The Great Transformation
In Karl Polanyi’s landmark work *The Great Transformation*, we explore the rise and catastrophic collapse of 19th-century Western civilization, anchored by four interconnected institutions: the balance-of-power system, international gold standard, self-regulating market, and liberal state. At the core of this structure was the gold standard, whose collapse triggered the chaos of the early 20th century. Polanyi dismantles the myth of the self-regulating market: treating labor, land, and money as "fictitious commodities"—not produced for sale—destroys human community bonds and natural ecosystems. As markets expanded unchecked, societies launched self-protective measures, from labor laws to tariffs, which undermined market autonomy, sparking a fatal conflict that shattered the 19th-century order. Polanyi traces how post-WWI attempts to revive the gold standard failed, giving rise to fascism and socialism as desperate responses to market failure. Blending history, sociology, and economics, this book challenges us to rethink the relationship between markets and human needs, offering urgent lessons for today’s global economy.
