Framing the Market: The Unexpected Commonalities between Karl Polanyi and the Ordoliberals

Abstract

There has been a resurgence in scholarship on Karl Polanyi in recent years, against the backdrop of rising populism and critiques of globalization and financialization. In these works, Polanyi is typically portrayed as critic of the contested notion of ‘neoliberalism’. In this paper I demonstrate that, to the contrary, Polanyi’s Great Transformation (1944) shares many of the themes central to the contributions of the early neoliberals, specifically the ordoliberal thinkers. Polanyi and the ordoliberals did not only seek to analyze the origins of the same social crisis of the 1930 s and 40 s, but their analysis of the deficiencies of nineteenth-century liberalism as well as the subsequent disintegration through rapidly growing interventions in favor of powerful groups in society has much in common. This paper explores these similarities and demonstrates that they also extended to the way they perceived the responsibility of scientists as well as the interdependence of the various orders in society. It is argued that the ordoliberals, their fellow-traveler F. A. Hayek and Karl Polanyi all perceived the interdependence between the state, civil society and the market somewhat differently, but agreed on the need to conceptualize the relationship between the three. Finally, it is suggested that even the normative ideal of Karl Polanyi, the realization of ‘freedom in a complex society’, has important commonalities with the ordoliberal program: the protection of individual freedom from concentrated forms of power in society.