Law, Fugitive Capital and Karl Polanyi's The Great Transformation

• Author: Walter J. Kendall lll
• Position: The John Marshall Law School
• Pages: 847-865

e Indonesian Journal of International & Comparative Law

ISSN: 2338-7602; E-ISSN: 2338-770X

http://www.ijil.org

© 2015 e Institute for Migrant Rights Press

847

Law, Fugitive Capital and

Karl Polanyi’s The Great

Transformation

Walter J. KenDall iii

e John Marshall Law School

Email: 7kendall@jmls.edu

e basic ideas of Karl Polanyi, a sometimes forgotten thinker, are that the

autonomous, self-regulating market is neither natural nor central to society.

Rather that social, political, and cultural institutions shape, and should

shape, how the economy works. e market is seen as a means to the Good;

not as an end in itself. Rather than Adam Smith’s truck, barter, and exchange,

Polanyi sees as the ordering principles of society reciprocity, redistribution,

and householding.

is essay is themed around Law as both a central cause and consequence

of society; of its political, economic and cultural practices and values. It

presents an understanding of the link between law and law reform, and

Polanyi’s concepts of embeddedness and double-movement. Law is a moral

idea reecting the ideals of its society, and an instrument of order, a social

glue. It is embedded in the economy and embeds the economy in society at

the same time.

Keywords: Law and Economics, Legal Philosophy, Liberalism, Law and Society,

Legal Reform.

The Indonesian Journal of International & Comparative Law Volume II Issue 4 (2015) at 847-65

walter j. Kendall iii

848

I. INTRODUCTION

is essay is themed around the law as a central cause and consequence of

society in Polanyi’s e Great Transformation: e Political and Economic

Origins of Our Time.1 e November 2013 issue of e Atlantic points out

that Pope Francis’ thinking about social inequality and the limits of the

unregulated markets is indebted to Karl Polanyi, not to the other more

famous Karl.2 e basic ideas of Polanyi, a sometimes forgotten think-

er, are that an autonomous, self-regulating market is neither natural nor

central to society; that social, political, and cultural institutions shape,

and should shape, how the economy works; and that such markets have

historically been the means used by peoples to serve their individual and

societal needs. Polanyi specically rejects Adam Smith’s “barter, truck,

and exchange” as natural, arguing that while essential they were socially

marginal. Rather he sees the ordering behavioral principles of society was

reciprocity, redistribution, and householding.3

Polanyi was born in Vienna in 1886. He received a Doctor of Laws

degree and became a member of the Vienna bar in 1912. In the 20s and

early 30s he was an activist socialist thinker who debated with the leaders

of what has become known as Austrian economics, Ludwig von Mises

and Friedrich Hayek. Polanyi left Austria-Hungary for England in 1933.

While there he taught in the Workers Education Association programs

and edited Christianity and Social Revolution. In the 40s and early 50s he

taught at Bennington College in Vermont and at Columbia University in

New York. He retired in 1953 and moved to Canada to join his wife of

40-plus years who had been denied entry to the United States because of

her leftist political activities in Austria-Hungary. In his retirement Polanyi

wrote extensively on anthropology and economics. He and his wife co-

edited e Plough and the Pen: Writings from Hungary following the 1956

1. karl polanyi, the great tranSForMation: the political anD econoMic originS

oF our tiMe (2001).

2. the atlantic (Nov. 26, 2013).

3. polanyi, supra note 1, at 45, 49, 55. Also id. at 276-80. See generally eDwarD o.

wilSon, the Social conQueSt oF earth (2012) wherein he presents a biological

argument that “our species is not “homo oeconomicus . . . it emerges, as something

more complicated and interesting. We are homo sapiens . . .” Id. at 251.