Polanyi in the United States: Peter Drucker, Karl Polanyi, and the Midcentury Critique of Economic Society

An extraordinary trend in the social sciences has been the revival, from relative obscurity, of Karl Polanyi's The Great Transformation. With the end of the Cold War and the rise of neoliberalism, Karl Polanyi's ideas are, ironically, more relevant today than they were in 1944, when his book was first published. Social theorists concerned with political economy in particular have latched onto The Great Transformation for its powerful criticisms of market-based policies and for its defense of the role of the state. Rather than speaking of the need for governments to don what Thomas Friedman calls "the golden straight] acket" of market discipline, Polanyians speak of states creating the sorts of markets that meet human needs - economic structures that will serve society, not command it.1 Enthusiasm for such an approach has led admirers of Polanyi to found the Karl Polanyi Institute of Political Economy, hold eleven international Karl Polanyi conferences, translate The Great Transformation into at least nine languages, and publish numerous books and articles on Polanyi's ideas.And yet, despite Polanyi's current popularity, his path to prominence has been a tortuous one. Initially, Polanyi's intellectual legacy was limited to the field of anthropology, where his insistence that the rules of the market society did not apply to much of the world was taken as an invitation to do more research on nonmarket economies. Polanyi and his followers - known collectively as the "substantivist" school of economic anthropology (a Polanyian term) - explored the exchange, control, and distribution of land, labor, and resources in the absence of the price-setting mechanism of the market. It was only really in the 1980s that other social scientists turned back to The Great Transformation and recognized Polanyi as having something to say to students of the modern market economy as well. Since then, The Great Transformation has become something of a canonical text in sociology, political science, and development studies, with its trademark concepts of embeddedness, the double movement, and fictitious commodities taking on rich lives of their own. Historians, however, have been slow off the mark in the race to make something of Polanyi, despite Polanyi's keen interest in historical questions. At least in the Anglophone world, the British Marxists and particularly E. P. Thompson have had such a large disciplinary influence that Polanyi's criticisms of economistic thinking and of the universality of the profit motive have seemed to many like old news. It is no great surprise that the Karl Polanyi Institute of Political Economy counts on its executive board of sixteen academics only one historian.I will not make the case here that historians ought to become Polanyians. I would submit, however, that historians, treating Polanyi as a historical subject, have an important perspective to add to the growing Polanyi literature. Examining Polanyi from within my own field of U.S. history, I will argue that The Great Transformation can fruitfully be read in the context of an important and only recently unearthed episode in U.S. intellectual history: the midcentury critique of economic society. In particular, Polanyi's book ought to be read alongside the early work of management theorist Peter Drucker. Doing so sheds light on a number of matters. First, acknowledging how much Polanyi shared with his contemporaries in the United States makes it easier to see how he came to develop the theories for which he is rightly famous. Second, exploring the important differences between Polanyi's critique of economic society and those articulated by his fellow thinkers draws Polanyi's theory into focus and exposes some of its limits. Finally, having placed Polanyi within the context of the United States (where he wrote and published his book), we can take The Great Transformation as a noteworthy contribution the disparate movement to jettison homo economicus as the basis for society. …