The Great Transformation

This is the title of a  book published in 1944 by the Hungarian-American political economist Karl Polanyi. It is widely considered to be an important work in political economy, so read it if you can. But the Wikipedia summary actually isn't bad. Polanyi addresses many of the problems and issues that concerned Karl Marx, but with 100 years of added perspective, including of course the experience of actually existing Communism. I'm going to run a trick play here and quote from the Communist Manifesto, which was first published in 1848. (The wordsmithing was actually mostly by Friedrich Engels, who was a better communicator than Marx, whose books are turgid doorstops.)

 

From the serfs of the Middle Ages sprang the chartered burghers of the earliest towns. From these burgesses the first elements of the bourgeoisie* were developed.

The discovery of America, the rounding of the Cape, opened up fresh ground for the rising bourgeoisie. The East-Indian and Chinese markets, the colonisation of America, trade with the colonies, the increase in the means of exchange and in commodities generally, gave to commerce, to navigation, to industry, an impulse never before known, and thereby, to the revolutionary element in the tottering feudal society, a rapid development.

The feudal system of industry, in which industrial production was monopolised by closed guilds, now no longer sufficed for the growing wants of the new markets. The manufacturing system took its place. The guild-masters were pushed on one side by the manufacturing middle class; division of labour between the different corporate guilds vanished in the face of division of labour in each single workshop.

Meantime the markets kept ever growing, the demand ever rising. Even manufacturer no longer sufficed. Thereupon, steam and machinery revolutionised industrial production. The place of manufacture was taken by the giant, Modern Industry; the place of the industrial middle class by industrial millionaires, the leaders of the whole industrial armies, the modern bourgeois.. . .

Each step in the development of the bourgeoisie was accompanied by a corresponding political advance of that class. An oppressed class under the sway of the feudal nobility, an armed and self-governing association in the medieval commune⁽⁴⁾: here independent urban republic (as in Italy and Germany); there taxable “third estate” of the monarchy (as in France); afterwards, in the period of manufacturing proper, serving either the semi-feudal or the absolute monarchy as a counterpoise against the nobility, and, in fact, cornerstone of the great monarchies in general, the bourgeoisie has at last, since the establishment of Modern Industry and of the world market, conquered for itself, in the modern representative State, exclusive political sway. The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie.

*"Bourgeoisie" is their term for capitalists -- owners of industry and employers of workers. It literally means "townspeople" and reflects the historical developments they describe, in which the locus of economic and social power shifted from the landed agrarian estates to the mercantile and industrial activities of the cities. 

Marx and Engels espoused a so-called "conflict theory" of society. They were principally concerned with how interest groups with varying degrees of power vied to maintain and gain power and advance their own interests. In 1848, they saw society as essentially divided into two classes, the bourgeousie and the proletariat who survived by selling their labor. They did not foresee the development of a substantial professional and managerial class, which greatly complicates the picture; nor did they foresee that capitalists would eventually move to protect themselves from revolution by enacting reforms that improved the condition of at least some workers. 

They also thought that Communism would emerge from industrial capitalism, but in fact the regimes that called themselves Communist and purported to be based on Marxist thought emerged in largely impoverished agrarian monarchies, and certainly did not result in the people effectively owning the means of production or the withering away of the state. So as prophets they were failures. But the history they review here is basically valid. Next time we'll discuss what Polanyi makes of it, and what that means for us today.