A recent Marxist critique of Karl Polanyi’s theoretical approach concludes that there is nothing wrong with the latter that cannot be remedied by a major infusion of key Marxist concepts. Benjamin Selwyn and Satoshi Miyamura in their 2014 New Political Economy article display an impressive grasp of Polanyian as well as Marxist categories. Yet, in their critique, they never consider why Polanyi, who was both knowledgeable of, and sympathetic to, Marxism in his early and middle years, eventually broke with Marxism to forge his own analytical path. Might he not have had good reasons for doing so?

I believe that Polanyi did, indeed, have defensible grounds for his skepticism. His mature work (beginning with The Great Transformation in 1944) suggests certain arguments Polanyi might have adopted in a rebuttal. Experts on Polanyi’s early scholarship could doubtless expand on these points and add others.

Selwyn and Miyamura contend the #Marxisttheory has superior explanatory or prescriptive power vis-a-vis the #Polanyianapproach in four important issue areas:

• Marx’s notion of exploitation is the key to understanding capitalism, not Polanyi’s weaker notion of commodification;
• Polanyi fails to understand that class is a crucial concept in the production and reproduction of capitalism and that the working class has a critical role;
• Polanyi fails to provide “an overarching theory of capitalism”;
• Polanyi adopts an ambiguous notion of socialism; in particular, he equivocates on the role of markets in a socialist society.

This critique, if accepted, would imply that central features of Polanyian analysis are mistaken, and should be abandoned or heavily Marxified. But matters are not so clear-cut.

In response, Polanyi might well begin by pointing out that Marxism, like liberalism, falls prey to the #economisticfallacy. Of course, liberalism focuses on the individual whereas Marxism portrays man as a social animal. Yet both view the economic system – capitalism – as an independent sphere subject to its own laws of motion and its own peculiar economic motivations. Marx in Capital treats capitalism as an ideal type (in Weberian terms), and sets out to dissect its laws of motion. The mode of production is given a central place in Marxist analysis; in vulgar Marxism, the economic base determines the superstructure, whereas in more subtle versions, for example Gramsci, politics does exercise some independence in shaping class struggles. Regardless, Marxists define classes, which they understand as the primary agents of historical change, in terms of their relationship to the means of production. Moreover, when classes (principally the bourgeoisie and proletariat) develop class consciousness, they do so on the basis of shared economic interests. Polanyi rejected this economistic outlook, believing that social obligation, status considerations and religious and other ideals also were key motivators of human action – and not simply “false consciousness.” It is a pity that Selwyn and Miyamura failed to address this crucial point, but readers can assess the validity of Polanyi’s critique.

Consideration of whether exploitation or commodification is the key to understanding capitalism is clearly a vast topic. Marxists assume that the key contradiction in capitalism occurs at the point of production, ultimately embodied in the clash between the proletariat and the bourgeoisie. Socialism emerges from this basic contradiction. Polanyi, in contrast, depicts the inherent tensions within capitalism as arising not only in the production process but more broadly in society as various classes and groups react to the injuries to the social fabric impelled by the commodification of such “fictitious” commodities as labour, land and money. The movement toward liberalization spawns a counter-movement of societal protection. Granted, Polanyi is unpersuasive in contending that the counter-movement is an organic and spontaneous response of society to intrusive and rapacious capitalism. But, stripped of this organic notion of society, the “double movement” is a powerful tool in understanding the socio-political dynamics of capitalism. To this important extent, Polanyi does offer a theory of capitalism through his focus on commodification, though it is also true that his technological-determinist explanation of the origins of market society is unsatisfying.

Moreover, the double movement has also withstood the test of time better than Marx’s class struggle paradigm. For the latter, the proletariat is the universal class whose agency will bring about socialism. This focus made good sense during the industrial revolution. But today, when the organized working class is a shrinking share of the population in post-industrial societies and vastly outnumbered by the informal sector even in industrializing countries of the Global South, the focus on the proletariat and its historical mission is outdated. Polanyi’s more general notion of the counter-movement, by comparison, is highly relevant to today’s political equations. Not only does Polanyi not assume that classes are the motor of social change nor select the proletariat as the prime actor, but also his concept of the counter-movement implies the necessity of cross-class and even cross-communal alliances to achieve social progress. Technological change has spawned a large middle class that must be mobilized, in part at least, to attain progressive ends.

Finally, what of the charge that Polanyi’s idea of socialism is ambiguous, and that his conception of the role of market in this future society is equivocal? Certainly Polanyi is guilty on both counts, but is this ambiguity a bad thing? The fact is, we don’t know what a socialism that avoids political tyranny looks like. In light of the blighted nature of actually existing socialism in the 20th century, people remain skeptical of socialist blueprints. We need much more discussion of what socialism is. And why not markets – though not free markets in the #fictitiouscommodities? Polanyi was opposed to market society, but not to a society with markets. Although I cannot explicate this statement in a short space, readers may at least agree that this notion is refreshing, opening up the political imagination.

Although Polanyi’s work can rightly be criticized for various shortcomings, I hope we can agree that the way to improve his analysis is not to replace its key concepts with their Marxist counterparts.

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