So in our last installment, I showed a bit of the Communist Manifesto and how Marx and Engels viewed the emergence of capitalism. Polaynyi, writing 100 years later, had a longer and somewhat different perspective. A central point, to him, which Marx and Engels don't much note, is that in pre-modern societies, most people had limited interaction with markets as we understand them -- systems of capital accumulation and exchange facilitated by money. To be sure, money and markets have existed since ancient times, and while they were of varying importance at different times and places for the most part they were secondary.
In the first place, the vast majority of people were farmers, and they farmed for subsistence, not for monetary profit. Historian Here's his first installment on pre-modern farming.writes a prolific long-form blog on many aspects of social history, which you may enjoy exploring at leisure.
It's much too long and complicated of a story to do any justice in a summary here. But the key point is that subsistence farmers -- the vast majority of the population -- simply could not turn any surplus they were lucky enough to have one year into monetary savings, or money to somehow invest. The world didn't work that way. Instead, they would turn it into social capital, by banqueting their neighbors, in expectation that they could count on help in hard times. And they made their own clothing -- more precisely the women did -- and tools. There was little or nothing for them to buy. In the next chapter, to which you can click through, Devereaux discusses the manorial organization of pre-modern Europe. Landowners extracted rents from their serfs or tenants in the form of produce and forced labor. They had some use for monetary trade although they also used the extracted rents to support artisans and soldiers and servants directly, rather than paying them in cash.
So Polanyi's Great Transformation is the quite rapid evolution from this form of society to the modern nation-state in which a centralized polity is the setting for a largely monetized market economy. Previously, most economic exchange was governed by personal reciprocity or highly structured relationships among people in sharply defined castes. To quote the Wikipedia article, "As a consequence of industrialization and increasing state influence, competitive markets were created that undermined these previous social tendencies, replacing them with formal institutions that aimed to promote a self-regulating market economy."
This is not to say that the former situation was better. These economic relationships were often highly exploitive, and most people lived continually on the edge of hunger and even starvation. The emergence of capitalism produced unprecedented material abundance, and eventually -- not until after Marx's time, and probably only temporarily as matters now stand -- something of a reduction in inequality of station and increased opportunity for social mobility. However, it also produced a highly distorted perception of history and society, and produced immense harms and dangers, which again are becoming more urgently apparent today. More on that next time.