Karl Polanyi's The Great Transformation has had enormous influence since its publication in 1944. In form, this influence has been salutary: Polanyi targets one of the main weaknesses of modern economics. But in substance, Polanyi's influence has been baneful. Mirroring the methodological blindness he criticizes, Polanyi insists on the all‐or‐nothing existence/ nonexistence of laissez faire—and on its all‐or‐nothing goodness/badness.

The postcommunist age calls for a Sociological Marxism that gives pride of place to society alongside but distinct from state and economy. This Sociological Marxism can be traced to the writings of Gramsci and Polanyi. Hailing from different social worlds and following different Marxist traditions, both converged on a similar critique and transcendence of Classical Marxism. For Gramsci advanced capitalism is marked by the expansion of civil society, which, with the state, acts to stabilize class relations and provide a terrain (...) for challenging capitalism. For Polanyi expansion of the market threatens society, which reacts by constituting itself as active society, thereby harboring the embryo of a democratic socialism. This article appropriates “society” as a Marxist concept and deploys it to interpret the rise and fall of communist orders, the shift from politics of class to politics of recognition, the transition from colonialism to postcolonialism, and the development of an emergent transnationalism. (shrink)