In 1944 economy historian Karl Polanyi published his book “Great Transformation” dealing with the social, political and economical changes that led to the increasing development of a market economy in England and Polanyi’s analysis concerning market liberation.
In a journey through time, starting from the early 16th century on, Polanyi portraits the immediate circumstances that produced World War One, the great depression and the rise of fascism and other historical turning points.
Based on these “Grand Transformations” he deduces his personal conclusions . He enfolds the development of the theory of market liberalism and also the forces that hindered the spreading and advance of this liberation process and free markets in the intended way.
For Polanyi the real market liberation through in self-regulating is a never existent utopia.
Polanyi reverses the thesis that both, national societies and the global economy should be organized through self-regulating markets by stating the exact opposite:
To him the idea that the economy is autonomous, self-regulating and free is wrong. Instead he talks about a so called embeddedness: an economy that is subordinated to politics religion and social relations.
This embeddedness describes the link between the alternating connecting between the development of the modern state and the development of modern market economies. To Polanyi disembedding changes and liberalizations also meant the destruction of the basic social order.
The initial point of these Great Transformations Polanyi fixes in the year 1834, when the British government disposed the Speenhamland laws and hitherto support for poor parts of the society broke down. The collapse of Speenhamland lead to a radical turning away of the structural poverty prevention. Jobs and work were freely dealable on the markets and enabled a quest for the individual benefit and advantage. This quest as the so called homo oeconomicus stayed a utopian fiction and lead to new depending factors.
The alternating links between society and economy in this concrete example where broken. The embedded forces of economy where pressuring on the social situation. A true freedom in economy and the markets stayed a fiction and utopia.
In dealing with different commodities, real and fictious, the value of freedom on and in the markets and the worth of employment it is important to reflect the value of the person itself.
In a market, that is supposed to be free, only depending on the adjustments of supply and demand, the value of a human being is the weak and inflationary factor of this development.
In Germany there is still no agreement about the general minimum wage, that is demanded from many side for years now. Amongst the European countries. Germany, Italy, Sweden and Denmark were at least able to ratify collective bargainings. These collective bargaining’s set, instead of a general minimum wage, standards for minimum wages limited to different job sectors. These negotiations and regulated job conditions ensure a certain standard in a free and independent market. Though this reverse disembedding new standards ensure a certain value.
What is a freedom worth that is either utopian or worthless in terms of value?