Economic Ideas

TY - CHAP

T1 - Economic Ideas

AU - Holmes, Christopher Martin

AU - Yarrow, David

PY - 2019/7/25

Y1 - 2019/7/25

N2 - In this chapter, we consider the various ways in which Polanyi’s desire to challenge market-centric representations of the economy permeated his most important theoretical interventions, considering strengths and weaknesses along the way. Firstly, we examine the critique of laissez-faire market ideology that Polanyi presented in The Great Transformation (TGT). Here, Polanyi argues that a market-centric reading of the history of capitalism occluded both the role of politics in creating and sustaining market orders, as well as failing to recognise adequately the way in which markets can generate various types of harm and conflict. After demonstrating how that critique fits into the broader framework of the book, we note weaknesses both in terms of a failure to recognise relevant precedents to nineteenth century laissez-faire thought, and in terms of the way in which the theoretical premises of economic liberalism are relied on too directly in his narrative of real-world economic history. In the second section, we move on to consider Polanyi’s books published subsequently to TGT. In them, he sought to demonstrate that a market-centric view of economy could not be universally valid by finding empirical examples of economies – usually ancient – not organised primarily along market lines. In response, he developed a ‘substantivist’ economics which represented the economy in institutional terms and which did not assume market-like characteristics of people. After outlining this theory, we discuss the fact that he never applied this substantivism to market society directly, noting the various ways in which this omission has been approached in the literature.In regard to both arguments, we conclude that there are clearly problems in the way in which Polanyi executed his critique of market-centric accounts of economy. He had a tendency to pile ideational and historical levels of analysis on top of one another, which means that the complexity of the history of both economies and economic ideas sometimes gets glossed over. Nevertheless, to think that these problems undermine his critique of market-centrism itself would be to throw the baby out with the bathwater. Instead, it is a question of thinking more cautiously about how market-centrism manifests itself, who purveys it, and what impact it has in particular contexts. With this in mind, the final section of this chapter surveys some examples of the contemporary relevance of Polanyi’s challenge to market-centrism both in academic economics and in recent debates over the limitations of the UN System of National Accounts, which, since the 1950s, has provided the most authoritative and widely deployed representation of ‘the economy’ in policy-making, and one which is couched strictly in market terms.

AB - In this chapter, we consider the various ways in which Polanyi’s desire to challenge market-centric representations of the economy permeated his most important theoretical interventions, considering strengths and weaknesses along the way. Firstly, we examine the critique of laissez-faire market ideology that Polanyi presented in The Great Transformation (TGT). Here, Polanyi argues that a market-centric reading of the history of capitalism occluded both the role of politics in creating and sustaining market orders, as well as failing to recognise adequately the way in which markets can generate various types of harm and conflict. After demonstrating how that critique fits into the broader framework of the book, we note weaknesses both in terms of a failure to recognise relevant precedents to nineteenth century laissez-faire thought, and in terms of the way in which the theoretical premises of economic liberalism are relied on too directly in his narrative of real-world economic history. In the second section, we move on to consider Polanyi’s books published subsequently to TGT. In them, he sought to demonstrate that a market-centric view of economy could not be universally valid by finding empirical examples of economies – usually ancient – not organised primarily along market lines. In response, he developed a ‘substantivist’ economics which represented the economy in institutional terms and which did not assume market-like characteristics of people. After outlining this theory, we discuss the fact that he never applied this substantivism to market society directly, noting the various ways in which this omission has been approached in the literature.In regard to both arguments, we conclude that there are clearly problems in the way in which Polanyi executed his critique of market-centric accounts of economy. He had a tendency to pile ideational and historical levels of analysis on top of one another, which means that the complexity of the history of both economies and economic ideas sometimes gets glossed over. Nevertheless, to think that these problems undermine his critique of market-centrism itself would be to throw the baby out with the bathwater. Instead, it is a question of thinking more cautiously about how market-centrism manifests itself, who purveys it, and what impact it has in particular contexts. With this in mind, the final section of this chapter surveys some examples of the contemporary relevance of Polanyi’s challenge to market-centrism both in academic economics and in recent debates over the limitations of the UN System of National Accounts, which, since the 1950s, has provided the most authoritative and widely deployed representation of ‘the economy’ in policy-making, and one which is couched strictly in market terms.

M3 - Chapter

SP - 7

EP - 25

BT - Karl Polanyi's Political and Economic Thought

CY - Newcastle

ER -