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Lessons from Polanyi

from Jorge Buzaglo

Under the gold standard the leaders of the financial market are entrusted, in the nature of things, with the safeguarding of stable exchanges and sound internal credit on which government finance largely depends. The banking organization is thus in the position to obstruct any domestic move in the economic sphere which it happens to dislike, whether its reasons are good or bad. In terms of politics, on currency and credit, governments must take the advice of the bankers, who alone can know whether any financial measure would or would not endanger the capital market and the exchangesThe financial market governs by panic (Polanyi, 1944, p. 229).

The present globalization wave is a financialization wave. The previous waves described in Karl Polanyi’s The Great Transformation also involved financialization. The financial sector appears as the major and most consistent leader and beneficiary of the general marketization policies of deregulation, liberalization and privatization. One of the main lessons of The Great Transformation is that previous globalization waves radically undermined established systems of social relations, thus provoking, in time, socially and/or nationally “protectionist” reactions, within a “double movement” (for more on Polanyi, see Zaman, 2016).

As Polanyi also observes, political reactions could be extreme:  

“After 1930 market economy was in a general crisis. Within a few years fascism was a world power” (Polanyi 1944, p. 242).

It seems that, if the lesson from The Great Transformation holds also for the present globalization wave, we should expect social and national reactions trying to “re-embed” the de-regulated, unbridled forces of the market within new networks and rules of social life. Nationalism seems to be the more primitive and irrational form of “protectionist” reaction. An eroded and divided society, in which political parties and elites have lost legitimacy, is unified around the myth of the great — and abused — Nation. Minorities become potentially treasonous; other nations become potentially enemies. Fascism can present itself in several different guises, from the more folkloristic and semi-democratic, to the aggressively imperialistic and genocidal. We are perhaps already witnessing different forms of implementation of evolving, “post-modern” fascism.

The social protectionist, or socialist reaction, on the other hand, is a more rational reaction, which is based on an analysis — by the social movements and their intellectuals — of the nature of the existing social conflict and its possible progressive resolutions. The socialist response is therefore less visceral and more difficult. It requires generous class solidarity, even at the international level. It requires an ability to form wide programmatic alliances, and to unify the plurality of social forces characteristic of modern, late capitalism. It requires endurance and patience, clarity about long term interests and objectives, and a capacity to postpone and negotiate for further advancement.

Human growth and avoiding European disintegration: lessons from Polanyi

  1. Helen Sakho
    August 1, 2018 at 1:15 am

    Please follow the destiny of the gold mines is South Africa and which Economists are celebrating a new chapter in gold digging in the same geography. Also follow who is “lighting up” new geographies to enlighten the ignorant natives. We are back to Africa, which is where life began, as agreed by most people. Also look up which African regions are dealing with refugees from Africa. Hatred is the ideological function of power. As power relations shift, so does their focus, until further shifts become necessary. Advancement is socio-culturally defined, and that exactly how it must be. If we train our poor or rich students to internalise power relations with gratitude, we are not human, let alone teachers or economists of any kind.

  2. Helen Sakho
    August 1, 2018 at 1:26 am

    P.S. Please also see which “T” is being suggested as an addition to what groups of countries for a new alliance in the de-structuring of an already devastated world.

  3. Craig
    August 1, 2018 at 1:56 am

    It is completely true that the glaring virtual monopoly on credit creation by private finance and its paradigm of Debt Only/Burden/Additional cost post retail sale ARE the problem, however socialist re-distributive taxation is not their best and actual resolution. I will not argue against the fact that certain socialist economies are more humane and re-distribute the scarcity of individual incomes better than more capitalist ones do, but reactions and palliatives are not integrations and to claim that such are better than integrative and actual solutions cannot be objectively or long justified.

  4. dmf
    August 1, 2018 at 4:14 am

    Mirowski traces the origins of neoliberalism to Friedrich Hayek and a European thought collective called The Mont Pelerin Society, who saw markets as information processors, superior to human reason. But we soon see that when neoliberalism, as a real-world political project, expects ignorance of the masses, then spreading confusion becomes an acceptable mode of operation, and lying is not necessarily a bad thing.

    When political disenchantment is seen as a positive effect of market societies, and while neoliberal actors say one thing and do another — often coopting the left into their projects — how is an alternative to neoliberalism ever to succeed? Mirowski argues the left needs to leave classical liberal ideas behind and come up with a plausible modern counterargument to the neoliberal multi-level long-game: the telos of market domination.

    We look at sources of knowledge in the neoliberalized world, from the power of thought collectives to the faux epistemic authority of market-inspired information spaces like Wikipedia which Mirowski has called “a fetid swamp of misinformation.” Finally, a look at how a Nazi theorist and the father of neoconservatism inspired the neoliberal politics of knowledge, along with the increasingly common political tactic of telling two stories — one to the public, and one to the insider elect — that we’ve now seen one candidate for president openly defend in the second debate.

  5. August 14, 2018 at 8:14 am

    Sapiens has a long evolutionary history. Along with a cultural history of over 10,000 years. That history has produced many forms of aberrations. Those relevant to this discussion are given various names. Sociopathy, psychopathology, aberrant personality, intellectually challenged, organic and inorganic brain disorders, and a long list of psychoses. Then there are the multiple forms of culture humans create. From elites to warrior society to class to race to family to gender, and many more. All ways to divide up people into categories. Evolution and culture, the sources of thousands of wars, genocides, hatreds, murders, etc. Within this complex maze of genetics, biology, ways of life taught and followed how do humans build a practicable and durable community? This question requires we examine and answer several other questions. First, how do we assess group formation and how necessary is community to human viability? Second, how do we create history of the creation of social relations? Three, how do nonhuman actors figure into the process? Four, how do we refocus research on matters of concern rather than matters of fact. The former being more important it seems in understanding human society. Fifth, how do we share how we answer these questions with others to enhance understanding? Polanyi provides answers without asking or answering these questions. In fact, he answers the questions in alternative versions of the evolutionary and cultural divisions he’s attempting to thwart.

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