Karl Polanyi: An Intellectual Biography 0231176082, 9780231176088

Karl Polanyi (1886-1964), a Hungarian-born thinker, is renowned for his seminal text, "The Great Transformation,&qu

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Karl Polanyi: An Intellectual Biography
 0231176082, 9780231176088

Table of contents :
Table of Contents
1. In the East-West Salon
2. Bearing the Cross of War
3. Triumph and Tragedy of Red Vienna
4. Challenges and Responses
5. The Cataclysm and Its Origins
6. “Injustices and Inhumanities”
7. The Precariousness of Existence
Epilogue: A Lost World of Socialism

Citation preview

Karl Polanyi




Columbia University Press Publishers Since 1893 New YorkChichester, West Sussex cup.columbia .edu Copyright © 2016 Columbia University Press All rights reserved Library of Congress Cataloging-in-Publication Data Dale, Gareth, author. Karl Polanyi : a life on the left / Gareth Dale. pagescm Includes bibliographical references and index. ISBN 978-0-231-17608-8 (cloth : alk. paper)— ISBN 978-0-231-54148-0 (electronic) 1. Polanyi, Karl, 1886–1964.2. Economists—Hungary— Biography.3. Economics—History.I. Title. HB102.P64D3482016 330.15’42092—dc23  [B]2015029465

Columbia University Press books are printed on permanent and durable acid-free paper. This book is printed on paper with recycled content. Printed in the United States of America c 10 9 8 7 6 5 4 3 2 1 Cover illustration: Tim Bower Cover design: Jordan Wannemacher References to websites (URLs) were accurate at the time of writing. Neither the author nor Columbia University Press is responsible for URLs that may have expired or changed since the manuscript was prepared.


Acknowledgmentsvii INTRODUCTION1

one IN T H E E AS T- W E S T S AL ON1 1 two BEARIN G T H E C RO S S O F WA R 4 1 three T RIU M P H AN D T RAGEDY O F R E D V I E NNA 7 3 four C H A L L E N G E S A N D R E S P O N S E S 1 1 3 five THE CATACLYSM AND ITS ORIGINS157 six “INJ US T IC E S AN D IN H UMANI T I E S ” 1 9 9 seven T H E P RECARIO US N E S S O F EX I S T E NC E 23 9 epilogue A LOST WORLD OF S OCIALISM281 Notes289 Index371



n researching the life and work of Karl Polanyi I have benefited from the goodwill of many people, notably members of Polanyi’s family, his friends, and former students. To Kari Polanyi-Levitt in

par ticu lar, I express my gratitude for her willingness to sit through interview after interview, in Montreal (five times in 2006 and 2008) and by telephone (on seven occasions in 2007–2009), with innumerable e-mail and telephone follow-ups (2006–2015). Other interviewees who kindly agreed to answer questions include Don Grant (in London, May  15, 2009, with additional material provided in 2013 and  2015), Immanuel Wallerstein (at the appropriately named East-West Hotel in Moscow, September 12, 2009), Istvan Meszaros (in London, December 12, 2010), Abe Rotstein (by telephone, May 16, 2009), Robert Halasz (by e-mail, September  28, 2011), Jean Richards (by telephone, August 17, 2011), Mihály Simai (in Montreal, December  11, 2008), Gregory Baum (by telephone, January  11, 2009), and Anne Chapman (by telephone, July  19, 2009).  Anne was among the warmest and most charming people whose acquaintance I made while researching this book, and it was with sorrow that I learned of her passing in 2010. I was fortunate, in addition, to gain access to a number of archives that contain a wealth of unpublished texts—including memoirs,

correspondence, essay fragments, book notes, and eyewitness accounts, by Polanyi himself, by his wife Ilona Duczynska, and by his students, friends, and acquaintances. A substantial portion of sources consulted were originally in German and Hungarian. The large majority of translations from German sources, published and unpublished, are my own. Translations and summaries of Hungarian texts were almost all provided by Adam Fabry, with some by Kinga Sata. This was no easy task, given Polanyi’s scrawl. Even his medical doctor (of all people!) implored him to write more legibly, and I have abiding memories of poring


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over his correspondence, word by spidery word, alongside Adam and a magnifying glass.1 To him especially, and to Dr. Sata, I am boundlessly grateful, and likewise to the bodies that funded their labor: the Nuffield Foundation and the Amiel-Melburne Trust. Thanks are also due to my hosts in Montréal, Mathieu and Frédérique Denis, and to Brunel University’s Business School, its School of Social Sciences, and the Lippman-Miliband Trust, which funded my sojourns in Montréal in, respectively, 2006, 2008, and 2010. Research trips to Chicago, Budapest, and Vienna, as well as visits to Montréal and New York in 2014, fortuitously branched from other engagements that were funded by the British Academy, the University of Vienna, McGill University, Université de Montréal, and the “Tanácsköztársaság: Ninetieth Anniversary” conference in Budapest. In writing this book I have been assisted by numerous people. As a background influence, I thank my parents for having introduced me to several of the principal narratives and milieux explored in this book: Jews and communists of Mitteleuropa; and, in Britain, Quaker socialists and social democrats in their various stripes. More immediately, I am grateful to a series of friends and acquaintances who read draft chapters and excerpts. Through their comments and criticisms they have significantly improved its empirical accuracy and the coherence of its argument. My greatest debts are to Kari Polanyi-Levitt, Chris Hann, and John Hall, each of whom combed through the entire manuscript. I am grateful to Don Grant, Thomas Uebel, John O’Neill, and Sander Gilman, who commented on a chapter each, and to Ruth Danon, Dan Tompkins, Marty Moleski, Stephen White, Perry Anderson, Tibor Frank, Judit Szapor, and Matthew Grimley, who lent a hand on points of detail.

The archives I utilized were the Karl Polanyi Archive (Concordia University, Montréal); the Michael Polanyi Papers (Regenstein Library, University of Chicago); the Polanyi Family Papers (Országos Széchenyi Könyvtár, Budapest), the archive of the Society for the Protection of Science and Learning (Bodleian Library, Oxford University), and three sets of papers at the Butler Library of Columbia University: those pertaining to Karl Polanyi, Oscar Jaszi, and Robert Merton. In references, the archive’s name is abbreviated, with numbers denoting container and folder. For example, KPA-23–9 refers to folder 9 in container 23 at

tories for their assistance, in par ticular Ana Gomez at the Karl Polanyi Institute. The abundance of source materials has been a boon but the attempt to weave from it a faithful portrayal inevitably encounters problems of selection and of the fragmentary nature of evidence, the subjectivity of witnesses and of authorial interpretation, and the hazard that by tracing successive layers of the palimpsest, and by giving prominence to par ticu lar statements and phrases, one may accord them a permanence greater than their authors might have intended. Given the lively current interest in Polanyi’s life and work, we can be hopeful that any errors of reference will be rapidly brought to light and differences of interpretation will be debated. Finally, a note on orthography is required. Names of Hungarians who gained recognition in the Anglosphere appear in anglicized form. For all others, the Hungarian is used.


PFP, SPSL, KPP, OJP and RMP. I thank the archivists at all five reposi-

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the Karl Polanyi Archive. The other archives are abbreviated as MPP,

Karl Polanyi



uring the interwar period a quartet of Hungarian exiles, the brothers Karl and Michael Polanyi and their friends Georg Lukacs and Karl Mannheim, dedicated themselves to diagnos-

ing the economic, political, and spiritual crisis of the age. It was a task to which they appeared peculiarly well suited. They had spent their childhood and youth in Budapest, the capital city of the frailer half of the Austro-Hungarian Dual Monarchy, a short-lived and forgettable empire that had been created in submission to Prussia and was destroyed by the mutiny of its own armies. They had lived through a concatenation of historical upheavals and conflicts: the breakneck expansion of Hungarian capitalism and the still more rapid and continent-wide transition from a system of empires to one of nation-states, the First World War and the revolutions that brought it to an end, the rise of economic nationalism, of fascism and Stalinism, and finally the Great Depression. When their parents’ generation had come of age in the mid-nineteenth

century, imperial implosion and fascist persecution were nowhere on the horizon. For the liberal bourgeoisie the epoch was optimistic. Its flavor is captured in the character of Laszlo Hegedüs in The Happy Generation, a bildungsroman by Ferenc Körmendi. “This age,” Hegedüs exults, “will be a happy one because—because there is no reason to the

contrary. Oh this happy generation! Science is impelling civilisation to take great steps forward; human knowledge is extending and every day adds a new layer of bricks to the palace of human welfare and the peace of nations and souls.”1 This splendid construction process was speeding up, with Hungary enjoying an exceptional economic surge. Average annual growth in national income, 2  percent or thereabouts before Polanyi’s birth, accelerated to 7  percent during his childhood and touched 9  percent during his teenage years. The growth hub was Budapest. When its components, Buda, Pest, and Óbuda, were unified in 1873 the city’s population passed the 300,000 mark. By 1900 that figure had more


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than doubled, elevating it from obscurity to Eu rope’s sixth largest metropolis. Budapest was a city of contrasts. Without leaving his street, Karl could attend the theater or the opera, listen to students—including Bela Bartok—practising at the Academy of Music, or watch as the gleaming tracks of continental Europe’s first underground railway were lowered into place. On the horizon, smoke rose over the factories and slums of Kiszpest, and beyond lay the puszta. In theory serfdom had been abolished, but in practice labor relations on the landed estates had scarcely changed since feudal times, and in some parts, the diet was so poor that mens’ voices did not break until the age of twenty.2 This could seem a benighted wilderness against which Budapest stood out as a citadel of cosmopolitan civilization—or indeed, from an alternate vantage point, a world of honest face-to-face intimacy that put the metropolis to shame, with its venality and casino commerce. A few hours by road or rail in the other direction lay Vienna. The imperial capital was in the throes of cultural experimentation and was pulsing to market opportunities and a new individualism. It was here, and now, that methodological individualism was first introduced into economic theory and here, too, that the priest was being elbowed out by the therapist as the provider of meaningful narratives of life. In the Habsburg Empire’s high-contrast psychogeography, the great clash of visions that characterize societies undergoing the breakthrough and consolidation of capitalist society assumed a singular force. That conflict is traditionally represented as pitting Enlightenment liberalism against Romantic reaction. In one corner we find gesellschaft, an atom-

istic and universalistic outlook that reveres individualism, human rights, market freedoms, and cosmopolitanism; in the other, gemeinschaft, a conservative or communitarian vision of society constituted as an organic totality, with communal connectedness and cultural particularities exalted.3 The cohort of Budapest intellectuals to which Polanyi belonged, the so-called Great Generation (whose roster counted Lukacs, Mannheim, and the Polanyi siblings as well as Oscar Jaszi, Ervin Szabó, the art critics Arnold Hauser and Béla Balázs, the poet Endre Ady and composers Bartok and Zoltan Kodaly, the mathematician John von Neumann, and the physicists Leo Szilard and Edward Teller), was

innovative political and intellectual movements elsewhere in Europe. They were “more thoroughly disenchanted with the present and more passionately invested in the future” than their West European counterparts, in the judgement of Mary Gluck. As East Europeans they invariably found themselves “somewhat outside West Eu ropean developments,” and as Jews, many were excluded from “an inward-looking and increasingly anti-semitic national community.” Their inability “to find genuine roots in the stony soil of turn-of-the-century Hungary,” she suggests, encouraged a nostalgia for the possibility of the gemeinschaft that seemed perpetually to elude them.4 Although sometimes considered a thinker of gemeinschaft, Polanyi is better understood as a synthesizer, a freethinking humanist on a quest for community. As such, he was destined to tease out, and become entangled in, the contradictions between liberal and communitarian (and socialist) thought that formed (and form) the dominant creative tension within political philosophy—the seemingly contrary pulls of responsibility to individual and to community; the divergent demands of adherence to the doctrine of individual integrity and the duty of maintaining and developing community life. He prized the triumphant ascent of the selfreflexive actor equipped with an independent moral conscience, and he vehemently opposed any worldview that disavowed the responsibility of individuals for their collective future. A dignified and virtuous life, he maintained, must be founded on an acceptance of individual responsibility, or duty. (At the personal level, Polanyi was the soul of civic duty. He


aware of their country’s backwardness yet were closely attuned to

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stirred and troubled by this “Habsburg Dilemma.” They were painfully

insisted on “the responsibility of citizens to pay taxes” and “wouldn’t tolerate conversations where people discuss how to evade,”5 and he took as axiomatic that individual freedom remains a shrivelled shrub if it is not nourished by the citizens’ commitment to do their duty.) Equally, he supported the complementary precept that government has a moral duty to provide for the good life of the citizenry as a whole. Illustrative of this patterning of his thought are the political movements to which he subscribed. An early one was “liberal socialism.” Another was the anarchism with which he briefly fl irted—not a Stirneresque individualism but the Christian species, of which Leo Tolstoy was the figurehead.


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When he returned to the socialist tradition, it was to its “guild socialist” avatar, a movement that, while advocating an “old English individualism” and defending workers’ rights against the state,6 held that liberties and obligations should be framed principally in group terms, with the rights and duties of associations in civil society determined according to their function in society as a whole. Later he involved himself with Christian socialist groups, for whom an ethos of duty was common currency—whereby duty connoted above all ser vice to the community, as distinct from its more normal associations of obedience to existing institutions and social superordinates.7 A substantial segment of the Great Generation adhered to socialist currents of one stripe or other, and when divisions in that movement were severely aggravated during the decade of war and revolutions that commenced in 1914, they rallied to different flags. Polanyi fought in the war, Lukacs did not. Following war’s end the two engaged in a public political duel: Polanyi issued an idealistic call for the construction of an ethical basis for social organ ization in an era that he diagnosed as suffering from acute spiritual crisis, while Lukacs advocated an actionoriented philosophy, Marxism, geared to the actuality of revolution in an age of social crisis. Their debates took place amidst the tumult of a revolutionary upheaval that lasted fully ten months but ended in defeat and White Terror, forcing many, including Polanyi and Lukacs, to flee the country. Their destination was Austria, while Michael Polanyi and Mannheim chose Germany. A decade or so later, with fascism on the march, all four found themselves in exile yet again: Lukacs in Moscow, the others in Britain. All

were engaged in a quest to find the meaning of the political convulsions that were wracking their lives, Europe, and the world, and all four, in different ways, focused their diagnosis on the fragmentation of society. For Lukacs, the problem centered on the social fractures engendered by capitalism, a society in which human activity is reduced to the egotistic responses to abstract forces of atomized individuals and in which, correspondingly, the reigning forms of consciousness prove incapable of comprehending the particularities of empirical existence as “aspects of a totality, i.e. as the aspects of a total social situation caught up in the process of historical change.”8 It was working people, in their dialectical

tality and an interest in breaking out of the iron cage of reification. For Mannheim, society had splintered into separate spheres—“homo economicus, homo religiosus and homo politicus”—under the impact of liberal modernity.9 The rise of liberal individualism and the market system had atomized society and subordinated social values systematically to the economic. For Michael Polanyi, the divide to be sutured was that between science on the one hand and ethics and religion on the other.10 He advanced a Burkean defense of liberal capitalism, one that appealed to the ineffability of tradition as contrasted with the hubristic, totalizing, and rationalist tenets of ideological thought.11 Liberal capitalism, in his conception, had proved itself to be a spontaneously evolving and reliably functioning social tradition, one that, suitably corrected by laws, regulations, and Keynesian intervention, provided a perfectly comfortable habitat in which modern human beings could thrive. This liberalism would not be of a utopian kind; the “innocent” liberal ideals that he and Karl had “breathed” in their childhood could not be recovered after the trauma of war, fascism, and the Depression.12 The task instead was to reconstitute liberalism on a robust basis, one that was capable of withstanding modern scepticism. Karl Polanyi, meanwhile, was sketching out a thesis that was to offer a counterblast to his younger brother’s. In his optic, the journey from gemeinschaft to gesellschaft had witnessed traditional socioeconomic practices recklessly cast asunder, as market capitalism “disembedded” economy from society. In this, it represented a violent and hazardous


who possessed both the capacity to comprehend the social process as to-

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existence as conscious political beings and objectified commodities,

rupture with all previous tradition. For him, the historical wound to be healed was the one that had been ripped open between economy and society, and only its closure would truly enable a flourishing both of individual responsibility and community. The institutionalization of the market system in Britain, he argued in The Great Transformation, had led to the corruption of liberalism’s ethic of individual responsibility by its economic commitments, and liberal political economy had sanctioned “a denial of responsibility on the part of the well-to-do for the conditions of their fellows” that served to demolish “the traditional unity of a Christian society.”13 In this, he was advancing an interpretation of the


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ethic of responsibility in diametrical counterpoint to that of right-wing liberalism, the defi ning document of which was the 1834 Poor Law Report, which held the poor to be responsible for their own predicament and not innocent victims of fate. This stricture, Polanyi contended, acted as the ethical accomplice of the material forces that had brought the labor market into existence, viz., the “fear of privation” that drives the worker to market.14 In his Great Transformation, Polanyi charted the phenomenology and economic history of market society. With regard to its phenomenology, he was guided by the Rousseauian question of how moral habits are shaped by social and political institutions.15 If human beings are institutionally treated as if they were one-dimensional, egotistical incentiveseekers motivated by cost-benefit calculus, one should not be surprised if that is what they become.16 As for its history, his emphasis was on the exceptionally sharp disjuncture between the embedded economies of the past and the disembedded market society of nineteenth-century Britain. This thesis, at first sight, appears to sit within a genre of historical sociology that seeks to explain the “Great Ditch” that separates premodern civilizations from modernity.17 But appearances deceive. Explanations of the ditch can be divided, broadly, into three currents. Some privilege the category of social relations of production and theorize the modern side of the ditch as capitalism. Others privilege exchange relations and the division of labor; their focus is on the gradual transition to commercial (or market) society. A third group privileges technological change, above all the Industrial Revolution that brought forth industrial society. In which of these groups does Polanyi’s Great Transformation

belong? Although exhibiting affi nities with the commercial and industrial paradigms, it cannot be assimilated to either. Its dichotomy is of embedded societies, in which markets are either marginal or enmeshed in social and religious institutions, and market society, characterized by a sharp demarcation between the market economy and other institutional spheres, in which economic relations are conducted contractually and a utilitarian and materialistic spirit reigns. Market society, in Polanyi’s assessment, is a transient liberal utopia, which, in the midtwentieth century, was experiencing its inevitable and terminal demise as the socioeconomic dislocations that it had bred spawned irreconcil-

society. Thus, if Polanyi’s theory includes a Great Ditch, it is not one that partitions pre-modern society from modernity but instead divides the liberal Euro-Amer ica of the nineteenth and early twentieth centuries from all other social formations, past, present, and future. But in the postwar period, Polanyi looked on, somewhat puzzled, as the great transformation stalled. A tendency toward state intervention in economies remained robust, as he had predicted, yet it was evolving in tandem with an equally sustained tendency toward the universalization of the commodity form, and this he had not foreseen. Gradually he came to reconstruct his theory along more mainstream Great Ditch lines, with the divide now determined by the Industrial Revolution such that all industrial economies, liberal market or étatiste alike, were subsumed under the master category of the Machine Age. This maze of ditches is indicative of a tension at the core of Polanyi’s social theory. It is one of the many unresolved contradictions in his work, one of the many moments when, in piecing together the jigsaw, some pieces do not seem to fit. Such puzzles and paradoxes provided the initial impetus for the writing of this biography, in part because to understand them requires a thinking through of Polanyi’s life and times, but also because it is the tensions and contradictions in his personal commitments and his oeuvre that give them their engagingly maverick character. Polanyi was, for example, in love with a Bolshevik while spurning Bolshevism; he was a social democrat who disdained the socialdemocratic orthodoxy, and a liberal who charged classical liberalism


tion” had commenced, one that was destined to re-embed economy in

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able contradictions. From out of the ensuing crisis a “great transforma-

with full responsibility for the collapse of its dreams. He was a humanist—in the sense that he held that anything that violates human dignity should be subjected to theoretical criticism and practical obstruction— and yet a steadfast defender of Stalin’s regime in Russia. In his correspondence he can appear moralistic, not to say straitlaced, yet he was an eager reader of Lady Chatterley’s Lover, and of his two most cherished Shakespeare poems, one was the uninhibitedly lustful Sonnet 129.18 He was a Christian who rarely if ever worshipped God, a modernist who immersed himself in study of the ancient world, and an ardent supporter of the peasant’s cause who lived almost exclusively in sprawling conurba-


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tions. It may be that biographical research, in its ability to juxtapose traits developed in different decades of the subject’s life, is prone to exaggerate contradictions such as these. Yet Polanyi cast his own personality in a not dissimilar light. One letter to Michael, for example, ruminates semi-apologetically on the contradictions of his character. His “passionate loyalties” tended to be “frustrated by an erratic lack of response” on his part, and the ratio between his “generosities and withdrawals” was too often out of kilter. He was overly “sensitive to superficial hurts” and unduly hard on himself, “helpless when led, overhelpful when leading,” “too selfless” and yet forgetful of others and of the need to express affection; and unable to say “thank you” for gifts that he was deeply grateful to have received. Add to this list “an almost complete incapacity to defend myself; an abhorrence of clarifications, and you have the impossible person that I am.”19 The protean and contradictory aspects of Polanyi’s political positions and personality make him an attractive biographical protagonist, requiring as they do a detective’s application and knack. But he is an appealing subject in other ways too. By all accounts he was a genial and engaging man. “Twinkling eyes” and “an aura of warmth, humanity and endless curiosity”20 are the words that came to the son of his friend Donald Grant, while the son of another friend, Robert Halasz, recalls him as “kindly, with a benevolent manner [and], in keeping with his vaguely Oriental appearance, Buddha-like.” In the words of his second cousin, he laughed “in a beautiful way,”21 while his friend Peter Drucker recalls him as “full of ideas, warm and generous, with a smile that could light up a winter’s night.”22 His intellect was sparkling, his writing style

engagingly sibylline, the questions he asked were fresh, and his answers original. The influences that irrigated his ideas spanned the millennia and ranged widely across the arts and sciences. His knowledge and talents ensured that he excelled in a series of occupations: political impresario, editor, journalist, teacher, and scholar. And if we pan out from his personality and talents to his family and friends, we uncover layer upon intriguing layer: a larger-than-life family, with a captivating and talented mother and passionate relationships among the siblings, an activist-intellectual wife, and a galaxy of friends, many of whom were seeking to study and to shape the extraordinary times through which

environment. It seeks to reconstruct his political and intellectual development, introducing the traditions that excited his interest, homing in on those elements in his thought that were to become stable and permanent, and opening out to what Stefan Collini calls “the context of refutation”—that is to say, the theories that provoked his critical engagement and the arguments that he sought to challenge.23 It studies the similarities between his thought and that of other original minds within and beyond his milieu, noting the way in which similar riddles and challenges evoked in different individuals the same, or kindred, theses and solutions. Following the contours of Polanyi’s life can reveal something broader, too, concerning the territories and times in which he lived. In Hungary he assumed command of a new, “radical bourgeois” party, took part in an epoch-defi ning war, and lived through a revolution. He arrived in Vienna just as it was embarking on its municipal-socialist odyssey, of which he became a wholehearted supporter, and it was here that his identification with reformist socialism became cemented. By this I refer to the international movement that sought to transform capitalism into a socialist society by means of parliament-led piecemeal alterations to existing institutions, a movement the rise and fall of which paralleled the course of Polanyi’s own life. He had come into the world in 1886, three years before the founding of the Second International, and he departed it in 1964, five years after the Bad Godesberg conference at which the German Social Democratic Party embraced a market economy


The focus of this biography is on the process of Polanyi’s intellectual formation, as he interacted with the changing social and geopolitical

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they were living.

with “as much competition as possible,”24 thereby signaling the beginning of the end of red flag-flying social democracy in Europe. As a reformist socialist who lived through the heyday of that movement, thinking through Polanyi’s life helps us think through the hopes and illusions of a world that today appears marginal, even lost. Throughout his life, Polanyi would reflect upon and note down his thoughts about the momentous events that he was either experiencing first hand or observing in ner vous detail: the triumphs and defeats of orga nized labor; the exile of Hungarian leftists and Jews in 1919, and the later exodus of Central Eu ropean intellectuals to Britain and the


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United States; the promise and frustrations of Soviet communism; the causes and consequences of the Great Depression; the Holocaust; the ascendancy of the United States to superpower status, which climaxed just as he reached its shores; the McCarthyite Red Scare; and Hungary’s failed revolution of 1956. “My life was a ‘world’ life,” he wrote near its end. 25 In some respects indeed it was. But from the vantage point of the present, it appears above all a twentieth-century life, one whose narrative dramatizes, parallels, intervenes in, and sometimes seems to encapsulate the events and processes, the soil and rubble, on which we stand today.




orn of liberal minded Jewish parents of the upper classes, I was brought up in an intense, if vague, religiosity.” So begins a short autobiographical digest that Karl Polanyi sent to a

Christian organ ization aiding refugees from fascism in the 1930s. “My mother was Russian, my father Hungarian, but of German culture and western education. I feel deeply indebted to his passionate idealism for the ethical impulse he tried to pass on to our lives. Until 1919, when I left Hungary for ever, I never thought of myself in any other way than as a Hungarian.”1 These lines are revealing. They beg questions too, which are explored in this chapter. It will look in turn at Polanyi’s family life, his parents’ social status and religion, the Jewish Question, and his relationships to religion and nation. Karl’s father, Mihály Pollacsek, came from a commercial and landowning family in the foothills of the Carpathians. 2 He lived for a time in Vienna, where three of his children, Adolf, Laura, and Karl, were born. A contractor and engineer, he bid for contracts “to build sections of railway, including tunnels” in Galicia and elsewhere in the AustroHungarian empire. 3 His fortune enabled him to keep an apartment in Vienna, even after he had moved his family, in the early 1890s, into a spacious apartment on Budapest’s Andrassy út. Still today the most

expensive residential street in the city, the Andrassy was a broad avenue modeled on Paris’s boulevards, with recherché arcades, cafés, and a department store. While its fi rst residents, in the previous decade, hailed predominantly from the artisanal middle classes, if with a substantial minority from the haute bourgeoisie and intelligentsia, by the 1890s its prestige had risen, and aristocrats and plutocrats were moving in.4 The Pollacseks’ immediate neighbors included a grosskapitalist, a doctor, a


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factory owner, and a retired captain of the Hussars.5 Other Andrassy residents included friends of the Pollacsek family, such as Georg Lukacs (father: banker) and Arthur Koestler (father: businessman).6 In a land of savage poverty the Polanyi children—Laura, Adolf, Karl, Sophie, and Michael—were raised in luxury, and it is safe to suppose that Karl’s lifelong dedication to the socialist cause was informed by an early awareness of iniquitous social division. In a country with a literacy rate of only 40–50  percent, they received the best education that money could buy, modeled on that of John Stuart Mill.7 They received private tuition until the age of eleven, with emphases on classics and world literature, as well as the acquisition of languages. Mihály, who utterly adored his son and was tremendously impressed by his emotional intelligence and academic prowess, described the elevenyear-old Karl as “unusually, indeed preternaturally gifted” and able to effortlessly “master the most difficult philosophical questions.”8 At eleven, Polanyi began to attend the Minta Gymnasium, thanks in part to a scholarship from the Jewish community.9 The Minta was one of the fi nest high schools in the city. Its alumni included the likes of Edward Teller, Nicholas Kaldor, and Thomas Szasz; its teaching staff included distinguished members of the intelligentsia, and it has been styled by a writer for the London Observer as a “nursery for the elite” comparable with such schools as Eton (for Conservative M.P.s) and Le Rosey (for ex-monarchs and socialites).10 It was, however, a democratic and forward-thinking institution. In its corridors, Theodore von Kármán recalls, “the teachers moved constantly among the pupils,” the two groups were permitted to talk outside class time and about nonschool matters, and its charter declared “for the first time in Hungary that a teacher might go so far as to shake hands with a pupil in the event of their meeting outside class.”11

Polanyi applied himself industriously to his academic tasks, in which he excelled, and there is some evidence that he performed well in physical exercise too. (In a letter to his mother he boasts that he won more “power points” than any of his classmates and complains of the muscle pains that resulted.12) He threw himself into a plethora of pursuits, including a Socialist Students group, as well as dancing, rowing, fencing, and chess (to which he grew so addicted that, later in life, he

he took up private tutoring to help out with the family budget—his teenage years were busy, and it was often past midnight before he retired to bed.14 When Mihály’s firm went under, the family was obliged to move house. They found a fourth-floor apartment in the nearby Ferenciek tere: less sumptuous, less spacious, and a step down from the top of the social pyramid, yet still a “fine address”—a plaza with more than its share of imposing buildings, including the Klotild Palaces and the library of the Royal Hungarian University.15 Five years later, in January 1905, Mihály drew his last breath. “My poor, poor children” were his parting words.16 This was the most cataclysmic moment that Polanyi was ever to experience. Until his marriage seventeen years later, he wrote his brother Michael, their father’s memory remained “the strongest force in my life.”17 He had “never loved anyone as much as” Mihály, and admired in par ticular his “warm, virile and noble personality,” moral probity, and the “pure, unadulterated idealism of the Western brand.”18 Throughout his life, he experienced recurring dreams that Mihály had come back to life, and on the anniversary of his death, he would send a commemorative letter or card to one or more of his siblings (and, later, his daughter).19 “The little that was good in me,” he confided not long before his own death, “was the gift of my father to my life.”20 Karl’s mother, Cecile Wohl, came from Vilnius, at the time a center of Jewish learning. Her father had been a rabbinic scholar who had translated the Talmud into Russian but took to exploring the similarities between the Jewish and Christian faiths—an inquiry that did not endear him to conservative sections of his community. Cecile’s own freethinking streak came to the fore at an early age, which prompted her


ricular activities, as well as work—for following his father’s bankruptcy

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felt compelled to give it up).13 With the demands of school and extracur-

father, suspicious of her associations with narodnik students, to dispatch her to Vienna to stay with Anna Lvova and her husband Samuel Klatschko. 21 There are grounds to be sceptical of descriptions of the young Cecile as possessing a rebellious spirit.22 But if they are accurate, her father was dousing the flames with petrol, for Klatschko was a populist-inclined socialist in whose home Russian revolutionaries would habitually overnight during sojourns in Austria. Karl, too, would


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stay there during his frequent visits to the imperial capital, and, with his family, would spend summer vacations with the Klatschkos in a resort in Lower Austria. The Klatschkos nourished Karl’s fascination with Russia, in par ticular in narodism and literature. The Russian intelligentsia, Georgi Derluguian has observed, perceived itself as “the critical and guiding force of epochal renovation”; it inclined to voluntarist political strategies, whether charitable activism or pitching bombs at counts and emperors, and was as if born to bring forth a “world-class literature full of tempestuous emotions.”23 Russia exerted an irresistible pull on Polanyi’s imagination. It was a land of “profound originality,” its aspirations expressed by “poets, novelists, and philosophers of unrivalled force and profundity.”24 If he never quite fully became a Fabian, this was due essentially to his Russian influences. Consider by way of comparison the biography of the Fabian leader, Beatrice Webb. Like him, she was the child of a railway-building businessman; like him, she was steeped in classical liberal thought when young (notably the positivist sociology of Herbert Spencer) before turning sharply against mainstream liberalism, vigorously supporting welfare reform, and becoming an apologist for Stalin’s regime in Russia. To her, however, Tolstoy and Dostoevsky were classic authors, while to  Polanyi’s imagination they leapt out as “elements of the Russian revolution!”25 The words Karl chooses to describe his mother are “infinite fascination and overwhelming personality.”26 She was a colorful woman—not so much in outward appearance (she tended to dress casually, “the opposite of a fashion model”27) but in her avant-garde spirit and public persona. An early follower of Émile Jacques-Dalcroze, she established an Academy of Eurhythmics in Budapest (“Dalcroze Foiskolaja”) that taught the representation of musical rhythm through bodily move-

ment. 28 A pioneering feminist, she set up a private women’s college in 1912, which she envisaged as an open university for Hungarian women.29 (It is presumably with reference to this that the apparently sceptical Karl advised her that “young women should not be taught by young chaps.”30) She was a devoted follower of contemporary cultural life and letters, with a nose for the zeitgeist, and hosted a highly successful salon. In this respect she epitomized the middle-class Jew for whom as-

Oscar Jaszi, “the mistress of the house, sparkling and witty” would perform “aerial somersaults among various ideologies,” and would excel at discovering and showcasing new talents, whom she would “tame to her taste.”31 She wrote for liberal German periodicals in Budapest and Berlin32 and penned unpublished texts on a miscellany of cultural and political topics, from graphology to jewellery, pedagogy to pyjamas, romance to the Russian revolution.33 Her letters overflow with references to poets (Schiller, Burns, Heine, etc.), artists and aesthetic movements (Cézanne, Picasso, Braque, Léger, Simplicissmus), and social scientists (Friedrich Engels),34 and her description of the “ecstasy” she experienced when reading Nietzsche and Spencer is entirely in character.35 She was interested in psychoanalysis too, in par ticular in the potential it offers for deciphering works of art. In a letter to Freud, Sandor Ferenczi described her as “a very well educated lady who has an excellent grasp of the sense of psychoanalysis.”36 She was, in addition, a friend and patient of Alfred Adler, the most politically progressive of its three founding fathers.37 Karl did not share Cecile’s enthusiasm for psychoanalysis—it was obfuscatory, even morally dubious38—but had he lain on Adler’s couch he might have divulged feelings toward his parents that were less than oedipal. He truly loved his mother and greatly appreciated her wit, political vim, and intellectual curiosity. But he did not inherit her hautebohème temperament, and he mistrusted what he saw as her moth-like attraction to bourgeois salon life, fluttering around the light instead of grasping it as a torch. 39 His father’s character was calmer and less flamboyant—“rather sober and sceptical” in his words40—and there was not the slightest ambiguity in Karl’s feelings toward him.


zeitgemäss (up-to-date). At her salon, in the recollection of her friend

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similation was about becoming salonfähig (culturally respectable) and

Polanyi’s parents supplied him with a heady cocktail of liberal and radical-populist values, contradictory influences that defined his worldview. Like many a continental liberal of the day, Mihály was anglophilic. In contrast to Cecile, Karl describes him as “deeply Westernized” and the motivating force behind the “English upbringing” that he and his siblings enjoyed.41 From him, Karl learned that English connotes “gentleman,” such that when he complimented Lukacs with “Your father


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sure is an Englishman!,” gentleman was understood.42 (Karl’s image of the English gentleman in his natural habitat was quaint: “He wore a chequered suit; he was called ‘My Lord’; he climbed the Matterhorn and was never seen without a telescope and an umbrella; he stayed at a first class hotel where, it was understood, he had parked his battleship.”43) Britain, moreover, was home to a pantheon of the young Polanyi’s inspirations, such as Rudyard Kipling and H. G. Wells, and it had blessed the world with the most idealistic current of liberalism. When a young journalist, Polanyi wrote that it was, back in 1848, “British free traders” who had “mobilised the British liberal bourgeoisie and working class behind the seemingly hopeless Hungarian struggle for independence.” This was despite the fact that the 1848 revolutionaries were Listian opponents of free trade, a rider that emphasized in Polanyi’s mind the notion that free trade is not simply an economic manifesto but is “glorious in the spirit of pacifism and the rights of the peoples.” He revered two free traders in par ticular, the “heroic and tough Quakers” Richard Cobden and John Bright, as the “forbears of socialism” in general and of Britain’s Labour Party in par ticular.44 The ingredients that engendered what Polanyi describes as his characteristic tendency to envisage social developments in “prophetic” terms (as “the fate of our civilization”) were, he wrote his brother, “the explosive mixture of 100% pure Russian and  100% pure Anglo-Saxon influences in my early life in the presence of the Germanic speculative catalyser of Geistigkeit.”45 Elsewhere he cites the same geocultural triad in explaining his respect for the value of tolerance: he had acquired it from “Goethe, but [also from] Dostoevsky and John Stuart Mill.”46 Is it a coincidence that this same triangle maps to the conceptual schema that Polanyi developed in later life, of redistributive, market, and reciprocal mechanisms of economic integration? The first of these is a synonym for the Germanic Verwaltungswirtschaft,47 the second has historically been

identified with Anglo-liberalism, while the third conjures up the Russian peasant commune. Alternatively, if one omits the Germanic apex, the maternal Russia / paternal England dichotomy can be interpreted as the foundation of what one of Polanyi’s friends identifies as his inclination to construct analytical situations that center on antagonisms between binary opposites.48 His tendency to draw a sharp line between modern “market-directed” economies and all other “tradition-directed”

and to some of his contemporaries he appeared the “most radical of radicals”—in contrast to his “moderately radical” brother, Michael.50 Yet in his practical recommendations he tended to favor either the reconciliation of opposing parties or a middle path between them. The name of the political organization that he cofounded in 1914, the Radical Bourgeois Party, is symptomatic. Later, in the 1920s, he sought to lash a guild-socialist conception of societal transformation to a liberal advocacy of free markets, envisaging a “pure” market economy contained within an institutional framework that would conjoin parliamentary democracy in the political sphere with industrial democracy in the economic. In the 1920s he advocated a Third Way in contrast both to Soviet planning and the market liberalism of Ludwig von Mises, and he aligned himself with the Second International in opposition to the liberal international of Geneva and the Comintern of Moscow.51 In the 1930s he swung close to communism, but principally during its liberal Popular Front phase, and shortly before his death he set up a journal, Co-Existence, that was dedicated to the reconciliation of the West and the Soviet Union. Given the fusion of paternal West and maternal Russia that was so deeply rooted in his psyche, this was a fitting valedictory venture.

A “ M A G YA R - J E W I S H M O N G R E L” If his contradictory parental influences set up a creative tension that linked the familial and geocultural scales, Polanyi’s relationship to his identities that occupied the intermediate scale—Magyardom and Jewishness—was of a more fractured and volatile kind. To the question, asked by Louis Dumont, whether Polanyi was “a Jew by birth,” his daughter Kari Polanyi-Levitt replied that “he would most certainly not


In his theoretical framework, Polanyi inclined to polar contrasts,

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systems is a case in point.49

have wished to be described as a Hungarian Jew, although he would have qualified as a Jew by the Nazi ‘blood’ definition.”52 Two principal markers of assimilation were the magyarizing of the family name to Polanyi— in Karl’s case, in around 1907—and religious conversion.53 He was registered as a Christian in the early 1920s but had probably converted in 1919, a year that witnessed a “mass movement” of conversions of Budapest Jews to Chris tian ity, particularly of the upper classes, and which in-


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cluded in its number Michael Polanyi and his friend Leo Szilard.54 The environment in which Polanyi grew up in Budapest, PolanyiLevitt’s letter continues, “was certainly not Jewish. Indeed, my grandfather and my father had an aversion to any contact with the Jewish community, which was considered as a ghetto from which enlightened people should remove themselves to join the mainstream of Hungarian society.”55 If the gist of these comments is accurate, some details are debatable, notably whether the environment in which Polanyi grew up was “not Jewish.” A remarkable number of Jews and those of recent Jewish descent inhabited two of his environments: the Galileo Circle (on which more below), and Andrassy Avenue. In the latter case this was a function of class and oppression. Upwardly mobile Jews tended to congregate in Pest, excluded as they were from Buda by the Magyar gentry who considered Pest alien, dirty, Jewish-and-German, money-grubbing, and usurious.56 Most of his friend Georg Lukacs’s renowned Sunday Circle came from the ranks of the assimilated Jewish middle and upper classes, including Lukacs himself (née Löwinger), Mannheim, and Béla Balázs (née Herbert Bauer). As to the Galileo Circle, Polanyi was well aware that its composition was disproportionately Jewish; he himself described it as Hungary’s “only approximation of an entelechy of Russia’s revolutionary Jewish emancipation.”57 When, in a letter to his brother of 1959, Polanyi attempts to capture the quintessence of Hungary it is its Jewish-Magyar mix that he emphasizes. Styling himself a “British friend of Hungary,” he explains that although he “never quite belonged to Hungary,” its people have his affection. I remember the depths from which they rose: a Magyar-Jewish mongrel, not deserving to be fully accepted as morally civilized, bearing the “stamp” of the ethically defective, victims of the backward standards of a church

and aristocracy whose heart was elsewhere. A nobility, fitted with false pride but without self-respect, linked to the West by a half-assimilated Jewry, not truly Western and yet hindered in melting into the Magyar stock. . . . And yet the Magyar stock too had been denaturalized by the hothouse brood of a second-class foreign intelligentsia which pre-digested the valuable Western experiences Hungary required.58

mongrel, but that for all its pejorative tone, Polanyi’s avowed aim is to explain why “the Hungarians” have his affection, and that, alongside sideswipes at the church and nobility, he aims barbs at his own milieu, the hothouse brood. The Magyar-Jewish mongrel was the product of a par ticular time and place: the Austro-Hungarian Empire of the nineteenth century. With respect to its sustained period of administrative and constitutional unity, Hungarian liberals liked to compare their nation to Britain. Hungary’s “national cohesion and patriotism,” claimed Jaszi, Polanyi’s mentor and lifelong friend, “is the result of an evolution that is as ancient, natural and logical as that of England.”59 But if this is a rose-tinted rendition of English history, it bore no connection to Hungary’s. In letters of blood and iron, History was scrawling the message that the highway to modernity proceeds by way of the assimilation of disparate classes and ethnic groups into culturally homogenous nation-states. The old world made up of myriad minorities was giving way to a new regime, in which some achieved recognition as nationals, while others—whose customs, language, or looks prevented them from “fitting in”—were relegated to minority status. Whereas in Western Eu rope this process tended to assemble diverse linguistic and cultural peoples into discrete nations, in Central and Eastern Eu rope successive inward migrations and conquests had established a more complex interlayering of ethnic groups.60 In the case of Hungary, the nation’s linguistic heart was rural. Latin-reading clerks, French-speaking aristocrats, and German- and Yiddish-speaking merchants and teachers all assimilated to Magyar, the language of the peasant. Its political nucleus, however, was a reactionary aristocracy, locked in an uncomfortable if sporadically tender


ing echo of Daniel Defoe’s “true Englishman”—of the Magyar-Jewish

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What is remarkable in this passage is not only its description—in a know-

embrace with the liberal bourgeoisie, suspicious of their overbearing superiors in Vienna, and pledged to the marginalization and persecution of minorities: Romanians and Serbs, Slovaks and Ukrainians, Roma and Jews. Thus the Hungarian nation coagulated in a peculiarly fractured manner and was subject to ferocious torque as the kaiserlich-undkönigliches system disintegrated. Why was this? It had much to do with what Leon Trotsky referred to


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as uneven and combined development. In Western Eu rope, capitalism had evolved relatively gradually, with the mode of production, class relations, nation-state formation, and the emergence of “consolidated” states developing more or less in parallel. But the formation of a global market dominated by Western businesses and of a world political order controlled by Western states challenged the disparate polities of Eastern Eu rope to catch up or risk subordination. Eastern civil society was increasingly influenced by processes underway west of the Elbe, even as monarchies and aristocracies continued to hold the reins of political power. More or less reluctantly, they presided over reforms that aimed to strengthen their armies and bureaucracies, attenuate caste privileges, and reduce feudal constraints on trade, but it was a fraught process, one that lacked the cultural preparation and commercial integration that had facilitated nation-state formation in the West. The twin revolutions—political and economic—of the closing decades of the eighteenth century, centered on France and Britain respectively, elevated and challenged the Jewish populations of Central and Eastern Europe. The former saw the rescinding of religious and occupational restrictions, generating pressure far beyond France’s borders to grant Jews full democratic rights and spurring reform-minded Jews to challenge the authority of orthodox rabbis. This strug gle for emancipation took place when the Enlightenment ideal of bildung (rational self-improvement and refi nement, especially of the mental faculties) was enjoying its acme, and many Jews took this image of modernity to heart.61 The latter, the Industrial Revolution, enabled Jewish financiers and traders to integrate into a swiftly expanding and socially fluid urban bourgeoisie. Central Europe’s Jewish communities were peculiarly attuned to the pulse of these momentous transformations. Soaring Western demand benefited the many Jews who were involved in the grain trade—including Polanyi’s paternal grandparents, flour mer-

chants in Austro-Hungary’s northeastern reaches. But even as some were poised to ride the cresting waves of economic demand, others were being flushed out of the traditional economy as manufactured imports flooded their artisanal markets. The new ideas of nationalism and modernization emanating from the West were picked up quickly by Jews, plugged as they were, through German and the various dialects of Yiddish, into the Germanic cultural

on: a common religion, customs, and language, as well as commercial collaboration and patronage networks. These potentially supplied the sort of cohesion that is indispensable to the development of national consciousness—in Western Europe, networks of merchants had provided one of the vital elements around which embryonic national consciousness crystallized. On the other, Jews lacked that other obligatory component of nation formation: a territorial concentration of culturally connected communities. In its absence Jewish nationalism was, literally, utopian. The contradictory effects of capitalist development on the Jewish populations of Europe have been perceptively discussed by Abram Leon in The Jewish Question. One tendency was for capitalism to favor “the economic assimilation of Judaism and consequently its cultural assimilation.” It uprooted millions of Jews, ripping them from their traditional milieux and reassembling them in urban environments where, bereft of the local community that had enveloped their religious identity, many now sought to blend into the dominant culture. Yet the same structural conditions of economic dislocation, migration and urbanization, especially where anti-semitism was rife, could also stimulate Jewish national consciousness. The “renaissance of the Jewish nation,” the formation of a modern Jewish culture, and Zionism, writes Leon, all accompanied “the processes of emigration and the concentration of Jewish masses in  the cities” and went hand in hand with the rise of modern antisemitism.62 The two tendencies played out quite differently according to place and period. In Western Europe the accent was on assimilation, which itself henceforth came to connote the “West”: gesellschaft, economic modernization, and political equality. If the Age of Nationalism was confronting all groups—French-speaking nobles, German-speaking


Jewry. On one hand, their national identity had much that it could draw

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sphere. But the Age of Nationalism raised a paradox for Central Europe’s

merchants, and so on—with the injunction to assimilate, for Jews, being an oppressed group, assimilation required more than a gentle blending into the new cultural landscape but also, crucially, a “purposeful, even programmatic, dissociation from traditional Jewish cultural and national moorings.”63 Having achieved this successfully, the Western assimilated Jew came to be stereotyped as the incarnation of modernity: rationalistic and deracinated, bloodlessly cosmopolitan and “inau-


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thentic,” plastic people lacking an organic culture and custom. In the East, Jewish populations were greater in number and size, with a preponderance of middle and lower social layers, such as artisans, pedlars, hawkers, and vagrants, and more likely to retain the badges of distinction—Yiddish, the caftan, Talmud-centred education—that assimilated Jews rejected.64 Over the course of the nineteenth century the stereotype of the Eastern Jew was constructed: rural, poor and uneducated, dirty and loud, clinging to tradition and prone to mysticism; altogether zurückgeblieben (left behind).65 The “East” came to stand for cultural nationalism—gemeinschaft, religion, and tradition—and for the ghetto, which by century’s end connoted not simply the zones in which many Jews were forced to live but a slumscape of superstition and ossified tribalism.66 If any city experienced a confluence of Western and Eastern Jews it was Budapest. Nowhere in Central and Eastern Europe were Jews more assimilated and secular than in the Pest of Polanyi’s childhood. Nearly a quarter of its population, and a much higher proportion of its professional, business, and fi nancial circles, was Jewish.67 In the mid-nineteenth century the message conveyed by the liberal establishment was that Jews were progressively to be permitted entry into Hungary’s civil society and political community. At this time, discussion of the Jewish Question revolved around the feasibility of political emancipation and social integration, and “the Jew” was depicted in the press as a rag collector or a rich shopkeeper: clever and shrewd, and disreputable rather than odious. Welcoming the liberal climate, Jews played their part in forging the new nation. They were vital elements in Hungary’s economic and cultural renaissance, and its capital city was “made by Jews, for us,” in the words of the (non-Jewish) poet Endre Ady.68 In the mid-1890s the Jewish faith was accorded the same privileges as the Christian denominations, and

Jewish representatives were accorded seats in the upper house of parliament. The Liberal Party championed emancipation and was rewarded for doing so: half of Budapest’s electorate was Jewish, and Liberal deputies were elected with comfortable majorities. Throughout Central Europe, Jews, due to their higher levels of literacy and their need for political security, generally associated with, and assimilated to, the dominant nations (Poles, Magyars, and above all

talist classes played a central role in sustaining the cohesion of the imperial state, and within them, Hungary’s Jews were prominent. Their alignment was further cemented by the 1867 Compromise, which promoted the Hungarians from the status of subject people to joint governor of the Habsburg “prison house of nations”; it signified, in Polanyi’s words, “the establishment of the hegemony of the German bourgeoisie in Austria,” coupled with “Magyar domination over Slovaks, Serbs, Croats, Ruthenes, and Roumanians, in the eastern half of the Monarchy.” 70 Following the Compromise, large numbers of Hungarian Jews discarded the Germanic identity in favor of the Hungarian, and many switched their household language from German or Yiddish to Magyar. This contributed to its transformation from a peasant dialect to a medium of high culture and to the accelerated magyarization of Budapest in par ticu lar, fully 90  percent of whose inhabitants spoke the national tongue in 1920, up from 46  percent only fi fty years earlier.71 In this way, Hungarian Jews cast off “the stigma” of being Germans, writes Peter Pulzer, “though this did not help them much with the races whom the Magyars were oppressing.”72 Indeed, in consideration of the Jews’ tendency to favor the “historic nation,” even conservative Hungarians could enjoy the benefits of Jewish assimilation. Without it, they knew, their nationality would have dwindled to a minority within its own territory. For the Polanyi children, acculturation was fi rst and foremost in a bourgeois milieu that spoke German—the lingua franca of the Habsburg Empire. Their mother tongue was not Hungarian, a language that Cecile never succeeded in mastering. Yet they did take on a Hungarian identity,73 and one, moreover, that assumed that par ticular historic nation’s blindness toward its nonhistoric counter parts. “As schoolboys,” Polanyi


(Czechs, Slovaks, and Romanians).69 In the Habsburg Empire, the capi-

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Germans), rather than to the peasant, so-called nonhistoric nations

recalls, “we had no interest in the vicissitudes of the 49 per cent of the population who were of non-Magyar extraction; many of us had not so much as heard of their existence. Actually, their great majority belonged to those underprivileged strata with which middle- class boys had but little contact.” It was a chauvinistic outlook, he adds, that “made us resent as an insult the assertion that Hungary was not a Magyar country.” 74


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Despite their best efforts to learn Hungarian and despite the conversion of some to Christianity, Polanyi and his peers found themselves increasingly excluded from full national membership, as Jew-hatred grew. Political culture in Hungary at the time was dominated by the nobility. It harbored the deprecation of commerce that is characteristic of premodern agrarian elites, with merchants seen as duplicitous and deception assumed to be the necessary basis of all commercial transactions. It fancied itself the steward of authentic Hungarian values: honesty and love of the land. But its station and values were under threat from encroaching capitalism and from the movements of resistance that it was catalyzing. Traits identified with capitalist modernity and its discontents were projected onto the Jew. Assimilated and ghetto Jews alike were stereotyped as profiteering and selfish, materialistic and unethical, cosmopolitan and urban, liberal and socialist.75 A wholly rebarbative caricature emerged of the Jew with a dev ilish grin—speculating, mercenary, and alien76 —and the Jewish Question was insidiously reworked as a stock concept that conflated discussion of Jews with that of the afflictions of modernization tout court.77 Under the guise of this seemingly neutral term, anti-semites accused Jews of taking over the economy, education, the professions, and even agriculture, conjuring up an image of an inundation of rural Jewish immigrants from neighboring states to the East.78 The greater the success Jews achieved in the limited zones of economic life and the professions that were open to them, the more vociferously they were identified as a cancerous intruder. Endemic anti-semitism ensured that the identity of Jews, whether or not they sought to assimilate, remained in the spotlight. However loudly they protested their indifference to their “Semitic” heritage, antisemitism remained fiercely interested in them. It possessed a weapon, in the form of a twin-bladed stereotype, that could attack the target from diametrically opposed directions. One attack, more common in the

early modern period and, later, toward the Eastern Jew, stereotyped Jews as particularist: they cleave to a traditional way of life, atavistically refusing to dissolve their identity into the warm ocean of modern secular citizenship. But with Jewish emancipation a second image gained ground. Emancipation and industrialization had swept immigrants into the cities, prompting such cultural conservatives as Thomas Carlyle and Oswald Spengler to bewail the impure culture and

politans who threatened to corrupt the nation and who mingled suspiciously with other groups that evinced an unhealthy regard for liberalism or radicalism, such as intellectuals, artists, or freemasons.79 (One conservative “social and scientific” periodical, to give a representative example, equated Jews with two other groups to which Polanyi happened to belong, the bourgeois radicals and the freemasons, and described this triad as “a parasitical force weakening the body of the nation.”80) With no “true” homeland of their own but with cultural and commercial connections to their brethren in other countries, Jews were treated with suspicion, obliged to publicly perform their renunciation of their heritage, and to declare their allegiance to the imagined national community. Institutionalized anti-semitism ensured that the struggle for emancipation gave way to the duty of assimilation. The price exacted for the Jews’ equality was the disowning of their par ticular identity. “Once they became citizens,” as Enzo Traverso has put it, “Jews were no longer supposed to be Jewish.”81 But the greater their success in assimilating, the more the cosmopolitan threat was borne out. In the final decades of the nineteenth century—an age of xenophobic imperialism—Jews came to be perceived as “cosmopolitan, as the embodiment of an unlimited, ‘deracinated’ existence which threatens to dissolve the identity of every particular-limited ethnic community.”82 In this way, Jews found themselves facing a double bind. The cosmopolitan identity offered a means of disavowing the particularist ethnic identity that was condemned by the fi rst stereotype. But the second stereotype identified cosmopolitanism as a characteristically Jewish trait, thus transforming a method of downplaying Jewish identity into its very badge. Ultimately, the only acceptable Jew was the non-Jew, but the charting of any route toward that goal could only affirm what it


Jews were now singled out as the eternal outcasts, the rootless cosmo-

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loss of traditional values that supposedly resulted from ethnic mixing.

was attempting to deny. If a Jew maintained her traditional customs and appearance, she would be stereotyped a ghetto Jew; if she attempted to assimilate, this “could be construed as a duplicitous exercise in camouflage.”83 She could convert to Christianity, but to switch religion in this way was regarded as capricious, opportunistic, or a sign of self-hatred. It attested to a lack of integrity, authenticity, and self-respect. Or of course she could turn to atheism, fully embracing secular modernity


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with its promise of the dissolution of all religious communities along with their primitive superstitions. But to do so was to commit treason against the Hungarian nation, the soul of which was Christianity, and in exposing her lack of faith, revealed also her rootless cosmopolitanism, that is, her Jewishness.

CONTRADICTIONS OF THE NON-JEWISH JEW Budapest in Polanyi’s day was not only a hothouse of assimilation but also the destination of waves of immigration as Jews were squeezed from the Habsburg hinterlands or fled the pogroms that were unleashed in Tsarist Russia from 1881. The new arrivals from the East confronted racism of a standard format, even from their “own kind.” Incomers, many of whom were poor, uneducated, and from small town or rural backgrounds, could only enter the city’s labor market by the back door and faced explicit and implicit discrimination. Indigenes saw them in a socially inferior position and racialized this, essentializing the immigrant’s situational “inferiority” by interpreting it as the manifestation of an intrinsically inferior race or culture. The logic of racialization proceeded along socioeconomic tracks but was also politically steered. In an infernal cycle of dehumanization, the authorities in the closing decades of the nineteenth century treated Jewish refugees from the East as subhuman, for example, by transporting them in sealed railway wagons without food or water, thereby ensuring conditions of dirt and disease, on which the swirling prejudice could gleefully fasten.84 In a sense the Eastern Jew came to figure as the Western Jew’s “ugly sister,” whom anti-semitic Hungary was reluctant to adopt. Assimilated Jews could respond in a number of ways. One was to extend sympathy, to humanize the Eastern Jew. The paradigm was Arnold Zweig’s Das os-

tjüdische Antlitz, which said, in effect, “Look more closely! She’s beautiful.” A minority view was revolutionary socialism, the universalism of which tended to favor assimilation but brooked no compromise with racism.85 (“The ugliness is not her, it’s anti-semitism!”) But far more common than either was for assimilated “cravat” Jews to feel disdain toward their caftan-wearing brethren, expressing discomfiture at their distance from Western modernity or even denigrating them as “Asian.”86

image of themselves reflected in harsh light by the circus mirrors of the prevailing anti-semitism.87 (“The Jew in me wouldn’t be so ugly if it were not in her too.”) The disdainful attitude was adopted by many radical intellectuals in Polanyi’s successfully assimilant milieu, egregiously so in the case of his mentor and lifelong friend, Oscar Jaszi. A convert to Calvinism, Jaszi would speak of traditionalist Jews as “cowardly wearers of the yellow patch.” He bemoaned “the defects of the Jewish character” that had been “ingrained by centuries of ghetto life,” and bracketed Jews together with a political current for which he reserved par ticu lar contempt, Bolshevism. Jews and communists alike, he inveighed, “show the same lack of instinctive and natu ral promptings, the same lack of tradition, the same proud exclusiveness, the same call to deliver a Messianic message, the same impatience of other ways of thinking, the same overdevelopment of materialist hedonism in some, and absolutely oriental, life-spurning mysticism in others.”88 As Kati Vöros has shown, Jaszi played an impor tant part in disseminating the anti-semitic fantasy that the Jewish Question was a serious concern that had to be tackled. His “reframing of the ‘Jewish Question’ as a sociolog ical problem,” she writes, “served as a normalizing channel for the expression of anti-Jewish content.”89 In its essentials, Polanyi shared Jaszi’s outlook. For instance, when discussing Jewish emancipation in later life, he emphasized “the conservatism of Jews; their attachment to par ticular traditions, which distanced them from even the thought of progress,” and played down their own struggle for recognition. The movement for emancipation had come not from Jews themselves but from “northern Eu ropean Christian


an internalization of an element of racism—a partial acceptance of the

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It was a stance that spoke of arrogance but also of self-abnegation and

society,”—just as in the United States, he argued (unpersuasively), the demand for equal rights came not from black people themselves but from “Northern Yankees” for whom “equal rights had become a question of the unity of the state.”90 Thus, the “Jewish question hardly existed for the Jews” even though for “the Magyars it was seen as the central national problem.”91 In his younger days, when an atheist (until 1917 or so) his disavowal of Judaism was one element in a sweeping, Enlightenment-


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inspired refusal of religion.92 All religions, he thundered, by infusing superstition and credulity into “the magnificent facility of faith and trust, from which morality springs, [had] treacherously poisoned the sources of human prosperity.”93 But even then, his criticism of Judaism was particularly sharp. He regretted the Jews’ divided loyalties (to ethnos and to nation-state), and he looked down on the ghetto Jews. For him, as his daughter puts it, “the model was every thing English,” which he identified with modernity.94 England may have been “modern,” but it was also the proverbial nation of shopkeepers, and Polanyi held a marked distaste for the bargaining and profit-seeking to which such people devote themselves. Indeed, his life’s vocation was to subject the commercial ethic to moral critique and the market economy to scientific critique. Yet the ethnic cathexis for his distaste of profit-seeking was not the English but his own spurned tribe. According to his daughter, he and his entire family “disliked haggling intensely.” They showed “a huge amount of prejudice, a real distaste, for commerce, and above all for talking about prices. What they valued were education, science, and learning. They turned up their noses at dealing with money and pursuing monetary advantage”—attitudes that were identified with the aristocracy and the commercial Jewish bourgeoisie.95 In this regard, one may reasonably ask whether Polanyi’s critique of the commercial ethic was influenced by his Jewish-bourgeois roots. The anthropologist Jonathan Parry has suggested that it is among such groups as the Jews and Jains, which have a particularly close historical association with market trade, that the ideology of the “pure gift” gains par ticu lar prominence, alongside its antinomy, the “pure market.”96 Whereas traditional gift-exchange involved a merging of persons and things, of interest and disinterest, modern market society separates the

categories, as if by electrolysis, “leaving gifts opposed to exchange, persons opposed to things and interest to disinterest.”97 Only in market society does “free gift” become a pleonasm, with gift exchange defined in counterpoint to market transactions: altruistic, moral, and invested with emotion.98 Parry’s thesis is suggestive, although it sits uneasily with the fact that the “pure gift” was first conceptualized by the non-Jewish (but Austro-

it was the uneven and combined experience of fi n-de-siècle AustroHungary, with liberal economics crashing into a largely agrarian society, that nourished a style of thought underscoring the opposition of the market system to its cultural integument. Either way, in his anthropological writings Polanyi was certainly prone to proposing sharp contrasts between economic systems, such as the Melanesian kula trades taxonomized by Malinowski (which were based on reciprocity and driven by noneconomic motives of “prestige, status, and kinship”) and modern market society, with its accompanying assumptions (theorized by Adam Smith and Spencer) that economic mechanisms should be guided by economic motivations.100 Can Polanyi’s own sociopersonal experience be detected in this formulation? His fi lial love notwithstanding, he elected not to follow in his father’s professional footsteps, either in its constructive (railway building) or its commercial aspect. In this he was marching in step with Lukacs, Koestler, and others in their milieu. The memoirs of many Jewish intellectuals of the era chart a break between “the anti-bourgeois youth, passionately interested in Kultur, spirituality, religion and art” and “their entrepreneurial parents—merchants or bankers, moderate liberals and [dutiful] patriots, indifferent to religious matters.”101 Polanyi himself traced the rift as it ran through three distinct generations of Jewish students: those of the mid-nineteenth century retained their religious heritage; those of 1880–1900 wished only “to live the bourgeois ideal”; while the third, to which he belonged, stood out in in their acceptance of their relative poverty and their desire to spark social movements. His generation “did not seek to create a future by looking towards their parents’ generation but in contrast to it.” Thanks in part


a French Jew, Marcel Mauss.99 An alternative conjecture would be that

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Hungarian) anthropologist Bronisław Malinowski and was rebutted by

to the Galileo Circle, their speech and sense of humor contrasted with the predecessor generations; and they stood out, too, in their guiding lights: neither Zionism nor Western relativism but “Russian morality (Tolstoy, Dostoyevsky).”102 In a sense, then, Polanyi’s cohort were freely deracinated Jews; they approximated to the “socially free-floating intelligentsia” that was to be theorized sociolog ically by one of their number, Karl Mannheim. They


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sought to make their way in the intellectual realm, but discrimination was no less rife than in in the business world of their parents. Many were condemned “to marginal intellectual occupations such as freelance journalist, independent artist or researcher, private educator, and so on.” Polanyi’s own cousin Ervin Szabó, for example, had to convert to Christianity to gain a position in the civil ser vice. According to Szabó’s friend Robert Michels, it was the experience of discrimination and marginalization that accounted for the predisposition of Central Eu ropean Jewish intellectuals to join revolutionary political movements. Where normal integration into the intelligentsia is blocked, a wholesale critique of society’s foundations grew in appeal.103 Where anti-semitism was institutionalized in professional bodies, this only reinforced “the conviction held by the excluded that ‘normal’ integration into the intellectual marketplace required subversion of the ground-rules.”104 The ineluctably contradictory elements of the condition have been summarized by Michel Löwy. Jewish intellectuals, he writes, were “deeply assimilated yet marginalized; uprooted and at odds with their business and bourgeois milieu of origin; rejected by the traditional rural aristocracy yet excluded in career terms within their natural sphere of acceptance (the university).”105 As Jewish Hungarians, Polanyi, Lukacs, and their peers were semidetached from the Western European scene and were treated as aliens in their own land. Their experience accords with the explanations offered by Thorstein Veblen, Isaac Deutscher, and others as to why a staggering number of political radicals and revolutionaries of modern thought were Jews: Spinoza, Marx, Einstein, Freud, Trotsky, Kafka, and so forth.106 Socially and politically oppressed yet endowed with economic and cultural resources, they were able and driven to excel; and without any straightforward allegiance to “tradition” or “the conventional,” they lacked that

security and peace of mind which “is the birthright of the safe and sane quietist.”107 In their existence on a margin within a minority, critically estranged from the social mainstream and familiar with the experience of social exclusion, Europe’s Jews were unusually sensitive to the crisis of Western culture at the turn of the century.108 Perched precariously on  the borderlines of religions and national cultures, they were (in Deutscher’s emphasis) uniquely keyed to grappling with social change

pariah, spurning the sycophancy of conservative fellow Jews and rejecting not only the chauvinism of aristocratic Hungary but also Zionist separatism, in favor of a political community based on universalist criteria. They longed for a social order in which the entire issue of assimilation would be an irrelevance.

B L O O M S B U R Y- O N - D A N U B E : T H E R A D I C A L C O U N T E R C U LT U R E In fin-de-siècle Hungary, classical liberalism was no longer the buoyant creed that it had been when Polanyi’s parents came of age. Whereas in 1870 most citizens of Budapest had welcomed economic liberalization, by 1900 ever more were inclined to see capitalism and free trade as mechanisms for the enrichment of a minority at the expense of the majority.110 Commodification and marketization appeared to spawn all manner of disagreeable phenomena—the destruction of rural communities, exploitation, moral regression, and philistinism—and the liberal faith that social progress would arrive courtesy of capitalist development was evaporating. On the right, antiliberal sentiment among peasants fused with antidemocratic and antisocialist reaction among the nobility and petit bourgeoisie to form a conservative anti-semitic coalition, fronted from 1895 by the Catholic People’s Party. Although not a successful mass organization in the style of the anti-semite Karl Lueger’s Christian Social movement in Austria, the People’s Party did rally chauvinist sentiment and helped refashion anti-semitism from a religious movement directed specifically at practising, nonassimilated Jews into a sociopolitical movement that targeted the assimilated as well. On the


gree, the radicals around Polanyi adopted the stance of the conscious

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and contradiction,109 and (in Gluck’s), yearning for community. To a de-

political left, opposition to these ills coalesced around the labor movement and a radical counterculture. During Polanyi’s teenage years the power and influence of the Hungarian Social Democratic Party (SDP) and its allied trade unions surged. Union membership, less than 10,000 in 1901, leapt to more than 70,000 just four years later.111 Although Polanyi regarded the SDP with some scepticism—it was “archaic” and “not particularly attractive to the intel-


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lectual classes”—it spearheaded the campaign for political democracy, and this undoubtedly contributed to his lifelong identification with labor.112 When, in the biggest demonstration that Budapest had ever seen, 200,000 people marched past parliament to demand the extension of the franchise, his “cheeks burned”—he wrote Lukacs—as he witnessed “the endless red armies marching into the future.”113 Alongside, and in partial coincidence with, the labor movement was the radical counterculture. Its outstanding figure was the poet, Ady. A messianic figure, Polanyi likened him to Jesus with respect to his instinctive ability to “awaken” people’s consciences and to provide inspired leadership—although in his political commitments and taste for a tipple, he may more fairly be bracketed with Arthur Rimbaud or Dylan Thomas.114 Messiah or not, Ady gave searing expression to the radicals’ painful awareness of their country’s undemocratic and socially backward condition. “Socially we live in prehistoric times,” the selfdescribed “lonely revolutionary” lamented. “In this country only aristocrats, priests, and donkeys can exist. And those who seek to please them.”115 One of Ady’s responses to life in the desert was to seek out more fertile climes. “My whole being,” he wrote on one occasion, “is an almost pathological burning feverish longing for Paris, and to get away from the fi lth at home.”116 In his quest for escape, Ady typified a Bohemian band of young artists and intellectuals whose preoccupations with solitude, sin, and death expressed their alienation from established society, with its corrupt politicians, dogmatic priests, and philistine “donkeys.” Other means of flight included the internal exile of aestheticism, and alcoholism, but art always requires consumers, and society can never be escaped entirely—as Bartok discovered when his Bluebeard’s Castle encountered hostility from philistine audiences and the state cultural authorities on account of his “strange predilection for

Rumanian folk music.”117 (“Let the donkeys be donkeys,” the composer fumed at the asinine Hungarian public. “We shall take any genuine creative productions abroad.”118) In addition to external or internal emigration, an alternative response to repression is to orga nize resistance, and Ady engaged in this too. His poems, in their proud refusal to compromise with existing reality, inspired rebellion. In a letter to Ady, Polanyi empathizes with his decision to live in Paris, entailing as it did

the Galileo Circle’s annual event celebrating Hungary’s 1848 revolution, and Polanyi offered him public speaking invitations through which to address “the Hungarian youth.”120 The radicals’ ethical revolt against the moral hy pocrisy of the day is captured in the moniker Bloomsbury- on-Danube.121 But just as the Bloomsbury group, in its revolt against Victorian moral hy pocrisy, overlapped with the Fabians, who protested the social and political order that had given rise to it, so did the aesthetic radicalism of Ady and Bartok intersect with the movement of bourgeois radicalism in conjoint opposition to absolutism, Magyar chauvinism, and clericalism.122 The operational center of bourgeois radicalism was the Society of Social Science, founded by Jaszi together with two of Polanyi’s university teachers, Felix Somló and the Spencerian sociologist Gyula Pikler. The Society established a journal, Huszadik Század (Twentieth Century), in whose editorial board meetings Polanyi regularly took part.123 Likened by Jaszi to the Fabian Society, it was dedicated to breathing new life into a Hungarian liberalism that had discredited itself through its opposition to democracy, its support for fanatically repressive measures against the agricultural labor force, and its association with “Manchesterism”—the advocacy of free trade as a means of entrenching the world-market position of the liberal hegemon.124 The Society’s vision of change centered on a vanguard of reformminded intellectuals whose state-of-the-art social-scientific knowledge would enable them to rationally navigate Hungary’s path to modernization, steering between the shoals of aristocratic reaction and plebeian social democracy. The masses, in their conception, would support and legitimize the intellectuals’ chosen path, but to be effective, programs of


ist response.119 At the younger man’s request, Ady would send poems to

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a flight from this “place of stagnation,” but he also encouraged the activ-

working-class education were indispensable. Through the elevation of working people by pedagogical means, the fear of the “tyranny of the majority” that had prevented their liberal-socialist forebears, such as John Stuart Mill, from fully embracing democracy could be confidently discounted.125 The “precondition for socialism,” according to the Society of Social Science, was “the existence of an educated working class.”126 Although the Society inclined toward liberalism, and the SDP was in


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its theoretical commitments stoutly socialist, even Marxist, there was considerable crossover between the two. In practice, the SDP “concentrated on Sozialpolitik,” the corporatist reformism that had been pioneered by Germany’s Historical School of political economists and was later adopted by the revisionist camp of German social democrats, of which Eduard Bernstein was the guru.127 As an alternative to revolutionary agitation, Bernstein advocated the broadening of the franchise. Socialism, he argued, could equally well be called “organizing liberalism,” for the kernel of socialist organizations is their “liberalism; their democratic constitution.”128 In its ideology, the SDP was saturated with the positivism and evolutionism of the age. It inclined to Bernstein’s revisionism and set the campaign for parliamentary representation at the heart of the party program.129 Here we can see the aforementioned crossover: Bernstein was simulta neously a social democrat and an ally of Jaszi. He was a noted contributor to Twentieth Century, as were Austrian social democrats such as Karl Renner and Otto Bauer, of whom we shall hear more in later chapters. For Polanyi, too, from his teenage years until his mid-thirties, Bernsteinian liberal socialism represented a powerful pole of attraction. But it was not the only such pole. An impor tant crosscutting influence was the populist-inflected Marxism of Szabó. Szabó was a friend of Klatschko and admirer of Nietzsche. (He even grew his moustache in emulation of the latter.) He was Hungary’s most distinguished Marxist scholar of the era, and for some years was co-editor of the SDP’s newspaper.130 But he had grown impatient with orthodox Marxism. It had reinterpreted historical materialism as a deterministic “objective sociology” that denies the role of ideas and human agency in the making of history.131 Syndicalism, which was enjoying rising influence worldwide on the back of strike waves and in

reaction against the ossified gradualism of Second International social democracy, was the alternative to which he was drawn. While the SDP became ever more occupied with the demand for universal suffrage, he dismissed parliamentary democracy as “of little value for the workers,” on the grounds that it concentrates power in the hands of professional politicians and party bureaucrats.132 Denouncing the SDP’s “timid parliamentarism,”133 he embraced the strategy of direct action,

not be the conquest of parliamentary representation but radical cultural transformation, a “prolonged preparation of the soul” that would be indispensable to the success of eventual revolutionary political change, by way of the establishment of direct democracy through selfgoverning councils.135 Polanyi was never as critical of parliamentarism as was his cousin, and was generally more enthusiastic about “programmes.” But he did express sympathy for syndicalism, and he propounded an analysis of its emergence. As capitalist society becomes increasingly socialist, he ventured, with regulated labor markets and state intervention, socialism comes to be wrested from the working masses by their social superiors, forcing the workers, their social position unchanged, to seek a new ideology to facilitate their struggle.136 Polanyi supported that struggle and shared Szabó’s ethical idealism, his admiration for Russian populism, with its elevation of human agency and its “revolutionary élan,”137 as well as his sense that a critical task for the labor movement was pedagogical. (He saw its organizations as “fortresses of universal education.”138) He also concurred with elements of Szabó’s critique of social democracy: of its wooden theoretical infrastructure (economic determinist philosophy and mechanistic fatalism), its practical shortcomings (a fi xation on the cities and neglect of the plight of the peasantry), and its lack of interest in new developments in the natural and social sciences. In intellectual life, the period was characterized by dynamic change and explosive tensions. In Vienna, where Polanyi studied for a semester in 1907, Ludwig Boltzman’s discoveries in atomic theory and thermodynamics were revolutionizing physics. In economic theory, what later


grammes.”134 The priority of socialist organization, he blazed, should

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insisting that “one step of actual movement is worth a hundred pro-

became known as the Austrians were championing deductive method and atomistic individualism against the holistic inductivism of the German historicists. In philosophy and sociology, debate raged between positivism and its hermeneutic and neo-Kantian critics. This, the question of social-scientific method, divided the radical counterculture like no other. Lukacs vehemently opposed positivism, seeing it as the ideology of social atomization, of capitalism.139 His object of study was the


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relationship between spiritual experience and aesthetic form, as a means of comprehending what he conceived of as a cultural crisis, the resolution of which required cultural revolution and spiritual renewal. He and his co-thinkers, such as Mannheim, were deeply influenced by German idealist philosophy, which drew sharp lines between the methods of the natural and the social sciences, and between the objective world studied by science and the subjective reality of individual consciousness and social existence. Against Lukacsian romanticism, Jaszi, Pikler, and Somló found inspiration in the notion that human behavior is rationally comprehensible and predictable according to natural laws—the idea that had encouraged Enlightenment reformers in their quest to re-engineer social conditions such that human beings would at last be free to act according to reason. They regarded its contemporary incarnation, positivism, as a razor-sharp weapon against clericalism, and Spencer as their patron saint. Jaszi described Spencer as “the great visionary,”140 and entreated him to “support our difficult pioneering movement.”141 The fi rst issue of Twentieth Century sported a picture of the great man on its cover and opened with words of encouragement from him. Spencer might seem an odd choice of hero for the left-liberal counterculture. A Social Darwinist and supporter of laissez-faire, his work was funded by such plutocrats as Andrew Carnegie and John D. Rockefeller, because it opposed socialist and welfare-liberal positions,142 and he originated several staple theses of twentieth-century conservative social science: “illiberal democracy,” the “road to serfdom,” and the “iron law of oligarchy.”143 However, for liberals in benighted Hungary his theories offered something precious: a confidence that history was on their side. Human civilization, the British sociologist was convinced, evolves towards “happiness” and “ultimate perfection,” with the crude “militant”

societies of the agrarian past and present destined to give way to a superior, complex “industrial” society in which the discrete parts of the social organism cohere in mutual, functional interdependence, and voluntary cooperation among individuals becomes the norm.144 For Jaszi and the radicals, these arguments sanctioned their idealistic strug gle to replace the decaying religious and metaphysical ethics of the old clerical order by a new morality, based on rational science and human

ual action or metaphysical forces,146 they followed Spencer in conceiving of social processes as the outcome of objective evolutionary laws. And they believed that social scientists, girded with a positivist comprehension of those laws, were in a position to apply their knowledge to the improvement of the social and political order and thus of the human soul itself. “We believed in the limitless optimism of the theory of progress,” Jaszi was later to recall. “We were rationalist, anticorruptionist knights errant” armed with the “lances of our utilitarian truths” and waging guerrilla warfare against “the thousand-year-old bastion of feudalism and clericalism.”147 Rationalist social science enabled the foundations of conservatism—religion and nation—to be deconstructed. These were not divine creations but institutions. As such, they reflected the exigencies of a par ticu lar period in the human story. Nations, in Pikler’s constructivist perspective, are not the expressions of innate instincts but, like clubs or corporations, are consciously fabricated by real people. This was a thesis that provided warrant for a progressive belief in a cosmopolitan future, while also recognizing the abiding strength of national sentiment. If the ultimate objective was internationalist, the route thereto had fi rst to wend via the nation-state.148

C O S M O P O L I TA N L O G I C S , CHRISTIAN CONCLUSIONS Both in his lifestyle and in his political outlook, Polanyi was cosmopolitan, a citizen of the world. By the first, I refer to a way of being: the culture of intellectuals, middle-class travelers, and business elites—people who lead mobile lives. Plugged into transnational networks, they are


traditional view of social phenomena as explicable in terms of individ-

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solidarity.145 While Hungary’s atavistic establishment supported the

equipped to feel at home when abroad. They can “keep true time in two longitudes at once,” as the colonialist scholar Sir Henry Maine once put it.149 Colonialism demanded this sort of outlook in its administrators, but nineteenth-century European liberalism encouraged it too. “We had built a network of railways,” recalls Michael Polanyi, the rail-builder’s son; we could “travel about without passports and settle down anywhere without permit: a degree of civilization inconceivable today.”150 Civilization,


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it was understood, required the ability and freedom to travel, a liberty of which the Polanyis made the most, with regular family holidays in Hungary, Austria, Germany, and beyond. Mihály’s business, too, often took him away from Budapest, and Karl would sometimes accompany him: to Vienna, frequently, and to Germany, where Dresden station mightily impressed him. (It is colossal, he wrote excitedly with accompanying pencil diagrams, adding that even Charing Cross and St. Pancras, his father had informed him, could not compare.151) In a sense, then, Karl and his siblings were paradigmatic cosmopolitans. Already as children they were polyglots. German, and to a lesser extent Hungarian, were spoken at home; English was learned from the earliest age, and Cecile’s father encouraged the precocious Karl to compose his letters in French—which was also the language spoken at table.152 Latin and Greek quickly followed. Languages, Karl reminisced at the end of his life, had “kept the worlds of learning open to me” during his “years of poverty,” for they afforded him “access to broader horizons.”153 The second strand of cosmopolitanism, its political outlook, refers to a way of seeing, one that foregrounds our common humanity, refuses to essentialize par ticular identities, and advocates the extension of political unity and liberty from the national to the global scale. “I’m a cosmopolitan, in favour of freedom of every kind” was one of Polanyi’s watchwords.154 “I feel at home anywhere, so long as there is a library,” was another.155 He dissociated himself, however, from the more radical cosmopolitan outlook, in which the par ticu lar is effaced by the universal. That he considered himself an “internationalist,” he liked to assert, “should not be confused with disloyalty to one’s country or even the colourless existence of the person who feels equally at home everywhere because he has no country of his own.”156 Ever since the Enlightenment philosophes, this has proved a treacherous path to tread. In

Kant’s case, as David Harvey has shown, the universality of his ethics contrasted with the “awkward and intractable particularities of his geography”—including his theory of national character and national belonging, according to which par ticular peoples are considered “indolent, smelly, or plain ugly.”157 When certain groups are deemed inferior, cosmopolitan principles come to function as a discriminatory code that masquerades as universalism. To this condition, Hungary’s assim-

often successful integration into civil society and could not readily understand the discrepancy between their aspirations and those of other nationalities. Why, they wondered, could Slovaks and Romanians not be equally gratified by incorporation into the Hungarian cultural sphere?158 Polanyi was no Hungarian chauvinist, yet he did staunchly believe that the nations of Central and Eastern Europe should follow the lead of “ England” and France in assimilating their plural ethnic constituencies into a unitary national tradition. He did not support the right to secession of the oppressed minorities within Greater Hungary and extended scant sympathy to the ghetto Jews, who appeared to him a closed society, mulishly resisting the beneficent course of Progress and the reasonable demands of modernity, patriotism, and liberalism. His liberal cosmopolitanism accorded with the smoothing away of his own Jewishness in the interests of universal values, but its precept of toleration was limited by his nationalist values. Polanyi’s cosmopolitanism was complicated not only by his nationalism but also, from his early thirties, by a quasi-religious communitarianism. Initially, this was informed by a Whiggish conceptualization of the human story, according to which human beings had made steady progress on the long and upward road to contemporary Western civilization from the culture of “the savages of Borneo”159 in whose “tribal existence . . . life is immediate” and neither power nor value have crystallized into institutional forms.160 In this narrative, a crucial intermediate milestone was the invention of the world religions, for it was they that first conceptualized a community of all in a single moral order. In his words, they brought into being the idea “of the shared human fate,” a “common order of all humans based on the living individual’s self-consciousness.”161 Credit


Although themselves oppressed, they were buoyed by their rapid and

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ilated Jewish intellectuals, including Polanyi, were quite susceptible.

was due above all to Christianity, which is why there existed “no greater figure in the history of the white race [sic!] than Jesus of Nazareth,” whose “life, teachings and death” revealed to us “in what manner we may be saved.”162 Jesus, and Christianity, had demonstrated how to fuse gemeinschaft, a communitarian consciousness, with the best of liberal gesellschaft—its universalism and the ethic of individual moral responsibility. Polanyi came to regard this as Christianity’s triumph and


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also as the defining cause of anti-semitism. When asked in the 1950s why the Jews had been “the target of the terrible events” of the previous decade, he rehearsed the standard Christian demonology, albeit with his own distinctive twist: “It was the Jews that brought Christianity into the world, and this was a terrible burden. For, it brought into being the trepidation of conscience: the Jews had brought this burden into the world but then walked away from it!” Their “guilt,” he added, “is not with the death of Jesus but with rejecting the teachings of Jesus, which are superior.”163 Christianity on its own, however, was not capable of saving the world. It had brought into being the morally autonomous individual, and this was a necessary prerequisite to the transformation of humanity “into a universal community.”164 Yet Christianity’s achievements were links in a chain of human progress that greatly transcended it. “The cultural work of medieval Christianity, together with the progress associated with the Reformation, the French Revolution and modern socialism,” Polanyi argued in the 1920s, “are witness to ever larger masses of people becoming aware of the shared human fate.”165 The time has come, he added with greater urgency in the following decade, “when a new move towards community is inevitable, if humanity is to survive.”166 Christianity had supplied the matrix that would enable the emergence of a cosmopolitan global community, but it could not achieve that task alone. It had “now to be aufgehoben. (He would use the German term.)”167 Central to that Aufhebung would be radical and socialist politics.




olanyi entered the University of Budapest in 1904, where he majored in law, with philosophy, politics and modern history, economics, and statistics as minor subjects.1 He excelled, and

Pikler predicted his name would become known, but political reaction was to grievously disrupt his studies. 2 The University was a bastion of anti-semitism. In the late 1890s, students had sent a telegram of approbation to Karl Lueger, and a movement of “Christian awakening” had gripped a sizeable segment of the student body, not least in the faculty of law. The liberal and ethically relativist ideas of Pikler and Somló were anathema to Hungary’s conservative educational establishment, which bore down upon them, encouraging right-wing students to mobilize. During Polanyi’s student years, polarization between conservative and leftist (predominantly Jewish) students reached fever pitch, and this accelerated his radicalization. His combative spirit has been immortalized by a fellow student, Paul Ignotus. “When in the heat of a brawl at the University he was challenged to a duel, [Polanyi] answered: “‘I’m always pleased to fight you, by intellectual arms.’”3 In fact, he was prepared to go further. When a talk by Pikler, orga nized by a socialist student society to which he belonged, was disrupted by conservative students, he and his comrades responded by physically ejecting them from the

room, and then commandeered Pikler’s carriage to form a triumphant procession on the Kossuth Lajos Avenue.4 For this, Polanyi was expelled from the University. He resumed his studies elsewhere, at the University of Kolozsvár, where in 1908 he passed his doctor of law exams. In the following June he took his final oral exam, with Somló, to acquire his doctorate of jurisprudence.5


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Concurrently with his studies in Kolozsvár, Polanyi played a vital role in ensuring that the Budapest students’ campaigning spirit did not dissipate, and in 1908, with the Hungarian Association of Freethinkers as midwife, the Galileo Circle was born. The name was suggested by Pikler. Just as in 1633 the Earth “still moved” despite Galileo’s coerced recantation of his discovery that it revolves around the sun, so in 1908 the radical scholars’ and students’ case retained its force despite the repression to which they had been subjected. With his election as its first president by the Circle’s 256 members, Polanyi entered a defining phase of life, as intellectual impresario and political leader. Between the formation of the Galileo Circle and the outbreak of the First World War, Polanyi experienced career dissatisfaction and personal travails, but also a succession of forward leaps in his intellectual and political development. In 1910 he resigned the presidency of the Galileo Circle and took on the leadership of the Committee for Workers’ Education.6 He was inducted into a Freemason’s lodge (where he found himself “well liked”) and joined the leading circles of the Radical Bourgeois Party.7 In reminiscences two decades later, he would single out this period, with its multifarious intellectual and pedagogical activities, as having constituted “the real background of my life and thought.”8

R E G E N E R AT I N G T H E “ WA S T E L A N D ” In his early twenties, for all his intellectual burgeoning, Polanyi remained overshadowed by the emotional and financial repercussions of his father’s death. For long years, Cecile was depressed and sick with pleurisy and other ailments, while Karl was “horrible” and full of “rage.”9 Equilibrium did not return until the summer of 1907—a normal, enjoyable summer, “safe from elementary troubles”10—but even then, normality was not to endure. In late 1909 he suffered a series of illnesses. One friend reported

that, although able to continue his studies (in statistics), he was “constantly constipated: his face is grey-green.” Some months later he was “very poorly; able to do only the minimum.”11 In 1910 he recovered enough to enjoy a sojourn in the Tirol with his closest friend, the art critic Leo Popper; his speeches in Vienna and to the Galileo Circle were also well received. (“He spoke as a great agitator,” Lukacs reported to Popper. “If

Hirlap [newspaper].”12) His physical health was improving too, and he regained fitness—to the extent that friends joked that he was destined to become a professional sportsman.13 But the uptick did not extend to his mood. He was plagued by depression and a “dreadful anxiety,” which was inflamed in 1911 by the suicide of his cousin (and Lukacs’s muse), Irma Seidler, and by Popper’s death from tuberculosis.14 Nor was his temper helped by vexatious quarrels with the equally depressed Lukacs over the latter’s failure to fulfi l an alleged promise to provide a stipend for Popper’s fiancée, a Dutch artist named Beatrice (Bé) de Waard.15 Could romance have contributed to Polanyi’s recovery? Documentary evidence for this period of his life is sketchy. We know that in 1910 a friend attempted to “pair him up” with a lover, but the bait was not taken.16 Around two years later, a liaison does seem to have developed. Bé de Waard has been depicted as the love of Polanyi’s early youth,17 and her words to Karl certainly resemble those of a lover—albeit at times a jilted one. (“My darling why have you abandoned me? . . . I worry about you endlessly, for no post from you ever arrives.”18) In winter 1914, Karl confided to Michael—in a letter that took an effort to write, as he had fractured his collarbone in a tobogganing accident—that “the last time I was with Bé I finally broke up with her. . . . I am convinced that with regard to me (but not with regard to her) this is a positive step. She tolerated the break up well, which calmed me down.”19 All the while, Polanyi was torn as to what vocation to pursue (the options were lawyer, sociologist, or politician) and was struggling under the pressure of supporting his family. 20 With the eldest brother, Adolf, having emigrated to Japan, the burden of familial care fell on Laura and Karl’s shoulders. Although Mihály’s well-to-do lawyer brother provided for their basic needs, Karl saw himself as paterfamilias, assuming


sal suffrage, attack Parliament and smash the windows of the Budapest

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he were to address a throng of people they would, in the name of univer-

substantial responsibility for the care of his younger siblings and for the household income. Alongside his studies he tutored wealthy schoolboys and cared for children in the summer vacations, but ancillary earnings of this sort were insufficient, and his inclination to seek a career in the intellectual or political sphere met with his mother’s express displeasure.21 He was, she complained to Lukacs, “becoming a ‘scholar’; he goes to the aid of


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every poor old woman; he refuses to grow up.”22 She was adamant that he pursue the “financially supportable” option,23 and was delighted when his uncle offered him a position as a clerk in his chambers. Then, in 1912, he was called to the Budapest bar, but law was not Polanyi’s calling—and the meager satisfaction he gleaned from this enforced career move, some believe, was a factor in the resentments he felt toward Cecile.24 If postpaternal hardships complicated his feelings toward his mother, they strengthened his bond with his teenage brother, Michael, toward whom he acted in loco parentis. In Karl’s recollection, expressed in a letter to Michael, these were the years “when I—my confused self—had you living beside me, a young saint.” There was “some selflessness” stored inside him, and it fueled a “great love” for the genius cub of the household, a dedication to his flourishing that was to become “a governing passion over many a year”25 and would yield a quiet but steady satisfaction in his achievements. 26 This fraternal flame was to glow brightly throughout their lives, even if, as we shall see, it encountered turbulence when Michael’s intellectual and political trajectory departed decisively from Karl’s in the 1930s, to the disappointment and sometimes pained irritation of the elder brother. In their teens and twenties, however, the brothers’ relationship was enjoying its “golden age,” characterized by shared ideas and idols (Dostoevsky, Tolstoy, and H. G. Wells) and collaboration in the Galileo Circle.27 “My passion for ser vice,” Karl wrote Michael in recollection of the Galileo experience, became an ingredient in a students’ movement which introduced in Hungary a faint echo of the Russian revolutionary commitment to a cause. The intellectual proletariat, mainly Jewish, [was] infused with a spirit of selfless dedication to the spirit of a movement in that Waste Land. . . . I was engaged in an effort which I now recognize in its true character: the

reconditioning of a morally destitute people. This was not done out of patriotism. I was moved by humanism. 28

This excerpt tells us something about the moral fervor and pedagogical reformism of the Galileo Circle and about the motivations behind Polanyi’s involvement. Its typical member was a young intellectual or

the Jewish intellectual proletariat,” although, while recognizing the prevailing anti-semitism, they did not view politics through the lens of the “Jewish question.”30 Its membership is listed on his curriculum vitae as more than 2,000, and the number of lectures and classes it organized as more than 2,000 per year. 31 Its core activities were seminars and adult education classes as well as “village research” competitions through which young urban intellectuals were encouraged to acquaint themselves with rural life.32 Its overarching mission was to transform the Hungarian “Waste Land” by way of moral uplift and the dissemination of scientific knowledge. In Polanyi’s description, it “was anything but religious. It was violently opposed to the ruling Clericalism, and was definitely agnostic in its outlook.” Rather, its importance lay “in the cultural and moral field.” As with many a moral regeneration project, from Socrates onward, politics was regarded as secondary. The Galileists “asked, for the first time in modern Hungarian public life, for a definition of the scope and contents of politics in terms of ethics.” However, numerous goals around which it mobilized were clearly political in the broad sense. It stood for “the introduction of universal suffrage, for land reform, and a liberal policy towards racial minorities,”33 and its moral crusades brought it into overtly political skirmishes with rival student movements, particularly drinking clubs and church groups.34 Although many of its members were social democrats, the Galileo Circle maintained a distance from the labor movement. Party political issues were barred from discussion, and the SDP responded in kind: its leaders “ were not willing to accommodate this intellectual workers’ camp.”35 In retrospect, Polanyi saw the downplaying of political engagement as a weakness. If in “the moral sphere” the Circle had been a  success, with “masses of students becoming acquainted with the


geois elements,” he recalls. 29) It was “overwhelmingly recruited from

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lower middle-class student. (It was shunned by “the ‘better’ petit bour-

experience of moral mission,” politically it had not. It could have given birth to something similar to “the Russian student movement of the 1880s—but not without leadership and political experience.” Nobody recognized its “revolutionary possibilities” and this, he concluded, was “one of the hidden reasons” of the failure of “October”—Hungary’s “white chrysanthemum revolution” of 1918. 36


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His error in leading the movement “in an anti-political direction” notwithstanding, Polanyi flourished in the Galileo Circle.37 Ignotus recalls him as “a fascinating young sociologist, sophisticated, witty, eloquent.”38 His coruscating intellect and oratorical brilliance had found a stage, and  he was beginning to publish his ideas, in Huszadik Század and in Szabadgondolat (Free Thought), the Galileist periodical whose editorial board he joined in 1913. This phase of his intellectual formation involved grappling with the England-Russia polarity that characterized both his own thought and the Galileo Circle itself. He embodied and internalized the “sharp opposition” that characterized the Circle, between its “underlying ethical impulse” and “the scientific positivism of its creed.”39 What Polanyi initially welcomed in positivism, of which tradition he saw Comte, Marx, Spencer, and Ernst Haeckel as leading representatives, was its refusal of religion and metaphysics in favor of the scientific method.40 But following Pikler and Jaszi, he was sceptical towards its pretence to what he and they termed “objectivism.”41 It sat uncomfortably with his commitments to moral regeneration and voluntaristic narodism. His fi rst considered reaction against “objective positivism” emerged in 1907–1914, by way of an enthusiasm for a different species of positivism: the empirio-monism of Wilhelm Ostwald and Ernst Mach. Ostwald, a natural scientist, was co-instigator with Haeckel of the Monist movement. Although in his political views a reactionary—Social Darwinist, romantic nationalist, and imperialist zealot—his broader philosophy attracted Polanyi’s interest. He promoted a view of the Wissenschaften as a social phenomenon, one that encompasses the entire world of learning, and one, moreover, that is the vital source of ethical progress in that it gives human beings, hitherto condemned to live as atomized individuals, the tools with which to forge a sense of social unity.42 His cothinker Mach, following Comte, proposed that humankind had outgrown

its religious and metaphysical ages and was progressing toward the age of positive science. Passive wonder in the face of the universe was giving way to the quest for Enlightenment, impelled onward by scientifically minded individuals.43 A monist, Mach maintained that no “great gulf” existed between the “material world and the spiritual world,” or between research in the natural and social sciences.44 His attack on metaphysics

dition. He translated Mach into Hungarian, and invited both him and Ostwald to speak to the Galileo Circle; indeed, Mach’s work was the topic of its very first public debate.45 If viewed through the rear mirror of Polanyi’s subsequent evolution, his infatuation with Mach seems bewildering, for the Moravian philosopher-physicist was hostile to religion and metaphysics, and contributed significantly to the popularity of methodological individualism. Yet, for the young Polanyi, his work was invaluable, and he devoted a series of articles to its evaluation and dissemination. He found Mach’s atheism bracing and valued his subjective positivism, for it appeared to offer a means of simulta neously rejecting determinism and affirming the creative role of human agency (not least in the exercise of moral responsibility), while at the same time retaining a scientific attitude robust enough to counter traditional conservatism and to legitimate rational social engineering. He praised Mach’s work for redefi ning science such that it could be clearly “separated from all types of metaphysics.” More even than religion, he argued, metaphysics represented a threat to social progress; for whereas the difference between science and religion is readily discernible, “metaphysics represents a transition between the two that is dangerous and generates illusions”: it lends legitimacy to words such as “essence,” “truth” and “final cause” which from a scientific standpoint are vacuous. Critically, whereas the claims of science can be shown to be true or false, those of metaphysics cannot be logically defined and are therefore irrefragable.46 By delivering science from the fog of metaphysics, Mach had cleared the field for conscious human engagement in history. If Mach was the dominant influence on Polanyi’s philosophy during his Galileo period, other stars also burned bright, notably G. K. Chesterton,


revolutionary rationalism that champions reason over encrusted tra-

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seemed to Polanyi to represent a further stage in the development of a

Dostoevsky, and Tolstoy. Their views and Mach’s mix as consecrated oil with distilled water, and although there is no documentary record of his thoughts concerning this tension, Polanyi was surely alive to it. Both were Christians. Tolstoy was later to be lauded by Polanyi as the fi rst thinker to have “discovered the meaning of the New Testament,” while Chesterton, in the fi rst chapter of Heretics—which Polanyi translated


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into Hungarian—bewails his generation’s disparagement of metaphysics and religion and pleads for a return to “theory about ultimate things,” including “cosmic philosophy” and “the nature of men.”47 Gradually, Polanyi’s own outlook turned in this direction. In his early twenties he had venerated scientific reason, in opposition to religion and metaphysics, which undermine morality by attenuating our apprehension of responsibility for our own actions.48 Later, as his critique of determinism in social theory hardened, he was to justify his idealism on the terrain of ethics rather than of positivist science. A pivotal moment arrived with “The Crisis of Our Ideologies.” Published in 1910, this essay intervened in a decade-old debate over the trajectory of “orga nized capitalism” that had been raging between Eduard Bernstein and his opponents. The German revisionist had postulated that increasing state regulation would stabilize the business cycle. Orthodox Marxists disagreed, proposing that orga nized capitalism would be far from crisis free and would instead intensify class strug gle and geopolitical competition. Polanyi sided with Bernstein. His sociolog ical spectacles tinted with a Kantian (or Spencerian) optimism that the development of knowledge and the douceur of commerce diminishes the likelihood of international conflict, he predicted that “the next period of the capitalist age will produce largely stable conditions of material existence” and concluded that “a tendency towards stabilisation will be its main feature.”49 The ink had barely dried on these words when the Great Unrest broke out—in Hungary with a wave of industrial action that included more than seventy-five political strikes—succeeded by three decades of war and economic chaos.50 It was to explain this unlikely turn of events, the “collapse of liberal civilization” that had shattered his youthful meliorism, that Polanyi was later to write The Great Transformation. In the short-term, however, it was a different contradiction in his essay that preoccupied him. On one

hand, it deemed certain socioeconomic trends to be inevitable, on economic grounds; on the other, it called for them to be resisted, on ethical grounds. The contradiction in this position, he later summarized, “turned me against the materialism and positivism of the time,” and toward “the idea of ethical activism.”51 He “discarded naturalism in social theory in favour of the deliberate moral action of individuals,” refusing “to allow

as we shall see by his conversion to Christian ity, set up a series of puzzles that he was to address in the interwar era, a period during which his energies were directed toward reconciling “the social gospel [with] man’s condition in an industrial society.”53

BOURGEOIS RADICALISM: A HEGEMONIC PROJECT In the course of repudiating determinism and positivism, Polanyi became “increasingly critical” of Marxism. It was the school of thought in which he “had been, in a manner, brought up,” having been “practically the only form of Socialism known in the Central European countries at the time.”54 This is an exaggeration, for other socialist currents were well known— Kathedersozialismus, for example, or indeed Bernstein’s liberal socialism, which Polanyi himself came to support. The liberal socialist movement was dedicated to democratization and to overcoming the exploitative aspect of capitalism, a task that would be accomplished with the expropriation of the feudal landowners and the opening to all of the opportunity to own land. Alongside Bernstein, it included the German economist Franz Oppenheimer and his Hungarian friend Jaszi.55 In Polanyi’s account, liberal socialism represented the culmination of a tradition initiated by the Physiocrats and which included Smith, Henry Charles Carey, Proudhon, Spencer, Eugen Dühring, Henry George, Peter Kropotkin, and Theodor Hertzka.56 From Smith and Carey, liberal socialists took the determination to broaden the field of market competition and a belief in the coincidence of interests between workers and bourgeoisie; and from Proudhon, Spencer, and Kropotkin they took a commitment to narrow down the sphere of activity of the state. Polanyi singled out


right and wrong.”52 These successive shifts toward idealism, capped

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the claims of scientific determinism to decide questions of political

George and Carey for praise: both were “great Christian socialists,” and George’s Social Problems was “a true economic evangelium.”57 He also found himself impressed by the works of Dühring, a Smithian socialist best known for proposing that the interests of capital and labor exist in harmony, and for the Gewalteigentum thesis: the idea that all exploitation derives ultimately from the forcible acquisition by land-


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owners of a monopoly of land ownership. In contrast to Marx and Engels’s identification of economic “laws” that underpin the exploitation of workers in capitalism, Polanyi argued in Dühringesque vein that exploitation is rooted in “conquest and enserfment,” and that it is the monopolization of land that accounted for the ascendancy of the capital ist class. 58 Polanyi uses the term liberal socialism interchangeably with reformism, radicalism, and “land reformers.” It carries little that is specifically socialist in content other than sympathy with the plight of working people and preferences for cooperative ownership and a more egalitarian income distribution. The liberal socialist project sought to achieve economic freedom through land reform and the liberalization of trade and competition, including “the complete cessation of all regulation of prices, wages and tolls, as well as all other forms of intervention in the free market.”59 For some democrats this was an uncomfortable proposal, because in the latter half of the nineteenth century the more democratic states had tended to favor protectionism.60 Against this, liberal socialists argued (in  the tradition of Smith, Cobden, and Bright and the British Labour Party) that the interests of the broad masses lay with free trade.61 It would undermine speculative profiteering and the monopoly in land, resulting in the elimination of exploitation. With full freedom of trade and markets, the economy would be governed according to a socialist version of Say’s Law: egalitarian and crisis free. The transition to socialism to which Polanyi aspired would retain the market system, “for otherwise the economy itself would cease.”62 (At this stage, and arguably as late as the 1930s,63 he was occasionally susceptible to the “economistic fallacy” of which in later life he would become a zealous critic: the assumption that all societies are based on market- exchange- oriented individual action and should be modeled accordingly.) Encouraged by Bernstein, Jaszi established a Radical Bourgeois Party in mid-1914, and Polanyi was his right-hand man. By virtue of his orga-

nizational and rhetorical talents, a leadership role suited him. (On the occasion of one of his speeches, to law students, he recounted how Count Mihály Károlyi, the tall, maverick aristocrat who was later to become president of Hungary, “came over to me again and again, to congratulate me. Somebody embraced me: ‘An orator at last’—and there was something in it.”64) The party’s program centered on land redistribution, extending

was a prominent member—that campaigned for the revision of marriage law on the basis of gender equality.66 Its championing of land reform and economic decentralization set it apart from Hungary’s SDP, as did its disapproval of class conflict.67 In Jaszi’s summary, its program and ideals resembled “the Labour Party in England,” albeit with “more radical” elements.68 In the meaning that Polanyi gives it, radicalism denotes a belief in individual emancipatory agency, in contrast to the gutlessness of traditional liberalism and the fatalism of orthodox Marxism. These movements represented the haute bourgeoisie and the manual-industrial working class respectively, while radicalism’s constituency was the intervening layer: a “new middle class” of white-collar workers, private and public officials, entrepreneurs, and intellectuals.69 Polanyi’s party set out to lead this layer in a “bourgeois siege of the fortress of feudalism,” a campaign that would simulta neously entice the bourgeoisie back to its proper emancipatory agenda and arouse the workers from their stupor. Thus interpreted, radicalism represented the interests of all social layers apart from the aristocracy and clergy, including the intelligentsia, bourgeoisie, peasantry, and “the nationalities.” 70 In a series of articles and speeches, Polanyi and Jaszi propounded an alliance between social democracy and their party. Social democracy would wage “the struggle against capitalism” while “bourgeois politics and the struggle against feudalism will be carried out by the radicals.”71 This alliance, however, was not to be of equals. Only the radicals could represent the overall interests of the “labouring peasants and workermasses,” for that task, Jaszi insisted platonically, required “the leadership of the genuine, truly creative intellectuals, . . . phi losophers [who could boast] complete theoretical knowledge and complete moral purity.” 72 Adopting a position vis-à-vis the middle class analogous to


ration of church and state .65 It set up a women’s section—of which Laura

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the franchise, international free trade, education reform, and the sepa-

that of Gramsci’s toward the working class, Polanyi made a case for its hegemonic role in a broad democratic bloc, to ensure “leadership of the intellectual forces on a democratic foundation.”73 His case rested on two main arguments. First, due to their occupation of superordinate positions in the economic field, the middle classes cannot be expected to “bring up the rear in the field of politics. If they are not the leaders, they


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are nothing.”74 Second, they possess the most developed political and ethical consciousness, due to their role as guardians of the “accumulated values of human intellect.” In contrast to manual workers, they tend to support democracy,75 and because it “is the necessary minimum” political goal “from the viewpoint of the proletariat,” its achievement is a priority for both classes. Therefore, although the two classes were united in their overarching interests, their different nature— manual workers being “necessarily materialist,” intellectual workers “necessarily idealist”—demanded separate organization in bourgeoisradical and socialist parties.76 Polanyi’s prescription for a radical–social democratic alliance could also be adapted to explain the crisis of progressive Hungary. The cause of that crisis, he argued in 1913 (in anticipation of his later turn toward functionalist theory), was that social democrats had trespassed on the functions proper to bourgeois radicals and had been able to do so because the latter were politically homeless, with no party to call their own. For waging the struggle for democracy and for “entrenching radical bourgeois ideas within progressive public opinion,” Polanyi was warmly appreciative of social democracy, but in so doing it had stolen the clothes of bourgeois radicalism.77 For their part, a good many members of the “extreme left wing of the bourgeoisie” had backed the social democrats’ campaign for democracy, but such support had become “empty with the passing of time.” 78 In short, neither intelligentsia nor industrial proletariat had shown itself capable of fulfilling its proper vocation; only a coalition of manual and mental labor, orga nized separately but acting together on the critical question of democratization, could rescue Hungary—and indeed, Polanyi believed, human society—from its parlous condition. Jaszi and Polanyi propounded a strategy of hegemony not only for the intelligent sia but also for the Magyar nation. They could see that the question of democracy had become insidiously knotted within the na-

tional question in Hungary. Gerrymandering had ensured that few non-Magyar representatives were elected to parliament. National privilege was used as a shield of social privilege, as the lower classes of the Magyar population were encouraged to acquiesce in their exclusion from the vote with the chauvinistic argument that its extension would imperil “Magyar supremacy.” 79 Against this, the Radical Party advo-

liberalism, which was attempting to preserve absolutism through deals with the minority nationalities, but it showed insufficient appreciation of the oppression that minorities had suffered in the Habsburg prison house. “The cultural hegemony of the Magyars,” in Polanyi’s view, was visible in their “more highly developed industry and commerce, literature and science, political institutions and political ideals,” and had to be defended—albeit by impeccably democratic means. “Instead of the hegemony of force,” he proposed in early 1914, democracy would enable the Magyar nation’s cultural hegemony to adopt a progressive guise.80 It was not long, however, before hegemonic struggles on the European stage cut this debate cruelly short.

A TORTURED SOUL AND THE TERRIBLE MACHINE Only weeks after the foundation of the Radical Party, the Habsburg Empire declared war on Serbia, and a general conflagration ensued. The principal constituencies that shaped Polanyi’s political thought, the socialist movement and the liberal intelligent sia, had been powerfully influenced by the Enlightenment belief that humankind had shown itself capable of perfecting its social environment through reason, debate, and the majority vote, and by its optimistic corollary, that war was a relic of a barbarous past.81 Yet both groups greeted the outbreak of fighting with approval. The bulk of liberal intellectuals came out in its support, justifying their respective nations’ involvement as righteous self-defence. Most Habsburg Jews, tragically, backed “their” empire, on the grounds that the enemy was anti-semitic Russia and that the outcome “promised to bring their final and complete acceptance” into civil society.82 Despite


the minorities. Their position was critical of mainstream Hungarian

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cated a federal democratic regime, with equal political rights accorded

their patriotism they were accused of shirking military ser vice, war profiteering, and a lack of solidarity with the national cause.83 Their enthusiasm for Austria-Hungary ultimately served only the interests of Hungary’s conservative elite—the same group that had suppressed and goaded them in the prewar period, was to humiliate and terrorize them in 1919–1920, and persecute them during the Horthy dictatorship before


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acting as accomplices to genocide in 1944. As to the socialist movement, Polanyi recalled after the guns had fallen silent, the expectation had been that on the day war breaks out the world “will awaken to the Internationale.”84 Instead, Europe’s labor movement splintered, with most of its constituent parties, including the social democrats of Austria and Hungary, lining up against their foreign comrades. The Austrian SDP leader Otto Bauer epitomized the case. His recent book on the national question had contended that workers will inevitably hold nationalist sentiment and socialists should therefore embrace the idea of the nation. Following this logic, he appealed to AustroHungarian workers in August 1914 to follow him to the front, where he relished “the romance of war” and was proud to serve as an officer, even earning a Military Cross III Class with Swords in recognition of bravery in battle. 85 Only a small minority—the likes of James Connolly and Lenin—resisted. In Hungary, this current was represented by Ady and Szabó. The latter became a leader of the antiwar camp, a movement that encompassed liberal pacifists as well as a group of “Revolutionary Socialists” that had sprung from the Galileo Circle. Lukacs, too, rallied to Szabó. Although no agitator, he opposed the war and regarded military conscription as a form of slavery—and was able to use his father’s connections to gain exemption. Of Polanyi’s Radical Party comrades, many either fought in the war or applauded from the home front. Károlyi, although sympathetic to pacifism, volunteered to fight. Given his aristocratic privileges, he reasoned, the “poor dev ils” in the trenches would never forgive him if he stayed away.86 “I felt that I could not identify myself in the future with a democratic Hungary if I had not shared the hardships of the underprivileged,” he recalls in his memoirs, while also admitting to a “half-conscious and less estimable consideration—the fear of being branded a coward.”87 Jaszi represented a position that may be styled “nationalist cosmopolitanism.”

Its supporters elsewhere included Emile Durkheim and Arnold Toynbee Jr.: liberals who, while vesting hope in a future in which national antagonisms would be sublimated into a loftier pacific order, fiercely supported “their” nation (or military alliance) in the here and now, on the grounds that the cosmopolitan values that it supposedly represented ensured that its victory would be tantamount to triumph for humanity as a whole.88

small nations and allow larger regional entities to emerge in their place.90 This sociolog ical thesis alone would presumably have impelled him to cheer annexations by all the contending empires, but it was supplemented by a belief that the Mittelmächte represented the progressive party. Jaszi placed his faith in German liberalism and expressed enthusiasm for a German-dominated postwar order.91 In Károlyi’s recollection, Jaszi shared the sentiments of the Germans and advocated the “conception of Mitteleuropa”—the vision, advanced by the liberal imperialist Friedrich Naumann, of bringing the vast territory stretching from the Adriatic to the Gulf of Finland under German sway.92 His emphasis, and that of Világ (World), the periodical of the Radical Party, was that victory for the Central Powers would help accelerate the demise of feudalism, create a secure bulwark against autocratic Russia, and expedite the formation of a confederation of Danubian countries integrated in a German-led regional alliance.93 If in his references to Jesus, Jaszi’s case joined with the “God is on our side” cries of the clerical conservatives, his stress on the specifically maleficent nature of the Russian enemy connected to arguments that were hegemonic in the liberal mainstream— that the war presented the opportunity to punish Russia for its role in crushing Hungary’s 1848 revolution—and especially in the Jewish community. In which group did Polanyi find himself? As a self-declared cosmopolitan, and one who had singled out Britain and Russia in his childhood affections, one might have expected him to have opposed the conflict or to have engaged reluctantly. In his daughter’s opinion, he was “probably not enthusiastic” about its cause—and yet, as a “Hungarian patriot, he considered it his civic duty” to fight. 94 In his own words, immediately prior to enlisting, he “looked forward to joining the army.”95 He regarded


its horrors, it was progressive in that it promised to liquidate Europe’s

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Jaszi likened the goal of the war to the “aims of Jesus and Kant.”89 For all

states as the legitimate representatives of national communities, with the corollary that citizens are duty-bound to respond to their leaders’ call to arms. In addition, and in common with many a willing volunteer, he wished to escape oppressive personal circumstances. He had sunk, in Kari Polanyi-Levitt’s words, into “a state of depression and probably felt great relief to get out of Budapest and go to the front.”96


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But his position may have been more considered, and more politically minded, than these reflections suggest. One reason was that Polanyi shared his mentor Jaszi’s presumption in favor of large nations and regional entities. Even later in life he was to show understanding, if not sympathy, for the Habsburg invasion of Serbia on precisely these grounds. For example, in a text written for an American audience he compared it to the U.S. Civil War, in which the imperative of war was in the last resort not moral but “geographical and topographical”—to safeguard the Union. Was the invasion of Serbia, he asked rhetorically, not similar in nature? The preservation of the Austro-Hungarian Empire “might thus have seemed—even if falsely—to its rulers as an objective value of a higher order than the questions involved in the squabbles of the small nations within its borders.”97 A second and related reason was Polanyi’s approach to the national question. The traditional socialist argument, as he interpreted it, “went thus: where there is no conflict of material interests, no antagonism exists. Thus there is no antagonism among the proletarians from the different countries as there is no conflict of material interest.” But this thesis, he supposed, was falsified in August 1914. Following Bauer, the inference he drew was not that workers had been misled into following interests other than their own but that their lack of material stake in their nation meant that their “interest in it is purely spiritual and moral. While the capitalist has only a partially spiritual and moral interest, the proletarian has nothing other than the national culture that he owns.” Had socialist theoreticians realized this misconception earlier, the labor movement could have educated its followers to the need for an emotional and spiritual dimension to internationalism.98 Until that day arrived, nationalism would retain a certain validity, and with it, Polanyi’s willing assent. In short, August 1914 revealed that a cosmopolitan self-identification and an ardent concern to secure the ethical founda-

tions of one’s belief system, on the part even of a soul as sensitive as Polanyi, are perfectly compatible with support for an orgy of jingoistic bloodletting. Although unable to enlist at the outbreak of war as a result of his legal work (court cases that had to be followed to their conclusions), in January 1915 Polanyi commenced volunteer officer’s training. It began “on the

(during which he experienced minor injuries) as well as theoretical exercises—in which, he bragged to his younger brother, he ranked first in his class of thirty-nine.99 Shortly after, he was called to serve as a lieutenant in Galicia.100 For the next year or two his fortunes were mixed but never unbearable. From his war time address it appears that he was stationed with a company of engineers constructing horse-drawn field railways. Given his father’s profession, this must have seemed a fitting assignment. He was “in the field almost from the first to last,” and although he never engaged “in actual fighting” at times it came unnervingly close.101 In autumn 1915 he complained in a letter to Cecile that “the damned shooting has been going on all day long.”102 In another, he described a visit to the front. On approaching, he was surprised to find that it consisted of “idyllic trenches . . . abandoned by God and men.” This initial tranquillity, however, only enhanced the shock that then arrived: the “grotesque surprise of the grenades and shrapnel” that came “looping down, right by our defensive covers.”103 It was a ghastly war, and for Polanyi there were, inevitably, bleak moments. Even in 1915 when the Austro-Hungarian armies were making steady territorial gains, they were losing men at an alarming rate. In the first sixteen months alone, the empire lost 400,000, with a million missing or prisoners of war, a further million wounded, and a similar number sick—often from rat- and lice-borne typhus.104 The same year saw the recruitment screw turned tighter. Polanyi outlined the result: “No healthy body escapes the front. Extreme war-weariness.”105 The deterioration of conditions can be traced in his correspondence. In early 1915 the tone was often chirpy, if with a mordant edge: “I’ve been a soldier for a month now and I’m still alive. . . . Being in the military is very healthy, so long as you don’t die of it. . . . I remain an excellent soldier, the best in the brigade.”106


to seven in the morning until six in the evening. It included horse riding

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morning of the 16th, at a forced tempo” and lasted each day from quarter

By late summer, an anxious or stoic tone was more common. “It’s cold and rainy,” one letter to his younger brother begins, and “the little tent” was being blown about in the wind. “In the last six days we’ve been encamped in four different places. We’re starving, and hardly have anything to drink. We went for four days without bread. Those days were the bitterest. Now we’re getting fed again, and there’s coffee, tea, wine. . . . All of the


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soldiers have problems with their guts. Cholera is sporadic, although prophylaxis is possible.”107 Two months later he described his situation to his elder brother: “Where I am at the moment is a specific artefact of war. There’s no laxative like this war. . . . Not a soul anywhere; not a house with windows or doors.”108 Similarly, in a letter to Cecile, sent in “swirling fog,” he complains that the area in which he was encamped—probably near Przemyśl, a battleground that saw both sides lose up to 115,000 men to death, injury, or desertion—was anything but a rural idyll. The “hole” consists of nothing but “cows, hens, and 63 thatched farmhouses. And the rain is pouring down. The marsh is creeping closer.”109 Morale, for all that, was “stubborn and resilient.”110 We may presume that Polanyi served obediently. Certainly, the only record of his flouting army rules is the story, a Polanyi family legend, that he was disciplined for failing to stand to attention during the playing of the national anthem. Rather than insufficient patriotism, the cause of the infraction was that he was tone deaf and failed to recognize the tune.111 He was able to enjoy substantial furloughs in Budapest, and when not on leave he generally received adequate provisions, remained in good health and not infrequently in fine spirits—or so at least he assured his mother.112 He suffered from the lack of objective news and implored his brother to “write me a couple of lines, especially news,” for “what people discuss is all rumour; it is as if everyone here is deaf.”113 He knew solitude, treasured his contact with family and friends (including Bé—from whom he once again “felt the need for friendship”),114 and worried about the loneliness of those he had left behind. (In a sense, he wrote Cecile, “the war has sent the ‘dependants’ into battle, too.”)115 Yet such sentiments were overshadowed by the daily grind. In some phases he had to shoulder a “terrific amount” of work: “Day and night. . . . Duty, duty and duty.”116 In others, work was “less tiresome and more tolerable”; he could relax, and indulge his passion for reading.117 One letter, probably sent from the front, con-

tains a lengthy disquisition on tragedy in classical and Shakespearian drama.118 In others he beseeches his relatives to send books (volumes II and III of Das Kapital, Flaubert, and Locke), and when he thanks his sister Sophie and Aunt Irma for the “wonderful trea sure chests” they had sent, we can be sure that it was books that glittered most brightly within.119 It is in a letter to Irma that we see the first glimpse of the question that

sociotechnical systems geared to the wreaking of carnage, and presents the war as a sort of antisublime: so infernal as to be ineffable. “I consider an idiot anybody who can think of anything other than the war,” it fulminates, “and the greatest idiot the one who understands it.”120 The terrors of the war had evacuated the world of all meaning, and this was the cause of one of its “gravest afflictions,” for in the emptiness all that remained was boredom, “the boredom of a world without meaning,” and in the vacuity of meaning it had become difficult to put the bleakness and horror into words: “Not only can we not live in a world that is void of meaning, we cannot even describe it.”121 Even to begin to capture the enormity of the war required metaphor, and literary and mythical reference. “Humanity is a Golem which stares with horror at its own frozen mask, the tortured soul at the terrible machine,” Polanyi wrote Irma.122 “ Here one should not be able to write, only bark,” he wrote in a letter from “the wasteland” to his elder sister, adding that “if Dante had written from the 7 circles of Hell with an English aluminium pen, on a Feldpostkarte, it would have looked just like this, just as grotesque, displaced.”123 It was not to Dante but Shakespeare that Polanyi turned when, surrounded by “blackish steppe” and with the Galician winter closing in, melancholia consumed him. “For companionship I had nothing but a volume of Shakespeare’s plays; in my desolation I found myself reading and rereading one: ‘The Tragedy of Hamlet, Prince of Denmark.’”124 It was to be in an essay on Hamlet that Polanyi recorded the moment at which his war time experience reached its nadir: “The cold was so intense that when my horse stumbled and fell I was too apathetic to get out of the saddle. Fortunately—though I may not have thought so then—the gaunt stiff creature . . . jerked herself onto her long legs and I was saved,


which The Great Transformation was to be devoted. The letter conveys a sense of astonishment in the face of the human capacity to construct

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was to become Polanyi’s preoccupation in the postwar period, and to

for had she rolled over I might have been crushed to death.”125 Hamlet’s “inhuman suffering” came to form part of his being, and the haunting memory of those months would abide with him. Depression became an incubus with which Karl strug gled for many months, and at one point in 1917 it could have ended his life.126 But an equally malign threat emanated from a material source. In December of


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that year he experienced symptoms that he self-diagnosed as typhus. Although he was prone to hypochondria, on this occasion the alarm was all too real. Consumed by fever, he had to rely on a friend and comrade for his care.127 Following confirmation of the diagnosis, he was returned to his family in Budapest: dreadfully ill with typhus, suffering from a hernia, gripped by weltschmerz, a tortured soul. It was now, in conditions of “enforced quietness” during a months-long confinement in bed, that the “reading of the New Testament turned me to Christianity,” and he completed his conversion.128 Having left the Jewish community on his father’s death, following his own near-death experiences he now found a new community in Protestantism.129 Polanyi was not a believer in any traditional sense of the term. He respected every religion so long as “it forgot about theology and devoted itself to the advancement of humanity.”130 He was a modernist, for whom the meaning of life is about changing the world and not communion with our Maker through prayer or meditation. Like John Stuart Mill, he thought of religion in pragmatic, sociolog ical terms—that is, in terms of how it shapes social behavior.131 He saw its essence as the means by which human beings render the world meaningful, and he looked to Christianity not for an eschatological crystal ball but for norms and practices that enable an ethical community to be constructed, as a prerequisite for radical world-changing projects.132 Although his conversion attested to a “mea sure of mysticism,” his was a this-worldly interpretation of the gospel.133 In Jesus he saw a “revolutionary” who had revealed to human beings their capacity to bring into being “by their own strength, the kingdom of heaven on Earth.”134 Some leftist thinkers find inspiration in early Christian communities due to the rebel élan they displayed in resisting Rome, by their suspension of hierarchy, or sympathy for outcasts,135 But for Polanyi the accent was on Jesus’s revelation of the spiritual foundations, and therefore the universal relevance, of liberty,

equality, and community, and their irreducible basis: the absolute value, moral autonomy, and self-consciousness of the individual human being. Individual conscience itself, he believed, is the “bequest of the New Testament.”136 He did not pray, worship God in communion with others, or subscribe to the belief that Christianity cures the soul. Nor was church a familiar terrain—except on Easter Sundays in Vienna, when he would

gian Gregory Baum’s term, Polanyi was a “soft” Christian, “agnostic on some of the major doctrines but possessing great admiration for the teachings of Jesus and for a Christianity that promotes humanism.”138 Some would go further, proposing that he “was not religious in his makeup, nor had an interest in the spiritual world”; that he simply believed rather nebulously that “some higher order in the universe probably existed, but which we cannot comprehend.”139 But this is to overstate his agnosticism. He was deeply appreciative of the Christian gospel, for its revelation of “the way to a higher life, over and above personal selfinterest” and its emboldening of individuals to “act with uncompromising radicalism, the almost terrifying radicalism of Jesus.”140

EPHEMERAL CHRYSANTHEMUMS Sick in bed and glued to the Bible, Polanyi could scarcely have been aware that even as he departed the battlefield, a new social conflict was under way on the domestic front. Following an initial dip during the first year of war, Hungary’s labor movement had begun to revive. Trade union membership surged: from less than 100,000 in 1914 to 215,000 in 1917 and  721,000 the following year.141 In late 1917 workers’ councils were established in factories, and the first half of 1918 witnessed a general strike, scores of wildcat strikes, and revolts in the barracks. Amid frightful social conditions and with defeat in war looming, the political mood swung sharply toward republicanism, social democracy, and communism. In mid-October 1918 Count István Tisza, a prominent parliamentary deputy who had until recently headed the government, admitted publicly that defeat was inescapable. Ears pricked up among the already demoralized troops, and mutinous soldiers began to stream home.


who presided over his wedding ceremony.137 In short, to use the theolo-

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take his family to the Dorotheer Church to pay respect to the minister

In the early autumn, the SDP joined forces with Károlyi’s grouping, and the Radical Party—of which Polanyi, his health partially restored, was appointed general secretary—to form the Hungarian National Council (HNC).142 Károlyi, whose aim was a peaceful and orderly transition to liberal democracy, warned the parliament in Budapest and the emperor in Vienna that Hungary faced the choice between an HNC-led govern-


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ment and bolshevism. When neither legislators nor monarch responded to the threat, the SDP appealed to the workers and soldiers to act. It was simply a gambit designed to entrench their bargaining position, but the response far exceeded expectations and took them utterly by surprise. A wave of strikes and mutinies, flanked by street demonstrations in which white chrysanthemums were sported, hoisted them to power.143 Károlyi was no Jacobin. His instincts favored a negotiated transition to parliamentary democracy. But the logic of his position, as Polanyi was later to reflect, pointed toward revolutionary rupture. Given that a majority of Hungary’s subjected minorities were “of Slav stock,” the Magyar aristocracy and gentry along with “their mainly-Jewish financial backers” had traditionally looked toward “the non-Slav might of Vienna and Berlin.”144 Against this backdrop, the count’s stand for Hungary’s independence necessitated a far-reaching sociopolitical transformation, one that centered on the “ battle for political democracy” and the abandonment of a Germanophilic foreign policy in favor of a Franco-Russian orientation. A stable liberal order, in his analysis, required domestic peace between “Magyar democrats” and the Slav and other minorities, yet “this was impossible as long as the morbidly active foreign policy” of the Habsburgs identified “all Slavs over the border as enemies, and made their kinsmen on this side of the border appear as potential traitors.” Károlyi “was driven to the conclusion that only through the economic, social and ethnical liberation of the common people could Hungarian independence be gained: he became a radical peasant leader and an adherent of racial equality, at one and the same time.”145 In its early bloom the Chrysanthemum Revolution was characterized by the sense of unity that typifies the first stages of revolts in which the working and middling layers of society band together against an autocratic regime. But the honeymoon was short lived. The first step of the incoming administration was to autonomously sign an armistice with

the Entente. By ending the war and breaking from Vienna, this move was popular, but it came at the cost of awarding the Entente powers the right to occupy any part of Hungary they chose—a concession that entailed a thumping loss of prestige.146 Nor did the HNC government’s troubles end there. Despite the goodwill that Károlyi’s government had earned by signing the armistice and extending the franchise, few constituencies

been levered into power by mass movements, and these were pressing for swift and wholesale change: land redistribution, improved pay and conditions, and socialist economic policies. Inevitably, social polarization ensued. In Budapest a rival power had arisen in the form of networked soldiers’ and workers’ councils, and Károlyi had to rely heavily on the SDP—by a wide margin the most popular and best-organized party in the coalition government—to gain the councils’ support for his policies.147 Meanwhile, in the countryside peasants were agitating for land redistribution. According to Jaszi, late 1918 and early 1919 witnessed “the complete conversion of the masses,” including the rank and fi le of the army, to bolshevism.148 In a sense, he goes on, this was the inevitable reckoning for the “bloodshed and brutality of four years of war, for the cynical luxury at home, the systematic squandering of our economic resources,” not to mention “the appalling abuses of the pasharidden county governments” and half a century of “a grasping and unprincipled class policy which had made all serious democratic organisation and all reform in Hungary impossible.” Adding combustible potential to the mix was “the senseless and inhuman policy of the Entente” in the form of its continued economic blockade of Hungary.149 Conservative forces, too, were mobilizing against the new government. “Vested interests, doctrinaire prejudice, and urban indifference”150—by which Polanyi referred to the landowners, the church, and social democracy respectively—ensured that Károlyi procrastinated over land reform. In a moving section of his memoirs Károlyi conveys his plea sure and sense of justice in distributing land from his own estates, but his own philanthropic acts were the exception.151 His government implemented barely any land reform, even as scores of large estates were being redistributed “from below” by contingents of local peasants.


gradual reforms within a liberal framework, the new administration had

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felt their grievances were being addressed. Although committed to

Nor was the HNC government able to meet the demands of the national minorities. Jaszi, the new minister of nationalities, was prepared to concede a measure of linguistic autonomy and a federal state but not national self-determination. Although less chauvinistic than his cabinet colleagues, he was determined to maintain a Greater Hungary stretching from Galicia to the Adriatic. In a democratic age this colossal territory,


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he reasoned, could only be securely held by Budapest if concessions to the nationalities were granted.152 But given his long-standing support for Magyar hegemony, his plan was never going to win Slav support. Thwarted in his efforts, bitterly disappointed in the Entente’s attitude to the HNC coalition, exasperated by his enervated party’s weakness and entrenched divisions, and frustrated by what he termed the government’s “indifference to the progress of the revolution” (not least its procrastination over land reform), Jaszi resigned his cabinet position in January 1919.153 In Hungary and across Europe, war and revolutions had driven a wedge between the radical and reformist left. Should military mobilization be advocated or opposed? Was the way forward being charted by soviet democracy or by its parliamentary rivals: Ebert, Noske, and Bauer? In Hungary, the divide deeply affected the SDP, particularly after the formation of the Hungarian Communist Party in November 1918, as well as both of Polanyi’s organizations, the Galileo Circle and the Radical Party. The latter polarized sharply in late 1918, with some veering rightward while others leaned toward communism. Polanyi appears to have hewed to a center-left position in this split.154 As to the Galileists, he declared his pride in the moral role they played in the Chrysanthemum Revolution but criticized their inability to form an effective political leadership. He added that this inability contributed in no small part to the fall of the HNC government in March. The government, he was later to reflect, lacked a “clear and feasible political programme,” but even had it possessed one, “there was no politically educated generation to represent that programme in practice, to carry it out by campaigning and administration.”155 Due to the failings of the Galileo Circle “there was not available in 1918 a generation, welded in one with the peasantry and with the national minorities in long-standing, stern battles,” and for that, he was prepared to carry the can. “I had been leading the Circle in

an anti-political direction. Neither with the working class, nor with the peasantry, nor with the national minorities did I try to achieve unity based on action.”156 When one section of the Galileo Circle did succeed in achieving “unity based on action” with sections of the labor movement, it was in Polanyi’s absence. During the war, a group of “Zimmerwaldian” revolutionaries in

She belonged to the Circle but was fiercely critical of its “unpolitical” character and its members’ failure to form any “political ties to the shop stewards in the factories.”157 In late 1917, Jaszi recalls in his memoirs, “the young men [sic] of the Galileo Circle pursued their anti-militarist propaganda almost openly,” and when some of them, including Duczynska, were imprisoned, this “only increased their revolutionary enthusiasm.”158 A year on, many of the younger Galileists around Duczynska joined the newly formed Communist Party, a move that elicited a fierce response from the Circle’s founding members, including its founding father.159 Polanyi turned Szabadgondolat, the Galileists’ fortnightly periodical of which he was editor-in-chief, into “a fighting organ . . . against Communist doctrine,”160 and he “fought vigorously, in a series of articles, against the Bolshevik ideas that were sprouting with such tremendous force.”161 The most impor tant was his contribution to a debate that he initiated in Szabadgondolat with the communist Eugene Varga and with Lukacs, who was on the brink of his leap toward bolshevism.162 Both sides shared a sense that the common explanations of the war, focused on the diplomatic bungling that preceded it, simply would not do.163 Both perceived that the pre-1914 world order had collapsed, and both prophesied a “world revolution”—one that would introduce soviet democracy (Varga) or “liberal socialism” (Polanyi).164 The communists’ diagnosis of civilizational crisis, unlike his, centered on the contradictions of capitalist competition and imperialism, culpability for which was seen to rest with national ruling classes, supported by labor-movement leaders who had betrayed their class interests by reneging on the promise to oppose the war. Polanyi, in contrast, having prior to 1914 predicted an era of stability, spoke of the war as a bolt from the blue, one that was best understood not


demonstrations and other protests. One of these was Ilona Duczynska.

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the Circle had linked up with factory workers to instigate antimilitarist

social-scientifically but in spiritual terms—a “religious kind of event”— or even in Spenglerian fashion as Western “civilization’s grand attempt at suicide.”165 The “void of meaning” that the war had revealed could not be scientifically comprehended but required a leap of imagination. He disagreed with Varga and Lukacs’s political critique of the socialist parties that had backed the bloodshed. For him, agency and culpability were


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located in the psychological and spiritual realm: the moral bankruptcy of humankind that the war had exposed, the shame and guilt that “we all” share, and the “corrupted conscience of our generation.”166 Both Lukacs and Polanyi shared a critique of positivist and determinist philosophy and the fatalistic political strategies that it had sanctioned, but their thinking was developing along different lines. In the cauldron of war their mindsets had changed radically. In Polanyi’s case, the movement was from liberal nationalism to pacificism and from positivism to philosophical idealism. He attempted to trace the void of meaning that had so tormented him in the war-torn wastes directly to the positivism that had gripped the prewar social sciences. Society, he now believed, had fallen victim to a myth propounded by scientific sociology, which was that “the fate of the human soul is laid down in the reality of society.”167 Marxism, as a species of scientific sociology, sees the world “from the outside” and posits the inevitable collapse of capitalism.168 Such evolutionary-deterministic thinking lulls individuals into a quietist weltanschauung, in which the individual’s ethical stance counts for nothing, or, at its nihilist worst, sanctions the assumption “that human existence in itself is void of significance.”169 Against such ubiquitous fatalism, he called for a moral perspective to be injected into the social sciences and for the design of a new “image of society” without which effective ethical action would be impossible. Scientific sociology must be cast aside and replaced by an ethically oriented verstehende alternative, the purpose of which would be to discover the human causes of social phenomena. It is within individuals that the best in humanity is to be found.170 Only thus can the world be restored to its proper ethical moorings. Lukacs’s movement, in contrast, was from idealism to materialism, in the form of an antipositivist Marxism. In reply to his old friend’s accusation that Marxism views the world from without and fails to give

consciousness its due, he sought to restore human agency and class consciousness to the heart of Marxism—philosophically, politically, and strategically. Communists, such as his comrade Duczynska, who had risked their freedom in antiwar resistance, did not see themselves as the passive executors of a historicist script but as conscious agents, acting ethically and politically in an attempt, with no predetermined

ment philosophers, in whose theories human beings appear as passive objects, but he also contended that the ethical socialism to which Polanyi, along with Bernstein and Bauer, subscribed, represented its similarly contemplative antinomy. This was, as we shall see in Chapter 3, an astute observation.171

S L AV E R E V O LT, W I T H C A B A R E T To the Károlyi government, Polanyi was no sycophant. He exhorted it to  exhibit “more determination against every breath of the counterrevolution,” to expedite “the economic construction of socialism,” and to slough off its “chauvinist position on the nationalities question— especially the south Slav question.”172 Yet his Radical Party remained part of Károlyi’s coalition, and he regarded the government as his own. Although confined to bed, in hospital and at home, for much of Károlyi’s time in office,173 he inveighed against the dangers posed by political and geopolitical polarization, warning of the “leftist and rightist revolutions” that carried the spore of “anarchy,”174 and he spoke out publicly in a lecture at the University of Budapest “against the rising Communist tide.”175 In 1919 that tide was in flood. From one end of the continent to the other, Lloyd George observed, “the whole existing order in its political, social and economic aspects” was being questioned by the masses.176 In Hungary, the sluice gates were inadvertently opened in February, when the government ordered the imprisonment of leaders of the Communist Party, banned its newspaper, and shut down its premises. The communist leader Béla Kun was beaten up in prison in the presence of a journalist, whose report occasioned “a wave of sympathy for the bolsheviks [to


ness, Lukacs criticized the positivism and determinism of Enlighten-

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outcome, to turn war into revolution. In History and Class Conscious-

sweep] over the capital.”177 This was a turning point. Not only the working masses but also, in Bernstein’s words, “large sections of the bourgeoisie, including the intelligent sia” came to sympathize with the communists—even though many of them would later deny it.178 In the aftermath of the Kun affair, Polanyi expressed bitter frustration at the behavior of the government, and in par ticular its main pillar, the


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SDP. As a socialist party it should be guided by the dictum that “socialism can be achieved only by the transformation of souls,” with no place for coercion.179 The government’s resort to violence, in a futile attempt to stamp out opposition to its left, had badly blotted its copybook. External events also contributed to the communists’ popularity. In March, Hungary found itself under attack from Czech-Slovak, Serb, and Romanian armies. When the Romanians advanced into Hungary, Colonel Vix, military chief of the French Occupation Forces, ordered Budapest to acknowledge their territorial gains and to withdraw its forces. The Entente powers were preoccupied not only with defining the postwar “peace” but also with prosecuting war on Russia. The “Vix note” was designed to reward their Romanian ally for its role in the First World War and for its support in attacking Bolshevik Russia.180 But, perhaps inadvertently, it undermined the HNC government, boosting support for the communists. Nationalists, Jaszi reported, now regarded “the Russian example in fighting off imperialism as the means Hungary must follow” if it was to avoid being carved up by the Entente.181 By now, Károlyi’s government was under pressure from peasants seizing land, workers taking industrial action in support of the imprisoned communists, and counterrevolutionary movements that were aided and abetted by the French. With his authority crumbling, Károlyi resigned and handed the reins to the social democrats. Only they “can maintain order,” he told his cabinet. Given that power had, “for months, been exclusively in the hands of the organised workers,” only a social democrat government would be able to stand up to the communists.182 Yet the social democrats too were in disarray. In the wake of the Kun affair, with the nation churning with fears of counterrevolution and impatience with the Entente and with support for communism surging, left-wing social democrats explored the possibility of rapprochement with the communists. In this maneuver international considerations

played a critical role: the expectation was that before long Russia’s Red Army would break through Romanian lines and reach Hungary. By agreeing to the fusion, and against advice from Moscow, the communists entered the government. They took only a minority of the senior positions in the new government, but it was headed by Kun.183 Polanyi viewed the handover with ambivalence. Although far from uncritical of

of Szabadgondolat, he believed that no alternative regime was viable, and he gave it credit for its social and cultural reforms.184 On Lukacs’s invitation he accepted an official position in the People’s Commissariat of Social Production.185 Kun’s Councils’ Republic (or “Commune”) was a peculiar phenomenon. Although ostensibly modeled on the Soviet republic in Russia, Hungary’s communists gained power not by securing a majority in the workers’ and soldiers’ councils but by fusing with the governing social democrats. Initially, the Councils’ Republic earned widespread approval. One of its normally implacable critics, Jaszi, conceded that a great many urban and rural workers as well as “the majority of Hungarian intellectuals” supported it, and that there was “a certain greatness” in the seriousness and the enthusiasm with which it “took in hand the things of the spirit.”186 He credited it for maintaining “a mea sure of order and organisation,” for instilling emancipatory ideas in the hearts of Hungary’s “great mass of semi-brutalised slaves,” for its internationalist ethic and its “pioneer work for the ideals of more advanced types of democracy and self-government.”187 It drew approval, additionally, from its defiance of the Entente’s intention to reduce Hungary’s territory: nationalists of all political stripes prayed that the new regime would imbibe something of Soviet Russia’s spirit in rebuffing the Great Powers. Whereas the power of Kun’s Russian allies was based on the Bolshevik majority in the soviets, his own government had ducked any formal appeal for popular approbation—and yet it sought to institute even more ambitious policies than its sister party in St. Petersburg. Some of these were innovative, notably in the fields of labor legislation, culture, and education. The right to work was introduced, as were the liberalization of divorce and laws that removed the stigma of illegitimacy.188 The public


ance with the Bolsheviks, or of the new government for its suppression

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the social democrats for having abandoned Károlyi in favor of an alli-

baths were opened to working class children, theaters proliferated (in part because of the distribution of cut-price tickets to workers), and the admission charge to Budapest’s most scenic beauty spot, Margaret Island, was abolished.189 Under the auspices of Lukacs’s Commissariat for Education, artworks were removed from private vaults and put on display at an Art for the Masses exhibition, with free admission for trade union


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members,190 and school and kindergarten curricula were amended to favor Hungarian language and world literature, with less Latin and Greek and fewer poems glorifying war.191 Children benefited in addition from the recruitment of extra staff in schools, free medical examinations, and school breakfasts. The teenage Arthur Koestler recalls that at his school “strange and exciting events were taking place. New teachers appeared who spoke to us in a new voice, and treated us as if we were adults, with an earnest, friendly seriousness.”192 During those hundred days of spring, he reflects, “it looked as if the globe were to be lifted from its axis.” Despite hardship, people maintained a sense of humor, and Budapest was abuzz “with funny stories told in the cafes and on the stage of its famed cabarets.”193 Outside the cabarets, beyond the school perimeter and the museum walls, the buzz was of a more menacing sort. Food shortages had been exacerbated by the politically motivated decision of the U.S. Food Relief Mission to cancel urgently needed supplies, and the Kun government aggravated the predicament with a raft of unwise policy decisions. It expropriated the estates of the Hungarian aristocracy without redistributing the lands to peasants—a decision that Polanyi and Jaszi contrasted with the more liberal approach of Russian bolshevism.194 Equally problematic was its resolve to press ahead, within weeks of assuming power, with the nationalization of more than 20,000 businesses, a move that drew a sharp rebuke from Polanyi. With hindsight, he was to argue, the Councils’ Republic could have survived—but only if less reckless economic policies had been pursued.195 Primarily as a result of its economic policies and agricultural collectivization, discontent with the Councils’ Republic mounted. Yet the blows that laid it low were delivered by foreign hands. Even before it could celebrate a month in power it faced invasion by Romanian forces alongside French-backed armies and conservative officers’ detachments. By the

end of April Hungary’s Red Army had been driven back almost to Budapest.196 On May 2 it received an infusion of personnel and energy from Budapest’s working-class neighborhoods and began to push outward again, in a remarkable turnaround that saw it reoccupy every major city on the Hungarian plains and push deep into Slovakia, where a soviet republic was proclaimed in mid-June.197 Polanyi was, it seems, caught up

intended to act on this, his next move was determined more by his physiological needs than by political commitments. In mid-June, following Jaszi’s intercession with Otto Bauer, now foreign minister of the newly minted Austrian Republic, he was permitted entry to Vienna to undergo hospital treatment.199 Behind him disaster unfolded. In a deal brokered by the Entente powers, Budapest agreed to withdraw from Slovak territory in return for the Romanian army vacating Hungary. The Hungarian Red Army honored the agreement, but the Romanians did not, and the Great Powers refrained from enforcing compliance. 200 Hungary’s Red Army began its final retreat, and on August 1, Kun’s government resigned. “The desperate but not inglorious episode of the Commune,” as Polanyi put it, was over. 201 Power was first usurped by the Romanian army then passed to a French-backed navy commander, Miklós Horthy. With its “organised pogroms, with its bombs thrown into synagogues, its torture chambers and man-hunts,” in Koestler’s words, Horthy’s regime gave “a nasty foretaste of things to come.”202


pital, to say “I am joining the [Communist] Party.”198 Whether or not he

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in the euphoria, for it was on May 2 that he wrote Lukacs, from the hos-




hrough the summer of 1919, Polanyi convalesced in Eugenie Schwarzwald’s rest home at Hinterbrühl, a suburb of Vienna.1

Schwarzwald must have seemed to him an Austrian pendant

to his own mother. A pedagogue, social reformer, and feminist, she put her villa at the disposal of Hungarian left wing refugees, and ran a salon— not unlike Cecile’s—at which regular guests included Polanyi’s future political antagonist, the arch-conservative sociologist Othmar Spann, as well as several future acquaintances, such as the legal theorist Hans Kelsen and the philosopher of science Karl Popper. Yet no amount of care or gesellschaft could alleviate his sense of malaise. He was plagued by ailments,2 and even after releasing himself from Schwarzwald’s sanctuary, his infirm health “constrains my day; I am finding it hard to get around, travel, stand or wait.”3 The city was afire with social conflict and

political innovation, but nothing could excite Polanyi until he felt able to raise his eyes above the gloomy walls of his own soul. Life, he wrote Cecile, “is crazy: it is expensive (!!)4 bad (!!), hot (!!) boring, and desolate.”5 Each night Polanyi would sleep for ten hours or so before beginning his routine, which consisted of library work until lunchtime and again in the evening from five until eight, with the afternoon devoted to pleasures and chores: shopping, correspondence, “rummaging around in

second-hand bookshops”6 and receiving occasional visitors, such as the anarchist poet Arnold Gahlberg.7 Gahlberg apart, Polanyi was disappointed by the city’s political and intellectual scenery. It was “a

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“Party work” and even the literary luminaries, such as Karl Kraus and


salt-desert,” aggressive and barren.8 The Marxists were glued to their

health reasons that he had to turn down an invitation to accompany Jaszi

Rainer Maria Rilke, were pygmies—compared for instance to Jaszi, who “simply transcends their horizon.”9 The city’s “spiritual” landscape, he complained in spring 1920, was no less desolate. It should only be “experienced by those who imagine the spirit to be bound to a source of income.”10 Over the course of 1920 and 1921, life did begin to assume a sunnier aspect, but the ascent was slow. Polanyi continued to live “like a hermit. Having been accustomed for so long to the battlefield, to the infi rmary and the sick bed, it has become second nature.”11 His letters to family members abound with references to spells of poor health: “Today, I’m sick, despondent, languid. All night long I tossed and turned, and I have a fever. I’m not going to tell you why. Perhaps I’ve gone mad.”12 It was for on a trip to the United States,13 and while he sought to resume his acquaintance with Bé, there is no evidence that their intended meeting took place.14 Nor were his and his family’s financial circumstances solid. Sophie was close to the breadline, and his own situation was variable, while their mother required assistance too.15 He was momentarily buoyed by the apparent offer of a position in Buenos Aires on the staff of La Prensa, but it slipped through his fingers.16 And each day he had to suffer the other residents of the lodging house. (They are “so dreadful; even in my little room I can’t escape their shouting and clamour.”) Yet for all that, and sounding almost surprised as the words issued from his pen, he described his life as “quiet, even idyllic.”17 He was gaining confidence that his manuscript Gegen die wissenschaftliche Politik would shortly be publishable,18 he was able to spend some months convalescing in the Alpine resort of Semmering and in Reichenau, and his quarters in Vienna were, at least, “very comfortable.”19 (He kept them “marvellously tidy,” prompting visitors to comment upon his “scrupulous love of order.”20) The lodging house was near the library and the home of Jaszi, from whom Polanyi was inseparable. The two would sit for hours in ca-

fés, alone or with friends—such as the trim-bearded Hungarian émigré Aurel Kolnai—discussing developments in Russia, international political economy, or Jaszi’s “Anti-Marx” book project. 21

Its ambit was global, but its most impor tant achievement was to provide regular reports on what it termed “Magyar fascism,”23 Horthy’s reign of terror in which thousands lost their lives. 24 In political orientation it took a broadly left-liberal tack, but its columnists included the communist Béla Bálazs, and Károlyi, whose political views were (to Jaszi’s exasperation) lurching leftward. 25 Edifying aphorisms specked its pages, predominantly from the liberal corner (Montesquieu, Smith, J. S. Mill, and L. T. Hobhouse) but also from conservatives (Herbert Spencer) and motley radicals (Marx, Max Stirner, Gustav Landauer, H. G. Wells, and Chesterton). Jaszi hired Polanyi as his private secretary in 1921 and promoted him to the editorial team in the following year. 26 By autumn 1922 his name was regularly flagged on the title page as author of the issue’s lead article. In topic his essays ranged widely: from Tutankhamen and early Christianity to Gandhi and Nazism, and he also fi led reports on the political affairs of numerous European countries, particularly Britain, Germany, Hungary, and Russia. Installed in a new job, one that not only drew on his erudition and stimulated his roving curiosity in international developments but also contributed to a virtuous and urgent cause, he rediscovered his equilibrium. Already by the summer of 1921, Laura was able to reassure their mother that he was not only working hard but was “healthier than one would think from afar, given all the diagnoses. He looks lovely, fresh and healthy.”27 Polanyi’s spirits were lifted further by a friendship that was developing, against Jaszi’s counsel, 28 with an aristocratic Hungaro-Slavic revolutionary whom he had met in 1920, through a young communist friend in Hinterbrühl. Maria Dorothea Angelika Helena Vlasta Duczynska— Ilona or Ilko to her friends—was at first blush the antithesis of Karl. She was an engineer, he a journalist. She was an atheist, he a Christian. She was an intrepid communist, impatient for militant political action;


was the foremost publishing organ of Hungarian exiles and emigrés.22

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In 1921, Jaszi took on the editorship of the Bécsi Magyar Újság. Funded, to his discomfiture, by the Czech liberal leader Eduard Beneš, it

he a troubled and withdrawn liberal concerned more with party programs and steeped in philosophical contemplation. But they also had a great deal in common. There were personal connections. Ilona had known


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Szabó since 191529 and Polanyi’s Aunt Irma for even longer. 30 Both were former Galileists—indeed, while he had been barracked in Galicia, she had become its “outstanding personality”31—and both had been steeped in the Circle’s positivist and scientific culture.32 As in his, a defining figure in Ilona’s life was her father, Alfred Duczynski. An Austrian Pole, he belonged to that layer of the gentry which had nothing to lose but their titles—indeed, the title was a recent family adornment, awarded by the Kaiser as a reward for military ser vice. He earned his living as a clerk and engineer in a railway company, but his personality was more flamboyant than that occupation might imply: Duczynski was an atheist, self-taught intellectual, homeopath, and would-be inventor of flying machines. Ilona attempts to encapsulate his paradox-packed outlook with the oxymorons “conservative anarchism” and “patriarchal socialism.”33 In 1904 he moved—sans famille—to the United States, where he died prematurely three years later. 34 Ilona identified him with the “progressive ethic of work, non-conformism, risk-taking, and intellectual and artistic striving,” in contrast to her mother’s side, a more secure, traditional landed gentry family, the Békássys, who stood for “property, privilege, and conservatism.” From the time of Duczynski’s passing, when Ilona was but seven, she and her mother depended for their livelihoods largely on their Békássy relatives in Hungary, and she spent several years “educating herself in one or other of the country houses where they were never more than guests.” The experience of existing at the cusp of two families, two social classes, and two intellectual climates, her biographer Kenneth McRobbie submits, helps explain Ilona’s attraction to revolutionary politics. 35 She was, in McRobbie’s portrayal, selfless, and blessed with a highly refined literary sensibility; a formidably intelligent and original scholar; and in possession of an unswerving faith “in the ability of the individual,” in concert with others, “to reject and overcome imposed structures of power and authority, to bring about, no matter how long it may take, the reign of freedom and social responsibility.”36 When Ilona met Karl she was an exiled professional revolutionary, fiercely idealistic and committed to the spread of communist revolution.

“To us nothing, absolutely nothing, seemed out of the possible,” she recalls her temper of the time.37 Some years earlier she had planned to assassinate Hungary’s prime minister, István Tisza. 38 Thereafter, under the

Comintern in Moscow.39 Now, despite their glaring differences, the political attitudes of the two friends were both in flux and about to commence a decades-long process of convergence. Ilona grew increasingly critical of the Hungarian Communist Party. In early 1922 she launched a scathing critique of its internal culture, making fully apparent that its leading figures, Kun and Lukacs, were in her sights. Under their direction the party had set up a rigid, “military-centralist” form of organization, undervalued its own membership, and remained frozen in a stance of enforced optimism. It had degenerated, and its organic connections with the masses had withered.40 She published her critique in Unser Weg, a periodical edited by Paul Levi, a former associate of Rosa Luxemburg who had recently been expelled from Germany’s Communist Party following publication of his critique of Kun’s reckless adventurism—a strategy that communist parties were now replicating on the international scale. On publication of her critique, Duczynska too was expelled. She later joined the Austro-Marxist Social Democratic Workers’ Party (SDAP)—as indeed did Polanyi.41 By 1922 companionship had blossomed into something more.42 Karl was smitten by his friend’s Slavic beauty and her voice,43 by her “modesty and integrity,”44 and was entranced by her political ardor, which he contrasted to his own Hamlet-like irresolution. As he was later to phrase it, he had long been “in love with the thought of the Russian girl ideal, and so Ilona, who was Polish and a revolutionary, ‘fitted the bill.’”45 In 1922 Ilona divorced her previous husband, from whom she had long been separated; in November Karl announced to his brother that the “fruit” of his relationship with Ilona “will soon be born—from being a Golem it is time for me to become a man”;46 and in February 1923 the Protestant Dorotheer Church hosted their marriage ceremony. Four blissful months followed. Despite some exasperation that his salary was “much lower” than hoped, Karl was at least earning something and was able to repay debts, and the couple could afford to honeymoon on the Baltic isle of Rügen.47 In his working life too, Ilona was heaven sent. She would take


Affairs of Kun’s Commune, and briefly as Karl Radek’s secretary in the

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alias Anna Novotny, she had worked in the Commissariat for Foreign

down his dictated notes, search for materials from his “newspaper labyrinth,” and edit his work. Without her assistance, he disclosed to his mother, he would have been “completely unable to make progress.” On


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top of it all she had time “to knit and to darn and to scrape together an outfit for the little one” who was growing within and giving her notice of its existence several times each hour. Although fairly weak and her face “gaunt,” she was healthy and happy; her pregnancy was progressing well.48 “How large is a belly supposed to be?” Karl inquired of his mother, “for I’m not exactly sure. The fact is, Ilona’s is huge. Hopefully within normal bounds and not too big, for we don’t have enough room for twins.”49 After weeks of hunting, they had at last found an apartment. It was in the Vorgartenstrasse, near the Danube, and would enable the small family “to lead a normal proletarian existence.”50 How remote must Karl’s years of melancholy have felt now. His spirits were high, and in early June he could disclose to his mother that “I could spend each delightful day singing merrily of my happiness!”51 A week later, the baby came into the world and was named after her parents: Karoline Hélène. The birth was difficult, even traumatic. At one point it was unclear whether Ilona would pull through, and Kari’s fi rst months were spent in the hospital.52 An alarming experience, it haunted the parents and compelled them to ensure that their first-born would remain an only child. And they both continued to suffer recurrent ailments: she, with weak lungs and pneumonia,53 he from ner vous exhaustion, allergies, convulsions and cramps, headaches, and other pains that at times confined him to bed, where he would lie, rolling from side to side and speculating feverishly as to their origin.54 Such miseries apart, and notwithstanding Jaszi’s remark that Karl’s “mental state is not the less la mentable,” this was on the whole a fulfilling period, and when he reached the age of forty Karl was able to look back on his life with contentment. He relished his journalism, his seminar (on which more below), and of course his role as husband and parent. “Babi, Ilona and I are very good together,” he assured Michael, adding, with wry pathos, that he could now “meet death more easily.”55 The Polanyis’ apartment was situated in a largely Jewish and working class district of Vienna, the Leopoldstadt.56 At the front, giving onto a municipal garden, were Ilona, Karl, and Kari’s quarters. From the mid-

1920s Karl received a generous salary, and they lived in reasonable comfort, although he was “ascetic and puritanical” in temperament and the principal luxuries he enjoyed were “a telephone, and travel.”57 On one wall

Marx, Böhm-Bawerk, Pikler, and others. Beside these hung a portrait of Karl’s father.58 At the back, overlooking a yard, was a tiny room occupied by Erzsi, “the friendly smiling domestic help,”59 and a room occupied by Ilona’s mother, Hélène (also known as Neni, Nenko or, with affection, “die alte Katze”).60 Hélène’s room was dark, adorned with paintings and portraits and dominated by an ornate armoire that contained valued possessions, such as silver cutlery engraved with the Békássy coat of arms.61 She received a substantial income—“one million per month,” according to Karl, “which enables her to spend 200–250,000 on luxuries: clubs, travelling and gifts.”62 Erszi and Hélène would converse in Hungarian but were not permitted to speak it with Kari, on the basis of the “stupid thenfashionable theory that children should not be confused by being exposed to more than one language.”63 The infant Kari (“the little wisp,” “ little soldier”) was a perpetual source of joy.64 She had a sunny disposition, Karl wrote Cecile, and a “blessed smile,” possessed “average talents” but was very “clever, open and sociable”: a child of whom “one knows that she will be on top of any situation she confronts, will judge her capabilities correctly, will be cautious, tactfully avoid trouble, [and] valiantly advance.”65 She was fortunate to grow up in a peaceful atmosphere; the family knew few if any domestic quarrels, or even raised voices.66 Karl was calm and tolerant in disposition and issued few prohibitions.67 (The only two that stuck in Kari’s mind were “thou shalt not lie!” and “thou shalt not let papers get stained by flecks of grease!”) With one exception—their custom of eating meals together but never with her68—Ilona and Karl treated their daughter from an early age as an equal, an independent soul. (“Like an adult,” in her words.) Akin to her father, Kari was “not inclined to intimacy,” and this did affect their relationship,69 but she was not an inhibited child and was encouraged to engage with the visitors who often called on her parents. She developed a precocious political consciousness, having grown up with the red flag fluttering from their living room window


tocratic relatives, in uniform. Against another, shelves with books by

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of the living room, which doubled as a study, were portraits of Ilona’s aris-

every May Day and the sounds of political discussion and Ilona’s revolutionary hymns in her ears. Among her earliest memories she recalls assisting her mother rolling ink onto the leaflets she was printing. Some years later she would take part in the annual May Day march and at-

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Kari, rarely warning her of the need to wrap up warm or to tread care-


tended summer camps convened by the Workers’ Athletics Association.

in her “domain” under the living room table, cut out the clippings that he

Summer was also a season for family holidays, whether on the Dalmatian coast,70 with Sophie’s and Michael’s families in Reichenau, south of Vienna,71 or by a lake in Carinthia—described by Karl as “cheap and utterly unsophisticated.” 72 As parents, the Polanyis avoided being overly protective toward fully. Karl was, however, concerned at the prospect of his daughter, an only child, becoming spoiled—so much so, that he “invented” a sister for her, named Paula, which she experienced as a somewhat “disturbing” event. (“I wasn’t sure how to react!”) He was playful by nature but wouldn’t play children’s games with Kari. Rather, he let her assist him with his work, allowing her to answer the telephone or, when ensconced would mark out with big red and blue pencils in his daily newspapers: the Frankfurter Allgemeine Zeitung, Le Temps, The Times, and the Arbeiter Zeitung.73 Karl was a born storyteller and would read aloud to Ilona, but never to Kari. That task fell to his mother-in-law. Kari loved Hélène’s stories, for example of the balls and carnivals she had attended in her youth—even though she was acutely aware that the world of aristocratic fashion and frippery was not one of which her mother approved.74 Karl’s position at the Bécsi Magyar Újság never felt stable, for it was “in perpetual crisis.” 75 But in 1924 his situation improved. Through the intercession of a friend he entered employment, initially on a two-month contract, with the prestigious Österreichische Volkswirt. “I could not ask for a better position than this,” he thrilled to Michael. “I’ll mostly do book reviews and reports on world economic affairs. It will allow me to read books and write.” 76 The salary provided enough for his new family to survive—although “a lot” of it was expended on “subscriptions to journals, visits to coffee houses and libraries and so on.”77 The Volkswirt, edited by Gustav Stolper and Walter Federn, was Austria’s “only serious economic journal.” It resembled the London Economist in its coverage

and its liberal inclinations, albeit with less enmity toward Marxism and greater sympathy for social democracy.78 Its contributors included Kelsen, Drucker, and the liberal economists Joseph Schumpeter, Fried-

had moved to Berlin to set up a sister periodical, the Deutsche Volkswirt.79 Shortly afterward he was appointed foreign affairs editor, and when Federn was absent, he would preside over office meetings as well as informal editorial gatherings held in the nearby Café Bauernfeld.80 Except on Tuesdays, which he would spend at the Volkswirt’s offices, Polanyi generally worked at home.81 Wearing gold-rimmed spectacles, he would sit at his desk, engaging in prolonged phone calls with Federn, writing, or smoking.82 (He was a heavy smoker for much of his life.83) As supplementary paid work he held classes in economic history at the People’s College in Vienna, 84 an experience that kindled his interest in the theorization of economic evolution, in par ticular the work of Karl Bücher and the German Historical School.85 Further, in January 1924 he established a private, evening seminar on guild socialism, participants in which included his Volkswirt colleague Drucker, his future nephewin-law Hans Zeisel, and his friends Kolnai, Popper, and Felix Schafer.86 Initially they met in the headquarters of the Association of Socialist Students, even though, from a lack of fuel, the room could grow bitterly cold.87 As numbers dwindled, the seminar transferred to Polanyi’s apartment, where it morphed into a study circle devoted to general themes in socialist economic theory and policy.88

GUILD SOCIALISM AND THE “PERVERSION OF FUNCTIONS” Polanyi’s early years in Vienna marked a turning point in his intellectual formation. He had been in a state of turmoil for some years, his worldview agitated by the “great evils” of war and revolution.89 In their wake, postwar Central Eu rope was left with a pervasive sense of dislocation and flux. Diagnosing the political, social, and spiritual crisis of the age was a priority for intellectuals in the humanities and social sciences. Was it a  crisis of liberal civilization, of the West, or of humankind’s spiritual


to the editorial team to fi ll the shoes of his friend Gustav Stolper, who

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rich von Hayek, and Gottfried Haberler. In 1925, Polanyi was promoted

consciousness?90 Did its causation lie with the economic system or the social order as a whole? What had the war revealed to humanity about its faith in the primacy of reason or its deployment of science and tech-


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nology? Was civilization losing its way in a maze of machines? Polanyi immersed himself in these debates, and his ideas evolved at a clip. He was becoming impatient with the Tolstoyan ethical individualism that had captivated him for some years; it failed to appreciate the interdependence of individual and society—in his phrase, “the reality of society.”91 He was intrigued by Spenglerian perspectives on the impending decline of the West, but was more enduringly drawn to thinkers who were making the case for social unity and moral renewal, notably the British novelist and Fabian thinker H. G. Wells. Polanyi had long been an avid reader of Wells and was particularly struck by his The Salvaging of Civilization, which he reviewed in 1922. 92 Its central thesis, shared with such contemporaries as Mannheim and Veblen, was that advances in humanity’s technological powers were outrunning the progress of its moral faculties and knowledge of the arts of government. Modern civilization, Wells argued, had produced a plenitude of scientific knowledge, and this had immeasurably expanded “the physical range of human activities,” but there had been no commensurate “adjustment of men’s political ideas to the new conditions.”93 As a result, it lacked “orga nized solidarity” and was unable to withstand “shocks and strains.”94 Polanyi found wisdom in Wells’s vision and shared his angst at the civilizational crisis that had engulfed his generation and at the dangers that loomed. With Wells, he lamented the enrollment of science “in the ser vice of destruction,” with the development of aerial bombing and other weapons of war that “lay waste the earth.” In the confl icts of the future, as he paraphrased the novelist prophet, “the only true areas of refuge will be the well-buried, concealed, and carefully located headquarters of the competing armies. From here, men will carry out colossal destruction, without even understanding its meaning. Mankind’s physical powers have grown enormously but without social structures developing in proportion. The condition of mankind today is rather like toddlers in a kindergarten who have been supplied with acids, poisoned razors, or bombs.”95 But in explaining the root cause of the crisis, Polanyi placed greater weight than his Fabian idol on the emergence of market society, the topic

that was now beginning to define his work. Market prices, he averred, had come to “rule every thing, but nobody ruled them.”96 This, the separate institutionalization of the market sphere, was the most insidious

mand of conflicting social strata (capitalists and workers). From now on social unification was to become the defining concern in  Polanyi’s anthropology, axiology, and eschatology. Arguably, this bespeaks his origins: the Budapest Jews of his milieu, as discussed in Chapter  1, were acutely sensitized to questions of detachment, alienation, and community. Lukacs is a case in point. His History and Class Consciousness theorized the part that an oppressed but “universal” class, the proletariat, was destined to play in overcoming class divisions and unifying society. Mannheim is another. His Ideology and Utopia identified the role that a detached social group, the free-floating intellectuals, is able to play in synthesizing the ideologies of other social strata. Later, his Man and Society in an Age of Reconstruction argued that liberal policy and ideology had splintered modern society into fragmented components, for which the remedy is societal reunification via economic planning and political Bildung.97 For his part, Polanyi during his Vienna years was captivated by works that emphasized the natural or religious imperative of social unity, in par ticular those of the sociologist Ferdinand Tönnies. His Gemeinschaft und Gesellschaft had become a touchstone in debates on social unity and differentiation. It offered a critique of Spencer’s The Social Organism and was in turn subjected to critique by Durkheim in The Division of Labour in Society. The debate arose as sociologists pondered the implications for human society of Darwin’s theory of evolution, but Tönnies’s perspective related directly to developments closer to home, for he belonged to Germany’s Bildungsbürgertum at a moment when education and culture were undergoing fundamental change. “Unity—unified knowledge and a unified sensibility” was the cultural ideal that the Bildungsbürger had inherited from early nineteenth-century romanticism. By the late nineteenth century, however, “the growing specialization of knowledge made it difficult for Gymnasium and university to provide a universal historical and philosophical outlook.”98 Reacting against the dominant liberal tradition of social theory, which since Hobbes had treated bourgeois self-interest as


social functions (economy and polity) came increasingly under the com-

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cause of social disintegration, and it was set to worsen as the separate

a universal and necessary law, Tönnies set out to expose as partisan and myopic all assumptions about the naturalness of possessive individualism and of the institutions erected on it. Capitalist gesellschaft,


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in his theory, is a society based predominantly on “rational will” and follows compulsive logics of social differentiation and fragmentation. If an era of gemeinschaft (organic unity based on face-to-face relationships) had preceded capitalist society, then the latter was historically relativized, its Hobbesian normative framework reflecting merely one stage in human history. Although no nostalgic romantic, Tönnies contrasted the “artificial” and “unnatural” order of gesellschaft with the contrary image of the human being’s “natural will” to live in fellowship. To achieve social unity and fellowship, he proposed communitariansocialist and universal-religious pathways.99 In the first half of the twentieth century a galaxy of scholars and political movements emerged to pit themselves against excessive social differentiation and for social unification, in either socialist or corporatist guise. In Austria these included the social democrat Otto Bauer and the social reformer (and pioneer of eurhythmics) Rudolf Steiner. In his writings on the “three-fold state,” Steiner proposed that the relationship between the economic, political, and cultural spheres had become dysfunctional. To be harmoniously integrated, each had to be afforded sufficient independence. With “one exception,” in Polanyi’s assessment, Steiner’s social threefolding “constitutes the most stimulating contribution to the economics of a functional society.”100 He applauded the Austrian for recognizing that social harmony requires a social whole that is undergirded by “unity of a religious kind” combined with a substantial degree of institutional autonomy in the economic, political, and cultural spheres.101 The “one exception” was the theory of guild socialism developed by G. D. H. Cole in Britain and by Bauer (and Polanyi) in Vienna. In his Hungary years, Polanyi had regarded guild socialism as an intriguing outlier of liberal socialism, but in Vienna he shifted his affections from the latter, which had reached “a dead end,” firmly toward the former.102 Guild socialism, he exclaimed, was “becoming a reality in England today,”103 but, in truth, it exerted less influence in its homeland than in Vienna.104 Cole maintained close contact with socialist leaders throughout Central Europe and was especially well received by Bauer and Rudolf Hilferding (who at the first meeting of the German Economic

Parliament paid tribute “to the ser vices of the English writers on National Guilds”).105 Bauer credited guild socialism with being the “strongest intellectual power within the British labour movement.”106 He

as well as its adherence to an “old English individualism,” which championed the rights of the individual worker against the state.107 In 1919 he popularized Cole’s theories in a series of articles and followed this up in 1920 with a book, Bolshevism or Social Democracy?, that presented guild socialism as the strategy appropriate to the SDAP’s goal of “nonrevolutionary socialization.” Socialism, Bauer argued in terms with which Polanyi would surely have concurred, was rooted in the “individual’s desire for freedom, the source of which is the self-activity of the masses, which aims at the self- government of all workers.”108 Cole also exerted an impor tant influence on Polanyi, whom he met in 1921. Polanyi was not uncritical of his young friend, noting that his ability to convert good ideas into philosophical insight was limited. But he recognized in him “a style of thinking similar to my own” and admired the sophistication of his thought—particularly in the other wise so “mechanical” field of public law.109 Indeed, he regarded Cole “as a kind of rebirth of [Robert] Owen,” and in his cosmos no accolade comes higher.110 Cole’s political views are rather difficult to summarize, given that he  changed them at regular intervals. Indeed, the conundrum of his political essence was famously put in triolet form by his comrade Maurice Reckitt. “Mr G. D. H. Cole / Is a bit of a puzzle / A curious role / That of G. D. H. Cole, / With a Bolshevik soul / In a Fabian muzzle; / Mr G. D. H. Cole / Is a bit of a puzzle.”111 “Bolshevik” here connotes idealism, syndicalism, and perhaps romanticism too. It alludes to Cole’s enthusiasms for Rousseau and William Morris—and for Owen, whom he interpreted as a prophet of “moral and intellectual revolution” and as the progenitor of a decentralized guild socialism.112 More broadly, it could encompass his support for New Age, a journal that, like Cole himself, rejected the paternalistic and statist elements of Fabianism, was radicalized during the Great Unrest, supported guild socialism, and appealed for a “revolution of the soul.”113 “Fabian” reminds us of Cole’s rapprochement with the Labour Party, his emphasis on pedagogy and the designing of blueprints for state-led social change, and his obsession


Party” and “the revolutionary elements of the trade unions” attractive,

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found its synthesis of the “reformist state socialism of the Labour

with administration. (While writing his tomes on guild organization, his wife records, “he completed a detailed plan for the organisation of English government on regional lines, worked out with maps and all.”)114


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From the mid-1920s Cole’s muzzle grew tighter and his soul ever fainter, culminating in his assumption of the chair of the Fabian Society in the 1930s. By this stage he was once again styling himself as a “liberal socialist” and a voice for “sensible socialism,”115 but he continued to produce work that excited Polanyi’s interest—in par ticular a critique of individualism and its most ruinous consequence: the institutional separation of society into political and economic spheres.116 What did Polanyi find appealing in guild socialism? At the most general level it neatly conjoined the Fabian and syndicalist traditions. (It was sometimes referred to as “English syndicalism,” where “English” connoted scepticism toward abrupt change and a saturation in the culture of liberalism.) Programmatically, it advocated a prominent role for trade unions or works committees in economic administration. In a corporatist age such ideas were not uncommon, but it went further than most, with support for actual workers’ control over production and a moral revulsion at the purchase and sale of labor. Polanyi was also receptive to Cole’s pluralist (or “functional”) theory of institutions, which conceived of society as composed of associations of individuals, and of social institutions as based on the different “functions” in which individuals engage in their daily life. These are, in Polanyi’s rendition, “production, consumption, neighbourly relations, intellectual life and their flourishing.” On the basis of these needs (or “functions”) of daily life, individuals form associations, such as trade unions, cooperatives, churches, community organizations, and municipal councils and the state, “each of which expresses a function of individual life.”117 Ergo, economic associations relate to individuals’ material needs, guilds to their cooperative function, and the state to their requirements for justice and equality.118 Each can serve its own purpose best by “working in conjunction with, but not under the authority of, any of the others.”119 Society, in Polanyi’s explication of functional theory, “is essentially an organism whose individual organs carry out their functions in unity with each other.”120 The organism metaphor is not wielded in the traditional way, to explain social structure by analogy with the physiological body. Rather, it refers to his beliefs that the economy is not a discrete mech-

anism but “a natural process in society” and that the institutional separation of politics and economics conflicts with society’s functional needs, with the corollary that economic crisis and class conflict are

of individual life, Polanyi maintains, justifies the conclusion that because institutions are composed of individuals, harmony should likewise prevail at the institutional level. But institutions, he goes on, had in recent times begun to trespass on one another’s territory, and in spilling beyond their proper boundaries, they contradict their essence. States, for example, had been intervening in economic functions that should by rights be the domain of trade unions (“guilds”) and industrial associations. The trade unions and business elites were responding by attempting to influence the state, to re-establish a balance, but in so doing they abused their function, transgressing the boundary between economics and politics. “In consequence of this double perversion of functions,” Polanyi concluded, “serious disturbances arise in the life of the community that would not arise if the state kept to its functions, and the guilds to theirs.”122 Guild socialist theory provided Polanyi with a tool to intervene in two debates, one immediate and practical, the other theoretical. Its practical uses were apparent, he believed, when applied to a series of industrial conflicts that were rattling the social democrat–controlled Vienna Council in 1922–1923. It was a time of hyperinflation, when Austria’s economic governance was assumed by a high commissioner posted by the Entente, under League of Nations colors.123 Resistance to austerity measures was led by trade unions, the largest of which, the Metalworkers, had earlier won an accord to link wages to the price index. When other unions sought to negotiate similar agreements, employers, including the Council itself, refused. Strikes broke out in municipal sectors, including gas and electricity, the fire ser vice, public transport, and the city administration. The social democrat leadership responded in its usual highhanded manner: the Party knows best; short-term pain for employees would bring long term gain for all.124 Polanyi was contemptuous of leftists who viewed the strikes through the lens of class struggle. With social democracy in office, he fondly believed, the working classes genuinely had assumed collective control over


sus.121 The premise that “a basic harmony exists between the functions”

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symptoms of the breakdown of an underlying unifying moral consen-

their muncipality, such that if public sector workers took industrial action, they were acting simulta neously for themselves as individual producers and against themselves as citizens and consumers.125 Guild

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could be rendered visible and amicably resolved, with the community as a


socialism proposed a mechanism by which such conflicts of interest

entrenched, a guild socialist society would institutionalize conflict “be-

whole deciding whether to consume more goods and ser vices and to work longer to produce them, or to enjoy more leisure time while consuming less.126 The outcome would be negotiated between two (or three) institutions representing producers and consumers (and citizens).127 Negotiations would begin with an economic plan proposed by the Producers’ Association. It would press for reductions in working time, while consumers would demand better quality, cheaper goods, and investments in public infrastructure. Eventually two schedules would be agreed on: one for social labor time and one for products. Because the negotiations would involve institutions that represent elements of the interests of each and every individual, cordial agreement should be feasible.128 In contrast to class societies, in which conflicts between opposing interest groups are tween variously constituted aspects of the same body of individuals which animate economy and society.”129 In this way, a functional guild system would enable citizens to achieve “internal overview” of their economic praxis and therewith disalienate both the market system and state power.

I N FA N T N E O L I B E R A L I S M A N D T H E C A L C U L AT I O N D E B AT E The most notable theoretical debate into which Polanyi sought to inject guild socialist arguments concerned “socialist calculation.” Ignited by Otto Neurath and Ludwig von Mises, its subject in reality was the feasibility of socialism, a question that had until recently been the province of smoky backroom disputation but now gripped the masses—and the elites. Councils’ republics had been established in Russia, briefly in Hungary, and also in Munich, where Neurath was appointed president of the Office for Central Economic Planning.130 In Austria, social democratic parties had entered government in Mises’s hometown of Vienna; some

liberal economists, such as Schumpeter, had come round to advocating state planning for certain branches of industry; and the Bohemian academic socialist and Polanyi’s in-law, Emil Lederer, was appointed min-

transformation would this entail? The debate was triggered by the appearance of Neurath’s Through War Economy to Economy in Kind, a treatise he had completed when a consultant to the Munich Workers’ and Soldiers’ Council. Neurath saw in the war economies a demonstration of the feasibility of centralized planning. By suppressing the price system and profit-seeking activity, they had enabled production to be maximized and full employment to be maintained. If this worked in war time, could not similar methods be applied in the postwar order too? Out of the hellfire of war a socialist phoenix could arise. “Utopia,” Neurath effervesced, “has become socially acceptable.”133 In Red Vienna, Neurath was an emblematic figure: a self-styled social engineer and socialist polymath, as comfortable in the rarefied heights of philosophy or economic theory as in the practical realm of designing urban space for allotments; an avant-garde modernist and ardent promoter of urban planning, housing, and education reform, whose conception of social change was attuned to local communities and grassroots movements. He had participated in Eugen von Böhm-Bawerk’s celebrated economics seminar together with such neoliberals as Mises and Hayek, such corporatist liberals as Schumpeter, as well as his social democrat comrades Bauer and Hilferding. In the early 1920s he became an enthusiast for guild socialism and set up a Building Guild that, just like its British counterpart, enjoyed brief success before collapsing, after which he threw himself into founding a Social and Economic Museum, the mission of which was to help an uneducated public grasp social and economic relations in their magnificent complexity. Neurath had undertaken his doctoral studies in Berlin with the leading light of the German Historical School, Gustav Schmoller, and the historian Eduard Meyer, and his mentors included Tönnies and Oppenheimer. Yet in several respects his economic theory was recognizably Austrian. He defined the modern market system (Geldwirtschaft)


to socialism,” Polanyi pronounced in 1922.132 But what kind of economic

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ister of socialization.131 We think of our economy as being “in transition

narrowly, as an economy in which economic behavior is influenced solely by processes of exchange.134 In contrast, the administered economy (Verwaltungswirtschaft) was governed by a variety of factors, in-


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cluding profit and loss calculation. And his thought centered on economic decisions, whereby resources are allocated to alternative uses. This was akin to Mises and Hayek, but unlike them he regarded all decisions as multidimensional, with major economic decisions necessarily entailing negotiated deliberation by collective associations.135 Their assumption was that for an economic decision to be rational, it had to maximize value, and this required an institution—money—through which values are commensurated. In contrast, Neurath insisted that the factors on which the quality of human life depends are necessarily heterogenous and cannot be effectively commensurated.136 As Thomas Uebel has noted, the “economics in kind” that he proposed was not simply a blueprint for a barter economy but was also a protest against the presumption that economic decisions lack any discernible rationality unless their purpose is the maximization of monetary value.137 Neurath advanced a detailed case in favor of the replacement of Geldwirtschaft by Verwaltungswirtschaft, to be run much as a multidivisional enterprise except that all calculations regarding the appropriate levels of inputs and output would be denominated in terms of “natural” physical quantities. He conceded the feasibility of mixed forms, but advocated instead a centrally planned economy, in which money would retain a presence only as a unit of account, with a diversity of forms of ownership and with planning probably (but not necessarily) controlled by the state.138 Statistics would be gathered to enable overview (Übersicht) of the state of demand, the availability of raw materials, and means of production (capital equipment and labor power),139 and given that they mea sure a myriad of heterogenous items, the choices between alternatives would necessarily incorporate political and ethical judgments.140 Such an economy, he proposed, would be a transitional form. Beyond it lay the prospect of a fully collectivized realm in which even the shadow form of money might eventually disappear.141 The “socialist calculation debate” was ignited by Mises’s response to Neurath. A rational, centrally planned Verwaltungswirtschaft, he contended, is infeasible, because economic calculation is only possible with

the existence of a price mechanism in an environment in which owners of private property (including labor power) engage in free competition. Prices provide property owners with the information they require to

In this way the infinitely complex and ever-changing pattern of final demand is organized by the invisible hand of the market, which informs and coordinates market actors’ calculations. Only a system based on private property, free markets, and money enables the human mind to “orientate itself properly” around the “bewildering mass of intermediate products and potentialities of production.”142 The establishment of a common measure, money, enables heterogenous goods to be commensurated, thereby enabling choices among different options to be reduced to the manageable plane of price calculation.143 In a socialist state, in contrast, true prices cannot form, and no planning authority can substitute itself for the price mechanism; modern economies are simply too vast to be administered by a single center. Mises’s case was later adapted by Hayek, who refocused it around the question of knowledge. For Hayek, calculation is at bottom a cognitive problem, with the division of knowledge forming the “really central problem of economics as a social science.”144 That economic knowledge is “unorga nized” and fragmented and “practically every individual” has some advantage over rival actors, enabling them, say, to use a machine more efficiently or to deploy “a surplus stock” of which they have become aware. Thus, “the estate agent whose whole knowledge is almost exclusively one of temporary opportunities, or the arbitrageur who gains from local differences of commodity prices” are performing “eminently useful functions based on special knowledge of circumstances” not known to others. This private, local information is precisely the sort of knowledge on which rational economic behav ior depends. The knowledge problem—that each individual possesses knowledge pertinent to their own projects but not an overview of the economic totality—is solved by the invisible hand of the price system, in which prices communicate the economically relevant aspects of myriad dispersed bits of information. This process cannot be matched by central planners, for whom the only type of accessible knowledge is statistical aggregates.145 In the absence


even as relationships between supply and demand continually fluctuate.

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gauge the most profitable employment of the resources at their disposal,

of a workable mechanism for communicating knowledge to planners, the quest to fi nd a socialist proxy for the capitalist price mechanism is doomed to fail.146


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Mises’s article was published in the Archiv für Sozialwissenschaft und Sozialpolitik in 1920. Shortly thereafter, the editorship of the Archiv was assumed by Lederer, who was himself fascinated by the question of economic calculation in socialism.147 With Lederer at the helm, the Archiv published three guild socialist responses to Neurath and Mises, two of them by Polanyi,148 who also elaborated his case in a brilliant essay in Der Kampf, the theoretical journal of Austrian social democracy.149 Polanyi saw his three essays as a political intervention: to rebut the “neoliberal” arguments of Mises while offering a superior economic strategy for the left.150 Social democratic leaders appeared to believe that the choice available, as regards the constitution of a socialist economy, was either a “gradualist” attempt to reform capitalism along social democratic lines or a revolutionary attempt to construct a command economy. This, he argued, was a false dichotomy, and as such was inducing paralysis. His case was that a guild socialist Third Way was available: society’s major economic decisions could be reached through negotiation between producer and consumer associations, with a space secured for regulated markets covering a range of consumer items. In an economy of this sort, resolution of the calculation problem would be practically possible, as “genuine working-class formations” would, “in their free action and functional linkage, produce the economic levels of wages, hours of work and prices which a socialist economy requires.”151 Were this program to be adopted by social democracy, it would be able to pursue its political program with redoubled vim and élan.152 In their engagement with Neurath, Polanyi’s polemics were not free of wrinkles and distortions. He misrepresented the Austrian as a “dogmatist” who promoted monolithic centralization and top-down economic planning,153 and even as the debate unfolded both parties were modifying their positions: Neurath moved from Marxism toward guild socialism, while his adversary incorporated Marxist accoutrements into his guild socialist framework.154 Polanyi was, however, correct in interpreting Neurath’s goal as a moneyless economy. On this point, in concord with Mises, he insisted that money plays a vital role in enabling the commensuration of economic values and thereby rational accounting, and

that in the absence of a price mechanism central planners would be unable to accurately assess ongoing changes in labor productivity or consumer demand.155 However, he rejected Mises’s presumption that

als statistically, as objective atoms, free market capitalism atomizes them in an equally insidious fashion: it orients all economic decisionmaking to questions of profit, neglecting social criteria. In this way, Polanyi combined a thesis on calculation and information with an ethical position. Because in free-market systems economic actors engage as individual units in private economic transactions, markets cannot provide meaningful information about the social effects of those transactions. Market capitalism not only generates an asocial ethic of individual selfinterest, but it also prevents the sort of overview of economic life that would facilitate the awareness that is essential to the ethical exercise of individual responsibility. For Polanyi this is a crucial point, for a virtuous society is precisely one in which human beings are able to “realise their responsibilities”: to know how their actions will affect other people so that benefits can be maximized and harms minimized.156 This represented a sharp break from the vulgar free-trade boosterism of Polanyi’s earlier liberal socialism. In economic theory he continued to see himself as a solid supporter of “the individualist method of the Austrian school.”157 He maintained that in a market economy, compared with central planning, the individual has greater “oversight concerning the facts relevant to his economic interests” and greater liberty to engage in economic activity. He now emphasized, however, that society consists of more than economic life, that individual behavior is driven by more than material motives, and that economies should be judged holistically. The “moral value” of social organ ization, he asserted, “depends on the degree to which it helps individual responsibility to be realized in the social sphere.” As such, a planned economy “has no moral precedence over a market economy.” Every thing depends on “the degree to which democratic organization of the whole of the social fabric makes authority representative and individuals responsible.”158 At face value, Polanyi’s ethic of personal responsibility is similar to that of Hayek. The Austrian set out from the premise that “the individual” should be able to “take account of all the physical effects” caused by


market capitalism. If top-down central planning apprehends individu-

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advocating a role for money and markets necessitates a defence of free

his decisions, and for this “it is necessary that the ‘sphere of responsibility’ be made to comprise as fully as possible all the direct effects which his actions have on the satisfactions which other people derive from the

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The exclusive right of owners to determine the use of their property


things under his control.” This is achieved by absolute private property.

in contrast, the maximization of productive potential was only one of

encourages individual responsibility, enabling each to make full use of his knowledge and possessions in the interests of himself and the wider community—in the manner of Smith’s invisible hand, the magic of which is that it weaves the public good from the skeins of private selfinterest.159 But Polanyi married a cognate ethical premise to a very different epistemology, yielding a conclusion antithetical to Hayek’s. Economically relevant knowledge, Hayek assumed, is private, expressible in terms of price and necessarily oriented to improving productivity in the interest of individual profit maximization. These suppositions underpin his argument in favor of free markets, because the sort of information that markets are best able to communicate is of the economic alternatives available to individuals qua private economic actors. For Polanyi, the criteria that should determine economic decisionmaking. The other is social well-being.160 The sort of knowledge required for the latter is context-dependent social knowledge; it is “not individual” but is generated by individuals in their collective practice and leads to concrete understanding of the real mutual relations among them. In contrast to individual knowledge, “social knowledge can be effectively mediated by the real transformation of mutual human life.”161 If in a market society it is the needs of individual consumers that count, in a socialist society these would be complemented by the rather different needs of the individual “as a conscious member of society.”162 How can this goal be realized? Polanyi’s answer centres on Übersicht, a concept best translated as “overview.” An alternative is “transparency,” but Polanyi’s Übersicht is the antithesis of the transparency of neoliberal lore, the purpose of which is to render greater accountability of policymakers to the market.163 Overview, for him, does not mean making information about prices more visible, with more perfect competition as the goal, but making the formation of prices visible, with industrial democracy as the goal. Just as overview is central to the achievement of

democratic accountability in the political sphere, so too must it be central to the achievement of democratic accountability in the economic. In this we can already glimpse the heft of Polanyi’s critique of market soci-

overview, in rendering interpersonal relations as impenetrable, opaque responses to impersonal, objective market forces, it stonewalls freedom and democracy. In a market society it is not human will that determines the goals of labor but the invisible hand of interest rates and the price mechanism; yet if the organization of human livelihoods occurs invisibly, according to market forces, how can accountability be achieved?164 In the modern era the problem may be attenuated somewhat by the concentration and centralization of capital, but these trends are counteracted by the increasing complexity of the division of labor, as a result of which “all overview over the position of the individual is lost.” The loss of overview, Polanyi concluded, is “the deepest cause of the chasm between democracy and economy.”165 How can overview be restored? How can economic relations be made visible such that we can see them “from within,” enabling us to comprehend the consequences of, and thereby gain responsibility for, our own actions? Polanyi’s answer is the achievement of conscious and responsible control of the economic process by the workers themselves, through a process of the “democratic organization of the whole of the social fabric,” rendering authority accountable and individuals responsible.166 This does not necessitate the abolition of money and markets, as Neurath believed, but rather the “mastery of their functions”; prices should not be “abolished but partially determined” through political intervention,167 and this, in turn, requires the comprehensive overview of economic life. For this, the statistical data in which Neurath places his faith is indispensable, but it facilitates external overview only. Internal overview requires an overall assessment of human needs and of Arbeitsleid (the discomfort, or disutility, of labor), a task that can only be fulfi lled by the “democratic representation of interests” and “self-organization,” as instantiated in “trade unions, industrial associations, co-operatives, and socialist municipalities.”168 It is in associations of this kind that individuals learn to “put themselves in the situation of others, to


nation of moral will to an all-pervading egotism, but that in preventing

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ety: it is not merely that the market economy encourages the subordi-

empathize with their needs and their Arbeitsleid.”169 The members of a trade union or a democratic workers’ party are sensitized to the wants, needs, and sufferings of their community—regarding supply bottlenecks

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organ ization. In such fashion, internal overview can be generated, en-


and the like—and are able to transmit this knowledge through their

as a single social labour force.”172 In such a society, the relations of work-

abling comprehensive accounting in a socialist economy.170 In its highlighting of overview as the key to the creation of “personal” and transparent economic relations, Polanyi’s thought resembles that of left social democrats, such as Richard Tawney, but also Marx and his followers, and in his seminar he expounded on the importance of the theories of alienation and commodity fetishism, Marx’s analysis of the ways in which human activity assumes the reified appearance of exchange value or market price.171 He singled out for attention a passage from a subsection of Capital on the “Fetish Character of Commodities,” in which Marx envisages a transparent society: “a community of free individuals, carry ing on their work with the means of production in common and expending their many different forms of labour-power in full self-awareness ers, “in respect both of their labour and its products, are transparent in their simplicity, in production and distribution alike.”173 This, Polanyi argued, was precisely what his thesis on overview was driving at. With Marx he shared the critique of a social order ruled by abstract economic forces, in which private property relationships ensure the domination of living labor by past labor in the form of capital,174 and in which socioeconomic relations are mystified such that cognizance of the impact of our economic actions becomes nigh impossible, prejudicing moral reflection and judgment. Along Marxian lines he argued for economic socialization, so that distinctively “ human” motives may prevail: where economic relations appear as transparent and unmediated relations among persons, the choices among goals are rendered visible, enabling the injunction to individual responsibility to be satisfied.175 Such a society promised to free workers from the rule of capital, restoring a living unity between activity and product and enabling the simultaneous achievement of “closer human community” and the “unified human personality.”176 This represented a turnaround. Polanyi had arrived in Vienna a caustic critic of Marxism, castigating it as a wretched discipline that aims to

break the power of individuals and subject them to the collective will. In positing the cogs of history as turning inexorably, Marxism, as he defined it, was a species of “objectivist” sociology—a term shortly to be

edge).177 Objectivism, and its close cousin historicism (in the sense soon to be given it by Popper), rob the individual of the freedom to choose, revoking the democratic responsibility of each of us to contribute freely to the evolution of society. The consequence is heedlessness, apathy, and what Jean-Paul Sartre was to call bad faith. In repudiating moral freedom, Polanyi had thought, Marxism’s belief in the inevitability of a socialist future is morally corrosive, and its presumption that individuals are mere cyphers of socioeconomic laws had seriously aggravated “the wars, revolutions, suffering and conflicts” that he had lived through.178 In his first two years in Vienna, he had begun to draft a book that charted analogies between medical research and quackery in the seventeenth century and contemporary “social doctrines of salvation,” such as Marxism, each of which pursued noble aims yet resulted in thousands of human corpses. The book defended the theses that the “fundamental fallacy of Marxian Socialism” lay in “the concept of ‘scientific politics,’ i.e. in the false conviction that political action could be based upon science,” and that “the religious concept of life” is in all respects “superior to the scientific one.”179 Although certain parts of the manuscript were reworked as published pieces (e.g., his 1922 articles on socialist accountancy), the project as a whole was abandoned—in part, one presumes, because his hostility to Marxism was mellowing.180 Why was this? Was it perhaps the result of thinking through his new Christian convictions? Certainly, while continuing to insist that Marx had erred in seeking to establish socialism on “an agnostic and merely scientific basis” rather than on the stable ground of religion, Polanyi now came to see his work as an unconscious Christian heresy,181 with Marx a modern prophet—a sage who damned greed, corruption, and hy pocrisy; divined the twisted logic of the ruling order; and warned that if we do not tear its pillars asunder we may not have a future at all. But surely other factors were at play. Had he perhaps embraced socialmovement activism? Possibly, but he never took part in protests (in


modern science, and later by Michael Polanyi (in his Personal Knowl-

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popularized by Edmund Husserl in his explanation of the crisis of

part, but not only, on health grounds). Might his marriage to a communist have played the crucial part? His daughter thinks not. “Neither of my parents,” she avers, “was influenced by the other. Ilona wasn’t inter-

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toward anything, it would indeed have been toward “participation in


ested in theory; she was an activist.” If she had pushed her husband


politics” but not Marxism. “Coming from a military family she was fascinated by military tactics. She would read and underline the writings of Clausewitz but never those of Marx. I never heard her speak about Marxism. Lenin or the Communist Party, yes. Training workers to fi ght in Spain, yes. But not Marxism.”182 This is an exaggeration. Ilona’s writings include incisive and theoretically informed discussion of the Marxist terrain, and we can be reasonably confident that her involvement in Marxist organizations and milieux would have contributed to Polanyi’s reappraisal of Marxism. Be that as it may, there can be little doubt that the principal reason lay less with his communist consort than with the ambient political culture of Red Vienna.

Formally speaking, Polanyi was in exile in Vienna. After his initial tough years, however, he felt perfectly at home. In part this was because it was the only European metropolis to be run by a labor party. That party was not without its shortcomings: its focus on serving the “immediate narrow material interests” of its working-class constituency had blinded it to the need for “elastic” policies that “would meet the needs of the community as a whole and thereby safeguard the interests of the working class in the long run by keeping its representatives in power.”183 Overall, however, he regarded Red Vienna as a shining light of democracy, a city in which institutional reforms—universal suff rage and representative government—had engineered a profound sociopolitical transformation, with the working class taking power and impressing its interests upon the constitution of the city. In reflections on contemporary social trends in Europe in general, he proposed that the most striking transformation was not in the political sphere but in the everyday life of the masses. Particularly among young people, there had been a reaction against “overindustrialised town life” and an elevation of physical sport, folk dance, and

the “rhythm and aesthetics of nature.” Anticipating his friend Erich Fromm, he summarized these trends under the motto “To BE, not to HAVE,” and they were especially pronounced in Vienna. It was in the

dergärten, libraries, and adult education programs were expanded, and a plethora of cultural associations were established. On any given day, a worker might read a socialist newspaper, take part in mass calisthenics, or attend a lecture on the socialist implications of the theory of relativity, while her husband attended a socialist chess club or gardening group.184 Alcohol consumption fell, and teetotallers’ societies mushroomed. Folk dancing and sports grew in popularity, entailing an ethical gestalt flip from individual achievement to team spirit. Polanyi was particularly impressed by Red Vienna’s initiatives in the fields of culture and educational reform. When a young activist in Budapest he had been engaged in workers’ education, and in this regard the Austro-Marxists spoke his language.185 Education was deeply embedded in their project, which has been astutely described as one of transforming the working classes “into a socialized humanity [through] a politics of pedagogy.”186 The socialist movement in Austria had evolved out of cultural societies, the Bildungsvereine, which were committed to the dissemination of enlightenment through Bildung and which perceived in education the principal tool by which to advance labor’s interests. The SDAP leaders conceived their party’s mission in terms of the elevation of  the cultural level of society above the materialistic and commercial ethic that prevailed in bourgeois civilization, and for this reason they invested tremendous faith in workers’ education.187 If there was one policy that Polanyi singled out for praise, it was the Viennese School Reform of 1919–1920. Its theoretical underpinnings had been laid by Alfred Adler, cofounder with Freud of the psychoanalytic movement (and the Polanyi family’s physician and friend).188 In practice, Polanyi conceded, the reform was overly cautious. It accepted the existing Imperial School Law as the constitutive basis of the system of school discipline and school life, did not develop the idea of socialist education— which was being attempted in Soviet Russia—and addressed questions of pedagogical method more than content. Nonetheless, it bore the


power by social democracy, a remarkable shift had occurred. Kin-

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throes of a popular renaissance. Thanks to the assumption of municipal

promise of remarkable progress. It encouraged regular parental contact with the school; teaching oriented to lived reality, above all to the child’s own experiences and surroundings, their local and regional environ-


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ment (with class excursions to the docks, a power station, an exhibition, or the woods); and, specifically in history lessons, a democratic approach that fully recognized the achievements of the “common people.” “In spite of its narrow scope,” he concluded, “it proved to be one of the most impor tant single factors in the Socialist transformation of Vienna, i.e. the establishment of that type of life and general working class culture that made the New Vienna into one of the most vital forces in the Socialist movement in the world.”189 For all that, Polanyi added by way of clarification, the Viennese seachange was not principally a response to pedagogy or to preaching from the socialist pulpit but to material changes in social organization. The achievement of political power by a socialist workers’ movement had encouraged Christian values to flourish and had imparted working people with a sense of their social importance, of moral purpose, and a “mentality of responsibility and leadership.”190 “Almost overnight,” he thrilled, the imperial capital had been transformed “into a world famous metropolis of a fine working class culture.”191 There was, his daughter recalls, “a real sense of the trade unions, the working class, being involved in political decisionmaking,” a phenomenon of which her father “with his bourgeois background” had never previously conceived. Theories of the “working class as vanguard” appeared suddenly plausible, for example at the May Day parades when hundreds of thousands of workers and their families marched to the Ringstrasse from every district, with banners, flags, and bands.192 Polanyi, in short, experienced an epiphany akin to that which George Orwell described ten years later in Barcelona: suddenly, workers “looked you in the face and treated you as  an equal.” His previous political project, the establishment of a separate organization for middle class radicals, was put firmly behind him, as was his abstract, liberal conception of democracy—which, he now believed, had “superciliously” glossed over the realities of class stratification.193 Unlike their sister party in Hungary, Austria’s socal democrats had succeeded in connecting the radical intelligentsia organically to a mass

movement. Intellectually open and dynamic, they included gifted and creative thinkers, such as Hilferding and Renner, who had elaborated the thesis—with which Polanyi sympathized—that the increased

tion to socialism. He also admired Max Adler, Austrian social democracy’s most gifted philosopher, and, according to Schafer, the feeling was mutual. Polanyi was enchanted by Adler’s thoughts on the role of human volition in the historical process, by his conception of the “a priori socialized individual,”194 and by his attempt to marry Kant’s ethical universalism to Marxism—with capitalist tendencies to reification and alienation interpreted as entailing the deployment of other humans as means to an end, against which the collective categorical imperative must spell resistance.195 In that resistance the process of creating the “new human being” already begins. Cultural revolution (the “revolution of souls,” in Bauer’s phrase) need not await the overthrow of the capitalist state.196 Of social democracy’s leading lights it was Bauer whom Polanyi held in the highest esteem. The two became friends and continued to correspond following Polanyi’s departure from Vienna.197 Bauer was a Marxist, but where Marx theorized the capitalist state as a set of alienated institutions through which a ruling class organizes itself and its relationship to civil society and to other states, he conceived of it as an institution in which power is distributed among the various social classes,198 and where Marx regarded parliamentary democracy as a political shell of bourgeois rule, he viewed it as a politically neutral form, the content of which is determined by the balance of class forces, mea sured by the voting power of the workers’ party relative to others.199 Polanyi found Bauer’s conceptions of democracy, the state, and socialism more congenial than those of classical Marxism, and he also shared his enthusiasms for Tönnies and for guild socialism. 200 Although rejecting strategies of political revolution, Bauer insisted that the SDAP, in contrast to its German sister, include both reformist and revolutionary currents, conditional on the domination of the former. 201 Polanyi found this Third Way compelling, and in par ticu lar Bauer’s Cole-inspired thesis on functional (or “industrial”) democracy.202 It understood socialism to


class antagonism were enhancing the prospects for a peaceful transi-

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organ ization of capitalist business and a concomitant moderation of

represent an extension of democracy into the economic sphere, with the proletarian content of democracy expressed not so much in parliament as through trade unions and workers’ and peasants’ cooperatives.

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racy organizes workers according to their function in the economy, as


Whereas political democracy atomizes the citizenry, functional democ-

lic. 204 Functional democracy, in the shape of the trade union and SDAP

producers and consumers. 203 As such, it connects government to citizens and provides a means for their self-education. In Bauer and Polanyi’s understanding, the years immediately following the overthrow of the Habsburg monarchy had seen Austria exhibit a coalescence of political and functional democracy, with the latter offering itself as an alternative to proletarian hegemony. The soldiers’ and workers’ councils that had formed the core of the 1918 revolution could have inaugurated a soviet republic at any moment, a prospect that appalled Bauer. Using the credit that social democracy enjoyed among even the more militant sections of the movement, it had sought to apply the “brakes,” in his words, to the revolutionary dynamic, to re-establish factory discipline and to inculcate a sense of loyalty to the new repubapparatuses, won out: the revolutionary elements in the councils were adroitly outmanoeuvred, the councils marginalized, and the militant sense of working-class identity and political strength that they embodied was diluted. In the early 1920s Polanyi believed that the immediate postwar years had tested the social-democratic assumption that a straight road leads from universal suff rage to workers’ power. It had been shown to be sound and had thereby revealed the final severance of the longstanding connection between liberalism and democracy. As those erstwhile bedfellows, capitalism and democracy, entered a condition of permanent conflict, liberalism rallied to the former, tossing aside the flame of democracy. Once a tribune of democracy and competition, liberalism had since the 1870s been “barren”;205 it now kowtowed to monopoly capital and supported either “neo-democracy,” a pale and derivative reflection of the real thing, or out-and-out authoritarian reaction. 206 A pertinent example of the latter was Polanyi’s old adversary Mises, who served as economic advisor to the Austrofascist government of Engelbert Dollfuss and whose Liberalismus, which Polanyi studied carefully in the late

1920s, includes rhapsodies to fascism.207 Yet, despite being forsaken by liberals, democracy’s torch was still borne aloft, as witnessed by the social-democratic breakthrough in Vienna, and “nothing will be able to

democracy was entering its long retreat. In the new republic, the SDAP controlled only the capital and its own province. Here it went from strength to strength, its membership rising steadily through the 1920s. But the Christian Socials and Pan- Germans dominated the provinces and took command of the state, and the ownership of industry remained in the hands of existing elites. The state revealed itself to be not the neutral body of Bauer and Polanyi’s imaginings but, as Bauer later admitted, “an increasingly resolute class rule of the bourgeoisie, which steadily pushed us back.”209 Faced with this blockade, the SDAP retreated. Its rhetoric continued to insist that the “working class” would return to national political power, but in practice the focus was on the recruitment and education of party members, and cultural activity in the municipality.210 This met with Polanyi’s approval but was criticized by left-wing social democrats who resented the fact that their party was morphing into an electoral machine with limited involvement of the rank and fi le. 211 This was, they objected, a patrician approach, in which a stable oligarchy of largely middle class intellectuals dominated the trade union and social democratic organizations, warding off grassroots initiatives that challenged their supremacy. 212 A pessimistic prognosis appeared to be confirmed by events elsewhere, not least in Britain. It was the country on which Polanyi fi led the bulk of his reports for the Volkswirt, and he had long held the Labour Party in high regard, in view of its Christian-socialist roots, its Fabian and guild socialist philosophies, and its willingness to simulta neously sponsor the socialization of major industries and to “go into battle” for free trade. 213 In Britain too, the early postwar years had seen the labor movement surge forward and then ebb. Trade union membership declined in the mid-1920s and the Labour government of 1924 failed to act on its radical manifesto promises. In 1926 a general strike led to defeat of the political and industrial arms of the labor movement, much to Polanyi’s dismay.


Even as the ink was drying on these fighting words, Austrian social

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stop it on its victorious path.”208

European social democracy had reached an impasse, and its theorists were obliged to rethink. Bauer came to revise his earlier reformist socialism. In a self-critique he admitted to having erred in believing that the


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working class could effectually increase its power within a bourgeoisparliamentary framework, gradually “fi lling its form with socialist content.” Recent events had “refuted this illusion.” Where workers’ parties gained political power, they were able to win this or that concession but wherever the bourgeoisie believed property relations to be seriously imperiled, it would abandon democracy and lend its weight to fascist movements. 214 He continued to maintain that the conflict between democracy and capitalism would proceed toward a socialist transformation, but the route would detour via a complex zig-zag: the enduring strength of the European working class would undermine economic growth, precipating an economic and social crisis to which economic elites would seek to respond with force, thereby detonating an epoch of political polarization that would open doors to social-democratic advance. In the 1930s he developed this thesis into a diagnosis of fascism. It had arisen due to the stalemate of class forces that democracy had brought about. Democracy had cued a new working-class confidence that ensured higher wages but lower profits, rendering capitalist elites vulnerable, desperate, and prepared to sponsor fascism. In turn, victorious fascism would only serve to sharpen tendencies to class strug gle, ushering in a new revolutionary period.215 Contemporaneously with Bauer, Polanyi developed a kindred argument, albeit with greater sociolog ical refinement. Western society, he proposed, had “arisen on the basis of the interaction between two spheres of individual freedom: economy and democracy.”216 That human liberty had found institutional manifestation in two separate spheres was the root of the problem. In this, Polanyi’s central charge against market society, he saw himself as a follower of Robert Owen and Simonde de Sismondi, as contrasted with Marx, whose critique was framed in terms of the Hegelian distinction between state and civil society. 217 In the early 1930s he elaborated the thesis, and it later became a central thread in The Great Transformation. In concord with Bauer, he proposed that with the enfranchisement of the working class, democratic government in the modern era had entered into an irreconcilable tension with the rule of capital. With democracy entering the workers’ camp

while capitalists owned the economy, class conflict had come to intersect with the separation of politics and economics, dislocating the social whole. From the political-democratic realm “arise forces that inter-

bodiment of an irresponsible, biased anti-economism.”218 Thus, when left-wing governments seek to direct their democratic mandate to economic purposes, they are bound to fail, because capitalist interests will respond to intervention in the market mechanism with a reduction in output, accompanied by a tirade against “democracy”—accusing it of the sins of inflation, protectionism, and neglect of the currency. As a result of this contradiction, the Left faced a dilemma: it could either “rule the political sphere without being able to reconstruct the economy” or it could “relinquish political power to the Right.”219 The situation was unsustainable. Capitalism was consolidating as a global economic system, but political democracy was becoming entrenched in nation after nation. The contradiction between capitalism and democracy lay behind the collapse of liberal civilization in the First World War and the economic and political crises in the decades that followed. Now the two spheres had to be reunited. Two “totalitarian” solutions offered themselves: communism, signaling the triumph of politics over economics, and fascism, representing the abolition of politics by economics. 220 Both movements manifested the will to abolish the division between spheres, but whereas communism was a totalitarian embodiment of democratic politics, fascism was determined to abolish freedom and democracy. 221 Polanyi’s hope lay in a Third Way that could bridge the chasm between the spheres. It would entail economic and political education and organ ization, in three areas. 222 One, in “theoretical economics,” would illuminate the general economic laws (Zwangsläufigkeiten) common to every society. The second, discussed above, would elaborate mechanisms for economic overview. The third, propagandistic in character, would disseminate basic economic information to the general public. 223 Popu lar education in social science would enable the mass of the population to understand how capitalism works, why it had come into contradiction with democracy, and how the interests of the latter could be served by a transition to a socialist society.


economy “answers with a general storm upon democracy, as the em-

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vene in the economy, disrupting and undermining it.” The capitalist

The strategy that Polanyi advocated was fundamentally pedagogical, and his interventions in the political field were invariably of a scholarly kind—organizing seminars on socialist economics, for example. In con-

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of a leader of Austria’s Schutzbund workers’ militia. 224 Her understand-


trast, his wife was an activist; her wallet contained pictures of Lenin and

automatism,” a fatalistic view of historical progress that served to shroud

ing of the impasse focused on strategy. Although a member of the SDAP, her analysis of Red Vienna was very different from that of her party’s leadership and her husband. She marveled with him at the uplift in confidence of working-class Vienna and shared his enthusiasm for any number of social-democratic reforms. But where he had justified social democracy’s smothering of the revolutionary upheaval in 1918–1919 in terms of the forestalling of a counterrevolutionary backlash, she saw not only a historic opportunity missed—of Austria becoming a bridge between the Bavarian and the Hungarian Councils’ Republics—but a betrayal of nerve that set the compass toward a spirit-sapping succession of climbdowns during the 1920s and early 1930s. Its root cause, she argued, was the social democrats’ philosophy of “determinism—not to say its “opponents’ actions, as well as its own inactions, with the magical mantle of ‘historical necessity.’”225 Crucially, this fatalism had contributed to social democracy’s failure to mobilize comrades, with arms, to protect Red Vienna against the threat from the parties of the Right: the Christian Socials, Pan-Germans, Nazis, and the Heimwehr.226 The events of July 1927 bore out Ilona’s critique. Earlier that year three fascists had fired on a socialist march, killing a war invalid and an eightyear-old boy.227 Although there was no question as to who had discharged the fatal shots, the three were acquitted. On hearing the news, workers across Vienna ceased work and marched on parliament. 228 Without warning, mounted police with sabers drawn charged the crowd, killing eighty-five. 229 It was a devastating massacre, comparable in scale to Peterloo, Croke Park, or Sharpeville. The Polanyis were summering in a rented flat in the Danubian resort of Klosterneuburg, but Ilona hurried back to Vienna, where a press pass enabled her to cross police barriers. 230 What she witnessed was nothing less than “the total irrelevance of the Social Democratic Party leadership and of its politics.”231 It had failed to listen to, or consult, its rank-and-fi le

members and was taken aback by the breadth of support for the demonstrations and strikes that broke out across the city. It refused to countenance the demand that the Schutzbund be mobilized until late in the

attempted to regain the initiative by calling a general strike, but the action was designed to be symbolic, the leadership’s aim being simply to regain control over the protests. It was called off after a few hours—a sign of hesitancy that only served to encourage the Heimwehr, which rose up against the strike. At this pivotal moment, the SDAP hesitated to confront fascism. It had dared to play its highest card, the general strike, but in such a tentative fashion that the Heimwehr were emboldened to face it down. In the ensuing confrontation, the SDAP blinked first. In response to her leadership’s refusal to put up physical resistance to the fascist threat, Ilona and her comrades established a left opposition current in the SDAP. When it issued a call for active and direct mobilization against the Heimwehr—without consulting the leadership and in contravention of their policy of passivity—she was suspended from the party, before being expelled in 1929. 233 Later she would draw together the lessons of these years in a book, Workers in Arms. A study of the interwar Austrian labor movement with a par ticu lar focus on the Schutzbund, it describes the demoralization within the Schutzbund and the wider working class that resulted from social democracy’s serial failures of nerve. The 1927 debacle set a precedent that was repeated many times in the following years. “The power ful potential of the Austrian workers’ movement,” she argues, was “frittered away in a longdrawn-out process of yielding one position after the other.”234 This rendered the terrain on which social democrats did eventually launch armed resistance, in February 1934, distinctly less propitious.

C A P TA I N O N A S I N K I N G S H I P The final years of Polanyi’s sojourn in Vienna were, at the personal level, far from unhappy. A typical letter, from his niece, Eva, reported that he seemed “happy, cheerful and calm,” that his mother-in-law was “a lovely, good and kind person, a blessing for the child,” that the child was healthy,


As the gulf between leadership and rank-and-file gaped wider, the former

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day, and unequivocally rejected the urgent appeals for the issue of arms.232

and the flat appeared “tidy, nice and friendly.”235 Other family members lived in the city, including his uncle Karl and aunt Irma, his sister Sophie (“a wonderful woman, brimming with life and reality”236) and her hus-


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band Egon Szécsi—a “sweet” chap who had belonged to his Socialist Student group years before.237 His social circles were rich and varied, including the Hungarian émigré community, Volkswirt editors and journalists, and comrades of the League of Religious Socialists in the SDAP, which he had joined on its formation in 1926. 238 He took plea sure in his work, in the occasional lecture invitations that came his way (notably on “economic statistics” to the Ernst Mach Society in 1930), and in excursions—for example, to the Netherlands and Switzerland, where he lectured on Christian Socialism. 239 However, in an inversion of the situation on his arrival in Vienna, his sunlit personal landscapes contrasted with the darkening skies beyond. The political and economic stability of the latter part of the 1920s vanished as Austria was swept up in the global economic crisis. From 1929 through 1933 employment levels and average wages plummeted, and the authoritarian trend that had commenced in July 1927 gained momentum. Public life was punctuated by paroxysms of anti-semitism. In 1930 the Heimwehr pledged itself to a full-blown fascist program and in the following year attempted a march on Vienna. In 1932, Austria’s Nazi party achieved its electoral breakthrough, as swathes of the “unemployed intelligentsia,” flanked by pinched peasants and assorted Protestants, flocked to its flag. 240 In spring 1933, parliament was prorogued indefinitely, and government was thenceforth by decree. Strikes and demonstrations, as well as press freedoms and state and communal elections, were outlawed, as was the Schutzbund. The Christian Social Chancellor, Engelbert Dollfuss, formed an alliance with the Heimwehr, appointed a prominent fascist to the post of minister for internal security, and traveled to Rome to pay respects to his ally and benefactor, Benito Mussolini. The SDAP’s passivity in the face of the fascist upswing elicited different responses among its intellectual supporters. Some defended the strategy, while others were disillusioned. Of these, some—a notable example is the sociologist Paul Lazarsfeld—immersed themselves in scholarly work or other forms of internal emigration while others, such as Marie Jahoda, actively opposed the party line.241 Polanyi and his wife in-

terpreted the 1933 coup in different ways. For Ilona, the SDAP’s insistence on constitutional methods of resistance and its refusal to mobilize its membership (which in Vienna included one in every five adults) rep-

of his wife’s frustration at the SDAP’s strategy and recognized that its  hesitations and retreats bred disillusionment and demoralization among its supporters that could only give confidence to the far right. However, he applauded it for the “very strong opposition” that it put up to the 1933 coup and reserved special praise for its wisdom in refusing to be drawn into conflicts that it might lose—notably in not repeating the error of July 1927 by calling a political general strike. Such an act would have been tantamount to “civil war”; it would have either given the Heimwehr a pretext to seize power or would have enabled the Nazis to further increase their presence.242 Whether the social democrats had offered “strong opposition” to Dollfuss’s coup or had meekly succumbed, frittering away their considerable support base, the fact remained: Vienna was Red no more. As his cherished social-democratic experiment was disassembled, with socialists treated as traitors, Polanyi began to discuss with Ilona the possibility of emigration. If Austria became a police state, he could become a target; and as a socialist to whom lying did not come lightly, he might find it hard to extricate himself from a tight spot. 243 Toward the end of 1932 he wrote his brother of the Volkswirt’s manifold problems. Its future was no longer assured, and still less was that of the known socialists on its payroll. Under the watchful eyes of fascist censors they had to weigh their words ever more carefully. It was “struggling financially, despite having lowered our salaries by 10  percent,” and “the political pressures are mounting”—an editor had been arrested, and “the head of the Bank of Austria personally announced that, under the current leadership, the journal will not be allowed to survive.” Federn had been saying repeatedly “that he was not able to carry on any longer and that he would quit,” and it was “only a matter of time” before Polanyi himself lost his job. With that in mind, the Volkswirt had allowed him “to leave for Britain.”244 Emigration was hardly an easy option. Polanyi was immersed in his work, having become Federn’s deputy. They had struck roots and had


lihood of the annihilation of the labor movement. Polanyi shared some

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resented yet another failure of nerve, and one that only increased the like-

ongoing commitments. They had numerous friends and comrades in the city, and Kari was attending school. Ilona’s mother was settled too, and Ilona was studying at Vienna University—her final exams not due until


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December. 245 However, the gamble had to be taken, for “staying here would be riskier.”246 And if they were to emigrate, at least the selection of the destination would present little difficulty. Karl had visited Britain in 1931. Friends and acquaintances lived there. He spoke English fluently, and his acquaintance with well-placed personalities, such as Cole, would surely prove helpful in the hunt for work. Through his journalism for the Volkswirt his interest in British politics and society had deepened, and his anglophilia remained undimmed. (He inhabited “a prevalently English mental universe”247 and harbored an exaggerated esteem for what he called the “Anglo-Saxon” traditions of religious tolerance, political democracy “and a general humanitarian outlook,” which he valued as “infinitely trea sured” assets in the “common fund of Universal peace and progress.”248) In April 1933, he suggested to Michael, who was then living in Nazi-occupied Berlin, that they both move to Britain, where he would seek employment as a “lecturer on economics in some very modest appointment, e.g. at a workers’ College.”249 In June he again visited London, where he renewed his friendship with Cole and Tawney over dinner at the home of another Labour luminary, Harold Laski. 250 By summer, the idea was firming up, and he and Ilona had alighted on Birmingham—where Karl had given lectures at the Woodbrooke Quaker study center—as the probable destination. 251 In September, Polanyi was promoted to editor-in- chief of the Volkswirt, a position he held jointly with Federn (whom he by now regarded as a friend).252 It was not unlike promotion to the captaincy of a sinking ship. Vienna’s intricate counterculture of social democratic organizations was being dismantled or, as with the Schutzbund, driven underground. With each passing week the pressure to exit Austria intensified. Given his socialist views, he no longer felt that he “belonged” there, he confided to Schafer.253 For the month of November he took leave, which he spent in London—in a twilight state: one foot in Vienna, the other in exile.254 By now, the British capital had become the destination of choice. He decided to quit Vienna, leaving his family there until he had found employment. Michael advised him to tarry a while longer and

to refrain from making precipitous decisions; he should instead carefully prepare to step into a new career by publishing articles in British journals. Yet, Karl explained to his London friends, his brother “does

meaningful work.”256 The Volkswirt had been confiscated by the authorities for a second time, and the possibility of its closure loomed. In December he tendered his resignation, and asked Michael—who had taken up a professorship in Manchester—for £50 to tide him over on his arrival. 257 The following month he bade farewell to his friends and comrades, his  wife and daughter, and to those shimmering—now sorrowful— memories of municipal socialism.


had deteriorated so precipitously “that it has become impossible to do

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not know how matters stand” in Austria. 255 The political atmosphere




n London, Polanyi found himself in exile once again, living in digs and looking for work in a bitter economic climate. The lot of the refugee is always daunting, particularly when loved ones are left

behind, and even for an anglophile, Britain in 1934 was no Eden. Ilona’s absence was intensely felt. She was able to visit only once, some six months into Karl’s stay.1 When Kari joined him in March, his spirits lifted somewhat, but life remained “hell” and, in any case, she was too young to “share [his] burden.” At times he was too lonely to be consoled even by his best friends, the Grants and the Macmurrays.2 Yet they did provide a

crucial support system. Donald and Irene Grant had moved to Vienna after the war, where they had administered a Quaker-run student welfare program. In 1933 they relocated to London, where he made a living giving lectures to schools and colleges in Britain and the United States. Karl and the Grants had been close since 1920, and through them he had met John and Betty Macmurray when they visited Vienna in 1932.3 In London they formed a close-knit socialist circle that agitated within the Auxiliary Movement (Aux for short), the senior arm of the Student Christian Movement.4 Although based in the capital, their group also drew in individuals from farther afield, notably the Shakespeare scholar Kenneth Muir.

Polanyi was able to stay for a while with the Macmurrays in Golders Green, in the vicinity of the Grants and the premises where the Aux held its meetings, and for almost a year thereafter with the Grants themselves.5 If Irene, a gently controlling personality, was indispensable to their subdivision of the Aux, John Macmurray, quiet and unpretentious, was its leading intellectual light—alongside Polanyi. The two men “had

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politicized in a milieu of left-turning liberalism but during the war (in


enormous regard for each other, and great affection.”6 Both had been

cerning the crisis of the age: that capitalism had developed to the point

which both had fought) became convinced that the Whiggish conception of progress was not for them and that a more radical agenda was required, to be secured on spiritual as well as sociolog ical foundations. During an intense period of intellectual exchange, Macmurray learned from Polanyi’s knowledge of Marx’s theory of alienation, while he encouraged the Hungarian to think about the spiritual in terms of what he called “the personal,” 7 and commissioned him to survey Rudolf Steiner’s work in the periodical of the New Britain Movement.8 Separately and together, Polanyi and Macmurray adumbrated several theses conat which it was no longer compatible with democracy; that fascism should be conceived of as the negation of politics, a movement geared to creating a state that “exists only as an outgrowth of economics;” and that the cardinal difference between communism and fascism is that, for the former, dictatorship is a transitory phenomenon with which it is essentially incompatible.9 Although the two were closely attuned in their outlook, their comrades perceived distinct differences in style. Polanyi was “the Apocalyptic chap,” while Macmurray’s revolutionary prophesy was delivered in a softer, understated tone.10 The Grants and Macmurrays provided shelter and companionship, and acted as a career agency too. From conversations among the five, a book project had arisen, Christianity and the Social Revolution, for which Polanyi undertook editorial work, earning £37 (roughly $2,500 in today’s terms). Recommendations from John and Donald were shortly to help Polanyi find work as a tutor with the extramural program of the Universities of Oxford and London, but until that position was secured in 1936, money was painfully tight.11 He attempted to eke out a living by working two days per week for the Volkswirt, alongside freelance lectur-

ing work.12 He was able to afford an occasional holiday—to the Isle of Wight, for example—but his transatlantic voyages were by steamer, third class, and the apartments he lived in after moving out of the Macmurrays’ home were far from grand.13 His first two years in Britain featured repeated applications for financial aid and university positions, most of which met with rejections. One concerned a research fellowship

coming.14 Polanyi’s application to the Central British Fund for German Jewry was turned down on the grounds that he was not “a member of the Jewish community in Germany” and that he had not lost an academic post, but the rejection letter recommended that he apply instead to the Academic Assistance Council (AAC).15 The AAC assisted refugee scholars in job hunting and in the payment of a stipendium until they found work. Its founder members included Jacob Marschak, the nuclear physicist Leo Szilard, and the London School of Economics dons William Beveridge, Eileen Power, and Mannheim. Polanyi already knew most of these individuals, and he was to become fi rm friends with the AAC’s secretary Esther Simpson (who had spent some time in Vienna with the Grants) and with at least one executive committee member, Richard Tawney.16 He was also assisted by Aux members, notably its general secretary, the Quaker feminist Zoe Fairfield, who urged the AAC to help Polanyi. She contacted the World Alliance for International Friendship through the Churches, which agreed to transfer £50, earmarked for Polanyi, to the AAC, with the expressed hope that it would match it with an equal sum.17 The AAC did put out feelers—perhaps a research fellowship could be found at University College, Swansea—but then determined that Polanyi could not be helped.18 (He was not, Beveridge ruled, “of academic standing and therefore not appropriate for assistance from the AAC. The People’s College in Vienna at which Polanyi worked is a place of Adult Education. Apart from this Polanyi is a journalist.”19) An appeal was orga nized, and high-profi le references for Polanyi came flooding in: from Cole, Haberler, Laski, Mannheim, Marschak, Tawney, and the economist J. B. Condliffe. All to no avail. Neither did an application to the Sir Halley Stewart Trust, made on Polanyi’s behalf by the AAC’s Secretary, Walter Adams, yield results.


made available—but only if funding were found, and this was not forth-

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at Liverpool University, which its vice-chancellor indicated could be

The AAC did, however, help to secure for Polanyi an invitation to undertake a lecture tour in the United States.20 In this, he was also assisted by his acquaintance Walter Kotschnig, an Austrian Quaker who had been active in the student movement and refugee welfare issues in Geneva, and who was a close associate of Edward Murrow, a rising star of New York’s liberal intelligent sia. From a Quaker family, Murrow was a Roosevelt


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New Dealer, a lifelong friend of Laski, and a member of the AmericanRussian Institute, an organization dedicated to fostering friendship with the Soviet Union. 21 In the 1930s he was appointed assistant secretary of the U.S. counterpart to the AAC, the Emergency Committee in Aid of Displaced German Scholars, which arranged stipends and lecture tours for German exiles, such as Thomas Mann and Herbert Marcuse. His regular job, however, was chair of the Institute of International Education (IIE), an organization, founded in 1919 with backing from the Carnegie Endowment for International Peace, that was devoted to furthering international student and academic exchanges.22 The IIE, Karl reported to his brother, wished “to send a lecturer, preferably European, to one or two dozen universities in the countryside, where no bird even flies, in order to improve the political education of the students there.” Kotschnig had recommended him to Murrow, who had approved the appointment. Polanyi was thrilled. The tour would be “perfectly suited to my life vocation: to provide a political education for the world—this is what I seem to have been born to do.”23 The honorarium for his U.S. tour amounted to around $1,750. It was a substantial sum but not enough to liberate Polanyi from financial hardship. Shortly before the tour commenced, in December 1934, he visited Oriel College in Oxford and returned home “full of hope” of receiving some sort of position there, but he had not reckoned with Oxford snobbery. “Some of the Fellows,” the Provost of Oriel reported, opposed making him “a member of the Common Room as he had not actually held an academic position.”24 A further blow arrived with news that the AAC had used the £50 from the Churches Fund to assist instead a theologian, Otto Piper, for whom a fellowship was created at Swansea. 25 Following interventions from Fairfield and others, the AAC eventually acknowledged its error and transferred the sum.26 But in the meantime, Polanyi had to rely on handouts from Michael, a minor severance package he had received

upon his resignation as Volkswirt editor, and a regular but undersized salary from the same periodical, for which, as it limped on until the Anschluß, he remained a correspondent. 27 When Aux members gifted him £12 for Christmas, out of thanks for the efforts he had devoted to their cause, he found the gesture “deeply moving.” It came, he disclosed to Michael, “just at the moment when loneliness had appeared palpably

Polanyi’s plight stood in synecdochal relation to that of Europe as a whole. “Maybe the end of the world is near,” he agonized in a letter to Michael. Human society “on the European Continent is surviving in forms which are suggestive of death.”29 Polanyi’s own life had been harassed and imperiled by a proto-fascist movement in 1919. Not long afterward, Mussolini had come to power in Italy—and his cousin Ödön Pór, hitherto an anarcho-syndicalist, had gained profi le as a precocious propagandist for Il Duce’s new movement. A decade later, Germany experienced what Polanyi regarded as “the most thoroughgoing and complete break in the social system” in centuries—more so even than Russia’s 1917 revolution30— and his brother was forced to quit Berlin. Now, Austria was succumbing to a similar disease. The final years of the republic witnessed a succession of police raids on social democratic premises. In one, in Vienna in 1932, they occupied an SDAP local headquarters for ten days, leaving behind a trail of destruction. Incidents such as this ultimately led to the decision of party members in Linz to offer armed resistance to a similar attack on February 12, 1934. 31 A grassroots reaction spread across the country, despite opposition from the party leadership, which dismissed as “communists” those, such as Ilona, who appealed for decisive resistance to fascism.32 She immediately went underground with the Schutzbund, with which she had long been associated, leaving Kari in charge of looking after the apartment and her grandmother. On February 14, Kari saw armed soldiers fi ling out of nearby barracks and heard artillery fire all night long, as the Goethehof, where Schutzbund units had holed up, was subjected to sustained bombardment. 33 After a four-day civil war, Austria’s workers were vanquished, but their heroic stand—summed up

1 17


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as my fate, and I appreciated its humanity and warmth twice over.”28

in the mot d’ordre “Better to go down fighting than to surrender without a strug gle”—inspired antifascist struggles elsewhere in Eu rope and beyond. Austria now witnessed the construction of a “clerico-fascist” regime. At the onset of the February civil war Polanyi had fretted that its outcome would be the replacement of “the Dollfuss lot” by a Nazi regime and


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that this would force his wife and daughter to flee.34 The prediction was accurate enough, although the process would take four years to reach its conclusion. Dollfus remained in office until mid-1934. He abolished all remaining vestiges of democracy and remodeled the regime on fascistcorporatist lines, a process that was consolidated under his successor, Kurt Schuschnigg. For the Polanyis, the most immediate concern was Kari. They had originally decided that she should accompany Karl to London, chiefly on financial grounds, but that the move should be delayed until the summer to minimize disruption to her education.35 The February fi ghting, however, forced them to act quickly. After it subsided, she had returned to school to discover that the director and several of her favorite teachers were missing, and “Austrian fatherland” pins were being distributed to the pupils. 36 Being an already politicized girl of ten, she asked to be excused. Together with a friend whose father was fighting with the Schutzbund, she repaired to the washroom and they flushed the patriotic fandangles down the toilet. Barely a fortnight later, Ilona dispatched her to London.37 As to Ilona herself, despite poor health, she remained in Vienna to orga nize propaganda activity and training sessions for the Schutzbund, while, formally speaking, continuing her studies at the Technical University—attending lectures on electrochemistry and researching X-radiation.38 She rejoined the illegal Communist Party, which stood apart from its preposterous Comintern sister parties in refusing to brand social democracy as a form of fascism. Her activism was brave but, her husband noted wryly, “less dangerous now, because the prisons are so full that those who are arrested are quickly released.”39 Over the course of the 1930s, as fascism tightened its grip on Central and Southern Europe, Polanyi and Ilona found themselves devoting ever more energy to assisting the flight of family members, friends, and colleagues. In 1938 Germany’s annexation of Austria gave Polanyi concerns of his own, for it implied a future change of his citizenship—Austrian

since 1924—to German, which would conceivably bedevil his applications in Britain for a residence permit and naturalization.40 More worryingly, it meant that not only Adolf in Italy but now two other siblings, Sophie and Laura, were living under the fascist knout. Cecile, meanwhile, remained in Budapest, where she suffered isolation, deteriorating health, and a lack of means.41 Anti-semitic legislation limited

that “civilized Germans would not stand for anything really rough happening,”42 and then, following refutation of this thesis, that his having fought for the Central Powers in the Great War would ensure his exemption from the anti-semitic laws.43 Such hopes came to nought. His property was confiscated, constraining his ability to provide financial support to relatives.44 Hungary’s government had in the meantime aligned itself with Berlin and Rome and in 1938 introduced a series of anti-Jewish mea sures modeled on the Nuremberg laws. When Cecile passed away in the following year, none of her children were able to risk returning home to pay their last respects.45 Laura and her children, meanwhile, had been looking to secure their escape from Vienna and in early March 1938, days before the Anschluß, she had completed preparations to leave for America. For a U.S. visa to be granted, affidavits were required, and sponsorship by well-heeled guarantors. The Polanyi family was able to mobilize a range of influential friends and relatives in the United States, including Jaszi, Lazarsfeld, Lederer, and Szilard’s brother. Complicating matters was that U.S. immigration required that potential immigrants apply on the quota assigned to each country based on their birthplace. Laura had therefore to apply on the German quota by dint of her Viennese birth, Austria having become part of the Reich. Her son Michael did manage to gain admittance to the United States in April, where—in a common reversal of roles, as the rescued becomes rescuer—he immediately set about securing affidavits for Laura as well as for his sister Eva and her future husband Hans Zeisel. In June, a family friend optimistically reported that Laura expected to receive her visa within weeks, but two months later she was arrested and taken into custody.46 On hearing this alarming news the Polanyi family sprang into gear. The best lawyers


tives. When living in Berlin in 1933, Michael had ingenuously assumed

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Karl’s and especially Michael’s ability to help her and their other rela-

were dispatched to Vienna “to explore official and semi-official avenues,” while Eva, through the intermediation of either Karl or Michael, sought help from the Quakers, and Karl purchased and sent her (and apparently Sophie and Egon too) train tickets for the Paris to London leg of her anticipated journey.47 According to Laura’s biographer Judith Szapor, the combined efforts of lawyers and Quakers, together with medical cer-


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tificates attesting to Laura’s failing health and the leniency (or corruption) of the Austrian police official in charge of the case, led to her release, on the very day of her scheduled hearing. She straightaway boarded a flight to London.48 During her time in London, Karl visited his sister frequently. She remained there for a year, her spirits at a low ebb as she underwent extended hospital treatment and awaited her eternally postponed U.S. visa.49 He would write her frequently, discussing the travails of family members or entertaining her with stories of daily life. (One recounts a lecture he gave to antifascists in early 1939, at which the audience of a dozen people all seemed very pleased—eleven of them with his enthralling oratory while the twelfth, presumably a “Nazi spy,” seemed to be gloating over the gathering’s small size.50) In March  1939, Laura, Karl, and Michael were joined in Britain by Adolf, who had been driven out of his adopted homeland of Italy.51 Four siblings were able to enjoy a rare reunion. But the occasion was haunted by the absent fifth. Sophie had remained in Nazi Austria.

DIAGNOSING THE VIRUS Fascism was something to be feared and fought, but also to be understood and explained—not solely in its actuality qua social movement or political regime but above all in its “essence,” its relationship to human history and to divine creation. Polanyi’s first major essay on the topic, The Essence of Fascism,” was written in 1934. Its gist is that fascism is a movement that seeks to assail three enemies si multa neously— socialism, democracy, and Christianity—and that this three-pronged character is its essential feature. In agreement with the Austro-fascist theorist Othmar Spann, he argued that socialism is the modern heir to democracy, but Polanyi argued that both are rooted in Christian traditions: the doctrine of the soul translates in secular terms to the princi-

ple of individual autonomy; from there it is a short hop to social equality and democracy (the “brotherhood of individuals”) and thence to “racial tolerance and pacifist internationalism.”52 As he recapped the case to students in Iowa, “Individualism leads to Liberalism, Liberalism leads to Democracy, Democracy leads to Socialism.”53 Because democracy, as continental Eu rope’s recent experience had demonstrated, “tends

In “Essence of Fascism” it is striking that Polanyi mentions fascism’s persecution of socialist parties, trade unions, Christian pacifists, and religious socialists, and proposes that Nazism aspired to establish itself “as a counter-religion to Christianity,” but nowhere does he mention Jews or Judaism. One commentator has expressed perplexity as to why, in his defining and putatively comprehensive treatise on fascism, Polanyi neglects to mention “the Jews as the primary focus of Nazi hatred.”56 Was this because the essay was to be published in a volume the subject of which was Christianity and the Social Revolution? If so, anti-semitism might then be expected to figure prominently in his other texts on fascism, but it does not. It is possible that his troubled attitude toward the Jewish Question played a part. Certainly, he underestimated the importance of anti-semitism to Nazism, and in 1933 he appears to have expressed irritation at the “Jewish press” for overstating the sufferings of Germany’s Jews.57 An alternative interpretation is that his essay’s main target was Spann, who, a supporter of the Heimwehr, was less prone to anti-semitism than the brownshirts across the Inn, and that Polanyi’s broader focus was on what is fundamental to fascism in general, not its Nazi subspecies.58 Certainly, his scope included a sizeable grouping of movements that were united in militant opposition to “representative democracy and working class institutions,” including the Black and Tans in Ireland, the Association of Awakening Magyars, Italy’s Fascio di combattimento, and Freikorps-style officers’ detachments in countries from Finland to Austria.59 Spann is singled out in “Essence of Fascism” in part because he was Austria’s pre-eminent far-right ideologue. Although little known today, he was a fascist celebrity of the time, guru of the fascist Kameradschaftsbund in the Sudetenland, admired by such German industrialists as Fritz Thyssen, courted by Germany’s Nazi Party and venerated


is to prevent socialism, 55 democracy must be eliminated too.

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to lead towards Socialism,”54 and because the raison d’être of fascism

by members of both the Heimwehr and the Christian Social Party— including by its leader, and two-time Federal Chancellor Ignatz Seipel.60 Seipel’s successor, Dollfuss, adopted Spann’s Catholic corporatism, with its vision of a medievally inspired Ständestaat, as his own frame of reference—as became conspicuously evident in the new constitution that Dollfuss brought in on May 1, 1934, following the abolition of the


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last vestiges of democracy. In part, too, Polanyi focuses on Spann because he expressed with unusual clarity a view that he shared: that socialism, including Marxism, is “thoroughly individualistic” and that representative democracy therefore opens the door to socialism.61More intriguingly, Spann also posed a challenge to guild socialists. Drawing on the work of Adam Müller, a reactionary Romantic economist who railed against economic individualism and advocated a return to a medieval order, he proposed that guilds be resurrected and positioned as a central pillar of the Austrian Ständestaat. In response, Polanyi sought to etch the sharpest possible line between fascist and socialist guild orders. The guild system, he warned, had become “the watchword of two opposite groups: those who regard it as the utmost expression of individual liberty as well as those who make it the embodiment of a social ideal which is the very negation of individual liberty.”62 When their paths had crossed in Hinterbrühl, Spann was already developing his reactionary version of the guild system. Some five years “before the corporative principle can be said to have emerged in Italian Fascist politics,” Polanyi noted, the Viennese professor had made it “the basis of a new theory of the State.”63 But in Italy the boundary between fascism and guild socialism had become grievously blurred—most notably by Polanyi’s own cousin, Pór. In the same year that his Fascism appeared, Pór published a second book, Guilds and Co-Operatives in Italy, which praised Mussolini for his labor policies (and included an appendix by none other than G. D. H. Cole).64 Pór justified his embrace of despotism in terms familiar to the left: Mussolini’s movement was a “revolutionary” project designed to construct “a functional democracy” and to unify society; Italy would be reorga nized as a corporatist unit, via a revolution in which fascist trade unions would play an elevated role, drawing their inspiration from Italy’s “Mediæval Guilds and Guild Republics.”65

In a raft of essays in the mid-1930s Polanyi charted a critique of Spann that vigilantly differentiated right- and left-wing versions of the principles of social unity (or “totality”), “function,” and guild organization. In an abstract, academic sense Spann was right to suggest that “functional and corporative organ ization” is more adequate to the “essential nature” of society than the chaotic, atomistic, and centrifugal

conception of social order that would supplant equality with hierarchy, with freedom stringently defined as action according to preordained rules.66 Spann’s application of functional theory to modern society, with power to be vested in economic and political “chambers,” supposedly offered an institutional alternative to capitalism, but Polanyi argues that it does nothing of the sort. In a socialist order, “the Political Chamber,” embodying and expressing “the Idea of common human Equity and Justice,” would take precedence; under its sway, private property “would tend to turn into ‘Socialist,’ i.e. public property.” In Spann’s model, in contrast, “it is emphatically the Economic, not the Political, Chamber which dominates. And this settles the matter, whether Spann likes it or not, in favour of Capitalism.”67 Indeed, in Spann’s “functionally orga nized” fascism, private property rules in an “even more downright and thorough” manner than in liberal capitalism. This was clear for all to see in the corporatist Austria of 1934. Whereas a genuine functional state would democratically elevate the political sphere, giving greater say to the “common man,” in Austria it was the business class that had been empowered, with a “functional mask” slipped on to disguise the abolition of democracy.68 With this, Polanyi had arrived at the essence of fascism. It lay not in Spann’s utopia but in what it sought to obscure: the construction of an ultracapitalist regime dedicated to reducing workers to commodityproducing automata, for which their exclusion from the political sphere is a prerequisite.69 As a regime, fascism represents the rescue of capitalism “ under the aegis of the capital ist class” and with revolutionary means, including the introduction of a planned economy; as a movement, it “is borne by those classes which are most opposed to the workers.” 70


any reasonable and scientific definition of society’s organic character, and his “romantic predilections turn him towards the Middle Ages,” to a

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structure of liberal capitalism, but his concept of totality went far beyond

Workers are least susceptible to the “emotional epidemic” of fascism; the intelligentsia is its breeding ground—serving to remind us that “education is no safeguard against social superstition.”71 The secret of fascism’s advance, however, was not the numerical strength of its support base, but first, the tacit support it received from capitalists, the judiciary, the army and police, and second, the weakening of the labor move-


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ment.72 Why, though, should its victories have been achieved so swiftly? Polanyi’s explanation emphasizes neither the support fascism received from capitalists and other elites nor the strategy of the labor movement but the underlying political-economic crisis that had materialized in the late nineteenth century before being unleashed on the world from 1914 on. If this megacrisis had a single root, it was the entrenched “hostility of capitalism to popular government.” As such, fascism was nothing but the latest and most virulent outbreak of the “antidemocratic virus” that had been inherent in industrial capitalism from the outset.73 At the end of the 1930s, Polanyi elaborated this thesis in an essay, “The Fascist Virus.” Using materials from Britain, it surveyed the fears of nineteenth-century elites that enfranchising the working classes would spell the end of capitalism. “Only if the poor bore their lot patiently,” they argued with reference to the economic “laws” established by Thomas Malthus and David Ricardo, “would they be safe from starvation, only if they resigned themselves to their misery could they survive at all. They must therefore be kept away from the levers of government, which they would other wise try to use to wreck the property system on which the community depended for their subsistence.”74 In different ways, the axiom that democracy and capitalism were incompatible was defended by conservatives (Edmund Burke, Robert Peel), liberals (Thomas Babington Macaulay), and socialists (Robert Owen) alike. Peel opposed the Chartist demand for universal suffrage on the grounds that it would “impeach the constitution of the country.” Macaulay, the historian of Rome and member of parliament, warned that “institutions purely democratic must sooner or later destroy liberty or civilisation, or both.” The danger was plainly visible in the United States, too, where “the majority is the government and has the rich, which are always a minority, absolutely at its mercy.” That unfortunate nation, Macaulay opined in 1857, had entered a downward spiral that would end

in the destruction of liberty or civilization. “ Either some Caesar or Napoleon will seize the reins of government with a strong hand,” he thundered, or the United States “will be as fearfully plundered and laid waste by barbarians in the twentieth century as the Roman Empire was in the fifth.” 75 For Polanyi, Macaulay’s words anticipate fascism. Given that the de-

inevitably be deployed in their interests and against civilization, capitalism will have to be rescued by Caesarist technique. (In the modern vernacular: fascism.) The same era in which Macaulay expressed his fears of latter-day Huns and Vandals had also witnessed early presentiments of fascism in literature: in Dostoevsky, we see the demands for an “impossible freedom” of the people deflected by spiritual despotism into a condition of permanent dependence, joyfully accepted by the masses; later examples included the dystopias of H. G. Wells, in which a laboring population is reduced to a subhuman condition, and Jack London’s apparition of a people crushed under the iron heel of big business. Their premonitions were based on a valid intuition: that capitalist elites would have little choice but to deploy extreme mea sures to counter the democratic aspirations of the uprising working class. Despite such portents, Polanyi continued, liberals in the age of Dostoevsky and London were able to blithely assume that universal suffrage would yet mesh harmoniously with a flourishing market economy. They could point to the fact that several countries had broadened the franchise without much ado. Was this not robust evidence that the conflict between democracy and capitalism was abating? No, he argues; their sense of security was a fantasy. It had been facilitated by a series of contingent and transitory phenomena, such as the expansion of the world market and “the false impression created by the prosperous American scene.” 76 Following the war, all such illusions were dispelled as the result of a twin transformation: capitalism’s lurch from laissez-faire to an orga nized, regulated form, which enabled political power to immediately and effectively steer the economy, and the extension of the franchise. The concession of universal suffrage, it was plain to see, would lead to the working class exerting a “decisive influence upon the state” but this,


selves by pressing for political and industrial democracy, which would

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structive effects of the market mechanism oblige workers to defend them-

in turn, would induce market panic and the “imminent danger of a complete stoppage of the productive apparatus,” because parliaments “weaken, discredit and disorganise” market capitalism, by meddling with its self-regulating mechanisms.77 As a consequence, democracy had become dysfunctional. It depressed the profitability of the economic system, which began to grind to a halt.78 While the workers sought to

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to diminish working class influence either through suborning democ-


deploy their electoral power to protective ends, economic elites strove

reframing of the point, “have reached a deadlock, because they have

racy, pressing leftist governments to accede to their will, or, when that failed, by the forcible suppression of democracy. The “fascist era,” in this perspective, heralded the “total crisis of a market orga nized industrial society,” with fascism itself conceived of as the last throw of the dice by embattled capitalist elites (or, as he put it later, the “reaction of the middle classes” to the workers’ revolts in Russia and elsewhere).79 Fascism, in short, was the pathological symptom of the fact that, as Hitler put it in his Düsseldorf speech of 1932, economic inequality and political equality are incompatible.80 Democracy and capitalism, in Polanyi’s become the instruments of two different classes of opposing interests,” and this is the clue as to why the social upheavals of the age were characterized by such “cataclysmic vehemence.”81 There were only two ways out of the deadlock. Its underlying cause was the liberal utopia of the self-regulating market. This had generated an unsustainable acceleration of change and the “disembedding” of the economy from the social fabric and these, together, were bound to wreak civilizational collapse.82 A cure could only come about if society were to unify once again, with the scission between politics and economics sutured. Fascism represented a reunification of society on an inegalitarian, undemocratic basis; socialism its reunification on the basis of ideals of equality and the extension of democratic principles throughout society. A modern industrial society, Polanyi concluded, can in the long run be either fascist or democratic and socialist. History had entered a new phase. No longer would world order be determined by confl icts among empires and nation-states. Now the battleground was the sociopolitical strug gle between fascism and socialism- democracy, with its front lines drawn both within and between nations.83

AU X I L I A R Y A C T I V I S M Fascism was a movement to be feared, to be explained, but also to be opposed, and its rise was undoubtedly one factor behind Polanyi’s mid1930s return to activism. The defi ning purpose of the Polanyi- GrantMacmurray circle, which was at the core of the “Christian Left,” derived

institutional change effected by legislation, but also the “personal field” of education, culture, and municipal activity, a quotidian realm to which religion has privileged access.84 Conversely, contemporary Christian Socialists “ were vague as to the nature of Socialism”; therefore the formation of a knowledgeable, radical ginger group could serve the socialist movement in its antifascist campaign.85 Polanyi’s circle set about gaining an institutional foothold, initially by winning an audience among existing members of the Aux. They wrote to Tawney, a prominent Aux member, to invite him to consider their suit. At the meeting it became apparent that although the Labour eminence grise supported their efforts to form a Socialist Christian group, it should be autonomous from the Aux. They were reluctant to accept this advice, but the Aux’s general membership plainly shared Tawney’s view.86 Swallowing his aversion to camping, Polanyi attended an Aux summer camp at Sandy Balls in the New Forest,87 helped to draft and edit Christian Left bulletins and memoranda, and gave lectures at numerous meetings—especially on Marx’s early works, which had recently been published in German and which, he enthused, “may still save the world.”88 He explicated the early writings for his anglophone audience, presenting them as the key to Marx’s mission and as a trove of profound insights into the problem of alienation in capitalist conditions.89 Although some saw Polanyi as perched on the movement’s radical fringe, he himself did not view his location in quite that way.90 At one meeting, at which Macmurray and Fairfield were present, alongside Malcolm Spencer (author of Economics and God) and J. H. Oldham (Christianity and the Race Question), he quipped that he was “almost the most conservative of the circle.”91 That said, the thrust of his group’s involvement in the Aux was to push it from its previous position as a “fortress of conservatism” over to “socialism,” a battle they won in 1935.92


“impersonal sphere” of political life narrowly conceived, the sphere of

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from their belief that effective social change must target not only the

Arguably, the major fruit of Polanyi’s Christian-socialist engagement— and his “greatest success here in Britain”—was Christianity and the Social Revolution.93 It was designed as a counterblast to Christianity and the Crisis, a collection of essays by prominent Christian clerics that (its title notwithstanding) treated the Great Depression and its attendant evils with a fusty complacency. Christianity and the Crisis was con-


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structed around the consoling premise “that Chris tian ity had the wherewithal to withstand the current social crisis just as it did one hundred years earlier when William Wilberforce and others accomplished in the Great Emancipation Act the liberation of both Black Slavery and White Slavery.” Moreover, it barely acknowledged the communist phenomenon and made no mention of fascism whatsoever. The response of Polanyi and his comrades was to publish a book that openly broached these topics and allowed communists to speak for themselves.94 They found a fitting publisher in Victor Gollancz, who was rapidly making his name with a series of contemporary classics, such as Orwell’s Down and Out in Paris and London.95 Polanyi guided the editorial team and worked closely with contributors—Macmurray, Joseph Needham, and Wystan Auden, among others—to achieve a near-ideal balance of opinions.96 (One perspective for which he had called, without success, for representation was the “Marxian atheist,” to be authored by Lukacs, or, if he refused, Franz Borkenau.)97 His efforts were rewarded when some 11,000 copies were sold, aided by a favorable review from Tawney in the New Statesman and Nation, which highlighted Polanyi’s chapter for commendation.98 In a series of pamphlets and letters, as well as lectures to such bodies as the Society of Jews and Christians, Polanyi set out his religious philosophy and his understanding of the global political situation. The kernel of the former was the axiom that Christianity had revealed to humanity that its “spiritual nature” (or “true nature”) is individual freedom. “Because there is God,” as he put it, “the individual has an infinite value.”99 In this phrase one can see the indissoluble linkage—central to Christian doctrine, in Polanyi’s hermeneutic—between freedom, community, equality, and universalism. For the “Christian discovery of personality is the discovery of the truth that every human being has a soul to save”;100 ergo all humans are morally equal, they cannot act ethically without reference to their coexistence with others, and, in aggregate,

they are destined to create a community, with each existing in and through their fellows. This represented a moral recognition of which pre- Christian civilizations had been ignorant, and it was destined to become the dominant force in history.101 This prospectus was not smug Christo-Whiggery. A new conjuncture had been reached at which a further move “towards community is inevitable, if humanity is to sur-

coming transformation. Indeed, it had inadvertently constructed one of the obstacles to that transformation: the Judaeo-Christian postulate of “the absoluteness of the individual’s freedom, freedom also from society” had given rise, “step by step, to the complex society engendered by the machine.”103 If we unpack this asseveration, it contains two interconnected elements: individualism’s false turn, and the complexity of industrial society. Moral individualism, Polanyi maintained, flourished first in Christianity but only truly came to the fore with the religious and socioeconomic revolutions associated with Calvin and capital, which, respectively, Weber and Tawney had chronicled. For three centuries of youthful capitalism and early anticapitalist movements, “moral individualism and liberal Christianity fitted the occasion.” As socioeconomic complexity and marketization increased, however, their appropriateness to human requirements declined.104In a complex industrial society, humans cannot avoid coercing others, a circumstance that is evaded by a purely individual relationship with God or a Tolstoyan stance of “abstention,” and it demands instead collective moral reflection on social relationships in their entirety.105 Jesus had not conceived of society as “the necessary framework within which human freedom and community were to be realized,” for the problem of freedom in a complex society could not have been posed in his day.106A millennium and a half later his approach, keyed to the needs of “simple” societies, still underpinned the liberal Christian ideal. It exhibited no awareness of “the reality of society,” its institutions or its history, and viewed power “in all its manifestations as evil.”107 The consequences had become increasingly malign and included an obeisance to the “cult of efficiency” and “idolatry of the authority of science and technology.”108 The liberal Christian ideal,


tions to steer the “reform of consciousness” that was indispensable to the

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vive,”102 and Christianity did not have the wherewithal in its own tradi-

Polanyi argued further, was culpable for encouraging technology worship. Echoing Sandy Lindsay, on whom more below, he posited two types of individualism: the “atheist” kind, which exalts “the passions of the individual ego at the cost of God,” and “religious individualism,” which values individuals “ because they have soul.”109 The former is peculiarly pernicious when combined with the rise of the market and the


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“machine.” In these circumstances it had generated “egotistic, competitive individualism of the destructive type,”110 and this, in turn, facilitated the rise of market society. Liberal Christian ity, in Polanyi’s analysis, has fallen short. It had proved incapable of reconciling moral individualism with moral community. Ever since Jesus, the truth had been known that human beings cannot fulfi l their true nature except in communion with their fellows, and it was the disavowal of this truth by liberal individualism and its foiling by market society that had occasioned the interwar crisis.111 In the 1930s, at the height of his religious zeal, Polanyi held that Christianity “is also the force that is alone able to solve it”112—but not the churches in their existing state, for they are culpable of extolling misery as a sign of salvation and of encouraging the masses “towards a resigned, if not joyful acceptance of the sufferings of life, while turning their minds passionately against revolutionary ideas.”113 Nor even would Christianity as a body of doctrine suffice. While he believed “more than ever, in the Christian interpretation of existence,” he had become “convinced that the New Testament is insufficient” and that “a post- Christian” age was dawning.114 Christian individualism had to be reinterpreted in a form attuned to the realities of modern industrial society. In this view, socialism was the true inheritor of Christian individualism, and the movement uniquely able to fulfi l its original promise.

THE BALLIOL NEXUS If the Christian Left constituted Polanyi’s core political-intellectual milieu in the mid-1930s, a second, intersecting, circle comprised Labour Party intellectuals, such as Cole and Tawney. Already in Vienna, when discussing his impending move to Britain, he had mentioned to Michael that he would relish the opportunity to revive his acquaintanceship with

Cole and to meet Tawney and Maynard Keynes.115 Between them, his Christian Left and Labour Party contacts opened doors to the intellectual establishment, and before long Polanyi found himself attending events at the Economic History Association, lecturing at Chatham House on the European balance of power, and conversing over cups of tea with Cole, Tawney, and R. W. Seton-Watson.116

lanyi likewise, believed that the Labour Party’s assumption of the role of Her Majesty’s Opposition had transformed the political scene, such that the two major parties now differed on the fundamentals of the social system in a way that had not been known since the days of Roundheads and Cavaliers.117 All three had joined the Fabian society but were impatient with its utilitarian and technocratic inclinations and its paucity of moral idealism. Cole and Tawney in par ticular had been shaped ethically and intellectually by late nineteenth-century liberalism, a current of thought that had experienced a state of creative turmoil as it reckoned with the theoretical deficiencies of classical liberalism and the suffering of the impoverished classes, and searched for a new foundation of community.118 In this project two central figures were the Balliol scholars Thomas Green and Arnold Toynbee Sr. In works that Polanyi read admiringly in the 1930s, Green developed a critique of classical liberalism’s conception of the relationship between individual and society.119 He assimilated social Christianity and romantic thought, and enlisted Hegel’s depiction of society as an organic whole, of which citizenry and government were integral parts, with the state theorized as a national community with a moral purpose—albeit shorn of the vulgar Hegelian notion that the state supplies the vital connection between individuals, society, and the universal spirit.120 Society, for Green, consists of political and social beings, not a mere sand-heap of individuals. The solitary and autonomous individual of liberal legend was a myth, and a harmful one at that, for isolated atoms pursuing their selfish needs can produce neither a public-spirited ethic nor a civil society. The self can only be realized within the life of a community, and government therefore has a moral duty to concern itself with the good life of the citizenry as a whole. If Green radicalized liberal political theory,


triumvirate that dominated left-wing political thought. All three, and Po-

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In interwar Britain, Cole and Tawney, together with Laski, formed the

Toynbee did the same for economic theory. He took Smith, Malthus, and Ricardo to task for their claims that human misery is the result of inexorable laws of nature. In fact, the poverty and economic dislocation experienced in Britain during the Industrial Revolution were the outcome of preventable injustices and selfishness. Toynbee’s methodological proposition was that morality “be united with economics as


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a  practical science,” with the policy-related corollary that liberal political-economic thought be revised to permit emphases on community cohesion, welfare rights, and state interventionism.121 While generally supportive of free trade, he attacked the doctrine of “free exchange of labour”—a comment with which Polanyi, poring over Toynbee’s Balliol lectures, heartily agreed.122 In the final quarter of the nineteenth century and the first of the twentieth, Oxford was abuzz with left-turning liberal idealists. They were for the most part Liberal Party supporters, almost all were sympathetic to socialism in certain respects, and many assumed the existence of a natural link between socialism and Christianity.123 Balliol was the central meeting ground between liberal theology and socialist thought. Its doors opened to four friends and mentors of Polanyi: Sandy (Lord) Lindsay, vice-chancellor of Oxford University and chairman of Oxford’s ExtraMural Delegacy (for which Karl Polanyi was to gain employment); Tawney, a former Balliol Fellow whom Polanyi met frequently during his early years in Britain;124 Macmurray, a Balliol alumnus who helped to secure Lindsay’s return to Balliol as its master in 1924; and Cole, who had, like Macmurray, been a tutee of Lindsay. The elder pair, Lindsay and Tawney, were two of Polanyi’s British-based referees (the others were Mannheim and Cole) and had assisted him in finding teaching positions when he arrived in Britain.125 To them, he was more deferential and distant than to Macmurray and Cole, his juniors by a few years.126 Lindsay and Tawney, as well as Tawney’s brother-in-law William Beveridge, were students of the Idealist philosopher Edward Caird, who until 1907 had been master of Balliol.127 Lindsay’s name is now all but forgotten. “The tone of windy Christian uplift” that suff used the moral phi losopher’s larger pronouncements grates on postmodern ears, while his anglicized Hegelianism no longer enjoys much standing among professional philosophers.128 In the 1930s,

however, he was a towering intellectual figure. He drew on Greenian philosophy, a Calvinist-inclined Christianity and Rousseauian political theory (notably the idea of the general will: that the state exists to serve the national community), to develop a critique of market society and a communitarian case for socialism. His Christianity and Economics (1933) castigates “the perversion of means into ends” that is effected

Christian ‘operative ideal,’” it argues, “based on moral equality and expressed through a notion of community, underlies democratic society,” and socialism is nothing but the extension of these same principles.130 Christianity not only underpins democracy, égalité, and fraternité but also one of two forms of individualism, the clash between which Lindsay sees as the defining antagonism of modernity. One is idealist, or “Christian”: “an individualism rooted in an ideal of freedom and . . . concerned with the dignity and worth of all men.” The other is materialist, or “scientific”: “a secular, atomistic individualism motivated in everything by self-interest and willing to manipulate things or people indifferently in the quest for power and material satisfactions.” Since the Industrial Revolution, Lindsay believed, the latter had usurped the former, allowing technological progress to run ahead of political and social organization. That a material revolution had occurred “without a corresponding moral and spiritual revolution,”131 he argued in anticipation of Polanyi, explained the gathering crisis of the interwar years. Tawney’s Christian socialism was also situated in the tradition of Green (and his disciples Caird and Charles Gore) with regard to the prioritization of the spiritual over the scientific, advocacy of an organic society united by a belief in the common good, and the affi rmation of the state’s role in enabling the fulfi lment of individual personality.132 Ross Terrill has helpfully drawn attention to the progression from Green to Tawney on the question of how social unity can be attained. For Green, the emphasis is firmly ethical and paternalistic, with the accent on social ser vice for the community. Tawney shared the concern for social ser vice but subordinated it to a political argument that postulates socialist transformation as indispensable to the creation of social unity.133 Society, in his view, should be orga nized around the “per for mance of


beings, thereby weakening our sense of personal responsibility.129 “A

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by market society, as economic relations become the master of human

duties, not the maintenance of rights, and the rights which it protects should be those which are necessary to the discharge of social obligations.”134 In his Equality, he advised that the unity of “national life should no longer be torn to pieces by obsolete property rights and meaningless juristic distinctions”—a sentence that is underlined in Polanyi’s copy of the book.135


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Tinged with guild socialism, Tawney’s vision was of a functional society, wherein the common good is fulfi lled by individuals performing their function, defined as an individual activity that is performed not for mere personal gain but to express a social purpose.136 His critique of capitalism, accordingly, is that it is not a functional society built around social purpose but a mechanistic society orga nized around individual rights. In Religion and the Rise of Capitalism, which Polanyi admired, he traces how the motive of personal gain and the self-adjusting mechanism of the market economy usurped norms of mutual obligation that had prevailed in medieval Europe—an epoch in which the social and the spiritual were construed as inextricably intertwined, with economic interests “subordinate to the real business of life, which is salvation,” such that economic activity is but “one aspect of personal conduct upon which, as on other parts of it, the rules of morality are binding.”137 In capitalism’s youth, Tawney argued further, social duty (or “purpose”) had lost out to “mechanism,” but during its decline the tables would turn.138 Decisive to its demise, he proposed, anticipating Polanyi’s Great Transformation, would be the extension of welfare benefits. For by raising workers’ confidence and security, these tend to depress economic output. Hence, the motive of fear “on which the industrial system relied for several generations to secure efficiency, secures it no longer.”139 Tawney was an appreciative follower of the work of yet another former Balliol Fellow, Arnold Toynbee Jr., in particular of his multivolume Study of History. Like the other Balliol radicals discussed here, and Polanyi too, Toynbee had grown up swaddled in positivist-Whiggish promises of progress but had been jolted by the experience of the First World War, which revealed the fragility and potential for collapse of Western civilization. He began to comprehensively rethink his previous optimistic meliorism, a task that culminated in his grand narrative of world history, the first six volumes of which appeared in the 1930s.140 It presented

a history of the rise and fall of civilizations, with civilizational dynamics theorized as progressive and cyclical movements that are governed by sequences (or laws) of Challenge-and-Response and Withdrawal-andReturn. The latter posits a dichotomy in societies between fruitful minorities and their fallow fellows: the minorities abstain or withdraw from normal expectations, and engage instead in creative activity,

cited Polanyi’s interest. Its premise is that the central explanatory events in any historical process are challenges that confront individuals and societies, putting their spiritual resources to the test. When an individual is subjected to an ordeal, he may fail to meet the challenge or may react victoriously, and in the process produce a new “creation.”142 The same applies to societies. These are confronted in the course of their lives “by a succession of problems, which every member has to solve for himself as best as he may.” Each problem presents a challenge, “and through this series of ordeals the members of the society progressively differentiate themselves from one another,” with some failing while others find a solution. As ordeal follows ordeal, some civilizations fall by the wayside, others struggle on, while still others grow in wisdom and stature—in the process releasing new forces and institutions that are then tested by new challenges. The obstructive institution “may either be brought into harmony with the new force promptly and peaceably” or be “eliminated tardily and violently through a revolution,” or it may defy both adjustment and elimination, in which case “some social enormity will result from the unnatural ‘drive’ which will now be put into the intractable institution automatically by the new force that has failed to master it.” The ratio in which the three outcomes are represented in the “total result” of each round of Challenge-and-Response will be “a matter of momentous importance in the working out of the society’s destiny”143—as was evident in the interwar period. Polanyi read Toynbee’s History with mixed feelings. Some of its lofty generalizations seemed far-fetched. But he emphatically agreed with Toynbee’s identification of democracy and industrialism as the twin master institutions of the modern age, which had simultaneously entered a historic moment of crisis,144 and he found the Challenge-and-Response


But Challenge-and-Response is the richer concept, and the one that ex-

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typically in relative isolation, before returning to the mainstream.141

concept hugely stimulating—indeed, it later became an impor tant tributary into, even a model for, his own “double movement” concept. In Polanyi’s reading, the Industrial Revolution represented Britain’s “response to the challenge of the Commercial Revolution.” That revolution had challenged Western Europe, primarily due to the ensuing drain of silver, to which, in turn, a variety of responses evolved: the voyages of

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seas empires, the slave trade, and above all the Industrial Revolution it-


discovery, the construction of nation-states, the establishment of over-

Transformation, into which he subtly sewed the Challenge-and-Response

self. Industrialism was thus a response, but it si multa neously posed a challenge—to the “regulative system” within which it had developed; and to that challenge, the invention of the market economy was in turn the response. In its turn, the market economy posed “a challenge to human society,” to which “Interventionism” developed as the response. The contemporary stage was characterized by a new challenge, posed by the  “breakdown of the Market Economy” that interventionism had occasioned.145 The question of the day was what response would now emerge. This was the issue that Polanyi later addressed in The Great dialectic.146 His own answer was socialism, a movement in which he believed, at this stage in his life, a key theoretical position must be played by Marxism, an ideology that he understood (in concurrence with Toynbee) to be an offshoot of Western Christendom—with Soviet communism figuring as “a Christian heresy.”147

M A R X I S M : T H E C O N S U M M AT I O N OF CHRISTIANITY If Polanyi, in weltanschauung and political trajectory, was close to the Balliol socialists, he was more receptive to the Marxist tradition than were they—apart perhaps from Macmurray. Indeed, it reveals something of his understanding of Christianity and of Marxism that the decade that saw his fervor for the former reach an unprecedented intensity also saw him engage more closely than ever with the latter. As described in chapter 3, he reappraised Marxist theory during his stay in Vienna and found riches in Marx’s sociology of market society, notably the theory of commodity fetishism. In the 1930s his admiration for Marx deepened, in con-

sequence of the publication of Marx’s early writings in 1932 and the shared enthusiasm of Macmurray and other Christian Left comrades.148 He came to see Marxian philosophy as not only compatible with, but “unconsciously derived from” and embodying the best of the Christian tradition,149 and characterized his own outlook as “based on the Christian understanding of the Marxian analysis,” whereby the “truth” of

Christian teachings to conditions of a “complex” industrial society, notably through its insight that flourishing communities are the prerequisite for individual flourishing. In short, he regarded Christian Marxism as a pleonasm, such that “a position which is primarily Marxist and secondarily Christian” is “as unreal as its converse would be.”151 In the modern era, the two creeds quite simply depend upon one another. One furnishes the moral basis for social transformation; the other reveals how to achieve it. Not unlike Lukacs, Polanyi conceived of Marxism as “more of a method than a system,”152 and indeed he saw Lukacs’s History and Class Consciousness, which he read and reread in the 1920s and 1930s, as offering a useful understanding of “the dialectic of theory and practice”: of the interaction of “material” and “ideal” factors in history and the pivotal role played by class consciousness.153 Unlike his old friend, however, Polanyi did not flesh out his understanding of Marx’s method. Instead he emphasized Marx’s prophetic and humanistic qualities, the latter referring to a focus on human beings and their interrelations, and to his vision of a socialist society as one “in which distinctively human motives prevail, i.e. relationships are direct, unmediated, personal.”154 In this, Marx had gone “beyond Jesus.”155 Jesus had revealed that the “true nature of man” is freedom, the achievement of which requires “communion with his fellows,”156 but he had not—and could not have—foreseen the difficulties of applying this insight to industrial capitalism. What Marx had demonstrated was that modern society, with its extended division of labor, deepens the sphere of human interdependence but in an alienated way, begetting “a new and tragic form of self-estrangement.”157 In Polanyi’s interpretation of Marx, an accent is placed on the contrast between nonmarket societies, in which economic relationships take


tent.”150 Marxism, he suggested, was uniquely capable of adapting

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Marxism was understood to be synonymous with its “Christian con-

immediate and personal forms, and market society, in which human relationships manifest themselves through the impersonal guise of exchange value, yielding, by way of commodity fetishism, “a spectral world” in which the “spectres are real.”158 From the fetishization of commodities follows that of capital. Albeit in reality “merely the result of man and nature’s interaction,” in modernity capital assumes the


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“semblance of independent existence, and poses as the third original factor of production alongside Man and Nature”—and the one, indeed, “on the presence and amount of which the effectiveness of man and nature depend.”159 In addition, market society splits humanity in several ways.160 First, the individual economic actor is divided from her fellows, as all economic relations are processed through the medium of the market. That the fate of each is determined by prices impedes “the moral development of mankind,” attenuating the ability of each of us to account for the social consequences of our actions, preventing us from realizing our humanity and taking responsibility before God.161 Relatedly, market society effects an institutional separation of the social spheres.162 This had become “the main issue of our time,” for it sequesters a political sphere, in which “responsibility” obtains, from an economic sphere steered by the price mechanism, in which it does not.163 Finally, Polanyi had come to believe, in a reversal of his earlier liberal socialism, that the market economy entrenches class division. Riven along class lines, no genuine political community can be constituted, and this was the “ultimate reason for the drift of the world towards destruction” that he was observing in the 1930s, for so long as most of the nation is excluded from ownership of the means of production it will “lack the will and power to proceed to the massive economic adjustments needed to make an international community possible today.”164 Given the tendency of “capitalism” to fragment society and to render social relations opaque, Polanyi concludes, “the true nature of man rebels” against it and in this regard too, Marxism provides revelation.165 On one point he quibbles with Marx, who, he supposes, conceived of class as “an ultimate reality,” a term that Polanyi feels should be applied only to “the interest of society as a whole,” with classes only effective when they come to represent society as a whole, as “the spearhead of evolution.”166 But he was in unison with Marxists in identifying to whom the spearhead

role had fallen. Modern industrial society, Marx had revealed, “contains within itself the seeds of the resolution” of society’s self-estrangement, in the form of the proletariat, a class that is able to lead the reconstitution of society as a totality.167 This capacity flowed from its position in the process of production, which enables it to recognize “that man and nature are the only necessary elements in production.” Because workers are

tative of common humanity.”168 To buttress this assertion, Polanyi invokes Jesus, who “consorted with the poor not because they needed compassion but because they are the representatives of mankind.”169 The proletariat’s “historical mission,” he concludes, is to lead a transformation that establishes community control over the means of production, thereby making human relationships “immediate, i.e. personal.” Once that is achieved, “ human society will be real, for it will be humane: a relationship of persons.”170 It is the “denial of this truth that has led to the present world crisis,” and the way to overcome it is shown, theoretically, by Marxism and practically by “socialism in the USSR.”171

M O S C O W T R I B U L AT I O N S On the whole the Christian Leftists, including Polanyi, were staunch supporters of the Soviet Union, and the banner they proudly carried on demonstrations featured a cross superimposed on a hammer and sickle.172 This did not find universal favour among the faithful. Michael Polanyi, to take a pertinent example, vented exasperation at “the combination of Marxism and Biblicism which seems to be becoming increasingly accepted among modern Christians”173—including his brother. Those who knew Karl and Michael would be struck by their dissimilar personalities, the elder brother appearing out going, exuberant and cheerful, in contrast to the restrained and “British” Michael. But they were exceptionally close. As children their relationship knew a “fervent deep affection,” in Karl’s words, and a tender concern and respect for one another extended throughout their lives. In the first decades of the century they had been intimate, and their worldviews held much in common, with both drawn to anti-materialist philosophies and to


workers” but cannot consist of “owners”—the proletariat is “the represen-

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indispensable to social reproduction—such that society “may consist of

Christianity. This was the brothers’ “golden age,”174 during which ideological differences, although becoming apparent in par ticular vis-à-vis socialism, did not disrupt the warm sense of a shared spirit. As late as 1932, a solaced Karl could report to their mother that he and Michael had achieved an understanding as to “our views of the Soviet Union” that had for long divided them but which “now considerably coincide.”175


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But this was not to last. When they moved to Britain a period of tension and some anguish began—a “plaintive split,” in Endre Nagy’s description. A stiffness entered the relationship, the roots of which were personal and political. Some have suggested that Michael was discouraging of Karl’s plan to emigrate to Britain and was aloof when he arrived, while he himself diagnosed Karl’s “hypochondria” and his attitude toward the Soviet Union as the rubbing points.176 The chief cause, as Karl perceived it, was an imbalance in respect of the fraternal duty of care. “Our dear father put you in my care 29 years ago,” he reminded Michael in 1934. “By now, you do not need me any more.”177 A certain paternalism is apparent in Karl’s reminding his forty-three-year-old brother that his fathering is now no longer needed, coupled with an importunate reassertion that whenever it had been required he had stepped up to the plate. When he himself needed nurture during his years of physical and psychological breakdown at war’s end, and again during the vexed period that followed his arrival in Britain, his younger brother’s reciprocation had not been as fulsome as Karl might have wished. (Others were left to help the stricken soul back to his feet, “always others.”178) In the early 1930s this itch may have been aggravated by an awareness of the inequality of their material circumstances: the elder Polanyi living in digs and scrabbling around for odd jobs while the younger was settling into his Manchester mansion, with its three elegant reception rooms and six bedrooms—not to mention the two rooms for servants, of whom Michael and his wife Magda employed three in addition to an au pair.179 Magda herself represented a further source of friction. She jealously mistrusted her husband’s siblings, accused Karl of leeching off her husband and disparaging him as a “miser,” and regarded Ilona’s revolutionary activism with thinly disguised revulsion.180 In Karl’s recollection, the brothers endeavored to ignore her antagonism, but it was potent, and from around 1934 “began to be effective.”181

It was at this time, too, that political disagreements between Karl and Michael began to assume a chronically confrontational form, with respect to economic planning, Marxism, and especially the Soviet Union. Michael visited Russia on several occasions and analyzed it in USSR Economics (1935) and The Contempt of Freedom (1940). He was one of the first to make the case that the Stalinist economy was not cen-

were “not systems of planned economy but merely systems of planned production, and even this is an overstatement for no great stress is laid on the systematic nature of the plan.”182 In short, the Soviet system was almost identical to capitalism, the principal difference being “that ‘ownership’ is not transferable by private agreement, since the Government appoints the ‘owners’ (managers).”183 This analysis was the obverse of Karl’s. For him, the Soviet economy had been capitalistic until the manufacture of a socialist system in the 1930s. In the middle of that decade he discerned “new forms of democracy” arising in Russia, and he stubbornly defended the Moscow Trials: by quashing “the threat of a conspiracy” they had ensured “greater freedom of debate within the Communist Party.”184 The brothers tussled over these issues, and some sharp words were exchanged. After Michael published a paper, “Truth and Propaganda,” that challenged the findings of Sidney and Beatrice Webb’s obsequious Soviet Communism, Karl accused him of a prejudice as la mentable as any of his pro-Moscow opponents. In the same letter Karl asserts his “unqualified agreement” with Michael’s campaign for the autonomy of scientific enquiry but cavils at its one-sided deployment in critique of the tutelary attitude found in the Soviet Union. This neglected the obvious parallels in, say, the United States, where big business has, “as you know, a solid grip on teaching and research.”185 The fraternal feud took on an emotive aspect when it concerned the treatment by the Soviet regime of the brothers’ own niece, Eva. In 1932, she and her husband Alex Weissberg had moved to Russia. He was supportive of the communist project while Eva was moved principally by “curiosity”: she wished to see what lay “ behind the mountain.”186 While Alex worked as a physicist in Kharkov, she found a position as director of


not been attempted in the Soviet Union since 1921. The Five-Year Plans

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trally planned at all. “A system of planned economy,” he maintained, had

design at a porcelain factory near Moscow. In the spring of 1936 she was arrested and incarcerated. She faced ludicrous, trumped up charges: she had conspired with Trotskyists, had smuggled swastikas into her ceramics designs, and owned a revolver for the express purpose of assassinating Stalin.187 The Great Oarsman himself intervened in her case, which saw her spend sixteen months in the Lubianka, many of them in solitary


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confinement.188In the struggle to stay sane she played mental chess, practiced conversations in French, and composed poems, but eventually she was tricked into signing a fabricated confession.189 Back in her cell, in agony at having been deceived and at having implicated acquaintances, she attempted to slash a wrist artery. Depending on which account one reads, the chosen instrument was either a razor hidden in her heel or a piece of wire, and either its ineffectiveness or the timely intervention of a warden saved her life.190 Not long afterward, and thanks in part to lobbying by her mother, Laura (who happened to be living in Moscow at the time), her release was granted—which was no mean feat in Russia of 1938.191 Eva’s experience was the subject of rancorous exchanges between her uncles. Michael was shocked and indignant when Karl suggested to him, “with the emphasis of a person telling me of an obvious fact, that Eva was treated by the most fair judicial methods.” Her interrogators, Eva had told Michael, “had impressed upon her that she must confess ‘just a little,’ in order to make it possible for them to have a ‘regular trial’. Other wise she would be shot without trial.” Under sustained pressure of this kind “she broke down and made false confessions implicating other equally innocent persons.”192 Karl replied evasively. His niece’s own account of her experience, he harrumphed, varied greatly “according to her mood and situation,” and she herself, he averred, had underscored that the Soviet public prosecutor was duty-bound “to proceed with a meticulous regard for the law.”193 Eva’s ordeal not only featured in her uncles’ fights but was also picked up by her childhood friend Arthur Koestler. He modeled parts of the narrative and dramatis personae of Darkness at Noon, his tale of political tyranny and psychological torture in the Gulag, on it.194 Koestler possessed abundant knowledge whereof he wrote: he had been a communist and moved to Russia in the early 1930s where he fell in love with a clerk whom he then half-wittingly betrayed to the secret police “over a

trifling matter. She was never heard of again.”195 At the time of the Moscow trials he broke with communism and developed an analysis of the Soviet Union as a “State- Capitalistic totalitarian autocracy”196—an identical construal to that of his close friend Michael Polanyi, to whom he dedicated his collection of essays, The Yogi and the Commissar. That volume’s focal article, “Soviet Myth and Reality,” critiqued the Soviet

of criminal responsibility to twelve, including for capital offences, and adduced this as proof that all pretence of a progressive politics had been thrown overboard in Russia.197 This infuriated Karl. He immediately fi red off a letter to The New Statesman and Nation that referred to Koestler as a “crusader” who was prepared to engage in the most egregious distortion of facts in order to tarnish the reputation of the Soviet Union. The letter conceded that jurisdiction over juvenile criminality had been transferred from the educational authorities to the courts, but justified the move. “Experience” had shown “that the ‘criminal underworld’” had been exploiting miscreant children who were being dealt with in the school system. In addition, Koestler’s claim that twelve-year- olds could face capital punishment misrepresented the facts.198 On the last point Polanyi was correct. The 1935 decree did establish criminal responsibility for juveniles over 12 years of age only for certain crimes, and not ones that were normally capital offences.199 However, his antagonist was surely right on the crucial issues. The 1930s had seen the extension of the death penalty and the 1935 decree was barbaric. Indeed, as Koestler put it, no “civilized country” would be prepared to treat children of twelve as grown-ups in the Criminal Court. 200 He was likewise right to suggest that “the history of Soviet legislation since Lenin’s death” was characterized by “a gradual freezing of individual liberties in every realm of life.”201 This included not only the well-known list of prohibitions—abortion, homosexuality, and so on—but extended even to Polanyi’s most cherished work of literature, Hamlet, per formances of which were forbidden by Stalin, presumably on the grounds that its plot centered on a usurpation, or perhaps because its Polanyi-like protagonist lacked the heroic Soviet qualities of decisiveness, optimism, and fortitude.


“On Mea sures to Combat Criminality among Minors” reduced the age

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legal system. It reported, inter alia, that the Soviet Code of Laws of 1935

W I D E N I N G A M E R I C A’ S M O AT Polanyi’s national affections, Hungary apart, were invariably toward big states and empires, these being the engines of historical progress. As a child, Russia, “ England,” and Germany were to the fore. In the 1930s and after, Russia remained uppermost in his affections, and he hoped that it

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would lead the world “for centuries to come.”202 In the same period his partiality for Germany faded while that for China and especially the United States blossomed. 203 He welcomed the prospect of Washington assuming alongside Moscow a leading role in world affairs. “My faith in America, as in Russia, is unwavering,” he declared in early 1939. For all their manifold differences, the two polities were remarkably similar in two respects. Politically they were the only two countries in modern history to have been born of “a conscious and deliberate determination to found a society” and, sociologically, both were forging a “new kind of link” between industrial and intellectual work, as the “dispersion of education among factory workers begins to transform in a mysterious way” the nature of manual labor. 204 Although Russia remained Polanyi’s primary affection, he never visited it, unlike America. His first visits there took the form of two lecture tours.205 These provided the bulk of his income in 1934–1935 and, as a bonus, enabled him to visit Jaszi. He enjoyed teaching, and the colleges he visited conveyed grateful reports to the organizers.206 Having been forewarned “that at the smaller colleges of the South” students would be “remarkably likeable and intelligent but sadly lacking in any interest whatever” in international affairs, he was pleased to report that the “latter prediction was proved strikingly false” (although on the subject of international confl ict he found a regrettable polarization between “idealistic illusionism and credulous cynicism”).207 The tours, however, entailed labor of a precarious kind. The itinerary was punishing, with travel by sleeper train or Greyhound to settlements from Clarksville to  Parkville, Conway to Ruston, New Wilmington to Tuskegee, and Oneonta to Saratoga Springs.208 One circuit included “a six weeks stay in the Middle West, an eight weeks tour in the Central and Eastern South, as well as a few weeks in the East,” plus two-day halts “at some 30 colleges and universities, as well as interviews, visits, etc. at High Schools.”209 At

Des Moines, Iowa, to give a typical example, he addressed the Rotary Club and the Womens’ Institute, and visited a packing plant, a woolen mill, a school for disabled children, and the offices of the local newspaper offices, before moving on to speak at Fort Dodge (“a very fortress of the isolationists”). As the organizers conceded, in reply to Polanyi’s complaint of a work-induced health breakdown, his load was excessive,

of a single parent, although Kari was able to live with the Grants—as indeed she had done since her arrival. Despite the hardships, Polanyi’s tours were “immensely interesting experiences” and gave him a crash course in  U.S. political and social life. 211 From the time of Jean Charles de Sismondi onwards, left-leaning European intellectuals had expressed varying degrees of horror at the extent to which business interests held sway over American society and culture, but that image was now being modulated by the New Deal.212 In certain respects Polanyi hewed to the traditional, sceptical line. The Founding Fathers, in their obsession with “factions and mob rule” had inserted a pronounced “conservative capitalist tendency” into the constitution. 213 It was designed to separate the sphere of private property from politics, with the former placed “under the highest conceivable protection” against the latter. As a result, and “in spite of universal suffrage, American voters were powerless against owners,” and Big Business was able to deploy all its means to “undermine the authority of political bodies.”214 Whether with respect to the regulation of working conditions or welfare insurance, social policy in the United States remained backward—and furthermore, unlike in Britain, there was “no intelligent Christian public at all.”215 For all that, Polanyi warmed to the country. By 1936 he was thinking of his next trip “almost with a kind of homesickness, strange though that may sound,” and in 1939—at last!—he began to plan it. 216 Friends in Canada were directing him to possible openings in the United States, and speculative thoughts even turned to the prospect of emigration.217 For he had come to cherish American society in so many ways: its dynamism, aspects of its system of government, its foreign policy (“the generous message of a continent that is free from fear; . . . the spirit of a nation that


towns. 210 The tours, moreover, were hardly designed around the needs

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and the itinerary did wend around poorly accessible and out-of-the-way

feels itself at one with humanity because it holds but few foreign possessions and seems to have the moral force necessary for relinquishing them”), and especially the “common people”—who are known to be “ahead of the leaders of the orga nized groups.”218 Ambivalent notes did enter his perception of American democracy. At one time, he could write of “the amazing extent to which democracy (liberty, tolerance, free speech) sur-


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vives in Britain during the war. This strikes Americans as a miracle, as they have very little liberty of speech and conscience even in peace time.”219 At another, he could remark that the constitution, for all its faults, did at least permit “populist-democratic” elements to be firmly embedded in the political sphere, 220 and thanks to the absence of feudal encrustations, American democracy embodied “the idea of liberty to a much greater extent than England, and the idea of equality to a much greater degree than Europe.”221 Those ideals may have been vitiated by the crass inequality of incomes, but in America nonetheless, he bluffly opined, the rich did not “feel socially superior” and “the common citizen does not feel inferior.”222 Unlike class-crusted Britain, America was, the “segregated races” apart, a nation “of one speech, one behaviour, one standard of manners [and] one outlook, irrespective of income classes.”223 As a result, the level of educational attainment of the masses was “unprecedentedly high.”224 Most of all, Polanyi was mesmerized by Franklin Roosevelt (“a great leader”) and the New Deal. Out of the depths of the Depression, he prophesied, “a great transformation in the USA is growing.”225 Polanyi’s attachment to Roosevelt’s New Deal was not love at fi rst sight. He initially reacted sceptically, as indeed did the Comintern and much of the Labour left. He was sharply critical of Roosevelt’s scuttling of the World Monetary Conference of 1933, an act which served to worsen the Depression,226 and associated his Brain Trust—the Columbia University academics who shaped the First New Deal—with “plan-economic fascism.”227 But by the Second New Deal (1935–1936), with its programs of public works and social insurance implemented against a backcloth of rising workplace militancy, he had warmed to the Roosevelt administration and, in his accounts of its behavior, radical criticisms of the New Deal—the conservatism of its fiscal and welfare measures, its domination by business insiders, promotion of corporate interests, and so on—are notably absent.228 One of his lecture tours took him to the dusty Tennessee

valley, where state investment in rural electrification greatly impressed him, and in reports fi led for the Volkswirt he extolled the New Deal as a policy regime that had elevated industry to a public concern, with codetermination rights assumed by the state. 229 In The Great Transformation, similarly, he summarizes it as the attempt “to build a moat around labour and land”—a moat that was wider, indeed, than any equivalent in

earlier isolationism and triumphed “over a narrowly recalcitrant public opinion.” With his ability to grasp the sociology of a crisis conjuncture, FDR had been able to lead decisively and avert a social catastrophe in the early 1930s, and later, at the decade’s end, was shrewdly preparing “an isolationist public for internationalist tasks.” When he ditched the New Deal, reined in welfare programs, and focused instead on the drive to war, Polanyi remained supportive. “The rate at which Roosevelt unified the nation politically,” he eff used, preparing “an isolationist public for internationalist tasks through clever maneuvering and wise judgment,” enabled the nation to “switch its industrial potential to war production in as many months as Hitler took years to do.”230 This was a display of “democracy at its marvellous best” and confirmed Polanyi’s view that America should assume a hegemonic role in international affairs. 231

OF HEART AND HOME It was with regret that in 1936 the need to find regular teaching work in Britain forced Polanyi to abandon his U.S. tours. 232 But there were other positive reasons to stay. In April of that year Ilona, having spent some months on the Italian Riviera recovering from tuberculosis, arrived in London. 233 At the time, “Dicki” (Fatty), as Polanyi was known to loved ones—the nickname was Kari’s origination, making a toddler’s sense of his hernia bulge—was living in a boarding house for students in Kilburn that was run by a child psychiatrist. She was on the lookout for a cook and gave the job to Ilona. While domestic work was hardly Ilona’s metier, her efforts were appreciated; so much, indeed, that the owners gushed that they wished the Polanyis would remain “as guests here for ever.”234 Dicki would occasionally help out in the kitchen, but this was restricted to


into Franklin Roosevelt the statesman” and rejoiced as he abandoned his

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Europe. Elsewhere, he charted “the transfiguration of the party politician

taking care of the kettle on the stove that provided a supply of hot water, and not with the cuisine.235 He was “quite old fashioned,” recalls Don Grant; in the 1930s “there were some things that men didn’t do and one of those was cooking.” The limits to his culinary expertise were illustrated on a dramatic occasion when he played host to his friend Kenneth Muir. “The two of them sat down, and talked and talked. After some


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hours Muir said ‘it’s surely lunchtime by now.’ Dicki replied ‘I’ll fix it,’ and disappeared into a side room.” A minute or two later he returned and the conversation resumed. Time ticked by. “Suddenly a loud explosion was heard. He had put an unopened can of beans directly on the stove!”236 The year of Ilona’s arrival also saw Kari’s departure to boarding school. In early 1936 Bedales, an elite private school, offered her a place, which, although won on a scholarship, nevertheless required money for incidentals. In a fundraising effort that continued over months and years, her parents sent strenuous entreaties for donations and subscriptions to a long list of friends and relatives. 237 Given Polanyi’s critique of Britain’s class-divided school system, and his insistence (with a nod to Adam Smith) that “the only sound principle is one national education for all classes of the population,” it is perplexing that he held not the slightest misgiving over the decision nor even seemed aware of the contradiction that it entailed.238 Neither did Ilona. As a child, she had had “the bitter experience of watching all six of her cousins go away to England to attend the relatively new, progressive boarding school of Bedales,” and she was keen to see her daughter furnished with the privileges that had been barred to her. 239 For Karl and Ilona, 1936 was a providential year. After the extended and challenging separation, their relationship returned (almost) to normal. But their material circumstances were less than snug. Kilburn was “a crummy neighbourhood,” and their room was sparsely furnished, with a mattress on the floor.240 Ilona agitated for them to move to the countryside. One reason she cited was that living costs would be lower, although the motive that her daughter recalls is that Ilona, as a youth, had grown up amidst flora and fauna, and “loved gardening.”241 In addition, she conceivably wished to pull Karl away from the clutches of the Christian Left, disliking its “mix of Christianity and socialism,” and elements of its social dynamics too. 242 The Grants and Macmurrays had considered

setting up home together as an experimental “social unit,” although the plan did not get beyond the drawing board.243 Friendships among the Grants, Macmurrays, and their wider circles were comradely, intense, and intimate—certainly in the old sense of the term, but occasionally also in the modern. 244 Irene utterly adored Polanyi, and their friendship may have skated beyond the normal boundaries. Later in life, Ilona

adoption of Kari into her family while she remained in Vienna. 245 Whatever the precise details may have been, there is no doubt that jealousy over Kari’s relationship to Irene, and over Karl’s too, fueled Ilona’s wish that some clear green fields be put between her family and London.246 Luckily, this desire converged with her husband’s work-related need to move out of town. The upshot was to inhibit Polanyi’s Christian activism, although other events also played a role in this: the passing of the Aux’s spiritual leader, Zoe Fairfield; the chilling of Polanyi’s friendship with Macmurray; the burdens of teaching; his move to America; and, post-1944, the decline of the fascist menace that had so galvanized the group. 247 In July 1937, Ilona found their rural idyll: a sunny little bungalow in a “complete wilderness.”248 It was situated in a field overlooking a picturesque valley dotted with oast houses, just at the point at which Kent divided “between the ugly and the beautiful part,” but facing the latter.249 It was supplied by neither gas nor electricity, and “a fair walk” was required to reach the road from which buses departed for Borough Green rail station or nearby Maidstone, but, crucially for Karl, it did boast a phone connection. 250 Ilona immediately set to work creating a garden, but the North Downs clay was recalcitrant; “you needed a pick axe” to break the ground. A year later they moved again, this time only a matter of miles, to the pretty Kentish village of Shoreham. Ilona “loved” their new house, Holly Place, with its ancient walls and uneven floors, a kitchen with thick beams and a welcoming hearth, and above all the verdant garden, its plum trees blossoming in the spring. 251 Despite the attenuation of his links to the Christian Left, Karl was on the whole “happy as a schoolboy.”252 Sitting at his desk, he could enjoy “the sun embracing the woods, and the green fields bathed in gold.”253 Crucially, he had


closeness to Irene, she found it impossible to come to terms with Irene’s

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confided to her daughter that while she had been able to accept Karl’s

found steady employment, teaching classes for the Workers’ Educational Association (WEA). Teaching brought little remuneration and demanded dedicated effort, for the core subjects Polanyi taught, British social and economic history, had never been his areas of expertise, and many hours were spent preparing lectures or riding trains or Green Line buses to towns

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went poorly, due to hernia pains that prevented him “physically from


around Kent and Sussex where his next class awaited.254 Some classes

could be relaxing. (“I’m never happier,” Polanyi wrote Michael, “than

coping with the workload”—or even, at times, from being able to carry his “briefcase and indispensable typewriter.” Some indeed were “failures,” and those at Morley College in par ticular “went through a crisis.” His employers at at least one college, he confided to Michael (while keeping it hidden from Ilona), “ were justifiably unhappy with me,” and he even considered resigning in order “to spare difficulties for the College.” The overall scene, however, enjoyed more light than shade. The job spanned only the teaching terms, leaving the stretch between Easter and late September free for research, and even the commuting when I am exhausted from work, sitting in a train and, with the view of the southern English countryside outside the window, on my way home.”255) And despite the hiccups, teaching brought much satisfaction. Polanyi saw himself as “born for the vocation,” and would prepare his WEA lectures—given to classes composed largely of white-collar workers, such as laboratory technicians, clerks, journalists, and nursery nurses—as if he were presenting to an invited audience at Harvard. 256 In an obituary letter a former student described his pedagogical style in fulsome terms: “He did very little lecturing but had a remarkable capacity for stimulating really fruitful discussion. He would throw an idea into the pool and gently lead us to examine it from every conceivable angle.” He used “the discussion technique effectively, and one felt that Polanyi must have put far more into the preparation of one of these sessions than would have been necessary if he had been giving a formal address.” Polanyi, the same memoir adds, was not the sort “to regard his class as just a group of people to whom he came once a week.” He knew his students “personally as friends and helped us a great deal with our personal reading and indeed with our own problems. Along with it all he had a wonderful sense of humour and great charm.”257

Polanyi’s teaching experience deepened his commitment to adult education as an instrument of political and social change, and the WEA was the ideal institution for him. Its president was comrade Tawney, with comrade Cole as president of the Tutors’ Association. Its mission was to provide a broad, general education for workers whose social circumstances precluded access to higher education. As Polanyi saw it, the aim

means to achieve this included introducing workers to their class’s history, highlighting “the institutional unity of society,” the prospects of social change, and the challenges faced by the labor movement.258 Such a program would highlight the “underlying assumptions of a capitalist society”: that individuals ought to act according to the principle of gain, that the wage system is inevitable, that economic activities should be “removed from the orbit of public life and social morality,” that radical change “is either impossible or immoral,” that “planning is the road to serfdom,” and that “popu lar rule is the natu ral enemy of culture.”259 Against those who charged the WEA with offering a class-based and biased curriculum, he defended the principle of partisanship as an integral element of critical pedagogy, an indispensable factor in turning the downtrodden masses into “responsible” members of society.260 Unless the worker is taught the significance and social function of “constitutional fictions” she will fall “a helpless victim to the traditional fetishes; a conditioned boob not a responsible citizen.”261 The WEA’s left-wing critics, Polanyi noted, caviled at its philanthropic and liberal tendencies and reproached it for offering a route to the incorporation rather than radicalization of workers. Even Cole was later to express regret that few “actual workers” had played a “really leading part” in shaping it, and that it had never succeeded in becoming “a real educational movement of the working class,” hovering instead “between trying to be such a movement and serving as a ‘general provider’ of adult education.”262 Polanyi shared these fault-finding reflections to a degree, and criticized the WEA for not orienting sufficiently to “the socialist mission of the working class.” But he distanced himself from Marxists who supported a tougher interpretation of that mission or whose alternative system would produce “irresponsible debaters” who pose a danger to democracy. 263 He recognized that workers who benefit from adult


its militancy, and develop its consciousness of its historical mission; the

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was to emancipate the working class from its deferential habits, arouse

education often move on to greener pastures while their colleagues remain mired in poorly paid menial work, but it did at least, he protested, offer a means of empowerment and of undermining the educational class divide, which in Britain maintained the working class in a condition of helpless inferiority, while the upper crust was trained to command. 264 Education “in such a basically feudal society,” he lamented, “is educa-


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tion of a privileged class for the task of leadership, responsibility and rule,” while the rest are taught to accept their subordinate position.265 The education system, in Polanyi’s view, was at the heart of British society’s deplorable divide into “two nations.” His childhood impressions of the English gentleman forgotten, he castigated the upper classes: they are as deficient in “moral sensibility” as they are overendowed with snobbery. 266 They are “infinitely more snobbish” than anything known on the Continent. (“We try to be snobs,” he would joke, but are “amateurs” compared with the English.267) However, they are “anything but degenerate.”268 Indeed, the danger to any country is posed less by the decadence of the ruling class than by that of its common people, and in this regard Britain was in mortal peril. 269 In contrast to Vienna or Budapest, where society was divided between the educated and uneducated but communication across the classes was intimate, in Britain class division was stark, and workers lacked autonomy: they are “inarticulate,” afraid of responsibility, “utterly sentimental,” and “out of touch with reality.”270 They had first been whipped into stupefied compliance by the trauma of industrialization, which dehumanized them and denuded them of culture and confidence, then allowed to binge on the higher living standards that a wealthy economy and empire afforded them, which served to bind them more closely to the bourgeois habitus, before finally being dunked in the icy 1930s, when mass unemployment, the legacy of the defeat of the General Strike, and the austerity policies of Ramsay MacDonald’s National Government froze them into a mood of resignation and submission. 271 Politics had played a part too, with Britain and continental Europe experiencing contrasting chronologies of democratization. In the former, democracy had been constituted relatively early, prior to widespread social leveling. This ensured the exclusion of the common people from the demos and, correlatively, cemented liberty rather than equality as the strong suit of British democracy. 272

Against this long history, not even universal suff rage could emancipate Britain’s working class, “for it wore its shackles within.”273 Across much of the continent, by contrast, particularly its eastern half, workers’ and peasants’ incomes and status were lower still and yet they, the narod, were the people; they were God’s flock. Compare, for example, the characters in Tolstoy or Gogol with those drawn by English novelists. Only

“ T H AT A B Y S M A L H AT R E D O F T H E MARKET SYSTEM” Alongside Hardy, Polanyi was an avid reader of British and Irish fiction, especially Kipling, Shaw, D. H. Lawrence, and Graham Greene, and he threw himself into British cultural life in other ways too. When Donald Grant’s son, Don, invited him to attend a cricket match, he immediately agreed, and two solid days were spent at Lords. On the first, Polanyi “was fairly neutral.” When asked if he would return, he replied: “yes, but you’ll have to explain the rules.” Grant did so, “and on the second day he was riveted: by the complexity of the game, and its symbolism. He was not a sporting man but was interested in the meanings involved in all sorts of behaviour. He was interested in anything about the human race. . . . But he probably never went to a cricket match again!”275 If not with respect to cricket, Polanyi’s anglophilia remained essentially intact. He had arrived in Britain believing that it “has a peculiar contribution, perhaps a decisive contribution” to make toward solving the world’s problems, and that “if I could get the feel of English life and English thought it might enable me to make my own contribution in a way that nothing else could.”276 He admired what he regarded—with ludicrous hyperbole—as specifically British traits, including tolerance and the refusal to “hit a fellow when he’s down,”277 and he stuck to his longstanding veneration of British political culture, displaying a surprising lack of critical awareness of the vested interests that had underpinned some of its vaunted traditions. He praised the British constitution (alongside the American) as a beacon of liberty and hailed the democratic traditions of Anglo-Saxon political culture as “infinitely treasured asset[s] to



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in Thomas Hardy “does one feel the same attitude of taking the poor

the common fund of Universal peace and progress,” albeit with the caveat that their long-term survival in Britain would require the introduction of “genuine social equality” into its political institutions.278 Britain’s “most impor tant contribution to the world of political thought” was the idea of tolerance, which he took to encompass not only the acceptance of nonconformity and minority opinions but also the conviction


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that its own political institutions should not be “imposed” on other countries. 279 In one re spect, however, the experience of Britain sorely tested Polanyi’s anglophilia. “That abysmal hatred of the market-system, the passion behind The Great Transformation,” recalls Ilona, stemmed from his meeting with the classical homeland of capitalism. “It simply wasn’t there before and it endured to the last.”280 Her comment doesn’t tell the whole story of her husband’s disillusionment with market economics, but it is nonetheless instructive. When they first met he was an enthusiast for the market economy, conceived of simply as a mechanism, a method by which individuals in possession of goods could exchange them. 281 In the 1920s he recoiled from economic liberalism, which was allying itself with authoritarian politics, and came to recognize the possibility of a functioning planned economy and to speak of a balance of advantage between it and its market Other. In the early 1930s he observed the implosion of the global world market and the rise of planning in the Soviet Union. All the while his critique of the market system was evolving and was deepened by his move to Britain, both with respect to the economy and society he experienced and through his study of its history. On one question of local history—had Britain become a “normal” capitalist society?—Polanyi tended to vacillate. At times he would portray its political culture as “mainly aristocratic and rural”282 or even “feudal,” with social cohesion “grounded on the recognition of their respective monopolies and privileges on the part of the various professional and vocational groups” and with the social accessories of economic life fashioned with the aim of “securing to every producer the maximum stability of conditions of work, earnings, professional honor and traditions.” Such norms had tended to suppress “atomistic individualism” and “unlimited competition.”283 However, his dominant emphasis was to depict Britain as urban and market-driven, with political life governed

by financial and industrial interests from the nineteenth century onward. 284 This position came to the fore in his intervention into a seminal debate on British economic history, concerning the social impact of the Industrial Revolution. In one camp stood Arnold Toynbee Sr., William Cunningham, and the Hammonds, who criticized the effects of indus-

economic growth and the gradual nature of socioeconomic change.285 Polanyi concurred with Toynbee and company in their highlighting of “the social as against the economic nature of the catastrophe that befell the common people” but insisted much more forcefully than they that the market economy was a creature of the nineteenth century, one that had explosively usurped the mercantilist order.286 That previous system had depended for its reproduction on a sense of community, and its economy was “invisible,” with its core elements—division of labor, patterns of distribution, purposes of action—inextricably entangled with noneconomic values and institutions, and markets merely a subordinate trait in the economic system as a whole. In the early nineteenth century the commodification of land and labor dissolved that organic unity, disembedding economic life from the social fabric. In accounting for this drastic departure, he stressed two factors. One was technological development (which, with Owen, Schmoller, and Szabó, he refers to as “the machine”). 287 Against those who foregrounded the role of capitalist social relations in begetting the Industrial Revolution he insisted that the line of causation was the reverse: capitalism had resulted from the introduction of elaborate technology into a commercial society, for “the machine” was ill served by commodity markets alone; it “needed markets for all factors of production.”288 The other was the ideological justification for the commodification of land and labor, which arrived in the form of a phalanx of intellectuals who dominated British political economy at the time of the Industrial Revolution. 289 In this connection he mentions Smith, with his conception of man as naturally inclined to market behavior; Edmund Burke, who justified the commodification of labor and “recognised the laws of commerce as the laws of God”; and Jeremy Bentham, who rationalized subjection and


Clapham, for whom the accent was firmly on the all-round benefits of

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trialism on the poor; in the other, a revisionist school around John

inequality “as the natural state of man,” but his true bêtes noire were Ricardo and Malthus, for it is they who provided the arguments to justify the cessation of outdoor relief. 290 That mea sure turned the fear of hunger into an effective force, thereby enabling the creation of a functioning labor market in 1834. 291 The moral convictions that Ricardo’s and Malthus’s doctrines under-

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act of humanitarianism as a crime against humanity since it must nec-


wrote “were devastating. Misery was regarded as nature’s cure, and any

nineteenth-century England a dread of this all too visible fate had

essarily increase their sufferings.”292 Ricardo’s iron law of wages and Malthus’s population law played a particularly wicked role, for only laws of such putative rigor could, by impressing the poor with the “certainty of their being doomed to toil in misery,” make them “submit willingly to their fate.”293 However, Polanyi would advise his students, constructing a society along market-liberal lines, with land and labor mere commodities to be produced and reproduced according to laws of the market, was to build castles in the air. If economic liberalism were to fully take hold of society’s material life, it would surely destroy it. Indeed, in early prompted a twin response: from enlightened conservatives, and from liberal radicalism, a response that prepared the ground for future currents (notably Christian Socialism), which resisted the reduction of human beings and nature to commodity status. With these reflections, Polanyi had arrived at the thesis for which he was to make his name: that the introduction of laissez-faire liberalism provokes a protectionist reaction, a Challenge-and-Response that he famously termed the “double movement.” He now proceeded to prepare it on the pages of a manuscript, The Great Transformation.




n early 1940, only weeks before the “phony” phase of war gave way to all-out military hostilities, Polanyi experienced a lucky escape. Thanks to Ilona’s family connections to Sir Josiah Wedgwood,

she and Karl received their naturalization papers, in March and April respectively, without which they would likely have joined the tens of thousands of British residents of Axis citizenship, predominantly those of Jewish extraction, who were interned in 1940–1941 as enemy aliens in camps on the Isle of Man.1 British citizenship—which he was to retain for the rest of his life—would also facilitate his decampment to the United States, for without it, in war time, the permission to return could not be guaranteed.2 Given his state of health, war time Britain was not an ideal location, and his research was suffering from the expense of using London University’s library and the difficulty of getting to London. 3 (On at least one occasion rail transport ceased completely due

to the war.4) Fortunately for his research, Polanyi’s naturalization was swiftly followed by the offer of a visiting, resident lectureship at a liberal arts college in Bennington, which he cheerfully accepted.5 When he set sail from Liverpool in early August, Polanyi envisaged his stay as brief and Bennington as mediocre, but he was pleasantly surprised. Bennington immediately appealed to him. With its generous

salaries, “exceptionally high standards of human intercourse and community atmosphere” it struck him “very much as a Bedales No. 2.”6 He was reassured by the knowledge that in America “a college is a university” and that Bennington ranked “amongst the 10 first girls colleges of the country.” It was, he had heard from Lazarsfeld (who “often has Ben-


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nington girls” working for him as interns), “far superior” to Sarah Lawrence College of which it was an offshoot. The latter was “psychoanalytically infected and definitely highbrow,” while Bennington, “which of course is also very wealthy and socially very high-up, is by far the more serious place.” 7 Other colleges, he added, “are either too poor or too hierarchical and conservative to want a man like myself,” and he was left in no doubt that he was the right person for the job.8 The position was temporary and honorary (nonfaculty), the workload was light,9 and it permitted him to (reluctantly) undertake a previously contracted lecture tour in December. The pay was roughly half that received by his tenured colleagues, but within weeks it began to appear that the contract might be extended to a full year, with the prospect of a further year if external funds could be raised. Even before the extension was confirmed, he saw fit to cancel his Cunard-line return ticket. And when, only a fortnight into his stay, he learned that his contract would be extended, he was overjoyed. A lengthy stay in America would enable him to reconnect with Laura, and above all, “the prospect of research and writing,” as Ilona put it, was “almost too good to be true.”10 Perched on a green hill in a corner of rural Vermont, Bennington was a tranquil place for Polanyi to sit out the war, and in a matter of weeks he was feeling completely “at home here.”11 When he arrived the campus was less than ten years old; the buildings were complete, but preparation of the grounds was still underway, and the trees were little more than saplings. It was an elite institution. Lacking an endowment fund, it demanded hefty fees—the highest, indeed, in the United States. Its philosophy was progressive, and it attracted a cluster of creative innovators: Wystan Auden, Buckminster Fuller, Kenneth Burke, and Martha Graham. It was the first college to include the visual and performing arts as elements of the curriculum. (Polanyi, although not known as a dance enthusiast, attended its dance festivals).12 John Dewey, whose work Polanyi was eagerly reading, served on its Board of Trustees, and

his ideas on “learning by doing” informed the ethic. Bennington sought to foster a civic spirit, with students encouraged to engage in volunteering and internships. In the war years they performed manual work, several shifts per week, on its arable lands. Polanyi found Bennington’s ethic and community spirit highly conge-

and sometimes “intense interest.”13) The College also furnished a welcoming environment for political refugees, including Drucker and Erich Fromm. The Austrian ensured that Polanyi was introduced quickly to other faculty—and “not on a refugee basis, but on the basis of my personality and standing.”14 The fact that the College hosted refugees from Europe informed its political atmosphere. Its teachers, “many of whom were refugees from Eu rope,” one alumnus recalls, “defi nitely made you feel that it was your responsibility to prevent further holocausts.”15 Faculty members were largely liberal. Fully 90  percent of them, Polanyi estimated, voted for Roosevelt.16 Far left views were not strongly represented. ( Until recently, Drucker remarked enigmatically, “Trotskyists were burned at the stake”—but this would not have unduly disturbed our protagonist.17) Support staff also, Polanyi conjectured, inclined to the Democrats. When Roosevelt gave his 1941 Inaugural Address, Karl and Ilona, on either side of the Atlantic, listened in with a sense of “joy, pride and elation,” and he took it as a given that all the manual workers in the College, those “in the packing-room, in the store, in the garage, in the tool house and sheds” were listening too, “for it was to them that their President spoke.”18 There was one downside to Polanyi’s appointment at Bennington. In the early summer Ilona suffered a “bad breakdown,” presumably related to the dilemma she faced: while her “heart” was in America, she confided to Michael, leaving Britain would “very nearly kill” her.19 There were times when she bemoaned Britain’s hard edge, even “ruthlessness.”20 She complained of a “poverty of contacts” and the dearth of radical politics (her “being-out-of-things, the fighting for ‘a hopeless cause in a hopeless country’”).21 Yet even at such bleak moments, despite loneliness, periodic unemployment, and the dim prospect of finding truly satisfying work, she was in other respects settled and content in her adopted homeland,


girls really study and work hard”; they listen to his lectures with respect,

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nial, as well as its staff-student ratio—1:5—and the industrious air. (“The

admitted to harboring “a spark of love” for it, and did not experience the intrusions of the phony war as especially bothersome.22 Occasionally she found the din of overhead battle disturbing, but her letters generally reassured Karl that any risks were remote. “Our village is as peaceful as ever; we feel or hear nothing of the war,” said one; “I still have not set


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eyes on a bomb-crater or any damage done by bombs. . . . I have not even seen a dog-fight.”23 Conditions of war, she added, had brought out the tremendous kindness of the people of Shoreham, and she had come to cherish London too.24 In its war time agonies it had achieved a “serenity” that began to resemble the other suffering cities that she had known and loved, St.  Petersburg and Vienna.25 However, although “very broken hearted” at the idea of leaving Britain, she determined that she “must try to join Karli.”26 She began to consider plans for life at Bennington, and hoped to find a flying school nearby where she could train as a pilot.27 With this decision a lengthy saga commenced, one that consisted of transatlantic journeys, yearning for the distant lover, and, for Ilona, repeated visa applications and refusals as well as chronically conflicted feelings—for the pull of Europe remained strong throughout. Several times per week Polanyi would write to “Ilko” (or “darling sister,” “ little birdie,” “my cat,” etc.), and his brother regularly corresponded with her too. 28 Karl would occasionally enclose a poem and, having repaid his debts, was in a position to send money, too. (“I sent you £50. Should you ever have money left over, don’t leave a penny in the bank, but have yourself and Kari a real costume made and spend the rest on shoes!”)29 Letters by steamer would take twenty days; by clipper only ten, but they were more expensive. Citing his “very parsimonious” nature, he normally chose the former but reassured his wife that if anything urgent arose he would select the quicker option.30 He loved receiving her “wee scrap-notes . . . with their pencil lines” and would read them over and over, sometimes learning them by heart and reciting them to himself.31 “Much more” frequent correspondence from him would have gladdened her heart, but she recognized that he was working hard on The Great Transformation.32 Some of Polanyi’s letters vividly capture this labor. One begins “I am working and reading all day, for weeks on end.”33 Another describes his “delving in the slightly dusty pamphlets of the XVIIIth century Poor Law

collection of Seligman Library” and “the dark air-conditioned stacks of Columbia library which I am privileged to use.” Not since 1920 had he spent “a time so rich in study and development than my last three weeks around Columbia libraries,” punctuated only by half-hour breaks for driving lessons.34 In a third he writes of the snow: piled up “foot-deep

entirely confirm my theories about the nature of the cataclysm.”35 (Ilona replied, “I read and re-read your letter about the snow round your house and the books on the floor and the Gold Standard and the cataclysm. I cannot get enough of it.”36) War and migration control intruded into their lives and correspondence on a depressingly regular basis, compounding the general air of uncertainty. Letters were often delayed and not infrequently lost outright. (At one point Karl received none for over three weeks.37) The visa problem proved the greater demon, for Ilona and for many relatives. A particularly knotty case was that of Adolf’s sons, who had fled fascist Italy and found themselves stranded in Cuba, whence they sought to enter the United States. By an unfortunate coincidence, relates Szapor, the State Department’s visa policy “had been considerably tightened to correspond exactly with the arrival of the boys.” In June 1941 consular officials were instructed “to withhold visas from all applicants who had parents, children, husband, wife, brothers, or sisters resident in territory under the control of Germany, Italy, or Russia.” This ruled out Adolf’s boys, for they had close relatives in fascist Italy. The new policy was, Michael fumed, stupendously cruel, and hypocritical: it pursued “a policy of antisemitism under the pretext of protecting the country against Hitler’s influence.”38 Polanyi’s involvement (or lack of) in his nephews’ case occasioned a serious wrangle with his elder sister. At its root lay their different dispositions. Laura was, in Kari’s words, “a regular Central Eu ropean Jewish bourgeois mama.” A “superb manipulator of the system, she would do things in the interest of her family that my father would never do.” For his part, he “took on a lot of the English Protestant ethic,” with “a quite excessive idea of respect for the law—that one must not disobey the law.” As a result, he was “always a bit suspicious” of Laura, believing that “she


night I found passages in the newest work on the Gold Standard which

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before my wooden house; my books lie ankle-deep on the floor; and last

would use connections to assist family members in a way that he regarded as not quite correct.”39 In the case of Adolf’s boys he carried this ethic “a bit too far.”40 Bridling that she had used his name without “explicit authorization,” he sought Michael’s assistance in impressing on her that “she should on no account send a wire above my signature without consulting


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me first, as I would have to repudiate it.” Michael, Karl added, would be well aware “that American and English standards are not Vienna standards,” and that he “must, even if it were only by necessity, conform to the former.”41 In the end, Adolf insisted that his sister take charge of the case, as he doubted whether “Karli has the push” or “Misi [Michael] the time.”42 Eventually, thanks to Laura’s unstinting exertions and an alteration to U.S. immigration policy, in 1943 the boys were granted visas.43 If only marginally engaged in his nephews’ case, Polanyi was intimately involved in assisting Ilona’s attempt to enter the United States. He himself had arrived on a visitor’s visa and—his fingers subjected to meticulous printing—registered as an alien, following which he traveled to Washington, where he applied to the State Department to have his visa upgraded to a nonquota type, which, in turn, would permit Ilona and Kari to enter on nonquota visas too.44 That Bennington was set to employ his ser vices for two years should have enabled the issuance of a nonquota visa but, to his acute dismay, because the only formal commitment was to hire him for one semester, the College found itself bound by an internal stipulation that prevented such arrangements and was obliged to renege on the promise.45 Polanyi could not immigrate on the strength of his Bennington position and was obliged to seek a quota visa instead.46 Ilona, meanwhile, began the process of applying for exit and entry visas in September 1940, but the process dragged. We do not know the precise reasons, but the fact that the U.S. ambassador to Britain at the time was a fascist sympathiser, Joe Kennedy, conceivably played a role. Kennedy was an associate of Breckinridge Long, a formidable figure in Washington who oversaw immigration rules. Long, too, was a dyed-in-the-wool reactionary and anti-semite. (He applauded Mein Kampf  for its “eloquent opposition to Jewry and Jews as exponents of Communism and chaos.”47) Despite being warned of his “fascist” inclinations, his friend FDR appointed him assistant secretary of state, from which office he was to play a critical role in deterring undesirables from

reaching the United States. Long set out to sabotage the entry of Central European Jews. He introduced a four-foot-long visa application form that required detailed information about both the applicant and two American sponsors, and instructed consulates to use administrative devices to postpone the issuing of visas.48 Largely as a result of his ob-

In all likelihood, Long’s appointment lay behind the “sudden and complete change of attitude on the part of the authorities,” which, Karl observed anxiously in a letter to Ilona, meant that “none of your former comrades can enter the country on any of the refugee steamers.”49 With Ilona stuck in Britain and unable to secure a quota visa, they considered sending Kari on a solo trip to Bennington, but that idea was quickly squashed, due to Karl’s apprehensions over “the danger for a lone girl of some of the boats with the dissolute and depraved class.”50 It was at this point that he fi rst began to contemplate whether a temporary solution might be for Ilona to come to Canada. Were she to make that leap, he assured her, he would be able to provide for her needs.51 In early 1941 Polanyi was entertaining the hope that the roller coaster was giving way to a more pleasant and predictable period. For one thing, his Great Transformation, provisionally titled Origins of the Cataclysm: A Political & Economic Inquiry, (or Anatomy of the 19th Century: Political and Economic Origins of the Cataclysm), was making good progress—an impression that was confirmed by comments on its outline offered by his old friend Marschak. 52 For another, the prospect of enticing Ilona across the ocean was firming up. “Now my position is very much easier” and the “elaborate tactics” that he had deployed in the previous year were no longer necessary, he informed Michael, rather hopefully.53 In the short term, she was granted a visitor’s visa, which permitted her a transatlantic visit in February. During her stay, Polanyi introduced her to colleagues at a Bennington social event. Aware of her communist background, they had expected her to be “at least one of the following things: ‘heroic’ ‘militant’ ‘pathetic’ ‘enthusiastic’ ‘interesting’ ‘conventional’ or ‘unconventional’.” In fact, she was the antithesis of the monster they feared: “unenthusiastic, matter of fact, unemotional and competent.” They were “utterly overwhelmed by her charm and


grants from Germany (including Austria) were never filled.

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structive behavior, 90  percent of the quota places available to immi-

intelligence, and personality.” The gratified and relieved husband lapped up the congratulations and marked the event down as “a tremendous success.”54 Even as this visit was under way, however, Ilona’s prospects of receiving a quota visa were receding. She and Karl pursued two courses of ac-


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tion si multa neously. With the announcement of the German quota in January 1941, Karl suggested to her and Kari that they each apply for a quota visa. Meanwhile, Karl would apply for his own, and in the longer term would hope to receive a nonquota visa that would cover them too.55 But he was aware that U.S. immigration officials would likely deem Ilona ineligible. An acquaintance, J. B. Condliffe, put the point icily: “I do not quite see how she will answer the questions that will be asked. Any one, who like myself, has knowledge of the background would not be able to act as sponsor or as a reference.” She will “I suppose,” he shrugged, be able to enter “on your own quota visa.”56 In March, Ilona suffered renewed disappointment when her exit permit was refused, and she took a snap decision not to leave Britain after all. Her reasons lay in part with the frustrations of repeated visa refusals but were also to do with the war, both as political struggle and lived experience. She had been spending her spare time reading up on theoretical and practical aerodynamics, and applied to join the Women’s Auxiliary Air Force (WAAF). In her words, she elected not to leave Britain in 1940 “on the grounds that I desired to make myself useful in the war-effort.”57 “In the mea sure in which it became clearer that this is not merely a fight, but the fight,” she wrote Karl, “it does increasingly mean all and every thing to me to belong to it. You mustn’t think that I am bitten by jingoism or anything like that. It has nothing to do with ideology. I am merely afraid that should I really leave England, something might die in me which is meant to be immortal, the very shape and temper of the mind.”58 Her agonized decision was also, of course, influenced by Kari’s preferences. A budding communist who “did not like” Americans, she was underwhelmed by her father’s move across the pond. It was clear to the parents that her “conviction, inclination and plan of life” were at the time centered in Britain and that “to drag” her away “would have meant to break her spirit and to destroy all that is best in her.”59 Ilona elected to retract her and Kari’s applications for exit permits, yet so long as Karl remained stateside, the dilemma persisted. In a letter to

Ilona, Michael expressed understanding. “You feel that, except for Karli, all your duties, all your more active interests lie here, not there,” and, given Ilona’s and Kari’s attachment to Britain, emigration would “be a blow.” However, their experience of separation was “not beyond the average hardness in these austere times. Separation is the rule, not the

man whose purpose must be to reap, to collect and bring to final shape the

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gains of a lifetime of thought. It is the only good he can do; to himself and


exception, and this,” he entreated, “is the guide to the necessary decision.” That decision was made “imperative” by the fact that his brother “cannot go on living on lecturing work of the kind he was doing during the past years.” How could he come back to Britain, “from a place where he can support himself without such undue, indeed entirely excessive, strain?” Of course, his “happiness was largely drawn from sources” other than his work, yet the occasion to write his book, prepared as it had been “by years of study,” could not be abandoned without the most profound and, I think, quite undue sacrifice. The occasion is a last offer of a capricious fate. . . . Karli, at 54, with all his wanderings behind him and his infi rmities hampering his movements, is a

to society. He cannot do it here, but only in America.60

Ilona was prevailed on by her husband, too. Previously, when it seemed she might not be able to join him at all, he had offered to return, even though his “plans were working out here well,” insisting that “no commitment” would keep him stateside in her absence.61 But that situation no longer applied. Now, he cajoled, “I feel that you should join me.” Being “unemployed, in poor health [and] over-age,” her departure would scarcely hinder Britain’s war effort. More seriously, “I need you and I cannot live without you”—although, he concluded with a maudlin flourish, if she decided that she must remain in Britain, “I can die happily alone.”62 Doubtless in part due to connubial persuasion but certainly also due to the failure of her application to join the WAAF, Ilona was won over. She applied for a lectureship in mathematics and physics at Bennington, and was awarded it in June.63 It was hoped that she would start in September, but two new immigration problems immediately raised their heads: Karl’s attempt to get a visa for himself by traveling back into the United States via Canada failed, and Washington passed a new regulation on immigration that obliged him to commence the whole process all over

again.64 Ilona’s problems with her exit permit and especially her entry visa continued, and the months wore by. While waiting, she found work with a scientific charity, the Royal Institution. “I do hope she doesn’t settle down in it,” Karl fretted in a handwritten letter to Toni Stolper, “before I succeed in making the State Department issue that [word


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illegible] of a visa!”65 At long last, in December 1941, Ilona arrived. In her words, Ilona “survived the first impact of the USA with relative ease” and found Bennington to be “a rather utopian place, extremely beautiful [and] with excellent libraries.”66 The couple’s income was comfortable enough ($5,500, or $80,000 in today’s terms), as was their life.67 Karl would drive her from their tiny cottage to college each morning in their “dearest friend,” a roomy old Buick Sedan with a leaky roof and fungus spreading over the back seat that he had acquired for a song at $35. (“But it goes, if you push it.”)68 He loved to drive those empty Vermont lanes, with their clear view across to the mountains, and the hues of purple and ultramarine that would “break through the pattern of frosty forest.”69 Ilona enjoyed Bennington, and applied herself diligently. Describing her as “a very distinguished woman and an excellent teacher,” Bennington’s president, Lewis Jones, hoped to keep her on indefi nitely (and in preference to her husband), but after only a year she switched to a more hands-on occupation, in the Department of Aeronautics at the Rennselaer Polytechnic Institute, some thirty miles away. Concurrently, she earned her pi lot’s license for light aircraft, and in December 1942 sought to put her avionic skills to military use, by volunteering for repatriation to Britain.70 Karl’s focus, throughout, was not the sword but the pen. In spring 1941 he had secured a Rockefeller Fellowship that would enable him to be employed at Bennington for two years, formally as a resident lecturer but without teaching responsibilities.71 He could now focus exclusively on his book. The words were flowing freely.72

T H E PA S S I O N O F A L I F E T I M E The seed from which The Great Transformation grew had been planted in Galicia’s war-torn wastes, where Polanyi prophesied that until a new image of society is found, efficacious ethical action will be unattainable. It was in Vienna that the image began to gain substance as an “institu-

tional vision”: of the economy conceived as a “natural process” in society rather than as a separate sphere, and correlatively of society conceived as a self-conscious unified collectivity, in contrast to the bad image that dominated the horizon of the present: human beings as individualistic profit maximizers, their actions sustaining a seemingly independent

pelled Polanyi toward writing his magnum opus coalesced. He kept abreast of debates on the issues of the day and learned much from scholars who were exploring the collapse of the liberal world order (Drucker, Fromm, Schumpeter, Edward Carr), the rise of totalitarianism (Kolnai, Borkenau), the sociology of economic planning (Mannheim), and the causes of the Great Depression (Lionel Robbins). From some of these theorists, most of whom were personal friends, he borrowed ideas, while others stimulated him to develop alternative theses. What, he puzzled, were the roots of the Great Depression? How extensive a rupture with liberal civilization was taking place, and was liberal political economy entering its terminal decline? Was a general shift to autarky, corporatism, and planning under way, and should its two most egregious examples, fascism and Stalinism, be understood as antithetical phenomena or totalitarian twins? In what ways, beyond the banal observation that recession-hit voters turned to Hitler, might the crisis and the rise of fascism have been related? It was in grappling with these puzzles that The Great Transformation began to gain shape. To understand the fascist irruption, it appeared, required digging down to the source of the market system in nineteenth-century Britain, a task that was facilitated when Polanyi gained employment as a WEA tutor. It was as drafts of economic history lectures that the principal theses of the book that was to make his name were first jotted down. In the late 1930s Polanyi began to draft the book. Its subject, he summarized, was “capitalism and the great transformation”: the nature of the market system and its associated mentality, the crisis that followed the collapse of liberalism in the interwar period, and the emergence of alternative political and economic orders.74 In an abbreviated, not to say gnomic, note from the late 1930s he reviewed the core thesis. In the nineteenth century Britain’s “destiny” had come to be “directed by


liar logic and rules.73 But it was in Britain that the questions that im-

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market economy that operates autonomously according to its own pecu-

economic mechanisms” so comprehensively that the market became taken for granted; hence, “the economic religion of the age was truer than it knew it was.” The dominance of market economics, however, was unsustainable, and the liberal world order collapsed. This, in turn, facilitated the rise of fascism, a rupture that exposed “the most obvious


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failure of our civilization,” for fascism “sacrifices precisely what we cherished most.” The world now found itself in desperate need for new methods of economic governance, and a new philosophy, which Polanyi dubbed “freedom from economics.” 75 As we have seen, our protagonist was more than a detached analyst of these processes. A child of nineteenth-century liberalism, he later experienced war and fascism at close quarters. In the 1930s, he and his family endured their most stringent conditions of life and work, and this surely sensitized him to the economic misery and insecurity into which millions around him had been plunged, as well as heightening his sense of urgency that solutions be found. A dedicated follower of developments in the Soviet Union, he also tracked the fortunes of the New Deal in the United States with rapt interest. And all the while he was familiarizing himself with the sociology and history of Britain, the heartland of liberal capitalism. The essence of Polanyi’s thesis, as it was unfurled in The Great Transformation, lies in the conjoining of four arguments. The first is an anthropological axiom: the market economy, in separating the economic from the political spheres, corrupts the natural, God-given condition of human society. “Essential” to his book, Polanyi wrote Michael, is its description of the “murderous” consequences of the market.76 Nothing “could be more contrary to the traditional organization of human society” than the existence of a system that treats land and human labor as “fictitious commodities” to be disposed of by market forces as if they were “cucumbers.” 77 The society that resulted was artificially orga nized around the myth of market “self-regulation” and the “fictions” of commoditized land and labor, and as such it transgressed Christian-socialist values and inevitably incited resistance. The second argument is a philosophy of history. Western civilization had been brought into being by a momentous drive toward human self-determination, but when this dynamic sundered society into separate economic and political spheres, it generated irreconcilable contradictions, in par ticular between capital-

ism and democracy. The third takes this thesis and applies it, with the infusion of a peculiar combination of a Christian socialist understanding of protectionism and an Austrian analysis of its incompatibility with the market system, to the welfare policy of Georgian Britain and of interwar Europe, societies in which the interpenetration of politics

which Polanyi brings the previous three theses to bear upon the political economy of the interwar period (corporatism, fascism, communism, the end of the gold standard, and the fragmentation of the world market), meticulously charting the connections between economic and political processes at the national and international levels. The book, then, would consist of analytical historical surveys together with a manifesto that offered an alternative image of society to the prevailing liberal norm. It represented the summation of several decades of Polanyi’s thought on matters economic, sociolog ical, political, and ethical. Of these, he tended to highlight the latter two, classing his book as a work of political philosophy, for the defining question it addresses is: “How is it possible that the science of society should be the center and basis of all human orientation, while every thing shows that such a science leads to moral relativism, psychoanalytical solipsism, intellectual nihilism [and] sickness unto death?” 78 In late 1940 he was able to test the main ideas in lectures at Bennington. His primary goal, he wrote Ilona, would be to explain the “Age of Transformation” in terms of “the moral values underlying social organization in the political, economic and cultural field.” 79 The “central thesis” was that: the present world crisis is ultimately due to market-economy, as the first phase of industrial civilization. The past quarter century was a result of the dissolution of the international economic system based on that economy. An “economic” society is a utopia; in all human society economics must be subordinated to the needs of society as a whole. The reform of the economic system had to be achieved on pain of destruction of society; the alternative was between a democratic or an anti- democratic method of achieving it. In Eu rope the democratic method proved unavailing; thus fascism became inevitable. Amer ica may be an exception, owing to the


flict. The fourth is an analytical survey of contemporary history, in

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and economics had given rise to economic stagnation and political con-

first years of the New Deal. Still—this is a world process; the re-integration of international life must still be achieved.80

Some months later, a detailed abstract had been formulated. The main argument, Karl now wrote his brother, “is that the Cataclysm was due to


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matters of an economic order, the last 150 years having been eminently an age of economic determination.” This had resulted from the institutional separation of economics and politics, which, in turn, conditioned and interfered with the separation of the national and international spheres. Hence, “we get something like a system of four interdependent institutional spheres, each of them supposedly self-regulating or at least comparatively autonomous.” This gargantuan mechanism, however, pivoted on a basic assumption, “that of an autonomous, self-regulating economic sphere.” This was “utopian”: it relied upon a supposition— that land, labor, and money could “actually be regulated by the market mechanism alone”—that, if put into practice, “would have caused the destruction of the social fabric itself i.e. the human beings, the natu ral resources and the enterprises. The consequent self-protection of society was therefore in a very real sense inevitable.”81 From the late nineteenth century onward, that self-protective “counter-movement” had called forth state interventionism, which in turn impaired “the selfregulative capacity of the market.” In this lay the origin “of the typical strains and stresses which developed between the four typical institutions, (1) market economy (2) popular government (3) Gold Standard and (4) Balance of Power System. The typical strains were (1) unemployment (2) pressure on exchanges (3) class tension and (4) imperialism.” These strains developed in consequence “of the imperfect self-regulation of the supposedly independent spheres, and account for the major historical events of the age.”82 To highlight the book’s elucidatory thesis, Polanyi recommended either The Liberal Utopia: Origins of the Cataclysm or Freedom from Economics as its title, but under pressure from the publisher, who believed those titles “ wouldn’t sell,” he reluctantly agreed to The Great Transformation.83 Despite common misconceptions, the title alludes to his prognostication, not to any historical sociology. The “objective factors,” he believed, that were preparing the path toward the transforma-

tion, the reunification of society, lie “entirely outside our control. But this integration must be achieved on a democratic basis,” because it is democracy, in the sense of equality, free discussion, and liberty of conscience, that most faithfully “expresses the requirements of a Christian interpretation of life.”84

leaves outside, he wrote Michael that his life was so immersed in his book “that hardly anything that belongs to me reaches me other wise than through its medium.”86 The effort continued through much of 1943, yet as the tide of war swung against the Axis, he itched to return to Britain. He had left “just before the blitz—the most terrible ordeal any people had ever to endure in modern times. And I feel in my bones that something will have snapped between me and home unless I go back in the coming critical phase of the war.”87 Due to the exigencies of preparing for the move, compounded by a final lecture tour of U.S. colleges, he was obliged to leave the near-complete manuscript in the hands of three friends. They pieced the final sections together. “One is a liberal, the other a conservative, the third a socialist,” wrote the appreciative author, “each of them of the diehard brand, yet they pull together on the job of getting my book out, believing it to be essentially true.”88 The Foreword was penned by the sociologist Robert MacIver—a “brisk, bright, live Scottie,” as Polanyi saw him.89 He “brilliantly formulated what I myself preferred to leave unsaid, namely, the general human implications of my approach.”90 Even before receiving the final manuscript, its U.S. publisher had already solicited a sequel: a short book, to be provisionally christened The Common Man’s Master Plan—or perhaps Tame Empires, a title that Polanyi liked for its mix of “realism and prophecy”— that would tease out the policy implications secreted within the first.91 He “gladly accepted” the invitation, not least because it would enable The Great Transformation to be kept “free from politics.”92 Polanyi was justly pleased with his manuscript, although during one of those moments of self-doubt that many authors experience, he pronounced his text to be “one of the most stubbornly sustained arguments a born bore ever inflicted upon the race,” adding that “perhaps for that reason, I suspect it is my true portrait.”93 How did others view his

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Ilona beside him, with squirrels and chipmunks playing in the autumn

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Polanyi spent 1942 writing.85 In autumn, sitting at the fireside with

portrait? On the whole, friends who read draft chapters provided supportive comments. Tawney found it “full of suggestive ideas,” although he then applied such torrents of red ink that Polanyi was forced to consolingly remind himself that the Labour celebrity was “a notoriously severe critic.”94 Cole read draft chapters “with mixed feelings.”95 During a

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Ilona were enchanted by his “sensitive poetic personality” that “filled

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sustained and undisturbed conversation at Balliol, in which Polanyi and

up the book’s meaning in relation to its author’s journey. It says “pretty

the atmosphere with a peculiar quiet,” the Fabian sage conveyed both a general enthusiasm that Polanyi was “returning to institutionalism” as well as an admiration for the book’s general argument, which he found “exceedingly interesting and to a considerable extent, correct.”96 His praise, however, was mixed with observations that at a number of points Polanyi was either “definitely wrong” or guilty of exaggeration—in particular with one of the book’s central arguments: “that the unsolved problems of the 1820s explain the crisis of the 1920s.”97 Unquestionably the most moving appraisal of the book was provided, shortly before its appearance, by Michael. In a letter to Karl, he summed well all you had to say” and gives expression to “the thought and passion of a lifetime.” So intensely personal is it, “so passionate and eloquent in your own particular tone of sentiment,” that it simply could not have been written by anybody else. It will make Karl’s name, the affectionate (if perhaps arch) brother predicted, opening “at a late hour the door from a condition of relative obscurity to a state of full notoriety.” As such, it promised to guarantee him, at last, a secure material footing.98 Michael’s prediction was accurate, although the author’s fame did not rise as rapidly as one might have expected. Some readers were put off by the book’s “repetitive” and “elliptical” prose, or by what Jaszi derided as his quondam amanuensis’ propensity to spout “semi-Marxist Double Dutch”—an instance of what he saw as a general Polanyi-family “tendency for loose thinking.”99 Appraisals in economics journals were lukewarm. The Economic Review dismissed it as “full of vague generalizations,” while in the Journal of Political Economy its author was reproached for an “arbitrary use of terms and exaggerated interpretations of events.”100 Historians bridled at its “distortions of fact” and carped that its method was “that of the institutional sociologist rather than of the his-

torian.”101 In the United States it gained only a “marginal” place in mainstream and leftist social analysis, while in Britain it was “greeted with a deafening silence.”102 The lack of audience in the country to which The Great Transformation was pledged, Sally Randles has persuasively conjectured, in part reflected the snobbish disinclination of British

from a well-regarded university.”103 More significantly, British debates over economic thought and policy were dominated by a drawn-out war between ascendant Keynesians and a minority of laissez-faire economists, to neither of which camps Polanyi belonged. It was only in the 1980s that The Great Transformation gained a wide audience, but that turn of fortune lies outwith the scope of this biography. The book went to press in the autumn, shortly after Karl and Ilona had set sail for Britain.104 Their return was agreeable, but, coming so soon after a lecture tour and with no abode organized in advance, was anything but relaxed. Within the loop of their repatriation to London, they were obliged to follow lesser circles: a move from a guest house (Mountview) in September to a rented flat (in Jackson’s Lane, Highgate). For Polanyi these peregrinations called to mind a train set at which he had marveled when a boy. Each toy train was so designed that another could run on top of it, and a smaller one on top of that. “It made me quite dizzy by its complicated dislocations.”105 Eventually, with one further move, the gyrations came to an end, and the couple found themselves “settled in a sweet odd corner of Hornsey, a quiet nook off the beaten track, with a row of beautiful poplars opposite our sitting room window.”106 Here they were to live and work until early 1947. Karl sought to gain a tenured academic position, but to no avail.107 (He applied to the University of Hull and the London School of Economics, for example, but although his applications were supported by Lindsay, Tawney, and Mannheim—a referee A-list in exchange for which some academics would happily chew off their typing fingers—he failed to secure any such position.108) He turned down an offer of extramural teaching in Oxford due to his aversion to traveling during war-enforced blackouts and was left to eke out a living by tutoring for the WEA in London, supplemented by occasional additional hours—teaching trade unionists at Ruskin College summer schools, for

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their institutions and who possessed no “status-enhancing qualifications

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academics to value the work of an author who lacked connections with

example.109 If these were lean times, however, they were not miserable. “Somehow or other,” Karl confided to Jaszi, “we must have become a part of this country, other wise that deep feeling of happiness would be


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inexplicable which impresses itself almost physically on us.”110

MECHANISMS OF MURDER The final phase of Polanyi’s life in London saw, geopolitically, the defeat of the Axis powers and the designing of a new world order. It commenced just as he had finished the final chapter of The Great Transformation, which summarized his credo: if “industrialism” is not to extinguish humanity “it must be subordinated to the requirements of human nature.” 111 The fervency of the final chapter derives from its author’s experiences at this historical conjuncture. Humanity stood before a cliffside crossroads: it could press on toward socialism or lurch into the chasm. In Britain and Eastern Europe he discerned prospects for a socialist commonwealth, and his optimism in this regard surged in the aftermath of the war, as leftist experiments were attempted in both of the countries he called home. Amidst the hope, however, were events of indescribable horror. Barbarism was disturbingly close, in the form of war and the Holocaust. The drip feed of reports from Nazi-occupied Europe formed a funereal backdrop to the other wise contented life that Polanyi enjoyed during the war. Of news reports the most disturbing was what Polanyi referred to as “the ghastly affair of the Hungarian Jews” in the early summer of 1944.112 In less than two months more than half of Hungary’s Jewish community was rounded up by the Nazi occupiers and the Hungarian authorities before being deported to their deaths, in the single greatest act of genocide in human history. In total, more than half a million Jews were murdered before the Soviet liberation of Budapest. Later, in a 1947 letter to Michael, he listed some of the unspeakable crimes that had been visited on innocents over the previous ten years. It commences with the Moscow Trials (which he now recognized to have been a “horror”).113 The Gestapo comes next, followed by Lidice, a Czech village whose inhabitants were murdered by the Nazis, and Auschwitz-Birkenau. The grisly inventory concluded with the experiment in mass murder inflicted on the

people of Hiroshima and Nagasaki, and he predicted that the foreseeable future will know many more horrors of similar magnitude, for all these events were signs of a deeper problem: that “man, in the material and moral cast for the sake of which we cherish our humanity” is finding it increasingly difficult “to maintain himself in the future in the technolog-

trajectories. Living in London, he was able to study the techniques and phenomenology of modern warfare at close quarters. Like the other inhabitants of the city and its suburbs, he would listen for the “hoarse, short-breathed exhalations” of the Doodlebugs, would draw away from the window, and would spare a thought for those unfortunate enough to be present where its flight path ended, the random groups of citizens— ”families in their dwellings, housewives getting their rations at the local stores, children at play, workers in shops, ecclesiastics in conference, passengers in buses”—who were about to be wiped out.115 He reflected on the consequences of technological progress, in par ticu lar that the deployment of V-2 ballistic missiles, screaming at supersonic speed through “space outside the habitable planet,” meant that civilians now faced “unsheltered” life and “unwarned” death.116 In the second half of 1944, bombs, flying bombs, and missiles were raining so thick and fast on Camberwell, the district of London where Kari worked, that she gave up counting them.117 She survived, but other friends and family members were less fortunate. One such was Anna Klatschko, who starved to death, abandoned in occupied Paris.118 Another was Karl’s nephew-in-law, György Engel. He held out for most of the war in a Wallenberg house in Hungary but was arrested in 1944 and died in a “ labor” camp.119 A third was Ilona’s mother. When she visited Shoreham in mid-1939, Karl beseeched her to stay. Yet she returned home to Berlin, confident that war would be averted. In an allied air raid in 1943 she met her doom.120 The Holocaust was a topic that, understandably, Karl rarely addressed in conversation, but he did put thoughts to paper.121 He described the “convulsion of horror” that shook Britain when footage of the death camps appeared, a distress that was compounded by the bewilderment felt when one sought to comprehend the motivations for, and techniques of,


In his own life the terrors of the 1940s waylaid Polanyi along various

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ical environment which he has created.”114

industrial genocide. “ There was no frame of reference,” he wrote, “no yardstick with which to mea sure the magnitude of the crimes,” including, as they did, the use of medicine as an instrument of murder, the organization of starvation, and the construction of elaborate plants for the obliteration of millions of people in the conquered countries, whose


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“annihilation was planned and premeditated, systematic, meticulous, and undoubtedly carried out at lowest cost per man-death.”122 Although most of Polanyi’s immediate family had fled Europe before the outbreak of war, the fate of Sophie was the source of grave anxiety— “an agonisingly convoluted situation,” in his words.123 Her husband Egon had been arrested and prosecuted before, and now, in 1938, was arrested again, “during a coffeehouse raid, a random victim of the terror of the first days of Nazi takeover in Vienna.”124 He was detained in the concentration camp at Dachau, but the prospect of his release was relatively auspicious. In the summer of 1938, before Kristallnacht, the authorities were still granting passports to bearers of valid visas, even to those arrested and in prison or in concentration camps. One of the Szécsi daughters, Maria, had already reached the United States. Next, the Polanyi family successfully helped Sophie and Egon to secure visas, first for Britain, with their American visas due to follow in September 1938. At this point Karl was able to report to family members that Sophie’s correspondence still “glows with inner spiritual tranquillity, despite every thing.”125 However, her other daughter, Edith, of whom Karl and Ilona were very fond, remained in Vienna—and Sophie, “typical of a good mother with a conscience, [was] not willing to leave if she cannot bring Edith with her.”126 With Ilona’s assistance the Polanyi family did succeed in bringing Edith to Britain, and helped her fi nd quarters on the coast in the hope—in vain, alas—that sea air would cure her tuberculosis.127 But it proved harder to secure the same documents for the Szécsis’s son, Karl, whose mental impairment ensured he would not be granted equal consideration.128 In early 1939 the Gestapo summoned Sophie, confiscated her passport, and confronted her with a “choice,” the essence of which was that to save her husband she must abandon her son. Egon, they informed her, would not be released or their passports returned “unless they procured a visa for the boy or left him behind in the care of an institution.”129 If she turned down the latter option, she would have to either

take her chance in Nazi-occupied Austria or hope for a clement decision from the immigration authorities in Britain or the Americas. The gravity of Egon and Sophie’s plight was clear to see, even though no one could predict the full extent of the impending catastrophe. “ Whether Sophie’s husband can be saved is doubtful,” Karl confided to

the immigration authorities as best they could. When Sophie and Egon’s British visas were due to lapse, in July 1939, Karl pressed for their renewal. But their attempts to acquire a Mexican visa for their son, and Karl’s hopes that intercession by Quakers in London and Vienna might assist, were all in vain.131 In early September, just before the outbreak of war, Karl wrote Michael expressing relief that he had acquired British citizenship and hope that Laura would imminently receive her U.S. visa, and yet, he fretted, there was still no news from Sophie.132 By the time she did decide to flee, without her husband, it was too late. In March 1941 she and young Karl were transported to Poland. A month later, Egon was executed in Dachau.133 What made Sophie’s fate particularly difficult to come to terms with, as Szapor has described, is “that she had the chance to escape and, guided by moral obligation or indecision, she chose not to take it.”134 On receiving news of his murder and her deportation, Adolf expressed, albeit in über-rationalist terms, what must have been on all their minds. “We cannot help but feel that Egon could have probably been saved and Sophy living with a new lease of life in America if it had not been for the unfortunate idiot boy, whose fate has in no way been changed or altered by all this. She is certainly the most tragic victim of her loyalty, to a lost cause.”135 For a further two years the Polanyis kept in contact with, and sent funds to, Sophie, and they heard reports—difficult to believe—that the Jews of the Polish camp where she was confined maintained a radiant spirit and that she herself was “very happy.”136 In March  1942 they engaged in one fi nal effort to save her, prompted by news that her son had been taken away. By now, writes Szapor, “the family must have had some understanding of the fate of Jews taken to the East. But Sophie was already beyond reach, despite the American visa waiting for her in Vienna.”137 Her last known location, in mid-1942, was the Kielce

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morally impossible.”130 In the meantime the brothers intervened with

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Michael in May, adding that “to suggest this to him or to her would be

ghetto.138 “My dearest little sister,” Polanyi grieved, “was murdered by the madmen.”139


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limited, although in 1940–1941 he did use lecturing opportunities to agi-


During his stay in the United States Polanyi’s political engagement was

those countries.141 Its goals were to promote the Allied war effort, to

tate for U.S. entry into the war. His return to London, however, afforded new opportunities in this regard, by way of his renewed connections to Hungarian political entrepreneurs. In London the community of Free Hungarian exiles sustained no fewer than three movements. One was the communist-run Hungarian Club, another originated in the pro-British wing of the Hungarian Legation and enjoyed unofficial support from the Foreign Office, while the third was Károlyi’s New Democratic Hungary Movement.140 It had been conceived in the spring of 1941 as a movement of antifascist Hungarians resident in Britain and the United States, and it sprang to life in December of that year when Hungary declared war on support the fight for Hungary’s liberation from fascist rule, and to prepare for its postwar democratic future, with Károlyi as presumptive president. Polanyi had been transiently acquainted in 1918 with Károlyi and had supported his government, but it was only now, in October 1943, that he truly got to know the count.142 He and Ilona bonded at once with Károlyi and his wife Catharine Andrassy.143 “I liked them both exceedingly well,” Polanyi confided to Jaszi, adding that, with the exception of only a few British friends, “there is nobody with whom we feel so trustfully sympathetic as with this much suffered couple.”144 The Hungarian exile communities in Britain and the United States were far from homogenous. This was the case in their antifascist sectors, broadly defined, but also within the smaller perimeter of Károlyi’s movement. There were political variances (particularly over attitudes toward Soviet communism), divisions along class lines, and differences in outlook between “old” immigrants and more recent arrivals, as well as regional rivalries, with relatively independent groups clustering around metropolises, such as Cleveland, Chicago, and New York.145 In the United States, Károlyi’s outfit, the American Federation of Democratic Hungar-

ians (AFDH), was led by some of his earliest American-based supporters, including his “truest friend,” Jaszi.146 But in 1943 it split, with the formation of a pro- communist breakaway, the Hungarian-American Democratic Council (HADC). Energetic individuals in the HADC included the avant-garde painter and designer Laszlo Moholy-Nagy and

in the Viennese underground resistance.147 Those who remained in the AFDH, in contrast, tended to view the HADC as a nest of red vipers. Jaszi was unwaveringly anticommunist, while the upper-class, anti-semitic members of his milieu were fiercely so—they even condemned him for his association with that “crypto- Communist” Jew, Karl Polanyi.148 Although Jaszi’s and Károlyi’s divergent views on Soviet Russia had been apparent for two decades or more,149 the former felt betrayed when Károlyi accepted the title of HADC honorary president.150 In a letter to the count, Jaszi could barely suppress his fury as he attempted to persuade him that he had gravely erred. The HADC, he explained, was a front. It included “a couple of Mitläufer, and some other colourless progressives” but communists pulled the strings. That Károlyi had signed up to it—“without our consent”—had shocked him and also raised wider concerns: “if you were only able to show so little resistance against the communists from New York, then what would happen if you would feel the direct pressure of Moscow?” For Jaszi, the Free Hungarian movement should model itself on de Gaulle’s Free French, with Károlyi thrust forth as the prospective leader of a postwar “Hungary that builds on the principles of freedom of association and liberal socialism.” For this to work, a delicate balancing act would be required, a “manoeuvr[ing] between bolshevism and capitalism.” To win the support of mainstream opinion behind a Gaullesque initiative would necessitate cultivating relations with the communists that knew just enough cordiality to win their “sympathy and trust” but would hold back from making significant concessions and avoid at all costs becoming their “battering ram.” “Show a strong hand” in dealings with them, he counseled Károlyi, spell out the limits and be sure to declare: “thus far but no further!”151 In Britain, unity among the three Free Hungarian Movements did eventually come about, in the form of a Hungarian Council headed by

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Striker and his wife Barbara, both of whom had been comrades of Ilona

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the Hollywood star, Bela “Dracula” Lugosi, as well as Laura’s son, George

Károlyi, yet beneath the surface, fractures parallel to those in the United States were pervasive.152 The Polanyis maintained that the Council should take care to avoid becoming an “addendum of the communists,” but they were broadly sympathetic to communism and were disappointed to see that it welcomed the type of Hungarian nationalist who seemed


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disturbingly quick to absolve Horthy’s government from culpability in the genocide of Hungary’s Jews, as well as intransigent anticommunists such as Koestler.153 (Koestler, at the time, had vehemently broken with communism and was preparing his tormented soul for loan to the next bidder.) The Council’s internal politics were complicated additionally by the communist movement’s nationalist lurch, which saw communists forming informal alliances with conservative nationalists who were profoundly suspicious of Károlyi’s project in general and of his socialdemocrat supporters in particular—the very constituency that Polanyi was keen to encourage. This, to his frustration, threatened to make “leftist cooperation impossible.”154 We can be sure that Polanyi contributed to the development of Károlyi’s program for a postwar Hungary, the major planks of which were land redistribution, “orga nized” foreign economic policy, the right to work, reduced unemployment, and higher living standards, but his most constructive role, he believed, would be to provide sustained political analysis that aimed to facilitate rapprochement among communists, social democrats, and anti-Horthy liberals.155 Given that the latter two groups’ suspicion of communism represented an egregious sticking point, the weight of his output was geared to rehabilitating Soviet Russia. In early 1943 he outlined his argument in an article published in Harper’s Magazine—a periodical edited by his friend John Kouwenhouven. Moscow’s foreign policy, it began, had in the 1920s “been frankly revolutionary,” such that its exclusion by the Great Powers was entirely predictable.156 Yet their stance had stymied the formation of an AngloFrench-Russian diplomatic alliance against Hitler’s Germany, and that tilted the diplomatic field toward the policy of appeasement. Since then, however, Russia had visibly “swung towards a peace policy.” This was exemplified by the Comintern’s strategy in the Spanish civil war, where, although under intense pressure to join with forces to its left in mobilizing for revolutionary change, the Communist Party “kept to the

last to the position that no other cause than that of constitutionalism and legality was involved.”157 It showed impressive maturity, recognizing for example that workers’ power in Barcelona “would mean war in Eu rope.”158 In crushing movements to its left, the Spanish Communist Party was furnishing cast-iron proof of Moscow’s “constructive policy”

of Communism’s cooperative intentions and formed an alliance with Moscow against Berlin, Polanyi contended, the Molotov-Ribbentrop pact would not have been called for. Instead, Russia “was pushed by the Foreign Office into co-operation with Hitler.”159 The Molotov-Ribbentrop pact was a desperate expedient born of isolation, in Polanyi’s apologia, and by the same token it was living proof of how earnestly Russia took its new realist approach: that as an alternative to its previous uncompromising foreign policy, which had aspired to “stir the natural urge for revenge into a blind passion and fan the flames of justified agrarian unrest into a devastating fire,” it was now prepared soberly to countenance an alliance with its greatest foe.160 The West should study Russian actions more carefully, he advised, and make constructive approaches. Moscow, he conceded, still possessed the ability to adopt a “world-revolutionary strategy” but only if provoked to do so by recalcitrant unconstructive attitudes on the part of the Western powers.161 It was capable of imperialist expansion (“running amok”), as witnessed in its 1939 attack on Finland, yet it had no genuine wish to extend its frontiers, was “definitely averse to an expansionist policy,” and—like the United States—required “nothing but peace to be prosperous.”162 It would seek to achieve its aims by way of military alliances with its neighbors and was inclined “to leave them to run their internal affairs.” Its foreign policy could even be the harbinger of a “new internationalism,” one that promises “to bring peace and stability” to Central and Eastern Europe.163 Polanyi was scathing of the budding Cold Warriors who presented Stalin’s foreign policy as a historical unicum: unfathomable, innately belligerent, and hardwired for expansion. He was right to insist that, its rhetoric notwithstanding, the Kremlin’s designs on Central and Eastern Europe were guided by realpolitik—essentially, to create a buffer


hall had drawn appropriate conclusions from the accumulating evidence

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toward Western governments, and this should be recognized. If White-

zone—and in this he was in tune with an influential section of opinion in London and Washington.164 It should be recalled that as the armies of the Grand Alliance rumbled toward Berlin, Rome, and Tokyo, influential voices on all sides believed that agreement over spheres of influence could be reached in a comprehensive postwar settlement. Moscow


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envisaged an agreed-on carve-up, with the United States retaining its traditional spheres while assuming a somewhat more global role, while Britain would act as a hegemonic maritime power in Eu rope, counterbalanced by the Soviet Union as the major land power. In its outline and spirit, the ill-famed percentage agreement in which Stalin granted Churchill a free hand in Greece in exchange for the same in Romania and Bulgaria hinted at the logic and principles involved.165 Polanyi was also correct in his suggestion that the Kremlin was developing plans for the construction of “socialism” within its Eastern European glacis by gradual methods, with a reliance on collaboration among “progressive forces,” including the national and petit bourgeoisies. Comintern theorists, notably Varga, proposed that socialism could take the form of a “progressive democracy” with a mixed economy; Britain’s postwar Labour government was envisioned as an exemplar.166 However, Polanyi indisputably overstated the defensive character of Soviet foreign policy and, relatedly, tended to confuse two quite different meanings of “expansion”: the world-revolutionary aspirations of the early Soviet regime, and the Great-Russian chauvinist adventurism that flared up episodically from the 1930s on. Certain rhetorical continuities notwithstanding, the two phases were antitheses. In one, revolutions abroad were to be supported by Russia, and oppressed nations within its sphere were to be granted the right to self-determination. In the other, nations of the former empire that had declared their independence were re-annexed, revolutions abroad (as in Spain) were throttled, and “socialism” was preferred if imposed by force (as in Hungary) than if achieved by indigenous strug gle (as in Yugoslavia). The shelving of worldrevolutionary goals in the 1920s did not, as Polanyi assumed it would, facilitate the emergence of a peaceful Soviet Union. Rather, the retreat from world revolution was part and parcel of a violent restructuring that saw Russia re-emerge as a Great Power, one that was prone to periodic bouts of overextension—strikingly so in 1947.167 Even more dewy-eyed

was Polanyi’s analysis of Moscow’s democratic intentions in the areas it had liberated. He was adamant that it would not “sovietise” but would instead permit the flourishing of “a form of representative government based on political parties.” In its westward extension, as he saw it, the “Russian revolution is bringing the social changes of the French Revo-

intentions.168 At the time he had penned it, he reminded Károlyi with unconcealed pride, “I was absolutely on my own” in arguing that “the Russians will bring democratic consolidation to Eastern Europe.”169 Polanyi’s analysis of the Soviet Union and its Eu ropean designs set him at odds with his closest political interlocutor in Amer ica, Jaszi. He did not publicly identify himself with either of Károlyi’s allied groups in the United States but did regard himself as an ally of Jaszi’s organization, and even involved himself in its internal disputes.170 However, on the burning issues he was closer to the HADC, and the two friends engaged in spiky disagreements concerning Soviet tactics and intentions and, relatedly, the stiffness of Károlyi’s spine. The younger man deeply identified with and admired Károlyi’s political character, which he read as the blend of an aristocratic type of Russian revolutionary populism and a sober political realism inherited “from his Magyar ancestry.”171 He shared his outlook for postwar Hungary: that it required not only a social (even socialist) transformation but one that in its external policy would break decisively with Germanophile traditions and orient instead to the Soviet and Slavic East, with an unreserved acknowledgment of Moscow’s “security interests” in the region, even as it maintained friendly relations with its neighbors and “the great Western democracies.”172Jaszi, however, was less impressed with Károlyi. Whereas Russian populism had been animated by Western ideals of individual freedom, “our friend is captivated by the Marxian formulae, and considerations of power politics.”173 The future of the West, he went on, would depend on “the moral resistance of the leaders against Asiatic totalitarianism,”174 and Károlyi, he fretted, lacked the requisite backbone. Worse still, Jaszi suggested that Polanyi, more even than Károlyi, appeared to harbor “Communist or crypto- Communist sympathies.” This charge angered and upset the  younger man. He energetically


Harper’s article as having presciently identified Moscow’s “constructive”

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lution with it,” and in letters as late as 1946 he continues to refer to his

rebutted it, arguing that his vocal backing of Russian involvement in the Danubian zone reflected a sober assessment of Moscow’s intentions and could emphatically not be interpreted as wholesale promotion of its ideology or policies.175 Inevitably, the Soviet question played a part in the quarrel between

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lationship.176 The background was the Soviet Army’s advance toward


Károlyi and the Polanyis that led to a conspicuous dampening of their re-

could be taken, and the moment of choice had arrived. If he “felt in the

Hungary and the formation in the Soviet-occupied East of a provisional government—sans Károlyi. In response to this snub, the count’s attitude to the Soviets cooled, and so too his determination to take an active part in Hungarian politics.177 In discussions in the Károlyis’ Queen Anne flat in Hampstead, Polanyi charged his friend with vacillation and an abstentionism which, although the consequence of a “passionate, unbreakable faithfulness to his principles” that may have been admirable in the abstract, prevented effective political intervention in the real world. His friend had neither withdrawn from Hungarian politics nor demonstrated his support for the new regime “with acts.” Only one of these two paths depth of [his] soul” that he could not identify with the new, Soviet-steered Hungary he should abandon his political ambitions altogether. But Polanyi enjoined him to follow the second path, to “decide now to support the regime.” This would entail three commitments: to issue a “public statement of support,” to endorse its “authenticity in front of the progressive foreign public opinion, and to return to Hungary forthwith.” If he were to seize the opportunity, two possible scenarios would present themselves. In one, the Russians would appoint a Hungarian Quisling to the presidency—a closely controlled general or technocrat who lacked a broad political base. In this scenario there would be no prominent role for Károlyi, and the “democratization of Eastern Europe would slow down,” albeit only temporarily. In the other, he would be given a figurehead role, with a brief in the field of foreign policy—but no domestic role; the Russians would not look kindly on that. He would have to strike a balance: never pledging unquestioning obedience to the new masters but yet, “as a necessary precondition of trust,” foreswearing any intention of organizing opposition to their overlordship. Such an approach would permit him to play a part in forging a popular left-dominated

regime, involving cooperation between the National Peasant Party, “leftist Smallholders,” and Social Democrat and Communist parties, and to act as symbolic guarantor that radical land reform would ensue. For this to work, Károlyi would have to broadcast a strong signal to his followers: that he would return presently, to help build the new Hungary.

Eastern European situation” and it was “unquestionable that a successful Hungarian leftist regime” would bring about a “huge consolidation” of progressive politics throughout the region.178 In January 1945, Karl and Ilona acted. She wrote a letter, which he cosigned, appealing to Károlyi to grasp the nettle: to either “go forward or backward.”179 Károlyi does not appear to have taken the advice well, for a row quickly erupted. Before long, Ilona was accusing him of listening to advisors who operate with “gangster methods.”180 He hit back, summoning her to resign her positions on the board of his movement and on the Hungarian Council.181 (“ Whether one likes it or not,” added this most high-handed of democrats, “the policies of the Movement and of the Council are primarily shaped by me.”) He shared her and Karl’s view that the Soviet onrush had created a situation in which Hungary could move in a progressive direction characterized by land reform, universal suffrage, and a warm relationship with Moscow, but, he added tartly, he himself would be able to find an accommodation with Hungary’s communists “without any hysterical mediation.”182 She refused to resign, eliciting a sharp rebuke from him: he had no wish for his movement to “be considered a gathering place of fellow travellers,” or, worse still, “a pocket communist party.”183 Moreover, he considered its members to be personal disciples; he was “not only President of the New Democratic Hungary Movement but also leader of the majority of Hungarian exiles, and thus also responsible to them for my actions.” This gave him “the authority to select who is the right man in the right position,” and in the case of Karl, who Ilona hoped would be nominated by Károlyi as a “delegate,” his response was negative. For one thing, he and Karl did not enjoy a sufficiently strong rapport to justify the nomination. For another, although Ilona had declared that she and her husband “have very different positions,” Károlyi had “become convinced that in fact


ulated hyperbolically, that Károlyi alone could “turn the balance of the

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The stakes were high, the prize was great. It was possible, Polanyi spec-

you share the same position on every thing.” For those, such as Ilona, who not only disagreed with him but failed to demonstrate sufficient “loyalty or trust,” the logical step was to quit.184 It is a testament to Ilona’s warmth and sense of proportion that she could write, only months later, that “our love and admiration and friendship for Károlyi is for all


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time, and [has] stood many storms and alarms which go with close contact.”185 Through 1945 and 1946 Polanyi followed his old comrade’s speeches and deeds with a gnawing sense of disappointment. Surely this was the wrong time to turn one’s back on the Soviet military administration and the Communist Party! The Russians were providing indispensable assistance to the Hungarian nation, in liberating it from fascism, in “providing an elastic framework for national unity,” and in permitting it a “remarkable” degree of self-government—and the communists’ publications, he was pleased to discover, revealed “a greater advancement towards the reception of the healthy ideas of the West” than Westerners do “towards the understanding and the fruitful usage of the healthy ideas of Marxism.”186 With all this in mind he sought to persuade Károlyi to publicly defend the regime, for example against the allegation disseminated by a Labour Left periodical that its land reform had been “fake,” and against the more sweeping charge that “the Russians are building a Badoglio regime in Hungary concealed by leftist slogans.” That Labour leftists viewed communist involvement in Hungary with suspicion, in contrast to their staunch defence of the Spanish republicans in the 1930s or of the National Liberation Front in 1940s Greece, he argued, was in no small part the consequence of the count’s ambivalences and silences. “It is no wonder,” Polanyi admonished Károlyi in early 1946, that Britain’s Labour government had lent its support to the conservative Smallholders’ Party in Budapest, and this, he added, could be the prelude to a sharp shift to the right.187 Károlyi was unconvinced, and disparaged Polanyi’s arguments: they were warped by his tendency to look at the world “through English eyes.”188 If a right-nationalist shift were to occur, blame ought to be placed firmly at Moscow’s door. He was scathing of the communists’ encouragement of an inflamed nationalism—the “cockade-patriotism” of which he had been a lifelong opponent—and was aghast to see the Russians giving their backing to it.189 If the purpose was to consolidate the communists’

political base, it was bound to backfi re, by “strengthening the reaction and thus weakening their own position.”190 Following a year in which he had vacillated, ignoring the Polanyis’ injunction to act, he now took a clear decision, albeit not the one they had advised. In April 1946 he informed Polanyi that he would return to Hungary the following month,

politics at home,” he lamented; “those nauseating compromises are not for me anymore.”191 As Hungary underwent Sovietization, the welcome mat was withdrawn and, following a two-year stint as Hungary’s ambassador to France, Károlyi retired from political life.

P O S T WA R P L A N S With the end of the war, the Polanyis’ daily life became more relaxed, and the irritations and fears of blackouts and bombs faded into memory. Karl found the peace something of a misnomer, and in certain respects even “more difficult to bear” than war, for society remained governed by capitalism, with human values systematically “subordinated to the requirements of the property system.”192 Yet there was nonetheless a groundswell of hope. The idea of planning had taken hold in the popular imagination, in the 1930s in response to the blight of unemployment and again during the war as government economic intervention proved its efficacy. In Britain and the United States alike, the public had exhibited a willingness not only to shoulder the material and spiritual burdens of war but also to adapt their behavior to the needs of planning, in the form of “controls, rationing, direction of labour, [and] conscription”—and on this score the common people were “well ahead” of their leaders.193 In liberal Britain, he noted approvingly, the introduction of “an all-round planned economy” and exchange controls had effaced the separation between government and industry, “yet never were public liberties more securely entrenched.”194 Was the rise of planning a war time aberration, an anomaly irrupting into the norm, with business as usual soon to be restored? The general election of July 1945 suggested that something more momentous was afoot. Under Attlee, the ever-sanguine Polanyi believed, Britain was shedding its capitalist past and embarking upon its great transformation.


diately return to London. He “would not be capable of entering internal

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but only to address the National Assembly, after which he would imme-

For a century or more it had been “conditioned by market society,” with a culture dominated by Puritan pessimism toward human nature and a “utopian optimism in respect to the virtues of a harmonistic laissezfaire” that obliged “the common people to acquiesce in forms of work and existence which favoured the extremely rapid growth of industrial


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capitalism at the price of stunting their lives.” Now socialism, the cooperative commonwealth, would begin to put the opposite principle into effect, enabling “man to readjust his industrial environment to the requirements of human existence.”195 Attlee’s government has earned a place of honor in the Labour Party’s history due to its implementation of Beveridge’s proposals for a cradleto-grave welfare state. Polanyi’s belief that it was committed to constructing a “socialist commonwealth,” however, appeared delusional, as egalitarian promises were jettisoned, one by one. This was particularly striking with respect to education policy. Before entering government, Labour had opposed the anti-egalitarian provisions of the 1944 Education Act, but on assuming office, it proceeded to implement them. The Act allowed the misleadingly named public schools to retain their exclusive position outside the state system and the church schools their privileged position within it. Its structuring of secondary schooling mirrored Britain’s class-segregated society, and it was animated by a eugenicist fabrication: that an individual’s position on a mea surable scale of intelligence tends naturally to correlate with her status on the social scale. It ensured that public schools remained the preserve of the upper classes, with grammar schools designed to furnish pupils destined for the professional and business classes with an academic education and, at the base, “secondary moderns” to provide the mentally substandard hoi polloi with a cheap, basic instruction manual for their working life.196 Polanyi made little comment on the restructuring of the schools system but did jot down his thoughts on the critical political role that education would play in the coming socialist transformation. First, it would be vital to the functioning of the Labour Party’s political machinery. Its grassroots members, he recommended, should be trained to “act as agents or commissars for the government” and coached in the sort of “constructive attitude” that would enable them to pronounce on complex issues of the day—for example, “the Nationalisation of the Bank of

England”—rather than simply parrot “the existing mere anti-Capitalist attitude.” Second, if the working class were to lead Britain toward a socialist future, it would have to subordinate its interests to those of the wider public. This would require grasping politically difficult nettles, including the need to implement “austerity,” to confront “the danger of in-

that threatened to lower productivity. Education would be indispensable to ramping up the lofty sense of civic virtue, responsibility, and enlightened class consciousness on which the subordination of class interest to national interest would depend. Third, he believed that the socialist pedigree of Attlee’s government was secured by its base in the industrial working class, but because that class existed in a raw form, it would have to be properly tutored if the socialist adventure were to enjoy any genuine prospect of success. Many workers who had cast their votes for Labour, he soberly observed, were oblivious to the fact that they were supporting a socialist program of government, and education was essential to raising their consciousness of their own interests.197 For politics to be fully pervaded by democratic norms and practices, education would be indispensable. In no field was this more pressing than in foreign policy, and to this end, Polanyi wrote a WEA pamphlet, The Citizen and Foreign Policy, which presented the case that all citizens should keep themselves informed on international affairs.198 If his commentaries on the actions and inactions of Attlee’s government are taken as a yardstick, it was foreign affairs that particularly engaged Polanyi’s interest. The Labour Party had entered office at a historic moment, just as the postwar settlement was being maneuvered into place. In opposition the Party had promised radical new thinking in foreign affairs, yet on entering government, it instead acted swiftly to reconstitute Britain’s traditional imperialist agenda, at least insofar as frailer economic conditions allowed.199 On this question, Polanyi was a traditionalist. Rather than viewing Britain’s imperial decline as something to be actively encouraged, he shared the Establishment view that it was a threat to be forestalled. He foresaw a new world order in which Britain, the United States, and the Soviet Union would operate as a power triangle in a global framework secured by international law and


forms of labor resistance, such as “absenteeism [and] unofficial strikes”

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flation,” and to put an end to restrictive trade union practices as well as

the United Nations, and was close to an impor tant strand of mainstream opinion that urged that each of the three powers maintain a sphere of influence, with Britain heading a Western Eu ropean and Commonwealth bloc. Britain, he proposed, should maintain its “free hand” (an independent foreign policy) and “should try to increase her influence on


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the Continent and in the world.”200 It would be “the natural leader” of postwar Europe, and “should feel free to make use of this lead.”201 In this perspective a crucial question was how obliging Washington and Moscow would be. The bottom line, for Polanyi—and in this he represented a minority position—was that the hand of friendship had to be extended to Russia. If it were not, with relations becoming freighted with ideology, Britain’s prospects of evolving in a socialist direction would be irreparably damaged. “The future of mankind,” no less, depended on “successful Anglo-Russian co-operation,” and this would of course possess par ticular salience on the European continent, which he advocated should be divided between British and Soviet spheres.202 Less clear was how Britain should relate to the United States. In the early 1940s he had encouraged and applauded America’s rise to globalism. He held a number of U.S. leaders in high regard, above all Roosevelt and also, more equivocally, James Byrnes, who presided over war time economic planning. While stateside, Polanyi had used the forums available to him to agitate for American entry into the war, warning his audiences that if its abstention were to continue, Germany and Japan would come to “dominate the two Oceans” and might even force the United States to relinquish its hegemony over Latin America.203 In the postwar period he maintained that Britain should accept America’s interest in “her Oceanic security” and should devote itself to collaboration “with the USA in reconstructing the Planet”—except where this would hinder cooperation with the Soviet Union. 204 While dismayed that Whitehall was “reluctant” to roll up its sleeves “and help to fi ll in the terrifying vacua of the political globe,” he lauded Byrnes and his crew at the State Department, who were “working for peace with all their might, and have done a very good job”—notably by collaborating with the Kremlin in the restoration of China as a sovereign power.205 In its combination of collaboration and rivalry, Polanyi suggested to an audience in London in 1943, the relationship between Britain and the

United States bore comparison to the Prusso-Austrian “struggle for supremacy” that had ended with Prussian victory followed by half a century in which the Habsburg Empire acted as junior partner, prior to its implosion in 1918. (On hearing this comparison, one member of the audience grinned good humouredly. He was a representative from the U.S. Em-

The year 1946, he now cautioned, in an article published in Kenneth Muir’s Leeds Weekly Citizen, could mark the beginning of Britain’s 1776—a tipping point that sees longstanding oppression transmute into unstoppable resistance. Colonial America had been “deprived by a tyrannical England of the means of protecting herself against the sweep of the mother country’s superior trade,” he reminded his British audience. “Yet the stranglehold of English trade on the Colonies in the eighteenth century was no more cruel than American free trade imperialism threatens to be to a rejuvenated England, in the twentieth.”207 What real-world events had provoked this allegorical about-face? In line with his interpretation of the war as a moment in the world-historical struggle for democracy rather than as an inter-imperialist conflict, Polanyi had anticipated that the war time spirit of democratization would converge with the ethos of the New Deal to produce a planned social transformation in the United States and Britain, one that would ramify globally as the postwar settlement was nailed into place. Woven into this geopolitical prognosis was the “capitalism versus democracy” thesis of The Great Transformation, interpreted in party-political terms: the Labour Party and New Dealers on the side of democracy versus Wall Street and the Republican and Tory parties. 208 It is within this conceptual framework that the shift in Polanyi’s historical metaphor should be understood. Although hopeful of a global left turn, he was lucidly aware that Washington was steering in quite the opposite direction. In Europe, democratic socialism was rejuvenating Britain, and Russia was pioneering new forms of social organization, but across the pond the United States was positioning itself as the bastion of the old order. The promise of the New Deal on the domestic front should have translated into plans for a new world order constructed on “a semi-regional basis,” but instead, once “big government” had restored economic growth by


Polanyi portrayed Anglo-American relations had changed dramatically.

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bassy. 206) But three years later the historical metaphor with which

means of arms production, Roosevelt reversed course and steered the United States and the world toward “the economics of the gold standard and free trade”—those “primitive Trotzkyist forms of capitalism,” in Polanyi’s impish phrase. 209 If one puts oneself in American shoes, the U.S. “retrospective utopia of a restoration of the pre-1914 world,” he


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cautioned, does not appear “phantastic.” If Britain “can be won over or coerced over, the plan is feasible . . . and the USSR then might be forced to give in.”210 The coercion of Britain took the form, principally, of conditions attached to Lend-Lease and obligations undertaken in connection with a large U.S. loan (the Anglo-American Financial Agreement) and the Bretton Woods Agreements. In the words of its supplicant, Chancellor of the Exchequer Hugh Dalton, the conditionalities attached to the loan aimed to help His Majesty’s Government “to make sterling convertible and to adopt a liberal commercial policy on the lines favoured by the United States Administration.”211 To many citizens it seemed that unfair treatment was being meted out, and support for the United States slumped, from a high on VE day to a low in 1947. (Ilona, in a letter to Karl, drew his attention to the “anti-American wave” that was sweeping the nation— above all “the ordinary people, people like the old lady in Kensington Church Street who runs an antique shop and one day put out a poster which said ‘Americans not served.’”212) Opposition to Washington’s grand strategy was manifested on the floor of the House of Commons on two distinct occasions. One, in December 1945, saw the Bretton Woods Agreements whipped through, but with twenty-nine Labour and seventy Conservative MPs voting against it. 213 The Tory backbenchers who led the parliamentary revolt protested loudly that Bretton Woods would force Britain back onto the gold standard, although their antipathy was in truth fueled by indignation that Washington was cajoling Britain to abandon the Imperial Preference system (whereby trade within the empire enjoyed duty-free status). The second revolt, in November 1946, saw unrest on the government’s own back benches over its general conduct of foreign policy. It was led by Richard Crossman. He had been a Labour “Popular Fronter” in the 1930s and spoke for a broad constituency in his party who advocated cooperation with the Soviet Union, citing the disastrous consequences of the late-

1930s rebuffing of Moscow. Crossman chided his front bench colleagues for having yielded “to the views of the Opposition” on foreign policy and advised the government to “recast its conduct of International Affairs as to afford the utmost encouragement to, and collaboration with, all Nations and Groups striving to secure full Socialist planning and control

Britain orchestrating a Third Force of European social democracy that would mediate between the two superpowers and prevent the world sundering into hostile blocs.214 This was Polanyi’s view too. He applauded Crossman for having, in effect, “announced the slogan of an independent British foreign policy.”215 It was imperative that Britain deploy its still-colossal political and diplomatic influence to the organ ization of a Third Force, with London taking a lead and “planning, as far as possible, the Commonwealth plus Western Europe.”216 A global red shift was the prize, and it was threatened by U.S. incursions into the domestic economic policymaking of Western Europe’s nation-states. It was imperiled in par ticular by the gold exchange standard that had been envisaged at Bretton Woods: far from being “an innocent institution” as “many, even on the Left,” fondly believed, it was in fact “nothing but preparation of the world for rule by the US dollar.”217 In an article for a provincial newspaper he hailed the Crossman rebellion as a manifestation of the hostility of the “common people of Britain” to the “peril” of Bretton Woods, a system that, together with the U.S. loan conditionalities, was at heart aimed at restoring the gold standard. “ Under the cloak of free trade demagogy,” Bretton Woods represented a declaration of war “on controlled foreign economies”—and therewith on the prospects of a socialist Britain, for trade liberalization would give international market forces a free hand in determining the character of par ticular industries, and this was inconsistent with high-octane economic planning. Britain, he insisted, “must remain free to manage her currency, she must be free to plan her foreign trade.”218 Polanyi identified several political forces and actors that were attempting to derail Britain’s socialist trajectory. There was Wall Street and its “ruthless Republican” allies, whose fi ngerprints were all over


structing “a democratic and constructive Socialist” foreign policy, with

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of the world’s resources.” There was, he pressed, the possibility of con-

Bretton Woods alongside those of Keynes, who had “destroyed his life’s work” by pledging himself to the interests of “Republican big business.”219 There was the Tory leadership, in par ticu lar Churchill himself, whose goal was to solder “ England to America” to construct “a world bastion of Anglo-Saxon capitalism”—one that, given its antidemocratic nature,


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would necessitate surreptitious methods, with intergovernmental agreements utilized to sideline the proper procedures of public scrutiny and parliamentary deliberation. 220 Fi nally there was the Labour front bench, which had committed itself to “America, or, more precisely, to Republican big business.”221 Foreign Secretary Ernest Bevin, who owed his appointment to his hostility to Soviet Russia, had not only aligned himself with the now strident anticommunism of Byrnes and the State Department but also actively sought to draw the United States into military engagement in Europe and to set Britain up as an American aircraft carrier. 222 His government diverted a colossal proportion of its bud get to arms expenditure (including a nuclear bomb making program), which alone explains why the  U.S. loan was deemed necessary; sponsored a phalanx of right-wing dictatorships from Iran under the Shah to Apartheid South Africa; repeatedly deployed troops to combat left-wing and national liberation movements, such as the National Liberation Front in Greece; and, to Polanyi’s regret, contributed to the creation of a Jewish colonial ethnocracy in Palestine. 223 In all this, Labour was adopting a traditional conservative foreign-policy stance, but was it inevitable? He thought not. He construed the backbench revolt as a warning shot that signaled impending resistance and heralded the “promise of a new solidarity of British Labour and American New Deal.” He called on New Dealers “to fend off Republican free trade imperialism,” speculating that if they succeeded “then the people of Britain may be able, not only to establish socialism at home, but also to carry its principles into all dealings of the Commonwealth.”224 It did not take long for Polanyi’s hopes in the Labour left and the New Dealers to deflate. At home, the backbench revolt fizzled away, and from 1947 on the government pursued its Atlanticist foreign policy unencumbered by any significant backbench disruption. Across the ocean, the New Dealers appeared not to have read the script that Polanyi had written for them. In Washington, establishment figures grouped around former vice

president Henry Wallace had considered the war’s end to be a unique opportunity to bring the promise of the New Deal to fruition: to create a brave new world of law, freedom, and economic development, in cooperation with the Soviet Union. 225 However, the thrust of the New Dealers’ strategic thinking was convergent with the mainstream. In the political

managed by states through multilateral coordination rather than being left to automatic market mechanisms, and that prosperity is best achieved through increased levels of international trade and reduced capital controls rather than the inverse approach that had characterized the 1930s. 226 On these positions, conservatives, such as Cordell Hull, and New Dealers, such as Wallace, were of one mind. 227 Pace Polanyi, Bretton Woods represented not “ruthless Republicanism” but a ruthless bipartisan consensus. Indeed, the key figures in its early stages were Henry Morgenthau and Harry Dexter White, New Dealers both. White’s admiration for Soviet-style planning notwithstanding, the New Deal had been designed to make America safe for market capitalism, and Bretton Woods aimed to repeat the trick on the global scale—and in the process, as an undeclared goal, to facilitate U.S. hegemonic ascendancy by establishing the dollar as the world’s paramount currency.228 The aim, as Morgenthau saw it, was to provide a “New Deal for a New World,” entailing governmental coordination of international monetary operations, the suppression of speculative capital flows, and commitments to economic growth and full employment.229 Following Truman’s accession to the presidency, Morgenthau was shuffled out of the Treasury, and the program’s specifically New Deal edges were sanded down, yet its basic contours remained. 230 New Dealers also figured prominently in the design of the Marshall Plan, formally known as the European Recovery Program (ERP).231 The promise of the ERP was that it would assure the United States a high level of exports at a time of looming economic crisis at home, ward off economic collapse and political strife in Western Eu rope, and consolidate that region as a bulwark against Russia. It was guided by a vision of the United States as the core of an Atlantic corporate liberal bloc, exerting hegemony over a defeated Eu rope. 232 The project involved


geo-economic reorganization: that international payments should be

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elite as a whole a consensus emerged around two pillars of a postwar

restructuring the world economy along lines similar to U.S. corporate capitalism, combating the autarkic instincts of the Eu ropeans, and promoting U.S. interests against Soviet opposition. 233 The ERP’s two principal tasks, marshaling an anti-Soviet political front and reconstructing the European economy on liberal foundations, joined together


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to beget a third, the founding of the European Common Market. As with Bretton Woods, the Marshall Plan and West European integration divided the international Left, including Polanyi’s circles. Being keystones of a postwar U.S.-led liberal world economy, were these initiatives to be repelled or welcomed? His wife saw the Marshall Plan as the “thin end of the wedge to the Truman Doctrine.”234 In contrast, his friend Horst Mendershausen was emblematic of those who laid down the welcome mat. In the 1930s he had been a comrade of Richard Löwenthal and Willy Brandt in the Neu Beginnen [Start Again] movement in Germany. Following arrest by the Gestapo, he fled and secured a post at Bennington. On returning to Europe in 1945, he played a pivotal role in securing a political-economic framework in which Atlanticism could flourish—and his socialist and New Dealer credentials assisted him in this. In Berlin he reconnected to his Neu Beginnen comrades and took active part in the battle to prevent the Social Democratic Party in the Western zones from marrying its half-sister, the communist-dominated Socialist Unity Party. 235 His day job, meanwhile, was economic advisor to General Lucius Clay, the deputy governor of Germany during the Allied Military Government. Clay had opposed the Morgenthau-White strategy of dismantling the German economy, arguing that in the long run its reconstruction as a liberal-market regime would better serve Washington’s interests. As Clay’s aide-de-camp, Mendershausen helped lay the foundations of the Marshall Plan, and in his next position, as a researcher for the Federal Reserve Board, some of his recommendations for the execution of the Marshall Plan and the organization of the International Monetary Fund were directly influenced by Polanyian principles. 236 He also propagandized on behalf of the ERP-spawned Schuman Plan, which established an early institution of European integration, the European Coal and Steel Community (ECSC). For Mendershausen, it represented a happy blend of U.S. power and New Deal (or social democratic) ideology. Its condition of possibility was a Europe that had been

“softened by war, invasion, and defeat, and penetrated by strong constructive influences from the United States,” while its architecture evinced “an ingenious blend of central planning and market economy on an international level.”237 The ECSC, he concluded in an article that helped him secure an appointment at RAND, ranked alongside the Mar-

Polanyi’s views on the ERP and European integration are not as well documented as is his attitude to Bretton Woods, but it is clear that he took the opposing view. He called for a quadripartite reconstruction of Germany within “the framework of an orga nized Europe”239 in opposition to a U.S.-led restoration of liberal capitalism in that country, which represented a dangerous, atavistic move. 240 He seems to have been a critic of the ERP, and loudly applauded the 1948 presidential bid of its best-known opponent, the outspokenly pro-Soviet Henry Wallace. 241 (Wallace referred to it as the “Martial Plan.”) Indeed, he foresaw for himself a role as “pivot” of the Wallace-supporting progressives on campus. 242 As for European integration, his dream of a British-led social-democratic association of European states appeared increasingly distant, given the conservative drift of Western Eu rope and the Cold Warrior mentality of Labour ministers such as Bevin. According to a letter whose authorship is not beyond question but is probably by Polanyi, he viewed the Schuman Plan with apprehension. Written in 1950 or 1951, it refers to the leaders of France, Italy, and West Germany as “reactionaries or turn-coats” who had “decided to throw in their hand, completely, with America.”243 Britain, “despite Bevin and the acceptance of Marshall dollars,” had remained “socialist enough” that it did not follow their lead wholeheartedly, and yet European integration was throttling the prospects of its involvement. In his reading, the aim of the Schuman Plan, “implicit and unspoken, but nevertheless real and threatening is to FORCE BRITAIN TO CO- OPERATE IN A CAPITALIST WESTERN EUROPE on pain of economic (and therefore social and political) extinction,” with, at its heart, the ECSC: “a gigantic capitalist merger of the two basic European industries, [that] will be directed first against socialist Britain,” after which, “when her acquiescence has been wrung out of her, the heat will be turned on Russia.” An Atlanticist integration of the Western


vitality of our civilization on the international plane.”238

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shall Plan and Truman’s Point Four Program as a “bold assertion of the

world, in short, would mark the starting signal for an “onslaught” against Russia, Eastern Europe, and China. This perfidious trajectory, Polanyi writes in peroration, was not yet set in stone. Schuman’s plan could still “be turned into a socialist mea sure, or alternatively, diplomatically defeated.” However, the only instrument with which either


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option could realistically be achieved “is—God help us—the Labour Party of Britain.”244




he uncertainties and flux that marked the post-1945 period on the international scale were mirrored in Karl and Ilona’s own lives, and where they would settle was not clarified until 1950.

Budapest hovered as one option, and friends regularly reminded them of postwar Hungary’s charms. “Things here are interest ing and, at times, even beautiful,” wrote Endre Havas; “life is very dynamic; our spirits fresh and strong, we are working for the nation.”1 Another compatriot who visited Hungary in 1947 and met “everyone that matters”— including the former Galileist and now Communist Party leader, Mátyás Rákosi and his deputy, Ernő Gerő—reported: “my impressions are better than expected. The new regime has deeper roots amongst the population than what one might imagine. It is surprising how fresh the air is in Hungary, and I admit I have become interested in moving home. Of course, there is a large, sulky, recalcitrant mass of people, but I am convinced that 1–2  years of work will ‘persuade them,’ above all when the standard of living steadily rises.”2 However, most of the Polanyis’ close Hungarian family and friends

were in exile, and others had passed away. Following their spat with Károlyi, and after having been warned by an old acquaintance—Rákosi himself—that for their own good Karl should not return, they decided

“with no light heart” to close the book on their Hungarian life.3 That did not, however, prevent them from visiting their homeland. In 1946 Ilona undertook a tremendously rewarding trip to Budapest and thence to the countryside to study land reform.4 Later the same year Karl was invited to deliver “a solemn address” at the Pázmány Péter Catholic University


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in Budapest.5 With the help of Denis Healey, a Balliol alumnus who headed the Labour Party’s International Department and commanded a hotline to the Foreign Office, he was given clearance for the trip and for a seat on a flight to Prague. Alas, no entry permit was provided by the Hungarian authorities (due to a miscommunication, Polanyi believed), and he had no option but to postpone the journey.6 In 1948 the question of repatriation raised its head again. Friends and relatives were heading to Hungary. Laura’s son George, for example, returned to Budapest, eager to take part in the construction of communism, and Ilona herself spent a good part of the year there. She sent regular reports to her loved ones, describing the sociopolitical transformation underway.7 By 1949, Rákosi had outmaneuvered and diminished rival parties by means of what he termed “salami tactics”—one slice at a time. A communist economy was being fabricated, by which was meant one that was relatively autarkic, with a disproportionate heavy industrial sector, allocation by administrative decision, an extensive use of political incentives to increase productivity, and the mobilization of all resources toward the goal of capital accumulation. The project was summed up by Gerő, in his proclamation that the nation was to be transformed into “a country of iron, steel and machines.”8 Given Hungary’s complete lack of iron ore deposits this was a bold, not to say eccentric, ambition. Ilona hailed the Sovietization of Hungary as a “revolution from above,” spoke admiringly of the Communist Party leadership, and explained away the country’s “present difficulties” as the result of narrow-minded nationalists scandalously elevating “national interests” above “the common interest of defending the Soviet Union against American aggression.”9 “If I am anything politically,” she wrote her daughter, “I am a Hungarian Communist,” and enjoined her to come to help construct Hungary as “a rampart and first-line defence of the Soviet Union.”10 Her husband was more critical than they, of the suppression of political freedoms and

of the breakneck industrialization to which an agrarian country was, he felt, unsuited.11 Yet he too found the prospect of returning seductive, perhaps even on a permanent basis, and in 1948 he pursued the idea of giving up his Columbia job in favor of a research position in Budapest, where he would dedicate his “remaining years to Hungarian scholarship.”12 As

as uniquely placed to construct a broad intellectual “bridge between Eastern orthodoxy and modern scholarship.” That being the case, he confided modestly to Ilona, “I have no doubt in my mind that no greater ser vice could be done to the new Hungary than my repatriation, with my present equipment, experience and outlook.”14 It was the news she had been waiting for. She spoke of Karl’s “downright and unconditional application for repatriation” as “the joy of our life,” and kept a vigilant watch for possible vacancies that he could fi ll.15 Károlyi agreed to act as an intermediary and solicited assistance from the minister of Religious and Educational Affairs.16 Havas, too, wrote a recommendation, describing Polanyi as “well-meaning, honest, and brilliant,” and assuring the minister that “although Polanyi’s views depart somewhat from Marxism, he has a Soviet-friendly attitude.”17 But no suitable post was found. If not in Hungary, where then should they settle? They “loved Britain” and saw themselves as “Britishers.”18 Many close friends lived there, and Polanyi was excited by the socialist vistas that Attlee’s government had opened. Through the mid- to late 1940s he repeatedly expressed a desire to settle there. It would be impossible to “start a new life over here,” he wrote from New York to Sandy Lindsay, for he and Ilona had become “too deeply rooted by events in England’s soil,” and his Great Transformation had been pledged “to the British working people, whatever they may think of it.” Did Lindsay know of any suitable openings? For if one were to appear he would assuredly take it.19 Regrettably, none was forthcoming, and this enhanced the rival attractions of the United States, with its richer prospects of professional fulfi lment. Thanks not least to the G.I. Bill, which funded the tertiary education fees of any “honorably discharged” veteran, Amer ica’s university system was expanding briskly. And although “the intellectual and spiritual bankruptcy” of the left and liberal constituencies was greater in the United States “than anywhere


alongside the prospects for his own flourishing.13 He regarded himself

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principal motivations he cited Ilona’s exclusion from the United States,

else in the world,” this could be turned to advantage, for it enhanced Polanyi’s ability “to do something useful.”20 However, Ilona and Kari were adamantly opposed to settling stateside.21 The New Deal notwithstanding, America remained a stronghold of market capitalism—as Karl was forced to admit. Lines of conflict over where to create a perma-


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nent home ran between Karl and Ilona but also within each of them. A stressful period of indecision lay ahead, with many an unexpected twist and turn.

K A R L’ S C H O I C E , I L O N A’ S T R I A L Polanyi had written The Great Transformation in the United States, and the prospect of developing his research program in that country was enticing. A particularly appropriate venue appeared to be Columbia University. In the interwar years it had been one of America’s premier universities in the social sciences, rivaling Harvard and Chicago, and had attracted some extraordinarily gifted Austro-Hungarian émigrés and refugees—including Bela Bartok, Paul Lazarsfeld, and John von Neumann. 22 Its economics faculty was comparatively progressive, with a long-established cluster of institutionalist economists around Wesley Mitchell, and they drew philosophical inspiration from another leftliberal Columbia don whom Polanyi knew and hugely admired, John Dewey. 23 Arguably, the institutionalist voice at Columbia was faltering, but in terms of the number of doctoral students in economics it remained the country’s leading institution. 24 Mitchell had retired in 1944, but the flame was kept alive by the likes of John Maurice Clark, Car ter Goodrich, and Ragnar Nurkse. In autumn 1946 Polanyi wrote to a Columbia sociologist, MacIver, and to the Amherst economist Walter Stewart to inquire into the possibility of securing a position at a U.S. university. 25 He tentatively asked MacIver whether a one or two-year visiting professorship might be available in the Department of Economics at Columbia.26 Encouraged by the Scottie’s response, he submitted a formal application by letter to Goodrich. If appointed, he intended to conduct research “relating to the place occupied by the economic system in human society,” covering the fields of “Primitive Economics, the institutional aspect of Market-

economy, as well as the International system.” While a position in International Relations or Political Science would be ideal, he added, working in the Economics Department would be perfectly acceptable. 27 It was Polanyi’s good fortune that Goodrich and other institutionalists were well represented on the appointments committee, and his applica-

1947 he embarked at Southampton, bound for New York. 29 Aside from several cruel bouts of illness, and the absence—apart from at the General Studies Economics Club—of inspiring debate, Polanyi’s first months at Columbia were by all accounts “exceedingly” enjoyable.30 He kept busy, “working from morning until evening,” with the hours dividing between “the hotel, the library, and the office.” The last of these, borrowed from  J.  M. Clark (who was on sabbatical), was “enormous,” in contrast to the hotel room, which was “so small that I cannot unpack my things: all I can do here is read.”31 He was warmly welcomed by colleagues. Of the institutional economists, his closest bond was to Goodrich. The latter’s background afforded him a peculiarly nuanced insight into Polanyi’s mindset. He had written his doctoral dissertation, with advice and assistance from Cole, on the inroads made by workers into managerial prerogative in 1910s Britain, the syndicalist upsurge that had brought forth guild socialism, and its published version included a Foreword by Tawney.32 Polanyi’s work also caught the imagination of such anthropologists as Julian Steward, and, as regards the Sociology Department, it hosted the Institute of Social Research during its exile from Frankfurt and boasted a number of left-leaning sociologists, such as Robert Merton, Lazarsfeld, Seymour Martin Lipset, and Charles Wright Mills.33 Although recent recruits, Merton and Lazarsfeld had already become established figures in the department: the former as an authoritative theorist, while the latter, known as the methods man, was well on his way to achieving the heady status of “dean of social science methodologists” in the United States.34 Together with Talcott Parsons, Merton and Lazarsfeld made up what Pierre Bourdieu has referred to as the “Capitoline triad” of U.S. postwar sociology, and Polanyi engaged with all three.35 Parsons was the wizard of sociology’s major contemporary theory, functionalism, and had


his delight that it had been approved, albeit for one term only. In January

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tion also received support from Stewart. 28 Within a week he learned to

co-authored Economy and Society, a tome that Polanyi praised as being of genuine and lasting importance and deserving of critical appreciations in two chapters of his Trade and Market in the Early Empires: Economies in History and Theory (hereafter: T&Mkt).36 The other two, Merton and Lazarsfeld, offered vital encouragement to his major re-


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search projects of the 1950s. Polanyi and Merton were on warm and mutually admiring terms; indeed, no one apart from MacIver was more friendly and helpful toward his work at Columbia than Merton.37 The two met frequently, engaging in discussions that ranged from sociolog ical topics, such as class struggle or Max Weber’s social theory, to the economic history of the ancient world and Marx’s early manuscripts. 38 Polanyi knew Lazarsfeld, too, and shared drafts of his work with him.39 Exactly when they met is not known, but they had belonged to a similar milieu in 1920s Vienna, where Lazarsfeld, a social democrat fi rebrand, had set up the party’s youth group and its newspaper, before crossing into academia.40 His career-defining moment arrived with a pathbreaking study of the sociology of Marienthal, a small industrial town suffering from staggeringly high unemployment, which he co-directed with Marie Jahoda and his boyhood pal Hans Zeisel—Polanyi’s nephew. Later, in 1930s New York, he received support from the Institute of Social Research and collaborated with a number of its members, including Polanyi’s friend Erich Fromm.41 He and Polanyi were unquestionably acquainted by 1940, in which year the latter limned him as “an amazingly nice, able and intelligent chap.”42 Polanyi found himself situated betwixt two departments: the sociologists saw him as an economist, while the economists thought the reverse.43 His work caught the imagination of the economist Arthur R. Burns, but on the whole the sociologists were more receptive to his ideas, and his closest contact, at least initially, was MacIver, a warm, candid, and supportive colleague who quickly made the newcomer feel at home.44 It takes little imagination to see why the two bonded so closely. MacIver was on intimate terms with British leftists such as Laski and knew continental Europe well, particularly Austria. The lifelong theme of his academic work was community, the principles that bind human beings together “in a common life.” Community was the title of his first book, while his second, Elements of Social Science, was written explicitly

for the benefit of WEA classes in Britain.45 MacIver greatly admired the work of his new colleague, to the extent that when Princeton University conferred an honorary degree on Michael Polanyi, he snorted that the honor had been bestowed on “the wrong Polanyi.”46 He encouraged his new friend in his research, enjoining him, for example, to submit an

corner of what you have to say, and make a whole long article out of it.”47) Polanyi declined MacIver’s suggestion, perhaps because he was not quite decided on the direction that his research should take. Contractually he was committed to preparing a politically oriented sequel to The Great Transformation, yet the weight of his intellectual engagement was moving ever further toward economic history, and he was entertaining the idea of writing a text book on general economic history.48 After his term at Columbia ended, Polanyi undertook a short tour. Its coordinates, planned with friends and relatives in mind, included Chicago and Bennington, with a detour to Toronto.49 It gave him the opportunity to reflect upon his four months in the United States. They had been simply idyllic, and although, ceteris paribus, he planned to return to London in June, with no secure position awaiting him there, he submitted an application for renewal of his contract at Columbia while also cultivating contacts at other institutions.50 His eye was trained on Chicago in par ticular. Not, of course, its economics department, which, as Marschak warned him, was so laissez-faire that his prospects of success were exiguous, but its social science department was regarded (alongside Columbia) as a preeminent venue for the critical exploration of the cultural underpinnings of modern industrial society.51 Polanyi wrote to a political scientist and an anthropologist at Chicago, wondering aloud whether a visiting professorship with “limited teaching obligations” might become available.52 No sooner had he posted these supplicatory letters than a telegram arrived from Goodrich that confirmed his reappointment as visiting professor of General Economic History, this time for a full year.53 It was followed later the same week by a letter from David Riesman that enjoined him to come instead to Chicago, where staff in the Department of Social Sciences had unanimously supported his appointment as full


ple of economy should be applied to the writing process. “Just take a wee

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article to the American Economic Review. (But, he remarked, the princi-

professor.54 Not long afterward a third bid arrived, from the Dean of New York’s New School of Social Research. 55 In view of the offers of secure employment that were all of a sudden cramming his mailbox, Polanyi was ecstatic—as might be expected when one recalls the insecurity that had shadowed him down the years: the sturdy world he had


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known as a child had been cruelly shaken in 1905, followed nine years later by the breakdown of Europe’s political and ethical fabric; when he eventually gained permanent employment, it was not long before fascism loomed, and the jobs he then took in British exile were precarious in kind; and although The Great Transformation had been well received in some quarters, he was now nearing the end of his working life. In his failed job applications in Britain, and still more in the United States, his age, he believed, had been “the precluding factor.”56 Hence, as it now dawned on him that he had at last achieved security, recognition, and a solid base from which to build his future research, his jubilation knew no bounds. “I began to feel entirely unknown things,” he wrote Ilona, “surprising states of inner movement, small warm springs bubbling forth, as if little birds sang which I had never heard. For days— two days, three!—the ‘birds’ and the ‘springs’ spoke.” He was overwhelmed by a sensation of tranquillity, which “came from this: I had security in life. A profession. A living. A [job]. My own work. No black emptiness in front of me. No certainty of perishing. . . . No strain of the morrow flashing into the void after tomorrow.” It was a feeling the like of which he had “never known.”57 If the dilemma as to which offer to accept was not unpleasant, neither was it easy to resolve. Columbia’s attractions were obvious. It offered a higher salary and demanded fewer teaching hours.58 A position there would provide Polanyi with “the authority of a teacher at one of the topmost graduate faculties,” with the prospect of influencing a new generation of graduate students as well as carry ing on with the course that he had been teaching—which would also provide the basis for a textbook on “primitive economics” that he was preparing. 59 Yet while both universities were offering a fixed-term contract as visiting professor, Chicago also gave “the definite intention,” in writing, that it would later be made permanent.60 In addition, the week he had spent in the Windy City had injected a powerful argument in its favor, for it was when there, on campus, that he had come to realize that Chicago “wants me for the

sake of what I am,” unlike Columbia, which was prepared to take him “in spite of what I am.” With that, his mind was made up. “I have to choose Chicago,” he wrote Ilona, “and I do so gladly. The whole College of Chicago stands behind the decision to get me. And they are doing all that’s humanly possible to overcome age limit, finance, curricula, every-

One cannot but wonder how Polanyi’s trajectory would have evolved had he moved to Chicago. Would his proximity to Leo Oppenheim, the Viennese émigré who was shortly to take the reins at Chicago’s Oriental Institute, have deepened his interest in Assyriology? Would he have sparred with the economists Frank Knight and Milton Friedman? Would Knight have publicly red-baited him in the 1950s as a purveyor of “socialist propaganda,” as he did Polanyi’s friend, the institutionalist economist Karl-Wilhelm Kapp?62 Such questions will remain unanswered, for in late June he received, entirely unexpectedly, a telegram from Columbia with improved terms: the position would still be only a visiting professorship for one year but with the salary ($7,500) of a regular professor and with minimal teaching.63 Only now, he wrote Ilona, “did I realize the true strength of my position: I was being offered carte blanche.”64 For a while he continued to wrestle with the decision and sought advice from friends and acquaintances. Lewis Mumford, the polymath and urban critic, recommended that teaching Columbia students would be more rewarding, and for good mea sure added a swipe at life in Chicago: “a fate I’d hardly be tempted to wish on my worst enemy; outside university circles it is an intellectual desert.”65 Columbia, then, it was. In this instant it seemed that the coordinates of contentment were slotting seamlessly into place. Polanyi foresaw a busy and cheerful year or two in New York, with Ilona at last by his side. Their love for one another remained undimmed, and from their correspondence one could easily mistake them for newlyweds. “My sweetheart Dicki,” begins one letter from Ilona, “how loveable and human the Holloway Road looks, from the top of the No. 14 bus, coming back from work with a surge of happiness around one’s heart. This surge comes when I think of you nursing the students’ minds, educating, influencing, fighting your way—but most of all it comes of your confidence, and that we are one.”66


ber 15, and he would begin teaching a fortnight later.61

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thing.” The University would have their lodgings prepared by Septem-

In his response he rejoices that “every thing we were praying and hoping for 25 years, so far as our own union was concerned, has come to fruition,” adding that although the world was “more endangered and more desolate” than it had been for decades, “many people” were crying out for his writing and for his leadership: he was forging an instrument


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with which to “break the backbone of the old world.”67 From his secure base at Columbia he would be able to spread the message far and wide. Striking a new note, he urged her to move to New York forthwith. The moment of bliss twinkled briefly before expiring under two blows. In July 1947, only days after Polanyi’s commencement at Columbia, Ilona was involved in a car accident. Her injuries were slight but significant, and they appear to have shaken Karl badly, as can be attested by notes from his dreamlife—to which he normally paid scant attention. The most fearful mare visited one night in August. In the bleak dreamscape he could dimly make out a structure with narrow, low compartments. The last of them was wrecked, with Ilona lying on its floor. Sheathed in a thick film of filthy grey dust, she resembled a worm that, having been dropped and rolled, had become coated with dirt. It was a frightening sight; heartbreaking to see her lying there, unconscious, able to do nothing but breathe—and in this most puzzling of locations, a smashed cubicle. There she lay, in a pitiable state and close to death: a smallish, flat, gray object, merely breathing. Polanyi was petrified by the scene, transfi xed by the horror of the wreck, and his wife’s wretched condition.68 The second blow was not of metal but of paper. It was delivered more gradually but was incomparably more severe; its object was not Ilona’s flesh but her immigration status. She, it will be recalled, was reluctant to move to New York and had been comforted by Karl’s promise that his position at Columbia would “definitely” not be renewed.69 In early summer he had assured her that he intended to return to London within months, yet now, with his unexpected swing of fortune and mood, he was committed to remaining stateside for a year or more, and informed her that he was “assiduously saving” to “meet the expenses of our settling.” Albeit with mixed feelings, she applied for entry to the United States, confident that her application would be granted. Columbia’s presidency, no less, had lobbied the State Department, and the latter, Goodrich assured Polanyi, would certainly have intervened in the London Embassy on her behalf.

Their status as permanent resident aliens in the United States, Karl promised, was “unassailable and unexceptionable.”70 Her last exit from the United States, moreover, had been as a returning “war-volunteer, in possession of a re-entry permit”—and it contained an appended text, handed to her before she set sail, of an “Anglo-American gentleman’s

ment” remained valid.71 But were these assurances watertight? Following long and “nervewracking” delays, the American embassy began to signal that they might not be, and on August 20 Ilona received, from the vice consul, an invitation to attend an interview.72 The political backdrop was America’s slide toward McCarthyism. In 1938 Congress had set up the House Committee on Un-American Activities and then passed the Hatch and Smith Acts, which rendered advocacy of a domestic change of political regime a criminal offence. In 1940, the Voorhis Act endowed the government with broad powers to exclude political radicals, and a year later Congress granted consular officers sweeping discretionary powers to deny visas to any would-be immigrant who might be suspected of endangering “the public safety,” however defined. After having praised Stalin’s regime during the war, the  U.S. Establishment in its aftermath executed a hurried volte face. Communism was no longer a staunch ally but a menace, classed alongside venereal diseases and tuberculosis as a malign threat against which immigration controls should be marshaled. A further milestone was reached in March  1947, when President Truman signed the notorious Loyalty Order, under which several million federal employees were inspected for patriotism deficiency syndrome, with defenestration for those deemed guilty of harbouring admiration for Marx and Lenin or of preaching the overthrow of the bourgeois state. In the same year, the Truman administration slammed the door on all foreign communists, apart from those holding diplomatic passports.73 These dark clouds were either invisible to Ilona or far from her mind as she breezed into her interview on September 9 in a mood that was bright, verging on the nonchalant. But as the process began to reveal some quite callous and Kafk aesque edges, her self-assurance melted away. Secretaries were sent to fetch dossiers. Officials with hushed voices


was required so long as the reentry permit and the “gentleman’s agree-

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agreement” that “safeguarded her status.” On the face of it, not even a visa

convened to discuss her case, and over the course of the nearly six-hour session, she was repeatedly asked to leave the room. It was when she was given to understand that the interview’s purpose was not to establish the legal technicalities of her citizenship status and reentry permit but to discuss her “background”—her beliefs and past political


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associations—that she realized that it was a “farce” with a preordained verdict. Asked about her beliefs, she replied that she had “no beliefs in abstracts” but had faith in the country of her citizenship, Britain: in its way of life and its future independence “both of Russia and of America.” Was she a socialist, they asked, and could socialism be achieved by nonviolent means? Yes, she replied to both, adding that she did not belong to a “party or organisation.” But had she, they pressed, belonged to “a party” in the past? At this point Ilona ceased attempting to give her responses a blurry patina or patriotic spin and “told the bastard” that she had belonged to the Communist Party in the early 1920s.74 The upshot: Duczynska was barred from entering the United States “for good.” 75 The decision was one of the many “inane injustices and inhumanities” committed by the  U.S. Immigration and Naturalization Service—an agency that, as James Wechsler once put it, seems to specialize in the application of “quiet, prolonged mental torture.” 76 Formally, the decision was made under the provisions of the JohnsonReed Act of 1924, a law that was infused with a racist (and anti-semitic) spirit; its thinly veiled rationale being to reduce immigration from Eastern and Southern Europe. For its purposes the nationality of the wouldbe immigrant was determined not by current citizenship but by country of birth. The decision to refuse her visa application, however, came not from the general legal provisions of the Act but from the discretionary powers afforded by a decree of 1941. In short, Ilona was debarred on the grounds of communist ethnicity, not Habsburg birth. Polanyi had assumed that the granting of his wife’s visa was a fait accompli, and the news of its rejection in perpetuity came as a cruel blow. He raged at the “farce” of an interview, reserving par ticular irritation for reports that embassy officials had cast doubt on his wife’s integrity and had disregarded her war record as an engineer at the Royal Aircraft Establishment.77 Acting out a form of denial, he zeroed in on a

minor aspect of the case: that at the time of the interview Ilona had still been suffering aftereffects from her car crash. Concussion, he intimated, showing more condescension than medical expertise, had reduced her “to a state in which it is doubtful whether she fully understood the true intentions of the questioners.”78 He played down the extent to which the

he reasoned that Ilona’s exclusion would not be forever. He swore that he would do his utmost to help her appeal the decision, and if that failed, he would return to work in Britain for a year or two . . . or, he ventured, might Canada offer an alternative solution? Ilona could perhaps sojourn 1947–1948 in Toronto? She would be able to continue her studies and to become acquainted with members of the large Hungarian community, with its cohort of “progressive” activists.79 Later on, if she secured Canadian citizenship, she would surely be permitted to travel to New York to visit him. Or might he even find work in Canada?80 In truth, Ilona had understood the embassy officials’ intentions perfectly well, and her relations with Karl grew vexed. It appeared that he had been concealing from her the extent of his desire to prolong his sojourn stateside and had paid little heed to her preference for Europe. Fueled by this underlying contradiction, the conjugal crisis deepened. What had begun as a divergence over where to settle had been acutely aggravated by Washington’s decision to thwart their desire to live together in the United States. The matter became further inflamed by personal resentments and misunderstandings in a manner that was, in this other wise so marvelously warm and consonant a relationship, profoundly unsettling. Ilona experienced her visa denial as an act of spiteful hostility that revealed a meaningful truth. During the interview she had correctly “assessed America and what it stands for,” but the embassy officials had been equally accurate in their assessment of her; and therefore the decision “has validity.” She could not fight to go to the United States, as Karl was imploring her to do. “Had I single-mindedly willed to go there at any cost,” she pointed out to him, “I would now be there, only it would not be me.”81 The visa decision, she added, would not be reversed, given that she would not go back on any of her interview


it retained considerable respect for political freedoms, and on this basis

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United States had been infected by anticommunist mania, avowing that

statements, and in the unlikely event that it were, it would involve her being “blackmailed and gagged.”82 Therefore, he should remain at Columbia for the year while she would deliver a little payback to her interviewers by taking a stand “for Islam”: returning to Communist Hungary to “help in the building up of the country.”83


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In Polanyi’s response to this challenge a rather histrionic trait made an appearance. He had, one letter begins, taken step after step “to overcome the perils of distance and delay” that dogged their communications but each act had only given rise to “absurd misunderstandings [and] increased difficulties.”84 In self-pitying gear, he urged her to consider his sufferings: years earlier he had been “on the brink of insanity” after having “seemingly overcome pressure to act against my conscience” and yet, when set against even that bleak period, the present danger was an order of magnitude greater. “Assuming that we are doomed” (the tone shifts from lachrymose to catastrophist), “and that we must both perish—and perish in vain—what shall we do? I say: let each of us perish alone. Maybe you have a chance of survival. I have none. I can therefore agree to your going your own way, and try myself to do my duty to the end.”85 Having outlined their prospects in words of frozen despair, he then cast around for avenues of hope. On news of her exclusion he had immediately thought of moving to Hungary to be with her, but this would only make sense if they truly were prevented from settling in North America, and that remained unresolved. Ilona, he insinuated, in a line of reasoning as unjust as it was disingenuous, was expressing a lack of will to join him! Had she not permitted their relationship to be overdetermined by her “personal quarrel with the USA?” Why, he pressed, had she not put up a fight instead of accepting “the threats of the Vice Consul at their face value?” Her clash with the U.S. authorities appeared to him a “sudden inspiration” that had hardened into an obsession, which was now casting shadow over their future together. That she blamed her rejection on the vindictiveness of the U.S. authorities was a clear-cut case of bad faith, to which she should own up. He “could bear the idea” of Ilona going her own way, he sighed in mawkish peroration, but only so long as he was convinced that she was being candid with herself and with him. The bottom line was that she must cease persuading herself that she had “been forced to a course of action while actually choosing it freely.”86

By this point the row had become an acute crisis, and the couple turned to Doug Jolly for counsel. 87 Polanyi’s friendship with Jolly harked back to their time in the Grant-Macmurray circle. Jolly had then departed for Spain, where he spent two years as a frontline surgeon with the International Brigades—Britain’s “most impor tant volunteer” in

in recognition of his efforts.88 Given that he was close to both parties— and that he was known for his compassion, generosity, and loyalty as a friend—he seemed the ideal interlocutor.89 After having been apprised by Karl and Ilona of their readings of the situation, Jolly fired off a searing letter to his “darling Dicker.” Polanyi was, he blazed, flagrantly elevating his own needs and desires above those of his wife. One simply cannot “use another person as you now use Ilona,” and he should desist at once from pressing her “to do something that she cannot do with any hope of becoming the person she could be.” Of course, her love for and belief in her husband would ensure, sooner or later, that she would submit to his demands. But if he pushed her too far, if he continued to insist that she move to North America, the risk was that the edifice of their marriage would be saved but at the cost of the destruction of her soul. “I don’t think the real essential Ilona can, however much she wills it, do this thing,”90 Jolly concluded. Polanyi ignored his friend’s sermon and ultimately got his way. But the victory had to be gradually consolidated through a process of persuasion and accommodation. Cautiously, he began to tempt Ilona to dip her toe in the waters of Lake Ontario. In promoting Canada, he drew on a number of cultural stereotypes, confirmed by MacIver (who knew Toronto well). Canadians tend to assert a moral superiority over their encroaching neighbor, regarding their nation as more social and less materialistic, and as “an English country,” its inhabitants regarded Britain as their motherland and ensured that arrivals from there feel “doubly at home”; plus, it  embraces intellectuals and foreigners—a warmth that compared favorably with Britain, where the former are “branded” and the latter are  “permanent outsiders.”91 (Ilona knew this only too well. She had encountered obstacles in fi nding work during the war on account of her Austrian nationality.92) He began to look into the practicalities of


Medical Corps, and was awarded a military Order of the British Empire

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that campaign, according to some—before returning to join the Army

accommodating Ilona with acquaintances in Toronto. One offered that she may stay as a guest, in exchange for “helping a little” with the household chores.93 Compromises were made too. For several years Polanyi refrained from committing to a future in North America, and although in 1948 he applied


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for a teaching position at the University of Illinois, a few months later he also put out feelers for a position in Hungary, as discussed above. His commitment to Columbia firmed up later the same year when the Council for Research in the Social Sciences endowed his $7,000 salary as director of an interdisciplinary project on the origins of economic institutions, yet only a year later he declined a proffered reappointment at Columbia and declared his determination “to return to England for good.”94 In the latter half of 1949 he was able to spend a sabbatical with Ilona in London, where he picked up some WEA teaching and rooted around in the British Museum’s collections on the West African kingdom of Dahomey. 95 When he returned to Columbia in early 1950, it was again on a temporary basis, for one term only.96 To Karl’s delight, Ilona did begin to consider settling in Canada, but her journey resembled less a straight line than a slow spiral. She spent the winter of 1947–1948 there, and several months in 1949. Finally, in 1950, she moved permanently to Pickering, a suburb on the Eastern outskirts of Toronto. There she bought a small, cobwebby cottage perched amid trees on the edge of the steep bank of the Rouge River just before it entered Lake Ontario, and with a charming garden that she planted with poppies and other flowers.97 For several years, Karl would spend university vacations with her before, in 1953, he retired from his teaching position and moved there himself. For some years he remained adjunct professor at Columbia and co-directed the so-called Interdisciplinary Project (the findings of which were published in T&Mkt), and would travel by train or plane to New York every month or so during the summer and winter semesters to host his economic history seminar. 98 Even then, Ilona was prone to bouts of intense loneliness, and the couple did not envisage Pickering as their definitive place of retirement.99 After she underwent major surgery in 1954 they again discussed plans to return to Britain and began to put them into practice. He applied for a research fellowship at the University of Manchester, declaring to his Columbia col-

leagues that due to his wife’s ailing health he would “look for a retreat in England” where he envisaged “a busy retirement.”100 But the application was unsuccessful, and not long afterward his own faltering health closed

One cannot know for sure whether the decision to settle in North America was the right one for Ilona, but her husband flourished. In the first few months after his arrival, work was hampered by suboptimal living conditions, Columbia having soft-pedalled on its promise to fi nd him an apartment, which obliged him to spend a while in a “rooming house.”101 But before too long an apartment had been found at the opposite corner of Columbia’s Morningside Heights campus, which he shared with the Hungarian writer Nikolas Halasz. It was in the Upper West Side, a neighborhood frequented by Central European refugees—including Laura. She lived just around the corner (and attended one of his economics courses).102 Other acquaintances, such as Julius Holló, the Polanyis’ family physician, lived close by.103 Following his arrival at Columbia, Polanyi spent four years “as if in the fever of a single workday.”104 He would rise very early and, while preparing breakfast, listened for the thunk of the New York Times as it was dropped at the door.105 After acquainting himself with the news, he would prepare lectures and seminars for his graduate courses on general economic history and the economic institutions of antiquity (Babylonia, Israel, and Greece).106 His work would be undertaken either at his bookstrewn home or in his office on campus—which, being modeled after the Athenian agora, must have felt a peculiarly appropriate location. Before retiring at the end of the day he would tidy his room, a task that could sometimes take “almost an hour, so great is the chaos.”107 Polanyi’s seminar on General Economic History continued until 1953. It was attended by graduate students and a sprinkling of economics faculty (including Goodrich and Burns108) as well as guests, such as Kapp. The material basis for his research was provided by Columbia University together with funding from a variety of institutions, principally



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the door on further peregrinations.

the Ford Foundation. It paid his salary until his retirement and thereafter provided for his travel and other costs associated with his seminar series on economic institutions (also known as the Columbia Interdisciplinary Project)—including a monthly stipend for Ilona, who, in spite of the anthropologist Conrad Arensberg’s advice that hiring close


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relatives would be frowned on, acted for a time as research assistant.109 It was a major disappointment when Ford cut the flow of funds in 1958 and the Rockefeller Foundation turned down a grant bid, but Polanyi was able to keep the seminar alive with assistance from other bodies.110 Teaching was enormously pleasurable, and Polanyi’s lectures would often spill over into long seminars in which he would seek to counter students’ miseducation by teachers of more orthodox persuasions.111 On occasion he would invite his class to the College Lounge for a beer or two and discussion of politics and current affairs.112 He had come to regard academic life less as a profession than as his vocation, a track from which he had been derailed when expelled from university four decades earlier.113 Yet the fit between Polanyi and American university life was not wrinkle-free. “He was not an academic but an outsider,” recalls one of his graduate students, Anne Chapman, which is why his colleagues— such as Arensberg, with his Ph.D. from Harvard, and Oppenheim, the distinguished Assyriologist—“were so important to him. In the academic world you have to be on the list, you have to have an entrée. Arensberg and Oppenheim did that for him.”114 In some respects Polanyi appeared an unlikely professor. He would dress formally, always with either a tie or a bow tie—except when on vacation in Pickering.115 “He did not look like an academic,” recalls Robert Halasz, the son of his flatmate. “There was nothing tweedy about him. He wore suspenders and hiked his pants up to well above his waist: it looked very peculiar.”116 In other respects, he conformed to the professorial stereotype. Although “not quite the dissociated academic,” recalls Don Grant, he was hardly a practical type: if, say, a friend asked him for assistance putting up a curtain rail he would refuse, and would trot out all manner of reasons in justification.117 Halasz remembers him “spilling a glass of milk as he sought to explain the gold standard to me,” while his father recalls being roused in the early morning hours by a telephone call. “It came from the border, since Polanyi, returning to Canada by train, had

left his passport behind.”118 Similar anecdotes concern his arrivals at Toronto airport, where employees could occasionally be seen chasing after the absent-minded professor to return a mislaid pair of gloves or a scarf.119 One would like to suppose that the grain of truth in the scatty professor stereotype derives less from one’s age than from immersion in one’s

simply interested in lecturing but encouraged dialogue; for he wanted to penetrate the subject more, to see if others could shed additional light on it. He was very orga nized, and open—interested in what others thought, always wanting to know more.”120 He was possessed of an omnivorous hunger for knowledge and a ceaselessly inquiring mind, and was adept at finding novel insights even in everyday materials. His strength, in Moses Finley’s view, “lay in asking questions and calling attention to misinterpreted or ignored texts” (even when “he himself produced absurd or indefensible answers”).121 A good example of this occurs in the recollection of his great niece, Jean Richards, who visited him in Pickering when he was conducting research on the economies of ancient societies. “He was reading the Lord’s Prayer, just to himself. Suddenly he jumped up: ‘Oh my God, they had the rationing system! “Give us this day our daily bread!’”122 Year by year Polanyi’s seminar attracted new graduate students who would go on to work closely with him. Original examples were Harry Pearson and Walter Neale, followed in the early 1950s by Finley, Chapman, Marshall Sahlins, Abe Rotstein, and Terry Hopkins.123 At his seminars he “relished being the maître,” Chapman recalls; “he wanted his work to become known, and liked to have a knowledgeable and interested audience.”124 He was proud to have developed a new “sociolog ical” approach to economic institutions, was bent upon training “a group of young scholars” in his methods and was confident that they would be able “to proceed” with the project.125 But his approach to the mission was relaxed. He did not, according to Rotstein, “deliberately or consciously” plan to found a school, believing instead that if one’s approach is convincing enough, “it would carry on without him.” “‘New ideas,’ he would say, ‘are carried forward by many tramping feet.’ So, a lot of the work was about educating students, getting his perspective shared by others.


apace during his years at Columbia. Chapman recalls that he “was not

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work, and, certainly, Polanyi’s teaching and research were progressing

There wasn’t ever a practical design, but a notion that if clear ideas that made sense could be put forward then the basic mainstream perspective on the economy could be shifted.”126 Undoubtedly his strengths included the ability to set up a research space—his seminars—in which ideas could be freely exchanged, as well as the drive to turn those ideas


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into a finished product—notably T&Mkt. He was slightly less efficient at collaborating on writing projects with colleagues or former students. Weighing in at only four pages, the chapter of T&Mkt that he authored jointly with his co-editors, Arensberg and Pearson, is the exception that affirms the rule. Alongside Arensberg and Pearson, Polanyi’s closest collaborators in the mid-1950s were Finley and Chapman. In contrast to the majority of his students, they were well acquainted with socialist movements and found his conceptual language easy on the ear.127 In the late 1940s Chapman had belonged to a socialist milieu in Mexico, a country that “was much more intellectually open than the USA.” Although never “officially” a communist or a socialist, she did “have that background,” and for that reason he “felt freer with me than with many others.” The two worked together closely, and at one stage he employed her to assist with seminar organization.128 Finley, her senior by ten years, had been a doctoral candidate at Columbia in the 1930s, where he associated with members of the Institute of Social Research and wrote for its journal.129 When he met Polanyi he had his doctorate and some notable published articles under his belt, but through his engagement with the older man the theoretical side of his work flourished. The two began to exchange ideas intensively in 1951, when Finley was researching The World of Odysseus—a book that might not have found the shelves had its author not encountered Polanyi.130 The influence was mutual, and some of Polanyi’s writings on Greece, including “Aristotle Discovers the Economy,” drew heavily on conversations with Finley. According to Mohammad Nafissi, Polanyi was “the mentor that Finley’s formative years had prepared him for,” although the younger man was never deferential toward his mentor, and his personal comments revealed a good deal of critical reserve. (One letter calls Polanyi’s theory of economic integration “a dead duck.”131) The close relationship lasted until 1954, when Finley accepted Polanyi’s offer to work as a research assistant on the Interdisciplinary Project.132 However, he

had been fired from a good teaching position at Rutgers (for refusing to cooperate with McCarren’s witch-hunting committee) and now to be undertaking relatively menial tasks in a poorly paid position as Polanyi’s factotum evidently chafed.133 From then on, relations deteriorated, and Finley withdrew his promised chapter on Aristotle from T&Mkt.134

Pearson—both of whom were “outstanding writers” with “great promise”—as well as the “brilliant young sociologist” Terry Hopkins.135 The same epithet could equally have applied to a graduate student introduced to him by Hopkins: Immanuel Wallerstein. He recalls Polanyi as “extremely likeable and intelligent, in an admirably open way,” and “very interesting, not least with his Christian-socialist value system which was relatively rare.”136 In this pantheon one should also mention Marshall Sahlins, who engaged closely with Polanyi while writing his doctoral dissertation and went on to apply his typology of economic patterns of integration (reciprocity and redistribution) in his work on Polynesian economic systems.137 Polanyi’s most zealous, not to say pugnacious, disciple, however, was George Dalton. He had attended the master’s lectures in 1950, but it was not until the end of the decade that their intellectual dialogue, if that is the right term, got underway.138 Dalton has the distinction of being the neophyte who most frequently received stinging flak from the guru. In one missive, not aty pical, Polanyi hurls a volley of highfalutin and, to a substantivist, utterly merciless insults at his former student: “Your defense of redistribution . . . is not only catallactic, but the Benthamite variant of it: utilitarian.”139 This letter, the stung acolyte replied, made him feel “like a heretic in receipt of a Papal Bull telling him why he’s been excommunicated from the communion of the True Church.”140 A late addition to the pews was Paul Medow, who participated in Polanyi’s Seminar on Non-Market Institutions in the late 1950s. Although “very naïve” when it came to political affairs, he possessed an “outstandingly creative theoretical mind” and had the added bonus of having been born (in Prague) to Russian narodnik émigrés.141 “The real trouble with the world these last 40 years was that the Russians had gone,” Polanyi wrote his brother. “Well, Paul is one.”142 Medow was “the boon” of


high regard, including the anthropologist Paul Bohannan and Harry

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Alongside Finley, Polanyi held a number of his collaborators in

Polanyi’s old age, and the pair looked forward to collaborating on a sequel to The Great Transformation, provisionally titled The Great Transformation in the Sixties.143 When the young man was appointed to a position at Rutgers University, he inaugurated an economics doctoral program that, an evidently thrilled Polanyi reported, was “based on our


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approach” and as such represented the first attempt in the United States “to subordinate the analytical approach to the institutional in the field of Economic Growth and Development.” It represented “a breakthrough,” he exulted, and “it may well catch on.”144 It would be remiss to leave unmentioned two other former students with whom Polanyi attempted collaborative research projects of a booklength kind. One, the anthropologist Rosemary Arnold, was appointed by Polanyi to the position of executive secretary of his Interdisciplinary Project in the early 1950s. Her research on the organization of trade on the Guinea Coast helped stimulate his work on money and on the social structure of Dahomey.145 They worked together on a volume, posthumously published (in Polanyi’s name) as Dahomey and the Slave Trade; An Analysis of an Archaic Economy, while Arnold contributed in addition a brace of chapters to T&Mkt, on Dahomey and its port of trade Whydah (or Ouidah).146 Their research contained original aspects and attracted admiring attention from eminent scholars, such as Max Gluckman, but the collaborative process deteriorated, apparently due to Arnold’s resentment at what she perceived as an insufficient appreciation of her labor, and it eventuated in a fierce dispute.147 A more enduring relationship was forged with another former student, Abe Rotstein. His contact with Polanyi had commenced fleetingly in 1951 and became substantial some years later, when he won a NATO fellowship to study the problem of international trade “in the face of the threat posed by the Russian trade monopolies and the constricting market orientation of the free world.”148Over the next decade they collaborated on two manuscripts. One, Dahomey and the Slave Trade, already existed in draft: when Arnold pulled out, Rotstein was roped in. The other was the long-postponed sequel to The Great Transformation. Originally to be titled Freedom from Economics, its aim, as conceived in 1952, was to “theorize the adjustment of the world to a post-market society, with the economy ‘consciously embedded’ in non-economic institutions.”149 By the mid-1950s the title had been altered to The Great

Transformation in America.150 It would kick off with a historical analysis of the development of market society in the United States, followed by chapters exploring the “re- embedding” of the economy in “non- economic institutions: the trade union, the corporation, the government,” the “significance of functional finance,” and a final chap-

between the world’s political and economic orders.151 By the late 1950s the project’s envisaged subject matter had shifted again. The new working title was Freedom and Technology, and its subject matter would rove across wider areas, including “George Bernard Shaw, Sartre and the Existentialists, Robert Owen, [and other] philosophical and metaphysical issues.”152 Despite the repeated revisions to title and rationale, little material progress was made. Of course, the two men were working concurrently on Dahomey, but Polanyi’s perfectionism played a part too. This was a disease that he was ill-equipped to handle when he was the victim but able to expertly treat when diagnosed in others. One such was Hopkins. When perfectionism prevented him from writing a promised chapter for T&Mkt, Polanyi “got it out of him by telling him to sit in a room and not to come out until he’d finished it.”153 But he was less vigorous in applying the same medicine to himself. As a rule, he would refuse to let any manuscript be put to bed if he considered that even one further round of revisions could be performed. For one of his essays, recalls Rotstein, “I counted forty drafts!”154 This was the chief reason why Freedom and Technology remained in the bottom drawer. “We never got fully into it” because Polanyi “never let Dahomey go.”155

THE MARKET IN THE MACHINE As has been widely noted, a modulation occurred in the balance of Polanyi’s interests between his British and  U.S. periods. In The Great Transformation the section on precapitalist societies is the least developed, but by 1948 these had become his main focus, and it stayed this way. What explains this development? Did his immersion in anthropology and ancient history represent a fl ight from political-economic disappointments? While in Britain he had been an enthusiast for a number of political projects, from the Popular Front through to Attlee’s government,


update the exploration in The Great Transformation of the interactions

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ter, “Freedom and Peace: From Economics to Politics,” that would

and had been involved with the Christian Left and Károlyi’s Free Hungarians, but in America the ground was stonier. Left-radical Christianity had thrived in niches in the 1930s, and links had been forged between communist and Afro-American church groups around the defense of the Scottsboro Boys, but in the 1940s all this was dormant and


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would not revive until a decade later.156 The industrial militancy of the 1930s had been co-opted and its mid-1940s after-tremors repressed. The radicalization that had so enlivened the New York intelligentsia in the 1930s had subsided. An index of this was the lurch of Commentary, a periodical in which Polanyi published, from its origins as a bulletin of the  anti-Stalinist Jewish Left to a flagship of liberal—increasingly, neoconservative—anticommunism.157 Whereas in Britain, Polanyi had regularly lectured to activist audiences, in the United States such invitations did occasionally crop up—such as a lecture delivered to the Fellowship of Socialist Christians—but they were exceptional.158 Not only were his favored social movements in decline but also the same period witnessed setbacks to many of his chosen political projects. He had nurtured hopes of a radicalization of the New Deal and of a Labour-guided socialist renaissance in Britain, not to mention a revitalized Eastern Eu rope under Russia’s benign hand. By the late 1940s he must have recognized that the New Deal had been comprehensively colonized by corporate interests, that Attlee’s government was dependably wedded to NATO and capitalism, and that Moscow’s overlordship was anything but benevolent. That his hopes revealed themselves to have been delusions must have been disheartening. With this context in mind, Sally Humphreys has argued that Polanyi’s trajectory in the 1940s involved a politically occasioned rupture. In The Great Transformation he had failed to combine his socialist and “primitivist” perspectives and now, given that his move to the United States was “from a political world to an academic one,” he found himself able to escape that failure by separating the two segments of his thought. The socialist aspect, with its underscoring of the contradictions of capitalism and the perspectives of socialism, was allowed to wither. Thus, during his American period, his economic historiography no longer focused on the study of market society but precapitalist societies. This represented a turn from politics, and it was illustrated, too, by his unwillingness to elab-

orate “the implications of his theories for America’s post-war problems.” His concern “with the problems of socialist economics” remained subdued, reemerging only “in his last years in his connection with the review Co-Existence, lectures in Hungary and Italy, and his influence on Medow’s work on the humanistic aspects of economic planning.”159

1950s, and I find her conjecture that this reflects his transplantation to stonier political terrain largely persuasive.160 However, she errs in supposing that “the problems of socialist economics” no longer remained at the heart of his work. In an impor tant sense, as Nafissi has argued, his research on precapitalist societies represented a logical progression, a further elaboration of the concerns of The Great Transformation.161 It included, as we shall see, what Polanyi regarded as core topics of “socialist economics”: the decline of the market system, its ideological legacy, how to reintegrate the economy into society, and how to democratically control science and technology in the approaching stage of “machine civilization.” In the process, he was groping toward a new way of construing the relationship between industrial and commercial society, centered on the concept of the “machine.” The machine and the market system had long been conceived by Polanyi as co-constitutive. To unleash technology’s full powers, he had explained to a Bennington audience in 1941, “we transformed human society into a self-regulating market, and adapted our thoughts and values to this unique innovation,” but the system had broken down. Humanity could no longer believe in the “self-regulating society” and had to learn instead to “regulate our society ourselves.” From this social epiphany “a new ideal of man” and a new humanism will be born, one dedicated to harnessing “science and power” to the needs of the common people, and the Machine Age during which humankind had willingly and often enthusiastically subordinated itself to the needs of machine production will come to an end.162 In The Great Transformation this thesis was developed further. One of its axial arguments was that the transition from isolated and regulated markets into a self-regulating market economy had been occasioned not by “any inherent tendency of markets toward excrescence” but by the “artificial phenomenon of the


overtly political topics in Polanyi’s writings of the late 1940s and early

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Humphreys is correct to identify a decreasing preoccupation with

machine” introduced into commercial society; it was the use of elaborate machinery that prompted the development of the factory system, and therewith “a decisive shift in the relative importance of commerce and industry in favor of the latter.”163 In these texts Polanyi’s formulations on the market and the machine


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exhibited ambiguity. “The machine” led to the market system, yet at the same time it steered the transition from commercial society toward industrial society. If one conceived of industrial capitalism as an integral social formation that was approaching collapse, as he had done in the 1930s, there was no pressing need to pick apart the tangle. But if market society was dying while industrialism (or “machine civilization”) continued to thrive, the relationship between the two required attention, and it is to this puzzle that he devoted himself in the postwar years. In the process his argument took on a Weberian ring, but whereas Weber was “convinced of the superiority of the market system”164 and defi ned the problem as that of maintaining individual autonomy in a world increasingly subjected to the inexorable machinery of bureaucratic administration, for Polanyi the iron cage is constructed by the machine itself. It stamps the market, and through it society in general, with a mechanical imprint of standardization and automatism.165 A minor waystation in Polanyi’s conceptual shift can be seen in a lecture at the University of London. In it, he identified mechanization as an epoch-making disruptive factor in recent human history. Namechecking William Blake, John Ruskin, and Morris, he attached himself to the tradition of critical thought that identifies the machine as something to be feared. It is mechanized industry that caused the dislocation of “the delicate balance” between humanity, labor, and nature, as exemplified by forced urbanization and the deterioration of the human soul in the “artificial surroundings” of the factory. Such maladjustments of human development could not realistically be laid at the door of a social formation, capitalism, for that would be to overlook the fact “that capitalism was introduced precisely in order to orga nize machine production.” Therefore, although market capitalism was visibly receding, it would be survived by the problem of how to deal with the machine. The phase of industrial civilization in which the economy existed as “a separate and distinct ‘economic sphere’ in

society, controlled by a system of markets” was over. A new phase was about to begin.166 This evolving research program was given greater definition in two articles written just before Polanyi left for America. The first, “Our Obsolete Market Mentality,” begins with the stentorian announcement

minism,” deploys Toynbee’s challenge-and-response motif in proposing that competitive capitalism, having represented humanity’s “initial response” to the “challenge of the machine,” was now on the “downgrade”— across the globe and most manifestly in Eu rope.168 As the fabric of liberal capitalism faded, the new challenge had come into view: “the portent of an industrial civilization, with its paralyzing division of labour, standardization of life, supremacy of mechanism over organism, and organ ization over spontaneity.”169 The society forged by the Industrial Revolution had “unhinged the elements of man’s being,” and “may yet destroy man”—for we are not yet in a position to “gauge whether, in the long run, man and machine are compatible.”170 This, the problem of industrial civilization, was the true challenge facing humanity, and not, as some supposed, “the problem of capitalism.”171 In developing a response to the challenge of the next phase of industrial civilization, two options offered themselves. One, technocratic in nature, continued the rut of the previous century, in which human beings had been forced to adapt to the requirements of industry. The democratic alternative would seek the opposite. It aimed to resolve the “problem of industry” by way of “the planned intervention of the producers and consumers themselves.”172 To achieve this goal would be no simple matter and was rendered particularly refractory by the legacy of market society, which had so violently landscaped the ideological terrain. Market society ticks to a determinist logic and a “materialistic morality”; it assumes that human behavior dances to an economic tune, motivated by the utilitarian calculus of hunger and gain.173 Human beings had internalized this logic; they had become accustomed to serving as slaves to the machine. If democratic planning were to succeed, Polanyi averred, it would have to be “disciplined by a total view of man and society” quite unlike that


fear and trepidation.”167 The second, “On Belief in Economic Deter-

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that “The first century of the Machine Age is drawing to a close, amid

which prevailed in market society, and to prepare the ground for this required something that he was uniquely placed to provide: a systematic debunking of liberal-market ideology.174 It was here that the value of studying precapitalist economies revealed itself, for it is by estranging ourselves from our existing society that we come to reflect critically on it


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and recognize as fallacious the assumption that economic behavior can be universally modeled as if it were market-oriented individual action. The fieldwork in “primitive economies” reported by such anthropologists as Malinowski and Richard Thurnwald, not to mention Polanyi’s Columbia colleague Margaret Mead, had demolished the assumption that egotism and a propensity to barter and exchange are cultural universals and had revealed “primitive society” to be, in a sense, more humane than contemporary market society “and at the same time less economic.”175 They had demonstrated that, outside the market economy, attitudes toward everyday economic life tend to be determined socioculturally and not by “the utilitarian logic of the means of production.”176 What thrilled Polanyi in the emerging ethnographic evidence was that the lack of a primary orientation to material gain displayed by “primitive” people was evidently a function of the structure of their society, and this opened a window onto new ways of construing “the economy” that were radically different from the contemporary capitalist norm. Thurnwald, to whose ideas Polanyi devoted several lectures each year (and to whom he wrote “my indebtedness to your work was great from the start, as my The Great Transformation shows”), had identified “reciprocity” as an orientation that pervaded “every relation of primitive life.”177 In the Pacific islands investigated by Raymond Firth and Malinowski, purely economic institutions did not exist; nor did “the economy” assume the form of a separate and distinct sphere. Rather, economic structures (division of labor, patterns of distribution, etc.) were overdetermined by noneconomic values and institutions: community absorbed economy; it directed it, or infused it with its values, rather than being governed by it as in liberal capitalism. In this sense the economic systems of “primitive” societies were invisible: they were submerged in the totality of social relationships. The best-known term with which Polanyi described the relationship between economic institutions and the social order was “embedded-

ness.”178 We do not know what inspired the choice of vocabulary. In his own journalistic writings from the 1920s similar terms can be found— for example, to depict the way in which a mutualized economy could be “built into” the social order.179 Perhaps, too, he noticed the term used in 1932 by the American institutionalist economist Walton Hamilton: an

of a people.”180 More likely, he noticed its usage by Thurnwald. Indeed, some credit Thurnwald as the originator of the concept. As Jens Beckert points out, citing Firth, Thurnwald used the term “embedded” (eingebettet) in Die menschliche Gesellschaft.181 However, Firth and Beckert overlook the fact that Thurnwald’s usage is unlike Polanyi’s. For the German anthropologist it denotes the fact that individual economic activity is rarely isolated but is plugged into the community’s broader economic circuits. Used thus, embeddedness is synonymous with economic cooperation or division of labor. In the mid-1930s Polanyi used the term in a similar fashion. Thus, in notes on Mead’s Coming of Age in Samoa he penned “embeddedness” against this paraphrased passage: “The emphasis was never upon what an individual did, neither upon his skill nor upon the size of his catch or harvest, but always upon its place in a larger social situation.”182 However, his subsequent usage expanded its referent from individual concrete acts to the relationship—algebraic, so to speak—between ensembles of social relationships, such as economy and society. (One of his very first dissertation students at Columbia, he reported with satisfaction to his brother, was studying “industrial order” from the viewpoint of “embeddedness.”183) Opening the aperture wider, from “primitive” societies to the entire sweep of human history, Polanyi observed that economic behavior is generally governed not by the egotistical pursuit of material goods but by motivations of pride, prestige, public approbation, and private reputation. As late as the eighteenth century the economies of Western Europe were still “submerged” or “embedded” in society, with material labor and livelihoods governed by overlapping systems of institutions and not by an autonomous self-regulating market. It was not until the nineteenth century that the latter crystallized out as a separate system, and when it did, an inversion occurred: society now became “embedded in the market,”


permanence, which is embedded in the habits of a group or the customs

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institution “connotes a way of thought or action of some prevalence or

with all institutions attuned to its rhythms. The impending task for humanity, in this prognosis, was to adapt industrial civilization to the requirements of human existence, a mission that would require a battle against the economistic fallacy and the prejudices bred by economic determinism. In casting such illusions aside, human beings would


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awaken to the rich heterogeneity of their motivations and gain the freedom to consciously “create and shape” their society.184 In short, the great transformation remained a tangible historical potentiality and continued to dictate Polanyi’s research agenda. In one sense, he saw his task as philosophical, even spiritual: to lay “a new foundation for understanding the meaning of life in an industrial civilization.”185 This preoccupied him until the end of his life but, a dozen lectures and several fi les of unpublished texts apart, it yielded relatively little. In par ticular, his attempt to update The Great Transformation with the assistance of former students faltered, as outlined above, and ultimately fizzled out. However, two tasks in the fields of economics and economic history were better suited to his new institutional position at Columbia and were more productive, as evidenced in numerous lectures and journal articles as well as two monographs and an edited volume. Of these tasks, one was deconstructive: to debunk the economistic fallacy and, relatedly, to demonstrate the novelty of the market economy. The other was constructive: to elaborate an array of concepts to assist scholars and policymakers develop instruments of industrial democracy and democratic planning in a mixed economy.186 Both tasks required some conceptual ground-clearing, but also, above all, empirical research into “primitive” and archaic societies. One should not, Polanyi insisted, underestimate the contemporary relevance of the study of ancient history; indeed, it “may prove to be one of the most urgently needed tool-boxes for the conceptual mastery of the problems of everyday life.”187 In 1947 his focus was on the political-economic dynamics of nonmarket societies in general (which he referred to under the rubric “primitive feudalism and feudalism of decay”188) but by the end of the decade he had zeroed in on classical Athens and Dahomey. What captivated him about these two polities was that despite being separated by two millennia, they had both discovered ways of effectively reconciling “economic planning with the requirements of markets.”189

His economic and economic-historiographical agenda, Polanyi believed, would contribute to a broader, spiritual-political mission. “It is not for the economist,” he remarked platonically, “but the moralist and the philosopher, to decide what kind of society we should deem desirable.” But economists, insofar as they recognize the economy is “an instituted

condition, an obstacle to social progress, and the principal source of the pessimism that so fatefully saps our confidence in our capacity to shape the future. To them falls the task of repudiating myths: that political gains, such as democracy and civil liberties, are bequeathed to humanity courtesy of the market system; that economic justice is only attainable at the cost of political freedom; and the mainstream understanding of economic behavior as scarcity-induced choices made by individuals acting to maximize utility. In such ways, critical economic historians could underlabor for the philosophers; they can demonstrate that humankind “can afford to be both just and free”—and if that requires some reduction in efficiency in production or greater economy in consumption, so be it.190 The “awe-inspiring challenge of an industrial civilization” required the elaboration of “wider concepts”: a new institutional and historical methodology with which to approach the problem of absorbing “our industrial economy into the fabric of human society.”191 Such were the core concerns of Polanyi’s research agenda. The approach to economic analysis that Polanyi developed at Columbia, which he dubbed “substantive economics,” was based avowedly on the method of institutional analysis.192 He saw his role as updating institutionalism for the dawning age in which, he predicted, market behavior was bound to decline. “With the recession of market institutions from dominance,” he wrote Rotstein, somewhat cryptically, “the substantive meaning reasserts itself in the guise of institutionalism. This is a ‘convergent’ movement: the fringes of the market-system are hemmed and patched with the same patterned cloths (American institutionalism) as are displayed in the whole cloth of the non-market systems of the past and, although maybe to a lesser extent, of the future.”193 The convergence of which he spoke was between American institutionalism and its Eu ropean historical and sociolog ical cousins,


mainstream of their discipline is a chief cause of the world’s precarious

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process,” are perfectly able to see that the dogmatic, determinist

exemplified by Weber and Henri Pirenne. As the market economy receded, he believed, “the scope of its theory and method is reduced and institutionalism automatically comes to the fore.” American institutionalism “as conceived by Veblen, Mitchell or Clark, and historical Institutionalism of the Weberian type are converging towards a general


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theory of economic institutions, the main methodological instrument of which is institutional analysis.”194

THE ECONOMISTS’ PENDULUM While sketching out his brand of historical-institutionalist economics, Polanyi sought to situate its position in the pa norama of economic thought. Its “philosophical fount,” he told Finley, was Aristotle.195 In the Greek phi losopher’s understanding, humankind is “naturally selfsufficient,” with the economy conceived of “as an instituted process through which sustenance is ensured.”196 The elementary institution that mediates production and consumption is the domestic household, the oikos, and it is constituted not by possessions but by individuals: parents, offspring, and slaves. In modern Europe, Polanyi elucidated, when political economy began to be constituted as a science, its practitioners treated the economy, much as did Aristotle, in “substantive” (or “societal”) terms, with reference to its organization of material subsistence and its institutional structure. Montesquieu regarded economic institutions as “formed according to their function in the framework of society as a whole,” and the physiocrats and Adam Smith elaborated the concept of wealth on essentially substantive lines.197 But the 1780s marked a watershed. In Joseph Townsend, and still more in Malthus and Ricardo, a sense emerged of the economy as an institutionally distinct sphere. Drawing on the “individual-cum-contract” postulate of Enlightenment rationalism, these authors “established the modern concept of a separate autonomous economic system, governed by economic motives, and subject to the economic principle of formal rationality [i.e., economizing].”198 In their work the “substantive element” withdrew “into the postulates of population (Malthus) and diminishing returns of the soil (Ricardo).”199 The new conception was of economic behavior as resulting “from the boundlessness of man’s wants and needs, or, as it is

phrased today, from the fact of scarcity.”200 This represented the antithesis of Aristotle’s position, for he had “explicitly rejected the scarcity postulate.”201 The nineteenth century, in Polanyi’s optic, witnessed a pendulum swing in economic theory. The formalist (or “economistic”) approach

joinder in the shape of neoclassical economics, spearheaded by Carl Menger. 202 In Polanyi’s schema Menger plays a complex role. In seminars he would praise Menger’s theory of value and the “market process” as “one of the greatest feats of the human mind” for its demonstration “that price resulted from human activity.” Price, accordingly, can be viewed as an attribute of the person and the social relationship rather than of the item itself—in opposition to Polanyi’s bugbear, the idea that value inheres in the commodity. 203 However, the Austrian and his cothinkers erred grievously in equating rational economizing behav ior with economic activity as such, in representing scarcity as a natural condition, and in its corollary: the assumption that the subject of economics is the allocation of scarce resources to meet unlimited human wants. 204 Post-Menger, the pendulum swung back once again toward the societal, as evinced in early institutionalism, which advanced critiques of classical economics’ individualistic and positivist methodology. Institutionalists of German and American schools alike were acutely aware of socioeconomic change and fiercely critical of classical economics (in particular its individualistic conception of human beings as governed by natural laws). They were closely attuned to contemporary research in biology and anthropology and to the new thinking on cultural variation and the evolution of societies to which it had given rise.205 Polanyi’s own work was powerfully influenced by German and American institutionalism. He was sufficiently familiar with the work of Veblen that he could venture the gnomic assessment that “Veblen’s secret was that he was a socialist, and the secret of secrets was that he wasn’t.”206 Although critical of his tendency “to discount the relevance of market laws for capitalism,” he found much with which to agree, and lauded Veblen as “a prophet of the ‘substantive’ rebellion against the reign of the ‘formal.’”207


Frederick List, Carey, and Marx, which in turn sparked a formalist re-

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of Malthus and Ricardo was countered by the societal approaches of

If German historicists and American institutionalists deserved accolades for their endeavors to transcend marginalist economic analysis, they had failed to develop “a positive conceptual system.”208 It was Max Weber—a thinker who, like Menger, appears chiaroscuro on Polanyi’s canvas—who attempted to achieve that positive synthesis. While ac-


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cepting marginalist economic theory, he was critical of the notion that free markets provided the basis for a stable social order; rather, the economic sphere had to be shaped by ethical and political concerns, and the study of their workings required a theory of institutional structure. Weber had studied under the institutionalist economists Karl Knies and Wilhelm Roscher, and with them he concurred in discussing capitalism principally in terms of its “rational” orientation, which, understood as an ethical ideal (or “spirit”), contrasted with the paternalistic culture of feudal society in which self-interest is subordinated to community and duty. 209 In his research on capitalist development in Prussia, he advanced a thesis that was characteristically historicist in its counterposition of culture to economics. Viewed in purely economic terms, the transformation of rural Prussia was progressive, but this had come at the expense of an erosion of the ethical and political foundations of the nation. This illustrated Weber’s wider concern with the unstable aspects of capitalist society. The market alone could not provide the foundation of a rational social order; its operation had to be confined within limits set by morality and by states—the latter conceived as broadly benign impersonal entities that guarantee civil order and progress.210 Given that the social preconditions for a cohesive capitalist society could not be discovered in the self-interest of market actors alone, the study of economics required supplementing with a theory of its cultural integument (or spirit) and of its institutional structure. While at Columbia, Polanyi conceived of his approach to economic history as a critical appropriation and updating of Weber’s project. Shortly before departing for New York, he had, in a letter to Michael, disclosed that he was reviewing Weber’s life work “in the knowledge that it will have to be done all over again if it is to be brought up to the level of understanding attainable in 1947.”211 Weber’s merit was to have been the first to stake out the space of “general economic history” and to have populated it with conceptual tools aimed at understanding “the place

occupied by economic systems in human societies.”212 Additionally, he found inspiration in Weber’s distinction between the formal and substantive rationality of economic behav ior. (The former refers to the quantification and calculation of economic activities, the latter to the degree to which economic activities serve “ultimate values.”213) But he

pology, had fallen victim to the economistic fallacy.214 He identified the economy with the market, subscribed to the myth of the human need to truck and barter, and had in consequence been unable to push his formal/substantive dichotomy toward its proper, radical conclusion. 215 This was a task that Polanyi set for himself. The nub of Weber’s error was that he had fallen into a semantic trap concerning the twofold meaning of the term “economic.” Polanyi suggests that one, the formal meaning first formulated by Menger in 1871 and popularized by Lionel Robbins, had come to identify economics with economizing, defining it as the study of rational choices between alternatives in conditions of scarcity. 216 But if Menger, as originator of the formal meaning, had been the first to spread the disease, in his later work he inadvertently invented the cure by providing an alternative, substantive meaning: economics as the study of “material want satisfaction,” a science that takes its cue “not so much from the mind and its rationality as from the body and its needs.”217 He had therewith fashioned a concept that, in the hands of institutionalists, offered a practicable basis for a general theory of the human economy that would embrace history and anthropology and could be consistently applied across all human societies, in contrast to formal economics, which puts only market phenomena before its lens and can be of no assistance in understanding “primitive communities.”218 In view of the importance of the distinction between the two meanings of the economic, that so many social scientists had confused them was scandalous—albeit understandable, given that the ascendancy of the market system had in practice led to a coincidence of the two meanings. In promoting the “miscegenation” of the meanings, Weber, alongside Alfred Marshall, was the “chief culprit,” and this defect in his theory explained the basic flaw in his approach to  economic history: he assumed that the scarcity axiom applied to


perhaps due to his neglect of the nascent discipline of economic anthro-

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did not uncritically embrace Weber’s method. The German sociologist,

precapitalist societies. 219 Whereas Weber, on the basis of his flawed schema, believed modern rationality had become disengaged from values, for Polanyi, the modern economy has become disembedded from society. 220 By way of this historical conspectus of economic thought, Polanyi


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situated his own approach. One may defi ne it as Aristotelian, with “Aristotle’s reciprocity and redistribution,” enriched by the fi ndings of contemporary anthropology, adopted to model the basic patterns of economic interaction, and with additional stimulus from American institutionalism and from Weber’s “general economic history” (the shortcomings of this fi nal input having been remedied with the aid of Menger’s substantive defi nition). 221 In Polanyi’s understanding, the substantive element points to the commonalities of all economies, while the institutional dimension draws attention to the differences. In Polanyi’s substantivist theory, a certain functionalism may be discerned. Functionalism, as developed by Durkheim and by such anthropologists as Malinowski and Alfred Radcliffe-Brown, conceives of society as an integrated, coordinated system generated by the nature of humankind. It holds that social institutions exist to fulfi l specific social needs, with a given set of social relations viewed as an integrated whole to the extent that they are functionally complementary. This is Polanyi’s conception, too. His method claims applicability “in all the social sciences that touch upon the economy and its place in society” and aims specifically to provide the basis “of an ‘economics’ of nonmarket economies.”222 In claiming that the substantive meaning represents the only truly universal pa rameter for the purposes of comparison between economies, he was asserting the necessity for understanding economic activity in its relationship to the general ends of society as a whole.223 In his institutionalism, likewise, a functionalist aspect is evident. In it, the economy is “a matter of organization,” with organization defined in terms of “the operations characteristic of the working of the institutions” and with institutions, in turn, conceived according to their function—the ser vice they provide to the community. 224 Economic institutions embody purposes in the use of resources and in the valuation of efforts that enable the disparate economic elements to become integrated and embedded in society as a whole, ensuring its stability and

unity. This determines the central task for the economist: to seek the “form of integration” of the various elements of the economic process.225 That process “is integrated to the extent to which the various movements are interdependent, i.e. exhibit a tendency to be a function of one another.”226

standing of the economy of early societies, especially of the phenomena of commerce, money and market,” and to “lay the foundations for a comparative economic history.”227 It would seek scientific answers to a range of questions: How to define the differences between, for example, “primitive economies” and industrial capitalism?228 How does an economy function in the absence of a market system? And in the absence of market exchange, how is economic integration effected?229 These puzzles dominated Polanyi’s research throughout the 1950s. His fi ndings were published in T&Mkt and in two posthumously published books, The Livelihood of Man and Dahomey and the Slave Trade: An Analysis of an Archaic Economy.230

THE CITY ON THE HILL As Polanyi conceived it, his research “really belongs to classical economic history,” yet this did not make it antiquarian. Its goal was “to serve and widen our interest in the present,” for the central problem facing humanity was “the rivalry and the possible combinations of [a] system based on markets [and one based on] scientific overall planning.”231 The three volumes prepared during his North American years all study premodern exchange institutions; their purpose is to confirm that economic integration can be achieved through redistribution, reciprocity, and institutional price-setting. 232 He was particularly interested in past economies that successfully combined markets with “effective central planning,” and many passages echo to the sound of his puzzling out the implications for contemporary economic orders. 233 Studying Hellenic society in par ticu lar offered illuminating insights into modern economies, for both market and planned systems in a sense originated in Hellenic cultures—the former in classical Attica, where “small scale


operational goals, he disclosed to Jaszi, were to provide a new “under-

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By 1950 the contours of Polanyi’s research program had been fi xed. Its

planning” coexisted with retail food markets, the latter through the adaptation of Pharaonic methods in the “large-scale bureaucratic planning” of Ptolemaic Egypt. 234 The Greeks of antiquity, Polanyi effused, “whose genius was already credited with giving birth to our politics, philosophy, science, and art, were also the initiators of all ad-


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vanced human economy.”235 What doubled the importance of this thesis, Polanyi confided to Finley, was the paradox that while the ancient Greeks were the initiators “both of market-trade and of the elaborate type of planned economy,” they were wholly ignorant of economics!236 Hellenic philosophers, for example, saw no need to develop a theory of prices, for these were subject to political regulation, and they knew no sharp distinction between political and economic power. In their world, economic resources principally took the form of personal ser vices, the disposal of which “was orga nized through relations of a non-transactional character, such as kinship, clientage, or semi-feudal dependency.”237 The planned economy of Ptolemaic Egypt was not “economic” in the modern sense of the term, and the markets of ancient Athens, whether retail markets or leases in land or silver mines, were “regulated by the polis with its political and moral discipline (not by market laws, which is what the economic historian unfortunately still means by ‘economic’).”238 Classical Athens was Polanyi’s city on the hill. It demonstrated that elements of redistribution, reciprocity, and market exchange could be effectively fused into “an organic whole,” and it exposed as risible the modern supposition that liberty and the centralization of power are antithetical principles. 239 The Athenian democratic polis exerted its discipline over the economic and social spheres and over the individual too, but this was not a negation of liberty, for freedom came through participation in the state, with the polis and its laws perceived as “the institutional embodiment of justice, and morality.” With its systems of office rotation and selection by sortition, Athenian democracy represented, at least as applied to citizens, the triumph of the principles of equality and participation in a manner that lent every citizen “familiarity with the intricate workings of public administration” and ensured that justice was not served up by alienated bureaucracies but was embodied in institutions of which every citizen possessed inside knowl-

edge. 240 Citizens participated cheerfully and dutifully in the Assembly and jury ser vice, in festive processions, sporting events, and theater per formances, as well as in business and other material practices. The good life was understood to focus on engagement in public activity and not as the mere aggregated satisfaction of individual wants. Acquisition-

democratic polis was that it enabled “central state planning to be accomplished and made effective without a bureaucracy” while, at the same time, imparting a critical stimulus to the development of food markets due to its requirement that money payments be disbursed to the citizenry for military, political, and other ser vices. In other words, the efficacy of Athenian democracy demanded “municipal redistribution through money payments” and this, in turn, required local markets. The citizens’ livelihood was provided by the state by means of markets, with no need for bureaucracy and no risk that market forces would burst the bounds of the social and political fabric. 242 For Polanyi, democratic Athens truly was antiquity’s forerunner to Red Vienna. When it fi rst appeared in print, in the form of a chapter in T&Mkt, Polanyi’s historiography of ancient Greece was subjected to withering critique, above all by the Oxford historian Geoffrey de Ste Croix. In a review of T&Mkt in 1960, he singled it out as one of the volume’s weaker chapters. It was “hag-ridden” by Polanyi’s general theory, demonstrated “no knowledge of the great body of evidence for Greek commercial practices contained in the private speeches of the Attic orators and in the comic poets,” drew “an entirely unwarranted distinction” between a primitive, “naïve” economy in the age of Solon and Pericles and the proto-market economy of the Hellenistic period, and was unconvincing in its supposition that the economies of classical Greece were based on relations of reciprocity and redistribution. These, the Oxford classicist countered, were “conspicuously absent” from the fifth century on. 243 Ste Croix’s criticisms must have stung, but Polanyi was happy to take them on the chin. For while critical of parts of T&Mkt, the review commended it overall as “a pathbreaking work” that would excite the interest of “any anthropologist and any economic historian whose field of interest lies outside the highly developed societies of the nineteenth


but this did not preclude market activity.241 Indeed, the genius of the

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oriented trade, considered as an end in itself, was perceived as a threat,

and twentieth centuries.”244 Polanyi wasted no time in communicating his appreciation to the reviewer and to his own collaborators. Although Ste Croix “demolishes my views on classical Athens mercilessly,” he wrote Pearson, what matters more is that “he gives an unexceptionable presentation of our general approach, which he believes to be of out-


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standing interest.”245 Indeed, Ste Croix was “the first scholar outside of our circle” to have recognized “the significance of Trade and Market”— and to have published it in a leading economic history journal, too. This represented the breakthrough for which he had been longing.246 For historians of antiquity, Trade and Market in the Early Empires proved a stimulating text, but its most resounding influence was felt in a new subdiscipline, economic anthropology. Indeed, it shaped its very emergence, through the debate it ignited between formalists (for whom the tools of neoclassical economics are universally fungible) and substantivists. In sparking this debate, T&Mkt contributed to an explosion of interest in the field. Prior to its publication about ten major articles or books appeared annually in economic anthropology; afterward, the figure jumped to several dozen.247 In the social sciences as a whole, however, the volume’s impact did not come close to fulfi lling Polanyi’s expectations. Admittedly, these were overly optimistic. He had long believed that “the market” had irrevocably lost its dominant position in all industrialized economies and that as a consequence, mainstream economic analysis was destined to shrivel while institutionalist approaches such as his own would “automatically come to the fore.”248 In fact, the stream was flowing the other way. Since the war, the U.S. state, acting through the Pentagon and the Social Science Research Council, had redefined the agenda of the social sciences, with an accent on “valueneutral” professional expertise.249 Partly incorporated into military planning, economics came to be practiced as a form of social engineering to achieve externally given goals, with its neoclassical variant entrenched as the orthodoxy. 250 Responding to the new incentives, scholars tended to highlight their purportedly disengaged, technical credentials, and the social sciences experienced a lurch toward positivism and away from radical perspectives. 251




n 1956 two events occurred that affected Polanyi with dramatically contrasting effects. One, the eruption of the Hungarian masses, was rejuvenating. In phrases that could have been plucked from his

teenage paeans to Russian populism, he hailed it as “one of the most courageous and pure revolutions in world history.”1 It “re-conquered” him for Hungary, he wrote Michael. “More than that: it gave me a mother country, which I now love.”2 Notwithstanding its cruel repression, it had

cast in bright silhouette the central force “from which the future Hungary will emerge,” namely “the Populists’ linkage with the now persecuted Party-reformers.”3 This marriage was between two movements with which, respectively, he and Ilona closely identified, and the couple chose to consummate their newfound unity of purpose—in the process celebrating Hungary’s future and their own relationship4—by co-editing an anthology of Hungarian poetry translated into English. The publication of The Plough and the Pen was one of the most joyful moments of Karl and Ilona’s fi nal years together. The title was chosen to honor Hungarian popu lism, for it was their “joint conviction that the Populists’ linkage with the now persecuted Party-reformers is the seed from which the future Hungary will emerge.”5 Poetry was a peculiarly appropriate medium. The poet Sándor Petőfi had been the torchbearer

of Hungary’s liberal revolution in the nineteenth century, and it was a Petőfi poem that Polanyi had read aloud at his school-leaving ceremony decades earlier. For his own “reform generation” Ady had played a similar role. Auden was “much interested” in the project and was invited to


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contribute a Foreword, and the book was dedicated to the memory of their fallen comrade, the poet Endre Havas.6 The other event was enfeebling. All his life, Polanyi had endured bouts of ill health; the latest had been in summer 1953.7 But 1956 announced a terminal turn: the irruption of a bladder condition, identified in the following year as cancer.8 Over the next seven years he was a frequent patient at a Toronto hospital, where he received X-ray and cobalt-60 radiation therapy and underwent a number of operations, none of which could avert metastasization.9 The diagnosis inevitably brought premonitions of mortality.10 Already in 1940 he had prepared a will that bequeathed his estate to Ilona, but now he began to make arrangements for the administration of his literary legacy too.11 In his correspondence of these years one finds a pronounced tendency to reflect upon the shape and meaning of his life and to offer appraisals of his own personality and his relationships with others. There were also unfinished projects to fulfi l and reconciliations to effect: a return to Hungary, for example, and a rapprochement with Michael. Between hospital visits Polanyi was able to lead a full life. “We are very busy and happy,” Ilona exclaimed after Karl had spent a fortnight in hospital in 1962. He is “feeling in good form . . . very active.”12 After another confinement a year later, Karl wrote Merton that they “dismissed me with an emphatically cheery finding. I am back to work again.”13 And the diagnosis of cancer even brought a welcome, if unexpected, side effect: it cured his hypochondria.14 Nonetheless, some periods in the hospital were uncomfortable and prolonged. The worst came at the end of 1963, during which heavy bleeding necessitated a stay of fully two months.15 “A hell of an autumn” was the phrase used by his friend Walter Neale.16 With respect to intellectual activity, hospital stays did not unduly impair Polanyi’s progress. His public engagements were not intolerably hampered by restricted physical abilities. Where previously he would travel to seminars in New York, he now encouraged friends and former students to visit him in Pickering. Where previously he would generally

accept speaking invitations, now he was circumspect: refusing some, canceling others, and ensuring that public address systems were available to amplify his weakening voice.17 Cancer notwithstanding, he believed that he had only now reached his peak of intellectual output, ment,” adding that he was “only now” coming into his own.18 He contrasted this with the anemic level of productivity that he had suffered in his middle age (thirty “lost” years “waiting for Godot”), a condition he attributed to an “excited inner paralysis” that resulted from the “strain” he had experienced in the aftermath of his father’s death.19 This lostdecades notion was a delusion. In truth, after inspiring a succession of valuable contributions in precisely those decades, his muse now began to retire, and after 1956  no substantial text of major importance issued from his pen. However, his mind did remain very much alive, and he continued to write on an impressive range of topics, including Parsonian sociology, freedom and technology, and precolonial West Africa. (“I am immersed in the Dahomey stuff,” he thrilled to Pearson in 1961; “I


love it!”20)

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and in a series of letters to Michael he rejoices in his “return to achieve-

OLD SINNER In an unpublished manuscript dubbed “Old Sinner,” Polanyi engaged with the enigma that was Talcott Parsons. He regarded him as “our friend and opponent.”21 On one hand, Parsons’s weltanschauung seemed enchantingly familiar. He had emerged from a milieu that Polanyi knew well. His father had evangelized for a Christianized socialism (albeit with Christian ity the teacher, socialism the pupil). 22 The young Talcott had sought to develop an ethically oriented economics, and he adumbrated a critique of utilitarian individualism and the market system as engines of social atomization and the subordination of social values to the economic. 23 In Heidelberg he worked with Lederer and Mannheim, and in London he rubbed shoulders with the anthropologists Edward EvansPritchard and Firth, while also immersing himself in the writings of Tawney, Malinowski, and English idealist philosophy. His version of functionalist sociology manifested some commonalities with Polanyi’s own—for example, in the priority it accords to the concept of integration,

referring to the means by which a society ensures coordination among its internal elements. On the other hand, Parsonian thought appeared quite alien, even menacing. It shared with neoclassical economics a formalist vision of the economy and an atomistic understanding of social behav-


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ior that treats individual acts as if they were things that exist prior to all interdependencies. 24 It pictured human society as ontologically unified, such that processes of differentiation could not possibly imperil social unity.25 And politically, although Parsons had been a New Dealer in the 1940s, he had since morphed into a Cold War Liberal, supportive of the Civil Rights struggle but adamantly and vociferously anticommunist.26 The attractive and repulsive aspects of Parsons were extravagantly apparent in his contribution to The New American Right, a volume that represented a milestone in the rightward drift of Amer ica’s liberal intelligentsia.27 Under avowedly liberal colors, it assembled a set of essentially conservative explanations of McCarthyism. Intriguingly, however, at the center of Parsons’s essay was an inverted version of Polanyi’s “double movement.” Industrialization, it argued, had amplified the role of the state in U.S. economic life, but the citizenry remained wedded to the ideology of free enterprise. It was in this contradiction that “the focus of the strain expressed by McCarthyism” lay.28 Such strains had rendered the political system brittle, and they were overdetermined by the current “dangerous and threatening situation” at the international level. It required that society be “mobilized,” with “the many heterogeneous elements of our population” fired up to flag-wave for the national interest. Inevitably, this pressure clashed with the traditional American presumption “in favor of the private interest,” generating strains and psychopathologies that flared up in McCarthyist testeria.29 The New American Right represented a challenge to Polanyi. It had emerged from a seminar at Columbia and harnessed currents in political and social theory that were dear to him: functionalism and prewar pluralism.30 Yet it yoked them to a conservative, antidemocratic and anticommunist cause that was anathema. If his self-identification as a radical had tempered somewhat during the 1950s, and if he came to view a narrowly socialist agenda as inadequate vis-à-vis the “new” problems of freedom and technology, he nonetheless maintained his “sacred hate” toward market society. Indeed, according to Ilona it “grew in in-

tensity” during his  U.S. years. 31 Although he did not assay a head-on critique of The New American Right, he did respond to the specific challenges posed by Parsons. The first Polanyian reckonings with Parsons—or, more precisely, with

gave their critique of Economy and Society added spice is that the two volumes represented rival bids for the same terrain. American sociology, as Richard Swedberg has argued, had tended to entrust to economists the study of the bulk of economic behavior, apart from a residue, such as factory life, social mobility, and the formation of professions. From the residue, only a fragmented and warped view of the economy could be constructed. It was in the mid-1950s that this “residual” perspective was thrown overboard, and credit for that is due to Economy and Society and T&Mkt. 32 Pearson and Hopkins made no bones of their admiration for Economy and Society, a “tour de force aimed in the direction of a general theory.”33 They noted an array of commonalities between the Polanyian and Parsonian approaches. Both are “functional,” in viewing society “in terms of certain functional requirements all of which must be satisfied if that society is to prosper,” with its institutions construed as “necessarily contributing to the fulfi lment of these functional prerequisites.”34 Both adopt a similar perspective on the relationship between society and economy, considered at the general level—thus, a substantivist conception of the economic process as the continuous supply of want-satisfying material means is compatible with Parsonian functionalism.35 Both developed a threefold categorization of economic activity, with the Polanyian “patterns of integration” (redistribution, reciprocity, and market exchange) corresponding to Parsons’s “allocative decisions” (by “authoritative agency,” “membership,” and “individual competition”).36 And when Hopkins met Parsons, they agreed that too much was being made of their differences and that common ground existed, especially around the concept of embeddedness. 37 Yet the differences could not be overlooked. Where Parsons most clearly veered astray, in the view of Polanyi, Pearson, and Hopkins, is that he fails—like Weber and Durkheim before him—to grasp the distinction between formal and substantive meanings of the economic, and this permits the


by Pearson and Hopkins, in close collaboration with their mentor. What

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Parsons’s coauthored Economy and Society—were published in T&Mkt

market to be taken, by default, to be the prototypical economic institution.38 Hence he was unable to theorize the “place of the market economy in modern society” and could not see that the subsystems—economy, polity, and religion—into which he categorizes forms of social action


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are themselves the products of the peculiar social relations of contemporary market society.39 Over the rest of the 1950s, indeed for his remaining years, Polanyi gnawed away at the task of producing a critical appraisal of Parsonian functionalism. In its aspirations to a “universal sociology,” he wrote Pearson, it was a “complete failure,” and yet Parsons’s “world of thought has a great achievement to its credit in filling some of the gap of the dissolving atomistic-individualistic picture, through his personality structure–role linkage.”40 What this refers to is the conceptualization of integration in Parsons’s social action theory, whereby full integration occurs when individuals’ wants are congruent with society’s expectations. Where society’s “expectation system” is disturbed, as Parsons put it in The Social System, social integration is disrupted and a “reequilibrating process” takes place, generating an adjusted equilibrium in which “new value patterns” become internalized.41 This idea is central to the theory of “social strain” that Parsons, together with Merton, developed during the middle decades of the twentieth century. Their focus was on the responses of individuals to the tensions generated by social strains. Polanyi, in contrast, was interested in the macro level. The term “strain” peppers his writings of the 1930s and 1940s, contemporaneously with its appearance in Parsons’s work. European governments’ attempts to regulate industry in the nineteenth century, he wrote, produced “strains” due to the “false integration” that they effected of the political and economic spheres.42 “Economic strains,” he discusses elsewhere, arose in the late nineteenth century when the increasingly rigid bodies of nation-states proved incompatible with deterritorialized free world markets, strains that resulted in world war.43 The same development was analyzed in The Great Transformation, in a chapter titled “Disruptive Strains.” Later, as his interest in Parsonian sociology deepened, he came to revisit his earlier ideas through a functionalist lens, highlighting the “stress and strain theorems” that permeated The Great Transformation, and he worked for some years on a manuscript, titled

“The Role of Strain in Institutional Change” (to friends: “Old Sinner”), that reconstructed his general outlook in the vocabulary of social strain, with emphases on Parsonian parallels.44 In Old Sinner, Polanyi proposed that the market system “derives its

life, are attained,” and, motivationally, “from the relative absence of strain with which hunger and gain as actual determinants result in ‘endeavor to earn an income.’” The system “may be put under a strain from either the institutional or the motivational side.” As examples of institutional inadequacy, he cites “mass unemployment, unused resources, lack of security of tenure, growth of monopoly, and so on,” while motivational inadequacy occurs when motives of hunger and gain lose “their effectiveness to produce the required behavior.” The latter was the dominant contemporary trend, as manifested in the institution of unemployment benefits, which decrease the motivation to work, and high taxation, which diminishes “the lure of profits.” The “strain” generated by the new pattern of expectations resulted in the need for “adjustment,” the burden of which tends to fall on the motivational side. As the whip of hunger slackens, employees seek other motivations to work; as the profit motive fades, employers emphasize nonpecuniary incentives: prestige, power, status, or public obligation.45 In this manner a new equilibrium is reached. But genuinely progressive “adjustment,” Polanyi insisted, necessitates institutional change, requiring a recognition that “a shift of the place occupied by the economy in society” was under way: the market system, with its peculiar institutions and motivational systems, had entered its senescence, and full employment and state intervention were the new norms.46 Altered patterns of trade union and managerial organization and policy were coming into being, manifesting an ongoing transformation from a narrow economistic outlook to a broader “social and political one.”47 Polanyi found Parsons’s conceptual grammar captivating, and he sought to adapt it to his own case for institutional reform. But with respect to the content of the desired reforms, he found other contemporaries more inspiring, none more so than Parsons’s colleague John Kenneth Galbraith. When the Harvard economist’s Affluent Society appeared in


completeness with which employment, use of resources, standard of

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strength from two sources”: institutionally, “the degree of stability and

1958, Polanyi recognized a kindred spirit: it “cuts deeper than any work in economics since Keynes’s General Theory, yet while Keynes remained within the confi nes of his discipline, Galbraith is consciously transcending it,” and it advances a truly radical “reinterpretation of the


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issues facing American capitalism.”48 What Galbraith’s book identified so lucidly was the radical transformation under way in the morphology and phenomenology of capitalism. Since the Industrial Revolution, Polanyi argued, the principal justifications for the market economy had lain with the existence of material poverty and the insufficiency of the necessaries of life, while its Achilles’ heel comprised its generation of inequalities, exploitation, and insecurity. Through “all-round regulational and institutional reforms,” however, inequality had been mitigated, poverty diminished, and insecurity largely ameliorated.49 So successful had the industrialization process been that societies like Europe and America now boasted full employment and an overabundance of material welfare.50 What Galbraith had uncovered was the politicalcultural impact of this transition. In acting “as an alternative to income redistribution,” across-the-board pay hikes had dissolved “social tensions associated with inequality of income.”51 With comfortable incomes and ubiquitous jobs, the language of workers’ security was no longer couched in terms of pay and work. Instead, it depended simply on continuing and expanding production, “irrespective of what is being produced.” Yet this in turn raised a new range of sociocultural predicaments, of a type “that cannot be assimilated to the manner in which the economic process is presently instituted”—specifically, the Galbraithian polarity of efficiency and equity, a couplet analogous to Polanyi’s “improvement and habitation.”52 While recognizing that technology could reasonably be utilized to attain a sufficiency of material welfare “by methods of maximum efficiency,” Polanyi objected that in industrial modernity, production has come to be regarded as an end in itself, with all human values subordinated to it, and productivity, efficiency, and prosperity installed as the holy trinity.53 This was true of capitalist and “socialist” societies alike. Neither was prepared to confront issues of “personal life,” which had become ever more subservient to the accumulation of material goods, with individuals chained to “the treadmill of money-motivations.”54

With no end in sight on the highway to technological progress, the dystopian prospect was of “efficiency” installed permanently as the “arbiter of social ethics,” and freedom consigned to secular decline. 55 Yet the conjuncture bore utopian possibilities too: of a weakening of the “primacy

occur, a cultural revolution was required, whereby what is valued is no longer “another car, a more expensive suit of clothes, or sales-pressured pseudo-commodities” but self-improvement through education, science, and exploration, contact with nature and such creative activities as art and poetry, as well as “security against the avoidable accidents of life” and freedom from “humiliating dependence upon an employer.”57 That program would require legislative reform, above all to protect workers from the abuse of corporate power and to constitutionalize the rights of unionized labor “by vesting ultimate industrial freedom in the person of the worker,” reforms that would consolidate society’s market-free zone and push its boundaries outward from its existing bases in government, corporations, and labor unions.58 Alongside Dahomey and Old Sinner, it was to this set of questions, the promise and perils of technology, that Polanyi devoted his attention in his final years.

FREEDOM AND TECHNOLOGY In the mid-1950s Polanyi resumed his interest in the question of “freedom in a complex society” and began to map out a book on the relationship between freedom and technology. It would include, inter alia, chapters on the young Hegel and the young Marx, and one on postexistentialist philosophy. Its thesis, he wrote his editor at Rinehart, “is that in our complex technological civilization there is inherent a basic loss of freedom, not of a legal or political but of an operational nature, which goes to the roots of the metaphysics of everyday life. Here lie the roots of our moral disorientation which leaves us helpless in the face of the portent of science, technology and economic organization.”59 The book would highlight the “precariousness of existence” in a civilization in which technology, unleashed, was stitching the social fabric and imperiling society in a way that could not previously have been


bear its “true fruit”: the prospect of human emancipation.56 For this to

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of efficiency” and of resis tance to “the machine,” enabling it at last to

imagined.60 It would end with a call for humans to accept “the reality of society” as a prerequisite for gaining genuine freedom and enabling “a true inner life” to be lived.61 By “reality of society” Polanyi referred to the recognition that individuals fulfi l themselves through social con-


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nections, such that norms, laws, and institutions place limits on their actions in ways that demand moral acknowledgement.62 It is only with the “machine” and the complex division of labor that it brings into being, with its commensurate intensification of social interdependence, that consciousness of society arises—and with it, a painful awareness of the social limits to the exercise of freedom and of the necessity of involving ourselves in relations of power and economic value. In “a complex society” it was delusional to imagine that we may “pursue our freedom as personal salvation without reference to participation in society.” Therein lay the false temptation of anarchism, of the individualistic liberal socialism of his own youth and of its contemporary counterparts (such as Sartrean existentialism).63 The challenge facing humanity, the book would argue, was to restore “meaning and unity to life in a machine civilization.”64 Central to this would be the refashioning of our understanding of liberty away from market freedoms (“to sweat one’s fellows, or to make inordinate gains without commensurate service to the community”) and toward freedom understood as the collective construction of institutional life, secured through civic liberties and enabling individuals to follow what the Anabaptists and Quakers “called the ‘inner light.’”65 Part of the context for this line of research was provided by the ongoing revolution in the means of production and destruction. States in the interwar period, whether of liberal, fascist, or communist stripe, had championed technological innovation and the scientific rationalization of the production process; the declared aims were to enhance national competitiveness and to consign economic crisis to its proper place, the irrational past. During the war, technological advance accelerated further—to Polanyi’s horrified fascination, as discussed in chapter 5. In the postwar years production lines in the automobile industry were mechanized by means of automatic devices—for which the term “automation” was coined—and in 1951 the electronic digital computer UNIVAC I ushered in a further technological revolution.66 On either side of the Iron

Curtain, technology was seen as a magic wand capable of working wonders on economic efficiency and everyday life. The spirit was summed up in the DuPont advertising slogan “Better Living through Chemistry” and its Eastern Eu ropean equivalent, “Chemistry Gives Bread, Beauty

postcolonial world posed questions for social scientists. What were its causes and its meaning? Economic historians who studied the eighteenth-century origins of the Industrial Revolution—notably David Landes, a young guest at Polanyi’s seminars—placed the explanatory weight on entrepreneurial activity and technological innovations, while sociologists such as Clark Kerr and Ralf Dahrendorf dusted off the concept of “industrial society” and gave it a fundamental restatement. “The world is entering a new age,” proclaimed Kerr in 1960, “the age of total industrialization. . . . Everywhere, at a faster or slower pace, the peoples of the world are on the march towards industrialism.”68 The general tenor was optimistic, with the transition from traditional agricultural backwardness to scientific-industrial modernity plotted as an uplifting program that would yield not only prosperity but also simultaneously the triumphant march of liberal democracy. Kerr, Galbraith, and Parsonian functionalists elaborated the thesis that industrialization imposed common requirements on all societies, which would therefore tend to converge toward similar orga nizational patterns. The disorders and inefficiencies of the early phase of industrialization were being overcome, it was argued (most famously by Polanyi’s Columbia colleagues Daniel Bell and Seymour Martin Lipset), with residual political and social problems relegated to the status of technical issues. This was the “end of ideology” thesis, forecasting a postpolitical epoch.69 If in the 1950s the concept of industrial society was framed in ebulliently liberal terms, romantic and Marxist critiques were present too, in the shadows. The early critiques of industrialism had been romantic. They counterposed Kultur to Zivilisation, the old organic gemeinschaft of direct social relations to the emergent gesellschaft: that souless and utilitarian society geared to relentless industrial development, the cold calculation of price and profit and the quantification of life itself. For critics, such as Ruskin and Morris, technology and the division of labor had


Roaring technological progress and the rush of industry into the

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and Prosperity!”67

engendered a new slavery, with human beings remolded as “cog-wheels.”70 Providing the heartbeat of romanticism were poets, from Blake through Coleridge to Walt Whitman (who Polanyi believed had revealed “the meaning of man’s freedom” in industrial society), Tolstoy (the most pen-


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etrating critic of technological civilization) and D. H. Lawrence (whom he admired for his insights into the emotional impoverishment of human beings in the Machine Age).71 Several of the social scientists whom he venerated, such as Rousseau, Sismondi, and Tönnies, had contributed to the romantic critique of industrial society, too, while Marx, although no romantic, was fiercely critical of the bourgeois rationalized worldview and excoriated industrial capitalism for its subordination of human beings to mechanical ends, with workers’ activity dictated “by the movement of machinery” and science.72 Also deserving of mention are Polanyi’s anthropological favorites, Thurnwald and Malinowski. The former contrasted “primitive societies,” in which tools are invented to serve humanity, with modernity, in which the machine forces human beings into a condition of dependence, while the latter inveighed against the “aimless drive of modern mechanization” and disparaged science as “the worst nuisance and greatest calamity of our days.”73 During Polanyi’s North American years, the romantic critique of industrial society and its technology fetish was not at its meridian but it was very much alive. It was propounded by liberals, such as Wilhelm Röpke; conservatives, such as Arnold Gehlen; and Marxists, such as Theodore Adorno, Max Horkheimer, and Herbert Marcuse.74 Polanyi’s own views, as one would expect, were closer to the non-Marxist left. An example is his friend Mumford, whose lecture series on Art and Technics at Columbia University in 1951 he would surely have attended. In these lectures Mumford expounded a critique of the cult of technology: that in “machine civilization” modern man had come to overvalue “the quantitative, the mea surable, the external,” and had come to “pattern himself on the machine,” with its traits of mechanical uniformity and repetitive order, its submission to routine and drill. A full-throated romantic, he called for a “revolt against the machine” in favor of “the autonomy of the human spirit.” 75 It is possible that Mumford’s lectures spurred Polanyi to focus his attention on the theme of humankind in the Machine Age, and some of his concepts certainly have a Mumfordian ring: that the machine had

stamped its traits of “efficiency, automatism and adjustment” upon the market and society had been re-engineered “around the machine”; and that the external world has been so machined as to leave “man empty, frustrated and self-alienated” while by contrast his inner life had reached

need not betoken borrowing, and as we have seen, Polanyi’s general attitude to technological civilization had been formed long before his acquaintanceship with Mumford. If Polanyi developed a critique of science and industry as ardent as that of Mumford, it was not as openly romantic. Certainly, he railed against the introduction of “the scientific outlook” into the humanities and social sciences, deplored the “scientific age” with its “scientific barbarism” and reserved par ticular animus for false prophets such as W. W. Rostow, in whom “the reactionary series of technocracy, managerialism, neo-technocracy and industrialization” had reached “its scientific apex.” 77 He argued, too, that new technologies tend to compel workers to greater exertion, in addition to creating a reliance of consumers on machine-produced gadgets that inhibited the development of their independent mental faculties, rendered them putty in the hands of the mass media, and encouraged them to cede power to hierarchies of experts who claim the capacity to oversee complex technological systems.78 However, his opposition was not to science and technology per se but, in accord with Wells and Lindsay (as discussed in chapter 4), to the pace at which they had rushed ahead of moral progress. He called for the “humanization” of science, posited as essential to the creation of the sort of “purposeful society” advocated by socialists, such as Owen, and tended to refer to “the blessing and curse of the machine”: while our fear is “that in a society in which man’s role has been usurped by the machine our human existence will vanish,” our hope “is that our internal freedom can be salvaged within a humanised industrial society.” 79 In this context, Owen deserves special mention. He was celebrated by Polanyi as possessing a prophetic power matched in modern times only by Dostoevsky.80 If he were alive today, “he would be the true guide to how to live in a world where his discovery of the machine and of society has become the burning problem.”81 He was the genius behind the third


dom” that had previously nourished it.”76 Such resemblances, however,

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“the point of extinction because he has lost hope of the individual free-

in the trinity of historic insights from which the “consciousness of Western man” had been forged.82 The first, transmitted through the Old Testament, was knowledge of death, while the second, knowledge of freedom, had been revealed in the New Testament. It was Owen who


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recognized that Jesus’s postulate “of the absoluteness of the individual’s freedom, freedom also from society” was inadequate in the “complex society” that the machine had “engendered,” and that is why the revelation of the “knowledge of society” should be credited in the first place to him.83 Owen’s revelation was not of course crafted from romantic materials. He was “emphatically not an enemy of the machine,” Polanyi reminds us, and the movement in his name, “Owenism, was a religion of industry the bearer of which was the working class.”84 According to the Welsh utopian entrepreneur, the poverty of that class lay not, as the standard romantic narrative would suggest, in industrialization nor, as Marxists would have it, in the systematic exercise of power wielded by another class, but in a peculiar and historically contingent conjunction of mechanization and marketization.85 That manufacturers were forced by competition to cut costs was unfortunate, but Owen perceived this to flow from humankind’s temporary inability to rationally control the productive powers that its genius had let loose, rather than as an inherent characteristic of industrialization or the capitalist mode of production. His genius, as Polanyi saw it, was to see that “the machine” had given rise to a qualitatively new social environment and that its own incorporation into society would require the development of new forms of cooperation and social solidarity, underpinned by a farreaching revolution in human consciousness.86 In lectures and unpublished essays propaedeutic to his draft book “Freedom and Technology,” Polanyi attempted to weave, out of Owenite and romantic threads, a thesis on the paradox of technology. On one hand, it is in a very real sense the “embodiment of freedom.” It enables society to become more “intensely human”; it is called on by humans to provide for their needs and to remove the causes of their fears; it guides them “out of ignorance and helplessness” and into the light of civilization.87 On the other, it presses society into an ever more mechanical form. This alarming tendency grew especially pronounced in the twentieth century, with the development of mass media that enabled the construction of seam-

less ideological webs in which our moral selves become imprisoned, and with the invention of the nuclear weapon, which turns the human being “into a mere lump of matter that can be vaporized by the hundred million.”88 In short, while technology tended in general to facilitate human

the narrows of fear”—fear of annihilation and of totalitarianism. The industrialization of the mass media had opened the door to totalitarianism, validating the romantics’ warning that technology begets tyranny, while technologies such as the nuclear bomb had revealed complex society to be “destructible” and the very existence of society to be “precarious.”89 That Polanyi was acquainted with Szilard, whose discoveries inadvertently led to the harnessing of atomic energy as a technology of murder, and that the early atomic research was sponsored by Columbia University, added a personal edge to his horror of the Bomb. Polanyi’s essays and lectures on freedom and technology were exploratory in nature and did not represent him at his dazzling best. In par ticular, they failed to satisfactorily relate the dialectic of freedom and technology to his longstanding research program on embedded and disembedded economies. He remained as convinced as ever that humanity was in the grip of a great transformation (and that even in the United States the people “are in a crisis as deep and fateful as was the Civil War: They are out for a new kind of existence, still unimaginable and yet certain”).90 But to what extent would the impending transformation follow the contours predicted in The Great Transformation? Had his thoughts on freedom in technological society modified his concept of the double movement? It is remarkable that Polanyi, the renowned theorist of market society, tended to ambiguity and ambivalence in his analysis of that society’s evolution in the postwar decades. By and large, he continued to regard the contemporary West as “a market society,” but on occasion he floated different formulations—for example, that “capitalism is shaping its power structure to some extent in the image of a planned economy and the welfare state.”91 In one paper he directly addressed the question of whether the contradiction between technological progress (or “improvement”) and the demands of human existence (“habitation”) could in principle be reconciled under a market


fects” were making themselves felt, forcing humankind to “pass through

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progress, in the contemporary period of “transition” its “dangerous ef-

system. If this were possible at all, it would involve “long and painful crises” and a large dose of irrationality—rather “as if a pilot first got rid of his eyesight before turning to the gadgets of blind flight.” This is because the experiences and decisions underlying the balance between technology


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and human existence should be the result not of the invisible hand but of “a formative power active in human society; shaping our wants and needs, harmonizing our material and moral needs, balancing work and leisure, freedom and its limitations.”92 If Polanyi had little confidence that the technology problem could achieve a solution within market society, his belief that Soviet planning offered an alternative was, in the 1950s, at its nadir. He possessed a growing conviction that Russia was facing essentially the same challenge as the West, of adjusting to industrialization.93 In Soviet and market societies alike the old materialist problems of “wages, housing, welfare, social insurance, and the further levelling of class privileges” were becoming overlayered by postmaterialist questions concerning survival and totalitarianism—”moral and political” causes, such as industrial automation, the “penetration of workers’ democracy into production,” the “horror of atomic poisons,” and the “revolt of the colored peoples.”94 Peace and freedom were becoming the “dominant concerns of the future,” he opined in 1956, adding hopefully that “the end of Western—American-Russian— materialism is in sight. The world is turning back from the so-called ‘economic’ to its ‘moral and political’ axis.”95 In an essay of 1958, “For a New West,” Polanyi updated his diagnosis of the challenges facing Western civilization. By the “West” he referred to three intertwined phenomena. Over the longue durée, a historicogeograph ical assemblage of societies, from antiquity onward, which had identified with Judaeo-Christian values; in modernity, industrial civilization in its capitalist and socialist guises; and in the current conjuncture, the coalition of Great Powers which, together with their Soviet ally, had confronted Nazi Germany.96 The West’s most precious legacies were the values of universalism, democracy, and the ethic of individual responsibility, but it had disowned all these when it “claimed Europe and America as its habitat and severed the geographical East because of its Victorian prejudices against any other economic organ ization but the market economy.”97 The West’s “spiritual ascendancy,” having been

regained during “the long battle against Hitlerism,” was being “frittered away in the hopeless support of a decaying past,” in the shape of  U.S.-led market capitalism. Its decline was being accelerated by that defi ning movement of the postwar era, the national liberation

enjoyed since the raising of the siege of Vienna in 1683.”98 Were these events combining to sound the knell of Western civilization as a whole? On the face of it the very question seemed absurd. The United States remained the world’s most power ful country, and “if anything, Western civilization is spreading more rapidly than ever.”99 On the “spiritual” plane, however, the reverse appeared to obtain. Admittedly, “the East” was not “at present given to creative thinking on world affairs,” but neither was the West.100 Its age of accomplishment, during which both capitalism and socialism had been concocted, was long gone, and it now quite patently “has nothing to say.” Indeed it found itself “in the dock,” and rightly so, for having steered the world onto its favored, and ever more precarious, “industrial, scientific and economistic road.”101 In a series of letters to Michael, Karl sketched out his ideas for the creation of a “New West,” a civilization that would retain the best of Western culture while emancipating itself from the Western power group.102 It would be sceptical of “Americanism,” would set limits to the industrialization process, and its statesmen would hopefully take a leaf out of Khrushchev’s book and denounce the West’s crimes.103 Suitably chastened, Western states would be able to play a positive role as wise advisors to the rising nations of Asia and elsewhere in the Third World. For, having created technological civilization, including both its “capitalism-socialism variants,” the West alone was in a position to “usefully contribute to the discussions going on in Asia today. Then it would be listened to, because they are eager to learn from the West, not to swallow its selfish poison but to pick up much needed warnings; not to act upon Western advice (they have their own motives for acting and must live up to them) but to freely follow what they feel is helpful.”104 Such arguments did not convince Michael. Indeed, even as he perused his brother’s meditations on the New West, he was positioning himself at the heart of a project dedicated to an antithetical project: the pressing


industrialization, which were shaking “the supremacy which Eu rope

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struggles that were creating a postcolonial world, and its subsequent

of Western culture into ser vice on behalf of America’s campaign for unipolar superpower status.


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B R O T H E R LY D É T E N T E As described in chapter 4, Karl’s relationship with Michael experienced strains in the 1930s. At the end of the decade their correspondence was punctuated by seemingly wilful misrepresentations of the other’s positions and by bitter arguments, for example over the Hitler-Stalin pact, and on his departure to the United States in 1940 the elder brother expressed stung disappointment over Michael’s “cool and formal” farewell. For all that, the underlying fraternal feeling remained resilient and from the nadir of 1940, they appeared to be groping their way toward rapprochement. That is to say, fierce debates continued, but would typically be superseded by admissions that they must agree to disagree and reaffirmations of mutual affection.105 The publication of The Great Transformation shed light on their relationship in an almost “comic” manner, as Michael put it, for the depth of their love for each other was matched only by the chasm that transparently yawned between their social philosophies. “Here am I,” Michael wrote his brother a week or two before its publication, “connected with you by ties which are close and vital beyond, far beyond, the perception of either of us; yet I doubt whether there is anybody more clearly born and bred, more thoroughly destined, to disagree with that particular, unique function which you have so dramatically fulfilled now.”106 Not long afterward, however, the fraternal relationship suffered yet another dip, and communication ceased for a time.107 While Karl resided in Bennington writing The Great Transformation, Michael was conscientious in maintaining contact with Ilona. He was able to make light of the differences in their political philosophies, which, he assured her, were showing “distinct signs of approaching one another and promise definitely to meet somewhere short of infinity.”108 Could this epigram have applied equally to his convergence with Karl’s economic outlook? In the late 1930s Michael had assimilated Keynesian theory to orthodox economics in a distinctive version of what later became known as the “neoclassical synthesis.” His Full Employment and Free Trade of 1944 was saluted by Karl as “the most damning indictment of a market economy I have ever read (in my specific definition as including compet-

itive markets for labor and land).” From Karl, praise can hardly come higher than that, yet he was in the same period critical of Michael for his advocacy of a Keynesian program that would “be compatible with the complete absence of state regulation.”109 Karl evidently found aspects of

indeed”: he “adamantly rejected all talk of planning” while standing “relatively isolated as a strong supporter of Keynesian macroeconomics.”110 In Michael’s own words, he adopted “the most ‘radical’ Keynesian attitude which—incidentally—involves the least ‘planning.’”111 He joined Hayek in the Mont Pèlerin Society, and his work was embraced by conservatives, yet he was quite capable of castigating dogmatic strands of  liberal-conservatism which sought to preserve “every evil consequence of free trading” and objected “on principle to every sort of State enterprise.”112 He was even prepared to float some quite un-Hayekian proposals—for example, that parliament should not merely vote on state taxation and expenditure but “should come to regard the entire distribution of the National Income as subject to its annual decisions.”113 Karl’s economic philosophy in the same period was clearly to the left of his brother’s Keynesian liberalism. He ardently believed that capitalist states should expand their use of planning and floated the idea that they should feel able to force businesses to employ workers.114 However, radical proposals such as these nestled alongside, and were compatible with, his advocacy of a “harmless form of free trade” at the international level and, domestically, a mixed economy in which markets and the profit motive would rule—a middle course, in his words, “between a laissez-faire and a totally planned economy.”115 To this extent, the 1940s saw their economic views converge slightly, and Karl’s newfound willingness to voice criticism of the “new Russian Islam” and the “esoteric ideology” of the Soviet ruling class aided the fraternal détente.116 In addition, and perhaps surprisingly, the brothers found themselves united in suffering from American anticommunist legislation: Karl, through the refusal of his wife’s visa application; Michael, through the rejection of his own. Michael’s visa application coincided with that wave of red-baiting which, as it crested in the early 1950s, came to be associated with Senators McCarran and McCarthy. In 1950, Congress had passed the McCarran Internal Security Act, which required all Communist Party


the younger Polanyi, as Philip Mirowski has remarked, was “a rare bird

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his brother’s position contradictory, and perhaps understandably so, for

members and adherents of affi liated organizations to register with the authorities, deprived “subversives” of their right to government employment, granted the president emergency powers to intern “potential subversives” in concentration camps, and obliged the State Department to


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investigate the views and background of visitors applying for a visa, with those deemed “subversive” subjected to exclusion or deportation.117 A measure of the fanaticism of the McCarran legislation is that, in a darkly comic turn, it caught in its net Michael, the inveterate anticommunist. He was denied a visa—and therewith forced to surrender a proffered chair at the University of Chicago—solely on the grounds that a decade earlier he had delivered a lecture in London to the Free German Institute of Science and Learning, which unbeknownst to him was a communiststeered body.118 For eighteen long months, consular officials remained unswayed by his entreaties, whether they took the form of truckling declarations of his lifelong hostility to communism or detailed rebuttals (in essence, that his lecture had included a polemic against the political distortion of scientific practice in the Soviet Union) of the charge itself.119 The fact that Koestler’s polemical anticommunist bestseller, The Yogi and the Commissar, was dedicated to him, Michael’s biographers report, “carried no weight, because none of the American officials had ever heard of it.”120 As a last resort, he changed his application from immigrant visa to visitor’s visa, yet still the door remained slammed shut.121 Arguably, then, the brothers’ relationship in its final years experienced a wise and resignative reconciliation.122 In the 1940s their economic philosophies appeared to converge slightly (at least if one sets aside Michael’s ascent up Mont Pèlerin), and in the early 1950s they were both smarting from visa refusals. Throughout these decades, and particularly when cancer reminded Karl of his mortality, many a tender sentiment can be found in their correspondence. When confined to the hospital bed, he was buoyed by “the love of my dear Misi.”123 Earlier, indeed only days after his initial diagnosis, Karl had reaffi rmed to Michael that with the exceptions of his father and Ilona, he had “never loved anyone as dearly” as him, and recalled the difficult years when he had assumed guardianship over Michael, sheltering him “from the thrust of fate, our dear father’s early sudden death.”124 He reflected in sorrow on their disputes and “estrangement” of the 1930s, which had “darkened” his exis-

tence, and called to mind his brother’s many kindnesses—most of all, the times when he travelled to be with Karl in his “darkest hours” and helped to rescue him “from insanity.”125 Yet after each affectionate avowal, reconciliation would be buried again beneath political and ideo-

Misi ever more fanatical,” and he resented in par ticular his prominent role in the Congress for Cultural Freedom, the organization that had assembled the general staff of what Frances Stonor Saunders has called the “cultural Cold War.”126 The animating spirit behind the first conference of the Congress, in West Berlin in 1950, was Koestler. After his break with communism, he had joined with Crossman to prepare The God That Failed, a volume that compiled personal revelations of their disillusionment and conversion by former communists and fellow-travelers. Following its success, he convoked a bevy of contributors and other ex-communists, such as Borkenau and Sidney Hook, to plan the formation of a permanent organization, the Congress for Cultural Freedom. Its mission was to counter communist influence in the arts and sciences, showcase American cultural achievements, promote Washington’s foreign policy objectives, and sponsor intellectuals who championed the U.S. interpretation of democracy.127 During his time as sidekick to the Comintern leader Willi Münzenberg, Koestler had learned the arts of propaganda, in par ticular the technique of forming cultural front organizations through which to influence the political zeitgeist of Western nations. That strategy was now mirrored by the CIA. Acting in effect as the U.S. “Ministry of Culture” and disbursing money through the foundations of the “robber barons” Ford, Rockefeller, and Carnegie, it financed networks of anticommunist artists and scholars and orchestrated an apparatus of organizations.128 It recognized in the Congress an already-fashioned instrument to serve its purposes, agreed to fund it, and took the helm. Surprisingly perhaps, the CIA was seeking to cultivate a less overt anticommunism than was Koestler, whose abrasive and militant speeches alienated sections of the “democratic Left” (to “Koestlerize” came to mean to contemptuously attack communist fellow travelers).129 The CIA’s goal was to construct a “united front” that linked Cold War liberals with


assessments of the Cold War. Karl believed “the Cold War [was] turning

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logical clashes. At bottom, these were rooted in the brothers’ conflicting

leftist intellectuals in Eu rope and to win the latter to the Atlanticist cause, establishing a bulwark against communist influence in the intelligentsia.130 Accordingly, although the Congress reached out to rightwing intellectuals and even proved willing to rehabilitate former


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fascists and flatterers at the courts of Hitler and Mussolini, its core constituents were moderate social democrats and “democratic socialists.”131 Its journals welcomed contributions by left-leaning Democrats such as Galbraith, Fabians such as Healey and Hugh Gaitskell (with whom Karl Polanyi was acquainted), and authors and poets such as Auden and Stephen Spender, whose outlook had been shaped by the struggles against fascism in the 1930s.132 The Congress-backed journal Science and Freedom typified the strategy. It stood up for civil liberties, recognized détente “long before most people knew the meaning of the word,” and encouraged intellectual exchanges with the Soviet bloc and a tempering of the West’s Cold Warrior stance.133 Unable or unwilling to apply the lessons of front-building that he had learned at Münzenberg’s side, Koestler was eased out of his central role, but he continued to build the Congress and persuaded two of his compatriots to lend it their support. One, his closest Hungarian friend, was Michael Polanyi.134 He not only joined the Congress but masterminded some of its high-profi le international conferences and edited Science and Freedom beginning in 1953.135The other was Paul Ignotus.136 A onetime editor of an organ of the urbanist literary tendency in Hungary, he had moved to London, where he identified—cautiously and ambivalently— with Károlyi’s Free Hungarians.137 When on a visit to Hungary in 1949 he was arrested and imprisoned, and was not released until 1956.138 After the failure of the revolution of that year he departed for a second exile, in which he rapidly established himself as the Congress’s Hungarian point man and, through his role as president of the Hungarian Writers Union (Abroad), as a well-known voice in the émigré community.139 In 1957 he suggested to the Association that Karl Polanyi be invited to join. At the time, the two men were on friendly terms, and Polanyi accepted at once—although not without misgivings.140 According to Ilona, it was a “poisonous” essay by Ignotus that “caused the beginnings of that bitter feeling which cropped up between Karl and Michael in the late years of Karl’s life.”141 When one reads the essay, these

words appear perplexing, for it hardly seems disrespectful. Its most injurious comment is that the young Karl Polanyi “may always have been dominated by a fear of lagging behind the times, a fear capable of driving one into such bold extremes one day that one appears outdated the day

hardly lacerating. To understand Polanyi’s apoplectic response requires attention to the subtext and context. Ignotus had set up a journal, the Hungarian Literary Gazette, with CIA support, to Polanyi’s distress and fury; the editor of the volume in which Ignotus’s essay appeared, Edward Shils, was also a supporter of the Congress; and the volume itself was a Festschrift for Michael Polanyi.143 Hence the lines that gently taunted him appeared to Karl as something more sinister: they were orchestrated by the CIA, which appeared to be busy wrapping its tentacles around the Hungarian exile community as a whole—including his own brother. One would be tempted to dismiss this as a vain old man’s paranoid fantasy were it not for the essential—and on some counts penetrating— truth of his perspective. When Michael visited him in Pickering in the late 1950s, Karl advised him in the strongest terms to disentangle himself “from the parasites of the Cold War” and pointed out that his involvement in CIA-funded publications such as Encounter and the Paris Review stood in flagrant contradiction to his commitment to a free market in intellectual inquiry, uninhibited by political interference, in which individual talent would matter while power and ideology would not.144 In funding the Congress, the CIA was emulating its ostensible Cold War enemy: it was using money and power to shape the concept of freedom and to restrict the freedom of expression. To look on as American dollars were mobilized to buy up the “seeds of the future,” he seethed, made his “blood freeze.”145 That the CIA funded and controlled the Congress became public knowledge only after Polanyi was no longer around to cry “Told you so!” In the 1950s, particularly in Britain and France, suspicions were raised, and the Sunday Times labeled the Congress’s flagship journal, Encounter, “the police-review of American-occupied countries,”146 but the CIA connection was truly known to only a select few. Congress luminaries such as Shils, Bell, and Koestler were aware that their


ment” was not their strength.142 If these were satirical barbs, they were

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after.” This, Ignotus added, was typical of the Galileists; “sound judge-

organization’s dollars flowed from Langley, but others preferred to disbelieve the rumors.147 Michael Polanyi seems to have belonged to the latter group. He denied any awareness of the CIA’s existence in the postwar years, although he added that, had he possessed that knowl-


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edge, he would have served it “with plea sure.”148 In short, Karl was correct in supposing that his brother was actively contributing to, and benefiting from his participation in, Washington’s Cold War crusade. It was one thing, in the 1930s, to have been poorer than his younger brother by dint of bad luck combining with the greater fortunes that natural scientists tend to command, but quite another to see Michael’s reputation and career receiving a fillip due to his boosterism for such an unseemly cause. Polanyi’s nose for Washington’s machinations and Hungarian dupes was equally acute in the case of the Hungarian Literary Gazette. He astutely referred to the Gazette as “the financial organizing staff” of the “festering sore” that was the Hungarian exile community around Ignotus, even though he did not know what is now public knowledge: that Ignotus and his fellow leaders of the Writers’ Union were aware that it was being kept afloat by the Congress; that they were under the impression (partly accurate) that the Congress was itself funded by the Ford Foundation; and that because the latter was known to be an engine of  U.S. soft power projection, they had calculatingly established the Gazette as an intermediary body to disguise the source of the subsidies.149 Yet if Ignotus was a hardened supporter of the Congress, other émigré intellectuals were lured to it out of naivety and desperation. A case in point was Gyula Borbándi, a supporter of the Smallholders Party and editor of the leading exile journal, Látohatár, which published articles by Karl and Michael Polanyi in the late 1950s. Facing straitened circumstances, its editors sought fi nancial support from the Congress, but owing to their populist inclinations, their supplications were refused.150 Borbándi approached Jaszi, who provided a recommendation, and Polanyi too. Might he, the editor importuned, help Látohatár gain a place at the Congress’s bloated udder? Could he not prevail on his brother to intercede on their behalf, for Michael’s word “counts for a great deal within the Congress for Cultural Freedom”?151

Experiences such as this were hugely dispiriting. Polanyi had hoped that the infusion into the Hungarian exile community of intellectuals fleeing after the 1956 rising would revive the critical camp, but he was disappointed. The Hungarian expatriate journals instead pledged them-

eral was “hateful” and “immoral,” a “Magyar-Jewish miscegenation of corruptions.”152 He registered his protest positively, by pouring his energies into The Plough and the Pen and Co-Existence (on which more below), and negatively, by resigning his membership of the Hungarian Writers Union (Abroad).153 It was shortly after his resignation that Ignotus’s jeer appeared in Michael’s Festschrift. When Karl protested, Michael responded with an outright repudiation: Ignotus’s essay was inoffensive. After repeated pressing, he was won round, yet hardly had the ink dried on this partial ceasefire than the brothers’ war-within-the-cultural-Cold-War resumed, with Karl throwing some indelicate phrases (“obscene,” “corrupt”) at Michael over his participation in CIA-financed propaganda journals such as Encounter, to which the younger man retaliated with an affirmation of his proud ser vice to the Congress and a reminder—with reference to West German SPD leader Willy Brandt—that it was a united front that included social democrats whose outlook was not so very different to Karl’s.154 A year later, the détente remained in a parlous state, and when the brothers met in London, with Karl now ailing badly, they squabbled so persistently that Irene Grant had to take Michael aside and beseech him to desist. Even then, “no more than ten minutes passed before a racket could again be heard in the room they were in. Irene had to march in and drag Michael out.”155 The above discussion has shown, inter alia, that the tensions between Karl and his brother in the postwar period were inextricably connected to his battles with other elements in the Hungarian exile camp, a community that Karl reviled as politically toxic and spiritually empty. This was in marked contrast to his view of the mother country itself. In 1956 it experienced a political revolution that challenged but also exhilarated him. It replenished the wells of political hope.


American interests and purposes,” while the exile intelligentsia in gen-

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selves to “American organizations” and acted “exclusively on behalf of

T H E “ S P I R I T UA L R E B I R T H ” O F S O C I A L I S M In February 1956, Communist Party of the Soviet Union (CPSU) general secretary Nikita Khrushchev astounded his audience by denounc-


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ing the terrorist methods of his predecessor Joseph Stalin. It was a revelation that Polanyi considered to be of resounding moral import.156 While not lionizing Khrushchev, he believed that in him “a human being has made its appearance (without cellophane wrapping).”157 Khrushchev’s speech surely would inspire “the Great Transformation [to write] a further chapter of its course, and this time one in which there is a glimpse of hope.”158 The most immediate consequence of the revelation was to stun and stupefy the communist movement, and this was amplified in the summer and early autumn when the political crisis occasioned by an insurrectionary rising in the Polish city of Poznań  paved the way for Władysław Gomułka’s return to power only two years after his release from prison, an event that in turn sparked insurrection in Hungary. The Hungarian Revolution rekindled Polanyi’s interest in politics. It tugged him away from that “introspective world of science, teaching, and reasoning” that had preoccupied him “for decades.”159 He took a close interest in its course—the process of mobilization, the actors involved, and their goals—and especially in its causes and consequences. His explanation of its origins highlighted what he regarded as a decisive but hidden factor: the precarious and morally unjustifiable nature of a relationship between socialist nations in which one exercises “concealed” domination over the other.160 Although Hungary was no colony, its government rested on “the power of another state,” not that of domestic constituencies. This type of suzerain relationship is malignant enough when practiced between capitalist polities, but in the Soviet bloc it assumed an abnormally harmful character. In the capitalist world “indirect rule” can operate relatively smoothly, for it need not intrude into “the minutiae of daily life.” Not so in a socialist economy, “the vital element and driving force” of which is “centralized government and its functions.”161 While this institutional arrangement brings “technical advantages,” it also imparts such economies with a peculiar brittleness, for “a mere flicker at the centre” will reverberate throughout the system, such that “by the time a shift of policy reaches the shop, the family, the indi-

vidual, it will have grown into a devastating blow.” When a policy is introduced in compliance with Moscow’s latest whim, it appears “as an erratic, arbitrary command with effects blindly destructive of the social and economic tissue of the country.”162 Gross maladministration and

enforced foreign rule.”163 These consequences were specific to concealed foreign rule as contrasted with either foreign rule, or its concealment, considered separately.164 Unable, in an age of sovereign nations, to publicly admit the true nature of the relationships on which its authority rested, the Hungarian government was incapable of honestly presenting its actions as serving the interests of the citizenry. From this original act of denial a tissue of lies had grown. In its dealings with dissidence the government felt obliged to “suppress or distort well-known facts” or even resort to “terror,” the regime grew “harsh and tyrannical” and the “chasm between the Party and the population” widened inexorably.165 On the basis of this analysis of the rising—as occasioned ultimately by strains resulting from the flawed relationship between Hungary and Russia—Polanyi interpreted its course as governed by the demand for a reform of communism. He took issue with those, such as Michael, who hailed it as a liberal national revolt, initiated by communists yet essentially fought under the flag of 1848.166 What such analyses missed was that at the heart of the movement lay an alliance between, even a fusion of, anti-Stalinist communist revisionism and Hungarian populism. Polanyi understood the latter as a movement somewhat akin to the Russian narodnitchestvo, “except that its protagonists did not ‘go to the people,’ they came from there.”167 Although populism’s traditional vanguard, the peasantry, funneled “a thousand grievances” into hostility to the party leadership, it “did not add up to a revolutionary factor.”168 That was provided by the “eruptive force” of the working class, whose “heroic” intervention, in the form of permanent mass strikes, street fighting, and barricades and the formation of workers’ councils, formed the heart of the rising. It was not primarily nationalistic or liberal in temper. Rather, it exhibited an unambiguous “loyalty to socialist principles.”169 Turning to the consequences of the uprising, Polanyi regarded it as momentous. It bore the potential not only to catalyze processes of


sulted from the fact that the economy was subject to detailed and “strictly

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other “organic and functional distortions” in Hungary’s body politic re-

transformation in the Soviet bloc but also to provide invaluable lessons for socialist movements in the Third World and to spark a realignment and reinvigoration of radicalism in the West. I shall look at these three arenas in turn.


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The rising’s most immediate effect was that it demonstrated conclusively that Russian communism, although a “genuine” liberation movement, had gravely let down “its satellites by failing to provide them with governments of their own.”170 Reforms were urgently required with respect to the satellites’ independence from Moscow as well as democratization and “the introduction of certain market elements” in their economies.171 Polanyi’s hopes that these lessons would be learned from the 1956 events receded following the crushing of the rising, but in July 1961 they were dramatically reawakened with the announcement by the CPSU of its new program. This was, his friend Fromm cautioned, a purely cosmetic affair: the program was laced with “Marxist phraseology” and stuffed with “the conservative values of duty, family, patriotism and work.”172 Polanyi respected Fromm enormously and credited his humanistic outlook with having infused Marxism (and “the West” itself!) with “life-saving ingredients,” but on this issue he gave Moscow the benefit of the doubt.173 Although certain terms in the 1961 program, notably its portrayal of Western economies as “state monopoly capitalist,”174 irked him, as he pored over its pages (for almost an entire week) he came to see its message as nothing less than awe-inspiring.175 It was “without doubt the most impor tant event in the history of the modern socialist movement since the foundation of the Communist Party in 1919.”176 No longer was socialism to be understood as a mere transformation of property relations; now the accent would be on the quality of life and the “embedding” of the economy in social relations.177 Domestically, the program promised a mild resuscitation of trade-unionism, a revival of rural culture in the countryside (with a “re-embedding of economic organization in the rural towns” reminiscent of “Owen’s villages of union”) and partial concessions to democracy—with “parliamentary possibilities” bruited as feasible.178 On the international front it underscored peaceful coexistence and nonviolent revolution.179 At the level of theory it shook up the rigidities of orthodox Marxism, unfroze its concepts, elevated “economic science” to the top table while relegating the labor theory of

value to the scullery, accepted “the principle of economic reward as the individual motivation governing the structure and functioning of rural society,” and accepted the significance of “spiritual values.”180 The program, he gushed to Dalton, draws on “great creative powers.”181 It will at

tory of mankind.”182 More than any other single event, he reported to Irene Grant, it had reconverted him to socialism.183 “Reconversion” was hyperbole, for Polanyi had never abandoned the creed. His admiration for the Soviet Union had been bruised by the bloodbath in Budapest, but compensation arrived in the form of the 1961 program and putative socialist transformations elsewhere. He hailed the communist ascendancy in China as “the first non-Western event of these last two centuries that has an essence and core of its own.”184 It had transformed that nation within a decade—and Africa was accomplishing similar feats within an even shorter span.185 To sceptics who opined that these processes were merely recapitulating the developmental stages of Eu rope and North Amer ica, he retorted that whereas in the West, “the self-protection of society . . . lagged far behind the impact of the machine, . . . in the present spread of industrialization the order is reversed. Asians, Latin Americans, and Africans have learned the lesson. The new economic organization puts the safety of society above the requirement of maximum technological efficiency. The emphasis has shifted from machine to man.”186 The “broadening of the Road of industrialism,” hastened by import substitution industrialization and nationalizations, represented the contemporary form of socialism.187 The great transformation was writing yet another pulsating new chapter—and one that would include a global power shift toward the South. For world economic pressures were “forcing all countries to socialize their foreign economy,” enabling them to act in a unified way, unlike market economies, which “cannot act at all.” Such countries as Britain and the United States were now “less of a power than the smallest, poorest country which has an up to date foreign economic organization, as most of them now have,” for they can “link into a chain, where the market economies lie flat on their bellies.”188 This truth, he believed, was being proved by Cuba, a country that by virtue of its foreign


nal the start of “an enormous advance, a hesitant giant step in the his-

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minimum “swing open the doors of the future” and could conceivably sig-

trade monopoly was able to withstand the howling threats that blustered across the Straits of Florida.189 As the Cuban example showed, economic revolution tended to be accompanied by political awakening, and this could be witnessed


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worldwide. Throughout Africa, Asia, and Latin America, the historic movement for decolonization, at least for a heady period around 1960, promised to expand the zone of neutralism and push the superpowers back toward their Northern lairs. Polanyi was particularly impressed by the determination, manifested in resolutions at the All African Peoples’ Conference in Tunis, to exclude the colonial powers and superpowers from Africa. “The whole world,” he wrote Michael, “is realizing that the immutables of yesterday have gone forever. There is hope again.”190 Vis-à-vis these global processes, Polanyi believed, the Hungarian revolution stood as an inspiration and a warning; in both respects Hungary’s fate was “symbolically of global significance.”191 On one hand, it was the “first populist-socialist heroic stand” of modern times; it attested to the “spiritual re-birth” of socialism and the rejuvenation of Marxism, and as such it was of electrifying relevance to populist and socialist transformations in agrarian societies across the world.192 On the other hand, its causation and its termination exposed pathologies of the socialist project, notably the authorities’ “lack of mental contact with the peoples”—defects that, he feared, were in danger of being replicated across the developing world.193 If the Hungarian uprising visibly affected the course of socialism in the Second and Third Worlds, its impact on the Western world was no less significant. There it contributed directly to the splintering of the old communist milieu and the rise of what came to be known as the New Left. Its repression by the Red Army was not the first time that an act of Soviet imperialism had harrowed the consciences of communists around the world. The Hitler-Stalin pact and the crushing of the East German rising had been among a litany of earlier instances. But on these occasions, Chris Harman has described, the vast majority of those “who turned against the ‘god that failed’ moved towards social democracy or liberalism. And in the late 1940s and early 1950s this meant accepting the claim of US imperialism to stand for ‘freedom’ and ‘democracy’. In Britain many of the novelists and critics who had written

for the Communist-run Left Review in 1935 were writing for the CIAfinanced Encounter by 1955.”194 By 1956 the lie of the land had changed. Whereas in the earlier period the liberal states’ war against Nazi Germany had been advertised as an

the unbridled impulse to imperialist adventurism. All of these featured prominently in the news stories of the year: the Montgomery Bus Boycott, the Battle of Algiers, the Anglo-French-Israeli invasion of Egypt, and so forth.195 In 1956, a young communist and WEA lecturer, Edward Thompson, gave voice to the new mood: Stalinism has sown the wind and now the whirlwind centres on Hungary. As I write the smoke is still rising above Budapest. . . . It is true that dollars have also been sown in this embittered soil. But the crop that is rising will surely not turn out to be the one which [US secretary of state] Mr Dulles expected. . . . By an angry twist of history, it seems that the crop is coming up in students’, workers’ and soldiers’ councils, as “anti- Soviet” soviets.196

Seeds were being sown in the West too. In Britain, Thompson went on to establish and edit the New Reasoner, a periodical that expressed the voice of dissident communists—a cohort that had been formed by the experience of the Popu lar Front in the 1930s, war time Resistance movements, campaigns for “friendship with the Soviet Union,” and the popular red tide that had occasioned the Labour Party’s 1945 landslide.197 The critical analysis of the Soviet regimes that Thompson elaborated, as he broke with orthodox communism, was rudimentary and imprecise, but it was coupled with a moral condemnation of the crimes of Stalinism and a critique of Stalinist ideology that were arresting, trenchant, and immediately attracted an audience.198 His manifesto for “socialist humanism,” launched in the first issue of New Reasoner, castigated Stalinism for its despotism, anti-intellectualism, elitism, and determinism.199 Whereas for Marx and Engels, he reflected, human beings make history and ideas are understood “as the medium by which men apprehend the world, reason, argue, debate, and choose,” in the Stalinist script human beings are machined by objective circumstances,


sat uneasily with foot-dragging on civil rights and decolonization and

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emancipatory crusade, by the mid-1950s trumpeted democratic goals

their social relations and historical experiences reduced to relations among things, with ideas determined by social structures “like evil and wholesome smells arising from imperialist and proletarian cooking.”200 The outcome was moral nihilism, in opposition to which Thompson as-


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serted that “the conscious fi ght for moral principle must enter into every ‘political’ decision.”201 In the literature on Polanyi, Thompson is commonly cited as his spiritual and intellectual brother. 202 Less well known is that already in 1958 Polanyi himself remarked that his outlook was “somewhat akin to E.P. Thompson’s in ‘New Reasoner’ No. 1.”203 The two thinkers were socialist humanists, and in their historical work on the Industrial Revolution they underscored its destructive effects (although Thompson also identified its “great spiritual gain”: the formation of working-class consciousness). 204 Both shared a disdain for the barrenness of economistic species of Marxism, a moral critique of postwar capitalism, and a predilection for the romantic tradition of British socialist thought, as represented by Morris (for Thompson) and Cole (for Polanyi). Cole himself had in the meantime become a mentor figure to the student wing of the early New Left. The editors of Universities and Left Review were regulars at his seminar group at Balliol, and it was here that some of the essential personal connections out of which the New Left grew were first forged. 205 Like Cole, they developed a “bifocal” political vision, one that aspired to hold in view a long-range perspective of radical socialist transformation and a set of short-term tactical goals that rendered their outlook “conformable with that of parliamentary labourism.”206 One might suppose that the New Left provided Polanyi with a natural habitat. Edward Thompson and other New Left thinkers spoke a language that he found familiar: in their oscillation between romantic utopianism and Machiavellian realpolitik, and their adoption of a Jacobin stance toward Third World struggles while preferring Fabian norms when nearer to home. 207 They and Polanyi both drew inspiration from specific workers’ movements (notably Hungary in 1956), even as they entertained the pessimistic thesis that the growth of consumerism had so disarticulated class structures that the proletariat could no longer be considered a revolutionary force. 208 He broadly shared the diagnosis advanced by New Left theorists, such as Raymond Williams, of the fracturing of

human society in modernity: that it derives principally from “blockages . . . in moral perception” rather than from class conflict, as in the Marxist script. 209 He welcomed their insistence that for left-wing renewal to succeed, “a new conception of socialism” was indispensable,

ect.”210 And he was of one mind with the Eu ropean New Leftists, Cole to the fore, who sought to open up a Third Way in Eu ropean politics: critical of Stalinism and institutionalized social democracy, “unyieldingly positive” in its attitude to neutral powers of the underdeveloped world, opposed to both NATO and the Warsaw Pact, and eager to create connections and exchanges across the Cold War divide. 211 Polanyi closely followed the fortunes of the New Left, from its advent in the mid-1950s to its recession in the early 1960s. However, it was a milieu that he was “of” but not quite “in.” Why was this? Several reasons offer themselves. First is that his work was little known.212 Although he mentored one or two New Left thinkers, notably Wallerstein, his influence in New Left circles as a whole was substantially less than that of, say, his friends Fromm and Cole or his Columbia colleagues Marcuse and Mills. Second was the contingencies of biography and geography. He lived in Canada, where noteworthy New Left organization only arose after his death (e.g., Student Union for Peace Action, founded in 1964). The United States was not far away, but in comparison with the British New Left, with its Labour Party fi liations, its New Left was more beatnik and bohemian—not quite Polanyi’s cup of tea. Third, although his conception of utopia could reasonably be summed up by the slogan “freedom from economics,” and as such it cut with the New Left grain, he was viewed as  an economic historian in an age in which the cutting-edge disciplines were philosophy, psychology, and cultural studies.213 The era’s hot topics were the mass media and the plea sure principle, not Speenhamland or Late Dynastic Ur. A fourth factor is that his political fiber had been profoundly shaped by the Old Left. He viewed the state as the pivotal agent of social progress and doggedly maintained—caveats and many a twist and turn notwithstanding—an enthusiasm for the Soviet regimes. Despite harboring a degree of sympathy for the notion, popularized by Mills and Marcuse, that Western and Soviet societies were


quire “a far-reaching, ambitious and multifaceted intellectual proj-

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with postmaterialist concerns foregrounded and that this would re-

converging, he did not accept that position, and on the important question of the threat of war, he admired Moscow’s stance. 214 The Soviet Union, he raved to Fromm in 1963, “truly defends peace and the future of mankind” and was making giant strides on the cultural and “quality of life”


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issues that the New Left had under its lens.215 It was with the Soviet bloc’s needs uppermost in his mind that Polanyi, in his fi nal years, devoted his energies to establishing a journal of East-West intellectual exchange. Its name, he proposed, should be Co-Existence. 216

CO-EXISTENCE Polanyi’s valedictory enterprise arose out of his response to two interrelated issues that dominated international and domestic politics at the time. One, in the West, was anticommunism and the seemingly ceaseless social and political reverses being pushed through in its name. In the United States, Senator McCarthy may have been quashed, but his vendetta was being continued by other means. In Western Europe, Polanyi lamented after visits in 1959 and 1960, “the general intellectual atmosphere” was no better. Progressive thought and action were being corrupted and para lyzed due to “the penetration of cold war influences on all levels.”217 The antidote was co-existence, at least if its meaning was not restricted to “a mere Soviet-U.S. modus vivendi” but was instead conceived broadly as the securing of “a peaceful frame of existence” for all the world’s nations. 218 For Polanyi, the term si multa neously connoted liberal-socialist convictions (mutual respect, cooperation) and a realist recognition of the inevitability of difference. In an almost metaphysical aspect, it embodied for him the “will to live,” in a struggle against the Cold War toxins of mistrust and hostility.219 The first of his proposed journal’s three core aims was to take up that cause: to bring the Cold War to an end. 220 The other two were to uphold neutralist and socialist values, and “to counter the very numerous pseudo-scholarly Americansponsored organs that are carry ing on Cold War propaganda in the English speaking countries and the Continent of Eu rope.”221 In this last respect, Co-Existence also carried a personal edge, for reasons that require no explanation. The other issue was a geo-ideological tack by the Khrushchev administration. For the world’s media, “peace through coexistence” was its

summary soundbite. 222 It signified a recognition that Soviet Russia, as the weaker of the two superpowers, while keen to retain its territorial gains of the 1940s was aware that in an era of potential nuclear annihilation, prospects for further expansion by military means were not at

Kremlin’s coexistence campaign and was aware of Russia’s “great power chauvinism” and the helplessness of its “satellite countries.”223 Nonetheless, he was convinced that Moscow’s new voice contained genuine notes. Coexistence appeared to express a perfectly reasonable case: that the socialist countries “be able to ‘co- exist’ with the free economies without having tacitly to accept the universalist market eschatologies adhered to in those countries.”224 The “Soviets,” he added, appear “very conscious of the need for an intellectual and institutional equipment that would enable them to contribute to co-existence.” In setting up a journal by that name, he aimed to contribute “towards the improvement of Soviet theory and outlook, as a by-product of their girding themselves for co-existence.”225 The question of coexistence appeared to Polanyi, furthermore, to link seamlessly to, and to provide justification for, his historical studies of precapitalist societies. “The truly historical topicality” of the methods that he and his collaborators presented in T&Mkt, he wrote Michael in 1956, springs from the “co-existence initiatives of the Russians,” because these made the “distinction of trade and market,” as elaborated conceptually in T&Mkt, not only “a vital need for the West” but possibly also “the key to a peaceful co-existence tomorrow.”226 Just as the nonmarket archaic economies that he had been studying at Columbia were able to briskly trade with one another, with “ports of trade”—politically neutral sites at which merchants would gather—serving as connective nodes, so, too, in the coming regulated international economy, new techniques would facilitate trade between nonmarket economies: “state organs of trade, exchange equalization funds, foreign aid departments, investment boards, etc.” The development of institutions of foreign trade of this sort would play a vital role in “the struggle for peaceful co-existence.”227 A third aim of Co-Existence, therefore, was to create an arena of political dialogue and intellectual collaboration across the Cold War divide that would enable the concerns elaborated in T&Mkt to be aired anew,


phasized. Polanyi was conscious of the propagandistic aspect to the

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hand, and the stabilization of existing borders was therefore to be em-

informing and exciting a wider audience, with a view to uptake in the policy field. Polanyi was confident that the methods he proposed for the mediation of international trade by government organizations would be adopted soon and would enable practical strides to be taken toward

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“world co-operation.”228 Karl and Ilona began to contact friends and acquaintances with a view to setting up the journal. 229 Alongside Polanyi, the active core of the editorial board was envisaged as Joan Robinson, Thomas Hodgkin, and Rudolf Schlesinger. 230 Already in the 1930s Polanyi had admired Robinson’s work.231 A Labour Party leftist who combined Fabian socialism with a keen interest in Marxist thought, she had visited the Soviet Union and regularly visited China, where Mao’s revolution enormously impressed her; it was an exemplar of the “peaceful implementation of a planned economy.”232 By 1961 she had met Polanyi several times— including a long, rich afternoon of discussion in Pickering—and had become one of the new journal’s most active editors.233 Hodgkin knew Polanyi from his time as secretary of the Oxford Delegacy for Extra-Mural Studies, and his world would have been very familiar to Polanyi: Quaker by upbringing, Balliol by education, and communist by conviction.234 (Balliol and the Communist Party were the two institutions he had loved, recalled Christopher Hill at his memorial ser vice.) After resigning from the Communist Party in 1949, he maintained an active political life, hobnobbing with such radicals as Kwame Nkrumah, Frantz Fanon, and Che Guevara. 235 As for Schlesinger, he too was a former Communist Party member. Vienna-born, he had worked with Varga in Berlin, and for a short while in the communist underground, before fleeing to Moscow, where he took charge of the German section of the International Agrarian Institute—with Stalin’s wife Nadya Alliluyeva as his private secretary. 236 In spite of his 24-carat connections to the royal household, he was suspected of “deviationism,” and it was fortunate that he was found guilty of this crime shortly before the Moscow Trials. Expelled from Russia, he made his way via Czechoslova kia and Poland to Scotland, where he found a teaching position at the University of Glasgow. Schlesinger was close to Ilona but not to her husband. (Perhaps his political temper was coarser and more orthodox than Karl felt comfortable with. One of his colleagues at Glasgow describes him as “a classic Stalin-

ist. A bulky, shambling sort of man, with a very heavy German accent,” and students found him “stringent and unyielding,” while to children he came across as “a very gruff, scary unfriendly man.”237) It was due principally to Ilona that Schlesinger was appointed to the position of

nal. For Polanyi, their Five-Year Plan was to influence “the strategic points of high opinion-formation—outside of the Establishment—at which the cold war front may perhaps be outflanked by courageous senior leaders.”239 With that in mind, currying support from “great names” was essential. 240 Sartre headed the wish list, closely followed by Bertrand Russell (who, incidentally, had earlier been affiliated to the Congress). 241 Another non-Marxist bigwig to be actively courted at an early stage was Carr, whose History of Soviet Russia Polanyi admired, 242 and it was with profound disappointment that the editors learned that he had poured cold water on the project. With Schlesinger and Robinson holding its keys, Carr admonished, Co-Existence would be seen as a socialist magazine, and discussion in its pages would inevitably have something of the family affair about it.243 This was a warning that the editors sought to heed. They dropped the word “socialist” from the subtitle, which now read, innocuously, A Journal for the Comparative Study of Economics, Sociology and Politics in a Changing World, and stepped up the search for nonsocialist contributors. 244 Yet where exactly should the line be drawn? Galbraith was an obvious candidate, but his closeness to the U.S. government ruled him out. 245 Instead, Polanyi approached the chemist and novelist C. P. Snow, without success, as well as the Canadian literary critic Northrop Frye, who offered “moral and intellectual support.”246 If speculative approaches to the “great names” was yielding little, a more secure source of interest lay in the editors’ own circles. Articles were solicited from Polanyi’s friends and students, including Bohannan, Hopkins, Neale, and Wallerstein, all of whom agreed to contribute (although Wallerstein’s essay was, to Polanyi’s seething displea sure, vetoed by the editor).247 The name John Macmurray was mooted, too, but since Karl’s departure for the United States in 1940, there had been silence between the one-time bosom companions, and if a contribution to Co-Existence was solicited, it was not forthcoming.248 MacIver and


The first task for the editorial team was to attract support for the jour-

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editor-in-chief. 238

Merton agreed to contribute, and although neither followed through, Merton did assist by sounding out Kenneth Boulding—a Quaker and an economist, shortly to be appointed President Kennedy’s environmental advisor—and Talcott Parsons, who expressed “sympathy with the proj-


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ect in general” and a willingness to be listed as a future contributor so long as no specific deadlines were set. 249 Polanyi also approached his former colleague Nathan Glazer, and Riesman, who responded with some critical remarks about the Soviet associations of the journal’s name and refused to contribute, but did offer his best wishes and a warm, if undefined, willingness to help out.250 Riesman’s one act of assistance took the form of a recommendation: that the editors approach Amitai Etzioni, a budding Columbia sociologist who had recently published a manifesto for a more resolute détente, The Hard Way to Peace. 251 But this was not the sort of help that Polanyi was hoping for. He had no time for Etzioni, whom he viewed as one of the “moving spirits in the enemy’s camp” alongside established Cold War ideologues, such as Rostow and Arthur Schlesinger. 252 The “anti-Communists,” Polanyi grumbled in 1963, never forgave his “non-participation in cold war hysteria,” and he and his fellow editors were seen as a “Moscow maneuvered crowd.”253 (The word that Shils used was “Sovietophilic.”254) But neither, he added, was he forgiven by “the Communists.”255 From the editorial viewpoint, this posed the greater problem: while contributions to the opening issues of Co-Existence from the First and Third Worlds were being secured, Eastern Europeans were proving rather harder to attract. Friendly responses were received from Lukacs and Oskar Lange, but other early targets declined or failed to respond. The latter included the Polish philosopher Adam Schaff and the economist Michał Kalecki. (“The Great Kalecki,” as Polanyi had earlier referred to him on seeing him speak to Columbia University’s Graduate Club. 256) As a result, Hungarians and a Yugoslav apart, the first three issues contained no contributions from the communist world.257 In 1962 a roster of prospective articles was drawn up, and early the following year an agreement was reached with Robert Maxwell’s Pergamon Press and Oslo University Press to jointly assume its publication. 258 Maxwell, a Ruthenian Jew who had emigrated to Britain to escape Nazism, was the editor’s choice, but it did not sit well with Karl or

Ilona. They suspected that Maxwell’s interest was mercenary. “He wants a ‘prestige journal,’” complained Ilona, that would be out of reach for many potential readers; “it seems he does not care whether this journal is read by anybody.”259 She fiercely disapproved of Schlesinger’s decision

pears if the journal is priced prohibitively and the Editor accepts remuneration as well.” It was apparent that this was “a very deliberate move by Schlesinger to make himself free of all control by anybody.”260 For a revolutionary, which he had been, to accept £100 “from a scamp like Maxwell” was “a kind of selling out.”261 Differences and quarrels notwithstanding, the fi rst issue of CoExistence duly appeared in May 1964, followed by a second issue in November. The editors had, understandably, set their sights high, and not all were achieved. Few, if any, A-list celebrities adorned the first issues, and many B-list targets were absent, too.262 Yet the initial issues were of a respectable standard. Each contained contributions from authors with personal ties to the journal, whether editors (Robinson, Schlesinger) or Polanyi’s students and friends (Muir, Fromm, Joszef Bognar), as well as articles by invited guests, including no fewer than five Indian planners and economists, a trio of Hungarians, and the same number of Dutch economists, contributions from Yugoslavia and the West Indies, as well as by the Keynesian economists Lynn Turgeon and George Cumper, the sinologist Marthe Engelborghs-Bertels, the Sovietologist John Somerville, and—perhaps surprisingly—the conservative historian Ernst Nolte. Polanyi was doubtless pleased to see the inclusion of two essays of a Christian-socialist hue, in par ticu lar one that discussed Pope John XXIII’s Pacem in terris—the 1963 Encyclical that, in Polanyi’s reading, warned the flock against chasing after “the daydream of a capitalist world community.”263 Polanyi was unable to enjoy the sensation of picking up the first issue of Co-Existence. Nor was he able to assess its impact—whether in the short-term, during which the editors oscillated between satisfaction at the quality of articles and disappointment in the low political profi le and sales figures, or in the longer term, during which it established itself as a quality journal that continues to grace the social science shelves


spelled the ruin of Co-Existence, for “all basis for voluntary work disap-

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to accept payment of £100 per issue (the equivalent of $2,600 today). This

today. 264 Yet the first issue came into the world only weeks after he had departed it. He at least had the satisfaction of knowing that his longcherished project was coming to fruition. It had achieved a satisfying


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conclusion. What of his life as a whole?

DUSK OVER BUDAPEST In a letter to Michael from 1959, Karl Polanyi gave expression to the “great happiness” he experienced due to his having led “a complete life.”265 In his fi nal years the sense of fullness can only have grown. His relationship with Michael had entered a phase of reconciliation, and to the extent that endemic tensions remained, they only spurred Karl to make haste with projects, such as Co-Existence and The Plough and the Pen, that expressed his own alternative outlook. His conjugal relationship, meanwhile, was blossoming. Ilona, who had known much sadness and suffering when living alone in Pickering, was smiling again and, perhaps more than ever, their correspondence from the time brims with tenderness and devotion. 266 Their political views were undergoing a further convergence, hastened by the “spiritual rebirth” of socialism that was manifesting itself all around—in Khrushchev’s speech and the Hungarian uprising, in the “Chinese change” and “the African stirring.”267 The heroism of Hungary’s revolutionaries was also revitalizing Polanyi’s bond to Hungary, and if his life achieved a sense of completeness toward its close, it was in no small mea sure thanks to visits to the city of his childhood, as well as to the other European cities in which he had lived and loved. In autumn 1959 Karl and Ilona spent “three weeks in Europe: life-size weeks, life-time weeks.” In London, they stayed with Donald Grant and spent time with old friends, such as Tawney, as well as two full days with Bé de Waard (with whom the young Karl had “danced”).268 In Cambridge they met newer acquaintances, such as Robinson and the historian Michael Postan, before heading to Paris, and then Vienna, followed by an excursion to Budapest. 269 So soon after the crushing of hope in 1956, the reconnaître with Budapest was particularly emotional. Its atmosphere “was quite ghostly,” reported Ilona. “‘Double-talk’ is so common that you immediately begin to practice it yourself, in consideration of your

friends. . . . I met with many of my oldest friends; the tragedy is like an ocean. . . . The city, its streets, were paved with sadness.”270 A certain poignancy affected their mood elsewhere in Europe, too. Having emigrated to the United States at the historical moment when it

was “not half as much threatened by cultural disintegration as the U.S.,” but here too the Cold War was undermining the norms of tolerance and mutual respect that were expressed in the idea of coexistence. 272 Even Europe’s socialist movements, he remarked despondently, had lost much of their verve and vigor—and yet, in terms of their general ambience, the countries he visited appeared “hale and live.”273 Vienna in particular stood out, “debonair, intensely patriotic and very well off on a moral level.”274 So richly did they relish their reconnection with the people and places of their youth that they planned to repeat the trip, and in autumn 1960 Karl’s doctor gave him the green light. 275 In November they enjoyed an “extremely active week” in London, discussing CoExistence with Robinson and Carr, before moving on to the Habsburg capitals. 276 This time they were able to sojourn rather longer in Hungary, for almost a week, the highlight of which was a “wonderful Wiedersehn” with Lukacs, whom Ilona had not seen for twelve years and Karl not for forty.277 In Polanyi’s words, the trip had been “five weeks of condensed ‘Wanderjahre,’ . . . a sentimental journey, a leave-taking from the sites and friends of my youth with whom I have started out fifty-two years ago to improve the world, and whom I now met, fortunately unchanged, in a world much changed.”278 In autumn 1963, during the last phase of his life spent in tolerable health, Polanyi bade a final farewell to Europe. With Ilona he visited London and Vienna, and Paris (to call on Chapman), but the climax of the tour was a three-week stay in Hungary—largely in Budapest, with a brief excursion to see friends at Lake Balaton. 279 To Karl’s surprise and gratification, he was once again invited to deliver an address at the University of Budapest, now renamed the Eötvös Loránd University.280 For an entire week he worked solidly on the paper, which he delivered to an audience of around one hundred. On entering the room and seeing the many old friends and “old-timers” in the audience, Ilona recalls, “well, it’s


old continent now appeared “distinctly provincial.”271 Admittedly, it

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usurped Western Europe as the world’s hegemonic center, to Polanyi the

difficult to describe how our hearts went out to them, and theirs to us.” The paper itself “was heavy going, Parsons-ian sociology and in Hungarian. We were both quite sick in the end of the stuff. . . . But it went off very well, and Dicki spoke more or less freely,” for the best part of two


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hours. 281 (In Karl’s drier account, he presented “a critical appraisal of the Parsonian system” as well as the central fi ndings of his research on precapitalist economies. 282) As they were accompanied back to their rather ramshackle “and immensely lovable and mellow” high-ceilinged hotel on Margaret Island, dusk was drawing in, and the city appeared “very touching in the October mists.”283 In this instant, and throughout his visit to Budapest, Karl Polanyi cannot but have felt a sense of fulfi lment and finality. He was “very moved” to be back home. 284 Full circles had turned. He was put up “in regal comfort” as a special guest of the Eötvös Loránd University, the same institution that had expelled him from its student body nearly six decades earlier and from whose podium he had denounced the rising communist tide in early 1919. In his paper, his swan song, he outlined the research findings that had made his name, and he proffered these as a resource for the enrichment of communist theory, the better to outflank its bourgeois enemies. With the love of his life—his companion and comrade—by his side, he threw himself into cultural and political activities, attending a per formance of Bartok, meeting with writers and poets, and canvassing for Co-Existence. 285 He chewed the fat with relatives, such as George Striker, and with old-timers from his Galilei days, notably the economist Árpád Haász. Over dinner with Haász and friends he debated issues of socialist principle and strategy of the kind that had formed the red thread of his political and intellectual life. Could a socialist regime be established without a revolution? Had Hungary’s social democrats been right to merge with the communists in 1919, and had the latter behaved honorably in taking power following the Second World War?286 The argument continued, fiercely but affectionately, deep into the night.



arl Polanyi is best known for his critique of classical liberal political economy, and he died believing that its errors “would never be repeated.”1 Indeed, the classical liberal program never

quite could be repeated, yet sustained efforts were made. The sermons from Mont Pèlerin, by Hayek, Michael Polanyi, and company, were barely heeded during the trente glorieuses, but when global capitalism entered a structural crisis in the 1970s the policies and institutions that had facilitated profit-making during the long boom no longer seemed to work. As the world economy globalized, industrial and financial corporations pressed for the lower taxes and attenuated regulatory constraints that they viewed as essential to furthering their interests in a more competitive international marketplace.2 Against a backdrop of economic and ideological turmoil, policymakers began to listen to the drumbeat of the Neoliberal Thought Collective.3 The new paradigm was not identical to classical liberalism. Where previously the role of states had been envisaged as correcting or securing a “natural” market order, in the neoliberal optic the task was to construct and continually support the conditions of market competition. Yet the “neo” (and “ordo”) renewers of the liberal economic utopia possessed an equally zealous faith that all corners of

society should be colonized by the market and that dismantling the controls on economic transactions would redound to the benefit of all. The result was neoliberal capitalism: globally integrated, heavily privatized, trade exposed, financialized, and socially segregated.4 The rhetoric of individual choice, the notion that each of us creates our own life chances, grew in acceptance even as actual social mobility dimin-


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ished. As has often been observed, this is a world that Polanyi would have recognized. In 2010, when striking employees in upstate New York—across the Ontario waters from his home in Pickering—were informed by their plant manager that even moderate wage demands cannot be met, because workers are “a commodity like soybeans and oil, and the prices of commodities go up and down,” Polanyi’s words spring to mind: a system that treats “ human labour as a commodity to be bought and sold, like cucumbers” displays a “grotesque perversion of common sense.”5 Similarly, when government ministers call for unemployed people to be “starved back to work,” as the Labour peer Digby Jones did not long ago, Polanyi would have recognized this immediately as a recrudescence of the Malthusian war on welfare, a crusade animated by the presumption that “only if the poor resign themselves to their misery” would they be able to survive at all.6 It is Polanyi’s diagnosis of the corrupting consequences of the marketization of labor power and nature that gives his work a contemporary feel and explains its continued appeal. Yet the prescriptions he offers appear antiquated, even foreign, to twenty-first-century ears. He belongs to a lost world: the socialist project embarked on in the late nineteenth century and early twentieth by such organizations as Britain’s Labour Party and the Austro-Marxist SDAP. These were not “parties of social reform” mandated to nip the thorny brambles of capitalist society but “reformist socialist parties,” dedicated to attacking its roots.7 For them, capitalism stood condemned. They sought to uproot its basic property relationships and to train society toward socialism by a gradual process of parliament-led piecemeal alterations to existing institutions. As often as not, their practice was as tame as any social reform party, yet the flags they bore aloft were bright red, and they invariably possessed a left wing that spoke in urgent tongue of capitalism’s oncoming doom and the march toward the socialist commonwealth.

One reason why thinking through Polanyi’s life is a rewarding exercise is that it enables us to think through the experience of reformist socialism, to explore a world that now appears marginal, even lost, and yet which only two or three generations ago was carving deep and distinctive tracks across the political and cultural landscape. Although never an active member of a social democratic party, throughout most of

Britain’s Labour Party, several of whom he befriended: Otto Bauer and Max Adler, Richard Tawney and Douglas Cole. One could even hazard that he was more typically a reformist socialist than they—at least in the sense given to the “typical character” in the literary theory of Georg Lukacs: a protagonist who is not the average representative of a social class or historical movement nor an allegorical avatar but a person in whom general aspects common to the mass are synthesized with the peculiarities of their own singular life story.8 Typical characters appear to encapsulate a historical moment, their individuality condensing the defining elements of a movement or era. If an author (or biographer) plumps for a typical protagonist in the Lukacsian sense, the details of a historical moment or movement can be limned in a way that is not possible when a dominant figure is selected for portrayal. To the extent that Polanyi typified the reformist socialism of his era, it was not least in his Cole-like combining of “Bolshevik soul” with “Fabian muzzle.” At times his emphasis was passionately upon the radical expansion of human freedoms, understood to necessitate a bursting of the shackles imposed by a society that is structured on the commodification of land and labor; at other times his horizon appeared limited to providing the market economy with a warmer and more cohesive social integument. His tendency was (if I may switch metaphor) to view political strategy through a “bifocal” lens, with social democracy’s traditional minimum and maximum programs—the amelioration of immediate suffering and the revolutionary transformation of society—appearing in distinct fields of vision, with “realist” and “utopian” commitments jostling casually, unconnected by a strategic bridge. A movement or mentality is utopian, in Mannheim’s definition, when it seeks to wrench social institutions out of their existing framework and restructure them around


and his outlook resembled that of senior figures in Austria’s SDAP and

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his adult life Polanyi steadfastly supported the reform-socialist project,

new rules and norms. 9 Understood thus, Polanyi’s utopianism was invested in his raising of the question “what to do about capitalism?” in his contention that modern economies need not and should not be orga nized through a market system, and, relatedly, in his scotching of the thesis that such a system is natural. Drawing support from historical evidence of nonmarket institutions in archaic societies and from anthropological


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materials on small-scale societies in which price-making markets are absent, individual gain-seeking is spurned, and mutual aid- oriented behavior favored, he advanced a case for the radical expansion of nonmarket methods of economic organization in the modern era. For traditional social democracy, the minimum program of reforms would lead via increased parliamentary representation of the working classes to the capture of the state, thereby opening the gateway toward the maximum program of socialist transformation. It was a prospectus predicated on a belief in the sociolog ical neutrality of the state. For Polanyi, too, the state was conceived as “the instrument and guardian of ‘society,’” and his conception of the transition to socialism centered on the replacement of private ownership by public and/or cooperative ownership, together with the state’s acceptance of responsibility for social welfare.10 This strategy of socialist transition, he thought, was an emphatically realist facet of his other wise romantic outlook, but it was in fact a utopian belief, in the colloquial sense of the term: a mirage; a shore that attracts but can never be attained. While he has deservedly received acclaim for having drawn attention to the pivotal role played by polities, specifically the British state, in engineering conditions propitious to liberal economics in par ticular, he paid relatively little heed to the ways in which states had themselves become systematically geared to the interests and imperatives of capital accumulation: they enforce contracts and punish breaches, maintain the walls of property exclusion and synchronize the media of commodity exchange; they regulate the regeneration, security, and circulation of the labor force; they tailor the attributes of the workforce to the needs of business and invest in social and physical infrastructures as well as in the inculcation of values and beliefs conducive to the reproduction of capitalism.11 Yet one searches in vain in Polanyi’s oeuvre for a recognition that the bodies that orga nize the political affairs of capitalist society are in any mean-

ingful sense capitalist states, or that “the general interest” might be an illusion.12 As even his most loyal disciples concede, Polanyi’s framework was ill-suited to exploring “power dynamics” and tended “to treat the state as an impartial arena for the double movement.”13 Many of the laws and regulations that he supposed had been undermining the market system from the late nineteenth century onward either involved the

theorize the rise of state intervention and of the corporation as developments integral to modern capitalism, as Chris Hann and Keith Hart have argued, led him to lose his analytical touch when surveying the postwar decades.14 He failed to take stock of the fact that a system based on commodified labor power requires a supportive framework of noncommodified institutions, and that capitalism is capable of accommodating trade unionism, welfare mea sures, state intervention, and public ownership. Polanyi’s Fabian belief in the sociolog ical neutrality of the state and political impartiality of the democratic game underpinned the illusion, which he held fervently in 1945, that when Labour ministers assumed office in Whitehall, they were by considered choice implementing policies that steer toward a socialist transformation, when in reality they were stabilizing and reinventing British capitalism.15 He applauded the victory, secured with a thumping 55  percent of the vote, of the Social Democratic Party in Austria’s presidential elections of 1963 (shortly before his visit to Vienna). Throughout the postwar period, it had governed in coalition with the conservative People’s Party, but the 1963 result represented a new pinnacle, and further peaks were scaled in the 1970s, when a social democratic administration under Bruno Kreisky—with whom Polanyi’s niece, Maria, had worked as an economics advisor— governed alone for more than ten years, at one point winning over 50  percent of all votes cast.16 The old reform-socialist dream had come true: over half the electorate had voted for a socialist party. Yet the social democrats set about constructing not socialist but corporatist institutions, which they later redesigned along neoliberal lines. This would have astonished Polanyi. In his dichotomous optic, liberal political economy fi nds its nemesis in the countermovement, in which social


not seriously or ultimately impair its functioning. His unwillingness to

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provision of public goods or the correction of “market failures,” and did

democracy plays a leading part. The clash between market liberalism and social countermovement, he believed, would fatally undermine the workings of the market system, presaging a great transformation. Instead, social democracy helped restabilize the market system, which in the postwar decades underwent a remarkable expansion, with a rising percentage of the workforce entering dependent employment, accompa-


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nied by what Burghart Lutz calls the internal colonization (innere Landnahme) of ever larger spheres of life by market forces: the commercialization of ser vices and activities previously carried out at home, the attenuation of economic ties to family, neighborhood and other “nonmarket” habitats, and mass participation in commodified forms of consumption.17 In Polanyi’s analysis of contemporary power relations, much is awry, and he gravely underestimated the degree to which social democracy had, however reluctantly in some cases, hitched itself to the capital ist machine. He attempted to make sense of the crushing of popular social democratic projects by capital, a phenomenon that afflicts our era hardly less than his. (At the time of writing, early 2015, it looms as a possible future for Greece, with the role of enforcer shared by Berlin, Brussels, and the International Monetary Fund [IMF].) But he examined neither the organic, internal connections between business and state power nor the molding by capitalist relations of the institutions of democracy themselves.18 He failed to come to grips with social democracy’s sidelining of its maximum program, and, consequently, The Great Transformation can legitimately be read either as an anticapitalist manifesto or as a socialdemocratic bedtime story: a provider of sweet dreams that help chastened idealists to rise in the morning, to get to work on the countermovement, more or less ruefully reinterpreted as a mission to improve, upholster, and repair the cogs of the market machine.19 For all that, Polanyi’s critique of the market system carries an enduring force. As the world has turned, its neoliberal face increasingly resembling the “market fundamentalism” that he took as his subject, his star has risen relative to his friends and comrades, such as Tawney and Cole, or Bauer and Adler. They, not he, were leading social democratic intellectuals of the mid-twentieth century. Nowadays his rising fame outshines theirs. What accounts for the inversion of fortunes? One reason, just

mentioned, is that his ideas are particularly applicable to the neoliberal phase of capitalism, if less so to its étatiste predecessor. Another is that Tawney and company were, as social democrats, typical in the sense of being exemplary figures, while Polanyi’s typicality was in the Lukacsian sense. They were leading intellectuals of social democratic parties; their work was keyed to the specific experiences and needs of those organiza-

that he was perennially troubled by the conflict between liberalism and socialism that lay at the heart of social democracy, or that he would occasionally toss barbs into its mainstream, or that he veered between its syndicalist and Fabian wings. In all this he barely differed from Tawney or Cole. 20 That he was more willing than they to lend support to rival political projects—bourgeois radicalism, anarchism, and Stalinism—may be a contributing factor. This certainly helps explain why his work speaks to a variety of audiences, including socialists, anarchists, and Greens, as well as social democrats—such as the Labour peer Maurice Glasman, who has reinterpreted The Great Transformation as a hymn to the “German model” of capitalism—and even the occasional neoliberal, such as Dominique Strauss-Kahn, former IMF managing director and Parti Socialiste leader, whose fondness for Great Transformation bespeaks nostalgia for the frayed memories of youthful radicalism or perhaps balm for a bothersome conscience. 21 That Polanyi’s name cannot be pinned firmly to a par ticular tradition only adds to his appeal in an age that views engagement and partisanship with suspicion. Unlike Tawney and company, he was temperamentally disinclined to launch himself into any organized political project, or into parties that were driven compulsively to compromise with the established order. We find this sentiment expressed eloquently, if allusively, in an essay on Hamlet, in which Polanyi empathizes with the hero’s “refusal to ‘set the world right.’” Hamlet’s equivocation, he underlines, “springs from his dread of becoming part of a world he now detests more bitterly than ever.”22 In the end, is it nobler to take up arms against the corrupt king and in so doing become corrupted, or to stoically but futilely suffer the slings and arrows? Alongside the New Testament, Hamlet is one of world literature’s classic engagements with the experience of human suffering, and it was


ship to social democracy was detached and conditional. It is not simply

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tions in the first half of the twentieth century. In contrast, his relation-

during his own war time desolation that Polanyi found himself magnetically drawn to both texts. Some years later, an emphasis upon suffering entered his theorization of the market system. Michael Burawoy has highlighted this, within a discussion of the contrast between Polanyian and classical Marxist theories. For the latter, the key to progressive change is held by the exploited classes in whom experiences of injustice


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and oppression are conjoined with the collective strength to halt the machine. For Polanyi, in Burawoy’s interpretation, it is situated in the realm of suffering, the universality of which stems from its common source: the market system. Workers suffer from unemployment, poverty, and sweatshop conditions, peasants from land seizures and proletarianization, landed aristocrats from the degradation of territory and the importation of cheap foodstuffs, and capitalists from “the anarchy of the market” and stiffer, global competition, while for human beings in general the unrestrained market leads to environmental catastrophe and “the colonization of free time.”23 In this, have we stumbled across a further clue as to why Polanyi is enjoying a growing audience? In the neoliberal age, revulsion at the social dislocation and moral corruption attendant upon marketization is pervasive, yet projects that would dismantle the market system lack confidence, and social democratic parties have long ago dumped the red flag. In such a conjuncture the spores of what Walter Benjamin referred to as “left melancholia” can spread far and wide, a mood of “negativistic quiet” that rebukes the powerful but, unable to successfully reach out to rebellious spirits among the dispossessed, instead dissipates the energies of dissent in cynical, self-pitying or fatalistic fashion. 24 Polanyi himself was immune to cynicism, but he was prone to fatalism, at least in the form common among social democrats of his day: a presumption that an expanding working class in the dawning democratic age was impelling human civilization inexorably toward socialism.25 That thesis proved to be utopian, in the colloquial sense. But one of the antidotes to fatalism and left-wing melancholy is provided by utopia in Mannheim’s sense: an anticipatory and transformative guiding idea that can inspire collective action to change social reality, and it is in his defense of nonmarket utopia that Polanyi’s legacy lies.


AC K N OW L E D G M E N T S 1. KPA-54–3, Julius Holló to Polanyi (date unclear).

INTRODUCTION 1. Ferenc Körmendi, The Happy Generation (London: Nicholson & Watson, 1945), 18. 2. Norman Stone, Europe Transformed, 1878–1919 (London: Fontana Paperbacks, 1983), 303. 3. Karl Mannheim and Ernest Gellner, discussed in Stephen Quilley and Steven Loyal, “Wittgenstein, Gellner, and Elias: From the Philosophy of Language Games to a Figurational Sociology of Knowledge,” Human Figurations 2, no. 2 (2013): 2–9. 4. Mary Gluck, Georg Lukacs and His Generation, 1900–1918 (Cambridge, Mass.: Harvard University Press, 1985), 73. 5. At one point, when preparing his British tax return, Polanyi concluded that the Inland Revenue had miscalculated in his favor, upon which he insisted on returning the “small extra sum that he thought he should pay.” (Kari PolanyiLevitt, interview, December 2008.) This was perhaps true to Polanyi’s nature, although he was not consistent. For example, in 1954 the  U.S. Social Security Administration claimed that it had overpaid Polanyi by around one thousand dollars. He tenaciously fought his corner, fi ring off dozens of letters and statements, over almost a year, and brought in a law fi rm too. His case was that his salary at Columbia, being funded by the Ford Foundation, did not strictly speaking count as salary and was not therefore taxable income. He lost. (KPA-49–5,

6. 7. 8.

9. 10.


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12. 13. 14. 15.



18. 19. 20. 21. 22. 23.

24. 25.

Polanyi’s correspondence from 1956; also KPA-30–12, D. J. Plitz, 1963, to Karl Polanyi [n.d.].) The incident was not without irony, given that Henry Ford had created the Foundation to avoid inheritance tax. Otto Bauer, Werkausgabe, vol. 2 (Vienna: Europa Verlag, 1976), 329. For example, Ross Terrill, R. H. Tawney and His Times: Socialism as Fellowship (Cambridge Mass.: Harvard University Press, 1973), 128. Georg Lukacs, “The Standpoint of the Proletariat,” in History and Class Consciousness (London: Merlin, 1967 [1919–1923]), 63–95. See also Jan Rehmann, Theories of Ideology: The Powers of Alienation and Subjection (Leiden: Brill, 2013), 80. Karl Mannheim, Man and Society in an Age of Reconstruction (London: Routledge, 1940), 157. Michael Polanyi, Personal Knowledge: Towards a Post- Critical Philosophy (London: Routledge & Kegan Paul, 1958). Jefferson Pooley, “An Accident of Memory: Edward Shils, Paul Lazarsfeld and the History of American Mass Communication Research” (D.Phil., Columbia University, 2006), 130. Michael Polanyi, The Tacit Dimension (Garden City, N.Y.: Doubleday, 1966), 86. Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (Boston: Beacon, 2001), 102. KPA-17–24, Karl Polanyi, “Rise and Decline of the Profit Motive,” London Cooperative Society Weekend School. Blaise Bachofen, “Why Rousseau Mistrusts Revolutions: Rousseau’s Paradoxical Conservatism,” in Rousseau and Revolution, ed. Holger Ross Lauritsen and Mikkel Thorup (London: Continuum, 2011), 35–61. This insight has more recently been developed by the political phi losopher Ruth Grant, in Strings Attached: Untangling the Ethics of Incentives (Princeton, N.J.: Princeton University Press, 2011). Ernest Gellner, Nations and Nationalism (Ithaca, N.Y.: Cornell University Press, 1983). For a critique of “Great Ditch” theories, see Bruno Latour, We Have Never Been Modern (Cambridge, Mass.: Harvard University Press, 1993). KPA-51–2, Karl Polanyi to George, August 6, 1960. MPP-17–12, Karl Polanyi to Misi, January 21, 1957. Typewritten memoir by Don Grant, shared with the author, September 2013. William Scott and Martin Moleski, Michael Polanyi: Scientist and Philoso pher (Oxford: Oxford University Press, 2005), 9. Peter Drucker, Adventures of a Bystander (New York: John Wiley, 1994 [1978]), 134. Collini, cited in Denys Leighton, The Greenian Moment: T. H. Green, Religion and Politi cal Argument in Victorian Britain (Exeter: Imprint Academic, 2004), 28. See also Peter Thomas, The Gramscian Moment (Leiden: Brill, 2009), 128. Godesberg Programme of the SPD, November 1959, http://germanhistorydocs.ghi -dc.org /docpage.cfm?docpage _ id=3341. KPA-30–2, Karl Polanyi to Bé de Waard, January 6, 1958.


1. SPSL-536–1, Karl Polanyi to Walter Adams, March 31, 1934. 2. See for example the letterheads in PFP-212–28: “The Pollacsek family were wealthy country folk who rented crown property for their business in the 18th century.” Jean Richards, e-mail to the author, May 28, 2013. 3. Kari Polanyi-Levitt, telephone interview, November 2008. 4. Péter Hanák, The Garden and the Workshop: Essays on the Cultural History of Vienna and Budapest (Princeton, N.J.: Princeton University Press, 1998), 12–17. 5. Gábor Gyáni, “Bürgerliches Heim und Interieur in Budapest,” in Bürgerliche Wohnkultur des Fin de Siècle in Ungarn, ed. Péter Hanák (Vienna: Böhlau, 1994), 45–89. 6. Arthur Koestler, Arrow in the Blue (London: Hutchinson, 1983 [1952]); Georg Lukacs, Record of a Life: An Autobiographical Sketch (London: Verso, 1983). 7. KPA-30–1, Karl Polanyi, “Biographical Information,” 1940–1984. 8. KPA-56–1, Mihály to Cecile, May 27, 1898. See also PFP-212–55, Mihály to Cecile, July 12, 2003. 9. János Gyurgyák, ed., Karl Polanyi, 1886–1964 (Budapest: Fővárosi Szabó Ervin Könyvtár, 1986). 10. Tibor Frank, “The Social Construction of Hungarian Genius (1867–1930),” background paper for “Budapest: The Golden Years: Early Twentieth Century Mathematics Education in Budapest and Lessons for Today,” von Neumann Memorial Lectures, Princeton University, 2007, www.franktibor.hu/index.html?hu _uj _ kozl .html, 42. 11. Theodore von Kármán, quoted in Frank, “Hungarian Genius,” 44. 12. PFP-212–324, Polanyi to Mama (n.d.). 13. PFP-212–34, Cecile to Lieber Papa (n.d.); Kari Polanyi-Levitt, interviews, Montreal, December 2008. 14. PFP-212–34, Cecile to Lieber Papa (n.d.). 15. In 1905 the family moved to a more central address, in Bécsi utca. KPA-30–1, Karl Polanyi, “Biographical Information,” 1940–1984. 16. KPA-59–2, Karl Polanyi to Kari and Joe, January 25, 1962. 17. MPP-17–12, Karl Polanyi to Michael, January 11, 1952. 18. KPA-59–2, Karl Polanyi to Kari, January 9, 1961. 19. KPA-59–8, Karl Polanyi to Misi, July 11, 1947. 20. KPA-59–2, Karl Polanyi to Kari, January 8, 1960. 21. Kari Polanyi-Levitt, telephone interview, March 2009. 22. Ilona Duczynska, “‘I first met Karl Polanyi in 1920,’” in Karl Polanyi in Vienna: The Contemporary Significance of the Great Transformation, ed. Kari Polanyi-Levitt and Kenneth McRobbie (Montreal: Black Rose, 2000), 303. 23. Georgi Derluguian, “The Lessons of Communism,” in Immanuel Wallerstein, Randall Collins, Michael Mann, Georgi Derluguian, and Craig Calhoun, Does Capitalism Have a Future? (Oxford: Oxford University Press, 2013), 99–130. 24. KPA-47–15, Karl Polanyi to E. D. Simon, June 12, 1945.

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1 . I N T H E E A S T- W E S T S A L O N

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25. KPA-48–5, Karl Polanyi to Oscar Jaszi, October 27, 1950. In other respects, Webb’s upbringing was quite unlike Polanyi’s. See John Hall, “The Roles and Influence of Political Intellectuals: Tawney vs Sidney Webb,” British Journal of Sociology 28, no. 3 (1977): 351–362. 26. MPP-17–12, Karl to Michael, January 11, 1952. 27. Eva Zeisel, quoted in William Scott and Martin Moleski, Michael Polanyi: Scientist and Philosopher (New York: Oxford University Press, 2005), 7. 28. PFP-212–28, various letterheads. Zoltán Kodály, another of Hungary’s “Great Generation,” was also influenced by Dalcroze, as can be seen in the Kodály method of music tuition, and Dalcroze’s eurhythmics was on the curriculum at the kindergarten run by Cecile’s eldest daughter, Laura. Scott and Moleski, Polanyi, 29. 29. Tibor Frank, Double Exile: Migrations of Jewish-Hungarian Professionals through Germany to the United States, 1919–1945 (Oxford: Peter Lang, 2008). 30. PFP-212–324, Karl Polanyi to Mama (n.d.). 31. Quoted in Arpad Kadarkay, Georg Lukacs: Life, Thought and Politics (Oxford: Blackwell, 1991), 89. 32. Tibor Frank, “‘All Modern People Are Persecuted’: Intellectual Exodus and the Hungarian Trauma, 1918–1920,” in The numerus clausus in Hungary: Studies on the First Anti-Jewish Law and Academic Anti-Semitism in Modern Central Europe, ed. Victor Karady and Peter Tibor Nagy (Budapest: Pasts Inc. Centre for Historical Research, History Department of the Central European University, 2012). 33. PFP-212–68, Correspondence. 34. PFP-212–28, Cecile to Laura (n.d.); PFP-212–14, Cecile to Lieber Freund (n.d.). 35. PFP-212–14, Cecile to Lieber Freund (n.d.). 36. Judith Szapor, The Hungarian Pocahontas: The Life and Times of Laura Polanyi Stricker, 1882–1959 (Boulder, Colo.: East European Monographs, 2005), 52. 37. PFP-212–68, Cecile Polanyi, “Kunst und Psychoanalise [sic]” (n.d.); Szapor, Pocahontas, 52. 38. Francis Dunlop, The Life and Thought of Aurel Kolnai (Aldershot, U.K.: Ashgate, 2002), 56. See also MPP-17–11, Karl Polanyi to Michael, June 14, 1944. 39. Kari Polanyi-Levitt, interview, Montreal, December 2008. 40. KPA-56–1, Mihály to Cecile, May 27, 1898. 41. KPA-48–5, Polanyi to Jaszi, October 27, 1950. 42. Karl Polanyi to Lukacs, in Georg Lukacs, Selected Correspondence (New York: Columbia University Press, 1986), 194. 43. KPA-17–20, Karl Polanyi, “British Characteristics,” Canterbury (1939). 44. Karl Polanyi, “‘ Free trade!’” [“Szabadkereskedelmet!”], Bécsi Magyar Újság, November 2, 1922. 45. MPP-17–12, Karl to Michael, January 11, 1952. 46. KPA-48–5, Polanyi to Jaszi, October 27, 1950. 47. KPA-50–4, Karl Polanyi to George, April 23, 1959. 48. KPA-29–9, Felix Schafer, “Memoirs” (1944–1966), 40. I follow Polanyi in using Schafer rather than Schaffer. 49. KPA-21–18, Karl Polanyi, “Wealth” (n.d.). By way of illustration, consider his reflections on the social construction of wealth, presented in terms of an opposition



54. 55. 56.

57. 58.

59. 60.

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between market society and “primitive society.” In market society, wealth consists in the possession, by individuals, of “useful goods,” provided only “that they are scarce and exchangeable.” It is valued not least because it betokens the individual’s pecuniary or other power vis-à-vis others. This gives it “a competitive, differential connotation” such that “if all goods tomorrow became superabundant they would cease to be wealth because everybody could have them and exchange relations could no longer be set up.” By contrast, “wealth for primitives [sic] consists in the display or ceremonial manipulation or handing around, by individuals only in their capacity as members of society,” of useless, nonsubsistence luxuries that arouse “emotions of one kind or another.” In such societies wealth is valued principally because it contributes to social cohesion. Even if all goods became superabundant, they would still count as wealth in the eyes of the community. Paul Ignotus, “The Hungary of Michael Polanyi,” in The Logic of Personal Knowledge, ed. Paul Ignotus et al. (London: Routledge, 1961), 3–12. KPA-47–4, Karl Polanyi to Werte Genosse, 1927; Karl Polanyi, “Die neue Internationale,” in Chronik der groǞen Transformation, vol. 1, ed. Michele Cangiani and Claus Thomasberger (Marburg: Metropolis, 1925). KPA-55–6, Kari Polanyi-Levitt to Louis Dumont, December 14, 1983. In this his attitude was similar to that of Karl Popper, who did “not consider myself ‘an assimilated Jew.’ . . . This is how ‘the Führer’ would have considered me.” Malachi Hacohen, “Dilemmas of Cosmopolitanism: Karl Popper, Jewish Identity, and ‘Central European Culture,’” Journal of Modern History 71, no. 1 (1999): 147. János Gyurgyák (Karl Polanyi) claims that Karl successfully applied for his name to be changed in 1904, yet on Mihály’s death certificate (1905) all the children still carry the Pollacsek name, and Laura did not change hers until 1912. The name given on Karl’s fi rst published article, in 1907, was Polanyi. On Kari’s baptism certificate (1923, in KPA-47–11), Polanyi is listed as an adherent of the “Reformed religion.” Frank, “Hungarian Genius,” 29. KPA-55–6, Kari Polanyi-Levitt to Louis Dumont, December 14, 1983. Thomas Bender and Carl Schorske, “Introduction: Budapest and New York Compared,” in Budapest and New York: Studies in Metropolitan Transformation, 1870– 1930, ed. Thomas Bender and Carl Schorske (New York: Russell Sage Foundation, 1994), 17; Hanák, Garden and Workshop, 52. PFP-212–326, Karl Polanyi to Misi, October 21, 1959. PFP-212–326, Karl (1959) to Misi, October  21, 1959. In fact, Hungarians and Ashkenazi Jews shared nearly identical roots, in Khazar. See Shlomo Sand, The Invention of the Jewish People (London: Verso, 2009), 214, 225, and Arthur Koestler, cited in Sand, Invention of the Jewish People, 239. Oskar Jaszi, Der Zusammenbruch des Dualismus und die Zukunft der Donaustaaten (Vienna: Manzsche Verlags- und Universitäts-Buchhandlung, 1918), 18. Robert Bideleux, “In Lieu of a Conclusion: East Meets West?,” in European Integration and Disintegration: East and West, ed. Robert Bideleux and Richard Taylor (London: Routledge, 1996), 287.

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61. George Mosse, paraphrased in Steven Aschheim, Brothers and Strangers: The East European Jew in German and German Jewish Consciousness, 1800–1923 (Madison: University of Wisconsin Press, 1982), 7. 62. Abram Leon, The Jewish Question: A Marxist Interpretation, 1946, www.marxists .de/religion / leon /. 63. Aschheim, Brothers and Strangers, 5. 64. Aschheim, Brothers and Strangers, 11. 65. Michael Meyer, “German Jewry’s Path to Normality and Assimilation: Complexities, Ironies, Paradoxes,” in Towards Normality? Acculturation and Modern German Jewry, ed. Rainer Liedtke and David Rechter (Tübingen: Mohr Siebeck, 2003), 18. 66. Aschheim, Brothers and Strangers, 6. 67. In late nineteenth-century Hungary as a whole, Jews made up 5 percent of the population but 54 percent of businessmen, 43 percent of bankers and moneylenders, and 45 percent of lawyers. Mary Gluck, Georg Lukacs and His Generation, 1900– 1918 (Cambridge, Mass.: Harvard University Press, 1985), 58. 68. Quoted in Frank, Double Exile, 43. 69. Peter Pulzer, The Rise of Politi cal Anti- Semitism in Germany and Austria (London: Peter Halban, 1988), 132. 70. Karl Polanyi, “Count Michael Károlyi,” Slavonic and East European Review 24, no. 63 (1946): 93. 71. György Enyedi and Viktória Szirmai, Budapest: A Central European Capital (London: Belhaven Press, 1992), 67. 72. Pulzer, Political Anti-Semitism, 132. 73. However, some of them—for example, Michael—would later refuse to identify as Hungarian. Stefania R. Jha, Reconsidering Michael Polanyi’s Philosophy (Pittsburgh: University of Pittsburgh Press, 2002), 263. 74. Polanyi, “Count Michael Károlyi,” 94. 75. Hanák, Garden and Workshop, 58. 76. Hanák, Garden and Workshop, 48. 77. Kati Vöros, “The ‘Jewish Question,’ Hungarian Sociology and the Normalization of Antisemitism,” Patterns of Prejudice, 44, no. 2 (2010): 137–160. 78. Vöros, “Jewish Question.” 79. Eleonore Kofman, “Figures of the Cosmopolitan,” Innovation: The European Journal of Social Science Research 18, no. 1 (2005): 85–99. 80. Vöros, “Jewish Question.” 81. Enzo Traverso, Understanding the Nazi Genocide: Marxism after Auschwitz (London: Pluto, 1999), 1. 82. Slavoj Zizek, The Parallax View (Cambridge, Mass.: MIT Press, 2006), 254. 83. Aschheim, Brothers and Strangers, 79. 84. Aschheim, Brothers and Strangers, 36. 85. By way of example, consider Rosa Luxemburg’s thoughts, expressed to a friend in 1917. “Why do you come with your par tic u lar Jewish sorrows? I feel equally close to the wretched victims of the rubber plantations in Putumayo, or to the Negroes in Africa with whose bodies the Eu ropeans are playing catch-ball. I have not a separate corner in my heart for the ghetto: I feel at home in the

89. 90.

91. 92. 93. 94. 95. 96. 97. 98. 99. 100.

101. 102. 103. 104. 105. 106.

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86. 87.

entire world wherever there are cloud and birds and human tears.” Quoted in Natan Sznaider, “Hannah Arendt’s Jewish Cosmopolitanism: Between the Universal and the Par tic u lar,” Eu ro pean Journal of Social Theory 10, no. 1 (2007): 116. Aschheim, Brothers and Strangers, 20. Sander Gilman, Jewish Self-Hatred: Anti-Semitism and the Hidden Language of the Jews (Baltimore: Johns Hopkins University Press, 1986). Oscar Jaszi, Revolution and Counter-Revolution in Hungary (London: P. S. King, 1924), 123. Vöros, “Jewish Question,” 157. Polanyi adds: “As today the Negroes, so earlier the Jews gradually became conscious of their own emancipation.” “The legacy of the Galilei Circle” [A Galilei Kör hagyatéka], in Fasizmus, demokrácia, ipari társadalom (Budapest: Gondolat Kiadó, 1986), 193–214. Karl Polanyi, The Legacy of the Galilei Circle (Fasizmus, demokrácia, ipari társadalom (Budapest: Gondolat Kiadó, 1986), 193–214. That Polanyi was still an atheist in 1914 can be gleaned from his various writings of the time in Szabadgondolat. KPA-1–10, Karl Polanyi, “Credo and Credulity,” [Hit és hiszékenység], Szabadgondolat 1, no. 5 (1911): 159–162. Kari Polanyi-Levitt, telephone interviews, November 2007 and December 2008. Kari Polanyi-Levitt, telephone interview, November 2007. Jonathan Parry, “The Gift, the Indian Gift, and the ‘Indian Gift,’” Man 21, no. 3 (1986): 469. Parry, “Indian Gift,” 458. Parry, “Indian Gift,” 466. Marcel Mauss, The Gift: The Form and Reason for Exchange in Archaic Societies (London: Routledge, 1990 [1924]). In his later years, Polanyi regarded Smith as the other wise “noble-minded” coauthor of the “fatal fallacy” that had begotten “the satanic paradox which expects the growth of the community to develop from the self-interest of the individual. This thesis, while inundating the world with immea surable material abundance, released an automatic mechanism of immorality upon western humanity.” Polanyi, “Legacy of the Galilei Circle”; KPA-15–8, Karl Polanyi, Lecture notes, “Government and Industry,” University of London (1943–1944); KPA-31–15, Karl Polanyi, Research Proposal no. 1, Columbia University. Michael Löwy, Redemption and Utopia: Jewish Libertarian Thought in Central Europe (London: Athlone Press, 1992), 33. KPA-37–8, Karl Polanyi, “The Galilei Circle Fifty Years On” [A Galilei Kör otven év távlatából], 1958. Löwy, Redemption, 37. Quoted in Löwy, Redemption, 37. Löwy, Redemption, 32. Einstein has been described as “a typical marginal man living in a permanent state of marginality,” while Kafka was a stranger in multiple ways: as a German speaker

107. 108. 109. 110.


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111. 112. 113. 114. 115. 116. 117. 118. 119. 120. 121. 122.

123. 124. 125. 126.

127. 128. 129. 130. 131. 132. 133. 134. 135.

among Czechs, a Jew among Germans, a bourgeois among workers, and an indifferent man among Jews. Hanák, Garden and Workshop, 160. Veblen, quoted in Hanák, Garden and Workshop, 176. Gluck, Georg Lukacs, 8. Isaac Deutscher, The Non-Jewish Jew and Other Essays (Oxford: Oxford University Press, 1968). John Lukacs, Budapest 1900: A Historical Portrait of a City and Its Culture (London: Weidenfeld, 1993), 183. Zoltán Horváth, Die Jahrhundertwende in Ungarn: Geschichte der zweiten Reformgeneration (1896–1914) (Budapest: Corvina Verlag, 1966), 141. KPA-37–8, Polanyi, “The Galilei Circle Fifty Years On.” Lukacs, Selected Correspondence, 39. Polanyi, cited in Kadarkay, Georg Lukacs, 62. Quoted in Hanák, Garden and Workshop, 80. Quoted in Hanák, Garden and Workshop, 84. Andrew Janos, The Politics of Backwardness in Hungary, 1825–1945 (Princeton, N.J.: Princeton University Press, 1982), 172. Quoted in Horváth, Die Jahrhundertwende, 238. KPA-56–4, Karl Polanyi to Ady, February 2, 1909. KPA-56–4, Polanyi to Ady, February 2, 1909; Gyurgyák, Karl Polanyi. Ignotus, “Hungary of Michael Polanyi,” 10. The subject of Polanyi’s fi rst published article was George Bernard Shaw, one of a handful of intellectuals who belonged to both the Bloomsbury Group and the Fabian Society. Ferenc Múcsi, “The Start of Karl Polanyi’s Career,” in The Life and Work of Karl Polanyi, ed. Kari Polanyi-Levitt (Montreal: Black Rose, 1990), 27. Jaszi, Revolution and Counter-Revolution, 25. David  Kettler, Volker  Meja, and Nico  Stehr, Karl Mannheim (London: Ellis Horwood and Tavistock Publications, 1984), 22–24. Rudolf Tökés, Béla Kun and the Hungarian Soviet Republic: The Origins and Role of the Communist Party of Hungary in the Revolutions of 1918–1919 (New York: Praeger, 1967), 19. Ignotus, “Hungary of Michael Polanyi,” 6. Eduard Bern stein, Evolutionary Socialism (1899), chap.  3, www.marxists .org /reference/archive/ bernstein /works/. Janos, Politics of Backwardness, 187. György Litván, “A Moralist Revolutionary’s Dilemma: In Memory of Ervin Szabó,” Radical History Review 24 (Fall 1980): 77–90. Ervin Szabó, Socialism and Social Science, ed. György Litván and János Bak (London: Routledge, 1982). Szabó, Socialism, 136. Tökés, Béla Kun, 10. Szabó, Socialism, 183. KPA-1–50, Karl Polanyi, Untitled text, September 21, 1918; Litván, “Revolutionary’s Dilemma”; Janos, Politics of Backwardness, 187.

•  1 . I N T H E E A S T- W E S T S A L O N 297

136. KPA-1–6, Karl Polanyi, “The Crisis of Our Ideologies” [Nézeteink válsága], Huszadik Század 11, no. 1–2 (1910): 125–127. 137. Karl Polanyi, “Der geistesgeschichtliche Hintergrund des Moskauer Prozesses,” in Chronik der groǞen Transformation, vol. 3, ed. Michele Cangiani, Kari-Polanyi Levitt, and Claus Thomasberger (Marburg: Metropolis, 2005), 67. 138. KPA-1–11, Karl Polanyi “On the Destructive Turn” [A destruktiv irányról], Szabadgondolat, 1, no. 6 (1911): 195–197. 139. Lukacs, quoted in Michael Löwy, Georg Lukacs: From Romanticism to Bolshevism (London: Verso, 1979), 85. 140. Lukacs, Budapest 1900, 197. 141. György Litván, A Twentieth- Century Prophet: Oscár Jászi, 1875-1957 (Budapest: Central European Press, 2006), 16. 142. George Monbiot, “Millionaires and Corporations Are Using Tax Breaks to Help Sway Public Opinion” (2011), www.guardian .co.uk /commentisfree/2011 /oct/17 /millionaires-corporations-tax-breaks-sway-opinion. 143. Herbert Spencer, The Man versus the State (Harmondsworth, U.K.: Penguin, 1969 [1884/1892]). In later life, Polanyi would refer to Spencer as “the precursor of the thought age which came to fruition in the Vienna school.” KPA-8–12, Karl Polanyi, “Notes on readings” (1934–1946). 144. Spencer, Man versus State. 145. Kettler et al., Karl Mannheim, 20; Horváth, Die Jahrhundertwende, 135. 146. Gluck, Georg Lukacs, 88. 147. Gluck, Georg Lukacs, 104. 148. Janos, Politics of Backwardness, 185. 149. Quoted in Homi Bhaba, The Location of Culture (London: Routledge, 2012), 192. 150. Jha, Polanyi’s Philosophy, 6. 151. PFP-212–324, Karl to Cecile and his siblings (n.d.). 152. KPA-30–1, Karl Polanyi, “Biographical Information,” 1940–1984; Scott and Moleski, Polanyi, 8. 153. KPA-59–2, Karl to Kari, January 9, 1961. 154. KPA-29–9, Schafer, Felix “Memoirs,” 8, 1944–1966. 155. Kari Polanyi-Levitt, interview, December 2008. 156. KPA-18–35, Karl Polanyi, “Nationalism and Internationalism” (n.d.). 157. David Harvey, “Cosmopolitanism and the Banality of Geographical Evils,” Public Culture 12, no. 2 (2000): 535. 158. Cf. Hacohen, “Dilemmas of Cosmopolitanism.” 159. KPA-1–50, Karl Polanyi, “The Resurrection of Jesus” [Jézus feltámadása], Bécsi Magyar Újság, April 5, 1923. 160. Karl Polanyi, “The Essence of Fascism,” in Christianity and the Social Revolution, ed. John Lewis, Karl Polanyi, and Donald Kitchin (London: Gollancz, 1935), section IV. 161. KPA-1–50, Polanyi, “Resurrection of Jesus.” Here Polanyi overstates the role of religious creeds. Nonreligious traditions, for example, ancient Greek philosophy, have conceived of the moral unity of humankind. 162. KPA-1–50, Polanyi, “Resurrection of Jesus.”

163. 164. 165. 166. 167.

KPA-45–6, Rotstein, “Weekend Notes,” 1957. KPA-21–2, Karl Polanyi (1936), “Xtianity and the New Social Order.” KPA-1–50, Polanyi, “Resurrection of Jesus.” KPA-21–2, Polanyi, “Xtianity and the New Social Order.” Abe Rotstein, telephone interview, May 16, 2009.


•  1 . I N T H E E A S T- W E S T S A L O N

2 . B E A R I N G T H E C R O S S O F WA R 1. János Gyurgyák, ed., Karl Polanyi, 1886–1964 (Budapest: Fővárosi Szabó Ervin Könyvtár, 1986). 2. KPA-29–10, Felix Schafer, “Karl Polanyi’s Life in Vienna,” 1973–1974, 34. 3. Paul Ignotus, “The Hungary of Michael Polanyi,” in The Logic of Personal Knowledge, ed. Paul Ignotus et al. (London: Routledge, 1961), 3–12. 4. KPA-23–6, Karl Polanyi, “Answers to Random Questions” [Válasz elszórt kérdésekre]; KPA-29–9, Felix Schafer, “Memoirs,” 1944–1966, 42. 5. The qualification is roughly comparable to a Master’s degree today. See KPA56–7, Böske Révész, Excerpt from a letter to Lukacs, July 2, 1909. My gratitude to Mihaly Sarkany (via Chris Hann) for elucidation. 6. Gyurgyák, Karl Polanyi. 7. MPP-17–1, Karl Polanyi to Misi, February 7, 1914. 8. SPSL-536–1, Polanyi to Adams, March 31, 1934. 9. William Scott and Martin Moleski, Michael Polanyi: Scientist and Philoso pher (Oxford: Oxford University Press, 2005), 20. 10. Scott and Moleski, Polanyi, 20. 11. KPA-56–7, excerpts from letters from Édit Hajós to Lukacs (December 26, 1909), Pal Ligeti to Lukacs (April 29, 1910), and Édit Hajós to Lukacs (February 11, 1910). 12. KPA-56–7, Böske Révész, excerpt from a letter to Lukacs, January 3, 1910. 13. KPA-56–7, Henrik Herz, excerpt from a letter to Lukacs, June 7, 1910. 14. Irma took her life subsequent to the end of a brief affair with Béla Balázs, which coincided with a rupture in her romantic friendship with Lukacs. See KPA-56–6, Karl Polanyi to Georg Lukacs, January 31, 1912; Agnes Heller and Etti de Laczay, “Georg Lukacs and Irma Seidler,” New German Critique 18 (autumn 1979): 74– 106. Yet another loss suffered in the late 1900s was of Karl’s youn gest brother, Paul. Born with a severe disability, he was confi ned to an institution when very young. Paul’s fate was never discussed in the family. Scott and Moleski, Polanyi, 12. 15. KPA-56–6, Karl Polanyi to Lukacs, March 20, 1914. 16. KPA-56–7, Édit Hajós, excerpt from a letter to Lukacs, February 11, 1910. 17. KPA-30–1, Karl Polanyi, “Biographical Information,” 1940–1984. 18. MPP-17–1, Bé to Karl, July 11, 1913(?). 19. MPP-17–1, Karl to Misi, February 7, 1914. 20. KPA-56–7, Excerpts from letters from Édit Hajós to Lukacs, December 26, 1909 and February 11, 1910. 21. Scott and Moleski, Polanyi, 14.

28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42.

43. 44. 45. 46. 47. 48.

•  2 . B E A R I N G T H E C R O S S O F W A R

26. 27.

KPA-56–6, Cecile to Lukacs (n.d.). Scott and Moleski, Polanyi, 15. Judit Szapor, conversation with the author, Montreal, October 2010. PFP-212–326, Karl to Misi, October 21, 1959; PFP-212–326, Karl Polanyi to Misi, March 4, 1961. There is, however, little indication that Michael accepted the fi lial role. MPP-17–12, Karl Polanyi to Misi, March 4, 1961. Endre Nagy, “After Brotherhood’s Golden Age: Karl and Michael Polanyi,” in Humanity, Society and Commitment: On Karl Polanyi, ed. Kenneth McRobbie (Montreal: Black Rose, 1994), 81–112. PFP-212–326, Karl to Misi, October 21, 1959. KPA-1–39, Karl Polanyi, “The Galilei Circle: A Balance Sheet” [A Galilei Kör mérlege], Korunk, June 1929, 1–4. Karl Polanyi, “The Legacy of the Galilei Circle” [A Galilei Kör hagyatéka], in Fasizmus, demokrácia, ipari társadalom (Budapest: Gondolat Kiadó, 1986), 193–214. KPA-30–1, Karl Polanyi, “Curriculum Vitae” (n.d.); KPA-37–8, Karl Polanyi, “The Galilei Circle Fifty Years On” [A Galilei Kör otven év távlatából], 1958. Ferenc Múcsi, “The Start of Karl Polanyi’s Career,” in The Life and Work of Karl Polanyi, ed. Kari Polanyi-Levitt (Montreal: Black Rose, 1990), 27. SPSL-536–1, Polanyi to Adams, March 31, 1934. SPSL-536–1, Polanyi to Adams, March 31, 1934. Oscar Jaszi, Revolution and Counter-Revolution in Hungary (London: P. S. King, 1924), 25. KPA-1–39, Polanyi, “The Galilei Circle: A Balance Sheet.” KPA-48–5, Polanyi to Jaszi, October 27, 1950. KPA-30–1, Polanyi, “Biographical Information.” Ignotus, “Hungary of Michael Polanyi,” 11. SPSL-536–1, Karl Polanyi to Zoe Fairfield, March 24, 1934. KPA-1–3, Karl Polanyi, “Culture—Pseudo-Culture” [Kultura—álkultura], Szocializmus Szemle no. 5 (1909–1910): 238–240. Polanyi was also impressed by the number of German intellectuals—he mentions Franz Oppenheimer—who had “positioned themselves on the side of monism.” Of all systems, it is the one that is “most amenable to rigorous criticism,” and therefore “we Freethinkers” consider it the superior system. KPA-1–22, Karl Polanyi, “Books” [Könyvek], Szabadgondolat 4, no. 1 (1914). Wilhelm Ostwald, Gegen den Monismus (Leipzig: Verlag Unesma, 1913), esp. 54. Friedrich Adler, Ernst Machs Ueberwindung des mechanischen Materialismus (Vienna: Wiener Buchhandlung, 1918), 24. Ernst Mach, Die Analyse der Empfindungen und das Verhältnis des Physischen zum Psychischen, Neunte Auflage (Jena: Gustav Fischer, 1922 [1897]), 13–14. KPA-23–6, Polanyi, “Answers to Random Questions.” KPA-1–3, Polanyi, “Culture—Pseudo- Culture.” KPA-1–51, Karl Polanyi, “The Discovery of the Three Holy Scripts” [A három Szentirás felfedezése]; KPA-1–5, Karl Polanyi, “The Importance of Orthodoxy” [Az


22. 23. 24. 25.

49. 50.


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52. 53. 54. 55. 56.

57. 58. 59.

60. 61. 62.

63. 64.

65. 66. 67.

orthodoxia fontosságáról], Renaissance 8, no. 25 (1910): 707–712; G. K. Chesterton, Heretics (Peabody, Mass.: Hendrickson, 2007 [1905]), chapter 1. KPA-1–10, Karl Polanyi, “Credo and Credulity,” [Hit és hiszékenység], Szabadgondolat 1, no. 5 (1911). KPA-1–6, Karl Polanyi, “The Crisis of Our Ideologies” [Nézeteink válsága], Huszadik Század 11, no. 1–2 (1910): 125–127. M. Constantinescu et al., “Zur nationalen Frage in Österreich-Ungarn (1900–1918),” in Die nationale Frage in der Österreichisch-Ungarischen Monarchie 1900–1918, ed. Péter Hanák (Budapest: Akadémiai Kiadó, 1966), 39–147 KPA-20–2, Karl Polanyi, “Introduction to ‘Tame Empires,’” 1938–1939. SPSL-536–1, Karl to Zoe Fairfield, March 24, 1934. KPA-20–2, Polanyi, “Introduction to ‘Tame Empires.’” SPSL-536–1, Polanyi to Adams, March 31, 1934. KPA-2–9, Karl Polanyi (1919) “The Crucial Issue Today: A Response” [Worauf es heute ankommt. Eine Erwiderung]. Cf. Jaszi, Revolution and Counter-Revolution, 113; and György Litván, A Twentieth-Century Prophet: Oscar Jaszi, 1875–1957 (Budapest: Central European University Press, 2006), 72. During 1911 Jaszi sojourned for several months in Berlin, where he made the acquaintance of Bern stein, Ferdinand Tönnies, and Oppenheimer. MPP-17–2, Karl Polanyi to Misi, early 1920s. MPP-17–2, Karl to Misi, early 1920s. KPA-4–9, Karl Polanyi (early 1920s) “Early Chris tian ity and Communism.” A Marxist rejoinder to the liberal socialist critique was penned by Bukharin. See Nikolai Bukharin, “ Toward a Theory of the Imperialist State,” 1915, www.marxists .org /archive/ bukharin /works/1915/state.htm. KPA-2–9, Polanyi, “The Crucial Issue Today,” 2. Albert Hirschman, The Rhetoric of Reaction: Perversity, Futility, Jeopardy (Cambridge, Mass.: Belknap Press of Harvard University Press, 1991), 96. KPA-1–48, Karl Polanyi, “Radical Party and Bourgeois Party” [Radikális párt és polgári part], Szabadgondolat 8, no. 9 (1918): 198–204. See also Roger Fletcher, “The Life and Work of Eduard Bernstein,” in Bernstein to Brandt: A Short History of German Social Democracy, ed. Roger Fletcher (London: Edward Arnold, 1987), 49. KPA-2–9, Polanyi, “The Crucial Issue Today,” 2. In a letter of 1934, Polanyi insisted on the “recognition of the central importance of economic law in the sphere of social responsibilities: fi rst, because these laws apply to every sort of society whatever, limiting thus the very aims Social Reform can set itself; secondly, because economics are, in the last resort, an application of the rules of choice, the moral responsibilities entailed in choice being therefore inseparable from social economics.” SPSL-536–1, Polanyi to Adams, March 31, 1934. Emphasis added. Quoted in György Litván, “Karl Polanyi in Hungarian Politics,” in The Life and Work of Karl Polanyi, ed. Kari Polanyi-Levitt (Montreal: Black Rose, 1990), 31–32. KPA-1–48, Polanyi, “Radical Party and Bourgeois Party.” Conversation with Judit Szapor, Montreal, October 2010.

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68. Janos Hauszmann, Bürgerlicher Radikalismus und demokratisches Denken im Ungarn des 20. Jahrhunderts: Der Jaszi-Kreis um Huszadik Század (Oxford: Peter Lang, 1988), 152. 69. Jaszi, Revolution and Counter-Revolution, 23. 70. KPA-1–25, Karl Polanyi, “The Programme and Goals of Radicalism” [A Radikalizmus Programmja és Célja], 1918. 71. KPA-1–20, Karl Polanyi, “Radical Bourgeois Politics” [Radikális polgári politika], Szabadgondolat 3, no. 11 (1913): 347–348. 72. KPA-1–23, Karl Polanyi, “Bourgeois Radicals, Socialists and the Established Opposition” [Polgári radikálisok, szocialisták és törtenelmi ellenzék], Szabadgondolat 4, no. 5 (1914). 73. David Kettler, Volker  Meja, and Nico  Stehr, Karl Mannheim (London: Ellis Horwood and Tavistock Publications, 1984), 20–21. 74. KPA-1–20, Polanyi, “Radical Bourgeois Politics”; KPA-1–25, Polanyi, “The Programme and Goals of Radicalism.” 75. KPA-1–48, Polanyi, “Radical Party and Bourgeois Party”; KPA-1–30, Karl Polanyi, “Manual and Intellectual Labour 2” [Fizikai és szellemi munka II], Szabadgondolat 9, no. 2 (1919). 76. KPA-1–30, Karl Polanyi, “Manual and Intellectual Labour” [Fizikai és szellemi munka], Szabadgondolat 9, nos. 1–2 (1919). 77. KPA-1–25, Polanyi, “The Programme and Goals of Radicalism.” 78. KPA-1–23, Polanyi, “Bourgeois Radicals, Socialists and the Established Opposition.” 79. KPA-1–20, Polanyi, “Radical Bourgeois Politics.” 80. Karl Polanyi, “Count Michael Károlyi,” Slavonic and East European Review 24, no. 63 (1946): 94. 81. KPA-1–24, Karl Polanyi, “Magyar Hegemony and the Nationalities” [A magyar hegemonia és a nemzetiségek], Szabadgondolat 4, no. 3 (1914): 69–71. 82. Isaac Deutscher, The Prophet Armed: Trotsky 1879–1921 (London: Verso, 2003 [1954]), 174. 83. Hungarian Jews were underrepresented in the armed forces during the war, and their representation among those requesting exemption from military duty was above average. Yet this was presumably a function of class rather than ethnicity. Istvan Deak, Beyond Nationalism: A Social and Political History of the Habsburg Officer Corps, 1848–1918 (Oxford: Oxford University Press, 1990), 195. 84. Some were found “unfit” for military ser vice due to their Jewish roots. Kati Marton, Enemies of the People: My Family’s Journey to America (New York: Simon & Schuster, 2009), 9; Kati Vöros, “The ‘Jewish Question,’ Hungarian Sociology and the Normalization of Antisemitism,” Patterns of Prejudice 44, no. 2 (2010): 149. 85. Karl Polanyi, “The Calling of Our Generation” [A mai nemzedék hivatása], in Fasizmus, demokrácia, ipari társadalom: Társadalomfilozófi ai írások (Budapest: Gondolat, 1986 [1918]). 86. Otto Bauer, Werkausgabe, vol. 9 (Vienna: Europa Verlag, 1980), 1033–1037. Julius Braunthal, “Otto Bauer, Ein Lebensbild,” in Eine Auswahl aus seinem Lebenswerk,



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88. 89. 90.

91. 92.

93. 94. 95. 96. 97. 98. 99. 100. 101.

102. 103. 104. 105. 106. 107. 108.

ed. Otto Bauer (Vienna: Verlag der Wiener Volksbuchhandlung, 1961), 24; Friedrich Heer, “Vorwort,” in Ilona Duczynska, Der demokratische Bolschewik: Zur Theorie und Praxis der Gewalt (Munich: List Verlag, 1975), 17; Österreichisches Staatsarchiv, “100 Jahre erster Weltkrieg ‘Militarisierung der Politik’ Otto Bauer,” 2014, http://wk1.staatsarchiv.at/militarisierung-der-politik /otto-bauer/. Michael Károlyi, Fighting the World: The Struggle for Peace (London: Kegan Paul, 1924), 128. Michael Károlyi, Memoirs of Károlyi, Michael: Faith without Illusion (London: Jonathan Cape, 1956), 61. Robert Fine, “Cosmopolitanism and Violence: Difficulties of Judgment,” British Journal of Sociology 57, no. 1 (2006): 49–67. Zoltán Horváth, Die Jahrhundertwende in Ungarn: Geschichte der zweiten Reformgeneration (1896–1914) (Budapest: Corvina Verlag, 1966), 501. After the war, Polanyi argued that Jaszi and the radicals had “opposed the war already from the outset.” But I have found no evidence in support of this claim. KPA-1–45, Karl Polanyi, “Parties and the Peace” [Pártjaink és a béke], Szabadgondolat 8, no. 8 (1918): 146–152. Hauszmann, Bürgerlicher Radikalismus, 180. Nándor Dreisziger, “Oscar Jaszi and Peaceful Co-Existence among Nationalities and Nations,” Paper presented at the Ninth International Karl Polanyi Conference, Concordia University, November 2003. Károlyi, Fighting the World, 262, 140. Constantinescu, “Zur nationalen Frage,” 64. Kari Polanyi-Levitt, interviews, October 2007 and December 2008. MPP-17–1, Karl Polanyi to Misi, 1914 or 1915. Kari Polanyi-Levitt, telephone interview, October 2007. KPA-18–13, Karl Polanyi, “Extramural Lectures. Report no. 1,” IIE, 1935. KPA-1–30, Polanyi, “Manual and Intellectual Labour.” MPP-17–1, Karl Polanyi to Misi, January 25, 1915. MPP-17–1, Correspondence; Gyurgyák, Karl Polanyi; Judith Szapor, The Hungarian Pocahontas: The Life and Times of Laura Polanyi Stricker, 1882–1959 (Boulder: East European Monographs, 2005), 59; Scott and Moleski, Polanyi, 33. SPSL-536–1, Polanyi to Adams, March 31, 1934. PFP-212–324, Polanyi to Mama, November 19, 1915. PFP-212–324, Polanyi to Mama (n.d.). Holger Herwig, The First World War: Germany and Austria-Hungary, 1914–1918 (London: Arnold, 1997), 230. PFP-212–324, Polanyi to Cecile (n.d.). MPP-17–1, Karl Polanyi to Misi, February 13, 1915. MPP-17–1, Karl Polanyi to Misi, August  15, 1915. The same letter warns of the impending winter, asking that “anything made of fur” be sent him “immediately.” Two years later he returned to the theme: “Our winter is not as bad as the Russian; even with our warm clothes we’ll freeze in the winter campaign.” He was, he added, stocking up on clothes: “underwear, fur, and leather.” MPP-17–1, Karl Polanyi to Misi, September 3, 1917.

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109. MPP-17–1, Karl Polanyi to Adolf, October 31, 1915. 110. PFP-212–324, Karl Polanyi to Mama, November 19, 1915. 111. PFP-212–324, Karl Polanyi to Cecile (n.d.). For the informed speculation that Polanyi was stationed near Przemyśl, thanks are due to Chris Hann. 112. Kari Polanyi-Levitt, interview, December 2008. While this account is credible, as Polanyi did tend to regard music as “noise,” another plausible explanation, given his personality, is that he was simply lost in thought. 113. PFP-212–324, Karl Polanyi to Mama (n.d.) and May 6, 1916; Mary Jo Nye, Michael Polanyi and His Generation: Origins of the Social Construction of Science (Chicago: University of Chicago Press, 2011), 10. 114. MPP-17–1, Karl Polanyi to Misi, September 24, 1916. 115. MPP-17–1, Karl Polanyi to Misi, October 15, 1915. 116. PFP-212–324, Karl Polanyi to Mama (n.d.). 117. PFP-212–324, Karl to Mama (n.d.) and May 6, 1916. 118. MPP-17–1, Karl to Misi, August 15, 1915. 119. KPA-47–5, Karl Polanyi to Oberleutenant (n.d.). 120. PFP-212–324, Karl Polanyi to Cecile (n.d.). 121. Nye, Michael Polanyi, 10. 122. Polanyi, “Calling of Our Generation.” 123. Nye, Michael Polanyi, 10. 124. PFP-212–324, Karl to Cecile (n.d.); Szapor, Pocahontas, 60. 125. Karl Polanyi, “Hamlet,” Yale Review 43, no. 3 (1954): 336–350. 126. Karl Polanyi, “Letter to a Friend, 1925,” in Karl Polanyi in Vienna: The Contemporary Signifi cance of the Great Transformation, ed. Kari Polanyi-Levitt and Kenneth McRobbie (Montreal: Black Rose, 2000), 315–318. 127. PFP-212–324, Karl to Mama (n.d.). 128. SPSL-536–1, Polanyi to Adams, March 31, 1934. 129. SPSL-536–1, Karl to Zoe Fairfield, March 24, 1934. 130. Anon., “In Memoriam.” Document from Columbia University’s Butler Library. Dan Tompkins kindly provided a copy to the author. 131. Stefan Collini, Public Moralists: Political Thought and Intellectual Life in Britain (Oxford: Oxford University Press, 1991), 73. 132. KPA-45–18, Rotstein, “Weekend Notes,” 62, 1958. 133. KPA-48–5, Polanyi to Jaszi, October 27, 1950. 134. KPA-1–50, Karl Polanyi, “The Resurrection of Jesus” [Jézus feltámadása], Bécsi Magyar Újság, April 5, 1923. 135. For example, Slavoj Zizek, The Fragile Absolute, Or Why Is the Christian Legacy Worth Fighting For? (London: Verso, 2000), 115, 120. 136. KPA-56–9, Karl Polanyi to Toni Stolper, Christmas 1931. 137. Kari Polanyi-Levitt, e-mail to the author, May 30, 2013. 138. Gregory Baum, telephone interview. 139. Kari Polanyi-Levitt, interview, July 2006. 140. KPA-20–20, Karl Polanyi, “Church and State in the Light of Central European Experience,” 1934.

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141. Rudolf Tökés, Béla Kun and the Hungarian Soviet Republic: The Origins and Role of the Communist Party of Hungary in the Revolutions of 1918–1919 (New York: Praeger, 1967), 227. 142. SPSL-536–1, Polanyi, “Curriculum Vitae.” 143. Károlyi, Fighting the World, 443. Pace Knowles and Owen, this was no “communist revolution.” Rob Knowles and John Owen, “Karl Polanyi for Historians: An Alternative Economic Narrative,” European Legacy 13, no. 2 (2008): 175–191. 144. Polanyi, “Count Michael Károlyi,” 92. 145. Polanyi, “Count Michael Károlyi,” 95. 146. Gábor Vermes, “Hungary in Revolution, 1918–19,” in Hungary in Revolution, 1918–19, ed. Iván Völgyes (Lincoln: University of Nebraska Press, 1971), 41. 147. Jaszi, Revolution and Counter-Revolution, 77. 148. Jaszi, Revolution and Counter-Revolution, 88. 149. Jaszi, Revolution and Counter-Revolution, 38–41, 80. 150. Polanyi, “Count Michael Károlyi,” 92–97. 151. Károlyi, Memoirs, 150–151. 152. Holger Fischer, Oszkár Jaszi und Mihály Károlyi: Ein Beitrag zur Nationalitätenpolitik der bürgerlich-demokratischen Opposition in Ungarn von 1900 bis 1918 und ihre Verwirklichung in der bürgerlich-demokratischen Regierung von 1918 bis 1919 (Munich: Rudolf Trofenik, 1978), chapter 4. Polanyi shared Jaszi’s view: KPA1–45, Polanyi, “Parties and the Peace.” 153. Jaszi, Revolution and Counter-Revolution, 22, 37–40, 62. 154. Cf. PFP-212–587, Karl Polanyi to Mutter und Misi (n.d.): “I hear that Világ is to be sold. It’s too radical for the Jews.” 155. KPA-1–39, Polanyi, “The Galilei Circle: A Balance Sheet.” 156. KPA-30–1, Polanyi, “Biographical Information.” 157. PFP-212–587, Ilona Duczynska to Michael Löwy, January 1, 1974. Cf. KPA-46–6, Ilona Duczynska, interview with Isabella Ackerl, 1970s. “Ich war davon furchtbar niedergedrückt,” says Ilona, “weil dort lauter Seminare gelaufen sind, lauter Soziologie, lauter gelehrte Sachen statt Aktion.” In my “Karl Polanyi in Budapest” (Archives Européennes de Sociologie 50, no. 1 [2009]:122), I inadvertently attributed this quote to her husband. 158. Jaszi, Revolution and Counter-Revolution, 29. 159. PFP-212–587, Ilona Duczynska to Michael Löwy, January 31, 1974. 160. SPSL-536–1, Polanyi to Adams, March 31, 1934. 161. KPA-1–39, Polanyi, “The Galilei Circle: A Balance Sheet.” 162. In a letter to Erich Fromm, Polanyi recalls Lukacs’s movement as reflecting a dilemma faced by many revolutionaries—including Fromm himself. They envisage “the revolutionary as an ideal type” but abhor “his collective embodiment, the Communist Party.” In Lukacs’s case, he “refused to join the Hungarian Communist Party in December 1918. However, only a month later he joined the Party.” KPP-1–4, Karl Polanyi to Erich Fromm, January 14, 1961. 163. Polanyi’s dissatisfaction with superficial explanations of the war provided the initial seed that was later to grow into The Great Transformation. Polanyi, “Calling of Our Generation.”

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164. Polanyi’s usage of the term “libertarian socialism” tends to include liberal socialist and anarchist traditions. For example, KPA-2–9, Polanyi, “The Crucial Issue Today.” 165. KPA-1–29, Karl Polanyi, “Civil War” [Polgárháború], Szabadgondolat 9, no. 6 (1919). 166. Polanyi, “Calling of Our Generation.” 167. KPA-1–31, Karl Polanyi, “Oration to the Youth of the Galilei Circle” [Szózat a Galilei Kör ifjúságához], 1919. 168. KPA-1–25, Polanyi, “The Programme and Goals of Radicalism.” 169. KPA-1–31, Polanyi, “Oration to the Youth of the Galilei Circle.” 170. Karl Polanyi, “Wissenschaft und Sittlichkeit,” in Chronik der groǞen Transformation, vol. 3, ed. Michele Cangiani, Kari Polanyi-Levitt, and Claus Thomasberger (Marburg: Metropolis, 2005 [1920–1922]), 195. 171. For elaboration, see Gareth Dale, “Karl Polanyi in Vienna: Guild Socialism, Austro-Marxism, and Duczynska’s Alternative,” Historical Materialism 22, no. 1 (2014): 34–66. 172. KPA-1–45, Polanyi, “Parties and the Peace”; Litván, “Karl Polanyi,” 33. 173. Lee Congdon, Exile and Social Thought: Hungarian Intellectuals in Germany and Austria, 1919–1933 (Princeton, N.J.: Princeton University Press, 1991), 218. 174. KPA-1–25, Polanyi, “The Programme and Goals of Radicalism.” 175. KPA-30–1, Polanyi, “Biographical Information.” 176. Lloyd George, quoted in David McNally, Eddie Yuen, and Sasha Lilley, Catastrophism: The Apocalyptic Politics of Collapse and Rebirth (Seattle: PM Press, 2012), 60. 177. Congdon, Exile and Social Thought, 33. 178. Eduard Bernstein, “Geleitwort,” in Magyariens Schuld, Ungarns Sühne: Revolution und Gegenrevolution in Ungarn, Oskar Jaszi (Munich: Verlag für Kulturpolitik, 1923), xi. 179. KPA-1–29, Polanyi, “Civil War.” 180. Vermes, “Hungary in Revolution,” 57. 181. Jaszi, Revolution and Counter-Revolution, 88. 182. Jaszi, Revolution and Counter-Revolution, 94. 183. Peter Kenez, “Coalition Politics in the Hungarian Soviet Republic,” in Revolution in Perspective: Essays on the Hungarian Soviet Republic of 1919, ed. Andrew Janos and William Slottman (Berkeley: University of California Press, 1971). 184. KPA-1–43, Karl Polanyi, “The Autonomy of Science and the Autonomy of the University” [A tudomány autonomiája és az egyetem autonomiája], Szabadgondolat 9, no. 4 (1919): 87–89. One would also imagine that Polanyi approved of the prohibition of alcohol, one of the Commune’s fi rst decrees. 185. Congdon, Exile and Social Thought, 218; Anonymous interviewee. See also Karl Polanyi, “Die neue Internationale,” in Chronik der groǞen Transformation, vol. 1, ed. Michele Cangiani and Claus Thomasberger (Marburg: Metropolis, 1925). 186. Jaszi, Revolution and Counter-Revolution, 116, 144, 151. 187. Jaszi, Revolution and Counter-Revolution, 151. 188. Frank Eckelt, “The Internal Policies of the Hungarian Soviet Republic,” in Hungary in Revolution, ed. Iván Völgyes (Lincoln: University of Nebraska Press, 1971), 53–70.

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189. Thomas Bender and Carl Schorske (1994), “Introduction: Budapest and New York Compared,” in Budapest and New York: Studies in Metropolitan Transformation, 1870–1930, ed. Thomas Bender and Carl Schorske (New York: Russell Sage Foundation), 16. 190. In justification of the confiscations, Lukacs argued that a painting “belongs not to its legal owner but to those who enjoy and appreciate it.” Georg Lukacs, Record of a Life: An Autobiographical Sketch (London: Verso, 1983), 60; Arpad Kadarkay, Georg Lukacs: Life, Thought and Politics (Oxford: Blackwell, 1991), 221. 191. Eckelt, “Internal Policies.” 192. Arthur Koestler, Arrow in the Blue (London: Hutchinson, 1983 [1952]), 88. 193. Koestler, Arrow in the Blue, 90. 194. Jaszi, Revolution and Counter-Revolution. 195. KPA-2–9, Polanyi, “The Crucial Issue Today,” 7. 196. Andrew Janos, The Politics of Backwardness in Hungary, 1825–1945 (Princeton, N.J.: Princeton University Press, 1982), 201. 197. KPA-29–12, Ilona Duczynska, “Karl Polanyi—A Family Chronicle and a Short Account of His Life,” (n.d.). 198. In Kari Polanyi-Levitt’s recollection of her father’s history, “he sent a message to Lukacs that he would rise to defend the country and the revolution if he were physically able.” Letter to the author, January 2015. Cf. KPA-29–12, Duczynska, “Karl Polanyi”; KPA-29–8, Ilona Duczynska and Zoltán Horváth, “Karl Polanyi and the Galilei Circle.” 199. SPSL-536–1, Polanyi to Adams, March  31, 1934. Jaszi had left Hungary on May 1. 200. Alfred Low, “Hungary in Revolution, 1918–19,” in Hungary in Revolution, ed. Iván Völgyes (Lincoln: University of Nebraska Press, 1971), 152. 201. Polanyi, “Count Michael Károlyi,” 92–97. 202. Koestler, Arrow in the Blue, 91.

3 . T R I U M P H A N D T R AG E DY O F R E D V I E N N A 1. William Scott and Martin Moleski, Michael Polanyi: Scientist and Philoso pher (Oxford: Oxford University Press, 2005), 51. 2. However, his doctor, Holló, assured him that of these only his hernia was serious. MPP-17–7, Karl Polanyi to Misi, November 10, 1938. 3. MPP-17–2, Karl Polanyi to Cecile, April 24, 1920. 4. So expensive, indeed, that he relied on loans from her that could not be repaid until some years later. MPP-17–2, Karl Polanyi to Cecile, November 18, 1922. 5. MPP-17–2, Karl to Cecile, April 24, 1920. 6. MPP-17–2, Karl to Cecile, April 24, 1920. 7. Gahlberg was a Ukrainian Jew who when a youth had worked with Henryk Grossman producing a socialist periodical in Lvov. Rick Kuhn, Henryk Grossman and the Recovery of Marxism (Champaign: University of Illinois Press, 2007), 14.

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8. Polanyi, quoted in Tibor Frank, “Between Red and White: The Mood and Mind of Hungary’s Radicals, 1919–1920,” Hungarian Studies Review 9, nos. 1–2 (1994): 105–126. 9. MPP-17–2, Karl to Cecile, April 24, 1920. 10. Polanyi, quoted in Frank, “Between Red and White,” 99. 11. MPP-17–2, Karl Polanyi to Cecile, November 8, 1920. 12. MPP-17–2, Karl Polanyi to Misi, September 1921. 13. MPP-17–2, Karl Polanyi to Misi, November 5, 1921. 14. MPP-17–2, Karl Polanyi to Misi, January 19, 1920. 15. MPP-17–2, Karl Polanyi to Misi, May 20, 1920. 16. MPP-17–2, Karl Polanyi to Misi, March 17 and July 2, 1920. 17. MPP-17–2, Karl to Cecile, November 8, 1920. 18. MPP-17–2, Karl Polanyi to Misi (n.d.). 19. MPP-17–2, Karl Polanyi to Magda, October 20, 1920. 20. MPP-1–18, Adolf Smekal to Misi, October 14, 1922. 21. OJP-34, Jaszi diaries, entry of February 26, 1925; János Gyurgyák, “Karl Polanyi and Oscar Jaszi at the Bécsi Magyar Újság,” in Karl Polanyi in Vienna: The Contemporary Significance of the Great Transformation, ed. Kari Polanyi-Levitt and Kenneth McRobbie (Montreal: Black Rose, 2000), 320. 22. Arpad Kadarkay, Georg Lukacs: Life, Thought and Politics (Oxford: Blackwell, 1991), 240. 23. Front-page headline, Bécsi Magyar Újság, September 16, 1922. 24. John Neubauer, “Exile: Home of the Twentieth Century,” in The Exile and Return of Writers from East- Central Europe: A Compendium, ed. John Neubauer and Borbála Zsuzsanna Török (New York: Walter de Gruyter, 2009), 54. 25. In letters and diaries, Jaszi documented his disappointment at Károlyi’s radical turn. Károlyi was acidly critical of the parties of Second International socialism, because they sought to consolidate capitalism rather than begin a socialist transformation, and likewise of Britain’s Labour government: it had failed to move “socialist ideals” forward by even an inch. Károlyi, Jaszi wrote, is “imbued with the myth of the world revolution;” it is a “hysterical attitude” that threatens to “vitiate all our endeavours and I doubt if we can continue a common work.” He was right: the two would not cooperate closely again until the mid-1940s. See OJP-37, Mihály Károlyi to Jaszi, November 12, 1929; OJP-37, Jaszi diaries, entry of December 18, 1923. 26. János Gyurgyák, ed., Karl Polanyi, 1886–1964 (Budapest: Fővárosi Szabó Ervin Könyvtár, 1986). 27. MPP-19–2, Mausi to Cecile, July 3, 1921. 28. KPA-48–5, Polanyi to Jaszi, October 27, 1950. 29. PFP-212–587, Ilona to Michael Löwy, January 31, 1974. 30. Irma had told Michael about her in the early 1910s: she had kept Ilona out of his sight, for he would have fallen in love with her “straight away.” KPA-57–4, Michael to Ilona, November 12, 1943. 31. Aurel Kolnai, Political Memoirs (Oxford: Lexington, 1999), 46.

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32. PFP-212–587, Ilona to Michael Löwy, January 31, 1974. 33. KPA-46–6, Duczynska, interview with Isabella Ackerl, late 1970s; Kenneth McRobbie, “ Under the Sign of the Pendulum: Childhood Experience as Determining Revolutionary Consciousness. Ilona Duczynska Polanyi,” Canadian Journal of History 41, no. 2 (2006): 263–298. 34. KPA-46–6, Duczynska, interview with Isabella Ackerl, late 1970s. 35. McRobbie, “ Under the Sign.” 36. Kenneth McRobbie, “Education and the Revolutionary Personality: The Case of Ilona Duczynska (1897–1976),” Canadian Slavonic Papers 51, no.4 (2009): 469–494; McRobbie, “ Under the Sign.” 37. PFP-212–587, Ilona to Michael Löwy, March 16, 1974. 38. Fortunately for her, King Charles dismissed Tisza shortly before her attempt was to take place. He was later assassinated, but not by her. Kenneth McRobbie, “Ilona Duczynska Meets Ervin Szabo: The Making of a Revolutionary Personality—From Theory to Terrorism, April–May 1917,” Hungarian Studies Review, 33, no. 1–2 (2006): 39–92. 39. KPA-46–6, Duczynska, interview with Isabella Ackerl, late 1970s. 40. KPA-46–2, Ilona Duczynska, “Zum Zerfall der K. P. U.,” Unser Weg, March 1, 1922, 97–105; PFP-212–587, Ilona to Michael Löwy, January 1, 1974; KPA-46–6, Duczynska, interview with Isabella Ackerl, late 1970s. 41. According to his Curriculum Vitae of 1937, Polanyi joined the SDAP in 1925, “without, however, taking active part in its politics.” SPSL-438–4, Karl Polanyi, “Curriculum Vitae.” Elsewhere, he writes that from 1919 onward “I have been affi liated to no political party or group, nor followed the lead of any. [In Austria] I kept aloof from politics but voted for the Social Demo crat candidate.” KPA-30–1, Karl Polanyi, “Biographical Information,” 1940–1984. 42. KPA-46–6, Duczynska, interview with Isabella Ackerl, late 1970s. 43. KPA-59–7, Karl Polanyi to Ilona, August 25, 1940. 44. KPA-58–1, Karl Polanyi to Kari, January 30, 1959. 45. He goes on to note a parallel between Ilona and Cecile: both were “Russian.” This, he adduces, was one reason his father, had he survived, would have applauded his choice of bride. KPA-57–8, Karl Polanyi to Kari, January 1963. 46. MPP-17–2, Karl Polanyi to Misi and Magda, November 12, 1922. 47. PFP-212–324, Karl Polanyi to Mama and Geschwister, May 19, 1923; MPP-17–2, Karl Polanyi to Cecile, April 19, 1923. 48. MPP-17–2, Karl to Cecile, April 19, 1923. 49. MPP-17–2, Karl Polanyi to Cecile, April 10, 1923. 50. MPP-17–2, Karl to Cecile, April 10 and 19, 1923. The apartment did not belong to Ilona’s family, as suggested in Mary Jo Nye, Michael Polanyi and His Generation: Origins of the Social Construction of Science (Chicago: University of Chicago Press, 2011). However, it was Ilona who found it. 51. PFP-212–324, Karl to Cecile, June 7, 1923. 52. Kari Polanyi-Levitt, interview, December 2008. 53. Worse still: Ilona, suffering from a postpartum fissure, required an urgent operation. MPP-17–2, Karl Polanyi to Magda, October 24, 1926.

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54. KPA-29–9, Felix Schafer, “Memoirs,” 1944–1966, 17; KPA-29–10, Schafer, “Polanyi’s Life in Vienna,” 61, and cf. various letters from Karl to Michael in 1922 (MPP-17–2). Jaszi’s diary of February 1925, to give a typical example, reports his friend as suffering “a la mentable state of health.” 55. MPP-17–3, Karl Polanyi to Cecile, November 10, 1926, and Karl to Misi, July 29, 1925. 56. KPA-29–10, Schafer, “Polanyi’s Life in Vienna,” 14–34. 57. Kari Polanyi-Levitt, interview, December 2008. 58. KPA-29–10, Schafer, “Polanyi’s Life in Vienna,” 34. 59. KPA-29–10, Schafer, “Polanyi’s Life in Vienna,” 33. 60. Kari Polanyi-Levitt, interview, December 2008. 61. KPA-29–10, Schafer, “Polanyi’s Life in Vienna,” 3. 62. MPP-17–2, Karl Polanyi to Misi, November 5, 1925. 63. Kari Polanyi-Levitt, e-mail to the author, May 30, 2013. 64. MPP-17–2, Karl Polanyi to Misi, May 10, 1924. 65. MPP-17–3, Karl to Cecile, November 10, 1926. 66. Kari Polanyi-Levitt, interview, December 2008. 67. Don Grant, interview. 68. Kari Polanyi-Levitt, interview, December 2008. 69. KPA-59–4, Karl Polanyi to Joe Levitt, October 5, 1947. 70. Kari Polanyi-Levitt, interview, December 2008. 71. They would normally stay at the Hotel Edlacherhof. Scott and Moleski, Polanyi, 142. 72. MPP-17–4, Karl Polanyi to Misi, August 18, 1932; also Ilona to Misi, October 11, 1932. 73. Kari Polanyi-Levitt, interview, December 2008. 74. Kari Polanyi-Levitt, interviews, December 2008 and March 2009. 75. MPP-17–2, Karl to Misi and Magda, November 12, 1922. 76. MPP-17–2, Karl Polanyi to Misi, May 1924. 77. MPP-17–2, Karl Polanyi to Misi, October 7, 1925. 78. MPP-17–2, Karl to Misi, May 10, 1924. 79. Polanyi at one point aspired to follow Stolper to Berlin, but personal disagreements and Polanyi’s supercilious attitude to aspects of Stolper’s periodical interfered. MPP-17–3, Karl to Misi, October 7 and 25, 1925; Scott and Moleski, Polanyi. 80. Felix Schafer, “Vorgartenstrasse 203: Excerpts from a Memoir,” in Karl Polanyi in Vienna: The Contemporary Significance of the Great Transformation, ed. Kari Polanyi-Levitt and Kenneth McRobbie (Montreal: Black Rose, 2000), 332. 81. KPA-29–10, Schafer, “Polanyi’s Life in Vienna.” 82. Typewritten memoir by Don Grant, shared with the author in September 2013. 83. Kari Polanyi-Levitt, interview, December 2008. KPA-29–10, Schafer, “Polanyi’s Life in Vienna,” 11. 84. KPA-29–10, Schafer, “Polanyi’s Life in Vienna,” 78. 85. KPA-2–20, Karl Polanyi, “Einführung in die Volkswirtschaftslehre,” 1930–1931. 86. Karl Popper, Unended Quest (Glasgow: William Collins, 1976), 20; Malachi Hacohen, Karl Popper: The Formative Years, 1902–1945 (Cambridge: Cambridge University Press, 2000), 117–120, 468.


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87. 88. 89. 90. 91.


93. 94. 95. 96. 97. 98. 99.

100. 101. 102. 103. 104.

105. 106. 107.

KPA-29–10, Schafer, “Polanyi’s Life in Vienna,” 6. KPA-29–10, Schafer, “Polanyi’s Life in Vienna,” 12. KPA-2–6, Karl Polanyi, Draft manuscript, 1920–1922. Fritz Ringer, The Decline of the German Mandarins: The German Academic Community, 1890–1933 (Cambridge, Mass.: Harvard University Press, 1969). Ilona Duczynska, “‘I first met Karl Polanyi in 1920,’” in Karl Polanyi in Vienna: The Contemporary Significance of the Great Transformation, ed. Kari Polanyi-Levitt and Kenneth McRobbie (Montreal: Black Rose, 2000), 310. KPA-1–51, Karl Polanyi, “H. G. Wells on Salvaging Civilisation” [H. G. Wells a civilizáció megmentéséről], Bécsi Magyar Újság, October  21, 1923. See also KPA1–52, Karl Polanyi, “The New Machiavelli, Kipps and Tono-Bungay” [Az Uj Machiavelli, Kipps es Tono-Bungay], Bécsi Magyar Újság (n.d.). H. G. Wells, The Salvaging of Civilization (London: Cassell, 1921), 45–46. Wells, Salvaging, 102. KPA-1–51, Polanyi, “H. G. Wells on Salvaging Civilisation.” KPA-1–50, Karl Polanyi, “Titanic Journalism” [Titáni publicisztika], Bécsi Magyar Újság, September 23, 1922. Karl Mannheim, Man and Society in an Age of Reconstruction (London: Routledge, 1980 [1935/1940]). Harry Liebersohn, Fate and Utopia in German Sociology, 1870–1923 (Cambridge, Mass.: MIT Press, 1988), 6. Tönnies likened his gemeinschaft/gesellschaft couplet to Maine’s distinction between status and contract. Polanyi tends to use the English nomenclature—see, for example, Karl Polanyi, “Aristotle Discovers the Economy,” in Trade and Market in the Early Empires: Economies in History and Theory, ed. Karl Polanyi, Conrad Arensberg, and Harry Pearson (New York: Free Press, 1957), 84. However, from his book notes, it is abundantly clear that Tönnies was a more direct inspiration than Maine. KPA-18–11, Karl Polanyi, “Rudolf Steiner’s Economics,” New Britain 3, no. 63 (1934): 311–312. KPA-18–10, Karl Polanyi, “What Three-Fold State?,” New Britain 2, no. 43 (1934): 503–504. Gyurgyák, “Polanyi and Jaszi,” 319. Cf. Oscar Jaszi, Revolution and CounterRevolution in Hungary (London: P. S. King, 1924), 114. KPA-1–52, Karl Polanyi, “Guild Socialism” [A gildszocializmus], Bécsi Magyar Újság, June 18, 1922. Guild socialism exerted some influence in a number of British trade unions, and also on Plaid Cymru. See Laura McAllister, “The Perils of Community as a Construct for the Political Ideology of Welsh Nationalism,” Government & Opposition 33, no. 4 (1998): 505. Also see Hywel Davies, The Welsh Nationalist Party, 1925–1945: A Call to Nationhood (Houndmills: Palgrave, 1983), 101. Niles Carpenter, Guild Socialism: An Historical and Critical Analysis (New York: Appleton, 1922), 116. Otto Bauer, Werkausgabe, vol. 2 (Vienna: Europa Verlag, 1980), 325, 712. Bauer, Werkausgabe, vol. 2, 329.

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108. Quoted in Julius Braunthal, “Otto Bauer, Ein Lebensbild,” in Otto Bauer, Eine Auswahl aus seinem Lebenswerk (Vienna: Verlag der Wiener Volksbuchhandlung, 1961), 45. Emphasis in original. 109. MPP-17–2, Karl Polanyi to Misi (n.d.). 110. KPA-30–3, Irene Grant, conversations with Kari Levitt, 1984–1986. 111. Luther Carpenter, G.D.H. Cole: An Intellectual Biography (Cambridge: Cambridge University Press, 1973), 12. 112. G.D.H. Cole, Robert Owen (London: Ernest Benn, 1925), 14. 113. Tom Villis, Reaction and the Avant- Garde; The Revolt against Liberal Democracy in Early Twentieth- Century Britain (London: Tauris, 2006), 44–55. 114. Margaret Cole, The Life of G.D.H. Cole (London: Macmillan, 1971), 79. 115. G.D.H. Cole, Fabian Socialism (London: George Allen & Unwin, 1943); Christopher Lasch, The True and Only Heaven: Progress and Its Critics (New York: Norton, 1991), 327. 116. KPA-9–4, Karl Polanyi, “Notes on GDH Cole,” 1934. 117. KPA-1–52, Karl Polanyi, “Guild and State” [Gild és állam], Bécsi Magyar Újság, March 29, 1923. 118. KPA-2–1, Karl Polanyi, Draft manuscript, 1920–1922. 119. Carpenter, Guild Socialism, 147–148. Emphasis in original. 120. KPA-1–52, Polanyi, “Guild and State.” 121. KPA-56–13, Polanyi to Irene, March 15, 1963. Emphasis in original. 122. KPA-2–1, Polanyi, Draft manuscript. 123. Perry Anderson, “After the Event,” New Left Review 73 (2012): 57. 124. Jill Lewis, Fascism and the Working Class in Austria, 1918–1934: The Failure of Labour in the First Republic (Oxford: Berg, 1991), 74. 125. KPA-29–10, Schafer, “Polanyi’s Life in Vienna,” 4. 126. KPA-29–9, Schafer, “Memoirs.” 127. Polanyi’s model is all but indistinguishable from that of Bauer, in whose vision industry is administered by means of cooperation among the state (representing the community), the trade unions (representing workers), and a third body, representing consumers. KPA-2–1, Polanyi, Draft manuscript; Bauer, Werkausgabe, vol. II, 712. 128. KPA-2–16, Karl Polanyi, Draft of “Über die Freiheit,” 1927. 129. KPA-2–15, Karl Polanyi, “Die funktionelle Theorie der Gesellschaft und das Problem der sozialistischen Rechnungslegung,” Archiv für Sozialwissenschaft und Sozialpolitik 52 (1924): 218–228. 130. Paul Neurath, “Otto Neurath (1882–1945): Life and Work,” in Encyclopedia and Utopia: The Life and Work of Otto Neurath (1882–1945), ed. Elisabeth Nemeth and Friederich Stadler (Dordrecht: Kluwer, 1996), 20. 131. David Kettler and Volker Meja, Karl Mannheim and the Crisis of Liberalism (New Brunswick, N.J.: Transaction, 1995), 91. 132. Karl Polanyi, “Sozialistische Rechnungslegung,” in Chronik der groǞen Transformation, vol. 3, ed. Michele Cangiani, Kari Polanyi-Levitt, and Claus Thomasberger (Marburg: Metropolis, 2005), 76. 133. Otto Neurath, Durch die Kriegswirtschaft zur Naturalwirtschaft (Munich: Georg Callwey, 1919), 161.

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134. Otto Neurath, “The Conceptual Structure of Economic Theory and Its Foundations,” in Otto Neurath, Economic Writings: Selections 1904–1945, ed. Thomas Uebel and Robert Cohen (Dordrecht: Kluwer, 2004 [1917]), 321. 135. Thomas Uebel, “Neurath’s Economics in Critical Context,” in Otto Neurath, Economic Writings: Selections 1904–1945, ed. Thomas Uebel and Robert Cohen (Dordrecht: Kluwer, 2004 [1917]), 10. 136. Otto Neurath, “Economic Plan and Calculation in Kind,” in Otto Neurath, Economic Writings: Selections 1904–1945, ed. Thomas Uebel and Robert Cohen (Dordrecht: Kluwer, 2004 [1925]), 419. 137. Uebel, “Neurath’s Economics,” 11. 138. Neurath, Kriegswirtschaft, 150, 209. 139. Neurath, Kriegswirtschaft, 161, 212. 140. John O’Neill, “Who Won the Socialist Calculation Debate?,” History of Political Thought 17, no. 3 (Autumn 1996): 431–442. 141. Neurath, Kriegswirtschaft, 189. 142. Ludwig von Mises, “Economic Calculation in the Socialist Commonwealth,” fi rst published as “Die Wirtschaftsrechnung im sozialistischen Gemeinwesen,” Archiv für Sozialwissenschaft und Sozialpolitik 47 (1920): 86–121, http://mises.org /pdf /econcalc.pdf. 143. O’Neill, “Who Won?” 144. Lee Congdon, Exile and Social Thought: Hungarian Intellectuals in Germany and Austria, 1919–1933 (Princeton, N.J.: Princeton University Press, 1991), 229. Congdon claims that Hayek rated Polanyi’s Archiv essays as among the most important contributions from the socialist side, but the references he provides reveal no such thing. Richard Hull maintains that Karl Polanyi’s arguments “seriously nettled von Mises and especially Hayek, who later introduced ‘the Hayek knowledge problem’ as a response and solution to Polanyi,” but I have found no evidence to support this. See Richard Hull, “The Emergence of ‘Knowledge’ as a Unit of Analysis in the Social Sciences, 1900–1970,” 2002, http://is2.lse.ac.uk /events /esrcseminars/Hull /LSE _ Seminar_ fi les/frame.htm. See also Richard Hull, “ICTs and the Knowledge Economy: An Historical and Ethnographic study” (PhD thesis, Manchester School of Management, University of Manchester Institute of Science & Technology, 2001); Friedrich von Hayek, Individualism and Economic Order (Auburn, Ala.: Ludwig von Mises Institute, 2009 [1936]), 50. 145. Hayek, Individualism, 80. 146. Doomed with such horrible certitude, indeed, that one wry critic has likened Hayek’s oeuvre to a Gothic roman à clef (of which Mary Shelley’s Frankenstein was a classic). “ There is a mad scientist, and a monster, and a ‘constructivist’ project which is bound to fail because no one can fully encompass the unintended consequences of trespassing where angels fear to tread. It all is set in a castle somewhere in Eastern Europe, though the hero is British. The moral of the story is that there is knowledge which is intrinsically forbidden fruit; there are things which are better left unknown.” Philip Mirowski, “Economics, Science, and Knowledge: Polanyi vs. Hayek” (n.d.), www.missouriwestern .edu /orgs/polanyi /tad%20web%20archive/tad25-1 /tad25-1-fnl-pg29-43-pdf.pdf.

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147. Emil Lederer, Grundzüge der Oekonomischen Theorie (Tübingen: Mohr, 1922), 143ff. 148. KPA-2–15, Polanyi, “Die funktionelle Theorie der Gesellschaft.” The other guild socialist response was penned by Jacob Marschak: Jacob Marschak, “Wirtschaftsrechnung und Gemeinwirtschaft, Zur Misesschen These von der Unmöglichkeit sozialistischer Gemeinwirtschaft,” Archiv für Sozialwissenschaft und Sozialpolitik 51, no. 2 (1924). Marschak would later make his name— alongside Schumpeter, Mises and Hayek, and Michael Polanyi and his friend John von Neumann—as one of the cohort of Habsburg émigrés who reinvented neoclassical economics in the mid-twentieth century. His contributions included a critique of game theory and the introduction of information theory into economic analy sis. 149. Karl Polanyi, “Neue Erwägungen zu unserer Theorie und Praxis,” Der Kampf, January 1925, 18–24. 150. Polanyi did not refer to Mises as neoliberal during the debate itself but did so at other times in the same period— e.g., KPA-3–4, Karl Polanyi, “Faschismus,” 1920–1933. 151. KPA-56–13, Karl Polanyi to Irene Grant, March 15, 1963. 152. KPA-47–4, Karl Polanyi to unknown recipient, 1927. 153. Polanyi groups Neurath together with Kautsky and Trotsky as dogmatic proponents of a moneyless economy. In all three cases it is a misrepresentation. On Trotsky, see his In Defence of Marxism (www.marxists.org /archive/trotsky/1932 /10/sovecon . htm), which argues that “successful socialist construction is unthinkable without . . . a stable unit of currency.” On Kautsky, see Karl Kautsky, Proletarische Revolution und ihr Programm (Stuttgart: Dietz, 1922). On Neurath, see Günther Sandner, Otto Neurath: Eine politische Biographie (Vienna: ZsolnayVerlag, 2014), 121, 150, 291, 297–300. 154. Reacting against the militarism of nation-states, Neurath envisaged instead overlapping “functional” units of planning; a transnational socialist society in which, for example, areas adjacent to major navigable rivers would form an administrative unit for building, transport, and production, while educational administration followed the contours of language. In two other senses, however, he rejected the guild socialist model. First, although he envisaged a role for workers’ associations in economic planning, the plan would be drawn up by a central economic council rather than negotiated between two or three equipollent associations. Second, he rejected the guild socialist advocacy of a significant role for markets. A market and monetized economy in which cooperatively owned enterprises competed, he argued, would simply replace “the capitalism of individuals [by] the capitalism of groups.” Neurath (1925) quoted in John O’Neill, “Socialism, Associations and the Market,” Economy and Society 32 no. 2 (2003):193–194. See also Otto Neurath, “Total Socialisation,” and “Economic Plan and Calculation in Kind,” in Otto Neurath, Economic Writings: Selections 1904–1945, ed. Thomas Uebel and Robert Cohen (Dordrecht: Kluwer, 2004 [1920, 1925]), 401–406. 155. KPA-2–22, Karl Polanyi, “Pure Economic Theory,” 1924–1927. 156. KPA-19–19, Karl Polanyi, “Individualism and Socialism” (n.d.).

162. 163.




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157. 158. 159. 160. 161.

166. 167. 168. 169. 170. 171. 172.

173. 174. 175. 176.


SPSL-536–1, Polanyi to Adams, March 31, 1934. KPA-2–22, Polanyi, “Pure Economic Theory.” Hayek, Individualism, 20. Polanyi, “Sozialistische Rechnungslegung,” 79. Polanyi (1922–1923), quoted in Endre Nagy, “After Brotherhood’s Golden Age: Karl and Michael Polanyi,” in Humanity, Society and Commitment: On Karl Polanyi, ed. Kenneth McRobbie (Montreal: Black Rose, 1994), 92. KPA-3–7, Karl Polanyi, “Auszug aus einem Referat zur Sozialisierungsfrage,” 1919–1933. Pierre Rosanvallon, for example, sees economic oversight as epitomized in the work of the rating agencies, which help make the workings of markets more “visible” and enhance trust between seller and buyer in contractual transactions. Pierre Rosanvallon and Arthur Goldhammer, Counter-Democracy: Politics in an Age of Distrust (Cambridge: Cambridge University Press, 2008), 279. See also Garry Rodan, “Neoliberalism and Transparency: Political versus Economic Liberalism,” Murdoch University Working Paper 112, 2004, http://www.arc.murdoch .edu.au /publications/wp/wp112.pdf. Karl Polanyi, “Über die Freiheit,” in Chronik der groǞen Transformation, vol. 3, ed. Michele Cangiani, Kari Polanyi-Levitt, and Claus Thomasberger (Marburg: Metropolis, 2005), 137–170. Karl Polanyi, “Wirtschaft und Demokratie,” in Chronik der groǞen Transformation, vol. 1, ed. Michele Cangiani and Claus Thomasberger (Marburg: Metropolis, 2002), 154. KPA-2–22, Polanyi, “Pure Economic Theory.” KPA-3–1, Karl Polanyi, “Das Übersichtsproblem,” 1920s. KPA-2–22, Polanyi, “Pure Economic Theory”; Polanyi, “Neue Erwägungen zu unserer Theorie und Praxis,” 21–23. Polanyi, “Neue Erwägungen zu unserer Theorie und Praxis,” 19. Polanyi, “Neue Erwägungen zu unserer Theorie und Praxis,” 23. KPA-29–9, Schafer, “Memoirs,” 75. This same passage impressed Neurath, too. See Neurath, “Economic Plan,” 422. Marx used “transparency” [Durchsichtigkeit] to describe “ancient social organisms” in which “the conversion of products into commodities, and therefore the conversion of men into producers of commodities” is a marginal part of economic activity; KPA-29–9, Schafer, “Memoirs”; Karl Marx, Capital, vol. 1 (Harmondsworth, U.K.: Penguin, 1976). KPA-29–9, Schafer, “Memoirs,” 7. Polanyi, “Über die Freiheit,” 139. KPA-29–9, Schafer, “Memoirs.” See also KPA-21–22, Karl Polanyi, “Community and Society: The Christian Criticism of Our Social Order,” 1937. KPA-2–16, Polanyi, Draft of “Über die Freiheit”; Karl Polanyi, “The Essence of Fascism,” in Christianity and the Social Revolution, ed. John Lewis, Karl Polanyi, and Donald Kitchin (London: Gollancz, 1935), section VI. Later still, the term was rebranded by Ayn Rand. She apparently adopted it after having rejected her preferred term, “existentialism,” because its meaning had already been staked out—as if the same did not hold for “objectivism.”

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178. KPA-2–3, Karl Polanyi, “Wissenschaftlich Politik ohne Skepsis und die Privilegien der Soziologie,” 1920–1922; KPA-2–1, Polanyi, Draft manuscript. 179. SPSL-536–1, Polanyi to Adams, March 31, 1934. 180. KPA-46–6, Duczynska, interview with Isabella Ackerl, late 1970s. 181. SPSL-536–1, Karl to Zoe Fairfield, March 24, 1934. 182. Kari Polanyi-Levitt, telephone interview, June 2008. 183. KPA-9–2, Karl Polanyi, “ Labour Movement’s Post-War Failure,” 1934–1946. 184. KPA-12–3, Karl Polanyi, “The Youth Movement in Europe,” 1935. 185. KPA-18–18, Karl Polanyi, “Education and Social Reality. Austrian Experience,” (n.d.). 186. Cited in Marguerite Mendell, “Karl Polanyi and Socialist Education,” in Humanity, Society and Commitment: On Karl Polanyi, ed. Kenneth McRobbie (Montreal: Black Rose, 1994), 25–42. 187. Kari Polanyi-Levitt, “Karl Polanyi as Socialist,” in Humanity, Society and Commitment: On Karl Polanyi, ed. Kenneth McRobbie (Montreal: Black Rose, 1994), 115. 188. KPA-18–18, Polanyi, “Education and Social Reality.” 189. KPA-18–18, Polanyi, “Education and Social Real ity.” The promise that Polanyi identifies was not, however, to be fulfi lled. See, for example, Eric Hobsbawm, Interesting Times: A Twentieth-Century Life (London: Allen Lane, 2002), 20; Helmut Gruber, Red Vienna: Experiment in Working- Class Culture, 1919–1934 (Oxford: Oxford University Press, 1991). 190. KPA-21–3, Karl Polanyi, “Social Values in the Post-War World,” 1936. 191. KPA-18–21, Karl Polanyi, Europe To-Day (London: Workers’ Educational Trade Union Committee, 1937), 55. 192. Kari Polanyi-Levitt, telephone interview, June 2008; Lewis, Fascism and Working Class, 82. 193. György Litván, “Karl Polanyi in Hungarian Politics,” in The Life and Work of Karl Polanyi, ed. Kari Polanyi-Levitt (Montreal: Black Rose, 1990), 35. 194. Philological support for Schafer’s claim exists in Polanyi’s philosophical writings of the mid-1920s (e.g., KPA-2–16, Polanyi, “Über die Freiheit”), the tone of which is at times distinctly Adlerian. For example, the socialist recognizes “the many-sided relationality of human life, i.e. its socialization” such that the “innermost self appears indebted to others, derived and borrowed from them, reliant upon them.” That said, Polanyi was scornful of Adler’s attempt to reconcile Marx and Kant. And he was greatly irked to see that Adler’s book on Engels was silent on the contradiction between the author’s and his subject’s justification of socialist ethics—Engels’s being, in Polanyi’s interpretation, that it emanates from the workers’ position in production. KPA-29–9, Schafer, “Memoirs”; KPA47–4, Karl Polanyi to Werte Genosse, 1927. 195. Polanyi floated similar ideas in a series of unpublished essays in the 1920s. See Schafer, “Vorgartenstrasse 203,” 331; Polanyi, “Über die Freiheit.” 196. Gruber, Red Vienna, 6, 34. 197. MPP-17–4, Karl Polanyi to Irene, Donald, John, and Betty, December 1933. 198. When Hans Kelsen, the legal scholar (and one of Polanyi’s referees), drew attention to this point, Bauer, ever keen to avoid the charge of heresy, pointed to chapter and verse: in Marx’s Class Struggles in France the bourgeoisie and proletariat

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199. 200.


202. 203. 204.

205. 206. 207. 208. 209. 210. 211. 212. 213. 214. 215. 216. 217.



are described as sharing state power in the February Republic of 1848. (See Bauer, Werkausgabe, vol. 9, 55.) This is a vulgar misreading of The Class Struggles in France, in which Marx states unambiguously that “the February Republic was not and could not be other than a bourgeois republic” and that while the Provisional Government “was forced by the immediate pressure of the proletariat to announce it as a republic with social institutions,” it “acted in the ser vice of the bourgeoisie”; its “ whole life pro cess was comprised in a continuous fight against the demands of the proletariat.” Bauer, Werkausgabe, vol. 2, 346. Cf. Lewis, Fascism and Working Class, 57. Gerald Mozetič, Die Gesellschaftstheorie des Austromarxismus: Geistesgeschichtliche Voraussetzungen, Methodologie und soziologisches Programm (Darmstadt: Wissenschaftliche Buchgesellschaft, 1987). Tom Bottomore and Patrick Goode, eds., Austro-Marxism (Oxford: Clarendon Press, 1978), 38; Andrew Arato, “Austromarxism and the Theory of Democracy” in The Austrian Socialist Experiment: Social Democracy and Austromarxism, 1918–1934, ed. Anson Rabinbach (Boulder, Colo.: Westview, 1985), 137–138. Ewa Czerwínska-Schupp, Otto Bauer. Studien zur sozial-politischen Philosophie (Oxford: Peter Lang, 2005), 442. Bauer, Werkausgabe, vol. 2, 732. Bauer, Werkausgabe, vol. 2, 729–742. The latter task included appealing to base prejudice against “foreigners,” particularly Jews. See Kuhn, Henryk Grossman, 91; Gruber, Red Vienna, 25–29. KPA-3–12, Karl Polanyi, “Liberale Wirtschaftsreformen in England,” 1928. MPP-17–4, Karl Polanyi to Misi, November 21, 1932. Hans-Hermann Hoppe, “The Meaning of the Mises Papers,” Free Market 15, no.4 (1997); Ludwig von Mises, Liberalismus (Jena: G. Fischer, 1927), 45. KPA-1–50, Karl Polanyi, “The Rebirth of Democracy” [A demokrácia feltámadása], Bécsi Magyar Újság, November 26, 1922. Bauer, Werkausgabe, vol. 9, 305. Bauer, Werkausgabe, vol. 9, 62. Lewis, Fascism and Working Class, 83. Gruber, Red Vienna, 7. KPA-1–51, Karl Polanyi, “The Labour Government and Protectionism” [A kormány védővámokat munkáspárt], early 1920s. Otto Bauer, Werkausgabe, vol. 4 (Vienna: Europa Verlag, 1976), 200. Braunthal, “Otto Bauer,” 93. MPP-17–4, Karl Polanyi to Misi, November 21, 1932. Karl Polanyi, quoted in Lee Congdon, Seeing Red: Hungarian Intellectuals in Exile and the Challenge of Communism (DeKalb: Northern Illinois University Press, 2001), 82. Karl Polanyi, “Wirtschaft und Demokratie,” in Chronik der groǞen Transformation, vol. 1, ed. Michele Cangiani and Claus Thomasberger (Marburg: Metropolis, 2002), 149. KPA-2–21, Karl Polanyi, “Die Wirtschaft ist für den Faschismus, 1933.

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220. KPA-2–21, Polanyi, “Die Wirtschaft ist für den Faschismus.” 221. KPA-3–4, Polanyi, “Faschismus”; KPA-17–1, Karl Polanyi, WEA lectures, Canterbury, XI, 1938–1939. 222. MPP-17–4, Karl to Misi, November 21, 1932. 223. MPP-17–4, Karl to Misi, November 21, 1932; KPA-2–21, Polanyi, “Die Wirtschaft ist für den Faschismus.” 224. Kari Polanyi-Levitt, interview, December 2008. 225. Ilona Duczynska, Workers in Arms: The Austrian Schutzbund and the Civil War of 1934 (New York: Monthly Review Press, 1978 [1975]), 132. 226. The Heimwehr originated in the postwar period as a loose federation of militias, based largely on peasants, former soldiers, and students, who had little in common apart from the creeds of Catholicism and antisocialism. In the late 1920s they turned toward fascism. Duczynska, Workers in Arms, 66. 227. Lewis, Fascism and Working Class, 124. 228. Wilfrid Crook, The General Strike: A Study of Labor’s Tragic Weapon in Theory and Practice (Chapel Hill: University of North Carolina Press, 1931), 588–593. 229. This was the demonstration, incidentally, that sparked Elias Canetti’s interest in “crowds and power.” Crook, General Strike, 588–593. 230. KPA-29–10, Schafer, “Polanyi’s Life in Vienna,” 67; Alfred Pfabigan, “Ilona Duczynska and Austro-Marxism,” in Karl Polanyi in Vienna: The Contemporary Signifi cance of the Great Transformation, ed. Kari Polanyi-Levitt and Kenneth McRobbie (Montreal: Black Rose, 2000), 266. 231. Alfred Pfabigan, “Ilona Duczynska and Austro-Marxism,” in Kari Polanyi-Levitt and Kenneth McRobbie, eds., Karl Polanyi in Vienna: The Contemporary Significance of the Great Transformation, (Montreal: Black Rose, 2000). 232. Douglas Alder, “Decision-Making amid Public Violence; The Vienna Riots, July 15, 1927,” Austrian History Yearbook 19, no. 1 (1983): 239–260. 233. Hacohen, Karl Popper, 118; Pfabigan, “Duczynska and Austro-Marxism,” 266. 234. Duczynska, Workers in Arms, 143. 235. MPP-19–8, Eva to Tante Cecile, May 12, 1929. 236. MPP-17–2, Karl to Misi, May 20, 1920. 237. MPP-17–2, Karl Polanyi to Misi, January 19, 1920. 238. SPSL-438–4, Karl Polanyi, “Curriculum Vitae,” 1937. 239. SPSL-536–1, Karl to Zoe Fairfield, March 24, 1934; Friedrich Stadler, Vom Positivismus zur “wissenschaftlichen Weltauffassung” (Vienna: Löcker, 1982). 240. Bruce Pauley, “From Splinter Party to Mass Movement: The Austrian Nazi Breakthrough,” German Studies Review 2, no. 1 (1979): 7–29. 241. Whether Polanyi encountered Jahoda—in Vienna, London, or New York—is unknown. But it is probable. A Viennese Austro-Marxist, she was a good friend of Otto Bauer and Hans Zeisel, and also knew Polanyi’s friend Esther Simpson. In the 1930s she joined Funke, the Austrian wing of Neu Beginnen, and was active in the underground antifascist resis tance. She emigrated to Britain in the mid1930s (where she worked with Richard Crossman, knew Koestler, and was close to several Quakers) and then to New York, where she became good friends with


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242. 243. 244. 245.

246. 247. 248. 249. 250. 251. 252. 253. 254. 255. 256. 257.

Robert Merton, flatshared with Margaret Mead, and worked for the Institute of Social Research. Appropriately perhaps, the present author’s office at Brunel University is in premises named after her. KPA-18–2, Karl Polanyi, “Austria and Germany,” International Affairs 12, no. 5 (1933): 578–579. Kari Polanyi-Levitt, interview, December 2008. MPP-17–4, Karl Polanyi to Misi, December 1932. Ilona had begun studying mathematics, aged 18, in Zu rich, but illness and revolution had cut her studies short; she did not resume them until 1930. SPSL536–1, Ilona Duczynska, Personal statement; MPP-17–4, Karl Polanyi to Misi, 1933. MPP-17–4, Polanyi to Misi, December 1932. Aurel Kolnai, quoted in Francis Dunlop, The Life and Thought of Aurel Kolnai (Aldershot, U.K.: Ashgate, 2002), 112. KPA-12–4, Karl Polanyi, “Great Britain’s Foreign Policy To-Day,” 1936. MPP-17–4, Karl Polanyi to Misi, April 11, 1933. MPP-17–4, Karl Polanyi to Michael, June 5, 1933. SPSL-536–1, Karl to Zoe Fairfield, March 24, 1934; MPP-17–4, Ilona Duczynska to Misi, July 1, 1933. MPP-17–4, Karl to Misi(?), September 30, 1933. Schafer, “Vorgartenstrasse 203,” 332, 343. MPP-17–4, Karl Polanyi to Misi, October 13, 1933. MPP-17–4, Karl Polanyi to the Grants and Macmurrays, December 1933. MPP-17–4, Karl Polanyi to Misi, 10 December 10, 1933. In April Michael Polanyi had resigned his post at the Kaiser Wilhelm Institute in Berlin, in protest against anti-Jewish legislation. In the autumn he arrived in Manchester. SPSL-221–3, Michael Polanyi, “Curriculum Vitae”; MPP-17–4, Karl to Misi, December 10, 1933.

4. CHALLENGES AND RESPONSES 1. William Scott and Martin Moleski, Michael Polanyi: Scientist and Philoso pher (New York: Oxford University Press, 2005). 2. KPA-59–8, Karl Polanyi to Ilona, 1947(?). 3. John Costello, John Macmurray: A Biography (Edinburgh: Floris Books, 2002), 200. 4. Steve Bruce, “The Student Christian Movement and the Inter-Varsity Fellowship: A Sociolog ical Study of Two Student Movements” (Ph.D. thesis, University of Stirling, 1980). 5. MPP-17–5, Karl Polanyi to Misi, October 31, 1934. 6. Don Grant, interview. 7. Costello, Macmurray, 201. 8. Costello, Macmurray, 205. 9. John Macmurray, The Philosophy of Communism (London: Faber & Faber, 1933), 91–92.

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10. KPA-30–3, Irene Grant, conversation with Kari Levitt, mid-1980s. 11. Certainly they attempted to help. Macmurray, for example, wrote on Polanyi’s behalf to A. D. Lindsay, the master of Balliol. SPSL-536–1, Karl John Macmurray to Walter Adams, June 4, 1934. 12. MPP-17–5, Karl to Misi, October 31, 1934. 13. For example, on December 18, 1934, he took a third class berth on the S.S. Aquitania. KPA-47–6, Karl Polanyi, Correspondence, 1934. 14. SPSL-536–1, Hector Hetherington to Karl Polanyi, December 5, 1933. 15. SPSL-536–1, Bertram Benas, chairman of the Central British Fund for German Jewry, to Karl Polanyi, December 1, 1933; MPP-17–4, Karl Polanyi to Misi, December 9, 1933. 16. Leo Szilard, “Reminiscences,” in The Intellectual Migration: Europe and America, 1930–1960, ed. Donald Fleming and Bernard Bailyn (Cambridge, Mass.: Belknap Press, 1969), 98; Laura Fermi, Illustrious Immigrants: The Intellectual Migration from Europe, 1930–41 (Chicago: University of Chicago Press, 1968), 64; Jeremy Seabrook, The Refuge and the Fortress: Britain and the Flight from Tyranny (Houndmills, U.K.: Palgrave, 2008); R. M. Cooper, ed., Refugee Scholars: Conversations with Tess Simpson (Leeds, U.K.: Moorland Books, 1992), 32; Tibor Frank, Double Exile: Migrations of Jewish-Hungarian Professionals through Germany to the United States, 1919–1945 (Oxford: Peter Lang, 2008), 257–260. Szilard was a friend of Michael Polanyi. 17. SPSL-536–1, Zoe Fairfield to Walter Adams, March 30, 1934; SPSL-536–1, H. W. Fox to Zoe Fairfield, May 26, 1934. 18. “I realise of course,” commented Adams, “that Swansea is not a very appropriate place for Dr. Polanyi but at least it gives him an entry into the formal university world.” SPSL-536–1, Walter Adams to Zoe Fairfield, May 31, 1934. 19. Polanyi, Beveridge added, would be better served by “professional” bodies. SPSL536–1, William Beveridge to Walter Adams, July 5, 1934. 20. SPSL-536–1, Walter Adams to H. W. Fox (n.d.). 21. A. M. Sperber, Murrow: His Life and Times (London: Michael Joseph, 1986). 22. Sperber, Murrow, 45 23. MPP-17–5, Karl to Misi, October 31, 1934. 24. Earlier, Polanyi learned that another Oxford college, Queen’s, was considering awarding a post to a displaced foreign scholar. His admirably altruistic response was to suggest “that as far as Austria is concerned, it is my belief that Heinrich Gomperz’s claim ought to have precedence over mine.” SPSL-536–1, Zoe Fairfield to Walter Adams, March  11, 1935; SPSL-536–1, Karl Polanyi to Walter Adams, October 2, 1934. 25. SPSL-536–1, Walter Adams to H. W. Fox (n.d.). 26. SPSL-536–1, Walter Adams to Zoe Fairfield, June 21, 1935. 27. SPSL-438–4, Karl Polanyi, “Curriculum Vitae,” 1937. 28. MPP-17–5, Karl Polanyi to Misi, December 7, 1934. 29. MPP-17–4, Karl Polanyi to the Grants and Macmurrays, December 1933. 30. KP-18–6, Karl Polanyi, “Fascism and Marxian Terminology,” 1934, 128.

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31. John Warren, “‘Weisse Strümpfe oder neue Kutten’: Cultural Decline in Vienna in the 1930s,” in Interwar Vienna: Culture between Tradition and Modernity, ed. Deborah Holmes and Lisa Silverman (Rochester, N.Y.: Camden House, 2009), 35. 32. Alfred Pfabigan, “Ilona Duczynska and Austro-Marxism,” in Karl Polanyi in Vienna: The Contemporary Signifi cance of the Great Transformation, ed. Kari Polanyi-Levitt and Kenneth McRobbie (Montreal: Black Rose, 2000), 266. 33. Kari Polanyi-Levitt, interview, December 2008. Reports of the violence reached Karl, who heard by phone from his mother-in-law that fi ghting was taking place and was mightily relieved to hear that Ilona and Kari had not been hurt. MPP17–5, Karl Polanyi to Misi, February 16, 1934. 34. MPP-17–5, Karl Polanyi to Misi, February 14, 1934. 35. MPP-17–4, Karl to Misi, December 10, 1933. 36. MPP-17–5, Karl Polanyi to Misi, February 24, 1934. 37. Kari Polanyi-Levitt, interview, December 2008. 38. In 1936 Ilona left Austria without having been able to fi nish her thesis. SPSL-536– 1, Duczynska, personal statement; Barbara Striker, “‘This Is the Voice of Radio Schutzbund!, ’” in Karl Polanyi in Vienna: The Contemporary Significance of the Great Transformation, ed. Kari Polanyi-Levitt and Kenneth McRobbie (Montreal: Black Rose, 2000), 272–274. 39. MPP-17–5, Karl Polanyi to Magda, 1934. 40. SPSL-438–4, Karl Polanyi to Walter Adams, March 18, 1938; Karl Polanyi to the under secretary of state, Aliens’ Department, Home Office, March 18, 1938. 41. Scott and Moleski, Polanyi. 42. Szilard, “Reminiscences,” 95. 43. Tibor Frank, “Situation Berlin. Ungarische Wissenschaftler und Künstler in Deutschland, 1919–1933,” IMIS Beiträge 10 (1999): 7–38. 44. Judith Szapor, “From Budapest to New York: The Odyssey of the Polanyis,” Hungarian Studies Review 30, no. 1–2 (2003): 36. 45. Erzsébet Vezér, “The Polanyi Family,” in The Life and Work of Karl Polanyi, ed. Kari Polanyi-Levitt (Montreal: Black Rose, 2000), 17–29. 46. Szapor, “Odyssey of the Polanyis,” 32–38. 47. MPP-17–7, Karl Polanyi to Misi, August 19 and 24, 1938. 48. Szapor, “Odyssey of the Polanyis,” 35. 49. Szapor, “Odyssey of the Polanyis,” 36. 50. Karl Polanyi to Laura, January 24, 1939. Judit Szapor kindly shared a copy of this letter with the author. 51. In a letter to Michael (MPP-17–8, April  14, 1939), Polanyi envisaged a lengthy stay for Adolf and expressed concern, given “how difficult it is to achieve something in Britain if you don’t speak the language.” Cf. Szapor, “Odyssey of the Polanyis,” 36. 52. KPA-20–21, Karl Polanyi, “The State and the Individual in Fascism,” 1934; KPA-20–25, Karl Polanyi, “Fascism and Chris tian ity,” 1936. 53. KPA-12–2, Karl Polanyi, “Fascism: National Planning and International Anarchy,” 1935.

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54. KPA-21–4, Karl Polanyi, Lecture notes, 1936; KPA-21–4, Karl Polanyi, “On the Philosophy and Economics of Fascism,” 1936. 55. KPA-15–8, Karl Polanyi, Lecture 19, “Government and Industry,” 1943–1944. 56. Costello, Macmurray, 234. 57. KPA-7–7, Karl Polanyi, Notes taken by Ilona Duczynska, March 26, 1933. 58. Francis Carsten, Fascist Movements in Austria: From Schönerer to Hitler (London: Sage, 1977). 59. KPA-8–3, Karl Polanyi, Notes and outlines, 1933. 60. Lukáš Novotný, “Kameradschaftsbund. Contribution to the History of CzechGerman Relationship,” Part  1 (n.d.), http://usd.ff.cuni.cz/?q= system/fi les/novot ny%20kamerad.pdf. 61. Polanyi, “Essence of Fascism.” 62. KPA-9–2, Polanyi, “ Labour Movement’s Post-War Failure,” 1934–1946. 63. Polanyi, “Essence of Fascism,” section I. 64. Odon Pór, Guilds and Co-operatives in Italy (London: Labour Publishing, 1923). On Cole’s sympathy with Mussolini’s corporate state, see Geoff rey Foote, The Labour Party’s Political Thought: A History (Houndmills, U.K.: Palgrave Macmillan, 1997), 123. 65. Odon Pór, Fascism (London: Labour Publishing, 1923), 159–160, 221. 66. KPA-18–4, Karl Polanyi, “Othmar Spann, the Phi losopher of Fascism,” New Britain 3, no. 53 (1934): 7. 67. KPA-18–5, Karl Polanyi, “Spann’s Fascist Utopia,” New Britain 3, no. 55 (1934): 74–75. 68. Karl Polanyi, “Korporatives Österreich,” in Chronik der groǞen Transformation, vol. 1, ed. Michele Cangiani and Claus Thomasberger (Marburg: Metropolis, 1934), 212. 69. Hüseyin Özel, “Reclaiming Humanity: The Social Theory of Karl Polanyi” (Ph.D. dissertation, University of Utah, 1997), 78. 70. KPA-12–2, Polanyi, “Fascism”; KPA-20–16, Karl Polanyi, Christian Left bulletin, “Coercion and Defence,” 1939; Karl Polanyi, “Die geistigen Voraussetzungen des Faschismus,” in Chronik der groǞen Transformation, vol. 3, ed. Michele Cangiani, Kari-Polanyi Levitt, and Claus Thomasberger (Marburg: Metropolis, 2005), 219. 71. KPA-20–4, Karl Polanyi, book plan, “Common Man’s Masterplan,” 1939–1940. 72. KPA-20–8, Karl Polanyi, book synopsis, “The Fascist Transformation,” 1934– 1935; KPA-21–4, Karl Polanyi, “On the Philosophy and Economics of Fascism,” 1936. 73. KPA-18–8, Karl Polanyi, “The Fascist Virus” (n.d.). 74. KPA-18–8, Polanyi, “The Fascist Virus.” 75. KPA-18–8, Polanyi, “The Fascist Virus.” 76. KPA-18–8, Polanyi, “The Fascist Virus.” 77. KPA-18–8, Polanyi, “The Fascist Virus.” 78. Karl Polanyi, “Faschismus und Marxistische Terminologie,” in Chronik der groǞen Transformation, vol. 3, ed. Michele Cangiani, Kari-Polanyi Levitt, and Claus Thomasberger (Marburg: Metropolis, 2005 [1934]), 235.

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79. KPA-18–8, Polanyi, “The Fascist Virus”; KPA-51–5, Karl Polanyi, annotations to a letter from Paul Medow, 1961. 80. KPP-1–4, Polanyi to Fromm, January 14, 1961; Polanyi, “Die geistigen Voraussetzungen,” 218. 81. KPA-18–9, Karl Polanyi, “Marxism Re-Stated,” New Britain 3, nos. 58–59 (1934): 187–188. 82. KPA-15–4, Karl Polanyi, Lecture XXIV, “Contemporary Problems and Social and Political Theory,” University of London, 1936–1940. 83. Antisocialism was necessarily antidemocratic, Polanyi reasoned, “ because democracy tends to increase the influence of the socialist working class movement.” KPA-21–9, Karl Polanyi, Lecture notes on political/religious topics, 1937; KPA-18–21, Karl Polanyi, “Europe To-Day” (London: Workers’ Educational Trade Union Committee, 1937). 84. KPA-20–22, Karl Polanyi, “The Auxiliary and Politics,” 1934. 85. Tim Rogan, “Karl Polanyi at the Margins of English Socialism, 1934–1947,” Modern Intellectual History 10, no. 2 (2013): 317–346. 86. Rogan, “Karl Polanyi at the Margins.” 87. Don Grant, interview. See also Costello, Macmurray, 256. 88. KPA-59–7, Karl Polanyi to Ilona, January 20, 1941. 89. Although the bulletin was circulated, Rogan observes, “ there is little evidence of any significant notice being taken of the group’s work. English socialism quickly forgot this early engagement with the young Marx: when Charles Taylor brought a French edition of the Economic and Philosophical Manuscripts back from Paris in 1957 it was regarded as a great novelty.” Rogan, “Karl Polanyi at the Margins,” 333. 90. KPA-21–21, Karl Polanyi et al., Christian Left Group, memoranda and draft articles, 1936. 91. MPP-17–5, Karl Polanyi to Misi, Thursday (no date), 1934. 92. MPP-17–5, Karl Polanyi to Misi, November 31 (no year). 93. MPP-17–5, Karl to Misi, October 31, 1934. 94. Costello, Macmurray, 227. 95. Gollancz’s political trajectory was remarkably similar to Polanyi’s. As a youth he was involved with the Liberal Party and guild socialism; in the 1930s he veered close to communism before aligning himself with Christian socialism. 96. MPP-17–5, Karl to Misi, February 24, 1934. 97. KPA-56–11, Karl Polanyi to Joseph Needham, October 31, 1934. 98. Rogan, “Karl Polanyi at the Margins.” 99. KPA-12–3, Karl Polanyi, Lecture, “On Fascism and Christian Ideals,” 1935; KPA8–8, Karl Polanyi, “Munich and Moskow,” 1939–1946. 100. KPA-15–2, Karl Polanyi, Lecture I, “Confl icting Philosophies in Modern Society,” University of London, 1937. 101. KPA-21–27, Karl Polanyi et al. to the editor of Radical Religion, June 10, 1939. 102. KPA-21–2, Polanyi, “Xtianity and the New Social Order,” 1936. 103. KPA-37–3, Karl Polanyi, “Freedom in a Complex Society,” 1957. 104. KPA-18–36, Karl Polanyi, Notes on a pamphlet by V. Gollancz (n.d.).

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105. KPA-56–13, Karl Polanyi to Don Grant, December 7, 1929. 106. KPA-20–12, Karl Polanyi et al., “Notes of a Week’s Study on the Early Writings of Karl Marx,” 1938. Polanyi was the lead (or possibly sole) author of this text. 107. KPA-56–13, Polanyi to Irene, March 15, 1963. See also Matěj Vančura, “Polanyi’s Great Transformation and the Concept of the Embedded Economy,” IES Occasional Paper 2 (Prague: Charles University, 2011). 108. KPA-56–13, Polanyi to Irene, March 15, 1963. 109. KPA-12–3, Polanyi, Lecture, “Fascism and Christian Ideals.” 110. This distinction overlaps with John Macmurray’s between two types of human motivation: love and hunger; the former being altruistic, the latter egocentric. KPA-12–3, Polanyi, Lecture, “Fascism and Christian Ideals”; Costello, Macmurray, 229. 111. KPA-20–10, Karl Polanyi et al., “The Basis of the Christian Left,” 1938. 112. KPA-21–10, Karl Polanyi, “Community and Society” and “The Christian Approach to Social Reconstruction,” 1937. 113. KPA-18–33, Karl Polanyi, various draft articles, 1945–1946. 114. MPP-17–11, Karl Polanyi to Misi, May 6, 1945. 115. MPP-17–4, Polanyi to Misi, October 13, 1933. 116. MPP-17–5, Karl Polanyi to Misi, March 7, 1934. 117. With regard to Laski, Ralph Miliband points out: “The whole political scene in Britain would indeed have been transformed, had the Labour Party been the socialist party which he wanted it to be. But the Labour Party was not then, and was not on the way to becoming, such a party.” This gave his argument “an air of unreality.” This applies with equal force to Polanyi. See Ralph Miliband, Capitalist Democracy in Britain (Oxford: Oxford University Press, 1982), 16. 118. Denys Leighton, The Greenian Moment: T. H. Green, Religion and Political Argument in Victorian Britain (Exeter: Imprint Academic, 2004). 119. KPA-9–3, Karl Polanyi, Notes on T. H. Green, 1934–1946. 120. Jeanne Morefield, “‘A Liberal in a Muddle’: Alfred Zimmern on Nationalism, Internationalism and Commonwealth,” in Imperialism and Internationalism in the Discipline of International Relations, ed. David Long and Brian Schmidt (Albany: State University of New York Press, 2005), 97. 121. Toynbee, quoted in Matt Car ter, T. H. Green and the Development of Ethical Socialism (Exeter, U.K.: Imprint Academic, 2003), 64. 122. KPA-9–1, Karl Polanyi, Notes on Toynbee, 1934–1946. 123. Car ter, T. H. Green, 136, 164. 124. KPA-30–3, Irene Grant, conversation with Kari Levitt, mid-1980s. 125. KPA-47–14, Karl Polanyi to Cole, May 22, 1944. 126. Kari Polanyi-Levitt, telephone interview, October 2007. 127. Matthew Grimley, Citizenship, Community, and the Church of England: Liberal Anglican Theories of the State between the Wars (Oxford: Clarendon Press, 2004), 5. 128. Stefan Collini, Absent Minds: Intellectuals in Britain (Oxford: Oxford University Press, 2006), 464. 129. A. D. Lindsay, Christianity and Economics (London: Macmillan, 1933).

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130. Laski criticized Lindsay’s conception of socialism for its overriding focus on the “ethical” commitment to end individual acquisitiveness and its neglect of property relations. Yet at the same time, as Denis Healey has noted, “as the fi rst confessed socialist to head a college in Oxford,” Lindsay was viewed by many of his colleagues “as a dangerous revolutionary.” Healey, quoted in “A.D. Lindsay,” http:// spartacus-educational.com /PRlindsayAS.htm; Mark Bevir and David O’Brien, From Idealism to Communitarianism: The Inheritance and Legacy of John Macmurray, University of California Berkeley Postprints, 2003, http://escholarship .org /uc/item /95m6q13r#page -1. See also Graham Maddox, “The Christian Democracy of A.D. Lindsay,” Political Studies 34, no. 3 (1986): 441–455; Julia Stapleton, Political Intellectuals and Public Identities in Britain since 1850 (Manchester: Manchester University Press, 2001). 131. Harry Holloway, “A.D. Lindsay and the Problems of Mass Democracy,” Western Political Quarterly 16, no. 4 (1963): 798–813. 132. John Street, “Fabian Socialism, Democracy and the State,” in Democracy and the Cap italist State, ed. Graeme Duncan (Cambridge: Cambridge University Press, 1989), 169; Car ter, T. H. Green. 133. Ross Terrill, R. H. Tawney and His Times; Socialism as Fellowship (Cambridge Mass.: Harvard University Press, 1973), 211. 134. R. H. Tawney, The Acquisitive Society (London: G. Bell & Sons, 1930 [1921]), 96. 135. KPA, Polanyi’s personal library. 136. Tawney, Acquisitive Society, 9. 137. R. H. Tawney, Religion and the Rise of Capitalism (Harmondsworth, U.K.: Penguin, 1938 [1922]), 40, 43. 138. Terrill, Tawney, 228. 139. Tawney, Acquisitive Society, 182. 140. Richard Overy, The Morbid Age: Britain between the Wars (London: Allen Lane, 2009), 36–40. 141. Arnold Toynbee, A Study of History, vol. 3, 2nd ed. (Oxford: Oxford University Press, 1935), 365ff. 142. Overy, Morbid Age, 37. 143. Arnold Toynbee, A Study of History, vol. 1, 2nd ed. (Oxford: Oxford University Press, 1935), 22–23. 144. Toynbee, Study of History, vol. 3, 378; KPA-11–1, Karl Polanyi, “Toynbee’s Theory of Challenge and Response Applied to the Industrial Revolution in England,” 1935–1946. 145. KPA-11–1, Polanyi, “Toynbee’s Challenge and Response.” 146. See Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (Boston: Beacon, 2001), 69, 160, 162, 178, 188, 228. 147. MPP-17–9, Karl Polanyi to Misi, August  22, 1941; MPP-17–11, Karl Polanyi to Michael, March 10, 1944. 148. Costello, Macmurray, 225. 149. SPSL-536–1, Karl to Zoe Fairfield, March 24, 1934. 150. KPA-21–19, Karl Polanyi, “A Christian View of Marxism” and “Marxism and Christianity” (n.d.).

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151. A recent exponent of the same point is Richard Rorty: “‘Christian Socialism’ is pleonastic: nowadays you cannot hope for the fraternity which the Gospels preach without hoping that democratic governments will redistribute money and opportunity in a way that the market never will. There is no way to take the New Testament seriously as a moral imperative, rather than as a prophecy, without taking the need for such redistribution seriously.” KPA-21–27, Polanyi et al. to the editor of Radical Religion; Richard Rorty, Philosophy and Social Hope (Harmondsworth, U.K.: Penguin, 1999). 152. KPA-15–1, Karl Polanyi, “Marxian Philosophy,” 1934–1935, 2. 153. KPA-7–3, Karl Polanyi, Notes on readings, 1934–1946; Rogan, “Karl Polanyi at the Margins,” 335–336. 154. KPA-15–1, Polanyi, “Marxian Philosophy,” 2; KPA-21–22, Polanyi, “Community and Society”; KPA-20–11, Karl Polanyi, “Marx on Self-Estrangement,” 1936–1938; Karl Polanyi, “Christentum und wirtschaftliches Leben,” in Chronik der groǞen Transformation, vol. 3, ed. Michele Cangiani, Kari-Polanyi Levitt, and Claus Thomasberger (Marburg: Metropolis, 2005 [1930s]), 257. 155. KPA-20–12, Polanyi et al., “Notes of a Week’s Study.” 156. KPA-8–8, Polanyi, “Munich and Moskow”; KPA-20–10, Polanyi et al., “The Basis of the Christian Left”; KPA-21–27, Polanyi et  al., to the editor of Radical Religion. 157. KPA-20–12, Polanyi et al., “Notes of a Week’s Study.” 158. Polanyi, “Essence of Fascism,” 375–376. 159. KPA-21–22, Polanyi, “Community and Society.” 160. KPA-2–17, Karl Polanyi, “Wer ist die Linke?,” 1926–1927. 161. KPA-2–17, Polanyi, “Wer ist die Linke?”; KPA-21–2, Karl Polanyi, “The New Social Order from the Point of View of Christian Principles,” 1936. 162. KPA-15–4, Karl Polanyi, Lecture I, “Contemporary Problems and Social and Political Theory,” University of London, 1936–1940. 163. KPA-9–4, Polanyi, “Notes on GDH Cole”; KPA-56–13, Karl Polanyi to Don Grant, December 7, 1929. 164. KPA-21–22, Polanyi, “Community and Society.” 165. Polanyi, “Essence of Fascism.” 375–376. 166. KPA-21–22, Polanyi, “Community and Society.” 167. KPA-20–11, Polanyi, “Marx on Self-Estrangement”; KPA-20–12, Polanyi et al., “Notes of a Week’s Study.” 168. KPA-21–12, Karl Polanyi, “The Economic Order,” 1937. Emphasis in original. 169. KPA-20–25, Polanyi, “Fascism and Christianity.” 170. KPA-21–33, Karl Polanyi, “Christian Left Study Circle” (n.d.); Polanyi, “Essence of Fascism”; KPA-18–21, Polanyi, “Europe To-Day,” 55. 171. KPA-20–12, Polanyi et al., “Notes of a Week’s Study.” 172. KPA-29–12, Duczynska, “Karl Polanyi”; Costello, Macmurray, 275. This had also been the symbol of the League of Religious Socialists in Austria; see Aurel Kolnai, Political Memoirs (Oxford: Lexington, 1999), 151. 173. Michael Polanyi, quoted in Paul Knepper, “Michael Polanyi and Jewish Identity,” Philosophy of the Social Sciences 35, no. 3 (2005): 284.

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174. Endre Nagy, “After Brotherhood’s Golden Age: Karl and Michael Polanyi,” in Humanity, Society and Commitment: On Karl Polanyi, ed. Kenneth McRobbie (Montreal: Black Rose, 1994). 175. Tibor Frank, “Cohorting, Networking, Bonding: Michael Polanyi in Exile,” Polanyiana 10, no. 1–2 (2001): 115. 176. MPP-17–12, Karl Polanyi to Michael, January 21, 1957; Rogan, “Karl Polanyi at the Margins,” 323. 177. MPP-17–12, Polanyi to Michael, January 21, 1957. 178. KPA-59–8, Karl Polanyi to Ilona, August 28, 1947. 179. Mary Jo Nye, Michael Polanyi and His Generation: Origins of the Social Construction of Science (Chicago: University of Chicago Press, 2011), 184. 180. Magda also bristled on one occasion when asked to look after her niece. MPP17–5, Karl Polanyi to Magda, November 2, 1934; KPA-17–5, Karl Polanyi to Misi, September  18, 1934; KPA-59–8, Karl to Ilona, August  28, 1947; Nagy, “Brotherhood’s Golden Age.” Cf. Kari Polanyi-Levitt, telephone interview, December 2008: Magda “would even intercept post from my father, to prevent Michael getting it.” 181. KPA-59–8, Karl to Ilona, August 28, 1947. 182. Michael Polanyi, The Contempt of Freedom: The Russian Experiment and After (London: Watts, 1940), 80; also Michael Polanyi, “The Foolishness of History,” Encounter, November 1957, 33–37. 183. Polanyi, Contempt of Freedom, 84. 184. Karl Polanyi, “Russia and the Crisis” [Oroszország és a válság], in Polanyi, Fasizmus, demokrácia, ipari társadalom (Budapest: Gondolat Kiadó, 1986 [1939]), 142; KPA-15–2, Karl Polanyi, “Conflicting Philosophies in Modern Society,” 1937. 185. MPP-17–10, Karl Polanyi to Misi, September 29, 1943. 186. Eva Zeisel, “Prison Memoir,” A Public Space, 2011, www.apublicspace.org / back _ issues/issue _ 14/eva _ zeisels _ prison _ memoir.html. 187. Scott and Moleski, Polanyi, 163; Walter Gulick “Letters about Polanyi, Koestler, and Eva Zeisel,” Tradition and Discovery 2 (2003–2004): 6–10. 188. Jean Richards, telephone interview; Zeisel, “Prison Memoir.” 189. Michael Scammell, Koestler: The Literary and Political Odyssey of a TwentiethCentury Skeptic (New York: Random House, 2009), 158; Gulick, “Letters about Polanyi.” 190. Nye, Michael Polanyi, 199; Gulick, “Letters about Polanyi.” 191. Weissberg was not so fortunate. Arrested in 1937, he was accused of collaborating with Bukharin, Trotsky, and Hitler in plots to assassinate Stalin and to commit acts of sabotage against Soviet industry. In 1940 the secret police GPU handed him over to the Gestapo. That Weissberg, prior to his own arrest, had attempted to intercede on Eva’s behalf was used against him by his interrogators. “Your wife has been arrested as an enemy of the people and yet you intervened on her behalf? So you support an enemy of the people, eh?” On his protestation that he was certain of her innocence, the interrogator played the trump card of the self-righteous bully: “So now you’re saying we arrest innocent people!” Alex Weissberg, Conspiracy of Silence (London: Hamish Hamilton, 1952), 17; Judit Szapor, “Laura Polanyi

196. 197. 198. 199. 200. 201. 202. 203.


205. 206.

207. 208. 209. 210. 211. 212.


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192. 193. 194.

1882–1957: Narratives of a Life,” Polanyiana 6, no. 2 (1997), www.kfki.hu/chemonet /polanyi /9702/szapor.html. MPP-17–11, Michael Polanyi to Karl, June 16, 1944. MPP-17–11, Karl Polanyi to Misi, July 11, 1944. Eva and Koestler later fell out over his transformation from Comintern agent to anticommunist propagandist, which she regarded as troublingly abrupt. Conversation with Judit Szapor, October 2010. Frances Stonor Saunders, Who Paid the Piper? The CIA and the Cultural Cold War (London: Granta, 1999), 61; Scammell, Koestler, 92. Arthur Koestler, The Yogi and the Commissar, and Other Essays (London: Jonathan Cape, 1945), 188, 201. KPA-18–27, Karl Polanyi to the New Statesman and Nation, July  21, 1945; Koestler, Yogi and Commissar, 171. KPA-18–27, Karl Polanyi to the New Statesman and Nation, July 21, 1945. Ger van den Berg, “The Soviet Union and the Death Penalty,” Soviet Studies 35, no. 2 (1983): 158. Koestler, Yogi and Commissar, 172. These words resonate in England today, where the age of criminal responsibility has been lowered to ten. Koestler, Yogi and Commissar, 177. KPA-47–9, Karl Polanyi to HG, May 1, 1939. “We should model ourselves on China, which is and was based on the tolerance of other peoples’ ways of life,” opined Polanyi in the late 1930s. KPA-20–4, Polanyi, “Common Man’s Masterplan.” Conceivably, his enthusiasm for China was encouraged by his friendship with two distinguished sinologists, Tawney and Needham. KPA-19–26, Karl Polanyi, “Experiences in Vienna and Amer ica” (n.d.); KPA18–19, Karl Polanyi, “The Educated Workman: What He Is Contributing to Industry,” Technology Review 39, no. 5 (1937). The dates were December 1934 to April 1935, and October to November 1936. According to the assistant director of the IIE, “Polanyi did a thoroughly fi rstclass job and the reports received from the institutions where he spoke were unanimously favorable.” SPSL-536–1, Edward Murrow to Walter Adams, May 27, 1935. SPSL-536–1, Karl Polanyi, “Reflections on a Visit to Southern Colleges,” in Institute of International Education, Extramural Lectures, Report no. 1, 1935, 5, 8–9. MPP-17–5, Karl Polanyi to Misi, December 7, 1934; KPA-47–7, Karl Polanyi to Jack, March 22, 1935. KPA-19–26, Polanyi, “Experiences in Vienna and Amer ica.” KPA-47–7, Correspondence between Karl Polanyi and the IIE, 1935. KPA-47–7, Karl to Jack, March 22, 1935. For example, Simonde de Sismondi, New Principles of Political Economy (New Brunswick, N.J.: Transaction, 1991 [1818]), 339; Michael Newman, Harold Laski: A Political Biography (London: Macmillan, 1993), 290–291. KPA-11–9, Karl Polanyi to Mr. Mummery (n.d.).

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214. KPA-21–11, Karl Polanyi, “The Nature of the Present World Crisis,” Fellowship of Wives, 1937; Polanyi, The Great Transformation, 225–226. 215. Polanyi might well have revised this opinion if he had encountered the Social Gospel movement—its Christianity was infused with an anticapitalist egalitarian zeal. KPA-54–4, Karl Polanyi to Irene Grant, 1941; KPA-30–1, Karl Polanyi, “Biographical Information,” 1940–1984; KPA-30–2, Karl Polanyi, unpublished fragments, 1958–1960; Karl Polanyi, “Amerika im Schmelztiegel,” in Chronik der groǞen Transformation, vol. 1, ed. Michele Cangiani and Claus Thomasberger (Marburg: Metropolis, 2002 [1935]), 275. 216. KPA-47–8, Karl Polanyi to Toni and Gustav Stolper, May 19, 1936; MPP-17–8, Karl Polanyi to Misi, November 12, 1939. 217. MPP-17–7, Karl to Misi, November 10, 1938. 218. SPSL-536–1, Polanyi, “Reflections on a Visit to Southern Colleges,” 5; KPA-47–14, Karl Polanyi to E. H. Carr, November 27, 1944; KPA-54–6, Karl Polanyi, fragment; Polanyi, “Amerika im Schmelztiegel,” 275. 219. MPP-17–9, Karl Polanyi to Misi, January 13, 1941. 220. KPA-11–9, Karl Polanyi to Mr. Mummery (n.d.). 221. KPA-16–12, Karl Polanyi, Lecture 11, “Eu rope Today and Tomorrow,” Morley College, 1945–1946. 222. KPA-19–26, Polanyi, “Experiences in Vienna and America.” 223. KPA-18–16, Karl Polanyi, “Education for Politics—in England and the United States,” School and Society 45, no. 1161 (1937): 448. 224. KPA-19–26, Polanyi, “Experiences in Vienna and America.” 225. KPA-8–3, Karl Polanyi, “Political and Economic Experiments in Our Time. U.S.A. and New Deal,” 1934–1946; MPP-17–6, Karl Polanyi to Misi, January 15, 1936. 226. Karl Polanyi, “Roosevelt zerschlägt die Konferenz,” in Chronik der groǞen Transformation, vol. 1, ed. Michele Cangiani and Claus Thomasberger (Marburg: Metropolis, 1933), 178–183. 227. Polanyi, “Roosevelt zerschlägt die Konferenz,” 182. 228. Steve Fraser, “The ‘ Labor Question,’” in The Rise and Fall of the New Deal, 1930– 1980, ed. Steve Fraser and Gary Gerstle (Princeton, N.J.: Princeton University Press, 1989), 68–69; William Domhoff and Michael Webber, Class and Power in the New Deal: Corporate Moderates, Southern Democrats, and the Liberal-Labour Coalition (Stanford, Calif.: Stanford University Press, 2011); John Newsinger, “1937: The Year of the Sitdown,” International Socialism 127 (Summer 2010): 81–110; Mike Davis, Prisoners of the American Dream: Politics and Economy in the History of the U.S. Working Class (London: Verso, 1986); Thomas Ferguson, “Industrial Confl ict and the Coming of the New Deal: The Triumph of Multinational Liberalism in America,” in The Rise and Fall of the New Deal, 1930–1980, ed. Steve Fraser and Gary Gerstle (Princeton,  N.J.: Princeton University Press, 1989), 3–31; William Appleman Williams, The Tragedy of American Diplomacy (New York: W. W. Norton, 2009), 200. 229. Karl Polanyi, “TVA—Ein amerikanisches Wirtschaftsexperiment,” in Chronik der groǞen Transformation, vol. 1, ed. Michele Cangiani and Claus Thomasberger


234. 235.


237. 238.


240. 241. 242. 243. 244.

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230. 231.

(Marburg: Metropolis, 1936), 281–289; Karl Polanyi, “Arbeitsrecht in den USA,” in Chronik der groǞen Transformation, vol. 1, ed. Michele Cangiani and Claus Thomasberger (Marburg: Metropolis, 1937), 290. KPA-36–4, Karl Polanyi, “Public Opinion and Statemanship,” 1951. KPA-18–25, Karl Polanyi, “Friends of Democratic Hungary: Amer ica 1943” (n.d.); see also KPA-30–1, Karl Polanyi interview: “In Post–Pearl Harbour Amer ica I Learnt to Know Democracy at Its Best.” KPA-47–8, Ilona Duczynska to Toni Stolper, December 4, 1937; KPA-47–8, Karl Polanyi to Toni and Gustav Stolper, May 19, 1936. This is borne out by archival evidence (e.g., KPA-47–8, Polanyi to Toni and Gustav Stolper, May 19, 1936), although according to Zoe Fairfield, Ilona had arrived in London two years earlier, in May 1934. On this, see SPSL-536–1, Fairfield to Walter Adams, May 15, 1934; and David Simon, “To and through the UK: Holocaust Refugee Ethnographies of Escape, Education, Internment and Careers in Development,” Contemporary Social Science: Journal of the Academy of Social Sciences 7, no. 1 (2012): 27. KPA-47–8, Polanyi to Toni and Gustav Stolper, May 19, 1936. The Kilburn address was 72 West End Lane. György Dalós, “The Fidelity of Equals: Ilona Duczynska and Karl Polanyi,” in The Life and Work of Karl Polanyi, ed. Kari Polanyi-Levitt (Montreal: Black Rose Books, 1990), 40. Don Grant, interview. Polanyi was not the only culinarily challenged Hungarian immigrant to have come up against the explosive qualities of baked beans. Koestler’s autobiography includes a similar story: “when suddenly there was a loud report, and a hard object hit me on the back of the head, knocking me momentarily unconscious. A big can of tinned beans which had been standing on the radiator cover had exploded.” Arthur Koestler, Arrow in the Blue (London: Hutchinson, 1983 [1952]), 51. KPA-47–8, Polanyi to Toni and Gustav Stolper, May 19, 1936; Scott and Moleski, Polanyi. KPA-47–12, Karl Polanyi to Toni Stolper, February  17, 1942; Karl Polanyi in 1945, quoted in Marguerite Mendell, “Karl Polanyi and Socialist Education,” in Humanity, Society and Commitment: On Karl Polanyi, ed. Kenneth McRobbie (Montreal: Black Rose, 1994), 27; Kari Polanyi-Levitt, interview, December 2008. Kenneth McRobbie, “ Under the Sign of the Pendulum: Childhood Experience as Determining Revolutionary Consciousness. Ilona Duczynska Polanyi,” Canadian Journal of History 41, no. 2 (2006): 263–298. Kari Polanyi-Levitt, interview, December 2008. KPA-47–8, Ilona to Toni Stolper, December 4, 1937; Kari Polanyi-Levitt, interview, December 2008. Kari Polanyi-Levitt, telephone interview, November 2007. Costello, Macmurray, 202. For example, the connection between John Macmurray and Irene Grant may have ventured beyond the normal bounds of friendship. Likewise, probably, the friendship



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246. 247.


249. 250. 251. 252. 253. 254. 255. 256. 257. 258.

259. 260. 261. 262. 263.

of Irene with another Aux member, Doug Jolly, and, at different times, those involving Donald Grant, John and Betty Macmurray, and Kenneth Muir’s wife, Mary. Don Grant, interview; Costello, Macmurray, 260. Even when Karl was in London, Kari lived with the Grants. MPP-17–5, Karl to Misi, October 31, 1934. Kari Polanyi-Levitt, interviews, December 2008 and February 2015. This does not, however, support Endre Nagy’s contention that Polanyi’s Christian beliefs were fading while he wrote Great Transformation. In late 1938, for example, Polanyi stated that he “holds more fi rmly than ever to a religious fundament” and to “the Marxist reform of Christian consciousness.” Three years later he maintained that his “total outlook is very much what it was,” adding that Christianity underpins the ideals of Western civilization that were currently under fascist threat. This was to form a central argument in the fi nal chapter of Great Transformation, and in the year of its publication he repeated his belief that “no other than a spiritual approach to man’s nature makes any sense,” and that he “continues to believe in the Christian interpretation of existence.” See KPA-47–8, Ilona to Toni Stolper, December 4, 1937; KPA-47–6, Karl Polanyi to Otto Bauer, September  19, 1938; MPP-17–9, Karl to Misi, August  22, 1941; KPA-17–11, Karl Polanyi to Misi, May 6, 1944. KPA-47–8, Ilona to Toni Stolper, December 4, 1937, sent from Kingsdown. Kingsdown has since been renamed West Kingsdown. Thanks go to Anne Clements for confi rming my hunch. KPA-47–8, Ilona to Toni Stolper, December 4, 1937. MPP-17–6, Karl Polanyi to Magda (n.d.). Kari Polanyi-Levitt, interview, December 2008. KPA-47–8, Ilona to Toni Stolper, December 4, 1937. MPP-17–7, Karl to Misi, November 10, 1938. Kari Polanyi-Levitt, interview, December 2008. MPP-17–7, Karl to Misi, November 10, 1938. KPA-48–5, Polanyi to Jaszi, October 27, 1950; KPA-16–2, Karl Polanyi, “Eu rope Today and Tomorrow,” Morley College, 1945–1946. KPA-53–4, [Name indecipherable] to Irene Grant, July 20, 1964. KPA-20–11, Polanyi, “Marx on Self-Estrangement”; KPA-21–33, Polanyi, “Christian Left Study Circle”; KPA-8–2, Karl Polanyi, “Russia and the British Working Class,” 1934–1946; KPA-18–32, Karl Polanyi, “Adult Education and the Working Class Outlook,” Tutors’ Bulletin of Adult Education, November 1946, 8–11; KPA18–33, Polanyi, various draft articles, 1945–1946. KPA-18–31, Karl Polanyi, “What Kind of Adult Education,” Leeds Weekly Citizen, September 21, 1945. KPA-17–6, Karl Polanyi (n.d.) “Impartiality,” Workers’ Educational Association. KPA-47–8, Karl Polanyi, to Bassett, July 6, 1938. Cole, in Mendell, “Polanyi and Education,” 32. KPA-18–31, Polanyi, “What Kind of Adult Education”; KPA-18–33, Polanyi, various draft articles, 1945–1946.

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264. KPA-18–19, Polanyi, “The Educated Workman”; KPA-21–24, Karl Polanyi, John McMurray, and Irene Grant, Notes, 1939; KPA-18–33, Polanyi, various draft articles, 1945–1946. 265. KPA-18–16, Polanyi, “Education for Politics.” 266. KPA-18–18, Polanyi, “Education and Social Reality”; KPA-1–25, Polanyi, “The Programme and Goals of Radicalism.” 267. KPA-17–20, Polanyi, “British Characteristics.” 268. KPA-54–6, Karl Polanyi to Toni Stolper, early 1940s. 269. KPA-47–12, Karl to Toni Stolper, February 17, 1942. 270. KPA-18–18, Polanyi, “Education and Social Reality”; KPA-54–6, Karl to Toni Stolper, early 1940s; KPA-18–16, Polanyi, “Education for Politics,” 450. 271. KPA-8–2, Polanyi, “Rus sia and the British Working Class”; KPA-47–12, Karl to Toni Stolper, February 17, 1942. Cf. Miliband, Capitalist Democracy, 151. 272. KPA-17–20, Polanyi, “British Characteristics.” 273. KPA-18–33, Polanyi, various draft articles, 1945–1946. 274. KPA-21–25, Karl Polanyi, “The Cultural Background of the British Working Class” (n.d.). 275. Don Grant, interview. 276. SPSL-536–1, Karl Polanyi to Zoe Fairfield, March 24, 1934. 277. KPA-18–21, Polanyi, “Europe To-Day,” 20. 278. KPA-18–15, Karl Polanyi, “Is It Old England Still? An Outsider’s View,” 1936; KPA-12–4, Karl Polanyi, “Great Britain’s Foreign Policy To-Day,” 1936; KPA-17–1, Karl Polanyi, WEA Lectures, Canterbury, 1938–1939. 279. KPA-19–8, Karl Polanyi, “The Meaning of Parliamentary Democracy” (n.d.); Compare Tony Blair, for whom “Our tolerance is part of what makes Britain Britain. So conform to it or don’t come here.” Quoted in Terry Ea gleton, Reason, Faith, and Revolution: Refl ections on the God Debate (New Haven, Conn.: Yale University Press, 2009), 127. 280. KPA-55–2, Ilona Duczynska to George Dalton, June 23, ca. 1970. 281. KPA-2–10, Karl Polanyi and Felix Schafer, “Hans Mayer’s Lösung des Zurechnungsproblems,” 1920s. 282. KPA-17–1, Karl Polanyi, WEA Lectures, Canterbury IV, 1938–1939. 283. KPA-18–16, Polanyi, “Education for Politics,” 449. 284. KPA-10–8, Karl Polanyi, “Notes on Malinowski,” 1934–1946; KPA-20–13, Karl Polanyi et al., “Critique of Pacifism,” 1938; KPA-20–14, Karl Polanyi, “Russia in the World,” 1939. 285. KPA-47–14, Karl Polanyi to Sandy Lindsay, July 15, 1944. 286. MPP-17–10, Karl Polanyi to Misi, July 8, 1943. 287. Ervin Szabó, Socialism and Social Science, ed. György Litván and János Bak (London: Routledge, 1982), 37. 288. KPA-11–1, Karl Polanyi, “The Theory of Fascism,” 1934–1946. 289. KPA-15–4, Karl Polanyi, “Economic Improvement; Social Security,” in “Contemporary Problems and Social and Political Theory” lecture series, Morley College, 1936–1940.

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290. KPA-38–8, Karl Polanyi, Concluding note to draft manuscript of “Trade and Market in the Early Empires,” 1956; KPA-18–8, Polanyi, “The Fascist Virus.” For Burke, “ Labour is a commodity like every other,” and “the moment that Government appears at market, all the principles of market will be subverted.” Edmund Burke, Thoughts and Details on Scarcity (London: F. and C. Rivington, 1800 [1795]), 6, 29 and passim; KPA-18–8, Polanyi, “The Fascist Virus.” 291. KPA-18–8, Polanyi, “The Fascist Virus.” 292. KPA-15–4, Polanyi, “Contemporary Problems and Social and Political Theory,” Morley College, 1936–1940. 293. KPA-18–8, Polanyi, “The Fascist Virus.”

5 . T H E C ATAC LYS M A N D I T S O R I G I N S 1. Josiah Wedgwood had known Ilona’s mother’s family since the early 1910s. His daughter, Rosamund, married Ilona’s cousin, János Békássy. Karl had known the Wedgwoods for almost as long. SPSL-536–1, Duczynska, Personal statement; SPSL-438–4, Karl Polanyi, “Curriculum Vitae,” 1937; Kari Polanyi-Levitt, interview, December 2008. 2. Polanyi’s three passports, spanning 1940 to 1965, are British. See KPA-30–13. 3. PFP-212–326, Karl Polanyi to Misi, April 11, 1940. 4. Kari Polanyi-Levitt, telephone interview, March 2009. 5. KPA-59–7, Karl Polanyi to Ilona, September 5, 1940; KPA-59–7, Karl Polanyi to Ilona and Kari, September 6, 1940. 6. KPA-59–7, Karl Polanyi to Ilona, mid-1940. 7. KPA-59–7, Karl to Ilona and Kari, September 6, 1940. 8. KPA-59–7, Karl to Ilona and Kari, September 17, 1940; KPA-59–7, Karl to Ilona, August 25, 1940. 9. KPA-59–7, Karl Polanyi to Ilona, mid-1940. 10. KPA-59–7, Ilona Duczynska to Karl, September 5, 1940; Judith Szapor, “From Budapest to New York: The Odyssey of the Polanyis,” Hungarian Studies Review 30, no. 1–2 (2003): 29–60. 11. KPA-59–7, Karl Polanyi to Ilona, November 21, 1940. 12. KPA-59–7, Karl Polanyi to Ilona, July 26, 1941. 13. KPA-59–7, Karl Polanyi to Ilona, September 6, 1940; KPA-59–7, Karl Polanyi to Ilona, November 15, 1940. 14. KPA-59–7, Karl to Ilona, August 25, 1940. 15. Bennington College Alumni Profi les, “The Activist” (n.d.), www.bennington.edu /AfterBennington /AlumniProfi les/TheActivist .aspx. 16. KPA-59–7, Karl Polanyi to Ilona, November 15 and 21, 1940. 17. KPA-59–7, Karl to Ilona, August 25, 1940. Whatever this means, one wonders what Dewey might have made of it. Not long before, he had chaired the Commission of Inquiry into the Charges against Leon Trotsky in the Moscow Trials. 18. KPA-59–7, Karl to Ilona, January 20, 1941. 19. MPP-17–9, Karl Polanyi to Misi, June 7, 1940; MPP-17–15, Ilona Duczynska to Misi, November 8 (no year).

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20. KPA-59–8, Ilona Duczynska to Karl, March 5 (1940?). 21. KPA-59–9, Ilona Duczynska to Karl (n.d.). 22. From April 1940 to January 1941 Ilona worked as a mathematical assistant with an engineering firm, C. V. Blumfield. SPSL-536–1, Duczynska, Personal statement; KPA-59–5, Ilona Duczynska to Karl, November 29, 1940; KPA-59–9, Ilona to Karl (n.d.). 23. KPA-59–7, Ilona Duczynska to Karl, August 10, 18, and September 13, 1940. 24. KPA-59–7, Ilona Duczynska to Karl, November 13, 1940. 25. KPA-59–7, Ilona Duczynska to Karl, October 1, 1940. 26. MPP-17–9, Ilona Duczynska to Misi, September 13, 1940. 27. KPA-59–7, Ilona Duczynska to Karl, November 22, 1940. 28. Ilona assured Karl that Michael “writes to me about twice a week, I feel him very close to me”; his “warmth and friendship continues to mean very much to me, very much indeed.” KPA-59–7, Ilona Duczynska to Karl, August 20 and October 8, 1940. 29. KPA-59–7, Karl Polanyi to Ilona, December 21, 1940. 30. KPA-59–7, Karl to Ilona, August 25, 1940. 31. KPA-59–7, Karl to Ilona, August  25, 1940; KPA-59–7, Karl to Ilona and Kari, September 17, 1940; KPA-59–7, correspondence. 32. KPA-59–7, Ilona Duczynska to Karl, October 16, 1940. 33. KPA-59–7, Karl Polanyi to Ilona (1940?). 34. KPA-59–7, Karl to Ilona, July 26, 1941. 35. KPA-59–5 Karl Polanyi to Ilona and Kari Polanyi, March 4, 1941. 36. KPA- File 19, temporary folder, Ilona Duczynska to Karl Polanyi, March 31. 37. KPA-59–7, Karl Polanyi to Ilona, December 3, 1940. 38. Szapor, “Odyssey of the Polanyis,” 42–43. 39. Kari Polanyi-Levitt, telephone interview, March 2009; Conversation with Judit Szapor, October 2010. 40. Kari Polanyi-Levitt, telephone interview, March 2009. 41. PFP-212–326, Karl Polanyi to Misi, August 13, 1941. 42. Szapor, “Odyssey of the Polanyis,” 44. 43. Thomas Polanyi, “Letter to Eva Gabor,” Polanyiana 8, no. 1–2 (1999), http:// chemonet .hu /polanyi /9912/polanyi.html. 44. KPA-59–7, Karl to Ilona, September 5, 1940. 45. Bennington sought to make amends by raising Polanyi’s fee per lecture to $125. Although welcome, such compensation felt gratuitous to Polanyi. MPP-17–15, Ilona to Misi, October 10, 1940; KPA-59–7, Karl to Ilona and Kari, September 17, 1940. 46. KPA-59–7, Karl to Ilona and Kari, September 17, 1940. 47. Carl Stein house, Barred: The Shameful Refusal of FDR’s State Department to Save Tens of Thousands of Europe’s Jews from Extermination (Bloomington, Ind.: AuthorHouse, 2007), 93. 48. Peter Gay, cited in Judit Szapor, “To the Editors,” Polanyiana 8, no. 1–2 (1999), http://chemonet .hu /polanyi /9912/szapor.html. 49. KPA-59–7, Karl to Ilona, August 25, 1940.

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50. KPA-59–7, Karl to Ilona, December 21, 1940. 51. KPA-59–7, Karl to Ilona, December 3 and 21, 1940. 52. MPP-17–9, Karl Polanyi to Misi, August 22, 1941; MPP-17–9, Ilona Duczynska to Misi, October 10, 1940; MPP-17–9, Karl to Misi, January 13, 1941. 53. MPP-17–9, Karl to Misi, January 13, 1941. 54. KPA-59–2, Karl Polanyi to Kari, February 23, 1941. 55. MPP-17–9, Karl to Misi, January 13, 1941. 56. KPA-47–11, J. B. Condliffe to Karl, January 20, 1941. 57. SPSL-536–1, Duczynska, Personal statement. 58. Ilona’s letter to Karl, quoted in KPA-47–11, Karl Polanyi to Mar Leigh, April 26, 1941. 59. MPP-17–15, Ilona Duczynska to Misi, November 8 (no year). 60. KPA-57–4, Michael Polanyi to Ilona, March 12, 1941. 61. KPA-59–7, Karl to Ilona December 21, 1940. 62. KPA-59–5, Karl Polanyi to Ilona, May 14, 1941. 63. SPSL-536–1, Duczynska, Personal statement. 64. KPA-59–5, Karl Polanyi to Ilona and Kari, June 26, 1941. 65. KPA-47–11, Karl Polanyi to Toni Stolper, August 24, 1941. 66. MPP-17–10, Ilona Duczynska to Misi, January 27, 1942; MPP-17–15, Ilona Duczynska to Misi, October 10 (no year). 67. SPSL-536–1, Duczynska, Personal statement. 68. KPA-59–5, Karl Polanyi to Ilona (?), late June, 1941; KPA-59–2, Karl to Kari, February 23, 1941. 69. KPA-59–2, Karl Polanyi, “Biographical notes” (n.d.). 70. The application was presumably fruitless. SPSL-536–1, Duczynska, Personal statement; MPP-17–10, Ilona Duczynska to Misi, May 11, 1942; Kenneth McRobbie, “ Under the Sign of the Pendulum: Childhood Experience as Determining Revolutionary Consciousness. Ilona Duczynska Polanyi,” Canadian Journal of History 41, no. 2 (2006): 263–298; Letter from Lewis Jones to Tracy Kittredge, Rockefel ler Archive; document kindly shared with the author by Hannes Lacher. 71. MPP-17–9, Karl Polanyi to Misi, January 13, 1941; MPP-17–6, Ilona Duczynska to Misi, July 31, 1941; KPA-59–7, Karl Polanyi cable to Ilona, April 29, 1941; KPA59–7, Karl to Ilona, December 21, 1940. 72. MPP-17–10, Ilona to Misi, January 27, 1942. 73. KPA-56–13, Polanyi to Irene, March 15, 1963. 74. KPA-59–5, Karl Polanyi to Ilona, February 25, 1941. 75. KPA-10–5, Karl Polanyi, Notes on projected book, 1930s. Emphasis in original. 76. KPA-57–8, Karl Polanyi to Misi, October 13, 1943. 77. KPA-21–5, Karl Polanyi, “The Religious Nature of the Crisis,” 1936; KPA-21–22, Karl Polanyi, “Community and Society,” 1937; KPA-18–8, Karl Polanyi, “The Fascist Virus” (n.d.). 78. MPP-17–13, Karl Polanyi to Misi (1943?); MPP-17–11, Karl Polanyi to Misi, July 21, 1944. 79. KPA-59–7, Karl Polanyi to Ilona, mid-1940. 80. KPA-59–7, Karl to Ilona, November 21, 1940.

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81. Polanyi prefaced this with the observation that the book was “very much what it was when I came to this country.” MPP-17–9, Karl Polanyi to Misi, August 22, 1941. 82. MPP-17–9, Karl Polanyi to Misi, August 22, 1941. 83. The British edition appeared as Origins of Our Time: The Great Transformation, which both Polanyi and his publisher, Victor Gollancz, preferred. KPA-30–3, Irene Grant, conversation with Kari Levitt; KPA-47–13,  J. King Gordon to Polanyi, May 10, 1943. KPA-47–14, Curtis Brown to Polanyi, November 21, 1944. 84. MPP-17–9, Karl Polanyi to Misi, August 22, 1941. 85. One wonders whether Karl took his brother’s advice on board: “You must fi nish your book quickly now. The only way to do it is to think of the next one. Put everything that is in your way into the future plans and publish the residue.” (From Michael’s letter to Karl of January 26, 1942. Thanks are due to Marty Modelski for supplying this quotation.) 86. KPA-17–10, Karl Polanyi to Misi, October 26, 1942. 87. KPA-47–13, Karl Polanyi to Miss Lisowski of the IIE, April 10, 1943. 88. The socialist was Horst Mendershausen; the other two were John Kouwenhouven, a lit erature professor at Bennington, and Drucker. MPP-17–11, Karl Polanyi to Misi, January 3, 1944. 89. KPA-59–8, Karl to Ilona, February 13, 1947. 90. MPP-17–10, Karl Polanyi to Misi, September 21, 1943. 91. KPA-47–13, Karl Polanyi to J. King Gordon, May 7, 1943. 92. MPP-17–10, Karl to Misi, July 8, 1943. 93. MPP-17–10, Karl to Misi, July 8, 1943. 94. Tawney was particularly disparaging of Polanyi’s technological-determinist account of the rise of market society. KPA-47–12, Richard Tawney to Karl Polanyi, September 16, 1942; KPA-47–12 Karl Polanyi to John, September 12, 1942. 95. KPA-47–13, G.D.H. Cole to Polanyi, November 5, 1943. 96. KPA-57–8, Karl Polanyi to Michael, October 25, 1943; KPA-47–13, Cole to Polanyi, November 5, 1943. 97. KPA-19–6, G.D.H. Cole, “Notes on The Great Transformation,”1943; KPA-47–13, Cole to Polanyi, November 5, 1943; KPA-57–8, Karl to Michael, October 25, 1943. 98. KPA-57–5, Michael Polanyi to Karl, March 20, 1944. 99. OJP-37, Jaszi diaries, entry of December 12, 1943; György Litván, A TwentiethCentury Prophet: Oscar Jaszi, 1875–1957 (Budapest: Central Eu ropean University Press, 2006), 508; John Holmwood, “Three Pillars of Welfare State Theory: T. H. Marshall, Karl Polanyi and Alva Myrdal in Defence of the National Welfare State,” European Journal of Social Theory 3, no. 1 (2000): 23–50. 100. Cited in Ira Katznelson, Desolation and Enlightenment: Political Knowledge after Total War, Totalitarianism and the Holocaust (New York: Columbia University Press, 2003), 51. 101. In Katznelson, Desolation and Enlightenment, 51. 102. In his explanation of Polanyi’s lack of political influence in Britain, Tim Rogan places the accent on Polanyi’s philosophical conception of the self. Tim Rogan, “Karl Polanyi at the Margins of English Socialism, 1934–1947,” Modern Intellectual

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104. 105. 106. 107. 108. 109. 110. 111. 112. 113. 114. 115.

116. 117. 118. 119.

120. 121. 122. 123. 124. 125. 126. 127.

History 10, no. 2 (2013): 317–346. I would instead emphasize several material and political factors: the collapse of guild socialism; Polanyi’s outsider status and lack of implantation in the Labour Party; his limited output in terms of political and campaigning lit erature; and the intermittent nature of his activism. Kari Polanyi-Levitt, “Introduction,” in The Life and Work of Karl Polanyi: A Celebration, ed. Kari Polanyi-Levitt (Montreal: Black Rose, 1990), 6. Sally Randles, “Issues for a Neo-Polanyian Research Agenda in Economic Sociology,” in Karl Polanyi: New Perspectives on the Place of the Economy in Society, ed. Mark Harvey, Ronnie Ramlogan, and Sally Randles (Manchester: Manchester University Press, 2007), 137. MPP-17–10, Karl to Misi, July 8, 1943. KPA-47–14, Karl Polanyi to Ernest, mid-1940s. MPP-17–10, Karl Polanyi to Misi, November 9, 1943. KPA-54–6, Karl Polanyi to Tawney (n.d.). KPA-48–1, Karl Polanyi to Dr. Duggan, October 11, 1946. MPP-17–10, Karl to Misi, September 21, 1943; KPA-48–1, Karl Polanyi, Correspondence, 1946. KPA-47–13, Karl Polanyi to Jaszi, December 23, 1943. Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (Boston: Beacon, 2001), 257. KPA-47–14, Karl Polanyi to Taylor, August 14, 1944. MPP-17–11, Karl Polanyi to Michael, June 11, 1947. KPA-37–4, Karl Polanyi, “Economics and Freedom to Shape Our Social Destiny” (1957?). KPA-19–15, Karl Polanyi, “In the Hands of the Vanquished” (n.d.). Cf. Marie Jahoda, “Ich habe die Welt nicht verändert”: Lebenserinnerungen einer Pionierin der Sozialforschung (Frankfurt am Main: Campus, 1997), 79. KPA-19–15, Polanyi, “In the Hands of the Vanquished.” MPP-17–11, Karl Polanyi to Misi, July 21, 1944; MPP-17–11, Ilona Duczynska to Misi, September 5, 1944. Szapor, “Odyssey of the Polanyis.” His wife, Polanyi’s niece Eszter Polanyi Engel, survived. E-mail from Ruth Danon, May 2013; Judit Szapor, “Laura Polanyi 1882–1957: Narratives of a Life,” Polanyiana 6, no. 2 (1997), www.kfk i.hu /chemonet/polanyi /9702/szapor.html. Kari Polanyi-Levitt, interview, December 2008. Kari Polanyi-Levitt, interview, December 2008. KPA-19–15, Polanyi, “In the Hands of the Vanquished.” MPP-17–8, Karl Polanyi to Michael, May 15, 1939. MPP-17–5, Karl Polanyi to Misi, July 20, 1935; Szapor, “Odyssey of the Polanyis,” 33. MPP-17–7, Karl Polanyi to Misi, October 24, 1938. MPP-17–8, Karl Polanyi to Magda, May 4, 1939. Edit found work “in ser vice to posh ladies in Rugby.” She developed a chronic cough, was fi red from her position, and died shortly after. Kari Polanyi-Levitt recalls the cause of death as tuberculosis, while Judit Szapor suspects it was suicide. MPP-17–7, Karl Polanyi to Misi, March  21, 1938, and April  14, 1939; Kari


140. 141. 142.


144. 145. 146. 147.

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130. 131. 132. 133. 134. 135. 136. 137. 138.


128. 129.

Polanyi-Levitt, telephone interview, November 2007, and interview, December 2008; Szapor, “Odyssey of the Polanyis,” 40. Szapor, “Odyssey of the Polanyis,” 33. MPP-17–8, Karl Polanyi to Miss Ross, June  26, 1939; Szapor, “Odyssey of the Polanyis.” MPP-17–8, Karl to Magda, May 4, 1939. MPP-17–8, Karl to Michael, May 15, 1939. MPP-17–8, Karl Polanyi to Misko, September 2, 1939. Szapor, “Odyssey of the Polanyis.” Szapor, “Odyssey of the Polanyis,” 41. Adolf, quoted in Szapor, “Odyssey of the Polanyis,” 41. KPA-59–5, Karl to Ilona, February 25, 1941; Scott and Moleski, Polanyi, 189. Szapor, “Odyssey of the Polanyis,” 41. Scott and Moleski, Polanyi, 189. Although Polanyi lived less than a mile from William Styron in the late 1940s, one presumes it is coincidence that the protagonist of Styron’s Holocaust novel was named Sophie. Karl Polanyi, “The Legacy of the Galilei Circle” [A Galilei Kör hagyatéka], in  Fasizmus, demokrácia, ipari társadalom (Budapest: Gondolat Kiadó, 1986), 193–214. Paul Ignotus, “Exile in London,” Encounter, August 1959, 53. Nandor Dreisziger, “Émigré Artists and War time Politics: 1939–45,” Hungarian Studies Review 21, nos. 1–2 (1994): 43–75. The level of Polanyi’s involvement is difficult to gauge. In one letter he describes himself as a “personally co- opted member of the Hungarian Council” (KPA47–14, to Mihály Károlyi, December 6, 1944), and states that he devotes much of his time and “almost all” of his “surplus energies to constructive efforts in Danubian politics today” (KPA-47–13, to Oscar, September 21, 1944). In contrast, in other correspondence he states that although Ilona was active, he was not (KPA48–1, to Oscar, May 15, 1946), and his name is noticeable by its absence in much of the documentation of everyday activity of the Hungarian Council (see KPA-14–1, Documents from the Hungarian Council in Great Britain). KPA-47–13, Polanyi to Jaszi, December 23, 1943; KPA-47–15, Karl Polanyi to Mihály Károlyi, January 20, 1945. The occasion of their fi rst encounter in London was probably an event commemorating the twenty-fi fth anniversary of the Chrysanthemum Revolution, at which Ilona’s liberation from prison was remembered. Ilona sat on the dais between the Károlyis and read out a short speech, “which touched the audience deeply.” MPP17–10, Karl to Misi, November 9, 1943. KPA-47–13, Polanyi to Jaszi, December 23, 1943. Nándor Dreisziger, “Oscar Jaszi and the ‘Hungarian Problem’: Activities and Writings during World War II,” Hungarian Studies Review 18, no. 1–2 (1991): 62. Catherine Károlyi, A Life Together: The Memoirs of Catherine Károlyi (London: Allen & Unwin, 1966), 203. Oliver Botar, “Interview with Zita Schwarcz,” in “Documents on Laszlo MoholyNagy,” Hungarian Studies Review 15, no. 1 (1988): 79–81; Oliver Botar, “Laszlo



151. 152. 153.


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154. 155. 156. 157. 158. 159. 160.

161. 162.


Moholy-Nagy and Hungarian-American Politics II,” Hungarian Studies Review 21, nos. 1–2 (1994): 91–95. From his earliest days in the United States, Jaszi had been subjected to sustained pressure from conservative Hungarian anti-Semites to shun Polanyi. In the slippery apologetics of Jaszi’s sister, Alice, such comments were “of course” not directed at Karl himself but at “the many chaos-minded, ill-mannered Jews who made up his entourage.” There is not “a single Gentile among us (including myself),” added her husband, the eugenicist Jozsef Madzsar, who would be willing to cooperate in any way “with any of the Polanyis.” Tibor Frank, Double Exile: Migrations of Jewish-Hungarian Professionals through Germany to the United States, 1919–1945 (Oxford: Peter Lang, 2008), 96. It is telling that in Károlyi’s memoirs Jaszi’s name does not appear any later than the 1920s. Michael Károlyi, Memoirs of Károlyi, Michael: Faith without Illusion (London: Jonathan Cape, 1956), esp. 208. Having committed himself to the HADC, Károlyi felt obliged to seek to restore unity among his American followers, albeit without success. Dreisziger, “Émigré Artists.” KPA-47–13, Jaszi to Károlyi, August 6, 1943. Paul Ignotus, Political Prisoner (New York: Collier Books, 1964), 30. At one point Ilona wrote an impassioned letter to Károlyi, urging him to invite a speaker from the Soviet embassy to counter Koestler’s pernicious influence. KPA48–1, Karl to Oscar, May 15, 1946; KPA-47–14, Polanyi to Taylor, August 14, 1944; George Mikes, Arthur Koestler: The Story of a Friendship (London: Andre Deutsch, 1983); Michael Scammell, Koestler: The Literary and Political Odyssey of a Twentieth- Century Skeptic (New York: Random House, 2009), 235. For background, Mária Palasik, Chess Game for Democracy: Hungary between East and West, 1944–47 (Montreal: McGill– Queen’s University Press, 2011). KPA-48–1, Karl to Oscar, May 15, 1946. KPA-13–10, Karl Polanyi, “The Economic Objectives of the Council” [A Tanács gazdaságpolitikai celkitüzesei]. KPA-18–23, Karl Polanyi, “Why Make Rus sia Run Amok?,” Harper’s Magazine, March 1943, 404–410. KPA-18–23, Polanyi, “Why Make Russia Run Amok?,” 407–408. KPA-7–3, Karl Polanyi, Notes on readings, 1934–1946. KPA-18–23, Polanyi, “Why Make Russia Run Amok?,” 408. KPA-18–23, Polanyi, “Why Make Russia Run Amok?,” 409. See also KPA-9–6 (Karl Polanyi, Notes on “International Crisis,” 1944–1946), in which Polanyi outlines the potential for cooperation between Stalinist and fascist regimes in foreign policy and economic policy. KPA-18–23, Polanyi, “Why Make Russia Run Amok?,” 410. KPA-18–23, Polanyi, “Why Make Rus sia Run Amok?,” 409; KPA-15–4, Karl Polanyi, Lecture XXIII, “Contemporary Problems and Social and Political Theory,” Morley College, 1936–1940; KPA-20–3, Karl Polanyi, book plan, 1938–1939. KPA-20–3, Polanyi, book plan.

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164. Carolyn Eisenberg, Drawing the Line: The American Decision to Divide Germany, 1944–49 (Cambridge: Cambridge University Press, 1996), 82; Palasik, Chess Game. 165. In retrospect Churchill claimed that the proposed division was intended as temporary, but the minutes of the meeting suggest other wise. See Daniel Yergin, Shattered Peace; The Origins of the Cold War (Harmondsworth,  U.K.: Penguin, 1990). 166. Richard Day, Cold War Capitalism (Armonk, N.Y.: M. E. Sharpe, 1995). 167. Jack Snyder, Myths of Empire: Domestic Politics and International Ambition (Ithaca, N.Y.: Cornell University Press, 1991). 168. KPA-47–13, Polanyi to Jaszi, December 23, 1943; KPA-48–1, Karl Polanyi to Michael Károlyi, April  15, 1946; KPA-19–8, Polanyi, “Meaning of Parliamentary Democracy.” 169. KPA-48–1, Polanyi to Károlyi, April 15, 1946. 170. KPA-47–14, Polanyi to Károlyi, December 6, 1944. 171. KPA-47–13, Polanyi to Jaszi, December 23, 1943. 172. KPA-47–13, Polanyi to Jaszi, December 23, 1943; Karl Polanyi, “Count Michael Károlyi,” Slavonic and East European Review 24, no. 63 (1946): 92, 97. 173. KPA-47–14, Oscar Jaszi to Polanyi, February 15, 1944. 174. KPA-47–14, Jaszi to Polanyi, February 15, 1944. 175. KPA-47–13, Karl to Oscar, September 21, 1944. 176. KPA-48–1, Karl to Oscar, May 15, 1946. 177. KPA-48–1, Karl to Oscar, May 15, 1946. See also Károlyi, Memoirs, 307, and Károlyi, A Life Together, 316. 178. KPA-48–1, Polanyi to Károlyi, April 15, 1946. 179. KPA-48–1, Karl to Oscar, May 15, 1946. 180. KPA-47–15, Mihály Károlyi to Duczynska, January 18, 1945. 181. The London Hungarian Council, established in spring 1944, was formed from Károlyi’s group together with an assortment of communist, liberal, and conservative Hungarian emigres. KPA-47–15, Mihály Károlyi to Duczynska, January 18, 1945. 182. KPA-47–15, Mihály Károlyi to Duczynska, January 18, 1945. 183. KPA-47–15, Ilona Duczynska to Károlyi, January 21, 1945. 184. KPA-47–15, Mihály Károlyi to Duczynska, January 25, 1945. 185. PFP-212–497, Ilona Duczynska to Mausi, April 29, 1945. 186. KPA-47–15, Karl Polanyi to Sir, January 16, 1945; KPA-54–6, Karl Polanyi, Fragment; KPA-48–1, Karl Polanyi to Endre Havas, October 25, 1945. 187. KPA-48–1, Polanyi to Károlyi, April 15, 1946. 188. KPA-48–1, Polanyi to Károlyi, April 15, 1946. 189. In early twentieth-century Hungary, sporting a cockade of the national flag in one’s buttonhole was customary on national days. KPA-48–1, Mihály Károlyi to Polanyi, April 1, 1946. 190. KPA-48–1, Károlyi to Polanyi, April 1, 1946. 191. KPA-48–1, Károlyi to Polanyi, April 1, 1946. Cf. KPA-13–10, Hungarian Council of Great Britain: Draft articles and sundry ephemera.

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192. KPA-48–1, Karl Polanyi to John Kouwenhouven, 1946; KPA-18–33, Polanyi, Various draft articles, 1945–1946. 193. Karl Polanyi, The Citizen and Foreign Policy (London: Workers’ Educational Association, 1947), 26. 194. Karl Polanyi, “Our Obsolete Market Mentality,” in Primitive, Archaic and Modern Economies: Essays of Karl Polanyi, ed. George Dalton (Boston: Beacon Press, 1968 [1947]), 76. 195. KPA-18–33, Polanyi, Draft articles, 1945–1946. 196. Melissa Benn, School Wars: The Battle for Britain’s Education (London: Verso, 2011); Denis Lawton, Education and Labour Party Ideologies: 1900–2001 and Beyond (London: Routledge, 2005), 52. 197. KPA-18–33, Polanyi, Draft articles, 1945–1946. 198. Polanyi, The Citizen and Foreign Policy. 199. Peter Burnham, The Political Economy of Postwar Reconstruction (London: Macmillan, 1990), 14. 200. MPP-17–10, Karl to Misi, November 9, 1943. 201. KPA-17–32, Karl Polanyi, “United Nations Orga nization,” 1946. 202. KPA-19–9, Karl Polanyi, “Britain and Poland” (n.d.); KPA-18–25, Polanyi, “Friends of Democratic Hungary”; MPP-17–10, Karl to Misi, November 9, 1943. 203. KPA-59–7, Karl Polanyi to Ilona, November 15, 1940. 204. KPA-48–1, Polanyi (1946) to Kouwenhouven; KPA-19–2, Karl Polanyi, “Britain’s Foreign Policy” (n.d.); MPP-17–10, Karl to Misi, November 9, 1943; KPA-18–25, Polanyi, “Friends of Democratic Hungary.” 205. KPA-48–1, Polanyi to Kouwenhouven, 1946. 206. MPP-17–10, Karl to Misi, November 9, 1943. 207. Karl Polanyi, “British Labour and American New Dealers,” Leeds Weekly Citizen, January 10, 1947. Muir edited the Leeds Weekly Citizen from 1944 to 1949. 208. This should not be taken to imply a strictly partisan view of the benches of the House of Commons. For example, Polanyi admired Winston Churchill as a war leader even as he scorned his political philosophy. See, for example, KPA-18–23, Polanyi, “Why Make Rus sia Run Amok?,” 408. 209. KPA-48–1, Polanyi to Kouwenhouven, 1946; KPA-20–2, Karl Polanyi, “Introduction to ‘Tame Empires,’” 1938–1939. 210. KPA-18–25, Polanyi, “Friends of Democratic Hungary.” 211. Hugh Dalton, quoted in Richard Toye, “Churchill and Britain’s ‘Financial Dunkirk’” (n.d.), https://eric.exeter.ac.uk /repository/. 212. KPA-59–8, Ilona Duczynska to Polanyi, August 26, 1940s. 213. Robert Skidelsky, John Maynard Keynes, Volume Three: Fighting for Britain, 1937– 1946 (London: Macmillan, 2000), 444. 214. Hansard, Debate November  18, 1946, vol. 430  cc525–94, http:// hansard .mill banksystems.com /commons/1946/nov/18/foreign-policy. 215. KPA-19–24, Karl Polanyi, “The Emergence of the Crossman Opposition” [A Crossman ellenzék felvonulása] (n.d.). 216. KPA-48–1, Polanyi to Kouwenhouven, 1946. 217. KPA-19–24, Polanyi, “The Crossman Opposition.”

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218. Polanyi, “British Labour and American New Dealers,” 5. 219. Polanyi, “British Labour and American New Dealers.” 5. 220. Keynes, too, was wary of public scrutiny over geo-economic deals, and proposed direct cooperation among the U.S., British, and French trea suries to avoid parliamentary obstruction. Benn Steil, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order (Princeton, N.J.: Princeton University Press, 2013), 32; Polanyi, “British Labour and American New Dealers.” 221. Polanyi, “British Labour and American New Dealers,” 5. 222. Roger Eatwell, The 1945–1951 Labour Governments (London: Batsford Academic, 1979), 46. 223. On Britain’s role, see Avi Schlaim, “Britain and the Arab-Israeli War of 1948,” Journal of Palestine Studies 16, no. 4 (1987): 50–76. Polanyi’s opposition to unrestricted Jewish immigration to Palestine is recorded in KPA-47–14, Karl Polanyi to Taylor, August 14, 1944. His opposition to the creation of the state of Israel was confi rmed by Kari Polanyi-Levitt (interview, July 2006). In its nature, his antiZionism was similar to that of his brother. See Paul Knepper, “Michael Polanyi and Jewish Identity,” Philosophy of the Social Sciences 35, no. 3 (2005). 224. Polanyi, “British Labour and American New Dealers,” 5. 225. John Gillingham, “From Morgenthau Plan to Schuman Plan: America and the Orga nization of Europe,” in American Policy and the Reconstruction of West Germany, 1945–1955, ed. Jeff rey Diefendorf, Axel Frohn, and Hermann-Josef Rupieper (Cambridge: Cambridge University Press, 1993). 226. Peter Acsay, “Planning for Postwar Economic Cooperation:  U.S. Trea sury, the Soviet Union and Bretton Woods 1933–1946” (Ph.D. thesis, Graduate School of Saint Louis University, 2000). 227. Acsay, “Postwar Economic Cooperation.” 228. Steil, Bretton Woods, 6. 229. Acsay, “Postwar Economic Cooperation.” 230. Burnham, Postwar Reconstruction. 231. Yanis Varoufakis, The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy (London: Zed, 2011), chapter 3. 232. Kees Van der Pijl, The Making of an Atlantic Ruling Class (London: Verso, 1984), 28; David Calleo and Benjamin Rowland, America and the World Political Economy: Atlantic Dreams and National Realities (Bloomington: Indiana University Press, 1973). 233. Michael Hogan, The Marshall Plan; Amer ica, Britain, and the Reconstruction of Western Europe, 1947–1952 (Cambridge: Cambridge University Press, 1987), 53. 234. KPA-59–9, Ilona Duczynska to Karl, January 27 (1948?). 235. Some go so far as to present Mendershausen and his Neu Beginnen comrades Kurt Schmidt, Theo Thiele, and Kurt Mattick as the principal actors who thwarted the merger. See Jean Eisner-Steinberg, interviewed in Gerhard Bry, Resistance: Recollections from the Nazi Years (West Orange, N.J.: Self-published, 1979), 233. 236. KPA-59–9, Karl Polanyi to Ilona, February 17, 1949.

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237. Horst Mendershausen, “First Tests of the Schuman Plan,” Review of Economics and Statistics 35, no. 4 (1953): 269–288. 238. Mendershausen, “First Tests,” 287. On the Point Four Program, see www .trumanlibrary.org /whistlestop /study _ collections /pointfourprogram /index .php. 239. KPA-19–2, Polanyi, “Britain’s Foreign Policy.” 240. KPA-19–8, Polanyi, “Meaning of Parliamentary Democracy.” 241. Scammell, Koestler, 315–316. 242. KPA-59–9, Karl Polanyi to Ilona, January 29, 1948. 243. KPA-54–5, Karl Polanyi to unknown addressee (probable date, 1950–1951). The author is probably but not definitely Karl Polanyi. It is fi led under “correspondence, K Polanyi,” and there is indecipherable handwriting, in Polanyi’s hand, in the margin. 244. KPA-54–5, Polanyi to unknown addressee (1950–1951?).

6 . “ I NJ U S T I C E S A N D I N H U M A N I T I E S ” 1. KPA-48–1, Endre Havas to Karl Polanyi, October 9, 1946; KPA-48–2, Endre Havas to Ilona, June 13, 1947. 2. KPA-48–2, Tibor to the Polanyis, September 2, 1947. 3. PFP-212–497, Ilona Duczynska to Laura, April 29, 1945; KPA-37–8, Karl Polanyi, “The Galilei Circle Fifty Years On” [A Galilei Kör otven év távlatából], 1958; Kari Polanyi-Levitt, interview, July 2006. 4. KPA-57–8, Kari Polanyi-Levitt to Karl (n.d.). 5. KPA-48–1, Karl Polanyi to Denis Healey, September 26, 1946. 6. KPA-48–1, Polanyi to Healey, September  26, 1946; KPA-48–1, Karl Polanyi to Havas, October 25, 1946, and to Karl Mannheim, November 26, 1946; KPA-30–1, Karl Polanyi, “Biographical Information,” 1940–1984. 7. Judith Szapor, “From Budapest to New York: The Odyssey of the Polanyis,” Hungarian Studies Review 30, no. 1–2 (2003): 29–60. 8. Ernő Gerő, quoted in Adam Fabry, “The International Political Economy of Neoliberal Transformation in Hungary: From the ‘Transition’ of the 1980s to the Current Crisis” (Ph.D. thesis, School of Social Sciences, Brunel University, 2014), chapter 3. 9. KPA-59–9, Ilona Duczynska to Karl, October 9, 1948; KPA-59–9, Ilona Duczynska to Karl (1948?); KPA-59–3, Ilona Duczynska to Kari, June 21 (ca. 1948). 10. KPA-59–3, Ilona to Kari, June 21 (ca. 1948). 11. KPA-51–5, Karl Polanyi to Meszaros, April 24, 1961. 12. Polanyi expressed a disinclination to teach in Soviet Hungary, on the grounds that he was not a Marxist. See KPA-48–3, Mihály Károlyi to Gyula Ortutay, Hungarian minister of religious and educational affairs, June 23, 1948; KPA-48–3, Mihály Károlyi, Letter, no name, 1948; KPA-59–9, correspondence Karl Polanyi and Ilona. 13. KPA-48–3, Károlyi to Ortutay, June 23, 1948. 14. KPA-59–9, Karl Polanyi to Ilona, May 10, 1948.

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15. KPA-59–3, Ilona to Kari, June 21 (ca. 1948); KPA-59–9, Ilona to Karl, October 9, 1948. 16. KPA-48–3, Károlyi to Ortutay, June 23, 1948. 17. KPA-48–3, Endre Havas to Gyula Ortutay, June 23, 1948. 18. PFP-212–497, Ilona Duczynska to Laura, April 29, 1945; Kari Polanyi-Levitt, interview, December 2008. 19. KPA-48–2, Karl Polanyi to Sandy Lindsay (n.d.). 20. KPA-59–7, Karl to Ilona, January 20, 1941. 21. Kari Polanyi-Levitt, interview, December 2008. 22. Nandor Dreisziger, “Émigré Artists and War time Politics: 1939–45,” Hungarian Studies Review 21, nos. 1–2 (1994): 43–75. 23. In his youth, Dewey had been steeped in religious thought and Greenian idealism; in later life his orientation became secularized, and the Idealist worldview of spiritual community was “naturalized as the democratic cooperation of human society.” Although retired by the time of Polanyi’s arrival at Columbia, his emeritus presence remained influential—and he gave some gentle support to Polanyi’s career, publishing positive comments on The Great Transformation and, in private, conveying his admiring comments on Polanyi’s essay on the “obsolete market mentality.” MPP-17–11, Karl to Michael, June 14, 1944; KPA-48–2, John Dewey to Mr. Cohen (ca. 1947); Randall Collins, The Sociology of Philosophies: A Global Theory of Intellectual Change (Cambridge, Mass.: Belknap Press of Harvard University Press, 1998), 681. 24. Malcolm Rutherford, “Institutional Economics at Columbia University,” History of Political Economy 36, no. 1 (Spring 2004): 31–78. 25. Rutherford, “Columbia University,” 50. 26. KPA-48–1, Karl Polanyi to MacIver, October 12, 1946. 27. KPA-48–1, Karl Polanyi to Goodrich, November 20, 1946. 28. Goodrich was a former student of Stewart’s at Amherst. Stewart had studied with Dewey at Columbia. Rutherford, “Columbia University,” 66. 29. KPA-48–1, Karl Polanyi, Telegram, sent November 30, 1946. 30. KPA-49–2, Karl Polanyi to Rosemary Arnold, August 14, 1953; KPA-48–2, Margery Palmer to Karl Polanyi, May 27, 1947; KPA-59–9, Karl Polanyi to Ilona, autumn 1947. 31. KPA-59–8, Karl Polanyi to Misi, July 1, 1947; KPA-59–8, Karl Polanyi to unknown addressee, January 1947. 32. Car ter Goodrich, The Frontier of Control: A Study in British Workshop Politics (New York: Harcourt, Brace, 1921). 33. KPA-59–9, Karl to Ilona, February 17, 1949. 34. Immanuel Wallerstein, The Uncertainties of Knowledge (Philadelphia: Temple University Press, 2004), 84; Alvin Gouldner, For Sociology: Renewal and Critique in Sociology Today (London: Pelican, 1973), 164. See also Allen Barton, “Paul Lazarsfeld as Methodologist,” Journal of Classical Sociology 12, no. 1 (2012): 159–166. 35. In reference to the three supreme deities of ancient Rome. Pierre Bourdieu, Science of Science and Reflexivity (Cambridge: Polity, 2004), 18.

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36. Karl Polanyi and Conrad Arensberg, “Preface,” in Trade and Market in the Early Empires: Economies in History and Theory, ed. Karl Polanyi, Conrad Arensberg, and Harry Pearson (New York: Free Press, 1957), x–xi. 37. “You have been friendly and helpful towards my work in all these years as no one except MacIver has been.” RMP-68–7, Karl Polanyi to Robert Merton, November 15, 1955. 38. KPA-48–3, Karl Polanyi to Robert Merton, December 4, 1948. See also Merton’s reply, of December 7, contained in Columbia University’s Butler Library. (A copy was kindly passed to the author by Dan Tompkins.) 39. KPA-59–8, Karl Polanyi to Joszka, November 22, 1947. 40. Marie Jahoda, “Ich habe die Welt nicht verändert”: Lebenserinnerungen einer Pionierin der Sozialforschung (Frankfurt am Main: Campus, 1997), 38. 41. In Vienna, Lazarsfeld’s activist and academic talents had combined to good effect. That he came to be known as the father of modern survey research is well known, but less appreciated is that his apprenticeship in this field was the product of three factors: his desire to understand in detail “the misery of factory life,” a fascination with psephology that was rooted in the SDAP’s obsession with the electoral terrain, and a serendipitous encounter with corporate American market research into the selling of soap. Whereas in Austria “he could scrutinize soap sales and run socialist youth camps,” that was not the case in the United States, where socialist convictions represented a hindrance to the academic career that he so coveted. As his socialist commitment faded, what remained of the Austrian zeitgeist of his youth was solely its Neue Sachlichkeit: a cool, detached outlook, pragmatic and sober, with an emphasis on the power of “facts.” See George Steinmetz, “American Sociology before and after World War Two: The (Temporary) Settling of a Disciplinary Field,” in Sociology in America. The ASA Centennial History, ed. Craig Calhoun (Chicago: University of Chicago Press, 2007), 314–366; Robert Merton, James Coleman, and Peter Rossi, eds., Qualitative and Quantitative Social Research: Papers in Honor of Paul Lazarsfeld (New York: Free Press, 1979); Paul Lazarsfeld, “A Memoir,” in The Intellectual Migration: Europe and Amer ica, 1930–1960, ed. Donald Fleming and Bernard Bailyn (Cambridge, Mass.: Belknap Press, 1969), 279, 284; Jefferson Pooley, “An Accident of Memory: Edward Shils, Paul Lazarsfeld and the History of American Mass Communication Research” (D. Phil., Columbia University, 2006), 199; Martin Jay, Permanent Exiles: Essays on the Intellectual Migration from Germany to America (New York: Columbia University Press, 1985), 60. 42. KPA-59–7, Karl to Ilona, September 6, 1940. 43. The Political Science faculty, in contrast, was “hardly an exciting place. Rather the other way.” KPA-59–8, Karl Polanyi to Ilona, June 29, 1949; Abe Rotstein, telephone interview. 44. One of his graduate students, however, suggested that Polanyi was not seen by American sociologists as one of their own, because his “trade” was “the interpretation of specific sets of historical events” without regard to the intricacies of sociolog ical methodology. Tim Rogan, “Karl Polanyi at the Margins of English

47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59.

60. 61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71. 72. 73.

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Socialism, 1934–1947,” Modern Intellectual History 10, no. 2 (2013): 344; KPA59–9, Karl Polanyi to Ilona, April 25, 1949; KPA-59–9, Karl to Ilona, February 17, 1949. Robert MacIver, A Tale That Is Told: The Autobiography of R. M. MacIver (Chicago: University of Chicago Press, 1968), 87, 88, 130, 161. Eleven years later Princeton did offer Karl a fellowship, but he turned it down. PFP-212–326, Karl Polanyi to Misi, January 5, 1958; KPA-59–8, Karl Polanyi to Ilona, February 13, 1947. KPA-59–8, Karl to Ilona, February 13, 1947. KPA-59–8, Karl Polanyi to Ilona, April 23, 1947. MPP-17–11, Karl Polanyi to Misi, June 11, 1947. KPA-59–8 Karl Polanyi to Ilona, June 29, 1949. KPA-59–8, Jacob Marschak to Polanyi, 1947; C. L. R. James, American Civilization (Oxford: Blackwell, 1993 [1950]), 185–186. KPA-48–2, Karl Polanyi to Milton Singer, May 28, 1947; KPA-48–2, Karl Polanyi to Quincy Wright, March 10, 1947. KPA-48–2, Car ter Goodrich, Telegram to Karl Polanyi, May 28, 1947. KPA-48–2, David Riesman to Karl Polanyi, June 2, 1947. Whether MacIver, who sat on the board of the New School, had a hand in this is not known. KPA-59–8, Karl Polanyi to Ilona, September 16, 1947. KPA-59–8, Karl to Ilona, June 29, 1949. KPA-59–8, Karl Polanyi to Ilona, August 9, 1947. KPA-48–2, Karl Polanyi to Ilona (ca. 1947). KPA-59–8, Karl Polanyi to Ilona, early June, 1947; KPA-48–2 Polanyi to Sandy Lindsay (n.d.); KPA-59–8, Karl to Ilona, June 29, 1949; KPA-59–8, Karl to Ilona, early June, 1947. KPA-59–8, Karl to Ilona, June 29, 1949. KPA-59–8, Karl to Ilona, early June, 1947. Bernard Girard, “How Karl-William Kapp was received by economists.” Paper presented at European Society for Ecological Economics conference, Lille, June 2013. KPA-59–8 Karl to Ilona, June 29, 1949; KPA-48–2, Karl to Ilona (ca. 1947). KPA-59–8 Karl to Ilona, June 29, 1949. KPA-48–2, Lewis Mumford to Karl, July 12, 1947. KPA-59–8, Ilona Duczynska to Karl Polanyi, spring (1947?). KPA-59–8, Karl (1947) to Ilona, early June; KPA-59–9, Karl to Ilona, January 29, 1948. KPA-59–8, Karl Polanyi to Ilona, August 15, 1947. KPA-59–8, Karl to Ilona, June 29, 1949. KPA-59–8, Karl Polanyi to Ilona, August (?) (1947?). KPA-48–2, Karl Polanyi to Peter Drucker, September 14, 1947. KPA-59–8, Ilona Duczynska to Karl, September 9, 1947; KPA-48–2, Polanyi to Drucker, September 14, 1947. David Caute, The Great Fear: The Anti- Communist Purge under Truman and Eisenhower (New York: Simon & Schuster, 1978), 251.


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74. 75. 76. 77. 78. 79.

80. 81. 82. 83. 84. 85. 86. 87. 88.

89. 90. 91. 92. 93. 94.

95. 96. 97.



KPA-59–8, Ilona to Karl, September 9, 1947; sent from c/o Doug Jolly. KPA-59–8, Ilona to Karl, September 9, 1947. Wechsler, editor of the New York Post, quoted in Caute, Great Fear, 231. KPA-59–8, Karl Polanyi to Ilona Duczynska, September 16, 1947. KPA-48–2, Polanyi to Drucker, September 14, 1947. In addition, Toronto and Montreal were home to “really nice people” in the Student Christian Movement; but this was not of course Ilona’s milieu. KPA-59–8, Ilona to Karl, September 9, 1947; KPA-54–4, Karl Polanyi to Irene Grant, 1941. KPA-59–8, Karl Polanyi to Kari, September 13, 1947; KPA-59–8, Karl Polanyi to Ilona, September 16, 1947; KPA-59–8, Karl Polanyi to Ilona, September 20, 1947. KPA-59–8, Ilona Duczynska to Karl, September 17, 1947. KPA-59–8, Ilona Duczynska to Karl, September 15, 1947. KPA-59–9, Ilona Duczynska to Karl Polanyi, January 27 (1948?); KPA-59–8, Ilona to Karl, September 17, 1947. KPA-59–8, Karl Polanyi to Ilona Duczynska, mid-September 1947. KPA-59–8, Karl to Ilona, mid-September 1947. KPA-59–8, Karl to Ilona, mid-September, 1947. KPA-30–3, Irene Grant, conversation with Kari Levitt, mid-1980s. Linda Palfreeman, ¡Salud!: British Volunteers in the Republican Medical Service During the Spanish Civil War, 1936–39 (Brighton, U.K.: Sussex Academic Press, 2012). Palfreeman, ¡Salud!, 185. KPA-48–2, Doug Jolly to Karl Polanyi, September 28, 1947. KPA-59–8, Karl to Ilona, early June, 1947; MacIver, Autobiography, 78; KPA59–9, Karl Polanyi to Ilona Duczynska, November 22, 1948. SPSL-536–1, Letters from unknown correspondent to Professor Blacket, November 15, 1943, and to Dr. Orowan, December 2, 1943. KPA-8–2, Unknown correspondent to Ilona, 1947. The project later morphed into the “Interdisciplinary Project on Economic Aspects of Institutional Growth.” KPA-33–15, Karl Polanyi, Funding application submitted to Wenner-Gren Foundation for Anthropological Research, 1958–1959; KPA-48–3, correspondence of July 1948; KPA-49–3, Karl Polanyi to William Lane, November 12, 1954; KPA-48–4, Karl Polanyi to Sandy Lindsay, June 10, 1949. In 1948–49, Ilona resided in Edith Grove, Chelsea. KPA-48–4, Polanyi to Lindsay, June 10, 1949. KPA-59–3, Ilona Duczynska to Kari, October 10, 1963; Kari Polanyi-Levitt, interview, December 2008; Abraham Rotstein, “The Reality of Society,” Address to the Karl Polanyi Conference, Montreal, November, 2014; Kenneth McRobbie, “ Under the Sign of the Pendulum: Childhood Experience as Determining Revolutionary Consciousness. Ilona Duczynska Polanyi,” Canadian Journal of History 41, no. 2 (2006): 263–298. The seminar was usually held in his New York apartment. MPP-17–12, Karl Polanyi to Misi, March 6, 1953; KPA-54–4, Karl Polanyi to Walter Scheuer, July 1, 1958; Robert Halasz, e-mail interview. KPA-58–1, Karl to Kari, January 30, 1959.

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100. RMP-68–7, Karl Polanyi to Robert Merton, February 17, 1955. 101. William Scott and Martin Moleski, Michael Polanyi: Scientist and Philoso pher (New York: Oxford University Press, 2005), 201. 102. KPA-48–2, Karl Polanyi, Correspondence, 1947. 103. Szapor, “Odyssey of the Polanyis,” 38. 104. KPA-48–5, Polanyi to Jaszi, October 27, 1950. 105. Robert Halasz, e-mail interview. 106. KPA-33–15, Polanyi, Funding application to Wenner- Gren Foundation. 107. KPA-59–9, Karl to Ilona, January  29, 1948; KPA-59–9, Karl Polanyi to Ilona, November 5, 1948. 108. Rutherford, “Columbia University,” 31–78. 109. KPA-49–3, Conrad Arensberg to Karl Polanyi, November 8, 1954. 110. These included the Social Science Research Council, the American Philosophical Society, and the Wenner- Gren Foundation for Anthropological Research. When preparing his funding applications, Polanyi would likely have sympathized with the frustrations that the economic historian David Landes disclosed to him: “It seems to me that scholars are spending more and more of their time on applications. I have fi lled out forms this year until they are coming out of my ears, and I am beginning to be slightly sick of the whole thing. Nevertheless, there’s no gainsaying the fact that the money helps a good deal, so I suppose it is all worth it.” RMP-68–7, Karl Polanyi to Robert Merton, October 20, 1958; KPA-30–2, Landes to Polanyi, February 19, 1959; KPA-50–2, Norman Buchanan to Karl Polanyi, February 26, 1958; KPA-54–4, Polanyi to Scheuer, July 1, 1958, corroborated by Kari Polanyi-Levitt, telephone interview, March 2009. 111. KPA-59–8, Karl Polanyi to Ilona Duczynska, March 15, 1947. 112. KPA-59–8, Karl Polanyi to Ilona, April 23, 1947. 113. KPA-59–8, Karl to Ilona (1947?). 114. Anne Chapman, telephone interview. 115. Kari Polanyi-Levitt, telephone interview, March 2009. At the beach house on summer vacations, Kari adds, Polanyi “always wore what now would be considered pajamas but then were quite fashionable. They were quite fancy. Although not generally fashionable, he was always carefully dressed.” 116. Robert Halasz, e-mail interview. 117. Don Grant, interview. 118. Robert Halasz, e-mail interview. 119. Kari Polanyi-Levitt, interview, December 2008. 120. Anne Chapman, telephone interview. 121. Moses Finley to Geoffrey de Ste Croix, November 27, 1969. (The author viewed Dan Tompkins’s copy of this letter.) 122. Jean Richards, telephone interview. 123. Rutherford, “Columbia University,” 31–78. 124. Anne Chapman, telephone interview. 125. RMP-68–7, Karl Polanyi to Robert Merton, November 15, 1955. 126. Rotstein attended Polanyi’s General Economic History course in 1951. He “had no idea who Karl Polanyi was, and only took his course because it was a double one:

128. 129.

130. 131.

132. 133. 134.


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135. 136. 137.

138. 139. 140. 141. 142. 143.

you would get twice the credits and supposedly work twice the number of hours, but you knew it was not really twice as much. I was enough of an economist to realize that made sense for me.” Abe Rotstein, telephone interview; KPA-51–2, Abe Rotstein, correspondence. “The one student who understood my father’s socialist values was Anne Chapman. She had been a Marxist.” Kari Polanyi-Levitt, interview, December 2008. Anne Chapman, telephone interview. Daniel Tompkins, “The World of Moses Finkelstein: The Year 1939  in  M.  I. Finley’s Development as a Historian,” in Classical Antiquity and the Politics of America: From George Washington to George W. Bush, ed. Michael Meckler (Waco, Tex.: Baylor University Press, 2006), 95–125. KPA-49–3, Correspondence with Finley. See also Daniel Tompkins, “Weber, Polanyi, and Finley,” History and Theory 47, no. 1 (2008): 123–136. Mohammad Nafi ssi, Ancient Athens and Modern Ideology; Value, Theory and Evidence in Historical Sciences (London: Institute of Classical Studies, 2005), 212; Tompkins, “Weber, Polanyi, Finley.” Tompkins, “Weber, Polanyi, Finley,” 126. KPA-54–4, Karl Polanyi to Finley (n.d.). Finley also spurned an invitation to write the preface to a posthumous collection of Polanyi’s essays, Primitive, Archaic and Modern Economies. (“Apparently,” George Dalton commented, “things went on between [Finley] and your father that I know nothing about.”) Others who turned down invitations to contribute to T&Mkt included Robert Merton, who Polanyi invited to write the Introduction, and the economic historian David Landes, whom the editors initially slated to write a chapter on “Reciprocity in Western Feudalism”. KPA-49–3, Karl Polanyi to Landes, July 26, 1955; RMP-68–7, Karl Polanyi to Robert Merton, November 15, 1955; KPA-55–4, George Dalton to Kari, February  11, 1966; Tompkins, “Weber, Polanyi, Finley.” KPA-52–1, Karl Polanyi to Carroll Bowen, June 26, 1961; KPA-52–1, Karl Polanyi to Ted, May 26, 1961. “Ted” is almost certainly Karl Wilhelm Kapp. Immanuel Wallerstein, interview. KPA-54–5, Karl Polanyi to Marshall Sahlins (n.d.). See also S. C. Humphreys, “History, Economics, and Anthropology: The Work of Karl Polanyi,” History and Theory 8, no. 2 (1969): 177. KPA-50–2, George Dalton to Polanyi, February 19, 1958. KPA-52–1, Karl Polanyi to George, May 28, 1961. Emphasis added. KPA-52–1, George Dalton to Polanyi, June 2, 1961. KPA-52–2, Karl Polanyi to Rudolf Schlesinger, November 8, 1961; KPA-52–1, Polanyi to Ted, May 26, 1961. MPP-17–12, Karl Polanyi to Misi, March 5, 1958. Medow hoped to rewrite The Great Transformation, with Polanyi’s assistance, albeit “applied to the American scene (instead of the English)” and with “the religious outlook brought to bear on the emerging new forms of life.” Paul “makes me breathe deeper,” Karl wrote to his brother. KPA-52–1, Polanyi to Ted, May 26, 1961;

148. 149. 150. 151. 152. 153. 154. 155.


157. 158. 159. 160. 161. 162. 163.

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146. 147.


144. 145.

KPA-56–13, Karl Polanyi to Irene Grant, May 25, 1956; KPA-56–13, Polanyi to Irene, March 15, 1963; MPP-17–12, Karl to Misi, March 5, 1958, and Karl to Misi, March 4, 1961. MPP-17–12, Karl Polanyi to Misi, October 10, 1960. Rhoda Halperin, Cultural Economies: Past and Present (Austin: University of Texas Press, 1994), chapter four. On Polanyi and Arnold’s working relationship, see his letter to Arensberg (KPA-49–4, July  21, 1955), his letter to Arnold (KPA-49–2, August 14, 1953), and her reply of August 18. Abe Rotstein, telephone interview. Available correspondence reveals, for example, that Arnold resented the fact that Columbia had not permitted her fi ndings from her research with Polanyi’s team to be integrated into her doctoral thesis. That other factors may have been at work is indicated by the fact that Polanyi destroyed some of his correspondence with her and urged Arensberg to do likewise. See KPA-50–2, Karl Polanyi to Conrad Arensberg, January 30, 1958, and KPA-50–2, Arensberg to Polanyi, January 30, 1958; KPA-49–4, Karl Polanyi to Max Gluckman (ca. 1955). Abe Rotstein, telephone interview; KPA-49–5, Rotstein to Harry Pearson, December 27, 1956. KPA-48–7, Karl Polanyi to Abe Rotstein, January 10, 1952. Abe Rotstein, telephone interview. KPA-38–12, Karl Polanyi, Draft outline for a revision of The Great Transformation, 1954. KPA-54–4, Polanyi to Scheuer, July 1, 1958; Abe Rotstein, e-mail to the author, February 2015. Immanuel Wallerstein, interview. Abe Rotstein, telephone interview. An additional reason may have been a change in Polanyi’s estimation of Rotstein. In correspondence of the mid-1950s he regards him as perhaps his truest disciple, but after the experience of collaboration on the Dahomey manuscript, his trust in the younger man’s scholarship cooled rapidly. KPA-54–4, Anonymous to Paul Bohannan; Abe Rotstein, telephone interview. Polanyi had little to do with radical Afro-American Christianity, but had sought on one lecture tour in the 1930s to “make contact with as many Negro intellectuals” as possible. KPA-47–7, Council Trenholm to John Dillingham, March 12, 1935. Alan Wald, The New York Intellectuals (Chapel Hill: University of North Carolina Press, 1987). KPA-48–2, Correspondence, 1947. Humphreys, “History, Economics, Anthropology,” 174–175. I would emphasize his serial political disappointments, as the postwar settlement lurched toward the Cold War. Nafissi, Ancient Athens, 174. KPA-12–6, Karl Polanyi, “Notes on the Humanism Series,” 1941. Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (Boston: Beacon, 2001).

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164. Karl Polanyi, Conrad Arensberg, and Harry Pearson, “The Place of Economies in Societies,” in Primitive, Archaic and Modern Economies: Essays of Karl Polanyi, ed. George Dalton (Boston: Beacon Press, 1968 [1957]), 136. 165. KPA-37–3, Karl Polanyi, “Freedom in a Complex Society.” 166. KPA-16–2, Karl Polanyi, “Europe Today and Tomorrow.” 167. Polanyi, “Obsolete Market Mentality,” 59–60. 168. Karl Polanyi, “On Belief in Economic Determinism,” Sociological Review 39, no. 1 (1947): 96–112. 169. Polanyi, “Obsolete Market Mentality,” 59–60, 76. 170. Polanyi, “On Belief in Economic Determinism,” 96–112. 171. Polanyi, “Obsolete Market Mentality,” 59–60, 76. 172. Polanyi, “Obsolete Market Mentality,” 59–60, 76. 173. Polanyi, “On Belief in Economic Determinism,” 96. 174. Polanyi, “Obsolete Market Mentality,” 59–60, 77. 175. Polanyi, “On Belief in Economic Determinism,” 99. 176. KPA-35–10, Karl Polanyi, “Economic History and the Problem of Freedom,” 1949. 177. KPA-49–2, Karl Polanyi to Richard Thurnwald, December 4, 1953; George Dalton, “Karl Polanyi’s Analysis of Long-Distance Trade and His Wider Paradigm,” in Ancient Civilization and Trade, ed. Jeremy Sabloff and Carl Lamberg-Karlovsky (Albuquerque: University of New Mexico Press, 1975), 116; Thurnwald cited in Gouldner, For Sociology, 226. 178. Polanyi did not use “embeddedness” only in passing, as some have suggested: see Greta Krippner, “The Elusive Market: Embeddedness and the Paradigm of Economic Sociology,” Theory and Society 30 (2001): 779, and Benjamin Barber, “All Economies Are Embedded: The Career of a Concept, and Beyond,” Social Research, 62, no. 2 (1995). True, in The Great Transformation embeddedness makes rare appearances, yet it crops up repeatedly in his published books and articles from the postwar period, and even more frequently in the unpublished notes and manuscripts. 179. Polanyi, Karl “Liberale Sozialreformer in England,” in Chronik der groǞen Transformation, vol. 1, ed. Michele Cangiani and Claus Thomasberger (Marburg: Metropolis, 2002 [1928]), 96. 180. Walter Hamilton quoted in Walter Neale, “Institutions,” Journal of Economic Issues 21 (1987): 1178. 181. Jens Beckert, “The Great Transformation of Embeddedness: Karl Polanyi and the New Economic Sociology,” in Market and Society: The Great Transformation Today, ed. Chris Hann and Keith Hart (Cambridge: Cambridge University Press, 2009), 40; Raymond Firth, “Methodological Issues in Economic Anthropology,” Man 7, no. 3 (1972): 473. 182. KPA-7–9, Karl Polanyi, “Origins of Institutions,” 1934–1946. 183. KPA-59–8, Karl Polanyi to Misi, April 28, 1947. 184. Polanyi, “On Belief in Economic Determinism,” 96–112. 185. KPA-59–8, Karl Polanyi to Ilona Duczynska, late November, 1947. 186. Polanyi, “Obsolete Market Mentality,” 59–60.

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187. KPA-42–14, Karl Polanyi, “Market Elements and Economic Planning in Antiquity” (n.d.). 188. KPA-59–8, Karl Polanyi to Ilona Duczynska, September 24, 1947. 189. KPA-35–11, Karl Polanyi, Draft manuscript, “Livelihood of Man,” 1950–1955. 190. KPA-37–4, Polanyi, “Economics and Freedom to Shape Our Social Destiny.” 191. MPP-17–12, Karl to Michael, January  11, 1952; KPA-22–3, Karl Polanyi, “Notes– Economic Anthropology,” 1947–1957; MPP-17–12, Karl to Michael, January 11, 1952. 192. KPA-31–1, Karl Polanyi, “The tool box of institutional economics,” 1947–1953. 193. KPA-48–7, Polanyi to Rotstein, April 19, 1952. 194. KPA-31–1, Karl Polanyi, “Report on term paper no. 2,” 1947–1953. 195. KPA-49–2, Karl Polanyi to Moses Finley, October  18, 1953. There are hints of Aristotelian influence in Polanyi’s early writings, for example in his critique of the assumption that human activity is determined by “brutal chrematistical motives.” Karl Polanyi “Wissenschaft und Sittlichkeit,” in Chronik der groǞen Transformation, vol. 3, ed. Michele Cangiani, Kari Polanyi-Levitt and Claus Thomasberger (Marburg: Metropolis, 2005 [1920–1922]), 172–199. 196. Polanyi, “Aristotle Discovers the Economy.” 197. KPA-48–7, Polanyi to Rotstein, April 19, 1959; Polanyi, Arensberg, and Pearson, “Place of Economies in Societies,” 125. 198. KPA-51–1, Karl Polanyi, “University seminar on the institutionalization of the economic process,” 1959; Polanyi, Arensberg and Pearson, “Place of Economies in Societies,” 132. 199. KPA-48–7, Polanyi to Rotstein, April 19, 1952. 200. Polanyi, “Aristotle Discovers the Economy.” 201. KPA-49–2, Polanyi to Finley, October 18, 1953. 202. Polanyi, Arensberg, and Pearson, “Place of Economies in Societies,” 123. 203. KPA-42–9, Anonymous, “Karl Polanyi’s remarks on Menger, Brunner & the history of thought about the substantive economy,” 1958. See also Polanyi, Arensberg, and Pearson, “Place of Economies in Societies,” 135. 204. Polanyi failed to notice that Menger’s theory of value is the servant of his “formalist” economics. Menger pioneered the turn of economics away from questions of labor and resources and toward a preoccupation with the question of maximizing utility. This is why his theory of value—of the underlying basis of exchange relations—is phrased not in terms of what Polanyi calls substantive propensities, such as labor or other natural phenomena, but rather in the subjective calculations that individuals make, “in a context of scarcity and individual property, that they would rather have something that someone else has than all or part of something in their own possession.” Nicholas Xenos, Scarcity and Modernity (London: Routledge, 1989), 73; KPA-48–7, Polanyi to Rotstein, April 19, 1952. 205. The influence of the German historicists on their U.S. cousins is well documented, even if its strength is open to debate. In the fi nal third of the nineteenth century a significant cohort of American social scientists engaged in postgraduate study in Germany, where they encountered institutionalist political economy. As Anne Mayhew has described, its ideas—including the notion that the state and the


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206. 207.

208. 209. 210. 211. 212.

213. 214. 215. 216. 217.




church should be at the forefront of providing solutions to economic problems— were absorbed by the founders of American Institutionalism at early stages of their intellectual careers. Anne Mayhew, “The Beginnings of Institutionalism,” Journal of Economic Issues 21, no. 3 (1987): 981. KPA-45–14, Abraham Rotstein, “Weekend Notes,” 1957, 34. KPA-48–6, Karl Polanyi to Abe Rotstein, August 25, 1957. One passage in Veblen’s 1898 article “Economics as a Study of Process,” in which he contends that “ there is no neatly isolable range of cultural phenomena that can be rigorously set apart under the head of economic institutions,” elicited Polanyi’s strong approval. KPA27–8, Polanyi, “Annotations on Veblen,” 19–23; Thorstein Veblen, “Why Is Economics Not an Evolutionary Science?,” Quarterly Journal of Economics 12 (July 1898). For Polanyi’s annotations, see KPA-27–8, Karl Polanyi, “Annotations on an article by Veblen” (n.d.), 19–23. Polanyi also read Commons, noting comparisons between his institutional economics and the work of Weber (as well as an important difference: that Commons’s accent is upon the “system,” as against Weber’s “spirit”). Cf. KPA-24–6, Abraham Rotstein, Drafts, 1951–1960; KPA-48–6, Polanyi to Rotstein, August  25, 1957; KPA-9–7, Karl Polanyi, Notes on Readings, 1936–1946. KPA-33–15, Polanyi, Funding application to Wenner- Gren Foundation. Simon Clarke, Marx, Marginalism and Modern Sociology: From Adam Smith to Max Weber (London: Macmillan, 1982), 201. Clarke, Modern Sociology, 194–195, 216, 230. MPP-17–11, Karl Polanyi to Michael, January 6, 1947. KPA-33–15, Polanyi, Funding application to Wenner-Gren Foundation; KPA-23–6, Karl Polanyi, “Fragments,” 1947–1960; KPA-31–15, Polanyi, Research Proposal No.1. See also KPA-37–2, Karl Polanyi, “Methodological Problems Connected with the Question of Capitalism in Antiquity” (n.d.); KPA-42–9, Karl Polanyi, “Fragments on Menger,” late 1950s. Max Weber, The Theory of Social and Economic Organi zation (New York: Free Press, 1947 [1964]), 184ff. KPA-33–15, Polanyi, “Funding application to Wenner- Gren Foundation.” KPA-7–9, Polanyi, “Origins of Institutions.” Karl Polanyi, “The Two Meanings of Economic” (n.d.), Columbia University archives. The author thanks Dan Tompkins for supplying this document. Karl Polanyi, “The Institutional Approach to Non-Market Economies” (n.d.), Columbia University archives. The author thanks Dan Tompkins for supplying this document. KPA-42–9, Karl Polanyi, “On the Translation of Menger’s ‘Grundsätze’” (n.d.); KPA-42–9, Anonymous, “Karl Polanyi’s Remarks on Menger”; Polanyi, “Institutional Approach to Non-Market Economies.” KPA-48–7, Karl Polanyi to Abe Rotstein, April 26 (1952?). Cf. KPA-23–2, Karl Polanyi (1953) Notes on readings; KPA-42–9, Polanyi, “On the Translation of Menger’s ‘Grundsätze.’” Francesco Boldizzoni, The Poverty of Clio: Resurrecting Economic History (Princeton, N.J.: Princeton University Press, 2011), 98.

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221. KPA-30–2, Karl Polanyi to Harry Pearson, September 27, 1959. 222. KPA-22–11, Karl Polanyi, Notes and drafts on economy and society, 1953–1957; KPA-30–2, Polanyi to Pearson, September 27, 1959. 223. Cf. Boldizzoni, Poverty of Clio. 224. Polanyi, quoted in S. C. Humphreys, Anthropology and the Greeks (London: Routledge, 1978), 36. Emphasis added. 225. KPA-37–2, Karl Polanyi, “Methodological Problems Connected with the Question of Capitalism in Antiquity” (n.d.); KPA-45–3, Abraham Rotstein, “Weekend Notes,” 1956, 6. 226. KPA-22–3, Polanyi, “Notes–Economic Anthropology.” 227. KPA-48–5, Polanyi to Jaszi, October 27, 1950. 228. KPA-26–7, George Dalton, “Karl Polanyi’s Analysis of Long-Distance Trade and His Wider Paradigm” (n.d.). 229. KPA-33–15, Polanyi, Funding application to Wenner- Gren Foundation. 230. Polanyi wrote the bulk of The Livelihood of Man in the late 1940s and early 1950s. He attempted to pass it off to Rinehart Publishers as the follow-up to The Great Transformation that he was contractually obliged to offer. Rinehart responded with scepticism, pointing out that The Livelihood of Man bore no resemblance to the agreed title but encouraged the author to submit the manuscript nonetheless. Polanyi did submit two-thirds of it in 1955, and aimed to complete it, but the day never quite arrived. After his death, Finley sought to forestall its publication, although from disappointment, not disagreement. (“I possess hundreds of pages of unpublished manuscript, much of it unpublished because, in part, I blocked publication,” Finley confided to Geoff rey de Ste Croix [November 27, 1969].) Thanks to Harry Pearson’s efforts, The Livelihood of Man did eventually appear. MPP17–12, Karl Polanyi to Michael, July 19, 1955; KPA-49–4, Correspondence; KPA54–4, Polanyi to Scheuer, July 1, 1958; David Tandy and Walter Neale, “Karl Polanyi’s Distinctive Approach to Social Analysis and the Case of Ancient Greece,” in From Political Economy to Anthropology; Situating Economic Life in Past Societies, ed. Colin Duncan and David Tandy (Montreal: Black Rose, 1994), 10. 231. KPA-39–1, Karl Polanyi, “Greece,” 1954; János Gyurgyák, ed., Karl Polanyi, 1886– 1964 (Budapest: Fővárosi Szabó Ervin Könyvtár, 1986). 232. KPA-31–15, Polanyi, Research Proposal No. 1. 233. KPA-33–15, Polanyi, Funding application to Wenner- Gren Foundation. 234. KPA-40–2, Karl Polanyi, “The Economy of the Classical Polis,” 1954; KPA-48–3, Karl Polanyi to Moses Finley, November 17, 1951. 235. KPA-39–1, Polanyi, “Greece,” 1954. See also KPA-51–2, Karl Polanyi to Geoff rey de Ste Croix, August 6, 1960. 236. KPA-48–3, Polanyi to Finley, November 17, 1951. 237. KPA-33–3, Karl Polanyi, Interdisciplinary Project, “Economic Aspects of Institutional Growth,” 1953–1955, 28; Polanyi, “Aristotle Discovers the Economy.” 238. KPA-48–3, Polanyi to Finley, November 17, 1951; KPA-40–2, Polanyi, “Economy of the Classical Polis.” 239. On the basis of assertions such as this, Drucker (KPA-49–3, to Polanyi, October 2, 1955) suggested that Polanyi had “largely abandoned an earlier undertone of

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240. 241. 242. 243.

244. 245. 246. 247.

248. 249.



underlying confl ict between redistribution-reciprocity on the one hand and market on the other.” In part, this is based upon a misunderstanding. At no time did Polanyi recommend, as economic model, anything other than an ensemble of reciprocal, redistributive, and market elements. The different perspective that Drucker observed derived from the shift of Polanyi’s research focus to premarket societies from nineteenth- century Britain, in which one element—the market— dominated. The grain of truth in Drucker’s observation is that in his later years Polanyi did play down his earlier thesis that the unity of society had been destroyed by the separation of economics and politics in the market system. His emphasis increasingly was on the growth of “market-free areas” in corporations, trade unions, and government. KPA-40–2, Polanyi, “Economy of the Classical Polis”; KPA-45–2, Abraham Rotstein, “Weekend Notes,” 1956, 11. KPA-40–2, Polanyi, “Economy of the Classical Polis.” KPA-37–11, Karl Polanyi, “Aristotle and Galbraith.” KPA-40–2, Polanyi, “Economy of the Classical Polis.” In private, Ste Croix was more critical still. In a letter to Finley (November 12, 1969) he observed that Polanyi’s schema “enables you entirely to ignore nasty things like exploitation and class struggle and to explain socio-economic developments completely divorced from political strug gle—by in fact isolating ‘the economy’ as something that can be ‘integrated’ on its own, even in the reciprocity/redistribution situations, when ex hypothesi the economy ought to be still ‘embedded.’” G.. E. M. De Ste Croix, “Review of ‘Trade and Market in the Early Empires,’” Economic History Review 12, no. 3 (1960): 510–511. Ste Croix, “Review of “Trade and Market,’” 510–511. KPA-51–2, Karl Polanyi to Harry, July 31, 1960. KPA-51–2, Karl Polanyi to George, 6 August 6, 1960. H. T. van der Pas (1973), cited in Matthijs Krul, “Markets, Economics Imperialism, and Social Theory: A Theoretical and Historical Analy sis of the Market in Modern Political Economy” (Ph.D. thesis, Department of Politics, Brunel University, 2015). KPA-31–1, Polanyi, “Report on term paper no. 2,” 4. Roger Back house and Philippe Fontaine, “ Toward a History of the Social Sciences,” in The History of the Social Sciences since 1945, ed. Roger Back house and Philippe Fontaine (Cambridge: Cambridge University Press, 2010), 184–232. Philip Mirowski, Machine Dreams: Economics Becomes a Cyborg Science (Cambridge: Cambridge University Press, 2002); Back house and Fontaine, “ Toward a History of the Social Sciences.” Don Howard, “Better Red than Dead—Putting an End to the Social Irrelevance of Postwar Philosophy of Science,” Science & Education 18 (2007): 199–220; Roger Back house and Philippe Fontaine, “Introduction: Contexts of Postwar Social Science,” in The History of the Social Sciences since 1945, ed. Roger Back house and Philippe Fontaine (Cambridge: Cambridge University Press, 2010), 199.

5. 6.

7. 8. 9. 10. 11.

12. 13. 14.

15. 16. 17. 18.


KPA-51–5, Karl Polanyi to Meszaros, April 24, 1961. PFP-212–326, Karl to Misi, October 21, 1959. KPA-51–1, Ilona and Karl Polanyi to Harry Campbell, October 29, 1959. PFP-212–326, Karl to Misi, October 21, 1959; KPA-51–1, Ilona and Karl to Campbell, October 29, 1959. Ilona Duczynska, and Karl Polanyi, eds., The Plough and the Pen (London: Peter Owen, 1963). The Polanyis had known Havas in London, where he worked as Károlyi’s secretary. He returned to Communist Hungary, where he was tortured to death in a prison cell. The invitation to Auden was opposed by E. P. Thompson, on the grounds that he was apt to “welcome with open arms Hungarian rebels to the fraternity of the disenchanted.” KPA-56–8, Karl Polanyi to Laura, November 27, 1959; KPA-51–2, Kenneth Muir to Ilona, April 17, 1960; Lee Congdon, “Ilona and Karl: A Review Essay,” Hungarian Studies Review 29, nos. 1–2 (2002): 111–118. KPA-49–2, Charles Silberman to Karl Polanyi, August 20, 1953. MPP-17–12, Karl Polanyi to Misi, January 24 and May 2, 1957. KPA-54–4, Polanyi to Scheuer, July 1, 1958. Kari Polanyi-Levitt, interview, July 2006. Ilona and Kari were given the task of overseeing the whole. Friends and former students were assigned to assist with anthropological texts and the Dahomey book (Bohannan), the “Old Sinner” manuscript (Hopkins), philosophical texts (Fromm), with Medow, Muir, Pearson, and Rotstein as general advisors. At the instigation of Meszaros, Ilona began to compile a volume of Karl’s published and unpublished writings for publication. KPA-30–12, Karl Polanyi, Personal papers, 1943–1967; KPA-51–4, Karl Polanyi to Bohannan, November 24, 1960; Karl to Kari, September 23, 1960; KPA-52–4, Ilona Duczynska to Harry, August 18, 1962. KPA-52–4, Ilona to Harry, August 18, 1962. Karl Polanyi to Robert Merton, April 26, 1963. A copy of this letter, from Columbia University’s Butler Library, was kindly passed to the author by Dan Tompkins. Polanyi “was a hypochondriac. He always thought something was wrong with him. He only got over it when he got cancer.” Kari Polanyi-Levitt, interview, December 2008. KPA-53–2, Karl Polanyi to unknown addressee, 1963. KPA-53–3, Walter Neale to Karl Polanyi, early 1964. KPA-52–3, Karl Polanyi to David Bordua, April 8, 1962. PFP-212–326, Karl to Misi, October 21, 1959; Polanyi, quoted in Kari PolanyiLevitt, “Tracing Polanyi’s Institutional Political Economy to Its Central European Source,” in Karl Polanyi in Vienna: The Contemporary Signifi cance of the Great Transformation, ed. Kari Polanyi-Levitt and Kenneth McRobbie (Montreal: Black Rose, 2000), 379. PFP-212–326, Karl to Misi, March 4, 1961; Polanyi-Levitt, “Polanyi’s Institutional Political Economy,” 379.


1. 2. 3. 4.

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7. T H E P R E C A R I O U S N E S S O F E X I S T E N C E

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20. KPA-51–5, Karl Polanyi to Harry, January 10, 1961. 21. Karl Polanyi, letter to Car ter Goodrich, quoted in Malcolm Rutherford, “Walton Hamilton, Amherst, and the Brookings Graduate School: Institutional Economics and Education,” 2001, web.uvic.ca/econ/research/papers/ddp0104.pdf. 22. Bruce Wearne, The Theory and Scholarship of Talcott Parsons to 1951: A Critical Commentary (Cambridge University Press, 1989), 12–13. 23. Howard Brick, Transcending Capitalism: Visions of a New Society in Modern American Thought (Ithaca, N.Y.: Cornell University Press, 2006); Wearne, Theory and Scholarship, 21. 24. See for example, Norbert Elias, The Established and the Outsiders (London: Sage, 1994), 171; Norbert Elias, The Civilising Process (Oxford: Blackwell, 1994), 188; Stephen Mennell,“Parsons and Elias,” Sociologie et société 21, no. 1 (1989): 69–86; Greta Krippner, “The Elusive Market: Embeddedness and the Paradigm of Economic Sociology,” Theory and Society 30 (2001): 775–810. 25. Talcott Parsons, “Sociolog ical Elements in Economic Thought II: The Analytical Factor View,” Quarterly Journal of Economics 49, no. 4 (1935): 646–667. 26. At the height of the McCarthy era, even his anticommunism, doughty though it was, was insufficiently strident to deter the FBI from investigating him. Mike Keen, “No One above Suspicion: Talcott Parsons under Surveillance,” American Sociologist 24, no. 3/4 (1993): 37–54. 27. Arthur Lipow, Political Parties & Democracy: Explorations in History and Theory (London: Pluto, 1996), 25. 28. “. . . and not, as Marxists would hold,” Parsons adds obtusely, “in the structure of the economy.” Parsons viewed Marxism much as did most of its academic critics— including Polanyi; that is, as a mechanical, evolutionary, materialistic determinism. Cf. Alvin Gouldner, For Sociology: Renewal and Critique in Sociology Today (London: Pelican, 1973), 164. 29. Talcott Parsons, “Social Strains in America,” in The Radical Right: The New American Right, ed. Daniel Bell (New York: Doubleday, 1964 [1955]). 30. Given that Polanyi developed no theory of classes, Richard Walker has suggested, his implicit understanding of politics is akin to that of postwar liberal pluralism, in which politics fi gures as competition among ideas and interests. Richard Walker, “The Two Karls, or Reflections on Karl Polanyi’s The Great Transformation,” Environment and Planning A, 45 (2013): 1662–1670. 31. Ilona Duczynska, “Karl Polanyi: Notes on His Life,” in Karl Polanyi, The Livelihood of Man (New York: Academic Press, 1977), xvi. 32. Richard Swedberg, “The ‘Economy and Society’ Perspective in US Sociology,” Current Sociology 35, no. 1 (1987): 53–62. 33. Harry Pearson, “Parsons and Smelser on the Economy,” in Trade and Market in the Early Empires: Economies in History and Theory, ed. Karl Polanyi, Conrad Arensberg, and Harry Pearson (New York: Free Press, 1957), 307. 34. Pearson, “Parsons and Smelser,” 308. 35. Pearson, “Parsons and Smelser,” 308; Terence Hopkins, “Sociology and the Substantive View of the Economy,” in Trade and Market in the Early Empires: Econo-

39. 40. 41. 42. 43.


45. 46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60.

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37. 38.



mies in History and Theory, ed. Karl Polanyi, Conrad Arensberg, and Harry Pearson (New York: Free Press, 1957), 273. Hopkins, “Sociology and Substantive View,” 302; Talcott Parsons and Edward Shils, Toward a General Theory of Action (Cambridge, Mass.: Harvard University Press, 1951), 207. Polanyi used “forms” and “patterns” of integration interchangeably. KPA-50–2, Terry Hopkins to Karl Polanyi, 1958. Karl Polanyi, “The Economy as Instituted Process,” in Trade and Market in the Early Empires: Economies in History and Theory, ed. Karl Polanyi, Conrad Arensberg, and Harry Pearson (New York: Free Press, 1957), 244; see also Pearson, “Parsons and Smelser,” 313. Hopkins, “Sociology and Substantive View,” 274; Pearson, “Parsons and Smelser,” 314. KPA-51–1, Karl Polanyi to Harry Pearson, October 25, 1959. Talcott Parsons, The Social System (London: Routledge & Kegan Paul, 1951), 330. KPA-19–5, Karl Polanyi, “Origins of the Cataclysm—A Political and Economic Inquiry,” 1943. Government intervention, Polanyi writes elsewhere, “increased the strain on the social system.” KPA-15–4, Karl Polanyi, Lecture XIX, “Contemporary Problems and Social and Political Theory,” University of London, 1936–1940; KPA-31–10, Karl Polanyi, “The Trend towards an Integrated Society,” 1947–1953. KPA-51–5, Karl Polanyi to Harry, January 5, 1961; KPA-51–1, Polanyi to Pearson, October 25, 1959; KPA-41–7, Karl Polanyi, “The Role of Strain in Institutional Change,” 1963. KPA-41–7, Polanyi, “Role of Strain in Institutional Change.” KPA-49–3, Karl Polanyi to Car ter, February 17, 1954; KPA-35–11, Karl Polanyi, Draft manuscript, “Livelihood of Man,” 1950–1955. KPA-41–7, Polanyi, “Role of Strain in Institutional Change.” KPA-50–3, Karl Polanyi, “Memo on Galbraith,” December 10, 1958; KPA-54–5, Karl Polanyi, to “Friends,” 1958–1963. KPA-54–5, Polanyi, to “Friends.” KPA-37–4, Polanyi, “Economics and Freedom to Shape Our Social Destiny.” KPA-37–11, Karl Polanyi, “Galbraith’s Farewell to Poverty,” 1959. KPA-54–5, Polanyi, to “Friends”; KPA-50–3, Polanyi, “Memo on Galbraith.” KPA-23–6, Polanyi, “Fragments,” 1947–1960; KPA-50–3, Polanyi, “Memo on Galbraith”; KPA-37–11, Polanyi, “Galbraith’s Farewell to Poverty.” KPA-37–11, Polanyi, “Galbraith’s Farewell to Poverty.” KPA-37–11, Polanyi, “Galbraith’s Farewell to Poverty.” KPA-50–3, Polanyi, “Memo on Galbraith”; KPA-37–11, Polanyi, “Galbraith’s Farewell to Poverty.” KPA-37–11, Polanyi, “Galbraith’s Farewell to Poverty.” KPA-37–11, Polanyi, “Aristotle and Galbraith.” KPA-50–4, Karl Polanyi to Thomas Bledsoe, January 3, 1959. KPA-42–2, Karl Polanyi to Professor Bidnes (n.d.); KPA-45–7, Abraham Rotstein, “Weekend Notes,” 1957; KPA-45–18, Abraham Rotstein , “Weekend Notes,” 1958, 39.

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61. KPA-50–4, Polanyi to Bledsoe, January 3, 1959. 62. The seminal text is Karl Polanyi, “Notizen von Trainings-Wochenenden der christlichen Linken,” in Chronik der groǞen Transformation, vol. 3, ed. Michele Cangiani, Kari-Polanyi Levitt, and Claus Thomasberger (Marburg: Metropolis, 2005 [1938]), 274–275. 63. KPA-37–3, Polanyi, “Freedom in a Complex Society.” 64. KPA-37–4, Polanyi, “Economics and Freedom to Shape Our Social Destiny.” 65. KPA-35–10, Polanyi, “Economic History and the Problem of Freedom.” 66. Robert Hill, “Literary Executor’s Afterword,” in C. L. R. James, American Civilization (Oxford: Blackwell, 1993), 337. 67. Eric Schlosser, Fast Food Nation; What the All-American Meal Is Doing to the World (London: Allen Lane, 2001), 6; Anonymous, Sept années historiques (Berlin: Gesellschaft für kulturelle Verbindungen mit dem Ausland [n.d.]). 68. Clark Kerr, cited in Richard Badham, “The Sociology of Industrial Societies,” Current Sociology 32, no. 1 (1984): 26. 69. Badham, “Sociology of Industrial Societies,” 26. 70. Michael Löwy, “The Romantic and the Marxist Critique of Modern Civilization,” Theory and Society 16, no. 6 (1987): 891–904. 71. KPA-16–3, Karl Polanyi, “The Changing Structure of Society,” University of London, 1946; KPA-36–9, Karl Polanyi, “Freedom and Technology,” 1955; KPA-45–4, Rotstein, “Weekend Notes,” 1956, 48. 72. Karl Marx, Grundrisse (Harmonds worth,  U.K.: Penguin, 1973), 693; Löwy, “Romantic and Marxist,” 897. 73. Richard Thurnwald, Die menschliche Gesellschaft, vol. 3: Werden, Wandel und Gestaltung der Wirtschaft (Berlin: Walter de Gruyter, 1932), 202; Malinowski, quoted in Michael Adas, Machines as the Measure of Men: Science, Technology, and Ideologies of Western Dominance (Ithaca,  N.Y.: Cornell University Press, 1991), 392. 74. Wilhelm Röpke, quoted in Arnold Gehlen, Man in the Age of Technology (New York: Columbia University Press, 1980 [1949]), 56–57; Gehlen, Age of Technology, 100; Theodor Adorno and Max Horkheimer, Dialectic of Enlightenment (London: Verso, 1997 [1944]). 75. Lewis Mumford, Art and Technics (New York: Columbia University Press, 2000). 76. KPA-37–3, Polanyi, “Freedom in a Complex Society.” 77. MPP-17–13, Karl Polanyi to Misi (1943?); Polanyi, “Obsolete Market Mentality,” 60, 76; KPA-30–1, Karl Polanyi, unpublished interview, 1963. 78. KPA-45–18, Rotstein, “Weekend Notes,” 1957, 8; KPA-45–5, Rotstein, “Weekend Notes,” 1956, 11. 79. KPA-52–1, Karl Polanyi to Peter Drucker, August 31, 1961; KPA-51–3, Karl Polanyi to Heltai, May 21, 1960. 80. KPA-37–3, Polanyi, “Freedom in a Complex Society.” 81. KPP-1–5, Karl Polanyi to Donald Grant (n.d.). 82. Polanyi, Great Transformation, 267–268. 83. KPA-37–3, Polanyi, “Freedom in a Complex Society”; Polanyi, Great Transformation, 268.

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84. Polanyi, Great Transformation, 176. 85. Noel Thompson, The People’s Science: The Popular Political Economy of Exploitation and Crisis, 1816–34 (Cambridge: Cambridge University Press, 2002), 79. 86. KPA-37–3, Polanyi, “Freedom in a Complex Society.” 87. KPA-36–9, Polanyi, “Freedom and Technology.” 88. KPA-37–3, Polanyi, “Freedom in a Complex Society.” 89. KPA-36–9, Polanyi, “Freedom and Technology.” 90. KPA-52–2, Karl Polanyi to John, May 1, 1962. 91. KPA-37–4, Polanyi, “Economics and Freedom to Shape Our Social Destiny”; KPA-30–1, Karl Polanyi, unpublished interview, 1963. 92. KPA-33–8, Karl Polanyi, “Economic Aspects of Institutional Growth,” resume of session no. 3, 1958. 93. KPA-45–2, Rotstein, “Weekend Notes,” 1956. 94. PFP-212–326 Karl to Misi, February 23, 1956; KPA-30–1, Karl Polanyi, unpublished notes, 1963; KPA-51–3, Karl Polanyi, “Proposal for a Survey of Socialist Thought and Policies in Our Time” (ca. 1960); KPA-45–18, Rotstein, “Weekend Notes,” 1956, 23. 95. PFP-212–326, Karl Polanyi to Misi, February 23, 1956. 96. KPA-37–12, Karl Polanyi, “For a New West,” 1958. Cf. KPA-45–19, Rotstein, “Weekend Notes,” 1958, 4. 97. KPA-42–2, Karl Polanyi, “Dahomey,” 1961. 98. KPA-37–12, Polanyi, “For a New West.” 99. KPA-37–12, Polanyi, “For a New West.” 100. KPA-51–5, Karl Polanyi to Gunnar Myrdal, January  31, 1961. Cf. KPA-45–20, Rotstein, “Weekend Notes,” 1958, 22. 101. KPA-37–12, Polanyi, “For a New West.” 102. KPA-45–20, Rotstein, “Weekend Notes,” 1958, 21. 103. PFP-212–326, Karl Polanyi to Misi, January 5, 1958; KPA-37–12, Polanyi, “For a New West.” 104. MPP-17–12, Karl to Misi, March 5, 1958. 105. KPA-57–5, Michael to Karl, June 15, 1945; KPA-59–8, Karl to Ilona, August 28, 1947. 106. KPA-57–5, Michael to Karl, March 20, 1944. 107. MPP-4–13, Michael Polanyi to Laura, September 22, 1945 (copy of letter shared with the author by Marty Moleski). 108. KPA-57–4, Michael Polanyi to Ilona, November 12, 1943. 109. “I was particularly pleased,” wrote Michael, to have Karl’s approval “since he used to disagree strongly with me before I had the opportunity of explaining my point of view.” William Scott and Martin Moleski, Michael Polanyi: Scientist and Philosopher (New York: Oxford University Press, 2005), 196; and MPP-4–13, Michael Polanyi to Toni Stolper, December 20, 1945 (copy of letter shared with the author by Marty Moleski); KPA-9–3, Karl Polanyi, Notes on Lippmann The Good Society, 1937–1946. 110. Philip Mirowski, The Effortless Economy of Science? (Durham, N.C.: Duke University Press, 2004), 77.

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111. Michael Polanyi, quoted in Phil Mullins and Struan Jacobs, “Michael Polanyi and Karl Mannheim,” Tradition and Discovery 32, no. 1 (2005): 20–43. 112. Michael Polanyi, The Contempt of Freedom: The Russian Experiment and After (London: Watts & Co., 1940), 57; Mark Mitchell, Michael Polanyi: The Art of Knowing (Wilmington: ISI Books, 2006), 138. 113. Michael Polanyi, Full Employment and Free Trade (London: Cambridge University Press, 1945), 150. 114. Polanyi, quoted in György Litván, “Karl Polanyi in Hungarian Politics,” in The Life and Work of Karl Polanyi, ed. Kari Polanyi-Levitt (Montreal: Black Rose Books, 1990), 259–260; Duczynska, “Notes on His Life,” xix. 115. KPA-17–10, Karl Polanyi to Misi, October 26, 1942; KPA-45–18, Rotstein, “Weekend Notes,” 1958, 38–9. 116. MPP-17–11, Karl to Michael, March  10, 1944; KPP-48–5, Karl Polanyi to Jaszi, November 7, 1952. 117. Mike Marqusee, “Patriot Acts,” The Nation, 2004, www. mikemarqusee . com / ? p=114. 118. In addition, his visits to the Soviet Union and the radicalism of his siblings may have been held against him. See Stefania Jha, Reconsidering Michael Polanyi’s Philosophy (Pittsburgh: University of Pittsburgh Press, 2002), 27; Peter Coleman, The Liberal Conspiracy: The Congress for Cultural Freedom and the Struggle for the Mind of Postwar Europe (New York: Free Press, 1989), 106. 119. KPA-48–3, Michael Polanyi to U.S. immigration authorities, 1951. 120. Scott and Moleski, Polanyi, 223. 121. David Caute, The Great Fear: The Anti- Communist Purge under Truman and Eisenhower (New York: Simon & Schuster, 1978). Michael was eventually granted a visitors’ visa in June 1953. 122. Endre Nagy, “After Brotherhood’s Golden Age: Karl and Michael Polanyi,” Polanyiana 5, no. 1 (1996), www.kfk i.hu /chemonet/polanyi//9601 /after1.html. 123. Laura, he added, is “always with him, in his thoughts,” as was Adolf, “whom I never forget, perhaps because, or notwithstanding the fact that, he does not write.” KPA-56–8, Karl to Laura, February 4 (no year). 124. MPP-17–12, Karl to Michael, January 21, 1957; MPP-17–12, Karl to Misi, March 4, 1961. 125. “Do not leave me in the dark,” the letter ends, “Be good to me.” MPP-17–12, Karl to Michael, January 21, 1957. Cf. MPP-17–12, Karl Polanyi to Michael, January 24, 1957 (copy of letter shared with the author by Marty Moleski). 126. KPA-53–2, Karl Polanyi to Otto, November 13, 1963; Frances Stonor Saunders, Who Paid the Piper? The CIA and the Cultural Cold War (London: Granta, 1999). 127. Saunders, Who Paid the Piper?, 99. 128. Peter Linebaugh, Stop, Thief! The Commons, Enclosures, and Resistance (Seattle: PM Press, 2014), 116. 129. Coleman, Liberal Conspiracy, 33. 130. Peter Coleman, “Arthur Koestler and the Congress for Cultural Freedom,” Polanyiana, no. 1–2 (2005): 184–202. 131. Saunders, Who Paid the Piper?

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132. Polanyi became friendly with Gaitskell, who had been taught at Balliol by Macmurray and was close to Cole. Cole, who adored Gaitskell, introduced him to Polanyi. John Costello, John Macmurray: A Biography (Edinburgh: Floris Books, 2002), 120; Ilona Duczynska, “Appendix,” in Der demokratische Bolschewik: Zur Theorie und Praxis der Gewalt (Munich: List Verlag, 1975), appendix; Margaret Cole, The Life of G.D.H. Cole (London: Macmillan, 1971), 169. 133. Of all the Congress for Cultural Freedom publications in the 1950s, Science and Freedom came closest to being a “civil liberties journal.” Saunders, Who Paid the Piper?, 214; Coleman, Liberal Conspiracy, 98. 134. Lee Congdon, “Koestler’s Hungarian Identity” (n.d.), www.c3. hu /~prophil /profi053/ lee.html. 135. Coleman, “Arthur Koestler”. Alex Weissberg also encouraged Polanyi to involve himself in the Congress for Cultural Freedom. Cf. Mary Jo Nye, Michael Polanyi and His Generation: Origins of the Social Construction of Science (Chicago: University of Chicago Press, 2011), 211. 136. Congdon, “Koestler’s Identity.” 137. George Schöpflin, “Paul Ignotus,” Austrian History Yearbook 14 (1978); Paul Ignotus, “Exile in London,” Encounter, August. 1959, 53. 138. Paul Ignotus, Political Prisoner (New York: Collier Books, 1964), 55. 139. Congdon, “Koestler’s Identity.” 140. KPA-50–1, Letter from Zoltán Szabó to Polanyi, August 2, 1957. 141. KPA-55–2, Ilona Duczynska to George Dalton (n.d.). 142. Ignotus, “Hungary of Michael Polanyi,” 11. 143. Kari Polanyi-Levitt, telephone interview, April 2009. 144. Polanyi was convinced—and with hindsight, it appears, with very good reason— that the Paris Review was fi nanced by the CIA. PFP-212–326, Karl to Misi, October 21, 1959; KPA-55–1, Karl Polanyi to Erich Fromm, September 21, 1960; Patrick Iber, “Literary Magazines for Socialists Funded by the CIA,” The Awl, August 24, 2015, http://www.theawl.com/2015/08/literary-magazines-for-socialists-funded -by-the-cia-ranked. 145. PFP-212–326, Karl to Misi, October 21, 1959. 146. Saunders, Who Paid the Piper?, 188. 147. Saunders, Who Paid the Piper?, 395. 148. When the Congress executive member Michael Josselson was outed as a CIA agent, Michael Polanyi argued that he should not be expelled. Michael Polanyi’s eventual resignation from the Congress was triggered not by revelations of its CIA backing but because it ejected “a longtime and devoted member on charges of having been affiliated in youth with a communist organ ization.” Coleman, Liberal Conspiracy, 219; Jha, Polanyi’s Philosophy, 38; Scott and Moleski, Polanyi, 267. 149. PFP-212–326, Karl to Misi, October 21, 1959; John Neubauer, “Irodalmi Újság in Exile: 1957–1989,” in The Exile and Return of Writers from East- Central Europe: A Compendium, ed. John Neubauer and Borbála Zsuzsanna Török (New York: Walter de Gruyter, 2009), 204–229. 150. Neubauer, “Irodalmi Újság.”

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151. KPA-51–4, Gyula Borbándi to Karl Polanyi, October 17, 1960. 152. KPA-51–5, Karl Polanyi to the editors of Új Látóhatár, “Jóska” and Gyula Borbándi, April 24, 1961; PFP-212–326, Karl to Misi, October 21, 1959. 153. Others, including Borbándi, had resigned earlier. KPA-51–4, Karl Polanyi to the Hungarian Writers Union (Abroad), November 21, 1960; KPA-51–4, Jóska to Karl Polanyi, November 15, 1960. Cf. Gyurgyák, Karl Polanyi. 154. Michael had gotten to know Brandt at a Congress event in Berlin. KPA-57–7, Michael Polanyi to Karl, September 22, 1962; Karl Polanyi, quoted by Michael Polanyi, in KPA-57–7, Michael Polanyi to Karl Polanyi , December 3, 1962; Scott and Moleski, Polanyi, 244. 155. Anonymous interviewee. 156. KPA-49–3, Karl Polanyi to Abe Rotstein (ca. 1955). 157. KPA-51–1, Karl Polanyi to Paul Medow, September 30, 1959. 158. KPA-49–5, Karl Polanyi to Abe Rotstein, April 10, 1956. 159. KPA-52–4, Karl Polanyi to “honourable Mr. Doctor,” September 29, 1962. 160. KPA-50–1, Karl Polanyi to Car ter Goodrich, February  12, 1957; KPA-37–1, Karl Polanyi, “A Hungarian Lesson,” 1957. 161. KPA-36–11, Karl Polanyi, “Concealed Foreign Rule and Socialist Economics” [Leplezett küluralom és szocialista külgazdaság], 1956. 162. KPA-37–1, Polanyi, “Hungarian Lesson.” 163. KPA-50–1, Karl Polanyi to Car ter Goodrich, February 12, 1957. 164. KPA-36–11, Polanyi (1956) “Concealed foreign rule.” 165. KPA-37–1, Polanyi, “Hungarian Lesson”; KPA-36–11, Polanyi, “Concealed foreign rule,” 1956. 166. Michael Polanyi, “The Message of the Hungarian Revolution,” in Knowing and Being: Essays by Michael Polanyi (London: Routledge & Kegan Paul, 1969). Michael’s view on the convergence of liberal and communist thought among Hungarian insurgents can be found in Michael Polanyi, The Tacit Dimension (Chicago: University of Chicago Press, 2009) and in Coleman, Liberal Conspiracy, 123. 167. KPA-52–4, Karl Polanyi to John, November 5, 1962. 168. KPA-37–1, Polanyi, “Hungarian Lesson.” 169. KPA-51–5, Karl Polanyi to Meszaros, April 24, 1961; KPA-37–1, Polanyi, “Hungarian Lesson.” 170. KPA-56–13, Polanyi to Irene, March 15, 1963. 171. Karl Polanyi, quoted in Duczynska, “Notes on His Life,” xix. Three years after Polanyi uttered these words, Hungarian planners commenced work on the New Economic Mechanism, which introduced market elements in the attempt to “reinforce an economic attitude at every level” of society. (Agitation and Propaganda Committee of the MSZMP Central Committee, 1966, quoted in Adam Fabry, “The International Political Economy of Neoliberal Transformation in Hungary: From the ‘Transition’ of the 1980s to the Current Crisis” (PhD thesis, School of Social Sciences, Brunel University, 2014). 172. KPA-55–1, Erich Fromm to Karl Polanyi, 1961. 173. It was a relationship of mutual respect. In Fromm’s Man for Himself, for example, the influence of Great Transformation is clearly visible. See also KPA-55–1, Karl

179. 180. 181. 182. 183. 184. 185. 186. 187. 188. 189.


191. 192. 193. 194. 195.

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175. 176. 177. 178.



Polanyi to Fromm, June 25, 1961; KPA-48–6, John Collier to Louis Adamic, May 20, 1951. The term, reminiscent of the “state capitalism” analysis of “Trotskyites,” was “unfair to Roosevelt and his New Deal,” and was “irrelevant to the ‘welfare state.’” KPA-38–1, Karl Polanyi, “Notes on the Draft Program of the CPSU,” 1961. KPA-42–2, Karl Polanyi to George, August 16, 1961. KPA-38–2, Karl Polanyi, “Soviet Thought in Transition,” 1961–1962. KPA-38–2, Polanyi, “Soviet Thought in Transition.” KPA-38–1, Karl Polanyi, “Notes on the Draft Program of the CPSU,” 1961; KPA-42–2, Karl Polanyi, Notes overwritten with “CPSU,” 1961. KPA-42–2, Polanyi, Notes overwritten with “CPSU.” KPA-38–1, Karl Polanyi, “Notes on the Draft Program of the CPSU,” 1961. KPA-42–2, Karl Polanyi to George, August 16, 1961. KPA-38–1, Karl Polanyi, “Notes on the Draft Program of the CPSU,” 1961. KPA-56–13, Karl Polanyi to Irene, October 22, 1962. What Polanyi made of Mao’s distaste for “peaceful coexistence” is not known. KPA-55–1, Karl Polanyi to Fromm, June 25, 1961. KPA-52–2, Polanyi to John, May 1, 1962. Polanyi, Livelihood of Man, li. KPA-56–13, Karl Polanyi to Irene Grant, December 12, 1958. KPA-56–13, Karl Polanyi to Irene, September 22, 1960. Polanyi argued that an additional factor was required to bolster Cuba’s defenses: “the politically motivated readiness of another power to step in.” KPA-51–4, Karl Polanyi to Mr. Stevenson, November 10, 1960. Polanyi was convinced that the political awakening would continue to gather pace, and that neutralism and/or the Soviet Union would be the beneficiaries (e.g. KPA57–8, Karl to Michael Polanyi, January 2, 1960). However, he recognized setbacks when they came, for example, in the ousting of Congo’s president Patrice Lumumba. “Instead of the Belgians’ exodus,” he argued, “the UN has sold out and will keep the fort for the US, with the rapprochement to USSR shelved. So the colonialists have scored a full victory and the new peoples are split, baffled and momentarily para lyzed.” MPP-17–12, Karl to Misi, October 10, 1960; KPA-51–5, Karl Polanyi to Rudolf, February 9, 1961. KPA-52–4, Polanyi to “honourable Mr. Doctor,” September 29, 1962. KPA-56–13, Polanyi to Irene, March 15, 1963; KPA-52–4, Polanyi to John, November 5, 1962; KPA-51–5, Karl Polanyi to Meszaros, April 24, 1961. KPA-56–13, Polanyi to Irene, March 15, 1963. Chris Harman, “1956 and the Rebirth of Socialism from Below,” International Socialism 112 (2006): 77–162. Polanyi left little indication of his thoughts on the Suez debacle, although according to Abe Rotstein’s transcripts of conversations with Polanyi (KPA-45–6, Rotstein, “Weekend Notes,” 1957, 26) he veered toward imperialist realism rather than radicalism, in the thesis that Britain’s withdrawal from Egypt represented a more calamitous error than its decision to invade.

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196. Edward Thompson, “Through the Smoke of Budapest,” in The Left in Britain, 1956–68, ed. David Widgery (Harmondsworth: Penguin, 1976 [1956]), 66. 197. Stuart Hall, “Life and Times of the First New Left,” New Left Review 61 (2010): 177–196. 198. David McNally, “E.P. Thompson: Class Strug gle and Historical Materialism,” International Socialism 61 (1993): 75–89. 199. Edward Thompson, “Socialist Humanism,” New Reasoner 1, no. 1 (1957): 105–143. 200. Thompson, “Socialist Humanism,” 112. 201. Thompson, “Socialist Humanism,” 125. 202. See, for example, Christopher Lind, “How Karl Polanyi’s Moral Economy Can Help Religious and Other Social Critics,” in Humanity, Society and Commitment: On Karl Polanyi, ed. Kenneth McRobbie (Montreal: Black Rose, 1994), 149; Tim Rogan, “Karl Polanyi at the Margins of En glish Socialism, 1934–1947,” Modern Intellectual History 10, no. 2 (2013): 344. 203. PFP-212–326, Karl Polanyi to Michael, January 5, 1958. 204. E. P. Thompson, The Making of the English Working Class (Harmondsworth, U.K.: Penguin, 1968), 913. 205. Hall, “Life and Times.” 206. Peter Sedgwick, “A Return to First Things,” Balliol College Annual Record, 1980, www.marxists.org /archive/sedgwick /1980/xx /gdhcole.htm. 207. Peter Sedgwick, “The New Left,” in The Left in Britain 1956–1968, ed. David Widgery (Harmondsworth, U.K.: Penguin, 1976 [1964]). 208. In this, New Left thinkers in Britain drew heavily on the work of their American brethren, Riesman, Galbraith, and Wright Mills. See Hall, “Life and Times.” 209. Sedgwick, “New Left.” 137. 210. Hall, “Life and Times.”185. 211. Hall, “Life and Times”; Sedgwick, “New Left.” 212. When asked why Polanyi’s article submitted to New Left Review was not published, Perry Anderson offered that the editorial “chaos” of early 1962 may have played a role. There followed a hiatus, as Anderson took over from the quartet who had edited New Left Review 11/12. When he took the helm “it was a bit like boarding a ghost-ship”—there were few fi les, few visitors, and no phone calls. Anderson, e-mail correspondence with the author, August and September 2013. Cf. KPA52–3, Kenneth Muir to Karl Polanyi, January 7, 1962. 213. For Marcuse, for example, socialism promised “freedom from the economy; from the daily strug gle for existence,” Herbert Marcuse, One-Dimensional Man (Boston: Beacon Press, 1991 [1964]). Compare Polanyi’s “Freedom from Economics” discussed in chapters 5, 6, and 7. 214. Polanyi’s drafts on “freedom and technology” contain elements of a convergence theory, as do some of his writings on Soviet history. For example, in KPA-42–17 (Karl Polanyi, “Plan for Work” [n.d.]) he maintains that “international conditions formed an appreciable factor” in the USSR’s decision to opt for agricultural collectivization and breakneck industrialization. “To the degree in which this could be shown to be the case, Rus sia would have to be regarded as influenced by the same political and economic factors which determined the institutional change


223. 224. 225. 226. 227. 228. 229. 230. 231. 232. 233.

234. 235. 236. 237.

238. 239.

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215. 216. 217. 218. 219. 220.

in Western civilization.” This argument, however, is phrased tentatively and should not be assimilated either to the Mills-Marcuse thesis that East and West were converging toward a condition of repressive bureaucratization or to Clark Kerr’s “pluralist-industrialist” convergence theory. KPA-55–1, Karl Polanyi to Fromm (n.d.). KPA-51–5, Ilona Duczynska to Doreen, February 18, 1961. KPA-52–1, Karl Polanyi and Ilona Duczynska to Professor Infeld, May 18, 1961. KPA-51–5, Karl Polanyi to Rudolf Schlesinger, January 31, 1961. KPA-52–1, Polanyi and Duczynska to Infeld, May 18, 1961. KPA-52–4, From Karl or Ilona to Kenneth, October  18, 1962; KPA-53–1, Karl Polanyi to Paul Medow, January 4, 1963. KPA-52–3, Karl Polanyi and Rudolf Schlesinger to Professor Arzumanyan, June 1962; KPA-53–3, Karl Polanyi to Cyrus Eaton (ca. 1964). The phrase “coexistence” had cropped up in previous eras of Soviet foreign policymaking. It was Trotsky’s watchword at Brest-Litovsk. But in Trotsky’s case it possessed a quite different meaning: a temporary accommodation with a belligerent enemy in a period in which the survival of the socialist revolution in Russia depended on its emulation elsewhere. Isaac Deutscher, The Prophet Armed: Trotsky 1879–1921 (London: Verso, 2003), chapter 11. KPA-30–2, Karl Polanyi, “Polanyi on Polanyi,” 1958–1960. KPA-50–1, Karl Polanyi to Car ter Goodrich, February 12, 1957. KPA-30–2, Polanyi, “Polanyi on Polanyi.” PFP-212–326, Karl to Misi, February 23, 1956. KPA-51–3, Polanyi, “Proposal for a Survey of Socialist Thought.” PFP-212–326, Karl to Misi, February 23, 1956. KPA-53–3, Polanyi to Eaton (ca. 1964). KPA-52–4, Ilona Duczynska to Esther Simpson, August 21, 1962. MPP-17–13, Karl Polanyi to Michael (n.d.). Geoff rey Harcourt, and Prue Kerr, Joan Robinson (London: Macmillan, 2009). KPA-51–5, Karl Polanyi to Istvan Meszaros, April 24, 1961; Letter from Karl Polanyi and Ilona Duczynska to Istvan Meszaros, March  30, 1961, reproduced in Gareth Dale, ed., Karl Polanyi: The Hungarian Writings (Manchester: Manchester University Press, 2016). Michael Wolfers, Thomas Hodgkin: Wandering Scholar—A Biography (Brighton, U.K.: Merlin Press, 2007), chapter 3. Wolfers, Hodgkin, 136, 157, 189. R. Beerman, “Rudolf Schlesinger: An Appreciation,” Soviet Studies 21, no. 4 (1970). 409–410. Recollection of Stephen White, personal communication, September 11, 2013; Beerman, “Rudolf Schlesinger”; Zsuzsi Meszaros, personal communication. Schlesinger’s wife, she adds, was of a kindred species. When she visited her family, “I remember opening the door. She was planted there like a tank and declared ‘I am come!’ At mealtimes we’d have to duck to avoid the food spraying from her mouth.” Kari Polanyi-Levitt, interview, December 2008. KPA-53–1, Karl Polanyi to Rudolf Schlesinger, 1963.

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240. KPA-52–4, Duczynska to Simpson, August 21, 1962. 241. Russell’s association with the Congress had been uneasy. He thrice resigned his honorary chairmanship before fourthly and finally resigning in 1956. KPA-52–4, Polanyi or Duczynska to Kenneth, October 18, 1962; KPA-52–4, Duczynska to Simpson, August 21, 1962; Coleman, Liberal Conspiracy, 165. 242. KPP-1–4, Polanyi to Fromm, January 14, 1961. 243. Carr’s position quickly shifted to “friendly expectancy.” KPA-51–5, Duczynska to Doreen, February 18, 1961; KPA-51–5, Carr to Polanyi, January 17, 1961. 244. KPA-51–4, Karl Polanyi to Rudolf Schlesinger, February 18, 1961. 245. KPA-58–1, Karl Polanyi to Hans Zeisel, February 17, 1961. 246. Frye was not a close friend of Polanyi or Duczynska but did know and admire The Plough and the Pen. KPA-53–2, Northrop Frye to Polanyi, July 25, 1963; KPA-53–2, Karl Polanyi to C. P. Snow, November 1963. 247. Schlesinger “disagreed with its arguments and refused to publish it. Polanyi was shocked. The editor’s decisions, he said, should not be determined by whether he agrees with the content, and if he disagreed with it, he could say so in print.” Immanuel Wallerstein, interview. 248. KPA-52–4, Polanyi or Duczynska to Kenneth, October 18, 1962; Costello, Macmurray, 347. 249. KPA-53–3, Karl Polanyi to Parsons, February 16, 1964; KPA-53–3, Talcott Parsons to Polanyi, March 13 and April 6, 1964; Karl Polanyi to Robert Merton, September 16, 1963. A copy of this letter, from Columbia University’s Butler Library, was kindly passed to the author by Dan Tompkins. 250. KPA-52–4, Karl Polanyi to Nathan Glazer, October 5, 1962; KPA-53–1, Ilona Duczynska to Schlesinger, April 15, 1963; KPA-52–4, David Riesman, Correspondence (n.d.). 251. KPA-53–1, David Riesman to Polanyi, April 3, 1963. 252. KPA-53–1, Polanyi to Medow, January 4, 1963. 253. KPA-53–2, Karl Polanyi to Terry Hopkins, December 15, 1963; KPA-53–1, Polanyi to Medow, January 4, 1963. 254. KPA-52–4, Edward Shils to Esther Simpson, September 28, 1962. 255. KPA-53–2, Polanyi to Hopkins, December 15, 1963. 256. KPA-59–8, Karl Polanyi to Misi, April 28, 1947; Karl Polanyi to Robert Merton, September  16, 1963. A copy of this letter, from Columbia University’s Butler Library, was kindly passed to the author by Dan Tompkins; KPA-52–4, Duczynska to Simpson, August 21, 1962; KPA-51–5, Duczynska (1961) to Doreen, February 18, 1961. 257. Polanyi was eager to secure “high level contributions” from the Soviet Union, and, with Paul Medow’s assistance, he approached a number of individuals—such as Professor Arzumanyan, Head of the Institute of World Economics and International Relations in Moscow—but without success. However, the fourth and fifth issues did broaden the representation from the Soviet bloc, with contributions from the Polish scholars Oscar Lange, Wlodzimierz Brus, and Zygmunt Bauman. KPA-52–2, Karl Polanyi to Paul Medow, September  17, 1961; KPA-52–3, Karl Polanyi to Arzumanyan, June 1962.

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258. KPA-53–1, Rudolf Schlesinger to Robert Maxwell, January 5, 1963. Cf. McRobbie, “Memories of Childhood.” 259. KPA-59–3, Ilona Duczynska to Kari, September 10, 1965. Pergamon was later utilized by Maxwell to murky ends—the fi rst of his many frauds. 260. KPA-59–3, Ilona Duczynska to Kari, September 10, 1965. 261. Kari Polanyi-Levitt, telephone interview, April 2009. 262. These included Gunnar Myrdal (KPA-51–5, Polanyi to Myrdal, January 31, 1961; KPA-52–4, Karl Polanyi to Rudolf Schlesinger, August 18, 1962); A. J. P. Taylor and Isaac Deutscher (KPA-53–1, Karl Polanyi and Ilona Duczynska to Esther Simpson, March 26, 1963); C. B. Macpherson (Karl to Robert Merton, September 16, 1963; a copy of this letter from Columbia University’s Butler Library was kindly passed to the author by Dan Tompkins); Basil Davidson (KPA-51–5, Duczynska to Doreen, February 18, 1961) and Joseph Needham (KPA-53–1, Polanyi and Duczynska to Simpson, March 26, 1963). 263. KPA-38–7, Karl Polanyi, “Reflection on the article titled ‘Text of Pope John’s Encyclical “Pacem in Terris,” Calling for a World Community,’” 1963. 264. Issue 1 of Co-Existence sold 451 copies, mainly in North America, with twenty-two sold in Britain. Co-Existence morphed into Coexistence in 1984 and International Politics in 1996. KPA-54–1, Rudolf Schlesinger to Robert Maxwell, January 3, 1965. 265. PFP-212–326, Karl to Misi, October 21, 1959. 266. KPA-58–1, Karl to Kari January 30, 1959. 267. KPA-56–13, Karl to Irene, December  12, 1958; KPA-29–12, Duczynska, “Karl Polanyi.” 268. KPA-56–8, Karl to Laura, November 27, 1959; KPA-51–5, Karl to Harry, January 5, 1961. 269. Polanyi most likely knew Postan through his wife, Eileen Power or through Tawney. KPA-51–1, Ilona and Karl Polanyi to Esther Simpson, November 24, 1959. Cf. MPP-17–12, Karl Polanyi to Misi, May 15, 1957; KPA-51–1, Karl Polanyi to Harry, October 29, 1959. 270. KPA-51–2, Ilona Duczynska to Valiani, April 11, 1960. 271. MPP-17–12, Karl Polanyi to Misi, December 16, 1959. 272. PFP-212–326, Karl to Misi, October 21, 1959; KPA-52–1, Polanyi and Duczynska to Infeld, May 18, 1961. 273. KPA-51–1, Karl Polanyi to Norman Thomas, November 30, 1959. 274. MPP-17–12, Karl to Misi, December 16, 1959. 275. KPA-51–3, Leo Valiani to Ilona Duczynska, 1960. 276. KPA-51–4, Karl Polanyi to Toni Stolper, December 6, 1960. 277. They did not follow up with correspondence, lest it “embarrass him.” KPA-53–1, Ilona Duczynska to Professor Vogt, 1963. 278. KPP-1–4, Polanyi to Fromm, January 14, 1961. 279. Anne Chapman, telephone interview. 280. This time visa problems did not force its cancellation. KPA-53–2, Karl Polanyi to Paul Bohannan, September 20, 1963. 281. KPA-59–3, Ilona to Kari, October 10, 1963. 282. KPA-53–2, Karl Polanyi to Harry Pearson, September 25, 1963.


•  7 . T H E P R E C A R I O U S N E S S O F E X I S T E N C E

283. 284. 285. 286.

KPA-59–3, Ilona to Kari, October 10, 1963. Mihály Simai, interview. KPA-59–3, Ilona to Kari, October 10, 1963. Mihály Simai, interview, 2010, and e-mail to the author, August 2013.

EPILOGUE 1. Jamie Peck, Constructions of Neoliberal Reason (Oxford: Oxford University Press, 2010), 27. 2. Neil Davidson, “Introduction: What Was Neoliberalism?,” in Neoliberal Scotland: Class and Society in a Stateless Nation, ed. Neil Davidson, Patricia McCafferty, and David Miller (Newcastle: Cambridge Scholars Press, 2010). 3. Philip Mirowski and Dieter Plehwe, eds., The Road from Mont Pèlerin: The Making of the Neoliberal Thought Collective (Cambridge, Mass.: Harvard University Press, 2009); Philip Mirowski, Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown (London: Verso, 2013). 4. Jamie Peck, Nik Theodore, and Neil Brenner, “Postneoliberalism and Its Malcontents,” Antipode 41, no. 1 (2010): 94–116; Gareth Dale and Nadine El-Enany (2014) “The Limits of Social Europe: EU Law and the Ordo-Liberal Agenda,” German Law Journal 14, no. 5 (2014): 613–650. 5. KPA-21–22, Karl Polanyi, “Community and Society,” 1937; Steven Greenhouse, “In Mott’s Strike, More Than Pay at Stake,” New York Times, August 17, 2010, www .nytimes.com /2010/08/18/ business/18motts.html. 6. KPA-18–8, Karl Polanyi, “The Fascist Virus” (n.d.); Gerri Peev, “‘Starve the Workshy into Taking a Job’: Labour Peer Says Cut Dole for Young,” Daily Mail, April 26, 2010, www.dailymail .co.uk /news/article -1268744 / Labour-peer-Digby-Jones -says-cut-benefits-young-people.html#ixzz0mHUPM7pf. 7. John Saville, “Hugh Gaitskell (1906–1963): An Assessment,” Socialist Register (1980): 148–169. 8. George Lukacs, The Historical Novel (Lincoln: University of Nebraska Press, 1983). 9. Karl Mannheim, Ideology and Utopia (London: Routledge, 1991). 10. Karl Polanyi, paraphrased by Michael Burawoy, “For a Sociolog ical Marxism: The Complementary Convergence of Antonio Gramsci and Karl Polanyi,” Politics & Society 31, no. 2 (2003): 258. 11. Gareth Dale, “Capitalism and Migrant Labour,” in The European Union and Migrant Labour, ed. Gareth Dale and Mike Cole (Oxford: Berg, 1999) 281–314; Mike Kidron, The Presence of the Future, unpublished book manuscript (n.d.). 12. Burawoy, “Sociolog ical Marxism,” 258. 13. Timothy David Clark, “Reclaiming Karl Polanyi, Socialist Intellectual,” Studies in Political Economy 94 (2014): 76. 14. Chris Hann and Keith Hart, “Introduction: Learning from Polanyi,” in Market and Society: The Great Transformation Today, ed. Chris Hann and Keith Hart (Cambridge: Cambridge University Press, 2011), 8; Keith Hart, “Money in the Making of World Society,” in Market and Society: The Great Transformation Today, ed.


18. 19.

20. 21.

22. 23. 24. 25.

•  E P I L O G U E




Chris Hann and Keith Hart (Cambridge: Cambridge University Press, 2011), 103; Phillipe Steiner, “The Critique of the Economic Point of View: Karl Polanyi and the Durkheimians,” in Market and Society: The Great Transformation Today, ed. Chris Hann and Keith Hart (Cambridge: Cambridge University Press, 2011), 59–60. Cf. Alasdair Macintyre, Against the Self-Images of the Age: Essays on Ideology and Philosophy (London: Duckworth, 1971), 40; Claus Offe, Contradictions of the Welfare State (London: Hutchinson, 1984), 263. Maria Szecsi, daughter of Sophie, emigrated to the United States and then returned to Austria after the war. She supported communism until shortly after the Hungarian uprising, when she gravitated toward social democracy. Erzsébet Vezér, “The Polanyi Family,” in The Life and Work of Karl Polanyi, ed. Kari PolanyiLevitt (Montreal: Black Rose. 2000), 25. Cited in Max Koch, Capitalism and Climate Change: Theoretical Discussion, Historical Development and Policy Responses (Houndmills, U.K.: Palgrave, 2011), 69–70. See, for example, Brian Roper, The History of Democracy: A Marxist Interpretation (London: Pluto, 2012). I develop this in Gareth Dale, “Social Democracy, Embeddedness, and Decommodification,” New Politi cal Economy 15, no. 3 (2010): 369–393; and Gareth Dale, “Polanyian Perspectives on the Neoliberal Age,” Current Sociology 60, no. 1 (2012): 3–27. See, for example, Richard Tawney, The Choice before the Labour Party (London: Socialist League, 1933). Jean-Michel Servet, e-mail to the author, May 2011; Maurice Glasman, “Debt and Democracy: National Economic Institutions in a Global Order,” paper presented to the New Political Economy Network, London, May 2012. Karl Polanyi, “Hamlet,” Yale Review 43, no. 3 (1954): 336–350. Burawoy, “For a Sociolog ical Marxism,” 258; and as discussed in Gareth Dale, Karl Polanyi: The Limits of the Market (London: Polity, 2010). Walter Benjamin, “Left-Wing Melancholy,” Screen 15, no. 2 (1974): 28–32. For explication, see Gareth Dale, (2014) “Karl Polanyi in Vienna: Guild Socialism, Austro-Marxism, and Duczynska’s Alternative,” Historical Materialism 22, no. 1 (2014): 34–66; and Gareth Dale, “The Iron Law of Democratic Socialism: British and Austrian Influences on the Young Karl Polanyi,” Economy & Society 43, no. 4 (2014): 650–667.


Academic Assistance Council, 115–116 acculturation. See assimilation Adler, Alfred, 15, 99 Adler, Max, 101, 283, 286, 315n194 adult education. See education: workers’ education Ady, Endre, 3, 22, 32–33, 54, 240 alcohol, 32, 99, 305n184 Alliluyeva, Nadya, 274 America. See United States American institutionalism, 227, 229–234 anarchism, 4, 67, 74, 76, 117, 248, 287, 305n164. See also syndicalism Andrassy Avenue, 11–12, 18 anglophilia, 16, 46, 55, 110, 113, 153–154 anthropology, 28–29, 203, 205, 216, 219–221, 227, 231, 233–234, 238, 241, 250, 284 anticommunism, 179–180, 194, 211, 222, 242, 257–259, 272, 327n194, 356n26 antifascism, 107, 117–118, 120, 127, 178, 260, 317n241 anti-semitism, 21–27, 30–31, 40–41, 45, 53, 108, 119, 121, 161–162, 179,

338n148, 301n84, 316n204, 318n257, 338n148 Arensberg, Conrad, 216, 218, 349n147 Aristotle, 219, 230–231, 234, 351n195 Arnold, Rosemary, 220, 349n147 assimilation, 15, 18–27, 30–31, 39, 293n52 Athens. See Greece atomization of society. See fragmentation of society Attlee, Clement, 187–189, 201, 221–222 Auden, Wystan, 128, 158, 240, 260, 355n6 Austria, 14, 23, 31, 54, 71, 73–111, 117–118, 120–123, 177, 191; invasion by Germany, 117–119. See also Austro-Hungarian Empire; nationalism Austro-Hungarian Empire, 1–2, 19, 23, 29, 53–57, 62, 102, 191; 1867 Compromise, 23. See also Austria; nationalism Balázs, Béla, 3, 18, 75, 298n14 Balliol College, 130–134, 172, 200, 270, 274, 361n132 Bartok, Bela, 2–3, 32–33, 202, 280

•  I N D E X 372

Bauer, Otto, 34, 54, 56, 64, 67, 71, 84–85, 89, 101–104, 283, 286, 311n127, 315n198, 317n241 Bauman, Zygmunt, 366n257 Bedales School, 148, 158 Bell, Daniel, 249, 261 Benjamin, Walter, 288 Bennington College, 157–166, 169, 196, 205, 223, 256 Bentham, Jeremy, 155–156, 219 Bernstein, Eduard, 34, 48 Beveridge, William, 115, 132, 188, 319n19 Bevin, Ernest, 194, 197 Bohannan, Paul, 219, 275 Bolshevism. See communism Borkenau, Franz, 128, 167, 259 bourgeois radical movement, 25, 33, 49–52, 287. See also Radical Bourgeois Party Brandt, Willy, 196, 263, 362n154 Bretton Woods, 192–197, 341n220 Bright, John, 16, 50 Britain, 10, 16–20, 28, 39, 46, 159–169, 173–182, 186–194, 204–206, 211–215, 267–271, 284–285, 320n51, 331n279, 335n102; foreign policy, 75, 182, 186, 189–194, 197–198, 267, 341n223, 341n220, 363n165; Ilona’s life in, 159–166, 201, 210; labor movement, 16, 84–86, 103, 153, 186–187, 189, 198, 203, 323n117; market economy, 6, 132, 136, 154, 167, 353n239; Polanyi’s life in, 109–111, 113–157, 165, 171, 173, 201, 214–215, 221–222. See also anglophilia Budapest, 1–3, 11–12, 18, 31–32, 41–44, 58, 60, 63–64, 67, 70–71, 152, 199–201, 269, 278–280; Jewish community, 22–23, 26, 31, 174 Burawoy, Michael, 288 Burke, Edmund, 5, 124, 155, 332n290 Canada, 145, 163, 165, 205, 211, 213–217, 240, 261, 278, 346n79 capitalism, 5–6, 20, 24, 31, 36, 48–51, 114, 129, 134, 137–138, 154–155, 179,

187–188, 231–232, 246, 281, 282–284; and democracy, 102–105, 123–126, 168–169, 191; and fascism, 123–126; and The Great Transformation, 167; liberal capitalism, 5, 93, 123–126, 168, 194–197, 202, 222–226, 255; neoliberal capitalism, 281–288; organized capitalism, 48, 125, 196, 253, 285; state capitalism (USSR), 141–143, 200, 363n174 Carey, Henry, 49–50, 231 Carlyle, Thomas, 25 Carr, Edward, 167, 275, 279, 366n243 Central Europe, 20–23, 30, 49, 81, 84, 163, 215. See also Eastern Europe; Mitteleuropa Central Intelligence Agency, 259, 261, 263, 361n144, 361n148 Chapman, Anne, 216–218, 279, 348n127 Chesterton, G. K., 47–48, 75 China, 144, 190, 198, 267, 274, 278, 327n203 Christ, Jesus, 40, 55, 60–61, 129–130, 137, 139, 252 Christianity, 6, 8, 13, 18, 22, 30, 37, 40–41, 48, 60–61, 75, 97, 100, 120–121, 128–130, 132–133, 136, 145, 171, 254, 330n247, 349n156; Catholicism, 31, 122, 317n226; Christian anarchism, 4; Christian Social movement (Austria), 31, 103, 106, 108, 122; Protestantism, 27, 60, 77, 108, 161; Student Christian Movement, 113, 346n79. See also liberalism: Christian liberalism; socialism: Christian socialism Chrysanthemum Revolution. See Hungary: 1918 revolution Churchill, Winston, 182, 194, 339n165, 340n208 Clark, John Maurice, 202–203, 230 Cluj. See Kolozsvár Cobden, Richard, 16, 50 co-existence, 272–273, 365n222 Co-Existence, 17, 223, 263, 272–280, 367n264

Dahomey, 214, 220–221, 228, 235, 241 Dalton, George, 219 dance, 13, 98–99, 158–159, 278 determinism, 34–35, 47–49, 66–67, 106, 225, 228–229, 269, 335n94, 356n28 Deutscher, Isaac, 30–31 Dewey, John, 158, 202, 332n17, 343n23, 343n28 disembeddedness. See embedded economy Dollfuss, Engelbert, 102, 108–109, 118, 122 Dostoevsky, Fyodor, 14, 16, 48, 125 double movement, 135–136, 156, 170, 242, 253, 285–286 Drucker, Peter, 8, 81, 159, 167, 353n239 Duczynska, Ilona, 147–150, 157–166, 171–173, 176, 192, 199–202, 207–216, 260, 307n30, 308n50, 318n245, 320n38, 332n1, 333n22, 333n28, 355n11; and Canada, 163, 214, 346n79; political commitments, 65, 75–77, 98, 106–109, 117–118, 140, 164, 178–179, 185–186, 200, 274–278, 337nn142–143, 338n153; relationship with Polanyi, 75–80, 98, 109–110, 113, 147–150, 160–166, 207–216, 239–240, 258, 278–279, 308n45; and United States, 162–166, 201–202, 207–214 Dühring, Eugen, 49–50 Durkheim, Emile, 55, 83, 234, 243 duty, 3–4, 55–56, 131, 134, 161, 212, 232, 266

•  I N D E X

139, 147, 167, 169, 172, 253; cultural/ spiritual, 1, 4, 31, 36, 48, 52, 81; economic, 1, 48, 50, 87, 104, 108, 124, 167, 195, 248, 281; political, 1, 48, 52, 81, 124; scientific, 97; social, 4, 81, 104, 128, 167. See also Great Depression Croix, G. E. M. de Ste, 237–238, 354n243 Crossman, Richard, 192–193, 259, 317n241 Cuba, 161, 267–268, 363n189


Cold War, 181, 197, 242, 259–263, 271–273, 275–276, 279 Cole, G. D. H., 84–86, 101, 110, 115, 122, 130–132, 151, 172, 203, 270–271, 283, 286–287, 321n64, 361n132 Columbia University, 146, 161, 201–208, 212, 214–218, 226–229, 232, 242, 249–250, 253, 271, 273, 276, 289n5, 343n23, 349n147 Comintern, 17, 77, 118, 146, 180, 182, 259, 327n194 commodity, 5, 7, 91, 231, 247, 314n172, 332n290; commodification, 31, 155, 283, 286; commodity fetishism, 96, 136–138; fictitious commodities, 155–156, 168, 282, 285 Commons, John, 352n207 communism, 7, 27, 54, 61–70, 75–76, 85, 105–106, 114, 128, 136, 142–143, 209, 259, 265–269, 280, 283, 322n95. See also anticommunism; Marxism communist parties: Austria, 118; Britain, 274; Germany, 77; Hungary, 64–65, 70–71, 77, 185–186, 199–200, 210, 218, 222, 280, 304n162; Russia, 141, 264–266; Spain, 180–181; United States, 257 communitarianism, 3, 39–40, 84, 133 Comte, August, 46 Condliffe, J. B., 115, 164 Congress for Cultural Freedom, 259, 262, 361n133, 361n135, 361n148, 362n154 Connolly, James, 54 conservatism, 23, 36–37, 47, 55, 63, 70, 73, 75–76, 124, 156, 180, 186, 192, 194–197, 250, 257, 266, 285, 290; as Hungarian anti-semitism, 25, 31, 41, 54; in United States, 145–146, 195, 222, 242, 338n148 corporatism, 34, 84, 86, 89, 118, 122–123, 161, 169, 285 cosmopolitanism, 2, 3, 22–26, 37–40, 54–56. See also internationalism crisis: civilizational/general, 7, 31, 65, 81–82, 114, 126, 128, 130, 133, 135,

•  I N D E X 3 74

Eastern Europe, 3, 19, 20–25, 39, 174, 181–185, 198, 201, 210, 222, 276 economic planning. See planning education: education reform, 69–70, 89, 99, 151, 188; socialist education, 35, 99, 103, 105, 151, 188–189; workers’ education, 34–35, 42, 45, 99, 105, 115, 144, 148, 150–152, 167, 173, 189, 214, 269 embedded economy, 5–7, 126, 155, 220–221, 226–227, 234, 243, 253, 266, 350n178, 354n243 emigration, 10, 21, 33, 109–110, 140, 165, 317n241. See also refugees Encounter, 261, 263, 269 Engels, Friedrich, 50, 269, 315n194 England. See Britain Enlightenment, 2, 20, 28, 36, 38, 47, 53, 67, 230 equality, 21, 51, 61–62, 86, 121, 123, 126, 128, 133, 146, 152, 154, 171, 236, 246 Ernst Mach Society, 108 eurhythmics, 14, 84, 292n28 European Economic Community, 196. See also Schuman Plan evolution (social), 34, 37, 81, 138, 231, 253. See also progress exile. See emigration; Hungarian exiles Fabianism. See Labour Party; social democracy fascism, 1, 4–5, 71, 104–109, 114, 118–127, 146, 149, 162, 167–169, 206, 260, 317n226, 330n247, 338n160; Austrofascism, 102–103, 108, 118, 120–126. See also antifascism; Spann, Othmar feminism, 15, 51, 73, 115 Finley, Moses, 217–219, 348n134, 353n230 First World War, 53–60, 68, 105, 134 Firth, Raymond, 226–227, 241 Ford Foundation, 216, 259, 262, 289n5 fragmentation of society, 5, 36, 46, 83–84, 91, 93, 102, 138, 241 freedom. See liberty

freemasonry, 25, 42 Freud, Sigmund. See psychoanalysis Fromm, Erich, 99, 159, 167, 204, 266, 271, 277, 304n162, 362n173 Frye, Northrop, 275, 366n246 functionalism, 52, 203, 234, 241–244, 249 functional theory, 37, 86–88, 101–102, 122–123, 134, 221, 243, 265, 313n154 Gaitskell, Hugh, 260, 361n132 Galbraith, John Kenneth, 245–246, 249, 260, 275 Galileo Circle, 18, 30, 33, 42–47, 54, 64–65, 76, 199, 261, 280 gemeinschaft. See communitarianism; Romanticism German Historical School, 36, 81, 89, 232, 351n205 Gerő, Ernő, 199–200 gesellschaft. See capitalism; individualism; liberalism Goethe, Johann Wolfgang von, 16 Goodrich, Carter, 202–203, 205, 208, 215, 343n28 Gramsci, Antonio, 52 Grant, Don, 8, 148, 153, 216 Grant, Donald, 113–115, 127, 145, 148–149, 278, 329n244 Grant, Irene, 113–115, 127, 145, 148–149, 263, 329n244 Great Depression, 5, 10, 128, 146, 167. See also crisis Great Ditch explanations, 6–7, 290n17 Great Generation, 3–4, 292n28 great transformation, 7, 146, 167, 187, 228, 253, 264, 267, 286. See also The Great Transformation The Great Transformation, 6, 48, 59, 104, 134, 136, 147, 154, 156, 160–161, 163, 166–173, 191, 201–202, 205–206, 220–223, 226, 228, 244, 253, 256, 286–287, 304n163, 330n247, 335n83, 343n23, 348n143, 362n173. See also great transformation

Ignotus, Paul, 41, 46, 260–263 image of society, 66, 84, 166, 169, 253

Jacques-Dalcroze. See eurhythmics Jahoda, Marie, 108, 204, 317n241 Jaszi, Oscar, 3, 15, 19, 27, 33–34, 46, 68–71, 78, 119, 172, 262, 300n56, 306n199, 338nn148–149; political commitments, 36–37, 49–56, 63–65, 179, 183, 302n90, 307n25; relationship with Polanyi, 74–75, 144 Jews, 39–41, 60, 62, 115, 121, 128, 157, 161–163, 177, 179–180, 194, 222, 263, 293n52, 294n67, 294n85, 295n90; in Central/Eastern Europe, 3, 13, 20–28, 53, 163, 293n58, 295n106; in Hungary, 11–15, 17–20, 22–31, 44–45, 55, 83, 174, 301n83, 304n154. See also anti-semitism; assimilation; Holocaust Kant, Immanuel, 36, 39, 48, 55, 101, 315n194 Kapp, Karl-Wilhelm, 207, 215 Károlyi, Mihály, 51, 54–55, 62–63, 67–69, 75, 178–180, 183–187, 199, 201, 222, 260, 307n25, 337n143, 338n149, 355n6. See also Hungarian National Council

•  I N D E X

Haberler, Gottfried, 81, 115 Habsburg Empire. See AustroHungarian Empire Haeckel, Ernst, 46 Halasz, Nikolas, 215 Hamlet, 59–60, 77, 143, 287 Hauser, Arnold, 3 Havas, Endre, 199, 201, 240, 355n6 Hayek, Friedrich von, 81, 89–94, 257, 281, 312n144, 312n146 Healey, Denis, 200, 260 Hilferding, Rudolf, 34, 84, 89, 101 Hitler, Adolf, 126, 167, 255 Hitler-Stalin Pact, 181, 256, 268 Hodgkin, Thomas, 274 Holocaust, 54, 159, 174–177, 180 Hopkins, Terry, 217, 219, 221, 243, 275 Horthy, Miklós, 54, 71, 75, 180. See also fascism; White Terror humanism, 45, 61, 139, 223, 269 Hungarian exiles, 75–76, 178–180, 185, 211, 260–263 Hungarian National Council, 62–64, 68 Hungary, 2–3, 18, 33, 62–64, 119, 174, 199–201, 212, 239–240, 260, 268, 279; Hungarian nation and nationalism, 11, 18–19, 23–26, 28, 31, 39, 52–53, 68–69, 144, 180, 186, 199–200, 265, 339n189; New Democratic Hungary movement, 178–187, 337n142, 339n181; 1918 revolution, 46, 61–64, 102; 1919 Councils’ Republic, 69–71, 88, 306n198; 1956 uprising, 10, 239, 264–265, 268–270, 278. See also Hungarian exiles; Károlyi, Mihály; Social Democratic parties: of Hungary Husserl, Edmund, 97

immigration, immigrants, 19, 24–26, 119, 178; immigration control, 161–165, 176–177, 208–210, 258 individualism, 2–5, 36, 82, 84–86, 121–122, 129–130, 133, 154, 167, 231, 241, 244, 248; methodological individualism, 47, 93 Industrial Revolution, 6–7, 20–21, 132–136, 155, 225, 246, 249, 270 industrial society, 6, 37, 49, 126, 129–130, 137, 139, 205, 224, 249–251 institutionalism, 172, 202–203, 207, 227, 229–234, 238, 351n205 intelligentsia, 14, 32, 37, 51–52, 69, 131 internationalism, 37–38, 56, 69, 121, 147, 181. See also Comintern; cosmopolitanism; Second International Israel, 194, 269, 341n223. See also Zionism


Greece (Ancient), 215, 218, 228, 235–238 Green, Thomas, 131–133, 343n23 Greene, Graham, 153


•  I N D E X

Kelsen, Hans, 73, 81, 315n198 Kerr, Clark, 249, 364n214 Keynes, Maynard, 131, 194, 341n220; General Theory, 246 Keynesianism, 5, 173, 256–257, 277 Khrushchev, Nikita, 255, 264, 272, 278 Kipling, Rudyard, 16, 153 Klatschko, Samuel and Anna, 14, 175 Kodaly, Zoltan, 3, 292n28 Koestler, Arthur, 12, 29, 70, 142–143, 180, 258–261, 317n241, 327n194, 329n236, 338n153 Kolnai, Aurel, 75, 81, 167 Kolozsvár, 42 Kropotkin, Peter, 49 Kun, Béla, 67–71, 77 Labour Party, 16, 50–51, 85, 103, 130–131, 146, 182, 186, 188–189, 191–194, 198, 222, 269–271, 274, 282–285, 307n25, 323n117. See also Attlee, Clement Landes, David, 249, 347n110, 348n134 land reform, 45, 50–51, 63–64, 180, 185–186, 200 Lange, Oskar, 276, 366n257 Laski, Harold, 110, 115, 116, 131, 204, 323n117, 324n130 Lawrence, D. H., 8, 153, 250 Lazarsfeld, Paul, 108, 119, 158, 202–204, 344n41 League of Nations, 87 Lederer, Emil, 89, 92, 119, 241 Lenin, 54, 106, 209 Leon, Abram, 21 liberalism, 2–3, 5–7, 11, 14–17, 19, 25, 29, 31, 33–34, 36, 38–40, 45, 48, 51, 53–55, 62–63, 75–76, 81, 83, 100, 102–103, 105, 114, 121, 123–126, 131–132, 156, 159, 167–170, 222, 240, 265, 268, 362n166; Christian liberalism, 129–132; Cold War liberalism, 242, 259; economic liberalism, 5–7, 17, 29, 31, 88–94, 102, 154, 156, 167–170, 192– 197, 225–226, 257, 281–288; liberal bourgeoisie, 1, 16, 20, 22; liberal

nationalism, 66; Liberal parties, 23, 132, 322n95; liberal pluralism, 356n30. See also nationalism liberal socialism, 4, 34, 49–50, 65, 84, 86, 93, 138, 179, 248, 272, 300n59, 305n164 liberty, 4, 38, 76, 85, 97, 104–105, 122–125, 137, 179, 183, 195, 200, 228–229, 236, 247–248, 250–254, 271, 283; in Britain, 124, 146, 152–153; and Christianity, 60, 171, 128–129, 133; “freedom and technology,” 221, 242, 247–253; Freedom from Economics, 168, 170, 220, 271, 364n213; and market economy, 50, 93, 95, 248; in United States, 124–125, 146, 195, 211, 261, 268 Lindsay, A. D., 130, 132–133, 173, 201, 251, 319n11, 324n130 Lipset, Seymour Martin, 203, 249 The Livelihood of Man, 235, 353n230 Long, Breckinridge, 162–163 Lueger, Karl, 31, 41 Lugosi, Bela, 179 Lukacs, Georg, 1, 3–5, 12, 18, 29–30, 36, 77, 83, 128, 137, 276, 283, 298n14, 306n190; political commitments, 54, 65–67, 70, 304n162; relationship with Polanyi, 1, 16, 43, 69, 279 Luxemburg, Rosa, 77, 294n85 Mach, Ernst, 46–48 machine. See technology Machine Age (and “machine civilization”), 7, 223–225, 248–251, 255 MacIver, Robert, 171, 202, 204–205, 213, 175, 344n37, 345n55 Macmurray, Betty, 113–115, 127, 148–149 Macmurray, John, 113–115, 127, 128, 132, 136–137, 148–149, 275, 319n11, 323n110 Maine, Henry, 38, 310n99 Malinowski, Bronisław, 29, 226, 234, 241, 250 Malthus, Thomas, 124, 132, 156, 230–231, 282

narodism. See populism nationalism, 19–26, 31, 37, 39, 45–46, 53–58, 64, 66, 68–69, 144, 180, 209–210, 242, 265–266, 279; in Austro-Hungarian Empire, 19–20, 23, 39, 51; Jewish nationalism, 20–22, 28; national minorities, 64–65, 67; nation-state system, 1, 19, 38, 56, 244, 255. See also Hungary; regionalism nationalization of fi nance and industry, 70, 89, 123, 188–189, 193, 267. See also planning NATO, 220, 222, 271 Neale, Walter, 217, 240, 275 Needham, Joseph, 128, 327n203 neoliberalism, 88–94, 281–288, 313n150. See also liberalism: economic liberalism Neu Beginnen, 196, 317n241, 341n235 Neumann, John von, 3, 202, 313n148 Neurath, Otto, 88–90, 92, 95, 313nn153–154 The New American Right, 242–243 New Deal, 145–147, 168, 170, 191, 194–196, 202, 222, 242, 363n174 New Left, 268–272, 364n208, 364n212

•  I N D E X

Menger, Carl, 231–234, 351n204 Merton, Robert, 203–204, 244, 276, 317n241, 344n37, 348n134 metaphysics, 37, 46–48, 221, 247 Mill, John Stuart, 12, 16, 34, 60 Mills, Charles Wright, 203, 271 Mises, Ludwig von, 17, 88–93, 102, 312n144, 313n150 Mitchell, Wesley, 202, 230 Mitteleuropa, 55 Moholy-Nagy, Laszlo monism, 46–47, 299n42 Morris, William, 85, 224, 249, 270 Muir, Kenneth, 113, 148, 191, 277 Mumford, Lewis, 207, 250–251 Murrow, Edward, 116 Mussolini, Benito, 108, 117, 122, 260 Myrdal, Gunnar, 367n262


Mannheim, Karl, 1, 3–5, 18, 30, 36, 82–83, 115, 132, 167, 173, 241, 283, 288 Mao Zedong, 274, 363n184 Marcuse, Herbert, 116, 250, 271, 364nn213–214 Margaret Island (Budapest), 70, 280 market economy, 7, 9, 17, 28, 93–96, 105, 134–136, 154–155, 167–169, 197, 228–230, 237, 246, 254–256, 267, 283; labor market, 6, 26, 35, 156; market capitalism, 5, 93, 126, 195, 202, 224, 255; market exchange, 16; marketization, 31, 129, 252, 282, 288; markets-in-socialism, 92; market society, 6–7, 28–29, 82–83, 94–95, 104, 126, 130, 133, 136, 138, 188, 221, 225, 242–244, 253–254, 292n49, 335n94; market system, 5–6, 29, 49–50, 88–89, 91, 125, 154, 167–169, 223–229, 233–235, 241, 245, 284–288; self-regulating market, 126, 170, 223, 227; world market, 20, 33, 125, 155. See also embedded economy; liberalism: economic liberalism Marschak, Jacob, 115, 163, 205, 313n148 Marshall Plan, 195–197 Marx, Karl, 46, 50, 59, 79, 101, 104, 114, 127, 136–139, 204, 231, 247, 250, 269, 314n172, 315n198; as positivist, 46, 50, 97; as revolutionary, 30 Marxism, 4, 48–51, 66–67, 74, 92, 96–98, 101, 122, 151, 172, 186, 201, 250, 252, 266, 268, 270–271, 274, 288, 300n59, 342n12, 356n28; Austro-Marxism, 77, 99–101, 282, 315n194, 317n241; and Christianity, 136–139, 141; and Hungarian SDP, 34 Mauss, Marcel, 29 Maxwell, Robert, 276–277, 367n259 McCarthyism. See Red Scare Mead, Margaret, 226–227, 317n241 Medow, Paul, 219, 223, 348n143, 366n257 Mendershausen, Horst, 196, 335n88, 341n235

Nietzsche, Friedrich, 15, 34 nuclear weapons, 115, 194, 253, 273


•  I N D E X

objectivism, 34, 46, 97, 314n177 Oppenheim, Leo, 207, 216 Oppenheimer, Franz, 49, 89, 299n42, 300n56 Orwell, George, 100, 128 Österreichische Volkswirt, 80–81, 103, 108–111, 114, 117, 147 Ostwald, Wilhelm, 46–47 overview, 88, 90–96, 105 Owen, Robert, 85, 104, 124, 155, 221, 251–252, 266 pacifism, 16, 54–55, 66, 121 Parsons, Talcott, 203, 241–245, 276, 280, 356n28 patriotism. See nationalism Pearson, Harry, 217–219, 243 Petőfi, Sándor, 240–241 Pikler, Gyula, 33, 36–37, 41–42, 46, 79 Plaid Cymru, 310n104 planning, 83, 88–93, 123, 146, 151, 167, 187, 190–191, 193, 195, 197, 223, 225, 228, 235, 238, 253–257, 274–275, 313n154; in Soviet Union, 17, 141, 154, 254 Polanyi, Adolf, 11–12, 43, 119–120, 162, 320n51, 360n123; sons of, 161–162 Polanyi, Kari, 78–80, 113, 117–118, 145, 148–149, 162–165, 175, 202, 320n33 Polanyi, Laura, 11–12, 43, 51, 75, 119–120, 142, 158, 161–162, 177, 215, 293n53, 360n123 Polanyi, Michael, 1, 4–5, 12, 17–18, 38, 80, 97, 119–120, 161–162, 165, 205, 265, 281, 294n73, 299n25, 318n257, 326n180, 359n109, 360n121; and Congress for Cultural Freedom, 260–263, 361n148, 362n154, 362n166; and economic theory, 141, 256–257, 281, 313n148; relations with Karl Polanyi, 44, 110–111, 116, 139–143, 172, 240, 256–263, 278

Polanyi, Sophie, 12, 59, 74, 80, 108, 119–120, 176–178 Pollacsek, Cecile, 9, 11, 13–16, 23, 42, 44, 74, 119, 308n45 Pollacsek, Mihály, 11–13, 15–16, 18, 29, 38, 42, 79, 140 Popper, Karl, 73, 81, 97, 293n52 Popper, Leo, 43 populism, 14, 16, 34, 46, 146, 219, 239, 262, 265, 268 Pór, Ödön, 117, 122 positivism, 14, 34, 36–37, 46–49, 66–67, 76, 134, 231, 238 progress, 37, 47, 55, 134–135. See also Enlightenment Proudhon, Pierre-Joseph, 49 psychoanalysis, 15, 99, 158, 169 Quakers, 16, 110, 113, 115, 116, 120, 177, 248, 274, 276, 317n241 racism, 24–27, 33, 39, 53, 64, 67, 182, 210, 273. See also anti-semitism Radek, Karl, 77 Radical Bourgeois Party, 9, 17, 42, 50–51, 53–55, 62, 64, 67. See also bourgeois radical movement Rákosi, Mátyás, 199–200 Rand, Ayn, 314n177 reality of society, 66, 82, 129, 248, 252 reciprocity, 16, 29, 219, 226, 234–237, 243, 353n239, 354n243 redistribution, 16, 219, 226, 234–237, 243, 353n239, 354n243. See also Verwaltungswirtschaft Red Scare, 10, 209–211, 242, 257–258, 356n26 refugees, 11, 26, 73, 113, 115–116, 159, 202, 215 regionalism, 55–56, 144, 191–192 reification, 5, 96, 101 Renner, Karl, 101 responsibility, 3–4, 6, 40, 47–48, 76, 93–97, 100, 133, 138, 151–152, 189, 254, 300n64

Sahlins, Marshall, 217, 219 Sartre, Jean-Paul, 97, 221, 248, 275 scarcity, 229–233, 351n204 Schlesinger, Rudolf, 274–277, 366n247 Schmoller, Gustav, 89, 155 Schuman Plan, 196–198 Schumpeter, Joseph, 81, 89, 167 Schutzbund, 106–108, 110, 117–118 science, 2, 5, 28, 35–37, 45–49, 66, 76, 82, 97, 129, 132–133, 141, 223, 233, 236, 247–251, 258, 264 Science and Freedom, 260 Second International, 9, 17, 35, 307n25. See also social democracy Seidler, Irma, 43, 298n14 Shakespeare, William, 8, 59, 113. See also Hamlet Shaw, George Bernard, 153, 221, 296n122 Shils, Edward, 261, 276 Sismondi, Simonde de, 104, 145, 250 Smith, Adam, 29, 49–50, 94, 132, 155, 230, 295n100

•  I N D E X

social democracy, 14, 16, 33–35, 45, 54, 61, 66–68, 81–82, 84–87, 92, 99, 131, 260, 263, 268, 270–271, 274, 279, 282–288, 307n25; Polanyi and, 7, 9–10, 35, 51–52, 66, 69, 96, 101–107, 189, 193, 197, 201, 270, 283–288, 323n117 Social Democratic parties: of Austria, 34, 54, 77, 84–85, 87–89, 92, 99, 101–110, 117, 282–283, 308n41, 344n41; of Germany, 9, 34, 196; of Hungary, 32, 34–35, 45, 51, 54, 62–64, 68–69, 180, 185, 280. See also Labour Party; Second International socialism, 3–4, 12–13, 16, 24, 34–36, 40–41, 49–50, 52–54, 56, 63, 67, 76, 81, 89, 97, 99–101, 109–110, 113, 120–124, 126–130, 132–133, 136–137, 140, 151, 174, 182–183, 188–191, 193–194, 197–198, 201, 207, 210, 218, 222, 242, 251, 254–255, 264–288, 315n194; Christian socialism (and Christian Left), 4, 50, 103, 108, 113–117, 127–130, 133, 137, 139, 148–149, 156, 168–169, 219, 222–223, 241, 277, 325n151, 325n172; ethical socialism, 67, 315n194, 323n117, 324n130, 364n213; guild socialism, 4, 17, 81, 84–89, 92, 101, 103, 122–123, 134, 203, 310n104, 313n148, 313n154, 322n95, 335n102, 344n41; municipal socialism, 9, 100– 106, 111; socialist calculation debate, 88–97, 312n144, 313n148, 313n154; socialist student associations, 13, 41, 81, 108. See also communism; liberal socialism; populism; social democracy social sciences, 33–37, 47, 66, 91, 105, 169, 202–205, 230, 233–234, 238, 249–251, 266, 351n205. See also anthropology; sociology Society of Social Science, 33–34 sociology, 6, 46, 73, 83, 108, 136, 167–168, 171–172, 202–204, 233, 241, 243–244, 249, 276, 280, 344n44; positivist sociology, 14, 33–36, 66, 97 Somló, Felix, 33, 36, 41–42


revolution, 1, 4, 9–10, 20, 33–35, 62, 64–65, 67, 81, 97, 101–104, 106, 122–123, 135, 182, 200, 240, 268, 274, 283; French Revolution