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As a personal testimonial, Polanyi's Great Transformation was my
passport to another world, a crucial vehicle out of the
theoreticist training at the core of a US PhD program. For me the
sustaining lesson is less the dominant motif (the `great
transformation') but the background to the argument - the concept of
the `social fabric' of economic society. If anything, Polanyi's
treatment of market society is impoverished (he makes too many
concessions to the concept of `self-regulation' of the market), but
his accessible book has nourished later toilers.
The most pressing issue for economists would appear to be not the
importance of the `market' in pre-market economies but the importance
of the market in so-called market economies - the social fabric of the
market economy, or what economic anthropologists call, in their
excruciating conceptualisations and prose, `embeddedness'. The
problem can be simply grasped by confronting that the concept `the
market' is an inadequate descriptor. We need to put flesh on it.
(One of the desirable by-products is a feeling for `comparative
capitalisms', so that we as economists aren't bound to try to explain
the Japanese (etc) success in terms of differential levels of
economic variables (savings ratios, size of government, etc)).
Some examples? John Lie's article in Politics and Society 21,3,1993
(The Social Origins of Market Society in England) is a useful vehicle
for confronting the different social structures and balance of forces
around different market forms.
The debate, centred on New Left Review, on whether Britain ever
became truly `capitalist', is another useful vehicle for getting away
from ideal type abstractions to flesh and blood historically existing
capitalist economies.
For Americans, for which there is substantial propaganda apparatus
trumpeting a purist market model (Australians are subject to such
propaganda on a daily basis), the role of not merely the military
industrial complex but the military itself in influencing the
character, location and timing of industrial development provides a
nice little antithesis to any notions of purism (vide Ann Markusen et
al, The Rise of the Gunbelt).
As for wage labour, labour history and labour law (vide Atleson's
Values and Assumptions in American Labor Law, Forbath's Law and the
Shaping of the American Labor Movement, etc) are more instructive on
the complex and continuous shaping of the character of wage labour
than any grand abstractions as to `commodification'. etc. etc.
>From this perspective, the whole corpus of neoclassical economics (the
Walrasian strand in particular) is a diversion from the main game. But
Marshall is also heavily to blame, and his institutional victory over
the Historical School (Cunningham in particular) was a victory for
entombing Polanyi-type perspectives and keeping fresh impressionable
young minds from being exposed to such dangerous ideas.
The lessons from Polanyi are not that the post-'Transformation'
economy can thankfully be analysed purist terms, least of all in
general equilibrium terms. The lessons are in analysing how the
market economy is socially/politically/culturally/ embedded; in
particular, that history is not the gradual but inevitable triumph of
market rationality over `excrescences'. What economists from Smith
downwards want to see as aberrations aren't going to go away (a good
example being the persistence of divergences from the so-called `free
trade' ideal) and they need to be analysed as something other than
the dead hand of the past.
Fortunately, the history of economic thought encompasses more than
the history of economic theory. This debate on Polanyi is far more
instructive than multiple years of the core syllabus of
English-language economics, and the earlier one's students get
exposed to such stuff the better.
One contribution to the specific debate: I don't know why Anthony
Brewer is so antagonistic to the `conscious transformation of
institutions'. It's a losing argument. The historical record is
replete with pervasive and assertive (and substantially successful)
strategic interventions and counter-interventions, which blend
organically with the `unconscious' dimension of structural evolution.
History does not happen purely by stealth.
Evan Jones
Economics, Sydney University
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