The Great Transformation

Great transformation is very important event that happened in European history in which markets became the center for the society. Prior to the Great Transformation, self-sufficiency was the rule. When there was small self-sufficient communities then markets were not important. Markets were used to trade secondary but no the basic needs. People grow their own food at that time and provide food to those who don’t had it. Everybody gets fed but it was not on the basis of market. Markets were used for luxury or unusual things. According to Karl Polanyi there was Paternalistic societies which means that the society looks after its members i.e. if somebody is not getting something then the other people provide that. People take care of each other in Paternalistic societies. Markets were there before Great Transformation but it were regulated and their functions were limited by the officials.

In Great Transformation the market become central and there were no restrictions on the market. Markets became ruthless due to cut-throat competition. This is supposed to be good as perfect competition makes firms efficient. In Great Transformation economics, politics and social structure of society changed.

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