The book has influenced scholars such as Marshall Sahlins, Immanuel Wallerstein, James C. Scott, E.P. Thompson, and Douglass North.[16] John Ruggie, who called the Great Transformation a "magisterial work", was influenced by the work in coining the term Embedded liberalism for the Bretton Woods system of the post-World War II period.[17]
The sociologists Fred L. Block and Margaret Somers argue that Polanyi's analysis could help explain why the resurgence of free market ideas has resulted in "such manifest failures as persistent unemployment, widening inequality, and the severe financial crises that have stressed Western economies over the past forty years." They suggest that "the ideology that free markets can replace government is just as utopian and dangerous" as the idea that Communism will result in the withering away of the state.[18]
In Toward an Anthropological Theory of Value: The False Coin of Our Own Dreams, anthropologist David Graeber offers compliments to Polanyi's text and theories. Graeber attacks formalists and substantivists alike: "those who start by looking at society as a whole are left, like the Substantivists, trying to explain how people are motivated to reproduce society; those who start by looking at individual desires, like the formalists, unable to explain why people chose to maximize some things and not others (or otherwise to account for questions of meaning)."[19] While appreciative of Polanyi's attack on formalism, Graeber attempts to move beyond ethnography and towards understanding how individuals find meaning in their actions, synthesizing insights of Marcel Mauss, Karl Marx, and others.
In parallel with Polanyi's account of markets being made internal to society as a result of state intervention, Graeber argues the transition to credit-based markets from societies with separated "spheres of exchange" in gift giving was likely the accidental byproduct of state or temple bureaucracy (temple in the case of Sumer).[20]: 39–40 Graeber also notes that the criminalization of debt supplemented the enclosure movements in the destruction of English communities, since credit between community members had originally reinforced communal ties prior to state intervention:
The criminalization of debt, then, was the criminalization of the very basis of human society. It cannot be overemphasized that in a small community, everyone normally was both lender and borrower. One can only imagine the tensions and temptations that must have existed in a community—and communities, much though they are based on love, in fact, because they are based on love, will always also be full of hatred, rivalry and passion—when it became clear that with sufficiently clever scheming, manipulation, and perhaps a bit of strategic bribery, they could arrange to have almost anyone they hated imprisoned or even hanged.
— David Graeber, Debt: The First 5000 Years[20]: 334
Economist Joseph Stiglitz favors Polanyi's account of market liberalization, arguing that the failures of "Shock Therapy" in Russia and the failures of IMF reform packages echo Polanyi's arguments. Stiglitz also summarizes the difficulties of "market liberalization" in that it requires unrealistic "flexibility" amongst the poor.[21]
Charles Kindleberger praised the book, saying it "is a useful corrective to the economic interpretation of the world, and should be read more and more by economists, particularly those of the Chicago school." He did however argue that everything in the book should not be taken as accurate.[22]
Polanyi's argument is often cited as the "Polanyian moment", "Polanyi Moment" or "Polanyi's moment", which indicates the time when social protectionism starts to surpass marketization and thus reversing the direction of the double movement. This term has been used to describe the situation after the Great Recession in 2008[23] the COVID-19 pandemic.[24] Gemici compared the Polanyi Moment to the Minsky moment, the moment of a sudden collapse in the market.[25]
Criticism
Rutger Bregman, writing for Jacobin, criticized Polanyi's account of the Speenhamland system as reliant on several myths (increased poverty, increased population growth and increased unrest, as well as "'the pauperization of the masses,' who 'almost lost their human shape';" "basic income did not introduce a floor, he contended, but a ceiling") and the flawed Royal Commission into the Operation of the Poor Laws 1832.[26]
Both Bregman and Corey Robin credited Polanyi's view with Richard Nixon moving away from a proposed basic income system because Polanyi was heavily quoted in a report by Nixon's aide, Martin Anderson, then ultimately providing arguments for various reductions in the welfare state introduced by Ronald Reagan, Bill Clinton and George W. Bush.[26][27]
Economic historians (e.g. Douglass North) have criticized Polanyi's account of the origins of capitalism.[28] Polanyi's account of reciprocity and redistributive systems is inherently changeless and thus cannot explain the emergence of the more specific form of modern capitalism in the 19th century.[29]
Deirdre McCloskey has criticized several aspects of the Great Transformation. She notes that Polanyi's account of "pre-market" societies are inconsistent with anthropological evidence which suggests these societies were not as equitable, socially stable, and successful as Polanyi makes them appear to be. McCloskey notes that market-based societies are not a nascent invention, as Polanyi claims, but that they extend further back in time. She also criticizes Polanyi's conceptualization of self-regulating markets whereby any and all government intervention in the markets means the markets are no longer markets.[16]
The Great Transformation has been criticized for underplaying power and class relations in its analysis.[30][31] Polanyi argued, "class interests offer only a limited explanation of long-run movements in society."[32] He argued that while humans are "naturally conditioned by economic factors", human motives are only rarely determined by "material want-satisfaction"; rather, human motives were more social (e.g. desire for security and status) than material.[32]
