Modern market

In the book The Great Transformation, published in the United States, based on evening lectures on economic history and international relations in small towns, he stated that the Nineteenth Century Society was economic in a different and different sense from the past because it was based on profit.

This society was formed in England after the industrial revolution in the first half of the 19th century, and fifty years later it reached North America. Subsequently, such alternatives formed a standard of living in all Western countries.

The fundamental feature of this revolution was the establishment of a market economy, the nature of which can be fully understood only because of the influence of machines in combination with factory enterprises in a commercial society. Such a transformation implied a change in the motivation of people’s actions: profit replaced the motivation for existence. Transactions acquired a monetary nature, which required the introduction of a medium of exchange in each articulation of industrial life. All income is being received from the sale of something.

A market system denotes an institutional model, a market standard that works without any outside interference. Prices arising from transactions, not preceding them, have the freedom of self-regulation, not of a social, cultural or political, but of an economic nature. This system, capable of organizing the entire economic life without outside help, is called self-regulatory. Hence the opinion that a liberal society embraces not only a market economy, but also a market society in which society is embedded in a market economy, and not vice versa.

Put goods in requisition. Polanyi did not deny the existence of markets before the advent of 19th-century society, but such markets played only a secondary role in economic life. Therefore, such economies were not controlled by the market. Only in the sixteenth century did markets become more numerous and important, but they still did not control society, since they were not autonomous, but accessories of an institutional structure controlled and regulated by social power.

Thus, everything that is produced by industry is presented as something produced for sale, taking into account the supply and demand mechanism, with price mediation. In practice, this means that there must be a market for all elements of industry that form interconnected markets, organized by a supply and demand mechanism that makes up the Great Market.

Labor, land and money, the most important elements of industry, must also be organized into markets and form an absolutely vital part of the economic system. However, labor, land and money are clearly not commodities. The assumption that everything that is bought and sold should be made for sale is categorically unrealistic for them. In other words, according to the empirical definition of a product, they are not goods. 

The description of labor, land and money as a commodity is completely fictitious. Thus, a market society is based on a cultural organization based on certain fabrications. However, it is with the help of this fiction that real markets for labor, land and money are organized.

These elements are actually bought and sold on the market, and any measures or policies that may impede the formation of such markets threaten the self-regulation of the system. Thus, commodity fiction offers a vital organizational principle in relation to society as a whole, affecting almost all of its institutions in a variety of ways. 

The extreme artificiality of a market economy is rooted in the fact that the production process itself is understood here in the form of buying and selling. Therefore, the fundamental thesis of the Great Transformation is that fictions act as creative representations of the world.

Showing vibrations of the social imaginary and institutions structured according to the principle of embedding in an undeveloped economy is also an object of the Great Transformation, true socio-economic genetics, which clarifies the constitution of a large market and interprets the first collapse of a market society. 

Polanyi also argues that traditional societies and great archaic empires resolutely resisted everything that was moving towards economic and market autonomy, and that the symmetrical appearance of a self-regulating market in the modern West is not a spontaneous result of natural evolution, but the result of ideological fiction and a state project.