Essay Questions

What are the negative effects of industrialization and rationalization according to Karl Polanyi?

Karl puts across two major negative effects of rationalization and industrialization. Firstly, he blames the existing economical quandaries on industrialization and rationalization. One example of the predicament of rationalization is the introduction of Speenhamland policy which cultivates class divisions between the rich landowners and the local communities. The rich use their money to acquire large tracks of land from the locals rendering them landless. Secondly, rationalization and industrialization encourage poverty because it forces the local people to depend on the rich landowners for their survival. If they want to do any cultivation in their area, they are forced to lease or rent land from the rich. Therefore, industrialization and rationalization are meant to benefit a few people at the expense of the larger population.

What is the relationship between political interests and economics according to the book The Great Transformation?

Karl Polanyi thinks that politics and economics should not be linked. Unfortunately, political interests and the contemporary economy are knotted implying that the greatest beneficiaries are the politicians and few business people at the expense of the ordinary citizens. Political leaders initiate policies that are favorable to them with absolute disregard for the interests of the ordinary people. The result is that few people in society end up being super-rich at the cost of millions of poor people.

Is the great transformation the main reason for the marginalization of the lower class citizens?

According to Polanyi, the great transformation is to blame for the economic evils that are witnessed today. Initially, before the wave of the great transformation, almost all people owned land but things took a drastic change after the great transformation. After the great transformation, the rich people bought all lands from the local people rendering them landless in their ancestral homes. The other evil of the great transformation is the fixation of commodity prices implying that without a specific amount of money, one cannot purchase certain commodities. Therefore, it is true that the great transformation is the genesis of the problems of the lower class citizens are going through today.