Murray N. Rothbard vs. the Philosophers - Ludwig von Mises Institute
Murray N. Rothbard vs. the Philosophers - Ludwig von Mises Institute
Murray N. Rothbard vs. the Philosophers - Ludwig von Mises Institute
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REVIEWS AND COMMENTS BY MURRAY N. ROTHBARD 121<br />
10.<br />
ON POLANYI’S THE GREAT TRANSFORMATION<br />
June, 1961<br />
To: Robby<br />
William Volker Fund<br />
Karl Polanyi’s The Great Transformation is a farrago of<br />
confusions, absurdities, fallacies, and distorted attacks on<br />
<strong>the</strong> free market. 72 The temptation is to engage in almost a<br />
line-by-line critique. I will abjure this to first set out some of<br />
<strong>the</strong> basic philosophic and economic flaws, before going into<br />
some of <strong>the</strong> detailed criticisms.<br />
One basic philosophic flaw in Polanyi is a common defect<br />
of modern intellectuals—a defect that has been rampant<br />
since Rousseau and <strong>the</strong> Romantic Movement: worship of <strong>the</strong><br />
primitive. At one point (in dealing with <strong>the</strong> Kaffirs 73 ),<br />
Polanyi actually uses <strong>the</strong> maudlin phrase “noble savage,” but<br />
72Karl Polanyi, The Great Transformation (New York: Holt,<br />
Rinehart and Winston, 1944). Polanyi’s great transformation was<br />
<strong>the</strong> degeneration into authoritarianism of <strong>the</strong> liberal institutions in<br />
<strong>the</strong> 1920s and ‘30s. He denied <strong>the</strong> liberal axiom according to which<br />
a market society was a natural historical outcome; he <strong>the</strong>refore tried<br />
to demonstrate <strong>the</strong> artificiality and <strong>the</strong> pathological nature of <strong>the</strong> liberal<br />
market, which could only end in a violent crisis. The processes<br />
leading to fascism refuted <strong>the</strong> economic <strong>the</strong>ory of a market able to<br />
regulate itself, which, for Polanyi, was only a utopia. As a result,<br />
Polanyi criticized <strong>the</strong> classical economical school and <strong>the</strong> free market.<br />
In Polanyi’s opinion, <strong>the</strong> free market could only produce a dangerous<br />
individualism and social disaggregation. Therefore “society,”<br />
in order to defend itself, had to regulate <strong>the</strong> market by introducing<br />
control and redistributive mechanisms. Fascism and Communism<br />
were <strong>the</strong> historical proof of <strong>the</strong> impossibility of <strong>the</strong> self-regulating<br />
market.<br />
73A South African tribe.