Polanyi, Karl (1886–1964)

Karl Polanyi was born in Vienna and raised in Budapest. He founded the radical Club Galilei while at the University of Budapest, and actively engaged other leftist thinkers, such as Georg Lukács (1885–1971) and Karl Mannheim (1893–1947). He earned his PhD in philosophy in 1908 and earned a degree in law in 1912. He cofounded the Hungarian Radical Party. Polanyi worked in Vienna as a journalist writing economic and political commentary during the period leading up to the Great Depression and the rise of fascism. With Hitler's ascent to power in 1933, Polanyi left for England and worked as a lecturer for the Universities of Oxford and London. He taught as an adjunct professor at Columbia University in New York from 1947 to 1953. The Great Transformation (1944) received immediate acclaim, and remains influential because of its powerful critique of market liberalism (the belief that self-regulating markets can and should organize national societies and the global economy). He challenged the arguments of Ludwig von Mises (1881–1973) and Friedrich von Hayek (1899–1992), whose work, associated with the Austrian School of Economics, restored the intellectual legitimacy of market liberalism in the United States and United Kingdom after World War II.

Polanyi wrote that the entire tradition of modern economic thought rested on a faulty concept of the economy as an interlocking system of markets that automatically adjusts supply and demand through the price mechanism. He asserted that this concept sharply differs from the reality of human societies, and argued that the human economy has always been and remains embedded in society and subordinated to politics, law, morality, and social relations. According to Polanyi, the classical economists' goal of a disembedded, fully self-regulating market economy was a utopian project that could not exist for any length of time without physically destroying humans and transforming their surroundings into a wilderness.

Polanyi's work contributes to contemporary debates on globalization because he presents a direct challenge to the neoliberal market ideology that a fully selfregulating market free of government interference will make everyone better off. By emphasizing the centrality of the laws and rules that govern the global economy, Polanyi provided an alternative to the dominant law and economics school, one that holds that free markets create the most efficient distribution of property. Polanyi's work provides a model for legal scholars who wish to show that economics, law, and the rules of global governance cannot exist in a vacuum and that they must remain embedded in a complex structure of social relations.