Observing the collapse of liberalism in the 1930s and the self-destructing war that followed, Polanyi (1944) came to the conclusion that “the idea of a self-adjusting market implied a stark Utopia”. For Polanyi, if “a market economy can function only in a market society” this society is not sustainable in practice. It would imply free markets of fictive merchandises (labor, money and land), a system that would “annihilate” the human and natural substance of societies.
Polanyi’s lesson has clearly been forgotten, especially in the European Union. Since the Single Act treaty (1986), European economy took a path that aims to create a supranational free market economy that rest on three dimensions: 1/ a Monetary Union based on a supranational currency; 2/ a Single Labor Market that generates competitive pressures on national social systems; 3/ Competition Authorities that prevent public interventionism and support a total capital mobility.
The way the European economy is regulated is a direct product of the ordoliberal philosophy stating that public intervention should concern only the legal system surrounding the markets without any discretionary intervention. Implementing ordoliberalism was also a way to diminish the role of national states in an attempt to create a continental economy. But by detaching the economic sphere from the reach of national societies, this process created a European economy with no real European society to control it. The result is destructive and may explain the rapid development of populist movements. According to Polanyi double movement framework, the emergence of these political forces may be seen as protective measures from societies weakened by difficult market adjustments.