Abstract
•Michael Polanyi was an original thinker who provided an interesting view on government and economics spanning between Hayek and Keynes.•Michael Polanyi’s view on government and economics derives from his deep understanding of the interplay between spontaneous and organized orders of coordination in human social activities.•Michael Polanyi’s view on government and economics is linked to his conservative liberalism and his view of tacit knowledge.•Michael Polanyi’s conservative liberalism relies on tradition in the form of shared beliefs in transcendental values such as truth and justice and public liberty, which entails commitment to those values.•Tradition and public liberty provide the institutional bedrocks of the growth of knowledge in society due to the tacit dimension of knowledge.•Public liberty is both the condition of and the result of the human struggle for new knowledge because it gives meaning and purpose to the indeterminate scope of opportunities for free individual initiatives.
This paper gives an interpretation of Michael Polanyi’s vision of government and economics as spanning between Hayek and Keynes. The influence of Hayek is manifested by his opposition to central planning and the defence of self-organization as a superior mechanism for coordinating individual plans, while the influence of Keynes is evidenced by his strong support for government interventionism in order to dampen economic fluctuations, fight unemployment and limit income inequalities. Polanyi blended these two influences and produced an idiosyncratic approach to government and economics, which has until recently been underrated in the literature. Our aim in this paper is to show that, by considering Polanyi’s mixed vision of the market economy as embedded in his broader pursuits into the nature of knowledge and liberalism one can find coherence which cannot otherwise be found.