Outline for a revision of The Great transformation (1961)

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I. The vanishing of the Nineteenth Century

[9] [10] [11] [12]

II. The Rationalistic Bias of the Social Sciences of the West

[13] [14]

1. The Greek approach to the analysis of society


2. The origins of the rationalist bias in European Thought

Under these circumstances … […]


3. The rationalist bias in the social doctrines of the Enlightenment

For several centuries, … […]

[17] The only hopeful way, … […]

4. The rationalist bias in the social doctrine of Marxism

A somewhat different cause explains the similar confusion between the partial norms of cause and effect analysis and man-centered ethical norms in the Marxist tradition. This is the triple merging by Hegel into a presumed single historical process of the sphere of political necessity, [18] discovered by Machiavelli, of the development through stages of national culture, discovered by Herder, and of the Judeo-Christian idea that God reveals himself though history. His striving to identify the historical process through which modern nations appear simultaneously with "necessary" chains of causality and the Jewish idea of history which centers on ethics resulted in the odious postulate that God manifests himself in necessity, that "what is necessary is good". By centering his own view of the historical process on social responses to evolving situation of conflict Marx only partly avoided the moral dilemma inherent in Hegel's position. For while it was on moral grounds that he denounced the dilemmas created by the social order of his time, it was, nevertheless, to the operation of economic necessity that he tied the future emergence of a more moral order. Through such a link with the moral world of the future the sphere of cause and effect relationships once again acquired an aura of inherent morality that served to veil once more the distinction between man-centered and functional norms. The resulting strengthening of the hope that in spite of ominous appearances, history does move towards messianic times was achieved only at the cost of rendering the economic process immune to moral criticism. At the same time Hegel's already diluted emphasis on the historical development of the cultural nation disappeared altogether from view.

III. The Return to a non-atomistic Concept of Society

[20] Because Western political science, from which … […]

[…] … Greece and of Rome … […]

1. Early attempts to formulate a non-atomistic concept of society

a. The concept of the ‘oikos’ and the debate on primitivism


[23] ancient ones are merely … […]

b. The concept of social embeddedness

The concept of socially embedded economies directs attention to another and non-economic aspect of the … […]

[24] … […] status on the one hand, and those deriving from contracts on the other. […] … community and society, and became … […]

2. Economic anthropology and the discovery of the institutional basis of social embeddedness

Towards the turn of the century … […]

3. The non-atomistic Concept of Society

a. Rights and obligations deriving from functional responsibilities

b. Rights and obligations deriving from ethically-oriented interpersonal relationships


1) The dilemma of personal relations and the two ethics


2) The expansion of the sphere of internal ethics
  • a) the limitation of mutual aid through a division of functions
  • b) the use of internal ethics for external relationships
3) Personal religions and the redirection of personal ethics into impersonal functional channels (redistribution)
4) The secularization of social relationships

c. The relations of rights to duties: two concepts of social justice

d. The role of equivalencies in the economic process

4. The social conception of man


IV. The Emergence of socially disembedded Economies in the West

1. The socially embedded or market-regulated economy

2. Machine production and the establishment of the nineteenth century order

3. The market ideology of liberalism

4. The market system and economic development

5. The gold standard and the world market economy

6. Peace

V. The Self-protection of Society and the Great Transformation

1. The conflicts created by the disembedding of the economy as a source of social change

2. Liberal ideology and the economic paralysis of the political sphere

[89] The utopian expectation that a normality that a normally functioning market-instituted … […]

3. The socio-economic strains create by social and national protectionism

4. The general crisis of society in the 1930’s

[92] Yet a world-wide … […]

In such situation … […]

5. Fascism, socialism, and the New Deal

6. Liberal ideology and the causes of the Second World War

[93] In this way, the dedication of liberal … […]

VI. The Great Transformation after the Second World War

[95] The fundamental social conflict created by the establishment of self-regulating market economies - that between … […]

VII. The Need for a New West

[101] In a world of nuclear armies the particularity dangerous character of … […]

VIII. Science, Technology and Socialism

IX. The Liberal Threat to Personal Freedom

[123] Among the significant advantages for personal life ushered … […]


A. On Pre-industrial societies

B. On Marxism

[131] 1. Two views exist in the serious literature concerning Marx on the nature of his contribution: one, which has been emphasized by the official position in the Soviet Union, presents him above all as a scientist - as a person who has dared to consistently apply scientific or rational analysis to the study of societies, and who has pierced the veil of misleading social ideologies that misuse concepts of religion and of ethics for exploitative ends; the other, which has recently been stressed by E. Fromm[1], and which relies heavily on not long ago discovered early writings of Marx, notes that throughout his life Marx has been above all concerned with liberating the individual from irrational ideologies that stifle his natural development towards a genuinely human state of existence, in which man's capacity to love and to reason prevails. One sees, in short, in his writings, Marx the rationalist. The other - Marx the humanist existentialist. One regards the D[octrine of economic determinism] as the central doctrine in Marx's writings. The other sees his central contribution in his existentialist view of man.

That no conflict need exist between these two views of Marx's writings is (almost self-)evident: for they (simply) complement each other, and be, in fact, two views of same separate aspects of the historical process. A conflict does exist at present, however, between the parties adhering to these views. It centers, in the first place on [132] a specific market-oriented understanding of the doctrine of economic determinism which unfortunately only serves to illustrate that in market societies, at least, the economic institutions do badly distort thinking, even if they do not shape it.

The market-oriented interpretation of the doctrine of "economic determinism" centers on the presumption that in all societies ultimately economic and social motivations of individuals rest on the pursuit of individual material gain, as is the case in a market economy, and that the key to a scientific analysis of social institutions lies in the consistent awareness of the actual role of such "materialistic" motives in the behaviour of all classes, no matter what the formal ideology may be. Fromm rightly notes that the view of man that is implied in such a position is fully opposed to that actually held by Marx, which was an existential and humanist one. He then reinterprets the meaning of the Marxist so-called doctrine of economic determinism as simply an assertion that man must learn to shape all his circumstances, and especially his economic ones, in the light of the criteria provided by existential humanism.

This amounts to an assertion, however, that traditional opinion, which did regard a doctrine of economic determinism as the central one in Marxism, has been fundamentally mistaken. The explanation of this mistake lies in part, according to Fromm, partly in the influences on the minds of Western scholars of the capitalist environment to which they have become accustomed and partly in the limited availability, until recently, of the earliest writings of Marx in which his humanistic view of the historical process is so clearly apparent. It is due mostly, however, [133] he asserts, to the influence on Western scholars of the official Russian position, which Fromm understands as an extolling of the doctrine of economic materialism in its anti-humanist market-oriented version, - fully in accordance, he feels, with presumed non-Western and anti-humanist traditions of Russian culture generally and of its revolutionary intellectuals in particular. By freeing Marxism from its Russian influences, he then suggests, it should be possible for the West to win over the new nations of Africa and Asia to the support of a genuinely humanistic socialism and to the Western traditions in which it is contained.

This, then, is the conflict between the adherents to the two views of Marx's writings. It may, however, be easily shown that it rests indeed on the difficulty, for persons living in developed market societies, to interpret the doctrine of economic determinism in non-individualistic and non-motivational terms. Furthermore, by examining the contents of this doctrine in the light of the concept of the social disembeddedness of market economies, it is possible to cast new light on both its merits and its shortcoming of the manner in which this doctrine has been applied in the Soviet Union. This last question is one universal interest in view of the attractive influence of the Russian experiences on the new nations of the world.

[134] Actually it was a quite different interpretation of the doctrine … […]

This, then, is the meaning that the terms 'materialism' and 'economic determinism' acquired in the Russian Marxist tradition. It clearly did not center on a market concept of selfish motivation, although the latter was implied, at least with regard to the past, in the subordinate concept of class struggle. Nor was it one that was incompatible with a humanist position, which was, in fact, not by the Western European one deriving from Spinoza that found expression in the works of the early Marx, [136] but the Russian one, which has a long history of its own, and has also been reflected in the works of the Russian classics, in the populist movement, and in the writings of the emigre existentialists (Berdayev, Losski, Vysheslavtsev) of the post-revolutionary period. […]

The Russian response to the Marxist doctrines may thus be viewed as a response to the Greek rather than Judeo-Christian element of the Western tradition embodied in Marx's system. In The Myth of the State, E. Cassirer, who traces the interplay of the Greek, the Christian, and the Romantic (nationalist) strands in European doctrines, has noted that Hegel has strongly influenced by the discoveries of Machiavelli. Hegel's emphasis on "necessity" and Marx's corresponding on economic determinism thus be viewed as a reflection of a totally different conceptual tradition in Western culture than the humanist one stemming from Spinoza - one that stands for the recognition of the reality of means-ends relationships in societies independently of one's wishes of ethical considerations.

[137] It is precisely this concept, it may be noted, that is contained in the concept of the disembedded economy. The disembedded economy is not only an ethically uncontrolled means-end process, but also a solely economic means-end process, … […] [138] namely the presumed universal conflict between social classes with regard tot eh division of material goods, and in particular between economically non-productive 'propertied' classes and those that contribute their labor to production. […]

Concerning another process, … […]

In short it is within a framework of presumed exchange relations that the basic conflict among means-end relationships is presumed to occur. For that reason, this aspect of Marxist theory, too, while it [139] does appear

[140] ?

their interest



1. On the labour theory of value

[141] In one considers that embedded economies are integrated through a presumed equivalence of the human costs of the various social obligations and hence through concepts of social justice, … […] That market prices do violate social justice was the view of Aristotle and subsequently of the Christian Church. […]

[143] In the early attempts to demonstrate the justice of market established prices, however, which so distorted economic science, the method employed was to assume that the value of a good is determined by something other than the market, … […]

The view that in spite of appearances, the market does precisely … […]

C. The Mathematics of Social Costs

D. The planning of International Trade


  1. E. Fromm, Marx' Concept of Man, 1961

Document's Informations

Author: Paul Medow
KPA: 24/01, 8 (General plan, detail in all the archive)