The economistic fallacy and forms of integration under and after socialism

Abstract

The concept of ‘the economistic fallacy’, theorized most elaborately in a posthumous work, is central to the entire oeuvre of Karl Polanyi – and to its endemic ambiguities. While previous discussion has focused on capitalist and pre-capitalist societies, this paper explores the alleged fallacy in a socialist framework. Drawing on field-work in a village on the Great Plain, it is argued that the Hungarian variety of ‘market socialism’ brought about a successful balance between the Polanyian ‘forms of integration’, in a conjuncture which stimulated household accumulation and promoted the interests of the rural population as a whole. Since the demise of socialism, this balance has been lost. A renewed economistic fallacy can be detected in the era of neo-liberal capitalism, but in Hungary the scope for household accumulation has greatly diminished, and the high price paid by the countryside is reflected in reactionary political movements. Polanyi sometimes fell into the trap of an anti-market, ‘collectivistic fallacy’. However, if the economistic fallacy was dominant in the ‘nineteenth-century consciousness’ which he lambasted, the twentieth century demonstrated the inadequacy of Marxist-Leninist-Maoist alternatives in their purist forms. The Hungarian case exemplifies the more general challenge: how to institutionalize substantivist mixed economies which allow individuals and households appropriate space for ‘economistic’ behaviour in markets to meet some of their needs, without indulging the fantasy that reduces human motivations to utility maximization and socio-cultural complexity to a generalized market rationality.     

‘Whatever it takes’: Polanyian perspectives on the eurozone crisis and the gold standard

Abstract

The parallels between the monetary politics of the gold standard and that of the eurozone crisis are striking and have informed contemporary debate about the future of European integration. The eurozone crisis has been widely interpreted as the result of a mismatch between international monetary integration and a concomitant lack of fiscal integration, or more broadly as the result of a European Union which is economically integrated, yet politically fragmented. The prospect of a 1930s-style descent into division and nationalism has formed the backdrop against which moves towards extensive integration at the supranational level have been made. Polanyi diagnosed the political effects of monetary integration through his analysis of the gold standard system in The great transformation, making it important that we unpack his analysis and consider carefully how a Polanyian perspective might apply to the eurozone today. I argue that Polanyi encourages us to look beyond ‘monetary vs. fiscal’ and ‘economic vs. political’ characterizations of European integration, and instead to examine how such oppositions are formed in the first place and how they constrain political debate, particularly in terms of how ‘sound money’ is established as the highest policy concern. Through a re-reading of Polanyi's distinction between ‘all-purpose’ and ‘special-purpose’ money, I highlight how, despite the huge efforts undertaken to preserve the identity of the euro as an all-purpose currency, the eurozone crisis has rendered visible a series of latent conflicts between the different functions of money. This analysis moves us away from the ‘monetary vs. fiscal’ integration view of the eurozone crisis and towards a more open study of how the various possible purposes of money are being articulated and challenged, offering some limited hope for alternatives to the current eurozone policy agenda.     

经济扩张与社会保护——从波兰尼的“双向运动”看美国霸权体系

波兰尼提出了"双向运动"的概念,他认为,国家政策摇摆于经济扩张收益与社会保护成本的制衡之间;资本扩张与秩序维护形成了体系层面的"双向运动",霸权国则扮演了"体系中的政府"这一角色。国际体系的"双向运动"的矛盾焦点,在于经济扩张的同时如何维护国际层面及国内层面的秩序。美国霸权在这个问题上表现出相当娴熟的策略与技巧,利用国际多边机制使其成本外部化且将收益内部化,但美国的霸权也未能彻底克服"双向运动"带来的冲击与影响,存在着软肋与局限性。     

Towards a neo-Polanyian approach to money: integrating the concept of debt

Abstract

This paper aims to reconsider Polanyi's approach to money. His best-known writing on money uses is deeply original and presents strong insights that dissociate money from the concept of the market. Polanyi also developed an interesting non-dichotomous understanding of money in his The great transformation. However, taken together, these two contributions lead to some unresolved questions: his critique of the orthodox approach to money is ambivalent; his argument to separate payment from account is weak; and, most important, he ultimately makes an incomplete break with the classical real/monetary dichotomy. This paper proposes a distinction between money as a set of instruments and practices and money as a concept, through the integration of John Commons's concept of debt into Polanyi's framework. This reformulation allows us to resolve Polanyi's unresolved questions while preserving his major contributions, and leads to a more complex understanding of money.     

The Embedded Market and Ideology Critique

Abstract

When the Global Financial Crisis hit, major political economists were able to boast that they had long warned that "crazy times" were coming. By contrast, leading sociologists seem to have been wrong footed. Totalizing narratives of a new "risk society", "second modernity" and the like appeared to have sacrificed the grounds for weighing up the costs and damages of contemporary capitalism. Made famous by Karl Polanyi, the concept of the embedded market suggests a differentiated diagnosis of our times that should allow sociology to re-enter the discussion as a critic of an ideological attempt to block public discussions about losses and dam ages of contemporary capitalism. The following paper will explore several readings of this concept and will evaluate their capacity to revive sociology's critical powers.     

Weapons of the week,weakness of the weapons: Shifts and stasis in development theory

Over the past half century the theory, practice and politics informing development studies have followed contrasting trajectories, a tangled epistemological pattern displayed inadvertently by some of the contributions to three of the four books reviewed here. This inconsistency has resulted in confusion, not least where current Marxist approaches to the agrarian question are concerned. Unsurprisingly, therefore, misinterpretations of unfree labour plus the jettisoning of class analysis have led to the abandonment of socialism, and its replacement with nationalism and bourgeois democracy as desirable political objectives. By locating rural class formation and agrarian struggle in a global capitalist context, however, one of the four books demonstrates the continuing importance of socialist politics to the study of development.     

Die Wiederherstellung des Marktsubjekts

The UK is generally considered a laboratory for styles of governance influenced by New Public Management: outsourcing, internal markets, targets, auditing. The shifts in governance style, and the new instruments that have accompanied them, were once synonymous with “Thatcherism” but have since been adopted and refined by New Labour. Early critical social scientific analyses deployed the Gramscian notion of hegemony to analyse this shift. This was followed by Foucault inspired analyses of “governmentality”. The latter focused more explicitly on the micro-level of conduct. This article follows that lead, but seeks to address the central puzzles thrown up by this experiment through Max Weber’s conception of a “bureaucratic revolution” and Karl Polanyi’s analysis of the constitution of a “market subject” via a “double movement”: a simultaneous loosening and tightening of control. The Weber-Polanyi approach allows us, we argue, to make the link more explicit between micro-level changes in the “conduct of life” (Lebensführung) and the meso-level instruments designed to bring about such a re-orientation of conduct. The article makes the case with reference to empirical material from a number of public services, notably education and health. Overall, the decisive factor is not a weakening of the state, but a change in its capacities and instruments.     

Social change and social conflict in nineteenth century England: A comment

This article addresses the potential for food movements to bring about substantive changes to the current global food system. After describing the current corporate food regime, we apply Karl Polanyi's ‘double-movement’ thesis on capitalism to explain the regime's trends of neoliberalism and reform. Using the global food crisis as a point of departure, we introduce a comparative analytical framework for different political and social trends within the corporate food regime and global food movements, characterizing them as ‘Neoliberal’, ‘Reformist’, ‘Progressive’, and ‘Radical’, respectively, and describe each trend based on its discourse, model, and key actors, approach to the food crisis, and key documents. After a discussion of class, political permeability, and tensions within the food movements, we suggest that the current food crisis offers opportunities for strategic alliances between Progressive and Radical trends within the food movement. We conclude that while the food crisis has brought a retrenchment of neoliberalization and weak calls for reform, the worldwide growth of food movements directly and indirectly challenge the legitimacy and hegemony of the corporate food regime. Regime change will require sustained pressure from a strong global food movement, built on durable alliances between Progressive and Radical trends.     

The great transformation and progressive possibilities: the political limits of Polanyi's Marxian history of economic ideas

Abstract

Polanyi's The great transformation remains one of the stand-out texts of twentieth-century political economy, yet it contains important conceptual ambiguities. Perhaps most significantly, the later chapters reveal the influence of Polanyi's own notion of an ‘always embedded economy’, whereas the earlier chapters are constructed around a much more abstract notion of ‘economy’ derived from an essentially Marxian history of economic ideas. Marx worked within the basic Ricardian conception of economy as a method of immanent critique, but then proceeded also to project that same conception backwards onto pre-Ricardian traditions of economics. Polanyi did likewise, I argue, consequently missing the opportunity to connect his own ideas about the non-market influences on all market outcomes to pre-Ricardian studies of the substantive basis of functioning economic relations. I use the following pages to try to restore one such link, in this instance to Adam Smith's account of the moral ‘sympathy’ underpinning the process of market co-ordination. This reconstruction also has implications for progressive possibilities today. Polanyian responses to the ongoing crisis have tended to be framed by the basic Ricardian conception of economy and have accordingly been restricted to a discussion of more market or less, more social protection or less, more austerity or less. By contrast, tracing the lineage from pre-Ricardian concerns to Polanyi's notion of an always embedded economy allows the potentially much more radical question to be asked of what sort of economic relations today best serve essential human needs.     

Can society be commodities all the way down? Post-Polanyian reflections on capitalist crisis

Abstract

In his classic 1944 book, The great transformation, Karl Polanyi traced the roots of capitalist crisis to efforts to create ‘self-regulating markets’ in land, labour and money. The effect was to turn those three fundamental bases of social life into ‘fictitious commodities’. The inevitable result, Polanyi claimed, was to despoil nature, rupture communities and destroy livelihoods. This diagnosis has strong echoes in the twenty-first century: witness the burgeoning markets in carbon emissions and biotechnology; in child-care, schooling and the care of the old; and in financial derivatives. In this situation, Polanyi's idea of fictitious commodification affords a promising basis for an integrated structural analysis that connects three dimensions of the present crisis: the ecological, the social and the financial. This paper explores the strengths and weaknesses of Polanyi's idea.