Labour as a (Fictitious) Commodity: Polanyi and the Capitalist ‘Market Economy’

In The Great Transformation, Karl Polanyi problematised the commodity status of labour. He described it as ‘fictitious' and asserted the human aspect of labour necessitates ‘protection’. In bringing Polanyi's mature works to bear on these claims, this article uses the ‘fictitious commodity’ concept to highlight the tension in neoclassical theory between concrete reality and its idealist construction of the economy. This contradiction directly challenges the veracity of the self-regulating market. The article develops two related themes. The first is Polanyi's critique of the neoclassical conception of ‘the economy’ as an ideal (market) construct which gave rise to the notion that labour could be regulated by the forces of supply and demand. The second is the lack of logic in the notion of a ‘self regulating’ market and Polanyi's appreciation of the concrete tendencies of capitalist economies to develop institutional arrangements that ensure the economy is always, and necessarily, more than ‘the market’.