Societies and Economic Systems Book Review - 825 Words

Societies and Economic Systems (Book Review Sample) Content: Societies and Economic SystemsAuthorInstitutionSocieties and Economic SystemsIntroductionThe great transformation by Polanyi is a crucial book in understanding the economy why behaves in certain ways. The book tries to bring out a historical description of the growth in market economy which became a competitor to traditional economy. Polanyi argues that the modern state development went hand in hand with modern market economies development. The human economic mentality was one of the greatest hindrances to the modern economy. This was because the human mentality then was not to maximize utility which is the basic reason why people buy goods and services. Markets had a very small role and influence in the society and were only seen to thrive in long distance trade. This paper seeks to discuss the societies and economic systems chapter of the Great Transformation by Karl Polanyi.Societies and Economic SystemsA great modern state began the great transformation pushing th e changes into the social structure that encouraged a competitive capitalist economy. To Polanyi, this meant the destruction of that had roots in the society due to the pre-modern human nature. The factors of production were crucial to the transformation because they were now on sale at the market and their prices being determined by the market. This changed a lot of the social norms because initially prices were being allocated based on tradition, reciprocity and redistribution. Market economy involves a system that is self regulating. It means that the market is only dictated by the market prices only. Polanyi argues that throughout history, such a system has never been in successful the demerits not only internal operations but also the consequences to the society. Therefore, a government intervention is necessary to bring sanity to this ideology (Polanyi, 2014). Polanyi explains that this ideology of a self regulating market was a tailored to suit the industrialistsà ¢Ã¢â€š ¬ interest. Adam smith wrote that the division of labour in the economy depended on the presence of market, implying the proclivity to truck and barter trade.A hundred years later, industrialization began sweeping the planet creating another form of economic activity for the human race. This brought about intellectual, spiritual and political pursuits. Fifty years on, many writers on social history and political economy sprung up equating the division of labour principle with barter trade. Polanyi argues that history did not capture the presence of an economy prior to the modern one. He says ità ¢Ã¢â€š ¬s clear that the role and influence internal markets played were undistinguished until recently. Te author says we need to seize looking at history and how early societies viewed economy. This is because it will encourage a bias view of man as just interested in barter trade alone. Polanyi argues that traditional economists who based market law on early inclinations of man ware later replaced by ideologies which are concerned with understanding, modern problems facing the economy (Polanyi, 2014). There have been many exaggerations about the difference in civilized and uncivilized man in the economic field.In Europe for instance, much had not changed in the agricultural industrial life until recently. The author argues that ever since the introduction of farm tools such as the plough which was ox drawn, many parts continued to use this method of farming. Modern age only brought changes in the spiritual, political and intellectual arena. Among the first modern economists protesting against the side lining of primitive economics since they were viewed as irrelevant to modern societies was Max Weber. Social anthropology explains that mans natural ability constantly reappears in the society at all times as a way of survival. The research argued that man protects his social relationship strongly. He acts to protect his social assets, social claims and social standing as opposed to individual interest. The research further says that all the processes in business such as distribution and production was aimed at achieving social interest rather than material possession. Polanyi argues that survival was key to maintaining social ties and being an acceptable code of honor (Polanyi, 2014).The social structure beginning with the family was created a strong bond in the society. It brought about social relationships which emphasized on mutual dependence. The article explains that the institutional centrality pattern exists in to some degree in human groups. This helps in tracking of collections, storage and all other activities pertaining goods and services. The social economics of centrality t...