Karl Polanyi 1944

Decent Essays
Karl Polanyi's (1944/1957) Societies and Economic Systems, The Great Transformation, provides a historical background to the structure of markets before the modern era. It is important to first differentiate between markets and the market economy in order to understand the factors that make up economies. The market economy is "a self-regulating system of markets" that is "directed by market prices and nothing but market prices" (p. 43). Polanyi argues that having an economy of some form is essential to the survival of a society, however, he notices that pervious societies successfully existed with no evidence of market control (p. 43). Markets have existed since the Stone Age, but their role was "no more than incidental to economic life" because it did…show more content…
44). Max Weber was one of the first contemporary historians to reject the idea that primeval economies provide no significance to modern economy, he emphasizes the "changelessness of man as a social being" (Polanyi, 1944, p. 46). Polanyi (1944) explains that "man's economy, as a rule, is submerged in his social relationships" meaning that individuals place their social standings, social claims, and social assets at higher value, rather than economic motives/material goods (p. 46). In primitive economies, production and distribution is enforced through the principles of reciprocity and redistribution. Reciprocity is observed in families and kinship; this is explained through an example of Trobriand Islanders of Western Melanesia culture (Polanyi, 1944, p. 47). This civilization uses a matrilineal system; the male in the family is recognized for his good behaviour if he offers the best crops to his sister and her family; however, if he fails, his reputation (which is extremely valuable) is at risk and he will not earn material benefits in exchange (Polanyi, 1944, p.
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