Karl Polanyi’s The Great Transformation
Every so often, a piece thinker trips onto the global stage and says something like: “Sure, people say that they’re unhappy, and they say that it’s the economy, but GDP is steadily growing and a lot of those people are rich. So they’re wrong.” Then Donald Trump gets elected or some country ‘exits, and the slightly clammier thinker regurgitates their argument, but this time they punctuate it with: “You dicks.”
More nuanced thinkers add a few parentheticals (“2008”, “racism”, “coastal gains and middle drains“, etc.) but they retain the basic structure.
It’s important to understand something: They’re not wrong. They’re just insane.
The same thing happens on the left, this isn’t split across the French National Assembly. It’s something more like “current system” vs. “new/old one”, which does sound like “conservative” vs. “other”, but doesn’t match any such party we have.
Take Occupy. No, first, take this graph:
Ok. The left is quick to point out inequality, or the fact that poverty still exists. Here’s the counter: though inequality might be a problem, it’s not clear that it’s the problem. Our society has made everyone richer by [expression for large multiplier here]. Boats and tides, something about rising-but-not-like-Bane-rising, etc. Man’s root state, after all, is not wealth but poverty. If we started with very little, and then capitalism made us all wealthier, is it really the devil if, while doing that, a few got wealthier than others?
This is a hard argument to counter, and one has to question the instinct to counter it. That graph and the common narratives – mass dissatisfaction, endemic poverty, social malcontent – do not work together. And yet we do observe such things – people are really angry. There’s something strange about telling a very angry person that they aren’t, in fact, a very angry person. The real problem is reconciling that anger with an economic motivation. “What if they’re just wrong?” Fine, phrase it this way: what’s the motivation for being angry then? It means the same thing with less presumptions.
So we have: Trump, Brexit, and Occupy. All of those threatened the status quo, all of them claimed economic reasons (more or less), and all of them had no way to deal with the graph above.
Here’s how one economist puts his colleagues’ position contra the critiques:
Nothing in the nature of a sudden deterioration of standards, according to these writers, ever overwhelmed the common people. They were, on average, substantially better off after than before […] and, as to numbers, nobody can deny their rapid increase. By the accepted yardsticks of economic welfare – real wages and population figures – the Inferno [of capitalism], they maintained, never existed; the working classes, far from being exploited, were economically the gainers and to argue the need for social protection against a system that benefited all was obviously impossible.
Critics of liberal capitalism were baffled.
Except that that isn’t about our time. The brackets are, respectively, “…before the introduction of the factory system“, and “the Inferno of early capitalism“. The description is of the Industrial Revolution and its contemporaneous debates. The author is Karl Polanyi, writing a history of said debates.
I really wanted that to be more of a gotcha, but Polanyi is just such a fucking dated writer. So, yes, finally: that’s from 1944.
“Wait, the Industrial Revolution? The one with all the child labor and missing limbs and -” Yes, that one. “But -”
Whatever you want to say about capitalism, the Industrial Revolution was a terrible time to be poor. Anecdotally, I’ve yet to meet a single person who dismisses Marx without qualification (that isn’t a contest, comment section), and the qualification is always, always, “Well, yes, that made sense if you lived in England then. But today it’s wrong.” I’m talking both progressives and conservatives. This isn’t the time to get into Marx, I merely mention that to make a point: everyone knows that being poor during the Industrial Revolution was atrocious. But they don’t all know that it was relatively lucrative.
I should probably say this quickly: I’m not comparing the modern Western world at all to the people of Industrial Britain. The point is simply that these kinds of debates aren’t new. People have been pointing to graphs to falsify complaints for forever.
The quoted line comes about 150 pages into The Great Transformation. About 100 of those pages detail the near-constant immiseration and degradation of (what would become) the British working class. From all ends of that island they were drawn into cities, or factory towns, and, piece-by-piece, reduced. “Reduced how?” Simply reduced. Diminished in every way one can imagine, qualification is unnecessary.
So the quotation reads like a punch to the gut, but you recover. After all, he’s been railing against (classical) liberals, and this must just be another one of their lies that he’s about to explode. But it isn’t. The economists are right. Wages went up. Everything went up (except people – consider the height graph foreshadowing).
The horrors also happened, of course. That part isn’t a lie.
Polanyi calls the tendency to judge the world solely financially the economic prejudice. One can intuitively understand that people can get richer and have disaster befall them, but that isn’t quite what Polanyi means. He means three things:
1) “Wealth” is defined only by market value – wages, property, etc. This automatically removes any of the blurrier forms that exist in traditional societies, whether those are usufruct land, social ties, etc. Since the “traditional” forms are much more common pre-capitalism, their loss is not calculable. They aren’t admitted into the debate.
2) Over time “quality of life” starts becoming an essentially economic concern, especially when pursuing policy. If by (1) “economics” no longer included traditional forms of sustenance, then through (2) the realm of “politics” also stops asking about those more “social” things. I distinguish this from (1) largely because it’s at least possible to imagine a society that adheres to (1) but not to (2).
3) Causation gets restricted and confused as a result of this. If “economy” is sharply differentiated from “culture” via (1), and via (2) becomes the association with politics, then “why such and such happened” only admits of certain explanations. A hypothetical politician: “People are getting richer”, via (1), “so there can’t be economic complaints. The complaints must be over x.” The political debate then becomes “Whatever x is”, and it might be culture, or “loose morals”, or greed, or…. Or, now an anti-capitalist side: “The people are crushed by poverty, so the problem must be low wages, or landlords, or…., again via (1), “Therefore there must be something directly in the market system itself causing that.” And then the mad scramble to determining what economic structure is making this happen surreptitiously. By (2), the solution must also be phrased in a certain, restricted way.
All of this should remind you of James C. Scott’s Seeing Like a State, and if you read that that you can probably guess your way reasonably close to the problem. Also like Scott, there’s nothing necessarily devious about this. In Polanyi there actually are devious characters who conspire to keep wages low so that there’s constant access to labor, but, ironically, those were the people who failed. Wages kept going up despite their plans, and the people got poor in ways they didn’t intend. Either way, the economic prejudice is not malicious, but it might be unavoidable. There’s no way to quantify “social relations”, at least not in a way the state understands, whereas wages and property really can be quantified. Moreover, those are the only things that a state has direct control over (somewhat, in theory, anyway), so if you wanted to help the poor then that’s exactly the kind of information you’d need. It’s the only part that “touches” the (1) restricted market, so it’s natural to assume that it’s the part that needs fixing.
If there is any malice, it’s a kind of indifference to the social arrangements that existed beforehand. The state theoretically could have taken the time to learn the local structures, but there was way less motivation to do that than to get fabulously rich and powerful.
That’s out of the way now. The economic prejudice is a crucial aspect of GT, but if it were the point of the book, then I wouldn’t really be writing this. It wouldn’t be differentiated enough from Seeing Like a State to make a point.
Scott’s story has no response. The state crushes the populace and then… bummer, I guess. If Seeing Like a State were a film, it would be immensely disheartening. The local populace – the Good Guys! – never gets a chance to rebel, to reestablish metic control. That might be a good thing. Despite our preference for the underdog, we forget what happens when the underdog becomes an [overdog?]. These reviews are moving backwards chronologically, and Polanyi is writing at a time during which some of those crushed, metis-loving people actually get the state under their grasp. Spoiler: quite a few wind up becoming the villains of Seeing Like a State.
The Great Transformation is not really about the evils of early capitalism, in other words. It’s about how those perpetuate in the reaction to them.
Seeing Like a State is just vague enough that pretty much everyone can pattern-match their preferred policies onto it. I mean, I know I do.
Polanyi is not that vague. Or he is, but in the opposite direction (hated, I mean). The right calls him a discredited communist, and the left calls him an out-and-out fascist. People in the center just tend to get weirdly quiet and kind of sad. Some of those claims are moral, many are political (even if he doesn’t conflate the USSR with Nazi Germany, the fact that he assigns them to the same root cause is bad enough), and others are… well, I’m not sure. There are a lot.
His theory is highly contentious, and I can guarantee you that writing this I’m going to get someone with much more economic knowledge blasting me with papers as to why [such and such] is totally wrong, or the history of [thing] was bad. (Side note, but if you actually can do that, I’d appreciate it. Good counterarguments are desirable, etc.).
I’m hedging super hard here, so I may as well keep doing that: I suspect his history is flawed, he lacks any sort of solution, and I know that the anthropological work that informs the first section is outdated. He’s also kind of a bad writer. I also know that none of that changes the argument.
Polanyi’s stance is odd, and you can see it in discussions over whether he’s “right” or “wrong“. Much of the debate centers on his value as an economic historian. This makes sense – The Great Transformation is, theoretically, about the creation of capitalism and the Industrial Revolution. The debate then rages over his analysis, whether there are historical factors, whether the economy grew in the way he thought it did, etc. But allow me to sound like a complete idiot for a moment and ask a very basic question: What does Polanyi think “capitalism” is? And, along with that, what does he take a “market” to be? After all, if we’re all talking about different things, then I’m not sure how anyone can be right or wrong.
Polanyi dislikes using the word “capitalism” to describe either the dreams of liberal (classic sense) economists or the economic process of early Industrial Britain. He refers to it as a “self-regulating market” or a “market society” (normally with a derisive adjective attached), and I don’t think that’s merely a semantic distinction.
Ultimately, that is why the control of the economic system by the market is of overwhelming consequence to the whole organization of society: it means no less than the running of society as an adjunct to the market. Instead of the economy being embedded in social relations, social relations are embedded in the economic system. The vital importance of the economic factor to the existence of society precludes any other result. (60)
In other words, separating “society” from “market” is a non sequitur. There’s always been a market, but it was mediated through extraneous social factors. This still sounds like Scott from a particular lens, and I tried to get at what that looked like in the example of Christianity (section VI). From Scott, I’ll call this economic metis, a kind of pre-state craft that groups use to socially organize themselves.
Here’s a more general example that Polanyi gives a few pages before:
The outstanding discovery of recent historical and anthropological work is that man’s economy, as a rule, is submerged in his social relationships. He does not act so as to safeguard his individual interest in the possession of material goods; he acts so as to safeguard his social standing, his social claims, his social assets. He values material goods only insofar as they serve this end. […] These interests will be very different in a small hunting or fishing community from those in a vast despotic society, but in either case the economic system will be run on non-economic motives.
The explanation, in terms of survival, is simple. Take the case of a tribal society. The individual’s economic interest is rarely paramount, for the community keeps all its members from starving unless it is itself borne down by catastrophe, in which case interests are again threatened collectively, not individually. The maintenance of social ties, on the other hand, is crucial. (48)
There will be a longer addendum arguing for Polanyi, but I don’t think that what he’s saying here is even controversial. We absolutely see status (power) overruling pure “wealth” in a ridiculous amount of societies (my first thought was the Roman patronage system, but then it would be). What you think that’s from is a totally different matter.
Polanyi isn’t saying that pre-capitalist societies had no “market motivation” or were unaware of the profit mentality. That wouldn’t even make sense with his argument. For pre-capitalist societies to have developed social arrangements around and about market motivations there has to be some kind of natural market motive. Markets are there, but “culture” in a very broad sense also is. It protects and shields the societies from market failures, largely due to kinship and social relations. When social mechanisms fail, decay, or are destroyed, we absolutely would expect to see certain forms of capitalism arising.
Destroy is the key word there, because Polanyi goes further than simple coexistence of market and society, or than their interrelation. You can see it implied even in the quote above: the social relationships (whatever form they are) are not always simply media for the market. They’re also ways of containing it. Were an individual in his tribal society to begin hoarding all the wealth, it would pose a severe threat to the other members of society as well as to the culture as a whole. Hence, the social order becomes more important and overrules the wealth.
That “preservation and control” is going to become critical.
I haven’t read any of Polanyi’s other books, but I’ve heard they’re bad. Oh well. I expect that, in fact – they’re mostly economic history of ancient societies, now all dated by 50 or so years. The primary criticism I’ve read of Polanyi using those books is that he thinks the “capitalist view” is entirely modern, and that no earlier society thought that way. That’s historically wrong, sure, but it’s also wrong by Polanyi’s own work for all the reasons stated above.
What Polanyi does think changed is emphasis. That’s why he calls it the “self-regulating market” or the “market society” rather than capitalism – the economic prejudice is part of that, not simply “profit motive”. The market society shifts focus, and builds itself out of a market, is controlled by it, rather than functioning along with it (i.e. controlling it).
As for “self-regulating” and its difference from “capitalism”: If “private capital” is taken to be the bedrock of capitalism, then capitalism has always existed – look at bronze age trade routes in the eastern Mediterranean and try to pretend that capital is recent. The difference is that those traders all operated under the charter and supervision of emperors and, hence, the larger social arrangement. Our relationship to the market, on the other hand, is here: “Instead of the economy being embedded in social relations, social relations are embedded in the economic system.” The metic control over societies is gone, and instead of social structures guiding the market, the market guides our social structures. Also: itself, and so the market is now “self-regulating”.
Markets control commodities, but social relations are (obviously) between people. Hence, to create a market society, you have to get rid of or at least ignore those social relations. To put it in more economic language that everyone will understand: without a market for labor and land, there is no capitalism. Wages have to be in tune with the market for it to function, and land has to be allocated on market bases for the same reason.
The commons system (and “waste”) was a prime example of traditional practices that subordinated part of a market to social relations. It ensured some kind of safety net that ran parallel to the market, but was built on the trappings of a remaining social system (in this case, feudalism, otherwise absent in Britain via black plague). These were relegated to market behavior through the Enclosure Acts. The loss of this made peasant life much more perilous, and yet (economic prejudice) all monetary effects were positive. Price of food on the market was lower, and lands that were previously commons became more productive. Still, the amount of truly penurious workers in England grew – there was no longer a social net to shield them from market calamities, and now there was no good way to even talk about what had happened. After all, why should they be poor when everything is cheaper?
As Polanyi puts it:
We recall our parallel between the ravages of the enclosures in English History and the social catastrophe of the Industrial Revolution. Improvements, we said, are, as a rule, bought at the price of social dislocation.
But that shift was among the earliest, and the only people who really fought against it were conservative aristocrats (for obvious reasons).
It’s only in 1834, with the birth of a labor market through the removal of political protections, that Polanyi thinks a market society really came into being.
Polanyi views economic history as a “double movement”. The first movement is in the direction of economic liberalism. The second is social protections. This isn’t unique to him – he’s responding to economists from all across the political spectrum that notice the same pattern. Many of them (on the liberal side) view those protections as attacks on the free market, and some of those apparently thought that there was something like an organized conspiracy. I have no idea whether that’s a strawman or not, but either way: there was no conspiracy, there were disparate groups all enacting regulations organically. In fact, there seems to have been much more conspiring to turn Britain into a market society.
There’s a certain view of the “free market” as the natural state of society. Governments only regulate parts of that. This is kind of a straw man libertarian, because even the libertarians I know recognize that it’s an oversimplification. No matter – give me the scarecrow. In Polanyi’s scheme, governments create the conditions of the “free market”, because “free market” really means self-regulating market. They create that by dissolving all of the social relations that previously had regulated it. Regulation, confusingly, comes first.
Most of those “regulations” aren’t obvious, because most of those “regulations” are non-contractual social ties, or highly specific metic arrangements. But they exist, and they have power, and people go fucking crazy when they disappear. Polanyi:
Obscure as the beginnings of local markets are, this much can be asserted: that from the start this institution was surrounded by a number of safeguards designed to protect the prevailing economic organization of society from interference on the part of market practices. The peace of the market was secured at the price of rituals and ceremonies which restricted its scope while ensuring its ability to function within the given narrow limits. (65)
In other words: anti-capitalists have a myth about “markets” suddenly coming into existence, somehow against human nature. Capitalists have a myth about self-regulating markets as the totally natural state of things. Both of these are wrong and bad. Stronger: both of these are based on an economic prejudice that sees “politics” and “society” as somehow cordoned off from the economy.
But that connection, the obvious society-market-person connection, gives us this:
Social history in the nineteenth century was thus the result of a double movement: the extension of the market organization in respect to genuine commodities was accompanied by its restriction in respect to fictitious ones. (79)
Those “fictitious ones” are land, labor, and money. The fiction is that land, labor, and money are simply “other commodities” on the market. They aren’t – those are exactly the objects of social protection (well, money is more political, but that would get things too long and confused). Moreover: no one will treat them as such when they’re in peril.
Hence, the real fiction is that these will behave like other commodities on the market. Widgets don’t fight back when their price drops. But labor, if wages fall or unemployment abounds, will. Basing your entire society around the illusion that it will behave like everything else is ridiculous.
Just like land, there are pre-existing social arrangements around labor. People don’t start out somehow “independent”, ready for the market. You’re born into a society with familial and political and religious and social ties. In Polanyi’s scheme, these community protections run around the market, or subsume market behavior into a much deeper system. Given that, you know, “social” means people, a competitive labor market can’t really exist while that community exists. In many ways, those ties are there precisely to prevent labor markets. Hence, you liquidate it. Polanyi:
To separate labor from other activities of life and try to subject it to the laws of the market was to annihilate all organic forms of existence and to replace them by a different type of organization, and atomistic and individualistic one.
Such a scheme of destruction was best served by the application of the principle of the freedom of contract. In practice, this meant that the noncontractual organizations of kinship, neighborhood, profession, and creed were to be liquidated since they claimed the allegiance of the individual and thus restrained his freedom. To represent this principle as one of noninterference, as economic liberals were wont to do, was merely the expression of an ingrained prejudice in favor of a definite kind of interference, namely, such as would destroy the non-contractual relations between individuals and prevent their spontaneous reformation.
In terms of the ninteenth century, Polanyi is really thinking about removal of the commons, of parish laws for the poor, and the massive social movements that uprooted families. Hence, people who had previously lived with strong social ties were suddenly left barren of them.
Again, none of this is moral or even pre-planned. Anything from price fluctuation to industrial relocation can do that. And this is (probably) where Polanyi sounds most like Scott. Ignore how strong that language is, focus on what underlies it. Social regulation of markets is essentially defensive. When you remove that defense mechanism (as one must), people get exposed to vicissitudes of the market. And when one of those goes very bad, people react. Hence the double movement: freer market relations, but aggressive reactions in favor of protecting labor, land, and money.
There’s also this: Humans are social animals , and we really don’t like being removed from other people we like. We also really hate when the social laws around us are changed to facilitate that. The argument pro capitalism is efficiency and wealth. That wealth is, theoretically, to give people the lives they want. But what if the lives that people really want have much more to do with social ties than they do with economic ties? And, indeed, that the process of creating a labor market destroys precisely those. I’m not going to get into that [psychological?] argument now, but it’s going to become important in later posts.
You might expect Polanyi to be very in favor of labor’s reaction. That is to say: a standard leftist argument against the market, social protection is great, etc. He’s… well, he’s not very hopeful that things will get better.
Those “fictitious commodities” are essential for the market, and social protections are going to severely damage both the economy and themselves. Polanyi pretty much agrees with the “economic liberal” analysis here (is that ironic? I have no idea).
I’ve ignored the vast majority of the “historical” section of the book, and one might get the view that it’s all about capitalism destroying the poor. That happens sometimes, but almost all of the worst depredations come from these weird social proto-saftey-net laws that were meant to combat the effects of the self-regulating market. Above all, the book attacks the Speenhamland system of poor relief for decomposing the poor’s communities (even while it recognizes the coldness of Speenhamland’s removal). I think a big part of the problem is that the earlier social nets are metic and social, whereas the new ones are all blinded by the economic prejudice, but that’s mostly a guess. In any event, the social protections set up to combat self-regulation of the market only make things worse.
That’s bad for labor, of course. It’s also terrible for the economy. That leads to economic catastrophe, which would theoretically be “fine” I guess, except that if a society has made the transition to “market society” then the economy is its entire bedrock.
The double movement, then, threatens to destroy all of society. It might be a slow burn, but it’s there. And, of course, it can’t be stopped: social protections exist, market gets rid of them, more go up except they’re worse, market gets rid of them, repeat forever. Finally a catastrophe happens (for Polanyi, the Great Depression) that’s the result of everything that came before it, and then the society crumbles. That somewhat sounds like a very surface reading of Marx, except for Marx this was all great. Contradictions in capitalism lead to a revolution and the proletariat move us forward into [something nice].
But Marx wasn’t alive when Polanyi was. In Polanyi’s time, contradictions contradicted, and we received fascism and Stalinism.
“Wait, so – ”
Polanyi pretty much blames everyone, ever, for everything. I think that’s fair. Also: unhelpful.
I think this is the point where I’m supposed to talk about Polanyi’s solutions. Yeah, about that. He doesn’t really have any.
He also thinks the New Deal was a response, and he’s relatively positive about it. But not only is it unclear if that’s enough, it’s not even clear if those protections can do what they’re supposed to. A tremendous part of the problem is not simply economic malcontent, but the fact that people really hate social dislocation. Economic nets help, in the sense that people have to move around less and can develop stronger social ties, but it’s not really clear to me that we’ve seen the development of “social economies” in the US. I’m pretty sure that we’ve actually seen the opposite, which is to say: total disintegration of traditional societal protections.
That’s probably why Polanyi thinks that fascism was the strongest reaction, as in: well timed and superficially reacting in the right way. It offered the social thing. It also neuters the double movement by removing democracy and killing all ideological opponents. So those are upsides, I guess. The downside is that it’s fascism. Another downside: even if, for some reason, you were really into fascism morally, then it still economically annihilates itself. And again, to underline this: Polanyi’s argument against fascism is the same argument you or I would have. It’s fascism. (This is the reason leftists call him a fascist, I think, but he’s pretty damn clear that it’s a terrible idea.)
So Polanyi can’t really help us with the solution aspect. Failing that, I guess I could offer some of my own. Yeah, about that.
Here’s the quote from my title. Think about it forever:
M’Farlane was not, therefore, venturing an unusual view when he expressed his belief that, as England had now approached the meridian of her greatness, “the number of poor will continue to increase.” (108)
Where does this leave us?
James C. Scott is all about the way states oversimplify traditional societies and uproot them in the name of “progress”. He focuses on the places where that progress fails, but it can sometimes have good effects even while wrecking traditional societies. For Polanyi, the self-regulating market (or free market) is a prime example of state simplification. It may get channeled through private companies, but there always has to be some sort of political struggle that maintains a free market against traditional markets. Scott has been adopted by a lot of libertarians, but he’s wary himself of the free market. He has to be using Polanyi for that. That explains Scott, but it’s not really an argument for what Polanyi does for us now.
I started by mocking a certain view of people and GDP. It’s probably clear why I did now, even if that was somewhat in bad faith. Polanyi explains why a whole lot of people reject simplistic economic explanations. “America is already doing great, here’s the growth rate” is not helpful. That’s not even what people are talking about. Polanyi’s real focus is on social dislocation, which is economic but is not necessarily explicable through traditional economic language. Scott helps to show all the ways that communities fail to explain their woes, and Polanyi just adds to that. But Polanyi also offers at least some way to quantify that problem. He lets us move forward and analyze, even if we haven’t traditionally emphasized that research. No, I’m not going to dump a bunch of studies on [the world] right now, this thing was long enough, but it helps to establish a stance.
It helps to explain those otherwise baffling voting patterns. There was a lot of debate last election over rich voters arguing for protectionist platforms that were against their economic interest. But those platforms were in the interest of the poor members of their community, and sure enough, that’s how the rich tended to vote. Homo economicus can’t really explain that, but if people vote for social protections of their tribe or [whatever], rather than strict economic arrangements, then it makes perfect sense. I guess another response is “people are foolish” or “cultural concerns”, but those don’t actually explain anything.
I’m going to say “neoliberal” here, don’t flay me: a stupendous amount of the argument against neoliberalism is that privatization comes at the expense of democracy. a) that’s fair, but b) I’m not sure those words contextually make sense or are the ones you should be using. I think what’s really going on is an argument over self-regulating markets, and the ways that society needs forms of regulation that are social. But, of course, that doesn’t really necessitate anything “democratic”.
Polanyi was a socialist (whatever he meant by that, unexplained), so it’s easy to see him saying that “social protection” was always a good thing. That’s wrong. Not only do the political solutions fail (i.e. the double movement), the original social protections aren’t things that I really want. Commons sound nice, sure, but the rest aren’t exactly modern desiderata: feudalism, strict patriarchy, kinship in the sense of kinship-that-causes-blood-feuds, religious fanaticism. (This also explains why so many early anti-capitalist movements were from conservatives.) But we also know that market solutions are bound to make everything worse.
That leaves us in a deadlock. No matter your feelings on market societies, I don’t really see a way to institute them without there being the kind of equal-but-opposite reaction that Polanyi’s talking about. Trying to plan around that, assuming that people won’t react to market vicissitudes, is foolish. Hell, assuming that they won’t react negatively to the best of all market societies is foolish, given that creating that requires a certain amount of social dislocation no matter what. As a side note, that does help explain why so many libertarians went all-in for Pinochet recently (as well as in the past, but w/e). But even if you think that’s a good idea (I don’t), Pinochet himself was toppled by mass social discontent. So… I dunno, “plug in [enlightened ruler] there and it’ll be fine” seems like a pretend argument to me.
All of this sounds bad for all sides, I know. So I’m going to make it worse. Most of the arguments here are material, as in “social dislocation has material problems”. But Polanyi’s real concern is much more psychological (“spiritual”, depending on your persuasion). Namely: human beings want much richer social lives than they can maintain under strict market conditions, and much of the reaction against market societies comes from that. Even if you can control the initial response, the absence of whatever that social void is turns people towards much more frightening things than “welfare” or [whatever]. (Also: maybe that’s a serious problem with market societies, and not merely a problem as in “revolutions happen we should avoid those”. We’ll build to that later.)
“How is that worse?” Well, the next book in this series is called The True Believer, and it’s about mass movements and extremism. Polanyi pushes us towards that understanding, but you really need Hoffer to get at why fascism became fascism, or Stalinism became Stalinism, or Wahhabism becomes Wahhabism.
top image from Terrence Malick’s Days of Heaven