Scholars commonly explicate the work of significant thinkers by one of two methods: the first is to deploy close textual analysis to pin down what they actually said and meant; the second is to interpret texts as living documents relevant to issues of current concern. This book falls in the second class. The authors argue that Polanyi developed the concept of “socially embedded” or “socially constructed” market economy as a critique of the libertarian claim that markets are naturally self-regulating entities best left to do their work unimpeded by government intervention. They term this view “market fundamentalism”; Polanyi called it utopianism. This theme is developed through a brief sketch of Polanyi's life in Vienna as a politically engaged financial journalist and subsequently in England and America as an uncredentialled academic refugee, and by analyses of historical arguments developed in his one major work The Great Transformation. The final chapters consider these ideas in light of the pronounced turn toward market-based solutions to social problems in the United States and the economic crisis following the crash of 2008.

Polanyi's vision of the logic of economic organization rested on the belief that attempts to remove politics from markets to muzzle the power of “special interests” betray an unrealistic and ultimately self-defeating understanding of how economies actually work; that to conceive the market as an autonomous social mechanism demanding only the state's protection of the sanctity of contract and the freedom of individuals to enter and exit occupations ignores the customs, values, and law that define the legitimacy of particular kinds of contract at each point in time that reflect “special interests.” It is in this sense that markets are “socially constructed.” An eclectic thinker, he drew on wide (although at times uncritical) reading of an historical and ethnographical literature that informed the worldview of non-Marxist intellectuals in the early twentieth century. This is not the place to rehearse that literature, but it is clear that he derived the concept of “social embeddedness” from Durkheim's holistic account of social organization, according to which that the stability and persistence of societies results from interaction of many distinct elements, of which self-interested market exchange is but one. In particular, the structure of society is not logically derived from principles of scarcity and individual self-interest. Polanyi thus opposed both the neoliberal Austrian economists, whose work would have been familiar to him as a financial journalist in Vienna in the 1920s and early 1930s, but also Marx. The problem is that the argument is too easy. Yes, economies reflect social convention; yes, the real world seems to have become more like the construct invented by neoclassical economists (or more ominously, by Marx); yes, a world privileging private wealth-seeking above all other goals is psychologically and socially barren. Who disputes these claims, which have been the sum and substance of middle-brow criticism of modern culture since the mid-nineteenth century? Does putting labels like “embedded” or “socially constructed” on such notions help us understand them more clearly? Polanyi was a master label-maker. Is there anything beyond the label?

The authors claim there is. Polanyi's fundamental critique of what he called the “economistic fallacy” is that it rests on the ontological premise that only theory is truly real, and that what we observe are superficial manifestations of a logical reality divorced from time and space. In this respect, his critique echoed analogous objections to related claims by the Vienna Circle to have constructed a propositional language purged of “meaningless” statements induced by the multiple meanings of actual words used in ordinary language. Polanyi lacked the training (not to mention the leisure and inclination) to develop definitions of “social embeddedness” that could have situated his ideas in the mainstream of contemporary philosophical thought, and drew instead on examples from English history to argue that the “market” was as much (if not more) a product of attempts to put a particular ideological view into practice, and that the policies did not reflect a dispassionate consideration of facts on the ground, but imposed a theoretical vision as to what those facts “really were.” He thus stressed the importance of ideas and ideology in establishing the framework of market activity, or as Keynes put it, that the power of vested interests is greatly exaggerated compared with the gradual encroachment of ideas. He did not propose an institutional solution to the problem of securing a viable social and economic state, but supposed that the only viable way was to muddle on in the knowledge other things besides the optimization of market value matter and that no institutional solution to the problem of accommodating market and non-market elements in society can be permanent. Like Wittgenstein, he offered a critique of modernist oversimplification. The authors of this work have with some success recovered a small part of it.