Karl Polanyi’s economic theory must be one of the most ambiguous in the history of economic thought. On the one hand, his views contradict the existence or, most likely, the advantageousness of the self-regulating market system described by Adam Smith. From this perspective, Polanyi’s economic views coincide with those of Keynes who insisted on the need for the government’s active regulation of the market growth.
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In the meantime, while Keynes simply rejects the potential of the invisible hand of the market, Polanyi develops this idea and comes to a conclusion that the liberalistic attempt to establish the self-regulating market system is the root of all the world’s “catastrophes” (“Episode 6”). On the face of it, such a parallel might seem to be an exaggeration. Meanwhile, a brief retrospective overview shows that the market’s self-regulation does not essentially imply positive outcomes for the society; on the contrary, it often leads to the disastrous consequences. Thus, for instance, the capital’s mobility that, while being uncontrolled, is certainly an integral part of the self-regulated basis, has already become the cause of the overall unemployment.
Polanyi’s criticism of the capitalistic system appears to be aligned to that expressed by Marx. Hence, the former economist also puts an emphasis on the ethical prevalence of social needs over the profit motives (“Episode 6”). Meanwhile, his theory reminds that of Marx only at the first sight. Thence, a closer analysis reveals that Polanyi’s views are more “humanistic.” The economist is mainly focused on the examination of the human character trying to determine such forms of market structure that would be most resonant to the inborn nature of a person.
This humanistic approach is illustrated by Polanyi’s numerous references to the historical background; hence, the economist tries to overview the entire scope of the humans’ experience. Despite his criticism of the free market, he is still less dogmatic in his attitude towards its mechanisms than Marx. Generally speaking, it might be concluded that Karl Polanyi generated one of the most rational and grounded economic theories. His theory avoids extremes; instead, it proclaims the reasonably balanced liberal and democratic market system.
“Episode 6.” Capitalism., Icarus Films. Brooklyn, New York. 2014. Television.