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Maurice
Glasman
The
Great
Deformation:
Polanyi,Polandand the
Terrors
of
Planned
Spontaneity
Labour
is
only
another name
for
a
humanacrivirythat
goes
with
life
itself
...To
allow
the
market
mechanism
to
bethe
sole
direcor
of
the
fate
of
humanbeingsand
their
natural environment,
indeed,even
of
the arnounrand
use
of
their
purchasing
power,would
result
in
the
demolitionof
sociery.
For
the
alleged
commodiry'labour
power'cannotbe sh6ved
about,
used
indiscriminacely,or
even
left
unused,
withour
affecting the
humanindividuals who
happen
to
be the
bearers
of thisparticularcommodiry.
In
disposing
of man's labour
power
thesystem
would,incidentally,
dispose
of
thephysical,psychological,
and
moralentiry'rnan'
atrached
to that
tag. Robbed
of
the protectivecover
of culturalinstitutions,
hurnan beings
would perishfrorn
the
effects
of
social exposure;they
woulddie
as
the
victimsof
acute
social
dislocation through
vice, perversion,
crime
andstarvation.
Karl
Polanyi,
T'he
Great'I'rantformation
Thecentral
problem
addressed
in
this
essay
is
why
the most
successful
model
of
economicand
social
reconstruction
in
world
history
has
been
ignoredin
Eastern
Europe.'The
'West
German
posrwarsettlement
combined
the
crea-
tion
of
a
sustainableand
efficientmarket
economy,
liberal-democraricinsti-
tutions
and parties,the
developrnent
of
a
welfare
sratebased
on
cerrainideals
of
justiceand the institutionalization
of
trade-union
responsibilities.
Why
has
thesocial-marketmodel
in
general,and
codeterminarion
in
parric-
ular,been
ignored
asa
necessary
part
of
the
ffansitionfrom
a
closed
ro
an
opensociety?
This
question
is all
themore
puzzling
as
the
four
conscious goals
of
Polish
transition,
a)
theconstruction
of
arnarkereconomy
with
recognized
Propertyrights;b)
theestablishment
oflegitimatedemocratic
political
insti-
tutions
and
parties
functioning
within
aframework
of
rights
enforced
by
law;
c)
the
creation
of
social
stability
through
theesrablishment
ofminimal
standards
of
justiceand
fairpublic
procedures;and
d)
the
integrationof
the
country
into
\Western
Europe,
were
all
achieved
by
the Federal
Republic
of
Germanyafter the
Second
World
War.
Thusthe model
exists
in
the
most
politically powerful
and
economically
successfulstate
in
Europe,
which is
alsoa
directly neighbouringcountry.
The questionis
all
the
more
pressing
as
the
principal
agent
of
Communism's
reiection,
the
Solidarnosc
union,
wasbased
preciselyupon
those values
of
Catholicsyndicalisrncharacteristic
of
the
\West
German
consensus,
of
wlrich
the
most fundamental idea
was
that the
precondition
of
economic
reconstruction iseffectivesocietal
restoration.'
lt
will
be
argued
thar
Karl
Polanyi'sconcept
of
the market utopia
described
in
T'he
Great
'fransformationisthe best
available
starting
point
fortrying
ro
explain
thisweird
state
of
affairs.-lPolanyi's
work
provides
resources
for
an
explanation
of
how
it
came
to
happen
that
a
workers'
movementbecame
the
guarantor
of
a
reform
programme
that
removedunions,
solidarity
and
justice
from
Polish
politics
leadingro
rhe
re-emergence
of
the
CommunistParty
as
the
principal
defender
of
labour.
Polanyi's
two
general
laws
of
transformation
will
be
developed
and
rhen
applied
in
the
second
halfof
the
essay.
I.
The
Shape
ofHuman
Association
This
sectionhasthree
purposes.
The
first
isto
define
the
basic
elements
of
Polanyi's
system,
most
particularlythe role
of
labour
inthe
reproductionof
a
culture.The
second is
to develop his
analysis
of
Speenhamland
and
theconsequent
introduction
of
a
free
market
in
labour
and
to
show
that
it
is
of
comparative
relevance
in
understand-
ing
the
transitionfrom
Bolshevism
to
a
market
society
in
Poland.I
Paternalist
authoritarianism,
it
will
be
argued,
is
aprecondition
oflsocietal
commodification.
The
third
purpose
isto
emphasize
the
importance
of
reason
in
the
framingof
agendas, and
the fundamentalrole
that feasibility
plays
as
a
force
in
mobilizing political
support.
Tradition
and
Transition
To
separate
labour from
the
activities
of
life
and
ro
subject
it
tothe
laws
of
the
market
was
to
annihilate all organic forms of
existence
and
to
replace
them
by
a
different
rype
of organization,
an
atomistic
and
individualistic
one.4
Polanyi's
work
is
framed
by
an idea
that
can
best be
summarized
as
.@!Jy,"Thisisthephilosophythathumantransform-
ation
does
not
begin
ex
n0a0
butfrom
existing
institutions
and
pat-
terns
of
cooperation,and further,
that
humanthought andacrion
can
comprehend
and influence
thesechanges.
It
is an
industrial
philosophy
rTlris
essay
will
alsoappear
thisyear
in
an
alternate
version
in
C.Bryant,
ed.,
Tbe
Neut
Great Trantformatioz,
publishedby
Roudedge.
The author
alsohas
four
primary
debts
to
acknowledge.The
first
is
toJeff
lDUeintraub
who
insisted
that
I
studyPolanyi's
work
after
reading the
firstdraftof
my
book
Unneceuary
Saffering"
Verso,
forthcoming.The
second
is
to
Steven Lukes
who
suggested
the
tide. The
third
is
to
Luisa Zanchi
whose
study
of
inter-sectoral
wage
differentialsin
German
industry underpins
many
of
the
efficiency
arguments made hereconcerning
trade-union participation.Thefourtlr
is
to
ChristopherBryantwho
edited anearlierversion
of this
essay.
'Solidariry"
'ProgrammeAdopted
by
theFirst National
Congress',
in
P. Raina,
ed.,Poland
t98r,
Tou,ardt
Social
Rencwad
London
r98I.
r
Karl
Polanyi,
Thc
Great
Transformation
(henceforth
rcr),
Boston
1944.
4
rcr,
p.
r(r3.
(ro
in
wlrich
solidarityand
freedom are
both
created
and
sustained
by
human labour,
and
thus
work
and
its
democrati
c
organization
become
its distinctive
centralconcern.
'Workis
the
means
by
which
'reason
and
community
arereconciled
in
freedom.
Throughthis
idea
Polanyitries
to explain
theparadox
of modernitywhich
can
besum-
marized
as
the
following
process"
As
society develops
in
size,techno-
logicalpower
and
complexiry,
it
tends
to
eliminate itself
as
rhe
centralized
state
grows
on one side,andthe decentralizedeconomy on
the
other.Amorphously
squeezed
between
the
individual
maximizer
and the
collective
aggregator,society
as
a
functional
moral
entiry
disappears.
The
emergence
of
the
modern
state
with
irs
nationalcurrency
and
uni-
formityof
rariffs
destroysthe
existinginstitutions
of
social
orga.niz-
ation
such
as
cities, corporations,unions,
parishes,municipalitiesand
estates.
The
legal
constitution
replaces
theethical ties
generated
by
shared
vocational institutions.
The
central
bureaucracy
and
nationalpolice
replace
more
immediate
forms
of
discipline
and
organization.The market,
in
its turn,
undermines racketeering
and
rigging,
thecentralcharacteristic
of
all
stableassociation,
thus
open-f
ing up
che
elements
of
society
for
sale
on
the open
market.Confronted
I
by
stable
patterns
ofproduction
characterized by
qualitycontrol
and
I
apprenticeships
with
the
consequent
barriers
to
entry, the
market
lsolution
is
to
abolishcooperation,
not
to
democratize rackets.
Thestate
creates
the
conditions,
the
market
makes the moves, the
result
is
theemptying
of
thebody
politic"
Society,
understood
as
a stable
net-
workof
self-governing
institutions
as
well
as
a
web
of
self-regulatingsystems,disintegrates.
This
nationalization
of
politicsand
marketsproduces
a
furtherparadoxical
development.
The
newstate
becomes
embedded
in
a
structure
of
international
economic
competitionand
retreats from
internal
regulation,surrendering
the
principle
of
ordering
social
relations and
distributing
resources
to
themarket.Simultaneously
it
becomes
increasinglyhostile
to
the
interventionof other
states
in
its
nationalmarket,
and
thus
a state
ofwar
becomes
the
parallel
politicalorderto that ofinternationaltrade.t
fPol"nyi'sfirst
general
law
of
transformation
is that
atomism
and
f'".--
I
nationalism
are
logically andstructurally
linked
through
their
mutual
I
contempt
for
societal
institutions and traditions. The
atomism
of
-classicaleconomictheory
is
transformed
inro
thenationalism
of
state
conflict throughthe
process
of
collectivismwhich
disintegrates
and
then
aggregates
without
mediation"
State
intervention
is
oJrly
morally
justified
in
theaffairs
of
othercountries.Theonly
formofpatriotismleft
is
war,the
civil
lifeof
the nation being
characterized
bycompeti-
tion. An individualistic internal
order
is
complemented
by ananarch-
istic
global
order
with
sovereignty
doing
the
transitional work.
Both
the
sovereign
agent
of
rational
choice
and the
sovereign state
of
politics
see
dependency
as a
weakness,a
denial
of
autonomy, and
aret
Tlris conflict
cantake the
form ofinrperial
rivalry
as
anattempttoexpandthe
size
of
internal
markets,
border
disputes,
or
ethnic
conflicts.
6r
constantlyresistingthe demands
of
socialand economiccooperation
broughtaboutbythe
divisionof
labour,international
markets
and
che
complex
skills
andknowledge
requiredtosurvive
in
the
modern
world.
As
"
contequence
of
theSovernment'sattempts
to
maintain
internationalrecognition
of
its
currency,
which
remainsthelast
sur-
viving
economicresPonsibiliry
of
the
state, sociery
is
further
subordi-
nated
to
the
demands
of
the
market
in
the
name
of
protectingpurchasingpower.
In
a
market
society
the
necessities
oflife
are
made
dependent
on
international
exchange
andthusthe value
of
money
becomes
fundamental
to
survival.
Labour
and
land,
or
in
simpler
language
human
beings
andnature,the
substance
of
socieryarecom-
modifiedto
thisend,andthe
particular
forms
of
ownership,
associa-
tion
and
tradition
throughwhich
theywere
previously combined
have
no
rational
or
productivefunction
left.6
People's
sustenance'
employment
and
accommodation
become
dependent
on
the market.
I
Invariably
sociery
disintegrates
under
the
strainof
relentless
commod'
I
ificarion.The
lack
of
intermediate
institurions
then
leads
to
the con'
f
srr,rctio.,
of
an
abstract
community
enforcedbythe $dte
aPparatus
in
I
orde.to
restore
'order'
andthe
values
ofcommunity.Nationalism
is
the
most
abstract
of
ideologies,
it
isan
attempt torevive
an efnaciatedcorpse
by
means
of
a
centralbureaucracy.
It
is also
a
necessity,
for
thesrate
is
theonly
institutionleft
to
which
people
can
turnfor
relieffrom
themarket.Polanyi'sexplanation
of
rhe savagery
characteristic
of
the
first
half
of
rhe
twentieth
century
is
primarily
concepcual
and
boilsdown
to
the
thesis
that
onceeconomic
rationalityand
'reasons
of
state'
become
severed
from
an
organized
social
base
both
democracy
and
stable
l-cooperation
become
irrational.
Disembedded
rationality
and
disem-
I
boaieapoliries
leads
ro
rhe
relentless
vacillation
between
these
two
I
extremely
powerful
abstractions,
the
stateas
the
defender
of
order
I
and
the market
as
thearena
of
freedom.
Thus
the
conceptualparadox
-underpinning
the
construction
of
amarket
society
is
thatwhile
the
economic
sphere,
understood
as a
self-regulating
system
of
exchange
grounded
in
individual
choiceand
governed
by
prices
(catalaxy),
Leco-"r
increasinglyautonomous
and
its
idea
of
rationality
domi-
natessocietal
relations,
it
is
based
onan impoverished conception
of
rhe
importance
of
theeconomyand
its
institutions
in
thereproduc-
tion of
society.Polanyi's
criticismof
the
Marxist
tradition
is that
its
understanding
of
theeconomy
is similarly
impoverished
through
an
equallyinstrumental
analysis
of
therole
of
labour
in
distributing
knowledge,creating
solidaritiesand
generating
trust. The
problem
is
not
a
choice
betweeneconomics
and culture
for
the
two
ale
indistinguishable.
A
society
which
does
not
transform
the
worldthroughits
combined
effort
and
knowledgehas
neither
a
culture
nor
aneconomy.
('Theirony
is thar
sovereignry
is a
territorial
concept
and
was
central
to
the
emerg-ence
of
thenarion
stare,
butits
rise
coincided
with
the dissolurion
ofall
patterns
of
association
that
linkeclthe land
toproduction
through the
impositiono[
a
free
ntarketinland
and
its
products. Thusthe
defence
of
a
tertirory
ceased
to
mean
theprotection
of
a
way of
life,
more
a
milirary
defence
ofborders separatingcountries
with
homogen-eouspar(erns
of
regulation.
It
is at
thispoint
that
rhe
linguistic
turn
is ntade
in
the
distinction
betweennations.
6z
For
Polanyi
labour
value
is not
an
externaleffect
of
aggregation
or
a
surplus
value accruing
to
goods
but
aninternal
cause
of
human
devllopment
and
survival.
Economic
activity
isnot
aninstrumentaloutcome
of
the
arbitrarycoordinationof
humandecisions
driven
bygreed,
but
the creation
of
stable
relations
of
dependencyrenewed
by
.h^.tg.t
in
knowledge
and
thedemand
for
cooperation.
People'slives
and
their
livelihoods cannot
beseparated
without
damage
being
done
to
both.As
labour
is
the
means
throughwhichthe
worldis
trans-
formed
byhuman
action,
the
relation
of
prodactionare
fundamentaltoany conception
of
freedom,and
it
is
this
idea
that
is thefundamental
concern
of
organic
rationality.
Economicsas
a
substantive
activity
concerns
man'smost fundamentalrelationships
with
othersand
withnature.As
a
formaldiscipline
it
is
concerned
only
with
means-end
relationshipsunder conditions
of
scarcity.
z1'1tt
formal
meaning
is
made substantial
in
a
market
society
through
the
commodification
of
society,
but
it
cannot
control
or
comprehendthe
consequences
of
its
imposirion.
The
bounded
rationality
of
rational
choice
turns
allresistance
into
a
form
of
irrationaliry.The
state
then arrives
to
clear
up
the
mess.
In
the
absence
of
self-governing
institutionswhich
struc-
tJre
economicacriviry,the
mess
is
centrallycontrolledandcontainedandthus
both
freedomand
stability
are
undermined.Polanyi's
ques-
tion
is
ethical
as
well
as
empirical
and
is:'how
cansocial
continuity
and
solidarity
be
both
rational
and
substantive
so
as
to
retain
enough
of
a
society's
traditional
functionsand
shape
to
resisttheclaims
of
both
state
andmarker
subordination,whilemodernizing
productionandrenewinginstitutions?'8f"Polanyi's
idea
oforganic
rationaliry,
which
heproposes
as
an alterna-
I
tiveto
che
domination
of
states
andmarkets,
is
derived
from
that
Imor"l
tradirion
which
seeks
to
reconcile
theclaims
of
reason
with
the
I
demands
of
historical
association.
This
philosoPhy hasdistinctive
|,oo,r,
the
most
important
of
which
are
the
Catholic
and
socialist\.rerponres
to
tiberalismdefined
in
terms
of
competitive
labour
and
-land
markets
in
the newly
createdself-regulated
economic
sphereand
the
centralization
ofpolitical
power
in
the
state
through
the idea
of
citizenship.Both citizenship
and economicself-regulation
break
the
power
of
intermediate
institutionsand
solidarities
while
severing
politics
from
economics
through
the
elevation
of
private
ProPerty
claims
to
rhe level
of
a
human
right.
The
constitutional
separation
of
powers effectivelymeant
the
separation
of
people
from
power
over
rheir
economic
lives.
Irwill
be
argued
that
the
twin
components
of
s-ocialistsvndica
based
on
the
idea
of
self-organized
democratic
labour
power
and
@withitsstressonsolidarityandcooPeration
7
Fora
detailed
analytic
distinction
betweenthesubstantive
andformal
meanings
of
economics,
see
Karl
Polanyi,'The
Economy
as
Instiruted
Process',
in
G.Dalton,
ed.,
Prinitiae,
Archaic
and
Modcrn
Economies,
Boston
1968.
I
In
thishis
answer
is similar
to
Durkheim'sand
takes
theform
of
a
vocationaldemocracy.For
Durkheim's
attempt
to
renderthe
idea
oforganic
rationality
amenable
torational
reflecrion,
see
Emile Durkheim,
Profutional
Ethiu
and Ciuic
Moralt,
London
1992.
For
a
long,er analysis
of
Polanyi's conception
of
tradition
see
my
'Liberty,
Labourandthe
Limits o[theMarket',
,jt/,
Vorh.ing
Paper,Florence
t994.
6r
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