Polanyi against the whirlwind.

AuthorGuinan, Joe
PositionEditorial

The left must quickly recover the capacity to offer a radically different political economy or reap the consequences.

We've been here before--up against the social and political limits of our economic order, on the brink of a great unwinding of market liberalism. The previous, Victorian era of globalisation unfolded along a similar arc. Few establishment observers saw the end approaching then, either.

The years following the Napoleonic Wars up until 1914 witnessed massive worldwide economic integration under the protection of the Royal Navy. Commodities moved ever faster across borders, as sail gave way to steam and horsepower to railways. New communications technologies and multilateral agreements proliferated. Trans-oceanic submarine cables were laid, scientific conventions standardised weights and measures, and clocks were synchronised at Chester Arthur's International Conference on the Meridian in 1884. Tariff barriers came down, trade volumes increased, and more than forty commercial treaties were concluded among European countries. (1) It was, for many, an 'economic Eldorado'. Keynes was later to marvel, in The Economic Consequences of the Peace, at the age's newfound ability to 'order by telephone... the various products of the whole earth... and reasonably expect their early delivery upon [the] doorstep'. (2)

Then as now, liberal elites were transfixed by the fruits of capitalist globalisation, congratulating themselves and each other on such epiphenomena as the spread of culture and consumption. As with our own era of market liberalism, they missed or ignored the deeper underlying dynamics of the system. The 'stark utopia' of the universalisation of the market as the governing principle of social organisation eventually reached its breaking point. 'Such an institution', as Karl Polanyi admonished in The Great Transformation, 'could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness'. (3) One after another, the ruling institutions of nineteenth-century civilisation--the gold standard, the Great Power system, the liberal state--collapsed under pressure. In the end, the attendant horrors of imperialism and deep conflicts that had been brewing--financial crisis, deflation, mass unemployment, beggar-thy-neighbour trade wars--erupted into the charnel house of the twentieth century.

Today, we're once again in a Polanyi moment. The vast disruptive power of markets and globalisation unleashed upon people, communities, and regions now requires a massive 're-embedding' of the economy in society and nature if we are to avoid a catastrophic spiral into fascism and environmental collapse. Decades of ceaselessly expanding market liberalism have sown row upon row of dragon's teeth; the left must quickly recover the capacity to offer a radically different political economy or reap the consequences.

Contours of the present crisis

There are encouraging signs that the more thoughtful elements of the centre left are awakening to the magnitude of the crisis. Stagnant real wages, labour arbitrage, compounding inequality, financialisation, social atomisation, ecological destruction --the dashboard warning lights have been blinking insistently for long enough. And yet, whether through complacency, wilful ignorance, or cynical accommodation, most social democrats have left it until very late in the day to sit up and pay attention. After Brexit, after the US election, it should be evident that the clapped-out politics of triangulation and pallid economics of amelioration are no match for a resurgent right populism now on the march. Frantically leafing through the Third Way playbook to cycle in some new empty suit with a soundbite is a recipe for disaster, given the depth of popular anger at the political class.

This is not just a matter of the US presidential election. The American people have spoken, and through their ridiculous antique constitutional machinery have propelled into office a monstrous gargoyle, a Batman villain with a comb-over and bright orange tan who hails from a gilded tower in Gotham and stands at the head of some of the most sinister forces in American political life. A rogues' gallery of plutocrats and ideologues is being assembled to govern the nation. But we should not mistake symptoms for causes. The crisis extends way beyond Donald Trump.

An election-day poll by Reuters/Ipsos found a whopping seventy-two per cent of all Americans--a supermajority across all parties and persuasions--agreeing that 'the economy is rigged to advantage the rich and powerful'. (4) The parallels with the Brexit vote--in which citizens overturned an overwhelming establishment consensus favouring the status quo to reach for something radically different out of a desire to 'take back...

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