This 1946 work was written in reaction to the persecution of scientists in the USSR. Polanyi felt the need to formulate a philosophy of science that defines its nature and provides justification for science in light of the Leftist denial of the creative power of thought.
The first part, Science & Reality, seeks to define the nature of science. He demonstrates that the propositions embodied in natural science are not derived by definite rules from experiential data. It is rather a process of (1) guessing or intuitive speculation driven by the creative impulse, guided by (2) critical caution or verification by observation. Both the aforementioned are channeled through the scientific conscience and the mind of the scientist transcends both.
In Part Two: Authority & Conscience, Polanyi differentiates General Authority from Specific Authority. The first leaves the decision for interpreting traditional rules in the minds of numerous independent individuals; this type of authority requires freedom. Specific Authority centralizes such decisions at one point; it requires obedience.
Part Three: Dedication & Servitude, considers how freedom is maintained within science. Sovereignty in the scientific realm is divided into fragments represented by individual scientists of whom fairness and tolerance are required. Fairness means that the scientist makes an effort to put her/his case objectively, recognizing the limitations of their own abilities and the existence of personal bias; tolerance requires the capacity to endure the unfair/hostile statements of opponents.
Upholding fairness and tolerance involves the public since controversies between proponents of ideas are conducted in order to canvass support instead of persuading one another. In the public arena, fairness and tolerance can be maintained only when the audience resists false oratory and appreciates moderation. A discerning public able to perceive insincerity of argument is an essential partner in the process of open debate. Such an audience will prefer moderate claims admitting an element of personal conviction in order to maintain mental balance and as proof of conscientious thinking by those appealing for its support.
Institutions that provide shelter to free discussion in a free society may include houses of parliament, courts of law, churches, the media, local government and a multitude of cultural, humanitarian and political organizations. A community which practices free discussion agrees with the fourfold proposition that (i) truth exists (ii) all its members value it (iii) feel compelled to pursue it (iv) are capable of doing so.
Thus the sovereignty of a free public opinion is the foundation stone of science since a society committed to truth must grant freedom to science as one form of truth. Even though true propositions cannot be established by any explicit criteria we do assert the universal validity of propositions to which we personally assent. In this way we express our conviction that truth is real; according validity to any great domain of the mind is to affirm a faith that can only be upheld within a community.
Our current civilizational crisis derives from the idea that freedom does not mean the acceptance of any particular obligations and is incompatible with a prescription of its own limits. In this view, freedom of thought means the rejection of any type of traditional beliefs including those on which freedom itself is based. Polanyi provides a brief outline of the historical process by which the (post)modern crisis has arisen.
In discussing movements like Bolshevism and Fascism he observes that they owed their success entirely to hidden spiritual forces, gaining power on a wave of patriotic or humanitarian passions. As shown by Hoffer in The True Believer, those who discard the pursuit of truth for the interests of particular groups inevitably attach their aspirations to the struggle for power. All their love & devotion are poured into a residue of reality, the power of the chosen party. This is the root of the fanaticism and explains the profound moral response even while moral realities are scorned; love of truth & justice is distorted into a love of power.
There is no common ground for argument between the believer in transcendent reality and the sinisterist but conversion is possible, where the collectivist's beliefs are transferred from the theory of political violence to the spiritual realm. The case of the Romantic nihilist is more difficult according to Polanyi, since the cult of brutality tends to utterly corrupt the very core of humanity.
Polanyi's distinction is crucial: although he denies that truth is demonstrable, he asserts that it is indeed knowable by tradition and by conscience which is mankind's guide to truth. It is impossible - as logical positivism demonstrates - of verifying any universal statements (a fact that exacerbates the crisis caused by skeptical empiricism), but tradition remains the foundation for universal ideals. We ought thus to cultivate to the best of our ability the particular strain of tradition into which we were born.
Polanyi concludes that well-being seems not to be the real purpose of society but secondary to its task of fulfilling aims in the spiritual field. The knowledge of abiding concerns is reinforced by the free conscience of every generation, adding to our spiritual heritage. We may therefore assume that the source of this inspiration is the same as that which first gave mankind its society-forming knowledge. Knowledge of reality & acceptance of those obligations that guide our consciences will ultimately reveal to us The Eternal Divine in man and society. This thought-provoking book concludes with three indices: Premises of Science, Significance of New Observations and Correspondence with Observation.