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About Polanyi's Great Transformation 
 
Is there agreement that (a) markets of some sort go back at least to  
the earliest written documents, and almost certainly much further and  
(b) there has never been a system in which unregulated, perfectly  
competitive, markets accounted for all economic activities? If so, we  
have to be talking about what forces predominated in which societies at  
which dates. It is not at all clear that this is a matter of fact. It  
is a question about what sort of analysis we find most illuminating.  
That may depend on the question we are asking. Does it really make any  
sense to characterize all societies as either on side or the other of a  
simple dividing line - market or embedded? 
 
That said, can I bring a bit of the history of economic ideas into the  
discussion (on the HES list!)? Hume and Smith would have agreed with  
Polanyi, to a degree. They had a story in which increasing market  
penetration and increasing availability of attractive things to buy  
transformed incentives, led farmers and landlords to improve methods of  
production in order to buy the luxuries which were becoming available,  
and eventually brought down feudalism. They thought this process had  
been essentially completed in Britain well before their own time. (They  
also thought, if I understand them, that ancient Greece and Rome had  
been previous examples of developed commercial societies, but that is  
another story.) 
 
Following Hume and Smith, I suggest that dark age Europe really was  
relatively little affected by markets, but that by the later middle  
ages (or earlier), customary rules and procedures, and production for  
subsistence, were already being undermined by the market. The market  
may not have dominated before (say) the sixteenth or seventeenth  
century, but it was the main dynamic force. In terms of understanding,  
a static view of the medieval economy would focus on custom, etc., but  
a dynamic view would focus on the expanding market sector. I do  
disagree with the idea that the market was consciously constructed  
and imposed (unless that is meant to mean the-market-as-a-concept). The  
market was consciously opposed and obstructed by feudal institutions  
but (fortunately) they lost. See Hume on how commercial society fosters  
science, arts, individual freedom, relative equality and the like, as  
compared to feudalism. 
 
References: 
Hume, Essays and History of England 
Smith, Wealth of Nations, book III, especially III.iv.4 
A. Brewer, An eighteenth century view of economic development: Hume and  
Steuart, European Journal of HET, 1997, 1-22. 
 
 
Tony Brewer ([log in to unmask]) 
University of Bristol, Department of Economics 
 
 
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