Karl Polanyi's concept of utopianism in the Great Transformation

Utopianism

In the book the Great Transformation, Karl Polanyi explains the rise of the industrial revolution from the 19th century to the end of World War II. Where, the book discusses in detail how the rise of the industrial economy contributed to long period of economic peace and prosperity that would last until 1914. At which point, the world would plunge into a period of darkness that would be accompanied by two wars and extreme boom / bust cycles in the economy. To illustrate these points, Polanyi goes back to England during the 19th century. Where, various intellectual thinkers of the day would respond to the vast disparities that were created in society through the capitalist system. With a process known as market liberalism or the self-regulating function of the markets. According to Polanyi, these ideas would lead to a second great transformation that would occur in the period between the end of War I and the Great Depression, with the rise in fascism. This is significant, because during the time of the first great transformation, there would be extreme boom and bust cycles. These were created from the self-regulation of the markets that would lead to the inevitable collapse of the world economy. At which point, this would help contribute to the rise of fascism. (Polanyi, 2005) to fully understand the overall scope of the transformations that occurred requires: examining how utopianism is used, why Polanyi used this term in numerous ways and what are the lasting impacts of these ideas on politics / the economy. Together, these different elements will provide the greatest insights into the various ideas presented by Polanyi.

How is the term, utopianism, used?

The term utopianism is used a criticism of the economic systems. Where, Polanyi is attempting to show how those who advocate a reduced role of the government in the markets are: promoting their own sense of utopianism. As their ideas of self-regulation and the market being able to correct the obvious imbalances that occur from greed, are nothing more than an illusion. A second way that utopianism is used, is when there is the inevitable backlash against the excesses of the capitalist system. Where, the large amounts of greed will lead to bubbles in asset prices that will cause severe recessions. To prevent this, the government will begin to over regulate business, where it stifles growth. In either case, utopianism is the belief by the proponents of both economic systems, as the way to justify the social ills that are occurring in society. ("Great Transformation," n.d.)

How do you see utopianism impacting the longer history of political economy?

The different views on utopianism would create the rise of globalization after the end of World War II. Where, the various regulations that were created during the Great Depression were slowly removed based upon these utopian ideals. At which point, this would create a similar economic situation that occurred in 1929. Where, the lack of regulation would create bubbles in asset prices that would cause a severe financial meltdown. At which point, there was a backlash against the self-regulation, with more calls for greater controls on private business. What this shows is: how both views cause the economic / political pendulum to swing back and forth. Where, during times of economic prosperity, the overall attitude will be utopianism will based upon a push for self-regulation. Then, during times of recession / economic challenge, the pendulum swings the other way, as there is more of an emphasis on restricting various products / rules that contributed to the excess. As a result, the utopianism on both sides of the political / economic spectrum leads to various excesses.