Placing Polányi after 2008: The Double Movement of Social Embeddedness in Eastern European Economies

Karl Polányi and the Double Movement: Introductory Lectures and Roundtable Discussion

Roundtable Discussion

Corvinus University of Budapest, Building E, Lecture Room III
2 May (Thursday) 5:20 PM – 6:40 PM

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Chair: Zoltán Ginelli


Ilya Budraitskis (The Moscow School of Social and Economic Sciences, Russia)
Mariya Ivancheva (University of Liverpool, UK)
Brigitte Aulenbacher (JKU Linz, Austria, International Karl Polanyi Society)
Balázs Krémer (University of Debrecen, Hungary)

Polányi’s legacy has been variously forgotten and selectively rediscovered. On the one hand, a holistic reconstruction of his life work would wrongly suggest a return to an “essential” Polányi, but on the other hand, selective rediscovery is not necessarily “wrong”, since everyone finds an own situated interest or influence in Polányi’s rich pool of ideas. On a further note, his own ideas changed over time and were later put to use in different contexts by different interpreters, and have influenced various fields and disciplines, ranging from political science, institutional economics, economic anthropology, economic geography, regulation theory to new economic sociology. During the 1990s, Polányi gained mainstream readership as a critic of neoliberal global capitalism, but was also read in the 1960s socialist bloc due to his ideas of controlled markets.[1] However, Gareth Dale has differentiated between the “soft” Polányi as the “institutionalist” theorist of the social embeddedness of economies, whose ideas have passed into mainstream conceptualizations; and the “hard” Polányi, the prophetic critic of free-market globalization and capitalist commodification, and the advocate of an alternative socialist transformation. In other words, we may distinguish between a “reformist” and a “radical” Polányi.[2] But whichever of his sides we may accentuate, Polányi’s “legacy” remains to “place economies” in a substantivist, comparative and global historical socio-economics.

Like all readings, ours will also be also situational. Polányi may have perhaps too optimistically thought before he passed away in 1964 that laissez-faire capitalism and market fundamentalism are gone for good. Today, he might be puzzled by the successful expansion of East Asian “small tigers” and “communist neoliberal” China, the protectionist turn of the United States, and the rising tide of so-called “illiberal”, state-centralized and nationalist authoritarian regimes from North to South and East to West, with their curious recallings, reinventions or reformulations of what we used to call “neoliberal capitalism”. The aim of this roundtable is to revisit some of Polányi’s key ideas and themes in order to understand how and why recent global capitalist restructuring and hegemonic shifts in the world economy after the economic crisis in 2008 affected the rise of these new authoritarian regimes in Eastern Europe. 

Polányian ideas as point of departure: double movement, embedded economies, and modes of integration

 In his seminal book, The Great Transformation, published during the war in 1944, Polányi introduced two of his perhaps most influential and closely interrelated concepts: the double movement and the embedded economy. These encompassed two wider propositions, which may be in conflict with each other:

1. Historical and progressive proposition

Polányi starts by presenting the evolution of 19th century modern capitalism as a process in which market relations were “disembedded” from social relations. This proposition was born from his debates with neoclassical economists, who envisaged the unilinear development of capitalism leading to an autonomous and self-regulating market, against which he posed his own normative vision of a socialist economy that may transgress the socially disembedded economy with a promise of a socially embedded one. Polányi ultimately believed in a social democratic world where the vicissitudes and inequalities generated by uncontrolled market conditions may be resolved and regulated by democratic planning and a new global order of redistribution.

For Polányi, the double movement represents a dialectical process of emergence: the socially destructive overreach of marketization and the commodification of land, labor and money triggers various forms of “protective” socio-institutional reflexes and counteractions. But Polányi saw in economic crises not only moments of social and institutional change, but also historical opportunities embracing a gamut of alternative political trajectories from revolutionary class struggle to new class compromises between labor and capital, and to political regimes ranging from socialism to fascism.

2. Epistemological and comparative proposition

In a general sense, the embeddedness of the economy means for Polányi that markets and economic activity are constituted through “instituted” processes embedded in social forms, behaviors, and relations. On the one hand, markets are inescapably formed politically and are subject to political contestation and manipulation or management; on the other, markets overflow into social spheres and generate institutional frictions, which create new local articulations or resolutions of economic crises.

Polányi worked with the tensions between holistic modes of analysis and qualitative difference-finding methods. For him, economies are substantive, situated in time and place, in heterogeneous socio-institutional contexts. Since all economies are socially embedded, what matters from a comparative view are their modes of embeddedness or integration. The Polányian economy is multilogical along at least three modes of economic integration: reciprocity, redistribution, and market exchange (according to Jamie Peck, a fourth may be householding).[3] Reciprocity is based on symmetrical relations and mutual sociality as seen in gift-giving economies; redistribution is based on central authority, regulated by custom or law and tax or tribute; exchange is driven by individual gain from priced commodities in an instituted market. Altogether, these different modes of economic integration establish the basis for (re)productive and (re)distributive capacities in societies, which are stabilized through culturally and politically institutionalized forms of regulation.

Questions to roundtable participants

In the current academic “regime debate” we can see rivaling political-institutional typologies of “illiberal democracies”, “populist conservatism”, “soft authoritarianism”, “semi-authoritarian regimes”, Steven Levitsky and Lucan Wray’s “competitive authoritarianism” or “hybrid regimes”,[4] world-systems analysts’ “semi-peripheral dependent development”, or the Varieties of Capitalism School’s typology of national and elite strategies on the different roads to capitalism in the postsocialist “transition”. It is still debated to what extent these new regimes are path-dependent on their local modes of postsocialist development, and whether they actually constitute new forms of neoliberal capitalism or protectionist counter-movements against a liberal capitalist order. But a Polányian explanation would start not with the “disfunctionality” of institutions compared to “democratic” societies, but with their new and comparative modes of socio-institutional integration into an evolving capitalist world order.

Reaching to Polányi’s ideas, we may ask the following questions:

  1. In many Eastern European countries, the 2008 global economic crisis seemed to signal the political failure of the promises of postsocialist “transition” to liberal market economies and democracies (“catching up to the West”). How can we understand the recent dialectic dynamics between the commodifying market-impulses of global capitalism and its local Eastern European social embeddedness: what comparative political-institutional strategies of integration into the capitalist world economy emerged since 2008?
  2. What new modes of social integration have developed under post-2008 political regimes regarding reciprocity, redistribution, or market exchange – new informal economies, new redistributional politics, and new market-regulation by the state and the political elite?
  3. Considering Polányi’s ideas about the double movement, how can emerging nationalist “illiberal” authoritarian regimes be regarded as local socio-political (protectionist) reactions to recent processes of neoliberal global capitalism, and what potentials or challenges remain for counter-movements of progressive politics, social movements or social policy?

[1] Lengyel, György (2016): Embeddedness, Redistribution and Double Dependence: Polányi-reception Reconsidered. Intersections, 2(2): 13–37.

[2] Dale, Gareth (2010): Social democracy, embeddedness and decommodification: On the conceptual innovations and intellectual affiliations of Karl Polanyi. New Political Economy, 15: 369–393.

[3] Peck, Jamie (2013): For Polanyian economic geographies. Environment and Planning A. 45: 1545–1568.

[4] Levitsky, S., Wray, L. A. (2010): Competitive Authoritarianism: Hybrid Regimes After the Cold War. Cambridge: Cambridge University Press.


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