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The Failure of Substahtivist Social Theory I 3^ a Critical 3^ I THE FAILURE OF SUBSTAHTIVIST SOCIAL THEORY A CRITICAL REASSESSMENT OF KARL POLANYI Ellen Antler, B.A. University of Chicago, 196? A Thesis Submitted in Partial Fulfillment of the Requirements for the Degree of K&ster of Arts at The University of Connecticut 1971 APPROVAL PAGE Master of Arts Thesis THE FAILURE OF SUBSTAIJTIVIST SOCIAL THEORY: A CRITICAL REASSESSMENT OF KARL POLANYI Presented by Ellen Antler, B.A. Major Adviser /'i—- Associate Adviser Associate Adviser a c,£-,,v< The University of Connecticut 1971 ii ACKNOWLEDGMENTS I wish to thanlc Dr* Janes Chester Faris, Daryl Clark White and the Wilbur Cross Library. iii TABLE OF CONTENTS INTRODUCTION ..................................................... 1 PART I. Chapter I. THE RATIONALE FOR POLANYI*S MORALIST, HUMANITARIAN UNDERTAKING: BERATING THE SCOURGE OF INDUSTRIALIZATION .... 8 II. THE CONTENT OF THE NSW ECONOMICS: BOTH HISTORY MID THEORY REVEAL THE MARKET TO BE UNIQUE AND PERNICIOUS ..... 11 III. THE STRATEGY OF THE NEW ECONOMICS I ........................ 16 IV. THE STRATEGY OF THE NEW ECONOMICS II ...................... 21 V. THE STRATEGY OF THE NEW ECONOMICS III ..................... 25 VI. THE NEW ECONOMICS BECOMES A NEW SOCIAL THEORY ............. 30 VII. EVALUATION OF POLANYITS SOCIAL THEORY .................... 1,0 PART II. I. THE SEARCH FOR THE NON-MARKET STATE OF NATURE WITH POLANYI »S OWN TOOLS OF ANALYSIS ................... .......46 II. THE NON-MARKET STATE OF NATURE ...................... 50 III. SUMMARY AND CONCLUSIONS .....................................77 APPENDIX .......................................................... 83 REFERENCES CITED ................................................ 88 iv LIST OF ILLUSTRATIONS Figure Page 1. Polanyi^ Patterns of Integration .................... 33 2. Map of the Trobriand Islands ............................. 54 3. To^uluwa^ Harvest Gifts ...... .......................... 61 4« Trade Items Price List .... .............................. 70 v INTRODUCTION The decision to commit more resources to the Fomalist- Substantivist Debate in Economic Anthropology is one made with great caution. The history of the debate is often not interesting, and many of the arguments and counterarguments have sailed past each other; much of the controversy has been over issues not im­ mediately relevant to anthropologists. Too much argument has centered around the epistemological status of formal economic theory and of the applicability of neoclassical models to other than market economies. These concerns are peripheral to anthro­ pology although they are surely legitimate—and economists are now waging their own version of the Formalist-Substantivist debate over the "Mew Economic History" to determine whether or not market models can be fruitfully applied to the American economy of 150 years ago (Andreano 1970). The most unfortunate aspect of the debate is that with few exceptions (Cook 1966, 1969; LeClaire 1966; Kaplan 1963) little of the verbiage lias been directed to the especially relevant issues such as the relation of economy and society, or to the nature of the parameters set on social institutions by the demands of produc­ tion, or to the relation between institutional constraints and human behaviors.3. Most of the debate has centered, instead, on the gloss ■‘■Even George Dalton, perhaps Polanyi's most persistent supporter has noted this elipsis in the literature (1969: 96-97). 1 2 of the arguments, that is, on the substantivist position that "marhet analysis loses much of its analytical value in non-market economies" (Polanyi 1957a: 143). Yet, there has been virtually no critical examination of the assumptions about society and social processes that this statement rests upon. There is great value in the examination of the logic that precedes this summary statement and of its implications; this thesis will bo directed to that examination. We will need to closely scrutinize the work of Karl Polanyi for Kaplan is quite correct in asserting that all of substan­ tivist theory rests ultimately on his work: As both Nash and Cook rightly point out, it was largely under the impact of the writings of Karl Polanyi and his followers that anthropologists divided themselves into "formal­ ist" and "substantivist" camps. The ensuing debate seems to have had as its major catalyst the collection of essays in Polanyi, Arenbsbcrg, and Pearson (1957). It is interesting to note, however, that all of the basic ingredients of the substantivist position can be found in Polanyi1s The Great Transformation. origanally published in 1944 [l96Sl 233jf7 Polanyi has been the subject of much study—as historian (Humphreys 1969), and economist (Sievers 1949; Dalton 1965a, 1953, 1969). What is surprising is that no one has yet done a rigorous examin­ ation of Polanyi as social scientist. Scott Cook, in his second discussion of the substantivist position (1969), has done but a brief sketch of Polanyi's social theory; Manning Nash r/ho has been most out-spokenly critical of the quality of Polanyi*s social science has done only a casual critique: There is confusion on Polanyi's part among explaining the institutional structure...explaining economic performance... and explaining the cognitive and enotional bases for choice... The confusion can be partly resolved by understanding some of the general principles of social anthropology rather than the 3 homemade sociology Polanyi uses in his explanations of prim­ itive economies. , .The institutional analysis of Polanyi is rather crude and ad hoc Ofash 1969: We need to scrutinise Polanyi1 s ■rorlcs in depth because it is his sociological formulations that are at the heart of the substantivist position. His single notion of "embeddedness that is, that "man's economy is as a rule submerged in his social relationships" (1947: 112)^ generates quite directly nearly all of the foundations of the substantivist framefrork. They are: 1. Only market economies are not embedded in, that is, are distinct from the social system (Polanyi 1946, 1947, 1957a, b, 1968). 2. Embeddedness of the economic functions in the social system precludes the possibility of "choice" as the lavs of the social institutions in which the economy is embedded (and the often limited material resources of non-market economies) determine action. This makes it not useful to discuss economic choice. In subsistence (non-market) economies, the ques­ tion of choice among real alternatives (J.e., "yield times expected money price compared to money costs of production^ does not arise in such explicit fashion (Js it does in modern America}...the Trobriander... does not "choose" to plant j«mas.. .the question does not arise in this form... (Balton 1969: 6^]. 3. In the embedded state neither economic institutions nor economic motives have an independent existence; therefore. suggest that part of the reason for the general lack of critical analysis of Polanyi's social theory has been that many anthropologists have assumed that by "embeddedness" Polanyi was simply asserting that an examination of economic systems should not be done outside of their societal contexts. Surely a reasonable position. This is not, however, the only implication of his form­ ulation. The implication of his position that too often is glossed over is that in non-market societies "man's social relationships" determine economic action, i.e., that economic systems are epi- phenomenal, simply reflections of social relationships. I will suggest, on the contrary, that in no way can such a simplistic assertion be construed as adequate explanation of the complex— but ascertainable—relationship Of economic and social systems. (See below. Part I, Chapter 6.) 4 actors in primitive societies are not economically rational in their behaviors. The assumptions outlined above D..e.> Polanyi's dictums on the distinctness of capitalist economic institutionsj...imply a very special institutional setting in the absence of which one would not behave in an economically rational fashion even if one v/anted to {Kaplan 1963: 23£]» 4. Finally, for these three reasons (and, in addition, be­ cause of difficulties in quantifying material from prim­ itive economies) it is not useful to apply formal economic theory to the discussion of non-market economies and performances. Although the notion of embeddedness figures so centrally in substantivist theory it remains a difficult concept to penetrate. This results, in part, because in The Great Transformation Polanyi 3 was really concerned with describing "disembeddedness," that is, the condition of industrial capitalist societies in which the economic institutions are not embedded in but rather are distinct from the social system; and in v/hich, conversely, the society is embedded in the economic system. Disembeddedness was Polanyi's real con­ cern; embeddedness appears at first in his work as more of a residual category—as not-disembeddedness. The disembedding of the economic system was a unique historical event brought about by the operation of economic motives. Polanyi devised this con­ cept to describe the overwhelming pov/er of economic motives and to describe hov; their operation could have overturned the previously existing natural order in which such motives were absent. 3 3 Polanyi coined this word in 1957 in "Aristotle Discovers the Economy" which appeared in the collection of essays edited by Polanyi, Pearson and Arensberg Trade and Markets in the Early Empires. 1957. All page references from "Aristotle Discovers the Economy" and "The Economy as Instituted
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