Karl Paul Polanyi (Vienna October 21, 1886 - Pickering, Ontario April 23, 1964) was a Hungarian intellectual known for his opposition to traditional economic thought and his influential book The Great Transformation.

Karl Polanyi, brother of chemist and philosopher Michael Polanyi, was born and raised in the Austro-Hungarian Empire. The son of a prominent member of bourgeoisie involved in railroads, Polanyi was well educated despite the ups and downs of his father's fortune, and he immersed himself in Budapest's active intellectual and artistic scene. Polanyi founded the radical and influential Club Galilei while at the University of Budapest. During this time Polanyi was actively engaged with other leftist thinkers, such as Georg Lukács, Oscar Jászi , and Karl Mannheim. Polanyi earned his Ph.D. in philosophy in 1908 and graduated in law in 1912. In 1914 he helped found the Hungarian Radical Party and served as its secretary.

After service as a cavalry officer in the Austro-Hungarian army in World War I but was removed from service due to disabilities after arriving at the Russian front. After the war Polanyi returned to Budapest where he became politically active once again. Polanyi supported the Republican government of Mihaly Karolyi and its Social Democratic regime. The republic was short-lived, however, and when Béla Kun toppled the Karolyi government to create the Hungarian Soviet Republic Polanyi was forced to flee to Vienna. There he worked as a journalist writing economic and political commentary for (among others) the prestiguous Der Oesterreichische Volkswirt. It was at this time that he first began criticizing the Austrian School of economists, who he felt created abstract models which lost sight of the concrete reality of economic processes. Polanyi himself was attracted to Fabianism and the works of G. D. H. Cole. It was also during this period that Polanyi grew interested in Christian Socialism.

Polanyi fled Austria in 1933 as the short-lived Austrian Republic began to collapse and fascist influence began to grow. He moved to London, where he earned a living working as a journalist, lecturer, and tutor. He also conducted the bulk of his research for what would later become The Great Transformation. He would not start writing this work until 1940, however, when he moved to New York to take up a position at Bennington College. It was published in 1944 to great acclaim. In it, Polanyi described the enclosure process in England and the creation of the contemporary economic system at the beginning of the nineteenth century.

After the war Polanyi received a teaching position at Columbia University. However, his wife's background as a former communist made gaining an entrance visa in the United States impossible. As a result they moved to Canada and Polanyi commuted to New York City. In the early 1950s Polanyi received a large grant from the Ford Foundation to study the economic systems of ancient empires. Having described the emergence of the modern economic system, Polanyi now sought to understand how 'the economy' emerged as a distinct sphere in the distant past. His seminar in Columbia drew several famous scholars and influenced a generation of teachers, eventuating in the 1957 volume Trade and Market in the Early Empires. Polanyi continued to write in his later years and established a new journal entitled Coexistence. He died in 1964.

Polanyi is remembered today as the originator of a 'substantivist' approach to economics, which emphasized the way economies are embedded in society and culture. This worked against mainstream economics but was popular in anthropology and political science. His book The Great Transformation also became a model for historical sociology, more because of its breadth and daring than because its argument has withstood the test of time.

Bibliography

• The Great Transformation (1944)
• Trade and Markets in the Early Empires (1957, edited and with contributions by others)
• Dahomey and the Slave Trade (1966)
• Primitive, Archaic, and Modern Economics: Essays of Karl Polanyi (1968, collected essays and selections from his work).

External Links

• About Karl Polanyi http://artsandscience.concordia.ca/polanyi/pubs/about.html - From the Karl Polanyi Institute website.
• An Austrian School rebuttal of The Great Transformation http://www.mises.org/fullstory.aspx?Id=1607 - From the Ludwig von Mises institute.