Analysis Of The Great Transformation By Karl Polányi

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Paper 2: Marketizers and Protectionist

In “The Great Transformation” from 1944, Karl Polányi argued that a double movement has shaped the market society. The first movement is Marketizers/laissez-faire while the second one is Protectionist. The movements disagree whether or not a free market assures an optimal allocation of recourses. There is a disagreement on how large role the state should play in the market and whether it’s helping or harming innovation. Polányi debated that the society needs to shield itself from both too little and too much protectionism.

Market Fundamentalism/Marketizers seek to expand the free market and to separate market and society. They seek to create a market without governmental regulation, where the market dynamics, as the "invisible hand" by Adam Smith, always will assure an optimal use of resources. Since people are self-regulated, the market should be self-regulated. Milton Friedman is still one of the biggest advocates for a free market. He believed in free market capitalism and meant that the government’s role in the economy should be restricted. He argued that a free market, where prices are set by demand and supply, would give
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He means that the private sector has a tolerance for taking bigger risk and failures; they are the roaring lion of innovation in Silicon Valley. The government has trouble with being as innovating as the private sector. The state should therefore only interfere in the innovation economy to give money to research, provide education and to encourage cooperation between academia, government and industry. The best way to get an innovated environment/economy is to keep the government regulation to a minimum and believe in market mechanisms, Isaacson says. Thiel believes that the bureaucratic hierarchies in the public sector are standing in the way of innovation because they move too

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