his is a much-praised critique of capitalism in historical perspective. While the ideas can be extremely interesting, it is very difficult to follow and requires great effort. Nonetheless, I think that most of the arguments are sound, even though the predictions at the end of the book - of the imminent demise of market capitalism - proved premature.
The book has four basic ideas. First, capitalism - based on free markets in land, labor, and money for individuals seeking personal profit - does not reflect "human nature" but in fact goes against it in historical terms. I.e. human communities traditionally had a more communal survival strategy, sharing resources when the need arose in exchange for the right to claim reciprocal benefits for themselves when circumstances change. It was the basis of society.
Second, free-market capitalism is a utopian, quasi-religious construct that paradoxically required extensive government support to impose on a largely unwilling society. In the process, it destroys traditional society and all its built-in safety mechanisms and rights. Indeed, Polanyi argues, free-market capitalism is contrary to democratic political systems.
Third, except for brief periods, it doesn't work. Not only does it impose intolerable burdens on the under-privileged, but governments regularly must intervene to remedy these deficiencies on both an individual level and during regular systemic breakdowns. This flatly contradicts the claims that government can only mess things up.
Fourth, the breakdown of the market in the 1920s led directly to fascism, which (like communism) was designed as a nationalist alternative to capitalism. Rather than a self-correcting system that automatically leads to optimal outcomes, it leads to mass unemployment, disenfranchisement and any number of social maladies that are impossible to measure in any social scientific sense.
Where the book gets difficult is in the many historical proofs that Polanyi presents to prove his points. The principal proof is that the gold standard wreaked havoc on the economies that adopted it, forcing brutal internal adjustments that were destructive and ultimately self-defeating. The argument gets so technical and is expressed with such convoluted style and organization that it is an awful, often dull struggle to read. Government, he concludes, was key to creating and constructing the market mechanism as it exists, which implies that it can be done in a very different way from what we have.
In spite of my criticisms, I am glad I read this book and recommend it. Polanyi makes a cogent argument that capitalism is bound to eventually fail and highlights how ridiculously fanciful many of the claims by classical ecnomists (and now by neo-liberals) are. While the book has clearly aged, it deserves its status as a classic.