Thursday, October 29, 2015

Karl Polanyi: Land and Labor and the Resistance to the Market

Karl Polanyi wrote The Great Transformation: The Political and Economic Origins of Our Time in the Second World War while a refugee from fascist Europe in Britain and the US. It is a ringing critique of the market economy.

In "Capitalism as a Utopian Movement" we discussed Polanyi's argument that capitalism was an ideological movement, followed by "Great Depression Failure of the English System" and "History of Exchange Prior to the Modern Market" and "The Self Regulating Market and Its Fictions" and "Speenhamland and the Poor Law" and "The Social Crisis of Poverty and Commodity Labor" and "The Market Economy Means Annihilation of Land and People."

It all comes down the the utopian economic liberal creed, and so Polanyi takes a look it in "The Special Pleadings of the Laissez-faire Creed."

What Polanyi really dislikes about the market in labor and in land is this:
To separate labor from other activities of life and to subject it to the laws of the market was the annihilate all organic forms of existence and to replace them by a different type of organization , an atomistic and individualistic one.
 The idea of freedom of contract meant that the ties of "kinship, neighborhood, profession and creed were to be liquidated" as a restraint on the freedom of the individual.

You can see how the idea of a market for labor breaks up traditional society by looking at the (in the 1940s) colonies of the western powers.
The natives are forced to make a living by selling their labor. To this end their traditional institutions must be destroyed[.]
The motivating idea to make the natives submit to the market is that in an individualistic market for labor the worker must either work or starve. In traditional rural society things are different. "There is not starvation in [traditional] societies living on the subsistence margin." (Really?)
The protection of society, in the first instance, falls to the rulers, who can directly enforce their will. However it is all too easily assumed by economic liberals that economic rulers tend to be beneficial, while political rulers do not. 
In the run-up to the Industrial Revolution it fell to the landlords to protect the people, and they did, in their way, with Speenhamland. And after the Poor Law reform in 1834 they continued to fight for the people with factory acts.

(Really? Or did the landed gentry merely hate the upstart industrialists the way that Lady Glencora Palliser hated Mr. Bott.)

What the working people really wanted, according to Polanyi, was to "discover a form of existence that would make man the master of the machine," and that was the purpose of the Owenite Movement. It was "a religion of industry, the bearer of which was the working class."  Then there was the Chartist Movement with its Six Points that "demanded an effective popular suffrage."

When the Industrial Revolution arrived in continental Europe it lured the peasants into the city with the promise of higher wages. And the peasants found there a lower middle class that could teach them "an urban tone." While the British working class left politics to his "betters" the European worker "became a political socialist." Social insurance, with the help of the reactionary elite, came earlier to Europe than to England.

The purpose of all the resistance to economic liberalism was to hinder the absolute rule of the market in labor, and that is what the "social legislation, factory laws, unemployment insurance... and... trade unions" achieved. They were intended to interfere with the laws of supply and demand, and they did.

No less weird than the idea of a market in labor was the idea of a market in land. Land is "tied up with the organizations of kinship, neighborhood, craft, and creed[.]" The market destroys these ties.

Really, the process was driven by the need of industrial towns for an unlimited supply of cheap food. Thus we get the "commercialization of the soil, mobilizing the feudal revenue of the land." Then comes the need to feed the towns in the industrializing nations. Then comes the extension of this system to the world, forcing everyone into the orbit of the market.

Common law and statute law sometimes encouraged, and sometimes slowed this process with respect to land. But the feudal and landed proprietors did what they could to slow down the commerce in land and slowing the migration to the city. And, with wars and rumors of wars, they could point to the importance of self-sufficiency in food.

Next, Polanyi shows how the conflict between the market ideology and peoples' instinct for self-protection created impossible economic and political contradictions and strains.

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