Karl Polanyi (1886-1964) was a Hungarian economic historian. His view of laissez-faire capitalism as a fleeting episode in history and of a new world economy as having evolved from it led to better understanding of nonmarket economies.

Born in Vienna on Oct. 25, 1886, Karl Polanyi was the son of a prosperous entrepreneur. The family fortune suffered reverses, however, and while attending the University of Budapest, he had to serve as a tutor to support his family. His problems were intensified by radical political activities which led to his banishment. He completed his education and received his degree in law at Kolozsvár in July 1909 and was called to the bar in 1912.

Polanyi was general secretary of the Radical Citizens party of Hungary for a short time and served in the army during World War I. The close of the war found him gravely ill, and he was taken...