Polanyi on institutions and money: An interpretation suggested by a reading of Commons, Mitchell and Veblen

The purpose of this contribution is to suggest an interpretation of the substantivist thought initiated by Karl Polanyi. An approach such as this is concerned with « historical economics », in the sense that substantive concepts are the result not of a retrospective projection of modern bias but of an attempt to apprehend universal categories of economic analysis in order to clarify the true particularities of different economic systems1. The point is to show that the coherence of institutionalist thought founded by economists such as Mitchell, Commons and Veblen are in agreement the reflexions of Karl Polanyi who thinks of money as an institution that embeds the economy into social relationships. In this analytical framework, stripping money of its institutional character and trying to reduce it to a commodity is bound to create chaos. It is important to note that, rather than focusing on facts, the paper concerns the history of ideas. Certainly, Polanyi's writings on ancient economy can no longer be wholly accepted, if the evolution of the work of historians is seriously taken into account. But this is not the real issue according to Duncan, Tandy (1994 : 23)2. The history of ideas is the history of problems, which can suggest new interpretations that do not depend substantially on facts. It is interesting to remark that Ian Morris's (1994 : 54) attempt to combine Finley's thesis and Polanyi's insights constitutes a recent attempt to escape from the fallacy of the primitivism/modernism dichotomy3; such a solution has surely been an objective of Polanyi