After the Future

Learning from Our Grandparents

Or great-granparents, as the case may be.

I want to spend some time with Polanyi in part because he has a fundamentally conservative temperament and POV. I'd argue that he's more of a Burkean conservative than most to the conservative intellectuals who are obsessed with the tyrannic threats posed by big government. I like reading The American Conservative, as contrasted with other conservative  partisan rags like The National Review or The Weekly Standard, because TAC for the most part gets that while the Big State creates significant problems, the market as a disruptive force is far more destructive of human liberties and well-being than the state is. TAC is opposed to Liberalism as a mindset, and in that I largely agree with them, but I also believe that the Liberal State is a necessity for living in a country with 310 million people and on a planet with over 7 billion.

Large scale governmental bodies are with us in the long run; it's silly to think otherwise. The challenge is to organize them in such a way that they allow for as much freedom as possible where people live on the ground while at the same time making sure that power and wealth don't aggregate into the hands of too few. That is job #1, and that requires creating a mindset in which the basics tenets of social democracy are broadly accepted in such a way as to push every other ideology to the fringes. This was the hard-fought accomplishment our  grandparents, the folks in Polanyi's generation in the thirties and forties, after having learned the hard way that nothing else works.

It's a lesson we've forgotten, and so we are having arguments on the ethos level when we should be having arguments on the logos level. We need consensus about basic political  values, so that we can argue about the most practical way to solve pressing practical problems. The current domination of Neoliberal ideology among our elites has been a regression to the mindset of  late 19th-century Liberalism. Our grandparents learned that that mindset leads to disaster, and now it looks as if we'll have to learn it again. But it is a lesson we will learn for good sooner or later because nothing else but social democracy in a subsidiarist key will work. And social democracy cannot work unless there is broad acceptance that it is the best way to organize things in the political sphere. It will be hard enough to make it work when there is consensus about it, but it's impossible for it to function in any practical sense without it. 

What Is More Natural Than Markets?

Reflections on The Great Transformation, Chapter Three: "Habitation versus Improvement"

Central to Polanyi's argument is that markets are not natural, that contrary to the assumptions of classical economists, to "truck and barter"  is not something that has been a central element in human social activity for thousands of years. He argues that the market economy is something that only became possible after the machine made a certain kind of wealth accumulation possible. Economic activity had always before that been subordinate to other social values, and that the key to 'the great transformation' is that for the first time in history, society's values have become subordinated to economic ones, that economic growth was the only thing that mattered.

This is a "revolution" that is taken for granted by us now, and most of us assume that its benefits are self evident, but it's worth a few moments to reflect on its significance. 

Nowhere has liberal philosophy failed so conspicuously as in its understanding of the problem of change. Fired by an emotional faith in spontaneity, the common-sense attitude toward change was discarded in favor of a mystical readiness to accept the social consequences of economic improvement, whatever they might be. . . . It should need no elaboration that a process of undirected change, the pace of which is deemed too fast, should be slowed down, if possible, so as to safeguard the welfare of the community. Such household truths of traditional statesmanship, often merely reflecting the teachings of a social philosophy inherited form the ancients, were in the nineteenth century erased from the thoughts of the educated by the corrosive of a crude utilitarianism combined with an uncritical reliance on the alleged self-healing virtues of unconscious growth. 

The catastrophes of social dislocation experienced first in England and then elsewhere were justified by a purely materialistic/utilitarian calculus: Happiness = economic growth. The entire 19th century is shot through with an optimism and that the disruptions caused by the unprecedented economic growth were temporary that the wealth generated would somehow be redistributed, and that a rising tide lifts all boats. Utopian schemes proliferated. That optimism evaporated during the trente inglorieuse between 1914 -1945, and a more sober, social democratic compromise in the Atlantic world replaced the ideological fervor of the decades preceding whether the fervor was for free markets, for socialist revolution, or for fascist will to power. The boring, sober, process-oriented bureaucratic nature of social democracies is precisely what destabilized it in the 70s, and a space was created for the re-emergence of market idolatry.

When Polanyi wrote this book in the forties, he assumed we learned this lesson. That the catastrophes of the preceding thirty years were directly associated with our not having understood the destructive impact of the 'market system' when it first appeared. 

. . . an entirely new institutional mechanism was starting to act on Western society; that its dangers, which cut to the quick when they first appear, were never rally overcome; and that the history of the nineteenth-century civilization consisted largely in attempts to protect society against the ravages of such a mechanism. The Industrial Revolution was merely the beginning of a revolution as extreme and radical as ever inflamed the minds of sectarians, but the new creed was utterly materialistic and believed that all human problems could be resolved given an unlimited amount of material commodities . . . .

But how has this revolution itself been defined? What was its basic characteristic? Was it the rise of the factory towns, the emergence of slums, the long working hours of children, the low wages of certain categories of workers, the rise in the rate of population increase, or the concentration of industries? We submit that all these were merely incidental to one basic change, the establishment of a market economy, and the commercial nature of this institution cannot be fully grasped unless the impact of the machine on commercial society is realized. We do not intend to assert that the machine caused that which happened, but we insist that once elaborate machines and plant were used for production in a commercial society, the idea of a self-regulating market system was bound to take shape. . . .

Perhaps no other outcome was possible during the nineteenth century because technology, although it is a human invention, works back on humans and reprograms them as they adapt to its effects. That this process is largely unconscious is what makes it so hard to resist. There are so many little choices made that in their aggregate lead to transformations that even twenty or thirty years before would have been unimaginable. 

Since elaborate machines are expensive, they do not pay unless large amounts of goods are produced. They can be worked without a loss only if the vent of the goods is reasonably assured and if production need not be interrupted for want of the primary good necessary to feed the machines. For the merchant this means that all factors involved must be on sale, that is, they must be available in the needed quantities to anybody who is prepared to pay for them. Unless this condition is fulfilled, production with the help of specialized machines is too risky to be undertaken both from the point of view of the merchant who stakes his money and of the community as a whole which comes to depend upon continuous production for incomes, employment, and provisions. 

Now in an agricultural society such conditions would not naturally be given; they would have to be created. That they would be created gradually in no way affects the startling nature of the changes involved. The transformation implies a change in the motive of actions on the part of the member of society; for the motive of subsistence that of gain must be substituted. All transactions are turned into money transactions, and these in turn require that a medium of exchange be introduced into every articulation of industrial life. All incomes must derive from the sale of something or other, and whatever the  actual source of a person's income, it must be regarded resulting from sale. No less is implied in the simple term "market system," by which we designate the institutional pattern described. But the most startling peculiarity of the system lies in the fact that, once it is established, it must be allowed to function without outside interference. Profits are not any more guaranteed, and the merchant must make his profits on the market. Prices must be allowed to regulate themselves. Such a self-regulating system of markets is what we mean by a market economy. 

The transformation to this system form the earlier economy is so complete that it resembles more the metamorphosis of the caterpillar than any alteration that can be expressed in terms of continuous growth and development.

For the first time everything is fungible--even people and their labor. The traditional face-to-face relationships that shaped economic activities are destroyed, and social value becomes subordinated to economic value as determined by the market. This works hand in hand with the larger liberal project of rejecting tradition as unnecessary baggage and a heap of superstitious mumbo jumbo. The nineteenth century bourgeoisie thought they could create society anew according to a rationalistically determined template. 

My goal here is not to decry that horrors of the market system, but only to point out with Polanyi's assistance, that a market society isn't natural.  It is a recent development. The machine enabled market economy produced was a historical inevitability precisely because it was so radically new and so poorly understood, and gaveexcitements rise to remarkably naive utopian ideas, not the least of which was revolutionary Marxism.

So we've been there, and we've done all that. The challenge now is to learn from our mistakes and move sanely forward. I'm all for a politics and an economic system that is boring and sober. Let people find their excitements elsewhere. 

The Great Transformation

Several months ago I announced that I was going to post a piece entitled "1848". It's probably not going to happen, but my reason for it was that I saw it as the year that the music died, so to say, the year that materialism and disenchantment became the dominant motif in the West.

When I was younger I mostly thought this was a bad thing, but now I see it as an inevitable or even as a necessary thing. I think it's important as a stage in anyone's spiritual development that they see reality and all the ways it's shot through with evil and brutishness and yet to remain hopeful. I've written before here about how the early modern St. John of the Cross was a harbinger in writing about his own spiritual development about what we would go through collectively as dark nights of spirit, soul, and senses. After 1848 the Dark Night began in the West.

Delusional, optimistic, naive, utopian thinking lingered until World War I among certain factions within the West's cultural elite, but already by 1848 the new cultural OS had been installed, and it had purged romantic notions of spiritual dimensions shaping history. My essay "Metaxis" discusses this theme in greater detail. Hegel dialectics of spirit became Marx's dialects of matter, and about ten years later Darwin's publication of the Origin of the Species provided a basis for Huxley, Spencer, and the development of ontological naturalism as the culture's new dominating (if not quite yet dominant) metanarrative that sealed the deal.

Thereafter any arguments that history was anything more than a random, purposeless struggle for survival seemed silly and medieval. But surely once a civilization loses all sense of spiritual aspiration, it ceases to be a civilization. It's been the argument of this blog that our current social reality is not civilization, but a wintertime of the spirit, a wandering in the dead land, the wilderness, a decadent interlude, which we must endure in hope while we wait for spring. 

And so for the last year or so I've been trying to understand the how this winter came upon us, and if understanding its nature might lead to some understanding about how to look for and cultivate the early signs of spring. I've been spending time reading about 19th Century as much as I had time for it--mostly Eric Hobsbawm's "Age of" books. And I feel that while I don't have a specialist's grasp of what happened, I do have a very good understanding of the main economic, cultural, and political developments from the American and French Revolutions through to World War II.

But knowing what happened is not the same as understanding it, and I need some help in understanding that, and since in a wintertime of the spirit, there is no such thing as a philosophy of history, one is force to embrace people of a philosophical cast of mind who think about history, and such a person is Karl Polanyi.  I've just started 1944 book, The Great Transformation: The Political and Economic Origins of Our Time, which has been on my reading list for some time. I wanted to read Wm. James and maybe Peirce this summer, but that will have to wait, because Polanyi is more in the flow of what I've been thinking about the last year. 

So this is my summer project. I've just finished reading the first two chapters, and I invite readers here who have read Polanyi or may have had him on their list too to work with me as I read through it. My family health issues are a little more stable, but not completely resolved, so my posting here still might be a little spotty. 

***

Polanyi understands that something really big happened in the 19th century, which wasn't all that long ago, and that we still don't understand it very well. He's writing from the perspective of the middle of WWII, but I don't know that we've learned much about what happened since he wrote about it, especially considering the developments of the last thirty years:

To trace the institutional mechanism of the downfall of a civilization may well appear as a hopeless endeavor. Yet it is this we are undertaking. In doing so, we are consciously adjusting our aim to the extreme singularity of the subject matter. For the civilization of the nineteenth century was unique precisely in that it centered on a definite institutional mechanism. 

No explanation can satisfy which does not account for the suddenness of the cataclysm. As if the forces of change had been pent up for a century, a torrent of events is pouring down on mankind. A social transformation of planetary range is being topped by wars of an entirely new type in which a score of states have crashed, and the contours of new empires are emerging out of a sea of blood. But this fact of demoniac violence is merely superimposed on a swift, silent current of change which swallows up the past often without so much as a ripple on the surface! A reasoned analysis of the catastrophe must account both for the tempestuous action and the quiet dissolution. (p. 4)

What is this institutional mechanism? It's the self-adjusting market of 19th Century Liberalism and the complex of institutions that became subservient to it from the Concert of Europe, to the gold standard, to the great international banking houses: 

Our thesis is that the idea of a self-adjusting market implied a stark utopia. Such an institution 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. Inevitably, society took measures to protect itself, but whatever measures it took impaired the self-regulation of the market, disorganized industrial life, and thus endangered society in yet another way. It was this dilemma which forced the development of the market system into a definite groove and finally disrupted the social organization based upon it. (p. 3-4)

I find it interesting that he thinks that the changes that came in the 1930s and 40s as a response to the cataclysm were a permanent:

But if the breakdown of our civilization was timed by the failure of world economy, it was certainly not caused by it. Its origins lay more than a hundred years back in that social and technological upheaval from which the idea of a self-regulating market system sprang in Western Europe. The end of this venture has come in our time; it closes a distinct stage in the history of industrial civilization. (p.5)

Has this stage in industrial civilization dominated by the unregulated market come to an end? Until the mid 90s I would have agreed with this statement, but the resurgence of 19th Century Liberalism in the Libertarian and Neoliberal ideologies that dominate American and world political elites since the 80s shows that the lessons that Polanyi thinks we learned apparently have not been learned. 

That we have traded material prosperity for spiritual poverty is basically a conservative argument, at least an argument made by thoughtful conservatives. I agree with conservatives in this regard. I disagree, however, that this was a mistake. I embrace it, as suggested above, as a necessary stage in the spiritual evolution of humankind. I also disagree with conservatives who think that the State is necessarily the enemy--it can be, for sure. But the depredations of powerful actors in the private sector have been and will continue to be more destructive of the quality of our lives if left unchecked, and the only checking mechanism we little people have is our collective political will to push back against the predators through our political institutions. The cataclysms dating from 1914 through to 1945 taught our grandparents and parents a lesson that Polanyi thought we had learned, but apparently not. I hope we won't have to go through similar cataclysms in order to understand what he and they did. 

More as I continue with my reading.