The Great Transformation and the Redistributive Imperative for Development

Drawing from Polanyi’s thesis of The Great Transformation and supplemented by the ideas of several seminal thinkers in the field of early development economics such as Celso Furtado, this paper argues for rehabilitating an understanding of redistribution as a fundamental functional element of modern market societies, without which capitalism itself becomes dysfunctional. This understanding is in contrast to common neoclassical reasoning, which sets up a frame of analysis that leads to an in-built tendency for the case of state intervention or regulation to be on the defensive, in tension with and morally trumped by freedom, rather than as an enabler of freedom via the strengthening of social competencies within complex modern market societies. In this sense, redistribution needs to be understood as an essential synergistic condition of productionist strategies, principally by way of socialising the wealth produced by increasing productivity, as well as through its role in buttressing the institutional bases of capitalism. Moreover, in the context of contemporary global development challenges, there is an even stronger imperative for redistribution now than in the past.