Freedom, Community, Self: Insights of Karl Polanyi

“Life is man’s missed opportunity.” Although Karl Polanyi used these words to sum up Hamlet, they also encapsulate his sense after 1947 that capitalist society had forfeited a promising future – a liberating freedom in community. Yet perhaps the opportunity has not been forfeited but delayed. Polanyi’s insight into the connection among freedom, community and personal responsibility can still guide us.Until about 1947, Polanyi had hoped that people would escape the “market mentality” that fatally limited their sense of historical possibilities. They might recognize that the catastrophes of the twentieth century – economic depression, fascism and world wars – flowed from destructive market forces. This recognition would surely dispose movements to search beyond the market system for a more rational, planned and democratic future. Just the opposite occurred, of course. The opportunity was missed as the Cold War branded all socialist ideas as subversive and totalitarian.

Today, disillusionment with neoliberalism again demonstrates the obsolescence of market society. Neoliberalism has precipitated several interrelated challenges for which it has no solution. They include such all-to-familiar trends as catastrophic climate change, the undermining of ecologies, the growing precariousness of employment, vast inequalities that make a mockery of democracy, the menace of unbridled war, and the collapse of states into warlordism and criminality. The insecurity induced by these trends generates an increasingly fertile soil for barbarism in the form of fascism.

Is there an emancipatory escape from this mess, towards what Polanyi termed freedom in a complex society?

Karl Polanyi summarized his views on this question in the final chapter of his classic The Great Transformation (1944). It is the most condensed (a mere 12 pages) and difficult chapter in the book. Polanyi moves beyond historical investigation to a reflection on the nature and limits of freedom in modern, technologically-advanced societies. Others have provided learned discourses that repay close attention. Briefly and simply put, I understand Polanyi’s compelling case as follows.

Men and women can only be free if they live in a moral community. Industrial economies can provide enough material wealth to ensure that everyone can live comfortably. But mere comfort for all or decommodification or even a just distribution of wealth is not the essence of socialism, but only its preconditions. The essence is rather the opportunity for everyone to live a meaningful life. A meaningful life is one in which people take responsibility not only for their own lives, but also for a community in which all can flourish. It is a life in solidarity as befits a social animal.

Solidarity and mutual flourishing, for Polanyi, cannot happen in a capitalist society. Why not? In the market system, impersonal forces of markets, bureaucracies and technological requirements shape life chances, weaken social obligations, and direct individuals into materialistic pursuit. By treating labour, land (nature) and money as commodities and subjecting them to opportunistic drives, market society undermines community and institutions, as well as nature. Atomization and moral/spiritual decay are the most insidious results. And the inevitable rise of a countermovement of societal protection, provoked by the impossible liberal ideal of a self-regulating market, threatens to plunge the system into economic crisis. This crisis, as it deepens, brings the contradiction between democracy and capitalism to the fore. The fascist virus spreads in this poisonous environment, resolving the contradiction by eliminating democracy and introducing a regulated capitalism.

But there is an alternative, emancipatory outcome of the stalemate between liberal movement and societal countermovement, of the clash between democracy and market. Polanyi does not provide a blueprint for attaining freedom in his terms. We know it will require decommodification of the “fictitious” commodities: labour, land, money and (today) knowledge. Markets in real commodities, however, may continue. It will also depend upon a deep democratization of economy as well as polity. Only then can the “common man” live in a system that allows him to be free with the replacement of reified market structures by rational regulation and planning. But even if we achieve both, together with some redistribution, we cannot escape inherent limitations of freedom.

A brief and abstract discussion of “the reality of society” conveys this central message. In the final paragraph of TGT, Polanyi leaves us with a striking paradox. “[L]ife springs from ultimate resignation,” he observes. “Uncomplaining acceptance of the reality of society gives man indomitable courage and strength to remove all removable injustice and unfreedom.”

The “reality of society” is a complicated notion. Fundamentally, humans have a certain capacity to achieve freedom through community and personal responsibility. We can take some responsibility for our collective future when we are no longer dominated by reified market structures. Even so, freedom is perpetually subject to challenge and reversal. Abuses of power will always be with us and freedom never guaranteed. Furthermore, we cannot live in modern societies without imposing upon ourselves impersonal forces such as bureaucracies and technologies. Despite these realities, we can still create “all the freedom we need” and remove much injustice.

Liberals contend that regulation of markets, especially any type of planning, precipitates a slide towards despotism. Karl Polanyi disputes this polemical view that essentially equates freedom with free enterprise. We may agree with him – up to a point. Although participatory planning is in principle compatible with democracy, we must be skeptical that any centralized planning can actually work in practice. Markets, though not the market system, will continue.

Freedom, community and individual responsibility are thus closely linked. We do not have to submit to reified market systems, but can, to some degree, change our institutions and mentality to accord with solidarity and freedom for all. Yet we must resign ourselves to, and gain strength from, a central reality. The struggle is unending and incomplete because regulation is necessary, some markets continue, and bureaucracy and power abuses are ever present in modern societies.

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About Richard

I am a Professor Emeritus of Political Science at the University of Toronto. I am currently interested in understanding how the humanistic tradition of the left can be adapted to fit the realities of the 21st century. I am particularly concerned with how we can deal equitably with the deadly challenge of climate change and live with globalization. My most recent academic research has focused on the Left’s experience in the Global South and on counter-hegemonic globalization. Africa has been the major site of my field work; I have also travelled widely in Latin America and Asia. My most recent books include Reinventing the Left in the Global South: The Politics of the Possible (2014), a revised and expanded edition of Civilizing Globalization: A Survival Guide (co-editor and co-author, 2014), and Social Democracy in the Global Periphery: Origins, Challenges, Prospects (co-author, 2007).

1 thought on “Freedom, Community, Self: Insights of Karl Polanyi

  1. José Antonio Vergara

    Thanks for this interesting piece, Richard. I guess Karl was aware of the view developed by Erich Fromm on this matter.

    Of course, thinking about these problems is essential for building a new emancipatory project towards real freedom, solidarity and human flourishing.

    Reading your texts, I have noticed the extension you propose of the Polanyian concept of fictitious commodities to include a 4th one, namely knowledge. This seems to be a very important theoretical step, so I wish to learn more about your thought.


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