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The Great Transformation

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I had pretty mixed feelings about this book, but I’m very happy I read it; there was seriously worthwhile stuff in here that I hadn’t known before.

The basic thesis appears to boil down to “full-scale market economies treat labour, land, and money as though they were normal commodities that can be bought and sold freely, created and destroyed, etc; this leads to absolutely horrible outcomes unless restrained”. The idea of a complete market economy in which everyone benefits was described as “utopian”, and successfully demonstrated as such; I now firmly believe that you cannot have an unrestrained market economy that doesn’t destroy social order, lives, and the environment, and I was not entirely convinced of these things before.

On the flip side, the author did a piss-poor job of coming up with ways the amazing power of market economies can be harnessed without the negative side effects; see Cons. The last 80 years have been an ad hoc jumble of patches to this effect, but it seems like we can do better, and it would have been nice to have some insight on this point.


  • The fact that market economies did not exist until a couple of hundred years ago, and that in particular Middle Ages and Renaissance Europe was not in any sense a market economy no matter how much modern authors talk about the importance of wandering traders, was startling and fascinating.
  • The examples of historical non-market economies (i.e. middle ages Europe) were often fascinating. The shredding of the myth of the barter-oriented primitive human was very good. I had no idea that moving between towns was basically totally forbidden in the middle ages; you worked the family plot of land that your ancestors had worked, period.
    • Con: It felt like there might be some cherry-picking of examples; I’m pretty certain that the ancient Greeks did a lot of market-oriented stuff, but they were never mentioned.
  • The Speenhamland poor law was fascinating. I still can’t believe that “supplement everyone’s income up to X” (that is: if you make .5X you get .5X from the government, if you make 1X you get nothing) was actually tried. It seems like all of about 5 minutes of thought to see why that’s a bad idea.
  • The point was well made that you can’t have a labour market, not just for obvious reasons like “it can’t be created or destroyed”, but for very human reasons like “fluid markets need to be able to do things like ignore commodities completely for six months”; that a truly fluid market in human labour would lead to people routinely earning half of what they earned last year, and then double the next year, and then a third the year after that, and and and … and we can’t do that to people, both morally and because they won’t allow it.
  • The directly related point that market effects can be slowed down, and that this is usually sufficient to make survivable the worst effects, was a good one and well demonsrated.


  • The writing is terrible. I’m very averse to academic-style “never use a short word when mellifluous verbiage will do” writing, but even for that this book seemed exceptionally bad at getting its point across. That is: I had to work much harder to extract the author’s point than I should have.
  • The writing assumes a pretty decent economic background, sometimes. Sometimes basic points are lingered on, and sometimes the other will say something that I’m sure is totally obvious to economics students, and it takes me 5+ minutes to unpack
  • It seemed like a lot more words were used than were necessary to get the point across, but I feel that with books so frequently that this is probably about me.
  • The author didn’t appear to notice that all of the examples of historical non-market economies came with aspects that modern readers would find totally intolerable, in particular extreme restrictions on travel, whether de facto (primitive tribespeople) or de jure (middle ages farmers).
  • As I said before, the author totally failed to come up with anything useful with regards to how to patch a market economy to be less injurious. There was a flurry of utopian BS right at the end, like “we should guarantee everyone a job!!”, with no concrete ideas about what that would look like. Like, massive public works projects are a thing that can work, but even that wasn’t suggested, just, “guaranteed jobs!”. -_-