Transformations, Then and Now: The Appeal of Karl Polanyi

Karl Polanyi's views on the nature of "pre-market" society are influential not only among historians but also among economists concerned with present-day transitional and developing economies. This paper examines Polanyi's arguments about the "Great Transformation" from traditional to market society in the light of recent advances in economic theory and empirical evidence from a range of European and non-European societies. These theoretical and empirical considerations provide little support for Polanyi's views concerning fundamental discontinuities between traditional and market societies. The paper concludes that Polanyi's rosy view of pre-market society provides an inappropriate historical basis for addressing the challenges faced by present-day transitional and developing economies.