Polanyi’s thesis is quite powerful and perhaps his greatest claim. In his own words “Our thesis is that the idea of a self-adjusting market implied a stark utopia. Such an institution could not exist for any length of time without annihilating the human and the natural substance of society; it would have physically destroyed the man and transformed his surroundings into a wilderness. Inevitably, society took measures to protect itself, but whatever measures it took impaired the self-regulation of the market, disorganized industrial life, and thus endangered society in yet another way. It was this dilemma which forced the development of the market system into a definite groove and finally disrupted the social organization based upon it.”

Polanyi has many empirical claims regarding the effects of the market economy on individuals, societies, and states. He says that the beginnings of the market economy were at first followed by the appearance of the abject poor in England. This occurred because it made previous methods of social organization, in conjunction with other processes such as enclosure (in England), untenable for communities, as the influx of wages from population centers drove the value of subsistence farming down. Machine production occupies Polanyi’s theory as an important driver of change in the English economy. In his view, this the development of “elaborate and specific” machinery completely changed the relationship of the merchant to production causing the industry to win over commerce. In addition, the competitive labor market made community ties untenable, pushing laborers to independence.

Polanyi’s examination of the Speenhamland system and other English laws forms the basis of his assertion that the traditional economy was being too swiftly replaced by the modern, creating poverty and disenfranchisement among the population of England. He also says that the system was among the first to defend society from the market by creating a bare-bones welfare arrangement.

Capitalist economies rest on the exploitation of labor. They also require poverty since, going hungry is a motivating factor for all to work and contribute, a stark departure from the traditional economy in which social relationships create welfare. This means that interventionism in the form of social welfare had to automatically respond to care for marginalized individuals in all capitalist economies.

Economic processes often lead to conflict for Polanyi. Often the conflict is domestic, but sometimes it precipitates to the international level. Polanyi suggests that both World Wars occurred due to unforeseen consequences of the international market economy, but the first was a war between great powers while the second led to world upheaval. States engaged in protectionism were beset by financial panics and depressions, which were displaced into the national and the international sphere. Following the first War, there was a breakdown of economic institutions which plunged states into inflation and mass unemployment. For Polanyi, the Second World War was a disaster due to laissez-faire took to the extreme.

Another claim and perhaps the most terrifying that Polanyi makes is that fascism in Europe and elsewhere appeared due to the deadlock within government; at the hands of the double movement which characterized the push and pull of economic liberalization at one hand and interventionism on the other. He motions that only accidentally were Nationalism and Counterrevolution connected to fascism, it was in fact the market system which caused its emergence. Fascism becomes a way to reform the market economy at the price of democracy, an alternative solution to the industrialized society. Although he does not detail its specific characteristics, he describes the symptoms of a fascist state as, “racialistic aesthetics, irrational philosophies, anticapitalistic demagogy, criticism of parties, disparagement of the regime and current democratic system…”