Introduction

The year 2020 has been an eventful year, for many reasons, but principal among them being the ongoing COVID-19 crisis, that has knocked over a series of dominoes, leading to very serious implications in so many different aspects of life on our planet, including health, economics, trade, environment and society. The global pandemic has revealed and highlighted many of the structural and ideological weaknesses present and prevalent in a globalized free market economy run along neoliberal lines. How did we get here? Where is “here” exactly? Where do we go from here? These are some of the lines of enquiry we will follow in this book.

Before we dive in, let us take a moment to consider why we use the term Great Transformation. It is not about technology, the Internet, the invention of electricity, nor even the wheel, although these have indeed been transformative to the way people live. Rather, we are talking about economic systems, which overarch all of these things. The First Great Transformation, according to the brilliant economic historian Karl Polanyi, was the shift in human and societal relations—the transformation of humans as social beings to homo economicus, acting purely according to economic considerations. Society was turned on its head when the market as a social institution traditionally embedded in social relations became disembedded, with price and profit calculus dictating economic behaviour. This facilitated the rise of wage labour crucial to the rise of industrial capitalism beginning in eighteenth-century England. As Polanyi so graphically puts it, man became labour, land real estate and trees timber—all exploited for profit.

This book examines what happened next, and how we entered into a Second Great Transformation—the change from industrial-managerial capitalism to financialized capitalism—from the 1980s onwards, whereby the finance that was supposed to be the servant became the master of the real economy. By the end of the book we hope to have made a convincing argument for a Third Great Transformation that is yet to come, and much needed, to a more balanced economic system that puts finance back where it belongs and encourages a different, more balanced relationship between Man, Nature and Society.