In this book, Polanyi forcefully argues the minimal point that governmental intervention in the economy is required to make society and the economy work. Critically, he argues that the economy is embedded as a part of society, and what is good for the economy is not always good for society. Moreover, he argues that in order for the economy to work, the government must intervene, and that historically governments have done so. There is no escaping markets and there is no escaping planning. Even "laissez-faire was planned" by the state to get people to engage in impersonal trade rather than the more communal village "economy" of giving based on custom. In the Middle Ages, after all, the daily needs of life were not bought and sold. The individual household made its own clothes, bought its own food, etc. With capitalism, that system of "cottage industry" was broken up and everyone was required to specialize in a job in order to get the money to pay for goods.
For Polanyi, the major trauma of the 18th and 19th centuries was the entry of the market into all people's lives, often forcibly, such as the closing of the commons. Societies were threatened by the market, and the fascist movement emerged to protect society from the market by sacrificing human freedom. Small villages were destroyed by urbanization. As capital flowed into cities, labor followed. The result was a general increase in the rise of wages in those cities, but also an increase in unemployment as people flowed in and didn't always find work. This hollowed out the towns they came from, causing a major social cost due to the predominance of the market. Famines could emerge under capitalism that would not have emerged under feudalism or in village communities because the rules of the market dictated that people could starve if they did not have money for food, whereas the rules of noblesse oblige would have created a backstop to feed them. Free market capitalism as it existed especially in the 19th century provided none of the backstops that existed in feudal or other primitive systems. In the 20th century, it became necessary to recreate these backstops through welfare that would have been provided in earlier times by the village or the lord. In regard to famines, Polanyi mentions India, but points out that "what the white man may still occasionally practice in remote regions today, namely, the smashing up of social structures in order to extract the element of labor from them, was don't in the eighteenth century to white populations by white men for similar purposes." So for whatever positive economic effects there are of drawing people out of their villages to do more valuable work elsewhere, it also breaks up support systems in those source communities. Tonies would probably have something to say about how this was a transition from community to society.
Ultimately, Polanyi concludes that fascism was brought about not by nationalism, but by different societies' attempts to protect themselves from markets, and that nationalism just affected the local flair of fascism. Nationalism was the means to rally the society together under an identity to oppose the takeover of markets. Therefore, there must be some planning and control in order to avoid the much greater denial of freedom represented by fascism, which comes when markets, completely free, threaten the fabric of the society.
Miscellaneous:
- Just a thought from Polanyi: Protectionism begets imperialism and vice versa because without protected markets, it is uneconomical to keep colonies. The colonies are made to pay for themselves by being restricted to only trade with the imperial metropole.
- A Scottish bridgebuilder by the name of Telford ordered a copy of Thomas Paine's Rights of Man to his home village, which caused a riot to break out there when people read it.
No comments:
Post a Comment