In his writings between 1941 and 1951, Michael Polanyi developed a distinctive view of liberal social and political life. Planned organizations are a part of all modern societies, according to Polanyi, but in liberal modernity he highlighted dynamic social orders whose agents freely adjust their efforts in light of the initiatives and accomplishments of their peers. Liberal society itself is the most extensive of dynamic orders, with the market economy, and cultural orders of scientific research, Protestant religious inquiry, and common (...) law among its constituents. Liberal society and its dynamic orders of culture are, Polanyi explained, directed at transcendent ideals (truth, beauty, and justice). He saw knowledge, rules of practice, and standards of value in these orders as being preserved in traditions that inform and constrain the initiatives of their members. Investing faith in a cultural enterprise, Polanyi's agents choose to act responsibly, dedicating their freedom to an ideal end. They are custodians and cultivators of the heritage of their dynamic order. ☆ The authors express their appreciation to two reviewers for History of European Ideas for having provided helpful comments on the penultimate version of this text. (shrink)

ABSTRACT This paper examines the evolution of Michael Polanyi’s critique of economic planning. It portrays how the focal point of his critique shifted from addressing the ‘spirit,’ ‘social consciousness,’ and ‘public emotion’ of the people supporting planned economies to addressing the administrative ‘unmanageability’ and the logical impossibility of economic planning. Polanyi developed thought experiments of imaginary economies, contrasted the ‘pyramid of authority’ with the polygons of liberty, and explained organic and inorganic ways of adjusting economic relations. He attempted to relax (...) the Leviathan of Soviet economics, and drew the conclusion that mathematics is not sufficient in itself to properly address the economy. Eventually, Polanyi developed an institutionalist approach in order to be able to address both the variability of market economies and the failures of socialist ‘super-planners’ who claimed to eliminate the drift of individual economic adjustments. (shrink)