The notion that individual acts of exchange were at the root of trade, money, and even of market institutions, is hardly tenable. Foreign trade, as a… - Karl Polanyi

At the heart of the Industrial Revolution of the eighteenth century there was an almost miraculous improvement in the tools of production, which was accompanied by a catastrophic dislocation of the lives of the common people.

One simple recognition, from which all attempts at clarification of the place of the economy in society must start, is the fact that the term economic, as commonly used to describe a type of human activity, is a compound of two meanings. These have separate roots, independent of one another. It is not difficult to identify them, even though a number of broadly synonymous words are available for each. The first meaning, the formal, springs from the logical character of the means-ends relationship, as in economizing or economical; from this meaning springs the scarcity definition of economic. The second, the substantive meaning, points to the elemental fact that human beings, like all other living thins, cannot exist for any length of time without a physical environment that sustains them; this is the origin of the substantive definition of economic. The two meanings, the formal and the substantive, have nothing in common.
The current concept of economic is, then, a compound of two meanings. While hardly anyone would seriously deny this fact, its implications for the social sciences (always excepting economics) are rarely touched upon. Whenever sociology, anthropology, or history deals with matters pertaining to human livelihood, the term economic is taken for granted. It is employed loosely, relying for a frame of reference now on its scarcity connotation, now on its substantive connotation, thus oscillating between two unrelated poles of meaning.

Mankind was in the grip, not of new motives, but of new mechanisms. Briefly, the strain sprang from the zone of the market; from there it spread to the political sphere, thus comprising the whole of society. But within the single nations the tension remained latent as long as world economy continued to function. Only when the last of its surviving institutions, the gold standard, dissolved was the stress within the nations finally released. Different as their responses to the new situation were, essentially they represented adjustments to the disappearance of the traditional world economy; when it disintegrated, market civilization itself was engulfed. This explains the almost unbelievable fact that a civilization was being disrupted by the blind action of soulless institutions the only purpose of which was the automatic increase of material welfare.