Dynamics of conflict and system change: the great transformation revisited

Karl Polanyi’s analysis in The Great Transformation has played a prominent role in shaping our understanding of the nature and outcome of both globalization and the movements that have emerged to resist it. However, this article argues that Polanyi’s account of the rise and demise of Europe’s 19th-century market system is, in important respects, incomplete and misleading. Its central concern is Polanyi’s neglect of class structures and processes and how this leads him to mischaracterize both the international and domestic institutions of Europe’s 19th-century market system, and the central dynamic driving its development and ultimate collapse. The article critically reviews key features of Polanyi’s analysis. Based on this review, it then presents a re-reading of the history of Europe’s unregulated market system. Finally, it considers the implications of this alternative account for how we view the context and conditions for globalization and the ways it can best be resisted or shaped in less destructive ways.