Karl Paul Polanyi (1886 – 1964) is known for his opposition to traditional economic thought and his book, The Great Transformation. The Great Transformation was written in the interwar years but not published until 1944. Polanyi is known for his opposition to the emerging Austrian school of formal economic method. Methodologically, the Austrian free-market group of economists, that included Ludwig von Mises, defended abstract quantitative economic models based on the assumption of Homo oeconomicus. The associated policy recommendation fosters market liberalism. The “natural” free markets without state intervention would function efficiently.
Polanyi’s critic is oriented to the Homo oeconomicus – all-knowing self-interested decision maker that maximizes choices combining considerations of opportunity cost, marginal utility and price. His critique is also oriented to the free markets as a “natural” setting.
Indeed, Polanyi is remembered today on behalf of his cultural approach to economics which emphasized the way economies are historically embedded in society and culture. This view ran counter to mainstream economics but has been popular in anthropology, economic history, economic sociology and political science.