Book Review

Karl Polanyi in Vienna – The Contemporary Significance of The Great Transformation

Kenneth McRobbie, Karl Polanyi Levitt, editors, Black Rose Books, Montreal, New York, London, 2000

There could hardly have been a more timely book than this anthology appraising the significance for our current problems of Polanyi’s great work. It is indicative of the role of Vienna in the intellectual life of the past century that this great city, though the capital of an obsolete patchwork empire, should have served as nursery where so much of the social science and social experimentation should have been fostered. Part of the explanation, of course, was that the intermingling of the intellectual elites of its former provinces gravitating to the capital, intermingled and disputed at the crossroads between the past glories of Europe’s past heritage and its clouded future, before moving on to their next exile. Polanyia Levitt, the son of Karl, set the scene for us:

“The International Karl Polanyi Conference held in Vienna in 1994 coincided with the 50th anniversary of the publication of The Great Transformation (1944) and the 30th anniversary of the death of my father. Friedrich Hayek’s The Road To Serfdom was published in the same year. The Great Transformation was well received in the United States but attracted no interest in England. Hayek’s polemic against socialism of any variety suggested that the reaction of the Labour Party could set Britain on the road to totalitarianism. It attracted mixed reviews in England, but met with disbelief and ridicule in the US where `New Deal’ Keynesians were firmly established in the economics profession. Prior to the ideological shift associated with the Cold War and the McCarthy witch hunts of the early 1950s, there was more tolerance for Hayek’s views in Britain than in the US.

“For the next 25 years the Keynesian consensus of `embedded’ liberalism achieved an unprecedented increase in the material standard of living under state-managed welfare capitalism, within the framework of the Cold War. The third quarter of the 20th century has been described as the Age of Keynes. Hayek had to wait 50 years to claim ideological patrimony over the last quarter .... In the Age of Hayek, the 19th century liberal economic order was refurbished as an inevitable trend toward a globalized world of winners and losers, requiring the subordination of all aspects of social and cultural life to intensified economic competition. Hayek’s libertarianism furnished the `globalization’ agenda with an ideology dressed in the language of economics. Yet Polanyi’s prophetic warning of the perils of the `utopia’ of a generalized `self-regulating’ market cast a lengthening shadow of the neo-liberal vision of universal capitalism.”

As he himself wrote in his great work, “Market society was born in England-yet it was on the Continent that its weakness engendered the most tragic complications. To comprehend German fascism, we must revert to Ricardian England. The Industrial Revolution was an English event. Market economy, free trade, and the gold standard were English inventions. But whatever the scenery and the temperature of the final episodes, the long-run factors which wrecked that civilization should be studied in the birth-place of the Industrial Revolution, England” (page 30).

“In his second flight from Vienna to Britain - the first was from his native Hungary to Vienna - the shock of discovery of the deculturization of the working classes, the legacy of Blake’s, `dark Satanic mills’ - the slums of London, Birmingham and Manchester, the coal valleys of Wales, the hopeless faces of Britain’s two and a half million unemployed, - stood in contrast to the higher quality of working class life in (much poorer) socialist Vienna. In Polanyi’s formative years, England was the Mecca of the intelligentsia of Central Europe - a role played on a world scale by the US after the Second World War.”

In Polanyi’s writing the truth emerges that the valuable variety of life quality must neither be confused nor traded for sheer statistical prosperity.