Self-regulating markets and fictitious commodities
Polanyi (1944) argued that markets were historically embedded in social relations, but that in the nineteenth century, centered on Britain, a self-regulating market system emerged in which markets dominated society. Labor, land and money, he noted, are 'fictitious commodities' not produced for sale, and subjecting them to market forces threatens human lives, nature and economic order. Krippner (2001) examined how the concept of embeddedness has been used in economic sociology.
Social self-protection
For Polanyi, as marketization advances, movements of social self-protection, such as unions, factory acts, social insurance, tariffs and central banking, arise spontaneously among diverse groups. The tension between the two movements, he argued, led to the collapse of the gold standard and the rise of fascism. Ruggie (1982) extended the insight to international political economy, describing the postwar order as embedded liberalism combining domestic social protection with international free trade.
Contemporary readings and debates
Block and Somers (2014) analyzed the revival of market fundamentalism since the 1980s through Polanyi's lens, and many scholars read the backlash against globalization and populism as a new double movement. Burawoy (2003) combined Polanyi with Gramsci to stress civil society. Critics note that protective countermovements are not necessarily progressive and can take exclusionary nationalist forms, and that the double movement is sometimes used too readily as an automatic balancing mechanism. It also appears frequently in welfare state debates alongside varieties of capitalism and power resources theory.
FAQ
- What is the double movement in simple terms?
- When the push to leave everything to markets grows strong, society responds by building protections such as labor rights and welfare to limit the damage.
- What are fictitious commodities?
- Things like labor, land and money that are not produced for sale but are traded as commodities; Polanyi argued society collapses if they are left entirely to markets.
Sources reviewed: 2026-10-26
References
- Polanyi, K. (1944). The great transformation: The political and economic origins of our time. Farrar & Rinehart. The founding work.
- Block, F. (2003). Karl Polanyi and the writing of The Great Transformation. Theory and Society, 32(3), 275–306. How the book was written.
- Block, F., & Somers, M. R. (2014). The power of market fundamentalism: Karl Polanyi's critique. Harvard University Press. Polanyi's critique today.
- Ruggie, J. G. (1982). International regimes, transactions, and change: Embedded liberalism in the postwar economic order. International Organization, 36(2), 379–415. Embedded liberalism.
- Krippner, G. R. (2001). The elusive market: Embeddedness and the paradigm of economic sociology. Theory and Society, 30(6), 775–810. Embeddedness reconsidered.
- Burawoy, M. (2003). For a sociological Marxism: The complementary convergence of Antonio Gramsci and Karl Polanyi. Politics & Society, 31(2), 193–261. Polanyi meets Gramsci.
- Dale, G. (2010). Karl Polanyi: The limits of the market. Polity Press. An introduction to Polanyi.