Die Adam Smith probleme: Karl Polanyi on Smith’s division of labour

Abstract

The concept of the division of labor is comprehensively discussed in Adam Smith’s classic work, The Wealth of Nations (1776), and it holds a key function in his theory of economic development. As a rigorous critique of liberalism, Karl Polanyi does not make use of this socio-economic concept very much in his works, while he conveys Smith’s general understanding throughout The Great Transformation (1944). This calls for a review of the two scholars use and perception of the concept of the division of labor. As opposed to Smith's economic theory based on the division of labor, Polanyi's substantivist approach to economic phenomena poses a different dynamic of social change based on commodity fiction. In retrospect, this study compares the analytical frameworks of Smith and Polanyi based upon their views on the division of labor and tries to find affinities in their methodologies and approaches to economic phenomena.