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Polanyi, The Great Transformation

Society defends itself against the folly of the liberal ideal of the self regulating market which is a utopia, incompatible with human history, human nature, and internally illogical. This folly led to the World Wars, double entendre is society defending itself against international market liberalism.

Imperialism results from international economic situation not human nature,

Foreword by Stiglitz:

Self regulating markets never work. Government intervention is necessary. Trickle down growth doesn’t work.

(x) Free market exposes countries to risks disproportionately affecting the poor. There is no real free exchange due to limits of information and advantage of contacts.

(xi) Most economies develop social mechanisms to take care of the poor. Trade liberalization doesn’t look at these factors, when it destroys them stability is gone and therefore economy investment suffers.

(xiii) IMF rejected bankruptcy in public sphere, no default, but will bail out private lenders. Violated social and economic contracts.

N: Rapid social transformation destroys coping mechanism but leaves demands that are not met until transition period ends. People are screwed over.

N: In Russia Putin saviour from economic disaster? Could we have gotten economic stability without some form of freedom curtailment?

N: Rational investors put money in stable markets. usually US when other economy is failing. Instability abroad as domestic solution to crisis, money transfer. But now US downgraded, wtf?

(xiv) Governments do intervene in all transformations, they can do it in a way to help social cohesion or to destroy it.

N: Lebanon: is corruption and cronyism a mechanic of social stability?

Market is part of economy and part of society.

(xvi) Liberalism accedes democracy to political sphere but not to economic. Like Greece. you’re going to mess up the economy can’t be democratic, drag down all of europe.


1. Embededness: Economy not outside society, something separate from government but inside it.

N: Paradigm of disembedded economy has no trust so world looks risky and needs contracts, But it doesn’t have to be so and wasn’t so in the past.

2. Disembedding is impossible: People react to deregulation by seeking to rescue society. Mechanism turns into rubber band, the harder the liberal push the harder the backlash. It requires state repression to impose the free market.

3. Liberalism is an ideal, it is not refuted by historical experience, therefore it returns periodically. There is a constant movement between liberalizing and reactions to it. “Laissez faire was planned, planning was not”. Socialism is the democratization of the market, no binary like Marxism. Efficiency versus democracy is a false choice, states can achieve both.

4. No great deal of agency. State decisions are determined by global rules. Your options are already limited. (where is the agency?)

5. Imperialism not caused by nature of humans or state, but a reaction to the pressures of the gold standard system that encourages protectionism (xxxii). Explanation for colonialism in the 19th century. Gold Standard meant that difference in domestic and international price structure forces state to deflate the economy and business hated it cause it was risky.

(xxxii) “(utopian liberal invents gold standard to create borderless world of prosperity) the relentless shocks of the gold standard forced nations to consolidate themselves around heightened national and imperial boundaries. (gold standard pressured nations but was undermined by protectionism, tarrif barriers, and empires)” This led to WW1, reinstated after war, led again to WW2.

Global free trade is a utopia, it ignores social coping mechanisms whether gold standard or other. Modern economy expects workers to put up with 5-10 years in which their income is halved. This is intolerable, state seeks to resolve this by more regulation or by war. Give up on the liberalist utopia. If we stick to liberalism we are heading to war. When international economy is uniform what domestic economic relations are found in foreign countries affect your own. conflictual.

6. Peace is possible: If we give up the ideal of self regulated market. Social arrangements must be kept.


Chapter 1:

(1) 19th century was based on four institutions: BOP, Gold Standard, Self regulating market, Liberal state.

Gold Standard extension of the self regulating market. The thesis is that the self regulating market is an unattainable utopia that caused the state of peace of the 19th century to collapse. BOP, liberal state are also extensions of the philosophy of the self regulating market which is a utopia that cannot exist without the human and natural subsistence of society being undermined.

(4) Society reacted against the disruption but this undermined the free market which threatened society in unseen way. This caused the market system to develop into a “definite groove” and finally disrupted the social organization based on it.

Method of ideal typifying central institution to the west in the 19th century and placing it at center of civilization which in reality is a complex result of interaction of great number of variables.

(5) Present conditions lie in institutional origins. To explain collapse of the international system, we look at why BOP failed, why economy failed, and we find that it is due to  the ideology of the self regulating market.

N unrelated: ( Is society moving away from agency.Everything is seen as an ill, prescribed as fault of hormones, fixed by drugs (more Durkheiman) Culture not of agent but of victim. People are victims. Abnormality must be rectified.

(7) BOP used to cause lots of war to balance, war to keep balance against others. Why was it that in the 19th century that it caused peace?

(10) High finance (Haute finance) established in  1870 a link btwn politics and economic, finance had an interest in overall peace.

(11) Rothschilds a nationless bank acting for benefit of firm. This benefits from war but happened to need stability of the UK for finances, so enforces peace in UK at least. (Today does the US play this role, but moody downgraded the US against interests)

(16) Trade became linked to peace whereas in the past it was linked to war. (great wars not small ones which are profitable)

(18) BOP is peaceful only under new economic interest in peace.

(19) Use of gold standard disrupted the peace interests and led to protectionism which made economic power favour war again.


(24) 1930 abandonment of gold standard by UK, 5 year plan in Russia, socialism, these are all reactions to the failure on the institutions of the market system. Problem of foreign currencies. Germany, Russia, US, Austria, Hungary, all currencies were wiped out in a year. inflation/depression.

(26)* Internal economic crises give rise to external grievance problems with gold standard. All countries after the crash returned to the gold standard as the solution … they wanted a stable currency.

(27) But gold standard caused domestic havoc in maintaining currency exchanges between countries with different domestic economic needs.

(29) Loss of gold standard released influence of trade, snap and revolution.

(31) Fascism and socialism result of failure of the myth of the self regulating market.

(35) Industrial revolution causes rapid sudden dislocation of people. Usually politicians try to buffer this dislocation but not this case due to free trade liberalism. Instead people turned to masses. There was a failure of the political elite.

(38) Enclosures (lords + Rich) vs Peasants and royalty. In history anti-enclosure is seen as bad economics, but in Polanyi these were safeguarding social peace from greed of the merchants who were parliament. That the king lost was seen not as injustice but as work of free trade. Natural economy. (to understand the origins of the crisis we must turn to English domestic politics where the system was set up and then globalized.

(39) Assumptions that government intervention in economics is non-existent is wrong. It can speed up, slow down, and channel social change, it does it even when we think it doesn’t.

(40) On valuing economic change and its benefits: “If the immediate effect of change is deleterious, then until proof to the contrary, the final effect is deleterious” Tudors and stewards of villages from their social position used the power of the crown to implement some safety nets to make the enclosure movement bearable for peasants, but the way they did it was from their outlook of what they wanted to keep fixed.

(41)Transition was made, England was better off, but now the royals clinging to poor protections hurt the growing middle class, so they overthrew the royals. When industrial revolution came about the governing class (not royalty) now forgot protection that allowed England to pass through the enclosure shift and forged ahead. Without compensating measures to offset the social costs of reform England became a shit-house for the poor.

“Improvement of the grandest scale (sea trade) wrought unprecedented havoc with the habitation of the common people”

(42) What actually happened in the industrial revolution. It was not exploitation since wages increased, and not new economic regularity. It was that in tandem to economic growth, social coping mechanisms were dislocated without government protection. (good section on industrial revolution coming about, humid weather good or cotton, coal and iron, people were dispossessed by enclosures, free institutions, invention of machines.

(43) Self regulating market took shape from machine and plant production.

(44) Machine production requires transformation of human substance of society into a commodity.


Illusion of past as primitive economically creates a teleological present in which free market exchange is seen as modern and progressive. (role of video  game economies?)

(47) “The habit of looking at the past ten thousand years as well as at the array of early societies as a mere prelude to the true history of our civilization which started  approximately with the publication of the wealth  of nations in 1776, is to say the least, out of date” Truck and barter tactics of markets are not primitive, but actually they are a result of the free market.

(48) “Changelessness of man as a social being”

Original economic system was based on reciprocity and redistribution (and householding), not barter and  haggling. Resources are collected and shared communally sometimes as decided by a chief. Division of labour existed as did coin. Redistribution means that the economic system is enmeshed in social relations, this has always been the case until we try to pretend that society and economics are disaggregated in our present time.

(55) Three ancient institutions: Reciprocation, redistribution, householding (house economies not individual) The economic principle was that of use whereas the market economy has the principle of gain and it is therefore a completely different basis of an economy.


Barter and exchange are  unique to capitalist economy. Market economy, social relations embedded in economic system. It used to be vice versa. The economic sphere now has its own institution, the market, when previouslyu market was simply an annex to society.

(65) Towns were there to protect the general economic system from the ravages of the market.

(67) Market not result of long-distance trade or local trade, rather it was imposed by states.

(68) Local trade separated from international trade by Burgess so towns wouldn’t disintegrate. State had to intervene at national level to rectify this. State imposed mercantilism, destroyed separation of local and long-trade with internal state wide trade. State freed trade from towns and had to take its role of regulating monopoly and competition.


(71) ” A market economy is an economic system controlled and regulated and directed by market prices; order in the production and distribution of goods is entrusted to this self-regulating mechanism.”

(75) Mercantilism was highly interventionist state in industry, land and labour not subject to trade yet. Market system is when everything becomes expressed as exchange value in terms of money. Labour and land as well become markets. Belief that the market will take care of social relations. Separation of two spheres, politics and economics.

N: Anarchists must believe that social relations require no governance because they are peaceful? In relation to republicanism saying that we only need governance if there is violence inter-dependence, so do anarchists think that there is none?

(77) Humanity unprotected from market would perish. Shortage and surplus of money is like floods and droghts, natural disasters in need of government oversight.

(80) Since no state restriction on market formed in industrial revolution, society had to provide its own protection. That is the double movement  of liberal ideal cracking down and society reacting to protect itself.


(81) Labour market was last to commodify but by that time its exclusion was doing mere harm than good. Then labour market was regulated but as market in 1834 when the peenhamland law was abolished. Spam law= bread allowance, give everyone a minimum level.

(84) Created pauperism. Employers paid slightly above what the law required, employees stopped working (hmm seems capitalist). (So the thing is that in parallel to speenhamland there was another law on parishes giving out the subsidy but only if you stay in your parish. So mobility of worker to go out and find work even when it did exist was rendered impossible)

(87) Only when poor law was removed did labour unions become possible. Even though it was harsh becasue it was sudden, it allowed the movement from abject poverty in society.

(88) Poor law focused intellectuals on state of society and modern man. Thought of in terms of political economy. Political economy in this period became universal formula for  prosperity. Limits of the possible. While simultaneously some got richer, others got poorer.

Three stages: 1. Speenhamland poor to pauper. 2. Poor law reform: Deserving poor. 3. Market labour: Harshest.

It was in market labour that the social consciousness of the present generation was formed as political economy.


(95) Where did the poor come from? Question asked in 1800. No real understanding of economy. Polanyi posits that the answer is that the rise of unemployment was partly due to speenhamland law, but mostly due to shocks of international trade. (where do the poor come from?) It was a good question and still is. Wanted to solve it, couldn’t tell really what the hell those people were doing before and how they became poor. Today poor are a structural part of any economy.

(96) Social damage as there is migration to urban centers and return back, displaced and transferred population. (In terms of numbers populations seemed stable but people leaving country were not those returning to it)

(99) Why Speenhamland law, which was perhaps the worst possible choice to come about? Interest in protecting village from the perspective of the squires not villagers.

(100) Spam law demolished poor laws, parish too small a unit to provide wellfare to all.

(102) Spam law provides cheap labour, how much did it cost? 3% of GDP so not much, but complaints of pauperization grew because law prevented social organization, artificially depressed wages. Prevented labourers from developing into a class of poor separate from paupers. Prevented labourer from working, made him lazy.

(106) 1834 industrial capitalist, utopia of labour commodity will solve pauperism.


(111) Problem of late 19th century, solve the displacement caused by machines. But the philosophy of work  emerged in 1700s. Pauperism and unemployed could be made to pay was the assumption of all the solutions (how to transform the poor into money) Stalin, french, Fascist etc… How to profit of poor which turned out to be impossible. (today in the US)

(115) How different people wanted to turn  poor productive “Bellers the humanitarian, hoped to use primarily for the relief of others; bentham the utilitarian liberal wanted to turn over to shareholders; Owen the socialist wished to return to the unemployed themselves.”


(118) N: (Myth of goats and dogs misleading, food determines population. Island where goats were left, populated forever, introduced dogs, a balance was struck, used as excuse for self regulation myth. Out regulation myth  is that of deer.)

(120) Townsend of goats and dogs story: Man is a beast, like goats and dogs will regulate self. Economics doesn’t require political intervention.

(123) How can we fill the armies and the shitty jobs without the poor?
(129) If society gets richer it still is possible for people to get poorer.

(130) Economics was established in spam law era. So material fact that theory was based on showed inevitable increase of poverty with wealth. Origins of economics. Results is that economic realm is not social but natural. Goats and dogs, laissez faire.

(133) State: helpful intervention to avert harm from community.

(134) Owen got it right. problems not natural economic, but social.


(136)* “For a century the dynamics of modern society was grounded by a double movement; the market expanded continuously but this movement was met by a countermovement checking the expansion in definite directions.

(136-137) Summary so far,

(138) Double Movement: Free trade vs preservation of man

(140) Each party took a pole government versus business, state vs industry, and the strain led to crisis in the 20th century, fascism.

(Long 19th century peace only makes sense in out understanding of time in years and centuries. If we eschew time and use social movement to measure change we dont get this stark uncommon peace for 100 years.


(141) 1820, liberal creed crystallized into faith. Labor market, gold standard, free trade. Commodification of labour, land, and money.

(142) Cotton industry started free of production regulation but not free of exchange regulation which was government regulated.

(145) For the tripartite whole to work it required a global free market where labour price corresponds to cheapest grain, otherwise nations can undersell one another. 1840-1850 Legislation to enforce laissez faire. Since such perfect global market is impossible, it is bound to fail.

(147) “Laissez faire was planned, planning was not”

(149-150) Our age sees an end to the illusion of liberal trade, we saw the ills it caused, it stopped states from avoiding war. Liberals can only defend themselves by saying it was imperfectly applied free trade that led to ruin, but this argument should not convince most.

(151) Yes counter movement to free trade but not to prevent utopia to avoid annihilation of man kind.

(156) Extreme liberals themselves had to call for laws of intervention to stop monopolies.


(158) Both liberals and Marxists think counter trend to market are taken by workers and path to liberalization is pushed for by capitalists. This is wrong, no clear given role for one or the other but reactions to events. ” Class interests offer only a limited explanation of long-run movements in society … role of classes is more frequently determined by the needs of society.”

Class constructed by social situation, economic, natural etc… Different contingencies lead to different alliances. Ultimate cause set by external forces, classes tell us how change happened but not why. The challenge is to society as a whole, response is by part.

(160) Class is not necessarily economic. In 19thcentury it was uber material so translated class into economic motives. Interests of class not economic but social standing, rank, status, security.

The identity of the individual =/= class. Any person has multiple identities and external causes yield to local reactions by group to challenge of society  at large. Only an indestructible (unchanging) society has fixed classes.

(164) Social calamity is cultural not economic phenomenon. Economy can grow with social disasters. Disintegration of cultural environment of victim is the cause of disaster.

N: Unrelated: We are physiologically made to require someone to scratch our back :p)

(169) Protective movement reacted to threats to society not one group, though it was undertaken by one group. (so the threat is to society as a whole, which group responds to this threat depends each time, but the response is also to protect society as a whole, though the actions are by a group the unit is all of society.)


To create labour market needed the formation of the atomistic individual. All social relations turned into contracts and non-contract relations  were liquidated.

(172) Seen in colonial countries, hut tax, cutting bread tree, creating hunger to induce labour. Same process took place in 18th century Europe.

(173) Economic sphere needs ruler, dictator. Political sphere needs democracy. According to liberals.

(175-178) Owenism example of cooperatives that can work, to protect from market. Robert Owen.

(180) Democracy only given to workers after they accepted capitalism. (So didn’t matter who was voted in, once economics was taken out of the realm of politics, democracy didn’t matter)

(183) Difference between UK and continent. England worker was low status, in Europe worker had higher status and politically active at national level. England politicall inactive except for unions which were reformist. So not social catastrophe in Europe though similar economic situation, it was culturally an improvement of status.

(184) In England political parties emerged from trade union, in continent vice versa. So in continent this undermined economic liberalism, led to same results disruption as a commodity in UK and on the continent.


How land became commodified. (link to migdal disruption)

(188) Land became private by becoming secular as early as 1300.

(192) Organized states of Europe can organize themselves to protect themselves from international free trade. Colonies can’t. That is why they want independence.

(198) Post 1920. All efforts taken to avoid disruption of market by working class. First by giving power to conservative peasants, then by fascism forcibly creating stability.

Necessity of sovereignty and state to protect society from international trade. 1920, give up international trade and return to national market. Both workers and protectionist violate market stability to protect society.


(204) Gold standard causing social unrest in early 20th.


(212) Need for nation to protect society from international economy by using national currencies to maintain balance with gold standard.

(213) Importance of currency in country, importance of nation as unit. Protection of land labour and money. Money protection took on a national dimension.

(214) Money becomes important player in everyday life. International becomes local.

(216) need for intervention to maintain world economy, war against defaulters.


Three strains caused the crash. Domestically we have unemployment, decline in production and  earning. Struggle of social forces, tension of classes. International economics, balance of payments, fall in exports, dearth of raw material, unfavourable balance of payment, pressure on exchange. International politics and imperial rivalry. (when other countries’ economies impact your own, you want to interfere in them)

(219) Gold standard prevents adaptation to any internal or external disturbance. Natural outlet is conquest.

(220) Economics not to prescribe like liberal but to describe.

Source of imperialism is economic imbalance, not vice versa (see jack levy).

(223) Colonies were shunned till1870 because they were expensive to protect and capitalist companies did the job well. When it became cheap to transport products over vast distances this disrupted life of millions of Europeans. Under this international context colonies became valuable and state protected people from ravages of international trade because it affected more people and state itself was beholden to stability.

(227) Stability meant end to self-regulating market. Failure of market utopia.

Part 3.


(238) “The financial market governs by panic. The eclipse of wall street in the 1930s saved the united states from a social catastrophe of the continental type”

Only UK and USA could go off gold standard because of their large economies, other countries were stuck because they need imports.

(242) Socialism is the tendency in industrial civilization to subordinate market to democratic society.


(245) Fascism is a reaction to dilemma of deadlock between labour in parliament an capitalists in industry. it secured the market and reeducated the individual. ( Fascism is local response to global problem, issue of agency?)

(246) Fascism is a global phenomenon with global not local causes, it is a force a social reaction to the pressures of the system. Trend of disarming workers to stabilize market, christian democrats all over Europe. (So where is agency? If the reaction is simply that then we can’t blame anyone. But he thinks we can step away from the abyss. Also he thinks there was agency in the liberal minds that started the system, not so sure if any after.)

(251) Fascism fades out when the market system seems stable 1924-1929 but 1930 with collapse of market, fascism comes to power in a flash. (1929 US goes off gold, great depression) Germany, Nazis go off gold in 1930, spent all their gold reserves, they bet on the collapse of the international money system so they were better situated when it did collapse. All social changes have underlying causes in threats to society. IF people didn’t  react they would have died.

(257) 19th century civilization was destroyed by measures taken by society so as not to be destroyed by the self-regulating market.

Ch21 Solutions:

Remove land from market. It is not just wages that are important but security as well, simply paying a worker is not enough to ensure a sense of security, remove labourer from the market. Remove money from the market.

(262) Freedom, institutional and social. Redistribution. Planning and control are not barriers to freedom but requirements for it. An industrial society can afford to be free.

(268) In a Complex society individual freedom can only be attained communally in society.

Notes from articles:

Silver and Arrighi

Looking at alternatives to liberal economy by using world historical comparison, and emphasizing the class differences as more than socially given. For a group to lead society it can’t have narrow interests, the group is sectional but is reacting to threat to society as a whole. Where Gramsci sees this action in the interest of society a one facet combined with domination, Polanyi sees it as much more benign. The paper seeks to makes the case that plunges into utter destruction is less rare than Polanyi paints and so some groups can screw society over. And that if society protects itself and is bounded in state at a local level against the international, what can the global society do? How can the global society protect the third world countries by first world leadership, if it can at all? What would the groups making up international society be?

(329) US in 1950-1960 promoted itself as world leader as protector of the world society. 1970-1980 US leadership gave way to US domination, (parallel to Grovogui Veto issue) it could no longer sense the danger to society.

Polanyi recognizes the local origins for the global movement of international liberal capitalism. Starting in UK to interstate trade etc..

First half of hundred year peace relied on BOP, concert of Europe, second half relied on Haute Finance trade had an interest in peace.

Industrialism crucial for formation of states, (as well as currency). Haute Finance kept peace but states reacted to it by becoming more imperial more nationalist, tension led to war at the peak of haute finance power because peace is only weakly enforced by finance because of geopolitics and the inherent contradiction in free trade.

Does his story stand up? Britain adopted free trade not because of ideal but because it benefited from it, internalized benefits and externalized costs and to build an empire. India provided Britain with  resources, market, and an army which was paid for by Indian taxes that the UK used to wage wars in Asia. (It wasn’t a long peace for the world) (336)

Free trade wasn’t a global movement, but a British system that the other European states opted out of. Britain kept it. Equivalent is US today with its liberal competitive global system. US also preached utopia of free trade except unlike Britain it did not practice what it preached.

Unlike Britain US only partially in world economy not completely inside it. No need to waste money because it is a continent. So less in tune with the society it is supposed to protect. But until 1970 seemed like a beneficial system.

In 1970 US hegemony was threatened so it shifted to the liberal creed. Crisis of profitability and legitimacy. (341)

Germany and Japan in 1960 catching up to US but not impinging on domestic market, but by 1970 they outperformed US in almost all industries. US retaliated in 1969-1973 devaluing dollar to Deutschmark by 50%, and 23% by yen in 1971-1973. So currency devaluation was a weapon used by the US. Only by doing this did US manufacturing turn around. The result was a more balanced rate of profitability where Japan and Germany cut back their profits and gave some to the US so more equitable between the three instead of uneven development post war.

So in this respect the US was different from UK in the 19th century crisis, because it left gold standard it could play around with the currency to avoid inflation and depreciation of prices. The thing is the threat to the US was dual so while the crisis of profitability was overcome, the threat to US hegemony was not resolved, in fact devaluation of currency made it worse. (What is Arrighi and Silver saying about the gold standard? That it would have avoided the worl-wide threat to US credit system?)

“More important, the U.S.

government began resorting to economic policies—a drastic contraction in

money supply, higher interest rates, lower taxes for the wealthy, and virtually

unrestricted freedom of action for capitalist enterprise—that liquidated not just

the legacy of the domestic New Deal but also and especially the legacy of the Fair

Deal for poor countries launched by Truman in 1949” (345) Philip McMichael, Development and Social Change: A Global Perspective, 2d ed.

(Thousand Oaks, CA: Sage, 2000). See also Giovanni Arrighi, Beverly J. Silver, and

Benjamin D. Brewer, “Industrial Convergence and the Persistence of the North-South

Divide,” Studies in Comparative International Development 38, no. 1 (Spring 2003).

US did not play role of global entrepot like Britain at its height, but it did do so after 1970. Now given that the US in this period was in its belle époque, including all the faults that Britain went through, the difference is that the social forces to resist the internationalization of trade and liberalism are much weaker (according to article). (What does this mean, can a Nazi germany state rise again and disrupt the system by being an early mover? Seems unlikely) The states are not asking for return to global standard, they are also not becoming more autarchic, but the opposite. US also has centralized military power. What is missing today that was present in 19th century is the ease of mobilization of people and resources and the weakness of the colonial countries for exploitation. Today the core protects itself from free trade by US flouting its own ideology and forces periphery countries to take free trade which ravages their societies.

Hmm they end on an upnote, much like Polanyi, that we don’t have to live this way but what is the alternative?


Michael Burawoy:

Polanyi similar to Marx but differs in that capitalism is identified by the commodification of labour land and money not exploitation.

Polanyi is falsely optimistic on four counts. Once liberal ideology is discredited it does not return. Society is underspecified and assumed to be intact. State and society are taken to be the same. Capitalism is taken out of the picture including the imperatives for accumulation in capitalism even without liberal ideology.

State can sometimes protect labour but generally mounts assaults on labour. Does international solidarity undermine the state and national level trade unions? Should they make those ties? Or is it undermining the state and its protection.

Which basis for action is better “exploitation which potentially brings together workers as wage laborers across geographical scale or commodification which brings together workers, expropriated farmers, people struggling for access to water and electricity?”

Instead of one countermovement there have been 3 waves of marketization. First one was on land labour and money. The third wave begins in 1974 and hasn’t stopped it is commodifying water and air and public goods, whether there will be a reaction to it or not is still debatable. So Polanyi was wrong to assume that the marketization was over by the counteract it is wavelike.

Polanyi misses other venues for resistance than state especially in third world. He argues countermovement must begin in the global because the nature of marketization begins globally in the third wave. Didn’t really convince me. No basis for global action, Harvey is much better at capturing reality.

Class Discussion:

1. What is annihilation? The utter doom that liberalism leads to and the end of man? Utter destruction, plunge into devastation. Polanyi doesn’t criticize internal logic of liberal self regulating market (he does though according t prof) he is saying given the historical situation we inherit we cannot go into liberalism unless we annihilate humanity, So is destruction recreation of man or the extermination of him? Is it the change of man from man inherited from history to liberal man or liberal world. nothing wrong with logic of liberlaism at least not in his book, except that it doesn’t deal with reality. His style/method/philosophy is that we can’t get rid of our history that is utopian.

Global pressure of market leads to local reactions, defence takes on different forms like xenophobia today? in 1920 fascism, new deal, socialism all different reaction to the same global impact.

Gold market was self regulating in 1920 by attempts of government and bankers. In 1800s  it was backed by britain, so it wasn’t self regulating.

Governemnts of left and right tried to regulate the market, local government all try to come into the gold standard. but why? Liberal ideology took hold. it is against their interests. (blaming the economists).

Contagion. Weak countries collapse first, then big countries take on the burdens of the small countries, they fail the gold standard, etc till the collapse reaches the center.

Undermining democracy is the gold standard, which was supposed to be a path to peace for everyone but it’s just an ideology.

Euro in summer of 2010 was treated like gold, they’re not printing more paper to get out of the crisis. So it began to look like 1920. Is Euro an ideological or an economic project? is it against economic interests? why include small unprepared sttaes?

1980-1990 Polanyi was read as optimistic, focus on double movement, there will be a countermovement to this and society will protect itself.

Today, focus on crisis and fascism oh shit, double movement not working. (Periphery sending fascism back to core?)

2. What is annihilation, in 1920-1945 t was the solution to the crisis of the self regulating market. This is not necessarily unavoidable. We saw how the enclosure transformation was slowed down and avoided crisis. So not necessary to  end in destruction. Can we still step back?

We should go back to society and economy as one (In thinking, we never stopped in practice). A new man can’t be made, the enclosure was simply a buffer to allow adaptation to social survival mechanisms, not to create new man.

Polanyi discusses both rate and direction of change. If rate is too fast it is bad even if everyone agrees that the direction is good.

Householding, reciprocity and redistribution, with a market outside of these social economic behaviours.A separate economic sphere was only aorund in 1800, market plays minor role till 1800, dependant and adjunct on social outcomes. Self regulating market vs market.

We must  decommodify money labour and land. Instead we find further commodification, next wave on air. So after WW2 (1950-1971) Polanyi was on top and indeed we saw labour and land decommodified, but money only partially so. US could not sutain this so in 1972 failure of Gatt etc started moving back to commodifiying first money then land then labour. Abandonment of full employment in 1970 and welfare, return of relevance for Polanyi.

Today land is a commodity which is undervalued, it is not renewable. it is therefore not fully commodified because the costs of the reproduction of nature are not being paid. The state ensures labours value to the fullest but not nature.

US backed 3 dollars with an ounce of gold, first crisis when people realized there were more bills than gold 😦 second is when US went off gold standard. So Us played role of UK for 20 years. Why did we recommodify? It was unsustainable, the US was footing the bill and trade imbalance could not be sustained. Disaster in Japan, slow growth in germany was necessary to help the US.

What was the great transformation? 1. Whole thing from enclosure to WW2. 2. Phases of one big transformation (small UK, industrial revolution, world) 3. multiple great transformations.

1950-1970 decommodification was unsustainable because you can’t do that and still pursue profit after a while profit making can’t be sustained so not the solution for this system.

(258) Liberal idea whether desirable or not assumes man to act as a rational economic actor “grounded in the immutable characteristics of the race” but man is not a rational economic actor, doesn’t do most work for least effort. The logic of man that liberalism has makes no sense.

Industrialization will continue but without market society.

(261) Two forms of 19th century: Anarchic socereignty and justified interference in other countries (financial itnerconnectedness)

(263) ” The true answer to the threat of bureaucracy as a source of abuse of power is to create spheres of arbitrary freedom protected by unbreakable rules”

(265) To turn against regulation is to turn  against reforms.

Problem with the meaning of freedom, freedom demands the absence of power and compulsion, in a complex society this is impossible. Freedom is either held as an idea and reality is denied, or as a reality and idea is denied. the problem is with the definition of freedm used as liberty. Freedom can only exist in society.

Fascism/socialism reject freedom, liberalists reject reality. But they are both opposites on the same spectrum which defines society as opposed to freedom and power as material.

Polanyi and Weber: Prestige and social standing in community is important. Speenhamland stopped the honour of work.

Question of agency: Was fascism inevitable? The statement laizzes faire was planed assumes there is some agency if at least at that foundational level.

The difference between fascism and socialism is nto economic but in moral differences.

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