Expanding heterodoxy in economic analysis

from Robert Locke

Asad Zaman in his “summary of the Great Transformation by Polyani,” lauds the work especially because it “shows that the economic, political and social spheres are closely inter-linked and cannot be studied in isolation, as the current structure of the social sciences assumes. USING Polyani’s methodology would lead to substantially deeper understanding of current events, as well as to better tools for research.”  To mainstream economists Polyani’s analysis is heterodox because it includes political and social sphere in economics, which neoclassical economics excluded from its purview. To non-neoclassical economists, Polyani’s approach is a breath of fresh air in the stultifying atmosphere of our current discussions, which have boiled down to sic et non evaluations of the validity of neoclassical economics. 

Historians have been aware of the inter-link that Zaman’s analysis of Polyani emphasizes for a long time, because of their preoccupation with the economic and institutional structures of nation states.  Within the historians’ ranks awareness of the interconnectedness of political, economic, and social (and we could add cultural) spheres has significantly increased recently brought on by the rapid expansion of world history and world civilization programs.* The inter-link has been the theme of famous texts, i. e. James Breasted’s The Conquest of Civilization (1926), William McNeill’s The Rise of the West: A History of the Human Community (1963), and Jerry Bentley and Herbert Ziegler’s Traditions and Encounters: A Global Perspective on the Past that is currently being used as a text in world civilization courses in many US colleges and universities.  

In addition, there has been an expansion of periodical literature that enhances our knowledge about the inter-links between political, economic, and social spheres.  To illustrate:  In the late 20^th century two journals in the University of Hawaii at Manoa began to explore these inter-links globally.  One is the Journal of Chinese Philosophy, founded in 1973 in the Department of Philosophy, whose articles are particularly enlightening for economists interested in the linkage between Chinese moral philosophy and the Chinese attempt to find a moral compass in their own traditions, as an alternative to the West’s neoliberalism (articles like “New Confucianism a Philosophy of Humanity and Governance,” or “Contemporary Moral Education and Zhu X’s Neo-Confucian Ethic”), which strive to make Confucianism the basis of moral education in business schools.  The second example is the Journal of World History, created in the Department of History in 1989, whose articles globalize the inter-link between political, economic, and social spheres (e.g., “The Global Financial Crisis in the Asian Context” or “Chinese Money in Global Context”) 

The recent advances in teaching and research of world history and comparative world civilizations not only permit heterodox economists, who take advantage of them, to explore better the linkages between political, economic, and social spheres but to shift the debate from Euro-US-UK centrism to one that includes historical developments in the nonwestern world. After all, Polyani’s “Great Transformation” is a UK-centric treatment, because it claims that “markets have been of marginal importance in traditional societies throughout history,” that “the market economy emerged after a prolonged battle against these traditions,” that it emerged from the London based global trade emporium established in the 18^th century, and that, “as Polanyi clarifies, this is not a good development,[ because] the commoditization of human beings and land required by the dominance of the market has done tremendous damage to society and environment.”  (Quotes from Asad’s article).   

Much of the discussion among world historians discounts this sort of UK centricism.  Their scholarship shows, for instance, that the view that”markets have been of marginal importance in traditional societies,” is not true — 17^th-18^th century Togukawa Japan is an obvious example of market dynamism.  The history of “traditional societies” has not been static.  As the late Jerry Bentley, co-founder of the Journal of World History, wrote: “Recent scholarship on commercial, biological, and cultural exchanges suggests… that during the millennium from 500 to 1500 C.E., cross-cultural interactions fostered the integration of societies throughout the Eastern Hemisphere.” (“Hemispheric Integration, 500-1500,” 1998) 

The “Great Tranformation” of which Polyiani speaks was not the source of change in the world outside a UK, US, British Empire context.  Nonwestern societies have been able to transform themselves dramatically without embracing free markets in principle or reality or accepting the organizational ethics or the political idea of English liberalism. The transformations of Japan and China, which could be considered the two most significant economic events since WWII, are not based on the Great Transformation Polyani  talks about, but on political (authoritarianism), economic (protectionism), and social (Confucianism, Buddhism) linkages rooted in non-liberal , nonwestern histories.