losing a LOT of money.
Schiff on Bitcoin:
https://www.foxbusiness.com/markets/bitcoin-is-a-fools-gold-...
Going back to the gold standard would not be an improvement. I highly recommend reading Karl Polanyi’s The Great Transformation for an analysis of the problems of the gold standard.
