Many scholars see the account of Europe’s nineteenth-century market system in Karl Polanyi’s The Great Transformation as offering key insights into contemporary trends of change. That account, however, differs substantially from much of the vast contemporaneous record of nineteenth-century Europe. What the analyses of countless social theorists; the speeches, official documents, reports and other writings of European reformers and statesmen; and the work of the century’s greatest literary figures emphasized were the features Europeans considered to be the most characteristic of that time: domination, exploitation, inequality, and the recurring class conflicts which these generated. But, while Polanyi is unsparing in depicting the horrors of industrialization, his account ignores the exploitation, monopoly, and political repression that created and sustained those horrors for over a century; and while contemporaneous accounts treated class conflicts as a fundamental dimension of Europe’s industrial development, in The Great Transformation, class interests and conflicts play a decidedly secondary or subsidiary role in the rise and demise of Europe’s nineteenth-century market system.

The Great Transformation focuses on the rise of Europe’s nineteenth-century market system, its disastrous impact on society, and the countermovement that it triggered and that, by interfering with the logic of the market mechanism, ultimately brought about its demise. Its central claim is that the basic dynamic shaping industrial capitalism during the nineteenth century and its transformation in the course of the world wars was the antagonism that emerged, not among groups, sectors, or classes, but between “society as a whole” and the “blind action” of the self-regulating market system’s “soulless institutions”. Polanyi argued that the rise of this system triggered a “spontaneous social protective reaction that came from all sectors of society”; and that all sectors or classes were successful in securing protection for themselves because their efforts served to protect the essential substances of human society (land, labour and money) and thus served the general interest of society as a whole. In sum, the self-regulating market threatened, and met with resistance from, “society as a whole”, and when different sectors or classes endeavored to secure protection for themselves (the “protectionist countermove”), their efforts redounded to the benefit of society as a whole.