By Marguerite Mendell, Daniel Sale
The nice Transformation by way of Karl Polanyi, written in 1944, is a twentieth-century vintage. It provides a passionate critique of the inhumanity of liberal capitalism, an inhumanity which, Polanyi proposal, might by no means be repeated. The social and political associations built within the post-War interval not just secure society from the cruelty of the self-regulating industry, yet have been necessary to let the marketplace itself to operate. The background of the industry, Polanyi tells us, is a heritage of regulation.
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The effects of its relative economic decline, has enjoyed a 'success' whose human, social, economic and ecological consequences bear little relation to the hopes of promises of earlier years. The dream of a leisure society in which material affluence allows people to turn more and more of their attention to family, to culture and to a renewed respect for nature and conservation, has been gradually displaced by a neoconservative nightmare in which the best we can hope for is a world in which alienated individuals 'live to work' rather than 'work to live'; a world in which people derive more than ever their identities, their sense of self and their sense of social worth through an impersonal and increasingly volatile market; a world in which family and community ties are often regarded as anachronistic, sentimental impediments to efficiency that 'we' can no longer afford in the face of the challenge of international competition.
The protection that the white man could easily secure for himself, through the sovereign status of his communities was out of reach of the colored man as long as he lacked the prerequisite, political government (Polanyi, 1944: 183). Now as then, many developing countries suffered devastating reversals, as the borrowed prosperity of the seventies turned into the debt crisis of the eighties. The demands and obligations implicit in the irresponsible investment and loan decisions of that earlier decade now manifested themselves in the form of the debt crisis.
Thus, in the 1920s 'economic liberalism made a supreme bid to restore the self-regulation of the [international] system by eliminating all interventionist policies which interfered with the freedom of markets for land, labor, and money' (Polanyi, 1944:231). In so doing it clearly failed to understand that the nineteenth-century introduction of free trade and the gold standard had been possible only because it was 'usually accompanied by the simultaneous introduction of the typical protectionist policies of the age such as social legislation and customs tariffs' (Polanyi, 1944:214).