Money as a fictitious commodity: making sense of the gold standard in Karl Polanyi’s The Great Transformation

Recent appraisals of Karl Polanyi’s account of the gold standard in The Great Transformation (The GT) have questioned the influence and contemporary relevance of his monetary thought for international political economy (IPE), charging that it obscures the critical political and governance functions of modern money. In this article, I argue that by ignoring his fundamentally social, rather than economistic, ontology of money, these critiques overlook much that is potentially useful for IPE in Polanyi’s thinking about money. Why, for instance, does Polanyi include money, commonly viewed as synonymous with commodity exchange, among the ‘fictitious’ commodities? Why is central banking at the heart of the double movement? Exploring these questions through a sympathetic rereading of The GT shows that beyond conventional interpretations that center the influence of liberal ideas or market mentalities in the drive to commodify money, Polanyi presents compelling material, political, and institutional factors motivating gold standard adoption and its interwar restoration. Instead of reflecting the conventional story of a self-equilibrating, market-based international monetary system, Polanyi highlights how the disruptions imposed on society by attempting to make money act as a commodity paradoxically propelled the emergence of modern monetary governance.