Polanyi, Ostrom, Pagel, Bregman and Adam Smith

Kevin Cox
7 min readMay 10, 2023

Summaries of the ideas of Polanyi, Ostrom, Pagel, Bregman, and Adam Smith from ChatGPT4

Karl Polanyi — The Great Transformation (1944)- (video)

In his renowned work "The Great Transformation" (1944), Karl Polanyi, a Hungarian economic historian and social philosopher, analyzed the limitations of the market economy and suggested alternative solutions. To summarize, Polanyi proposed an alternative model to the market economy.

  1. Embeddedness: Polanyi argued that economies should be embedded within social and cultural institutions rather than operating as separate entities. In this way, economic activities would be guided by social norms, values, and shared goals, rather than solely by market forces.
  2. Substantivism: Polanyi proposed the substantivist approach, which posits that economic activities should be viewed in the context of the broader social, cultural, and political environment. This approach contrasts with the formalist perspective, which focuses on economic behaviour determined by rational, self-interested individuals.
  3. Redistribution and reciprocity: Polanyi highlighted the importance of non-market economic mechanisms, such as redistribution and reciprocity, in meeting the needs of society. Redistribution entails allocating resources based on societal norms and values, while reciprocity involves mutually beneficial exchanges and cooperation among individuals and communities.
  4. Decommodification: Polanyi advocated for the de-commodification of labour, land, and money, which he viewed as “fictitious commodities.” He argued that these essential elements of economic activity should be treated as social and cultural assets rather than as commodities subject to market forces.
  5. Social protection: To mitigate the negative effects of market-driven economies, Polanyi emphasized the need for social protection mechanisms, such as welfare policies, labour regulations, and social safety nets. These measures would help safeguard the well-being of individuals and communities from market fluctuations and instabilities.

In summary, Karl Polanyi’s alternative to a market economy emphasizes integrating economic activities within social and cultural institutions, the importance of non-market mechanisms, and the need for social protection to promote well-being and stability.

Elinor Ostrom — Governing the Commons (video)

Elinor Ostrom, a Nobel Prize-winning economist and political scientist, is best known for her work on “Governing the Commons.” She challenged the conventional wisdom that common-pool resources, such as fisheries, forests, and water systems, will be overused and depleted under self-governance. Instead, Ostrom argued that communities can manage these resources effectively and sustainably through local, self-organized institutions.

Her main ideas can be summarized as follows:

  1. Critique of the Tragedy of the Commons: Ostrom challenged the widely held belief that commons are destined to fail due to overuse and depletion. She demonstrated that communal resource management can succeed when certain conditions are met.
  2. Institutional Analysis and Development (IAD) Framework: Ostrom developed the IAD framework to understand how different institutional arrangements affect the behaviour of actors and outcomes in social-ecological systems.
  3. Design Principles for Governing the Commons: Ostrom identified eight design principles that characterize successful, long-lasting, and self-governed common-pool resource management institutions. These principles include clearly defined boundaries, congruence between rules and local conditions, collective decision-making, monitoring, graduated sanctions, conflict resolution mechanisms, and recognition of local institutions by higher-level authorities.
  4. Polycentric Governance: Ostrom advocated for polycentric governance, where multiple governing authorities at different levels interact and cooperate to address complex social and environmental problems. This approach emphasizes the importance of local knowledge, experimentation, and learning.
  5. Social Capital and Trust: Ostrom emphasized the role of social capital and trust in fostering cooperation among resource users, which is essential for successful common-pool resource management.

In summary, Elinor Ostrom’s work on Governing the Commons highlights the potential for local communities to manage shared resources through self-organized institutions. It provides a framework for understanding the conditions under which such institutions can be successful.

Mark Pagel — Wired for Culture (video)

Mark Pagel, an evolutionary biologist, presents his ideas on the origins and significance of human culture in his book “Wired for Culture.” He argues that the development of culture has played a crucial role in human evolution and success and is deeply intertwined with our biology. Here are the main ideas from Pagel’s work:

  1. Cultural Evolution: Pagel emphasizes that culture, like biological evolution, evolves through variation, selection, and inheritance. Cultural traits emerge, spread, and are passed down through generations, shaping societies and affecting human behaviour.
  2. Social Learning: Pagel asserts that humans have an innate capacity for social learning, which allows us to absorb knowledge, beliefs, and practices from others in our group. This ability has enabled the rapid diffusion of culture and has allowed humans to adapt to various environments and conditions.
  3. Group Identity and Cooperation: Pagel suggests that cultural traits create group identities, fostering a sense of belonging and cooperation within social groups. These shared traits promote trust and coordination, crucial for human survival and success.
  4. Cumulative Culture: According to Pagel, one of the defining features of human culture is its cumulative nature. Innovations build upon previous discoveries, allowing for increasingly complex cultural achievements over time. This cumulative process has driven human progress and shaped our world today.
  5. Cultural Diversity: Pagel highlights the immense diversity of human cultures, suggesting that it results from our species’ ability to adapt to different environments and circumstances. He also contends that cultural diversity has helped humans survive by providing various solutions to problems and fostering innovation.
  6. Cultural Evolution and Language: Pagel connects language development with cultural evolution, proposing that a language is an essential tool for transmitting and preserving cultural information across generations.

Mark Pagel’s “Wired for Culture” posits that culture is a vital component of human evolution, deeply rooted in our biology. He emphasizes the role of social learning, group identity, cooperation, cumulative culture, and language in shaping human societies and driving our success as a species.

Rutger Bregman- Human Kind — a Hopeful History — video

Rutger Bregman’s book “Humankind: A Hopeful History” explores human nature that challenges many commonly held negative views about people. The book’s central thesis is that humans are wired for kindness, cooperation, and trust rather than selfishness and violence.

Here are some key ideas from the book:

  1. Innate Goodness: Bregman argues that humans are naturally innately good and cooperative. He bases this on a variety of scientific studies and historical examples. This contradicts the belief that humans are naturally selfish and competitive.
  2. Realistic View of Human Nature: While asserting that humans are intrinsically good, Bregman doesn’t shy away from acknowledging our capacity for evil. He notes that circumstances and systems can lead people to act in harmful ways. However, he emphasizes that this doesn’t change our fundamentally good nature.
  3. Critique of “Realism” and Pessimism: Bregman critiques the “realistic” view of human nature that is often seen as inherently selfish and competitive. He asserts that such views can become self-fulfilling prophecies, leading to more harmful behaviour and less cooperative societies.
  4. Reinterpretation of Historical Events: Bregman offers reinterpretations of well-known events, such as the Easter Island collapse and the Stanford prison experiment. He argues that these events have often been misinterpreted to support a negative view of human nature.
  5. Importance of Trust: Bregman emphasizes the importance of trust in society, stating that high levels of trust lead to more cooperative and productive societies.
  6. Power of Positive Assumptions: He encourages people and systems to assume the best of others. This positive assumption can actually lead to better behaviour, in what’s known as a “self-fulfilling prophecy”.
  7. Constructive Solutions: The book's final section focuses on how societies can build upon our natural inclination towards goodness. Bregman suggests universal basic income, participatory democracy, and restorative justice to nurture our better nature.

Essentially, “Humankind” is a plea to reassess our fundamental assumptions about human nature and shape societies that bring out the best in us instead of assuming the worst.

Adam Smith — the Theory of Moral Sentiments-video

Here’s a summary of some of the main ideas presented in “The Theory of Moral Sentiments”:

  1. Sympathy and Empathy: The key idea is that humans naturally sympathize (understood today more as empathy) with others. We can imagine ourselves in others’ situations and feel happiness or sadness based on their circumstances.
  2. Moral Judgment: Smith proposed that people’s moral opinions are based on their capacity for sympathy. We judge the morality of an action by imagining ourselves in someone else's position and considering whether we would feel sympathy towards their action.
  3. The Impartial Spectator: This is an important concept in Smith’s theory. He argued that when judging our own actions, we should take the perspective of an impartial spectator — a hypothetical, objective observer. This concept helps to guide moral judgments by forcing us to step outside of our own perspectives and consider how an impartial third party would react to our actions.
  4. The Pursuit of Virtue: Smith outlined various virtues, such as prudence, benevolence, and self-control, arguing that these qualities lead to moral behaviour. The ultimate virtue for Smith was beneficence: the act of doing good for others.
  5. Balance of Self-interest and Sympathy: Smith acknowledges the natural human inclination towards self-interest, but he believed that our sympathies and our desire for the approval of the impartial spectator balance it.
  6. Utility and Virtue: Smith also noted that we often admire and value utility or usefulness. We appreciate things that are useful not just to ourselves but to society as a whole, and this extends to our admiration for personal virtues, which are essentially useful characteristics.

In summary, Smith’s “The Theory of Moral Sentiments” offers a sophisticated model for understanding how we make moral judgments. It proposes that empathy, self-reflection, and desire for social approval shape our moral behaviour.



Kevin Cox

Kevin works on empowering individuals within local communities to rid the economy of unearned income.