I read Karl Polanyi's The Great Transformation: The Political and Economic Origins of our Time years ago. I find its thesis on the first passage of the first chapter:
"Nineteenth-century civilization rested on four institutions. The first was the balance-of-power system which for a century prevented the occurrence of any long and devastating war between the Great Powers. The second was the international gold standard which symbolized a unique organization of world economy. The third was the self-regulating market which produced an unheard-of material welfare. The fourth was the liberal state. Classified in one way, two of these institutions were economic, two political. Classified in another way, two of them were national, two international. Between them they determined the characteristic outlines of the history of our civilization.
Of these institutions the gold standard proved crucial; its fall was the proximate cause of the catastrophe. By the time it failed, most of the other institutions had been sacrificed in a vain effort to save it.
But the fount and matrix of the system was the self-regulating market. It was this innovation which gave rise to a specific civilization. The gold standard was merely an attempt to extend the domestic market system to the international field; the balance-of-power system was a superstructure erected upon and, partly, worked through the gold standard; the liberal state was itself a creation of the self-regulating market. The key to the institutional system of the nineteenth century lay in the laws governing market economy.
Our thesis is that the idea of a self-adjusting market implied a stark Utopia. Such an institution could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness. Inevitably, society took measures to protect itself, but whatever measures it took impaired the self-regulation of the market, disorganized industrial life, and thus endangered society in yet another way It was this dilemma which forced the development of the market system into a definite groove and finally disrupted the social organization based upon it. " -- Karl Polanyi
By the way Charles Peters has died.
In many ways, this blog is my commonplace book.
Posts
3 comments:
«Labor And Land Are No Commodities»
Whether they are is ideology. For some labor is a commodity but land is the sacred inheritance of the ancestors, and every other possible combination happens too.
There is an old saying in anglo-american law:
https://quoteinvestigator.com/2010/07/04/legal-adage/
“If you’re weak on the facts and strong on the law, pound the law. If you’re weak on the law and strong on the facts, pound the facts. If you’re weak on both, pound the table.”
So for those who strong on either the markets, the land, labor, capital. It is pretty natural.
«“Our thesis is that the idea of a self-adjusting market implied a stark Utopia. Such an institution could not exist for any length of time without annihilating the human and natural substance of society”»
Polanyi made a great contribution, but I think there is a wider point than his "markets vs. institutions" arguments: what is missing from most of Economics, political economy, political "science", and even a lot of sociology is *anthropology*, in particular the influence of kinship and culture. In particular the overwhelming importance of reproduction in human behaviour and culture as many people will do amazing things for the sake of their children and grandchildren, something that the often aspergery types that get into academic careers, and in particular in Economics, often cannot relate to.
As to “could not exist for any length of time without annihilating the human and natural substance of society” I even have a hypothesis that women switching from having sons to owning assets as pensions is what drives civilization cycles.
Ben Franklin wrote appositely “When old men plant trees under whose shade they know they will never sit, society flourishes” and that is a good insight, but he did not realize that what matters more is not what men do, but what women choose.
«“Of these institutions the gold standard proved crucial; its fall was the proximate cause of the catastrophe. By the time it failed, most of the other institutions had been sacrificed in a vain effort to save it. But the fount and matrix of the system was the self-regulating market. It was this innovation which gave rise to a specific civilization.”»
In retrospect I disagree with Polanyi not because he was wrong but because the gold standard and the "free markets" were just means to an end, and the end was the supremacy of the english class of owners of industry, which itself depended on the two really big deals, the industrial mode of production (secondarily) and cheap coal fuel (primarily).
The best pithy summary of the history, economics and politics (except for reproductive issues) of the past 200 years (it is a tall claim, but please consider it seriously) I have found is this short quote (use your imagination to extend it to post-Victorian periods and other countries):
Tony Wrigley, "Energy and the english industrial revolution" (2010)
https://www.cambridge.org/core/books/energy-and-the-english-industrial-revolution/A18E48989B4A915D0E77A29D57D85763
«Approximately two-thirds of the European production of cotton textiles took place in the UK. The comparable percentages for iron production and coal production were 64 and 76 per cent. [...] The total of installed steam engine horsepower was far larger than on the continent. In 1840, 75 per cent of the combined total capacity of stationary steam engines in Britain, France, Prussia and Belgium was in Britain alone (the other three countries accounted for the great bulk of installed capacity on the continent.»
The story is well summarised in this article: https://royalsocietypublishing.org/doi/10.1098/rsta.2011.0568
There is also this 1865 paper by Jevons: https://oll.libertyfund.org/titles/jevons-the-coal-question
More details here:
Andres Malm "Fossil capital" (2016)
https://www.versobooks.com/en-gb/products/135-fossil-capital
«One method used by Wrigley and his followers to illustrate the logic is to convert coal into acres of land required to generate the same amount of energy. In 1750, all coal produced in England would have equalled 4.3 million acres of woodland, or 13 percent of the national territory. In 1800, substituting wood for all coal would have demanded 11.2 million acres, or 35 percent of the British land surface; by 1850, the figures had risen to 48.1 million acres and 150 percent, respectively. As early as in 1750, then, a hypothetical total conversion from coal to wood in the British economy would have ‘represented a significant proportion of the land surface for which there were many other competing uses’; in 1800, it would have been ‘quite impractical’; in 1850 – the threshold of 100 percent crossed – ‘self-evidently an impossibility’. In other words, ‘in the absence of coal as an energy source, Ricardian pressures would have become acute’: forests denuded, soils exhausted, growth grinding to a halt. In a similar computation inspired by Wrigley, Rolf Pieter Sieferle concludes that, already by the 1820s, coal had freed an area equivalent to the total surface of Britain, while Paolo Malanima, likewise standing on the shoulders of Wrigley, estimates that in the absence of fossil fuels, Europe would have needed a land area more than 2.7 times its entire continental surface in 1900, rising to more than 20 times in 2000.»
Some Marxist textbooks I have read, for example, Rosa Luxemburg's, draw quite a bit on anthropology. A focus on the generation, distribution, and use of surplus production is not only for economics.
I have read some saying that the English could advocate free trade because they were ahead in industrial development. It is not an abstract theoretical argument.
Post a Comment