The Polanyi Moment, Decommodification of Labor and the Struggle for Full Employment: How the COVID-19 Crisis has Opened the Debate Over the Nature of the Fictitious Labor Market in Both the Industrialized and Developing World

Abstract The purpose of this article is first to discuss how the so-called fictitious labor market has been analyzed historically, by studying the classical, Marxian, and Lewis dual sectors and then by pointing to the current distinction between formal and informal sectors with the consequences of the phenomenon of informality on measured unemployment. We consider the recent 21st Century experience during the Great Financial Crisis and the current COVID-19 crisis, which, we believe, opens the door to how Karl Polanyi’s vision can offer alternative policy perspectives. This is of crucial significance for those of us who wish to prevent a return to neoliberal policies during the future post-pandemic period, particularly in the emerging and developing countries, where the highest incidence of employment informality prevails.