Karl Polanyi’s Vision of a Socialist Transformation 9781551646374, 9781551646350, 9781551646398

Table of contents :
Table of Contents
Introduction by Michael Brie & Claus Thomasberger
Part 1 - Looking Forward, Looking Back
Freedom of Action and Freedom of Thought by Kari Polanyi Levitt
Part II - Polanyi's Critique in the Age of Neoliberalism
Freedom, Responsibility and the Recognition of the Reality of Society by Claus Thomasberger
Why Two Karls are Better than One by Nancy Fraser
Revisiting “Freedom in a Complex Society” by Ayşe Bugra
Utopianism and the Reality of Society by Margaret R. Somers
“Neoliberal Violence”—An Attempt to Embed Society in the Market by Hüseyin Özel
Part III - The Case for a Socialist Conception of Freedom
Karl Polanyi and the paradoxes of freedom by Gareth Dale
Knowledge, Freedom and Democracy by Paula Valderrama
“Knowledge of Society” as the Basis of Karl Polanyi’s Demanding Conception of Freedom by Michele Cangiani
Karl Polanyi and Human Freedom by Fred Block
Polanyi’s Concept of Peace in a Complex Society by Chikako Nakayama
Part IV - New Ways of Reframing Socialism
Not the New Deal and Not the Welfare State: Karl Polanyi’s Vision of Socialism by Johanna Bockman
Planning for Freedom by Pat Devine
Commoning and the Commons by Marguerite Mendell
Karl Polanyi and the Discussions on a Renewed Socialism by Michael Brie
Part V - Essays by Karl Polanyi
Ideologies in Crisis (Weltanschauungskrise) (1919)
Science and Morality (1920-22)
Being and Thinking (1920-22)
The Science of the Future (1920-22)
On Freedom (1927)
Freedom in a complex society (1957)

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Karl Polanyi’s Vision of a Socialist Transformation Michael Brie Claus Thomasberger (eds.)

Montreal • New York • Chicago • London

Copyright ©2018 Black Rose Books No part of this book may be reproduced or transmitted in any form, by any means electronic or mechanical including photocopying and recording, or by any information storage or retrieval system – without written permission from the publisher, or, in the case of photocopying or other reprographic copying, a license from the Canadian Copyright Licensing Agency, Access Copyright, with the exception of brief passages quoted by a reviewer in a newspaper or magazine.

Black Rose Books No. SS389 Black Rose Books acknowledges the financial support of this publication by the Rosa Luxemburg Foundation (Berlin) Library and Archives Canada Cataloguing in Publication Karl Polanyi's vision of a socialist transformation / edited by Michael Brie and Claus Thomasberger. Includes bibliographical references. ISBN 978-1-55164-637-4 (hardcover).--ISBN 978-1-55164-635-0 (softcover).--ISBN 978-1-55164-639-8 (PDF) 1. Polanyi, Karl, 1886-1964. 2. Socialism. 3. essays I. Brie, Michael, editor II. Thomasberger, Claus, 1952-, editor HB102.P64K37 2018

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Table of Contents

5

Introduction Michael Brie & Claus Thomasberger

I . L OO K IN G B A C K – L O O K I N G F ORWARD

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Freedom of Action and Freedom of Thought Kari Polanyi Levitt

I I . P O L AN Y I ’ S C R I T I Q U E I N THE AGE OF NEOLIBERALISM

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Freedom, Responsibility and the Recognition of the Reality of Society Claus Thomasberger

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Why Two Karls are Better than One: Integrating Polanyi and Marx in a Critical Theory of the Current Crisis Nancy Fraser

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Revisiting “Freedom in a Complex Society”: A View from the Periphery Ayşe Buğra

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Utopianism and the Reality of Society: Decoding Polanyi’s Socialism, Freedom, and the Alchemy of Misrecognition Margaret R. Somers

110

“Neoliberal Violence”—an Attempt to Embed Society into the Market Hüseyin Özel

I I I . T H E C A S E F O R A S O C I A L IST CONCEPTION OF FREEDOM

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Karl Polanyi and the Paradoxes of Freedom Gareth Dale

141

Knowledge, Freedom and Democracy: Friedrich Hayek and Karl Polanyi on the Market Society and Beyond Paula Valderrama

154

“Knowledge of Society” as the Basis of Karl Polanyi’s Demanding Conception of Freedom Michele Cangiani

168

Karl Polanyi and Human Freedom Fred Block

185

Polanyi’s Concept of Peace in a Complex Society Chikako Nakayama

I V. N E W WAY S O F R E F R A M I N G SOCIALISM

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Not the New Deal and Not the Welfare State: Karl Polanyi’s Vision of Socialism Johanna Bockman

209

Planning for Freedom Pat Devine

221

Commoning and the Commons: Alternatives to a Market Society Marguerite Mendell

241

Karl Polanyi and the Discussions on a Renewed Socialism Michael Brie

V. E S S AY S B Y K A R L P O L A N Y I

264

Ideologies in Crisis (Weltanschauungskrise) (1919)

268

Science and Morality (1920-22)

287

Being and Thinking (1920-22)

293

The Science of the Future (1920-22)

298

On Freedom (1927)

320

Freedom in a Complex Society (1957)

Introduction Michael Brie and Claus Thomasberger

THe LAST TwO DeCADeS have been marked by a renewed interest in the work of Karl Polanyi. Spreading resistance to the neoliberal agenda and the deepening crises of the last 25 years, which culminated in the global financial and economic crisis of 2008, are viewed as a strong support for the main theses of Polanyi’s 1944 masterpiece The Great Transformation. Karl Polanyi was quoted by leading intellectuals and in the editorials of the main newspapers around the world as one of the most influential thinkers in the time of crises. But reception of his work remains largely restricted to the so-called “double movement” of commodification vs. social regulation. Polanyi is typically regarded as a social reformer supporting an increased social state, welfare intervention, and a broader national and international regulation of the financial markets. Or he is depicted as a theorist who gives legitimacy to various social associations and organizations which develop in the niches of current society. Both interpretations fail to address the depth of Karl Polanyi’s analysis and alternatives which are linked to his understanding of socialism as a new and different type of civilization. The socialist intention behind The Great Transformation, and indeed of the totality of his work, is not widely understood. The first reason is that a large part of his oeuvre concerning his understanding of socialism has, until now, not been published in english. Some important texts noted down in the 1920s and 1930s as well as some of his Hungarian writings have been published only recently (Polanyi 2014, 2016b, 2016c, 2017, forthcoming). To bring his unpublished writings to a wider public, we include in this book first-time translations of some of Polanyi’s most significant papers from the 1920s. A second reason is the depth and complexity of Polanyi’s analysis. The Great Transformation strives neither for a sociological theory of social development nor for a blueprint of a new great transformation. It aims primarily at an explanation of the disasters which, starting with the great war, caused the european civilization of the 19th century to collapse. It lays bare the roots of this historic cataclysm. In The Great Transformation Polanyi makes the attempt to reveal the meaning of this unique and singular event. He searches for a true understanding of the reasons which caused the horrors of two world wars, the great Depression, the rise of fascism and Auschwitz so as to prevent the repetition of disasters which threatened to extinguish the legacy of the west.

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Most scholars rightly regard Polanyi as the theorist who overcame the economic determinism dominating both the liberal theories and the schemes of most post-Marxist currents. The strength of his oeuvre, they maintain, has its origins in an approach emphasizing not economic laws, egoistic motivation and self-interest, but the relationship between the economy and society, the place of the economy in society and the double movement. Focusing on the distinction between the formal and the substantial concept of the economy, others assess Polanyi’s work as an indispensable contribution to economic anthropology. These are undoubtedly important aspects of his line of reasoning. Unfortunately, both interpretations fail to incorporate his involvement in the socialist debates of the 1920s and 1930s and the organic unity of his work as a lifelong search to overcome the contradictions of modern technological civilization. Too often, The Great Transformation is reduced to a description of the evolution of modern society in the form of a double movement which oscillates between commodification and political regulation, driven by business interests, the egoism of the wealthy and (neo)liberal ideologies on the one hand and the need for protection, social security and a more realistic vision of society on the other. The self-regulating market system and deliberate state intervention are depicted as the main instruments on which both sides rely. Some sociologists even seek refuge in the idea of long waves of pendulum swings between commodification and protection which after four decades of neoliberal hegemony raise hope of a rebound toward increasing social regulation and state intervention. In this interpretation, the socialist roots of Polanyi’s thinking are lost. This reading of his work also puts aside the fact that The Great Transformation focuses on the collapse of the civilization of the 19th century in Europe. His starting point is the breakdown of the four main institutions upon which 19th century civilization rested in Polanyi’s view: the european balance-of-power system, the liberal state, the self-regulating market system and the international gold standard. Not a pendulum swing but two world wars, the great Depression and the rise of Fascism brought the european system to fall to pieces. From today’s point of view Polanyi’s book is perhaps the most important “Austrian contribution” to the debate about the origins of these catastrophes. It may be sufficient to mention Peter Drucker, Karl Mannheim, Joseph Schumpeter, Karl Popper, Ludwig Mises or Friedrich Hayek. They all had spent their youth in the Austro-Hungarian empire and between 1942 and 1945, having immigrated to the Anglo-Saxon world, had each published at least one book that aimed to understand the cataclysm which threatened to destroy the western world. Polanyi’s work stands out because of the socialist outlook which underlies his critique of the liberal narrative of the catastrophe. In the interwar period, as Polanyi underlines, the civilization of the 19th century collapsed and the double movement ended. This is the core message of his analysis. The International gold Standard and democratic progress, which in the last decades of the 19th and the beginning of the 20th century had been

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achieved in nearly all the countries of the industrialized world, proved to be incompatible. The conflict between the international economic system, which restricted national policy space, and democracy erupted. Society had reached an impasse. Polanyi concentrates his attention on this deadly clash. Already in 1934 he writes: Democracy and Capitalism, i.e., the existing political and economic system, have reached a deadlock… the threat of disruption comes not from these opposing interests. It comes from the deadlock. The distinction is vital. The forces springing into action in order to avoid the deadlock are infinitely stronger than the forces of the opposing interests which cause the deadlock. Incidentally, this accounts for the cataclysmic vehemence of the social upheavals of our times… Mankind has come to an impasse. Fascism resolves it at the cost of a moral and material retrogression. Socialism is the way out by an advance towards a Functional Democracy. (Polanyi 1934, 188) Polanyi regards the great Depression as only the economic dimension of a far more fundamental conflict which encompassed the whole of society and threatened to destroy, along with democracy, the most valuable features of the 19th-century society. we should never forget that when the book was written—i.e. during the Second world war—not only social protection was at stake, but the future of civilization. Polanyi’s contribution is made absolutely essential today not by the theorem of the double movement, but by the aspiration to reveal the roots and the meaning of the most profound crisis experienced by the market society. The reasons are quite obvious. After four decades of economic globalization, the western world has again reached a point where an international market system has been created which restricts national policy space to a minimum. In europe and beyond, the Monetary Union is perceived more and more as a straitjacket which clashes with democracy on a national level. International competition (not only in goods, but also in currencies), threats of capital flight, the judgments of rating agencies, the conditionality of the International Monetary Fund, free trade agreements such as NAFTA or ASeAN, proposed agreements such as TPP, CeTA or TTIP (including investor-state dispute settlement (ISDS) and investment court systems (ICS)) all reduce the room for manoeuvre of economic and social policy at the national level to a minimum. what in the interwar period was mainly a european problem has since become a global conflict. The incompatibility between the international economic system and democracy is again at the heart of today’s social struggles in nearly all the countries of the western world. In the face of this challenge again—defending democracy in conflict with the new form of a market economy, i.e. global financial-market capitalism—Polanyi’s oeuvre is gaining new worldwide interest. The underlying problem is that the ideology of economic liberalism denies

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the conflict between the self-regulating market system and democracy. Marketcompliant politicians, even if they act with best intentions, have their hands tied. But instead of admitting the constraints which the market system imposes and openly questioning the predominance of the market, they feign control over the situation. The misleading dogma that the market system is essentially based on voluntary contractual relationships leads them astray. without awareness of their objective insincerity, they lose credibility. An increasing number of people regard market-compliant policy as corrupt. But the real difficulty has nothing to do with personal honesty or dishonesty. The true problem is that most politicians are blinded by the doctrine of economic liberalism which denies the conflict between the market system on the one hand and freedom and democracy on the other: one which was central to Karl Polanyi. As long as a convincing socialist account of the real conflicts is missing, it is easy for right-wing forces to seize the moment and accuse minorities and migrants of endangering national security. The consequence is that democracy itself loses credibility. Right-wing organizations and parties which disdain democracy are gaining ground. Under these conditions, the elaboration of a socialist perspective which can set the stage for a defence of democracy is decisive—this was the message of Karl Polanyi 70 years ago. It is thus all the more important for socialists to understand the conflict and the importance of democracy and freedom as the core of a socialist project. Karl Polanyi’s Vienna writings, most of them published for the first time in english in this book, reveal his unique approach, which takes freedom as the starting point in the search for a socialist transformation of the market economy. In a later work, Polanyi describes his research as “an economic historian’s contribution to world affairs in a period of perilous transformation. Its aim is simple: to enlarge our freedom of creative adjustment” (Polanyi 1977, xliii). This description also applies to The Great Transformation; this is what makes the book so up-to-date. If the main body of the book is an attempt to explain the origins of the most profound crisis of the western world in the last two centuries in an innovative narrative, the last chapter, titled “Freedom in a Complex Society,” is different in character. Polanyi describes it as a “philosophical outlook” (Polanyi 2018a, 320). On these pages he does not attempt to predict the future of the postwar era, nor is he interested in the question of how economic liberalism would (or would not) be able to adapt to the situation, postpone the conflict and buy time. Instead, he goes to the roots and grabs the underlying conflict by the horns: protection of freedom and democracy versus defence of the market system by authoritarian means; socialism versus fascism. If, in the concluding part of the book, Polanyi had tried to predict how the conflict might evolve in the post-war era, then the chapter would only be of historical interest. But this is not what he is trying to reveal: the focus is on the much more fundamental question of how the conflict can be resolved by safeguarding human freedom and democracy. It is here where the socialist roots of Polanyi’s thinking are most clearly visible in The Great Transformation. For this reason, this chapter plays a key role in the dis-

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cussion about Polanyi’s vision of a socialist transformation. what is the issue in the chapter? To put it in a nutshell: the interwar period, Polanyi underlines, had laid bare the limits of economic liberalism and of the market view of society on which it is built. The collapse of 19th-century civilization demonstrated that human freedom clashes with the dominance of self-regulating markets. It revealed that the co-existence of democracy and the global market system is unstable or even self-destructive. Sooner or later, freedom or the market tends to gain the upper hand. Socialism aspires to defend the supremacy of democracy over the market system. Fascism sacrifices democracy to safeguard the economy. when faced with the clash, Polanyi maintains, economic liberalism is unable to cope. It does not offer a lasting escape because it denies the existence of the conflict. The denial of the conflict between freedom and the self-regulating market system is one cause of Polanyi’s criticizing economic liberalism as a “stark utopia.” Polanyi’s use of the term “utopian” should not be confused with “unattainable.” On the contrary, the society of the 19th century had provided evidence that the liberal utopia is much more attainable than one may have expected. But the rise of fascism revealed that the liberal answer had become obsolete. This means that even if a new version of economic liberalism had been able to calm or temporarily hide the conflict by adapting to the post-war conditions, it would only have postponed the final clash. It would not have contributed to a solution of the contradiction between the market system and democracy, but transferred it into a new stage. Note that Polanyi does not rail against markets; on the contrary, he declares his conviction that “the end of market society means in no way the absence of markets” (Polanyi 2001, 260). Rather, it demands new forms of markets combined with forms of redistribution, reciprocity and commoning. The relationship between markets and society is his focus. Let us therefore return to the connection between economic liberalism, fascism and socialism. In reality, economic liberalism supports the command of the self-regulating market system over democracy. But ideally, it claims to safeguard freedom and democracy against the dangers of a technological-managerial civilization imposing centralized control on its citizens. Under modern conditions, there is no alternative to self-regulating markets, its protagonists declare, if freedom of the individual is to be maintained. Fascism discloses the utopian character and the factitiousness of this pretension. And it builds its stance against democracy on this insight into the contradiction between the market society and democracy. Its adherents thus conclude that democracy has to be suppressed. Socialists, Polanyi argues, accept the reality of the conflict between freedom and the complexities of modern societies and aim to strengthen democracy vis-à-vis the market economy. “Socialism,” Polanyi famously states, “is, essentially, the tendency inherent in an industrial civilization to transcend the self-regulating market by consciously subordinating it to a democratic society” (Polanyi 2001, 242). In light of the history of europe in the first decades of the 20th century, the central question which Polanyi poses is: How can we escape from the fascist

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outlook? How can freedom be maintained under the condition of a society with sophisticated technologies, complex institutions and a worldwide division of labour? In his own words: “is freedom an empty word, a temptation, designed to ruin man and his works, or can man reassert his freedom in the face of that knowledge and strive for its fulfillment in society without lapsing into moral illusionism?” (Polanyi 2001, 267). we know his answer: “while the fascist resigns himself to relinquishing freedom and glorifies power which is the reality of society, the socialist resigns himself to that reality and upholds the claim to freedom, in spite of it. Man becomes mature and able to exist as a human being in a complex society” (Polanyi 2001, 268). These sentences and Polanyi’s more general vision of socialism have been interpreted in different ways. The authors of this collection met to discuss these problems at the New School in New York in December 2015. The workshop was supported by the office of the german Rosa Luxemburg Foundation. The common starting point of the contributions of this collection is Polanyi’s reflection on Freedom in a Complex Society in the last chapter of The Great Transformation. Here Polanyi unfolds the philosophical roots of his thinking as well as of his understanding of socialism. The different chapters of our collection uncover the organic unity of his work which pivots on the polarities of individual freedom and the reality of society, personal responsibility and institutional constraints, ethics and sciences. They reconstruct the various periods of Polanyi’s life from Budapest, Vienna, england up to the US and Canada; they evaluate the influence which the Bolshevik Revolution, the great war, the New Deal and the welfare State exerted on Polanyi’s reasoning; they examine the relationship of his work to Marx’s critique of political economy on the one hand and the liberal edifice of ideas on the other; they analyze carefully Polanyi’s socialist notion of freedom and contrast it with social liberal, welfarist and communitarian interpretations; they stress the importance of his work in the age of neoliberalism; and they ask how his ideas can be used fruitfully so as to define new ways of reframing socialism. In the second part of the introduction, we will focus on three aspects of Polanyi’s work: 1. Industrial Revolution, market society and socialism; 2. socialism, institutional change and democracy; and 3. social sciences and socialism. even if it is impossible to provide a succinct account of the various trains of thought which characterize Polanyi’s understanding of the meaning of socialism, perhaps these considerations might serve as a starting point. 1. Industrial Revolution, market society and socialism The understanding that the Industrial Revolution marked a divide in the development of humankind is one of the rare points on which economic historians of different schools, the protagonists of classical political economy, Marx and engels, most sociologists and even neoliberal economists agree. Polanyi also shares this interpretation of the launch of modernity. In the posthumously

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published book The Livelihood of Man he sums up: “In the machine age we see the beginning of one of those rare mutations that mark the lifetime of the human race in terms of which the history of man since the Old Stone Age counts no more than three periods … The use of machines … that has already doubled the population of the globe should be expected to continue over a long period. It has come to stay. It is our fate. we must learn to live with it, if we are to live at all” (Polanyi 1977, xlviii). He is interested not in the technical change as such but in the social implications of the machine. Marx had built his philosophy of history on the dialectics between the development of the productive forces and the relations of production which adapt to the former. It has been the progress of the productive forces which gave birth to the bourgeois society, and this society opened spaces for technological and institutional innovations. And in line with Marx’s reasoning, it is their further improvement which will bring about a socialist revolution. From the Marxist perspective, the bourgeois society appears as a necessary intermediate stage where the development of the few and privileged is still the precondition for society’s progress. But what is socialism? Can it be imagined as a centralized planned economy? In the 1920s, the issue again played a key role in the so-called socialist accountancy debate. Max weber had prepared the ground with his studies on “bureaucratization.” In his famous article which opened the debate, Ludwig Mises referred to the intransparency and complexity of a technological civilization in order to prove the impossibility of rational planning under socialist conditions. “In the narrow confines of a closed household economy, it is possible throughout to review the process of production from beginning to end … In the incomparably more involved circumstances of our own social economy … the human mind cannot orientate itself properly” (Mises 2012, 12–13, cf. 1951, 118). He thus deduced that if the attempt is made to erect a socialist community in a complex society, the possibility of rational calculation is lost: arbitrariness and despotism will gain mastery over freedom and responsible decision making. The lack of economic calculation “makes socialism impracticable” (Mises 1951, 211). “Capitalism (is) the only solution” (Mises 1951, 217), Mises concluded. Since socialism destroys the foundation of human rationality, only the market system is compatible with human freedom and self-determination. Polanyi recognizes that, from a socialist point of view, the problem of a technological society which the “machine age” poses cannot be denied. In the 1920s, Polanyi often talks of the “problem of overview/transparency” (Übersichtsproblem) in reference to the same issue. “The overview problem (Übersichtsproblem) … unquestionably constitutes an important area of socialist theory” (Polanyi 2005, 114), he states shortly after the publication of Mises' article. But his own way of conceiving the relationship between the Industrial Revolution, market society and socialism deviates from both Marx’s and Mises’ lines of reasoning. On the one hand, Polanyi argues that the market society is a particular response to the

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introduction of specialized machines into an agrarian and commercial society under the conditions which prevailed in england at the beginning of the 19th century. On the other hand, socialism is not a model of a future “good society,” but a task which aims at subordinating the economy to a democratic society and thereby making “society a distinctively human relationship of persons which in western europe was always associated with Christian traditions” (Polanyi 2001, 242). And he criticizes the father of scientific socialism and Mises for the same reason. He rejects the economic determinism which is part of Marx’s interpretation as well as of the interpretation advanced by the protagonists of economic liberalism. even if it is unquestionable that the problems which a technological society poses are beyond human control, he argues, the answer remains a human decision. In contrast to Marx, he rejects the interpretation of the capitalist market society as an inescapable transition period and of socialism as the necessary outcome of history. He criticizes the poorness and meagerness of the materialist interpretation of socialism that, compared to the much richer and more stimulating utopias which had been developed earlier, does not stand up to the competition. He discards the deterministic fallacy which builds on the belief that the inner contradictions of capitalist economy are the mysterious forces which give rise to a socialist society.1 The failure of the Second International, Polanyi maintains, cannot be separated from its misdirecting trust in alleged economic interests and class struggle. He never accepts the doctrine of the dictatorship of the proletariat. The belief in “unbelieving politics” (Polanyi 2016a, 99)—in alleged economic laws, in the tendencies of accumulation and concentration, in the theory of immiseration and of the unavoidable collapse of the capitalist world—he is convinced, had weakened the socialist associations enormously. And he rejects the idea that socialism implies the subsuming of the economy and society by the centralized control of one authority. Against the liberal interpretation, he holds that the creation of a selfregulating market system can be neither taken for granted nor regarded as the only possible rational answer that is compatible with the western ideals of freedom and responsibility. On the contrary, the liberal denial of the conflict between the self-regulating market system and human freedom is not only utopian; it also prepared the ground for the fascist attack. Human freedom, Polanyi argues, is not dependent on one specific form of economic organization. Under the conditions of the market society “neither freedom nor peace could be institutionalized… we will have consciously to strive for them in the future if we are to possess them at all” (Polanyi 2001, 263). Therefore, in Polanyi’s vision it is the task of socialists to defend freedom and human solidarity by subordinating the economy to a democratic society of plural forces. even if in a technological society based on division of labour no centralized control by one actor as in a traditional household is possible, transparency, oversight and, therefore, the opportunity to make free and responsible decisions can be enlarged and extended, but in a different way. Throughout his life, from

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pre-world war One Hungary to the revolt in 1956, Polanyi contributes his share by fighting for an extension of civil and political rights so as to ensure and strengthen individual freedom. “The right to nonconformity,” Polanyi underlines, becomes “the hallmark of a free society” (Polanyi 2001, 262). In a time in which neoliberalism is past its best, a socialist critique of the belief that, in light of technological progress, there is no alternative to the self-regulating market system, to globalization, privatization and liberalization, is more important than ever before. 2. Socialism, institutional change and democracy Already in his contributions to the “socialist accountancy debate,” Polanyi raises the problem of the institutional setting of a socialist society. And during his later years, institutional patterns remain an important dimension of his research. Polanyi acknowledges that the market system as well as other institutions such as the state endanger freedom by developing a life of their own, regulating themselves and separating (disembedding) from society. But he also recognizes that democratic institutions are necessary in order to preserve freedoms (freedom of conscience, freedom of speech, freedom of meeting, freedom of association, freedom to choose one's job, etc). Polanyi’s vision of democracy is not limited to parliamentarian forms of democracy; especially in the 1920s, the idea of functional democracy garners his attention. In Red Vienna, Polanyi engages in a lively debate about the feasibility of guild-socialist ideas. Being aware that the fathers of scientific socialism never formulated a theory of a socialist economy, and rejecting market solutions as well as the idea of central planning, he participates in a search process for concrete institutional reorganizations towards socialist solutions. Taking up a position on the fringes of Austro-Marxism, Polanyi explores the possibility of concretizing and adapting ideas which had been developed in england, especially by g.D.H. Cole, to the Austrian context. even if it is not sufficient to refer directly to these proposals today, they remain highly relevant insofar as they show how under the conditions of a complex society creative institutional reforms can contribute to increasing freedom and democracy by supporting the solidarity-oriented interaction of a plurality of social actors. Polanyi’s vision of socialism comprises a technological culture (the awareness of the challenges of modern technology), a pluralist democracy (freedom within society), national independence, and an international order based on the coexistence of different cultures and respect for national sovereignty. This does not mean that Polanyi aims at a particular model of a “good society.” Democracy, first of all, is an answer to the problem of a technological society which aims at sustaining those features of the western culture which are most valuable. He certainly never accepts the idea that central planning by a single actor is compatible with democracy. But if we exclude centralized systems of detailed economic management, different answers are conceivable which aim at an

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increase in democracy and freedom. Democratization of the market economy with a trend towards subordinating the market system may give rise to a variety of new forms and institutional arrangements and forms of democracy which draw on respective national and regional traditions. Today’s world, being endangered by unrestricted commodification, loss of control, increasing insecurity and the rise of anti-democratic forces, renews the question of socialist alternatives. The fact that Polanyi’s idea of socialism includes a vision of cultural alternatives— pluralism, new forms of democracy as well as a redefinition of the relationship between countries and nations—makes his considerations topical again. 3. Social sciences and socialism Last but not least, Polanyi’s critique of economic and sociological determinism from a socialist point of view induces him to question the positivist epistemology on which vast parts not only of economics but also of sociology are built. The rejection of: a) the idea that modern society is outside history, and; b) the concept of social or economic laws which determine human interaction, implies that the primacy of ethics over science must be defended. Polanyi therefore discards the claim of “scientific policy.” Science can show possible ways to overcome social problems and conflicts, but science can never tell us how to decide. Only human beings can decide freely and responsibly and should do so on ethical grounds. Polanyi does not turn against the search for truth, for explanation and for deeper understanding. He does, however, reject the idea of keeping science separated from ethical considerations and norms such as freedom, human solidarity and responsibility and subduing decisions to “scientific answers.” At this point, Polanyi meets with gunnar Myrdal who wrote: There is no way of studying social reality other than from the viewpoint of human ideals. A “disinterested social science” has never existed and, for logical, reasons cannot exist. The value connotation of our main concepts represents our interest in a matter, gives direction to our thoughts and significance to our inferences. It poses the questions without which there are no answers. … It is … on account of scientific stringency that these valuations should be made explicit. … A value premise should not be chosen arbitrarily; it must be relevant and significant in relation to the society in which we live. (Myrdal 1956, 336) Secondly, Polanyi criticizes positivist sociology for confusing being and thinking. If it is true that social reality is a product of human action, the connection cannot be conceived as a one-way relationship. The active role of ideas and world views which influence the masses has to be taken into account. This has a further consequence: if human consciousness cannot be reduced to some kind of mirror to the world, scientists and social philosophers cannot regard themselves as observers only. They act; they contribute to the formation of society (they

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“perform”—to adopt a concept which has come into vogue in recent years). Polanyi repudiates what he calls the “scientific world view” insofar as it turns the relationship between science and ethics upside down. Finally, Polanyi rejects the claim that liberal and Marxist social sciences identify allegedly objective tendencies and economic or social laws. His critique is directed at the positivist attitude and the fatal conceit of social and economic sciences which imitates the natural disciplines by aiming at predictions concerning the future course of events. Social laws, such as Ricardo’s theory of distribution, Marx’s thoughts about surplus value and accumulation or the neoclassical laws of supply and demand, Polanyi maintains, can be considered relevant only as long as the functioning of the self-regulating market mechanism is taken for granted. But from a socialist point of view, such an emphasis is misleading. The true task of sociology, economics and other social theories should be to demonstrate that—and how—these mechanisms can be overcome by increasing democracy. Only free and responsible human beings can decide which path should be chosen. Social sciences can sustain such choices by revealing the implications of possible decisions. Socialists working in theoretical sociology can contribute to increasing freedom and democracy if they take their true task seriously. In “On Freedom,” Polanyi sums up that task as follows: “Instead of developing the supposed laws, which govern everything human, this science would instead principally have the task, of expanding the limits of human freedom within society by showing these laws to be the result of unintentional human actions … Not the ‘laws’ but the freedom of man in society would be the principal subject matter of this sociology” (Polanyi 2018b, 312). Polanyi’s work is his contribution to such a social science.

Mises, Ludwig von. 1951. Socialism (1922). New Haven: Yale University Press. ———. 2012. Economic Calculation in the Socialist Commonwealth (1920). Auburn: Ludwig von Mises Institute. Myrdal, gunnar. 1956. An International Economy, Problems and Prospects. London: Routledge and Kegan Paul. Polanyi, Karl. forthcoming. Economy and Society. edited by Michele Cangiani and Claus Thomasberger. Cambridge: Polity Press. ———. 1934. “Marxism Re-Stated.” New Britain III (59): 187–88. ———. 1977. The Livelihood of Man (Ed. by H. Pearson). New York: Academic Press. ———. 2001. The Great Transformation (1944). Boston, Massachusetts, USA: Beacon Press. ———. 2005. “Neue erwägungen Zu Unserer Theorie Und Praxis (Some Reflections Concerning Our Theory and Practice) (1925).” In Chronik Der Großen Transformation, Bd. III, Menschliche Freiheit, Politische Demokratie Und Die Auseinandersetzung Zwischen Sozialismus Und Faschismus, edited

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by Michele Cangiani, Kari Polanyi Levitt, and Claus Thomasberger, 114–25. Marburg: Metropolis. ———. 2014. For a New West: Essays, 1919-1958. edited by giorgio Resta and Mariavittoria Catanzariti. Cambridge: Polity. ———. 2016a. “Believing and Unbelieving Politics (1921).” In Karl Polanyi. The Hungarian Writings. Edited by Gareth Dale, 99–107. Manchester: Manchester University Press. ———. 2016b. Karl Polanyi: The Hungarian Writings. edited by g Dale. Translated by Adam Fabry. Manchester: Manchester University Press. ———. 2016c. “Socialist Accounting (1922).” Theory and Society 45 (5): 385–427. doi:10.1007/s11186-016-9276-9. ———. 2017. “Common Man’s Masterplan (1943).” In Karl Polanyi in Dialogue: A Socialist Thinker for Our Time, edited by Michael Brie. Montreal: Black Rose Books. ———. 2018a. “Freedom in a Complex Society (1957).” In this volume, 320-323. ———. 2018b. “On Freedom (1927).” In this volume, 298-319.

NOTeS 1 Before the great war he even prefers to define himself as a radical and not a socialist in order to keep a distance from those who trusted primarily in material interests and built on a determinist, pessimist and fatalist weltanschauung.

I L o o k i n g bac k l o o k i n g f o rwa r d

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Kari Polanyi Levitt

Polanyi’s life spans the period of modern socialism and, through his intellectual heritage, reaches beyond his 77 years which ended on April 23, 1964. All his life a socialist, he was never … doctrinaire; he many times cut across the main trends of debate within the socialist movements of europe. Although not a Marxist, he was much less a Social Democrat. Although a humanist, he was eminently a realist. Although aware of the reality of society, and the constraints which this reality places upon the action, values and ideas of all of us who inescapably live in society, his life was guided by an inner necessity to exercise freedom of action and thought and never to give in to determinism or fatalism. Hence the quotation from Hegel, which he many times cited. 2 (Polanyi Levitt 1964, 113)

IN AN UNPUBLISHeD note, Karl Polanyi set out the polarities of his world of thought: reality and freedom; the empirical and the normative; community and society; science and religion; efficiency and humanity; technological and social progress; institutional needs and personal needs. wherever he lived and worked, from Budapest to Vienna, London, New York, or Pickering, Ontario, Polanyi followed events of the day and commented on international political and economic affairs. what, we may ask, would he have thought about our now dangerously disordered world? It is my hope that the insights of this gathering of international scholars will enrich our understanding of Karl Polanyi’s passionate appeal to us to chart a path toward a socialist transformation of cooperation and co-existence of diverse cultures and societies that sustain life on our fragile Planet earth. Our Dangerously Disordered World The British master of spy fiction, John Le Carré, famously said “Just because communism failed does not mean capitalism has succeeded.” The end of the Cold war promised a peace dividend. Instead, free from military constraint, the west has engaged in wars throughout the greater Middle east. Following the dismemberment of the former Yugoslavia, we saw the first gulf war and the massacre of retreating Iraqi troops; military intervention in Afghanistan after 9/11; the destruction of Iraq where the dismantling of military and bureaucratic

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structures fuelled sectarian conflict and the vengeance of the Islamic State; war in Libya, creating a source of competing jihadist militias; in Somalia, giving rise to Al-Shabab and a fractured state; and in Syria, where external support for the Arab Spring revolt initiated four years of civil war, resulting in the loss of many thousands of lives and the exodus of millions of refugees. The tide of refugees is not confined to Syrians, Iraqis or Afghanis, but includes many more millions displaced by wars, climate change and crushing poverty in regions of Africa and elsewhere.3 we note the role of the former imperial powers, Britain and France, under the leadership of the now declining American empire. To all of this we add the United States’ support for destabilizing colour revolutions and the presence of NATO in countries bordering Russia, with intention to dismember the former Soviet empire. All this has created a dangerously chaotic world. There is an absence of statesmanship in the capitals of the major western powers. There is a dangerous culture of fear and revenge. There is danger that local conflicts could escalate into uncontrollable nuclear war. while refugees risked their lives crossing the Mediterranean to reach the shores of europe, the eU does not have the capacity or willingness to gain from their skills and desires to contribute to its societies, which are now in demographic decline. The earlier dream of a democratic social europe has turned into the nightmare of unfettered neoliberal market capitalism. The Maastricht Treaty, which imposed a limit of three percent on fiscal deficits, followed by the euro, which eliminated national currencies, has subjected national governments of the eurozone to austerity policies and other dictates emanating from Brussels. Democracy is in suspense. Varieties of european capitalism have given way to Anglo-Saxon dominance of financial and corporate capital. The refugee crisis has deepened the divide between political elites and disadvantaged sections of the population, expressed in rising support for nationalistic, right-wing political parties, hostile to the eU. The Left has been in political retreat for the past thirty years. In greece, it failed to support the expressed wish of the population to resist financial strangulation by creditors and demands for further privatization. Has the Left crucified itself on the altar of the euro? In the United States, where there is no limit on campaign funding and easy passage through the revolving doors of public and corporate sectors, 70 percent of the population has no confidence in the political elites of either party (The Associated Press-NORC Center for Public Affairs Research at the University of Chicago 2015). The American president can order killings by drones in distant lands, but he cannot intervene to stop the outbreaks of racial violence in his own country, nor can he impose gun control to stop the arbitrary shootings of children in American schools or of young black people on American streets. with assistance from the mass media a figure like Donald Trump was elected president of the United States. Supporters of his campaign were not confined to people sharing his outrageous views on immigrants or on Muslims, nor to people with low income or educational attainment, but included a wide cross-section of a

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disillusioned, frustrated and angry population. The epidemic of veteran suicides and the recently reported increase in mortality of white, middle-aged, American males due to depression and substance abuse, testify to a process of social disintegration; it calls to mind the declining life expectancy of Russian males following the collapse of the Soviet Union. The social problems enumerated above are symptoms of a disintegrating political and economic order reminiscent of the opening sentence of Polanyi’s Great Transformation: “Nineteenth-century civilization has collapsed.” Are we now witnessing the unravelling of the neoliberal reincarnation of the 19th century economic order which brought us the First world war and the great Depression? Is this why Karl Polanyi has returned from relative obscurity to ever-increasing prominence? The Return of Karl Polanyi The return of Karl Polanyi to popular discourse was first noted in connection with a wTO ministerial meeting in 1999, when environmental, labour and civil rights advocates staged a high-profile protest against globalization in Seattle. The rightwing CATO Institute targeted Polanyi as the most effective critic of market fundamentalism, and their most serious intellectual adversary. In 2001, Beacon Press issued a new edition of The Great Transformation with a preface by Joseph Stiglitz and an introduction by Fred Block. This signalled the rising importance of Polanyi in academic and intellectual circles. But it was the financial crisis of 2007/8 (henceforth the financial crisis) and the “New Normal” of economic stagnation, ever-increasing inequality of income and wealth, and continuing predatory financialization that invited comparison of the great Recession with the great Depression, and moved questions regarding the future of capitalism into the arena of public discussion. Karl Marx appeared on the cover page of The economist and the ghost of Karl Polanyi haunted the world economic Forum of 2012 (elliot 2012). The continuing resonance of The Great Transformation derives from the consequences of treating land, labour and money as if they were commodities produced for sale. Polanyi called them “fictitious commodities.” The instrumental rationality of economics values human effort and the bounties of nature in terms of their contribution to the expected profitability of the investment of capital. what is not profitable will not be produced. For economists, labour, land and capital are factors of production, the value of which is determined by supply and demand in the market. when labour is not in demand, it has no value. The intrinsic value of our time on earth has no place in economics. If a natural resource cannot be commodified, it likewise has no value. The contribution of nature to the harvest of grain, the yield of a fruit tree or the mineral extracted from the earth accrues to capital as income in the form of rent or profit. This fiction has produced an ever greater disconnect between the exchange value and the social-use value of goods, but more importantly, of services. Since that time

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Polanyi’s warning of the disastrous consequences of freeing the self-regulating market from regulatory control has gained ever increasing relevance and appreciation of the importance of his work. Remuneration in the financial industries, counted in billions, is grossly overvalued, while the essential services of nurses, teachers and other workers of the care industries are grossly undervalued. Unpaid work at home or in the community appears to have no value at all. Indeed, it is questionable whether the finance, insurance and real estate industries, which now contribute more than 20% to gDP in many countries, adds anything of substance to the well-being of the general population. Rather, they serve as a mechanism of transferring real wealth from the bottom to the top of the society. Money was originally a simple convenience to facilitate exchange, but that has changed: the creation by the banking system of mega-trillion financial instruments has ensnared families, businesses and governments in a web of debt, becoming hostage to the power of creditors, enforced by laws and international treaties. Forty years of neoliberalism have moved us ever closer to Polanyi’s dystopia of the self-regulating market, freed from democratic political interventions that safeguard human livelihood and ensure an ecologically sustainable future. The Satanic Mills of the market are crushing the tissue and threads that bind us in human society. Storms and fires, droughts, floods and earthquakes are Nature’s revenge for abuse and exploitation. Liberalization of capital has created a modern Leviathan that is devouring productive labour and enterprise (Hudson 2015). The continuing relevance of Polanyi is due to his contention that the requirements of a capitalist economy for ever new markets and profitable investment opportunities are in existential contradiction with our human requirement for mutually supportive social relations. A frequently cited passage of The Great Transformation is prophetic in summarizing the consequences of robbing human beings of the protective cover of cultural institutions: “They would die from social exposure and dislocation. Nature would be reduced to its elements, neighbourhoods and landscapes defiled, rivers polluted… the power to produce food and raw materials destroyed” (Polanyi 2001, 76f.). As wolfgang Streeck concluded in an article entitled How Will Capitalism End?: “… market expansion has today reached a critical threshold with respect to all three of Polanyi’s fictitious commodities” (Streeck 2014, 51). we do not know how capitalism will end, but we recall Rosa Luxemburg’s “barbarism or socialism.” Early Family Influences early family influences played an important role in Karl Polanyi’s lifelong commitment to socialism and freedom of thought. He was born in Vienna in 1886, three years after the death of Marx and the birth of Keynes, into a family whose intellectual milieu of fin de siècle counter-culture had important roots in Russia. His mother, Cecile wohl, was sent by her father from Vilna to Vienna, where she met and married Mihely Pollacek4, a Jewish Hungarian engineer and

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railway contractor. Karl and his older siblings were born in Vienna where the Pollaceks had a close family relationship with the Klaschkos. As a young man, Samuel Klaschko participated in a failed utopian commune of Russian families in Kansas named after Nikolai Tchaikovsky, a prominent figure of radical socialist activism. Klaschko then drove 3000 cattle to market in Chicago; visited the ILgwU in New York where european immigrants worked in the sweatshops of the garment industry; lived in Paris where he worked as a photographer, before eventually settling in Vienna in 1880. There he served as unofficial liaison between Russian revolutionaries of all varieties and International Socialist organizations. Trotsky was a frequent visitor. when they came to Vienna for meetings, and to purchase Marxist literature, they were cared for in rest and recuperation by the Klaschko and Pollacek families before returning to Russia. Some arrived without shoes, their feet wrapped in newspapers. My father told me that these men made an indelible impression on him, and also on his cousin ervin Szabo. He had a huge respect for the individual courage of revolutionaries, including Bakunin and Jesus of Nazareth. It was from Samuel Klaschko that Karl Polanyi acquired his admiration for the Russian Revolutionary Socialists. The Revolutionary Socialist Party, founded at the end of the 19th century, united a loose collection of radical socialists. They pioneered the ideological opposition to social democracy on Russian revolutionary soil. whereas the Russian Social Democrats concentrated their organizational strength on economic issues of the working class, and led mass political struggles, the smaller Revolutionary Socialist Party was based on subjective factors of personal initiative and revolutionary élan, on Bakunist direct action by the peasantry, and the radical intelligentsia. These Revolutionary Socialists followed the teachings of Marx, and their differences with the Social Democrats were profound and ultimately irreconcilable. They were socialists, not anarchists, but they were inspired by the legendary courage of Bakunin, who wanted to “organize society on the basis of collective and social property, from the bottom to the top, not from the top to the bottom on the basis of authority” (quoted in Polanyi 2005, 69—translated by KPL). Budapest from the Galilei Circle to the Great War The influence of Karl’s father, Mihaly Pollacek, was of equal, if not greater importance. His Anglophile orientation complemented the Russophile family influence. Karl referred many times to his father’s “pure, unadulterated idealism of the western brand.” Mihaly moved the family business from Vienna to Budapest in the early 1890’s where he provided a first-class home education for the children. Instruction in english and French, as well as Latin and greek engendered in Karl a love of Classical greek and a lifelong engagement with the philosophy of Aristotle (Polanyi 1957a).5 The language of the home was german; Karl did not learn Hungarian until he entered the gymnasium. The children adored their father who often invited one of them to accompany him on business

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trips, while Karl’s mother, Cecile, hosted a literary and cultural salon in their spacious Budapest apartment. The death of Mihaly Pollacek in 1905 was a trauma that cast a long shadow over the first decades of Karl’s adult life. Karl’s sister, Laura, was the first woman to graduate from Budapest University, at the age of 22, with a doctorate in History. Karl’s older brother, Adolph, was expelled from Budapest University for engaging in socialist student activity. He left Hungary for Japan, which, at the time, was an important centre of antiimperialist intellectual ferment (Mishra 2013). In 1908, at the age of 22, Karl became the founding president of a Hungarian student movement known as the galilei Circle. Its journal was called Szabad Gondolat (Free Thought), and received logistical support from the Free Masons. The movement challenged all that was backward in the Hungarian ancien regime of monarchy, aristocracy and the church. It included also senior gymnasium students and conducted some two thousand literacy classes for young workers and peasants. Polanyi was inspired by the Russian student movements of the 1880s and the unforgettable commitment of figures such as Vera Zasulich and Sofya Perovskaya. The galilei Circle enjoyed the support of the poet Andre Ady and Samuel Klaschko, whose influence extended also to Szabo and georg Lukács. In a note on Karl Polanyi’s life, my mother Ilona Duczynska recalled the words of one of his former galilei contemporaries, Maurice Korach: “He was a genius, rhapsodic in his world of thought. He saw far into the future … He was not made for giving continuous, political lead … He was the man for us, our hearts were with him” (Duczynska 1977, xii). Following a fistfight in defence of the well-respected professor, gyula Pikler, attacked by anti-Semitic students, Karl was expelled from Budapest University. He finished his studies in jurisprudence at Kolosvar (Cluj) in Transylvania. He was called to the Bar in 1912 and worked in the chambers of his uncle. But law was not his chosen profession, calling or vocation. He briefly served as general secretary of the Radical Party founded by his friend and mentor, Oskar Jaszi, and wrote for their journal. This constituted his single engagement in party politics. In the great war, Karl Polanyi served as a cavalry officer on the Russian front. He fell ill with typhus. when his horse tripped and fell on him, he was sure he would die there, but he woke up in a military hospital in Budapest. He was seized by a sense of personal responsibility and that of his whole generation. Patriotism had proven stronger than the internationalist commitments of the labour and socialist parties of england, germany and France, as the brightest and best of their young men marched behind King, Keiser and Republic to the killing fields of the great war. The February 1917 revolution, which ended the war in Russia, and the subsequent Soviet October revolution, signalled the impending end of the First world war and the old political order throughout central europe. In 1917, the Zimmerwald declaration of war on war was brought from Switzerland to Budapest by Ilona Duczynska and its distribution played an important role in the

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January 1918 general strikes. It led to her arrest, high profile trial, and imprisonment. In 1918 she was released by the Chrysanthemum Revolution which ended the war and established Hungary as a Republic with Mihaly Karolyi as its first president. Polanyi did not favour the short-lived Hungarian Soviet Republic led by Bela Kun which was established in January 1919. However, when Hungary was invaded by Romanian, Czech and other foreign armies, he responded to a call by georg Lukacs, stating that if he were physically able he would have joined the fight in defence of the country. Late in 1919, Polanyi left Budapest for medical treatment in Vienna. Red Vienna in the 1920s Following the defeat of the Hungarian Republic of the Councils by the “white terror” of Admiral Horty’s counter-revolution in late 1919, an exodus of communists, socialists, liberals and other free-thinking émigrés gathered in Vienna. They joined large numbers of demobilized soldiers and an influx of pension-hungry officials from the regions of the former Austro-Hungarian empire, now reduced to a small country of six million. “while the debate concerning the feasibility of a socialist economy waxed hot, the population of Vienna was literally freezing and hungry” (Polanyi Levitt 2013, 29). It was in Vienna in 1920 that Karl Polanyi first met Ilona Duczynska in a villa put at the disposal of Hungarian political refugees by a Viennese well-wisher. Ilona was ten years younger than Karl, and much admired by her contemporaries for her revolutionary anti-war activity. Her name was Polish; this, my father told me, was close enough to his ideal of the young Russian revolutionary woman. Their life partnership has been described as the fidelity of equals. My father was an educator, writer, and thinker engaged in the sometimes lonely task of the intellectual; my mother was a writer, historian and aeronautical engineer and at all times a political activist, but they shared a socialist outlook on life. when Ilona first met Karl at the villa, he was sitting apart from the rest, writing. She told me that he looked like a man whose life was behind him—the illness had taken its toll. The manuscript he was writing was known in the family as the Behemoth. It contained a critique of deterministic Marxism and reflections on revolutionary morality of the communist party. In the Moscow trials of 1922, the Bolsheviks settled old scores with the Revolutionary Socialist Party of Russia. Programmatic differences included land reform, the forced requisition of grain from the peasantry and the disbanding of the Soviets. In an article published in Die Wage in 1922, Karl Polanyi expressed his strongest condemnation of the false accusations brought against them. He valued personal integrity and courage above the correctness of political positions. with reference to the expulsion of Bakunin from the First International, he wrote: “In our view, Marx had a deeper and more fruitful understanding of the revolutionary mission of the proletariat. Just as fifty years ago the judicial murder

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of Bakunin impoverished the working class movement of the entire world by sapping its revolutionary morality and energies, so one fears that the obnoxious methods of the bloody Moscow replay may deplete the Russian Revolution of ideals and forces whose absence will, someday, cost the Russian working people very dearly” (Polanyi 2005, 70—translated by KPL). In the same year, Ilona wrote a devastating critique of the bureaucratic and military organization of the Hungarian communist party in exile, which was edited by Paul Levy and published in Unser Weg. She was promptly expelled. My parents married and I was born in 1923. At this time, Karl contributed articles to the Hungarian émigré paper Becsi Mayar Ujsag and delivered lectures on guild Socialism at the Socialist People’s University. He engaged Ludwig von Mises in a debate on the feasibility of a socialist economy in the pages of the most important social science journal of the german speaking world. In preparation, Polanyi studied economics for the first time. But it was not the english Cambridge classics of Marshall and Pigou that influenced him, but rather the writings of Austrian economists Menger, wieser and Böhm-Bawerk whose seminars were attended, among others, by Schumpeter, Neurath, Hilferding and Otto Bauer, a founder of Austro-Marxism. It is a testament to the vibrant intellectual atmosphere of Red Vienna of the 1920s that an article written by an independent intellectual with no formal certification in any of the social sciences appeared in Archiv für Sozialwissenschaft und Sozialpolitik and elicited a response from Mises and a further reply by Polanyi. This was in stark contrast with england where, despite stellar references, Polanyi was not considered qualified for even the lowest academic appointment. From 1924 until he left Vienna for england, Karl was a senior member of the editorial team of the most important economic and financial weekly in Central europe, where he was known as the socialist. From this vantage point, he followed international affairs and the unfolding world economic crisis. Polanyi did not believe in an administrative economy of central planning, nor in a moneyless so-called “natural economy,” popular among socialists at that time. His model of a socialist economy was based on the principle of combining technical efficiency with distributional justice and participatory democracy. There was, for him, a role for markets, but prices were to be determined by negotiation between associations of workers representing producers, cooperatives representing consumers, and municipalities representing communities. In the early 1920’s, issues of socialisation of the economy were hotly debated and Polanyi’s challenge of Mises should be seen in this light. It was not the result of abstract academic theorising. He insisted that a socialist economy must be based on actually existing associations of collective interests in negotiations at local, regional and national levels. In Austria, the government was dominated by conservatives at the federal level while in Vienna, a socialist majority prevailed continuously until 1933 (Polanyi Levitt 2013, 39–53). The trade union movement was strong, as was the

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consumer cooperative movement. Together with Felix Schafer and other participants, Polanyi continued to work on the elaboration of the socialist model, or theorem, of his 1922 article, but unresolved problems remained. In a letter written to Ilona and myself, Felix Schafer was of the opinion that the theoretical problems could not be solved and that Karl would later express his ideas in terms of economic history, in The Great Transformation. Encounters with Marx in Working-Class England The rise of fascism, and especially its german Nazi manifestation, caused Polanyi to leave Vienna for London in 1933. when he arrived in england, Donald and Irene grant, longstanding friends who had lived in Vienna for many years, provided a social support system for my father. when I was sent from Vienna to england in 1934, because Ilona remained to participate in the struggle against Austrian Fascism, I lived with the grants and their children who became the siblings I never had. The grants were at the center of a group of friends and supporters who called themselves the Christian Left. For Polanyi, the doctrines and practices of german Fascism appeared as a civilizational violation of Christian values as argued in “The essence of Fascism.” This essay appeared in Christianity and the Social Revolution (1935), co-edited by Polanyi. It also included a contribution by the Christian Socialist, Joseph P. Needham, best known for his monumental work chronicling the history of technology in China. Karl introduced his friends of the Christian Left to the early writings of Marx, including The Economic and Philosophic Manuscripts of 18446 by verbal translation from german. These early writings constitute the common root of Marx and Polanyi’s respective engagement with the economic and the social aspects of industrial capitalism. “From Marx’s early philosophical writings Polanyi took away an analysis of the way capitalism destroyed the essential humanism of mankind and turned multifaceted individuals into one-sided, calculating individuals” (Burawoy 2003, 205). Having earlier rejected economistic interpretations of Marxism, and reread volume one of Capital in Vienna in connection with his model of a socialist economy, this constituted Polanyi’s third, and most important, encounter with Marx. Donald grant was helpful in assisting Polanyi to undertake lecture tours in the United States until he obtained employment with the workers education Association in 1937. The weA programs required Polanyi to teach International Affairs, a subject with which he was familiar, and also english Social & economic History, which was totally new to him. The “Notes on Sources,” which appear as an appendix to The Great Transformation, attests to the depth and extent of his reading of the literature. The lecture notes for the courses became the skeleton on which The Great Transformation was to be constructed. As in the case of Marx a hundred years earlier, Polanyi’s encounter with industrial capitalism in england was traumatic. Overnight accommodation in the households of the provincial towns in Sussex and Kent, where the lectures were

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given, further acquainted him with the english working class. He found that the cultural life of the working class in the richest country of europe was inferior to that of the workers of Red Vienna, where a socialist administration had elevated their status above that of the owners of private property. He likened the class distinction in england by speech and accent to caste in India or race in the United States. In Notes on his Life, published as a preface to the Livelihood of Man in 1977, Ilona wrote that it was in england that Karl put down the roots of a sacred hate directed against market society and its effects, which divested man of his human shape.7 Like Marx, Polanyi traced the origins of industrial capitalism to the era of Malthus and Ricardo. The abrupt termination of outdoor poor relief in 1834, which had been instituted since elizabethan times, created a market for free labour that freed the ruling class from all responsibility toward the population. People were forced to accept employment however low the wages and long the hours. This legislation was validated by theories of political economy which claimed that wages neither could, nor should, rise above subsistence. These doctrines of political economy gained popularity as laws of nature, where economic livelihood was determined by the fertility of the human species (birth rate) and the fertility of the soil (food supply). Polanyi considered these doctrines to be more influential in the establishment of industrial capitalism than the simple technologies of the textile industry. According to Polanyi, “[f]rom this time onward naturalism haunted the science of man, and the reintegration of society into the human world became the persistently sought aim of the evolution of social thought. Marxian economics—in this line of argument— was an essentially unsuccessful attempt to achieve that aim, a failure due to Marx's too close adherence to Ricardo and the traditions of liberal economics” (Polanyi 2001, 131). Marx used Ricardo’s labour theory of value to prove how labour is exploited in competitive markets where all commodities, including labour, exchange at their value. writing almost 100 years later, when raw exploitation of labour was no longer the only source of profit, Polanyi concluded that the human costs of the industrial revolution went beyond the exploitation of labour, to the degradation of society and destruction of the natural environment: “writers of all views and parties, conservatives and liberals, capitalists and socialists, invariably referred to social conditions under the Industrial Revolution as a veritable abyss of human degradation” (Polanyi 2001, 41). The Writing of The Great Transformation The writing of The Great Transformation in Vermont was a result of a series of fortunate circumstances. early in 1940, we obtained British citizenship by naturalization, thanks in part to a family relationship to Sir Josiah wedgwood. As an enemy alien, Polanyi might have been admitted to the United States as a refugee, but that was not his wish nor his intention. British citizenship enabled

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him to accept a lecture tour invitation from the International Institute of education, as he had done on three previous occasions in the 1930s, with the right of return to england. In May 1940, germany occupied France and the battle of Britain raged in the skies of england. Return to england was problematic. In August 1940, the president of Bennington College offered Polanyi a teaching position. Ilona joined him in Bennington where she was employed to teach mathematics. In correspondence with the Rockefeller Foundation requesting two years of financial support for Dr. Polanyi, President Leigh wrote that Karl Polanyi considers the project to be “the chief intellectual contribution of his life” (Rockefeller Foundation 1942).8 The manuscript submitted by Polanyi after his first year of work at Bennington was not well-received by the Foundation. They suggested that he was not of university calibre and that his interests were in “Hungarian law, newspaper work, and forum lecturing.” They basically considered him unqualified and dismissed him as aspiring to a study of “Philosophy of Civilization.” The grant was nevertheless extended for the second year. while Bennington College wished to retain “indefinitely” the services of his wife, Ilona Polanyi, as an effective teacher of mathematics, they wrote that there would be no place for Karl at the college. He did not, it seems, fit into any of the designated silos of the social sciences. Fortunately, Polanyi’s manuscript came to the attention of Robert MacIver, an eminent institutional political economist and sociologist at Columbia University, who ultimately wrote the preface to the book. The subsequent invitation to join Columbia University must be attributed to the strong institutionalist tradition prevailing at the university. without British citizenship and the invitation from Bennington College, so late in Polanyi’s life, The Great Transformation might never have been written. And without the accreditation associated with his Columbia years, it is unlikely the book, even if written, could have survived to become acclaimed as a twentieth-century classic. Return to England in 1943-47 As the tide of the war turned toward Allied victory at Stalingrad, Polanyi left the two penultimate chapters of The Great Transformation unfinished. Karl and Ilona hastened to return to London to participate in discussions of the postwar order.9 Polanyi obtained a contract for the publication of The Great Transformation, and a second contract for The Common Man’s Master Plan, a popular version of The Great Transformation to be written and sent from england in 1943. The readers he had in mind were working class adults; namely, the students who attended his lectures under the auspices of the workers education Association. In London, both Karl and Ilona were actively engaged with Hungarian émigré intellectuals, including Mihaly Karolyi and his wife Katherine. The Keynes’ plan for an International Clearing Union with a special purpose currency called bancor was published as an official government white Paper in 1942. In Oxford, european refugee economists, including Kalecki, Marschak, e.F. Schumacher,

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and in London also Rosenstein Rodan, were variously engaged in plans for a Post war europe. Polanyi’s contribution to these discussions appeared in The London Quarterly of World Affairs as “Universal Capitalism or Regional Planning?” In this article, he maintained that only the United States continued to believe in universal capitalism. He advocated a system of managed trade for the world’s major regions, including the Soviet Union, the United States, Britain and its Commonwealth offshoots, europe, India and China. But he clearly underestimated the capacity of the United States to impose universal capitalism on the world (Polanyi 1945). The rejection of Churchill and the election of the Labour Party in 1945 in Britain opened a vista on a possible socialist future for england. It took the sacrifices of the Second world war to establish full employment and social security as objectives of national governments.10 From 1945 to the mid-1970s, a historic compromise of capital and labour resulted in shared gains from productivity and an increase in labour’s share in the national product. The Columbia Years & Final Return to Hungary The Columbia University appointment in 1947 provided Polanyi with the opportunity to further explore the implications of the anthropological findings of Malinowski and Thurnwald.11 At the advanced age of 61, he found his true vocation as teacher and intellectual mentor to a generation of mature young individuals whose access to a university education was facilitated by credits for war service. He formed a close relationship with his students, including Harry Pearson, walter Neale, Rosemary Arnold, Anne Chapman and george Dalton. A later generation included Terry Hopkins and Abraham Rothstein. In his teaching and research, Polanyi developed a substantive and general approach to the study of all economies, referring to man’s relationship to nature insofar as it relates to “supplying him with the means of material want satisfaction” (Polanyi 1957b, 243). Polanyi posited that reciprocity, redistribution and exchange are general patterns of integration of economic life in all societies. Only such a substantive and historical approach can provide a wider frame of reference within which markets can be situated (Polanyi 1957b, 270). He challenged the prevailing assumption that trade, money and markets were interdependent aspects of economic life in all societies, past and present. Polanyi’s anthropological research was aimed at unpacking this triad. His graduate students undertook the investigation of institutions governing trade, money-uses and exchange in primitive and archaic societies. The results of these studies, together with three seminal chapters by Polanyi, were published as Trade and Market in Early Empires (1957). A volume of Polanyi’s lectures and writings was posthumously edited by Harry Pearson and published as The Livelihood of Man (1977). A collection of essays edited by george Dalton, including chapters from The Great Transformation, provided an accessible introduction to Polanyi’s most important writings. while markets have existed throughout recorded history, Polanyi’s objective was to establish the unique character of modern market economy which

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elevates individual gain and fear of loss of livelihood to its operative principals. For Polanyi, in all previous civilisations, the economy was embedded in noneconomic social relations. Because Ilona was denied entry to the United States by McCarthyite measures, she established a home in Canada in 1950, where Karl could visit from New York. The move from London to a rural location on the outskirts of Toronto, where she was often lonely, represented a considerable sacrifice. Karl might have quit Columbia and returned to London had Ilona not made a home for them in Canada where he later retired. Here he received a stream of visitors including his American graduate students. In 1957, he was diagnosed with cancer. All his work thereafter was done with a heightened awareness of his mortality. A few years before his death, he founded the journal Co-Existence with support from eminent economists including Ragnar Frisch, Oskar Lange, P.C. Mahalanobis, gunnar Myrdal, Joan Robinson, Jan Tinbergen and Shigeto Tsuru, whose names appear on the front cover of the journal. The purpose of the journal was to encourage communication across the Cold war divide and, more generally, amongst the international community of socialist intellectuals. The last years of Karl’s life were years of great happiness for my parents. Ilona assisted in the Co-Existence project, and the production of english translations of Hungarian poets, The Plough and the Pen. Here again, they went against the stream. Following the Hungarian Revolution of 1956, suppressed by Russian tanks, thousands of Hungarians left the country. Many came to Canada. Karl and Ilona paid tribute to the dissident Hungarian intellectuals who stayed in the country; in the spirit of the legendary poet Andre Ady, they believed in the ability of Hungarian society to renew itself. Ady was the patron of the galilei Circle, and it was Karl Polanyi who paid the final tribute at his funeral in 1919. A year before Karl’s death, he visited Budapest with Ilona for the last time. He wrote that all he had achieved was due to Hungary. On the occasion of the centenary conference in 1986, Karl and Ilona were laid to rest together in a Budapest cemetery. He truly lived a world life. European Roots of The Great Transformation The Great Transformation was written over the course of two years in Vermont. The subject of the book comprised the experience of a european civilization that collapsed in 1914 and the following interwar period. It originality derives from Polanyi’s lived european experience as a student activist and independent intellectual in Budapest; his work as a socialist educator and as senior editor of a leading economic weekly in Vienna; his engagement with the Christian Left in London; and most importantly, his employment by the worker’s education Association in england, from 1937-40. Like Marx, who spent most of his life in england, Polanyi was an outsider and remained so. His statement that “[i]n order to comprehend german fascism, we must revert to Ricardian england” (Polanyi 2001, 32) could only have been made

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by a continental european, or more exactly a Central european. with minor revisions, an english edition of The Great Transformation, Origins of Our Time, was published by Victor gollancz in London in 1945. It attracted little attention. The defining event of my father’s life was, without question, the First world war. It shattered all the apparent certainties of the Belle Époque and the civilization of the long 19th Century. The first sentence of The Great Transformation, written 30 years after the outbreak of the war, speaks of this in the present tense: “Nineteenth-century civilization has collapsed. This book is concerned with the political and economic origins of this event, as well as with The great Transformation which it ushered in” (Polanyi 2001, 3). In europe, the First world war and the revolutions that followed constituted a political earthquake. Long standing dynasties disappeared. Fragile new nation-states were established. The Bolshevik Revolution of 1917 frightened the ruling classes. Socialism became an achievable objective of socialist and communist parties. In 1928 the Soviet Union launched the first five-year plan for the accelerated industrialization and modernization of a country where the peasantry formed the overwhelming majority. Polanyi saw the Soviet experiment as the last impact of the French Revolution on europe’s most backward country. In continental europe, mass unemployment and the pressures on fragile countries to conform to the rules of the gold standard evoked a protective reaction of economic closure implemented by authoritarian fascist governments with consent of the population. In germany, where there were 5 million unemployed and working-class parties dominated parliament, industrialists supported the accession of Hitler to power. Democracy was sacrificed for fascism. The conservative governments of Britain and France allied their countries with germany and Italy in a Four Power Pact on the understanding that Hitler’s armies would turn eastward to invade the Soviet Union. when Chamberlain returned from Munich in 1938 announcing “peace in our time,” the course was set for the Second world war. The United States did not experience any similar political upheaval; for Americans, the great war and the roaring 20’s were years of prosperity. It was the economic collapse of the great Depression which was the defining event of the era. Far reaching New Deal measures introduced by FDR as a reaction to the devastating decline of industrial production by fifty percent, although opposed by Republicans, won general acceptance. As the rising power of the capitalist world, the United States had the resilience to implement the New Deal without infringing on civil rights or the democratic process. The New Deal, Soviet fiveyear plans, german and other fascisms in europe, together with the rejection of Churchill and the election of the Labour Party in 1945, constitute the basis for Karl Polanyi’s Great Transformation. In continental europe, varieties of socialist and Marxist ideas have a long history. The two Karls, Marx and Polanyi, appear as complimentary social philosophers. Polanyi’s socialism is deeply rooted in a european experience, with ultimate origins in the “Liberty, equality and Fraternity” of the French Revolution.

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Marx first learned about socialism in France from Proudhon, known for Property is Theft. english socialism does not derive from the French Revolution, but rather from a vision of an earlier moral economy (Thompson 1966, 63).12 It has deep roots in Christian teachings of the brotherhood of man. european varieties of socialism were brought to the United States by immigrants in the late 19th and early 20th centuries, and many joined the logging and mining camps in the west where the Industrial workers of the world (Iww) challenged exploitation by the robber baron capitalists of the east. Socialism as an alternative to capitalism did not take root in America. In the United States today, socialism is known in terms of publicly-provided social services, including universal health care, free tertiary education or subsidized public transport. The reception of Polanyi’s institutional and social approach to the civilizational crisis of our capitalist world will differ according to the specific histories and cultures of diverse societies, peoples and nations. In the United States, Polanyi is considered a liberal, often associated with Keynes; in europe, a socialist linked with Marx. The Great Transformation has been translated into almost all european languages and also into Japanese, Chinese and Korean. In the rest of the world, where he is less well-known, his writings may find resonance in indigenous cultures and institutions which pre-date western hegemony and colonialism. American Reception: Embeddedness and Polanyi’s “Double Movement” It was not The Great Transformation that first brought him to the attention of American social scientists; rather, it was Polanyi’s contention that neoclassical economic theories of the optimal use of scarce resources are inappropriate for the study of pre-modern economies. His Columbia research confirmed this thesis regarding the unique nature of a modern market society characterized by a ubiquitous economic calculus of costs and benefits. As stated in The Great Transformation, “[i]nstead of economy being embedded in social relations, social relations are embedded in the economic system” (Polanyi 2001, 60). A market economy requires a market society. In Polanyi’s words, “society must be shaped in such a manner as to allow that system [market system] to function according to its own laws” (Polanyi 2001, 60). All subsequent references to embeddedness in the The Great Transformation distinguish earlier regulations governing the general organization of society from the social revolution which created a “free” labour market in the early nineteenth century. The ruling classes were thus freed from all social obligations and workers were subordinated to the requirements of the Machine Age. Chapter 4 of The Livelihood of Man (“The economy embedded in Society”) constitutes Polanyi’s most concise and complete statement of the difference between the social embeddedness of economic livelihood in all civilisations prior to the industrial and social revolution of the early nineteenth century, and the disembedded modern market economy. For Polanyi, in all previous civilisations,

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the economy was embedded in non-economic social relations. Our industrial civilisation has inverted this relationship. The society is restructured to serve the requirements of the economy. No primitive or archaic social order permitted individual families to fall into poverty and misery unless famine, war or natural disaster struck the entire community. In the 1970s, embeddedness acquired a different and more restrictive meaning. In an important article (1985), the American sociologist Mark granovetter popularized the use of embeddedness to relate social connectivity to the functioning of the economy in all societies throughout history. This drew attention to Polanyi’s work but created serious misunderstandings. On the basis of Polanyi’s contention that the self-regulating market is a utopian project which would “annihilate the human and natural substance of society” (Polanyi 2001, 3), Block and Somers (2014) make the case for the “alwaysembedded market economy.” I have called this the trivial interpretation of Polanyi’s concept of embeddedness. even the most marketized self-regulating modern capitalist economy requires laws, rules and regulations as well as basic public services. Market and State are complementary institutions. The pure market exists only in economic theory. Polanyi’s concern with the disembedding effect of markets on society is not specifically addressed. The contrast between the “embedded liberalism” of the first three postwar decades and the neoliberal counterrevolution of the past 40 years disappears from view. Block and Somers’ “always-embedded economy” fails to distinguish the disintegrating forces of market expansion from the countervailing measures which protect labour and the natural environment. Polanyi referred to these contradictory trends in market society as a “double movement.” In his words: “[t]he one was the principle of economic liberalism, aiming at the establishment of a self-regulating market, relying on the support of the trading classes, and using largely laissez-faire and free trade as its methods; the other was the principle of social protection aiming at the conservation of man and nature as well as productive organization” (Polanyi 2001, 138, my emphasis). Polanyi’s examples of the double movement were drawn from 19th century england where democracy functioned within the limitations of a highly restrictive franchise and the universal bourgeois belief that the working class could not be trusted with the vote.13 Secure in their control of the political process, conservative and liberal parties were responsive to pressures from civil society for social reform.14 On the european continent, Bismarck protected industry and agriculture from external competition and enacted comprehensive social legislation in response to the growing threat to the social order by the rise of mass socialist parties founded in the 1880s. Austria, Switzerland, and Scandinavian countries introduced social security measures in the late 19th century, at a time when their gDP per capita approximated that of Bangladesh today. Block and Somers are at pains to distance Polanyi from Marx. In the chapter on The Writing of The Great Transformation they maintain that there are unresolved

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contradictions in The Great Transformation which Polanyi could not address because of his “shifting relation to the Marxist tradition” (Block and Somers 2014, 73).15 According to correspondence with my father, the writing of the book proceeded smoothly following its initial plan with no indication of a shift in the argument (Polanyi Levitt 2006). As explained earlier in this text, his relationship with Marx remains one of complementarity. Britain and other western powers emerged from the First world war indebted and diminished in wealth and power but otherwise relatively unchanged. In the defeated central powers of europe and the weaker Mediterranean states, punishing reparations and austerity measures, imposed by western creditors, resulted in the polarising politics of fascism or socialism in the inter-war period. In response to the threat of socialism, industrialists lent support to populist fascist movements based on national rather than class solidarities. Popular support for fascist countermovements to the dysfunctional economy of the 1930s has inescapable similarities with contemporary political nationalist and xenophobic opposition to the ruling establishment. The historic compromise of capital and labour of the first three decades following the end of the Second world war can be seen as an effective reaction of society to the breakdown of the capitalist order in the great Depression. In europe, western governments adopted national economic planning. Important industries were nationalised. Capital was regulated and exchange controls limited international capital movements. Labour shared the gains of productivity growth and rising wages sustained effective demand and full-employment. Inequalities declined and countries attained unprecedented rates of growth. However, as foreseen by Michael Kalecki, three decades of full employment weakened the power of capital and laid the basis for the neoliberal counterrevolution. Polanyi is now recognized in the mainstream of socio-economic doctrine as an advocate of regulation and social policy, complementing Keynes on macroeconomic management of monetary and fiscal policy (eichengreen 2015, 378).16 This is an important recognition of the power of Polanyi’s insights but it does not speak to the future of a socially and politically dysfunctional capitalist order. Polanyi’s double movement has widely been interpreted as a self-correcting mechanism which moderates and contains the socially destructive tendency of unregulated capitalist markets; or as a historic pendulum. Less attention has been paid to the caveat which qualified the countermovement in the opening pages of The Great Transformation: “[i]nevitably, 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.” (Polanyi 2001, 3). In the opening pages of the final chapter of The Great Transformation, Polanyi leaves no doubt regarding the importance of this caveat. The countervailing reforms did not save the nineteenth-century liberal economic order from selfdestruction in the 1930s. It was not the recurrent economic crises, the falling rate

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of profit or even the great war, but the stresses and strains on the social fabric which resulted in the extremes of fascism or socialism in so many countries of continental europe. The neoliberal counterrevolution is best understood as the uprooting or disembedding of the reforms of the first three post-war decades. Neoliberalism reasserted the discipline of capital over labor by increasing rates of unemployment, reversing progressive taxation, privatizing public assets and uprooting restrictive regulatory controls domestically as well as with respect to international capital mobility. Social objectives of full-employment, reduction of inequality and the establishment of central banks as instruments of the State, were replaced by economic objectives of unlimited growth, competitiveness in globalized markets and independent central banks. At the global level some threethousand enhanced Free-Trade and Bilateral Investment Treaties have privileged foreign investors and effectively exempted them from local laws and regulations protecting labour and the environment. Our dangerously disordered world is best described as a continuous process of “disembedding” the market economy from laws, customs, institutions and values essential for civilised life. The double movement is the most interesting but also the most problematic of Polanyi’s concepts. It stands in total contrast with neoliberal doctrine as famously stated by Margaret Thatcher: “There is no such thing as society.” It implies that society is an active agent which has the capacity for self-protection and renewal. I believe this is true only where there is a level of social coherence. In a pluralistic society, it is the function of the state to negotiate competing interests. when the state is captured by corporate and financial capital, democracy and Polanyi’s double movement are in suspense. An extraordinary aspect of the long neoliberal era is the absence of effective political countervailing forces to the market. The societies of the advanced capitalist countries appear to have lost the capacity for collective resistance to the relentless encroachment of the market on public and private spaces. globalization and austerity policies have reduced the power of organized labour which in the past successfully moderated the unrestrained accumulation of capital. All major political parties have bought into neoliberalism to one degree or another. People have lost confidence in traditional political elites to represent their interests. Society has become increasingly individualised, or “liquid” in the terms of Zygmund Bauman (2000). Identity politics and the postmodern discourse are contributing factors to the absence of an effective alternative to neoliberal ideology and policy. Not only the market but also the concept of capital has gained currency in popular discourse. education is considered an investment in human capital. Informal social support relations are referred to as acquisition of social capital. In a related change of language in the United States, the working class is now referred to as a middle class, the decline of whom is feared to reduce the demand for consumer goods. It has been argued that the absence of an effective counter movement in the

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societies of the major western powers has hastened the disintegration of capitalism as a functionally effective economic and social order: “capitalism’s defeat of its opposition may actually have been a Pyrrhic victory, freeing it from countervailing powers which, while sometimes inconvenient, had in fact supported it” (Streeck 2014, 50). when trust and honesty are dissolved by greed and unrestricted money making, capitalism has lost the pillars of traditional values that sustain it as a coherent social order (Schumpeter 1942). It is useful to situate these comments in their historical perspective. Following the implosion of the Soviet Union in 1991, Thatcher famously proclaimed: There Is No Alternative (TINA) to capitalism. The TINA effect, together with the celebration of globalization by the world Bank Report of 1995 and the illusions of the return of prosperity to the United States in the Clinton years, favoured market-oriented policies of the liberalization of capital not only in the advanced economies but also in Latin America, India and China. In the United States, it set the stage for the neocon project for a new American century (PNAC). The North Atlantic Treaty Organization (NATO) was reconfigured to serve the empire in wars in the greater Middle east. The complicity of Tony Blair’s New Labour and that of other leaders of social democratic political parties closed the book on “50 years of democratic capitalism.” The century ended with the historic protest by labour, environmental and social justice activists against globalization in Seattle. At the start of the new century, in 2001, the first world Social Forum was convened in Sao Paolo. In a rejection of TINA, the Forum declared that “Another world is Possible.” Since that time, a variety of social movements from all corners of the world have been engaged in the struggle against exploitation and injustice. They are laying the foundations of a future social order that is respectful of the culture of peoples and nations, and of the natural environment. A World on the Brink of Self-Destruction or Transformative Renewal Forty years of neoliberal capitalism have brought us close to irreversible changes in climate and in the ecological balance that sustains life on earth. The planet cannot sustain our wasteful and ecologically destructive consumer society which the middle classes of the rest of the world now also aspire to attain. Neoliberal globalization has devalued labour in relation to capital. The contribution of labour to world output has declined from 64 to 59 percent since the 1970s. In the advanced capitalist countries, median wages have not increased in the last 35 years. globalization and information technology have created a divide between a relatively small number of highly skilled, highly paid workers and an everincreasing precariat, forced into low-paying and insecure employment. Living wage family-sustaining middle-income employment ($30,000-$50,000USD) is collapsing. Austerity policies and wage repression have reduced purchasing power, maintained by dangerously high levels of household debt. On a world scale, debt has risen to an unprecedented level of $252 trillion, or 225% of world output,

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two thirds of which is contracted by non-financial corporations. The IMF has advised that governments should intervene to defuse the next global financial meltdown. An overblown predatory financial sector has elevated money-making to the prime driver of economic growth. It is destabilizing and distributionally inequitable. Moreover, as mentioned earlier in this text, some 20 percent of gDP generated in finance, insurance and real-estate adds little to social value. In an increasingly precarious labour-market, a job is valued for the income it generates rather than the goods or services it produces. Many people are employed in producing services of marginal usefulness. The anthropologist David graeber calls them “made up” or “bullshit jobs” (graeber 2016). As long as people need employment to access the necessities of modern life and entrepreneurs find profitable investment opportunities, what is produced is incidental provided that we can be persuaded to purchase it. The collapsing middle class is valued less for the work they do than for the money they spend. President Bush, in response to the crisis of 9/11, urged Americans to shop till you drop. The fruits of productivity increase have largely accrued to the One Percent. They constitute a global ruling class of capital which has little knowledge of, and no responsibility for, the people and societies where their money is invested. They appear to be all-powerful, but the social cohesion in the heartlands of capitalism is disintegrating. Not only the economy but also society has been hollowed out. The American Dream of upward social mobility is history. Millions of Americans expressed their anger by voting for the outrageous Mr. Trump. In Britain, the Brexit vote reflected an economic and cultural divide between the globally integrated and prosperous regions of southern england and the disadvantaged industrial regions of the midlands and northern counties. The UK may fracture into its component territories, a fitting epilogue to the British empire. The future of the european Union remains uncertain. In the advanced countries, productivity has declined and growth has slowed since the 1970s. Stagnation has become the “New Normal” (James galbraith 2014). In the first decade of the new millennium, developing Asia, with half of the world’s population, attained gDP growth averaging 8 to 9 percent per annum. Since the financial crisis, emerging and developing countries have contributed the greater part of the growth of world output. It was thought that they had decoupled from dependence on the markets of advanced countries, but this illusion was shattered when China’s growth slowed and prices for the commodity exports of Latin America and Africa fell sharply. In these economies, high levels of corporate debt and increasing international financial integration could trigger the next global financial crisis. The 2016 UNCTAD Report, authored by Richard Kozul wright (Head of the UNCTAD Division on globalization and Development Strategies) together with his team of economists, presented a trenchant critique of the neoliberal policies of unfettered capital liberalization which resulted in the financial crisis and the

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“the biggest global contraction since the great Depression” (United Nations Conference on Trade and Development (UNCTAD) 2016, I). The Report argues that enthusiasts for efficient markets promised that financial deregulation would boost productive investment, but this promise has not been met. Rising profits coincide with increased dividends, stock buy backs and mergers and acquisitions but not with investment in new plant and equipment. Reliance on cheap credit to stimulate recovery has fuelled an explosion of corporate debt in emerging economies, now totalling 25 trillion, and UNCTAD warns that developing countries have become increasingly vulnerable to speculative and large capital flows: “Financial markets are chastened but unreformed, debt levels are higher than ever and inequality continues to rise.” The UNCTAD Report describes this conjuncture as a “Polanyi period”: “in which the regulatory normative framework …, having already warped, is beginning to buckle as the weight of greenspan’s mistake is felt in an ever-widening swathe of economic and social life—from precarious employment conditions to corporate tax inversions to undrinkable tap water” (United Nations Conference on Trade and Development (UNCTAD) 2016, II). Their comparison with the inter-war period suggests that they believe something similar to Karl Polanyi’s “great transformation” is now required. The report notes that western governments after the Second world war struck a balance between market efficiency, shared prosperity and economic security. “Managing such a transformation in our highly interconnected global economy is today’s big political challenge, for countries and communities at all levels of development” (United Nations Conference on Trade and Development (UNCTAD) 2016, II). The fractured political order in the United States and Britain and similar manifestations of populist challenges to the governance of the eU are unfavourable to effective action to reduce carbon emissions, reverse austerity policies, or forestall the next global financial crisis. To quote UNCTAD, “in the face of supposedly insurmountable global forces, [politicians and policymakers] have made “business as usual” their default policy option” (United Nations Conference on Trade and Development (UNCTAD) 2016, II). we are entering what Antonio gramsci called “an interregnum,” where the old order is falling apart, but the new one has yet to be conceived. These are times of turbulence and great uncertainty, but social movements are laying the foundations of a new world based on respect for nature and the co-existence of diverse peoples and cultures. As Polanyi suggests in a passage from The Great Transformation: “not for the first time in history makeshift arrangements may contain the germs of great and permanent institutions” (Polanyi 2001, 260). Land, Labour and Work in the Age of the Digital Revolution The challenges facing our disordered world are not limited to environmental degradation and climate change, or to the next global financial implosion, but include the massive displacement of workers by automation and robots. The

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workers displaced by the technology of the Second Industrial Revolution found new employment in service sectors, which now comprise 70% of gDP in many advanced countries.17 The Third Industrial Revolution of information technology is displacing workers not only in manufacturing but also in all service industries including transportation, distribution, communication, electricity, health and education. No government is prepared for this. In the new millennium, half of lost employment in the United States has been due to the replacement of people by computers and software (Karabarbounis and Neiman 2014; cf. Thompson 2015). A study by Oxford economists found that 47 per cent of employment may be replaced by software and robots in the next two decades. The economist expressed the view that: “[e]ven if new jobs and wonderful products emerge, in the short term income gaps will widen, causing huge social dislocation and perhaps even changing politics” (The economist 2014). In an address to a stellar audience hosted by Bloomberg, Nouriel Roubini18 identified the microchip as the innovation that created the most disruptive change in the past 85 years. He expressed the fear that it may well replace the human race. The astrophysicist Stephen Hawking believes we should colonize Mars because the human species may not survive the advent of Artificial Intelligence (AI). Information technology is further increasing the high level of inequality. It is capital intensive, favouring those who already have financial resources; skills-biased, favouring those who already have high-level skills; and labour-saving, reducing the total number of jobs in the economy (Roubini 2014a). The leading Information Technology corporations are immensely profitable: Apple makes over $500,000 per employee; Facebook and google are both over $300,000, while Facebook’s messaging application, whatsApp, employs only 55 people. Technological unemployment is not confined to the developed countries. Advanced computers can analyse images more rapidly and reliably than professional medical technicians in Bangalore, and speech recognition by artificial intelligence will replace outsourced call centers in India. Foxconn, which produces iPhones and a range of similar advanced electronics, plans to replace much of its Chinese workforce of more than 1.2 million with robots, and the process has already started. The advent of 3D printing may create new billionaires. An initial large investment can produce a wide variety of outputs at minimal marginal cost which will further reduce employment in established manufacturing industries. The future may be a factory where one highly skilled engineer oversees hundreds of robots (Roubini 2014b). Roubini’s reflections on the dark shadows under the silver lining of progressively more intelligent computers processing “big data” echoed Polanyi’s earlier fears that mankind might not survive a civilization of a “technological type.” The machine may yet destroy man. No one is able to gauge, in the long run, whether man and the machine are compatible” (Polanyi 1947a, 96). A Brave New world, where “20% of the labor force will work 120 hours a week while the other 80% will have no jobs and no income” (Roubini 2014a), is the 21st century

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version of Burnham’s “Managerial Revolution”: a “new form of serfdom called ‘managerialism’,” whereby the individual is conditioned to support an economy designed by a technocratic oligarchy “who believed that the whole of society should be more intimately adjusted to the economic system, which they would wish to maintain unchanged” (Polanyi 1947b, 117). By contrast, Polanyi believed that in a truly democratic society, the problem of industry would resolve itself through the planned intervention of producers and consumers themselves: “[s]uch conscious and responsible action is, indeed, one of the embodiments of freedom in a complex society” (Polanyi 1947b, 117). In two important articles written in the shadow of the “scientific barbarism” of Hiroshima, Polanyi made a passionate appeal for the rejection of the values which underlie the market economy and the progressively artificial environment of the machine age: “How to organize human life in a machine society is a question that confronts us anew. Behind the fading fabric of competitive capitalism there looms the portent of an industrial civilization, with its paralyzing division of labor, standardization of life, supremacy of mechanism over organism, and organization over spontaneity. Science itself is haunted by insanity” (Polanyi 1947b, 109). The reference to a receding capitalism was premature, but Polanyi’s words speak to us across the seventy years since they were written: “[t]oday, we are faced with the vital task of restoring the fullness of life to the person, even though this may mean a technologically less efficient society” (Polanyi 1947b, 116). Polanyi’s historical and institutional approach emphasizes the abrupt nature of the change in human consciousness with the coming of the Machine Age. Other historians have similarly identified the industrial revolution as a “genuine mutation” (Furtado) or a “historic accident” (Bairoch). The skills and crafts of artisanal industries were displaced by machinery producing uniform products on an ever larger scale and ever lower cost. Buying and selling for profit, previously confined to traders and merchants, were extended to govern the sphere of production. The purchase and sale of all commodities, including labour power and the use of land, were integrated into a market economy. Our capitalist market economy, driven by fear of loss of livelihood and gain from profitable investment, has survived for so long because we have accepted the market as the natural order of things: Our consciousness has been distorted by the economism of the market mentality (cf. Polanyi 1947a). Here it could truly be said that society was determined by economics, “Our humiliating enslavement to the ‘material,’ which all human culture is designed to mitigate, was deliberately made more rigorous” (Polanyi 1947b, 114–15). Computer games, cellphones, iPods and other digital devices, previously unknown, are becoming necessities. Since economic growth has stalled, an obsessive pursuit of start-ups promising profitable innovation exemplifies our belief in market solutions. “This is at the root of the ‘sickness of an acquisitive society’ that Tawney warned of. And Robert Owen’s genius was at its best when… he described the profit motive as ‘a principle entirely unfavourable to individual and public happiness’” (Polanyi 1947b, 115).

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Digital information technology and artificial intelligence presents the greatest challenge to humanity since the industrial revolution. It is the most artificial manifestation of the Machine Age. It has the potential to free our lives from engagement in unnecessary and environmentally destructive material production; or subjugate us to surveillance and control of society by corporate giants and government. In the factories of Charlie Chaplin’s Modern Times human hands operated machines that shaped steel or other materials to produce parts, components or other physical products. while many of the products of the second industrial revolution, such as washing machines, refrigerators, and other electrical appliances, were genuinely labor saving and lightened the burden of work in the household, the beneficiaries of information technology have not been the workers displaced by labour-saving technology but the owners and shareholders of enterprises, whose costs are reduced. In the “knowledge-based society” the producers are no longer the old working class of skilled mechanics and other trades but a new class of highly educated and specialized computer engineers, scientists and human resource managers. They are creating a world of digital communication and means of control. This has produced a social and digital divide between people privileged by higher education who benefit from global communication, whether for work, investment, recreation or vacationing, and a working class impoverished by loss of employment, status and community. They expressed their anger and frustration in voting for Brexit and Trump. Information technology has enabled fast communications and connections between individuals and social movements across the globe and opportunities for social and economic cooperation on a horizontal and local level (Rifkin 2011). It has also increased the ability of corporations to gather and process Big Data for commercial competitive advantage. It has accelerated and extended globalisation of trade and finance to the benefit of mega-transnational corporations. All this presents a historic challenge to socialists to refashion society in a manner which values, respects and includes each and every member. writing in 1930, Keynes foresaw the possibility of a good Life at a level of a national income prevailing in the lifetime of his grandchildren. They would work only fifteen hours a week and there would be no further need for saving and investment for economic growth. Interest rates would decline to zero, resulting in the “euthanasia of the rentier.” Keynes believed that love of money and moneymaking were pathological. His greatest fear was that finance would destroy industry. His principal concern was how to achieve and maintain full employment. His work did not address economic growth nor did he believe it to be necessary in advanced countries. His legacy has been misappropriated by advocates of unlimited economic growth. By the 1980s, the material standards of living in advanced countries had greatly increased, but hours of work had hardly declined since the end of world war 2.

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Addressing the problem of technological unemployment, the great RussianAmerican economist, wassily Leontief, proposed: “Instead of having one part of the population fully employed and the other totally unemployed, the labor hours might be shortened, the number of workdays in the week reduced, the length of regular vacations increased, the retirement age lowered, and the entry of young people in the labor force delayed through longer schooling.” He was optimistic that the Information Technology revolution would bring improvements as great as those of the earlier Industrial Revolution, but stated that: “…to make full use of these opportunities, our economic, social, and even cultural institutions will probably have to undergo a change as radical as that experienced during the transition from the preindustrial society to the industrial society in which we live today” (Leontief 1983, 3). Thirty years ago, he anticipated Roubini’s fear that technological hubris could render the majority population redundant and put out to pasture like the horses no longer required in agriculture and transportation. Since Leontief wrote that we could reallocate resources to benefit the population by lightening the burden of work and releasing time spent in economic activity, hours of work have not been reduced; the pensionable age is rising; and guaranteed pensions are being replaced by pension funds whose earnings fluctuate with the market. In the United States there is no federal legislation governing paid vacation, sick leave or maternity leave, and higher education has become prohibitively expensive19. Corporate profits are no longer invested in expanding the real economy, as noted by UNCTAD. They are used to acquire existing assets by mergers, acquisitions and stock buy-backs ; appropriation of nature by mining and logging; privatization of social knowledge by patents and other forms of intellectual property; land grabs amounting to approximately 2% of the world’s arable land; and purchase of urban real estate depriving populations of affordable housing. This degenerate rentier capitalism has reverted to the extractavism of the earlier mercantilist era of mines and plantations, trade and war (Polanyi Levitt 2013). Polanyi’s Socialist Vista of a World of Cooperation and Coexistence Polanyi reminds us that: “Not until a few generations ago was our habitation physically severed from nature ... The machine interfered with the intimate balance which obtained between man, nature and work” (Polanyi 1947a, 97). The extraordinary increase in material production since the industrial revolution, fuelled by hydrocarbons, was obtained at the cost of the progressive destruction of the natural environment and a historically unprecedented increase in inequality across the world. In the era of the enlightenment, living standards were nowhere more than twice as high as that in any other region of the world.20 “Over more than a century the dogma of material welfare ruled the souls, and ever growing efficiency of productive methods fostered by a scientific technology became the panacea” (Polanyi 1959, 1). Its contemporary manifestation has been called economic growth Fundamentalism (Bauman 2012).

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Freedom from enslavement is freedom from the treadmill of engagement in an economy of endless accumulation. we do not wish to be slaves to the production or consumption of unnecessary, wasteful and environmentally destructive commodities. Capitalism does not know how to stop at sufficiency. The good life for all does not require unlimited growth or unlimited goods. Polanyi did not live to see the advent of artificial intelligence. I think he would have seen it as a more serious threat to humanity than the machine age of his generation. Polanyi insisted that “freedom cannot be a supreme requirement as long as efficiency is enthroned as the arbiter of social ethics. … There seems to be no end of the road to technological progress which carried with it an ever decreasing freedom. … however “rich” the society grows in more or less “useful” products, the farther it is from the freedom to cut loose from the treadmill of moneymotivations. True, leisure may grow, as “freedom from work.” But the change to a life where the alternative to a monetized existence is merely the empty leisure of the “absence of work” is not the freedom man’s heart desires” (Polanyi 1959, 2). The nightmare of an economic order foreseen by Leontief and Roubini, which discards humankind as unnecessary as the horses replaced by tractors or automobiles, is a dystopia of authoritarian managerialism. Not only the economic, but also the political institutions of contemporary capitalism are failing us. It is now the task of the collective activity of social movements to restore the basic human needs of food and shelter, respect and dignity, community, friendship and affection, creativity and a relationship of harmony with nature. “The civilization we are seeking is an industrial civilization in which the basic requirements of human life are fulfilled” (Polanyi 1947a, 101). The society that is more human and respectful of nature will differ according to the cultural and historical heritage of peoples and nations of the world. There is no one model. All modern societies have mixed economies, combining private sector, state-owned enterprise, cooperatives, volunteer and non-profit organizations, and other forms of economic activity. Colonialism and imperialism have attempted to impose european institutions, political structures and even the religious beliefs of the west on the rest of the world. But the world has changed. China, not long ago the poorest country of the world, has risen to be the second largest economy. Indigenous peoples of the Americas have risen from centuries of marginalisation to reclaim their lands and challenge extractive mining operations. Together with environmentalists, they constitute the strongest force in the movement for the defense and respect of nature. Of equal importance is the social movement for food sovereignty, such as Via campesina, which seeks to establish a direct relationship between family farmers and urban consumers. Food is the most basic link between land and people living in urban conglomerations. Polanyi’s anthropological research has posited Reciprocity, Redistribution and exchange as a general pattern of integration in all societies throughout history. His critique of market economy has influenced social activists who see in

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Reciprocity alternative institutions for economic activity. They are engaged in the organisation of communities, cooperatives, social and solidarity economies and other forms of social enterprise. Redistribution of resources relates to equity and the universal provision of the social services of education, health, water, sanitation or transportation. Regarding exchange, Polanyi believed there was a role for the market, but that banks are an essential public utility which should not be permitted to operate for profit. How much abundance is needed to be free? “… the conditions we need more than most of the fantastic varieties of unwanted luxuries are the chance to be able to follow our inclinations, develop our talents, choose between money making and personal relations, enjoy shaping of our own existence above the meaningless conformity to a commercialized entertainment industry… what our children need is a better education, a wider opening for self-improvement, the opportunities of travel, studying, research, creative activity; what we all need is a broader contact with nature, art and poetry; the enjoyment of language and history, the perspectives of science and exploration, security against the avoidable accidents of life and above all a self-respecting person’s assurance that he can lead his life without a humiliating dependence upon an employer or upon the constricting interferences from a poorly educated, unenlightened community. Not another car, a more expense suit of clothes, … but the services provided by the village, the town, the government, the voluntary association that add up to those preconditions of a true life” (Polanyi 1959, 2). Concluding Comments There is a remarkable continuity in Polanyi’s world of thought from early days to the publication of Coexistence, the Plough and the Pen, and his final return to Hungary. The ultimate source of his social philosophy comes from a moral rejection of the commercial market values which underlie capitalism in all its manifestations, including redistributive social democracy which does not challenge the corporate control over the economy. The following comments are informed by the polarities which enriched Polanyi’s life and work. The order in which they appear in the unpublished note cited in the second paragraph of this text reflect his increasing concern with the relationship between technology, economics, science and the future of humanity. Freedom and Reality: From earliest days, Polanyi had a great respect for the courage of the men and women who fought for freedom in Tsarist Russia, like the legendary Bakunin, or Vera Zasulich and Sofya Perovskaya. The journal of the Hungarian Student movement was named Free Thought. Throughout his life as a student activist, independent scholar, journalist or adult educator, he was an observer and analyst of political and economic events. He did not offer a universal

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model of a socialist economy. Rather, he told us that the future is our responsibility to shape. Perhaps this is the reason why his vision has survived the failures and disappointments of socialist experiments of the past. His engagement with reality and freedom was the core aspect of his life. Empirical and Normative: Based on the findings of Thurnwald and Malinowski, his anthropological research was guided and motivated by his desire to prove that never before in human history was the livelihood of the population subjected to a system driven by individual self-interest. In all pre-modern civilizations, the economy was embedded in society and no family was permitted to fall into destitution, unless natural disaster or war afflicted the entire community. Community and Society: Polanyi’s ideal was a community in which people were responsible for each and all, as in a family. A modern complex society, however, requires a central power that enables a necessary minimum of conformity for social cohesion. But the society should be constructed democratically from the bottom to the top, not from the top to the bottom. Science and Religion: For Polanyi, there are core metaphysical questions beyond the reach of human intelligence and scientific investigation. They are in the area of belief systems we know as religion. He distrusted the hubris of scientists. In a reflection on his own responsibility, einstein warned the scientific community that: “the creations of our mind shall be a blessing and not a curse to (hu)mankind.” Efficiency and Humanity: efficiency belongs to the world of the engineer. It addresses the problem of the optimal use of resources to achieve a given objective. when applied to the problem of human livelihood, as in neo-classical economics, it treats human resources as inanimate inputs, and the economy as complex machinery producing maximum output of commodities, and generating incomes to purchase them. Beyond a certain level of material requirement, a more human society would enable people to take back more of their life from engagement in the economy. Technological and Social Progress: Polanyi rejected the economistic belief shared by mainstream and Marxist economists that technological progress is a necessary condition for social progress. He noted that in any technological era a great variety of societal institutions could be found. He stated that “technology, economics and science,” in that [historical] order, has contributed to the fallacious belief that abundance is the essence of freedom. He believed that we are now rich enough to be inefficient and more human.

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Institutional and Personal needs: Polanyi believed that freedom of thought and the right to non-conformity should be constitutionally guaranteed. Dissidence is essential for a free society. In the following passages, we address four other continuities in Polanyi’s life and work: • while the role of the working class was, and remains, central to the origins of socialism, Polanyi saw in the peasantry a repository of wisdom and traditional knowledge, rooted in nature and in the cultural expressions of legend, poetry and music. From his early admiration for the Narodnik and Russian revolutionary socialists to his support of the Hungarian populist poets, he celebrated the peasantry. • The model of a socialist economy he presented in 1920s Red Vienna was based on the existence of a strong trade union movement, socialist parliamentary majorities and consumer cooperatives. His historical and institutionalist approach to economy and society led him to consider the Soviet experiment of industrialization of the most backward country of europe as a great achievement. He did not join many Leftists in dismissing it on account of the crimes of Stalin. Socialism has to be built on the foundations of existing historical and cultural institutions of the people, the place and the times. • Polanyi greatly admired Aristotle and appreciated his condemnation of the disruptive effects of money-making on the well-being of community. From his first childhood encounter with Aristotle and greek classical literature, to his comparison of the cultural achievements of the Red Vienna of my childhood, with the cultural impoverishment of the British working class, Polanyi maintained that A good Life For All does not require economic growth beyond sufficiency of food, shelter and basic public services. A similar case for sufficiency was made by Skildelsky and Skidelsky in “How much is enough?” (2012). A current project launched in Vienna calls on environmentalists and the Labor movement to unite in the achievement of A good Life For All, and draws on Marx and Polanyi for inspiration21. • In 1945, when the United States was asserting leadership as a hegemonic power, Polanyi conceived of a multipolar world, composed of major regions sharing geographic and historic commonalities. Like many of his insights, it was premature, but in our time a multipolar, international order is the only hope for a world of peace. Polanyi believed that any supra-national political authority would be captured by the powerful. In his proposal of regional blocks, constituent nations would preserve their national and cultural identity. He believed that the nation continues to be the political manifestation of a cultural community, and

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that country still matters to people. As he wrote a few days before his death: “The essential connotation [of the nation] is always about the communion of humans. The heart of the feudal nation was privilege; the heart of the bourgeois nation was property; the heart of the socialist nation is the people, where collective existence is the enjoyment of a community of culture. I myself have never lived in such a society” (In a letter to Rudolf Schlesinger 1964). Finally, what advice would Polanyi give us if we asked him which way towards a socialist future today? I think it is liberation from the close network of economic relations into which all of us are trapped. Liberation from wasteful, unnecessary and environmentally destructive economic activity, which consumes too much of our lives. I was listening to the radio in November when the clocks went back, and they were jubilant: “we’ve gained an hour!” Think of socialism as a different way of life, where we can reclaim our time on earth. A better life is a simpler life.

Bauman, Zygmunt. 2000. Liquid Modernity. Cambridge/Malden: John wiley & Sons. ———. 2012. “Times of Interregnum.” Ethics & Global Politics 5 (1): 49–56. Block, Fred. 2003. “Karl Polanyi and the writing of ‘The great Transformation.’” Theory and Society 32 (3(Jun.)): 275–306. Block, Fred L., and Margaret R. Somers. 2014. The Power of Market Fundamentalism. Karl Polanyi’s Critique. Cambridge, Massachusetts: Harvard University Press. Burawoy, Michael. 2003. “For a Sociological Marxism. The Complementary Convergence of Antonio gramsci and Karl Polanyi.” Politics & Society 31 (2): 193–261. doi:10.1177/0032329203252270. Duczynska Polanyi, Ilona. 1977. “Karl Polanyi: Notes on His Life.” In The Livelihood of Man (Ed. by H. Pearson), by Karl Polanyi, xi–xx. New York: Academic Press. eichengreen, Barry. 2015. Hall of Mirrors. The Great Depression, the Great Recession, and the Uses—and Misuses—of History. Oxford: Oxford University Press. elliot, Larry. 2012. “Davos 2012: Soul Searching at the world economic Forum.” The Guardian, January. https://www.theguardian.com/business/economicsblog/2012/jan/25/davos-2012-soul-searching-world-economic-forum. galbraith, James K. 2014. The End of Normal. The Great Crisis and the Future Growth. New York: Simon & Schuster. graeber, David. 2016. The Utopia of Rules: On Technology, Stupidity, and the Secret Joys of Bureaucracy. Brooklyn: Melville House. granovetter, Mark. 1985. “economic Action and Social Structure: The Problem of embeddedness.” American Journal of Sociology 91 (3 (Nov.)): 481–510. Hegel, georg wilhelm Friedrich. 1936. “entschluß.” In Dokumente Zu Hegels Entwicklung, edited by Johannes Hoffmeister, 388. Stuttgart: Fr. Frommanns Verlag.

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Hudson, Michael. 2015. Killing the Host. How Financial Parasites and Debt Destroy the Global Economy. California: Counterpunch Books. Karabarbounis, L., and B. Neiman. 2014. “The global Decline of the Labor Share.” The Quarterly Journal of Economics 129 (1): 68–84. Leontief, wassily. 1983. “National Perspective: The Definition of Problems and Opportunities.” In Long-Term Impact of Technology on Employment and Unemployment, edited by National Academy of engineering Symposium. washington: National Academy Press. Mishra, Pankaj. 2013. From the Ruins of Empire: The Revolt Against the West and the Remaking of Asia. London: Penguin. Polanyi, Karl. 1945. “Universal Capitalism or Regional Planning?” The London Quarterly of World Affairs 10 (3): 86–91. ——. 1947a. “On Belief in economic Determinism.” The Sociological Review 39 (1): 96–102. doi:10.1111/j.1467-954X.1947.tb02267.x. ——. 1947b. “Our Obsolete Market Mentality.” Commentary 3 (2): 109–17. ——. 1957a. “Aristotle Discovers the economy.” In Trade and Market in the Early Empires. Economies in History and Theory, edited by Karl Polanyi, Conrad M. Arensberg, and Harry w. Pearson, 64–94. glencoe, Ill: Free Press. ——. 1957b. “The economy as Instituted Process.” In Trade and Market in the Early Empires, edited by Conrad M. Arensberg and Harry w. Pearson, 243– 70. glencoe: The fFee Press & The Falcon’s wing Press. ——. 1959. “galbraith’s Farewell to Poverty.” Container 37, File 11. Karl Polanyi Archive Montreal. ——. 2001. The Great Transformation (1944). Boston, Massachusetts, USA: Beacon Press. ——. 2005. “Der geistesgeschichtliche Hintergrund Des Moskauer Prozesses (The Intellectual-Historical Background of the Moscow Trials) (1922).” In Chronik Der Großen Transformation: Artikel Und Aufsätze (1920-1945). Bd. 3: Menschliche Freiheit, Politische Demokratie Und Die Auseinandersetzung Zwischen Sozialismus Und Faschismus, by Karl Polanyi, edited by Michele Cangiani, Kari Polanyi Levitt, and Claus Thomasberger, 66–70. Marburg: Metropolis. Polanyi Levitt, Kari. 1964. “Karl Polanyi and Co-existence.” Co-Existence. A Journal for the Comparative Studies of Economics, Sociology and Politics in a Changing World 2 (Nov.): 113–21. Polanyi Levitt, Kari. 2006. “Tracing Polanyi’s Institutional Political economy to Its Central european Source.” In Karl Polanyi in Vienna, edited by Kenneth McRobbie and Kari Polanyi Levitt, 2nd ed., 378–91. Montreal: Black Rose Press. ——. 2013. From the Great Transformation to the Great Financialization: On Karl Polanyi and Other Essays. London/New York: Zed Books. Rifkin, Jeremy. 2011. The Third Industrial Revolution. New York: St. Martin’s Press. Rockefeller Foundation. 1942. “Records 1942: Anne Bezanson to Joseph H.

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willits, April 9, Box 310, Folder 3694, Projects, Rg 1.1 (FA386), Series 200: United States, Subseries 200.S: United States - Social Sciences, Rockefeller Archive Center.” Roubini, Nouriel. 2014a. “Rise of the Machines, Downfall of the economy.” EconoMonitor, no. December 8th. http://www.economonitor.com/ nouriel/2014/12/08/rise-of-the-machines-downfall-of-the-economy/. ——. 2014b. “where will All the workers go?” Project Syndicate, no. Dexember 31th. https://www.project-syndicate.org/commentary/technology-laborautomation-robotics-by-nouriel-roubini-2014-12?barrier=true. Schumpeter, Joseph. 1942. Capitalism, Socialism and Democracy. New York: Harper & Brothers. Skidelsky, Robert, and edward Skidelsky. 2012. How Much Is Enough? Money and the Good Life. New York: Other Press. Streeck, wolfgang. 2014. “How will Capitalism end?” New Left Review 87 (May/June): 35–64. The Associated Press-NORC Center for Public Affairs Research at the University of Chicago. 2015. “National Poll.” New York Times, November 2. The economist. 2014. “Coming to an Office near You.” The Economist, no. January 18th. http://www.economist.com/news/leaders/21594298-effect-todays-technology-tomorrows-jobs-will-be-immenseand-no-country-ready. Thompson, Derek. 2015. “A world without work.” The Atlantic, no. July/August. https://www.theatlantic.com/magazine/archive/2015/07/world-withoutwork/395294/. Thompson, edward P. 1966. The Making of the English Working Class. New York: Vintage Books. United Nations Conference on Trade and Development (UNCTAD). 2016. Trade and Development Report 2016. New York/geneva: United Nations. United Nations High Commissioner for Refugees (UNHCR). 2016. Global Trends Forced Displacements. http://www.unhcr.de/fileadmin/user_upload/ dokumente/06_service/zahlen_und_statistik/global_trends_2015.pdf. NOTeS 1 I would like to thank Omer Moussaly (PhD, Political Science, Université du Québec à Montréal), currently a postdoctoral researcher at the UNeSCO Chair on the Philosophical Foundations of Justice and Democratic Society, for helping me put the final touches on this paper. 2

“Brich mit dem Frieden in Dir / Brich mit dem Werte der Welt / Besseres nicht, als die Zeit / Aber auf’s Beste sie sein.” (Break with the peace that is within you / Break with the values of the world / You cannot be better than your times / But you must be of the best.) These lines are not as they were written by Hegel but rather are as remembered by Polanyi (Polanyi Levitt 1964, 113). [These are lines from Hegel’s poem 'Entschluss' (Decision) written in 1801: "Kühn mag der Götter Sohn der Vollendung Kampf sich vertrauen, / Brich den Frieden mit dir, brich mit dem Werke der Welt! / Strebe, versuche du mehr als das Heut und das Gestern! so wirst du / Besseres nicht, als die Zeit, aber auf’s Beste sie sein!" (Hegel 1936)—eds.]

3

The United Nations reported that 65 million people were displaced by wars and other man made disasters worldwide in 2015 (United Nations High Commissioner for Refugees (UNHCR) 2016).

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4

A year before his death Mihaly magyarized the family name of the children to Polanyi.

5

For the countercultural values of the family see the chapter on the Polanyis in Peter Drucker’s Adventures of a Bystander. while his memoirs are inaccurate in detail the total picture which emerges is valid.

6

Published in germany in 1932, the two volumes, edited by Meyer and Landshut, were saved from destruction by the Nazis. They were taken to Switzerland.

7

“It is given to the best among men somewhere to let down the roots of a sacred hate in the course of their lives. This happened to Polanyi in england. At later stages, in the United States, it merely grew in intensity. His hatred was directed against market society and its effects, which divested man of his human shape” (Duczynska Polanyi 1977, xvi).

8

Thanks to Hannes Lacher whose research on the process of The Great Transformation's emergence brought to light the correspondence between Bennington and the Rockefeller Foundation.

9

I believe you could count the number of europeans who chose to leave the United States for wartime england in 1943 on the fingers of one hand.

10

In technical terms, the definition of government policy was called the social objective function. Full employment and the reduction in inequality were social, as distinct from economic, objectives designed to address the social ills of the inter-war period.

11

These ideas were first developed by Polanyi in chapter four of The Great Transformation (Societies and economic Systems).

12

It goes back to John Ball (1338-1381): “when Adam delved and eve span, who was then the gentleman?”

13

even Robert Owen did not favour the universal franchise.

14

In Britain, these took the form of factory legislation, abolition of child labour and limitation of hours of work; friendly societies for insurance and costs of burial; consumer cooperatives; and trade union and labour organization.

15

The authors here repeat an argument of an earlier article by Block (2003) regarding the writing of The Great Transformation.

16

In a survey by the world economics Association The Great Transformation ranks second only to Keynes’ General Theory.

17

In India also, services now account for more than 50% of gDP.

18

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini global economics, an economic consultancy firm. Known as “Dr Doom” as he was one of the few economists who foresaw the financial crisis.

19

Student debts in 2016 are now averaging $37, 172, mounting to $161, 772 for medical students.

20

Today, 75% of world output accrues to the top 20%, compared with only 2% for the poorest quintile, and the richest country, Qatar, is about 425 times wealthier than the poorest, Zimbabwe.

21

For details of the congress On the Good Life for All, organized and hosted by the Institute for Multi-Level governance and Development at the Socioeconomics Department, Vienna University for economics & Business, February 9-11, 2017, see http://www.guteslebenfueralle. org/en/about-gutes-leben-fuer-alle.html.

II P o l a n y i ’ s Cr i t i q u e in t h e A g e o f N eo l i b e r a l i s m

Freedom, Responsibility and the Recognition of the Reality of Society Claus Thomasberger

Utopias seem much more attainable than one may have previously thought. And we are now faced with a much more frightening thought: how do we prevent their permanent fulfillment? Utopias are attainable. The way of life points towards them. But perhaps a new century will begin, a century in which intellectuals and the educated class will find means of preventing utopias, and we will return to a non-utopian society, which may be less perfect, but will offer more freedom.

Nicolas Berdiaeff, epigraph to Aldous Huxley’s Brave New World

The Time Is Out of Joint The neoliberal age is past its best; but no credible alternative to the regulation of human affairs by markets is on the horizon. economic stagnation, inequality, overindebtedness, global warming, technological threats, wars and refugees: where is the prosperous and more peaceable world, “the end of history” that the liberal protagonists evoked two decades ago? Recent events suggest that the opposite is true. governments are trapped in a dead end; they have lost control and play for time. The feeling that fundamental change is necessary because western societies have reached an impasse is the background against which the critique of liberal political economy in general, and Polanyi’s contribution to this critique in particular, is so important today. The question of the deadlock which brought about the collapse of the liberal civilization of the 19th century is at the center of Polanyi’s oeuvre. It is the First world war, not the great Depression, that is the historic break that shaped Polanyi’s life. From the 1920s onwards his principle concern is the understanding of the collapse of liberal capitalism in europe. He challenges the liberal interpretation by opposing both the economistic accounts of the breakdown as well as the explanations that blamed the anti-liberal protective movement. The central role that the critique of the liberal political economy plays in Polanyi’s account makes his writings, especially The Great Transformation (hereafter TGT), highly topical today. what can we learn from his analysis to deepen our

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understanding of our own epoch? Does contemporary neoliberalism play a similar role to traditional liberalism in Polanyi’s account? How important are the differences? Notwithstanding the similarities, if the historical background of his work is neglected, the risk of an oversimplified interpretation increases. This threat is all the more critical as today a wide range of political forces refer to his writings. It is well known that Polanyi considers himself a socialist. Yet, in recent times his work seems to be attractive also to social movement theorists who aim at the exploitation of social niches within the market system, as well as to socialliberal academics who hope to strengthen a moderate countermovement. Certainly, theoretical misunderstandings can be fruitful. But in the case of Polanyi I fear important insights run the risk of being lost, especially his understanding of the deadlock which resulted in the collapse of the 19th century civilization. The main body of TGT deals with little else. In order to better understand the reasons for this breakdown he analyzes the growth, the evolution and the collapse of the european societies in the 19th and the first decades of the 20th century. The last chapter of the book, “Freedom in a Complex Society,” has a different character. Here he sets out the framework that informs the spirit of the study. He lays bare the roots of the liberal utopia, presents his own vision of personal freedom and sketches the preconditions of a socialist society. Therefore, from today’s point of view the final chapter of the book is particularly relevant. It should protect us against the dangers of a one-sided and superficial interpretation of Polanyi’s oeuvre. The End of 19th Century Civilization in Europe “Nineteenth-century civilization has collapsed” (Polanyi 2001, 3). The first sentence of TGT is well known. And so is Polanyi’s description of the breakdown: In the interwar period the development of the liberal societies in europe reached a deadlock. The specific form that the class struggle assumed at the end of the long 19th century prevented a further unfolding of the double movement. Sectional interests dominated on both sides. while business interests captured industry, the working class occupied parliaments and the political realm. As Polanyi writes, “the contending parties were making government and business, state and industry, respectively, their strongholds…Two vital functions of society— the political and the economic—were being used and abused as weapons in a struggle for sectional interests. It was out of such a perilous deadlock that in the twentieth century the fascist crisis sprang” (Polanyi 2001, 140).1 By sticking to their sectional interests the business class and the working class weakened both democracy and the economy. The end of the liberal society of the 19th century had become unavoidable. while popular Marxism explained the deadlock referring to the contradictions of the capitalist economy (falling rate of profit, monopolization, imperialism, the limits of colonialization, financialization etc.) in the interwar period economic liberalism targeted the protective countermovements which

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undermined the working of the market system. The role of protection is at the center of Polanyi’s critique of economic liberalism. Is protection simply the consequence of a collectivist conspiracy, as some liberals claimed? Must it be attributed to a fatal conceit on the part of the masses? Or has the countermovement, as Polanyi argues, all the characteristics of a realistic answer to a utopian liberal project? Polanyi takes up the liberal idea of a double movement, but he reverses the interpretation. Not the protectionists, the protagonists of economic liberalism are the real utopians. even if the dominance of sectional interests within the labor movement contributed to the deadlock, economic liberalism bears the responsibility for the collapse. TGT is written as a defense of common people’s realism against the utopian vision of the liberal economic elite. The countermeasures are a necessary part of the liberal society. The market system alone, he underlines, “would have physically destroyed man and transformed his surroundings into a wilderness. Inevitably, society took measures to protect itself” (Polanyi 2001, 3). Protection is vital. The movements which function as its vehicles cannot be blamed for defending society against the consequences of a dangerous utopia. economic liberalism itself is accountable for the disasters of the 20th century. Polanyi is aware of the importance of the question as to which of these two interpretations, the liberal vision or his own view, is correct (Polanyi 2001, 148). The possibility of overcoming the impasse largely depends on it. By pointing to the variety of forms of protection, to the non-intentional character of numerous defensive measures, to the comparison of different european countries and to the fact that liberals themselves advocated restrictions on laissez-faire, he tries to demonstrate that the liberal explanation of the deadlock in terms of an “antiliberal conspiracy is a pure invention” (Polanyi 2001, 151). Up to this point Polanyi’s arguments are well known. Less understood are the reasons why Polanyi criticises economic liberalism as a utopian creed. At the root of most misinterpretations of his argument is the usual positivist assumption that utopia and attainability are mutually exclusive. It is assumed that there are only two alternatives: either a vision is attainable and therefore is not utopian, or a vision is utopian and therefore not attainable. In the first case economic liberalism is regarded as depicting a correct picture of ruinous facts. In the second case economic liberalism is criticized as an incorrect reading of social reality. According to the first interpretation Polanyi’s critique aims at the market society itself; according to the second it is directed against liberal theory. It seems as if both cannot be true at the same time. Neither of these two interpretations do justice to Polanyi’s analysis. In his understanding the relevant social phenomena take place in the space in which the two possibilities overlap: even if a goal proves to be unachievable, it can be tried. The attempt is real. It is the latter aspect which distinguishes utopias from pure social fantasies. Like an ideal a relevant utopia is, as gunnar Myrdal puts it, “a living force in our society and it is, therefore, part of the social reality. … People’s strivings are, indeed, among the most important social facts and they

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largely determine the course of history” (Myrdal 1956, IX–X). we have to add: this is precisely the reason why utopian projects are dangerous. If it is true that utopias are real social powers, even if the ends are beyond the human condition, the results necessarily diverge from the aims of their supporters. The history of western europe as well as the history of the Soviet Union show that the attempts to realize the most positive social intentions can have the capacity of producing the most fatal and inhuman consequences in reality. Polanyi’s case for realism is based on this insight. The attempt to realize the liberal utopia has been the driving force of the civilization of the 19th century. without the utopian project market society would not have existed. For sure, the protagonists of economic liberalism never intended to bring about two world wars, the great Depression or fascism. Nevertheless, these were the results that the attempt to create a market society achieved in reality. No doubt, economic liberalism has been the most relevant real utopia of the last centuries. It has decisively shaped the transformation of the west since the industrial revolution. we all know the results. Therefore, following Polanyi’s line of reasoning, escaping the deadlock is linked directly to the question of how to overcome the liberal utopia. The last chapter of the TGT can be understood as a study of the requirements which are needed to find a way out of the impasse. On the institutional level, Polanyi maintains, “no radically new questions are encountered” (Polanyi 2001, 262). His focus is on the intellectual preconditions: what makes the liberal vision of the world a real utopia? How can we explain the overwhelming relevance of the liberal world view for the transformation of modern society in the last two centuries? The fate of a technological civilization In the last chapter of TGT Polanyi summarizes his critique as follows: “Liberal economy gave a false direction to our ideals. It seemed to approximate the fulfillment of intrinsically Utopian expectations. No society is possible in which power and compulsion are absent, nor a world in which force has no function. It was an illusion to assume a society shaped by man's will and wish alone. Yet this was the result of a market view of society which equated economics with contractual relationships, and contractual relations with freedom. The radical illusion was fostered that there is nothing in human society that is not derived from the volition of individuals and that could not, therefore, be removed again by their volition” (Polanyi 2001, 266). The liberal vision of society, Polanyi claims in the second half of this passage, ignores that a complex society necessarily includes features which cannot be derived from human volition. This critique refers to welfare economics as well as to the Austrian school. welfare economists depict society as a vast community in which every individual (spontaneously or via the auctioneer) enjoys complete information concerning the endowments and the needs of all the participants of the market process—a feature which induced gunnar Myrdal to the statement that

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“conceptually the theory of economic liberalism is built upon a communist fiction” (Myrdal 1932, 292—author’s translation). This assumption is even more prominent in the contributions of the Austrian school of economics (Menger, Böhm-Bawerk, Schumpeter, Mises, Hayek etc.) with which Polanyi was confronted in Vienna directly. The principle of “methodological individualism” requires that economic models explain society as the result of the free decisions of individuals following their own utilitarian interest. From the point of view of economic liberalism the freedom of the individual is considered the only legitimate starting point of social theory. This assumption is absurd, Polanyi maintains. Language, culture, trade, money, state, law, markets etc. are social artefacts. They cannot be reduced to contractual relationships between individuals. Nevertheless, the reference to human freedom explains the attractiveness of the liberal vision of society. In the name of personal freedom power, coercion and personal dependency are rejected. Society and freedom merge. Freedom produces the liberal society, and the liberal society guarantees personal freedom. Polanyi accepts the demand for freedom. But he repudiates the idea that a market society answers to the claim. His rejection his based on what he calls in the 1920s the problem of overview (Übersichtsproblem) and in his later writings the “problem of (a complex) society” or the “challenge of the machine age.” what is he referring to here? Awareness of the problem can be traced back to Adam Smith’s distinction between the conditions of “barbarous societies,” in which “every man is in some measure a statesman, and can form a tolerable judgment concerning the interest of the society,” and those of “a civilized state,” in which “though there is little variety in the occupations of the greater part of individuals, there is an almost infinite variety in those of the whole society,” so that individual actors lose overview and understanding of the general state of affairs. “The man whose whole life is spent in performing a few simple operations,” Smith continues, “generally becomes as stupid and ignorant as it is possible for a human creature to become” (Smith 1981, Volume II, 265). Smith wrote these sentences even before the industrial revolution had gathered pace. Since then the complexity and non-transparency of the modern society with its technological advancements, mass production and a global division of labor has increased enormously. In Polanyi’s times the members of the Austrian School of economics made the difference between a small, manageable community and a modern, complex society the starting point of their reasoning: “In the narrow confines of a closed household economy,” Mises wrote in his article which opened the so-called “socialist calculation debate,” “it is possible throughout to review the process of production from beginning to end, and to judge all the time whether one or another mode of procedure yields more consumable goods. This, however, is no longer possible in the incomparably more involved circumstances of our own social economy ... The human mind cannot orientate itself properly among the bewildering mass of intermediate products and potentialities of production”

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(Mises 2012, 12–13). we know the conclusion which Mises and other liberals draw: the problem that a complex, technological society poses can be resolved, in principle, in two ways: central planning or markets. But central planning necessarily includes coercion and dictatorship over needs. It is incompatible with personal freedom. The mechanism of supply and demand is the only setting known to us which allows for combining economic progress and personal freedom. Therefore, a self-regulating market system can be seen as a modern substitute for direct human relationships. According to the liberal reasoning the market system is the best concievable answer to the challenges of a complex technological civilization. Polanyi agrees with the advocates of economic liberalism on: a) the claim to freedom, and; b) the challenge that the machine age poses to the modern world. But he rejects c) the idea that markets are a realistic answer to the problem of “freedom in a complex society.” He discussed these issues in great detail in the 1920s in Vienna in his articles on the socialist calculation debate (criticizing Mises directly) and in his contributions concerning the theoretical, ethical and practical aspects of a socialist transformation of society (Polanyi 1924, 2005, 2016, 2018b). After his emigration to england he continued to work on these questions within the context of the Christian Left Study Circle (Polanyi 1935, 1937a, 1937b). And in his last years he returned to the difference between the two major innovations to which the 19th century gave birth, the machine age and the market society. The new civilization based on the machine, “has come to stay. It is our fate. we must learn to live with it, if we are to live at all” (Polanyi 1977, xlviii). But the selfregulating market system, he concludes, is not more than an initial adjustment to the former. It is past its best. Our task is to search for new ways to adjust to the conditions of a technological society which safeguard human freedom and dignity. In all these years Marx’s “critique of political economy”—more specifically Marx’s theory of reification and alienation—had been Polanyi’s point of reference. The early writings as well as the fetish-chapter of Marx’s Capital contain a forceful critique of the dissolution of direct human connections, estrangement, reification of human relations and unfreedom. Marx had described the problems which arise out of the complexity of modern industrial societies as the “problem of transparency” (referring to durchsichtig).2 Polanyi prefers the notion “problem of overview” (Übersichtsproblem) which is more popular in the Austrian debates in the 1920s.3 The problem of a complex society dervies from the institutional interruption of the immediacy of human relations, as such conditions make it impossible to track the indirect consequences of one’s actions. Against the liberal vision Polanyi argues that this also holds true for market society. Like other institutions such as the state, the law or the church, the market system also develops a life of its own. Markets follow their own laws and not human will. The market system supposes that people act not as human beings, but as economic “character-masks.” And even worse, in a market society human beings

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do not have the ability to oversee and control the effects of their decisions on their fellow beings. The relationship between ther intentions and the effects of their decisions on others is interruptered, rendering free and responsible decisions impossible. Nobody seems to be accountable for restrictions on freedom such as the poverty, unemployment and inequality which are produced by financial crises. Nobody is considered responsible when prices rise or fall, when unemployment increases or when the economy falls into depression. In the 1920s Polanyi did not yet employ the notion of “self-regulation.” Instead he used terms such as “objectivations,” or a “spectral world” which has an “objective existence” that acts “independently of the will of single actor,” following “pseudo-natural laws” and brings about economic value, power, compulsion etc. But the meaning is the same as “self-regulation” or “disembedded economy.” Polanyi’s conclusion is unambiguous: economic liberalism does not provide a sustainable answer to the problem of a complex society. By denying the inhuman consequences of the market system it simply feigns a solution. The fact that the market economy brings about its own laws, that a soulless mechanism decides how different needs of different people are satisfied without taking into account the demands of those who do not wield the necessary purchasing power, cannot be accepted without doing harm to society as a whole. A countermovement necessarily takes over the task of defending society. The recognition of the reality of society Marx had criticized the shabbiness of the liberal reaction to the problem of a complex society. His answer is well known: a revolutionary change of society is envisaged that overcomes reification and alienation. when a communist economy is substituted for capitalism real freedom will prevail. The answer obviously depends on his understanding of the origins and of the nature of the problem. Marx believed that private ownership of the means of production is the root of alienation. According to historical materialism the development of technological knowledge, the forces of production, are considered the ultimate driver of history. At certain points in history, when productive forces allow for (or necessitate) a change, a new social form gains the ascendency. Marx regarded the transformation of private property into collective property as the decisive step which creates the possibility of a truly free society. In “a community of free individuals,” he writes, “the social relations of the individual producers, with regard both to their labour and to its products, are in this case perfectly simple and intelligible” (Marx 1996, 90). From the beginning Polanyi is more skeptical than Marx. Already in the 1920s he expresses the idea that, “in every large society based on division of labour (that is, large enough so that with a limited lifespan and our limited mobility direct and mutual attention on the part of all members of society seems unfeasible) no direct socialisation of people is possible. The unity of the whole can only be perceived if certain social phenomena continuously appear and are mediated between persons” (Polanyi 2018b, 317). A decade later he repeats the same idea

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using language quite similar to that used in TGT: “No society can be the realization of community. Power and value are inherent in society; political and economic coercion belong to any and every form of human co-operation” (Polanyi 1937b, 8). This insight into the double character of a complex society (both community and objective reality at the same time) is referred to in TGT as the “recognition of the reality of society.” Recognition of the reality of society means first of all that under the conditions of a complex civilization not only the liberal models but all proposals which identify an ideal society with community are unfeasible. The issue is not a question of empirical imperfections, but of principle. economic liberalism never had a problem with recognizing that the real world is not perfect. Recognition of the reality of society in Polanyi’s interpretation is more demanding. It requires acceptance that under the conditions of a complex society self-regulating institutions (and their results such as power, economic value etc.) cannot be magicked away. even if we were to do away with the forms of economic globalization pioneered in the liberal age, there would be no way back to a preindustrial mode of production and/or to life in transparent communities. This is not a question of human will, but an objective condition which results from staging human life in a complex civilization. we do not have a choice but to recognize the reality of society. Only when the reality of society is recognized does the true problem of modern life become visible: does the recognition of the reality of society imply that freedom is impossible? Does it mean that social life is fully determined by objective conditions? Indeed, no other conclusion seems conceivable. The possibility of freedom itself is at stake. “The issue,” Polanyi states, “is whether in the light of this knowledge the idea of freedom can be upheld or not; is freedom an empty word, a temptation, designed to ruin man and his works, or can man reassert his freedom in the face of that knowledge and strive for its fulfillment in society without lapsing into moral illusionism? This anxious question sums up the condition of man” (Polanyi 2001, 267). Recall that in the interwar period this is not only a theoretical question. Polanyi underlines the fact that Fascists enthusiastically endorse this conclusion. Faced with the reality of a complex society fascism denies the possibility of freedom. Fascism pleads that the gap between the social reality and freedom is unbridgeable and that the deadlock can only be overcome if the claim to freedom is given up. For sure, in Polanyi’s eyes the fascist answer is no truer than the liberal one: it denies the claim to freedom. It ignores that recognizing the reality of society does not mean relapsing into social determinism. Modern men and women, he maintains, have the choice how to respond to the modern condition. It is not true that all societies are equally close to heaven. Freedom can be enlarged to a higher or to a lesser degree depending on the concrete institutional framework. The inconceivability of a completely free society does not mean that from the viewpoint of freedom there are no fundamental differences between different

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types of society. It simply means that we cannot hope for a society that is built on human will alone. Social freedom, Democracy and Socialism To find an answer to the vital question of how to recognize the reality of society and uphold the claim to freedom Polanyi again relied on the discussions in Red Vienna. He had already addressed the issue in a 1927 manuscript titled “On Freedom” and in TGT he continued to argue that the liberal concept of freedom is at the root of the problem. He developed the concept of “social freedom” to oppose this liberal notion. In the 1920s as well as in TGT Polanyi aims at a reformulation, adapting our understanding of freedom not to the laws of the market system, but to the conditions of a complex technological civilization. Modern men and women can uphold the claim to freedom by: a) recognizing the concrete conditions of unfreedom, and; b) utilizing their potential to increase overview, transparency and freedom as far as possible. In order to cope with the conditions of a complex society a socialist vision of freedom first of all has to be realistic. It must recognize the social interconnectedness and the limitations of the human will that result from the conditions of a complex society, the division of labor, technology and sciences. The market system answers to questions of what shall be produced, how the product shall be distributed and whose needs shall be satisfied by relying on its own laws: the mechanism of supply and demand. we know the consequences. The result of the market mechanism is not only unjust but also violates human dignity and freedom. The global distribution of labor has the consequence that: a) the consumer knows nearly nothing about the conditions of production, and; b) the producers have no influence on whose needs are satisfied. A socialist alternative must aim at alternatives which permit the producers and consumers to understand their mutual dependency and to take conscious decisions. Polanyi uses the term “democracy” for solutions which enlarge mutual understanding and the realm of collective decision making. In Polanyi’s vision democracy is not a substitute for immediate human relations but an instrument that allows for an increase of overview in modern society. His conception of democracy is not limited to its parliamentary form. He develops this broad understanding in Budapest and Vienna; his interest in “guild socialism,” his contributions to the “socialist calculation debate” and his reflections concerning a socialist practice prepare the ground (cf. Polanyi 2005, 2016). It is obvious to Polanyi that there is no conceivable society that does not, in one way or another, answer the question of how the different needs of different inidividuals are satisfied. Secondly, in Polanyi’s vision freedom is not a fact, not the result of a particular set of institutions, but a human task. It is therefore useless to depict the ideal model of socialism or a “good society.” No serious engineer wastes his time drawing plans of a perpetual motion machine; he knows that there is no possibility of avoiding

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the law of conservation of energy. In the same sense, the socialist refrains from sketching the model of a good society because he is aware of the insuperable limits that a complex society poses. The socialist renounces the belief in a paradise on earth. This is what resignation means for Polanyi in this context. Resignation to the reality of society allows humans to make everlasting efforts to eliminate those obstacles to freedom that are removable. Thirdly, if we abandon the idea of a perfect human world the range of available choices increases enormously. Indeed, there is a variety of ways of how to increase freedom in complex societies. The concrete conditions upon which technological civilizations are based are the necessary starting point of any attempts to enlarge freedom. The cultural heritages of nations, the traditions and the struggles of the past have to also be taken into account. In some countries these concrete conditions may increase that a shrinking of the state would allow for an increase in freedom, in others this same goal might be achieved by decommodification of labour, land and money. But even in this latter case a range of possibilities would have to be considered. As Polanyi writes in TGT, “from the viewpoint of human reality that which is restored by the disestablishment of the commodity fiction lies in all directions of the social compass. In effect, the disintegration of a uniform market economy is already giving rise to a variety of new societies” (Polanyi 2001, 260). In another manuscript written in the same period (Polanyi 1947a) he underlines the variety of democratic traditions and perspectives which have been developed in england, France, America and Russia. Fourthly, radical universalism is to be regarded as a misleading heritage of the liberal epoch. with the end of economic liberalism the claim to transform the world under the sign of one model of freedom has become obsolete. economic globalization suppresses national identities in the name of a universal model of progress and development. Social freedom, instead, offers the possibility of a variety of regional advancements. Polanyi expresses his opposition to the idea of a universal form of progress not only in the article “Regional Planning or Universal Capitalism” but also in other manuscripts in which he argues in favor of institutionalized cooperation between tame empires in order to keep peace and encourage international cooperation (cf. Polanyi 2017). Last but not least, Polanyi’s vision of freedom, even if it does not build on a revolutionary overthrow, aims at a fundamental reform of society. His outlook should not be mixed up with conventional “reformist” ideas. To show how deep the required break would need to be he returns to the results of a discussion within the Christian Left Study group in england. The understanding that “the three constitutive facts …: knowledge of death, knowledge of freedom, knowledge of society” (Polanyi 2001, 267),4 constitute the consciousness of western men and women goes back to these debates. The first two “facts,” Polanyi suggests, do not pose new difficulties. They are part of the Christian heritage. The true challenge is that in a complex civilization they are no longer sufficient. This insight is what Robert Owen represents for Polanyi. with the machine age “the post-Christian era

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of western civilization had begun, in which the gospels did not any more suffice, and yet remained the basis of our civilization” (Polanyi 2001, 268; italics added). This third fact is crucial because as long as the liberal reasoning prevails it cannot be considered “a constitutive fact” of people’s consciousness. Polanyi’s return to the results of these debates indicate that the required change has nothing to do with a superficial adaptation of life to the modern condition. It is comparable only to these two most profound reforms in the history of western culture. New liberalism and the Unsolved Problems of a Technological Civilization Focusing on “fascism versus socialism,” the final chapter of TGT links the problem of how to overcome the deadlock of the interwar period with the question of the collapse of the liberal civilization. Therefore, in TGT Polanyi does not raise the issue of how an adjustment of economic liberalism itself could have provided an emergence from the deadlock. This does not mean that Polanyi is not aware of this possibility. Quite the contrary, he knows that only in “europe the separation of economics and politics developed into a catastrophic internal situation. …The American social system is, in my conviction, not faced with this tragic dilemma” (Polanyi 2014, 218–19). Furthermore, he is well aware: a)  of the hegemonic position of the U.S. within the western world after the war; b) of the universalist claims which accompanied the ascent of the American liberalism, and; c) the support of liberal european politicians for such claims. In numerous articles he warned against a strengthend American influence that would have made impossible an independent and self-determined path in europe. Furthermore, the economic sciences contributed their share to find a marketcompatible escape the from the deadlock between the economy and democracy. The plea for market-conforming intervention was substituted for a policy which had opposed the laws of the market. walter Lippmann and the Chicago School of economics in the U.S., Keynes and the London School in the UK, Ordo-liberalism in germany; these movements were all conducive to a significant revision of economic liberalism. In the face of their overriding goal the differences between the various schools diminish. The common aim of all new liberal approaches was to readjust the relationship between the market system and politics so as to overcome the deadlock. As we know today, the realignment was quite successful. It allowed economic liberalism to buy time and to lengthen its life for now more than seven decades. But this is not what interests Polanyi in TGT. His analysis aims to demonstrate that the realignment of economic liberalism would not be sufficient to overcome the conflicts of the utopian vision. Sooner or later the issue had to appear again on the agenda. And as we know today, he was right. By the 1950s the deadlock had become a relic of the past. But, alongside his work on primitive, archaic and modern economies, Polanyi continued to think along these lines. As we know from his correspondence, a study with the title “The Common Man’s Master Plan” should have followed immediately after the publication of TGT (cf. Polanyi 2017). Like other projects such as The Great

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Transformation and America the book was never written. There remains only the article “Our Obsolete Market Mentality,” printed in 1947, some draft papers and the posthumously published book The Livelihood of Man (Polanyi 1977). However, in the aforementioned article Polanyi discusses a “significant advance over the thesis presented in The Great Transformation” (Polanyi 1947b, 109): the relation between the machine and social change. Here liberal capitalism is depicted as “man’s initial response to the challenge of the Industrial Revolution” (Polanyi 1947b, 109). This understanding of the relationship is the direct consequence of his belief that industrialisation is the underlying challenge. It follows that socialism does not only require the recognition of the reality of society, but also of the challenges that result from technical progress and modern sciences. In the manuscripts of the 1950s Polanyi concentrates on the conflicts caused by new technologies such as nuclear power and mass communication. In a complex society, he sustains, the challenge of the machine goes far beyond the economy: The self-regulating market may well have been the earliest sphere in society to carry those imprints of the machine: efficiency, automatism and adjustment. But not only the economy; society itself seems to be reconstructed around the machine—taking its forms and objectives from the needs of the machine. For technology does not only spin us around as persons to focus our concern entirely on the external; it turns also society itself inside out. The material surroundings, projections of the machine, are not our only artificial environment; this environment comprises also a society, of which the machine itself is the texture (Polanyi 2018a, 316). This is an important step in Polanyi’s reasoning. The machine has not only influenced everyday life all over the world; it has also fundamentally changed the nature of conflicts between social classes, political organizations, nations, etc. Technological innovations do not reduce the alienation of labor. In many sectors it is technology, not the worker, that governs the sequence of working operations. Personality traits such as voluntary conformism are taken for granted. The contemporary world is much closer to the utopias described by Huxley and Orwell than ever before. In addition, humanity is increasingly endangered not by external threats but by the unintended consequences of its own advancements. “Today the underlying concern,” Polanyi stresses in The Livelihood of Man, “is for the freedom and survival of all. Industrial technology is showing itself wholly capable of generating suicidal tendencies that strike at the roots of liberty and life itself” (Polanyi 1977, li). Large-scale technologies entail unpredictable threats to ecological sustainability. Mass media shape public opinion by describing a fictitious world that fills the gap created by the ambiguity and obscurity of our social conditions. The possibilities of democracy are also deeply transformed by

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new technical devices such as the Internet. Property rights have to be redesigned so as to adapt to the conditions of new industries, not only in the service sector. This does not mean that the critique of economic liberalism has lost relevance. Quite the opposite, the utopian vision of a self-regulating market system that, according to the liberal assumption, resolves not only the economic problems but also the puzzles of a complex society is more harmful today than ever before. But it also demonstrates the challenges that a contemporary socialist agenda has to face. From this point of view Noami Klein is right when she links the problem of climate change to the problem of a capitalist market society. Technological transformation is a fundamental part of the reality of an industrial society. “Upholding man's claim to freedom in such a society” (Polanyi 2001, 268;), brings us face to face with both the market and “technological society.” This is a further reason why Polanyi’s approach is growing in importance. Today sectional interests are again prevailing over the search for solutions of the problems of technological society. economic liberalism is unable to recognize the dangers of the new deadlock it is heading for. A realistic view of the world, one which takes the common people’s perspective seriously, is more important today than ever before. The problems that western societies have to face are not only— not even mainly—economic challenges but challenges that encompass modern civilization as a whole. Polanyi’s statement that, “how to organize human life in a machine society is a question that confronts us anew” (Polanyi 1947b, 109), has lost nothing of its significance. If the market system is a first response, socialists cannot avoid the question of how new democratic answers to the problem of a complex society can be found. It seems to be exactly this line reasoning which leads Polanyi to the conclusion that, “the search for industrial democracy is not merely the search for a solution to the problems of capitalism, as most people imagine. It is a search for an answer to industry itself. Here lies the concrete problem of our civilization” (Polanyi 1947b, 109). Today the critique of the utopian character of economic liberalism is a relevant as ever. economic liberalism leads society astray because it masks the true problems of the machine age. By entrusting the market with the solution, it weakens our capacity to meet the challenges of a complex society.

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NOTeS 1. Polanyi had arrived at this insight already a decade earlier: “Democracy and Capitalism, i.e., the existing political and economic system, have reached a deadlock, because they have become the instruments of two different classes of opposing interests. But the threat of disruption comes not from these opposing interests. It comes from the deadlock. The distinction is vital. The forces springing into action in order to avoid the deadlock are infinitely stronger than the forces of the opposing interests which cause the deadlock. Incidentally, this accounts for the cataclysmic vehemence of the social upheavals of our times. … Mankind has come to an impasse. Fascism resolves it at the cost of a moral and material retrogression. Socialism is the way out by an advance towards a functional democracy” (Polanyi 1934, 188). 2.

The english translation gives „intelligible“ (cf. quote below), while Marx in the original german text uses the adjective durchsichtig (transparent): “Die gesellschaftlichen Beziehungen … bleiben … durchsichtig einfach“ (Marx 1890, 93).

3.

Mises had used the notion “to overview” (übersehen) in his article which became the starting point for the “Socialist Calculation Debate.” It does not appear in the english translation which uses the term “to review” instead (Mises 1920, 98, 2012, 12–13). Polanyi uses in his writings not only the same verb übersehen but also the nouns Übersicht and Übersichtsproblem.

4.

Among others, Doug Jolly, Donald grant, Irene grant and Mary Muir participated in a months-long discussion about a Draft Statement by a Christian Left Group which draws on the interpretation of the three revelations (cf. Polanyi et al. 1938).

Why Two Karls are Better than One Integrating Polanyi and Marx in a Critical Theory of the Current Crisis

Nancy Fraser THe SITUATION we face today is a genuine crisis. But it cannot be adequately grasped through the received paradigms of critical theory. whereas those paradigms tend to be one-dimensional, focused above all on the economy, the present crisis is multi-dimensional, encompassing not only economic impasses but also others–social, ecological, and political, all entwined with and exacerbating one another. Only a multi-dimensional theory can possibly capture it. Nevertheless, it would be a mistake to adopt an approach that fetishizes “multiplicity” and “contingency.” That sort of thinking is no more able to clarify our situation than is monistic economism. Far from forming a dispersed plurality, the various strands of the present crisis are interconnected, and they share a common source. All are grounded in the deep structure of contemporary capitalism, which is globalizing, neoliberal, and financialized. A critical theory of contemporary crisis must be a theory of financialized capitalism–but one that avoids any hint of reductive economism. Instead of conceiving capitalism narrowly, as an economic system, such a theory must conceptualize it broadly, as an institutionalized social order (Fraser 2014a). Only such an expanded view of capitalism can do justice to a crisis that is at once multi-dimensional and grounded in a single, identifiable social formation. Karl Polanyi offers one of the two most promising models that we have for developing this sort of critical theory. The second model belongs to the other Karl: Karl Marx. In my view, each of these two Karls affords some indispensable insights for understanding capitalist crisis. Yet each also has some regrettable blind spots. Anyone who wants to develop a critical theory of the present crisis needs to integrate the strong points and overcome the blind spots of each. But even that isn’t good enough. If we are to develop a theory that can clarify the full range of crisis phenomena, as well as the prospects for an emancipatory resolution, we also need to incorporate the insights of feminist theory, post/de-colonial theory, and ecological theory, among others. My aim in this essay, however, is far more modest. I want to explain what I think Karl Polanyi can contribute to a critical theory of the present crisis and where his thinking needs to be supplemented and revised by way of some insights from the other Karl. Hence my title: why two Karls are better than one. My argument rests on a specific view about what counts as a critical theory of capitalist crisis. Unlike all the loose talk of crisis that abounds today, such a theory must encompass two analytical levels: first, a structural perspective on crisis, which

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discloses deep-seated contradictions in our social order; and second, a social action or lifeworld perspective, which clarifies the social struggles that arise in response to those contradictions. But that is not all. A critical theory of capitalist crisis must also link the two analytical perspectives to one another in a way that discloses the prospects for an emancipatory resolution (Habermas 1975, 1–8). As I read them, both Karls, Marx and Polanyi, were engaged in this sort of theorizing. each of them combined structural and action perspectives in an account of capitalist crisis imbued with emancipatory aims. But because their approaches diverged so sharply, their theories have usually been considered antithetical and mutually exclusive. I propose, in contrast, to treat them as complementary. Although it is not strictly faithful to the intentions of either thinker, my reading permits us to utilize the strong points of each of the Karls to remedy the weaknesses of the other. In addition, it points us toward an expanded conception of capitalist society that can clarify the multiple, yet interconnected strands of its current crisis. My reflections will proceed in two steps. I shall argue, first, and perhaps counter-intuitively, that Karl Polanyi can be read as offering a structural critique of capitalist crisis; and that this critique has some advantages over that of the other Karl, as well as some disadvantages. I shall then maintain, second, and less controversially, that Polanyi also provides an action-theoretical perspective, which overcomes some of Marx’s blind spots, while introducing a few of its own. In both steps, I shall indicate where and how it might be possible to combine their views, preserving the insights while correcting the blind spots. And that will set the stage for another step of the argument, which is omitted here for reasons of space, but which sketches the outlines of an integrated perspective that can clarify the present crisis. The overall result will be an argument that two Karls, suitably revised and conceptually integrated, are better than one. Fictitious commodification or falling rate of profit? On the structural dimension of capitalist crisis I begin by suggesting that The Great Transformation offers a structural theory of capitalist crisis. granted, my reading of the book is not entirely faithful to Polanyi’s intentions and could be challenged on two counts. First, The Great Transformation speaks not of capitalism but of a “market economy-cum-market society.” And second, its self-proclaimed focus is neither system nor structure but agency, especially the intentional political efforts by free marketers to establish a “market economy” (Polanyi 2001, 71–72, 141–46). As usually interpreted, therefore, the book is a far cry from the type of two-level crisis theory I seek to develop. Nevertheless, I maintain that Polanyi does offer a structural perspective on capitalist crisis, one that affords important insights and is worth unpacking. Interpreting his expression “market economy-cum-market society” as a synonym or euphemism for capitalism, I take his account of fictitious commodification as the conceptual core of a theory of systemic crisis–the counterpart in Polanyi’s thought to the falling rate of profit in Marx’s.

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Fictitious commodification is the analogue of Marx’s concept in the following sense: like the falling rate of profit, it qualifies social impasses and social sufferings, not as discrete problems that arise haphazardly, but as expressions of crisis tendencies grounded in the deep structure of a social formation that institutionalizes contradictory imperatives. But the two ideas operate very differently. For Marx, capitalism’s fundamental structural contradiction is internal to its economy. To put the matter succinctly (and to risk being as unfaithful to him as I am to Polanyi): capitalism’s orientation to limitless accumulation through the exploitation of wage labor tends over time to raise the organic composition of capital, exerting downward pressure on the rate of profit, intensifying competition, and encouraging financial speculation–developments that lead periodically to economic crises (Marx 1991, 317–75). Details aside, we can say that, for Marx, capitalist crisis has its roots in an economic system that harbors mutually contradictory imperatives within itself. For Polanyi, on the other hand, capitalism’s inherent tendency to structural crisis is not internal to its economy. It consists, rather, in a set of inter-realm contradictions between the capitalist economy and its natural and social surroundings. In a nutshell: society and nature supply indispensable preconditions for the economy’s functioning; yet the latter systematically consumes and degrades them, eventually jeopardizing its own operations. what grounds capitalism’s propensity for crisis for Polanyi, then, is the inherent tendency of the “self-regulating market” to destabilize its own conditions of possibility–through the process he calls fictitious commodification. Let me explain. A “market economy,” Polanyi tells us, depends on three non-marketized background conditions: first, on nature as a continuing source of “productive inputs” and as an ongoing “sink” for production’s waste; second, on unwaged practices of social reproduction that form and replenish the embodied and encultured human beings who personify the “factor of production” known as “labor”; and third, on a stable supply of money that can serve as a store of value over time and as a medium of exchange across distance. For Polanyi, the “market economy” needs these background conditions in order to function. But left to its own devices, the “self-regulating market” inexorably turns them into commodities and thereby consumes and destabilizes them. Once they are sliced and diced into saleable objects, land, labor, and money can no longer anchor and sustain market transactions. Far from behaving in an orderly fashion like ordinary commodities, they become central nodes of capitalist crisis (Polanyi 2001, 71–80). The gist of this argument is well captured in the title of Piero Sraffa’s 1960 book, The Production of Commodities by Means of Commodities (Sraffa 1975), which is, from Polanyi’s perspective, an oxymoron. If commodity production requires a non-commodified background in nature, money, and social reproduction, then any social formation that turns these things into commodities is asking for trouble. Trading in pseudo-commodities, which are not so much ontologically fictitious as practically fractious, it is like a tiger that eats its own tail (for this reading of Polanyi, see Fraser 2014b).

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with this argument, Polanyi points the way to a multi-dimensional view of crisis. By developing an “inter-realm” conception of capitalist contradiction, he augments the standard Marxian account of the system’s crisis tendencies. No longer restricted to the economy proper, capitalism’s contradictions now include the inherent tendency of the “self-regulating market” to destabilize society and nature as well. In effect, Polanyi identifies three contradictions of capitalism: the ecological, the social, and the financial, each of which underpins a dimension of crisis. each contradiction pertains to a necessary condition of production, which the capitalist economy simultaneously needs and tends to erode. In the case of the ecological condition of production, what is at stake are the natural processes that sustain life and provide the material inputs for social provisioning. In the case of the social reproduction condition, what is at stake are the sociocultural processes that supply the solidary relations, affective dispositions and value horizons that underpin social cooperation, while also furnishing the appropriately socialized and skilled human beings who constitute “labor.” In the case of the monetary condition of production, what is at stake is the ability to conduct exchange across distance and to store value for the future, hence the capacity to interact broadly in space and in time. The result is a triple-contradiction theory of capitalist crisis, premised on an inter-realm understanding of contradiction–and thus, on a view of capitalism as something larger than an economy. This account offers some major advantages. eschewing economism, it casts ecological degradation and social dislocation as non-accidental expressions of deep-seated contradictions. No longer epiphenomenal expressions of “real” economic dysfunctions, they simply are, in and of themselves, systemic dimensions of capitalist crisis. with fictitious commodification, accordingly, Polanyi has laid the conceptual basis for a multi-dimensional theory of capitalist crisis. equally important, he has pointed the way toward an expanded understanding of capitalism, which includes not only the economy proper but also its background conditions of possibility (Fraser 2014b, 548–49). Nevertheless, it would be wrong to conclude that Polanyi refutes Marx. The presence of inter-realm contradictions does not disprove the idea that capitalism’s economic subsystem proper (also) harbors internal contradictions. That idea captures an important feature of a social order subject to repeated economic depressions and financial crashes. Absent some account of the system’s tendency to over-accumulate capital and under-produce “demand,” we would be hard pressed to understand the near meltdown of the global financial system in 200708. It is fortunate, therefore, that we don’t need to abandon Marx’s insight in order to make room for Polanyi’s. It is perfectly possible to combine the earlier Karl’s “intra-economic” view of systemic contradiction with his successor’s “interrealm” view. Far from being mutually exclusive, the two conceptions are in principle complementary. On this point, in other words, two Karls are better than one. we need only figure out how best to integrate them. It must be said, however, that Marx offers something that Polanyi lacks: namely, the concept of capital as self-expanding value. Absent that notion, we

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have no way to understand why “self-regulating markets” push their way into evergreater swaths of social life. Nor can we understand what drives the system qua system, what impels it to limitless expansion and, in so doing, to destabilize its own background conditions of possibility. If we follow Polanyi in avoiding the concept of capital, in other words, we miss a major driver of the very crisis dynamic he insightfully identifies. On this point the Karl of the 19th century is in advance of the Karl of the 20th. It must also be said, finally, that Polanyi fails to develop the full potential of his inter-realm, triple-contradiction model of capitalist crisis. That model rests, as I noted above, on an expanded view of capitalism, which includes not only the economy proper but also its background conditions of possibility. Consequently, it cries out for an account of capitalism’s social structure–and of the institutional divisions that constitute its specificity as a social order. But Polanyi provides no such account. On the contrary, he falls back on a simple binary formula, which juxtaposes “economy” to “society.” This dualistic formulation is problematic as an action-level concept, as I shall argue in the following step of my argument. But it is also inadequate from a structural perspective, as I want to argue now. The problem is that Polanyi’s category of “society” is like a black box. Functioning as a catch-all, it mixes together everything that is not “economy,” conflating important distinctions between, for example, states and civil society, families and public spheres; nations and subnational communities; as a result, it obscures the institutional structure of capitalist society. what gives these societies their characteristic shape is not a binary division between economy and society, but rather a triad of institutionalized separations: the separation, first, of economic production from social reproduction (of “factory” from “family,” “work” from “care”); the separation, second, of economic from political coordination (of markets from states, the private power of firms from the public power of governments); and the separation, third, of culture from nature (of spirit from matter, history from stasis). Together, these divisions structure the relation of capitalism’s economy to its background conditions. In so doing, they ground the inter-realm contradictions Polanyi identified, as well as some others he missed, and allow us to conceptualize them more precisely. we can posit, first, that capitalism separates commodity production, based on wage work, from social reproduction, based largely on the unpaid labor, especially, of women; in making the former depend on the latter, whose value it nevertheless disavows, capitalism periodically destabilizes social reproduction and potentially jeopardizes economic production. we can also posit, second, that capitalism separates “the economic” from “the political,” even as it also makes the free ride on the latter; thus, in periodically hollowing out the public powers that secure the possibility of the private appropriation of surplus value, it potentially disrupts such appropriation. And we can posit, finally, that capitalism’s institutionalized imperative to limitless accumulation combines with its construction of “nature” as “humanity’s other” to ensure the latter’s instrumentalization and cannibalization in ways that could eventually redound to imperil the former.

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In general, then, we can say that capitalist society harbors at least three inter-realm contradictions, which correspond to crisis tendencies: the social-reproductive, the political, and the ecological. Much more needs to said about each of these crisis tendencies.1 Here, however, I want only to suggest that a view of capitalism as an institutionalized social order can serve to clarify the bases and character of inter-realm contradictions. By contrast, Polanyi’s binary formula “economy against society” muddies these matters. In the end, it blunts the critical force of his account of capitalist crisis. This conclusion is ironic, to be sure. I suggested earlier that the chief contribution of Polanyi’s approach lay in his inter-realm view of capitalist contradiction, which had the potential to enrich the intra-economic view of the other Karl. Linked to a triple-contradiction model of capitalist crisis, Polanyi’s account promised to clarify a triad of crisis tendencies inherent in capitalist society. Yet he failed persuasively to develop a broad conception of capitalism as something larger than an economy. Relying on the binary formula of economyversus-society, he obscured the institutional divisions that underpin the inter-realm contradictions he sought to clarify. Realizing the full potential of Polanyi’s insight will require adopting a conception of capitalism as a social order built on institutional separations that incline the society to crisis. The effect will be not only to correct Polanyi’s blind spots but also to help us integrate his insights with those of the other Karl. Double movement or class struggle? On the social action dimension of capitalist crisis Now, however, I turn to my second step, which concerns the social-action level of crisis theory. This level concerns the responses of social actors to their experiences of capitalism’s contradictions, including the forms of social struggle in which they engage. The centerpiece of this level in Polanyi’s framework is his signature concept of the double movement. with this concept he claims to identify the characteristic form of social struggle that arises in response to capitalism’s systemic crises. According to Polanyi, “society” naturally fights back against economy’s expansionist incursions, delivering a “spontaneous” countermovement to “planned” efforts to constitute “self-regulating markets.” what results from this play of movement and countermovement is an extended series of clashes between partisans of marketization, on the one side, and proponents of social protection, on the other. Spanning a good century and a half of history, from the early 19th century to the writing of The Great Transformation in the mid-20th, these clashes are seen by Polanyi as exemplifying the characteristic grammar of social conflict in modern capitalism. The double movement is the counterpart in his framework to class struggle in the other Karl’s (Polanyi 2001, 79–80, 136–40, 147, 156–57). On the action level, too, then, the Karl of the 20th century diverged from the Karl of the 19th. whereas Marx (purportedly) restricted crisis-relevant conflict to struggles between capital and labor that reflected the system’s economic contradictions, Polanyi expanded the set of crisis-relevant conflict to encompass

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extra-economic struggles that respond to the economy’s destabilizing incursions into society and nature. In The Great Transformation he eloquently and persuasively insisted that struggles in capitalist society have not been fueled exclusively by economic harms, such as exploitation, immiseration, and unemployment. On the contrary, they have just as often responded to deformations of the non-monetized aspects of life, including endangered habitats, dislocated families, and ravaged communities (Polanyi 2001, 159–63). Here, as before, Polanyi’s approach has the potential to enrich that of Marx. Social conflict in capitalist societies has in fact repeatedly assumed the guise of struggles over nature, social reproduction, and debt. In my view, these are best conceived as boundary struggles, as they concern the existence, location and character of the boundaries separating economy from polity, commodity production from social reproduction, human society from non-human nature (Fraser 2014a, 68–70). These boundaries mark the institutional separations I mentioned earlier, which are constitutive of capitalist societies. But they are not given once and for all. On the contrary, social actors have repeatedly mobilized around these boundaries, seeking to relocate, contest, or defend them, especially in periods of crisis, and have sometimes succeeded in redrawing them. Struggles over whether, where and how to divide states from markets, families from factories, and society from nature are as fundamental to capitalist society, as deeply grounded in its institutional structure, as is contestation over the rate of exploitation or the distribution of surplus value. examples include struggles over clean water, housing, fishing rights, and child care, among many others. exceeding the problematic of distribution, these are struggles over the grammar of capitalist life. Contra orthodox Marxism (which may not be the Marxism of Marx), they are neither secondary contradictions nor epiphenomenal expressions of economic realities. To be sure, Polanyi does not use the expression “boundary struggles” but his idea of the double movement fits squarely within that category as I define it. Its focus, after all, is (what Polanyi understands) as the boundary between “economy” and “society.” In principle, therefore, the concept of the double movement offers us the chance to expand upon Marx’s overly restrictive, class-centric concept of capitalist conflict, without lapsing into empty, ungrounded notions of “multiplicity” and “contingency.” Once again, however, it would be a mistake to conclude that the Karl of the 20th century simply refutes the Karl of the 19th. Class struggles remain important, indeed endemic, to capitalist society. It would be folly to jettison that notion just because the front lines of labor militancy are now to be found in guangzhou as opposed to Manchester or Detroit. Fortunately, in this case, too, there is no impediment to combining the Marxian and Polanyian conceptions. Critical theorists do not need to give up class struggles in order to incorporate boundary struggles, as the two notions are complementary, not antithetical. Here, too, in other words, two Karls are better than one. Unfortunately, however, neither Karl gives us much guidance as to how to

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combine their respective conceptions. Neither poses the crucial question: if capitalist societies harbor two different but equally characteristic types of social struggle, how do they relate to each other? Is class struggle inherently antagonistic to boundary struggle, or can they be articulated politically? Here, accordingly, the work of integrating the insights of the two Karls remains to be done. One crucial task is to overcome yet another blind spot in Polanyi’s vision. In construing (what I am calling) boundary struggles on the model of a double movement, he allowed only for two positions: one is either for “economy” or for “society.” The effect is to constitute the grammar of capitalist struggle along the lines of a stark dualism: on one side, the party of “marketization,” bent on extending economy’s reach into society; on the other, the party of “protection,” determined to repel the incursion and to defend society (and nature) against economy. There are (apparently) no other options. Like the economy/society dichotomy we considered earlier, however, this scenario is problematic–and for related reasons. For one thing, the idea of the double movement has some unfortunate normative resonances. Pitting marketization against social protection, it suggests a cold, dangerous, and volatile economy undermining a warm, safe, and stable society. But “society” is hardly so virtuous, and Polanyi’s reification of it encourages us to overlook its nasty aspects, including sexism, racism, homophobia, and exclusionary provincialism. Nor is “stability” an unmitigated good. Polanyi’s formula underestimates the emancipatory role of marketization in destabilizing traditional oppressions. And it fails to validate the inherently destabilizing yet undeniably emancipatory character of struggles against such oppressions. Here, again, the other Karl has something important to teach us. More than Polanyi, Marx grasped the two-sided character of capitalism and the need for a dialectical view. In addition, important strands of social struggle do not fit either pole of the marketization/protection dyad. we need only mention struggles to abolish slavery, liberate women, and overthrow colonial rule, all of which raged throughout the period Polanyi chronicled, but none of which figure significantly in The Great Transformation. These movements were fierce in their opposition to hierarchical, exclusionary forms of social protection, including those that constituted women, slaves, and colonials as “dependent” and prevented them from disposing freely of their persons or their labor. But abolitionists, feminists, and anti-colonialists were hardly partisans of the “self-regulating market,” as they also opposed market-mediated modes of domination, such as super-exploitation, unequal exchange, and the imperialism of free trade. Situated on neither side of Polanyi’s double movement, they occupied a third position, obscured by his analysis, a position I have called emancipation. Concerned neither to defend existing “society” nor to dissolve the latter in “the icy waters of egotistical calculation,” these movements sought instead to overcome domination across the board, in society as well economy. To that end they allied tactically with marketizers or protectionists as circumstances warranted, but without endorsing the project of either party.

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If critical theorists seek to do justice to struggles for emancipation, and to the full range of social conflict in present-day capitalism, we must revise the socialaction level of Polanyi’s framework. My proposal is to transform his double movement into a triple movement, comprising not two, but three poles of struggle: marketization, social protection, emancipation (Fraser 2011). This new figure can better allow critical theorists to parse the grammar of social struggle in financialized capitalism–above all, by problematizing the two-against-one alliances that structure the present constellation (Fraser 2013, 2016). Both Karls, Marx and Polanyi, were deeply interested in the dynamics of social struggle in moments of acute capitalist crisis. But neither developed a perspective that was fully adequate to his own time, let alone to ours. In part because he neglected boundary struggles, Marx wrongly predicted the progressive sharpening and simplification of class struggle until the whole world was divided into two camps, squaring off against each other for the final battle. Polanyi was somewhat more cautious, to be sure. But in neglecting struggles for emancipation, he failed to ground his hope for a democratic-socialist alternative that could end the intractable, escalating confrontations between social protectionists and free marketeers, which he thought had led to fascism and world war. The concepts of boundary struggles and the triple movement afford correctives to both sets of blind spots. By introducing the first, we overcome Marx’s class essentialism and validate Polanyi’s more expansive understanding of anti-capitalist struggle. By introducing the second, we overcome Polanyi’s communitarian leanings and validate Marx’s more robust conception of emancipation.

Fraser, Nancy. 2011. “Marketization, Social Protection, emancipation: Toward a Neo-Polanyian Conception of Capitalist Crisis.” in Business as Usual: The Roots of the global Financial Meltdown, edited by Craig Calhoun and georgi Derlugian, 137–58. New York: New York University Press. ———. 2013. “A Triple Movement? Parsing the Politics of Crisis after Polanyi.” New Left Review 81 (May/June): 119–32. ———. 2014a. “Behind Marx’s Hidden Abode: For an expanded Conception of Capitalism.” New Left Review 86: 52–72. ———. 2014b. “Can Society Be Commodities All the way Down?” economy and Society 43 (4): 541–58. ———. 2015. “Legitimation Crisis? On the Political Contradictions of Financialized Capitalism,” Critical Historical Studies vol. 2, no. 2, pp. 1–33 ———. 2016. “Contradictions of Capital and Care.” New Left Review, no. 100: 99–117. Habermas, Jürgen. 1975. Legitimation Crisis. Boston: Beacon Press. Marx, Karl. 1991. Capital: Volume III (1894). London: Penguin Books. Polanyi, Karl. 2001. The great Transformation (1944). Boston, Massachusetts, USA: Beacon Press.

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Sraffa, Piero. 1975. Production of Commodities by Means of Commodities: Prelude to a Critique of economic Theory. Cambridge: Cambridge University Press.

NOTeS 1 I have discussed the social contradiction of capitalism in Fraser 2016. For the political contradiction, see Fraser 2015.

Revisiting “Freedom in a Complex Society” A View From the Periphery

Ayşe Bugra Introduction The opening sentence of The Great Transformation announces the collapse of nineteenth-century civilization, with economic liberalism as its formative ideology and the self-regulating market its “font and matrix.” Yet, the recent upsurge of interest in Polanyi’s treatise on the self-regulating market economy as an unusual nineteenth-century episode in human history is largely related to the new wave of market expansion which has affected practically all contemporary societies since the late twentieth century. It is, in other words, Polanyi’s perspective on the historical developments of the past which seems particularly relevant for our present. But in the last chapter of The Great Transformation, we find a discussion that looks not at the past but to the future of the post-Second world war international order at a moment when, “after a century of blind ‘improvement’, man is restoring his ‘habitation’” (Polanyi 1957, 249). we know, at this point, that the market economy is incompatible with the reality of human society; we are now introduced to “freedom” as a new theme and we are confronted with a new question: given the knowledge of the reality of society, “is freedom an empty word, a temptation designed to ruin man and his works, or can man reassert his freedom in the face of that knowledge and strive for its fulfillment in society without lapsing into moral illusionism? This anxious question sums up the condition of man” (Polanyi 1957, 258A). The present paper is written with the conviction that the way Polanyi raises and pursues this “anxious question” is as important for our century as his analysis of the destruction of human habitation by the expansion of the market economy which we find in The Great Transformation. The paper explores Polanyi’s approach to the possibility of freedom in complex modern societies by highlighting the idea of “coexistence” as a central component of this approach. In Polanyi’s work, we find important insights which could be used in inquiries concerning the terms of coexistence that would be compatible with freedom. At one level, these inquiries are about ways of maintaining the cohesion and survival of society without the individuality of each member of the society being denied. At another level, they pertain to the coexistence of different societies in an international order which would not be characterized by the unusual and unacceptable cultural and institutional standardization brought along by the global reach of the market economy. At both levels, the contemporary relevance

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of Polanyi’s analysis is closely related to the way he addresses the relationship between freedom and equality, equality and difference, and universalism and diversity. The present paper is organized around these relationships. The first section draws attentions the importance of the idea of equal freedom in Polanyi’s work. The next two sections discuss the affirmation of cultural difference and diversity which marks some recent highly influential currents of analysis. It is argued that in an intellectual atmosphere where the emphasis placed on the respect of cultural difference at times leads to a demeaning of freedom and equality as universal human values, left wing agendas exploring possibilities beyond market globalization need to rediscover universalism, and that this rediscovery would be in conformity with Polanyi’s moral and political concerns. Freedom and Equality in Different Conceptions of Society The last chapter of The Great Transformation, “Freedom in a Complex Society,” introduces the reconciliation of individual freedom with the reality of society as an objective which should be realized through deliberately designed institutions. The way Polanyi defines freedom, both in this chapter and in subsequent texts, reveals why this task is not an easy one. As Polanyi puts it in a lecture delivered in 1949, “I mean by freedom concrete institutions, civic liberties freedoms (in the plural)—the capacity to follow one’s personal conviction in the light of one’s conscience: the freedom to differ, to hold views of one’s own, to be a minority of one, and yet to be an honoured member of the community in which one plays the vital part of the deviant” (Polanyi 2014a, 39). Freedom, in other words, has to do with the possibility of non-conformity. Yet, no society can function without demanding a certain degree of conformity to the prevailing norms and loyalty to the state. That is why the reality of society is something to which one has to “resign” oneself and “uphold the claim to freedom, in spite of it.” The Weekend Notes put together by Abraham Rotstein indicate that after the publication of The Great Transformation Polanyi wanted to continue exploring this idea in its philosophical underpinnings as well as in its political relevance. In the section on the “Rousseau problem” of the Notes, we read that Polanyi thought of Rousseau as the founder of political theory because he recognized the duality between volonté générale and volonté de tous, and he established it as the basic problem and dynamic of political society. Society is more than the sum of its constituting individuals and the individual action is guided by motives unrelated to the survival of society. How, then, does a society constituted of individuals survive when individuals do not necessarily act in conformity with the survival of the society? These questions then lead to the problem of harmonizing “personality” with “society.” 1 Rotstein writes that Polanyi was not satisfied with the way Rousseau dealt with the problem he defined. with the emphasis Rousseau placed on education he seemed to think that conformity would be assured as the individuals will wish what

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the volonté générale would require. Although Polanyi has no doubt about the impossibility of isolating the individual from the society, he also insists that people are not “robots” that could be reduced to wishing and acting in conformity with what the requirements of the cohesion and survival of the society defined independently of their will. In the “essence of Fascism,” Polanyi writes that personality is not real outside the society, but at the same time the reality of society is the relationship between individuals (1935, 370, and 375). It is with this particular definition of the reality of society that it becomes possible to harmonize personality with society and to deal with the tension between freedom and society, although it might be impossible to eliminate the tension completely. Polanyi shows that in the strict anti-individualism of fascist philosophy, “there are either no conscious human beings or their consciousness has no reference to the existence and functioning of society” (1935, 370–71). In a parallel vein, in the structural order of the fascist society, “neither the ideas and values nor the numbers of human beings involved find expression” (1935, 393). Fascist corporative state is “a condition of things in which there is no conscious will or purpose of the individual concerning the community, nor a corresponding responsibility of the individual for his share in it” (1935, 394). Polanyi ends the article by stating that “neither such a will nor such a responsibility can pass from our world altogether as long as we continue to conceive of society as a relationship between persons” (1935, 394). In his comparison of this fascist imaginary with the liberal one, Polanyi shows that the liberal imagination engendered by the market economy does not only present a denial of the reality of society, but the idea of freedom that it incorporates is also flawed. while the society in the fascist imagination is a “thinglike” entity shaped independently of man’s will and wish, a society shaped by man’s will and wish alone is but a liberal illusion. This illusion results from the market-view of society “which equated economics with contractual relationships and contractual relations with freedom” (Polanyi 1957, 256–57). where individual freedom is thus conceived, any intervention by the state in the realm of these relations is presented as a threat to freedom. Polanyi argues that this liberal imagination overlooks “such brutal restrictions of freedom as were involved in the occurrence of unemployment and destitution” (1957, 258). In the liberal approach, freedom is reduced to free enterprise. This “means the fullness of freedom for those whose income, leisure and income need no enhancing and a mere pittance of liberty for people who may in vain attempt to make use of their democratic rights to gain shelter against the power of the owners of property” (1957, 257). A society marked with such “unequal freedoms” could not be called a free society. The discussion presented in the article, “essence of Fascism,” complements the chapter on “Freedom in a Complex Society” in a particularly useful way by revealing the importance of the idea of “equal freedom” in Polanyi’s work and,

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relatedly, the “modernity” of his thought.2 Polanyi explains the “utter frustration of freedom in fascism” with reference to the anti-individualism of the philosophy of fascism which is contrasted with the individualism expressed in the Christian doctrine of the uniqueness and oneness of Man, an individualism to which socialism is the heir. This formulation, which necessarily implies the equality of human beings, also problematizes the liberal “individualism of the unequals.” According to Polanyi, it is only in socialism that the crucial relationship between equality and freedom would be properly addressed and human beings can remain loyal both to themselves and to the society. Nevertheless, Polanyi does not, obviously, rely on the economic order of the socialist society to achieve equal freedom. In fact, the historical developments in europe during the first half of the twentieth century lead Polanyi to observe that “the great experience of the past thirty years is that fascism is possible and socialism can go wrong.”3 The approach he adopted to surpass the meaningless dichotomy between equality and freedom is formulated in a language of rights grounded in institutions that define the relationship between the individual and society. The emphasis is placed on the institutions that control and regulate the economy according to socially defined goals while protecting and promoting “the right to nonconformity as the hallmark of a free society” (1957, 255). This approach is in many ways in line with some of the contributions forming the theoretical foundations of the welfare state institutions in europe in the aftermath of the Second world war. These contributions were part of the inquiries concerning the terms of coexistence in western societies trying to restore their habitation after a century of devastation brought along by the nineteenth century market economy. we know that welfare state institutions faced with a serious challenge after the second return of the market economy during the last quarter of the twentieth century. However, the challenge did not only come from the dynamics of the global market economy. Along with the global reach of the market economy, we have witnessed a series of intellectual developments whereby the affirmations of difference have begun to dominate the concern for equality. Affirmations of cultural difference and the idea of equal freedom There was, first, a wave of feminist criticism directed at welfare state institutions where women appeared as care providers with their access to social rights realized through their male relatives in the work force.4 The criticism was a truly valid one founded on the empirical reality of gender relations. It has led to a series of concrete demands involving public social care provision and other measures taken to assure equal participation of women to economic and political life. These demands, which have been taken seriously and realized with varying degrees of success in the social policy environments of developed capitalist countries, highlighted the importance of recognizing difference in order to achieve equality. As Ruth Lister would later present in a rigorous fashion, equality and difference

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were to be approached not as opposite but complementary concepts: “The opposite of equality is inequality. To posit it as difference disguises the relations of subordination, hierarchy and consequent disadvantage and injustice, which underlies the dichotomy, and distorts the possible choices open to us” (Lister 2003, 98). Nevertheless, the feminist critique of the welfare state was followed by other approaches where politics of identity and recognition have come to dominate questions of class and redistribution in a manner which even the feminist thinkers have felt the need to problematize. For example, Anne Phillips wrote that while inequality between sexes or cultural and racial inequality have recently received a lot of attention, “economic equality has certainly fallen into disuse, tainted as it is by the failures of socialism, and made to seem hopelessly out of kilter with celebrations of diversity and choice” (Phillips 1999, 1). Currently, politics of recognition which insist on the disadvantages related to ethnic identity, communitarian multiculturalist currents of analysis that refer to “civilizational cultures,” and the approaches that risk providing legitimacy to repressive authoritarian governments by using concepts such as the “civilizationstate” or “alternative modernity” rarely refer to socioeconomic equality, and even more rarely to individual freedom, as universally shared goals of societies integrated in the global market economy. How could one respond, intellectually and politically, to this situation with a Polanyian perspective? In The Great Transformation, Polanyi discusses how the peoples of the world are standardized to a degree unknown before. Since Polanyi’s obviously negative outlook on this loss of diversity might seem to resonate well with the current emphasis placed on cultural diversity, it is all the more important to draw attention to certain substantive differences between his approach and the current approaches situated in “the cultural turn.” In Polanyi’s work, references to culture appear in relation to “ways of life” associated with the institutions that define place of the economy in society and the social coordinates of the livelihood of the individual. In this approach, the distinction between material and the non-material motives of individuals are rejected as a construct proper to the ideological frame of a market economy and replaced, instead, by the cultural and moral atmosphere of the community where the principles such as cooperation and competition are valourized in different ways. It is this cultural and moral atmosphere which determines whether institutions that protect individual freedom would be put in place or not (Polanyi 2014b). In theories of multiculturalism, too, society tries to preserve its distinct culture which defines its form of life. Here, however, the argument begins by presenting “equal respect” as a condition for the development of individual identity and flourishing, which is then transferred to the level of society. Like individuals, societies are presented as entities that would suffer serious harm if they are denied recognition, unequally treated or despised. Like individuals again, societies aim at self-preservation and are entitled to protect their cultural integrity against the

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attempts to shape and mold their values and behaviour according to externally imposed principles. Here Polanyi’s argument for the right to non-conformity can be said to reappear at the level of the society or cultural community. Polanyi would of course endorse the idea that the society acts to protect the “ways of life that defines its identity” (2014d, 75). Nevertheless, the communitarian approach to societies or communities as if they were persons entitled to equal respect is problematic since it posits an entity constituted by individuals as a homogenous and unified one. This conceptualization leaves out the problem of reconciling personality with society. This is a dangerous omission since it opens the door to the repression of dissent, which might be legitimated as a necessary measure taken to assure the survival of society. In his article, “The Politics of Recognition,” where some of the important principles underlying a liberal communitarian position can be found, Taylor seems to be aware of this danger (Taylor 1994). But in his discussion of multiculturalism, which is pursued with reference to the empirical case of Quebec, the danger does not appear in all its possible dimensions. Taylor admits that Quebec language legislation includes certain provisions which are not compatible with the liberal idea of individual rights, such as the one preventing non-Francophone immigrants from sending their children to Anglophone schools. But he, quite legitimately, observes that the measures taken for the survival of French language, while overriding some individual rights and liberties, exist in a society where most of the fundamental individual freedoms are protected and complemented by social rights. This might not be case in other contexts where the preservation of the culturally informed way of life of the society might imply serious infringement on basic liberties of certain groups of people, the case of women in Islamic societies being perhaps the most obvious among them. It is also important to note that the case of Quebec, a political society, is difficult to compare with cultural communities whose attempts at survival often focus on a one-dimensional identity mostly defined in religious terms. Being Quebecois, in other words, is not the same thing as being a Hindu or a Muslim. where such communities are situated in nation states with other communities also protective of their one dimensional identities, multiculturalist dreams might turn into nightmares, not only in their implications for individual freedom but also in relation to the kind of ethnic conflict and violence that might emerge in such situations. Amartya Sen’s Identity and Violence presents a forceful critique of communitarian views of identity where multiplicity and hybridity of identities are denied in a simplistic call for the recognition of difference, not of individuals but their communities (Sen 2007). In his article “Communitarians and Human Freedom,” Z. Bauman writes that “Community without freedom is a project as horrifying as freedom without community” (Bauman 1996, 89). Some of the approaches of liberal communitarians incorporate a solution to eliminate the frightening trade-off between the loss of community and the loss of freedom. According to Kymlicka, for example,

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the existence of different societal cultures, which involve “not only shared memories and values, but also common institutions and practices” (Kymlicka 2000, 76), is conducive to freedom because it offers the individuals a choice between such cultures. This choice, which exists in the market place for cultural belonging, is about entering and leaving given cultural frames of life, but not necessarily about acting upon, influencing and changing the frame in question. Since cultures are entitled to their difference, the measures taken to preserve that difference have to be accepted and the individual choice becomes limited to a choice of cultural belonging. even when the difficulties involved in giving any empirical content to the freedom of exit granted to people are dismissed, within the community the choices open to the individual hardly include those that could modify the existing terms of social coexistence. The trade off, in other words, might not be easy to dismiss especially in the context of economic globalization. In this context, it corresponds to a globally observed trend whereby cultural identity appears as a factor of crucial significance in the life of the individual. This seems to be a rather natural reflection of the need for security and belonging which the nation state, under pressure from the dynamics of globalization, cannot provide. while in the affirmations of cultural difference one rarely finds a systematic analysis of the relationship between the political economy and culture of contemporary capitalism, the cultural environment is clearly articulated with the economic and political order. Communities, which owe their coherence and stability to the imaginations of cultural specificity, respond to but can hardly challenge the way “habitation” is affected by the expansion of market relations. The affirmations of cultural difference found in such approaches are in fact situated in an international order with rampant inequalities within and between nations. As Arif Dirlik puts it in a critical assessment of the notion of “alternative modernity,” “What is most remarkable with hindsight is that the ‘cultural turn’ came in the midst of a headlong flight globally from a century long search for distributive and political justice” (Dirlik 2013, 17). The current “homelessness” of the demands for redistributive justice is not solely related to the demise of the nation state. As cultural difference comes to be validated by multiculturalist legislation, socioeconomic life of the individual increasingly depends more on communitarian forms of identity and belonging than on redistributive policy action. The problem that this creates for personal freedom and equality becomes all the more serious when “civilizational cultures” are embodied in nation states where they are used to give legitimacy to a given political order. The emphasis on cultural difference has in fact become central to many contemporary approaches where it has informed ideas ranging from those announcing an inevitable “clash of civilizations” to those celebrating the emergence of alternative modernities which challenge european ethnocentrism. The Chinese state, for example, is presented as a “civilization-state” shaped by the

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strong historical legacy of the country’s cultural fabric and the relativist perspective cultural difference introduces into the analysis renders the discussion of its repressive practices irrelevant. while the emphasis placed on cultural difference might call for equal respect for different political regimes and hence for “democracy between nations,” the questions pertaining to “democracy within nations” are left out of analysis.5 with the justification of a given political order with reference to the culture of the society, democratic deficits can easily be dismissed and those who try to draw attention to them might be accused of orientalism or ethnocentrism or lectured on, at times undeniable, shortcomings of western democracies. Democracy and individual freedom are presented as western values that are of no relevance in an appraisal of a culturally different society. But contemporary societies, with all the differences between their cultures, are part of the global market economy and are not immune to its impact on the life and livelihood of the population. The challenge that China’s “civilization-state” presents to western hegemony goes together with the super exploitation of Chinese workers (Andersen 2010). Privatization and flexible employment practices on unregulated labor markets have created a global precariat now present in all societies.6 In Turkey where this article is written, for example, the commodification of land and labour has affected conditions of work in such a way that every year hundreds of workers lose their lives in what look like work crimes rather than work accidents. Here, “the ontological difference” of Islamic societies from western ones, which the current prime minister of Turkey had highlighted in his PhD thesis in an argument for the necessity of an alternative modernity for the former (Davutoğlu 1990), does not in any way help to develop alternative institutions to improve the existing employment relations which are much less dictated by culture than the requirements of economic globalization. Universalism and diversity A theoretical frame where cultural community appears as the entity entitled to equal respect could in fact accommodate an understanding of society as a “thing like” entity more easily than a conceptualization of society as a relationship of persons. As human beings with their diverse values, goals and aspirations melt and disappear in society, cultural relativism denies the possibility of critically evaluating the terms of coexistence in different societies with reference to the priority attached to equal freedoms. would this type of moral neutrality be acceptable to Polanyi? It seems difficult to give a positive answer to this question given Polanyi’s understanding of a free society with the right to nonconformity as its hallmark and his emphasis on the complementarity of equality and freedom. Cultural diversity is a fact, but it is also a fact that some societies are free and some are not. “Civilizational cultures” or “civilization states” are not immune to moral scrutiny with reference to the place assigned to the right to non-conformity.

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This leads to a related question on the validity of universal human values. In an article entitled “The Left’s Lost Universalism,” gitlin draws attention to a historical reversal of the positions of the Left and the Right toward the possibility of addressing universal human aspirations (gitlin 2001). He observes that while historically it was the Right that denied the possibility of talking about “Man” and “his” rights, at the end of the twentieth century the Left has embraced the primacy and irreducibility of difference and abandoned its former universalist position. Polanyi, as we know, has never refrained from using the terms such as “human nature,” “Man’s economy” or “brotherhood of Man.” As it has been mentioned before, in Polanyi’s conceptualization, socialism is the heir to the Christian notion of the brotherhood Man. Here, the emphasis on Christianity introduces a religious element that might vindicate the idea of cultural diversity; but the idea of the uniqueness of the individual and the oneness of mankind, which finds a strong expression in Christian doctrine, holds independently of its religious context and appears, instead, as a crucial element of modernity. In “For a New west,” we find a very succinct expression of what Polanyi thought about the relationship between the west and the rest. According to Polanyi, “The Russian Revolution of 1917 was patently a continuation of the French Revolution of 1789 in its eastern advance” and the national uprisings in Asia which came later were “a link in the chain reaction started by the American, French, and Russian revolutions.” This eastern advance of modernity, with equal freedoms and democracy as its core values, was first frustrated by Stalin’s crimes, which “almost reversed” the defeat of fascism, and later by the rise of cold war tensions. “The west now emerged as a designation for a political power grouping” (Polanyi 2014c, 30). This, for Polanyi, was a moral defeat for the west. “They lost caste, when democracy was made synonymous with capitalism in the USA and national status was identified with colonial possessions in Britain and France” (Polanyi 2014c, 32). Polanyi observes that the collapse of the old moral landscape of western universalism has taken place as the word was conquered by a technological civilization which has produced a variety of separate and distinct cultures with different core values sometimes incommensurable with the western ones. But this observation on cultural diversity does not lead Polanyi to end the text by announcing the death of universalism. The text ends with comments on a new type of universalism which is to be defined by a repositioning of the west “as an equal member of a family of (such) societies,” accepting to carry out a real conversation with them rather than sticking to a “spirited monologue” as in the old universalism. Polanyi was fully aware that different societies constituting the family are not isolated from each other, neither are they fixed in their culturally informed aspirations. All societies have the capacity to reflect on their terms of coexistence within their boundaries and in international relations. In other words, the fact that societies are entitled to remain different does not mean that they are entitled

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to refuse dialogue with other societies. Such a closing of the door to intercultural dialogue would not be compatible with peaceful coexistence at an international level. Dialogue appears, in fact, as a dominant theme in the contributions to the short-lived journal Co-existence designed to contribute to the eradication of cold war tensions which, with the nightmarish possibility of nuclear war in the picture, presented a serious threat to humanity at large. The contributors to the Co-existence were debating the political issues which define different methods of group decision making compatible or not with democracy. This debate on political systems and their accompanying economic institutions was closely linked with the question of values which also had to be included in the dialogue to establish a basis of trust. In his article “The east- west Ideological Rift,” Somerville wrote that “Peace is strengthened by seeking out, identifying and bringing about a consciousness of common ideological ground, shared values, [and] positions” (Somerville 1964). Polanyi’s repeated references to Christianity as a source of inspiration to an imagination of social coexistence with equal freedom of all individual members reappeared in Leslie Dewart’s attempt to interpret Pope John xxııı’s call for international peace (Dewart 1964). According to Dewart, the Pope’s call for respect for the natural order laid down by god is not one which suggests that Christian doctrine has to be accepted by all parties. It rather appeals to the idea that all people could accept the common origin of human beings and the whole universe, as well as their common human situation. Abiding by common principles of responsible lawfulness and equity could thus be binding for all human societies beyond their differences. It seems possible to understand the Co-existence project as one which incorporated an attempt to reach a common understanding between societies with different political and economic systems, an understanding with the potential to overcome systemic boundaries between capitalism and socialism in a common attempt at social transformation guided by the objective of achieving freedom and equality at both national and international levels. In lieu of conclusion The Cold war, which divided the word into rival ideological fractions competing for global influence, ended with the collapse of the Soviet Union and has led to imaginaries involving a “flat world” which stood at “the end of history.” But in the conflict with the Soviet Union, the west—United States in particular—had amply used political movements formed with religious references. As Kari Levitt Polanyi observed in her article, “Keynes and Polanyi: The 1920s and the 1990s,” the rise of jihadist fundamentalism is not independent of the strategies deployed against the Soviet Union in Afghanistan (Polanyi Levitt 2006). The current nightmare in the Middle east devastated by sectarian conflict, too, is closely related to the irresponsible, self-seeking interventions trying to model societies in ways which

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have left secular democratic opposition movements with universal human aspirations unable to influence the course of political developments. The current situation in the countries where Islamic resurgence in its radical and less radical manifestations dominates the political arena is one which is characterized by the failure of political alternatives to offer viable responses to popular demands for justice and dignity. In these countries, religious identity has proven to be a powerful unifying force which has brought together groups of people beyond class-based socioeconomic divisions. In a review article written on three books on fascism, Sheri Berman draws an analogy between the structural and ideological circumstances that define the rise of fascism in europe and those that are found in the contemporary Muslim world (2004). while the analogy is powerful, in the current international context where the nation state has been rendered economically and politically powerless, as well as ideologically demeaned through the affirmations of cultural diversity, it cannot give us the whole picture of the current situation. Today, successful mass mobilization against “common enemies,” defined in religious terms, has led to further sectarian divides in an escalating violence. International observers often accept these divides and the solutions sought to control violence and prevent its spreading beyond the region at times reflect an attitude of resignation to the reality of their existence. Could the attempts to control violence by allowing sectarian divides to define the boundaries in which cultures would protect their fetishized differences provide a viable solution to the problem of coexistence within and between different societies in a world which is truly global? At another level, could we refrain from morally judging the economic and political institutions put in place by nation states that deny freedom as part of their cherished civilizations? would this not be the same thing as accepting a type of anti-individualism which is similar to the one found in the fascist imagination of society as a unified entity which is not a relationship of persons? In The Great Transformation Polanyi writes that the peoples of the world were standardized to an unprecedented degree at the end of the nineteenth century. Today, the expansion of the market economy which is accompanied and supported by the massive developments in information technology has led to a much greater standardization of economic institutions, creating, at the same time, aspirations for a better life in all societies. The frustration of these aspirations in a world laden with widespread insecurity of life and livelihood leads people to take refuge in communities and the demand for equal respect for different cultures comes to overshadow the deficiency in institutional arrangements providing a dignified life for all individuals. It would not be justified to suggest that the aspirations for a better life are only about material conditions of existence. As “a new way of life spreads over the planet,” it carries with it the knowledge of human freedom which the guardians of cultural difference can only dismiss with repressive political action. In “Freedom in a Complex Society,” we find Polanyi drawing attention to the

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need to acknowledge that the institutional separation of politics and economics in the nineteenth-century market civilization, while presenting a deadly danger to the substance of society, also brought along a pattern of life of which moral freedom and independence of mind were an integral part. He thus wrote that “we must try to maintain by all means in our power these high values inherited from the market economy which collapsed” (Polanyi 1957, 255). In a world where people who live in different societies are more aware of each other than in any other period in history, it is not easy to interpret Polanyi’s call as one only addressed to those who happen to live in western societies. Neither does it seem possible to understand his repeated references to oneness of humankind as a guiding principle confined to the world of Christianity, which then would appear as the only world where equal freedom for all is conceivable. It might, therefore, be appropriate to end this paper with the following sentence from Dirlik’s critical assessment of the idea of alternative modernity: “In a global modernity caught between the degradations of a globalized capitalism and oppressive nativisms, the need for universal visions of justice and democracy is more urgent than ever before“ (2013, 37).

Andersen, Perry. 2010. “Sinomania.” London Review of Books 32 (2): 28. Bauman, Z. 1996. “On Communitarians and Human Freedom: Or, How to Square the Circle.” Theory, Culture & Society 13 (2): 79–90. doi:10.1177/ 026327696013002006. Berman, Sheri. 2004. “Three Faces of Fascism.” World Policy Journal 21 (3): 95–100. doi:10.1215/07402775-2004-4008. Davutoğlu, Ahmet. 1990. The Impacts of Alternative Weltanschaungs on Political Theories. A Comparison of Tawhid and Ontological Proximity. Istanbl: Bogazici University. Dewart, Leslie. 1964. “Peaceful Co-existence in Soviet American Diplomacy and in John XXIII’s PACeM IN TeRIS.” Co-Existence. A Journal for the Comparative Studies of Economics, Sociology and Politics in a Changing World 1 (1). Dirlik, Arif. 2013. “Thinking Modernity Historically. Is ‘Alternative Modernity’ the Answer?” The Asian Review of World Histories 1 (1): 5–44. doi:10. 12773/arwh.2013.1.1.005. Fraser, Nancy. 1989. Unruly Practices: Power, Discourse, and Gender in Contemporary Social Theory. Minneapolis: University of Minnesota Press. gitlin, Todd. 2001. “The Left’s Lost Universalism.” In Politics at the Turn of the Century, edited by Authur Melzer, J. weinberger, and M.R. Zinman, New., 3–26. Lanham, Md: Rowman & Littlefield Publ grou. http://chapters.rowmanlittle field.com/08/476/0847694453ch1.html. Jacques, Martin. 2012. When China Rules the World: The End of the Western World and the Birth of a New Global Order. 2nd ed. New York: Penguin Books.

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Kymlicka, will. 2000. Multicultural Citizenship: A Liberal Theory of Minority Rights. Oxford; New York: Oxford University Press. Lister, Ruth. 2003. Citizenship: Feminist Perspectives. Basingstoke, Hampshire: Palgrave Macmillan. Orloff, Ann Shola. 1993. “gender and the Social Rights of Citizenship. The Comparative Analysis of gender Relations and welfare States.” American Sociological Review 58 (3): 303–28. doi:10.2307/2095903. Pateman, Carole. 1988. “The Patriarchal welfare State.” In Democracy and the Welfare State, edited by Amy gutmann and Project on the Federal Social Role (U.S.), 231–60. Studies from the Project on the Federal Social Role. Princeton, N.J: Princeton University Press. Phillips, Anne. 1999. Which Equalities Matter? Cambridge, UK : Malden, MA: Polity Press ; Blackwell Publishers. Polanyi, Karl. 1935. “The essence of Fascism.” In Christianity and the Social Revolution, edited by John Lewis, Karl Polanyi, and Donald K. Kitchin. Freeport: Books for Libraries Press. ———. 1957. The Great Transformation (1944). Boston, MA: Beacon Press. ———. 2014a. “economic History and the Problem of Freedom (1949).” In For a New West: Essays, 1919-1958, edited by giorgio Resta and Mariavittoria Catanzariti, 39–46. Cambridge: Polity. ———. 2014b. “economics and the Freedom to Shape Our Social Destiny (N.d.).” In For a New West: Essays, 1919-1958, edited by giorgio Resta and Mariavittoria Catanzariti, 33–38. Cambridge: Polity. ———. 2014c. “For a New west (1958).” In For a New West: Essays, 1919-1958, edited by giorgio Resta and Mariavittoria Catanzariti, 29–32. Cambridge: Polity. ———. 2014d. “The Nature of International Understanding (N.d.).” In For a New West: Essays, 1919-1958, edited by giorgio Resta and Mariavittoria Catanzariti, 67–76. Cambridge: Polity. Polanyi Levitt, Kari. 2006. “Keynes and Polanyi: The 1920s and the 1990s.” Review of International Political Economy 13 (1). Rotstein, Abraham. 1956. “weekend Notes.” Montreal, Canada. Con 45 Fol 04. Karl Polanyi Digital Archive. http://www.concordia.ca/research/ polanyi/ archive.html. Sen, Amartya. 2007. Identity and Violence. The Illusion of Destiny. 1. paperback. ed. Issues of Our Time. New York, NY: Norton. Somerville, John. 1964. “The east-west Ideological Rift. Coexistene, Page Proofs, N. 1. Con. 43 Fol. 9.” In Co-Existence. A Journal for the Comparative Studies of Economics, Sociology and Politics in a Changing World. Vol. 1. Karl Polanyi Archives. Sous la direction de J.-M. Servet, J. Maucourant et A. Titan. 1998. La modernité de Karl Polanyi. Paris: editions L’Harmattan. Standing, guy. 2011. Precariat. The New Dangerous Class. London: Bloomsbury Academic.

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Taylor, Charles. 1994. “The Politics of Recognition.” In Multiculturalism: Examining the Politics of Recognition, edited by Amy gutmann. Princeton, N.J: Princeton University Press. NOTeS 1 Cf. Rotstein (1956). 2

For an anlysis where this perspective on Polanyi’s work developed in its different dimensions, see the “Introduction” to La modernité de Karl Polanyi (Sous la direction de J.-M. Servet, J. Maucourant et A. Titan 1998).

3

Rotstein (1956)

4

See, for example C. Pateman (1988), N. Fraser (1989), and A. Orloff (1993).

5

See the review of Martin Jacques' (2012) by Perry Andersen (2010).

6

For an extensive discussion of the rise and the current circumstances of life and work of the global precariat which now includes the overwhelming majority of the workers of the world, see g. Standing (2011).

Utopianism and the Reality of Society Decoding Polanyi’s Socialism, Freedom, and the Alchemy of Misrecognition 1

Margaret R. Somers “UTOPIANISM” and the “reality of society” are two of the most important but underexamined concepts in Karl Polanyi’s The Great Transformation (TGT). Utopianism is acknowledged in discussions of Polanyi’s work, but the concept’s seeming self-evidence explains why it has rarely been explored in depth. By “utopian” Polanyi meant the self-regulating market was socially unrealizable, and tragically so: “Such an institution could not exist for any length of time without annihilating the human and natural substance of society” (Polanyi 2001, 3). In the case of the reality of society, its relative scholarly neglect reflects its lack of salience in the text—with one exception it appears only a few times in the last paragraphs of the book’s last chapter, “Freedom in a Complex Society.” Yet a careful reading of TGT suggests that, for Polanyi, utopianism is more than just a proxy for tragic impossibility. After all, if market utopianism’s only feature was its unrealizability, its seductive and enduring appeal would be utterly inexplicable. As a rich and capacious concept, utopianism is simultaneously a genre of social theory, a means of normative analysis, and a form of historical political practice with which Polanyi was deeply versed, and which he used as a methodological diagnostic of the past, present, and future. Similarly, the “reality of society”—the necessary coexistence of freedom and power—is not merely a rhetorical afterthought. As becomes so poignantly clear in TGT ’s final chapter, it is the propulsive center of Polanyi’s post-utopian vision of socialism, freedom—and even fascism. But the post-utopianism of the reality of society is not sequential; rather, it is utopianism’s ever-present epistemological and ontological counterpoint, its immanent opposition. For Polanyi’s diagnosis of the self-regulating market as utopian only has purchase if we simultaneously accept his thesis that endows existential primacy to the reality of society—that all markets are sites of power that depend upon non-market relations to function. The reality of society is thus not merely utopianism’s bookend; it is the dynamic driving force of the market’s historical momentum, and the reason why the attempt to remake society in the image of the market will prove futile and dangerous. Together the two concepts establish TGT ’s explanatory spine. The catastrophic story of TGT is thus unintelligible without the incessant collision between market utopianism and the reality of society, even as they advanced through the nineteenth and early twentieth centuries deeply entwined. And it is this inextricable entanglement that explains both the market’s capacity

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for expansion as well as the havoc that expansion wrought. It also explains a seeming ambiguity in Polanyi’s theory. On the one hand, he analyzes the rise of the nineteenth-century self-regulating market as a triumph of the economy’s disembedding from social relations and politics. At the same time, he argues that the rise of economic liberalism actually “increased the range” of political “control, regulation, and intervention” (Polanyi 2001, 146–47), a theme sustained throughout the book. Critics proclaim an internal flaw in the theory: Market society cannot both “disembed” the economy from non-economic institutions, and have an economy that is “always embedded” by political power. Bringing in the dual analytic of utopianism and the reality of society, however, reveals not a flaw but the central strength of TGT ’s thesis: by recognizing the co-existence of disembeddedness and embeddedness can we fully understand the power of market utopianism to inflict tragedy on the many but endow enormous triumph for the very few. This dual analytic also explains the great paradox of our time. In a precise echo of Polanyi’s story, neoliberalism has for over four decades thrived under the banner of a deregulative free market ideal, even as that market has been thoroughly embedded in a thick complex of political power and regulations designed to redistribute wealth and income upwards. Yet it has done this all while convincing us we are seeing the free market at work. This alchemy of misrecognition, by which political engineering reorganized economy and society under the name of the free market ideal, was also the signature achievement of nineteenth- and early twentieth-century market utopianism. Just as Polanyi used the entwined concepts of utopianism and the reality of society to diagnose this paradox of misrecognition for his time period, so too can we mobilize them to diagnose today’s paradoxes. Putting Utopia to Work: Polanyi’s Critical Intervention There is a radical originality in Polanyi’s appropriation of the concept of utopia from the reactionaries and self-proclaimed “realist” conservatives such as Burke and Tocqueville, who had long monopolized “utopianism” as a term of condescending derision wielded against “idealist” social reformers, especially French Revolutionaries.2 For Polanyi to redeploy the term to criticize political economists’ own self-declared “scientifically-grounded” economic “realism” was an act of pure theoretical genius. It allowed him to unmask political economy’s supposed greatest strength as in fact its fatal weakness: Its self-avowed scientific status—buttressed by Newtonian “laws” and “natural limits”—was built on a normative ideal and a hyper-materialist ontology. Its seeming materiality and biological determinism was actually a stunning example of the same kind of pure idealism so derided by political economists as “utopianism.” Likewise, their claim to have discovered the economy’s laws of nature was in reality nothing less than a Potemkin imaginary, entirely sustained by an infrastructure of political engineering, regulatory interventions and, all too often, coercive violence. In short, Polanyi revealed the utopian sleight of hand underlying the market’s

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puzzlingly tenacious appeal: the perfectionist ideal of a world without constraints on economic activities could exist only by fiercely denying power and coercion as the unacknowledged features of all market participation. Polanyi built from utopia’s long political and literary heritage. Its tripartite grammatical structure of “an impossibly ideal scheme… a place, state, or condition ideally perfect in respect of politics, laws, customs, and conditions”3 suggests three tightly integrated but analytically distinct elements: 1) a normative ideal of perfection; 2) its unachievability, and; 3) a scheme of implementation. All three dimensions are necessary and causally linked, and provided Polanyi with a critical methodology to diagnose economic liberalism’s internal fault line between its ideals and the reality of society. Market Utopianism’s Normative Vision every utopian ideal has a political desideratum, a social ontology to make it plausible, and an epistemology to justify them both. A World without Power: Social and Market Naturalism TGT tells a story of how economic liberalism seduces through its political aspiration of a world free of political power—an enticing desideratum driven by self-interested elites revolting against high poor-relief taxes and a desire for a free labor market. The stepchild of political liberalism, economic liberalism skillfully deployed the former’s rhetorical traditions to create a syllogism in which markets are the “natural” refuge from state oppression: All political power is coercive and a permanent threat to liberty; power resides exclusively in the state, the economy is a site free of power; thus freedom requires market self-governance and a permanent shielding of the economy from state intrusion. For its justificatory ontology, classical political economy invented social naturalism. Social naturalism was a product of ideal theory, an epistemology that projects an ideal world based not on empirical extrapolations from the present but as a construct abstracted from ideal principles of the good and the right in the best of all possible worlds.4 Social naturalism stipulates that the laws governing natural phenomena also govern human society: Society is not “like” the natural world; the social and natural worlds are one and the same and regulated by the same laws and exigencies.5 As a micro-ontology, social naturalism stipulates a view of human nature that displaces rationality and moral agency as the essence of humanity, substituting instead materialist and biological instincts and an innate drive to maximize self-interest and survival. As a macro-ontology, social naturalism divides the world between an autonomous economy and a coercive government in existential conflict. while the economy is modeled on a biological organism regulated by horizontally circulating laws and constraints of nature, the government is controlled by artificial and hierarchically imposed political laws. with this distinction between the economy and government, political economy marks a notable change from social naturalism to market naturalism—the state is

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excluded from the realm of the natural, leaving only the economy and its biologized human agents within the privileged circle of natural laws. within that circle, political economy draws the causal arrow from micro to macro. The very plausibility of an autonomous economy capable of functioning unimpeded by noxious political interference fully depends upon—and is an outcome of—a biologized and incentive-driven human ontology driven by nature’s chronic struggle for scarce resources. In Polanyi’s felicitous formulation, “Hobbes had argued the need for a despot because men were like beasts; Townsend insisted that they were actually beasts and that, precisely for that reason ... no government was needed to maintain this balance; it was restored by the pangs of hunger on the one hand, the scarcity of food on the other” (Polanyi 2001, 119, emphasis added). Market naturalism thus became the foundation of economic liberalism and modern economics. whereas economic freedom from politics was originally only a desire, market naturalism scientifically justified its capacity to self-manage. In a conceptual universe delimited by the binary spheres of government and society, only a self-regulatory mechanism anchored to the laws of nature could usurp the government in the management of the economy. Market naturalism thus laid the ground for the Rubicon-like divide between a prepolitical site of natural market processes and a political site of public policy and governance. If market naturalism’s first achievement was to give the economy the capacity for functional autonomy, its second was to radically reverse the direction of regulative and policy-making authority. whereas under mercantilism the economy served as a handmaiden to the priorities of state power (“trade follows the flag”), with market naturalism the economy became the authority and the arbiter of all things policy-related. By adopting the laws and constraints of scarcity imposed by nature, market naturalism’s materialist ontology made the economy and the government not only separate, but distinctly unequal. The economic imperative to shield the market from politically-imposed distortions and disruptions now trumped all competing goals, such as alleviating hunger for the poor. Political activities that neutralized these potential threats to market efficiency were justified (e.g., policies that eliminated social programs), but those aimed at reducing economic insecurity through government programs were not, as they threatened to distort the market and pervert natural market incentives.6 government was effectively recast as a chronic threat to the economy in need of constant scrutiny and suspicion, thus subjecting every policy proposal— especially anything appearing “redistributive” or regulative--to the litmus test of non-interference in economic matters. Conversely, market naturalism endowed a new moral privilege to the prepolitical market site. Now framed as sanctioned by nature, the market gained moral prestige for its functioning independently of and prior to the political hand of “man.” By conflating the market with the regulative laws of nature in its originating moment, market naturalism established the original and enduring justification for social exclusion, poverty, and inequality. In effect, it naturalized these phenomena and stigmatized the redistributive state

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with the taint not only of political coercion but of moral injustice. Some may contest that in the twentieth century market naturalism’s anachronistic foundations were disposed of in favor of a more constructionist focus on the “laws of the market.” There is truth to this. Biological foundations are not necessary to maintain the functional autonomy of the economy. what is necessary, however, is the sustained doctrinal commitment to a generic market naturalism. without this, the idea of the market’s benign system of incentives that operate freely without the exercise of power is implausible, as is the market’s capacity to self-govern without government-imposed distortions. whether called the price mechanism, the laws of market, or the spontaneous co-ordination of market knowledge, Polanyi’s fundamental insight still holds: Absent political regulation, the premise of the self-regulating market requires it be rooted in some kind of natural ontology.7 Market Utopianism’s Unachievability The second and most familiar of utopianism’s three dimensions is its unachievability, an impasse expressed in Polanyi’s famous characterization of the double movement, by which efforts to marketize will inevitably incite a countermovement to protect the fabric and institutions of society. But it is the countermovement’s deeper ontological and epistemological infrastructure—the reality of society—that actually drives the dynamic process, and the impasse. The reality of society is Polanyi’s most complex concept. On the one hand it is his post-utopian negation of market naturalism, and thus market utopianism’s inevitable external adversary. At the same time, against the imaginary ideal of the naturalized market, the reality of society is the empirical infrastructure on which the actual institution of the market depends. This infrastructure has two components, both essential to the freedom and livelihood of complex societies-a relational institutionalism and the necessity of power and governance. In support of relational institutionalism, Polanyi mobilizes anthropological and historical evidence to eviscerate market naturalism’s biologized utilitymaximizing agent—itself a cultural totem and fanciful market conceit—and offers instead an ontology of individuals constituted by their societies and cultural practices. These are the foundations of modern livelihood, which Polanyi believes to be as much socially as economically determined. Individuals cannot exist outside of society not simply because they would starve and die, although they surely would, but because moral and social recognition by others is the very foundation of the self. Membership in society is what it means to be human and what it means to be able to secure a livelihood. It is a social ontology institutionalized in three societal “substances”: human relationships (families, communities, civil societies, social organizations); nature and natural resources; and money (or “tokens of purchasing power”). Here the first aspect of the tragic paradox of market liberalism emerges. while the reality of society is completely absent from the idealized utopianism of

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the self-regulating market, empirically actual markets cannot exist without the nonmarket social organization on which they depend: Markets need human beings in relations to perform work; they need natural resources to power those workplaces; and they need currencies to exchange in market contracts. However, because a market economy demands a fully marketized society, these substances must be commodified into labor, property, and money that, like all other market commodities, are bought and sold on the market. Since labor and land are “no[ne] other than the human beings themselves of which every society consists and the natural surroundings in which it exists” (Polanyi 2001, 75), they do not fit the definition of a true commodity, which is produced for the purpose of buying and selling on the market. They are thus “fictitious commodities,” and the act of subordinating them to the laws of the market by treating them as true commodities is thus an act of ontological and epistemological social violence. As Polanyi put it: To allow the market mechanism to be sole director of the fate of human beings and their natural environment…would result in the demolition of society. For the alleged commodity “labour power” cannot be shoved about, used indiscriminately, or even left unused, without also affecting the human individual who happens to be the bearer of this peculiar commodity. In disposing of man’s labour power the system would, incidentally, dispose of the physical, psychological, and moral entity “man” attached to that tag. (Polanyi 2001, 76) In the effort to remake society in its image the ideal of the autonomous market devours the social foundations on which it actually depends. Market naturalism is thus a failed—and unrealizable—ontology; in inventing a self-regulating market, it denies—indeed, destroys—the very substances that make economic life possible. The second component of the reality of society is the inevitability of power. Polanyi explicitly addresses this in the final chapter of TGT, an implicit response to Friedrich Hayek’s The Road to Serfdom (Hayek 2007), in which Hayek warned that even the mildest form of political “planning” (e.g., the UK’s infant welfare state) was an imminent and fundamental threat to individual rights and freedoms.8 For "liberal philosophy,” Polanyi writes, “power and compulsion are evil, [and] freedom demands their absence from a human community" (Polanyi 2001, 266). As a man who lived his life in the shadow first of empire, then of Nazi germany, Polanyi understood well the appeal of such critiques of state power. But he also knew that a world organized exclusively by the allegedly spontaneous voluntarism of market exchange to be illusory; so much so that he argued that the authoritarian and fascist regimes that destroyed much of twentieth-century civilization resulted from the effort to govern exclusively by markets free of political intrusions (Polanyi 2001, 265–68). For Polanyi, the reality of society in complex societies means that any true

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concept of freedom requires the exercise of power in the deepest interstices of the market. Indeed, the very idea that government action is some kind of interference in the economy misunderstands the reality of the actual, rather than the utopian, market, which is itself a construct of government and politics. Thus just as the market eviscerates its own social foundations when it forces the commodification of society, when it attacks the social state in the name of “freedom from government,” it is assaulting its own infrastructure. And because it is that political infrastructure that restrains unbridled market forces, when it is threatened so too is societal freedom from want and domination. For Polanyi, nothing less than freedom itself is at stake in this effort to destroy political regulation of markets in the name of freedom: “[R]egulation is the only means of spreading and strengthening freedom in a complex society, and yet [if] to make use of this means is contrary to freedom per se, then such a society cannot be free" (Polanyi 2001, 266). Polanyi thus contrasts the reality of society with the ideational metaphysics of social/market naturalism, and theorizes the former as a denaturalized social world in which power is a condition of freedom. The reality of society, both its relational institutionalism and its conjoining of freedom and power, explains why the selfregulating market is an impossible utopia: The market cannot remake society in its idealized image without destroying the constitutive substances on which it depends—akin to a snake eating its own tail. The violence entailed in inflicting an abstract market blueprint onto the actual social and political realities of complex societies will inevitably provoke resistance in the form of a countermovement. Successful resistance stops the momentum of market utopianism. This impasse is what drives economic liberals to the “scheme” of political engineering. Market Utopianism as a Scheme of “Political Engineering” Faced with the intractable resistance of a countermovement, market utopianism’s effort to remake society in its own image moves into the third dimension of utopianism-- its scheme for implementation. I call this “political engineering” in homage to Polanyi’s ingenious strategy of turning the conceptual tables on scornful conservatives who invented the reviled concept of “social engineering” to malign progressives’ redistributive efforts. In the case of market utopianism, political engineering entails the use of state power and control over the rules of the market to achieve certain economic outcomes while appearing to “disembed” the market from society. Indeed, Polanyi’s most counterintuitive contribution is that the “self-regulating” market depends fully on the very power, coercion, and violence abhorred and denied by its market naturalist ideal. Not surprisingly, as it means using counterideal methods (i.e., political power) to achieve its ideal ends of autonomous (non-political) markets, economic liberalism goes to great lengths to conceal its own practices of political engineering. In the end, market utopianism’s political engineering reveals its fundamental lack of any devotion to the ideal of freedom form power in the first place.

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Coercive Origins Polanyi demonstrates the reality of political engineering by demythologizing the origin myth of the self-regulating market order as a natural, spontaneous, and unplanned phenomenon. Not only was a capitalist national market far from natural, but “the introduction of free markets, far from doing away with the need for control, regulation, and intervention, enormously increased their range” (Polanyi 2001, 146–47). Tracing the political planning at the origins of free market utopianism undermines both its social naturalist self-representation and its mantle of spontaneity. Nowhere is the lack of fidelity to the free market more evident than in the coercion exercised by governments to forcibly transform nature, humans, and money into the famous fictitious commodities of land, labor, and capital. In analyzing how “free labor contracts” were created, Polanyi is especially pointed. Under the self-righteous but cynical banner of the self-regulating market the state engaged in “liquidating” whole communities and civil society organizations to eradicate alternative means of livelihood to that of the factory. Denying these activities as state intervention, he argues, shows clearly political economy’s selective “preference” for one kind of interference over another or, put slightly differently, the preference to use the state to effect one economic outcome rather than another. The Myth of Deregulation The central claim of market utopianism is that individual and economic freedom depends on liberating the market from the distorting constraints of political intervention—what Polanyi called disembedding and is more commonly known as deregulation. The conceit of deregulation is that there is a “pre-political” market that if not for exogenous political interference would self-regulate efficiently like an organic entity. Deregulation and disembeddedness would thus be projects of restoration—simply freeing the market to return to its natural state. But if we accept that political engineering is constitutive to all economies, then there is no such thing as a pre-political market to be restored, and deregulation is impossible. what is possible, however, and what “deregulation” actually entails, is the replacement of one kind of regulation that serves one purpose, by an alternative kind of regulation that serves a different purpose. This is why deregulation should more accurately be described as reregulation (Block and Somers 2014). Polanyi’s classic example of reregulating through political engineering was the 1834 repeal of the Old Poor Law and the simultaneous imposition of the draconian New Poor Law. In one fell swoop, a law designed to protect the poor against unforeseen harvest scarcity, unemployment, and economic insecurity was replaced with a new law designed to corral the poor into the “pauper palaces” that Polanyi refers to as befitting Bentham’s “fabulous Panopticon, his most personal utopia” (Polanyi 2001, 146). The coercive

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governance and continuous “inspectability” envisioned for the poor reflected the lack of fidelity to laissez-faire not merely in the workhouse but equally in the putatively governance-free site of the private workplace. For Polanyi nothing is more deceptive than the normative ideal that makes the coercions of power the exclusive property of the government, while denying the power of political engineering to effect market domination. Polanyi thus lays bare the fundamental utopian flaw—and the hypocritical conceit—at the core of free-market utopianism: The zealotry against the use of state power is selectively conceived and applied. In the name of deregulation, free market advocates challenge state intervention when it comes to aiding the poor, claiming that government alleviation of scarcity deploys power in the abuse of nature. At the same time, new instruments of government coercion are necessary to impose a policy regime that enforces a disciplinary logic and asymmetrical relations of power favorable to employers. Two Sites of Political Engineering: Redistributive and Predistributive Regulations whether as regulations or reregulations, political engineering takes place in the site of the government and in that of the market. The first instance is familiarly called redistribution--the government taxes incomes and “redistributes” those funds for public use. Thanks to the power of conservative ideology, redistribution is exclusively defined as taxing middle income earners to aid the poor in the form of social programs or welfare. It is thus maligned as government “handouts” or, in the popular language of neoliberalism, taxing the “makers” to give to the “takers.”9 The reality, however, is that over the last four decades there has been a drastic upward redistribution of income, from middle and lower income earners to the rich, which has contributed enormously to increases in inequality. But this kind of redistribution is not named as such, and thus escapes recognition and condemnation.10 Only egalitarian redistribution is named as such, and thus attacked as government “stealing” from justly earned wages. The second kind of political engineering is virtually invisible because it takes place not in the sphere of public taxation but inside the “black box” of the market. Only recently has it even been dubbed by a few analysts as predistribution—the political policies and rules of the market that, for example, strengthen or weaken the bargaining power of workers through pro- or anti-labor laws, or that influence corporate profits through anti-trust laws and rules of monopoly.11 whereas the “re” in redistribution refers to policies that take effect after gross income and profits have already been earned, the “pre” of predistribution refers to interventions that greatly determine the amount of those earned wages and profits in the first place. Just as redistributive practices can be designed to either advantage wealth and power or to foster more equality, so too can predistributive policies be calibrated to guarantee either greater profits at the top or to a more equitable wage and income structure. And just as redistribution has disproportionately

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favored wealth over the last four decades of neoliberalism, so too have the changes in predistributive policies over the same period been a major cause of the massive growth of extreme inequality.12 As the two poles of political engineering, the binary between redistribution and predistribution maps precisely onto market naturalism’s original binary between the artificiality and coerciveness of government, and the naturalized autonomy of the market economy. It follows seamlessly that redistributive practices—at least those aimed at redressing inequities--are fiercely contested by conservatives as arbitrary government violations of justly-earned market-based incomes. By contrast, since unequal market outcomes are putatively non-political and reflect impersonal natural market forces, the fact of predistributive political engineering is fiercely shielded from public scrutiny. To openly acknowledge the reality of political regulations that “interfere” with initial pre-tax levels of wages and profits, especially given the asymmetrical advantage they accord to wealth and corporate power, would be to acknowledge that the supposedly impersonal and natural workings of the “non-political” market are no less arbitrary and political than are redistributive tax policies. Indeed, the very novelty and unfamiliarity of the term “predistribution” testifies to the successful depoliticization and naturalization of so-called primary market inequalities, which are attributed to technology, globalization, and other market forces beyond our control.13 Polanyi’s message is clear: Once we see there is no such thing as a free market, the question is never whether the economy is regulated, but what purpose do those (always present) regulations serve and to whose benefit do they redound? But this leaves us with a deeper question: If the market naturalism story is so empirically false and the politically engineered economy so undeniable—after all, these regulations all take place in plain sight; even predistributive ones are rulings of legislatures, agencies, and courts—why, then, are they so difficult to see? To answer, we need to turn back to the normative ideal of market utopianism. The Alchemy of Misrecognition In examining the puzzling durability of market utopianism in the face of disconfirming evidence the first mistake is to confuse it with science. By definition, utopian ideals are not extrapolations from existing reality but assemblages of normative principles. Decoupled from empirical foundations, they are not held to the standards of empirical confirmation; as prima facie future states of being, they are supposed to differ radically from “reality.” This endows them with extraordinary epistemic privilege, as it exempts them from even commonsense evidential evaluation and immunizes them against disconfirmation. Such privilege has the potential to transform utopian ideals from being desiderata (and ontologies) into full-blown ideational regimes.14 The relevant question to ask of a utopian normative ideal is thus not whether it is true or false—a question that only reinforces its confusion with science—but whether it has achieved the status of an ideational regime. And the relevant test of an ideational regime is not that of

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truth/untruth or accuracy/inaccuracy but of social facticity and causal powers. Market utopianism succeeds on both criteria. Social facticity is achieved by the ability to impose the dominant, if not always hegemonic, definition of reality. It decides on the facts. Market utopianism exercises this power through the ontology of market naturalism, which made the bifurcation between a non-political economy self-regulated by natural market processes and a political sphere structured by rules and institutions of power so foundational to modern thought that its ontology has become naturalized. Social facticity then grafts onto this binary the normative categories of freedom and moral desert: As non-political and natural, primary market outcomes are coded as freely arrived at and morally just. Secondary after-tax incomes are products of redistributive politics and power, and thus coded as coercive and morally suspect. Operating at a different register than either truth or belief, this power to name the social world is the first test of an ideational regime. The second is the ability to act on the world. This does not require that the world be changed to reflect the perfect image of the ideas.15 Indeed, free market doctrine can never remake the world in its own image because, as we know from the reality of society, there never can be an actual market autonomous of power and society.16 But, as Polanyi establishes clearly, in its effort to remake the world in its image, economic liberalism changed that world: “[C]lassical economics [was] the most formidable conceptual instrument of destruction ever directed against an outworn order” (Polanyi 2001, 231). while the empirical reality of political engineering ascertains that market naturalism is not true, as an ideational regime its currency is not truth but power.17 It exercises this power through the alchemy of misrecognition. The alchemy of misrecognition is the process by which market utopianism’s ideational regime is able to get us to “misrecognize” the political engineering so clearly shaping our economic fates and to “magically” convince us that what we are seeing are the natural forces of the free market. It is an alchemy born of market naturalism’s naming rights—rights that are acquired neither by law nor by scientific truth, but through the epistemic privilege endowed by an ideational regime. Table 1 shows how the governing narrative of market utopianism maps onto the sociological reality of political engineering and creates a four-cell moral and political taxonomy in its own image. The table illustrates how underlying sociological phenomena are given meaning by dominant ideational classifications. Across the horizontal plane are two columns representing the familiar market naturalist vocabulary that divides between the “natural” market and the “coercive” government. The sub-headings below—“Predistributive Market governance” and “Redistributive Public governance”--qualify the main headings with the sociological reality that both sides of the divide are equally governed by rules and regulations, the difference being that whereas redistributive government policies take place under public scrutiny after the distribution of gross market incomes and profits, predistributive policies calibrate that gross market income in the first place.

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Table 1: The Alchemy of Misrecognition

PRO-EGALITARIAN For Common Good

MARKET GOVERNANCE

PUBLIC GOVERNANCE

“Natural”

“Artificial””

PREDISTRIBUTION

REDISTRIBUTION

(Market Rules & Regulations)

(Tax Code on After-Market Distribution)

1.

2.

“OVER-REGULATION”

“REDISTRIBUTION”

“Market Inefficiencies” Labor “Inflexibility”

Progressive Taxation Social Provisioning/ Public Goods

PRO-WEALTH Upward Transfer of Wealth & Income

3.

4.

“DEREGULATION”

“SUPPLY-SIDE ECONOMICS”

Reregulations

Austerity

“Free Market” Policies

Regressive Taxation

each of the two columns is divided by two rows, indicating that redistribution and predistribution can take the form of either advancing the interests of wealth and financial elites or those of social and economic equality. The resulting four quadrants each combine a different mix of types of political engineering and ideational nomenclature. But while there are four recognizable policy quadrants, within the logic of market naturalism only those forms of political engineering which are pro-egalitarian are recognized and named as political, and thus subjected to moral scrutiny, while those policies that advance wealth are either named as deregulations that simply restore the market to its natural state, or they remain unnamed and invisible, and their effects attributed to impersonal market forces. The result is that the moral valence for government actions is contingent on whether the policies advance wealth or advance equality. Thus quadrant 2, which includes progressive tax policies that support social programs and economic security for middle and lower incomes, is named redistribution, which is defined by market naturalism as coercive government appropriation from people’s justly-earned wages. It is condemned as morally wrong, as inducing government dependency in the poor, as economically

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disincentivizing for work and investment by the rich, and blamed for budgetbusting deficits.18 Quadrant 4, by contrast, which includes austerity cut-backs of social programs and regressive tax policies that redistribute income upward, are not named as redistributive, and thus escape moral censure. Rather, they are renamed as economic practices that belong under the rubric of “deficit reduction” and “supply-side economics,” instantly immunizing them from the scrutiny to which political acts are subject. Quadrant 3, which includes pro-wealth predistributive policies such as facilitating corporate monopolization and extensive patent and copyright laws, is the most peculiar category. For one thing, “predistribution” does not even exist in the market naturalist taxonomy, as market outcomes cannot be acknowledged as politically constructed. The denial of power in the site of the market requires its invisibility. when pro-wealth predistributive practices are openly debated in the public sphere, such as the Clinton-era repeal of the glass-Steagall Act and its replacement by the  gramm-Leach-Bliley Act,19 they are not defined as government interference but as financial “deregulation” restoring market freedom. Finally, there is quadrant 1, the most reviled category in the market naturalist lexicon, which includes such predistributive policies as labor laws that support unions, mandatory overtime pay, consumer welfare protections and anti-trust enforcement. These are still not recognized as predistributive, as that would denaturalize the market, but are instead defined as illegitimate government interferences—external arbitrary political constraints that coercively intrude on the otherwise natural market, causing market inefficiencies and negatively affecting growth. Decoding the alchemy of misrecognition thus reveals that while market utopianism has no actual loyalty to a competitive market free of monopoly power or to its normative ideal of a world free of politics and power, it has been deeply dedicated to the power of its own naming rights. And it has been remarkably successful: within the alchemy of misrecognition, regulation and redistribution are market naturalist terms of denigration selectively applied only to those policies that aim to advance a common good. Among four types of political engineering, only those are coded as political interferences—thus morally suspect. Deregulation, by contrast, is the term for predistributive political engineering that enhances corporate profit margins and reduces labor costs—under the aegis of the “free market.” Just as Polanyi shows us in TGT, state intervention into neoliberal markets is continuous; its condemnation—even its recognition--is selective. As a result, thirty years of wage stagnation and escalating income inequality have been framed as due to impersonal market forces beyond our control, primarily globalization and technological development.20 But it is not globalization that causes corporate outsourcing to cheap labor but a tax structure that rewards the practice, nor is it robots that have caused wage stagnation but

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politically-engineered deunionization and the suppression of the minimum wage. Neoliberalism is no more a free market system than was Polanyi’s era of economic liberalism. It is political engineering that has refashioned the recent shape of the American socioeconomic landscape. But it is the alchemy of misrecognition that convinces us that it is the free market at work. Market Utopianism and the Reality of Society: A Paradox of Co-dependence One of the enduring puzzles of Polanyi’s TGT is that he explains the crisis of 20thcentury civilization through the nineteenth-century disembedding of the economy, while he simultaneously tells a story of continuous practices of state intervention and government coercion over the same time frame. In a precise echo of Polanyi’s story, the last four decades of neoliberalism have been driven by a virtually hegemonic doctrine of unfettered free markets and financial deregulation, even as markets have not been deregulated but restructured by reregulations and unacknowledged predistributive political engineering. Deconstructing Polanyi’s interplay of utopianism and the reality of society explains both instances: The utopian normative ideal of disembeddedness and deregulation, then and now, is necessarily co-existent, mutually interdependent, and tightly coupled with the power and coercion of political engineering. Neither Polanyi’s economic liberalism nor today’s neoliberalism could exist without this duality of utopianism and the reality of society. This interdependence is built into market utopianism’s internal fault line: As soon as the project to create a self-regulating market begins to devour its own political and social infrastructure, it collides full-stop with the reality of society. Capitalism requires non-capitalist foundations. To supply those foundations, economic liberalism and neoliberalism alike use the power of political engineering. For its very viability as an economic system, market utopianism is thus thoroughly dependent on its submerged institutional foundations of power and political engineering even while, as an ideational regime, it proclaims and celebrates its self-regulative capacities. Ideational disembeddedness and deregulation depend entirely upon structural embeddedness and regulation. The reverse is equally true: The politically engineered economy depends on the ideational naturalism of the self-regulating market to compensate for its practices of power being so at odds with the ideal. As the alchemy of misrecognition makes clear, the ideational regime which embeds the political infrastructure is no mere veneer, readily unmasked even while it hoodwinks a gullible public. It is, rather, a public institutional force of enormous power: Power to name the activities of the economy and the state, power to adjudicate competing interpretations of social reality, and power to immunize itself from empirical disconfirmation. And because of the epistemic privilege built into an assumption-driven ontology, its failure as truth has no negative consequences for its powers to alchemize political engineering into a free-market regime. In the end the great paradox of market utopianism is in its power to embed

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political engineering within an ideational regime of disembeddedness and market freedom. It is this alchemy of misrecognition, through which political coercion and regulative controls organize socioeconomic life under the free market ideal, that confirms Polanyi’s rendering of history as driven by the dynamic interdependence of utopianism and the reality of society, of disembeddedness and embeddedness. Polaynyi’s Counter-Utopian Vision of Socialism, Freedom and Fascism In “Freedom in a Complex Society,” TGT’s poignant final chapter, Polanyi explicitly frames his dialectic of utopianism and reality of society within the context of a post-utopian prognosis of the future of freedom, socialism, and fascism. Polanyi’s warning is not about the danger of free markets, nor about a choice between market freedom and government intervention. By now history had laid bare the “illusory” nature of free market regimes—Polanyi calls it “the discarding of the market Utopia”—and we are instead brought “face to face with the reality of society,” a reality in which “no society is possible in which power and compulsion are absent” (Polanyi 2001, 266). At that moment the choice is only between two different kinds of “real societies”—the kind in which power and political engineering is harnessed by political and economic elites to control the rules of the economy in the interest of wealth and capital, at the increasing cost of democracy, rights, and even political freedoms; or the kind in which power and political engineering is harnessed by the forces of democracy and exercised in the interest of the commons and the common good, of an expanded conception of civil and socioeconomic rights, and of a robust sphere of institutionalized freedoms. The first is associated with proto- or even quasi-fascism; the second with Polanyi’s conception of socialism, which he defines as “the tendency inherent in an industrial civilization to transcend the self-regulating market by consciously subordinating it to a democratic society” (Polanyi 2001, 242). In the end, the choice between the two is not about market freedom, but about nothing less than human freedom. Polanyi leads us to accept the finality of this choice by reminding us that there are two kinds of freedom: the imaginary kind, for which freedom is free enterprise and the denial of society, and which is limited to a privileged few; and the kind which must be available for all, and which requires subordinating the market to a democratic society. But just as this economic democracy is unacceptable to today’s neoliberalism, so too was it to the Hayekian liberalism of its time, for which power and government were exclusively threats to individual rights and freedoms. However, just as with his radically original demonstration that it was the nineteenthcentury political economists who were the true utopians, Polanyi can reveal to us today the utopian political engineering underpinning twenty-first-century neoliberal market utopianism. Often brutal, necessarily coercive, power is the unacknowledged agent in the work of what we misrecognize as the free market. If free-market utopianism’s freedom from political power is a fictitious

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utopian impossibility to which market utopianism, Hayekian liberalism, and today’s neoliberalism have never had any true allegiance, the real aspiration of economic liberalism is revealed to have been, and continues to be, freedom from democracy. There is, of course, a long history pitting capitalism against popular democracy. But while democratic empowerment was decried as illegitimately violating the sharp division between politics and the economy, it is historically and analytically more accurate to observe that this was a division constructed precisely for the purpose of shielding the market from democratic intrusions. Polanyi’s argument that fascism was a response to a market that refused to function can thus be linked to economic liberalism’s virulent repression of the democratic efforts for reform, the countermovement that pushed back against the extreme privations of market inequality and mass unemployment in the 1920s. The resulting political-economic impasse forced market liberals to turn to more coercive power to achieve their ends. The unfortunate history of economic liberalism and today’s neoliberalism alike is that when faced with the threat of democratic intrusions into the economy, they have always made political alliances with right-wing, nativist, xenophobic, and authoritarian parties over social democratic ones—something painfully evident in today’s collusion between the American Republican Party and the forces of Donald Trump. In this context it should be understood that there is nothing mild or moderate about Polanyi’s counter-utopian democratic vision of socialism and freedom as channeled through the countervailing powers of economic democracy. In a world that has reached the crises of today’s neoliberalism, it may be the only thing standing between us and a renewed bout of authoritarianism and fascism. Thus Polanyi: The fascist answer to the recognition of the reality of society is the rejection of the postulate of freedom…The discovery of society is thus either the end or the rebirth of freedom. while the fascist resigns himself to relinquishing freedom and glorifies power which is the reality of society, the socialist resigns himself to that reality and upholds the claim to freedom, in spite of it… Uncomplaining acceptance of the reality of society gives man indomitable courage and strength to remove all removable injustice and unfreedom. (Polanyi 2001, 268) Anderson, elizabeth. 2010. The Imperative of Integration. Princeton: Princeton University Press. Block, Fred L., and Margaret R. Somers. 2014. The Power of Market Fundamentalism. Karl Polanyi’s Critique. Cambridge, Massachusetts: Harvard University Press. Hacker, Jacob. 2011. “The Institutional Foundations of Middle-Class Democracy.” Policy Network, May 6. http://www.policynetwork.net/pno_ detail.aspx?ID=3998&title=The+institutional+foundations+of+middleclass+democracy.

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Hayek, Friedrich. 2007. “The Road to Serfdom (1944).” In The Collected Works of F.A. Hayek. Vol II, edited by Bruce Caldwell, 37–241. London: University of Chicago Press. Malthus, Thomas Robert. 1970. An Essay on the Principle of Population (1798). London: Penguin Books. Miliband, ed. 2012. “Speech to Stock exchange, September 6.” http://www. politics.co.uk/comment-analysis/2012/09/06/ed-miliband-sredistribution-speech-in-full. Mirowski, Philip, and Dieter Plehwe, eds. 2009. The Road to Mont Pelerin. Cambridge, MA: Harvard University Press. Piketty, Thomas. 2014. Capital in the Twenty-First Century. Translated by Arthur goldhammer. Cambridge Massachusetts: The Belknap Press of Harvard University Press. Polanyi, Karl. 2001. The Great Transformation (1944). Boston, Massachusetts, USA: Beacon Press. Reich, Robert B. 2015. Saving Capitalism, For the Many, Not the Few. New York: Knopf. Somers, Margaret R. 1998. “we’re No Angels: Realism, Rational Choice, and Relationality in Social Science.” American Journal of Sociology 104: 722–84. ———. 2008. Genealogies of Citizenship: Markets, Statelessness, and the Right to Have Rights. Cambridge: Cambridge University Press. ———. 2017. “How grandpa Became a welfare Queen: Social Insurance, the economization of Citizenship, and a New Political economy of Moral worth.” In The Transformation of Citizenship, edited by Juergen Mackert and Bryan S. Turner. Routledge. Somers, Margaret R., and Fred Block. 2005. “From Poverty to Perversity. Ideas, Markets, and Institutions over 200 Years of welfare Debate.” Sociological Review 70 (2 (April)): 260–87. NOTeS 1 I am very grateful to Fred Block, greta Krippner and Kim greenwell for thoughtful comments on a draft of this paper, and to Kim greenwell for editorial assistance. The essay benefited from the conversation at the workshop on “Karl Polanyi and Freedom,” sponsored by the Rosa Luxemburg Siftung, Nov.19-20, 2015 and from the advice of Michael Brie and this volume’s editors. earlier versions benefited from presentations at the University of Michigan’s economic Sociology workshop; at Yale University’s Conference on “god and Mammon,” Macmillan Center for International Affairs; and York University’s Department of Sociology, Toronto, CA. 2

In political economy, much of the credit for consolidating its use as a term of scorn must go to Malthus, whose world-changing Essay on Population of 1798 (1985) was born of his attack on the progressive intellectuals of his day, godwin and Condorcet.

3

Oxford english Dictionary (OeD).

4

The philosopher elizabeth Anderson contrasts this with nonideal theory, which she describes as starting “from a diagnosis of injustices in our actual world, rather than from a picture of an ideal world” (2010, 3).

5

Social naturalism, an ontology, must be distinguished from naturalism—the methodological postulate that, because nature and society exhibit the same kinds of regularities, there should be a unified method applicable to both. For a full discussion of social naturalism,

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see Block and Somers (2014, Chapter 6) and Somers (2008, Chapter 7). 6

In Polanyi’s words: “essentially, economic society was founded on the grim realities of Nature; if man disobeyed the laws which ruled that society, the fell executioner would strangle the offspring of the improvident. The laws of a competitive society were put under the sanction of the jungle” (Polanyi 2001, 131).

7

Thus Mirowski and Plehwe (2009, 435): Hayek, Friedman, and their allies “did agree that for purposes of public understanding and sloganeering, market society must be treated as a ‘natural’ and inexorable state of humankind” (Mirowski and Plehwe 2009, 435, emphasis in the original).

8

To be sure, Hayek and his allies were not anarchists. Like all market liberals they embraced the rule of law for guaranteeing property rights and enforcing contracts.

9

The “makers” versus “takers” meme was popularized by Mitt Romney during his 2012 Presidential campaign when he was taped stating that “47%” of the American population are “dependent upon government” for everything and expect others to pay. The actual words came from his running mate, Paul Ryan, who in 2010 said that “60% of the American people” take from the government more than they pay: “[w]e’re going to a majority of takers versus makers.”

10

To be sure, there is a vigorous debate over “supply-side economics” but because it is treated as a matter of economic theory it has escaped the moniker of “redistribution.”

11

The term was coined by political scientist and political consultant Jacob Hacker (2011), and was picked up and put into currency by ed Miliband (2012), then leader of the UK’s Labour Party, in a famous speech to the British Stock exchange, 6 September 2012.

12

Rules of property, rules regarding monopoly power, patent and copyright laws, rules of bankruptcy, the details of wage contracts, and contract law are all characteristic of predistributive governance in the market. Those that advance wealth include copyright and patent laws that favor big Pharma and obstruct fair competition (property); crippling antiunion practices that have created radical asymmetries of power in waged labor (contracts); vigorous disabling of anti-trust law, which began in the 1970s under a newly invented concept of market efficiency, leading to massive corporate consolidation (monopolies); bankruptcy laws written by the financial sector (bankruptcy law); and defanged regulatory agencies (enforcement). See Reich (2015).

13

Not surprisingly, the exception to this is the minimum wage law, which market liberals attack as a gross government violation of private property and market forces.

14

For a full theorization of an “ideational regime,” see Somers and Block (2005) and Block and Somers (2014, chapter 6).

15

In our study of the 1834 poor law reform and the 1996 American welfare bill, Fred Block and I analyze the power of market fundamentalism’s ideational regime to act on the world by leading the vanguard of institutional and legal transformation. At the same time, we show how its powers to effect change did not make the world conform to its precepts; on the contrary, its powers were all the more striking in that under the impetus to open up labor markets to appropriate market signals by abolishing poverty relief, the actual changes that followed did not create “free labor markets.” They simply substituted one set of labor rules for another more draconian form of political control. That there would have been no changes at all without the causal force of market utopianism is the clarifying test of an ideational regime’s power to act upon the world.

16

Nor does it suggest that these powers can fully explain why and how certain changes are or are not actually accomplished—those questions can only be answered through structural, institutional, and non-ideational analysis.

17

The third kind of causal power characteristic of a utopian ideational regime is the epistemic privilege to auto-generate its own veracity and thus to immunize the entire intellectual project against empirical disconfirmation (Somers 1998, Somers and Block 2005).

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18

even universal social insurance programs like Social Security and Medicare are coded as politically toxic threats to the nation’s economic health and blamed as the source of public debt and imminent national bankruptcy. See Somers (2017).

19

Also known as the Financial Modernization Act of 1999.

20

Of course a quick comparative glance refutes this explanation. As global market forces we should see the same effects everywhere, but no advanced country comes close to the levels of U.S. inequality. See Piketty (2014).

“Neoliberal Violence”—An Attempt to Embed Society in the Market Hüseyin Özel “NO HUMAN SOCIeTY is possible in which power and compulsion are absent, nor a world in which force has no function,” says Karl Polanyi (Harré and Madden 1975), arguing that liberalism’s failure should be sought in its claim “that power and compulsion are evil, that freedom demands their absence from a human community” (Polanyi, 1947b, 116). given the fact that the “laissez-faire economy was the product of deliberate state action” and “laissez-faire was planned” (Polanyi 1957, 141), rhetoric that denies the reality of power and compulsion is, of course, self-contradictory. The market system, from the very beginning, was a project designed by the liberals and implemented through state actions (Polanyi 1957, 139). Throughout the history of the market system, any attempt at constituting or reforming the system has always involved deliberate use of force and even violence on the part of the state. The present paper deals with the most recent example of the use of overt force, namely the “neoliberal” attempt at “embedding” society into the market, arguing that violence has been an effective tool for reducing all aspects of human society to mere “appendages” of the market (Polanyi 1957, 77). This neoliberal transformation has been so widespread that it represents a climax or “limit condition” of the attempt to “annihilate all organic forms of existence and to replace them by a different type of organization, an atomistic and individualistic one” (Polanyi 1957, 163). In order to understand this process, the paper will first focus on the relations between the notions of power and violence in the context of the institutionalization of the market system, and then examine this new attempt at “embedding society into the market.” It is argued that two forms of power, the power of making a difference, or of “agency,” and “power relations,” are closely interrelated. In the spirt of the last chapter of Polanyi’s The Great Transformation, I conclude that escape from the power relations created by the market system requires an active use of the power of agency, defending humanity from the encroachment of the market by accepting the reality of power and compulsion and “resigning” ourselves to the reality of society. Market System, Power and Violence The world Health Organization defines violence as “the intentional use of physical force or power, threatened or actual, against oneself, another person, or against a group or community, that either results in or has a high likelihood of resulting in

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injury, death, psychological harm, maldevelopment or deprivation” (Krug et al. 2002, 5). It seems that this definition, whilst being too broad to have any significant operational content, does not include violence that emerges as a result of some institutional arrangement. However, such “institutional violence” is especially significant when we consider the fact that the use of violence has been a prevalent feature of the market system from the very start, as Polanyi shows. Following Polanyi, one can argue that the market society is closely linked to force and violence. First of all, this system owes its very existence to violence that was deliberately implemented by the state to create “fictitious commodities,” separating human beings from their own productive activity and their natural “habitat.” These fictions were in turn necessary for the institutional structure, i.e. the separation between economic and political spheres of the market system, to be established. And since the maintenance of this separation must be conserved at all cost, violence becomes a useful instrument for the protection of the system. Of course, violence is not the only way of protecting the system. As Polanyi points out in his discussion of the role of the Classical political economist in the constitution and justifuction of the market system, public consent fostered through capitalist “ideology” is also necessary. establishing the “naturalization” and “externalization” of capitalist relations of production, ideology is an essential element of the reproduction of these relations. At the same time, this ideology makes individuals take an active role in the reproduction of capitalist ideology by transforming them into “homo economicus” (Özel 2013). Thus, the establishment of the market system is realised through the “constitutive” action of a “false” set of ideas. In this respect, the establishment of the market system can be seen as an instance of what Anthony giddens calls the principle of a “double hermeneutic.” According to giddens, the social world is constituted by both the actions of relevant social actors and the “metalanguages” invented by the social sciences (giddens 1994, 284). Social science is therefore internal to its “subject matter” in a way the natural sciences are not, being both influenced by its social environment and an effective agent in shaping social change. This is to say that the findings of the social sciences have the property of “self-fulfilling prophecies,” in the sense that they “cannot be kept wholly separate from the universe of meaning and action which they are about” (giddens 1984, xxxii–xxxiii). The creation of fictitious commodities and its result, the subordination of the entire society to the market, was, for Polanyi, a result of conscious design. The market economy as a “project,” designed by the liberals and implemented by the state interventions, is a prevalent theme throughout The Great Transformation. According to Polanyi, “[t]here was nothing natural about laissez-faire; free markets could never have come into being merely by allowing things to take their course” (Polanyi 1957, 139). An “enormous increase in continuous, centrally organized and controlled interventionism” was necessary in order to “make Adam Smith’s ‘simple and natural liberty’ compatible with the needs of a human society” (Polanyi 1957, 140). To this end the most suitable means was the state. In fact, the

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significance of the state in the establishment of the market system with continuous and conscious interventions was actually one of the cornerstones of the liberal doctrine itself: “of the three things needed for economic success –inclination, knowledge, and power– the private person possessed only inclination. Knowledge and power, Bentham taught, can be administered much cheaper by government than by private persons” (Polanyi 1957, 139). The state has always been important for the market from the very beginning. In fact, its role in the establishment of the market system was so prominent that the assertion that “the liberal economic order was designed by the early english political economists and was instituted by the power of state” (Polanyi Levitt 1990, 10–11) is not an excessive one. Actions of the state and the Parliament were central to the establishment of the market system: “thus, the Anti-Corn Law Bill of 1846 was the corollary of Peel's Bank Act of 1844, and both assumed a laboring class, which, since the Poor Law Amendment Act of 1834, was forced to give their best under the threat of hunger, so that wages were regulated by the price of grain” (Polanyi 1957, 138). In order for the market system to be established and maintained, ideology and state power, both useful means for “legitimizing” the use of violence, are necessary. State force was also necessary to maintain institutional separation, as the fascist period had shown clearly. even the welfare state arrangement uses the force of the state, enforcing a kind of “social contract” among three important sections of the society. without state intervention, in the form of actual or threatened force and violence, the market system could not exist. even the homo economicus, as a representation of the subject of liberal social theories based on the idea of the social contract, is actually a “constituted” entity, created by the market system itself. Homo economicus, concerned only with her selfinterest, sees anything around her as a means that can be used to satisfy her own “wants.” That is to say, her relation to the world is entirely instrumental. She is even ready to use force and violence for her own satisfaction. In fact, her relationship with violence may go deeper than that. From a psychoanalytical perspective, as Norman O. Brown argues, homo economicus is an “anal” character representing the “alienated consciousness.” This character is governed by the desire to possess and dominate material objects: “abstraction from the reality of the whole body and substitution of the abstracted impulse for the whole reality are inherent in homo economicus” (Brown 1985, 237).1 The drive to produce a “surplus” of material wealth lies in the fact that wealth and money reflect the “power” of human beings; that is, these are to be possessed because of the “magical” power they represent. This shows that “all power is essentially sacred power” (Brown 1985, 251) because “it begins in the hunger for immortality; and it ends in the absolute subjection to people and things which represent immortality power” (Becker 1975, 49). For example, in “archaic” societies the tendency to produce a surplus, mostly in the form of food, can be explained by the fact that food “gives the power of life” (Becker 1975, 29). In fact, this is true for all material things: they represent the magical power of life. Through

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accumulating material objects and wealth, human beings try to transcend their “creatureliness,” and “the limitations of the human condition and achieve victory over impotence and finitude” (Becker 1975, 31).2 Therefore, the homo economicus is characterized by a strong drive to accumulate and instrumental logic that would not exclude the use of sheer force and even violence. when the market system places this individual into the center of its institutional structure, it means that the system accepts the possibility of the use of power as a proper means to satisfy needs. In other words, power and violence plays a double role in a capitalist system: on the one hand they are necessary for the creation and protection of the institutional structure, the commodity fictions and the separation between the market and the “rest” of the society. And on the other, they also form an instrumental part of the institutional fabric that regulates the “social” relations among the individuals in the society.3 The constitutive role of power is, of course, emphasized most by Michel Foucault, who argues that power is a constitutive element not only for the whole of social life, but also for the subject itself (Rabinow 1984, 12, 21). The notion of power is generally conceptualized in the context of domination relations among human beings. According to Foucault, power “needs to be considered as a productive network which runs through the whole social body, much more than a negative instance whose function is repression” (Foucault 1980, 119). Power relations are an integral part of social life, to the extent that not only social life itself, but even knowledge and “truth” are constituted by conscious use of power. In his monumental work Discipline and Punish (Foucault 1995), he shows that modern technologies of control are not concerned with law (and order) but normalization; they are directed to create certain results. Power is the most effective way of creating “docile bodies.” In this regard, power is productive, creating institutions, codes of “normal” behavior, and subjects who would cooperate in their own subordination.4 However we should not forget the fact that the notion of “power” has two sides: on the one hand, it refers to the total capacities, potentialities, and capabilities defining “agency,”5 as in the case of “labor power” referring to “the aggregate of those mental and physical capabilities existing in the physical form, the living personality, of a human being” (Marx 1976, 270); and on the other it refers to social forms and relations of domination, as in the class relations within society. There is a close connection between these two notions of power (giddens 1984, 14–16). According to the first definition, power refers to the notion of “agency” in the sense of “anything which is capable of bringing about a change in something (including itself)” (Bhaskar 1975, 109). That is, the notion of agency implies that in order for something to be an “agent” it must have some “causal power” in the sense that it has the potency to produce an effect in virtue of its nature, in the absence of constraint and when properly stimulated” (Harré and Madden 1975, 16). The “human” agency in this respect is defined by human intentional action or praxis, which consists in causal intervention in the natural

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world and the reflexive monitoring of that intervention (Bhaskar 1989, 81). Two important characteristics of the notion of agency are the power of “making a difference” and intentionality, the purposeful activity of human beings in which reflexivity plays an essential role. The second notion of power incorporates social practices, institutions and processes creating and reproducing domination, with the process of alienation or fetishism relying on these kind of “power” relations. The “alienated consciousness,” in Marx, or the “market mentality” in Polanyi, all refer to this process through which human beings lose the “freedom” characteristic of their humanity. According to these positions social institutions are basically “expressions” of freedom as the essence of humanity; they are “embodiments of human meaning and purpose” (Polanyi 1957, 254). Unfortunately, under specific forms of social organisation these insistutions also impose constraints upon freedom, if they do not negate it altogher. Under a dominant market system the free purposive action of humans beings, directed only to realise their own agency and potential, is forced to operate within the constratints of institutions that subordinate this action to the fear of hunger and the hope of gain. This process of “transference” leads to the “abstraction” homo economicus becoming a reality (Brown 1985, 238). The individual thefore transforms into a functioning component of a system and as such must be equipped with essential tools for surviving within in system (Kosik 1976, 52). And the result of this process, as Polanyi warns us, is fascism, which signifies a “reeducation” of the people that was “designed to denaturalize the individual and make him unable to function as a responsible unit of the body politic” (Polanyi 1957, 237), This reeducation denied the idea of the "brotherhood of man" in all its forms, and it “was achieved through an act of mass conversion enforced against recalcitrants by scientific methods of torture” (Polanyi 1957, 237). The emergence of fascism, in which both “the uniqueness of the individual and of the oneness of mankind is negated” (Polanyi 1957, 258), brings us to the third dimension of violence in the market system, namely, the double movement. As Polanyi clearly demonstrates, the double movement, emerging from society’s struggle against the extension of the market, was the basic cause of fascism. The importance of the double movement lies in the fact that the notion of agency discussed above also implies the “power of making a difference” in the world. As giddens argues, there is a “dialectic of control” in human affairs that refers to the “two-way character of the distributive aspect of power (power as control); how the less powerful manage resources in such a way as to exert control over the more powerful in established power relationship” (giddens 1984, 374). This conception suggests that human beings are not just “docile bodies” who accept and participate in their subordination by the more powerful. On the contrary, in their efforts to protect social freedoms they not only resist but, more importantly, also exert their own powers to change this power relationship in such a way that both the control of resources and the overall distribution of power may change. In that sense, “an agent who does not participate in the dialectic of

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control ipso facto ceases to be an agent” (giddens 1982, 199). However, such an understanding of domination relations as a two-way process (i.e., the weak are also able to affect the actions of the strong) requires a discussion of the connection between individual agency and the reproduction and/or transformation of social relations. The double movement works on the institutional strains inherent in the structure of the system. Such strains, especially when the market fails, create social tensions, abrupt periods of violence and turmoil. It can even be argued that economic crises could be the result of the double movement itself, as in the most recent episode of such crises, namely the global crisis of 2008 (Özgür and Özel 2013; gür, Canpolat, and Özel 2011). As human history shows, these instabilities can easily turn into active clashes, wars and episodes of collective insanity. In order to understand the importance of these risks in the context of “globalization,” we now turn to a discussion of the neoliberal transformation. 2. The Neoliberal Transformation: Embedding Society in the Market? The “global” crisis of 2008 can be seen as signifying the “dusk” of the globalization process. From the beginning of eighties onwards, the world seems to have been “launched on another disastrous attempt to realize the utopian and socially destructive idea of the self-regulated market” (Bienefeld 1991, 16). This new “global” setting heralded the “death” of the welfare state, with the nation-state abandoning the working people exactly when they most needed the state as a buffer from the excesses of the world economy in its globalization phase (Kapstein 1996, 17). In this new phase, optimism rearding the possibility of living in a “post-industrial societ” has been gradually replaced by a pessimism regarding the economic and social security of ordinary people. The resulting political environtment is characterised by: a neoconservative nightmare 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, 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. (Bienefeld 1991, 4) Institutionally speaking, this result is characterized by the absence of a “system” both domestically and internationally (gür, Canpolat, and Özel 2011). It should be clear that this is a new attempt to once again organize human society along “dualistic lines” (separation between the economic and the political spheres). Therefore, since the unfettered market is the central institution, all other institutions, including the “neo-liberal” state, must be at the service of the market. Unregulated capital flows on a global scale are a symptom of this settlement. On an international level, the challenge facing the neoliberal “non-system” is to establish a viable international economic and political response to declining US

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hegemony. even if the future is uncertain, a number of different tendencies or potentials could be considered. One such possibility is a “New Middle Ages” (Cerny 1998). Since the rhetoric of the “death” of the nation-state in the wake of the globalization has been a prevalent theme in many circles, an alternative institutional structure that does not give a role to the nation-state might be conceivable. In this regard, the growing emphasis on local communities and cultures make us think that a new nexus of semi-autonomous local communites, like those in the Middle Ages, could replace the nation-state. However, these communities would need to be monitoried and co-ordinated by a “big brother” or an “empire” (like the US, the IMF, wolrd Bank, wTO and BIS), to ensure that these communities do not clash with each other and to ensure smooth capital accumulation on a global scale. Institutional strains and tensions still exist in this “non-system.” Problems of inequality and poverty, both domestically and internationally in the form of the so-called “North-South divide,” become more serious after the neoliberal attack on human society, even to the extent that they may produce a real threat to the stability of the market. In the political sphere, the issues of “multiculturalism” and “communitarianism” have led to questions regarding the Christian (and enlightenment) idea of the “uniqueness of individual and the oneness of mankind.” But the first casualty of this “global” setting seems to be the individual herself: human beings increasingly become fragmented, isolated, and "postmodern" individuals (ertürk 1999). Regarding the fate of the individual, we can point to two contradictory tendencies in this new environment. Firstly, with the transition to capitalist society, the individual emancipates herself from the straightjacket of the “cosmic order” of community (Taylor 1985, 256) and becomes a free being who is responsible for her own actions and who sees herself as on the same footing with other individuals within the society, irrespective of traditional systems of stratification. She sees herself both as equal with other people and as having the power to transform the world. Yet, at the same time, the development of industry, another hallmark of capitalist society, with the increasingly social character of production requiring both cooperation and exchange, makes the individual realize her dependence on other people. This “discovery of society” (Polanyi 1935, 370), somewhat paradoxically, is an important ingredient of the “market society.” In fact, it is the existence of an ever-growing productive machinery that makes us feel more and more powerful. Nevertheless, such a society, characterized by a complex division of labor and an extended bureaucratic network in both the economic and political realms, also makes individuals feel less and less powerful. while emancipation from the ties that bind the individual makes her more independent, self-reliant and critical, increasing alienation makes her more isolated, alone and afraid (Fromm 1941, 104). In other words, while the possibilities of realizing and developing the potentialities of the individual seem to increase in a market society, the market

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system also destroys the very sociality of human beings by depriving them of direct, personal relationships with other individuals, and their social relations are mediated by exchange or money, which reduces them to abstract, functional units. In the market system the reality of society is both recognized for the first time and denied because of the perverse existence of human beings who are forced to behave as homo economicus within the market sphere, whilst affirming their sociality only in the political sphere. This distinction between “civil society” and “political society” is a manifestation of the fact that the economic and the political spheres have been separated and the individual has been reduced to an “isolated monad who is withdrawn into himself” (Marx 1975, 229): the individual is only acknowledged in the form of the “egotistic” individual, whereas in the political sphere he is just treated as an abstract “citizen” (Marx 1975, 220). This dual character of human beings also leads to the breakdown of the totality of the “self.” According to eric Fromm, “the ‘self’ in the interest of which modern man acts is the social self, a self which is essentially constituted by the role the individual is supposed to play and which in reality is merely the subjective guise for the objective social function of man in society” (Fromm 1941, 116–17). However, this “social self” exhibits of a contradiction: “while modern man appears to be characterized by utmost assertion of the self, actually his self has been weakened and reduced to a segment of the total self—intellect and willpower— to the exclusion of all other parts of the total personality” (Fromm 1941, 117). Since in the modern society we praise equality, and trust our own transformative power or “efficacy,” we see nature and other individuals “as potentially raw material for our purposes” (Taylor, 1985: 266). Such an instrumental attitude towards nature and other individuals is a hallmark of the capitalist society. However, as we are increasingly drawn into exchange relations, we also give way our own individuality and efficacy to the machine, falling victim to an alienation process through which commodities themselves become “fetishized,” endowed with the properties of the life that they are supposed to serve, as if the more we consume the more powerful we become (Marx 1975). It can be argued that the neoliberal transformation of the market system is simply the “limit condition” of the system’s institutional structure. That is to say, the institutional tensions and clashes inherent to the market system assert themselves most clearly in the “global,” neoliberal phase of the system. even though the failure of this system only became visible after the global financial cris of 2008, continuous “market reform” efforts were required to cement neoliberal principles as the cornerstone of human society. In this new attempt at reducing human society to an appendage of the market new forms of “barbarism” are already emerging. This is unsurprising, given that the market was founded through the active use of institutional forms of violence. But violence also results from society’s attempt at resisting the extension of the market. This double movement is, it can be argued, still functional in the neoliberal phase of the market system, and is responsible for its recent crisis (Özgür and Özel 2013). And,

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as the emerging tendencies for racism, xenophobia and violent confrontations throughout the world show, it is quite possible that the result of this double movement is a return to the “barbarism” of 1930s. However, as Polanyi warns us, it should not be forgotten that such violent tendencies are simply the result of the liberal vision regarding human beings and human society: Freedom’s utter frustration in fascism is, indeed, the inevitable result of the liberal philosophy, which claims that power and compulsion are evil, that freedom demands their absence from a human community. No such thing is possible; in a complex society this becomes apparent. This leaves no alternative but either to remain faithful to an illusory idea of freedom and deny the reality of society, or to accept that reality and reject the idea of freedom. The first is the liberal’s conclusion; the latter the fascist’s. No other seems possible.6 (Polanyi 1957, 257) Nevertheless, since “the challenge of the machine” requires a new institutional adjustment, the problem of freedom inevitably becomes an institutional problem. Yet, by itself, the institutional element is only one side of the problem of freedom; the other side of the problem is moral or religious. Since for Polanyi institutional guarantees of freedom are compatible with any economic system and technological apparatus (Polanyi 1947b, 117), on the institutional level the issue is one of balancing increased freedoms against diminished freedoms; hence no radically new questions arise. On the more fundamental, moral level, however, the very possibility of freedom is at stake, for in a complex society, “the means of maintaining freedom are themselves adulterating and destroying it” (Polanyi 1957, 254).7 For in such a society not only does technology and the resulting division of labor tend to limit human freedom, but also “the comfortable classes enjoy the freedom provided by leisure in security; they are naturally less anxious to extend freedom in society than those who for lack of income must rest content with a minimum of it” (Polanyi 1957, 254). For this reason, argues Polanyi, in an established society, the right to nonconformity must be institutionally protected. The individual must be free to follow his conscience without fear of the powers that happen to be entrusted with administrative tasks in some of the fields of social life. Science and the arts should always be under the guardianship of the republic of letters. Compulsion should never be absolute; the “objector” should be offered a niche to which he can retire, the choice of a “second-best” that leaves him a life to live. Thus will be secured the right to nonconformity as the hallmark of a free society. (Polanyi 1957, 255) In other words, the solution that Polanyi suggests seems to be the one that Marx

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proposed: the integration of “society” and “community” forming the conditions of “the person in community” (Rotstein 1990, 104). In this solution both individuality and sociality, the two characteristics that define a human being, are emphasized. A “solution” which only emphasizes sociality or connectedness, as in the rhetoric of the return to the “lost community,” is an impossible attempt “to elevate primitism to a morality and seek shelter from the machine age in the Neolithic cave” (Polanyi 1977, xlvii). The most important challenge that the “machine age” poses is the necessity of living in a “complex society,” that is, a society that exists side by side with the machine. Such a society, irrespective of its specific institutional format, should contain “an extended bureaucratic network to fulfill the purposes of the state and of the society, and is bound to encompass a complex division of labor—the necessary consequence of the industrial revolution” (Rotstein 1990, 100). Among the tendencies that the industrial civilization creates are, according to Polanyi, “paralyzing division of labor, standardization of life, supremacy of mechanism over organism, and organization over spontaneity” (Polanyi 1947b, 109). These tendencies therefore raise the problem of the protection of human spontaneity and freedom. Capitalist society cannot sustain freedom because it is based on the purpose of creating profit and welfare, not peace and freedom (Polanyi 1957, 255). According to Polanyi, any market-view of society that equates economics with contractual relationships, and contractual relations with freedom, hides the reality of society and fosters a “fragmented” life for human beings (Polanyi 1957, 257–58). For this reason, the liberal vision denied that “no complex society can exist without organized power at the center” and that “no society is possible in which power and compulsion are absent, nor a world in which force has no function” (Polanyi 1957, 257). For the liberal, “the power of the State was of no account, since the less its power, the smoother the market mechanism would function” (Polanyi 1957, 258). In other words, the liberal’s vision of freedom is limited only to the market sphere in the form of “free enterprise,” without ever considering the state and power as important factors in society. For Polanyi, such a limited notion of freedom, and the argument that abandoning the free market will destroy this freedom, is a direct result of economic determinism “which is valid only in a market society” (Polanyi 1947a, 102). For him: Basically there are two solutions: the extension of the democratic principle from politics to economics, or the abolition of the Democratic “political sphere” altogether. The extension of the democratic principle to economics implies the abolition of private property of the means of production, and hence the disappearance of a separate autonomous economic sphere: the democratic political sphere becomes the whole of society. This, essentially is Socialism.

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After abolition of the democratic political sphere only economic life remains; Capitalism as organised in the different branches of industry becomes the whole of society. This is the Fascist solution. (Polanyi 1935, 392) Fascism is characterized by a loss of freedom, not only at the individual level but, even more importantly, at the societal level as well. Acording to Polanyi, the first step in establishing a complex society in which freedom is protected institutionally would be to “resign” oneself to the three facts that shape the consciousness of the western individual: the knowledge of death, the knowledge of freedom, and the knowledge of society (Polanyi 1957, 258A). It is essential to resign to these three facts because: resignation was ever the fount of man’s strength and new hope. Man accepted the reality of death and built the meaning of his bodily life upon it. He resigned himself to the truth that he had a soul to lose and that there was worse than death, and founded his freedom upon it. He resigns himself, in our time, to the reality of society which means the end of that freedom. But, again, life springs from ultimate resignation. Uncomplaining acceptance of the reality of society gives man indomitable courage and strength to remove all removable injustice and freedom. As long as he is true to his task of creating more abundant freedom for all, he need not fear that either power or planning will turn against him and destroy the freedom he is building by their instrumentality. This is the meaning of freedom in a complex society; it gives us all the certainty that we need. (Polanyi 1957, 258B) Only through this resignation can human beings realise themselves without any need for a mediator to which essential human powers are transferred. In short, what we need is to affirm our humanity.8 The imperative of protecting freedom poses a responsibility for the humanity as a whole: “the vital task of restoring the fullness of the life to the person, even though this may mean a technologically less efficient society” (Polanyi 1947b, 116). In this regard, it is essential to keep in mind what Polanyi has to say about the tragedy of Hamlet: Hamlet is about the human condition. we all live, insofar as we refuse to die. But we are not resolved to live in all the essential respects in which life invites us. we are postponing happiness, because we hesitate to commit ourselves to live. This is what makes Hamlet’s delay so symbolic. Life is man’s missed opportunity. Yet in the end our beloved hero retrieves some of life’s fulfillment. The curtain leaves us not only reconciled, but with an accountable sense of gratitude towards him, as his sufferings had not been quite in vain. (Polanyi 1954, 350)

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Conclusion I have argued in this paper that a notion of violence is required for a full analysis of the neoliberal transformation of the market system for three reasons. First, state violence, both actual and threatened, was instrumental for the implementation of the “structural reforms” necessary to create the unregulated or “self-regulated” market in different parts of the world. Normalising “flexible employment’, creating a “precariat,” processes of “gentrification,” andeven forcing universities and knowledge producing institutions to create “information” with a clear “market value” are all implemented through active interventions, often with overt force. Second, the “re-education” of individuals aimed at creating the perfect homo economicus, realised through ideology and the power of domination and control, is almost complete. This new subject is eager to use violence to satisfy their own needs and is, at least, neutral to the various forms of “barbarism” in the world today. Thirdly, the neoliberal transformation represents a violation of essential human powers and an open threat to society itself because it reduces human nature and the natural environment to an “appendage” of the market. This results, sooner or later, in resistance on the part of different sections of society that are threatened by the extension of capitalist control. especially in “difficult times,” such as those following the last financial crisis, ideological resistance and “peaceful” reducation may not be sufficient, and there may occur episodes of violence. One can argue that we are, once again, living through a period of barbarism, one that this time has the potential to destroy all of us unless it is resisted actively throughout the world. In other words, as Rosa Luxemburg warns us, we have only one option: “socialism or barbarism.” And the solution is, of course, socialism: … the true nature of man rebels against Capitalism. Human relationships are the reality of society. In spite of the division of labour they must be immediate, i.e., personal. The means of production must be controlled by the community. The human society will be real, for it will be humane: a relationship of persons. (Polanyi 1935, 375) The next step in this history is yet to be written.

Arendt, Hannah. 1969. On Violence. New York: Harcourt, Brace & Jovanovich. Becker, ernest. 1975. Escape from Evil. New York: Free Press. Benjamin, walter. 1996. “Critique of Violence.” In Selected Writings, Volume 1: 1913 – 1926, by walter Benjamin, 236–52. London: The Belknap Press of Harvard University Press. Bhaskar, Roy. 1975a. A Realist Theory of Science. York: Books. ———. 1975b. A Realist Theory of Science. Leeds, UK: Leeds Books. ———. 1989. The Possibility of Naturalism: A Philosophical Critique of the Contemporary Human Sciences. 2nd ed. London: Harvester wheatsheaf.

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———. 1998. The Possibility of Naturalism. A Philosophical Critique of the Contemporary Human Sciences. 2nd edition. Critical Realism--Interventions. London/ New York: Routledge. Bienefeld, Manfred. 1991. “Karl Polanyi and the Contradictions of the 1980s.” In The Legacy of Karl Polanyi: Market, State and Society at the End of the Twentieth Century, edited by Marguerite Mendell and Daniel Salee, 3–28. New York: St. Martin’s Press. Brown, Norman O. 1985. Life Against Death: The Psychoanalytical Meaning of History. Hanover (NH): Vesleyan University Press. Cerny, Philip. 1998. “Neomedievalism, Civil war, and the New Security Dilemma: globalization as Durable Disorder.” Civil Wars 1 (1): 36–64. Dewey, John. 1946. “The Crisis in Human History. The Danger of the Retreat to Individualism.” Commentary 1 (March): 1–9. ertürk, Korkut. 1999. “Marx, Postmodernity, and Transformation of the Individual.” Review of Radical Political Economics, no. June: 27–45. Foucault, Michel. 1980. Power/Knowledge. Selected Interviews and Other Writings 19721977. Brighton, Sussex: Harvester Press. ———. 1995. Discipline & Punish. The Birth of the Prison. New York: Vintage. Fromm, erich. 1941. Escape From Freedom, New York. New York: Owl Books. giddens, Anthony. 1982. Profiles and Critiques in Social Theory. Contemporary Social Theory. London: Macmillan. ———. 1984. The Constitution of Society. Outline of the Theory of Structuration. Cambridge: Polity Press. ———. 1994. Beyond Left and Right: The Future of Radical Politics. Stanford, CA: Stanford University Press. gür, Timur, Naci Canpolat, and Hüseyin Özel. 2011. “The Crisis and After: There Is No Alternative?” Panoeconomicus 58 (1): 113–33. Harré, Rom, and edward H. Madden. 1975. Causal Powers: Theory of Natural Necessity. Oxford: Blackwell Publishers. Kapstein, ethan. 1996. “workers and The world economy.” Foreign Affairs 75 (3 (May/June)): 16–37. Keynes, John Maynard. 1963. “economic Possibilities for Our grandchildren (1930).” In Essays in Persuasion, 358–73. New York: w.w.Norton & Co. Kosik, Karel. 1976. Dialectics of the Concrete: A Study on Problems of Man and World. 1976th ed. Dordrecht/Boston: Reidel. Krug, etienne g., Linda L. Dahlberg, James A. Mercy, Anthony B. Zwi, and Rafael Lozano. 2002. “world Report on Violence and Health.” geneva: world Health Organization. http://apps.who.int/iris/bitstream/ 10665/42495/1/9241545615_eng.pdf. Marx, Karl. 1975. Early Writings. Harmondsworth: Penguin. ———. 1976. Capital. Volume I. Translated by B. Fowkes. Harmondsworth: Penguin.

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Özel, Hüseyin. 1997. “Reclaiming Humanity: The Social Theory of Karl Polanyi.” Utah: University of Utah. ———. 2001. “‘The Consciousness of Death: An essay on Polanyi’s Understanding of Human Nature,’ Paper Presented at the 8th International Karl Polanyi Conference: “economy and Democracy,” 12-14 November 2001, Mexico City, Mexico.” ———. 2008. “The Notion of Power and the ‘Metaphysics’ of Labor Value.” Review of Radical Political Economics 40 (4): 445–61. doi:10.1016/S04866134(99)80002-3. ———. 2013. “‘On the Marxian Notion of Ideology and economics,’ paper Presented to The 17th Annual Conference of the european Society for the History of economic Thought: “economic Theory and Business Practice,” Kingston University, London, May 16-18, 2013.” Özgür, gökçer, and Hüseyin Özel. 2013. “Double Movement, globalization, and the Crisis.” American Journal of Economics and Sociology 72 (4 (October)): 892–916. Philp, M. 1985. “Michel Foucault.” In The Return of Grand Theory in the Human Sciences, edited by Q. Skinner, 67–81. Cambridge, UK: Cambridge University Press. Polanyi, Karl. 1935. “The essence of Fascism.” In Christianity and the Social Revolution, edited by John Lewis and Donald K. Kitchin, 359–94. London: Victor gollanez. ———. 1947a. “On Belief in economic Determinism.” The Sociological Review 39 (1): 96–102. doi:10.1111/j.1467-954X.1947.tb02267.x. ———. 1947b. “Our Obsolete Market Mentality.” Commentary 3 (2): 109–17. ———. 1954. “Hamlet.” Yale Review 43 (3): 336–50. ———. 1957. The Great Transformation (1944). Paperback ed. Boston, MA: Beacon Press. ———. 1977. The Livelihood of Man (Ed. by H. Pearson). New York: Academic Press. Polanyi Levitt, Kari. 1990. “The Origins and Significance of The great Transformation.” In The Life and Work of Karl Polanyi. A Celebration, edited by Kari Polanyi Levitt, 111–24. Montréal/New York: Black Rose Books. Rabinow, Paul. 1984. The Foucault Reader. New York: Pantheon. Rotstein, Abraham. 1990. “The Reality of Society. Karl Polanyi’s Philosophical Perspective.” In The Life and Work of Karl Polanyi. A Celebration, edited by Karl Polanyi and Kari Polanyi Levitt, 98–110. Montréal/ New York: Black Rose Books. Taylor, Charles. 1985. Philosophy and the Human Sciences: Philosophical Papers (Volume 2). Cambridge: Cambridge University Press. NOTeS 1 A discussion of the psychoanalytical dimension of the drive to accumulate and its relationship to death is found in Özel (2001).

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2

Keynes too, in his famous “economic Possibilities for our grandchildren,” argues that “the love of money as a possession—as distinguished from the love of money as a means to the enjoyments and realities of life” is “a somewhat disgusting morbidity, one of those semicriminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease.” For him, “the ‘purposive’ man is always trying to secure a spurious and delusive immortality for his acts by pushing his interest in them forward into time. He does not love his cat, but his cat's kittens; nor, in truth, the kittens, but only the kittens' kittens, and so on forward for ever to the end of cat-dom. For him jam is not jam unless it is a case of jam to-morrow and never jam to-day. Thus by pushing his jam always forward into the future, he strives to secure for his act of boiling it an immortality” (Keynes 1963, 370).

3

For the relations between power, strength and violence, see Hannah Arendt (Arendt 1969, 44–46). Both Arendt and walter Benjamin (1996), emphasizes the instrumental character of power.

4

Foucault has been criticized for not linking power to a “subject” in his account. Power therefore acts like the “transcendental subject” of the history in Foucalt (giddens 1982, 221; Taylor 1985, 152; Philp 1985, 75), or like “a strange kind of Schopenhauerian will, ungrounded in human action” (Taylor 1985, 172).

5

For a fuller discussion of the notions of agency power and nature, see Bhaskar (1975a, 1989), Harré and Madden (1975) and giddens (1984, 5–14). See also Özel (2008), for the importance of the notion of power for the labor theory of value in Marx.

6

In this connection, John Dewey argues, mentioning Polanyi: “placing the socialistic in stark opposition to the individualistic was not the creation of Fascism and Totalitarianism. It was a direct inheritance from the laissez-faire ‘Liberalism’ which arrogated to itself the protection of human ‘individuals’ from oppression by organized society” (Dewey 1946, 5).

7

Polanyi’s concern with the moral aspect of the problem can be seen in the following quote: “what appears to our generation as the problem of capitalism is, in reality, the far greater problem of an industrial civilization. The economic liberal is blind to this fact. In defending capitalism as an economic system, he ignores the challenge of the Machine Age. Yet the dangers that make the bravest quake today transcend the economy. The idyllic concerns of trust-busting and Taylorization have been superseded by Hiroshima. Scientific barbarism is dogging our footsteps. The germans were planning a contrivance to make the sun emanate death rays. we, in fact, produced a burst of death rays that blotted out the sun. Yet the germans had an evil philosophy, and we had a humane philosophy. In this we should learn to see the symbol of our peril” (Polanyi 1947b, 117).

8

This is the essence of Polanyi’s notion of the “double movement” describing the “selfprotection” of the society against the extension of the market (Polanyi 1957, 76), for this self protection represents human beings reclaiming their own humanity against the danger of annihilation posed by the market (Özel 1997).

III T h e C as e f o r a S o c i a l i s t C on c e p t i o n o f F r e e d o m

Karl Polanyi and the paradoxes of freedom Gareth Dale

IN THIS CHAPTeR I shall survey the main features of Polanyi’s philosophy of freedom as it evolved over the decades prior to the writing of The Great Transformation. In his youth, Polanyi belonged to Budapest’s ‘freethinking’ counter-culture. He did not belong to the liberal mainstream but was drawn to socialist and social liberal currents that framed freedom with reference to “social obligation” (Polanyi 2016f, 59). Socialism, in the young Polanyi’s writings, figures as “an ethical objective that seeks to achieve the realization of human freedom and solidarity” (Polanyi 2016d, 114). Its “guiding spirit is the yearning for freedom” (Polanyi 2016b, 120) and its essence lies in its advocacy of the extension of “equality and freedom” (Polanyi 2016g, 102). Freedom lay at the heart of the freethinkers’ critique of clerical conservatism. Conservatism, as Polanyi saw it, referred moral choices to authority or to tradition, in effect denying the individual’s moral freedom to determine for herself what is good and what is evil (Polanyi 2016a). And it was in the name of freedom that Polanyi elaborated his critique of deterministic and ‘objectivist’ sociology. In a series of speeches and articles in Hungarian, that remained untranslated until recently, he railed against the idea that the wheels of history are turned by social and economic forces and not by human hands. In an oration at the poet endre Ady’s funeral, for example, he portrayed this idea in the prophetic, breast-beating Romantic idiom that came so effortlessly to him: we, the people of this age, believe that … the measurable and enumerable facts of the external world are the foundation of society that sets the frame upon which all inner life is stretched, [that] the fate of ideas depends upon the course of society’s development and the significance of dreams and fantasies depends upon the direction of economic progress. we believe that the torch ahead is but the reflected gleam of the revolutionary fires that smoulder in the masses … that our ideas and consciousness are mere reflections of real life. (Polanyi 2016e, 76) Polanyi singles out for censure the proposition “that not men but circumstances made the war; that responsibility and guilt for it lies not with us human beings but with circumstances, and that therefore not we ourselves but the circumstances

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should change” (Polanyi 2016e, 76-77). He regarded this, the creed of the epoch, as a charter for cowards. It was repugnant to him because it entails the assumption that human thought is laid down in the march of societal evolution, and that human behaviour is determined by economic interests. Such ideas absolve individuals of moral responsibility, lulling them into a quietist determinism according to which the individual’s ethical stance, manifested in word and deed, counts for nothing. In his twenties, Polanyi was close to the political current known at the time as liberal socialism, prominent representatives of which included Franz Oppenheimer and eduard Bernstein. In its socio-economic analysis, liberal socialism advanced three basic tenets. The first is the physiocratic axiom that all production depends upon agriculture. Secondly, and for Polanyi its “central pillar”, is the thesis that exploitation in modern economies results from the conquest of land by the capitalist class (see Polanyi 1920b).1 Its monopoly of land is a form of Gewalteigentum, with market freedoms abolished by extra-economic force. Accordingly, surplus value derives not from market but non-market processes, notably monopoly, speculation and “parasitic” tendencies—all of which are rooted in Gewalteigentum (Polanyi 1919a). Thirdly, the economic constitution of a liberal socialist society would rest upon “free cooperation”, entailing “organic, not mechanical solidarity”, with production organised in autonomous cooperatives (Jaszi 1924, 113–14). From these tenets Polanyi derived “five commandments of liberal socialism”: the distribution of land to those who are prepared to work it, security of property for peasants and agricultural cooperatives, economic autonomy for corporations, equality of mental and manual labour, and the abolition of all price and wage regulation. with the class monopoly of land abolished, supply and demand would harmoniously and “organically” regulate production and distribution according to the input of “free labour”. Shorn of monopoly excrescences the free market, he believed, would diminish the income gap, for its intrinsic logic is egalitarian (Polanyi 1919b; see also Oppenheimer 1910, 99). As regards institutional change in the political sphere, liberal socialists invested their hopes above all in democratisation. For Polanyi, democracy was more than a mere mechanism for controlling the administration by freely elected representatives. Rather, it was a way of organising society in all its dimensions. Indeed, democracy represented “the ideal way of life” (Litván 1990, 33). As such, it was all but synonymous with socialism. A socialist transformation of society, he argued, cannot occur “by means of political democracy and socialisation alone. It is democracy combined with the cooperative spirit that leads to socialism”. If given a “wider, richer and more concrete meaning”, he suggested with reference to “workplace and factory councils, municipal workers’ councils, [and] agricultural workers’ cooperatives”, the new economic democracy that was coming into being in the early 1920s, when combined with parliamentary democracy, comprised “the true nature of socialism” (Polanyi 2016d, 117).

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The dissolution of class power For many years Polanyi identified as a liberal socialist, but in the aftermath of the great war he began to re-evaluate the social consequences of the market economy. He turned against economic liberalism and embraced guild socialism. guild socialism has been described as “a self-consciously intellectual and propagandist movement” tinged with Fabian elitism (Brown 1977), but it was forged in the fires of the 1910s, above all the great Unrest of 1910-14. For Polanyi, its appeal consisted in four features. One was its advocacy of the necessity of simultaneously advancing workers’ control over production and transforming the state. In this sense it represented a felicitous blend of two strands of the labour movement: syndicalism, and “collectivism” (by which category he brackets communism and Fabian social democracy) (Polanyi 2016c). Secondly, it was “fundamentally an ethical and not a materialist doctrine”, in the description of g. D. H. Cole (Cole, cited in Thomasberger 2005, 13). Thirdly, it advanced a robust critique of the “commodity theory of labour”. Labour, in the guild socialist view, possesses a quasi-religious character such that its purchase and use for private profit is immoral. In Polanyi’s gloss, capitalism stood condemned for its failure to “honour” labour, leaving workers “robbed of the content and meaning of life”. For the industrial labourer working “under the capitalist’s command”, he continues, his place of work is not his home, as the land is for its owner; the product on which he works is not his creation, as a chair is the woodworker’s who carved it; he does not share with his workmates a communal life of labour, as in village communities, and if he looks back upon his life he cannot even see where its traces are visible, who perceived its benefits and in what respects.2 Socialism, in contrast, would centre upon the elevation of workers from their existence as bare commodified life to the condition of “autonomous members of society” (Polanyi 1920a, 89).3 The fourth tenet, and one that particularly attracted Polanyi, was Cole’s ‘functional theory’. Functional theory was the invention of nineteenth-century medievalists, principally the author and critic John Ruskin. For Ruskin, the goodness of society resides in its creation of conditions for the “wholeness of being”. Just as beauty is revealed in organisms that develop according to their laws of growth, and so give “the appearance of felicitous fulfillment of function”, he proposed, so an “organic society” develops by way of coherence and cooperation amongst its constituent parts. guild socialists deployed the term ‘function’ to denote “social purposes selected and placed in coherent relationship”. As Polanyi framed the theory, “the functional structure of society is based upon the discrete impulses of individuals’ lives”. Individuals have material needs, and so engage in economic activity; “this is the basis of economic associations”, while the commonality of all workers gives rise to “the second functional association: the

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guilds” (Polanyi 1920a). It was a communitarian theory, in that it framed rights and obligations not individualistically, as the claims of citizens upon the state and vice versa, but in group terms, such that the rights and duties of the various associations within civil society are organically related to their function vis-à-vis society as a whole. If function were to become the organising principle of community life, the resulting connection of rights and duties to social function would tend to promote a ‘responsible society’. By way of illustration, consider the Middle Ages, held up by guild socialists such as Cole and Richard Tawney as a workable approximation of a ‘functional society’.4 Individuals (in their rather rose-tinted view) exercised their function—prayer, defence, merchandise, tilling the soil—within the social organism. Property was held by individuals in trust, on behalf of the commonweal, and the purpose of production was not private profit but something utterly concrete, social and functional: service to others. Conversely, in modern capitalism ownership is separated from function and the purpose of production is abstract and individual: the owner’s profit. For guild socialists, it was “the divorce of property rights from any clear concept of function” that had led to “the ills of modern industrialism” (Carpenter 1922, 302). If the Middle Ages offered a glimpse of a functional society, guild socialists attempted to marry this to their contemporary aspirations for working-class democracy. Their paramount concern, in the words of one historian, was to elaborate “an institutional framework that would encourage the common people to be active” (glass 1966, 15, emphasis added). The organisations that would fulfil this role were trade unions, cooperatives, local councils and the state. The unions were beginning to “constitute a state within the state (Polanyi 1922), and would, in Polanyi’s conception, convert into industrial associations (“the modern guild”), by supplementing wage struggle with the exercise of actual control over industrial branches (Polanyi 2016c). guilds, he concluded, represented the point at which trade unions become near-identical with Soviets (Polanyi n.d.). Yet guild socialism differed sharply from Bolshevism in that, like nineteenth-century utopian socialism, it advocated the creation of bastions of the new within the existing order, on the model of nascent capitalism within the feudal order. “early revolution” was ruled out, in favour of the: consolidation of all forces on the line of evolutionary development with a view to making the ‘revolution’, which in one sense must come, as little as possible a civil war and as much as possible a registration of accomplished facts and a culmination of tendencies already in operation. (Cole, cited in Carpenter 1922, 213) Of those tendencies, the decisive one was workers’ “encroaching control” over industry. generalising from the experience of the wartime British revolutionary shop stewards’ movement, guild socialists advocated this as a strategy that promised to “gradually dispossess the present owners, without involving any acute

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dislocation of industry”, and in some cases proved compatible with a variety of wider political goals. The guild-socialist Secretary of the Miners Federation of great Britain, to give one example, advocated nationalisation of the mining industry “not as a step in the process of winning working class power but as a co-operative enterprise between miners, government and consumers to increase the efficiency of the industry” (Pearce and woodhouse 1995, 52–53). However, the ultimate goal tended to be presented in revolutionary terms. with encroaching control, the functions of the “possessing class” would atrophy, and its moral claim to the rights of ownership and control would dissolve. The result would be that, “like the Noblesse at the time of the French Revolution”, the capitalist would become merely “a useless appendage of industry, to be swept away with relatively little compunction at the time of final transition. That is, the ‘busy rich’ would be changed into ‘idle rich’, and then ‘expropriated’” (Cole cited in Carpenter 1922, 213). An Austrian debate guild socialism was never to become a significant movement in its homeland, but guild-socialist ideas were taken up enthusiastically by social democrats in Austria, Polanyi’s adopted Heimat from 1919. In the year before his arrival Austria had been in the grip of social upheaval. workers in the industrial districts had armed themselves and formed militias to protect their workplaces, to assure supplies of raw materials and to defend their newly won liberties. In early 1919 a very real prospect existed, in the words of Polanyi’s wife, Ilona Duczynska, of Austria becoming “the bridge between the two Councils’ Republics: the Bavarian and the Hungarian, which were struggling valiantly at the very borders of Austria, but in isolation” (Duczynska 1978, 41). A leading light of Austrian social democracy, Otto Bauer, recalled that the workers’ and soldiers’ councils could have inaugurated a soviet republic and “no power was in sight to stop them” (Bauer 1976, 727; Duczynska 1978, 36; Czerwínska-Schupp 2005, 326). On this assessment Bauer and Duczynska concurred, but in their strategic evaluations they were worlds apart. For Duczynska, 1918-19 was a historic opportunity missed. Social democracy’s behaviour in those years revealed a betrayal of nerve that set the course for a spirit-sapping series of future climbdowns. In her assessment, Bauer and the other social democratic leaders had devised an ingenious recipe for inaction, as summarised neatly by Martin Kitchen: they demanded obedience from the masses and, at the same time, waited for them to take the initiative (Martin Kitchen, quoted in Sully 1985, 64). The “rejection of revolution in March 1919”, as Duczynska put it, formed: the model for a long sequence of Social Democratic retreats, of contests never contested, their failure being regarded in the logic of hindsight as a foregone conclusion. Straining to ward off civil war for the time being, if not entirely to escape it, the party step by step gave in to the forces of reaction and fascism. (Duczynska 1978, 41)

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The strategy of the social democratic leadership, she elaborated, was rooted in a philosophy of “determinism—not to say automatism”, a conception of civilisational progress naturally tending toward socialism, of “historical necessity, operat[ing] not unlike a law of nature” (Duczynska 1978, 132). They believed that their party’s hold over municipal Vienna would enable a redoubt of socialism to be patiently constructed, brick by brick, but her account relates the desolate spectacle of its foundations being eroded over course of the 1920s, with trade union members resigning in droves and the militancy and military capacity of the social democratic militia, the Schutzbund, inexorably sapped. Ownership of the means of production, meanwhile, remained in the hands of the bourgeoisie, and the state revealed itself to be not a neutral umpire but inherently biased toward social democracy’s bourgeois opponents. Faced with these formidable obstacles, the Social Democratic Party devoted its energies to the cultural realm, but this tended to operate as a surrogate for political struggle, a justification for its failure to develop the “physical force” necessary to protect Red Vienna against the growing challenge of the Christian Socials, the Pan-germans, the Heimwehr and the Nazis (Duczynska 1978, 66). The hero of Duczynska’s narrative, Schutzbund leader Theodor Körner, pressed for action but was repeatedly knocked back. A milestone was the workers’ uprising of 1927, during which the SDAP leadership refused to countenance the demand that the Schutzbund be mobilised, and completely rejected the widespread appeals for the issue of arms. The demoralisation that resulted, within the Schutzbund and the broader working class, meant that armed struggle, when it did eventually arrive, received markedly less support than could have been expected. The outcome was the crushing of the working class in February 1934. The cataclysm that the Social Democratic Party liked to think it had averted in 1918-19 by favouring parliamentary democracy over a councils’ republic had returned despite democracy, and in a very ugly form (Loew 1979, 118). How did Bauer perceive these same events? In 1918-19 he believed that a revolution would provoke a counter-revolutionary backlash—a “catastrophe”— that had to be avoided at all costs. Instead, thanks to the extension of the franchise, the working class would be able to enjoy a “safe and painless road to power” (Bauer 1976, 727ff.). This conception, rooted in Second International social democracy, held that the social weight and educational achievements of the working class would expand inexorably, and would eventually, necessarily, bring about the demise of the capitalist system. The model was the transition from feudalism to capitalism, a gradual process in which a rising class attains control of ever-expanding interstices of civil society before making inroads into state power, culminating in its capture. Drawing upon the guild-socialist conception of ‘encroaching control’, Bauer advocated piecemeal social-democratisation through industrial (or ‘functional’) democracy, which would weaken the resistance of capitalists and the petty bourgeoisie and “serve the pedagogical function of preparing workers for a socialist society” (Arato 1985; cf. Loew 1979).

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In this prospectus, intense political conflicts, including movements of the working class such as the councils’ movement, appeared as “disturbing factors in the slow but supposedly ineluctable process of strengthening the Social-Democrat mass organizations and increasing the Party’s electoral vote” (Loew 1979). Although impressed by the confidence and consciousness on display in the soldiers’ and workers’ councils, Bauer doggedly opposed the formation of a councils’ republic. For the leadership of social democracy, the aim was for the established political architecture to be expanded to accommodate working people, not to be dismantled. The masses had to be convinced to refrain from seeking a socialist transformation via the councils, and to opt instead for parliamentary democracy. The task was tricky, but the trade union and party apparatuses succeeded. The revolutionary impulse, although powerful, had been inchoate, and social democracy was able to divert it onto a liberal-parliamentary road. On these questions Polanyi’s views were less closely aligned with Duczynska than with Bauer, but, in grappling with the issue, his theorisation of freedom evolved. In the 1930s, Polanyi elaborated a historical-philosophical thesis on freedom, social integration and the separation of the political and economic spheres. The course of “western civilization”, he remarked in a lecture entitled ‘The Paradox of Freedom’, exhibits two transhistorical imperatives (Polanyi 1936c). One is to social unity. The other is to freedom and self-determination. In respect of freedom, modern history had exhibited a clear upward curve. Until the nineteenth century, the curve had progressed smoothly enough but at that historical juncture its economic and political vectors began to conflict. In politics, the movement continued, toward individual self-determination, but in economic life, private ownership prevented most individuals sharing in responsibility for production (Polanyi 1936b). economic progress did yield mechanical inventions such as “the spinning jenny and the power loom” the successful introduction of which, however, necessitated a “dictatorship” of owners within the factories (Polanyi 1936a). Under laissez-faire conditions, despotism in the workplace proved compatible with the expansion of the suffrage, given that states were prepared to leave private capital to its own devices. But the logic of free property rights led to the expropriation of the mass of artisans and small producers, the logic of free competition led to monopolisation, and the logic of laissez-faire gave rise to a protective counter-movement. This marked a critical historical inflection point. with the achievements of the counter-movement, laissez-faire was replaced by regulated (or “organised”) capitalism, and political power quite suddenly found itself “an effective instrument of influencing the economic sphere” (Polanyi 1936a). In this way, the counter-movement became entangled with “the advance of popular government”, with the economically dispossessed classes deploying the vote to demand protection from market forces (Polanyi 1944). In sum, market freedom had contributed to the demand for political freedom, in the form of democracy. But democracy, in turn, was channelling and amplifying demands from the producing classes for the curtailment of market freedom.

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with the achievements of the counter-movement, Polanyi explains, the transhistorical tendencies to freedom and unity were forced to develop in “false”—stunted and contradictory—ways. The tendency to freedom manifested itself in the extension and deepening of democracy, including into the economic sphere, but this was “prevented by the class structure of society due to the capitalist system” (Polanyi 1934a). Challenges to the dominance of the market system failed to overcome the “basic incompatibility of capitalism and political democracy”, and “the mutual interference of industry and state, economics and politics was not disciplined by any higher principle”. As a result, the efforts of the countermovement remained haphazard and isolated, ensuring that the “unity of society” could not be properly restored (Polanyi 1934a). Instead, organised capitalism “merely increased the strain on the social system” (Polanyi, n.d.). The resulting social stalemate was summarised by Polanyi, in unpublished notes, thus: “economic power wielded by one class. Political power, in virtue of numbers, by another. The economic system becoming the fortress of the one class, the political system of another” (Polanyi 1934a). This was in Polanyi’s view the taproot of the mid-twentieth century breakdown of liberal civilisation, as he went on to elucidate in The Great Transformation. Rousseau and the paradox of freedom One of the side effects of the collapse of liberal civilisation was, Polanyi argued, the demise of the idea of absolute freedom, or ‘negative liberty’ as it later came to be known. This encompassed the idea of freedom associated with laissez faire economic policy (“the freedom to make a coal mine with a single shaft, or the freedom to send children up narrow chimneys” (Polanyi 1934b)). More generally, negative liberty was the freedom of “the wild ass in the desert, … of the freebooter on the high seas” or of the racketeer, all of whom are “free because they are outside society, not free through society; they have liberty apart from society not in society”. This view of freedom, Polanyi proposed, was “merely an accessory of liberal economics” generated under conditions of liberal capitalism; “an inheritance of the liberal age”, the outcome “of the denial of the underlying unity of society”. As such, it was “doomed to disappear” (Polanyi 1934a). For, in market societies, with their institutional separation of the political and economic spheres, absolute freedom had been understood simply as “the possibility of acting ‘freely’ in the political sphere”, with the industrial sphere removed, as it were, from society. what this ignores, he continued, is that in the industrial sphere: the organisation of production in factories necessarily implies acting under orders, and that the great mass of the people act under the orders of a small group of owners. The illusion of absolute freedom is thus acquired by limiting the idea of society to the narrow field of politics, and by removing from the picture the life of man as a producer. Liberal freedom is ‘absolute’ at the price of irrelevancy; for every worker knows from his own

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experience how much coercion he undergoes in his daily life as a producer that cannot be remedied by the use of his vote at general elections. (Polanyi 1939) It is in the working class, Polanyi concluded, that the idea of ‘societal liberty’ is rooted, for it is workers who experience most acutely both the dependence of society upon its human substance and that of each individual upon society. From this recognition stemmed the socialist insights that all human behaviour has social consequences and that all social institutions rest upon the actions of individuals, and it is these that underpin the core socialist ethic: that acting in freedom means acting according to the consciousness that we must bear responsibility for our involvement in the mutual relations of people towards each other. Freedom here signifies not freedom from duty and responsibility—which Polanyi sees as the stance typical of bourgeois political theory—but a more communitarian conception of freedom through duty and responsibility. The freedom we appear to lose by recognising the “reality of society” is illusory, while the freedom we gain is valid. As Polanyi put it, “man reaches maturity in the recognition of his loss and in the certainty of ultimate attainment of freedom in and through society” (Polanyi 1938, emphasis in original). In thinking through these paradoxes, Polanyi turned to Rousseau. In gáspár Miklós Tamás’ terms, Polanyi was a ‘Rousseauian’. In his youth, he had supported a Rousseauian movement, Russian populism. During his subsequent turn toward liberalism, his strategic political orientation tended firmly toward moral regeneration. when he (briefly) entered the orbit of anarchism it was to its most Rousseauesque guru—Tolstoy—that he was drawn. And when he gravitated closer to social democracy, his enthusiasms were either for thinkers such as g. D. H. Cole and Ferdinand Tönnies who drew inspiration from Rousseau, or for those who, while grouped under the banner of Marxism, were in Tamás’ sense Rousseauians, their goal being the abolition of the proletariat qua caste through its cultural elevation and accession to full citizenship and political rights via the suffrage (Tamás 2006). Polanyi regarded the genevan philosopher as a revolutionary (and, despite himself, revolution-inspiring) figure, and identified with the basic elements of Rousseau’s Weltanschauung: his egalitarianism and democratic patriotism, his affirmation of religion, and his diagnosis of alienation as the central affliction of modern society. Like Rousseau, he contrasted the virtuous peoples of the ancient world, living simply, gemeinschaftlich and close to nature, with modern Gesellschaft, dominated by an exchange-oriented economy that breeds venality, greed and inequality (Polanyi’s elaboration of this idea, famously, was constructed upon the precept that market societies are artificial, that they form the historical exception rather than the natural rule (Tamás 2006)). And a number of other tenets of Rousseauian political philosophy were shared by Polanyi. One is a conviction in the emancipatory potential of civic education, entailing the belief that when the people consist of equal and informed

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citizens, educated to the kind of life that their political institutions require, conflicts of interests will subside, allowing Reason to take hold (O’Hagan 2003). Another is the idea that the dynamic of historical change is governed less by power or production than by culture—in the broad sense of moral habits moulded by social and political institutions (Bachofen 2011). A third is the postulate that morality is rooted in social connections, such that a citizen’s duty to accept the general will arises from a conscious awareness of her belonging within a moral community in the social construction of which she participates. In 1943, Polanyi returned to Rousseau’s philosophy of freedom, in a significant but (to date) unpublished paper. In it, he presents Rousseau as the political theorist who had first truly discovered and apprehended “the people in the flesh”—i.e. the common people as the repository of culture, valid in themselves rather than as materiel to be polished up; “the people” which embodies a distinctive culture and morality, one that will tend to attract “the sympathy and the solidarity” of persons of good faith (Tamás 2006). Rousseau’s recognition was “breathtaking”, in Polanyi’s words: “what the people felt, thought and did; the way they worked and lived; their traditions, their loyalties were valid and sound. Their faiths and beliefs were deep and inspired; their native vigour and moral sense, their patriotism and natural religion made them the stuff of god’s creation” (Polanyi 1943). This discovery, crucially, enabled Rousseau to begin to address the “paradox of freedom”. That paradox can usefully be mapped, Polanyi argued, to the two horns of the classic Rousseauian dilemma, of individualism and totalitarianism. The totalitarian element “derives from the naturalistic law of survival” (every human society “behaves in such a fashion as to ensure its survival, irrespective of the will of the individuals composing it”) while its individualistic counterpart “derives from the normative principle of natural law” (every free society “bases its behaviour on the wills of the persons constituting it” (Polanyi 1943)). Rousseau’s concept of volonté générale, Polanyi proposes, is “simply the principle of survival”.5 But if that is the case, how is a free society possible? It is not enough to point to democracy and majority rule, for that only begs further questions, notably, what is it that sanctions the freedom of minorities? Polanyi believed that Rousseau had not resolved the paradox of freedom, but that he had at least, more than anyone, pointed toward the solution. Crucially, it was Rousseau who discovered “the people” (not as a political term meaning the multitude; not as an economic term, meaning the poor; but “the people as the repository of culture”); it was he who discovered the ‘reality of society’ (he recognised political society “as real, i.e., subject to laws of nature and morality”) and it was he who “linked the concept of a free society with the idea of a popular culture”. Rousseau was, in short, “the prophet of a popular culture, outside of which, in the convictions of the day, no free society is possible”. He had shown how an individual remains free when obeying laws that she has voted against. For, the individual belongs to a political community, a sovereign people, and as such

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is simultaneously ruler and ruled, governor and governed. Through social bonds (or the ‘social contract’) each citizen is pledged to support her fellows, and receives “the same pledge from all, in exchange”. Through these insights, Rousseau had discovered the path toward freedom in a complex society, with freedom understood as rational self-direction, a path that can only be realised through the collective control of the common life, a reconciling of individual freedom with the reality of society. This freedom would arise when “the dispositions of the people”, enabled by a process of collective self-education and moral discipline, “are such that they will spontaneously work their institutions in such a way as to allow society to survive”. Here we can see why Polanyi celebrated Rousseau’s “discovery of the people”. For if, in the abstract realm of normative political theory, the fulfilment of the democracy’s promise can never be achieved due to “the inherent antagonism between the ideals of freedom and equality”, in the “concrete medium of cultures, however much they differ”, liberty and equality may indeed coexist, and achieve simultaneous fulfilment (Polanyi 1943). Rousseau’s political philosophy was not a matter for scholars alone. It was, Polanyi enthused, “transforming the history of the race”. Implicitly, it was through Rousseau’s ideals “that the French Revolution, the American Revolution [and] the Russian Revolution were made possible” (Polanyi 1943). what is Polanyi driving at here? essentially, he believed that History was flowing (notwithstanding the inevitable and sometimes perilous eddies) toward deeper democratisation. Its pumping stations were the great revolutions, even though their democratic consequences could never immediately be apprehended. There were differences among the four. england’s revolution was libertarian, with no room for equality; the French Revolution was egalitarian, with less of an accent upon individual liberty; and the American represented a balance between equality and liberty. The Russian Revolution centred upon “the forms of the daily life of the working people”, and therefore emphasised the ideal of “fraternity rather than liberty and equality”. The inspiration behind them all, however, was the same: the desire for self-determination (Polanyi 1947). Conclusion From this survey of Polanyi’s philosophy of freedom, it is apparent that it exhibits a tension between voluntarism and determinism. At times, Polanyi appears an idealist, insisting upon the vital and autonomous role of ethics and the openendedness of history. At other times, he appears to identify a powerful secular tendency toward social progress, including a trend toward freedom, and some of his formulations carry the conviction that History is ‘on our side’. In the evolution of his thought, a pivotal moment occurred when, following the revolutions of 1918, the emphasis in his political thought switched from idealistic voluntarism toward a more deterministic philosophy—similar to that of Austrian social democracy. In the 1940s, Polanyi’s reappraisal of Rousseau appeared to offer a reconciliation of determinism and voluntarism (or realism and idealism), in that

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Rousseauian philosophy combines sociological recognition of the determined ‘realities of society’ with a spirited advocacy of cultural transformation and moral renewal. Rousseau’s schema, however, was geared to a world of spatially circumscribed polities—city states and nation states—and its success would depend upon a relatively egalitarian social framework. Polanyi hoped that nationbased democratic socialist societies were coming into being, in mid-twentieth century Russia, Britain and elsewhere, but these hopes did not materialise. Instead, the global capitalist system, with its tendencies to accumulation, economic globalisation and class polarisation, resumed its expansion. Its constitutive liberty consists in the freedom of private property ownership; and if freedom faces a conundrum today, it is the challenge of overturning the liberty to make private property of the world.

Arato, Andrew. 1985. “Austromarxism and the Theory of Democracy.” In The Austrian Socialist Experiment: Social Democracy and Austromarxism, 19181934, edited by Anson Rabinbach, 135–40. Boulder: westview Press. Bachofen, Blaise. 2011. “why Rousseau Mistrusts Revolutions. Rousseau’s Paradoxical Conservatism.” In Rousseau and Revolution, edited by Holger Ross Lauritsen and Mikkel Thorup. London: Continuum. Bauer, Otto. 1976. Werkausgabe Band II. edited by Arbeitsgemeinschaft für die geschichte der österreichischen Arbeiterbewegung. wien: europaverlag. Brown, R. 1977. Guild Socialism and the Idea of Function. MA Dissertation. Swansea: University of wales. Carpenter, Niles. 1922. Guild Socialism. An Historical and Critical Analysis. New York: Appleton. Czerwínska-Schupp, ewa. 2005. Otto Bauer. Studien Zur Sozial-Politischen Philosophie. Berlin: Peter Lang. Duczynska, Ilona. 1978. Workers in Arms. The Austrian Schutzbund and the Civil War of 1934. New York: Monthly Review Press. glass, S. T. 1966. The Responsible Society: The Ideas of Guild Socialism. London: Longman. Jaszi, Oscar. 1924. Revolution and Counter-Revolution in Hungary. London: P.S. King and Son. Litván, györgy. 1990. “Karl Polanyi in Hungarian Politics.” In The Life and Work of Karl Polanyi. A Celebration, edited by Kari Polanyi Levitt, 30–37. Montréal/ New York: Black Rose Books. Loew, Raimund. 1979. “The Politics of Austro-Marxism.” New Left Review I/118 (December). https://newleftreview.org/I/118/raimund-loew-thepolitics-of-austro-marxism. O’Hagan, Timothy. 2003. Rousseau. 1. publ. in paperback. The Arguments of the Philosophers. London: Routledge.

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Oppenheimer, Franz. 1910. Theorie Der Reinen Und Politischen Ökonomie. Ein LehrUnd Lesebuch Für Studierende Und Gebildete. Jena: georg Reimer. Pearce, Brian, and Michael woodhouse. 1995. A History of Communism in Britain. London: Bookmarks. Polanyi, Karl. n.d. “Notes on 1919 edition of g. D. H. Cole, Self-government in Industry.” Con 05 Fol 02. Karl Polanyi Digital Archive. http://www.concordia.ca/research/polanyi/archive.html. ———. 1919a. “worauf es Heute Ankommt. eine erwiderung.” Translated by Kari Polanyi Levitt. Con 02 Fol 09. Karl Polanyi Digital Archive. http://www.concordia.ca/research/polanyi/archive.html. ———. 1919b. “worauf es Heute Ankommt. eine erwiderung, Karl Polanyi Archive 2-9.” ———. 1920a. “Draft Manuscript.” Con 02 Fol 01. Karl Polanyi Digital Archive. http://www.concordia.ca/research/polanyi/archive.html. ———. 1920b. “early Christianity and Communism.” Con 04 Fol 09. Karl Polanyi Digital Archive. http://www.concordia.ca/research/polanyi/archive.html. ———. 1922. “Die Neue gesellschaftslehre.” Con 02 Fol 01. Karl Polanyi Archive. http://www.concordia.ca/research/polanyi/archive.html. ———. 1934a. “Notes and Outlines: The Christian and the world economic Crisis.” Con 08 Fol 07. Karl Polanyi Digital Archive. http://www.concordia.ca/research/polanyi/archive.html. ———. 1934b. “Notes and Outlines: The Rise and Decline of Marketeconomy.” Con 08 Fol 07. Karl Polanyi Digital Archive. http://www.concordia.ca/research/polanyi/archive.html. ———. 1936a. “Morley College, Lecture XXVI.” Con 15 Fol 04. Karl Polanyi Digital Archive. http://www.concordia.ca/research/polanyi/archive.html. ———. 1936b. “Social Values in the Post-war world.” Con 21 Fol 03. Karl Polanyi Digital Archive. http://www.concordia.ca/research/polanyi/archive.html. ———. 1936c. “The Paradox of Freedom.” Montreal, Canada. Con 21 Fol 01. Karl Polanyi Digital Archive. http://www.concordia.ca/research/polanyi/archive.html. ———. 1938. “The Meaning of Peace.” Con 18 Fol 39. Karl Polanyi Digital Archive. http://www.concordia.ca/research/polanyi/archive.html. ———. 1939. “Coercion and Defence.” Con 20 Fol 16. Karl Polanyi Digital Archive. http://www.concordia.ca/research/polanyi/archive.html. ———. 1943. “Jean Jacques Rousseau, or Is a Free Society Possible.” Con 18 Fol 24. Karl Polanyi Archive. http://www.concordia.ca/research/polanyi/archive.html. ———. 1944. “The Study of Human Institutions (economic and Social).” Con 15 Fol 10. Karl Polanyi Digital Archive. http://www.concordia.ca/

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research/polanyi/archive.html. ———. 1947. “The Meaning of Parliamentary Democracy.” Con 19 Fol 08. Karl Polanyi Digital Archive. http://www.concordia.ca/research/polanyi/ archive.html. ———. 2016a. “Credo and Credulity (1911).” In Karl Polanyi. The Hungarian Writings, edited by Dale gareth, 49–51. Manchester: Manchester University Press. ———. 2016b. “guild and State (1923).” In Karl Polanyi. The Hungarian Writings, edited by Dale gareth, 120–21. Manchester: Manchester University Press. ———. 2016c. “guild Socialism (1922).” In Karl Polanyi. The Hungarian Writings, edited by Dale gareth, 118–19. Manchester: Manchester University Press. ———. 2016d. “Karl Kautsky and Democracy (1922).” In Karl Polanyi. The Hungarian Writings, edited by Dale gareth, 114–17. Manchester: Manchester University Press. ———. 2016e. “Oration to the Youth of the galilei Circle (1919).” In Karl Polanyi. The Hungarian Writings, edited by Dale gareth, 74–78. Manchester: Manchester University Press. ———. 2016f. “Speech on the Meaning of Conviction (1913).” In Karl Polanyi. The Hungarian Writings, edited by Dale gareth, 55–59. Manchester: Manchester University Press. ———. 2016g. “Believing and Unbelieving Politics (1921).” In Karl Polanyi. The Hungarian Writings. Edited by Gareth Dale, 99–107. Manchester: Manchester University Press. ———. n.d. “The Present Age of Transformation.” Con 31 Fol 10. Karl Polanyi Digital Archive. http://www.concordia.ca/research/polanyi/archive.html. Sully, Melanie. 1985. “Social Democracy and the Political Culture of the First Republic.” In The Austrian Socialist Experiment. Social Democracy and Austromarxism. 1918-1934, edited by Anson Rabinbach. Bolder/ London: westview Press. Tamás, Miklós gáspár. 2006. “Telling The Truth About Class.” www.gerlo.hu/kommunizmusvita/tgm/telling_the_truth_about_class.pdf. Thomasberger, Claus. 2005. “Human Freedom and the ‘Reality of Society’. Origins and Development of Karl Polanyis Ideas during the Interwar Period.” The History of Economic Thought 47 (2).

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NOTeS 1 Dühring and Oppenheimer were the most forceful advocates of this view. 2

Karl Polanyi Archive 1-51, Karl Polanyi (1923) ‘Honourable and dishonourable labour’ [A megvettet és megbecsült munka], Bécsi Magyar Újság, 1 May.

3

whether this requires the abolition of the wage labour system altogether or merely sociopolitical measures to ensure workers’ full incorporation as citizens into the body politic is unclear. Indeed, this was the defining ambiguity of guild socialism.

4

Tawney’s relationship with guild socialism was complex. On some issues (for example his theory of the state) he was closer to orthodox Fabianism.

5

Michael Polanyi Papers (Regenstein Library, University of Chicago), MPP-17-10, Karl Polanyi (1943) to Misi, 29 September.

Knowledge, Freedom and Democracy Friedrich Hayek and Karl Polanyi on the Market Society and Beyond

Paula Valderrama Introduction Friedrich Hayek and Karl Polanyi are today regarded as key intellectual figures, whose antagonistic ideas shape the current political debate. Hayek is basically considered an advocate of market fundamentalism, whereas Polanyi is seen as a defender of regulated “embedded” markets. I argue in this essay that the radical difference between both does not rely on the application or non-application of market regulations, but on the diametrically opposed understandings of the possibility of achieving freedom under the condition of social complexity. The starting point of both philosophies is the so called “Übersichtsproblem,” i.e., the economic and political problem set by the missing centralized oversight into human needs and available resources (Section 2). Hayek not only praises the market as the solution to the economic problem of the complex society, but also considers it a substitute for democratic politics (Section 3). As the market becomes the matrix of Hayek’s ideal society, all other spheres, including politics and morals, must adapt to the market requirements; moral values are set to re-evaluation by Hayek, in particular, the idea of freedom (Section 4). Polanyi, on the contrary, does not consider the market a stable political solution (Section 5). By means of the theory of reification (Marx), Polanyi shows that market prices systematically block oversight and, therefore, the possibility of assuming social responsibility. The (neo)liberal concept of freedom is a vain illusion, as it declares a state of irresponsibility and dependence (of market laws) “free”. Polanyi looks for democratization forms, which replace market price formation; the principle of oversight is the main political guideline for Polanyi’s socialist transformation (Section 6). Red Vienna: Polanyi’s and Hayek’s common roots The common theoretical roots of Hayek and Polanyi can be found particularly in the intellectual discussion of Red Vienna of the 1920s. After the First world war and the collapse of the Austro-Hungarian empire, a democratically-elected government, dominated by socialist forces, took power (Polanyi Levitt 2013, 27ff.). The economist Ludwig von Mises, a leading figure of the Austrian School of economics, opposed strongly the social measures taken by the communal government. In his article “economic Calculation in the Socialist Commonwealth” (Mises 1920), he criticized the ideal of socialism as irrational. Socialism—

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understood as an economic system characterized by the state ownership of the means of production—is unfeasible, Mises states, for in such a system no economic calculation can take place. economic action, Mises asserts, is carried out when the means for set goals are used efficiently. economic rationality can therefore only exist if there is enough knowledge of the goals as well as the means. Mises uses a contextual argument in order to support his thesis. In a smaller context, Mises points out, it is possible to oversee existing preferences and available production methods in order to take an efficient decision. In a complex society, however, this kind of oversight is impossible as there is no way to centralize the manifold dispersed information, which is only possessed by the individuals. ergo: in absence of market prices, which provide the economic value of consumer goods and means of production, the socialist central authority cannot decide economically. The central authority must act arbitrarily, deciding over the satisfaction of human needs, as well as the use of resources without having enough information about them. Socialism is as economic system unfeasible, for no economic calculation can take place. It is also a stark utopia, for the political goals pursued by socialism—social justice, freedom and social security—cannot be achieved. The missing oversight (Unübersichtlichkeit) into the real human needs and productive possibilities causes non-intentional consequences and disables thereby any socialist plan. Although freedom and technical productivity are striven for in socialism, totalitarianism and inefficiency are the real results. For Mises it is clear, the only compatible system with a free, modern industrial society is capitalism. Hayek will consent and further develop Mises’ conclusion. Market prices as discovery procedure The debate about the “infeasibility of socialism” was brought from Vienna to London by Friedrich Hayek in the 1930s (Hayek 1935a, 1935b). Hayek’s goal was to show that not only state socialism, but more generally all social reforms can cause non-intentional consequences for society. In reproducing Mises’ argument, Hayek develops his own line of reasoning (Hayek 1935b, 1945, 2002). The economic problem, he states, is not the technical problem of looking for the suitable means for a given goal (Hayek 1935a, 3–6). The economic problem of society relies, on the contrary, on the fact that there are neither “given” goals, nor “given” resources (Hayek 1935a, 6, 1935b, 210f, 1945, 519f). The economic problem is, therefore, the problem of the application of unknown resources to unknown goals. It is therefore a knowledge problem; a problem set by the diversity and the dispersion of relevant information. The information about desires, preferences, know-how, etc. is never given once for all, Hayek states; not even at the individual level. For individual knowledge emerges within the process of human action; it arises as a result of the individual decisions towards changing circumstances (Hayek 1935b, 210f.). In the reaction to change, human beings develop what Hayek calls their “knowledge of the particular circumstances of time and place” (Hayek 1945, 521). This kind of

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knowledge, although not “scientific,” involves “unique information,” concerning the personal circumstances and the own capacity of adaptation to change (Hayek 1945). It is specific knowledge only available to the individual; therefore, it can neither be captured by statistics, nor collected by a central authority (Hayek 1945, 524). For this reason, only a decentralized mechanism of allocating resources is worth considering, one through which the tacit knowledge of the individuals can emerge and be made available for society (Hayek 1945). Hayek is sure that the capitalistic market is the only process that achieves this goal. Hayek argues the competitive market enables the utilization of dispersed information by human beings, who do not possess the information. Therefore, it coordinates the decisions and actions of individuals situated worldwide, who do not have any direct relationship to each other (Hayek 1945, 526). The market accomplishes, thus, a kind of miracle (Hayek 1945, 527). Market agents act according to prices and as they do so, they use the information about human circumstances contained in prices, however, without being aware of it (Hayek 1945, 525f). The fact of the dispersion of knowledge is and remains a given for Hayek; the missing oversight of this dispersed information is not improved by the market. “There is hardly anything that happens anywhere in the world that might not have an effect on the decision he [the market agent] ought to make,” states Hayek (Hayek 1945, 525; emphasis in orig.) However, “he need not know of these events as such, nor of all their effects,” Hayek stresses (Hayek 1945, 525; emphasis in orig.). The causes and consequences of price increases or price falls are “of no interest” for the market agent (Hayek 1945, 525). For the miraculous advantage of the market consists exactly in the matter that the market agent is able to use this information without having to possess it. The economic calculation is executed under capitalism by individuals, who are the best judges of goals and means; the market coordinates this information in a way that a sort of aggregated economic decision for the whole society emerges. The best use of available resources is guaranteed this way. The market solves the economic problem of society, but also achieves a political equilibrium, according to Hayek. For the market economy provides the perfect conditions under which democratic acknowledged goals—such as wealth, freedom and justice—can be achieved. However, human values and political goals must be redefined, in order to suit the market reality. Not only politics, but also morals must be made “market-conform.” The ideal society à la Hayek is, therefore, the market society per se, as the market sets the universal norm, under which every sphere has to be moulded. Hayek’s principle of market-conformity The competitive market becomes the core of Hayek’s political ideal. Laissez-faire is considered obsolete (Hayek 2007, 71, 85); instead, he suggests the political leitmotiv of “planning for competition” (Hayek 2007, 90). This principle involves state action, in order to create, sustain and promote the market economy (Hayek

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2007, 86). “Planning for competition” includes the setting of a detailed thought framework, under which competition can prosper (Hayek 2007, 86). The creation of further markets and the application of the market logic in areas which were previously organized by non-market principles, is part of this postulate. Hayek supports as well market regulations that are reasonable (e.g., increase market transparency) and applied equally to all market participants. Policies to avoid and correct market failure are accepted by Hayek too, as well as the provision of “an extensive system of social services,” as long as it does not disturb the functioning of the market (Hayek 2007, 87). Market conformity is thus the rule for neoliberal politics, but also the main norm for moral philosophy under neoliberalism. For Hayek’s principle of “planning for competition” additionally involves the re-evaluation of the existing moral and political values. Particular attention is set in the concept of freedom. Freedom, Hayek defines, is the political condition under which coercion from some to others has been reduced to a possible minimum (Hayek 1978, 11f.). Coercion is evil, because the person cannot follow her own will but must follow the will of another (Hayek 1978, 11f.). It devalues the person, for she cannot act according to her own ends, but serves the ends of another (Hayek 1978, 11f.). The practice of coercion, according to Hayek’s definition, presupposes a will; that is why coercion can only be exercized by persons or by organizations. The state is considered an organization by Hayek, while the market is not. For the market is a “spontaneous order”; a historically grown-up institution which cannot be held responsible for the results it causes. Market outcomes—such as poverty, unemployment, social exclusion, or misery—cannot be considered sources of coercion, according to Hayek; therefore, they pose no problem to individual freedom. Freedom understood as absence of coercion means economic freedom in practice. The market becomes the condition of possibility of freedom in Hayek’s philosophy. Market and freedom are furthermore identified as related parts of one system: There is no freedom without the market and there is no market without individual freedom. The market provides the possibility of freedom and, at the same time, determines the field of responsibility. For freedom and responsibility, Hayek is aware, are mutually dependent values (Hayek 1978, 71). There is no freedom to act, without assuming the responsibility of the own action, and vice versa, there cannot be attribution of responsibility without the condition of free action. Responsibility, Hayek states, can be only attributed at an individual level (Hayek 1978, 83). Individuals can and must assume responsibility for their own actions; however, the complexity of the human relations sets limits to the attribution of responsibility. The agent can only be made responsible for the consequences within his horizon of knowledge (Hayek 1978, 83). The field of responsibility must be limited to those effects of the individual action, which the individual “can be presumed to judge” (Hayek 1978, 83). The direct consequences of the action represent the terrain of legitimate responsibility, whereas the indirect consequences—for nature,

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society, or the world economy—cannot be taken into consideration, according to Hayek (Hayek 1978, 83). The realities of unemployment, of poverty or famine— as cause or consequence of market prices—are simply “of no interest” to the market agent, Hayek states (Hayek 1945, 525). For there is no way to assume responsibility for these events: there is neither enough knowledge about the causeconsequence relationship of these social phenomena available, nor is there any possibility to consciously change them, without causing non-intentional results. The complexity of industrial society and its correspondent Unübersichtlichkeit are the facts, which limit the field of responsibility. In this Hayekian context, the concept of democracy—understood as the liberty to consciously contribute to the shaping of society—does not make any sense. For there is no possibility for the individual to shape a given social reality; a reality, which in fact emerges out of the endless human actions, but is not the result of human intention, according to Hayek. The concept of democracy must, therefore, be re-evaluated and made market-conform. The (neo) liberal concept of democracy does not imply the possibility of radical change. Neoliberal democracy is limited by the market economy. Market conformity is, once again, the rule and the limit set to democracy. Polanyi’s critique of the (neo) liberal idea of “freedom” and “democracy” The concept of freedom is a central category in Polanyi’s social philosophy. without a clear understanding of it, it is difficult to comprehend Polanyi’s vision of socialist transformation. The whole work of Polanyi can, I think, be understood as an effort to answer one particular question. As Polanyi put it in a letter to a friend (1925): How can we be free, in spite of the fact [of] society? And not in our imagination only, not by abstracting ourselves from society, denying the fact of out being interwoven with the lives of others, being committed to them, but in reality, by aiming at making society as ‘übersichtlich’, as family’s inner life is, so that I may achieve a state of things in which I have done my duty towards all men, and so be free again, in decency, with a good conscience. (Polanyi, as quoted by Cangiani and Thomasberger 2002, 13, emphasis in orig.) For Polanyi the relationship between the individual, who strives for freedom, and the “fact of society” is the most important aspect of the problem of freedom. Like Rousseau, Polanyi thinks that the understanding of freedom as independence (from society) is passé. On the contrary, he uses the idea of freedom won during the enlightenment: freedom can only be thought within society (Polanyi 2018, 311312). The question, which arises in this context, is: how is freedom possible in a complex society? More specifically: which is the problem of freedom in capitalism? which obstacles to freedom can eventually be overcome? which are the real limits for the realization of freedom?

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The concept of freedom must be re-thought by means of these questions. The (neo) liberal understanding of freedom is blind to these issues and therefore appears short-sighted to Polanyi. According to the (neo) liberal vision, the human being is mainly considered a “market agent,” whose liberty consists solely in his “freedom to choose” within the market. Human beings are “free” to buy and “free” to sell, but have no awareness about the relationship of their actions within the existing social reality. They are blind to the social consequences of their own actions; their missing knowledge “liberates” them from any responsibility towards society. For Polanyi the (neo) liberal concept of freedom is merely an “illusion” (Polanyi 2018). For the idea of freedom can neither be separated from the concept of responsibility, nor can it be understood without the more profound idea of the individual as a moral subject and as a person in a community. The concept of the individual has, according to Polanyi, Christian roots and was developed further by the ideas of the enlightenment finding its climax in the Marxian interpretation (Polanyi 1935, 365f.). The assertion that human beings have a soul, Polanyi states, contains the idea of the uniqueness of the person (Polanyi 1935, 369f.). The idea of human rights and the conviction of human dignity, which arose at the enlightenment, are merely an evolution of the idea of the uniqueness of the person. The idea that every person is unique, additionally involves the concept of equality (Polanyi 1935, 369f.). The thesis of fraternity, which is nothing else than the assertion about the “equality of the individuals as individuals,” (Polanyi 1935, 366) is inseparable from the idea that the person can only exist in community, i.e., in interaction with others (Polanyi 1935, 370). Polanyi concludes that the understanding of the individual, which is at the basis of modern thought, involves the concept of equality as well as the idea of the person in a community and thus, it necessarily includes the moral principle of social responsibility. The individual is unique and ultimately free, because he can assume personal responsibility for his own actions and for the society, in which he lives; he is able to form society according to his will and wishes, for society is essentially his creation (Thomasberger 2003, 2). However, under capitalistic conditions, striving for freedom is vain, for market and capital set the law and determine the basic structure of society. Market prices, interest rates, profit rates, etc. are objective entities under capitalism; realities, to which human action has to adapt (Polanyi 2005a, 260f, 2018). Polanyi analyzes the nature of these realities and concludes by means of the theory of alienation of Marx that they are nothing else than reified human relationships, i.e., phenomena which have no existence of their own, but derive from the relationships among human beings, in particular, the relations that emerge from the actions of human beings as consumers and as producers (Polanyi 2018). Although market prices, interest rates, etc. are real, their existence is not absolute, Polanyi states. For they result out of the sum of human actions, but also out of the institutional arrangement, under which these actions take place. In capitalism, however, market prices are seen as objectively given entities;

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market laws dominate society and political will. The capitalistic market society is, therefore, the anti-thesis of Marx’s ideal of the human society (Polanyi 2018). For human is a society, when the relationships among human beings are so transparent that they resemble a community (Polanyi 2005a, 252–57, 2018). A community is characterized by the fact that human beings relate to each other directly, and, therefore, care and assume responsibility for each other. In a community, human beings can be free, because they are able to shape it according to held values and principles. The predominant role of market prices within the capitalistic society disables the constitution of the society as a community (Polanyi 2018). The fact of commodity fetishism (Polanyi 2018) sets a radical problem to freedom, as prices become an “invisible barrier” among human beings (Polanyi 2005c, 268). Market prices isolate human beings from each other (Polanyi 2005c, 268), as they obscure the relation between the individual action and the (indirect, but still real) social consequences. Responsibility cannot be assumed by the individual in this context; freedom without responsibility is for Polanyi a vain illusion. The moral problem set by market prices is given by the fact that prices transmit existing information without making it consciously available for the individual. Market agents utilize prices, as Hayek states, but they do not achieve oversight into the human relationships, which are behind the “walls” of market prices (Polanyi, quoted by Dale 2010, 36). while market agents act and oversee the consequences in Marktdiesseits (on this side of the market), everything in Marktjenseits (beyond the market) is null and void (Polanyi 2018). The Unübersichtlichkeit of the complex society sets a radical problem to freedom, for individual freedom cannot be realized without assuming responsibility for the consequences of free action. Social phenomena—like poverty or unemployment —are neither natural catastrophes nor destiny, but (at least partly) an outcome of human intentions (political will, institutional arrangements). Social reality is an indirect, yet a real consequence of human decisions. Polanyi will declare the (neo) liberal concept of freedom an “illusion,” for it allows “free” action without ascribing corresponding responsibility. This kind of freedom is, therefore, a contradiction in terms. For if there is no knowledge of the consequences of free action, there cannot be a rational decision. Rationality is, however, the condition of free action. If there is no knowledge, Polanyi states, no responsible decision can be made; and if there is no responsibility, then freedom is an empty concept (Polanyi 2018). For Polanyi the knowledge used in the market process is not enough, in order to enable a free and responsible human action. For this kind of knowledge merely concerns the individual preferences regarding the consequences of the action for the individual himself (and his family); however, it does not include individual preferences concerning social reality (Polanyi 2005d, 81–85). The individual acts as an “isolated” market agent; his character as social human being is, however, denied (Polanyi 2005d, 81–85). The market agent acts as if he had no relation

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with society; he lives solely in what Polanyi calls his “being out-of-society” (außergesellschaftliches Dasein) (Polanyi 2018). The market agent denies the relation between himself and the social reality; he is blind to the fact of being interwoven with other human beings. Market agents lack as such what Polanyi calls social knowledge (Polanyi 2018), i.e., the awareness that society is ultimately built on relationships among human beings. Social knowledge involves the consciousness that there is, on the one hand, no human behaviour that is completely without social consequences and that, on the other hand, there is no existing entity, no power, no structure and no law in society, nor can there be, that is not in some way based on the behaviour of individual human beings. (Polanyi 2018, emphasis by Polanyi) A progressive, modern concept of freedom must be based on social knowledge. The socialist concept of freedom involves this insight. According to Polanyi ‘acting freely’ means acting while conscious of the responsibility we bear for our part in mutual human relationships—outside of which there is no social reality—and realizing that we have to bear this responsibility. Being free therefore no longer means, as in the typical ideology of the bourgeois, to be free of duty and responsibility but rather to be free through duty and responsibility. (Polanyi 2018, emphasis by Polanyi) Polanyi’s social philosophy must therefore be understood as the search for an institutional form, which enables direct human relationships, and thus increases oversight and social freedom as much as possible. Polanyi is not blind to the “reality of society” and thus, to the fact, that reification is unavoidable in a complex society (Polanyi 2005c, 274). Power, economic value, public opinion, the state, the law, and markets for commodities, are indispensable realities in industrial societies (Polanyi 2005c, 274). Freedom must be achieved despite these realities, but not by denying their existence, but rather by confronting it. The questions which here arise are: how can the process of reification be stopped or at least decelerated? How can we reach more oversight into the human relationships which are the basis of society? The Marxian human society remains for Polanyi an ideal, a regulative idea, which cannot be completely achieved, but still aimed. Polanyi will look for forms to deconstruct objective entities (state and market!) into what they are essentially: relationships among human beings. The principle of oversight as guideline for a socialist transformation In capitalism, the deconstruction of market prices into human relationships is only theoretically possible; it is the task of socialism, Polanyi states, to carry this process into practice (Polanyi 2018, emphasis by Polanyi). The guiding leitmotiv for a socialist transformation is thus given by the principle of oversight. Oversight into the human relationships should be increased as much as possible, as oversight

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enables social knowledge, social responsibility, and, consequently, freedom and democracy. Polanyi asks himself, which kind of oversight is needed in a socialist society (Polanyi 2005d, 78f). while a capitalistic society requires information about capitalrelevant issues such as profit rates, wealth level or competition standards; a socialist society must rely on knowledge concerning production possibilities on the one hand, and regarding human needs and social standards on the other (Polanyi 2005d, 78f). This information must not be understood as data given by macroeconomic figures, but rather regarding individual knowledge, concerning the own needs, the own preferences (including social preferences), and the own capacities. Hence, socialism requires what Polanyi calls internal oversight (Polanyi 2005d, 116), i.e., information about individual states of mind (Polanyi 2005d, 116). Like Hayek, Polanyi argues that this multiple and diverse individual information cannot be collected by statistics and, therefore, would never be available for a central authority. A decentralized mechanism is required, through which every individual can express their knowledge about their own preferences and capacities. The market is in fact a decentralized institution, but, as we saw above, it merely coordinates a small part of the individual knowledge available. within the market, individuals judge solely in their being out-of-society (Polanyi 2018). Individuals express their preferences as “isolated consumers“ and “isolated producers,” however, their desires and convictions as social beings, i.e., as conscious members of society, do not surface. The task of increasing oversight in a complex society is, however, not a utopia. even in the capitalistic system, it is possible to find institutions and organizations, which provide internal oversight of human needs and capacities. Democratically organized trade unions, producer federations, consumer associations and political parties provide valuable information about the real states of mind of the people, according to Polanyi (2005b, 119–22). Trade unions posses knowledge about the worker’s real lives and problems; producer associations have valuable first-hand information about available know-how and internal perceptions of the industry; consumer associations provide information about real needs and desires, while political parties have access to normative principles and political ideals. Polanyi develops in the 1920s and as a reaction to Mises’ criticism to socialism, his political ideal of a radical democratic socialist society (Polanyi 1979, 2005b, 2005d, 2005e, 2018). By means of the ideas of guild-socialism (Cole) and of the functional democracy (Bauer), he works out a first version of what he calls a functional socialism. Polanyi certainly considers his own model to be too ideal (Dale 2010, 15). Nevertheless, I believe that this model provides valuable insights into Polanyi’s own thought structure. Polanyi’s functional socialism is an attempt to reduce reification and, therefore, to deconstruct market prices into real human relationships. Market price formation (for non-commodities) is substituted in this model by direct democratic agreements. Not only do the markets lose weight and primacy over society, but so

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too does the bureaucratic state (as reified entity too); instead, the functional organizations—producer and consumer associations, trade unions, political community—which possess internal oversight of human needs and preferences, assume the responsibility of specifying what Polanyi calls the “economy framework” (Polanyi 2005d, 96–99, 2005e, 126f), i.e., the social conditions, under which the markets (for commodities) can work. This framework, among others, includes the determination of wage scales (minimal and maximal wage), as well as price fixing for raw materials, staple foods, and other basic goods and services (Polanyi 2005d, 96–99, 2005e, 126f.). The determination of prices and/or quantities is not determined by the state, but rather an outcome of negotiations among the functional organizations (cooperatives, producer associations, political community, etc.). Polanyi hopes that reasonable compromises can be found, as these organizations do not represent private, but functional interests, i.e., interests, which are all vital for the good functioning of society. Polanyi’s ideal model is based on the functional theory, according to which society is a coherent whole, constituted in different functions; i.e., social spheres, each of which fulfill a certain role for society (Dale 2011). Fields like politics, economics, or religion are constituent parts of the same whole: although they serve an own purpose, they are interdependent from each other (Polanyi 2005d, 96–99, 2005e, 126f.). Cooperation among functional organizations is the basis of the survival of society. Polanyi strives for oversight, and thus for a higher degree of awareness about the relevance of the different social functions. Human beings need to understand that they are not only producers, and not only consumers, but always both at the same time (Polanyi, 2018). Human beings are moral, social and political beings. They are, therefore, capable to understand the importance of the different social functions. In this way, Polanyi states, a negotiation between functional organizations should not lead to an irresolvable conflict (Polanyi 1979, 83–89). Functional interests are ultimately the interests of each individual, as they play a vital role for the functioning of society. In functional socialism, human beings use their own knowledge of the circumstances, but this knowledge is not limited, like in Hayek’s model, to the knowledge of the “particular circumstances of time and place,” i.e., the knowledge of the isolated market agent. Human beings are under Polanyi’s ideal model not arbitrarily mutilated, but taken as a unity. Not only the needs and desires concerning consumer goods or production methods surface in this model, but also the social needs and the political views of the person. The expression of political opinions, moral values and normative principles are welcome in Polanyi’s model, for they are an important part of the individual. Democracy, Polanyi states years later, must learn to trust “the common man,” for he is the best judge not only of the own private circumstances, but also of key

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political issues (Polanyi 2017, 84f.). Concerning long-term aspects of the constitution of society, individual opinions are often more reliable than “experts” opinions, Polanyi states (Polanyi 2017, 84f.). Polanyi suggests the replacement of market price formation through conscious democratic decision-making. Under a functional democracy, not only the isolated market agent, but also the individual as a political being surfaces. The market society is, on the contrary, unstable, because it assumes economic rationality as the central aspect, which characterizes human beings. The (neo) liberal creed is based on a (false) belief in economic determinism (Polanyi On Freedom see below). It fails as political ideal, for it does not take any consideration of the natural sociality and morality of human beings. Moral and politics are constitutive parts of the reality of society; a modern society must be based on this fact. Polanyi is further aware that the reification process within a complex society cannot be stopped completely. Institutions such as the law, the state, the public opinion and the markets (for commodities) will continue to exist under socialism (Polanyi 2018). Socialism and capitalism do not differ in the existence or nonexistence of markets, nor in the existence or non-existence of private property (Polanyi 2005d, 73). Both—markets and private property—merely assume a different role in both systems (Polanyi 2005e, 128ff). In neoliberal capitalism, the whole organization of society is done by markets; therefore, capitalist markets set the law for society. In socialism, on the contrary, the moral, political, and democratic acknowledged principles are the basis upon which the markets for commodities function. Democratic socialism is an organizational issue, Polanyi states. The principle of self-administration (at the political and economic level) is central for him; in particular the organization of production (and consumption) on a mutual basis. Markets continue to play a role in socialism, but they function within a democratic framework. Polanyi favours regulated and, if possible, regional markets, for they provide a better oversight of consumption needs and production conditions. The one and only goal of these policies is to enable social responsibility and therefore, to increase freedom and democracy as much as possible.

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Auseinandersetzung zwischen Sozialismus und Faschismus, by Karl Polanyi, edited by Michele Cangiani, Kari Polanyi Levitt, and Claus Thomasberger, 265–73. Marburg: Metropolis. ———. 2005d. “Sozialistische Rechnungslegung (Socialist Accountancy).” In Chronik der Großen Transformation, by Karl Polanyi, edited by Michele Cangiani, Kari Polanyi Levitt, and Claus Thomasberger, 3:114–25. Marburg: Metropolis. ———. 2005e. “Zur Sozialisierungsfrage (On Socialisation).” In Chronik der Großen Transformation, by Karl Polanyi, edited by Michele Cangiani, Kari Polanyi Levitt, and Claus Thomasberger, 3:126–36. Marburg: Metropolis. ———. 2017. “The Common Man’s Masterplan (1943).” In Karl Polanyi in Dialogue: A Socialist Thinker for Our Times, edited by Michael Brie, 79–94. Montreal: Black Rose Books. ———. 2018. “On Freedom (1927).” In this volume, 298-319. Polanyi Levitt, Kari. 2013. From the Great Transformation to the Great Financialization: On Karl Polanyi and Other Essays. London/New York: Zed Books. Thomasberger, Claus. 2003. “Freedom and Responsibility. Karl Polanyi on Freedom.” A Paper presented at the 9th International Karl Polanyi Conference, Concordia University, Montreal,. http://people.f3. htw-berlin.de/Professoren/Thomasberger/pdf/26_Karl_Polanyi_ on_Freedom.pdf. November, 2003 Valderrama, Paula. 2012. “‘Planning for Freedom’. Hayekian and Polanyian Policies in Latin America.” International Journal of Political Economy 41 (4): 88–105. ———. 2013. “Polanyi’s Ideas for Socio-Political Production and Consumption Cooperatives and Their Realization in the ‘el Arca’ Cooperative in Argentina. Paper Prepared for the 15th Conference of the Association for Heterodox economics ‘economy and Organisation.’”

“Knowledge of Society” as the Basis of Karl Polanyi’s Demanding Conception of Freedom

Michele Cangiani

…the striking fact that we are less impotent in the face of elemental events of a physical kind than we are towards our own, purely social, purely human affairs! Rosa Luxemburg (Luxemburg 2013, 130)

Knowing our society Karl Polanyi intended his comparative study of economic systems as the continuation of both his previous analyses of capitalist society and his political commitment. Indeed, his research and teaching at Columbia University gave him the opportunity to support his findings and convictions with a deeper theoretical and methodological foundation. The political relevance for the present of his wide-range historical enquiry is explicitly stated in the opening sentence of the Introduction to The Livelihood of Man: This work is an economic historian’s contribution to world affairs in a period of perilous transformation. Its aim is simple: to enlarge our freedom of creative adjustment, and thereby improve our chances of survival, the problem of man’s material livelihood should be subjected to total reconsideration. (Polanyi 1977, xliii) Today, after over half a century, in the presence of so grave a crisis as to question our civilization as such, we should be able to appreciate this statement and the need it alludes to for a better reason: we cannot face and even detect the urgent problems of our society without the knowledge of its fundamental traits, those that distinguish it from any other. Polanyi criticizes the “economistic fallacy” of the market society as a fallacious generalization to different cultures of superficially-apprehended characteristics. Thus the market society cannot, in its turn, be recognized as a historically specific organization, whose basic institutions are a) market relations among free individuals, and b) capitalist relations of production. The genetic explanation of

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such radically new social forms is expounded in The Great Transformation and meaningfully recalled at the beginning of The Livelihood of Man: within a generation—say, 1815 to 1845—the price-making market … showed its staggering capacity for organizing human beings as if they were mere chunks of raw material and combining them, together with the surface of mother earth, which could now be freely marketed, into industrial units under the command of private persons mainly engaged in buying and selling for profit. (Polanyi 1977, 9) every society has an economy, and the economy is specifically organized in each society. Polanyi speaks in this sense of the comparative analysis of economic systems as the “study of the shifting place by the economy in society”, that is, “the study of the manner in which the economic process is instituted at different times and places” (Polanyi 1957, 250). what is typical of the market society is that its fundamental institutions—the market system and capitalistic relations of production—are economic institutions. The economic activity is “entrusted to a self-acting device”, “under the sole control of the incentives of hunger and gain”; the result is “an ‘economic’ society to a degree previously never even approximated” (Polanyi 1947, 111). All societies are distinguished from one another by their culture, within which their economic organization is defined. A further characteristic distinguishes the market society from any other: not only is its economy organized in a specific social way, but this way can be connoted as ‘economic’, in the sense that it functions by means of institutions and motives that, for the first time in history, seem to be peculiar to economic activities. The latter can be perceived as such, and the economic science can be born. In Max weber terms, the economy acquires its own “rationality”, thereby differentiating itself from other aspects and functions of the social whole. It becomes “disembedded”, Polanyi says, and therefore dominant, since it provides for the necessaries of life. Thus, in Polanyi’s opinion, a market economy produces a market society; an ‘economic’ economy implies an ‘economic’ society. The other aspects of social life acquire in their turn their own “rationality” and autonomy, however relative this autonomy remains, being subjected to the constraint of the economic organization. weber, for instance, points out the uniqueness of a social division that basically depends on individuals’ relationships with production and with each other concerning production. He proposes to denote it as “class division” in opposition to that of “rank” in all other societies (weber 1978, 926ff.). The contrasted institution of the labour market is so important in The Great Transformation because it gave rise to “a new type of society”, marking “a violent break with the conditions that preceded it” (Polanyi 1947, 111). The market society developed together with capitalistic production, which, indeed, has increasingly shaped the structure and functioning of the market. As Robert Owen realized, Polanyi writes (Polanyi 2001, 178), the “principle of profit” became “the

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organizing force in society.” The “investment for a profit”—Thorstein Veblen declares in the first page of his Theory of Business Enterprise (Veblen 1904)—is the “directing force” of the “Capitalistic System”. Polanyi belongs, in fact, to the old, radical, holistic (gruchy 1947) institutionalism. He speaks generally of “market society”, but he means—as Ron Stanfield (1977) appropriately states—“market capitalist society.”1 Critique of political economy Polanyi’s definition of “the form of integration of exchange” grounded on the institution of the market system, as typical of, and only of, capitalist society, is similar to the result of the analysis of “the commodity” and its exchange value in the First Chapter of Marx’s Capital. In both cases, the most general-abstract traits of a specific form of social organization are discovered through the analysis of the phenomena that reveal them and conceal them at the same time. Here are the foundation and the core of the “critique of political economy” and, consequently, also of the method of the comparative analysis of modes of production. The value-form of the product of labour is the most abstract, but also the most universal form of the bourgeois mode of production; by that fact it stamps the bourgeois mode of production as a particular kind of social production of a historical and transitory character. If then we make the mistake of treating it as the eternal natural form of social production, we necessarily overlook the specificity of the value-form, and consequently of the commodity-form together with its further developments, the money form, the capital form, etc. (Marx 1977, 174, note 34) In fact, the theory of the most general features of capitalist society is completed only in the Fourth Chapter of Capital, where “the transformation of money into capital” through the sale of labor force is explained. Polanyi read Marx in different epochs of his life; however, most comments and quotations can be found in his manuscripts of the late 1920s and of the 1930s. In england, where he moved from Vienna in 1933, he had a relevant role in the collective reading by the Christian Left group of Marx’s 1844 Manuscripts, published in 1932. In 1937 the same group circulated “Community and Society” (Polanyi 1937), a paper where Polanyi makes reference principally to the First Chapter of Capital and, in particular, interprets brilliantly the theory of fetishism. “The exchange value of the goods is only a reflection of the relations between the human beings engaged in the production of the goods concerned” (Polanyi 1937), he argues:2 the failure to recognize this gives rise to the attribution of value to goods themselves. Fetishism—that is, ascribing historically produced cultural realities to objects, gods or nature—can be explained, in the case of the market system, as a consequence of the fact that, in this system, social relationships actually are relationships of exchange of commodities.

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Polanyi also quotes the Eleven Theses on Feuerbach of 1845, where he points out a central aspect of Marx’s “critique” as a revolution in the social sciences: social relationships, culture, and their history are typical human deeds; there is no need to look somewhere else for “human nature”. A new foundation and a new method for social and historical knowledge were thus created, freeing it from naturalism and determinism. This is the solution allowing Polanyi to find an alternative to the method of social sciences—including the Marxism of the Second International—he radically criticized around 1920.3 His main point was the importance of moral attitudes and self-determination, which he opposed to mechanic views of society and history, to any “science of the future” stealing freedom from human beings. However, in the same years or immediately after, the inspiring achievements of “Red Vienna”, the contact with Austro-Marxists, Otto Bauer and Max Adler in particular, and a re-reading of Marx suggested to Polanyi a fruitful way of combining his theoretical interests and political ideals (see Cangiani and Thomasberger 2015). He participated in the debate on ‘socialization’ and planning with his 1922 essay “Sozialistische Rechnungslegung”, which he considered a first approach to a wider socialist theory to be built. All this made him think that a social-historical knowledge of a new kind not only may not hamper human emancipation, but is an essential component of it. even if the ideal society—a communitarian one, where individuals entertain personal and transparent relations with each other—can only be a horizon, moving in that direction requires, first of all, the knowledge of the constraints imposed by the existing or any other social organization. The particular place of the economy in the market society—its differentiation within the social whole, its “disembeddedness”—gives its contingent features the appearance of being economic per se, substantially economic, economic in general. Here lies the fallacy pointed out by Polanyi: specific qualities of the market economy—which is an element of the set ‘economic systems’—are attributed to the set itself. Polanyi speaks in this sense of the “logical error” of confusing the “formal” with the “substantive” meaning of ‘economic’. Only the latter—connoting the economy as “the interchange with [man’s] natural and social environment, in so far as this results in supplying him with the means of material want satisfaction” (Polanyi 1957, 243)—applies to whatever economic system. It defines, in fact, the “substance”—in the Aristotelian sense of the characteristic without which a thing does not exist—of the economy. Only the substantive definition and the acknowledgment of the marketcapitalist system as a specific, historical organization make the following institutional-heterodox question possible: to what extent is that system capable of achieving the general purpose of the economy, that is of socially creating the best “adjustment” for the “happiness” (as utilitarian philosophers used to say) of human beings in their social and natural environment? Is there a tendency to a systematic non-coincidence, to say the least, between profitability and

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“serviceability for society at large” (Veblen 1994) when the “investment for a profit”, in particular that pursued by “business enterprises”, becomes the “directing force” of the “Capitalistic System” (Veblen 1904, 1)? How is it possible to explain the paradox of scarcity and hunger as institutional features of a given economic system, while the purpose of the economic organization should be, in general, the solution of the problem of hunger and scarcity? In comparison to hunter-gatherer societies—Mashall Sahlins (Sahlins 1972, 36) points out—ours “is the era of hunger unprecedented. Now, in the time of the greatest technical power, is starvation an institution.” The market system is in fact an “integrative exchange pattern unique to our times” (Polanyi 1971, 19). In that specific historical situation—in which traditional norms disappear, needs cease to be culturally predetermined, and livelihood is no longer warranted to individuals within a network of personal links and reciprocal rights and duties—the economic behavior is institutionalized as “economizing”. when selling labor force—as the only means to avoid “the penalty of starvation” (Polanyi 2001, 172)—and the pursuit of gain become the institutional motives of the economic behavior, money becomes the universal medium and the necessary means for satisfying needs. Money, being only quantitatively worth something, is scarce by definition and requiring a choice among different uses, like time in its modern conception. As a consequence, scarcity acquires a specific meaning as a factor of a given institutional system, the modern economic organization; neoclassical economics entangles that meaning of scarcity with the more general one, concerning the condition of human beings on the earth. It is thus on the real, institutional basis of the market-capitalist society that mainstream economics builds its “economistic” generalizations, from the “formal” definition of the economy to the economically rational—economizing— individual choice. And reciprocally, the immediate link established between the economic activity and universal propensities of human beings allows us to bypass the problem of the social historical organization of the economy—without any feeling of loss. Like Marx, Polanyi criticizes the economic ideology by explaining it as a reflection of the actual features of the market-capitalist organization, which is not understood as such: as a whole, and in its historical specificity. Thus, obviously, those features themselves can be only partially and imperfectly understood by that ideology. Society “discovered” The need to raise the problem of society comes from the economic-individualistic nature of modern society, freeing itself from the preceding cultural tradition, religious believes and political bonds. Society cannot exist without norms: when the old ones disappear, how may they be substituted? How may social order be re-constituted? Thomas Hobbes builds his philosophy on a worried forewarning about the development of modern society (see Macpherson 1968). In Max

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weber’s terms, as stable traditional-religious societal arrangements fade away, people experience a greater sense of themselves as individuals. They distinguish themselves from their society. Correspondingly, sense needs to be made of the world, which is now “dis-enchanted”, and society becomes a problem. More precisely, problems concerning social organization and everyday life acquire a “social political character”, meaning that their solution is neither traditionally given nor merely technical (weber 1968, 153). weber’s concept of Zweckrationalität (purpose rationality), insofar as it characterizes modernity, implies that solutions are no longer already given, but have to be found and chosen through an endless process in which both means and ends are again and again questioned. Besides, a new awareness about society is triggered by the peculiar “place” of the economy no longer “embedded” in a society which is now involved in the process of individualization of social subjects and of “rationalization”. The modern development makes the “knowledge of society” necessary. But this “discovery” is hampered. It tends to be partial and distorted. It is typically implemented as the “discovery of the economy”—in an “economic” society, organized “on the principle of gain and profit” (Polanyi 2001, 134). The economistic-naturalistic-utilitarian shortcut not only fascinated economists, but became “a new starting point for political science” (Polanyi 2001, 119). Townsend’s “paradigm of the goats and the dogs seemed to offer an answer” (Polanyi 2001, 120). Chapter Ten of The Great Transformation analyses the “lapse into naturalism” (Polanyi 2001, 121), which was also an outcome of the alleged failure of the Speenhamland system and paved the way for the institution of the labor market. The discovery of society in the form of the discovery of the economy was consistent with a society that was to be dominated by its economic organization, but it was also paradoxical, because it appeared to be the discovery of the laws of nature governing society. “Nineteenth-century consciousness” in general, and laissez-faire in particular—Polanyi comments (Polanyi 2001, 124, 131)—rested on “social mechanics” and its laws, like the Malthusian law of population, the iron law of wages, and the law of diminishing returns. Society becomes more complex because it is wide, industrialized, individualistic, composed of differentiated and relatively independent subsystems, continuously changing. Robert Lynd, whose works were known by Polanyi, defines growing complexity as the lengthening of “chains of causation” (Lynd 1964 [1939], 212). To the extent that individuals and society lose control of these chains, freedom decreases. Since control can no longer be committed to traditional cultural norms, a purposeful organization is necessary, concerning individuals’ relationship with their own needs, other individuals, and their natural and social environment. Social knowledge is thus more and more required: knowledge concerning society and the problems it has to face, and the social diffusion of knowledge. Moreover, this suggests a further conceptual level at which the problem of society is to be raised, corresponding to the fact that the social system has to include reflections on itself

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and plans concerning its own organization. The “discovery of society” is a consequence of its increased complexity, and, in its turn, makes complexity increase. Karl Mannheim, in Man and Society in an Age of Reconstruction,4 maintains that in the increasingly industrialized mass society there is an insufficient diffusion of “‘substantial rationality’, i.e., the capacity to act intelligently in a given situation on the basis of one’s own insight into the interrelations of events” (Mannheim 1940, 58). In fact, “social knowledge and the power of making decisions become more and more concentrated,” along with the concentration of the ownership of the means of production, of administrative activities and the instruments of military power (Mannheim 1940, 47). In the last pages of The Great Transformation Polanyi comes back to the issue of knowledge of society as the third constituent of “the consciousness of western man”—after knowledge of death, at the origin of human history, and knowledge of freedom (Polanyi 2001, 267). He traces the latter to the Christian conception of the uniqueness of each person. with the modern differentiation of social functions, and the autonomy and dominance of the economic function, knowledge of freedom acquires a new socio-political meaning, related to the new social organization. Its history becomes that of liberalism—analyzed, for instance, by C. B. Macpherson (1962), who points to the “theory of possessive individualism” as its dominant tendency. The free-market utopian shortcut tends to reduce society to the immediate interaction of individuals: that is, to the sum of natural—and therefore ‘free’ —individual behaviors. Polanyi (Polanyi 2001, 266) points out that the economy was thought to coincide with “contractual relationships, and contractual relations with freedom”: but “it was an illusion to assume a society shaped by man’s will and wish alone.” He adds that the market itself produces this illusion, since it actually consists of “fragmented” exchanges by producers and consumers who, as (seemingly) free individuals, buy and sell on the market. Besides, the ironical destiny of free-market liberalism, indeed its degeneration, is of being invoked when “free enterprise” is “reduced to a fiction by the hard reality of giant trusts and princely monopolies” (Polanyi 2001, 265). Joseph Schumpeter criticizes the classical-utilitarian confidence that political decisions— corresponding, even though approximately or fictitiously, to the volonté générale—could be traced back to the will of independent and rational individuals. The field in which individuals show a sense of reality and of responsibility is, in his opinion, normally very narrow; as problems become more general and remote, so do their intelligence and moral standards diminish. Besides, they are easily influenced by advertising and other methods of persuasion. On the basis of this criticism, Schumpeter suggests that the identifying mark of democracy is but its modus procedendi: the struggle for the people’s vote has to be competitive. As in the economic realm, in politics too the creation of the demand by oligopolistic suppliers is normal; the electorate’s choice cannot but be shaped, “and the shaping of it is an essential part of the democratic process” (Schumpeter 1943, 282).

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Polanyi’s way out of the utilitarian ideology is different, indeed the opposite of Schumpeter’s outlook, that started the formalistic tendency of contemporary political theory. The problem with that ideology, Polanyi says, is that “society as a whole remained invisible” and “the reality of society” was “denied”. In fact, all societies—free-market society included—are organized, all are instituted systems; therefore, they have their own norms concerning political order and economic organization—their own form of “power and economic value” in which individuals are necessarily involved even if they persist in ignoring their situation and responsibility (Polanyi 2001, 266–67). The discovery of individual freedom, Polanyi points out, should instead lead to social responsibility, through the discovery of society as a problem and the knowledge of its historical structure and functioning. Understood and practiced this way, the third degree of consciousness—knowledge of society—implies a higher level of freedom by comparison with preceding societies. Human individuals discover themselves as such, and society as their own creation. They can—they must—know society, and acknowledge society’s constitution and change as their own affair. In Polanyi’s words, we cannot but realize that “institutions are embodiments of human meaning and purpose” (Polanyi 2001, 262). The liberalistic-utilitarian illusory freedom can be really overcome insofar as “social knowledge” spreads over people and conscious relationships take the place of external, reified mechanisms (see the following Section). Mannheim too concludes his above cited book by raising the “philosophical question” of freedom in the third stage of human history, corresponding to Polanyi’s stage of the knowledge of society. Now the problem is to control “the entire social environment,” Mannheim writes (Mannheim 1940, 376–77); purposeful regulation “will make man freer than he has been before,” since “an unjust or badly organized society” would be changed through democratic planning into “a healthy society which we ourselves have chosen” (Mannheim 1940, 378). “Social freedom” Short after the First world war, Polanyi considers “the crisis of our Weltanschauung” (Polanyi 2018a) as the need for a new relationship of individuals with each other and their society. This implies, he maintains, a new epistemology. If socialism has to mark a definitive break with capitalism, it should also refuse a way of seeing the world grounded on utilitarian ethics, positivist epistemology and deterministic philosophy. we must rely—Polanyi recommends—on our “free vision”, not on dogmas about material dynamics. Similar ideas were rather diffused among Hungarian socialists in that period. györgy Lukács, for example, in the same year 1919, speaks of the voluntary and free interaction of individuals as an “ethical” attitude opposed to any “automatic process determined by natural laws” (Lukács 1972, 49). He wishes, then, “the construction of a society in which freedom of morality will take place of legal compulsion in the regulation of all behaviour” (Lukács 1972, 48).5

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The manuscript Über die Freiheit (Polanyi 2018b) deserves some more detailed examination.6 Here Polanyi goes into the issue of “social knowledge,” its “ethical importance” and, in particular, its connection with freedom. Now, differently from the article of 1919, the criticism to determinism is more specifically addressed to the fact that the “historical laws of capitalist economy” are perceived and then operate “as laws of nature”, although they are “a cultural reality.” There is then a shift from refusing a theoretical and political attitude to the positive definition of an alternative; from accusing mainstream Marxism to the acquisition of the “critique of political economy” as a basic requirement for the knowledge of society. Recognizing society as a “cultural reality” and knowing its “historical laws” are now considered by Polanyi the first, essential step of modern liberty. The “free will of individuals” remains illusory, he writes, insofar as “capitalists and workers, human beings in general, appear as mere extras on the economic scene.”7 They are not free in their relationship with others, with the means of production, with their product, and then with themselves. The exchange of commodities is actually the relationship between producers, taking place outside them. They cannot decide consciously and in advance on the division of labor and resource allocation. Their personality suffers a mutilation. Marx revealed that “the reality of society” is made by historically specific relations between people; the task of socialism is, Polanyi maintains, to translate this discovery into practice by establishing direct and conscious relationships. “Freedom and humanity [Menschlichkeit] have the same meaning for Marx. Instead of the bourgeois society he wants a ‘human society.’”8 Human nature is essentially social, and society takes different historical forms. To recognize this is the premise, Polanyi continues, for “a hitherto unthinkable level of freedom,” “a new freedom, social freedom of human beings,” which could be reached when a “cooperative relationship” would be established, when humans would cease to be “servants of social laws apparently independent of them.” A new society of free and responsible individuals would be based on democracy, a democracy extended to the economy. Thus the “irresolvable contradiction” of bourgeois freedom— that freedom and responsibility for their choices, conquered by modern individuals against pre-modern constraints, do not apply in the present society— would be overcome. To be ‘human’ means to participate in society, in the process of socialization (“Vergesellschaftung”), that is in the making and functioning of social institutions. This is the new level of awareness achieved by mankind, after eating the fruit of the “tree of social knowledge.” The merely negative relationship of individuals with their society, typical of the illusory bourgeois freedom, must give place to the goal of an active relationship, constituting the positive, social freedom.9 Individuals will be responsible for their behavior, which always has social consequences. They cannot not choose about society. The power, now centered in the state, should be transformed by socialism, to the extent that this is possible, in direct relationships between individuals; the

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latter, through conscious economic choices, should also define the value, which presently depends on the exterior mechanism of price formation and the motive of gain. The transparency of social relations means knowing the effect of our action on the lives of others and feeling responsible for it and the “social cost” of our needs. Besides, we should be able “to establish the universal goals of humanity.” Polanyi continues by pointing out that this way of understanding and trying to realize freedom makes socialism something more than claiming economic justice and welfare. Socialist freedom demands a social reality that will no longer be reified; then the integration of individual wants and choices would be transparent, while the integration through the market takes place “behind people’s back,” Polanyi says, adopting Marx’s expression. The problem is how such an “overview from within” could be realized; how social knowledge could become part of individual knowledge. In reality, even this new sociology, which is radically opposed to positivist general-natural laws of human facts, is not enough. A solution can only be found by shifting the actually existing limits of freedom, that is, “through the actual transformation of the lives of people in their mutual relations.” In a ‘functional’ socialist society, based on solidarity, transparency should be extended from the economy to all social relations, in particular to politics and power, thereby achieving “what we call the social knowledge” leading to freedom. But this is “a task without end,” “a goal always renewed.” Freedom to be built The ideal of “social freedom”, typical of Polanyi’s political philosophy (cf. Cangiani 2012), is difficult to realize—though being realistic, grounded as it is on a theory of contemporary society. Twenty years later (Polanyi 1947, 117) Polanyi points out that the road to a “truly democratic society” is hindered by the belief “in elites and aristocracies, in managerialism and the corporation,” leading to a society “more intimately adjusted” to the existing economic system—to its disembedded economy. Yet he continued to work in view of a political alternative that would, at least, make his ideal plausible. “One of the embodiments of freedom in a complex society”—he writes (Polanyi 1947, 117)—should be the organization of the economy “through the planned intervention of the producers and consumers themselves.”10 Über die Freiheit was conceived as a philosophical investigation continuing Polanyi’s economic and sociological contributions to socialist theory (Polanyi 2005b, 2005c, see in particular 2005d). His 1925 article is particularly interesting in the current times—at least, for people who feel the risk of an uncontrolled entropic drift of our society, and therefore the want of “freedom of creative adjustment” (Polanyi 1977, xliii). Polanyi anticipates, in fact, systems theories and cybernetic approaches in social sciences with his thesis that the degree of “living democracy,” the availability of information and the extent of “the ability of organizations to accomplish their function” are interdependent and directly proportional (Polanyi 2005b, 124).

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In the 1930s Polanyi’s reflection develops from the same roots, though taking into account that the difficulty to function of market society created a “fascist situation”, in which “the bulwarks of democracy and constitutional liberties were stormed” (Polanyi 2001, p. 247). The manuscript Marx on Corporativism (Polanyi n. d.), commenting on the critique Marx addressed to Hegel’s philosophy of law, raises the question of modern separation of the economic and political spheres (the “civil society” and the State). He finds in Marx the suggestion that the way to recompose them should be based on a full-blown modern ability of individuals to politically organize their society, the economy to begin with. “This is the true meaning of democracy,” he affirms (Polanyi n. d., 3). But the abolition of the separation between politics and economy can also take the opposite way, if corporations instead of individual citizens, like Medieval guilds, become political subjects and tend to occupy political institutions. Polanyi cites Marx, who says that “corporatism is an attempt to establish economic life as the State,” and points out that this is what fascist corporatism tries to achieve, thereby abolishing, with the separation of the political and the economic spheres, democracy and freedom as well. As recalled above, Polanyi identifies two opposed beliefs and actual tendencies, also after the war. In recent times, the illiberal neoliberal transformation has caused the decay of democracy. The so-called ‘privatization of politics’ consists in the fact that big corporations, financial elites and technocratic international organizations enjoy an unprecedented and unaccountable concentration of power and are able to directly condition governmental policies. In the 1930s it was difficult to remain faithful to the ideals that were widely diffused in the period around the First world war, concerning ‘industrial democracy’, guild Socialism, ‘functional’ socialism, planning or the ‘social engineering’ of American institutional economists. Those ideals remained, however, an essential component of Polanyi’s reflection on freedom, and of his teaching for adult learners. “Democracy can be saved,” he writes (Polanyi 2002, 151), “only by the diffusion in the masses of a new culture through political and economic education.” In a letter of 1941, speaking of the book he is writing, he announces that it will end up with “the formulation of the new concept of freedom, the reform of human consciousness, the transcending of Christianity” (Polanyi Levitt 1990, 7). The concept of freedom expounded in the last pages of The Great Transformation implies, in fact, both the critique of the illusionary freedom of the bourgeois-liberalistic philosophy and the proposal of a new kind of freedom, “social freedom.” It takes into consideration the Christian ideas of personality and community, but also the inevitable “objectification” of social institutions,” constituting “the reality of society,” which, to begin with, has to be known. Cangiani, Michele. 2012. “‘Freedom in a Complex Society’: The Relevance of Karl Polanyi’s Political Philosophy in the Neoliberal Age.” International Journal of Political Economy 41 (4): 34–53. doi:10.2753/IJP08911916410403.

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Cangiani, Michele, and Claus Thomasberger. 2015. “Introduzione. Costruire la libertà.” In K. Polanyi, Una società umana, un'umanità sociale. Scritti 1918-1963, edited by M. Cangiani and C. Thomasberger. Milano: Jaca Book. gruchy, Allan g. 1947. Modern Economic Thought. The American Contribution New York: Prentice-Hall. New York: Prentice-Hall. Lukács, györgy. 1972. “The Role of Morality in Communist Production.” In Tactics and Ethics. Political Writings, 1919-1929, ed. by R. Livingstone. London: New Left Books. Luxemburg, Rosa. 2013. “Introduction to Political economy.” In The Complete Works of Rosa Luxemburg, Volume I: Economic Writings 1, 89–300. London/New York: Verso. Lynd, Robert Staughton. 1964 [1939]. Knowledge for What? The Place of Social Science in American Culture. New York: grove Press. Macpherson, Crawford B. 1962. The Political Theory of Possessive Individualism. Hobbes to Locke. wynford ed. The wynford Project. Don Mills: Oxford University Press. ———. 1968. “Introduction.” In Leviathan, Repr, 9–63. Penguin Classics. London: Penguin Books. Mannheim, Karl. 1940. Man and Society in an Age of Reconstruction. London: Kegan et al. Marx, Karl. 1977. Capital. Volume I. New York: Vintage Books. ———. 1987. “Outlines of the Critique of Political economy (Rough Draft of 1857-58, Part II).” In Marx Engels Collected Works, Volume 29. New York: International Publishers. Polanyi, Karl. n. d. “Marx on Corporatism.” Translated by Marguerite Mendell. Con 19 Fol 11. Karl Polanyi Digital Archive. http://www.concordia.ca/ research/polanyi/archive.html. ———. 1918. “A Szocializmus Próbája (The Trial of Socialism).” Szabadgondolat 8 (10): 241–46. ———. 1937. “Community and Society: The Christian Criticism of Our Social Order.” Con 21 Fol 22. Karl Polanyi Digital Archive. http://www.concordia.ca/research/polanyi/archive.html. ———. 1947. “Our Obsolete Market Mentality.” Commentary 3 (2): 109–17. ———. 1957. “The economy as Instituted Process.” In Trade and Market in the Early Empires: Economies in History and Theory, edited by Karl Polanyi, Conrad M. Arensberg, and Harry w. Pearson, 243–70. glencoe: The Free Press. ———. 1971. “Carl Menger’s Two Meanings of ‘economic.’” Studies in Economic Anthropology 7: 16–25. ———. 1977. The Livelihood of Man (Ed. by H. Pearson). New York: Academic Press. ———. 2001. The Great Transformation. Boston, Massachusetts, USA: Beacon Press. ———. 2002. “wirtschaft und Demokratie (1932).” In Chronik der großen Transformation: Artikel und Aufsätze (1920-1945). Bd. 1: Wirtschaftliche

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Transformation, Gegenbewegungen und der Kampf um die Demokratie, by Karl Polanyi, edited by Michele Cangiani and Claus Thomasberger, 149–54. Marburg: Metropolis. ———. 2005a. Chronik der großen Transformation: Artikel und Aufsätze (1920-1945). Bd. 3: Menschliche Freiheit, politische Demokratie und die Auseinandersetzung zwischen Sozialismus und Faschismus. edited by Michele Cangiani, Kari Polanyi Levitt, and Claus Thomasberger. Marburg: Metropolis. ———. 2005b. “Neue erwägungen Zu Unserer Theorie Und Praxis (Some Reflections Concerning Our Theory and Practice) (1925).” In Chronik Der Großen Transformation, Bd. III, Menschliche Freiheit, Politische Demokratie Und Die Auseinandersetzung Zwischen Sozialismus Und Faschismus, edited by Michele Cangiani, Kari Polanyi Levitt, and Claus Thomasberger, 114–25. Marburg: Metropolis. ———. 2005c. “Sozialistische Rechnungslegung (Socialist Accountancy) (1922).” In Chronik Der Großen Transformation, Bd. III, Menschliche Freiheit, Politische Demokratie Und Die Auseinandersetzung Zwischen Sozialismus Und Faschismus, edited by Michele Cangiani, Kari Polanyi Levitt, and Claus Thomasberger, 71–113. Marburg: Metropolis. ———. 2005d. “Zur Sozialisierungsfrage (On Socialisation) (N.d.).” In Chronik Der Großen Transformation, Bd. III, Menschliche Freiheit, Politische Demokratie Und Die Auseinandersetzung Zwischen Sozialismus Und Faschismus, by Karl Polanyi, edited by Michele Cangiani, Kari Polanyi Levitt, and Claus Thomasberger, 126–36. Marburg: Metropolis. ———. 2018a. “Ideologies in Crisis (1919).” In this volume, 264-267. ———. 2018b. “On Freedom (1927).” In this volume, 298-319 Polanyi Levitt, Kari. 1990. “Introduction.” In The Life and Work of Karl Polanyi. A Celebration. Montréal/ New York: Black Rose Books. Sahlins, Marshall. 1972. Stone Age Economics. Chicago: Aldine Publisher. Schumpeter, Joseph A. 1943. Capitalism, Socialism and Democracy. London: Allen and Unwin. Stanfield, J. Ron. 1977. “Institutional economics and the Crises of Capitalism.” Journal of Economic Issues XI (2): 449–60. Veblen, Thorstein. 1904. The Theory of Business Enterprise. New York: Ch. Scribners. ———. 1994. “Industrial and Pecuniary employments.” In The Place of Science in Modern Civilization, 279–323. London: Routledge. weber, Max. 1968. Gesammelte Aufsätze zur Wissenschaftslehre. edited by Johannes winckelmann. gesammelte Aufsätze. Tübingen: Mohr. ———. 1978. Economy and Society, Ed. by G. Roth and C. Wittich. Berkeley: University of California Press.

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NOTeS 1 Stanfield’s reflection on, and starting from, Polanyi would deserve wide and constant attention. See in particular his illuminating reference to the last chapter of The great Transformation in his article “The Institutional economics of Karl Polanyi” (1980). 2

Ibid. Similar considerations can be found in another manuscript of the same epoch, “Christianity and economic Life”, KPA, 19-22. On Marx see also: “Marx on Corporatism”, ms., n. d., KPA 19-11; “Marx on Self-estrangement”, ms., n. d., KPA, 20-11, also circulated with the title “The Marxian Theory of Self-estrangement”, Bulletin 1 of the Christian Left group, 1937-38, pp. 7-8; “Fascism and Marxian Terminology”, New Britain, Vol. 3, No. 57, pp. 128 sq., 1934; “Marxism Re-Stated”, New Britain, Vol. 3, No. 58, 1934, p. 159, and No. 59, 1934, pp. 187 sq.

3

See the manuscripts of the years 1920-22, KPA, Con. 2, partially published in Polanyi (2005a, 172–214).

4

Polanyi possessed and annotated this book in the previous german version of 1935 (KPA Catalogue, “Books annotated by Karl Polanyi”).

5

In an article for the special issue of December 1918 of Szabadgondolat on the Russian Revolution, Lukács raises “the moral problem” of the impossibility of reaching freedom through oppression. In this article, his opinion is close to Polanyi’s, who organized that special issue and radically criticizes Bolshevism in his contribution (see Polanyi 1918). There is also a similarity with Rosa Luxemburg’s position, concerning the Russian Revolution in particular. Later, however, in his 1923 Geschichte und Klassenbewußtsein, Lukács contests Luxemburg’s undervaluation of the problems of the organization of class struggle, to be distinguished from its ultimate aims. In his opinion, she was too confident in a revolutionary process essentially based on the participation of masses and the continuous widening of their consciousness and freedom.

6

The rest of this section, and in particular all the quotations (in the absence of different indication) concern that manuscript (Polanyi 2018).

7

Cf. Marx’s image of the characters on the economic stage (Marx 1977, 179).

8

Polanyi clearly refers to Marx’s Tenth Thesis on Feuerbach: “The standpoint of the old materialism is ‘bourgeois’ [or ‘civil’ (‘bürgerliche’)] society; the standpoint of the new is human society, or socialized humanity.”

9

In his Grundrisse (Outlines of the Critique of Political Economy) Marx alludes to a future society where “the activity of individuals” would be “immediately general or social activity” and “the objective moments of production” would be posited “as the organic social body within which the individuals reproduce themselves as individuals, but as social individuals” (Marx 1987, 210).

10

Cf. Marx (1977, 173): the veil will not be removed from “the social life-process” “until it becomes production by freely associated men, and stands under their conscious and planned control”.

Karl Polanyi and Human Freedom Fred Block

THeRe HAS BeeN considerable disagreement among Polanyi scholars on the interpretation of Karl Polanyi’s political views (Lacher 1999a, 1999b; Clark 2014; Panitch 2015). while almost everyone acknowledges that he self-identified as a socialist, that fact alone provides little clarity. In the 20th century, after all, selfidentified socialists stretched from revolutionaries and advocates of workers’ control on the left to “liberal socialists” (Dale 2016) and right wing social democrats. Moreover, when one focuses on the practices and policies of socialist parties, such parties have sometimes gained power only to implement modest reforms that helped prop up a system based on private ownership. So the issue remains of explaining precisely how Polanyi’s thinking about socialism fits into this very broad spectrum of different kinds of socialist politics. The question comprises two equally important parts. First, what was Polanyi’s vision of the good society? How did it compare to the type of society built by the Bolsheviks in Russia? what kind of institutional structure would it have? Second, what was his optimal strategy for implementing this vision? where did he stand on the historical division between revolutionaries and reformists? what role did he give to electoral strategies as compared to extra-parliamentary mobilizations? Did he see a transition to socialism requiring a fundamental attack on the power of the capitalist class? Unfortunately, there is no simple way to answer these questions. The reality is that we don’t really know what Polanyi actually envisioned as a good society or his preferred strategy for getting there. He had been preoccupied with these questions in the 1920’s when he made his contribution to the socialist calculation debate. 1 However, from the early 1930’s until his death, these issues were not a central focus of his thinking. Polanyi was always trying to make sense of the actual historical realities of the given moment. From the early 1930’s onward, the central question for him was not ushering in socialism but finding the way to defeat fascism. As with many others on the left, Polanyi recognized that broad alliances were necessary both at the domestic level and at the international level; the question of social transformation was necessarily relegated to the back burner. Furthermore, with the coming of the Cold war in 1947, Polanyi understood that the struggle between the two great superpowers had effectively pre-empted debates about what kind of society we should construct. As with such contemporaries as C. wright Mills and Herbert Marcuse, Polanyi viewed American society

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as becoming ever more conformist and narrow in the permissible range of political debate. given his unrelenting realism, he saw the project of envisioning a good society in those dark times to be irrelevant. He sought instead in the last initiative of his life to found a journal that would create a conversation about coexistence that included intellectuals on both sides of the Iron Curtain. In other words, he believed that a real thaw in the Cold war had to happen before the old questions would again be on the historical agenda. There was, in fact, only a brief window between confronting the threat of fascism and the polarization of the Cold war when Polanyi as a mature intellectual addressed the question of the good society. This was the period from about 1941 to 1946, which encompassed the writing of The Great Transformation (TGT). But even during this window, the nature of the good society was still not his primary focus. His central concern was avoiding a repetition of the mistakes made after world war I, especially the restoration of the gold standard which he believed had radically narrowed the political options available to societies. Polanyi’s view was that the creation of a decent set of global financial institutions was a precondition for any progress towards the creation of social reform either in europe, North America, or the rest of the world. This is why the critique of the gold standard is so central to TGT. It reflects his belief that the gold standard had been the major obstacle to social progress in the Interwar Years. His primary message was directed to the leaders of the British Labour Party who he believed would come to power after the war and would have an important seat at the table in shaping the post-war global settlement. It is only in that final elusive chapter of the book, ‘Freedom in a Complex Society’, when, almost, as an afterthought, Polanyi returns to the classic question of what the good society might look like. And even in that chapter, Polanyi is preoccupied with knocking down the kind of argument that Hayek (Hayek 1944) articulates so effectively in The Road to Serfdom—that giving the state an expanded role in planning and managing the economy would lead inevitably to a loss of human freedom. All this is to say that there are important clues in ‘Freedom in a Complex Society’ to Polanyi’s mature vision of what the good society might look like, but that is all they are. Any effort to ‘connect the dots’ and suggest what Polanyi truly believed is vulnerable to the charge of ventriloquizing—making Polanyi’s text into a dummy that cheerfully mouths the words that the interpreter selects. But in this chapter, my strategy is somewhat different. I am proposing to read what Polanyi said in relation to the writings of the Christian theologian Reinhold Niebuhr who was quite explicit in his discussions of socialism and socialist strategy in the 1930’s and early 1940’s. Today, Niebuhr is largely remembered for being an anti-communist liberal during the Cold war, but in the 1930’s, he was an internationally-known proponent of a militant form of Christian socialism. Niebuhr was an important contributor to the 1935 volume, Christianity and the Social Revolution, which Polanyi

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edited with John Lewis and Donald Kitchin. In my view, we can decipher some of the mysteries of the last chapter of TGT by looking at some of the key points of agreement between Niebuhr and Polanyi. Specifically, I argue that Niebuhr and Polanyi shared a strategic commitment to ‘empowerment without hubris’ and once that commitment is understood, it becomes easier to see where Polanyi fits within the key debates on socialist strategy and socialist vision. It should also be emphasized that in this period, both Polanyi and Niebuhr were engaged in a complex dialogue with Marxism. Both men read german and were among the relatively small number of intellectuals in the west who had read Marx’s Economic and Philosophical Manuscripts (not translated into english until the 1950’s). They had a sophisticated understanding of Marx’s intellectual trajectory and it is fair to say that Marx’s critique of bourgeois society was the foundation on which they were building. Nevertheless, as indicated by the discussion that follows, they were also deeply critical of the Soviet Union and of existing Marxist political movements. It seems fair to say that they wanted to create a theoretical synthesis that incorporated the strengths of Marxism, while transcending what they saw as its theoretical and political flaws. Polanyi and Niebuhr Aside from Niebuhr’s 1935 contribution to Polanyi’s edited book, there is a second convergence between the two men that has not previously been recognized. Twice in TGT, Polanyi quotes Robert Owen as saying: “Should any causes of evil be irremovable by the new powers which men are about to acquire, they will know that they are necessary and unavoidable evils, and childish unavailing complaints will cease to be made” (Polanyi 2001, 133, 268). For Owen, these new powers came through combining steam energy and machinery with a system of cooperative production. The Owen quote likely captured Polanyi’s attention because it was a powerful response to Malthus’ critique of godwin and Condorcet’s vision of human perfectibility. Malthus (1970), it must be remembered, critiqued the optimistic vision of these enlightenment thinkers for failing to recognize that the evils of inequality and poverty are built into the human condition of scarcity and so people must abandon their childish fantasies of a better world (Block and Somers 2014). Owen, in this sentence, is saying basically that our capacity to eliminate evils is an empirical question; we need to test how far human society can be improved by trying to improve it. Only when such efforts fail should we cease complaining about those evils. In 1943, as Polanyi was completing the writing of TGT, Niebuhr wrote a sentence that has come to be known now as the ‘Serenity Prayer’. According to Niebuhr’s daughter elizabeth Sifton (2003), the prayer was delivered by Niebuhr at a Sunday service in 1943 in Heath, Massachusetts where the family spent its summers. (It is only about forty miles from Heath to Bennington, Vermont where Karl Polanyi was working.) The date is significant because it was a dark period of world war II when the allied victory was not yet a certainty.

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Sifton (2003, 277) emphasizes that Niebuhr’s version of the prayer was different from the phrasing that has since been adopted by 12 step programs. He said: “god, give us grace to accept with serenity the things that cannot be changed, courage to change the things that should be changed, and the wisdom to distinguish the one from the other” (emphasis added). By using the first-person plural, Niebuhr was clearly stating that the imperative was a collective one; like Owen, he was talking about society, not just individuals. Moreover, Niebuhr’s reference to the things “that should be changed” evokes the powerful critique of injustice that was central to his Christian Socialist politics. The 12-step version is, not surprisingly, more individualistic and less obviously political. The point is that the Owen quote and the Serenity Prayer are basically identical. They both make a distinction between the things that can be changed and the things that cannot be changed and they both emphasize the moral imperative to remedy those injustices that can be eliminated. Owen did not ask the Lord to distinguish between the two probably because he actually believed that almost all evils were removable. Owen’s next sentence reads: “But your Reporter has yet failed to discover any which do not proceed from the errors of the existing system, or which, under the contemplated arrangements, are not easily removable” (Owen 1858). Polanyi did not reference this other sentence because it undercut what appealed to him about the first sentence; its agnosticism and openness about human possibilities. In other words, by taking the Owen quote out of context, Polanyi was also affirming the importance of distinguishing between the changeable and the unchangeable. The best way to make sense of what Niebuhr and Polanyi were intending with these parallel sentiments is to look more closely at Niebuhr’s 1935 essay in Christianity and the Social Revolution. In that essay, Niebuhr carries out a critique of Christianity and Communism as mirror images of each other. Niebuhr writes: “Thus the conflict between Christianity and Communism is a contest between a religion with an inadequate political strategy and a social idealism which falsely raises a political strategy to the heights of a religion” (1935, 442). Niebuhr affirms that the fundamental truth of Christian theology is the injunction that we must love our neighbors, but he is deeply critical of organized Christianity for its lack of a political vision to achieve a society built on universal brotherhood and sisterhood. “The highly diluted perfectionism of the modern Church obscures the realities and necessities of the political and economic order by promising to establish justice by pure love when every evidence of history points to the necessity of achieving justice through a contest of power and a conflict of wills (Niebuhr 1935, 460). Communism, on the other hand, correctly understands the necessity of the social and political struggle to achieve justice, but it makes the mistake of elevating its belief system into a new religion. Marxism, Niebuhr writes, “has much to commend it, both as a political strategy and as a religion” (1935, 463). But he goes on to argue that:

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Its inadequacy as a religion is due to its effort to solve the total human problem in political terms, and its limitations as a political philosophy and strategy are derived from its religio-dogmatic over-simplifications. Marxism attributes practically all ills from which the human flesh suffers to the capitalistic social order, and promises every type of redemption in a new society… (Niebuhr 1935, 463–64) In Niebuhr’s view, Marxism fails to understand the reality of human sinfulness; our efforts to love one another are perpetually in tension with our own egoism. Niebuhr is arguing for a Christian socialism that is radical and militant in its recognition that the existing social order must be transformed through struggle to create a different kind of society in which there would be far fewer obstacles to loving our neighbors. But he is also pointing to two dangers inherent in Marxian socialism. The first is the dogmatic assumption that revolutionary change will almost automatically create a better social order. This cannot be assumed because humans are sinful and movements can be hijacked to serve the egoistic needs of their leaders. It follows that a transformative movement must, through its practice, seek to prefigure the universal love that it seeks to achieve. Second, not all evils will be eliminated by a socialist transformation. Some might require years of incremental change as people learn to be less competitive. Others will persist because we are imperfect beings who must always struggle with our egoistic impulses. Niebuhr’s argument in his 1935 article is generally consistent with his other writings of this period, including the 1932 volume, Moral Man and Immoral Society, which made his reputation and his 1944 book, The Children of Light and the Children of Darkness. In the former, he wrote: … communists, in spite of their realism, become hopeless romantics when they estimate the social consequences of a new economic society. They seem to believe that it will be easy to create perfect social mutuality by destroying inequality of power. But can they destroy economic power without creating strong centres of political power? And how may they be certain that this political power will be either ethically or socially restrained? (Niebuhr 2013, 192) In Children of Light, he continues this argument by arguing that Liberalism and Marxism make a parallel error: Neither understands property as a form of power which can be used in either its individual or its social form as an instrument of particular interest against the general interest. (Niebuhr 1944, 106) At several points in the final chapter of TGT, Polanyi’s language echoes

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themes in Niebuhr’s writings. In fact, drawing on Niebuhr helps make sense of Polanyi’s somewhat puzzling discussion of resignation in the final pages of the book. Since Polanyi is calling on his readers to transform society, it is surprising that he here invokes the idea of resignation. He writes: “Resignation was ever the fount of man’s strength and new hope” (Polanyi 2001, 68). why does he invoke resignation, which suggests passivity, when he is seeking to empower his readers to change what can be changed? For Polanyi, resignation has two dimensions. The first is the awareness of human sinfulness. As Polanyi puts it writing about humankind, “he resigned himself to the truth that he had a soul to lose and that there was worse than death, and founded his freedom upon it” (Polanyi 2001, 268). This is what Polanyi refers to as the knowledge of freedom that entered human consciousness through Jesus’ teachings in the gospels. Once people understand that they have a soul to lose, they are empowered to lead lives of integrity and decency in which they seek to love their neighbors. The second connected aspect of resignation is recognizing our powerlessness relative to a Supreme Being whether conceived as a deity or the spirit that links together all of Creation. Here resignation equips human beings with the humility required to act effectively in the world. Niebuhr also emphasized the critical importance of humility. He writes: Religious faith ought therefore to be a constant fount of humility; for it ought to encourage men [sic] to moderate their natural pride and to achieve some decent consciousness of the relativity of their own statement of even the most ultimate truth. (Niebuhr 1944, 135) In short, Polanyi’s quote from Owen and Niebuhr’s Serenity Prayer are both seeking to convey to their audiences a political ethic that can be called ‘empowerment without hubris’. They are seeking to affirm Marxism’s optimism about the possibilities of a radical transformation of society while stripping away the dogmatic certainty that history is on our side. Niebuhr had clearly identified the dilemma in 1932: The inertia of society is so stubborn that no one will move against it if he cannot believe that it can be more easily overcome than is actually the case. And no one will suffer the perils and pains involved in the process of radical social change, if he cannot believe in the possibility of a purer and fairer society than will ever be established. These illusions are dangerous because they justify fanaticism; but their abandonment is perilous because it inclines to inertia. (Niebuhr 2013, 221) Hence, the need for a standpoint that empowered people to press for change without fostering utopian illusions.

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Both Polanyi and Niebuhr are also, in effect, responding to Max weber’s powerful argument in ‘Politics as a Vocation’ about the dangers of an ethic of ultimate ends—whether it is Christian Pacifism or Marxism.2 weber wrote: “If, however, one chases after the ultimate good in a war of beliefs, following a pure ethic of absolute ends, then the goals may be damaged and discredited for generations, because responsibility for consequences is lacking …” (weber 1946, 126). weber’s point is that when the end justifies the means, a well-intentioned movement can easily go astray. But weber did also suggest a possible way forward. He contrasted the ethic of ultimate ends with an ethic of responsibility in which one attends to the immediate consequences of one’s actions, but then he says that: “…an ethic of ultimate ends and an ethic of responsibility are not absolute contrasts but rather supplements, which only in unison constitute a genuine man [sic]—a man who can have the ‘calling for politics’” (weber 1946, 127). weber imagined this synthesis only for an individual politician, but Polanyi and Niebuhr were trying to formulate a synthesis for a transformative social movement. They are, in effect, trying to construct a non-utopian utopia.3 Polanyi is acutely aware that utopian ideas are extremely important in empowering people. He labeled market liberalism as utopian precisely because he recognizes the power that such ideas exert in the political arena. And yet, Polanyi also recoils from utopianism in his repeated insistence on coming to terms with “the reality of society”. So the idea is to engender confidence in the capacity of human beings to create a more just and more democratic social order without blinding them to the limitations inherent in the exercise of human agency. The Dilemmas of Socialist Transformation Polanyi’s commitment to this political ethic of “empowerment without hubris” helps us to make sense of his views on the key debates that divided socialists both in the 20th century and today. These debates center on three principle issues. The first is what constitutes socialism or what would a socialist society look like in its institutional design. The second is how the transition to socialism will be accomplished. will it come through an electoral strategy or through popular mobilization or some combination of the two? will it happen suddenly or incrementally over a long period of time? The final question is whether socialism can be realized in a single country or whether it requires a global transformation. Let us look at these questions in turn. Envisioning Socialism In TGT, there are a number of places where Polanyi implicitly endorses Niebuhr’s critique of the Marxist tradition for imagining that the problems of human existence can all be solved through a political transformation. For example, Polanyi distances himself from Marxist arguments about the possibility of creating a social order that was fully transparent. Towards the end of the book, he writes:

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“It was an illusion to assume a society shaped by man's will and wish alone” (Polanyi 2001, 266). Polanyi’s focus here is on the ideas of market liberals, but the indictment extends to Marx. In Capital, Marx makes the argument that within the bourgeois order, relations among human beings come to be perceived as relations between things, as when wages appear to be determined by impersonal market forces. Marx is explicit that in what he calls the ‘community of free producers’, social relations will become completely transparent; people will know exactly where they stand in relation to others. In his writings in the 1920’s, Polanyi embraced this idea of transparent social relations, but by the time he writes The Great Transformation, he had come to see complete transparency as an unobtainable goal. The issue is that human beings live within cultures in which some things are transparent and others cannot be. Marshall Sahlins, who was deeply influenced by Polanyi, argues powerfully in his book, Culture and Practical Reason (1976), that Marx reproduced the error of bourgeois modernity in imagining a society that was based entirely on practical reason. For Sahlins, modern men and women are just as much prisoners of their culture as were the Trobriand Islanders studied by Malinowski. To be sure, Polanyi continued to embrace Marx’s goal of creating a social order that is shaped to the greatest extent possible by the collaborative agency of those who live in the society. But he also recognized that people need predictability and stability and that means certain social practices will inevitably be perceived as natural and unchanging. Polanyi also broke with Classical Marxism in rejecting the whole idea of the withering away of the state. Here again, the influence of Max weber is clear in TGT. Polanyi writes: Freedom’s utter frustration in fascism is, indeed, the inevitable result of the liberal philosophy, which claims that power and compulsion are evil, that freedom demands their absence from a human community. No such thing is possible; in a complex society this becomes apparent. (Polanyi 2001, 265–66) Polanyi’s point is that real freedom involves recognizing the necessity of power and compulsion and finding ways to control and contain their misuse. So while his target continues to be market liberalism, the critique applies equally to the Marxist claim that solving the problem of class power will, in itself, bring state power under the control of society. For Polanyi, the strengthening of democratic institutions and the expansion of civil liberties are absolutely necessary to manage the power that derives from the state’s legitimate monopoly of violence. It follows that Polanyi’s vision of socialism was deeply democratic. In fact, he defines socialism in TGT as follows: “Socialism is, essentially, the tendency inherent in an industrial civilization to transcend the self-regulating market by consciously subordinating it to a democratic society” (Polanyi 2001, 264). while Polanyi had a lifelong fascination with Russia and an overly optimistic belief that

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Soviet institutions could be reformed in a more democratic direction (Dale 2016), the Soviet Union did not conform to his definition of socialism. His definition also suggests that Polanyi believed in an incrementalist process of transitioning to socialism. He is not employing here the standard Marxian binary in which capitalism is on one side of a great transition and socialism is on the other. He is arguing rather that the process of attaining socialism dates back to the 19th century and will continue far into the future as this inherent tendency of strengthening the democratic control over the market moves forward. This is another aspect of empowerment without hubris; the elimination of various evils will not happen overnight. It will happen over an extended period of time as people learn the skills required to exert greater democratic control over their society. It also follows that the achievement of socialism is the process of building new kinds of social institutions through which this democratic control of the market is achieved. For Polanyi, the Marxist concept of emancipation is simply too abstract. Polanyi was always concerned with imagining the actual institutional structures through which people would exert democratic control in a complex society. This was clear in his early enthusiasm for g.D.H. Cole’s (1920) vision of guild socialism that mapped out how worker control of industry could be combined with the institutions of parliamentary democracy. Polanyi’s contribution to the socialist calculation debate makes clear that he sees socialism as an institutionally complex structure in which constituencies would be organized into different entities that would be required to negotiate with each other. workers’ councils, for example, would negotiate prices with consumer cooperatives, but the core idea is that socialism is realized through very specific organizational structures. This brings us back to the Owen quote. There is a strong element of pragmatism in Polanyi’s envisioning of socialist construction. we do not know in advance what institutional arrangements will enhance democratic control of the market and remove many of the evils that the market has created. In fact, our efforts might well produce new evils that then have to be remedied. His approach is similar to the democratic experimentalism that has been elaborated by Roberto Unger (1987). As democracy is expanded, the citizenry comes to recognize the need to engage in a continuous process of monitoring the functioning of institutions so they can be rearranged periodically to make sure that they are achieving their intended goals. Accomplishing the Transition There is definitely an affinity between Niebuhr and Polanyi’s empowerment without hubris and the ideas of european social democracy in its heroic period in the 1930’s and 1940’s. Polanyi shared with social democrats the idea that the route to socialism lies through democratic politics and that there is not one single transitional moment but rather a long process of transition (Berman 2006). Moreover, in that heroic period, social democratic intellectuals understood that

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socialism was more than having a powerful party in control of government; it required the organization of people at the grassroots into union locals and party branches that made them an active part of the process of social transformation. But it also needs to be emphasized that Polanyi’s views were very different from what social democracy became by the 1950’s or 1960’s. Moreover, he would have been horrified to see the policies of New Labour in england in the 2000’s or of the german Social Democrats in recent decades. In other words, he believed in a deep transformation, not winning a slight improvement in the distribution of income, that left the power of wealth holders intact. A key element of Polanyi’s thinking about this transition is that he rejected Marxism’s view that socialism centered on the transformation of property from private to public. Similar to Swedish social democrats and the Legal Realists in the U.S. (Block 2013), Polanyi understood private property as a bundle of rights that are defined and enforced by the legal system. when, for example, trade union rights are effectively protected by national governments, so that workers are collectively mobilized at individual workplaces, there is an opportunity to negotiate contracts that improve pay, job security, working conditions, grievance procedures, and most importantly, afford the union an ongoing voice in the enterprise. In a parallel way, Polanyi anticipates much of the scope of modern environmental law. He argues that the commodification of land leads directly to extremes of environmental degradation as firms use the sovereignty of their ownership rights to pollute the land, the water and the air. As a protective countermovement sets in, the absolutism of property rights are gradually qualified, so that firms are legally restrained from imposing environmental degradation on others. To be sure, there will be continued resistance to a tighter regulatory regime from incumbent interests, but Polanyi’s point is simply that democratic societies have the capacity to address these issues. In a similar fashion, Polanyi sees an expansion of individual rights as part of the process of socialist transition. He recognizes that the power of governments, trade unions, and professional organizations can represent a threat to individual freedom. Hence, the law should recognize “the right of the individual to a job under approved conditions, irrespective of his or her political or religious views, or of color and race. This implies guarantees against victimization, however subtle it be.” The same paragraph ends with Polanyi’s resonant plea: “An industrial society can afford to be free” (Polanyi 2001, 264). Polanyi is responding to the way that the Soviet regime exerted pressure against dissidents by depriving them of any means to earn a livelihood. As Polanyi writes: The individual must be free to follow his conscience without fear of the powers that happen to be entrusted with administrative tasks in some of the fields of social life … the ‘objector’ should be offered a niche to which he can retire, the choice of a ‘second-best’ that leaves him a life to live. Thus

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will be secured the right to nonconformity as the hallmark of a free society. (Polanyi 2001, 263–64) In a word, those with political power should be blocked from driving dissidents into a marginal and tenuous existence. Furthermore, Polanyi’s vision of socialism includes a considerable broadening and deepening of democratic governance. Issues such as the power imbalance between employees and employers or the amount of pollution that firms are allowed to produce would be subject to democratic deliberations. It follows as well that choices about the tightness or looseness of the supply of money and credit would no longer be left in the hands of unelected central bankers; they, also, would be shaped by democratic debate. This deepening of democracy is explicit in Polanyi’s references to industrial democracy and the idea of employees expressing their voice in the workplace. But as suggested in Block and Somers (2014, chap. 8), Polanyi’s outlook is consistent with current discourse around “empowered participatory governance” —finding ways through which citizens are able to exert increasing influence on a wide range of governmental decisions such as the allocation of resources and the prioritization of infrastructure projects (Fung and wright 2001). Polanyi clearly saw democratic engagement as similar to a muscle that grows stronger the more that it is exercised. Polanyi imagines that the opportunity to take part in democratic deliberation, both at the local level and in the workplace, should help to narrow the distance between voters and those that they elect to represent them at the national level. As indicated by his commitment to worker education, he believes that people can develop the skills and capacity for effective selfgovernance (Mendell 1994). It follows from these points that Polanyi envisioned the transition to socialism as emerging out of an electoral struggle as a socialist party gained increasing support among voters. However, he did not imagine that winning electoral victories would be sufficient to achieve the goal of democratic control over the economy. As discussed in the next section, he emphasized the need to coordinate national initiatives with global efforts to reshape the rules and institutions governing the global economy. He understood that if the global system is organized around restrictive rules such as those of the gold standard, socialist initiatives would consistently be defeated by the machinations of bankers. Describing the politics of the 1930’s, he wrote: Under the gold standard the leaders of the financial market are entrusted, in the nature of things, with the safeguarding of stable exchanges and sound internal credit on which government finance largely depends. The banking organization is thus in the position to obstruct any domestic move in the economic sphere which it happens to dislike, whether its reasons are good or bad. (Polanyi 2001, 237)

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It also follows from Polanyi’s sensitivity to the ability of capital to exert power by withholding investments or by sending funds abroad that he understood that a socialist movement needed the capacity to exert counter pressure through mass strikes and mass demonstrations. This is part of the reason that he emphasized the need to build socialism from the bottom up; masses of people had to understand the need to mobilize against the power of the business community. But while he recognized that there would be periodic confrontations in which a socialist movement would have to overcome business resistance to one or another set of reforms, he did not argue for the elimination of private property. It would seem that he believed that the interests of business were quite malleable and that they could ultimately find ways to make profits under regulatory regimes that gave significant rights to employees and provided meaningful protections for the environment. From the 1832 Reform Act to the granting of full women’s voting rights in 1928, english businesses gradually learned how to survive within an electoral democracy. In the same way, Polanyi probably imagined, they would eventually learn how to survive within a social democratic society. But, of course, such learning could not be taken for granted; it would involve some sharp confrontations in which business would be forced to accept arrangements they despised. Socialism in One Country? This is probably the area in which Polanyi made his most important contribution to the theory and practice of socialism. Until Stalin advanced the slogan of building “socialism in one country” in 1924, the prevailing view had been that the transition to socialism had to be a global process that involved a world revolution. Stalin was simply responding to the reality that the revolutionary tide of 1917-18 had receded and the Soviet Communist Party needed a proper legitimation for their continued rule. Yet as the ultimate fall of socialism in the Soviet Union and its dependent states in eastern europe attests, the critics of socialism in one country ultimately won the argument. They had always insisted that a handful of socialist societies encircled by capitalist regimes would develop in a distorted way that would ultimately prove unsustainable. So here is the problem. The experiences of the 20th century meant that both approaches to socialist transition appeared to be impossible. The idea of a world revolution or even a simultaneous transition to socialism in ten or fifteen major nations seems highly unlikely given the different rhythms of political change in different nations. Yet the problem of encirclement has effectively doomed efforts to construct decent and attractive socialist societies. It is not just that the Soviet Union, China, and Cuba developed along autocratic lines without creating the expanded human freedom that socialists have envisioned. It is also that democratic socialist initiatives such as Allende’s project in Chile in the 1970’s, Mitterrand’s efforts in France in the 1980’s, and Syriza’s electoral triumph in greece in 2015 all came to naught because they were encircled by a hostile global system. In Chile’s case, it was an economic boycott combined with U.S. support

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for a military coup; with France and greece, it was sustained economic pressures from outside. It seems indisputable that the inability of socialist intellectuals to provide a persuasive narrative of how a socialist transition might actually occur has been a critical element in socialism’s weakness over the last four decades. Polanyi, however, brought a new angle of vision to this question. He had watched closely the process by which the Labour government in england in 1931 and the Popular Front government in France in 1936 were effectively forced to abandon their radical reform agendas by international economic pressures (woodruff 2016). But he was able to recognize that what was at work was not the inherent and necessary logic of a global capitalist order, but the workings of a very specific institutional mechanism—the international gold standard that had been restored in the aftermath of world war I. His central insight was that this had been a mistaken historical choice and that it was possible to organize the global economy with a very different mechanism for regulating economic transactions among nations. To be sure, Polanyi was not alone in this insight. The key British and U.S. architects of the Bretton woods system, John Maynard Keynes and Harry Dexter white, came to the same conclusion (Block 1977). But among socialist intellectuals, Polanyi was a rarity in recognizing that the global rules and institutions for governing international economic transactions were political arrangements that could be changed in ways that would open space for socialist politics. Polanyi’s viewpoint was vindicated because the Bretton woods global order, despite its clear shortcomings, did facilitate the significant advances of social democracy in western europe. Moreover, the post-1973 global order of floating exchange rates and accelerating liberalization did the opposite. It pushed the world back to the era of the gold standard. Rapid global capital movements are once again a critical barrier to implementing reforms within nations and they exert periodic pressures on nations to reverse social democratic reforms that had been adopted earlier. Polanyi’s specific contribution to socialist strategy is the idea that socialists must engage simultaneously in political struggle at three or four distinct levels or scales.4 There is first the local level where people must be organized to participate both electorally and in trade unions and other forms of association that contribute to their collective power. There is then the national level where these local movements aggregate their power by fighting for measures that will subordinate the market to democratic politics. There is sometimes, as with the european Community, a regional governance structure where socialists must campaign for region-wide reforms that facilitate strong grassroots organizations at the local and national level. Finally, there is a global level where agreements on the global rules governing finance, trade and environmental policies are formulated, and an international regime of rights that is more or less successful in protecting workers, women, children, indigenous people, and others. At this global level socialists also fight for reform measures that open up more space at the other levels of contestation.

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This idea of the multi-level struggle for socialism provides an answer to the historical conundrum of socialism in one country. As socialists gain increasing power and influence in particular nations, they push with greater intensity for reforms at the transnational level which would empower socialist activists and reforms in other places. For example, global trade rules have long allowed nations to block imports that were produced by child labor or slave labor. Imagine then that the global rules were rewritten to allow nations to exclude products produced in nations that did not have independent trade unions and collective bargaining. In this way, a transnational socialist politics could open up space for reform politics in places where it is currently impossible. with the same idea of gradually ratcheting up global standards that has been used by the environmental movement, one can envision an incremental process where most nations are moving towards greater democratic control over the market, albeit at somewhat different speeds. Moreover, this vision of multi-level contestation incorporates the idea of democratic experimentalism. The process of improving the global level rules will inevitably involve victories and defeats since the barriers to movements effectively coordinating across international lines are formidable and movements also have to contend with the complexities of power politics among major nations. Nevertheless, the idea is that over time these democratic movements from below will develop greater capacity as people around the world come to recognize that their own futures are highly dependent on what happens at the global level. Conclusion This essay has been organized around the surprising convergence between Karl Polanyi and Reinhold Niebuhr, who both used a single sentence in 1943 to convey an ethic of empowerment without hubris. Significantly, both men lived many years after these wartime formulations but did not return to this set of themes.5 The obvious explanation is that both men were responding to a unique set of circumstances. Both Polanyi and Niebuhr had been passionate opponents of fascism since the early 1930’s. Polanyi had left Vienna because of the fascist tide and Niebuhr who had strong family connections with germany was closely involved with german theologians who resisted Hitler such as Tillich and Bonhoeffer. Polanyi and Niebuhr could not help but be moved by the almost miraculous scale of the wartime mobilization in the U.S. to defeat the fascist enemy. In fact, Owen’s reference to the “new powers which men are about to acquire” took on new salience at an historical moment when factories in the U.S. were producing 232 new war planes every day and Kaiser’s shipyard in Richmond, California was launching five new battleships a week. The scale of the collective effort by the people of the United States working together with a common purpose must have been extraordinarily moving to both of these men who had spent more than a decade alerting others to the fascist threat.

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It would seem that both Polanyi and Niebuhr were projecting into the future what might happen if even a fraction of that wartime collective effort were devoted to the task of creating a more just and more democratic social order. But such a projection proved fanciful. what occurred in the post-world war II period was not progress towards democratic socialism, but the intensification of the Cold war that effectively closed the door on the radical possibilities that had existed in the 1930’s. Nevertheless, the ideas that Niebuhr and Polanyi formulated more than seventy years ago are extraordinarily relevant for the political economic circumstances that that world is facing today. The crisis that the world economy experienced in 2007-2009 is remarkably similar to the crisis of the 1930’s. The major difference is that governments were able to arrest the downward slide of the global economy in late 2008 and 2009, so a second great depression was avoided. Yet those same governments have not yet figured out a way to restart global economic growth. Instead, the world economy has stumbled from crisis to crisis for ten years, so that unemployment, marginalization, and intensifying poverty plague virtually every region of the world. At the same time, as in the 1930’s, there has been a broad retreat from democracy as voters throw their support behind parties that embrace nationalist and anti-immigrant sentiments. The confluence of intensifying nationalism, a weak global economy, migrants fleeing warfare and economic hardship, and the initial dislocations caused by global climate change is steadily increasing geo-political tensions. Most importantly, political and economic elites have responded to the crisis with a total lack of ideas or visions. Their only idea appears to be that a little more austerity will eventually set things right perhaps next year or the year after. In this setting, there is an urgent need for socialists to advance an alternative vision of the way forward. The time has again come for the empowerment without hubris that Polanyi and Niebuhr advocated. we know what we must do. we must have the courage to change the things we should, the serenity to accept those that we cannot change, and the wisdom to know the difference. Berman, Sheri. 2006. The Primacy of Politics. Social Democracy and the Making of Europe’s Twentieth Century. New York: Cambridge University Press. Block, Fred. 1977. The Origins of International Economic Disorder. Berkeley: University of California Press. ———. 2013. “Relational work and the Law. Recapturing the Legal Realist Critique of Market Fundamentalism.” Journal of Law and Society 40 (1): 27–48. doi:10.1111/j.1467-6478.2013.00611.x. Block, Fred, and Margaret R. Somers. 2014. The Power of Market Fundamentalism: Karl Polanyi’s Critique. Cambridge, Mass.: Harvard University Press. Block, Fred, and Margeret R. Somers. 1984. “Beyond the economistic Fallacy. The Holistic Social Science of Karl Polanyi.” In Vision and Method in Historical Sociology, edited by Theda Skocpol, 47–84. Cambridge/ New York: Cambridge University Press.

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Bockman, Johanna. 2016. “Preface to ‘Socialist Accounting’ by Karl Polanyi.” Theory and Society 45. Clark, Timothy. 2014. “Reclaiming Karl Polanyi. Socialist Intellectual.” Studies in Political Economy, no. 94: 61–84. Cole, george Douglas Howard. 1920. Self-Government in Industry. London: g. Bells and Sons. Dale, gareth. 2016. Karl Polanyi. A Life on the Left. New York: Columbia University Press. evans, Peter. 2008. “Is an Alternative globalization Possible?” Politics & Society 36 (2): 271–305. doi:10.1177/0032329208316570. Fung, Archon, and erik Olin wright. 2001. “Deepening Democracy. Innovations in empowered Participatory governance.” Politics & Society 29 (1): 5–41. doi:10.1177/0032329201029001002. Hayek, Friedrich A. 1944. The Road to Serfdom. Chicago: University of Chicago Press. Lacher, Hannes. 1999a. “embedded Liberalism, Disembedded Markets. Reconceptualising the Pax Americana.” New Political Economy 4 (3): 343–60. doi:10.1080/13563469908406408. ———. 1999b. “The Politics of the Market. Re-Reading Karl Polanyi.” Journal of Interdisciplinary International Relations 13 (3): 313–26. Malthus, Thomas. 1970. An Essay on the Principle of Population (1778). London: Penguin Books. Mendell, Marguerite. 1994. “Karl Polanyi and Socialist education.” In Humanity, Society, and Commitment. On Karl Polanyi, edited by Kenneth McRobbie, 25–42. Critical Perspectives on Historic Issues. Montréal/ New York: Black Rose Books. Niebuhr, Reinhold. 1935. “Christian Politics and Communist Religion.” In Christianity and the Social Revolution, edited by John Lewis, Karl Polanyi, and Donald K. Kitchin, 442–72. London: Victor gollanez. ———. 1944. The Children of the Light and the Children of Darkness. New York: Charles Scribner’s Sons. ———. 2013. Moral Man and Immoral Society. A Study in Ethics and Politics. (1932)Second edition. Library of Theological ethics. Louisville, KY: westminster John Knox Press. Owen, Robert. 1858. “A Supplementary Appendix to the Life of Robert Owen.” In Report to the County of Lanark. London: effingham wilson. Panitch, Leo. 2015. “Capital and Politics.” Perspectives on Politics 13 (04): 1075–83. doi:10.1017/S1537592715002340. Polanyi, Karl. 2001. The Great Transformation (1944). Boston, Massachusetts, USA: Beacon Press. Sahlins, Marshall. 1976. Culture and Practical Reason. Chicago: University of Chicago Press. Sandbrook, Richard. 2014. Reinventing the Left in the Global South. The Politics of the Possible. Sifton, elisabeth. 2003. The Serenity Prayer. Faith and Politics in Times of Peace and War. New York: Norton.

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Unger, Roberto. 1987. False Necessity. Cambridge: Cambridge University Press. weber, Max. 1946. “Politics as a Vocation.” In From Max Weber. Essays in Sociology, edited by Hans Heinrich gerth and C. wright Mills, 77–128. New York: Oxford Univ. Press. woodruff, David M. 2016. “governing by Panic.” Politics & Society 44 (1): 81–116. doi:10.1177/0032329215617465. wright, erik Olin. 2010. Envisioning Real Utopias. London / New York: Verso. NOTeS 1 This was a debate published in german in the 1920’s that centered on the question of whether a socialist economy could be organized in a way that efficiently allocated resources. For an overview of the debate and Polanyi’s contribution, see Bockman (2016). 2

Both Polanyi and Niebuhr were fluent in german and would have known weber’s important speech. Sifton (2003, 123) reports that Neibuhr and his brother H. Richard came to weber through the work of ernst Troeltsch.

3

There is a resemblance between this non-utopian utopia and what erik wright (2010) has called a “real utopia.”

4

This interpretation of Polanyi was first advanced by Block and Somers (1984) and has been further developed by evans (2008) and Sandbrook (2014).

5

Niebuhr joined the ranks of Cold war anti-communists after world war II and abandoned his previous radicalism.

Polanyi’s Concept of Peace in a Complex Society

Chikako Nakayama 1. Introduction Karl Polanyi discussed the ideal of peace with considerable emphasis in his major work, The Great Transformation (TgT), published in 1944. In the last chapter, “Freedom in a Complex Society,” he claimed, … there are freedoms the maintenance of which is of paramount importance. They were, like peace, a by-product of nineteenth century economy, and we have come to cherish them for their own sake. (Polanyi 2001, 263, italics added by Nakayama) That Polanyi mentioned peace as if it is a twin of freedom attracts our attention. However, the emphasis was on freedom. given this secondary importance until recently, his notion of peace was not investigated as much as was freedom. In 2014, an english translation of an anthology of Polanyi’s For a New West was published. This translation was an important milestone for further research on his notions of peace because it contains several of his articles and lecture notes dated primarily from the 1930s on the themes of peace, pacifism, and warfare. we examine in considerable detail Polanyi’s concept of these themes, especially in connection to his ideas of freedom in a complex society. As a starting point, we mention a passage in the draft of The Meaning of Peace, written between 1932 and 1938 (Polanyi 2014b, 78), which provides a definition of a complex society: The recognition of the inescapable nature of society sets a limit to the imaginary freedom of an abstract personality. Power, economic value, coercion are inevitable in a complex society. (Polanyi 2014b) In fact, investigating the significance of peace and freedom in a complex society in which power and coercion exist requires reflections on the law and politics at an international level. Catanzariti, an editor of the 2014 volume, discussed this concept in Postface (Catanzariti 2014, 229). Dale (2016) recently indicated a “realist” tendency in Polanyi’s thought on this theme. In fact, in the last chapter as previously noted, Polanyi dared to oppose fascism and socialism to economic liberalism on the basis that both recognize the reality of society (Dale 2016, 405). This classification is striking, taking his harsh criticism of fascism in the nineteen-

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thirties into consideration. Hence, we need to explore the reasoning and meaning of Polanyi’s thoughts on peace. 2. Economy and warfare during the interwar period 2-1. General concept of peace before and after the First World War Before examining Polanyi’s thoughts on peace in the 1930s, it is useful to survey economists’ considerations of peace in the historical context of the first half of the 20th century, when many economists committed to the problem of peace. Polanyi himself was aware of these contributions and developed his thoughts based on this milieu. Long and wilson who investigated the interwar period concluded that economics contributed considerably to the analysis of international relations “despite its apparent exclusion from International Relations scholarship after 1945” (Long and wilson 1995, 307). As an example, he picked up J. M. Keynes’s, The Economic Consequences of Peace. Certainly, Keynes opposed the self-interested viewpoint of victorious countries against the defeated countries, typically against germany.1 This commitment of Keynes was not an exception but rather a typical example of that time, even though he played a special role as the english negotiator for the Treaty of Versailles. In practice, “international relations” mostly meant the international liberaleconomic network and worldwide order primarily through the League of Nations as an organization that established and maintained peace after the First world war. The League was established following a proposal by U.S. President woodrow wilson, as described in his speech of the Fourteen Points in 1918 which had liberal-economic implications.2 However, the concept reflected not only wilson’s personal ideas but also those of a special committee that inquired about a new concept of peace in preparation for wilson’s speech. Part of this committee were geographer Isaiah Bowman, sociologist walter Lippmann, and journalist Noman Angell (Smith 2003; eulau 1954; Thomasberger 2012, 71; gelfand 1963, 80–81; Long 1995, 102). For these leading figures, the vision of scientific peace or “a peace settlement that was not predicted on the national power interest of any single government but instead would be a settlement based on the disinterested findings of specialists whose work would reflect those principles acceptable to the nations participating in the peace” (gelfand 1963, 16) was important. Such scientific peace was envisioned as technically constructed and should permanently be held. The role of Norman Angell deserves special attention, as his work, The Great Illusion, published in 1910, became an international bestseller before the First world war.3 The author’s idea of promoting peace through international networking and education against irrationality became known as “Angellism” and functioned as a defence for the League of Nations. Angellism had economic implications; Angell pronounced “that the war between modern industrial states was an exercise in economic futility” (Barber 1991, 61).4 This logic would have accelerated economists’ commitment to the concept of peace.

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Angell belonged to the Union of Democratic Control, which included several unique and influential advocates for peace, such as Arthur Ponsonby and Leonard woolf. Also coming from this milieu, an economist, John A. Hobson, expressed practical ideas for peace in the interwar period. He belonged to several unions, leagues, and committees against war. He promoted peace from around the 1910s—before the outbreak of the First world war—through the 1920s (Long 1995, 163). As a member of the Bryce Committee, he wrote a short treatise to establish an international government. However, Hobson’s investigation on imperialism, which aimed at clarifying the ambivalent character of an empire—one which headed for international peace but sometimes fell into colonialism (Arrighi 1983, 43)—had a considerable influence on Lenin. Lenin claimed that capitalism, once developed, proceeded to the stage of imperialism through the struggle among capitalists, which caused worldwide warfare. This concept of imperialism became quite popular as critics of capitalism and several economists including non-Marxists such as Schumpeter, inspired by Lenin, considered it further through a theoretical and historical lens. In the english intellectual milieu, left-wing tendencies close to the Labour Party had a strong influence on the peace movement. 2-2. Peace as a by-product and beyond Cangiani and Thomasberger noted the influence of english socialists and radicals on Polanyi and recalled Hobson’s warning against all those who were oriented toward an economic interest in the context of peace (Cangiani and Thomasberger 2003, 19–20). In fact, Polanyi showed his critical attitude toward the popular view of imperialism of his time, naming Lenin in his comment, “we have become too much accustomed to think of the spread of capitalism as a process which is anything but peaceful and of finance capital as the chief instigator of innumerable colonial crimes and expansionist aggressions” (Polanyi 2001, 16). Polanyi seemed to have referenced Hobson’s writings to develop this idea (Polanyi 2001, 12). In Polanyi’s terminology, the ambivalence of empire that Hobson clarified was articulated as “peace as a by-product.” This concept contrasts with peace that is cherished for its own sake, as quoted at the beginning of this article. In the first chapter of TgT, Polanyi defined 19th-century civilization in europe within an international political and economic framework and grasped the structure of this new civilization as a background for peace that lasted approximately one hundred years. Thereafter, he added the concept that the ideal of peace was sustained only passively, as a by-product. “Not peace at all cost, not even peace at the price of any ingredient of independence, sovereignty, vested glory, or future aspirations of the Powers concerned, but nevertheless peace, if it was possible to attain it without such sacrifice” (Polanyi 2001, 12). In the literal sense, the idea of the Hundred Years’ Peace came from “Thirty Years’ Peace” (1816–46) by Harriet Martineau (Polanyi 2001, 18), shown explicitly

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in his TgT source notes (Polanyi 2001, 286).7 Taking over Martineau’s historical analysis chronologically, Polanyi noted that peace was maintained in the latter half of the 19th century largely by haute finances. Although not pacifists themselves, they nevertheless contributed significantly to the maintenance of peace (Polanyi 2001, 10–18). However, Polanyi turned his attention more to the influence of liberal economists. Despite the drastic change in people’s attitudes after the First world war, liberal economists lacked recognition of this change. Polanyi stated that a “Hundred Years’ Peace created an insurmountable wall of illusions that hid the facts. The writers of that period excelled in a lack of realism” (Polanyi 2001, 198). Then, he added, “The nation-state was deemed a parochial prejudice by A. J. Toynbee, sovereignty a ridiculous illusion by Ludwig von Mises, war a mistaken calculation in business by Norman Angell. Awareness of the essential nature of the problems of politics sank to an unprecedented low point” (Polanyi 2001, 198). In the long run, he thought that peace as a by-product had misguided the awareness of those who believed in it. He specified that the essence of the problem of peace after the experience of the world war was of a political nature. However, since world war I the term peace as a by-product was no longer suitable because liberals such as Angell showed a definite will to bring and maintain peace itself. Polanyi was conscious of this, and hence, picked up the theme of pacifism several times.8 He did not merely negate pacifism but was critical of it so far as it claimed “an idealist or sentimental contention such as peace is ‘good', and therefore it ‘ought to be’ or any other equally meaningless assertion” (Polanyi 2014d, 86). He explained his stance as follows: “… if … pacifism implies the acceptance of the command ‘not to fight’, then I am emphatically not a pacifist. My specific diagnosis implies … that perhaps for a long time to come, human beings will have to fight if the institution of war is ever to be abolished” (Polanyi 2014d, 86). As he expressed, the ultimate goal was that war “must be abolished at all costs … once it is not inescapable” (Polanyi 2014b, 78). Thus, the issue was, “How far the will to peace can assert itself once the interest in peace which sprang from nineteenth-century economy has ceased to operate will depend upon our success in establishing an international order” (Polanyi 2001, 263, italics are added by Nakayama). Hence, he looked into the dimension of international politics. In this dimension, historically seen, the struggle for hegemony became ever more critical between the United Kingdom and the United States in the interwar period (Polanyi 2003c, 105), as Hobson analyzed. Polanyi wrote articles that focused on such issues in the interwar period.9 For example, the agreement on the parity of fleets, between hegemonic sea power as an island state, the UK, and the newly increasing continental power enjoying autarky, the US, meant a great concession by the former and, hence, a decisive change in world politics (Polanyi 2003a, 88, 90), from Pax Britannica to Pax (Anglo-) Americana. 10

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3. Reflections on a general postulate of peace 3-1. Institutional renunciation of wars by American initiative In 1928, the Kellogg-Briand Pact by American initiatives was signed,11 an attempt to renounce the use of war as an instrument of national policy.12 The agreement was eventually in contradiction to the Covenant of the League of Nations that already existed.13 Those who endeavoured to harmonize and integrate these two wanted to create an international pacifistic regime by integrating America into european or western institutions, even if the initiative was taken from the American side. Polanyi wrote an article on the Pact and discussed the skepticism of the europeans. He thought the American idea of international law was puritanically moralized, whereas the europeans, following the Roman tradition, felt the need for some legal framework to make the Pact meaningful (Polanyi 2001, 76). He then analyzed that American proposals were based on the idea that experiences and principles could also be applied more extensively outside America (Polanyi 2001, 78), which contained a contradiction: America was a federal state, whereas the world was not. At best, a union of nation-states in order to outlaw wars might be established. However, America in reality kept its distance from the existing world order through the League of Nations. Polanyi was convinced that America could not become an international court of justice or the policeman of the world (Polanyi 2001, 77). Further, Polanyi raised this issue again and asked the question, “Can America rescue world peace?” The theme of this article was taken from a book of the same title written by American journalist Frank H. Simonds, who attempted to fight against illusions and prejudice of ordinary Americans toward europe and european people. Polanyi described its contents to a considerable extent, in order to agree in part but generally criticize the author’s view. Polanyi looked into Simonds’ criticism of wilson’s fourteen points which indicated that the proposal of disarmament for defeated countries only established a new period of “economic warfare” instead of ending the fighting and conflict; because such a proposal was based on the belief that “it sufficed to threaten with weapons or to use economic coercive measures thoughtlessly” (Polanyi 2003b, 169). Simonds argued that wilson verified the incapability of democracy to create a new order, although he dreamt that it would do so. Polanyi thought highly of this part of Simonds’ analysis of democracy, which would have contributed to Polanyi’s contemplation of a “complex” society. But then he denounced Simonds’ pleading for violence, indicating the peace attained by violating other ethnicities’ rights would be “violent peace” (gewaltfriede). Polanyi emphasized that such violent peace could only be maintained through further violence (Polanyi 2003b, 166–67) and attributed Simonds’ totally false and “absurd” (Polanyi 2003b, 169) conclusion concerning the fates of Austria and neighbouring states to his excessive dependence on violence and on real politics.

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Further, in yet another article, Polanyi argued for a new measure of economic sanction that wilson praised. It certainly released people from resorting to military weapons and would result in savings—thrift of material, labour, and energy, as well as the risk of suffering severe physical damage. It was believed that this measure, if it were not really taken but merely mentioned as a threat, would still result in savings. Thus this measure was economically rational, corresponding to Angellism. However, as for Polanyi, it being “violent peace”, was a deceptive utilization of economy as an instrument or weapon. He sensed serious deception in categorizing economic sanctions as peace and ironically discussed this new order as the Anglo-Saxons adopting “the pacifistic-sanction-like religion” (Polanyi 1935, 266). In fact, during that time, measures of economic sanctions in the Covenant of the League of Nations were furiously discussed by Hans Kelsen, Carl Schmitt, and others (Catanzariti 2014, 229–30), and Polanyi shared this viewpoint.14 3-2. Critique of idealism and pacifism As already indicated, Polanyi attempted to criticize the liberal-economic rationale to avoid war apart from the political implications of Pax Americana. He investigated the psychological versions of pacifism, which regarded war “as an aberration of the mind or temperament” (Polanyi 1937)15 or assumed that “wars were caused by people’s passions, by outbursts of emotion, by errors of judgment due to overpowering sentiment, the results of hatred and envy, by the blind urge of uncontrolled instincts” (Polanyi 1937, 69). According to this idea, only some part of the nation or the people, for some reason, wanted and caused wars. In this sense, the myth that “the governments, not the people” caused war can be another variant of the idea. Polanyi certainly criticized Angellism as a kind of psychological pacifism.16 Angell’s book in 1910 dealt with imperialistic and geopolitical ambitions in england to compete with the newly appearing power of germany and judged such ambitions as an optical illusion, a misconception, and superstition (Angell 2012, 14). Angell’s book emphasized that the world had changed into a liberal one in which nation-states could not claim “ownership” of others; and he added that having colonies was costly (Angell 2012, 33–36). Although Angell then shifted this tone of economic rationalism after the First world war to a more realistic view of “international anarchy” in the thirties (Miller 1995, 110–11), his pacifism was still influential. He received the Nobel Prize in 1933. The popularity and depth of influence of “idée fixe” of Angellism might be the reason for Polanyi to have chosen it as the explicit target of criticism. Aldous Huxley’s “ends and Means,” which insisted that “war exists because people wish it to exist,” (Polanyi 2014b, 80; Aldous Huxley 1946, 89–125) was another important contribution which Polanyi opposed. Huxley thought that people could stop wars if they succeeded in making such people wish that wars did not exist. Thus, wars could be handled in principle by the force of people’s

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goodwill. In opposition, Polanyi counter-argued that “there is such a thing as unwanted war, indeed … this may be the true peril of our time” (Polanyi 2014c, 73 italics in original). Concerning this issue, Polanyi’s reasoning deserves attention in regard to the importance of territory or a territorial border for the bond and on the maintenance of a community (Polanyi 2014c, 72): He thought that only with the settlement of a frontier could a community produce law and order, safety and security, education and morality, civilization, and a culture without danger. Liberal idealists, he sustained, were mistaken when they neglected the meaning of territory: if it were endangered and if no other institution existed, war would be unavoidable. The idealism that denies or fails to recognize these “institutional functions of war” (Polanyi 2014c, 68) was the hardest substance for him to overcome.17 He thought that “war is an institution, and to this extent, it is impersonal” (Polanyi 2014c, 73). Hence, war had nothing to do with personal hatred and other similar concepts and could not be avoided even if it was unwanted by the people in question. Therefore, to “replace it by some other institution, which will perform the same vital function” was urgently necessary (Polanyi 2014c, 72) and became possible only with the recognition of the reality of war. Catanzariti discussed Polanyi coming close to the weberian idea of “a bond of obedience that joins people together in the face of rational legal power,” (Catanzariti 2014, 230) which Polanyi defined as “loyalty.” Dale indicated that Polanyi “hovered between radical and realist positions” in the 1930s and 1940s, closely acquainted to a Christian socialist milieu, the Labour left, e. H. Carr, or Harold Laski, among others (Dale 2016, 417). we now further investigate Polanyi’s idea of realism for attaining ultimate peace. 4. Confronting realism 4-1. Critique of the pseudo-realism proposed by fascism Polanyi’s realism meant to disapprove utopianism of failing to comprehend “the reality” and hence not being able to make some supposed ideal come true. In a sense, it could be interpreted to recognize that there were conditions beyond human will or human control, even if they were the results of human action18. In other words, realism posed a question of how much a human society could be intended and planned. It was Aldous Huxley who formalized this aspect as the problem of planned societies. In his book Ends and Means he included a chapter that discussed the planned society directly and classified two types of bad planning; one was the plan invented and put into practice “by men who do not accept our ideal postulates” (A. Huxley 1946, 32) or with a poor outcome. The other bad plan was to be made by men who accept such postulates but imagine that these ends “can be achieved by wicked or unsuitable means” (A. Huxley 1946, 32). Polanyi, in his consideration of peace, explicitly discussed these issues raised by Huxley.

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In establishing a general postulate of peace, Polanyi used the same example as Huxley discussed in the first type of bad plan (Polanyi 2014d, 77). It was Mussolini’s thought as was shown in an article19. Mussolini stated that fascism believed “neither in the possibility nor the utility of perpetual peace” (Polanyi 2014d, 77) because “war alone brings up to its highest tension all human energy and puts the stamp of nobility upon the peoples [sic] who have the courage to meet it” (Mussolini 1932, 11). Mussolini wanted to fight for the governmental power, stating explicitly that, “it is we who have the right to the succession, because it was we who forced the country into the war, and led her to victory” (Mussolini 1932, 9). This fascistic idea permeated beyond Italy into Austria. Polanyi, who sought pacifism in the ultimate sense and criticized any pseudoidealism without substance, defined Mussolini’s stance as “pseudo-realism”. Pseudo-realism considered wars inevitable for human beings, stating that there had “always” been wars (Polanyi 2014c, 68). In this connection, Polanyi also discussed the second type of bad plan referred to by Huxley who, with the viewpoint that the ultimate aim of all fascist planning was “to make the national society more efficient as a war-machine” (A. Huxley 1946, 33). Huxley argued that many plans were carried out in a militaristic manner, even those based on an ideal postulate but using a poor strategy: “if you wish peace, prepare for war” (A. Huxley 1946, 37). Huxley took up the example of food supply, because it raised an important question whether protective plans by a national government preparing for food shortages would disrupt international cooperation in free trade at the time. Huxley asked whether it would be the second-type of bad plan. Certainly, Polanyi remembered the post-First world war period when worried people wanted to hoard food because the world market had not solved the problem of food deficiency, which he defined as “the increasing military importance of agricultural self-sufficiency” (Polanyi 2001, 198). And it was Mussolini who incited people proposing a type of elitist spiritualism, stating that “fascism denies the validity of the equation, well-being-happiness, which would reduce men to the level of animals, caring for one thing only—to be fat and wellfed—and would thus degrade humanity to a purely physical existence” (Mussolini 1932, 14) and repudiated the conception of economic happiness that socialism postulated. Polanyi indicated that a logical deceit existed in this fascistic reasoning of spiritualism, covered by deliriously enthusiastic nationalism20. He interpreted such a stance by Mussolini meant a prohibition and deprivation of individuals’ room for freedom. For Polanyi, the actuality of material existence of man was world-wide interdependence and peace had to be organized in a new form of international cooperation to secure “the very lives of millions of human beings” (Polanyi 2014d, 87). He also raised the possibility of scientific agriculture in connection to this economic self-sufficiency as an attempt at autarky (Polanyi 2014d, 89). He picked up the possibility of “dirtless farming” proposed by Dr. gericke in California, which detailed a method to produce 20 times the national average crop of

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potatoes, originally outlined in a book by Dr. O.w. willcox, Nations Can Live at Home 22. Huxley also mentioned this attempt and was persuaded, although with some reservations, of its potential (A. Huxley 1946, 44) Polanyi criticized Huxley for seeming to forget the “ghastly costs of these uneconomic pseudo-scientific efforts” (Polanyi 2014d, 90), referring to attempts by Mussolini as well as german Nazis. Polanyi had to expel pseudo-realism’s notion of the inevitable factors of a society—power and coercion—for realizing the ideal of economic value. If peace were to be attained, the room for freedom with economic value had to be kept. Polanyi stated that the postulate of peace led to the diagnosis that “at the heart of the present struggle between fascism and democracy, as between capitalism and socialism, there is the problem of war” (Polanyi 2014d, 86). The same reference to Mussolini as above also appeared in another article by Polanyi, “The essence of Fascism” in 1935,23 in which he explained the incompatibility of democracy and capitalism in relation to his criticism of fascism. Mussolini rejected democracy as an anachronism, because “only an authoritative state can deal with the contradictions inherent in capitalism,” (Polanyi 1935, 391)24 whereas Polanyi supported a solution which defended democracy against capitalism. “The mutual incompatibility of Democracy and Capitalism”, he stated, “is almost generally accepted today as the background of the social crisis of our time” (Polanyi 1935, 391). 4-2. Exploring peace in a complex society In fact, around that time, Polanyi’s contemporaries confronted extraordinary territorial expansion and intrusion by a fascistic power with geopolitical ambitions, whereas liberal Angellism, which had originally controverted such power in england, could not raise an effective counter-argument. Certainly, the geopolitical interest attributed to “living space” (Lebensraum)—the space for habitation, food production and labour, getting and combining natural resources, and such—in itself could be justified if it was not excessive; therefore, Polanyi stood for realism in this connection. But emphasizing the importance of policy to solve the problem of territories, he wrote, “The key to peace … lies in policy. The means to international understanding is policy … The first aim of policy must be to avoid unwanted war. This, in a time like ours, may be a very great task” (Polanyi 2014c, 75). He then added that, “Sane realism is a realism that takes the moral and spiritual facts as realities. They are basic realities in politics. Sentimental idealization mistakes the facts” (Polanyi 2014c, 76 italics in the original). Peace for its own sake must be envisioned not only on the institutional level but also on the moral-religious spiritual level of tolerance (Polanyi 2014b, 82), or on these two levels combined, similar to the discussion of freedom. As Polanyi pointed out, “regulation both extends and restricts freedom: only the balance of the freedoms lost and won is significant” at the institutional level (Polanyi 2001, 261). even if the reality of society was considered, Polanyi believed that moral tolerance would function in international politics concerning peace and freedom.

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5. Conclusion In this article, we investigated Polanyi’s thoughts on peace in the interwar period, emphasizing the historical context of international relations, to clarify his implication for peace and freedom in a complex society. Polanyi knew that the peace concept after the First world war with the American initiative gradually led to the so-called Pax Americana, which was in effect a continuation of conflicts of interest among human groups using economic factors as weapons or instruments of threat. Apart from such historical critique, Polanyi as a socialist attempted to create a foundation of general postulates for peace. The foundation should serve the economic happiness of human beings, recognize the realities of society, and avoid unwanted wars. It seeks sane policies that secure people’s material needs through international economic cooperation. That was Polanyi’s vision of peace in a complex society.

Angell, N. 2012. The Great Illusion: A Study of the Relation of Military Power (1913). New York: The Knickerbocker Press. Arrighi, giovanni. 1983. The Geometry of Imperialism. The Limits of Hobson’s Paradigm. London/New York: Verso. Barber, w. J. 1991. “British and American economists and Attempts to Comprehend the Nature of war, 1910- 20.” In Economics and National Security: A History of Their Interaction, edited by C.D. goodwin, 61–86. Durham/London: Duke University Press. Cangiani, Michele, and Claus Thomasberger. 2003. “Machtpolitik, Systemkonfrontation und Friedlicher Koexistenz: Die Bedeutung der Demokratie. Karl Polanyis Analysen der Internationalen Beziehungen.” In Chronik der Grossen Transformation, Bd. 2: Die Internationale Politik Zwischen den Beiden Weltkriegen, Ed. by M. Cangiani and C. Thomasberger, by Karl Polanyi, 11–43. Marburg: Metropolis. Carr, e. H. 2001. The Twenty Years’ Crisis 1919- 1939: An Introduction to the Study of International Relations, (with a New Introduction by M. Cox). New York: Palgrave. Catanzariti, Mariavittoria. 2014. “Postface: Observations on Karl Polanyi’s Juridical-Political Thought.” In For a New West. Essays, 1919 - 1958, edited by giorgio Resta, Mariavittoria Catanzariti, and Kari Polanyi Levitt, 221–41. Cambridge: Polity Press. Dale, gareth. 2016. “In Search of Karl Polanyi’s International Relations Theory.” Review of International Studies 42 (3): 401–24. eulau, H. 1954. “wilsonian Idealist: walter Lippmann goes to war.” The Antioch Review 14 (1): 87–108.

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gelfand, L. e. 1963. The Inquiry: American Preparation for Peace, 1917-1919. New Haven: Yale University Press. Huxley, A. 1946. Ends and Means. An Enquiry into the Nature of Ideals and into the Methods Employed for Their Realization. London: Chatto & windus. Long, D. 1995. “J. A. Hobson and economic Internationalism.” In Thinkers of the Twenty Years’ Crisis. Inter-War Idealism Reassessed, edited by D. Long and P. wilson, 161–88. Oxford: Oxford University Press. Long, D., and wilson, P. , eds. 1995. Thinkers of the Twenty Years’ Crisis. Inter-War Idealism Reassessed. Oxford: Oxford University Press. Miller, J. D. B. 1995. “Norman Angell and Rationality in International Relations.” In Thinkers of the Twenty Years’ Crisis. Inter-War Idealism Reassessed, edited by D. Long and P. wilson, 100–121. Oxford: Oxford University Press. Mimaki, S. 2014. The Era of the Outlawry of War Movement: The Development of International Political Thought during the “Twenty Years’ Crisis” in the United States, (in Japanese). Nagoya: Nagoya University Press. Mussolini, B. 1932. The Political and Social Doctrine of Fascism. London: Hogarth Press. Polanyi, Karl. 1935. “The essence of Fascism.” In Christianity and the Social Revolution, edited by John Lewis and Donald K. Kitchin, 359–94. London: Victor gollanez. ———. 1937. Europe Today, Introduction by G. D. H. Cole. London: The workers’ educational Trade Union Committee. ———. 2001. The Great Transformation: The Political and Economic Origins of Our Time. Boston: Beacon Press. ———. 2003a. “englisch-Amerikanische Flottenparität.” In Chronik der Großen Transformation, Bd. 2: Die Internationale Politik Zwischen den Beiden Weltkriegen, Ed. by M. Cangiani and C. Thomasberger, 88–93. Marburg: Metropolis. ———. 2003b. “Kann Amerika Den weltfrieden Retten?” In Chronik der Großen Transformation, Bd. 2: Die Internationale Politik Zwischen den Beiden Weltkriegen, Ed. by M. Cangiani and C. Thomasberger, 163–69. Marburg: Metropolis. ———. 2003c. “Pax Anglo-Americana.” In Chronik der Großen Transformation, Bd. 2: Die Internationale Politik Zwischen den Beiden Weltkriegen, Ed. by M. Cangiani and C. Thomasberger, 101–10. Marburg: Metropolis. ———. 2014a. “For a New west (1958).” In For a New West: Essays, 1919-1958, edited by giorgio Resta and Mariavittoria Catanzariti, 29–32. Cambridge: Polity. ———. 2014b. “The Meaning of Peace (1938).” In For a New West: Essays, 19191958, edited by giorgio Resta and Mariavittoria Catanzariti, 77–85. Cambridge: Polity.

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———. 2014c. “The Nature of International Understanding (N.d.).” In For a New West: Essays, 1919-1958, edited by giorgio Resta and Mariavittoria Catanzariti, 67–76. Cambridge: Polity. ———. 2014d. “The Roots of Pacifism (1935).” In For a New West: Essays, 19191958, edited by giorgio Resta and Mariavittoria Catanzariti, 86–91. Cambridge: Polity. Smith, N. 2003. American Empire: Roosevelt’s Geographer and the Prelude to Globalization. Berkeley/Los Angeles: University of California Press. Thomasberger, Claus. 2012. Das Neoliberale Credo. Ursprünge, Entwicklung, Kritik. Marburg: Metropolis-Verl.

NOTeS 1 Keynes was said to have enthusiastically supported Norman Angell’s idea of peace as we discuss below and received considerable influence in forming his own vision of the post-war world (gelfand 1963, 81). 2

Before examining concrete proposals on the territorial solutions of countries such as Russia, Belgium, and France, Article III proposed “the removal, so far as possible, of all economic barriers and the establishment of an equality of trade conditions among all the nations consenting to the peace and associating themselves for its maintenance.”

3

It sold more than two million copies and was translated into 25 languages.

4

Barber examined mainly Anglo-Saxon economists’ attempts to comprehend the nature of war between 1910 and 1920, attaching importance on Angell.

5

Arrighi, finding the concept of imperialism causing confusion, examined Lenin’s thought and evaluated it that “at the bottom of Lenin’s discourse on imperialism, even when he was speaking of monopoly or finance capital, of the export of capital, parasitism or other aspects, lay the constancy of the tendency to war between rival capitalist countries – the tendency which specifically characterized the historical moment in which he was writing’ (Arrighi 1983, 14).

6

Polanyi also examined Hilferding’s work as another representative of Marxist works in contrast to Hobson (Polanyi 2001, 276).

7

In the list of “notes on sources” about the Hundred Years’ Peace, Toynbee, A. J., Robbins, L., and Carr, e. H. are seen together with Lippmann, w. (Polanyi 2001, 272).

8

It can be traced in several articles such as Polanyi (Polanyi 2014b), a draft of a journal article (Polanyi 2014d), a lecture draft, or an undated draft on international understanding (Polanyi 2014c), etc.

9

Most of such articles were published in Österreichische Volkswirt, but further, we found unpublished writings and memos in the folders of the digital archive (ex., con_15_Fol_09, “Collective Security=Conditions of Peace” walnamston, Notes 1944, con_17_Fol_19, Lectures –Versailles and After 1938, (including “war and Peace on Danube”), con_18_Fol_12 (Austria –the Key to european Peace), con_ 18_ Fol_37 (Lecture: Can Peaceful Civilization Be Virile?), etc.).

10

Polanyi used “Pax Anglo-Americana” in his 1930 article. But this concept has not been defined very precisely: it sometimes indicates the period after the First world war and in others after the Second world war.

11

It was signed in 1928, originally between France and America. By 1929, 15 countries, including england, germany, Italy, and Japan had signed the agreement, followed by another 63 countries.

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12

Article I claims that “they (the countries in question) condemn war as a solution for international controversies, and renounce it, as an instrument of national policy in their relations with one another”. Article II claims that, “the settlement or solution of all disputes or conflicts …shall never be sought except by pacific means”. Article III, the last, is about the procedures of ratifications.

13

Japanese representatives opposed the harmonization and revision of the Covenant according to the pact (Mimaki 2014, 177–82).

14

Polanyi’s criticism of the League of Nations was discussed by Cangiani and Thomasberger (2003, 23–24) and Catanzariti (Catanzariti 2014, 229). It also was clearly seen in Polanyi’s 1937 essay (Polanyi 1937).

15

Because this manuscript does not have a specific date, we cannot know exactly when it was written. However, because the same manuscript contains a passage about the situation in 1940 and 1941, we can assume that at least some part of it was written after these years.

16

It was implied in his usage of the term, “a great illusion” (Polanyi 2014c, 68).

17

He called it “the idealists’ last refuge” (Polanyi 2014c, 72).

18

I owe this viewpoint to Thomasberger’s suggestion. Here the influence of Carr’s idea of realism or his criticism of utopianism can be seen, as Carr analyzed the crisis of ideal at the time he experienced (Carr 2001, 25–88).

19

Mussolini stated that a doctrine founded upon a “harmful postulate of peace is an enemy to Fascism” (Mussolini 1932, 11). This article was originally published in the Enciclopedia Italiana, and an english translation was published by Leonard and Virginia woolf.

20

Polanyi explained the dangers of mobilization for total war by saying, “The Fascist, if he is to be consistent, cannot escape the conclusion that not the spiritual but the animal elements in the composition of man are man’s true nature” (Polanyi 1937, 58).

21

Huxley indicated this “tray agriculture” was one of the thirteen new inventions focused on by the Roosevelt government in 1937. For Polanyi, it was a typical and problematic manifestation of industrialism, which he further explored in the postwar period. He formalized this problem as a combination of technology, economic organization, and science, unique to the western civilization (Polanyi 2014a, 31).

22

Huxley explained it was [enlisted] in the report of the commission appointed by President Roosevelt to consider probable future trend.

23

A translators’ footnote of Japanese version tells us that Mussolini’s article was probably written by giovanni gentile, an Italian thinker of the time.

24

In Mussolini’s article, certain sentences reproach democracy, such as “ … the absurd conventional untruth of political equality dressed out in the garb of collective irresponsibility and the “myth of "happiness" and indefinite progress” (Mussolini 1932, 16), or “giving the people the illusion of sovereignty” (Mussolini 1932, 14).

IV Ne w W ay s o f R ef r a m i n g Socialism

Not the New Deal and Not the Welfare State: Karl Polanyi’s Vision of Socialism Johanna Bockman AT THe “Freedom in a Complex Society” Conference, Kari Polanyi Levitt expressed her wish that her father be remembered not as an American but rather as a Central european.1 This led to a heated discussion, which was not resolved. Many scholars, including Polanyi Levitt (2013), utilize Karl Polanyi’s work as a fundamental resource for examining today’s neoliberalism and for advocating social change. Polanyi Levitt understood her father’s legacy within the socialist traditions of Central and eastern europe, where he spent his formative years. In 1933 at about 47 years old, he left for London and later, at 61 years old, moved to the United States.2 Polanyi Levitt suggested that one’s interpretation of her father’s socialism depends on whether you view him as writing from a Central european perspective or an American one. Many scholars, especially in the US context, have used Polanyi to argue for re-embedding of the economy in a new welfare state, a new New Deal, or a european social democratic state (Block and Somers 2014; Blyth 2002; Krippner 2002; Stiglitz 2001). Fred Block and Margaret Somers also participated in the conference. while examining other time periods and texts, Block and Somers have focused on Polanyi’s The Great Transformation (1944), written and published while Polanyi moved back and forth between england and the United States. Block, Somers, and other scholars engage actively and importantly with the concerns in the United States, which focus on the state. Thus, we can see a Central european Polanyi and an American Polanyi. Here I step into this discussion with the goal of clarifying Polanyi’s vision of socialism. I start by exploring the arguments for the welfare state made by Fred Block and Margaret Somers in their The Power of Market Fundamentalism. I then argue that, while Polanyi most definitely preferred the New Deal to other options such as fascism, Polanyi’s socialism came out of Central and eastern european experiences, debates, and concerns. I join other scholars in demonstrating that the New Deal and the welfare state were not socialism to Polanyi.3 My contribution to this discussion is to demonstrate the specific anti-statist and anti-capitalist nature of Polanyi’s socialism. I also argue that Polanyi should be understood not only within the Central and eastern european context of the 1920s but also within the transnational context of anti-statist socialisms. Thus, I seek to recognize the resonance of his ideas with broader socialist worlds.

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The New Deal and Welfare State Argument Throughout their work, Block and Somers have made a profound contribution to social scientific knowledge and political discourse in the United States. They have demonstrated the relevance of Polanyi’s critique today and have developed an interpretation of Polanyi’s work to understand the rise of the right-wing in the United States, the logic of the right’s utopian free market ideas since the 1970s, and the devastating consequences of neoliberal policies based on these ideas. Thus, their work is a foundational resource for scholars, activists, and laypeople seeking to understand neoliberalism today. However, I take issue with their interpretation of Polanyi’s socialism. Block and Somers (2014) argue that markets have always been embedded.4 They build on Polanyi’s statement that the self-regulating free market has never existed, that it is “a stark utopia” (Polanyi 1957, 3). According to Polanyi, economic liberals condemn state regulation in the name of free markets while simultaneously calling for state intervention and regulation that helps their own interests, such as laws against union organizing, laws to protect private property, or ad hoc exceptions to laissez-faire policies (Polanyi 1957, 148). This liberal state, which embedded markets in the nineteenth and early twentieth centuries, was usually authoritarian and anti-democratic. Since the market is always embedded in a state, then, according to Block and Somers, the market or the economy more generally could be embedded in a more social democratic state. Block and Somers write: The concept of the always-embedded economy suggests that there are no inherent obstacles to restructuring market societies along more democratic and egalitarian lines. After all, if it is not “nature” but political discourses and institutions that drive our markets, then it is those very same political dynamics that are ultimately vulnerable to the power of democratic and egalitarian forces. (Block and Somers 2014, 96–97) Thus, by recognizing the always-embedded market, we might decide to establish another kind of regulatory state in place of the neoliberal ones we have today. Block and Somers present european social democracy, the New Deal, and the welfare state more generally as the socialist or proto-socialist models Polanyi would likely have advocated (Block and Somers 2014, 57, 220–23).5 First, working within the US debates, they argue that the state is a key element of these models and central to Polanyi’s thought (Block and Somers 2014, 240). For Block and Somers, Polanyi would support these models because Polanyi called for democracy and these models have parliamentary or representative democracy. These models also regulate markets, especially those in fictitious commodities, and provide social protection and “societal repair” (Block and Somers 2014, 113). Block and Somers assert that Polanyi supported such state regulation of the economy and “follow[ed] weber in recognizing that political authority and power

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would inevitably continue into any future social order, especially as a countervailing source of power to that of the economy” (Block and Somers 2014, 36, 26–27). For Block and Somers, a democratic state is an essential countervailing force against the economic domination of market society. Second, Block and Somers view these three models as socialist or protosocialist. Recognizing that “Polanyi is not explicit on this point,” they assert that Polanyi viewed the New Deal “as the beginning of a transition to socialism” (Block and Somers 2014, 57). Block and Somers present the New Deal as a socialist way out of crisis, which they equate it with Red Vienna. For them, Red Vienna is “a prototypical welfare state in which a healthier, more educated, and better housed labor force brought benefits to workers and employers alike” (Block and Somers 2014, 25), farther down the path to socialism than the New Deal but still on the same socialist path. However, Block and Somers interpret Polanyi’s socialism as a regulated capitalist system: “Polanyi’s vision depends on the possibility of a political-economic compromise by which businesses would continue to earn profits, but they would accept regulatory restraints, taxation, and the steady expansion of social welfare institutions” (Block and Somers 2014, 221). In the US context, such regulated capitalism appears socialist because popular political debates have long assumed that the market is capitalist and the state is socialist. Block and Somers have created a new, though related, dichotomy in which: a) the free market and its authoritarian state are capitalist, and: b) the New Deal, european social democracy, or the welfare state and their regulated markets are socialist or are on the path to socialism. Thus, in the US context, a system with private ownership of the means of production and profit-making companies can be understood as socialist if a democratic welfare state manages it. In their work, Block and Somers focus on the urgent concerns of the US, especially the rise of the New Right, the pernicious logic of free market ideas, and the destruction of the welfare state. They do talk about europe, such as in regards to Speenhamland and the european social democracies, but their concerns are primarily US concerns and they work within the framework of US debates. In these debates,welfare state capitalism is understood as socialist or leading to socialism, in opposition to free market capitalism. This dichotomy obscures socialisms that Polanyi supported, as well as others that he might have supported. Polanyi’s Vision of Socialism On the first page of The Great Transformation, Polanyi wrote, “inevitably, society took measures to protect itself, but whatever measures it took impaired the selfregulation of the market, disorganized industrial life, and thus endangered society in yet another way” (Polanyi 1957, 3–4). Polanyi found that market society impels countermovements, but these countermovements are primarily for protection and survival. For Polanyi, without the implementation of specific forms of socialism, capitalism would remain in systemic crisis and any intervention in that

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system would further intensify this crisis (Polanyi 1934).6 Furthermore, he believed that capitalism and democracy were mutually incompatible and that only socialism and democracy were mutually compatible: “either Democracy or Capitalism must go. Fascism is that solution of the deadlock which leave Capitalism untouched. The other solution is Socialism. Capitalism goes, Democracy remains” (Polanyi 1934, 159). Polanyi did not view the state as the savior of society. For him, the state had a role to play in markets, but he did not call for the state, rather he recognized the state’s role in the economy of the current system. Polanyi, of course, greatly preferred the protective countermovement of New Deal to that of fascism, but he would have still found it crisisridden and devastating to society. Only socialism of a particular sort will lead out of the crisis of capitalism. Until 1933, Polanyi lived in a socialist world–the world of the Bolshevik Revolution, Hungary’s Aster Revolution of 1918–19, the short-lived Soviets in Hungary and germany, and Vienna’s municipal socialism.7 Central european discussions revolved around markets and socialism, especially in the liberal socialist circles he entered sometime after 1908 and remained within during his life in Central europe (Dale 2010a, 7, 2010b, 377–79). Of course, when he moved to London and then to the United States, he developed new ideas, but his notions of socialism, I argue, developed in the socialist world of Central and eastern europe. Red Vienna and its Central and eastern europe environment were quite different from that of the New Deal. Polanyi admired Red Vienna for its socialism beyond its state. The many workers’ associations in Vienna at the time greatly inspired Polanyi. In the world of Viennese municipal socialism, it seemed bewildering to Polanyi to ignore such institutions and instead call for a centrally administered economy as Otto Neurath, Karl Kautsky, and others did. In 1925, Polanyi criticized these socialists: “the presently existing capacity of the trade unions, industrial associations, co-operatives and municipalities to contribute to a socialist economy is entirely overlooked by the theoreticians of the administered economy” (Polanyi in Dale 2010a, 23).8 The distinction between the New Deal and Red Vienna is obscured when one focuses on the state. As Kristin Ross states, “if we begin with the state, we end with the state” (Ross 2015, 14). For Polanyi, socialism should be built on a wide variety of autonomous organizations, not led by the state or a representative parliament. In 1922, Polanyi laid out his vision of a functional socialist society (Polanyi 2016).9 First, this society would abolish the private ownership of the means of production (Polanyi 2016, 406). Second, this society, in effect, would abolish the state. Importantly for Polanyi, this was not anarchy. In this society, there would be two main economic organizations, the commune (Kommune) and the production associations. The commune is the political community and the owner of the means of production. The production associations include “productive

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cooperative, guilds, ‘self-managed factory,’ ‘business partnership,’ ‘social workshop,’ ‘autonomous enterprise,’ producing trade union, industrial union or producers’ general labor association, One great Union” (Polanyi 2016, 414). The production associations have the right to use the means of production. Production associations could unite or federate to administer industrial branches democratically on the behalf of society, but at their base, these associations are directly democratic. For Polanyi, socialism requires both the commune and the production associations in negotiation with each other. These associations, in fact, represent the many sides of every person: everyone is both a consumer (and thus a member of the commune and possibly of local consumer cooperatives) and a producer (and thus a member of one or more production associations). People negotiating within and among these multiple institutions can, in Polanyi’s view, consciously organize society and thus attain freedom. According to Polanyi, this freedom is founded upon direct democracy across, in multiple ways, the illusory divide between the economy and the polity. This socialism is not the extension of regulations into the market as in the New Deal and the welfare state, but rather a movement through which the economy and the polity themselves are made social. By institutionally bringing together the polity and the economy, by “a true restructuring of society!” (Polanyi 2018, 298), Polanyi seeks to recognize and expand the social, a relational domain. Society itself creates markets and democracy simultaneously.10 This expanding, relational social sphere is socialism itself. According to Polanyi, the task of the socialist is “one of overcoming the state by resolving this social relation into a direct one that is no longer mediated by the state” (Polanyi 2018, 298). By advocating representative government as a polity intervening in or regulating the economy, Block and Somers ignore Polanyi’s call for direct participation in the economic sphere by the very same people who are also directly participating in the commune. By moving beyond the reification of the state and the market, we come to realize our mutual human relations, socialism, and freedom. Polanyi did not turn away from this ideal after he moved to the United States. In 1947, Polanyi repeated his call for such a society: [In America, there are two tendencies] some believe in elites and aristocracies, in managerialism and the corporation. They feel that the whole of society should be more intimately adjusted to the economic system, which they would wish to maintain unchanged. This is the ideal of the Brave New world, where the individual is conditioned to support an order that has been designed for him by such as are wiser than he. Others, on the contrary, believe that in a truly democratic society, the problem of industry would resolve itself through the planned intervention of the producers and consumers themselves. Such conscious and responsible action is, indeed, one of the embodiments of freedom in a complex society. (Polanyi 1947, 117)

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The “planned intervention of the producers and consumers themselves” is an unmediated, democratic relationship across and within the economy and the polity. Thus, freedom in a complex society would not be realized by a welfare state in a capitalist system, but rather would require the restructuring of the entire society around democracy practiced by producers and consumers. In 1922, Polanyi specifically used the term Kommune rather than a word for “state” (Staat). we can see Polanyi and others in 1920s Central and eastern europe as developing the socialist ideas of the Paris Commune of 1871. Kristin Ross recently explored the continuing legacy of the Paris Commune. According to Ross, the Commune entailed “the simultaneous dissolution of Capital, State, and Nation,” thus abolishing private property and the state (Ross 2015, 112, 142). At its core, this legacy is based on the idea that the state is oppressive and must be dismantled, and that society itself, in the form of autonomous associations of workers, should organize social, economic, and political life. Freeing themselves from the state, those participating in the Commune had “a vision of social transformation predicated on a large voluntary federation of free associations existing at the local level…[and] the free union of autonomous collectives against the state” (Ross 2015, 111, 20). As discussed by Ross, Frederick engels told August Bebel in 1875 that the Commune “ceased to be a state in the true sense of the term.”11 The Commune thus enabled equality and individualism (Ross 2015, 108), which Polanyi greatly valued. Only after the violent defeat of the Commune could the bourgeoisie use the Commune to bolster the state, but the legacy of the Commune–these ideas and especially the rejection of the state and capital–flowed to Central and eastern europe and other places worldwide. Socialism and socialist thinking are transnational or global, not merely national or regional phenomena. while the Soviet Union and official communist parties supported centralized states and central planning, socialists around the world early on criticized Stalinism and state-centered, authoritarian socialism, as well as welfare state capitalism and free market capitalism. within international discussions about socialism, Yugoslavia was particularly popular as a model because, after 1948, the Yugoslav government had implemented, though did not fully realize, worker self-management socialism. Socialists around the world found the Yugoslav model attractive because it sought to realize international socialist ‘best practices’: the decentralization or dismantling of the state, the creation of worker-organized economic and political democracy, (non-state) social ownership, and free markets (Bockman 2011: chapter 3). For example, in contrast to members of the Chilean Communist Party, who supported the Soviet Union, Chilean socialists showed great interest in anti-statist socialism and Yugoslavia. By 1947, the Socialist Party of Chile (PSC) publicly condemned Stalinism and Soviet central planning, suggesting a form of self-managing socialism. In general, the Socialist Party rejected Statism, as in 1953 when PSC leader eugenio gonzalez told the Chilean Senate:

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we must not nationalize [estatizar] the economy but socialize it, that is, humanize it…Socialism does not aspire to reinforce the political power of the State with the management of economic power. Socialism does not aim to be a State which plans, regulates, and manages complex process of production and distribution of goods and services… On the contrary, socialism wants that workers and technicians themselves, through their organizations, plan, regulate, and manage, directly and democratically, economic processes for the benefit of themselves, their security, and real and living society. (Martner and Joignant 2005, 25–26)12 The social–and not the welfare state nor the New Deal–had transnational socialist resonance. Thus, we can see Karl Polanyi as part of transnational socialist networks, which rejected state socialism and state capitalism either authoritarian or democratic, as well as market fundamentalism. At the conference, the heated discussion about whether we should consider Polanyi as an American or a Central european was not new. Block and Somers have provided an interpretation of Polanyi for today, which brings his ideas into current-day debates in highly effective ways. Yet, the US debates are unique in their focus on the state as the key actor that brings socialism, while leaving the market tied to capitalism. I discussed Fred Block and Margaret Somers’ The Power of Market Fundamentalism to demonstrate how the US scholars use Polanyi to call for the welfare state, the New Deal, and european social democracy. By turning to Polanyi’s youth and adult life in Central and eastern europe, we can see the transnational debates there. Broader transnational socialist networks called for the abolition of private ownership of the means of production and workers’ associational power against the state. The spirit of the Paris Commune, 1920s Central and eastern europe, and 1950s Yugoslavia and the non-aligned world continues their anti-statist socialist legacies. while he developed his socialist ideas in Central and eastern europe, Karl Polanyi also worked within these transnational socialist worlds.

Block, Fred L., and Margaret R. Somers. 2014. The Power of Market Fundamentalism. Karl Polanyi’s Critique. Cambridge, Massachusetts: Harvard University Press. Blyth, Mark. 2002. Great Transformations. Economic Ideas and Institutional Change in the Twentieth Century. New York: Cambridge University Press. Bockman, Johanna. 2011. Markets in the Name of Socialism. The Left-Wing Origins of Neoliberalism. Stanford, California: Stanford University Press. Dale, gareth. 2010a. Karl Polanyi. The Limits of the Market. Key Contemporary Thinkers Series. Cambridge ; Malden, MA: Polity Press.

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———. 2010b. “Social Democracy, embeddedness and Decommodification. On the Conceptual Innovations and Intellectual Affiliations of Karl Polanyi.” New Political Economy 15 (3): 369–93. doi:10.1080/13563460903290920. ———. 2014. “Karl Polanyi in Vienna. guild Socialism, Austro-Marxism and Duczynska’s Alternative.” Historical Materialism 22 (1): 34–66. doi:10.1163/1569206X-12341337. Drahokoupil, Jan. 2004. “Re-Inventing Karl Polanyi. On the Contradictory Interpretations of Social Protectionism.” Czech Sociological Review 40 (6): 835–49. Krippner, greta R. 2002. “The elusive Market. embeddedness and the Paradigm of economic Sociology.” Theory and Sociology 30 (6): 775–810. Martner, gonzalo, and Alfredo Joignant. 2005. “el socialismo y los tiempos de la historia: Diálogos exigentes.” http://www.archivochile.com/Chile_ actual/columnist/martner_g/1/colum01_martnerg0000007.pdf . Mendell, Marguerite. 1990. “Karl Polanyi and Feasible Socialism.” In The Life and Work of Karl Polanyi. A Celebration, edited by Karl Polanyi and Kari Polanyi Levitt. Montréal/ New York: Black Rose Books. Polanyi, Karl. 1934. “Marxism Re-Stated. Part I.” New Britain 58 (3): 159. ———. 1947. “Our Obsolete Market Mentality.” Commentary 3 (2): 109–17. ———. 1957. The Great Transformation (1944). The Political and Economic Origins of Our Time. Boston, Massachusetts: Beacon Press. ———. 2016. “Socialist Accounting (1922)(Translated and Introduced by J. Bockman, A. Fischer and D. woodruff).” Theory and Society 45: 385–427. ———. 2018 “On Freedom (1927).” In this volume, 298-319. Polanyi Levitt, Kari. 2013. From the Great Transformation to the Great Financialization. On Karl Polanyi and Other Essays. London/ New York: Zed Books. Rosner, Peter. 1990. “Karl Polanyi on Socialist Accounting.” In The Life and Work of Karl Polanyi. A Celebration, edited by Karl Polanyi and Kari Polanyi Levitt, 55–65. Montréal/ New York: Black Rose Books. Ross, Kristin. 2015. Communal Luxury. The Political Imaginary of the Paris Commune. London: Verso. Stiglitz, Joseph e. 2001. “Foreword.” In The Great Transformation: The Political and Economic Origins of Our Time, by Karl Polanyi, vii–xvii. Boston: Beacon Press.

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NOTeS 1 I am grateful to Michael Brie, gareth Dale, Kari Polanyi Levitt, Claus Thomasberger, Andrew Zimmerman, and all the participants at the “Freedom in a Complex Society” Conference in November 2015 for their insightful comments. 2

while living in england from 1933 to 1947, Polanyi visited the US for lecture tours and was a Rockefeller fellow at Bennington College in Vermont (from early 1940 to early 1943, during which he wrote much of The Great Transformation). In 1943, Polanyi returned to London and became involved in Hungarian politics. In 1947, at the age of 61, he moved to the United States to take up an appointment at Columbia University.

3

For example, Dale has demonstrated “that it is a caricature to present him either as a champion of Keynesian social democracy and ‘embedded liberalism’ or as an uncompromising opponent of market economy. Unlike many of his followers he was a radical socialist, committed to the replacement of capitalism by a socialist order” (Dale 2010b, 390). Mendell (1990) and Rosner (1990) made early english-language contributions to understanding Polanyi’s socialist ideas.

4

Here I focus on The Power of Market Fundamentalism, which brings together previously published texts with the authors’ most recent interpretative frame.

5

Block and Somers contrast these, as well as Polanyi’s ideas, with Keynesianism. They criticize Keynes for elitism and for officially supporting the idea that the economy was an autonomous space. For them, Keynesianism led to further technocratic elitism (Block and Somers 2014, 22–25).

6

Drahokoupil (2004) discusses in a much more rigorous way the arguments that the countermovement against market society is primarily a movement for survival and is part of market pathology remaining within capitalist crisis.

7

By “socialist world,” I do not mean that socialism or communism were fully realized, rather I mean that, in the early twentieth century, Central and eastern europe erupted with socialist experiments, practices, conversations, and futures that would continue, in various forms, through the post-1945 socialist era.

8

In a 1922 newspaper article, Polanyi criticized Karl Kautsky for “an almost flabbergasting lack of comprehension towards the forms and future possibilities of the cooperative idea and movement” (Polanyi in Dale 2014, 41).

9

Many others, including Block and Somers (2014), have discussed this 1922 work (Dale 2010a; Mendell 1990; Rosner 1990).

10

Polanyi spoke of socialism as “consciously subordinating [the self-regulating market] to a democratic society” (Polanyi 1957, 234). However, while markets would be subordinated to a functional socialist society, they would also be social and united with social life.

11

engels continued, “we would therefore suggest that Gemeinwesen [“commonalty”] be universally substituted for state; it is a good old german word that can very well do service for the French Commune.” while Ross discusses this letter, I am using the translation from https://www.marxists.org/archive/marx/works/1875/letters/75_03_18.htm.

12

This is my translation.

Planning for Freedom Pat Devine

Part 1: Introduction The final chapter of The Great Transformation, Chapter 21: “Freedom in a Complex Society”, poses the question of how freedom can be safeguarded and extended in a socialist society. In the chapter Polanyi summarises the preceding argument of the book and concludes that the ‘utopian’ project of creating a fully selfregulating economy has produced such devastating consequences for society that the choice facing society has emerged as fascism or socialism, echoing Rosa Luxemburg’s similar conclusion, ‘socialism or barbarism’. This is because the concept of freedom associated with the development of ‘market society’ in the nineteenth century was the freedom of the self-determining individual from the state, but this ‘freedom’ ignores the reality of society. Fascism and Bolshevism both recognise the reality of society, but fascism does so by abolishing freedom whereas socialism creates the conditions for extending freedom. However, the safeguarding and extension of freedom in a complex society cannot be taken for granted. It requires institutions that are both based upon and promote the moral and political values of equality and freedom. For Polanyi, the economy is “an instituted process of interaction between man and his environment” (Polanyi 1957, 248) which produces the means for satisfying human wants. It is worth revisiting the well-worn summary of his argument at the beginning of The Great Transformation: 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 organisation based upon it. (Polanyi 2001, 3–4) Most discussion of Polanyi focuses on the first part of this statement, neglecting the second part in which he argues that attempts to regulate the market system

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impair its operation and disrupt its social organisation. It is this second part that results in the argument of the final chapter that the choice is between fascism and socialism, and in Polanyi’s perspective of transcending capitalism, with the economy brought fully under social control as “the market system will no longer be self-regulating, even in principle, since it will not comprise labour, land and money” (Polanyi 2001, 259). It will be evident that I am assuming that when Polanyi talks about ‘market system’ and ‘market society’ he is talking about capitalism. For him, it is the existence of markets for the three ‘fictitious commodities’ – labour, land and money, that defines the market economy; fictitious because they are not produced for sale in the market as real commodities are, but are nevertheless treated as commodities and bought and sold in markets. This is, of course, the same as Marx’s definition of the capitalist mode of production as existing when all the inputs into the production process – labour, land and money, become commodities. The structure of the paper is as follows. Section 2 focuses on Chapter 21 in which Polanyi discusses freedom, the reality of (complex) society, and a new civilisational transformation. Section 3 restates Polanyi’s insistence on the need for institutions and moral and political values to safeguard and extend freedom in a socialist society and proposes a possible institutional architecture for realising this. Section 4 considers the relevance of this discussion for responding to the present crisis, focussing on two conflicting interpretations of the ‘double movement’, reformist and transformatory, and reflecting, as Polanyi did not, on the political process of moving from where we currently are towards the new civilizational transformation that he nevertheless looked forward to. Section 5 concludes the paper with some brief comments on the emancipatory and developmental potential of democratic socialism. Part 2: Freedom In Chapter 21 Polanyi poses the problem of freedom as follows: The problem of freedom arises on two different levels: the institutional and the moral or religious. On the institutional level it is a matter of balancing increased against diminished freedoms: no radically new questions are encountered. On the more fundamental level the very possibility of freedom is in doubt. It appears that the means of maintaining freedom are themselves adulterating and destroying it. The key to the problem of freedom in our age must be sought on the latter plane. Institutions are embodiments of human meaning and purpose. we cannot achieve the freedom we seek, unless we comprehend the true significance of freedom in a complex society. (Polanyi 2001, 262) At the institutional level Polanyi is addressing the relationship between freedom

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and equality, “regulation both extends and restricts freedom; only the balance of the freedoms lost and won is significant. This is true of juridical and actual freedoms alike” (Polanyi 2001, 262). However, it is the moral and religious freedoms – personal liberty, independence of mind, non-conformity, freedom to follow one’s conscience, “the most precious traditions of the Renaissance and Reformation”, which he was most worried about and argued must be preserved “by all means in our power” (Polanyi 2001, 263). Polanyi distinguishes between the liberal concept of freedom from society and the socialist concept of freedom within society, as part of society. For liberals freedom is freedom from the state. This freedom means “the fullness of freedom for those whose income, leisure, and security need no enhancing and a mere pittance of liberty for the people, who may in vain attempt to make use of their democratic rights to gain shelter from the power of the owners of property” (Polanyi 2001, 267). For the liberal, the planning and regulation needed to maintain freedom, and create freedom for all, interfere with freedom. There is a conflict between freedom and equality. However, this concept of freedom denies the reality of society. The two movements of the first half of the twentieth century that emerged as a result of the dysfunctionality of the attempt to create and perpetuate a selfgoverning capitalist market system, fascism and socialism, both recognised the reality of society, but while fascism glorifies power and abandons freedom, socialism “resigns” itself to the reality of society and upholds freedom “in spite of it” (Polanyi 2001, 268). Polanyi’s closing words in The Great Transformation are a resounding declaration of his belief in human creativity and morality: Uncomplaining acceptance of the reality of society gives man indomitable courage and strength to remove all removable injustice and unfreedom. As long as he is true to his task of creating more abundant freedom for all, he need not fear that either power or planning will turn against him and destroy the freedom he is building by their instrumentality. This is the meaning of freedom in a complex society; it gives us all the certainty that we need. (Polanyi 2001, 268) However, declarations are not enough; institutions are needed, based on a moral and political societal commitment to guaranteeing maximum freedom for all. Polanyi’s concept of freedom in a complex society, and the possible tensions involved when freedom is interpreted as equal freedom for all, is in some ways similar to etienne Balibar’s concept of “equaliberty”, derived from his discussion of the French Revolution’s 1789 Declaration of the Rights of Man and Citizen and its 1793 (Montagnard) and 1795 (Thermidor) rewritings. Balibar argues that the equation of freedom and equality requires a mediating institution if it is to be stable and that the French Revolution’s ‘Liberty-equality-Fraternity’ has been interpreted as offering such mediation in two ways: through the institution of

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private property or through the institution of community (fraternity). The former underlies the liberal conception – equal formal freedom to own unequally-owned property; the latter points to the socialist conception – equal substantive freedom involving equal access to resources. However, Balibar does not stop here. He introduces two additional dimensions which have to be addressed if we are to create a community of free individuals: the absolute duality of the sexes (not genders) and the division between mental and manual labour. Both cases, he argues, combine biological and historical elements and neither can be overcome by politics alone. He concludes that perhaps we have now entered a postmodern period in which the universal rights of equaliberty, while essential, must also be recognised as the basis for the uncertain development of subjective human difference (Balibar 2014, chapter 1). This is perhaps another way of expressing the closing declaration of The Great Transformation, the meaning of freedom in a complex society. Part 3: Institutions Polanyi looks forward to a time when the economy is brought fully under social control, his definition of socialism: “Socialism is, essentially, the tendency inherent in an industrial civilization to transcend the self-regulating market by consciously subordinating it to a democratic society” (Polanyi 2001, 242). This section outlines a possible institutional architecture for a self-governing society in which civil society controls the state, participating in its activities, and controls economic activity, both directly, and indirectly through the state. It is a form of associational socialism based on participatory social planning and social ownership. Market exchange continues but market forces are replaced by the allocation of resources through a process of negotiated coordination among the social owners. The social division of labour is abolished, with people in the course of their lives expected to undertake their share of the different (overlapping) categories of activity – unskilled, skilled, craft and technical, professional, caring, and organising and administering. However, the functional division of labour, specialisation within each category, would remain. As gareth Dale has observed, this model in many ways closely resembles Polanyi’s own model of associational or functional socialism (Dale 2010, 210–11). In a complex society decisions are inevitably made at different levels, corresponding to the degree of generality of the decision involved: from the local to the global; from the enterprise to the industry, sector, or economy as a whole. Social planning for freedom involves layered decision making, with those affected at each level being involved in making the decisions and carrying them out. At each level the self-governing institutions of civil society, through the appropriate combination of direct and indirect democracy, decide on priorities and policies to implement them, drawing on their values, the current state of scientific and technical knowledge, and their own tacit social knowledge. In this way civil society controls the polity and the economy and mediates its relationship with non-

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human nature. At each level, from the local to the global, action takes place within a framework of universal human and ecological rights arrived at through a process of deliberation and negotiation. Participatory social planning is a transformatory learning process through which people are able to develop their full potential as social human beings (Devine 2002, 2010). Social planning of economic activity starts with socially-owned enterprises, enterprises owned by their stakeholders, by those affected by their activities. Typically the social owners will be those who work in the enterprise, supply its inputs and use its output, together with the communities in which it is located and other enterprises in the same industry. In an eco-socialist society, enterprises would be eco-social enterprises, with the social owners including ecological groups committed to ensuring that the enterprise acted in an ecologically-responsible way in relation to the technology used, the sourcing of inputs and the disposal of waste. The social owners, directly in small enterprises, through their representatives in larger enterprises, would deliberate and negotiate over policy in relation to the use of the enterprise’s existing productive capacity, taking into account any differences of interest among the different groups and seeking to arrive at a consensus that all are prepared to accept. At the level of the individual enterprise ownership is social, neither private nor state. enterprises engage in market exchange, selling their output to other enterprises, public bodies or consumers. However, the objective of social enterprises is not production for profit but production for the common good, as defined by those affected by their activities, those whose common good it is. It is when the structure of economic activity, of productive capacity, needs to change in response to changes in technology or in what contributes to human flourishing that a system of social planning needs to extend beyond the individual enterprise. enterprises may need to become smaller, or to close; new enterprises may need to be established. Under social planning these changes will not be the outcome of the market mechanism, so it is important to distinguish between market exchange and the operation of market forces – markets for labor, land and money, which he argued would no longer exist (Devine 2010). Market exchange involves the use of existing capacity. The operation of market forces is how changes in the structure of capacity are brought about in capitalist (and market socialist) economies. Changes occur as a result of the separately made investment and disinvestment decisions of privately-owned individual enterprises in pursuit of profit, without regard for the human, social or ecological cost. enterprises and industries with falling levels of profitability, or sustained losses, decline or disappear; those with rising levels of profitability expand; and new enterprises and industries are created in new areas with high levels of expected profitability. However, these changes are not planned. each decision maker acts independently of the other decision makers, even though the outcome of each individual decision depends on the aggregate outcome of all the separately made decisions. If too much capacity is installed in the aggregate,

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profit expectations are not met and disinvestment occurs; if too little capacity is installed, profit expectations are exceeded and new investment occurs. Coordination takes place ex post, after the earlier investment or disinvestment has taken place, after resources have been committed or withdrawn. Adam Smith called this process ‘the invisible hand’; Marx called it ‘the anarchy of production’. In a system of social planning, changes in capacity are planned by industry or sectoral development councils consisting of representatives of all the groups that will be affected by the decisions made, the social owners at the relevant level. Depending on the type of activity involved, these councils may be at the city, regional, national, international or global level, determined by the principle of subsidiarity, that decisions should be made at the most local level consistent with all groups affected by a decision being involved in making the decision. The relevant level will be determined by the importance of economies of scale in production, the need to minimise transport costs, the desirability of having balanced local and regional economies wherever possible, the ecological and topographical characteristics of different locations and activities, and so on. The development councils arrive through negotiation at a set of interdependent investment decisions coordinated ex ante, in advance, taking account of the differing interests of the social owners and again seeking to arrive at a consensus considered by all to be acceptable. Based on these considerations it seems likely that at one end of the spectrum in an eco-socialist society global industrial agriculture will be replaced by organic food produced locally or regionally, while at the other end of the spectrum policies to mitigate climate change and preserve biodiversity will be agreed on globally. However, even when decisions have to be made on issues that affect the entire globe, the implementation of those decisions will obviously be disaggregated to the most local level possible. It is perhaps worth noting here that the only morally acceptable principle when thinking at the global level is a convergence on equal per capita access to natural resource use and waste disposal as the starting point, with negotiated variations agreed to take account of different climatic, ecological and topographic conditions, and also historic differences in levels of infrastructure development and ecological degradation. In summary, social planning for freedom is a participatory multi-layered political and economic process through which civil society controls both the polity and the economy at each level of decision making, as determined by the principle of subsidiarity. At each level civil society decides the priorities and direction of development of society, the allocation of resources, the character of technological change it seeks to promote, and so on, by relying on multi-criteria evaluation techniques. This process occurs within a framework set by more general levels of decision making while also respecting the autonomy of less general levels. The institutional structure through which the process operates will be developed on the basis of experience, starting perhaps from the existing institutions of municipalities, regions, countries, international, and global organisations, elected

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on the basis of universal suffrage or consisting of representatives of countries and international organisations. Alongside these bodies there are likely to be advocacy institutions representing different interests and expertise feeding into the decisions of the authoritative institutions. It is important to remember when thinking about such a structure that we are assuming a socialist global society informed by the values of freedom and equality, ecological sustainability and social justice, solidarity and mutual respect, and committed to the flourishing of all humanity and of non-human nature, rather than a societal structure in which governments and international institutions are dominated by global corporations and their richly endowed lobbyists interested only in profits and stock market values. Part 4: The Present Conjuncture: The Relevance of Polanyi for Today The present conjuncture can only be understood in the context of the development of the capitalist system since 1945. The settlement that emerged from the Second world war in the developed capitalist countries was to a greater or lesser extent some form of the Keynesian Social Democratic welfare State. The period from 1945 to the 1970s has been referred to as the ‘golden Age’ of capitalism, with historically unprecedented low rates of unemployment and high rates of economic growth. In the UK the 1944 Beveridge Report, Full Employment in a Free Society, defined full employment as 3% unemployed to allow for frictional unemployment; in fact unemployment during the golden Age ranged between 1.5% and 2.5 %. In 1944 the Bretton woods agreement established the institutions that successfully managed the international monetary system, despite the rejection of Keynes’s more radical proposals, until its final collapse in 1973. As we have seen, Polanyi in The Great Transformation argued that fascism and socialism both recognised the reality of society in response to the dysfunctionality of laissez-faire capitalism, albeit in fundamentally different ways. The question arises: was the post-war Keynesian Social Democratic welfare State also based on recognition of the reality of society? It can certainly be seen as the apogee of the (first) countermovement of the double movement, but it equally certainly did not abolish the markets for the fictitious commodities – labour, land and money. This brings us to the distinction between ‘instituted’ and ‘embedded / disembedded’. A possible source of confusion is that Polanyi uses the term ‘instituted’ in somewhat different ways in different places. First, “the study of the shifting place occupied by the economy in society is therefore no other than the study of the manner in which the economic process is instituted at different times and places” (Polanyi 1957, 250). This could be interpreted as referring to different degrees of economic embeddedness or disembededdness within the capitalist market system. Second, however, it seems clear that for Polanyi ‘instituted’ refers primarily to whether the economy is instituted separately from the rest of society or whether it is instituted as an organic part of the whole social ensemble. Thus, in the opening summary quoted in the Introduction, the self-regulating market

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is referred to as “an institution”. Then, “… once the economic system is organized in separate institutions, based on specific motives and conferring a special status, society must be shaped in such a manner as to allow that system to function according to its own laws. This is the meaning of the familiar assertion that a market economy can function only in a market society” (Polanyi 2001, 60). And finally, “the choice between capitalism and socialism, for instance, refers to two different ways of instituting modern technology in the process of production” (Polanyi 1957, 249). The conclusion of this discussion is that, despite some ambiguity in places, for Polanyi different ways of instituting economic activity are not identical to different degrees of embeddedness or disembeddedness. In subsistence economies economic activity is instituted as an organic part of the ensemble of social activity. In the capitalist market system economic activity is instituted as a distinct sphere of activity; the economy is separated from the other spheres of social activity, with its own logic and laws of motion. In a democratic socialist economy economic activity is again instituted as an organic part of the ensemble of social activity, but this time in a consciously designed way. Of course, this is not to say that in capitalism the economy is unrelated to society. Indeed, the distinct institutions constituting capitalism – markets for labour, land and money, were deliberately created by the ruling groups in society, unlike the defensive institutions and regulations of the countermovement attempting to impose some degree of social control over the economy. As Polanyi put it, “laissez-faire was planned; planning was not” (Polanyi 2001, 147). In my view, Fred Block misinterprets Polanyi’s argument in The Great Transformation when he writes: “Polanyi is often mistakenly understood to be saying that with the rise of capitalism in the nineteenth century, the economy was successfully disembedded from society and came to dominate it. … In fact, Polanyi repeatedly says that the goal of a disembodied, fully self-regulating market economy is a utopian project; it is something that cannot exist” (Block 2001, xxiv). It is certainly true that Polanyi considered the movement to create a fully self-regulating market to be an impossible, and in that sense utopian, project, as its unfettered operation would annihilate society and nature. To prevent this, a countermovement would develop to regulate the economy in various ways, in particular the markets for labour, land and money. Hence Polanyi’s well-known concept of the ‘double movement’. Block is obviously right that capitalist economies have never been fully disembedded from society, but although the economy has historically at different times been regulated to a greater or lesser extent, has been more or less embedded, it has always been instituted as a system separate from the rest of society, and has always dominated it. As we have already noted, “a market economy can function only in a market society” (Polanyi 2001, 60). These two interpretations lead to different policies and strategic trajectories: (i) the economy is never completely disembedded, “markets can be embedded in many different ways” (Block 2001, xxix), capitalism can be regulated so that

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the economy serves society, a reformist trajectory; (ii) the economy in capitalism is instituted separately from society, with its own laws of motion, it can be regulated to a greater or lesser extent but will always dominate society, society in capitalism will always be a “market society”. This latter interpretation points to a transformatory strategy for going beyond capitalism to democratic socialism, which is surely what Polanyi argued for. As was already noted in the Introduction, the second part of Polanyi’s opening summary has been largely ignored in the literature: “Inevitably, society took measures to protect itself, but whatever measures it took impaired the self-regulation of the market, disorganised industrial life, and thus endangered society in another way” (Polanyi 2001, 3–4). So should we look forward to a possible new countermovement, taming neoliberalism through creating a democratically regulated capitalism, or rather to the beginning of a process of transformation to a new socialist civilisation? It may help us to decide if we return to an analysis of the development of the capitalist system since 1945. The golden Age from 1945 to the 1970s may be seen as the high point of Polanyi’s first countermovement, the second moment of the double movement. However, the Beveridge-inspired commitment to full employment and the Bretton woods system of fixed exchange rates “impaired the self-regulation of the market”, interfered with the operation of market forces and began to cause capitalism to seize up. This took the form principally of a falling rate of profit and a rising rate of inflation, which in 1975 reached 25% in the UK. Michal Kalecki had already anticipated such a development in his 1943 paper ‘Political Aspects of Full employment’, arguing that unemployment was not a form of market failure but rather was integrally functional for capitalism as periodic mass unemployment was necessary to discipline the labour force, both in the labour market and in the workplace (Kalecki 1943). In Antonio gramsci’s terms it resulted in an ‘organic crisis’, a crisis in which the old ways of regulating the economy and controlling society no longer worked. There followed during the 1970s what gramsci would have called a ‘war of movement’ in which the contending social forces, capital and labour, together with their allies, fought over how to resolve the crisis. The options were either a move towards a radical extension of democracy, particularly in the workplace by encroaching on the managerial power of capital, or reversing the gains represented by the Keynesian Social Democratic welfare State by increasing unemployment, weakening the power of the trade unions, privatising and deregulating. Capital won, introducing from roughly 1980 onwards the neoliberal trajectory that is still with us. The neoliberal era has been characterised by what might be called a second Polanyian ‘first’ movement. Andrew glyn in his book (2006) characterised it as ‘capitalism unleashed’. Since 1980, Polanyi’s argument that “instead of economy being imbedded in social relations, social relations are embedded in the economic system” (Polanyi 2001, 60) has become ever more relevant. Privatisation has proceeded apace, market principles have penetrated to the inner core of the

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welfare system, and capital has invaded ever more areas of social life as commodification is extended to knowledge, non-human nature, space and beyond. The hegemonic neoliberal common sense of the age has become individualism, consumerism, private more efficient than public, market good, state bad. The consequence has been the accumulation of economic and financial, ecological and environmental, social and political, crises, which raises the question of whether we can expect the development of a second Polanyian countermovement, this time planned on a global scale. There is mounting evidence of movements of resistance seeking to check the worst excesses of neoliberal capitalism unleashed, but so far little evidence of the development of a systemic challenge to the present neoliberal form of capitalism, let alone to capitalism itself. Insofar as Polanyi has anything to say about the process of political change it is perhaps to be found in his discussion of the problem of freedom in Chapter 21, in particular of the second moral or religious plane. Recognition of the reality of society enables us to realise that freedom in a complex society consists in the recognition of necessity, recognising that society places limits on what can be done. It leads to the perspective of removing all obstacles to equal liberty that can be removed, accepting any obstacles that cannot be removed, and discovering the difference between them through political action. Drawing on gramsci, Michael Burawoy develops this insight in his three reformulations of classical Marxism, summarised as follows: (i) “Capitalism creates the conditions for its own demise through deepening crises and the creation of an industrial reserve army” becomes “capitalism generates a society which contains and absorbs its tendency to self-destruct”; (ii) “Capitalism creates class consciousness and class organisation, as antagonisms intensify” becomes “struggle within capitalism takes place on the terrain of hegemony”; (iii) “Capitalism creates the material conditions for a new socialist/communist order” becomes “the struggle for socialism is a political project for the subordination of the economy to a self-regulating society” (Burawoy 2003, 213). The significance of Burawoy’s formulation is its focus on the struggle for hegemony as part of a political project of subordinating the self-regulating market to a self-regulating society, which chimes well with Polanyi’s emphasis on the moral or religious plane, but goes beyond it in emphasising the necessity of political strategy and action. gramsci envisaged a political project for challenging the ruling hegemony by developing a counter hegemony in civil society during the long period of the ‘war of position’, as the basis for a successful outcome of the war of movement when the next organic crisis emerged. As I have argued elsewhere, for him: … politics takes the form of a struggle for hegemony, in which different classes seek to present their interest as the interest of all. This struggle takes place in civil society, and is a war of position, in the course of which alliances are built with the object of constructing an historic bloc of social forces,

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articulated around the dominant class and held together by that class’s hegemonic ideology, which becomes the common sense of the age. In order to create and sustain such an historic bloc, the dominant class has to make concessions to the subordinate social forces, in order to give them a material interest in its maintenance. It is when this ceases to be possible, as a result of developing contradictions arising from the underlying structure of capitalist relations, that an organic crisis sets in and a war of movement takes place until a new historic bloc is created. (Devine 2009, 89) In relation to both gramsci and Polanyi there is a danger that they may be wrongly interpreted as envisaging an endless cycle of organic crises resolved by ‘passive revolutions’ from above which restore in a new way the conditions for capitalist production and reproduction, or a series of regulatory countermovements which sooner or later cause capitalism to seize up, resulting in a period of deregulation followed by a new countermovement to deal with the adverse consequences of the newly unleashed capitalism. This is clearly not what either of them looked forward to. gramsci’s ‘pessimism of the intellect, optimism of the will’ led him to believe that the most likely outcome of a war of movement was a passive revolution from above, but he optimistically devoted his active political life to working for the overthrow of capitalism; and as we have seen, Polanyi saw the available alternatives as fascism or socialism, but looked forward to transcending capitalism by bringing the economy fully under social control. Part 5: Conclusion This paper has argued that Karl Polanyi was committed to a new ‘great transformation’, a structural transformation to a democratic socialism, creating the conditions for equal freedom for all in a complex society. The ‘reality of society’ means that equal freedom involves the recognition of necessity. However, Polanyi’s statement that, “no society is possible in which power and compulsion are absent, nor a world in which force has no function” (Polanyi 2001, 226), while it may be correct at the margins of society should not in my view be seen as a central feature of a possible future democratic socialism. His insistence on the importance of institutions to safeguard freedom and extend it to all needs to be supplemented by an equal insistence that the institutions should be designed to promote negotiation, compromise and consensus. In relation to the discussion of the institutions of a self-governing socialist society in Section 3, in which I outlined my model of participatory planning through negotiated coordination, Dale is right to argue that, “the specific sense in which Devine’s system resembles Polanyi’s is that it accords an integral place to market exchange while ruling out the operation of market forces” (Dale 2010, 211), but the sense in which the model perhaps differs from Polanyi’s is in its emphasis on participation as a transformatory learning process promoting consensus.

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even so, Polanyi frequently returns to the emancipating and developmental possibilities of socialism: “if industrialism is not to extinguish the race, it must be subordinated to the requirements of man’s nature” (Polanyi 2001, 257); “the economic function is but one of many vital functions of land. It invests man’s life with stability; it is the site of his habitation; it is a condition of his physical safety; it is the landscape and the seasons” (Polanyi 2001, 187); “personal freedom … should be upheld at all cost – even that of efficiency in production, economy in consumption or rationality in administration. An industrial society can afford to be free” (Polanyi 2001, 264). Finally, in relation to the international system, Polanyi saw prefigurative developments and potential forces and processes for transformation: “out of the ruins of the Old world, cornerstones of the New can be seen to emerge: economic collaboration of governments and the liberty to organize national life at will” (Polanyi 2001, 262). As greece’s recent experience shows, we are a long way from that at the moment, but Polanyi looked forward to the day when the end of the market economy would among other thing enable effective cooperation between free nations. Balibar, etienne. 2014. Equaliberty. Political Essays. Durham: Duke University Press. Block, Fred. 2001. “Introduction.” In The Great Transformation, by Karl Polanyi, xviii–xxxix. Boston, Massachusetts, USA: Beacon Press. Burawoy, Michael. 2003. “For a Sociological Marxism: The Complementary Convergence of Antonio gramsci and Karl Polanyi.” Politics & Society 31 (2): 193–261. Dale, gareth. 2010. Karl Polanyi. The Limits of the Market. Cambridge, UK: Polity. Devine, Pat. 2002. “Participatory Planning Through Negotiated Coordination.” Science & Society 66 (1): 72–85. doi:10.1521/siso.66.1.72.21001. ———. 2009. “The Continuing Relevance of Marxism’.” In Nature, Social Relations and Human Needs: Essays in Honour of Ted Benton, edited by Sandra Moog, Rob Stones, and Ted Benton. Basingstoke, Hampshire; New York: Palgrave Macmillan. ———. 2010. Democracy and Economic Planning. Cambridge, United Kingdom: Polity. glyn, Andrew. 2006. Capitalism Unleashed. Finance Globalization and Welfare. Oxford; New York: Oxford University Press. Kalecki, Michal. 1943. “Political Aspects of Full employment.” Political Quaterly. Polanyi, Karl. 1957. “The economy as Instituted Process.” In Trade and Market in the Early Empires. Economies in History and Theory, edited by Karl Polanyi, Conrad M. Arensberg, and Harry w. Pearson, 243–70. glencoe, Ill: Free Press. ———. 2001. The Great Transformation. Boston: Beacon Press.

Commoning and the Commons Alternatives to a Market Society

Marguerite Mendell 1. Polanyi on socialism and freedom. A Dialogue with the Commons In the last chapter in The Great Transformation, “Freedom in a Complex Society”, Karl Polanyi brings his analysis of the collapse of nineteenth century to a powerful conclusion leaving the reader with many questions. This is a difficult chapter that is made much clearer by contemporary events, as his concern with the loss of freedom has never been more compelling than it is today. Polanyi does not, however, equate freedom with the absence of regulation and authority; quite the contrary. It is a balancing act. will regulation create institutions and rules to protect the market economy? will it preserve elements of the now crumbling welfare state? Or will new rules and regulations be devised for a post market society? Polanyi’s last chapter raises questions about emergent counter movements or collective initiatives in today’s society, such as the social and solidarity economy, the collaborative and/or sharing economy, the circular economy and the commons, all of which risk being captured by or subordinated to the market economy in the absence of rules and regulations. In Polanyi’s words: The congenital weakness of nineteenth century society was not that it was industrial but that it was a market society. Industrial civilization will continue to exist when the utopian experiment of a self-regulating market will be no more than a memory. Yet the shifting of industrial civilization onto a new nonmarketing basis seems to many a task too desperate to contemplate. They fear an institutional vacuum, or even worse, the loss of freedom. Need these perils prevail? (Polanyi 2001, 258) Until recently, it has been common to refer to today’s diverse and numerous collective initiatives as fragmented or as marginal in a market dominated global economy, as incidental or residual, even if their individual realities are not. Critics have dismissed their transformational role, often wedded to the need for more state intervention to attenuate the fall out from more than three decades of neoliberalism. And so the pendulum swing from more state, less market or the reverse, has dominated the discourse until recently. In this paper, I will discuss the commons and commoning, a growing international movement that, in Polanyi’s terms, is a process of de-commodification, removing labour, land (nature) and money from the market. The commons movement, much like the other counter movements noted above, are driven by

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communities, by self-managed collective organizations, by networks, transforming relations between producers and consumers, reversing many of the destructive consequences of the market economy. They are designing new institutional arrangements, rules and regulations to formalize these processes in law and policy. They are disrupting market-dominated relations of production, consumption and exchange, creating markets to serve societal priorities. In the last chapter, Polanyi concludes that the “right to non-conformity [is] the hallmark of a free society” (Polanyi 2001, 264). However, Polanyi insists that this requires integration; it requires planning and coordination, but not the suppression of diversity and freedom. The balancing act, as stated earlier, is the challenge. And, “the devolution of power” also strengthens central power. Polanyi’s examples are the large trade and professional unions. The same can be said for the cooperative movement and for federated commons. And thus the need for institutions; for the preservation of citizens’ rights. Regulation and control are not incompatible with freedom for all. I begin this paper with a discussion of some of the issues in the final chapter of The Great Transformation, knowing full well that they are complex and difficult to interpret and summarize. This final chapter generated the rich discussions and debates in this volume. My own view is that the final chapter becomes clearer if we go back to Polanyi’s writings in the 1920s on functional socialism and his attempt to design institutions and organizational structures and rules to institute and preserve freedom in a socialist democracy. In other writings during this period, Polanyi emphasizes that the true concept of social freedom is based on “the real relation of men to men … For the socialist ‘acting freely’ means acting while conscious of the responsibility we bear our part in mutual human relationships—outside of which there is no social reality” (Polanyi, 2018, 304)). Freedom is not to be free of responsibility but to embrace it. Freedom is “… not a form of releasing oneself from society but the fundamental form of social connectedness, not the point at which solidarity with others ceases but the point at which we take on the responsibility of social being, which cannot be shifted onto others” (Polanyi, 2018, 304). A “human society” is otherwise unthinkable. And only with the abolition of private property do consumers and producers restore the fundamental connection between them. 2. Polanyi and commoning Polanyi begins the last chapter of The Great Transformation by acknowledging that “After a century of blind ‘improvement’ man is restoring his ‘habitation’. If industrialism is not to extinguish the race, it must be subordinated to the requirements of man’s nature” (Polanyi 2001, 257). I would like to share Michael Brie’s optimism in the transformative capacity of movements (entry projects) as they form alliances, as they co-design a framework for human society by breaking down boundaries that have kept them artificially separated until now, when risks of enclosing the commons by the market exist and when it is understood that in

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order to produce and distribute innovation in the commons equitably, dialogue is essential. In his paper “Nancy Fraser and Karl Polanyi—a Possible Dialogue”, Michael Brie proposes eight such possible dialogues. In the eighth, on “paths of transformation” he writes that together, “socially and ecologically oriented entry projects’” are the foundations for a “solidarity economy in the broadest sense, [for] a reproduction economy, based on commoning” (Brie 2017, 54f.). These “entry projects include participatory budgets, energy-democracy initiatives, free public transport, among others. erik Olin wright includes these in his broad and comprehensive concept of socialist transformation.”1 Brie also cites Polanyi’s Common Man’s Masterplan as providing a series of entry projects (Polanyi 2017). If we explore the mapping of contemporary “socially and ecologically oriented entry projects”, this is already occurring, but the conceptual framework goes begging. Instead, as stated earlier, these are, for the time being, perceived as fragmented even as they scale and transform many fundamental relations in society and in the market. This paper is very much a work in progress, a research agenda begun in 2014 on Karl Polanyi and elinor Ostrom and also builds on more than two decades of research and direct participation in the social and solidarity economy in Quebec and in other parts of the world, both in the north and in the south. I have discussed the relevance of Polanyi to these citizen-based processes of economic democratization in several papers and I continue to return to his earlier writings in Austria in the 1920s, in england in the 1930s, to his writings on non-market or traditional societies, to the posthumous Livelihood of Man and of course to The Great Transformation. The Polanyi archive provides invaluable access to Polanyi’s world of thought. It has enriched my work for over 30 years. And active participation in numerous initiatives in the social and solidarity economy, accompanying remarkable individuals committed to social justice and economic democracy has given me an extraordinary opportunity to participate in innovative strategies to co-design socio-economic initiatives with citizens organizations, in self-organized communities developing economic tools that challenge the dominant paradigm. while on the margins for some time, this is no longer the case. As these are increasingly networked locally, nationally and internationally, they are co-designing an alternative paradigm that, I believe, conforms to the vision of Karl Polanyi, especially in the last chapter of The Great Transformation. Polanyi’s complex society recognizes “a plurality of property and socialization forms, in which a plurality of protagonists shape their own lives in a self-conscious way …” (Brie 2017, 55). And that planning and regulation “could be the condition for freedom”. I would add to Michael Brie’s options of “socio-ecologically radicalized neo-Keynesianism” or “libertarian commonisms”, movements and institutionalization of economic democracy in the form of the social and solidarity economy as well as the important work that is under way to generate a dialogue between the commons movement and the social and solidarity economy. This is

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occurring and increasing the capacity of both to resist and even to transcend neoliberalism. How this is played out in societies today also generates a rise in right wing populism. The recent election of Donald Trump in the USA is an expression of anger and the disillusionment with the neoliberal agenda and its prophets. And paradoxically, its prophets are joining this chorus of critics reacting to the social devastation wrought by a free market ideology. It is not surprising that leaders of international organizations and the world economic Forum have put poverty and inequality at the top of their agendas in 2017. Nor is it surprising that more attention is being paid to alternative economic initiatives, including those mentioned earlier. Indeed, the radical edge is missing but the recognition of the need to “subordinate the economy to society” is coming from unexpected circles. Climate change can no longer be denied nor the call for a more ethical economy. Alternatives to market driven economic relations are no longer ignored or considered marginal. Is this a life boat strategy or a tipping point? The numerous and diverse commons initiatives in the north and the south are more than push-back. Commons have existed for centuries, but have, until recently, remained on the sidelines, largely invisible, despite their collective organizational model, their impact on the daily lives of commoners and the positive “externalities” they have generated in many areas, especially in the environment, agriculture, irrigation systems, and so on. But this is a limited view of the commons as we will discuss below. The commons are more than “resources”, more than “goods” or “things”. The commons raises deeper ontological questions. According to Felix Schaffer, student of Polanyi in the 1920s, Polanyi frequently referred to “societalized man”. Man is not a social being because he lives in society, but rather man can live in society because he is essentially social within his own consciousness. Thus ‘society’ is not something between men, nor over them, but within them, within each and every one of them, so that society as reality, not as a concept, is inherent within the consciousness of each individual. (Schafer 1965 citied Polanyi Levitt and Mendell 1987, 24) In later writings in england on socialist education, Polanyi argued for a working class education that validated and resonated with the daily lives, experiences and social relations of workers without which it would be impossible to achieve a democracy “in which the people themselves and not their betters or superiors set the measure” (Polanyi Levitt and Mendell 1987, 24). In the commons, in the social and solidarity economy, without the validation of daily life—the hopes, the fears, the collective imaginations, dreams of people, without their interrelationships—these initiatives, or “alternatives”, would not emerge. They are grounded in lived realities, in the relations between people, between people and nature, in the ability to self-organize and challenge the dominant ideology. even those skeptical about the capacity of citizen driven alternatives to disrupt, to destabilize, acknowledge their growing presence around the world.

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3. The Commons, the Social and Solidarity Economy. Convergences and Intersections In the Livelihood of Man, Polanyi writes: The history of mankind and the place of the economy in it, is not, as the evolutionists would have it, an account of unconscious growth and organic continuity. Such an approach would necessarily obscure some aspects of economic development vital to men in the present phase of transition. For the dogma of organic continuity must, in the last resort, weaken man’s power of shaping his own history. Discounting the role of deliberate change in human institutions must enfeeble his reliance on the forces of the mind and spirit just as a mystic belief in the wisdom of unconscious growth must sap his confidence in his powers to reembody the ideals of justice, law and freedom in his changing institutions. (Polanyi 1977, liv) Today, the commons and the social and solidarity economy are promising examples of “deliberate change,” that embody the “ideals of justice, law and freedom,” a freedom that Polanyi associates with agency, with the capacity to enact change, to build new institutions, to unsettle, disrupt existing institutions. The world of the commons, of commoning, reveals extraordinary experiences and intersections and convergences with the social and solidarity economy movements around the world. These resistance movements are architects of transformation. In June 2014, the government of ecuador organized an international “Open Knowledge Summit” of activists, practitioners, researchers and government to promote “open knowledge commons" in education, agriculture, production, policy-making and culture. The collective values of the commons and the social and solidarity economy are expressed in the ecuador’s constitution and its commitment to “buen vivir” (the good life) and to the development of the knowledge commons. The summit was preceded by a year of collaborative research supported by the government of ecuador. In the spirit of “open knowledge”, all research papers were circulated to summit participants and discussed, modified, even transformed in some cases, at numerous pre-summit workshops. They were a springboard for dialogue, synthesis, and collective proposals. For government, the objective of the Summit was to integrate the findings of this dialogue into government policy and share it with other countries. A few months later, the Heinrich Böll Foundation hosted a workshop with researchers and practitioners in the cooperative and commons movements “to explore the opportunities for a convergence of efforts between commoners and cooperators, especially in conjunction with the power of open platforms on open networks.” This took discussions in ecuador further to ask: “Could we find new ways to blend the innovative, participatory ethic of peer production (commons) with the historical experience and wisdom of the cooperative movement?” (the social economy), the objective set by David Bollier, co-convenor of this workshop and intellectual

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leader in the global commons movement. As David Bollier writes: “Prior to the rise of the web, commons were usually regarded as little more than a curiosity of medieval history or a backwater of social science research” (Bollier 2014a, 115). Today, we need to turn our attention, in the words of Joan Subirats, to “emerging models of collaborative peer production through the logic of the commons” (Subirats 2012). There was little if any intersection between the commons and the social and solidarity economy. In fact, most commons initiatives exist outside the market in contrast to cooperatives. while they share common values, the cooperative movement’s commitment is primarily to its members; the commitment of the commons is to the community. They are converging today as many in the cooperative movement are reclaiming the historic commitment to the public good and new forms of cooperation, such as social or solidarity cooperatives in many countries that have expanded membership to include citizens. The commons increasingly confronts both the need to engage with the market and to develop institutional and organizational structures to resist the capture by capital, a growing threat, examples of which include biopiracy, land grabs, and “enclosure” of the digital commons. The challenge is to generate intersections between these movements that have both institutionalized processes of democratization and decommodifcation. Until very recently, they have rarely engaged in dialogue with each other. This dialogue has begun. 4. A dialogue between Ostrom and Polanyi when elinor Ostrom won the Nobel Prize in 2009, “a major roadblock standing in the way of… [recognizing] the importance of the commons came tumbling down” (walljasper 2013). For over four decades, Ostrom had documented how communities self-organize to manage common resources equitably and sustainably, debunking the myth of Hardin’s Tragedy of the Commons (1968). Ostrom’s pathbreaking Governing the Commons (1990) documents numerous current and historic examples of “resilient commons practices on every continent, from fisheries management in the Philippines to rubber tappers in the Amazon, to Swiss villagers managing their meadow, rivers and Alpine forests since the 13th century, to water stewardship operating over centuries in Spain” (Conaty and Bollier 2014). To my knowledge, there has been little work on the complementarity of Ostrom and Polanyi and there are several reasons why this is useful. Ostrom herself does not refer to Polanyi in her publications. I began to explore complementarities in their work by referring not only to The Great Transformation but also to earlier and later writings by Polanyi. Throughout her work, Ostrom analyses “collective action and self-governing behaviors; trust and reciprocity; and the continual design and/or evolution of appropriate rules” (Hess and Ostrom 2006, 43) in common pool resources. In her publication on “Understanding the Knowledge as a Commons. From Theory to Practice”, she and her colleagues identify principles

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and rules for these complex self-governing communities. The high degree of cooperation and coordination that characterizes the evolving open source movement, is a simultaneous process of decommodification and democratization. If we focus on Ostrom’s work on “common pool resources,” the link to Polanyi is clear. In The Great Transformation he writes: [Land] invests man’s life with stability; it is the site of his habitation; it is a condition of his physical safety; it is the landscape and the seasons…. To separate land from man and organize society in such a way as to satisfy the requirements of a real-estate market was a vital part of the utopian concept of a market economy. (Polanyi 2001, 187) In his passionate account of the expansion of markets, Polanyi documents the end of the commons, the “catastrophic dislocation of the lives of the common people,” the dispossession by the new 18th century enclosures and the numerous laws passed throughout the 19th century to commercialize land and create private mortgage contracts. He also documents the inadequate protection provided by “the inertia of common law” in england and other forms of resistance to protect “habitation from the juggernaut of improvement,” to prevent “the devastation of neighbourhoods, the denudation of forests, the pollution of rivers… as well as the innumerable forms of private and public life that do not affect profits” (Polanyi 2001, 136). Ostrom documents the history of the common pool resources she studied in great detail. Her focus is micro-situational, with little attention to the larger sociopolitical context in which these experiences are located (Brie 2014). That said, Ostrom’s “polycentric systems of governance” captures the nestedness of these microsituational experiences in different levels of government as well as the intricacy of governance. with her colleagues, Ostrom developed a meta analysis of the numerous case studies of common pool resources internationally, to construct an “Institutional Analysis and Development Framework” that identifies similar patterns across these many experiences. Although Ostrom adopted a “neo-institutional rational choice” framework, writers such as philosopher Michael Brie suggest that she has paved the way for a new social science that reflects the complexity and plurality of contemporary society. Ostrom’s research on self-organized and collectively managed “common pool resources” is, in fact, a break with economic theory on at least two fronts: first, her rational choice hypothesis includes the choice to live and work collectively and second and most important is that by introducing the commons, she breaks with the market/state or public/private duality of mainstream theory and its underlying principles of resource allocation. Commons theorists such as Michel Bauwens refer to “triarchy” to describe the co-existence of market, state and commons (Bauwens 2005). Social and solidarity economy theorists refer to the plural economy with no reference to the

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commons as such, until recently. It is subsumed in the solidarity economy and remains to be identified more explicitly. Ostrom’s case studies on resource management in Africa, Nepal, europe, Latin America and the USA, undertaken over several decades, are the basis for her thesis that collective governance of the commons best meets the challenges of managing complex resources, preserving habitat and assuring equitable access and use. Ostrom and Polanyi provide a powerful critique of the commodification of nature. In her analysis of the “the adverse outcomes of individual action” to solve what she refers to as “commons dilemmas,” Ostrom demonstrates the effectiveness of a cooperative, collective strategy. while this suggests that neither the market nor the state can solve these dilemmas, she does not propose the withdrawal of government. Rather, she argues for collaborative arrangements (polycentric governance) with all levels of government to design enabling policies. There are many points of intersection and convergence between Polanyi and Ostrom. I raise a few here as areas for further research. Ostrom documents a diversity of commons in different cultural contexts over time. In all of her work, she is interested in “action arenas.” She asks when, how and why people cooperate; she identifies the institutions that govern common pool resources and investigates how they are established, how they differ from one context to another, how their rules and regulations are negotiated; how the use or appropriation of these resources is monitored; whether there are sanctions, boundaries, and so on. Ostrom poses this as a collective action problem. It is here that I found very interesting parallels with earlier work by Polanyi during the interwar years in Vienna, in his research on economic history and anthropology while at Columbia University in the 1950s and in his analysis of economic provisioning in the posthumous Livelihood of Man. I will introduce this briefly. In her writings, Ostrom asks how empirical research can contribute to a better theory of collective action and the development of institution design principles. while in Vienna, Polanyi proposed the creation of functional representative organizations to negotiate the laws of the economy (Litván 1990). He went beyond Ostrom to propose a model of functional socialism, of economic democracy, or a negotiated economy, made up of producer, consumer and citizen associations. But they both asked the same questions. Polanyi and Ostrom were preoccupied with institution building, with organizational challenges to embed collective and democratic governance of the economy—in microsituational common pool resource environments in the case of Ostrom and within a societal model built upon self-reliant organizations, in the case of Polanyi. The experience of Red Vienna (1917-1934) and its participatory, democratic and inclusive municipal socialism, the seminars Polanyi held on economic theory and the debates in which he participated over a ten year period, enriched this work, much as Ostrom’s questions emerged from her extensive fieldwork observations. Polanyi wrote that the problem faced by socialists was one of organizational design—how to develop a model of functional democracy as the “living essence of

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socialism”. Transparent relations between associations would reduce or even resolve conflict, noting that conflict was unavoidable. Ostrom’s eight design principles emerged out of the regularities she observed in her numerous empirical studies. These design principles involve reciprocity, trust and compliance and collectively agreed upon monitoring and sanctions. In the “Interdisciplinary Project: Economic Aspects of Institutional Growth”, directed by Polanyi at Columbia University in the 1950s, his anthropological and historical research adds a broad perspective to Ostrom’s research based in more micro settings. One could propose that her work intersects with Polanyi’s substantivist approach to understand economic provisioning within different institutional contexts, including Ostrom’s collectively governed common pool resources and more complex commons. Both are examining what I have referred to in earlier work as “instituted processes of economic democratization” (Mendell 2007, 78). Ostrom’s research on the processes of instituting collective governance and provisioning of common pool resources and more complex commons is a special case of Polanyi’s historical and anthropological analysis of the economy as an instituted process of interaction. There are other interesting methodological comparisons between Polanyi and Ostrom. Both ground their work in subjective value theory. Surprisingly, Polanyi supported the marginalists in the methodology debates with the german Historical School. He believed in the primacy of individual choice and needs. These were the human needs of Marx, not the narrow material needs in neoclassical theory. Ostrom foregrounds her work in individual rational choice theory. Yet both emphasize inter-subjectivity and socially embedded individuals— societalized man, the term used by Polanyi to describe the social essence of individuals. Both emphasize social agency—the capacity to engage collectively in deliberate action. For Polanyi, the “place occupied by the economy in human society” required broad historical analysis. For Ostrom, a theory of collective action could only emerge from extensive empirical research. The following quotation by Polanyi from Livelihood of Man, applies equally to the work of elinor Ostrom. “On the historical level, case studies are intended to bring to life our generalizations, by way of parallel and contrast. On the policy level, history should be made to yield answers to some of the burning moral and operational problems of our own age” (Polanyi 1977, XXXIX). A conversation between Polanyi and Ostrom is timely. 5. A Galaxy of Commons Today, according to David Bollier, commons theorist, activist and intellectual leader of a global commons movement, the commons is a “paradigm” that “can help us imagine and implement a transition to new decentralized systems of provisioning and democratic governance” (Bollier 2014b). In reading the rapidly growing literature on the commons, the diversity of commoning experiences reveals a “more equitable, ecologically responsible and decentralized ways of meeting basic needs” (Bollier 2014b). There has been a surge of interest in the

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commons over the last twenty-five years as a model of governance of material and immaterial resources, of urban space. elinor Ostrom’s design principles have guided many initiatives in developing functional and democratic structures of governance. In tracing its history, the commons has challenged ownership of resources and property regimes through collective self-determination enabled by policy, protocols and legislation, at local, regional, national and international levels. The late C.B. Mapherson, legal scholar, wrote that modern property rights, based on exclusion, neglect older forms of property rights, such as the ‘customary right of access to property held in common’ (Rifkin 2015). For example, Ostrom cites the villagers of Törbel, Switzerland who signed a commons covenant in 1224 permitting them to manage their forests, meadows and irrigation system that is upheld today (Bollier 2014a, 28). This can easily be dismissed as a microcosm, with little interest or impact outside a small community, but as Jeremy Rifkin points out, there are thousands of diverse examples throughout the world. The degradation of local ecosystems has spurred a growing interest in collective management of the environment enabled by new technologies to resist “bioprospecting” and the growing patenting of life forms (Rifkin 2015). In 2002, the Foundation on Economic Trends (FOET) convened organizations from 50 countries at the Puerto Alegre world Social Forum to draft a treaty declaring the heritage of the earth as a commons. Since then, numerous commons associations in life sciences have emerged. The tendency to dismiss the exponential growth of the commons as marginal and insignificant in the face of global crises ignores an undercurrent of democratic resistance that is constructing alternative forms of social and economic organization and is transforming property rights in numerous sectors that belong to the commons. The commons literature is crossing several boundaries. while the trend is to document numerous examples of resistance and reclaiming of the commons, which is indeed necessary, Ugo Mattei, leading legal scholar of the commons, emphasizes that the commons are not commodities and cannot be reduced to property relations. In his words: “we should rather see to what extent we are the commons, in as much as we are part of an environment, an urban and rural ecosystem.” Subject and object are inseparable (Mattei 2012). The commons are “relational social frameworks” (Bollier and Helfrich 2015, 3). They are above all “relational accounting for the interdependence among people in communities, between people and the environment” (Bollier and Helfrich 2015, 3). Any legal system on the commons must transcend categories of ownership and use the “ecosystem” as a framework accounting for distributed, horizontal or lateral relations with dispersed power thereby transforming the concept of the commons from a resource (water, culture, the internet, land, education) to a “shared conception of reality that radically challenges the seemingly unstoppable trend of enclosure” (Mattei 2012). I would like to return to the earlier quotation by Polanyi in which he states

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that it was necessary to separate land from man and to organize society to satisfy the market economy. while this appears to refer to physical separation as people were evicted from the land, I believe it is a stronger statement that extends the notion of “societalized” man to his [sic] relations with nature. This speaks to the ontology of the commons and its rejection of the separation of subject and object. For commons theorists, subject and object are one; people do not inhabit nature; humans are one with nature. They are in harmony with nature. Some of the most interesting work on the commons is in law as the commons evolves today to include new sectors, especially though not only in the new digital and cultural commons, but also for the protection of land, resources, locally and globally and for cities creating urban commons. The culture and software commons movement is resisting intellectual and information enclosures through the creation of commons. Movements for free culture and software are examples of the capacity of social movements to transform global intellectual and information property rights. The underlying logic of “distributed, collaborative and laterally scaled” [commons… favours] an open commons form of democratic self-management” (Rifkin 2015, 214). These challenges to intellectual property rights and the enclosure of information commons have mobilized a free culture movement to promote the free exchange of ideas with new licenses, the Creative Commons License, to promote the “creative commons” and the free software movement’s general Public License to promote the free sharing of information. government is collaborating in many examples of the Commons, old and new, with enabling policies, legislation, protocols and/or they are open to new collaborative deliberative forms of governance. The commons co-exists with the market and is increasingly engaged in market activity. Challenges between the commitment to free access, the mandate of the free software movement, for example, and its use by profit generating private capital raises important questions regarding pricing, for example. Rather than refer to this as discriminatory pricing, Michel Bauwens, commons theorist proposes “reciprocity licenses” to differentiate between commercial and noncommercial use of the digital commons (Bauwens 2005). These licenses would include a pricing scale for market players. This is one example. There are others. As the “internet of things” (Rifkin 2015) opens the possibility to produce goods that better serve society by respecting ecological limits, affordability and so on, their capacity to scale is limited because of insufficient access to capital, and in many cases, no organizational model to ‘contain’ such investment. The social and solidarity economy provides the necessary organizational model, the template that enshrines democratic governance in a business model able to attract investment. These are transformative initiatives that resist capture by capital. Social and solidarity finance provides a variety of short and long term investment products for this emergent market. And, of course, the rapid growth of crowdfunding that is now permitting investment in equity is a new potential source of capital. Legislation has recently been passed in several jurisdictions in

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North America. Commons projects that intersect with the market have new possibilities to emerge and to scale. where ownership becomes necessary, collective enterprise, the cooperative model has a long history to draw upon. The “intellectual commons” protects indigenous knowledge. For example, patents have been issued on seeds, grains, medicine derived from animal products, privatizing indigenous knowledge. To resist enclosure of indigenous knowledge, farmers and growers around the world have created seed libraries to save and share indigenous seeds with all who wish to grow them. In India, 5000 farmers have mobilized to resist Indian seed patent laws. The movement also sponsors tribunals against copyright laws and policies that infringe on the seed fights of farmers. Historically, the commons consists mostly of “vernacular law”, that is, socially established customs that communities follow to manage their resources. As Bollier writes: “Vernacular law has a moral and social legitimacy that commoners are struggling to assert, not just through law but through political struggles and cultural expression” (Bollier 2015, 2). Transforming intellectual property into open access to knowledge is, in the words of Polanyi, a process of “decommodification” as copyright, patents, are giving way to shared information, culture, research. The commons is ‘relational’, promoting collaboration, selfdetermination. Is this the basis for a new political economy as suggested by commons thinkers? what role has law played in institutionalizing the commons? There are well known examples such as conservation easement, public trust doctrine, eminent domain, to name a few. These laws have served to identify and defend the commons. Today, law and policy enable the formation of networks, the federation of commoners and the systematization of practice. David Bollier has recently documented a number of legal innovations—historic and more recent. I will introduce a few significant examples. I draw extensively from David Bollier’s invaluable documentation of commons initiatives (Bollier 2015). • Biocultural rights protect natural ecosystems and indigenous knowledge and ways of life (Bollier 2015, 8). “The term ‘biocultural rights’ denotes a community's long established right, in accordance with its customary laws, to steward its lands, waters and resources. Such rights are being increasingly recognized in international environmental law. Biocultural rights are not simply claims to property, in the typical market sense of property being a universally commensurable, commodifiable and alienable resource; rather… biocultural rights are collective rights of communities to carry out traditional stewardship roles vis-à-vis Nature, as conceived of by indigenous ontologies” (Bavikatte and Bennett 2015, 7). • The Traditional Knowledge Digital Library launched in 2001 in India, is a database of traditional biomedical knowledge, practices and plants that prevents the patenting of this knowledge. In just under two years, in europe

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alone, India has succeeded in bringing about the cancellation or withdrawal of 36 applications to patent traditionally known medicinal formulations. The key to this success has been its Traditional Knowledge Digital Library (TKDL), a database containing 34 million pages of formatted information on some 2,260,000 medicinal formulations in multiple languages… The TKDL is a unique repository of India’s traditional medical wisdom. It bridges the linguistic gap between traditional knowledge expressed in languages such as Sanskrit, Arabic, Persian, Urdu and Tamil … India’s TKDL is proving a powerful weapon in the country’s fight against erroneous patents, sometimes referred to as “biopiracy”… [and its] critical role ….in protecting India’s traditional knowledge. • Subsistence Commons, also in India, is an example of formal recognition of the commons by state law that prevents encroachment by private developers on community- created commons spaces. The Forests Act in India (1997) authorizes commons-based management of forests. • In the US, cooperative governance of public forests in Oregon enshrines collaborative governance in a region that was the site of struggles between environmentalists and the timber industry. • An interesting example of mobilization and institutionalization of commons practices is the creation of the System of Rice Intensification, a global system to improve rice yields for farmers. A self-organized collaborative network of farmers in cyberspace has resulted in an increase in rice yields from 20-100%, reduced the seed necessary by 90% and water usage up to 50%. This is one of many examples of an “eco-digital commons.” • Seed sharing is preventing the patenting of seeds and developing capacity for limited distribution and use. Inspired by the free and open source software movement that has provided alternatives to proprietary software, OSSI was created to free the seed—to make sure that the genes in at least some seed can never be locked away from use by intellectual property rights ... OSSI asks breeders and stewards of crop varieties to pledge to make their seeds available without restrictions on use, and to ask recipients of those seeds to make the same commitment. OSSI is working to create a pool of open source varieties, to connect farmers and gardeners to suppliers of open source seed, and to inform and educate citizens about seed issues. (Open Source Seed Initiative 2016)

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• The Public Trust Doctrine requires governments to protect resources for the public and future generations. There are many lawsuits in the US and in Holland that argue that the public trust doctrine consider atmosphere as a commons. Thus far, important attempts to link the commons with human rights have failed, but it is a matter of time. ecuador and Bolivia have recognized the legal rights of nature in their constitutions. Similarly in New Zealand, the Crown recognized a river as a legal being in a dispute with indigenous people. • Stakeholder trusts are being created to distribute revenues from shared assets as in the case of the frequently cited Alaska Permanent Fund that redistributes oil revenues to citizens. The Sustainable Economies Law Center in California is working to adapt shareholder trusts to other areas such as local forests by creating a local commons trust and an agrarian trust to assure that farmland which is sold will still be used for agriculture. • A recent initiative in Quebec has created a consortium of agricultural land trusts. The original land trust in this coalition enshrines organic farming in its statutes. The community land trust model protects land from speculation. Price fluctuations on property correspond to increase in costs. Land is decommodified. • State law in New Mexico protects community-based waterways. The acequias have been managed by native Hispanic-Americans since the 1600s. Bollier refers to this as a “biocultural” institution that is remarkable for its community management and usage of water with ecological limits set by a very dry climate (Bollier 2014a, 129). But we can go back much farther to trace the history of legislation to protect the commons. Roman emperor Justinian legally enshrined the commons in the 6th century. Res communes acknowledge that nature is common to all (Bollier 2014a, 87). Claims on nature could not be made by individual citizens, commerce nor by the State. The modern form of this law is the “public trust doctrine” referred to above, applied in the US and in different versions in other parts of the world. The digital commons is growing at a rapid pace. Privatization or the “uberization” of the “sharing” economy demonstrates how easy and highly profitable it is for capital to capture open platforms (Bollier and Helfrich 2015, 8). The digital commons continues to generate heated debates in the culture and publishing industries with accusations of piracy, theft, pillage. Despite this, the open source movement grows; new regulations are displacing intellectual property rights. Copyleft exists alongside copyright today. The general Public License and Creative Commons Licences, referred to earlier, are perhaps the best known. Some other examples cited by David Bollier (2015) include:

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• New software platforms like Ubiquitous Commons that increase the capacity for data-sharing in cities, enabling citizens, local governments, scientists, public health practitioners and researchers to identify and respond more effectively to urban social issues and to develop appropriate policies. • The rapidly growing platform cooperativism movement extends its reach to refugees in europe, for example, creating open source platforms to connect refugees with local people and opportunities; to provide information on much needed resources, etc. Cooperatives are creating online marketplaces to be able to compete with the Ubers and AirBnBs of the internet market. This is an important step in resisting the capture of the digital economy by private capital. Most interesting are the emergent and emerging commons initiatives in cities. The Bologna Regulation for the Care and Regeneration of Urban Commons (2014) invites citizens of Bologna to collaborate with local government. At the end of its first year, the city signed 90 “pacts of cooperation” with citizens in a variety of areas. The process underlying this institutionalization of democratic, distributed urban governance is innovative, involving university students in a program piloted by two university professors in two affiliated institutes—the Laboratory for the governance of Commons and the Laboratory for Subsidiarity. The “commons city” of Bologna is now being replicated in numerous cities throughout Italy. Citizens have agency to create and maintain the city for the benefit of collective welfare. Collaboration is not devolution; it is the collective management of resources, generating “urban collaborative democracy, expanding the possibilities for the development of ‘inclusive and equitable cities’.” The legal infrastructure was in place to create several urban commons initiatives throughout Italy. The 2001 reform of the Italian constitution instituted horizontal subsidiarity, transforming local government power to promote the “autonomous initiatives of citizens, both as individuals and as members of associations, relating to activities of general interest, on the basis of the principle of subsidiarity.” The question raised by two legal scholars and leaders in the urban commons initiatives is whether urban land may be considered as a “common pool resource” (Foster and Iaione 2016, 285). Historically, the public trust doctrine, noted earlier, also applied to cities and in some states in the US and is still is applied to protect public parks and/or city streets. But the urban commons refers to open usermanaged commons, with the help of state agencies in certain specified domains. Iaone and Foster cite several examples of business improvement districts, park conservancies, community gardens, neighbourhood watch as examples similar to Ostrom’s governance model. The cities of Seoul, Lille, Barcelona are among those that have created “shareable cities”. Other important examples include community ordinances that

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empower communities to resist encroachment on local self-determination (fracking, waste disposal, etc.). Community Charters are springing up in many countries to prevent the sale of cultural or environmental resources to private investors. even pubs in the UK are protected along with public libraries, public buildings, or resources that are considered an “asset of community value” under the “Assets of Community Value” law. Community Benefits Agreements between municipalities and community organizations address social inequalities by assuring that publicly funded urban infrastructure projects hire marginalized workers as apprentices in the construction industry to provide them with skill training for future well paid employment. This is an example of a commons initiative, of collaboration between community organizations and the labour movement in some cases, to break the spiral of unemployment and entrenched poverty in many communities. There are other examples of commons driven urban socioeconomic transformation such as the numerous initiatives in “community wealth building” in large cities across the US (Democracy Collaborative 2016). In the U.S, the Dudley Street Initiative in Boston is well known and has become a model for other disadvantaged urban communities. In 1984, residents of this community formed a non-profit community-based planning organization to take the revitalization of their devastated neighbourhood into their own hands. They were granted eminent domain to purchase land and collectively transform their community. It is still cited as an extraordinary example of citizen-based urban planning. Today, the best known example of community wealth building is Cleveland, Ohio, where worker cooperatives owned by disenfranchised workers have succeeded with procurement policies adopted by “anchor institutions” (hospitals, schools, prisons, government offices, prisons, etc.), that now purchase the goods and services produced by these cooperatives. This is an excellent example of collaborative and open cooperativism by government and private foundations and is grounded in community. Community wealth building is a systems approach to economic development that creates an inclusive, sustainable economy built on locally rooted and broadly held ownership. This framework for development calls for developing place-based assets of many kinds, working collaboratively, tapping large sources of demand, and fostering economic institutions and ecosystems for enterprises rooted in community. The aim is to create a new system that enables inclusive enterprises and communities to thrive and helps families increase economic security. (Kelly and McKinley 2015, 18) In is difficult to resist adding examples, old and new, of the commons and of the increasing intersection between the commons and the market. There are excellent sources for this on the web as well as ongoing mapping initiatives. ellen

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Friedman writes that since 2010 hundreds of commons and “new economy” mapping projects have emerged expanding the capacity to mobilize and share knowledge and experiences (Bollier and Helfrich 2015, 218). The work of Michel Bauwens (p2p Foundation) and David Bollier and their numerous colleagues are contributing to a broad conversation about the commons. Their excellent publications, websites, blogs, bibliographies and ongoing commitment are invaluable. As these experiences become more widely known, they dispel the myth that commons initiatives are only workable in small networks and/or communities. The recently published book by David Bollier and Silke Helfrich on Patterns of Commoning identifies patterns that are common across sectors, across communities. In their words: we intentionally departed from the usual classifications of commons such as natural resource and knowledge commons, or material and immaterial commons…. every commons, no matter its core focus is always based on producing and sharing knowledge. Material resources and knowledge are the bases for all commons. (Bollier and Helfrich 2015, 7) 6. Polanyi on socialism and freedom. A Dialogue with the Common. Final Thoughts The conclusion reached by the workshop in Berlin in 2014, called for a larger movement “based on the principles of open cooperativism which, stated simply, is a movement that can embrace the history, institutional innovations and finance models of cooperatives and blend them with the power of open networks, open source ethics, cooperative principles and commitment to the common good. It calls for “deliberate change in human institutions.” Beyond the demand for justice in a classless society the human race’s true destiny only first opens up here: it is the realization of the highest social and personal freedom through the concrete conception of solidarity between man and man. The leap does not bring us to the end but only to the beginning of our task. (Polanyi, 2018, 315) Polanyi acknowledges his debt to Robert Owen in the last chapter of The Great Transformation. Owen understood that the machine age and progress were not to be feared so long as workers self organized into cooperatives, thus not “sacrificing either individual freedom or social solidarity, either man’s dignity or his sympathy with his fellows.” In his article “Jean Jacques Rousseau, or is a Free Society Possible?” written in 1943, Polanyi identifies Rousseau’s “new hero” as the people, as the “bearer of all human values.”

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Rousseau became a “prophet of a popular culture, outside of which … no free society is possible. There is no best form of government and to attain freedom, the people must create institutions that will allow society to survive.” Rousseau “had a vision which no one had before….I have, of course, in mind Rousseau’s discovery of the people: not as a political term meaning the multitude; not as an economic term, meaning the poor; but the people as the repository of culture. Implicit in this was the conviction almost generally accepted today that a culture not shared by the people was no true culture.” (Polanyi 1943, 2) Freedom can only be achieved if the people design their own institutions embedded in values of social justice and equity. was Polanyi too hopeful in writing that “… [the] reality of society gives man indomitable courage and strength to remove all removable injustice and unfreedom?” (Polanyi 2001, 268). One can no longer dismiss the numerous self-organized initiatives around the world as marginal. The new narrative written by the countermovements today is contesting the dominant market paradigm and laying the foundation for freedom in a complex society.

Bauwens, Michel. 2005. “The Political economy of Peer Production.” University of Victoria CTHeORY Archive. Ctheory.net. https://journals.uvic.ca/ index.php/ctheory/article/view/14464/5306. Bavikatte, Kabir Sanjay, and Tom Bennett. 2015. “Community Stewardship: The Foundation of Biocultural Rights.” Journal of Human Rights and the Environment 6 (1): 7–29. Bollier, David. 2014a. Think Like a Commoner. A Short Introduction to the Life of the Commons. gabriola Island, British Columbia: New Society Publishers. ———. 2014b. “The Commons as a Template for Transformation.” Resilience. March 6. http://www.resilience.org/resources/the-commons-as-atemplate-for-transformation/. ———. 2015. “Reinventing Law for the Commons—A Strategy Memo for the Heinrich Böll Foundation.” https://www.boell.de/sites/default/files/ reinventing_law_for_the_commons_memo.pdf. Bollier, David, and Silke Helfrich, eds. 2015. Patterns of Commoning. Amherst, Massachusetts, USA: The Commons Strategy group, Levellers Press. Brie, Michael. 2014. “Towards a Plural and Polycentric world of Self-Organising Actors—elinor Ostrom’s Research Programme.” International Critical Thought 4 (2): 160–77. doi:10.1080/21598282.2014.906778. ———. 2017. “For an Alliance of Liberal Socialists and Libertarian Commonist: Nancy Fraser and Karl Polanyi—A Possible Dialogue.” In Karl Polanyi in Dialogue: A Socialist Thinker for Our Times, edited by Michael Brie, 7–64. Montreal: Black Rose Books.

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Conaty, Pat, and David Bollier. 2014. “Toward an Open Co-Operativism: The New Social economy Based on Open Platforms, Coooperative Models and the Commons.” Commons Transition. August. http://commonstransition.org/toward-an-open-co-operativism/ #prettyPhoto. Foster, Sheila, and Christian Iaione. 2016. “The City as a Commons.” Yale Lwa & Policy Review 34 (281): 281–349. Hardin, garrett. 1968. “The Tragedy of the Commons.” Science 162 (3859): 1243–48. Hess, Charlotte, and elinor Ostrom, eds. 2006. Understanding Knowledge as a Commons: From Theory to Practice. Cambridge, United Kingdom: MIT Press. Kelly, Marjorie, and Sarah McKinley. 2015. Cities Building Community Wealth. The Democracy Collaborative. http://democracycollaborative.org/sites/clone.community-wealth.org/ files/downloads/CitiesBuildingCommunitywealth-web.pdf. Litván, györgy. 1990. “Karl Polanyi in Hungarian Politics.” In The Life and Work of Karl Polanyi: A Celebration, edited by Kari Polanyi Levitt. Montreal, Canada: Black Rose Books. Mattei, Ugo. 2012. “First Thoughts for a Phenomenology of the Commons.” In The Wealth of the Commons. A World Beyond Market and State, edited by David Bollier and Silke Helfrich. Amherst, Massachusetts, USA: The Commons Strategy group, Levellers Press. Mendell, Marguerite. 2007. “Karl Polanyi and the Instituted Process of economic Democratization.” In Karl Polanyi: New Perspectives on the Place of the Economy in Society, edited by Mark Harvey, Ronald Ramlogan, and Sally Randles, 78–92. Manchester, United Kingdom: Manchester University Press. Open Source Seed Initiative. 2016. “The Open Source Seed Initiative.” Osseeds.org. http://osseeds.org/about/. Ostrom, elinor. 1990. Governing the Commons. The Evolution of Institutions for Collective Action. Cambridge/New York: Cambridge University Press. Polanyi, Karl. 1943. “Jean Jacques Rousseau, or Is a Free Society Possible.” Con 18 Fol 24. Karl Polanyi Archive. http://www.concordia.ca/research/ polanyi/archive.html. ———. 1977. The Livelihood of Man. edited by Harry w. Pearson. New York, USA: Academic Press Inc. ———. 2001. The Great Transformation. Boston, Massachusetts, USA: Beacon Press. ———. 2017. “The Common Man’s Masterplan (1943).” In Karl Polanyi in Dialogue: A Socialist Thinker for Our Times, edited by Michael Brie, 79–94. Montreal: Black Rose Books. ———. 2018, “On Freedom (1927).” In this volume, 298-319. Polanyi Levitt, Kari, and Marguerite Mendell. 1987. “Karl Polanyi: His Life and His Times.” Studies in Political Economy, no. 22: 7–39. Rifkin, Jeremy. 2015. The Zero Marginal Cost Society: The Internet of Things, the

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Collaborative Commons, and the Eclipse of Capitalism. New York, USA: Palgrave Macmillan USA. Subirats, Joan. 2012. “The Commons: Beyond the Market vs. State Dilemma.” openDemocracy. July 12. https://www.opendemocracy.net/joansubirats/commons-beyond-market-vs-state-dilemma. walljasper, Jay. 2013. “Ostrom’s Nobel Prize a Milestone for the Commons Movement.” On the Commons. December 16. http://www.onthecommons.org/magazine/ostrom’s-nobel-prizemilestone-commons-movement. wright, erik Olin. 2010. Envisioning Real Utopias. London; New York: Verso.

NOTeS 1. See also: wright (2010) and The Real Utopias Project series, Verso Books.

Karl Polanyi and the Discussions on a Renewed Socialism Michael Brie Gemeinschaft and Gesellschaft—the complexity of society The last chapter of Karl Polanyi's famous work The Great Transformation was titled "Freedom in a Complex Society". This title itself expresses one of the most fundamental contradictions in the heart of the socialist tradition and of Polanyi's thinking itself—the contradiction between Gemeinschaft and Gesellschaft. Socialism in general and Polanyi’s understanding of socialism in particular are visions of an "association, in which the free development of each is the condition for the free development of all" (Marx and engels 1976, 506). From its early beginnings in the aftermath of the great French revolution, socialism and communism challenged the emerging modern capitalist societies demanding that freedom should not be a privilege but accessible to the last favoured classes and groups. In the words of one of the most farsighted critiques of socialism, Lorenz von Stein, communism expresses the scandal that in the freest society humankind has ever seen new forms of unfreedom have emerged and one class is exploiting and suppressing the other (Stein 1959, 8). The society is unable to govern its own reproduction as a society of freedom. The classical communist solution to this scandal is the transformation of complex capitalist societies into a community of communities based on common property of the producers (in the broadest sense) or of a Gesellschaft with complex institutions of intermediation to a Gemeinschaft or association of individuals bound by common property and direct collective self-government. everybody should become collective owner and producer in one and the same person. All social relations should become interrelations of persons, directly regulated by rational and purposeful collective action. No hidden hand should steer the development and no private property should withstand solidarity. Money, law and state would vanish after a shorter or longer transitional period. Revolutionary communism in the tradition of François Noël Babeuf tried to implement this type of society by taking over the state apparatus; evolutionary communism in the tradition of Robert Owen proposed and experimented with building up concrete communities of New Harmony. The result would be the same—rebuilding societies as communities. Karl Marx resumed this position in his main work "The Capital" as follows: "Let us now picture to ourselves … a community of free individuals, carrying on their work with the means of production in common, in which the labour power of all the different individuals is consciously applied as

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the combined labour power of the community. … The social relations of the individual producers, with regard both to their labour and to its products, are in this case perfectly simple and intelligible, and that with regard not only to production but also to distribution" (Marx 1996, 89f.). In 1887 Ferdinand Tönnies published his most important work Gemeinschaft und Gesellschaft with the not so well known subtitle "An essay on Communism and Socialism as empirical Cultural Forms" (in 1912 replaced by "‘Fundamental Concepts in Pure Sociology"). In this work he introduced the difference between two analytically opposed types of social relations.1 Beside Henry Maine's works on ancient societies and Otto von gierke's on cooperatives Tönnies refers in his foreword of 1887 to Karl Marx as "the strangest and deepest social philosopher" (Tönnies 1887, XXVIII). Tönnies defines his dichotomist terms in the following way: "All kinds of social co-existence that are familiar, comfortable and exclusive are to be understood as belonging to Gemeinschaft. Gesellschaft means life in the public sphere, in the outside world. In Gemeinschaft we are united from the moment of our birth with our own folk for better or for worse. we go out into Gesellschaft as if into a foreign land" (Tönnies 2001, 18). It should be noted that for Tönnies socialism is the result of a tendency to bring Vergesellschaftung under social control which—becoming total and thus transforming society into a Gemeinschaft again—would be self-defeating.2 This position had an impact on Karl Polanyi as we will see (see also Dale 2010, 34ff.). Karl Polanyi’s understanding of socialism seems to be fed and enriched at least by three "sources" which made him doubt this identification of socialism with Gemeinschaft. Firstly it was shaped by his permanent and lasting reflection of very different currents of socialism and critiques of socialism and communism (Cangiani, Polanyi Levitt, and Thomasberger 2005). Secondly it was shaped by his work as an outstanding analyst of international political and economical affairs working for the Österreichischer Volkswirt. His analysis of the crisis-ridden period after wwI and the late 1920s and 1930s was a rich source of a deep understanding of the relations between economics, politics and the values of complex capitalist societies. More and more he became aware of the problems to combine an orientation toward social justice, individual freedom and economic efficiency faced by committed left governments, labour unions and left parties (Polanyi 2002a, 2003). A third source became his ever increasing interest in precapitalist societies and their relation of market and non-market forms of regulation (Polanyi, Arensberg, and Pearson 1957; Polanyi 1966). Based on the insights of these three currents of his work, Polanyi started to doubt the orthodox assumption that socialism would be a Gesellschaft reduced to Gemeinschaft. In the Great Transformation Polanyi posited that this assumption no longer held true—freedom should be realized in a complex society never reducible to gemeinschaft and dealing with very different institutional forms always confronted with the problem of objectivations and relative independence (Verselbständigung und Entfremdung) but having the horizon of a community of free individuals acting together in solidarian forms.

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In his debate with Ludwig von Mises, Karl Polanyi 3 bases his argument on socialism as a Gemeinschaft of individuals organized in functionally different organizations (Bockman 2013). In his work Gemeinwirtschaft Mises argued that an economy based on common property is not feasible (or is at least less efficient than a market economy) due to the fact that it would be impossible to establish prices for the factors of production making an efficient allocation of these factors impossible and neglecting opportunity costs (Mises 1932). In line with concepts developed by g.D.H. Cole (1920) and the Austrian School of Marxism (Bauer 1976), Karl Polanyi tried to prove that even on the basis of common property and united in one Gemeinschaft different actors can emerge—the collective producers (Produktionsverband), the collective consumers (Konsumgenossenschaften), the communities (Kommune). In this special "functional socialism" (Polanyi 2005b, 72) these associations are "functional representations" of one and the same individuals in different roles (Polanyi 2005b, 97). This functional socialism is clearly distinguished from any type of a centralized command economy based on the assumption of a mono-subject. In the second half of the 1920s the focus of Polanyi's search for socialist alternatives shifted from the problem of accountancy to the problem of freedom. This was in line with his earlier critique of corporatism and bureaucratization in the works of the first decade of the 20th century (Cangiani, Polanyi Levitt, and Thomasberger 2005, 21f.). His lecture "On Freedom" in 1927 is centered on the question how individual freedom can be possible in a complex society. In the liberal market societies nobody has control over the results of his or her actions and the consequences of free personal decisions are left to the "hereafter of the market": "The idea of being responsible for our personal share in the life of ‘others’, that is, in social realities, and incorporating it into the realm of freedom is not possible in the bourgeois world. But it is just as impossible to abjure and thus to voluntarily limit our responsibility and thus our freedom. The bourgeois world’s idea of freedom and responsibility points beyond the boundaries of this world" (Polanyi 2018, 304). In this lecture, on the one hand, Polanyi still refers to socialism as a society that is an assembly of direct personal relations, as a cooperation of individuals, “when the social relations of human beings to each other become clear and transparent, as they are in fact in a family or in a communist community” (Polanyi 2018, 306). On the other hand, he reflects on the problem that even in the most advanced socialist society forms of "objectivations" will remain. State, markets and law won't vanish but become much less entfremdet from the concrete actions of concrete individuals. He summarizes his position as follows: "… the idea of functional democracy, of functional representation … leads to robbing the political objectification state power of its reified character to an extent that is up to now unimaginable and approaching the direct expression of the impulses towards law of the individual. A complete cancellation of the objectification law naturally does not occur here. It is not even thinkable. The congealed will, which we call

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law, remains forever as a wall between past impulses to law and the fluid impulses to law which are at work today. However, in a functional democracy this wall will be infinitely thin and completely transparent—which is the most that our fantasy with regard to social freedom currently lets us imagine" (Polanyi 2018, 314). This discussion of the role of "objectivations" continues in Karl Polanyi's works during his stay in great Britain forming part of discussions in left Christian groups and different forms of workers’ education. I will restrict myself here to the distinction made between society and community (Gesellschaft and Gemeinschaft). The late 1930s, in other words the years immediately preceding the writing of The Great Transformation, was a time of intensive teaching activity for Polanyi, first in the circle of the Christian Left group4 and then in the workers educational Association, whose president was R. H. Tawney.5 This framework of teaching and discussion represented the decisive space for his thinking before he wrote his main work. This is where the narrative of the book arose and took final shape. Here he came into contact with england’s socialist thought, above all with that of Robert Owen. Here he formulated his specific view of the distinction between society and community, which also underpins The Great Transformation. This is also where he developed his position on the limits of Christian attempts to lead society back to community. From here on “recognition of the reality of society,” of the complexity of society, became for him an indispensable condition of all emancipatory—solidary politics. He said both positively and critically: "The Christian axiom about the essence of society is of the utmost boldness and paradoxy. It can be put in the simple phrase that society is a personal relation of individuals. Now, to regard society thus means to disregard altogether the share of institutional life and of other impersonal forces in social existence. In a sense it is the complete denial of the objective existence of society. … Two negative assertions seem to follow from this position. 1. Society as such, as an aggregate of functional institutions … is no concern of Christianity. His concern is with the individual in community, not with society. 2. Neither is history as such his concern" (Polanyi 1937a, 1–3). In view of the big catastrophes, however, this double "indifference" is no longer acceptable. "… if the claims of community press for change in society, the judgment passed upon society is inexorable. And when history points to the next step in the achievement of universal community, its claim to the allegiance of the Christian is unconditional" (Polanyi 1937a, 3). The aim has to be a ‘democracy of freedom’ (Polanyi 1937a, 16), which simultaneously preserves the institutions of a complex society and subordinates them to the free life of its citizen. In the already cited 1937/38 Notes from the Training Weekends of the Christian Left we find some remarkable utterances: "There is no contracting out of society. But where the limits of the socially possible are reached, community unfolds to us its transcending reality. It is to this realm of community beyond society that man yearns to travel" (Polanyi 1937b). Taking up this approach he then continues in The Great Transformation: "If industrialism is not to extinguish the race, it must

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be subordinated to the requirements of man's nature" (Polanyi 2001, 257). even in his last letter, written shortly before his death on 23 April 1964 to Rudolf Schlesinger, the editor of Co-Existence, the journal he founded, Polanyi stresses again the importance of community and writes: "The essential connotation [to ‘nation’] is always about the communion of humans. The heart of the feudal nation was the privilege; the heart of the bourgeois nation was property; the heart of the socialist nation is the people, where collective existence is the enjoyment of a community culture. I myself have never lived in such a society" (quoted in Polanyi Levitt 1990: 263). The interrelationships between the realm of universal community, the habitation and uniqueness of the individual, and his/her freedom with responsibility, together with the irreducible complexity of society as well as, finally, democracy as a mode of life and way of shaping society, are key concepts in Polanyi’s work and form the matrix of his understanding of socialism.6 Three ways to deal with the contradiction between the complexity of society and human freedom In 1831, during his final efforts to finish his famous Faust after almost 60 years, goethe created a tragic metaphor for modernity. Impressed and frightened by the new wave of european revolutions starting in 1830 and reading the works of the French socialist Saint-Simonists (see Jaeger 2014, 421ff.) he wrote the concluding parts of his work. Faust—a murderer again, blinded by the ghost of anxiety, commanding a large-scale project of land reclamation in the new industrial age, unaware of the proletarians as the diggers of his grave under the supervision of the devil—exclaims in the last moments of his life: "A swamp lies there below the hill,/ Infecting everything I’ve done/ My last and greatest act of will/ Succeeds when that foul pool is gone./ Let me make room for many a million,/ Not wholly secure, but free to work on./ green fertile fields, where men and herds/ May gain swift comfort from the new-made earth./ Quickly settled in those hills’ embrace,/ Piled high by a brave, industrious race./ And in the centre here, a Paradise…/ I wish to gaze again on such a land,/ Free earth: where a free race, in freedom, stand./ Then, to the Moment I’d dare say:/ ‘Stay a while! You are so lovely!’" (goethe 1832). The greatest vision ever in the midst of destruction and death! Modernity has many faces and its extremes are the radicalized market-society, the totalitarian rule under the auspices of ideologies, the rational bureaucratic command or the state-less war of militarized clans in anomic societies. Simple solutions to the complex problems of complex modern societies proved to be traps and nightmares, literally creating not paradise but hell on earth, destroying the freedom it promises to secure. This was true for Bolshevist communism as it was and is true for market liberalism. Nancy Fraser rightly points out that it is completely wrong to hope for a pendulum swing of the so-called double movement away from market radicalism

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and towards social protection and to work for it. For this protection can take on authoritarian, repressive, and even barbaric forms under the domination of capital oligarchies or with their active participation. elements of various sorts of neofascism have been emerging for a long time now. The global surveillance of the communication of citizens is only one such element. The new border regime, drone-based warfare, the massive erosion of social civil rights, and above all the emptying out of democratic institutions are threatening. This kind of ‘protection’ is the flipside of precisely those tendencies of an unleashed market radicalism against which Polanyi is arguing. The continuation of a double movement is the attempt to stabilize capitalism on its own basis. The decisive strategic task of a transformatively oriented left would be to challenge the foundation of the so-called double movement—the capitalist market society. This in turn overlaps with the goal of ‘non-reformist reform policies’ of the kind that Nancy Fraser asks for: ‘These would be policies with a double face: on the one hand, they engage people's identities and satisfy some of their needs as interpreted within existing frameworks of recognition and distribution; on the other hand, they set in motion a trajectory of change in which more radical reforms become practicable over time. when successful, nonreformist reforms change more than the specific institutional features they explicitly target. In addition, they alter the terrain upon which later struggles will be waged. By changing incentive structures and political opportunity structures, they expand the set of feasible options for future reform. Over time their cumulative effect could be to transform the underlying structures that generate injustice’ (Fraser 2003, 79f.). Socially and ecologically oriented entry projects towards a green New Deal would meld together with entry projects into a solidary economy in the broadest sense (Dellheim 2011a) into a reproduction economy, based on solidarian commoning.7 In Polanyi’s 1943 ‘Common Man’s Masterplan’ a series of ‘entry projects’ are cited, which are also invoked at the end of The Great Transformation: ‘Regulated market means markets with no supplementary markets for labor, land and money. The security is possible in a society wealthy enough to banish want without even raising the question of the motive to work. The freedom of arbitrary rejection of job to be limited. The freedom of arbitrary dismissal limited. The freedom of unlimited profits limited. The unlimited rights of private ownership limited. The public spirited forms of enterprise fostered. The plastic society achieved. The helpless society transcended. The concept of freedom reformed. Christianity transcended. The philosophy of the common man established’. (Polanyi 2017, 81) Karl Polanyi develops three directions to ensure freedom in a complex society:

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(1) to take the fictitious commodities out of the markets; (2) deglobalization; and (3) democratization. (1) Taking-out the fictitious commodities of the markets The best known proposal of Karl Polanyi for a radical reform to overcome the market society is the removal of the fictitious commodities (labour, nature, money—and one may add: knowledge and culture) from the subordination to the markets. His empirical observations and theoretical considerations of the 1920s and 1930s proved that the subsumption of the basic goods of a free life to the markets is self-destructive to the economy, the society, the political democratic system and the whole civilization. In his preparation for a lecture on the Übersichtsproblem (the problem of a transparent society) in the late 1920s he wrote: For the socialists it is evident: the labour force isn't a commodity… Humans aren’t a final product but are standing at the beginning of the … production process as its creator. They are situated outside of the economy. Likewise this is true for some raw materials… (Polanyi n.d., 18, translation by MB) Polanyi studied the different attempts to decommodify labour, nature and money starting from the early 19th century and the proposals of Robert Owen to regulate the labour day. In the lecture mentioned, anticipating ideas of The Great Tranformation. Polanyi demands that the basic conditions of human security and for development should be secured by regulation: "Not only conditions in the factory, hours of work, and modalities of contract, but the basic wage itself, are determined outside the market…" (Polanyi 2001, 259). One should be aware that this would include a deep and profound transformation overcoming the focus in our societies on wage labour. It is a care revolution (Chorus 2013; Madörin 2006; winker 2015). The spheres of life beyond wage labour should dominate the cycles of life. Frigga Haug is speaking about a four-in-one-approach combining wage labour, care, social and political engagement, and Muße (otium) (Haug 2014). The ecological question and the deep-rooted globalization of investment and commodity chains are radicalizing Polanyi's ideas concerning land and money even more than before. Not only must the economy be re-embedded into the society and society into a strong civilization but the human civilization itself must be re-embedded into sustainable cycles of life on earth. Polanyi is aware: "The nature of property, of course, undergoes a deep change in consequence of such measures since there is no longer any need to allow incomes from the title of property to grow without bounds, merely in order to ensure employment, production, and the use of resources in society" (Polanyi 2001, 260). This implies thinking about the end of the pressure for growth (Daly 1991; Ax and Hinterberger 2013; Klingholz 2014). Polanyi sees the "removal of the control of

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money from the market" (Polanyi 2001, 260) nearly completed at the time he is writing The Great Transformation: "Since the introduction of 'functional finance' in all-important states, the directing of investments and the regulation of the rate of saving have become government tasks" (Polanyi 2001, 260). Neoliberal financial- market capitalism has reversed this tendency (Streeck 2014). The current multidimensional crisis of the capitalist civilization would demand the socialization of a larger part of investment, the euthanasia of the rentier (Keynes 2003) and deep transformation in all parts of the financial- and tax spheres (Flassbeck et al. 2013; Polanyi Levitt 2013). Nothing less than a transformation of capitalism going beyond it is on the agenda (Klein 2013). The expression "to take the fictitious commodities out of the markets" could be misunderstood, because markets will need the input of labour, nature, capital and knowledge anyway. It may be better to speak about the removal of the reproduction of these "commodities" from the dominance of the markets. Their development should be steered by their own logic, the logic of their own spheres—the life-worlds with regard to "labour", the gaia-sphere with regard to nature, the sphere of stable and democratic institutions (the sphere of the social) with regard to money and the sphere of the cultural with regard to knowledge. without this the deep civilizational crisis will deepen and the new questions of our time won't be answered (see graph 1) (see Brie 2014b). For Polanyi to take the fictitious commodities out of the markets does not mean to abolish the markets but change the whole institutional and social framing of the markets. This faces us with a contradiction which is not elaborated in The Great Transformation: The regulation of labour, nature, money and knowledge must be done in a way to secure the stability and safe reproduction of the most important goods of freedom in a socially just way and in a way that these fictitious commodities can be used for economic and non-economic purposes without destroying them, making constant innovation by the permanent re-combination of these "factors" of production possible (Schumpeter 1964). The discussions with Mises have shown for Polanyi that markets are necessary "to ensure the freedom of the consumer, to indicate the shifting of demand, to influence producers' income, and to serve as an instrument of accountancy, while ceasing altogether to be an organ of economic self-regulation" (Polanyi 2001, 260). The chances to control the dynamics of the markets are bound to the problem of the spatial dimension of the markets. This leads us to the second direction of transformation —to deglobalization. (2) Deglobalization and the cooperation of large politico-economic and civilizational spaces In contrast to the broad reception of Polanyi’s position on the fictitious commodities and his proposals to remove them from the dominance of the markets his ideas concerning the pluralization of politico-economic and civilizational spaces are merely taken into account. But they are at least as

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Graph 1: The four questions during the crisis of neoliberal financial-market-capitalism The gaia sphere

Tradable natural resources Bourgeois society

Sphere of the communal-individual life worlds Wage labour

Sphere of the social institutions

Capital

Sphere of the public-cultural Knowledge and culture as commodities

Economy and society under the dominance of capital accumulation

The earth as a mining area and garbage heap

Society of labour and leisure

Financial-market capitalism and capitalist oligarchy

Culture as entertainment and self-preservation

The new ecological question: What are we allowed to produce and consume in which way?

The new social question: How do we want to live?

The new democratic and peace question: How do we want to decide on which question?

The new cultural question: What does it mean to be human today?

important. His close observations of the central european and southeast european development after the disintegration of the Prussian, Habsburg, Ottoman and Czarist empires led him to work on concrete proposals for a deeper regionalization in Central europe (see for an example Polanyi 2002b). In his sketch for a book to be written immediately after The Great Transformation, the Common Man's Masterplan, he concentrates on this task. The post-war order should be an order of peaceful empires cooperating on a global scale. In the ten theses summarizing his proposals in the draft for the Masterplan the problem of takingout the fictitious commodities of the markets is just the last (but not the least). without the international conditions created this step seems impossible as he has seen in the 1920s and 1930s: ‘The story of the unresolved problems should drive home the following recognitions: 1. That post war reconstruction is not about “what to do with germany” but what to do with the unsolved problems of the world. No conceivable treatment of germany will resolve them.

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2. That these unsolved problems led to world war I and were only partly resolved by the destruction of the feudal empires of the Hohenzollern, the Habsburg, the Romanov and the Sultan-Khalifs; that the between-wars period was entirely dominated by them, including the rise of Hitlerism, British appeasement, the Russian bogey, the collapse of France, the gay twenties, and the wasted thirties in America. 3. That these unsolved problems centered around the antiquated international system of absolute sovereignties and an automatic gold-standard on the one hand, of a national life based on unregulated economies on the other. Between them they corroded the civilization with unemployment and unrest, deflations and super-wars. 4. That the Hitlerism crime wave could be successful only because it benefited from these unsolved problems which were bursting the world wide open; in the Hitlerian venture some of the most obstructive features of the old world perished including nuisance sovereignties, the gold standard fetish as well as chaotic markets. But if Hitlerian barbarism was thus “hitch-hiking on the great transformation”, it was only because it could pretend to offer an ultimate solution even though it was that of slavery for all under the heel of the Nordics of the Munich beer garden. 5. That the survival of democratic methods depends upon the measure of their success in tackling the global tasks of the time. If freedom fails (a) to restrict the scope of wars, (b) to secure a medium of exchange between increasingly large areas of the planet, then the war-waging slave empire will triumph and ensure peace and division of labour within its confines of death. 6. That the greatest single step towards division of labour and the enlargement of the peace area is represented by essentially autarch and essentially peaceful empires the co-operation of which is institutionally safeguarded, empires such as the U.S.A., Latin America, great Britain, the U.S.S.R. and a similarly peaceful federation of a german Central europe, China, India, and some other regions. 7. That the will to cooperation between the empires must be positive and institutionalized. It is the new form of the peace interest which the 19th century produced, and which we should retain and develop. All but the predatory empires are eligible under the new dispensation. The tame empire is no more a utopia. 8. That the 19th century was peacefully imperialistic since under the gold standard the leading powers insisted on spreading their business pattern to all countries and forced them to accept their

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institutions, without which trade was then not possible. we should model ourselves on China which is and was based on the tolerance of other people’s ways of life. 9. That self-sufficient empires can regulate their economic life in the way that they please and live at peace with others. The helpless method of free trade must be superseded by direct responsibility of the governments for economic and financial relations with other governments. 10. That internally we must have regulated markets which remove labour, land and money from the scope of anarchy. The inevitable increase in centralization that is involved must be met by the positive will to freedom for all minorities—racial, religious, regional or otherwise—made effective with a single-mindedness modelled on england’s achievement (Polanyi 2017, 92f.). After ww II Polanyi observed two different tendencies: On the one hand the (in the end more or less successful) attempt of the U.S. to create a new version of a unified global system as it had existed until 1914 with modified rules and the dollar as the new standard. The dollar itself was linked to gold at the rate of $35 per ounce of gold until 1971. The Bretton woods Agreement again established a rigid system with one dominant power. On the other hand were proposals like those of John Maynard Keynes much more in favour of a regulation binding all sides to avoid strong inequalities of international trade and strengthening the ability for a more autonomous development. Based on Keynes' ideas Britain proposed a "useit-or-lose-it" mechanism. This would have forced creditor nations to import goods from the debtors, build factories in these states or donate part of the surplus to them (Cesarano 2006, 160ff.). In this context Polanyi wrote his profound and important article "Universal Capitalism or Regional Planning?" of 1945 and stressed: "The alternative to reactionary Utopia of wall Street is the deliberate development of the new instruments and organs of foreign trading and paying, which constitutes the essence of regional planning" (Polanyi 1945, 89). He hoped that the "new permanent pattern of world affairs" would be "one of regional systems co-existing side by side" (Polanyi 1945, 87). Such large regional systems could make the global market society history with its destructive tendencies and contribute to overcome the side-products of universal capitalism—"intolerant nationalism, petty sovereignties and economic non-cooperation" (Polanyi 1945, 88) which he had studied in detail with regard to the Balkan states in the 1920s. Polanyi was convinced that the catastrophe of his time originated in the institutional rigidity ("gleichschaltung") of the utopia of a global market society (linked to free trade and the gold standard). As only a few states (or only one of them, the global imperial power) are in fact really sovereign and the many are just quasi-sovereign, this leads to right-wing nationalism and fascism, experiences we are living through again in our time. The abolition of the global unified

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capitalist market order is for Polanyi the precondition for true federations of nation-states: "while under market economy and gold standard the idea of federation was justly deemed a nightmare of centralization and uniformity, the end of market economy may well mean effective cooperation with domestic freedom" (Polanyi 2001, 262)a lesson just recently learned with regard to greece! Deglobalization and the development of new forms of solidarian cooperation are two sides of the same coin (Bello 2005). Only under these conditions can individual freedom be secured and democratic planning and control realized. (3) Protection of individual freedom by democratic planning and control of the economy—democratizing democracy Polanyi's intentions can be summarized in the idea to make the economy and the society "compatible" with freedom and democracy. His fundamental lesson of the 1930s is: "The stubbornness with which economic liberals, for a critical decade, had, in the service of deflationary policies, supported authoritarian interventionism, merely resulted in a decisive weakening of the democratic forces which might otherwise have averted the fascist catastrophe" (Polanyi 2001, 242). According to his paradigm, in a market society the economic and social interests, entrepreneurship and labour, international cooperation and national sovereignty are in an antagonistic conflict (Polanyi 1979, 2001, 245ff., 2005a). Authoritarian attempts to defend the globalized market economy and capitalism on the one side and the democratic defence of the interests of the population on the other side (often without taking into account economic stability and competitiveness) had lead to a structural confrontation of economy and democracy against which the political system could not hold for long. Fascism emerged as a result of the crisis of the market society. The reluctance to intervene by planning, regulation and control into the economy made fascism possible. Liberalism committed suicide: "Freedom's utter frustration in fascism is, indeed, the inevitable result of the liberal philosophy, which claims that power and compulsion are evil, that freedom demands their absence from a human community. No such thing is possible; in a complex society this becomes apparent" (Polanyi 2001, 265f.). Karl Polanyi combined his commitment to freedom with the demand to use organized state power in a democratic way to regain control over the economy and to regulate it with the purpose to decrease unfreedom and injustice. From his point of view liberalism represents freedom as the freedom of the few: "The institutional separation of politics and economics, which proved a deadly danger to the substance of society, almost automatically produced freedom at the cost of justice and security" (Polanyi 2001, 263). But it has to be stressed that he is totally aware of those liberal achievements which have to be secured at any price and made a common good for all. He proposes to create strong institutional guarantees to secure the "right to nonconformity" (Polanyi 2001, 263). It would be of utter importance he wrote to "create spheres of arbitrary freedom protected by unbreakable rules" (Polanyi 2001, 264). This includes the imperative: Personal

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freedom "should be upheld at all cost – even that of efficiency in production, economy in consumption or rationality in administration. An industrial society can afford to be free" (Polanyi 2001, 264). He demanded the extension of civil and political right to the sphere of the social: "The list should be headed by the right of the individual to a job under approved conditions" (Polanyi 2001, 264). Under these conditions "regulation and control can achieve freedom not only for the few, but for all" (Polanyi 2001, 265). These positions were in accordance with the famous four rights stressed by president Roosevelt in his 1941 State of the Union Address (freedom of speech, freedom of worship, freedom from want and freedom from fear). In 1944 Roosevelt extended this position in a further address to the people of the U.S. with the demand to pass a second "bill of rights" (Roosevelt 1944; Sunstein 2004). His widow, eleanor Roosevelt, lead the committee of the U.N. to present a draft of a U.N. human rights declaration after ww II. The final declaration included social and cultural rights as liberal and political rights (glendon 2001). In the 1960s and 1970s new human right declarations were passed. All these declarations have created a normative framework in deep contradiction to the global economic, political, and social order (e. Klein 1997). A "utopian slope" (Habermas 2010) emerged. The more recent discussion is concentrating on the assumption, that the effective defence of human rights demands a protection of common goods as well, namely the "common goods of humanity" (Boff 2010; Houtart 2012; Brie 2012). All this proves that it is still a long way to go to ensure freedom in a complex society faced by most urgent global problems and to realize the vision of Polanyi's Great Transformation. Polanyi’s late works further developed approaches to a plurality of exchange principles already adumbrated in The Great Transformation. The traditional societies, which he investigated, are characterized by reciprocity, redistribution, and a subsistence economy. At the same time, as Polanyi noted, they developed extensive markets, which were subjected to strict control. Despite this, the ‘safeguards of the rule of law and of the traders’ liberty’ were impressive. He added: "Similarly, ways were found to reconcile economic planning with the requirements of markets in communities as different as democratic Attica of the fifth century B.C. and the preliterate Negro Kingdom of Dahomey in west Africa, more than 2000 years later" (Polanyi 1977, XII). He rejected the alternative "market society or oppression". For him, planning and regulation could be the condition for freedom. His vision was that of a society with a plurality of property and socialization forms, in which a plurality of protagonists shape their own lives in a self-conscious way and on the basis of a free agreement on their goals and means. Today’s initiatives, either in the form of a socio-ecologically radicalized neo- Keynesianism and, on the other side, of a libertarian commonism, are preconditions for it. But he stressed the most important condition: democracy! Democracy is in Polanyi's understanding the only form in which free communality can still exist within a complex society with “aggregates of functional

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institutions.” He thought that democratization would give rise to socialism as an attempt, however incompletely, to “make society a distinctively human relationship of persons” (Polanyi 2001, 242). He was aware that the complexity of society always produces unintended consequences, which can never be fully controlled. Full oversight and transparency is impossible. However, a much higher degree of freedom and responsibility for the consequences of one’s own actions can be achieved. It is true that new relations of domination and new exclusions constantly emerge: "No society is possible in which power and compulsion are absent, nor a world in which force has no function" (Polanyi 2001, 266). But, according to the last paragraph of The Great Transformation: "Uncomplaining acceptance of the reality of society gives man indomitable courage and strength to remove all removable injustice and unfreedom. As long as he is true to his task of creating more abundant freedom for all, he need not fear that either power or planning will turn against him and destroy the freedom he is building by their instrumentality. This is the meaning of freedom in a complex society; it gives us all the certainty that we need" (Polanyi 2001, 268). Here, as already before in Rosa Luxemburg’s thinking, freedom is understood as the merging of socialism and democracy, a goal that is at the same time the way.8 Some features of this type of democratic socialism are sketched in graph 2. The civilizational dimension of Polanyi’s vision appears when he writes: "After a century of blind 'improvement' man is restoring his 'habitation'" (Polanyi 2001, 257). The horizons this opens up could be denoted by the concepts of landscape, urban community (‘polis’), the squares and loci of public communality (the ‘agora’), and the home. Far too many people remain unaware of the radicality of this task. It is a great, enormously attractive vision, which deserves to live. A great deal of this tomorrow has for a long time danced today, as Dieter Klein has vividly shown (Klein 2013, 169–202). The philosopher Lothar Kühne formulated this context thus: "In the landscape the individual is not only incorporated into a specific community through the house that is crowned by the landscape; in the landscape he/she also has the incipient spatial form of his/her incorporation into humanity, because the landscape indeed exists because of the house although it is essentially nature and earth. The finiteness of individual life has become negated by/absorbed, in creative everyday life, by the species. … Thus the house takes back the values that have been separated out and seigneurially inverted in the church. “The house is not seigneurial but is homey and wonderful" (Kühne 1985, 39). To this end, however, the earth must become a paradise, which we take care of and cautiously preserve—the old Persian word for garden is pairi-daēza (Turner 2005, 121). The walls must crumble so that everyone can come and go freely in our cities and communities, no one as an outsider but always as a guest or at home, no one humiliated and no one exalted. Responsibility then can really be taken for freedom; solidary communality of provision and care would be a daily matter; citizens would put much time and effort into subjecting social institutions to democratic control. In the place of a society whose rhythms and

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Graph 2: Some features of a democratic green socialism

The gaiasphere

Sustainable reproductive economy, localisation and regionalisation

The sphere of communalindividual life-worlds

Sphere of openaccess social institutions

The sphere of cultural public

Self-determined unity of labour, care, co-decisionmaking and leisure

Socialisation of important decisions on investments, participatory and deliberative democracy

Emergence of a cultural society of a good life

The economic order Solidarity care economy

Economic organisations as associations of the reproductive workers

The social order Libertarian institutions of open access and intersubjective freedoms

Egalitarian distribution of the basic goods of freedom

spaces are determined by capital accumulation (Harvey 2006) the reproduction of solidary life would be shaped in all its diversity. Traditions of pre-capitalist and modern societies could be combined on a new basis in a ‘city of being’. A sustainable solidary society of good life would arise (Reißig 2009, 141ff.) (graph 2). Karl Polanyi’s contemporary ernst Bloch captured this hope in these words: “True genesis is not at the beginning but at the end, and it starts to begin only when society and existence become radical, i.e., grasp their roots. But the root of history is the working, creating [and, we should add, caring–M.B.] human being who reshapes and overhauls the given facts. Once he has grasped himself and re-established what is his, without expropriation and alienation, in real democracy, there arises in the world something which shines into the childhood of all and in which no one has yet been: a homeland” (Bloch 1995, 1375f.).

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Bauer, Otto. 1976. “Der weg Zum Sozialismus (1919).” In Werke, Bd. 2, by Otto Bauer, 89–131. wien: europaverlag. Bello, walden. 2005. De-Globalisierung: Widerstand gegen die neue Weltordnung. Hamburg: VSA. Bloch, ernst. 1995. The Principle of Hope, Vol. 3. Translated by Neville Plaice, Stephen Plaice, and Paul Knight. Cambridge, Mass.: The MIT Press. Bockman, Johanna. 2013. Markets in the Name of Socialism. The Left-Wing Origins of Neoliberalism. Stanford: Stanford University Press. Boff, Leonardo. 2010. “The Rights of Mother earth.” Other News. http://www.other-news.info/2010/03/the-rights-of-mother-earth/. Brangsch, Lutz. 2009. “„Der Unterschied liegt nicht im was, wohl aber im wie“. einstiegsprojekte Als Problem von Zielen Und Mitteln Linker Bewegungen.” In Radikale Realpolitik. Plädoyer für eine andere Politik, edited by Michael Brie, 39–51. Berlin: Karl Dietz Verlag. http://www.rosalux.de/fileadmin/rls_uploads/pdfs/Texte-62.pdf. ———. 2014. “Transformationsprozesse Und Ihre Politisierung in einstiegsprojekten.” In Futuring. Transformation im Kapitalismus über ihn hinaus, edited by Michael Brie, 368–91. Münster: westfälisches Dampfboot. Brangsch, Petra, and Lutz Brangsch. 2008. Weshalb? Wieso? Warum? Argumente für den Bürgerhaushalt. Berlin: kommunalpolitisches forum (Berlin). Brie, Michael. 2012. “Making the Common good of Humanity Concrete – For a Life in Solidarity.” In A Post-Capitalist Paradigm. The Common Good of Humanity, edited by Birgit Daiber and Francois Houtart, 133–58. Brüssel: Büro der Rosa-Luxemburg-Stiftung. rosalux.de/fileadmin/rls_ uploads/pdfs/sonst_publikationen/common-goood.pdf. ———. 2014a. “Die kommunistischen Opfer kommunistischer Herrschaft.” Berliner Debatte Initial 25 (1): 106–10. ———. 2014b. “Transformationen des Reichtums – Reichtum der Transformationen. eine Vier-in-einem-Perspektive.” In Futuring. Transformation im Kapitalismus über ihn hinaus, edited by Michael Brie, 194–241. Münster: westfälisches Dampfboot. Brie, Michael, and Mario Candeias. 2012. Just Mobility. Postfossil Conversion and Free Public Transport. Analysen. Berlin: Rosa-Luxemburg-Stiftung. rosalux.de/fileadmin/rls_uploads/pdfs/Analysen/Analyse_Just_ Mobility.pdf. Cangiani, Michele, Kari Polanyi Levitt, and Claus Thomasberger. 2005. “Die Polarität: Menschliche Freiheit - marktwirtschaftliche Institutionen. Zu den grundlagen von Karl Polanyis Denken.” In Chronik der großen Transformation: Artikel und Aufsätze (1920-1945). Bd. 3: Menschliche Freiheit, politische Demokratie und die Auseinandersetzung zwischen Sozialismus und Faschismus, by Karl Polanyi, 15–64. Marburg: Metropolis.

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Cesarano, Filippo. 2006. Monetary Theory and Bretton Woods: The Construction of an International Monetary Order. Cambridge: Cambridge University Press. Chorus, Silke. 2013. Care-Ökonomie im Postfordismus - Perspektiven einer Integralen Ökonomietheorie. Münster: westfälisches Dampfboot. Cole, george Douglas Howard. 1920. Guild Socialism Re-Stated. London: L. Parsons. Crome, erhard. 2006. Sozialismus Im 21. Jahrhundert. Zwölf Essays über die Zukunft. Texte Der Rosa-Luxemburg-Stiftung 17. Berlin: Karl Dietz. Dale, gareth. 2010. Karl Polanyi. The Limits of the Market. Cambridge, UK: Polity. ———. 2016. Karl Polanyi. A Life on the Left. New York: Columbia Univers. Press. Daly, Herman e. 1991. Steady-State Economics. 2nd ed., with new essays. washington, D.C: Island Press. Dellheim, Judith. 2011a. “Free Public and Accessible Transports.” Mehring1. July 6. http://ifg.rosalux.de/2011/07/06/free-public-and-accessibletransports/. ———. 2011b. “Free Public and Accessible Transports.” Mehring1. July 6. http://ifg.rosalux.de/2011/07/06/free-public-and-accessibletransports/. Flassbeck, Heiner, Paul Davidson, James K. galbraith, Richard Koo, and Jayati ghosh. 2013. Handelt Jetzt! Das globale Manifest zur Rettung der Wirtschaft. Frankfurt am Main: westend. Fraser, Nancy. 2003. “Social Justice in the Age of Identity Politics: Redistribution, Recognition, and Participation.” In Redistribution or Recognition? A Political-Philosophical Exchange, by Nancy Fraser and Axel Honneth, 7–109. London and New York: Verso. glendon, Mary Ann. 2001. A World Made New: Eleanor Roosevelt and the Universal Declaration of Human Rights. New York: Random House. goethe, Johann wolfgang von. 1832. “Faust - Part II Act V.” http://www.poetryintranslation.com/PITBR/german/FaustIIActV.ht m#Act_V_Scene_VII. Habermas, Jürgen. 2010. “Das utopische gefälle. Das Konzept der Menschenwürde und die realistische Utopie der Menschenrechte.” Blätter für Deutsche und Internationale Politik, no. 8: 43–53. Harvey, David. 2006. Spaces of Neoliberalization. Towards a Theory of Uneven Geographical Development. Heidelberg: University of Heidelberg. Haug, Frigga. 2014. “Die Transformation muss am Herrschaftsknoten ansetzen.” In Futuring. Transformation im Kapitalismus über ihn hinaus, edited by Michael Brie, 178–19. Münster: westfälisches Dampfboot. Houtart, Francois. 2012. “From ‘common goods’ to the ‘Common good of Humanity.’” In A Post-Capitalist Paradigm. The Common Good of Humanity, edited by Birgit Daiber and Francois Houtart, 11–56. Brüssel: Büro der Rosa-Luxemburg-Stiftung. rosalux.de/fileadmin/rls_uploads/pdfs/ sonst_publikationen/common-goood.pdf.

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Jaeger, Michael. 2014. Wanderers Verstummen, Goethes Schweigen, Fausts Tragödie. Oder: Die Große Transformation. würzburg: Königshausen & Neumann. Keynes, John Maynard. 2003. The General Theory of Employment, Interest and Money. Australia: Project gutenberg of Australia eBooks. Klein, Dieter. 2004. “einstiegsprojekte in einen alternativen entwicklungspfad.” http://www.rosalux.de/fileadmin/rls_uploads/pdfs/KleinBrangsch_ei nstiegsprojekte_d.pdf. ———. 2013. Das Morgen tanzt im Heute. Transformation Im Kapitalismus und über ihn hinaus. Hamburg: VSA. http://www.rosalux.de/fileadmin/rls_uploads/pdfs/sonst_publikation en/VSA_Klein_Das_Morgen.pdf. Klein, eckart. 1997. Menschenrechte. Stille Revolution des Völkerrechts und Auswirkungen auf die innerstaatliche Rechtsanwendung. Baden Baden: Nomos. Klingholz, Reiner. 2014. Sklaven des Wachstums - die Geschichte einer Befreiung. Frankfurt am Main: Campus Verlag. Kühne, Lothar. 1985. “Haus und Landschaft. Zu einem Umriss der kommunistischen Kultur des gesellschaftlichen Raumes.” In Haus und Landschaft. Aufsätze. Dresden: Verlag der Kunst. Lewis, John, Karl Polanyi, and Donald K. Kitchin. 1935. Christianity and the Social Revolution. Freeport: Books for Libraries Press. Luxemburg, Rosa. 2004. “The Russian Revolution.” In The Rosa Luxemburg Reader, edited by Peter Hudis and Kevin B. Anderson, 281–310. New York: Monthly Review Press. Macmurray, John. 1961. Persons in Relations. London: Faber and Faber. http://www.giffordlectures.org/Browse.asp?PubID=TPPIRe&Volume= 0&Issue=0&TOC=True. Madörin, Mascha. 2006. “Plädoyer für eine eigenständige Theorie der CareÖkonomie.” In Geschlechterverhältnisse in Der Ökonomie, edited by Torsten Niechoj and Marco Tullney, 277–97. Marburg: Metropolis. Marx, Karl. 1996. “Capital. Volume I.” In Marx & Engels Collected Works. Vol. 35. New York: International Publishers. Marx, Karl, and Frederick engels. 1976. “Manifesto of the Communist Party.” In Collected Works, Vol. 6, 477–519. New York: International Publishers. Mises, Ludwig von. 1932. Gemeinwirtschaft. Untersuchungen über den Sozialismus. Jena: gustav Fischer. Müller, Tadzio. 2012. “Von energiekämpfen, energiewenden und energiedemokratie.” LuXemburg. Gesellschaftsanalyse Und Linke Praxis, no. 1: 6–15. Nagy, endre J. 1994. “After Brotherhood’s golden Age: Karl and Michael Polanyi.” In Humanity, Society, and Commitment. On Karl Polanyi, edited by Kenneth McRobbie, 81–112. Montréal and New York: Black Rose Books.

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Polanyi, Karl. n.d. “Das Uebersichtsproblem.” Con 03 Fol 01. Karl Polanyi Digital Archive. http://www.concordia.ca/research/polanyi/archive.html. ———. 1937a. “Christianity and economic Life.” Con 19 Fol 22. Karl Polanyi Digital Archive. http://www.concordia.ca/research/polanyi/archive.html. ———. 1937b. “Community and Society: The Christian Criticism of Our Social Order.” Karl Polanyi Digital Archive Con_21_Fol_22. http://www.concordia.ca/research/polanyi/archive.html. ———. 1945. “Universal Capitalism or Regional Planning?” The London Quarterly of World Affairs 10 (3): 86–91. ———. 1947. “The Meaning of Parliamentary Democracy.” Con_19_Fol_08. Karl Polanyi Digital Archive. http://hdl.handle.net/10694/697. ———. 1966. Dahomey and the Slave Trade. An Analysis of an Archaic Economy. Seattle: University of washington Press. ———. 1977. The Livelihood of Man. New York: Academic Press. ———. 1979. “Das wesen des Faschismus.” In Ökonomie und Gesellschaft, 91–126. Frankfurt am Main: Suhrkamp. ———. 2001. The Great Transformation: The Political and Economic Origins of Our Time. Boston: Beacon Press. ———. 2002a. Chronik der großen Transformation: Artikel und Aufsätze (1920-1945). Bd. 1: Wirtschaftliche Transformation, Gegenbewegungen und der Kampf um die Demokratie. edited by Michele Cangiani and Claus Thomasberger. Marburg: Metropolis. ———. 2002b. “Zur wirtschaftlichen Neuordnung europas (1930).” In Chronik der großen Transformation: Artikel und Aufsätze (1920-1945). Bd. 1: Wirtschaftliche Transformation, Gegenbewegungen und der Kampf um die Demokratie, edited by Michele Cangiani, Claus Thomasberger, and Kari Levitt, 110–19. Marburg: Metropolis. ———. 2003. Chronik der großen Transformation: Artikel und Aufsätze (1920-1945). Bd.2: Die internationale Politik zwischen den beiden Weltkriegen. edited by Michele Cangiani and Claus Thomasberger. Marburg: Metropolis. ———. 2005a. “Jean Jacques Rousseau, oder ist eine freie gesellschaft möglich? (1943).” In Chronik der großen Transformation: Artikel und Aufsätze (19201945). Bd. 3: Menschliche Freiheit, politische Demokratie und die Auseinandersetzung zwischen Sozialismus und Faschismus, by Karl Polanyi, edited by Michele Cangiani, Kari Polanyi Levitt, and Claus Thomasberger, 296–311. Marburg: Metropolis. ———. 2005b. “Sozialistische Rechnungslegung.” In Chronik der großen Transformation: Artikel und Aufsätze (1920-1945). Bd. 3: Menschliche Freiheit, politische Demokratie und die Auseinandersetzung zwischen Sozialismus und Faschismus, by Karl Polanyi, edited by Michele Cangiani, Kari Polanyi Levitt, and Claus Thomasberger, 71–113. Marburg:

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Metropolis. ———. 2016. Karl Polanyi. The Hungarian Writings. Edited by Gareth Dale. Manchester: Manchester University Press. ———. 2017. “The Common Man’s Masterplan (1943).” In Karl Polanyi in Dialogue: A Socialist Thinker for Our Times, edited by Michael Brie, 79–94. Montreal: Black Rose Books. ———. 2018. “On Freedom (1927).” In this volume, 298-319. Polanyi, Karl, Conrad M. Arensberg, and Harry w. Pearson, eds. 1957. Trade and Market in the Early Empires. Economies in History and Theory. glencoe, Ill: Free Press. Polanyi Levitt, Kari. 1990. “Karl Polanyi and Co-existence.” In The Life and Work of Karl Polanyi. A Celebration, edited by Kari Polanyi Levitt, 253–62. Montréal; New York: Black Rose Books. ———. 2013. From the Great Transformation to the Great Financialization: On Karl Polanyi and Other Essays. London/New York: Zed Books. Reißig, Rolf. 2009. Gesellschafts-Transformation im 21. Jahrhundert. Ein neues Konzept Sozialen Wandels. wiesbaden: VS Verl. für Sozialwissenschaften. Roosevelt, Franklin D. 1944. “1944 State of the Union Address. FDR’s Second Bill of Rights or economic Bill of Rights Speech.” http://www.fdrlibrary.marist.edu/archives/stateoftheunion.html. Ruben, Peter. 1995. “gemeinschaft und gesellschaft – erneut betrachtet.” In Philosophische Schriften – Online-Edition. www.peter-ruben.de. ———. 1998. “Die Kommunistische Antwort auf die soziale Frage.” Berliner Debatte Initial 9 (1): 5–18. Schumpeter, Joseph A. 1964. Business Cycles. A Theoretical, Historical and Statistical Analysis of the Capitalist Process. New York and London: Mcgraw-Hill Book. Stein, Lorenz. 1959. Geschichte der sozialen Bewegung in Frankreich von 1789 bis auf unsere Tage. Bd. 2: Die industrielle Gesellschaft, der Sozialismus und Kommunismus Frankreichs von 1830-1848. Darmstadt: wissenschaftliche Buchgesellschaft. Streeck, wolfgang. 2014. “How will Capitalism end?” New Left Review 87 (May/June): 35–64. Sunstein, Cass. 2004. The Second Bill of Rights. FDR’s Unfinished Revolution - And Why We Need It More Than Ever. New York: Basic Books. Tawney, Richard H. 1920. The Acquisitive Society. New York: Harcourt, Brace and Howe. Tönnies, Ferdinand. 1887. Gemeinschaft und Gesellschaft. Leipzig: Fues. http:// www.deutschestextarchiv.de/book/show/toennies_gemeinschaft_1887. ———. 2001. Community and Civil Society. Cambridge: Cambridge University Press. Turner, Tom. 2005. Garden History. Philosophy and Design, 2000 BC--2000 AD. London/New York: Spon Press. winker, gabriele. 2015. Care Revolution. Schritte in eine solidarische Gesellschaft. Bielefeld: transcript.

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wright, erik Olin. 2010. Envisioning Real Utopias. London; New York: Verso. ———. 2013. “Transforming Capitalism through Real Utopias. Presidential Address.” American Sociological Review 78 (1): 1–25.

NOTeS 1 Interestingly enough the english translation of the title of Tönnies' work was changed several times: In 1940 Tönnies' work was translated by Charles P. Loomis and published under the title Fundamental Concepts of Sociology (Gemeinschaft und Gesellschaft), in 1955 the same work was published as Community and Association and in 1957 as Community and Society. The most current translation of the book title by Jose Harris and Margaret Hollis is Community and Civil Society. Frequently in the translation Gesellschaft is not translated at all. 2

In the concluding remarks of his work Ferdinand Tönnies writes: "The whole movement, from its first appearance and through all its subsequent stages, can also be understood as a transition from original, simple, family-based communism, and the small-town individualism that stems from it—through to an absolutely detached cosmopolitan and universalist individualism and to the state-based and international socialism generated by it. Socialism is already latent in the very concept of Gesellschaft, although it begins only in the form of practical links between all the forces of capitalism and the state, which is specifically employed by them to maintain and advance the commercial order. gradually, however, it turns into attempts to impose centralized control on business and on labour itself through the mechanism of the state—which, if they were to succeed, would put an end to the whole of competitive market society and its civilization” (Tönnies 2001, 260). The east-german philosopher Peter Ruben has developed a deep analysis of state socialism and the failure to impose Gemeinschaft as the main principle of Vergesellschaftung on complex societies (Ruben 1995, 1998; see also Crome 2006).

3

For Karl Polanyi's intellectual life in Hungary until 1914 (see Dale 2016; Polanyi 2016).

4

In this context he published Christianity and the Social Revolution (Lewis, Polanyi, and Kitchin 1935) together with John Macmurray, Joseph Needham, and others. Through this he could have also been influenced by the positions of Macmurray, who saw community and society as necessary poles of human-social existence, neither of which can be dissolved into each other: ‘The members of a community are in communion with one another, and their association is a fellowship. And since such an association exhibits the form of the personal in its fully positive personal character, it will necessarily contain within it and be constituted by its own negative, which is society. every community is a society; but not every society is a community’ (Macmurray 1961, 146).

5

Repeatedly, Polanyi comes back to the motif of the "acquisitive society", the subject of Tawney’s first influential book (Tawney 1920). Tawney had criticized an ideology that derived the fulfilling of societal functions purely from ‘free’, egotistical action, and he contrasted this with the vision of a society that rests on the connection between personal responsibility and social functions: "A society which aimed at making the acquisition of wealth contingent upon the discharge of social obligations, which sought to proportion remuneration to service and denied it to those by whom no service was performed, which inquired first not what men possess but what they can make or create or achieve, might be called a Functional Society, because in such a society the main subject of social emphasis would be the performance of functions. But such a society does not exist, even as a remote ideal, in the modern world, though something like it has hung, an unrealized theory, before men's minds in the past. Modern societies aim at protecting economic rights, while leaving economic functions, except in moments of abnormal emergency, to fulfill themselves" (Tawney 1920, 28f.). Polanyi later called the model of an acquisitive society ignorance of the reality of society: "No society is possible in which power and compulsion are absent, nor a world in which force has no function. It was an illusion to assume a society shaped by man's will and wish alone. Yet this was the result of a market view of society which equated

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economics with contractual relationships, and contractual relations with freedom. … Any decent individual could imagine himself free from all responsibility for acts of compulsion on the part of a state which he, personally, rejected; or for economic suffering in society from which he, personally, had not benefited. He was "paying his way,” was "in nobody's debt,” and was unentangled in the evil of power and economic value. His lack of responsibility for them seemed so evident that he denied their reality in the name of his freedom" (Polanyi 2001, 266). Polanyi exposed this as a convenient illusion. 6

we can only go briefly into his specific view of 1920s and 30s Soviet socialism. Like many of his left wing contemporaries he blinded himself to the extent of Stalinism’s destruction of civilization. He also refused to acknowledge the gap between his understanding of socialism and Soviet-type socialism, which along with democratic space had also destroyed the bases of individual freedom (see Arendt 1993, 39f.; my personal view is expressed in Brie 2014a; for remarkable perspicacity at a very early date see Luxemburg 2004). Polanyi’s relationship to socialism was mainly shaped by the non-communist left and by Central and western european experiences. For him, ‘Bolshevism’ was a subform of socialism alongside others. In this way he missed what was specific to the Soviet system of rule. In the 1930s he wrote that ‘Russian socialism is still in the dictatorial phase, although a development in the direction of democracy has already become clearly visible (Polanyi 1979, 124). In 1939 he said ‘The working class must stand by Russia for the sake of socialism. Both parts of the sentence are of equal importance. To stand for socialism and not for Russia is the betrayal of socialism in its sole existing embodiment. To stand for Russia without mentioning socialism would also be the betrayal of socialism, which alone makes Russia worth fighting for’ (quoted from Karl Polanyi’s 1939 manuscript Russia and the Crisis by Nagy 1994, 99). In 1943 he cited ‘the French Revolution, the American Revolution, the Russian Revolution, and socialist Britain’ within a list of Rousseau’s legacy (Polanyi 2005a, 310); and after 1944 he saw the problems of Soviet socialism in the fact that on the one hand the Russian Revolution ‘centers rather on the practice of co-operation and the ideal of human fraternity than on liberty and equality’ and, on the other hand, that ‘the Russians are moreover in a different phase of their revolution’, ‘far from having reached final fruition’ (Polanyi 1947, 6–7).

7

On the concept of entry projects see Klein and Brangsch (L. Brangsch 2009, 2014; D. Klein 2004). In this context the Institute for Critical Social Analysis has studied, among other phenomena, participatory budgets (P. Brangsch and Brangsch 2008), energy-democracy initiatives (Müller 2012), as well as free public transport (Dellheim 2011b; Brie and Candeias 2012). erik Olin wright’s real utopias project has tracked these kinds of projects within a comprehensive concept of socialist transformation (wright 2010, 2013).

8

Taking issue with Lenin and Trotsky, Rosa Luxemburg wrote in the summer of 1918 ‘… socialist democracy is not something which begins only in the promised land after the foundations of socialist economy are created; it does not comes as some sort of Christmas present for the worthy people who, in the interim, have loyally supported a handful of socialist dictators’ (Luxemburg 2004, 208). She wanted transformation in the sense of "resolute attacks upon the well-entrenched rights and economic relationships of bourgeois society’, but ‘in the manner of applying democracy’, ‘out of the active participation of the masses’, ‘subjected to the control of complete public activity’ (Luxemburg 2004, 308).

v e ssay s b y k a r l p o l a n y i

Ideologies in Crisis

1

(On Die Maschinerie der Gemeinsamkeit by F. w. Foerster).

(After the publication of Foerster’s essay in volume 25/26 we received this contribution to the discussion by a Hungarian comrade, which will very likely stimulate a new discussion. N. e.) AN eXTRAORDINARY revulsion at the capitalist system has taken hold of all people with souls that can feel and brains that can think. In a sense, people have already decided that capitalism should not continue to exist. But at the same time, like a religious renunciation of the previously pervasive tendency, a just-as-pervasive and apparently diametrically-opposed tendency is setting in: the spirit of rebellion against Marxism. A twofold movement is occurring at the same time and with the same sense of inexorability: the final rejection of capitalism and the final overcoming of Marxist socialism. what we can call the "socialist spirit" of the times is then at the same time an anti-Marxist spirit. Marxism and socialism are no longer allies. And they are suddenly on the verge of becoming the bitterest of enemies. This enmity is expressing itself today in the disguised form of a brotherhoodin-arms. Socialism has to withstand harsh attacks in the philosophical, ethical, epistemological, and religious spheres, but these attacks are not aimed at it itself but always at Marxism. However, in the face of every decisive confrontation the latter seeks refuge under the wings of its powerful comrade. However, socialism’s mission does not permit it to provide refuge for obsolete theories. The best minds and the youngest hearts will never give up the passionate search for truth. They are the secret kangaroo court condemning all outlived dogmas and all obsolete authority. If socialism closes itself off to this youth—a group that does not think in terms of age—it is closing the door to the future itself. It can never tolerate the best minds holding it responsible for a false doctrine at work under its protection. A fusion of Marxism and socialism persists today, and it is a bugbear for all modern thinking. Any initiative for the intellectual working through of today’s most urgent social problems founders in the swamp of this intellectual degradation.

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Those who today criticize Marxist socialism understand something definite by the term; but those who defend it understand different things at different times or associate it with something undefined and vague. If it is dissected into its phenomenal forms—as a social democratic party, as Bolshevism, as Marxist literature—then the critic is immediately rebuked for not grasping socialism as an economic-philosophical principle in contrast to, for example, individualism. If one persists in this criticism and points to the vagueness and insufficiency, to the utopian and fantastic character of this organization of all human affairs, then one is referred back to electoral figures, to the real political successes of Bolshevism, the question of socialization, or of the party newspaper. But even as a general principle, socialism has, for Marxists, long since dissolved into incomprehensibility. At times, its main goal is said to simply be the transcendence of exploitation, and in whatever way necessary; at other times socialized economy [Gemeinwirtschaft] becomes the absolute criterion, even if this first has to be purchased at the price of freedom and justice. At times socialism is the quintessence of human solidarity; at others it is the violation of the latter through self-conscious class struggle. Sometimes it means the revolutionary despotism of the freest social formation ever; at other times it is bald historic necessity and the blind dictate of dialectical reason; sometimes it is the highest moral imperative that overcomes the selfish capitalist economy; and then, at other times, it is the most extreme affirmation, the virtual idealization of the economic interests of the working class, of this chosen people. For Marxists, socialism is sometimes the world order beyond capitalism; at other times it is so-called "socialist reality", that is, every gain in power of an interest group that is built into and rooted in relations of the capitalist state itself. Sometimes, for them, socialist action is payment of dues, subscriptions, sympathy strikes and electoral success (even if with little enthusiasm); at times it is precisely this enthusiastic spirit, which is socialist in and of itself, and socialism itself is not power, is not action, is nothing external, is not even deeds at all but is goals and attitudes, the only belief that offers salvation. In the name of this definition of what is socialist, the Bolsheviks ruthlessly fought and still fight working-class organizations and the trade unions in general” in order to put living belief in the place of dead works”. what then is socialism for Marxists? what is the essence of this general principle that makes up their world view? Is it the belief or the deeds—is it the goal or the path—is it an intellectual ideal or is it a legal reality—is it of this world or of the other? It is claimed that socialism is the unity of all this; and that the capacity to grasp this ungraspable concept is the key to true Marxist feeling and thinking. Thus the Hungarian Bolsheviks have openly declared themselves for justification through faith and mystical Marxism. In its period of decline, the teachings of the church also took this path: the escape into mysticism. where are those proud times in which Marxist socialism still appeared as science? what happened to our unwavering belief in and hope for the awakening

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of the sleeping giant that is the proletariat that would usher in the historical revelation of a new world? The outbreak of the world war and of the revolutions that followed it signified the collapse of the old world and, with it, of the Marxism that belonged to it. Only determined opponents of the party dare to deny that the Bolsheviks today are the embodiment of Marxist theory and practice. However, it is equally a fact that this Bolshevik practice is resolutely or bitterly rejected by the overwhelming majority of the socialist proletariat of all countries, with Russia and Hungary at the top of the list, in direct proportion to how well acquainted they are with it. Both leaders and masses have spoken out against it. Yet the appearance is still maintained, the corpse of Sultan Suleiman is put on his horse in order to frighten the enemy even after his death. And so the dead Marx also rides through the world. Today those who criticize Marxism take it more seriously than those who defend it. The former do not see it as something generic and vague, while the worst exploiters, on the basis of this vague conception of socialism, will say that “they too are socialists”. For its critics the question is not this vague understanding, which is hardly any understanding at all, but Marxism itself. It was once a scientific doctrine, specifically a theory of the capitalist economy, a philosophy of history, a materialist one. The message of both was that the communist utopia can and must be realized by the modern proletariat. Socialism as a world view would become the proclamation of this doctrine and the belief in salvation through it. Most of us grew up in this belief. People who believed in Marx’s teachings and attempted to realize them through awakening the class consciousness of the proletariat could call themselves socialists. Marxist theory and practice was well-armed against the capitalist spirit of the pre-war period. It was born in the struggle against this spirit and overcame it. The materialism of capitalism found its conqueror in the supra-materialism of scientific socialism. If acquisition is the law of humanity then a new economy must be created to give humanity new laws. And if nothing exists outside the present economy, then nothing would exist outside the new economy. If inventions, technical civilization and big factories are the justification for mass misery, then the unleashing of inventions, the unprecedented intensification of technology, and still larger factories are the justification for class struggle, revolution, and dictatorship. The outbreak of the world war was the turning point for all capitalist and Marxist thinking. The leaders of humanity clearly recognized, and the masses felt vaguely, that so-called "vital interests" would never again rule the world and that they would be replaced by forces of a completely different order and nature. The omnipresent economic interests that the imperialists pursued and the socialists attacked in battles against windmills proved to be not merely unreal and abstract to the point of sophistry but also mere economic superstition and empty fantasy. It became plain to see that it is not the material world but the conception of it that is the driving force (however false and erroneous this conception is), and that it

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is therefore these conceptions, and not the material reality itself, that animates the masses. Indeed, even the concept of material interest, this allegedly most concrete and real phenomenon, only becomes historically effective when it is raised to the level of belief, when the sacrificial victims are no longer counted and its intrinsic value alone serves as justification and compensation for everything done in its name. This period of all the most monstrous paradoxes believed in egoism. It was no longer disavowed, no longer idealistically whitewashed. On the contrary, humanity marched towards death in the holy name of vital economic interests, which it surrounded with a halo of Sacro-Egoism that had raised itself to heaven. The material declared itself to be the only ideals, and thus the materialist world completed its trajectory. If the capitalists saw this idealization of the material as the only thing real and essential and called it fatherland, then Marxists openly called it socialism! The utilitarian ethic, the materialist conception of history, positivist epistemology, and the determinist philosophy are no longer viable in the new atmosphere. However, Marxism as a world view is built on these pillars. Its time is over. what should replace it? The answer to this question is not decisive for the fate of Marxism. For sincere minds striving for clarity this is a subordinate concern. If the sun is extinguished one has to find one’s way in the dark rather than take a will-o’-the-wisp for the sun. But the sun of our human race is being darkened by a new brighter and more radiant sun rising on the horizon. Freed from the incubus of an evolutionary theory in whose treadmill we are condemned to eternal compulsory labour, restless and homeless, leading a senseless existence; awakened from the hallucination of a perverse conception of history that imagines it hears in world events not the echo of a voice in the struggle, but only the mere echo of world events; awakened from the compulsive idea of a clownish determinism which portrays our free will as the accidental product of forces acting behind the scenes; awakened from the belief in dead quantity and finally coming to a belief in ourselves; we will find the strength and the calling in ourselves to make into humanity’s reality the demands of socialism for justice, freedom, and love. Marxist socialism is merely obscuring the fateful question before which humanity stands; it is inhibiting the free forces of a radical solution; it is impeding thought from emerging from the semi-darkness of an antiquated world of dogma; by its dark prophecies, obscure authorities, and mystical symbols it is damping the drive to act. It is blocking humanity’s clear vista. The church lived a thousand years beyond its calling. Marxism may survive us, but the new spirit that was born of the misery of humanity’s world war will certainly outlast Marxism. 1

[Original title: “weltanschauungskrise“; published in: Neue Erde Jg. 1919, wien, Heft 31./32, pp. 458-462; translation by eric Canepa]

Science and Morality

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[I. The reversal of scientific and everyday knowledge] The belief is widespread today that with regard to social interactions, science and morality relate to each other in approximately the following way: for simple questions, and ordinary people in general, the counsel of life’s course is sufficient. In complicated cases this is not enough; there science, with its broader horizon and more precise methods, has to intervene and lead. In reality, the relation is the inverse: knowledge suffices, as in handicraft, in technology, in medicine, also in human matters for simpler questions. whether it is everyday knowledge or as a result of more precise ordering and method a socalled scientific knowledge is not the issue here. As long as the overview is sufficient and experience provides specific support for each case, everyday knowledge is enough as a guide to our action. However, where the context of the phenomenon is such that we cannot gain an overview of it, in terms of its nature, causes, and consequences, then science fails us and we have to turn to ethics for counsel. This is always the case when what is at stake is the direction of our own lives and our relation to our fellow human beings and to the past and the future. The nature, the causes and consequences, and the true contexts of these things are, to use scientific language, much too complicated, their functions much too highly differ[entiated] ..., and the ways in which they are combined much too compounded for science to say something definite even for the most simple questions resulting from these contexts. In society, success and failure are conditioned by an immense series of factors. who can foresee the consequences of a good deed; who can gauge the consequences of an evil one? who knows how much evil we are bequeathing our descendants? who knows the degree to which mutual aid eases our common life; who knows how much self-interest damages everyone’s life? who can indicate with certainty that violence does more damage than good in a given instance; who can conclusively prove that an act of love does more good than damage? These questions, however, are the ones without whose answer we cannot live. where the truths of science are not enough we turn to the truths of ethics. Trust in science is today so great that we have inverted this relation. In the scientific world view hubris has gone so far as to want to replace moral truths by scientific ones or, as the expression goes, to derive them from the latter. The journey of life becomes a mere expression of “evolutionary theory.” The highest priorities for all action are supposed to flow from a natural law—of eternal

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progress or the saving of energy—allegedly independently of our will. Selfdeception here is easy prey for a common sleight. ethical truths of the inevitable evolution of eternal progress and of general reasonableness are first hidden behind scientific-objective facts in order then to discover in the latter the same truths that one has just embedded in them. The derivation of the what-ought-to-be from the unveiled what-is is so simpleminded that it can only find a place in those whose souls have become completely bigoted through worship of science. even the more reasonable representatives [of the] scientific world view refuse to be deceived by this phantasmagoria and look elsewhere for their arguments for pushing back ethical truths in favour of scientific ones. They recognize the fundamental difference between the truths of what-is and the truths of what-ought-to-be and in so doing apparently forsake the attempt to make the journey of life basically dependent on science. what I should do is the question of what-ought-to-be; how I should do it is the question whatis: thus runs their dichotomy. In terms of logical clarity, this probably leaves nothing to be desired. However, since there is no logical judgment that could decide on when the one or the other question is to be asked, this distinction only serves to quiet the philosophical conscience but infinitely extends the orientation toward an authoritarian science. To pose the problem of death penalty in this way means to reject any claim of ethos to find an answer to it: does the state have to render the criminal harmless—yes or no? The positive answer to this whatquestion hands the question over to science, which then can deal with the how-question with or without morality, depending on what seems best to it. The formal dichotomy into what- and How-questions arises from a superficial kind of observation. In our lives we are not dealing with two parallel unrelated reigns of the whatis and the what-ought-to-be or of what and How but with two competing areas of advice. They have a polar relation to one another, that is, they behave like North and South on our globe: the more northerly the less southerly and vice versa. But in reality it is not a question of two poles of equal value: moral truth is the fundamental one, which generally and always holds, wherever the particular preconditions of scientific truth do not exist. First come the counsels, derived from life itself, of the ethical what-ought-to-be and then, and only where scientific knowledge has proven its validity can it also claim validity. everywhere else, always and in every case, the journey of life is what a human being has to rely on. who, however, is to decide whether knowledge has proven its validity? “who other than science itself,” is the answer of the scientific world view, and with this answer it creates a new basis for its revelation. every newly founded diocese in the lands of the non-believers removes the native soil of moral truth from under its feet. even the recognition of the polar relation of the truths of science and of life as well as of the fundamental character of the latter is no impediment for the universal bishopric of science. For it is enough to recognize a science of the social

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life of people—and recognize its truths as demonstrated—in order to enforce the total victory of all claims of its pontificate, which were not possible to impose formally. we then clearly see the true meaning that a belief in a science of humanity’s future, which is the point to which sociology necessarily tends, must have and actually does have for our entire action and non-action. The sphere of moral truths depends on the recognition or denial of this belief. what could initially appear to be the mere justification for a scientific policy now reveals what it is; the liberum veto 2 the scientific world view throws onto the journey of life as soon as the latter brings us close to humanity’s major questions. The true content of the claim we are confronting becomes clear as well. It truly means no more nor less than that the insights of science enter into open competition with the insights of ethics. At this point we are asking what impact sociology has on the nature of that context in which everybody has some share and on which each person’s fate in some way depends. what does sociology know about the consequences, which result in a specific case from our actions, for other people and for ourselves? what does it know about when, where, and what results from our action and non-action for posterity, and what does it know about the action and non-action of the past generations as the cause that intervenes in a specific case in our life? Does it know the cases in which the subordination of my will to that of others is definitely harmful? Can it tell us in what cases the application of force helps more than it harms? Does it encompass certainty about the possible instances in which love is the correct value and teaching the correct means, and about the other instances in which they are not? Has it discovered the method to calculate the effects of a murder and to so gauge the various motives for which people use violence on other people that we can foresee in each given case what the consequences of the deed will be? Has it found the solution to the problem of when and where we must follow morality, of when and where we can change morality through our own doing? Has it uncovered the laws that rule the act of free will, and does it know the extent to which intellect and will affect the world in return? And does it know how much intellect and how much will and—what is alone decisive for action—whose intellect and will are able to change the world? Sociology knows little or nothing about all this. It is still the ethical insights that reveal to us the nature of human society and the effects and consequences that obtain in it. we have to follow our general truths in every case regarding how a human being relates to a human being, a group to a group, posterity to the past, and everyone to others. Since science does not know anything about what matters most we have to be guided by the knowledge that rests on the general experience of life: the lessons of life’s journey. For this is what is crucial: without a knowledge of the true context, the effects of the individual life on the lives of all others in each individual case and its

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retroactive effect on this individual and, then as a consequence, on the life of others—and so on in an endless chain, because the chain is life itself—without a more precise and specific knowledge of this idea sociology’s claims of being able to advise us in our social actions is unjustified. But does it know about the nature of the connection between group wills, about the effect and counter-effect of their activity more than it does about that of individuals? Is it able to answer even one of the questions that we have asked above in regard to the isolated human being, in regard to his associations and institutions? even the collective will arises from an inextricable tissue of fear and hope, toil and pleasure, joy and sorrow, right and duty. And this will too faces the choice of either subordinating itself to others or dominating them, working together with them or detaching itself from them. This will too fluctuates between the means of violence and compulsion and those of love and life. Here too custom and tradition, self-interest and indifference play their role. However, here too exemplary behaviour, intellect, love, and learning are decisive. Is sociology able to give [more definite] counsel to the groups than to the individuals? And yet, sociology’s influence on the whole intellectual and cultural, political and social being of today’s humanity is a powerful one. This is the fundamental reality, which was our point of departure. This influence openly competes everywhere with the counsels of moral truth and has snatched from it the entire sphere of politics: scientific policy decides all questions of the limits of violence and cooperation, the meaning of wars and revolutions, the true meaning of the individual for the whole, and of contemporary humanity for the humanity of the future—all on the basis of the scientific truths of sociology. we are facing an enigma: sociology knows nothing or almost nothing about everything that matters here. And yet the unshakable conviction prevails everywhere that it does know these things and is the sole discipline that knows it. what could the true object of this science be if it is not that which is ascribed to it? And how can we explain the special delusion associated with it? [II. Scientific outlook and sociological laws] Although the question seems so clear sociology makes it difficult to answer. Having arisen from the scientific outlook, it stays true to its obscurantist origin. In the question of practical application we have already seen privileges that make it untouchable. On the one hand, it rejects the ethical assessment of scientific policy, but protects itself, on the other hand, from any concrete criticism by appealing to the idea that general historical phenomena cannot be either “true” or “untrue.” Their existence, according to sociology, suffices in itself to demonstrate its right to exist. But still not content with this immunity it additionally entrenches itself behind the assertion—which can neither be proven nor refuted—that if a general practice in a time period turns out to be occasionally erroneous, then this is only the case because there are special interests of whatever sort hiding behind it; and sociology is supposed to enjoy the

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ethical prerogative of being seen as the sole representative of the solidary interests of humanity. The same hide and seek is repeated in the problem of what-is and whatought-to-be. It is certainly impressive how the scientific world view has made the what-ought-to-be emanate from the what-is. The light of the what-ought-to-be is removed from the world of the intellect and well hidden in the camera obscura of natural sciences. everything sinks into an uneasy darkness. Suddenly a radiant light breaks through the coloured windowpanes of the what-is, and through the graces of science a new what-ought-to-be comes into the world. The inexhaustible magic box fools us with new tricks when we finally try to grasp the object with which sociology is really dealing. As a positive science it represents a complicated technical apparatus. From statistics to psychoanalysis it has all the props of an exact reality. Captured on the canvas of human and historical life, however, it unfolds colourful and fascinating visions, full of impulses and ideals, counsels and programs—a magical kaleidoscope of a Utopian and intense reality of life. But a kaleidoscope of tin and glass is one thing; the world of colourful dreams that it projects is another. Sociology, however, is both at once! In the face of any doubt about the truth of its visions and prophecies it appeals to the truth of the optic that makes these images appear. If one in turn doubts the correctness of its lenses and the way its images are projected then sociology appeals to the beauty of these images. This double game has first to be confronted if we want to force sociology to acknowledge its own true content. In order that it can no longer appeal from one position to the other we have to acknowledge both facets of sociology: sociology, whatever else it is, must correspond to both functions: on the one hand, it has the character of a positive science; on the other hand, it has also to be able to serve as the basis for so-called scientific policy. we want to maintain both these premises in order to clear away the mist of conceptual confusion with which sociology is surrounded in order to create its authority and unapproachability. what might the true object of sociology be? In what way does it undertake to deal with the life of individuals or groups in order to derive results for a positive science? what is the basis for the possibility of laws and content of the concepts that result from this effort? Or, said differently, what is the object of sociological laws which are meant to guide scientific policy Up to now we have only touched the sphere of this question from a distance; we have only just illuminated the beginning and end point of the logical sequence. The scientific world view from which sociology arises, and the claim to practical applicability to which it tends, were the final links of the chain that we have taken hold of. In terms of its origin, the new sociology has presented itself as a pseudoscience that is hopelessly separated from true sciences through the irrational intermediate link of the scientific word view. It owes its existence to modern evolutionary theory and to its concept of future. As far as its practical

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applicability is concerned and in order to avoid undue sharp confrontation we have tried to show by way of an analogy from the history of medicine that even the application of true theoretical knowledge in practice is not always acceptable.3 In any case, what we want to understand and show now is what lies between this beginning and final point. we have two reference points from which we can disentangle this tissue. One of them lies in the particularity of the scientific world view from which the possibility of thinking about sociological laws and a science of the humanity’s future comes in the first place; the second point of reference is supplied to us by the ideas and concepts that are found in this science. Alongside the internal structure of social laws it is therefore the concrete ideas of social reality, its construction and substrata, the concept of the social question of politics, its [possibilities] and limits, which we need to look at more closely. The contents we are seeking have to be locatable in these concepts and in the laws which preside over them. This double point of departure, however, is more than a methodological pillar; we are holding in our hands the two ends of the thread whose knot makes up the true puzzle of sociology. This influence of sociology on all of contemporary humanity’s life journey has no parallel in any of the other positive sciences. engineering has led to a comprehensive technology, the medicinal natural sciences corresponded to a medical practice, other positive sciences have had other, sometimes far-reaching effects on the way of life. However, never has a discipline whose object is not life occupied such a dominant position vis-à-vis life. The fact that its object is the observation precisely of human moral impulses and [phenomena of life] does not alone explain this dominance. Psychology’s object is the soul, epistemology deals with the intellect and its laws. Accordingly, the influence of these sciences on the fate of the human soul and the activity of its intellect .... The enormous and mysterious power of this positive science of sociology must originate in another source, which endows this positive science with all the functions of a normative science Our twofold point of departure is in itself the solution to this puzzle: one end of the thread is held in the hand of positive science; the other end leads us to the intellectual mother of all black magic—to the scientific world view. Development, progress, the economic principle—these normative concepts are what make up the skeleton of this world view. And as with every world view, this one also constructs norms that correspond to these normative concepts. Under the appearance of discovering these principles in nature and proving their existence, these norms are promoted and recognized. ...4 Laws and concepts—these are the two reference points which we have to bear in mind to clarify the structure of sociology. The possibility of sociological laws arises directly from the scientific world view. The general laws of nature, which also embrace human life, and the general evolution of nature, to whose immutable laws everything is subjected—these are the ordering principles that contrast with the chaos of what is human. Their laws are the laws of the natural

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sciences applied to the life of humanity. The human being, intellect and nature, freedom and natural law all belong to contrasting, or at least very different, spheres. The hope of representing the life of people and of humanity as a part of nature could only be fulfilled if it is possible to find bases in this fabric, which themselves do not belong to the intellect but to nature and whose contexts are subordinated not to freedom but to natural law. Through space, time, and mass points, science was able to capture the chaos of nature so successfully that the movements that determined these points represented a system which seemed to be independent of everything else. Could not similar points and similar relations be found in society? That is what was at stake. Human life, however, is something personal and internal. If not everybody could say of himself that he has the inner certitude, that he is alive, then human life would not be what it is. Positive science, on the other hand, is built on generalization and objectification. How else could it create concepts serving as a basis for its laws? Certainly, in so doing it distances itself from the reality of lived life; the value of its abstractions, whether concept or law, rests precisely on the general validity it achieves through generalization and objectification. Science thus passes necessarily from the individual to the general, from the subjective to the objective. For human life, however, the personal and the internal is the point which cannot be left behind without the risk of forgetting what is essential in it. It is thus easy to pose the problem of sociological laws: what generalization and objectification does the life of people with each other allow without in the process losing the relation with its original contents? Two paths were open to sociology in order to accomplish this task: generalization through the observation of a great number of individual phenomena instead of viewing the individual phenomena separately, and objectification by grasping the material, external, and visible aspects of human life—instead of the inner life itself. The first path is seemingly not a generalization at all since sociology from the outset involves not individuals but groups, hence a large number of individuals. However, what is involved here is not the "object" of sociology in the sense of its objects but the basis for the laws that it postulates in these objects. It found this basis, for the first time, in the numerical exactness of the law of large numbers, as presented by statistics on moral behaviour. But large numbers are mathematical, not sociological, realities and have nothing to do with groups or associations. The latter served in another context for the construction of sociology, as we shall see. Since, as we have said, in all essential aspects these numbers simply equate the individual parts like repeated elements of a larger whole they offer scant basis for laws. Despite [the] existence of groups and associations, all that sociology could do in its beginnings, when it was still a [wish] and not a scientific world view, was to derive from the psychology of the individual the impulses out of which these groups and associations, indeed state and society themselves, arose (Hobbes, Rousseau). Statistics let the countable and measurable come to the fore without

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completely losing sight of the individual. Large numbers and external-material things were the bases that the scientific world view singled out from the fabric of what is human so that the sociological laws could use them as a foundation. The statistical laws of large numbers, which even related people’s internal regulations (marriage, suicide, crime, church attendance, etc.) in some relationships completely independently of their will, as well as the laws that can be discovered in the spheres of the external things of human life (commodity production, import/export, building of homes, agricultural produce, the productivity of machines and capacity of factories, etc.), were formally exact and strict mathematical functions—and yet intimately intertwined with human life. The philosophy of history took similar lines in order to become a science, a science that later merged into the new sociology. On the one side, the intellectual development of the individual human being, as studied by the older moral philosophers, was replaced by its outward-material, technical-scientific development (Defoe’s Robinson Crusoe); on the other side, instead of the intellect of the individual it was increasingly the intellect of whole peoples, races, classes, masses, and other groups, which became the substratum of science (Hegel). Marx combined both methods, in that he addressed the outward-material, technicalscientific development of whole peoples, classes, and races, as well as other groups as the "object" of the philosophy of history. The materialist conception of history is thus not an arbitrary one, and Marxist sociology, which arose from it, is not a competing sect of sociology but is the necessary sociology that arose from the spirit of the scientific world view. All disciplines, which merged into the new science of human life, took the same path. The beginnings of several disciplines met in its logical structure. ethics and the critique of moral behaviour, politics, economics, the philosophy of history, cameralism and the study of finance, even the idea of healing therapy, a series of natural sciences—from biology and the theory of evolution to mathematical statistics—aspire in one or another way to sociology. In similar ways Malthus, Comte, and Spencer presented the natural laws as the basis of the science of society. Here it is enough to point out that the sciences either were stripped of their original character in order to be able to absorb strict lawfulness into their structures, or their submission consisted in handing over the concept of strict lawfulness that they had developed to the new sciences. The whole history of sociology turns around the problem of the bases of Natural law. Marx simply solved it in the most consistent way. From its origin in the scientific world view it becomes clear why sociology has such a great influence on human life, even though the connection of this life to its laws cannot be specified. Now it also becomes clear to us why this context is not assignable and why it is reasonable to think that no useful counsels for the practical activity of the individual can come from these laws of social life. The laws of large numbers stand in no specifiable connection to the single cases of which they consist. No reasonable person has ever tried to seek counsel

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from suicide statistics in deciding whether he should take his own life. But the laws of the material-external also have no graspable relationship to the personalinternal aspect of our existence, which can be captured, though here at least the psychological attempt can be made to build seeming bridges. This occurs with the aid of a completely wilful, brutally egotistical motivation of all personalinternal relations to the material-external, indeed an accomplishment for which sociology is not aauthorizedand which stands in stark contrast not only to the results of actual psychology but also to the whole constellation of knowledge of sociology itself, in so far as sociology presupposes, and must presuppose, altruistic tendencies. These laws that in any way have to do with human life have no kind of meaning for this life because the exactness of these laws is inversely proportional to the exactness of their relations to human life. It is in vain that the laws of the material-external side of things are systematic and exact, often to the point of mathematic exactness. Astrology too was a mathematical science, and the path to modern astronomy runs directly from the horoscope. The horoscope became astronomy only after it came to understand that the laws that govern the horoscope have no recognizable connection with the laws that govern the life and fate of people. In this process [it] became a science only when it handed over the conduct of our lives back to moral cognizance . Sociology is still far from being the astronomy of the human. However, if it will have become this, it will have long ago also recognized its true aims, which could never be those of deriving life from science and substituting the voice of conscience by a statistical table. In this case it will have long since given up the attempt to feign a connection between its laws and the human feeling of life. Contrary to all reason, however, sociological laws today have a powerful impact on people’s lives. The magical legacy of ideals and valuations, which sociology owes to the scientific world view, explains this paradox well enough. Its facts are more than facts, its numbers more than numbers. It is not logical rigour and objective argumentation that make up its power. Its world has its own atmosphere and its special disposition: these are occult signs, cabbalistic means of communication. Sociology’s driest pages are written in phosphorescent ink from which the illumination proceeds—not from what is actually written, for all of its concepts, the skeleton of its thinking, are soaked in a world view that is not the stuff of science but of the things which make up oracles and magic, human sacrifice, and Caesarian mania. More than the source of its influence, it is the manner of its impact that illuminates the true nature of these laws. Their particularity is seen most clearly where it has a real impact on the behaviour of people (however unreasonable this influence may be), for it turns out then that these laws either cease being true because one believes in their truth—for example, the Malthusian law of

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population, which called forth the neo-Malthusian movement as its result, then to be more or less revoked by this movement. (Malthus’ law is no longer completely true just because people think it is fully true). Or these laws become true as the result of the fact that people believe they are completely true (for example, the law of class struggle only became true through the actual belief in its truth). In both cases we see that where these laws find a true or imagined connection with the life of the individual they turn out not to be laws but nonlaws, then to become ... through success. where games and ghosts prevail reason loses its right. Therefore there are laws here that run from their own shadow. There are some that only assume a form when their shadows begin to play in clouded brains. The superstitious person stumbles on his own superstition, and his bloody nose convinces him that something real caused him to fall. ...5 So it is with the truthfulness of laws when they begin to have an at least imaginable connection to the individual. Almost all superstition has a core of truth, which when dug out of its alien shell often contains profound knowledge. There is even an essential truth hidden under the arbitrary relation of sociological laws to the individual life. The founders of sociology, still unchallenged by the deeply rooted prejudices of the scientific world view, clearly recognized and [doughtily] declared that there is, and can only be, just one fundamental relation between the individual and the law, which presides over society: the actualization of this law by people who have become conscious of it. This law can likewise only be one thing: the necessary harmony in a society founded on the freedom of all. For this reason the Physiocrats wanted the most important and almost sole activity of the state to be the diffusion of the knowledge of this truth as the only link which ties people together. It is clear that this law of fundamental solidarity and harmony of all human interests can only arise from moral insight and that this can become a reality only through the ethical forces that call it forth. The connection between the "sociological laws" and morality is precisely specifiable only [in] the one case— and then, however, it is also a real and not just imagined connection—if this law ... a moral truth and its scientific .... In order to become a positive science, sociology thus discovered positive facts and a point of reference in external-material things for strict laws. However, the laws that originated in this way no longer have any specifiable connection with conscious personal life. They are not valid for the latter, and it is impossible on a scientific basis to create anything more than an arbitrary relationship between these laws and the individual. we have to ask to what these laws apply. we would like to call that to which they apply social reality. Hence we go from the study of laws, whose possibility of existence is in the last resort derived from the world view of the natural sciences, to the analysis of the concepts on which sociology is based.

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[III. The concepts of sociology: The external-material objects, social institutions and associations] generalization and objectification follow a simple principle: the social reality of science emerges because one brings together social phenomena in all those relationships they have which are independent of our will or appear to be. In this way the desired foundation for the system of laws is to be found, which is assumed also to be independent of our will. The external aspect of human life now presents itself as the first group. Factories, farm lands, houses, churches, weapons, etc. are the material-objective things whose existence can largely be regarded as independent of our will. Marx was the first one to call them the base of society in a way consistent with the natural sciences. The second group consists of social institutions. Marriage, property, religion, discipline, the armed forces, parliaments, administration, the school system, power, monetary transactions, production, trips, corso,6 and sports consist of a sum of procedures in which people of a specific period might spontaneously participate because they take this participation for granted. Most institutions are embodied in organizations, and then the purpose for which they were founded comes clearly into relief. As examples we can cite religion in churches, the armed forces in armies and fleets, the political institutions in the state, entertainment and travel in socializing and in tourist associations, the market at the stock exchange or in market halls, production at times in communities, state enterprises, stock companies, or other associations. Nevertheless, there are also important institutions without forms of association, for example today’s institution of private property, of money commerce, or of matrimony. These institutions without forms of association are sometimes legally recognized; sometimes their recognition is based only on convention and habit. Just as the transition from institutions to mere appearance, customs, and fashions is a nuanced one, so are certain institutions at times only partly organic, partly left to tradition or spontaneous participation. An example is education or the media. For the individual they are there, whether one wants them or not. The third group, that of associations and clubs, already due to their very nature, have a certain relationship to the will of the individual. But this relationship is so loose and its pathways are so entangled that these organizations, too, are suitable as the objective bases for laws of Nature. Let us now look at what the true relationship of these elements of social reality is to our will and the extent to which this objective existence can be verified. The external-material, especially the technical-scientific, is in fact largely independent of individual will. we have to live in the buildings that we find, walk in the streets that have already been laid out and use materials for work that are at our disposal. If one needs a weapon, one can only choose among available weapons, and if one wants to found a manufacturing plant one has to resign oneself to the given surface area and its condition, along with the available means

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of production. No wonder then that the only coherent sociology, that of Karl Marx, designates these as the base of society, which is consistent with the natural sciences. They were chosen as a basis precisely because they can be represented in the specific scientific sense. Because that was what was important. Precisely because the existence of objects is for any given moment largely independent of human will, its connection to the individual is not specifiable. The relationship in which its emergence is conditioned by the individual is undiscoverable. Some of these objects seem to be even completely independent of him, for example, the wealth of the earth’s coal deposits and similar natural phenomena. This appearance, however, does not stand up to a more exact investigation, for the essential meaning of these objects is in the final analysis always conditioned by us. In any case, it is certain that for single individuals their stock is objectively given . For precisely this reason sociology appeals to the dependence of our will from these objects and in so doing has the desired connection in its hand. It is not the objects that are dependent on us but we who are dependent on them; this is what sociology says and in so doing is certainly enunciating one truth. But the meaning of this truth is other than it seems. The existence of weapons is not the cause of warfare, just as the existence of churches is not the cause of faith. weapons existed long before people waged war. And weapons will exist long after men have stopped waging war. Religions existed long before churches were built. And they will still exist when perhaps no single church is left standing. Steam engines existed two [centuries earlier] than capitalism. And they will perhaps continue to exist long after capitalism disappears. The soil was there before anyone wanted nourishment from it. And it will still exist when there are perhaps only groves and gardens on it and it no longer produces food for people. weapons and war, religion and churches, machines and capitalism, indeed soil and food—these certainly have some interrelation. But it is just as certain that this relationship is not a one-sided dependency of the latter on the former. This group certainly has an objective existence, and our will is certainly largely dependent on this existence. The laws of this dependency, however, are not the connections between them that can be demonstrated in an accurate scientific way but are found in the effects of this reality on the spiritual and moral forces of the inner person. The most objective part of social reality is thus only apparently a basis for sociological laws. However, a more direct dependency is that of the individual will on the given institutions, that is the institutions that seem to be not organized into associations. we will look at the latter group in the context of the associations in which they are inserted. we can also leave out here those institutions in the stricter sense which enjoy some sort of legal recognition and ... are dependent on human will: matrimony, private property, and money commerce. There are quite spontaneous phenomena that we find in the most varied form and that without being supported by the law still confront the individual as objective institutions, for

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example, the market, the corso, or public opinion. They lend themselves to numerical description; their objective existence is indubitable, and although they consist exclusively of human participation they appear to be independent of the will of people. On the other hand, the far-reaching dependence of the individual on them is indisputable. They provide the strongest buttresses for sociology’s seemingly necessary laws. However, their complete dependence on human intentions is mere illusion. They arise from the unintentional side-effects of purposeful action. They arise involuntarily during the pursuit of deliberate goals. If I choose the sunny side of the street when strolling then an unintended side-effect of my action is to have increased the number of those strolling as recreation. when I purchase an object that I need it is an unintended side-effect of my action that I have increased demand for the object. when I say something about a speech in parliament, a street accident or a newly built house it was perhaps not my intention to form public opinion, but this effect has nevertheless occurred. when a stroller now comes across a corso, a buyer a price, and each citizen perceives public opinion these easily appear to him as things completely independent of his or her intentions. The housewife that goes shopping has to take account of the prices as the citizen does with public opinion. In good weather, the Sunday stroller will seek out the corso without thinking whether there would be a corso if no one intended to visit it. This impression is augmented by the fact that the prevailing relations that in these phenomena, once they are present, are completely or almost completely independent of our will. even people who come together voluntarily, who combine with the aim of purchasing something or consciously take part in the construction of public opinion—they too are subject, with regard to their average, their demand, their cooperation, or their attitude, to laws that are independent of their will. Mathematics, statistics, the economy, and mass psychology apply to these phenomena. Only a fool would imagine that statistics can stop him from leaving the corso, or that economics could save him from the consequences of an [unexpected] price rise, or that mass psychology could prevent him from having contempt for the opinion of the masses. we have so extensively discussed the kind of dependency of free and spontaneous institutions on the corresponding will because sociology’s authority bestows on this part of social reality, as it were, a second, greater, more scientific and therefore more significant virtue than it does on that part which directly results from the intentions of the individual. The impression is produced of a lawfulness in society that is completely independent of our will, a lawfulness that, through the mere belief in it, compromises our freedom to set goals. Someone is believed to be thinking unscientifically who does not recognise the laws that govern here as laws that govern himself. Sociology is right to invoke the fact that in many relationships associations of people are also independent of their will. The most important associations are ...

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given in their specific form: state, church, army, stock exchange—they are not only there whether I want them to be or not but are even there in the particular way that I discover them: this state, this church, this army, this stock exchange. In the case of ... associations of less importance the choice is freer: one can freely choose a religious association, a school association, a [co-op], or, still more, a sports club or a newspaper. The [institution] that embodies one of these associations, however, is also independently present in the form of the association that I may or may not choose to join. Objective existence confronts me much more firmly in their manifestations of will than in my more [or] less forced participation in these associations. The will of the state, the authority of the church, and the top command of the army restrict and limit my life. This is also the case where the concrete association itself arises from my free participation: the party association, the church congregation, the consumer co-op, and the [gym club] or theatre club in which I cooperate all have a will that confronts me as a stranger. even where my free will is freely joined to that of others [in order] to pursue a common goal, I have trouble in recognizing in the action of the community what my part played in this action is. Only a very small part of all the things which go into making me what I am enter into the will of the association, and in all other relationships my [conscience] and opinions … and proposed efforts remain completely outside of this will. Only a small part of the individual enters into the association, and this small amount is only a small part of the will that remains in the individual. This small part that I have contributed is now detached from motives; it has lost the colour which was originally proper to it and has acquired a rigidity that had not previously been a part of it. The association’s expressions of will become constantly more alien to the will that entered into it: it has lost colour, rationale, and flexibility and has now … become either colourless or has even taken on another colour, a motivation and ... in conflict with the original one. An enormous structure of an association’s will is often built up on top of a narrow foundation of will. A monstrous disproportion between the sphere of impact, the ..., and the ... rigidity of its machine-like life activity in relation to the living contents of the will of which it consists arises. And if this can be so even in the case of the freest associations, then it is much truer when the association has grown out of historical conditions (a social club that is at the same time a corps or a fraternity),being a more or less a compulsory association (whether it is a trade union or an army). One’s own will sometimes appears as a passive object of the association’s will, and only its existence is felt as an objective reality. [IV. Alienation] Thus the idea of the individual arises as the vestige of a freedom that remains after an external will has constrained it on all sides. Its allegedly indivisible essence (the individual) is in fact a composite of social elements. The individual is not the point of departure of individual energies but the point of interference of

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social forces. His existence is an abstraction of the social realities, which alone exist. It is not the individuals who make up society but society which constitutes the individual. His thoughts are mirror images, his words an echo, and his intentions not his but those of the external will that he has to obey.7 what I still am. after I have subjected myself to the state, society, the party, the stock exchange, the market, the school, the trade union, the social or sports club, as well as public opinion organized in newspapers, fashions, respectability, morality, and neighbourhood—if indeed something of me still remains—is myself and the area of my free will. If this [degradation] is carried out with sufficient exactness then hardly anything remains as the dominion of my free individuality beyond the tint of my necktie or the simple answer to the question of whether I prefer more or less oil on a salad whose preparation, price, consistency and spicing is precisely determined. The "I" becomes a modest question mark which confronts a world of external powers of will in imperturbable objectivity. Just as the world of physical events is well paved with material points of space and time, so is the human world now not much more than that [which] realizes itself like a law of Nature between the material-external things, the institutions, and the associations. Free will is written off as the prejudice of a pre-scientific time that can only try to assert its ghostlike existence against the powers of social reality. The first task has been accomplished: the objectivity of the social is unassailable and has become completely independent of the individual. However, the greater the success for the first challenge that we have posed, the greater the danger is for the second. 8 For if the individual is practically inexistent for objective reality, what meaning should the individual, who has ceased to exist from his limited standpoint, assign to this objective reality? The individual can only let his behaviour be determined ... and deduce a scientific policy if it is possible for him to influence or otherwise adapt himself to this fate, despite its no longer depending on him but he on it. However, if neither the laws nor the ... are based on individual people and are also not made up of them, how can the individual guide himself by them? It is then not only the specifiability of each relation but every relation itself which simply ceases to be. The necessity with which these laws operate, the material that makes up social reality, and the individual specificity that connects the individual to both of these, must have a common denominator, that is, a substratum to which they communally relate. Only then is it theoretically possible for the individual to depend on them, and, what is more important, only then does the knowledge of this dependency have a practical meaning for the individual. This question sounds quite metaphysical—and the answer to it sounds no less metaphysical. All of the presuppositions of sociology point unequivocally in the same direction: violence and self-interest are the stuff of humanity, the substratum of society. egotistical-materialist psychology is the silent precondition for all the dependency that sociology establishes regarding the individual. The connection

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that is asserted between the lawfulness of external-material things and the individual life is premised, as we have explained, on this kind of brutal chrematistic motivation of all human impulse. This premise doubtless has a strong basis in the reality of individual life itself: to force one’s will on others and realize one’s self-interest at the cost of others are both human. It is the worse side of our nature, which we see in these impulses. In what follows we will speak of how little these impulses make up the complete person—or his or her most essential part. However, this is the conception of humans to which the position it puts them in unequivocally tends. In himself the individual has no sociological reality at all. He is a mere abstraction. However, in the masses in which he multiplies himself and becomes ... a number, to the extent that he emphasizes the external at the cost of the internal, he becomes continually more real—in the view of sociology. However, what is best in human beings is necessarily something internal and personal. The general and external is what is not good in them, precisely because it is not personal and internal. Love and devotion are internal, personal. The masses too are sometimes filled with authentic love and true devotion, but these feelings only last when they have their roots in the internal side of every individual. Responsibility, which leads to duration, is personal true belief, from which the good ... . The mass has no responsibility because it is not a person; it has no true belief, because it is something corporeal, external. Its motive is most likely to be corporeal self-interest, and its most likely means are the violence of its corporeal forces. Just as these individuals first become real for sociology when they can be shown to exist in classes and masses—through which they become bearers of violence and self-interest—the institutions and associations also become objective realities because their will is independent from the will of the individual or appears to be. Social reality in this way becomes as objective as only some physical or anatomical fact can be. external will is independent of my own, and external will is what coerces me in all respects. This external will, however, is sometimes my own will alienated from myself and is neither mine nor that of ... another. It is the will of some or sometimes of all alienated from all. A will that compels my will is violence, and its motive is self-interest. This is what lies behind the idea that violence and self-interest rule the world. A will that is no longer personal can easily become an abstraction that is omnipresent because it belongs nowhere. In the scientific sphere, metaphysics is always based on such ambiguities. All these ideas logically give rise to the image of the world in which the impersonal ... dominates, in which the inexorable necessity of the laws arises from the inhumanity of violence and self-interest, the [units] of social reality are embodied structures of violence and self-interest, and the dependency of the individual on this world is based on the tendency of classes and masses to violence and self-interest. The metaphysical material, which enters into it, offsets all contradictions. Social reality and its laws find in the uniform material of the ... a substratum in

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which its equations and functions are solved without remainder. Might is right. every equation is right, for everything is made up of identical substance. Right is might. The state is the violence of the one on the other. The economy decides over intellectual existence; today morality and religion, artistic, philosophical, and legal world views are a conscious and unconscious means of domination, which obscure the self-interest of its use of violence; the world’s salvation can only be the [result] of self-interest and only lead to success if it is realized by means of violence. All these assertions appear all the more scientific in that they are completely impersonal. Nobody is supposed to take anything personally. These assertions, whose content is psychological, lack any ... "Right is might" can only be said by those who understand right to be the injustice that one suffers, and understand might to be the power that others have over one. He who feels and finds his own right, can never understand how someone can expect his own power to be the basis of his own right. Or who would let it be insinuated that his own ideals are the pretexts and mask of his own self-interest, that what is best in him is the most perverse expression of what is worst in him? Certainly, no one would ever take these truths as personal, least of all if they are to be directly applied to oneself. Sociology’s idea of the world carefully avoids these stinging confutations: it is true that it speaks of violence and self-interest and, completely without inhibition, constructs the world of people on this basis. However, the bearer of this violence and self-interest is never the one or even the other but the unknown alien ... . It is always alien will, alien self-interest, alien violence to which reference is made, never one’s own will, one’s own violence, one’s own self-interest. For when these paradoxes leave their scientific generality and enter into the ambit of reflected consciousness then ... dissolves.9 The unavoidable question for this world view arises: whose violence is it that oppresses all? Whose self-interest is it that dominates all? The "one" rejects them, but they also cannot be attributed to the "other." However bad and mean-spirited we might imagine the other to be, the other lives too near to us and it is too clear that for the other we are that other; we are not entitled to impose the nameless misery of the world on him out of self-interest everyone more or less suffers the same pain. There is not a single human soul who, even in the grossly materialist sense, is "better off" after this world war or after the world revolution following it, than he or she was before these catastrophes. The world has become so much poorer and more miserable that the individual has it worse than those who had it best [worst?] before.10 If one wanted to psychologically extend this theory of violence and self-interest one could easily ... cope with this difficulty. It would be enough to deploy, instead of self-interest, what appears to be one’s own selfinterest, and so not only bring it much closer to the internal reality but also to make it more adaptable against the external reality. This would explain why the exercise of self-interest so often has the most damaging consequences and that people of the same time and same place pursue their self-interest in such a

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contradictory way. This improved theory of self-interest is also often used in a hidden form in argumentation. But It cannot be openly declared and defended. It would upset the foundations of scientific sociology and thus deprive the theory of self-interest itself, which corresponds to this foundation, of its object. Human opinions and views can only function as the independent superstructure of social humanity, as a structure whose natural-science basis is accurate if this dependency is mediated through an elementary natural principle, which provides the metaphysical substratum for both. This substratum is, as we have shown, violence and self-interest. If self-interest is made dependent on the opinions and viewpoints of people, then they can no longer be the derivations of social reality (with the involvement of the self-interest principle). If it is not self-interest that rules the world but my opinions and views of what my self-interest is, then it is opinions and views that rule the world—and not the facts that can be confirmed in an accurate natural-scientific way, without which sociology could not be a science. However, human self-interest and human violence are not thinkable without a person to which they can be ascribed. Its inner contradictions constantly push sociology away from positive reality and to voluntarist metaphysics. It has detached the essential phenomena of violence and self-interest from the personal and [moulded] them into a metaphysical substratum. This metaphysical substratum, however, cannot be [based] on a personal subject and makes this subject as a metaphysical personality. A long road had to be travelled before physics freed itself from metaphysics. The ... animism of primitive peoples populated nature with anthropomorphic beings, which could serve to explain phenomena. This idea of a horror vacui, or of forces that lay behind all movement, was only overcome at a late stage and only gradually. Contemporary sociology is an animistic and anthropomorphic doctrine of social phenomena. The scientific policy that results is the ... praxis of today’s generation. The natural laws of society are realized through violence and self-interest. Violence and self-interest are the functions through which individuals depend on these laws. Violence and the embodiment of self-interest are the units of social reality which constitute its economic facts, its institutions and associations, and its structure. The powers which keep this mechanism in motion can logically be none other than the personified forces of violence and self-interest. A distinct mythology of the social world arose from this intellectual necessity. The personality of the state exists as the highest abstraction behind the common will. The forces of production and economic tendencies move the immense mass of commodities, create well-being and misery, work and famine—depending on how favourable or hostile they are to us. Small deities, such as supply and demand, rule the market. Behind wars and revolutions there are various imperialist interests and class interests that are in struggle with one another; they steer, direct, and confuse human things in the way that the Olympic gods steered the battle of the greeks against the Trojans. Behind every shrub, bush, and stone of this

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eerie landscape there are dryads and satyrs, oreads, and fauns of whatever economic powers, social forces, developmental tendencies, special interests, and spirits of dialectical contradiction full of ill-fated spectres. A metasocial mythology is at work behind social reality and influences it. In this world the personified powers of violence and self-interest govern the course of the sun. we have to listen to their oracle in order to [have a glimpse of] the future. And we bring human sacrifices, millions of them, to their altar so that they might show us some mercy. NOTeS 1 [Original title: wissenschaft und Sittlichkeit. This text and the two following ones involve parts of a manuscript in longhand written between 1920 and 1922, circulated among friends and family and signed "Behemoth." The titles are Polanyi’s, while the subheadings have been supplied by the editors. Missing or illegible words are marked with ... . Translation by eric Canepa. Special thanks to David woodruff whose comments significantly helped to improve the translation.] 2

[The free veto refers to the principle of unanimous consent, a parliamentary device in the Polish-Lithuanian Commonwealth]

3

[Polanyi refers to another, unpublished part of the manuscript.]

4

[This passage is followed by a half page of the manuscript, which has so many erasures, corrections, and overwritten words that it is impossible to reconstruct the word order.]

5

[The last lines of this page of the manuscript are illegible.]

6

["Corso" (orig. ital.) refers to a street on which people would go for walks to see and be seen.]

7

[At this point there is a cross in the manuscript, and the first four words of the following paragraph are crossed through. Both indicate that a passage was meant to be added at this point.]

8

First and second tasks here probably refer to this sentence from above: “what generalization and objectification does the life of people with each other allow without in the process losing the relation with its original contents?” So challenge one refers to generalization and objectification, challenge two is not losing the relation to life’s original contents.

9

[The page’s last line has been lost.]

10

[In german: „Die ganze welt ist um so vieles ärmer und elender geworden, dass es einem jenseits seiner Teile nun schlechter geht als dem, dem es vorher am besten [?] erging.“]

Being and Thinking

1

SCIeNCe HAS discovered social reality and in so doing raised a part of humanity to the level of being and demoted another part, consciously or unconsciously to the level of mere thinking. ever since the existence of this science there has been the question whether being determines consciousness or consciousness determines being. As we know, Marx categorically answered this question with the sentence that is the basis of the materialist conception of history: it is not the thinking of people which determines their social existence but their social existence which determines their consciousness. Since then, sociological literature has amounted to little more than defences of one of these viewpoints or of an intermediate one. we have derived this social reality from the presuppositions of sociology. It is an artificial construct whose reality originates in primitive animism, superstition, and arbitrariness. we would like to cite an economic, a political, and an intellectual example in order to illustrate this question of alternative causes. either capitalist competitive economy is the result of the newly emerging outlooks, or these outlooks are the result of those economic realities which are called capitalist competitive economy. either the ideologies, outlooks, and ideals—of do-it-yourself, every man is the architect of his own fortune, the struggle for survival, all power to the industrious person, personality, survival of the fittest, natural attainment, Übermensch—have created market economy and free competition; or it was the opening of new avenues of trade, new markets and transportation possibilities, the steam engine, and other economic realities—which pushed in the direction of free private property, free transportation, production and trade, the free wage labour contract and independent entrepreneurship – which brought these kinds of catchphrases, as their expression,into the world. either the ideologies of the national idea, of sovereignty, of the common good, of solidarity and authority, of democracy and equality before the law have created the modern state with its territorial, central organization; or, conversely, having necessarily arisen from other causes, the modern state has called forth these outlooks and made them into a reality. either the opinions, outlooks, wishes, desires, passions, and superstitions of the public give rise to the press and influence it, or it is the press and its organization that creates and maintains this intellectual construct. we would like to contrast these alternatives with a few cases in which the true

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relationship of thinking to being—although still closely interdependent—appears more clearly. Here, too, we would like to observe the economic, political, and intellectual phenomena independently. On the stock exchange, opinions and fact are indistinguishable as a matter of principle. The opinion about a fact is called a price quote. This price quote, if accepted, becomes the most important reality of the stock exchange: it becomes price. Therefore there are predictions here that are infallible, for example, the predictions of general opinion. If the general opinion is that the stock prices will fall then they unfailingly fall as a result of this opinion. everybody sells, nobody buys: the stock prices fall. This fall is then taken as the first confirmation of the prophecy’s correctness. Then an additional circumstance appears which accelerates this fall: the fact of the low price which devalues the coverage of the funds and leads to forced sales and realization sales. This increases the supply; the prices have to fall further. The prophecy is again confirmed and its certainness increases. As a result, these two factors become more frequent, and a third one appears: panic. Here the opinion about the realities and the realities themselves are united in a single point oscillating with increasing speed: every estimate, however far under the price it lies, is already a reality, which then in the next few seconds leads through still more extreme estimates to the most extreme price quotes until everything is devalued, shattered, and destroyed. Here we have a case in which thinking [and] being continually turn into each other until the system collapses. Let us take another case, which represents the same system in equilibrium: the monetary system. As a result of the general belief in the value of money, money has value. everyone accepts it because it is accepted by everyone. The illusion is the basis of the fact; thinking is the basis of being. The most merciless economic [truth], money, is the effect of a continuously fed imagination. However, the following cases bring us closer to the dichotomy mentioned at the beginning: it is allegedly competition that forces the capitalists to continual investment of surplus value. But what if the capitalist did not want to compete and just consumes his millions? what if he closes his factory and retires? ever since—as a result of the world situation—this tendency has become visible in the aspirations of capitalists we are seeing that it is not competition that makes the capitalists expand their enterprises but that the basis of the competitive economy was just as much a tradition that had up to then been completely unconscious (Keynes). Avarice and hedonism were reined in by it, but profit-seeking became mandatory—though it was a profit-seeking that could never be realized. As a consequence of this doctrine, tradition, tendency, outlook (or whatever we want to call it), the capitalist once again withdrew the acquired capital and transformed it again in production. Seen in this way, the reality of competitive society rests on a completely irrational custom and outlook. It is no different in the political sphere. where the idea reigns that discipline prevails, then discipline prevails. If the view gains ground that discipline has

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ceased, then it has ceased. Or if everyone believes in the outbreak of revolution, then it breaks out. And so forth. The "most powerful historical fact", "the revolution", can nowhere be separated from the thought of revolution. Here, too, there is a point in which thinking and being—like the waves of an electrical alternating current—in their continual turning into one another constitute the stream of renewal. However, here too there are lasting constructs—such as, for example, state and dictatorship—and they exhibit the same characteristics. Belief in the power of the state or of a dictatorship is the power of the state or the dictatorship. Being and thinking are one and the same. As long as one believes that the state has power, then it disposes over armies. If one believes that it compels everyone, then it can. If one expects it to kill all its citizens, then they all die in order not to let themselves be killed by it. In any case, as soon as no one any longer believes in the state it has already ceased to exist. Thus also the belief in the impossibility of a permanent power makes any permanent power impossible. Public opinion offers an example of the relation of thinking to being in the intellectual sphere: if everyone believes that somewhere at a specific time there will be a riot, then a riot will occur at this time. If everyone thinks that an issue of a newspaper, a book, or a coin will run out then it will run out. If everyone thinks that an actress, a politician, or a dandy is unpopular, unliked, or hated then of necessity exactly what was thought of him becomes a reality. From these examples we can see that the relations of thinking to being are completely different from the image called up by the idea of social reality as being. In certain cases, precise analysis is able to reconstruct the relationships of this reality, but never beyond a certain point. Because somewhere—and indeed precisely where consciousness directly touches being, where true, eternally creative life is born—they melt and blend into a life essence of the greatest concentration that makes a mockery of any analysis. And every decision and action occurs precisely in this mysterious place. In one way or another—and it is enough for us that we recognize this generality—what we call social being is essentially nothing other than an integration of the thinking of individuals. But it is very hard for one to tell how big one’s share of this integration is—very hard after the fact and impossible before it. whether one is, was, or will be the last or the first link in the chain, the trigger or the triggered, the inhibiting factor or the factor that increases the reaction, whether one is the condition, cause, consequence, an accidental detail, a fulcrum, a prerequisite, accessory, a peripheral accident, or a decisive accident—in advance we think we know something that afterwards we think we know quite differently. At the moment itself, one has no [judgement] of one’s actions, because one’s judgements are in themselves actions. One never experiences the way in which the phenomenon is truly linked, nor is it graspable in words, because the life process is essentially unfathomable.

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This makes all the clearer what the consequences of this for us are: the certainty of the creative power of consciousness is the only knowledge that is available to us. That things depend on me—and only on me—is the wisdom that we have to offer. Things depend on my acts, my behaviour, my words, my thoughts, my deepest sentiments. And all at once we see how superficial the distinction between external reality and internal consciousness is, because just as deeds are often futile, by the same token the quiet convictions of everyone, and therefore of each individual, are the decisive factors. This is not to say that there is no difference between act and attitude. However, there is certainly no difference that could remove the importance of my thinking and [my] quiet viewpoints for the well-being or misfortune of all. The world’s happiness can collapse due to the unexpressed mood of a moment. And no one knows whether his or her own mood is actually the decisive factor. Society poses to each of us three questions that threaten to devour us each if we do not find their answer. But we cannot answer them. Is freedom of will given to each of us or must one want that which one is forced to want? Does each of us have the power to establish values that have force and validity, or do we have to accept their validity? Is only one and one’s own kind present here in this society, or is there also another reality here, which we each have to tolerate? The world of human beings—our own world—is freshly posing the three old questions of free will, the question of the validity of values, and the question of the reality of the being that exists outside each of us. These questions are the ones which no person can answer, for they are insoluble. As evident as they seem to each, they nevertheless make no sense. Freedom of will is neither existent nor non-existent; it is a task for the human being. The validity of values is neither existent nor non-existent; it is a task for the human being. even the objective reality of human society is neither a given nor a non-given, but its transcendence, overcoming it, is the task of human beings. The will of human beings should be free! This demand flows from the meaning of life. Because this wish for freedom is unlimited, we should not set limits to it. every limit, however, which thinking imposes on it is arbitrary because this freedom does not arise from thinking; rather all thinking arises from this freedom. we know neither the limits of the efforts of which we are capable nor the degree to which belief in the freedom of the will can heighten this freedom itself. what we know for a certainty is that the more the idea of the finiteness of these efforts gains ground, the more narrowly we draw the borders around them; and that the [more unlimited] our belief in the unconditional freedom of our will is, the more widely we stretch its limits. This knowledge is an internal and certain knowledge. No one can contest its truth. And this knowledge is in complete harmony with the inexhaustible wish for complete freedom. The question of the existence or non-existence of this freedom is a temptation that we have to resist. The question itself is the mistake. The freedom of our will is a task to which we have to dedicate ourselves tirelessly and continuously.

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The ideals and values of the solitary soul distinguish themselves from the ideals and values in force in the same way as non-being is differentiated from being. And yet the latter are nothing other than ideals and values that live in many souls, which are aware of each other. The question seems unanswerable whether our innermost wishes, the dreams of our hearts, have validity or not. But this question too is senseless, for the practical reality of our innermost wishes depend on this question. everything which lies outside of our competence, beyond our responsibility appears to be only appearance, only seems to be true, we only imagine to be just. On this side of responsibility—within our competence— there is no appearing, seeming, and imagining: there it is, it is just, it is true. The degree of responsibility that enters into our judgement is the degree of its objective validity. To increase this degree without limits depends on us alone. The difference between individual and general, relative and absolute, subjective and objective validity is nothing other than that of the responsibility that we ourselves have tied to it. even conceptions of the state are only subjective opinions if the individual is no longer able to be responsible for them. The lonely position taken by Jesus of Nazareth insists in the face of thousands of millions of people even today—and more hour by hour—on its unshakable objective validity. The responsibility with which he himself ... —and everyone who followed in his footsteps—, this responsibility [alone] lent them this validity. we need to create the world’s values out of ourselves by never tiring of lending responsibility to our wishes. Therefore everything that is good that lives in us must acquire an existence in the world. The validation of values is a task of human beings which they have to fulfil. The more we look at society from inside it and discover the causes of its phenomena in ourselves and make depend on our own will the will that we see in the world by limiting and improving its manifestation and its representation in terms of direction, duration, and motives, the more we grasp the inevitable divergence between the will of all from our own individual will and—where this is ineradicable—take responsibility for this difference; the more in so doing we harness humanity, its own Doppelgänger, to the unity of experience and thus elevate it to take responsibility, the more we manage to prevent any will that is not our own from making decisive determinations over us and secure and set boundaries to the ego in the face of society. The better we manage all this, the more reality of the objective being of society will diminish for us. However, even then there is much that exists that is not us ourselves but rather an external reality. My will is not your will; my being is not your being but is still different. There is always something else: the self and society. Is this other thing truly present or is its presence a mere illusion? This question is irresolvable. For this question is meaningless. Nothing human should exist that is not human will, human feeling, and human soul. what we feel as the “being” of society is nothing other than what is alien in it: mediated will, confused convictions, and a reified soul. It is what is alienated from us that we have not yet

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recognized. we should, however, break through to it and destroy it; it will then have ceased to exist. It is a call that we must follow, a burden that we must bear, a task that we have to solve. when we will see our way so clearly that it distinctly, almost automatically, stands out from the reflected maze of all others, then the world of human beings—our own world—will stand simple and transparent before us, like an open hand. when the consequences of our own acts and thoughts relentlessly pursue us as if they were our own acts and thoughts, only then will the final meaning of the common life completely open itself to us. when we attain consistent self-determination in the face of all power, then the concept of power will be overcome. when we can see the consequences as clearly as the intertwined lives of intimate friends, then our understanding will be so comprehensive that love for all will become true. Because society will only cease existing when the human being steps up in place of it. There will be nothing alien in it for me anymore, just as the hand is not foreign to the will. And I will experience the greatest deeds of humanity as if they were my own gestures. My heart will beat in all things, my soul will be in every breath. The destruction of all that exists through love and knowledge is humanity’s task. If the will is free, if love is in force and if understanding is complete, then the task is accomplished, for nothing will then exist in the outside world. NOTeS 1 [Original title: Sein und Denken. See the footnote at the beginning of the manuscript of "Science and ethics." Translation by eric Canepa]

The Science of the Future

1

… NOT SCIeNCe ITSeLF, but its authority among people ... is what led reason astray. Its immense authority has resulted in a system of disastrous superstitions and legends, whose collective name is "the scientific world view." It is due to this world view that vast areas of existence, that have nothing to do with science, have been forced to submit to it. Moral laws are swept aside in favour of scientific ones, their truths denied and belief in them shaken. Moreover, in reaction to this world view, new pseudosciences arose, which no longer had any real connection with the original system of sciences and whose task it was to occupy those provinces illegitimately expelled from the realm of ethics. These pseudosciences no longer owe their emergence to reason but to superstition. But it is upon these sciences that what is claimed as scientific policy is based. No wonder then that this policy is blind and deaf in the face of reason. The task of an independent investigation would be to present an analysis of the scientific world view in such a way that it uncouples its component superstitions from the scientific truths with which they are interwoven. It is not enough to make it clear, as we will show in what follows, that there are two kinds of sciences which involve the scientific world view: the true sciences that preceded the emergence of this world view and those pseudosciences that only arose in reaction to it. The object of these pseudosciences is the scientific future. However, they unfortunately appear so interlaced in the fabric of the true sciences that they have no special designation. The disciplines into which they were absorbed are principally sociology and theoretical economics. we call the forms of the pseudosciences of the future of humanity—which appear to be already built into these sciences [sociology and theoretical economics – eds.]—the new sociology and the new economics. How did this string of superstitions and error arise? The justified authority of the true sciences has led from their overestimation to the scientific world view, but the false authority of this world view has led to the pseudosciences on which scientific policy is based. Let us now give the word to the scientific world view itself: science, it says, has taught us that humanity’s fate does not depend alone on what lies in the minds and hearts of people. It asserts the following: natural laws preside over all life; a human being is not just a human being; more important, he is also the representative of a species of animal that belongs to the realm of natural history; human beings have not always existed nor will they exist forever in their current

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form; however, a person is not just a person for himself but is also an atom or cell of the society to which he belongs; society did not always exist, nor will it always exist the way it is now. The development of the human species and of its society, as well as the natural laws that preside over this development are thus at the centre of our world view. Our relation to this development determines the worthiness or unworthiness of our actions, our ethos, and our aspirations. every sacrifice is justified that this development requires; life’s journey which it dictates to us is true. The future thus means for us human beings—this is what the scientific world view tells us—something different and more than simply what will be. Because in it we see the development, and thus the meaning, of life that science teaches us. The future does not just decide on success or failure, on happiness and unhappiness, but also on what is true and false in our ethos today. How we accordingly judge the past, whether it fulfilled the purpose of development, is also how we judge ourselves. The future is the judge of the present. It understands not just what will be but also what is, for in it alone everything acquires its meaning along with its value—this is what this world view says. This concept of the future had to have very far-reaching consequences. For humanity today believes in development, the way it once believed in god. However, god dwelled in the human breast, and we could read his laws in our souls. Development, however, dwells in the future, and its laws are disclosed to us through the natural sciences. The mediation of these sciences is the only thing that ties us to our destiny. This is how the irrefutable demand for a science of the human future arose. everything that science had up to then amassed on the history of living beings, of people, and of a society, was procured as material. The bases of the naturalscience world view—general laws of nature and development theory—were the pillars on which this air-light structure was built. As the superstructure of a world view, which itself was only the superstructure of the true sciences, there arose a new science—the science of the human future. Outwardly, these sciences were to be the similar to those which had emerged on the basis of empirical evidence and reason. It was precisely the exact sciences of physics, chemistry, and astronomy which had to a great degree accomplished the task of predicting the future. This task therefore did not appear to be a new one. That the realm of living people is by and large to be studied using methods similar to those applied to inanimate nature was recognized, owing to ... . There is nothing therefore that apparently distinguishes the new sociology and the new economics from the other sciences. They further comprised all the material that they had also earlier included as the sciences of the past and the present. It was outwardly established ... that a part of these sciences should now serve a completely different purpose and be built on completely different premises than those of the other parts of these sciences and the other sciences as such. The essential fact that a science of the human future is embodied in these parts and that, through this very fact alone, these parts of these sciences separated themselves from the whole

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of the positive sciences was completely concealed. The scientific world view, itself a parasite of science, nested itself secretly in its structure and, unnoticed, laid the eggs of the "sciences of the future" within the living tissue of the sciences. The scientific world view installed the future as the ... authority over what is true and false, good and bad. It succeeded in exploring this future with the means of science and gained power to the extent that knowledge can offer. The creation of the new sociology and the new economics as the sciences of the human future was the crowning of this work that the scientific world view had undertaken, making its position unchallengeable. evolutionary tendencies and natural laws of every sort were compiled from all sides and angles of knowledge. The struggle for survival, with its doctrine of natural selection, of the survival of the fittest and of selective breeding, the doctrine of the adaptation of species to their environment, of mutation, of the mutual support of living beings in nature, the dialectical evolution of the spirit in history, the law of large numbers and statistical laws in general, the differentiation and integration of all life phenomena, the laws of organic metabolism, of races, classes, and mass psychology, psychoanalysis, and business statistics, and countless other sciences contributed to laying broad and solid foundations. In a short time, the new man was integrated into the proud structure of science. From its towers the searchlights of knowledge shine deep into the darkness of the future. The paths of humanity have been illuminated in bright daylight. ... Certainly, there had never before been a more high-flown delusion than the one we are confronting here. All the prophecies of oracles, of astrology, the cabal, and chiromancy pale beside the gigantic obscurantism that lies in a science of the human future. Never before has there been a superstition more frivolous than the idea that humanity’s history is determined by laws that are independent of the will and action of humanity. It is enough to speak this proposition to perplex even those whose whole ethical behaviour rests on it as an unspoken proposition. If these laws then are not independent of our will and actions, then attaching crucial importance to these laws—which are hardly real—for our will and action is nothing else but an expression of irrationality. In any case, he who wants to understand human life from an outside position—as if the human being did not exist—to understand its causes, purposes, and laws, which are comprehensible to every human soul from within—enters an unreal world, which we may call the world of the sciences, but which is as far removed from reality as are our dream images, or those phantoms which a nightmare tricks us into believing. The mere fact that the believers in the scientific world view want to derive meaning and rationality for their lives and actions from development theory and sociology is full proof for any unbiased person that they have lost their senses and reason— or at least are not making use of reason.

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In the face of such a state of mind the power of reason is impotent. If we lack the simple insight that the natural-scientific knowledge of development can never offer anything other than the transposition of our own goals onto nature—in which process the connection of these goals to our own life, and therefore their true meaning, must necessarily be lost—we are immune to reason. And if we lack the further insight that no law of development can substitute for our human values, that in the end it is still precisely our human values that we recognize as the law of development, then we cannot comprehend that the conception of a future that is waiting for us somewhere is completely meaningless because this future exists nowhere, neither here nor later, but is continually born anew out of those forces that live within us in the immediate present. The present is the only thing that is real. There is no future on whose value the present depends. It is here and now that decisions are being made for us all. It would therefore be useless to want to test the truth of the scientific prophecies of the new sociology and economics. Never again should one compare them with the prophecies of those great men whom religion and the history of ideas call prophets. The latter have enunciated an ethical truth and these proclamations themselves have helped to make them into realities. Karl Marx too was almost a prophet, for the annunciation of socialism is the annunciation of a moral truth. As far as he was not ready to believe that the realization of socialism could be expected from reason itself, from human reflection and self-sacrifice, this made him a false prophet whose teachings became an impediment on the path to socialism. The prophecies of true prophets are not scientific truths but are themselves the sole ethical truth newly proclaimed by them. The truths of science regarding the future can neither be demonstrated nor refuted scientifically. Their premises go back to the scientific world view, and their systems are inaccessible to critical reason, as is every truth that in the end derives from a world view, whether it is true or false. The truth of scientific prophecies thus eludes the critique of reason. They are born in the empty space of arbitrariness, where reason has lost its rights. One cannot tackle the roots of a doctrine based on superstition using the means of reason; rather one has to try and take hold of it where it is obliged to approach reality. The practical application of the sciences of the future is therefore the point where we have to begin our criticism. we have said that the new sociology and the new economics are those sciences in which the pseudoscience of the future has been implanted. In them knowledge and superstition are almost inextricably interwoven together with all the intermediate stages that lead from secure knowledge to pure phantasm. How can we sort these sciences out so that we can distinguish what has practical utility in them? The new sociology consists of three kinds of components: positive facts, theories of the present and past, and theories of the future. According to their

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degree of validity, the first consist of certain knowledge, the second of indefinite and uncertain knowledge, and the third of arbitrary knowledge. As to their practical importance, this relates inversely to their degree of certainty: the first group has almost no practical application, the second has had far-reaching practical consequences, and the third completely dominates the whole of social and political daily life. As an example of the first group, that of positive facts, we could cite ethnology or economic history, for the second the theory of the state and Malthus’ theory of population, and for the third Marx’s and engels’ prophecy of the dialectical transformation of contemporary market economy into a communist distribution economy. even the positive knowledge of sociology has at times had a not insignificant practical application, for example, statistics led to the extension of the insurance business. However, these effects are negligible alongside the consequences, for example, of the theory of the state, Malthusian doctrine, or Marxist prophecies. In the face of the knowledge group consisting of positive facts, the second and third groups thus have a common feature from the practical point of view: their incomparably greater importance for practice. even in terms of the validity of their insights they are close: theories and speculation about the present and past are not that different in arbitrariness from theories and speculation about the future. And in other ways too it is hard to contrast these two groups very sharply, for by their very nature, many prophecies of the future rest on specific theories of the present and past. These theories, even where they occur independently, have had as a consequence certain prophecies about the future. The science of the human future has therefore become an integral part of almost all theories and speculations of sociology and of theoretical economics, so that from the practical point of view we have to regard them as a unity. we can therefore regard scientific policy as the application of sociological and economic theories and speculative ideas in practice. NOTeS 1 [Original title: Die wissenschaft von der Zukunft. See the footnote at the beginning of the manuscript of "Science and ethics." Translation by eric Canepa]

On Freedom*

eVeRY THOUgHTFUL socialist will have publicly or inwardly asked himself the painful question: isn’t there a kernel of truth in our opponents’ objection that modern socialism only addresses the meeting of economic needs, that at best it represents a demand for justice but cannot claim to be an outlook on life, a Weltanschauung? we would like to look this question squarely in the eye here, without fear of the consequences. Is socialism a Weltanschauung and, if it is, what is its meaning and content? That is the question we are facing. There is a succinct formulation of socialism’s final goal, which derives from Friedrich engels. It is the notion of the leap from the realm of necessity to the realm of freedom. This formulation may seem like a mere catchphrase to some. And to some extent it would be if this leap were to be understood in the epistemological or dialectical sense. epistemologically, we cannot see why the course of development, seen to be necessary – that is, determined by natural law – should simply cease to be determined – that is, necessary – exactly on the day in which socialism celebrates its victory. In the same way, it would also not mean much if freedom were thought of here merely in the sense of the dialectical movement of the Spirit up to the stage of freedom à la Hegel. But engels’s formulation has a different meaning. He expresses a social insight, an insight into the character of mutual human relations, indeed in a way intended to highlight the ethical implications of this insight. we should begin by developing this sociological insight. The necessity that socialism overcomes in favour of freedom is, as we know, the necessity of the historic laws of the capitalist economy, which operate as the natural laws of this society. The overcoming of these necessities is tied to the dissolution of those spiritual realities that, having arisen due to capitalism, are part of the true essence of this socio-historical stage. There are a whole series of spiritual realities in capitalist society that exist and operate independently of the will of each individual in society and thus have an objective existence. The way in which they operate is likewise independent of the will of the individual; for him, their operation represents a sequence of events governed by objective laws. This is above all the case with the economy. “Capital”and “labour” have an objective existence here. They confront each other independently of the will of

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individual capitalists and workers. what is more, capital bears interest, supply and demand meet each in the markets, and crises interrupt the course of production. we continually see that, despite the existing machines and raw materials, the available labour power and urgent, unsatisfied needs, the productive apparatus is idle and paralysed, with no earthly power able to set it in motion. Not human will but prices decide how labour is deployed. Not human will but interest rates command capital. The capitalist is just as powerless in the face of the laws of competition as the workers are. Capitalists and workers alike, human beings in general, appear as mere players on the economic stage. Only competition, capital, interest, prices and so on are active and real here, objective facts of social being, while the free will of human beings is only a mirage, only a semblance.1 Marx spotted a problem in this state of affairs. He asked: how can lifeless objects like machines and natural resources master living beings? How can the prices of commodities, which do not adhere to them by nature, become properties of these commodities, like the material of which they consist? How can machines bear interest as if they were trees whose fruit one can pick? Or, more generally, what is the essence of this ghostly process that appears to us as reality under capitalism? And what explains the laws according to which this reality proceeds? Putting it in this form was tantamount to answering the question; those feigned extra-human realities are ultimately nothing other than the effects of certain relations in the human world. They are effects of relations between persons, specifically of those relations in which human beings face each other as economic actors, in other words: the relations of production. why does “capital” exist? The machine, which in a human sense represents nothing other than past labour, is able to confront living labour, the workers, as a power independent of him or her, as capital, only because past labour, the product of labour—machines or tools—was alienated from present labour by becoming the property of others. without this alienation of past labour—that is, without private ownership of the means of production, which deprives the present worker of his control of his own past labour—present labour would be a simple continuation of past labour. That it is otherwise in capitalism is a consequence of the fact that here the interrelationship of the economic actors is not the cooperative relation of the joint workers who use the joint product of their past labour, the means of production, as tools for their current labour but is the capital relation between the workers—whose past labour (the means of production) has been alienated from them—and those who are in possession of that past labour, that is, the capitalists. Un-freedom therefore is part of the moral essence of the “capital relation”: the un-freedom of the wage workers, the proletarians, who depend on means of production in possession of others. They work under external command. It is not degrading to work under orders: any collective work requires its coordination through orders. what is degrading is the fact that under the given conditions the

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power to command, to which the workers are subjected, is an alien power, although it should be the workers’ own since, from the social point of view, it rests on the product of their own labour, the machine. However, this un-freedom is also degrading because it curtails the individuality of those who are subjected to it. Being separated from his product, the worker is in a sense separated from himself. A part of himself—his past work—is being alienated from him. The worker is in part alienated from himself. And, in the end, this part of his life, which is alienated from him, is in control of the remaining part of his life. what is a “commodity”? what is “price”? why do these things exist? The “prices” that appear as “properties” of “commodities” are also ultimately no more than relations between human beings, actually between the persons who have produced these commodities. The relation of producers to each other, in a society with a division of labour based on private ownership, is a unique one: They produce goods for each other without knowing about each other. They do not work in a cooperative way but in isolated groups, isolated from one another through the private property of the owners of the firms, and thus allocation of the total labour to the individual workers is impossible to plan in advance. This allocation takes place retrospectively since the prices in the market show whether too much or too little of a commodity was produced. Therefore, what appears to be price, that is, the relation of exchange between commodities, is nothing other than the relation of the different persons producing within the division of labour. The relation of the owners to those who are propertyless (the capital relation), and the relation of the workers to each other in a society based on a division of labour in which workers are separated from each other through the private ownership of the owners—these relations of people make up the ultimate basis of social realities in capitalism such as capital, commodity prices, interest and so on. If the worker’s past labour (the means of production) were not alienated from him, there would be no “capital”; if the workers were not alienated from each other through the private capital of the owners of companies, and if they only produced in a cooperative way, there would be no “commodity price”. The estrangement of man from man and the estrangement of things (“commodity”, “capital”) from man are both thus consequences of private ownership in a society based on a division of labour. “Capital” and “prices” only appear to dominate human beings; in reality, human beings are being dominated by human beings here. This is true not only of the economy but also of the state. Society creates an organ to safeguard its common interests against internal and external enemies. This organ is state power. As soon as it arises, this organ assumes an independent existence in the face of society. [ . . . ] And what goes for the economy and state is also true of the other entities, organs, reifications and ‘pseudo-natural laws’ in the realm of society. Between the realms of nature, where necessity reigns, and the human realm, where freedom reigns, there is, “up to now” as engels says, “the realm of history”.

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Or, according to Marx, between being and consciousness there is the world of “social being.” The relation of flesh and blood individuals to one another is the only real relationship in society; those ostensibly real relationships can be theoretically resolved into relations between human beings.2 In capitalism, this resolution can only be achieved in thought; it remains a theoretical insight of sociology. To turn it into a reality, to carry it out practically, is the task of socialism. Socialism resolves on the practical level the ghostlike and feigned realities of society controlling us today into what Marx, on the theoretical level, resolved them into: the direct relation of human being to human being.3 Freedom and humanness are equivalent for Marx. Instead of a bourgeois society, he wants a “human society.” The more directly, the more meaningfully, the more lively the human essence emerges in social relations, the freer is the human being and the more human is his society. No estranged “will”, which in essence is his own alienated will, no lawfulness that is not dominated by him because it emerged, so to speak, behind his back—none of this any longer limits his conscious, responsible and therefore genuine human will. we see that not only is an unjust order to be overcome here in favour of a just one but that humanity, through the manner in which it overcomes this, is to climb to a new, hitherto undreamed of stage of freedom. The socialist ideal goes beyond the demand for justice, which had already been raised by the bourgeois revolutions; they had originally demanded permanent equality and justice, a goal only later occluded by the economy. However, the outward recognition of the equality of human beings, that is, justice, represents an indispensable precondition of a social order based on human beings. Precisely the impossibility, for constitutive reasons, of realizing economic justice in capitalism—because in it men cannot become masters over the law of value (the law of the accumulation of capital)—is a basic reason why socialists demand the socialization of the means of production. However, even a just condition of society can remain an ethicalexternal condition because it does not necessarily have to be founded on the freedom and responsibility of individuals. There can also be dictatorial justice, and if justice, when realized through democracy, really is to mean ethical progress, this is not due to the nature of justice but to that of democracy, which is inseparable from the responsibility, however small, of the individual. Socialism, however, does not limit itself to the demand for the external equality of people, that is, the demand for justice. Since it extends the demand for justice to the economy, it faces a social situation in which injustice prevails as an economic necessity but in which men do not control their economy or thus the requirements of this economy. The struggle for economic justice leads to the struggle against a state of society in which man does not have control over the effects of his will; it leads to the struggle to overcome social necessity as such in favour of a new freedom, the social freedom of man. This idea of social freedom is a specifically socialist one. Both the sociological knowledge of the purely human conditionality of social being and the drive to

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give this knowledge a historic material form originate from proletarian life. Since the proletarian recognizes himself as what he is, as the lowest element of social existence, he recognizes the social being as a purely human-conditioned construct of which he himself, the human being, is quite simply the lynchpin. The proletarian can only free himself from the capital relation by replacing it with the purely human relation of human beings to human beings—the cooperative relation of working people. with this, not only does the dominion of man over man cease but at the same time men become masters of themselves, no longer servants of the social laws that are apparently independent of them but directly carry out their own will. However, the impulse towards a form of life—the cooperative form—in which this conditionality of social being would resolve itself directly in his own life, arises from his struggle against the capital relation, which can only be overcome by that form of life. Just as he needs no scientific re-education to arrive at this knowledge, he also needs no ethical re-education to arrive at this impulse: science and ethics only open his eyes to that segment of his mental existence which is conditioned by his class position.4 However, neither proletarian sociology nor proletarian ethics arise historically from nowhere. As we know, just as Marxian sociology came into being through the analysis of the economic categories of classical political economy, therefore as the continuation of Physiocratic-Ricardian sociology, so the proletarian ethic is the continuation of ethics beyond its bourgeois possibilities. Not only the objective but also the ethical preconditions of a new social order develop in the womb of the old society because, just like the objective possibilities, the ethical requirements of an outlived social order also point beyond its own limits. And so it is with the idea of freedom, which in its highest bourgeois form leads to an irresolvable contradiction, for to be free means to be accountable to my conscience and only to my conscience. Responsibility to myself—this is the material out of which freedom is realized. My personality passes the test when it itself weighs the responsibilities which present themselves to it. No other subject can or should take this decision from me. The state and society must not be accepted as moral subjects. when it comes to feudal corporative powers, the church, the guild and the dynasties, the citizen may well inwardly hold onto this negative attitude. But he cannot do this with regard to his own society, bourgeois society, for he can neither deny his share in it nor come to terms, within and with himself, with the responsibilities that arise from his participation. And he also cannot give up the demand for unlimited self-responsibility. [ . . . ] The heroic shaping of this contradiction leads to Kant’s categorical imperative, to the desperate adherence to an empty concept of duty as the social function of personality. within bourgeois decadence, this heroic tension between ideal and reality dissolves either into a sceptical turn against the ideal of freedom—as in fascism—or into a petit bourgeois idyll of moral contentedness. Historically, the idea of responsibility as the basis of inner freedom appears in the west in its purest

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form in Calvinism. The latter’s hostility to the state and society arises from this core of its essence: responsibility, which the individual seizes for himself, has to be attained at the cost of the traditional bearers of moral responsibilities, at the cost of the organic forms of medieval society. In the medieval world of god, responsibility is also in a sense a corporative monopoly. It rests with the organictraditional communities, with family, the municipality, the guild, nobility and the church. To claim personal responsibility here means rejecting the collective forms of responsibility, denying the validity of the “social” in the ethical realm. Souls cross the threshold of personality individually: for them the “others,” “society,” continue to cling to natural existence, to the dead responsibility from which the conscience of the newborn strives to break away. For them society—as far as they can conceive of the concept—remains a part of the creaturely realm, of unredeemed creation. Its authority—whether corporative, ecclesiastical or state— is the power of evil. However, even souls who are glad to accept responsibility do not form a social bond with like-minded individuals. The doctrine of predestination dissolves the world into solitudes. One’s neighbour is, like lifeless nature, a mere means to one’s own moral self-probation. The passionate religious obsession of Calvinists to limitlessly increase their own responsibility lends to the idea of inner freedom the force to affirm the personality as well as the resilience needed for an absolute rejection of society and state. The individual can assert this completely utopian, extra-social position only as long as he himself has no inner participation in the objective social powers. As long as the citizen is found as an isolated foreign element within a corporative society in the course of dissolution, he can believe that an extra-social existence is real. But bourgeois society, too, does not dissolve the formally extra-social existence of its members. Rather, it confirms it: “bourgeois society” is, in its narrower meaning, not a society of its citizens but a simple reality that can only be understood to exist in contradistinction to the state. The existence of society—not of the extraneous corporative society but of his own bourgeois society and his share in it—this is the point at which the utopian extra-social aspect of the individual comes into conflict with itself. The “social contract” and the categorical imperative represent two complementary attempts at resolving this contradiction. Rousseau resolves the share of the individual in the state into freedom through an agreed self-restraint. In Rousseau’s formula, this self-restraint is still dictated by a motive, although it is a purposively rational one, in which the neighbour plays a certain role, though a formal one. Kant sensed the ignobility of this rationalistic motivation as well as the contradiction of accepting the restraint agreed upon with others as moral selfrestraint. In his categorical imperative it seems as if both motivation and neighbour completely vanish from the picture. The relation of the individual to his own social function, to the state, also formally becomes, by way of an extraordinarily abstract concept of duty, an exclusive problem of the inner freedom of the individual. It is precisely the strict form of this solution that starkly

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lays bare the contradiction that it denies. Since the responsibility of the individual should include the social dimension, this responsibility loses humanly comprehensible meaning and any possible content. The idea of being responsible for our personal share in the life of “others,” that is, in social realities, and incorporating it into the realm of freedom cannot be realized in the bourgeois world. But it is just as impossible to renounce and thus to arbitrarily limit our responsibility and thus our freedom. The bourgeois world’s idea of freedom and responsibility points beyond the boundaries of this world. The true concept of social freedom is based on the real relation of men to men. It forces this demand on us through the twofold insight that there is, on the one hand, no human behaviour that is completely without social consequences and that, on the other hand, there is no existing entity, no power, no structure and no law in society, nor can there be, that is not in some way based on the behaviour of individual human beings. For the socialist, “acting freely” means acting while conscious of the responsibility we bear for our part in mutual human relationships—outside of which there is no social reality—and realizing that we have to bear this responsibility. Being free therefore no longer means, as in the typical ideology of the bourgeois, to be free of duty and responsibility but rather to be free through duty and responsibility. It is not the freedom of those who are relieved of the necessity to choose but of those who choose, not freedom of relief from duty but the duty which one assigns oneself; it is thus not a form of releasing oneself from society but the fundamental form of social connectedness, not the point at which solidarity with others ceases but the point at which we take on the responsibility of social being, which cannot be shifted onto others. what we have to ask is: Does this kind of freedom cancel the concept of personal freedom? Not at all! Personal freedom—the freedom and responsibility of the individual in his nevertheless existing extra-social relations—is and remains the unalterable basis of inner life. Socialism does not mean the liquidation of personal freedom; it means a crisis out of which the concept of personality emerges more powerfully than ever before. The largest, essential part of a human life takes place within extra-social relations. The relation of a person to the world surrounding him, to his friends, his family, his life partner and his children, his relation to his own capacities and his works, his relation to himself, the consistency and honesty with which he confronts himself and his destiny, limited as it is by death—all this he answers in the face of his innermost conscience; this is where personal freedom prevails, through which a human being only becomes a human being. A “human society” is unthinkable without it. The fact of socialization obviously does not override this foundation of moral being. However, the awareness of this fact, that is, being conscious of one’s social being, opens a new phase in the development of personal freedom. Before the awareness of socialization the individual in a sense lives in the paradisiacal innocence of extra-social existence. His freedom, however shallow and poor it

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may be in reality, appears to him as solidly founded and all-embracing. But the image darkens all at once as soon as he has eaten of the tree of social knowledge. The idyll becomes a problem; the naive, firm point of departure of moral existence becomes a goal to strive for. It is precisely the socially feeling person, the ethical person, who is today in danger of having his inner personal freedom completely cancelled out by this ethical orientation itself. For his social feeling opens his eyes to the endless mutual entanglement of human life and thus a series of unforeseeable responsibilities which he unintentionally brings upon himself. He feels that he must, he can, indeed he should free himself from the destinies of others and, in a sense, reassert his personal freedom, despite the reality of general socialization; but the only way in which he can do so without damaging his own true personality—and he feels this no less clearly—is by paying the full price for it, that is, by taking full account of all responsibilities to which social being gives rise. But he sees no means of doing so, no path. Therefore he withdraws into himself, without being able to assign content to this retreat. In the bourgeois world, which does not recognize socialization in the concrete sense, the personality is therefore not able to develop itself beyond certain narrowly set limits. The limits are determined by the personality’s negative relation to society. For the individual of the bourgeois world, social knowledge, the highest source of humanization, is buried. Here penal codes, civil law and bourgeois convention “govern” the relations of the individual to others. And within the boundaries, within these external determinations, the individual weaves the illusion of his freedom. However, those sensitive minds who nevertheless intuitively perceive the nature of socialization and their own unavoidable enmeshment in the lives of others flee from the flood of guilt feelings that overwhelm them and take refuge on the lonely island of religious delirium— because we must call that passive form of religious morality a delirium, which undertakes to endure its necessary indebtedness to external life without attempting to repay it. The socialist does not flee from the recognition of the socialization of his life. He stands up to this insight and strives, through his action, to reconcile himself to it. Trying to salvage his personality, in the traditional sense, would be futile. That unity of action which we call personality is something he is not able to produce for now. The recognition of the all-round human conditionality, that is, the socialization of his life, makes everything—including his innermost ego—appear to him as something derived from others, owed to others, borrowed from others. [ . . . ]5 is there power over him? Nevertheless, who would deny that precisely this state of power could not exist against the conscious will of all participants? (As we know, anarchists draw the irrational conclusion from this state of affairs that the state must be “abolished.” what they mean by this remains open to question.) The socialist recognizes the state as what it is, as a social relation of people to one another, and sees his task as one of overcoming the state by

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resolving this social relation into a direct one that is no longer mediated by the state. And a similar thing happens with the objectification “value” in the exchange economy. Like blinded slaves, we sense our fate from market prices, which in the end are nothing other than the parts of our consciousness that are alienated from ourselves. The first requirement of social freedom must then be: mastery of the necessary consequences of socialization, that is, of power and of value. The second requirement is: make humanity capable of universal goal setting and the solidary exercise of power towards the goals established. world history still presents the eerie image—to adapt a comparison made by H. g. wells—of desperate children who, enclosed in a cage on a cart, are rolling towards an abyss. we are all grown-up children of this sort; but we have ourselves built the cage that makes us helpless, and we are also holding up the inclined plane on which the cart rolls, and we have created the gravity, which has become fatal for us. Humanity, even civilized humanity, does not represent a unity. It is not a subject, and if it were then its organization would not make possible a universal goal nor a development of solidary power. Not only do the segmentation into states and the confusing and antagonistic character of the economy exclude this; the confusing relation between the political state and the economy of society also excludes the setting of a universal and thus political-economic goal at the outset. However, we can only speak of humanity’s freedom when it constitutes itself as a subject and is capable of expressing its will—indeed only if at the same time the condition of the earlier formulation of freedom is also met, that is, that this state embracing all of humanity, this economy of the whole of humanity or, better, the synthesis of the two, despite its enormity, come into existence as the immediate expression of living human volitions. However, we will have only attained the highest stage of social freedom when the social relations of human beings to each other become clear and transparent, as they are in fact in a family or in a communist community. To directly track the repercussions of our life impulses on the lives of all the others and, in this way, on our own, in order, on the basis of this knowledge, to be able to assume responsibility for the social effects of our existence, this is the final meaning of social freedom. To work out for ourselves what our own share in social problems is, to establish a balance in ourselves between effect and counter-effect and to freely take on ourselves the task of drawing up an inevitable moral balance sheet of social being and doing so heroically or humbly but consciously—this is the most that we human beings can hope for. No apparent objective power outside us may any longer be charged with this responsibility. There is no longer a state, a market or an authority on which we can put the blame for human troubles, mutual dependency, the limitation of needs or common misfortune. It would then be we human beings alone who face not only nature but also each other. And not only the economy and our interaction with nature, but all with social life will become so transparent that in all matters we have the choice to do or not to do

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–with the consciousness that in so doing we have chosen between two sharply contrasting and decisive responsibilities that we cannot shuffle off onto others. These are the three tasks that social freedom assigns to man. It is clear from the outset that its complete mastery exceeds man’s strength and perhaps goes beyond the limits of man’s nature. Nonetheless, the socialist has to measure his social ideal against this highest of goals. In that highest ideal condition of social freedom, in which all three requirements are simultaneously fulfilled, both the mastery of the necessary consequences of socialization and the universal goal of humanity, which includes ultimate responsibility for all social effects of our existence—in this situation the personality is free in a way that it could never be either in ideal anarchy or in bourgeois anarchy. For it is not free through sheer denial of the ineluctable reality of socialization, as in the frivolous and dishonest freedom of the anarchists, nor is it free as in bourgeois society, in which the so-called personality, as a gambler and evader of responsibilities, obtains a clear conscience under false pretences; it is only truly free as someone is who has paid for everything that he has enjoyed at the cost of others and can say of himself: for me the life that is most my own is that for which I am responsible to no one in this world. Those other “free personalities”, which see the true liberation of their personality, their so-called Übermensch status, in the denial of this debt to others, are free of conscience, free of responsibility and thus free of any personality; and the illusion of freedom that may remain is simply proof of their moral frugality, their philistine un-freedom, their inborn slave disposition. Many who have got used to imagining socialism as an economic “wishingtable” and a moral automaton, as a pre-established harmony of ethics, will ask: “won’t these problems resolve themselves automatically in socialism?” The answer is “no!” On the contrary, those responsibilities, which are today only felt by the more ethically gifted, the more highly developed personality, will be felt generally in that more highly organized society and weigh more heavily than they do now. As long as responsibilities exist, as they now do, only on this side of the market, it is easy to belie the fact that the satisfaction of every need is bought through the toil of other human beings and the workplace danger, tragic accidents and illnesses they suffer. Moreover, in so far as this situation is connected with the dreadful fact that it brings personal advantage to a minority of human beings, the feeling of indignation and the explosiveness of the indictment arising from it distracts us from clear consciousness of our own responsibility for stunted and destroyed human life. Under socialism, after the overcoming of the relations of exploitation, this emotional veil of resentment disappears, and we must learn to see that, even in the most justly organized economy, people’s struggle with the elements of nature and consequently the technical problem of production still costs toil and trouble, un-freedom and murderous agony, health and often life itself. whoever wants to look squarely at the facts cannot be blind to this. The highest wisdom of the bourgeois philistine is: “everything costs money in this world.” But the socialist

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insight is: “every good costs labour, renunciation, and human life!” Today, private property stands between one human being and another, and the fact that some selfishly enrich themselves in the production process covers up the fundamental connection that exists between consumers and producers, which comes directly and starkly into view with the abolition of private property, that is, that through the satisfaction of our wants, through their magnitude and direction, we take onto ourselves the responsibility for their social costs. You have probably all heard of the philosopheme of the murdered Chinese, which goes as follows6: If we were given the possibility of immediately having every wish granted by simply pressing a button, but on condition that at each press of the button one of 400 million Chinese people would die in far-off China, how many people would abstain from pressing the magic button? The cynical Frenchman, from whom this philosopheme originates, thinks he would practise finger exercises on the blessed button. And he was a humanist of high standing, who would probably never have harmed a fly, as long as the fly was not in China but had to kick the bucket painfully before his own eyes. This odd philosopheme gives us a true allegory of the situation in which even the best person finds himself in relation to his co-citizens. Anyone who is able to offer an appropriate price on the market can promptly conjure up everything that humanity can create. The consequences of this trick take place on the other side of the market. He does not know anything of these; he cannot know anything of them. Today, for every single one of these human beings, all humanity consists of nameless Chinese whose life he is ready, without batting an eye, to snuff out in order to fulfil his wishes, and this is what he in fact does. Here, moreover, we see the importance of an attitude that is unconsciously immanent in socialism but has never been clearly expressed. This is the finiteness of the human world and thus the limitlessness, but finiteness, of the task that socialism confronts. This is where the essential progress of the socialist conception of humanity over the bourgeois conception resides. The task of realizing social freedom can only be formulated in relation to a finite community; here, too, however, it remains a qualitatively unlimited task that at the same time becomes a quantitatively limited one. For in a finite community, responsibilities for actions are always feasible because those effects for which our action makes us responsible are at least logically locatable: they no longer evaporate into the twilight of the indefinite boundaries of the allegedly infinite mass of people and goods; instead, from an unnameable quality they become a concrete quantity in that this quantity must affect every last member of society. In any case, a world in which we would have to consciously bear the human effects of our existence must today seem frightening to us weak human beings. Indeed, this is also the reason why so many socialists prefer to flee from capitalism to state socialism in order at least to keep the impersonal state, which apparently exists independently of us, as the general scapegoat for all suffering. For the more transparent this state becomes, the more it becomes unavoidable to face ourselves beyond the glass wall of this state—for it is only we who stand behind that

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reification—the more forcefully is the fatal recognition imposed on us that each workplace accident has occurred for our own well-being, and the coal that we have just thrown onto the stove, the light with which we now see, contains a part of a human life. However, this recognition is the price that we have to pay for our freedom. So even after we fully overcome the shameful injustice of our condition, our full freedom will not drop into our laps. The more organized a society becomes, however, the smaller the circles in which cohesiveness in production, consumption and communal life lets individuals become solidary, the closer is the hour in which the only choice that remains is to either close one’s eyes in a cowardly way and abjure in favour of various self-erected powers, the true connection between human life and freedom or, on the other hand, boldly face reality in order finally to acquire the new freedom along with the new responsibility. If one sees more in socialism than an economic question, more than a mere demand for justice, if one hails in it the final programme of humanity’s emancipation, one cannot and must not shy away from this highest of freedoms! As ineluctably as these last goals impose themselves, so mighty, so frightening are the obstacles on the road to their achievement. These obstacles arise from the nature of the social objectifications of the will of which we spoke above, from the innermost nature of the phenomenon of power and of the phenomenon of value or, put differently, of law and economy. If we suppose a democratic society, the law is then based on the volitions of individuals; but at the moment that it arises, it cancels out these volitions in favour of a new essence, precisely that of law, which now opposes these individual volitions as an independent entity. The past of our will, that which we previously wanted, confronts the present will like an immutable event. even if we have strong will and also the power to want something different by now, we cannot eliminate the fact that we earlier had a different will. This is where the individual and the social problem of freedom most strikingly part ways. For personal—that is, inner— freedom, bygone will only gives rise to an inner but sometimes tragic problem: the problem of consistency or inconsistency. However, its solution occurs within the individual himself. But we have to ask why the same does not apply to the social phenomenon of will in regard to what is willed in common. we would like to point only to one cause for this, which arises from the difference between the individual will and the common will or common decision; this is the necessity of summing up individual wills in a socialized situation. The summation of individual wills, the integration of individual volitions is the necessary process without which a collective will cannot emerge. Volitions that are in alignment with each other can, however, be reduced to a common denominator only if the common content of the will can be wrested free of the personally different motives out of which they arise. This severing of the motive for the will, whether it occurs through unconscious development of customs or conscious election, makes our innermost impulses, our “volition,” into something external, addable, then into something added, which has thus become lifeless, into a fact alienated from ourselves, from

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social environment, from the human external world. The socialized form of the will is thus necessarily something objectified, something alienated from what was originally wished, a substance that confronts him from outside. The same phenomenon, as we know, can also be seen in the sphere of the economy in a society based on division of labour, and indeed for related reasons, as we would like to show. The needs of isolated individuals can only cause the relative size of the productive sectors in society to correspond to these individual needs when these needs are added together to form a composite need, which sums up the infinitesimal fractions of all imaginable feelings of needs, by way of an integration process, to specific quantities of composite needs or, more correctly, to the total need. In the course of this process, which however today occurs unconsciously, in contrast to the formation of law and similar to the formation of customs (though by way of a quite different psychic process), the need ceases to be an inner psychological fact and constitutes itself as a composite need, an objective quantity in relation to individual needs. In the market, total demand and total supply, or, more correctly, total need and total stock, meet; and the price, which emerges as a result, is almost completely independent of the will of individuals. They have to accept it in the way that primitive man accepted a natural event or the slave the diktat of his master. The personal freedom of individuals does not figure here at all. Through the reality of socialization of an individual’s work and his needs, his personal freedom has been cancelled. As long as we imagine him as an isolated “individual”—which is where the subjective or marginal utility school often still leaves the matter today—his needs, as well as the toil through which he could satisfy these needs, are the current, living contents of his soul, whose balance is indeed necessary but always only occurs within his own self. The integration of needs into the total need disappears, just as does the integration of the psychologically available labour powers into the total stock of these labour powers and, due to the lack of this external twofold integration, in his consciousness the needs and work impulses confront each other directly; and he mediates the struggle of these competing motives within himself in the framework of personal freedom under his own responsibility. He is and remains master in his own house. Let us now go one step further in the analysis of the most important objectifications. The social relation of people to each other, which both in the political as well as the economic sphere leads to the integration of the impulses of the soul [Seelenregungen] and thus to alienation, to fetishization of the reifications, that is, the objectifications that have arisen outside of ourselves— these social relations are in reality still much more complex than we have so far suggested. we cannot trace them here in all their ramifications. we would like simply to mention yet one more social relation, that between law and economy. And we must do this in order to make clearer the obstacles that stand in the way of that universal goal of social freedom that we have postulated. As we have explained, law and price are both results of the social integration of

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individual juridical volitions, of impulses of needs. what now is the relation between the reifications “law” and “price?” Marx expressed this relation as follows: the relations of property are the legal forms of the relations of production; on these relations of production the bourgeois exchange economy is built. In brief: private property leads to market economy and market price. we would like to emphasize here that the social relations of the economy already presuppose the other relations that are established in law. And so the market and price represent a kind of compressed, denser and less transparent reification, one of a higher level than property law is. even if ultimately prices have to be thought of as resolvable into simple social relations between people, those relations that constitute themselves in price are of a higher order and more complex nature than those contained in law as a reification. Or put more simply: the law is more dependent on our will than is price because price is also determined by the law, especially by property law. Market price, this sibylline manifestation of the fetish of commodity, thus represents, as Marx correctly saw, the true gessler’s hat of our social un-freedom. The main obstacle to the mastery of the necessary consequences of socialization, and to laying bare the mutual relations between human beings, thus consists in the great complexity of these relations and the nature of the reifications and their apparent natural lawfulness, on which social freedom founders. The person who is willing to accept responsibility, who seeks a higher freedom, appears condemned to play the tragicomic role of futilely expressing his self-sacrifice. Most things are done without him, and he everywhere announces his readiness to assume responsibility ex post facto. It is as if one lived in a bewitched world where, in Marx’s words, everything important in fact is determined behind the backs of the human world. what can socialism, which wants to achieve social freedom for all, do against this creation of circumstances? Through what means is it possible to dissolve the social reifications and integrate them into our own lives, from which they arose, and to take the social decisions made behind our backs into our own hands—not into the hands of any sort of state power? Put differently: is it possible to have a direct, inner overview of all our relations within society, that is, both the economic and noneconomic relations? The answer is staring us in the face, bringing us to the heart of the positive part of our deliberations. It is that social freedom is mediated in socialism through social awareness, through the concrete understanding of the real interconnections between individual human lives. This knowledge is certainly not an individual, abstract, Tolstoyan insight, that inner idea which in the social realm must lead to the unreal and empty anarchist position. In contrast to individual knowledge, social knowledge can only become effective if mediated by the real reshaping of the interrelated life of people. Indeed, this requires a real restructuring in the sense of larger, increasing and continuously clearer overseeability in certain areas of life of a certain dimension. The real restructuring of society in the sense of increasing overseeability is thus part of socialism’s

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innermost nature. For where there is no overview there is no freedom because without knowledge there can be no choice. “The real experience of real social mutual relations” cannot therefore be accomplished in a small study room. The purely cognitive aspect of social knowledge is very limited. But that small part of social knowledge nevertheless does have to be acquired. Socialists working in theoretical sociology should have this orientation. Instead of developing the supposed laws, which govern everything human, this science would instead principally have the task of expanding the limits of human freedom within society by showing these laws to be the unintended result of intentional human actions and by therefore extending the domain of free will. Only when, after reaching its limits, after being able clearly to understand that we necessarily have to choose between various unintentional consequences of intended actions, only then will we be in a position to take the consequences of the chosen actions upon ourselves, to be responsible for them and thus to incorporate them into the realm of freedom. Not the “laws” but the freedom of man in society would be the principal subject matter of this sociology. But it is not theory we are dealing with here. The solution to the problem of overview, which socialism can be said to be, can only be reached through a concrete restructuring of the interrelated lives of human beings. Before turning to the question of what kind of restructuring—the organization problem—we must take a closer look at the problem of overview [Übersichtsproblem]. Theory can only prove the possibility of a form of life that provides overview by showing the mutual economic relations of people to each other to be the real basis on which the superstructure of political, economic and other objectifications are built. In reality, however, this overview can only develop within concrete social relations as the latter connect individuals with one another in a way that offers an unmediated, truly lived overview, one that reveals a certain segment of the lives of others and is offered to each specific individual so connected. From the point of view of economic performance, the concentration and centralization of production represent such moments facilitating overview, hence their great importance for the socialist interpretation of capitalist development. Management overview in production is certainly immensely increased by those kinds of unification. However, management overview is only the first precondition of a socialist overview. even in a classless society, an economy that is managed by a central administrative office represents only an external socialist solution, for the overview that underlies the managerial overview only concerns external aspects of the economy, that is, the external things: the means of production and the material goods, on the one hand, and, on the other, the human elements of the economy, the needs and work-effort expended, but only in its external aspects in so far as this can be apprehended by a quantifying and measuring administrative apparatus through statistics. As important as this external apprehension of needs converted into the form of “past need” as well as work-efforts expended in the ambiguous aspect of ‘skilled labour power’ must be for an overview of the social

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economy, it is no less certain that the human element of the economy—needs and labour expended—in reality has not at all been apprehended but that instead some ambiguous objectifications, such as magnitude of need and labour powers, would have to serve as substitute. Thus even managerial overview does not relate to what it should relate to (needs and current toil) but to something else (the need and availability of labour power). For this, a true managerial overview would not suffice even to realize the socialist goal. Alongside managerial overview, membership overview would be required, for in order that every producer may produce with “species-consciousness” (engels) and every consumer consume with species-consciousness, it is clearly not enough that the directors of the economy issue orders on the basis of a general overview. Only if each individual at every moment directly perceives his place within total production, if he really experiences the connection between the satisfaction of his own needs and those of others, only if, finally, the actually existing real connection between his own consumption and production activity on a social scale is constantly before his eyes, or can at least potentially be, can we justifiably speak of an economy with overview, socialism at its highest stage. In a family, these conditions are all present. Socialism, however, must always be thought of as the solidary life form, as the living family extended to humanity. As will be clear to those who were present at previous lectures, asking this question is the same as posing the overview problem in its general form. we had the opportunity to exhaustively treat the problem of overview of the economy. what is at issue now is to generalize the overview problem beyond the boundaries of the economy and to extend it to all of the social relations of man to man. This is what we can call social insight. Freedom through social knowledge—this is the path of the human race. It is only possible through a true restructuring of society! The inner overview of needs and hard labour expended already took us a good distance further. The social process that integrates needs into the total need is here precisely no longer tied to a reification of needs, no longer tied to their alienation from need. And the same thing applies in the analogous case to labour expended. [In a solidary society,] individuals would directly experience everyone else’s needimpulses and the hard labour they expend as if it were their own because of society’s self-organization based on these motives. In particular, we have spoken of the unconscious and automatic, and yet living and direct, balancing of all value measurements of labour that the contemporary trade union undertakes. This follows precisely from the proposition that self-organization on the basis of specific motives represents a means of inner, true overview of those motives out of which self-organization arose. The objectification “total demand” as well as the objectification “total toil” are dispelled here and resolved into the living motives that had lain hidden behind them. But let us go a step further. Let us imagine that those present in this room formed the members of a small society based on division of labour. Let us think of those present here as being organized on the basis of functional democracy:

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they have come together as consumers in a consumer cooperative; on the other hand, as producers they have formed a guild. For the sake of simplicity, let us say they all draw the same income. And now they negotiate the economic plan. “who negotiates?”, you will ask. well, everyone with everyone else. everyone is simultaneously a consumer and a producer; it thus makes no difference how you would like to imagine the matter, but let us say that those who are standing to my right represent themselves and also the others, standing on the left, as producers, and those who are standing to my left represent themselves and all those sitting on the right as consumers. The main point remains that every person present is equally interested in both sides, although his assignment as a negotiating party places him on one side. And now the economic plan is negotiated: one side asks for better and cheaper goods, the other for shorter working times. In the end, they agree to a specific working time expressed in minutes and a product series expressed in prices. How did this working time and this price come into being? It follows from the whole structure that they arose from the inner, direct decision of each individual. For each person is indeed at once consumer and producer. Here there is no longer a market outside of the consciousness of those present, no market factors, no supply, no demand—all of that plays out within each individual. The two sides of his own existence, the consumer and the producer, are confronting each other eye to eye here, within his own consciousness. The decision made by the individual treats the social problem in question as something given within his personality, within the moral autonomy of his ego, and in full freedom and responsibility. He has taken his economic fate into his own hands. In a similar way, the idea of functional democracy, of functional representation—which moreover has much in common with the idea of soviets—leads to robbing the political objectification state power of its reified character to an extent that is up to now unimaginable and an approximation of the direct expression of the impulses of individuals towards the law. A complete abolition [Aufhebung]7 of the objectification law naturally does not occur here. It is not even thinkable. The congealed will, which we call law, remains forever as a wall between past impulses formulated as law and the fluid impulses to create law which are at work today. However, in a functional democracy this wall will be infinitely thin and completely transparent—which is the most that our fantasy of social freedom currently lets us imagine. The idea of functional democracy in our conception takes us further by dissolving and displacing directly into the realm of freedom that nexus of objectifications which is represented by the mutual relations of law and economy. I invite all present to think of yourselves as being divided into two further delegations: The representatives of the political state—let us call them the commune—who are elected on the basis of democratic suffrage, sit on the left; the representatives of the producers—we will call them the guild—sit on the right. Once again, both parties represent all present here. The commune repre-

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sentatives demand large investments in order to secure the healthcare interests of the community and the life interests of future generations. Thus in the name of ideals they demand sacrifices of the economy (because everything that costs human labour restricts human need). The producers defend their labour power and the satisfaction of their needs as such. In the end, they agree on a concrete tax figure that means a specific quantity of surplus labour, of restriction of needs. For this reason, social ideals are realized up to a point but only up to this point. Society has to abnegate things that lie beyond this. This decision in turn means a direct, internal choice, for here ideals within people are confronted with their costs; here everyone has to decide what his ideals are worth to him. No state and no market intervene between the two sides of our consciousness; here there can be no shifting of responsibility, and nothing outside of ourselves can be made responsible for our fate. The individual only confronts himself because his fate is in his own hands. within politics, in dealing with state power as a reification, and within the economy, in dealing with the reifications market and price, as well as, finally, within the interplay between state and economy—that is, within the highest reification, which we call society itself—an inner overview of the reciprocal relations between people is possible. Self-organization is the key to this solution. In a classless society, the free association of working people, of those in need, of neighbours, leads to cooperative organizations that offer a living inner overview of the socialized motive inherent in them. And the decisions that are arrived at through negotiations between such associations are a direct expression of the relations of forces of the conflicting motives and so carry with them the highest level of responsibility, one that only presents itself to the truly free. One of these associations, the political state, the commune, however, is a territorial entity and thus not a free association but a compulsory organization. And it could not be otherwise. Socialism as a leap into freedom must not be taken in the historical but in the logical sense. Beyond the demand for justice in a classless society the human race’s true destiny only first opens up here: it is the realization of the highest social and personal freedom through the concrete conception of solidarity between man and man. The leap does not bring us to the end but only to the beginning of our task. we believe that we have shown that socialism is able to approach this task infinitely. However, we can only come close to its accomplishment; its complete accomplishment is impossible, for it is an unlimited task that appears clearly only at the beginning of socialism, whose accomplishment however must remain an eternal task of humanity, an asymptotic goal to be approached and never completely reached. we can easily see from our presentation that humanity’s life can never be completely reflected in all its facets in each individual life, that our final goal of living our own lives as something directly social can never be completely realized. Nor is the moral idea of socialism ever exhaustible through any specific

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state of affairs but only through continuously working at the eternal tasks of humanity. Freedom through social knowledge can never mean a specific state of affairs; rather, it is a programme, a goal which is constantly re-establishing itself. The history of humanity will not have reached its final point with socialism; humanity’s history will, in its true sense, only begin with it.

Appendix 1 Ought and Being in Marx8 Socialism’s image of the world—its world of Being—and worldview—its world of Ought—constitute a unity. The gap that opens for logic between Being and Ought is overcome through the most inner disposition of human Being—and only of human Being. He who says Man, says Being and Ought in the same breath. As a thing, as an animal, Man simply is, he is simply Being; but as the measure and meaning of our world, the human world, he is the embodiment of the Being that Ought. The difference between Man and other living beings or things is one of mere Being. even if being a human being had no meaning for him, Man would, as a species of animal, be different from all other species, a corporeal thing differentiated from other things. But if, in relation to one person, I assert that in contrast to another person he is more human than the latter, that he is more of a human being than the other, and that he is a Man in the truest sense, that the other person does not deserve this name, then something else is meant: a judgement not about Man as Being but Man as Ought. The meaning of the judgement is just as clear as that of the other [judgement]. This is the meaning of the judgement Marx has in mind when he wants “human” society instead of “bourgeois” society. They both consist of human beings, but today’s society is not human. (Marx nowhere systematically developed a conception of the Being of the Human.) Nevertheless, this socialist ideal of being human remains the backbone of the socialist critique of bourgeois society. Marx’s entire work was one single condemnation of bourgeois society, which does not let Man become Man. His critique of the capitalist economy and its laws was a unique attempt to use a segment of the bourgeois world to demonstrate its essential dishonourableness, its inhumanity. The denunciatory literature of the period, the philosophies of misery and novels of poverty—many of which were authored by noble minds— fuelled outrage at the injustice of capitalist relations [and] at the monstrous misery of the masses. And, even before Marx, many of them also saw that in such a social order the life of the wealthy too would have to slide into nullity and falsehood. But what none of them saw was the inescapable necessity with which capitalist society has to make class division constantly re-emerge within itself despite any benevolent attempts to bridge these divisions. However, Marx saw still something more, and this constitutes his historic greatness. He understood that capitalist society is not just unjust but also un-free.

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A social condition in which each individual life is dominated by apparent laws, which our faculty of reason can understand as in reality only facts of our own relations, lacks freedom. Not only the workers but also the capitalists, as Marx saw, are dependent on market laws whose subjects they remain, even if through them they keep themselves affluent and the workers in poverty. It is not that the capitalists have no inclination to allow more economic justice but that, even if they had, it would be impossible for them, the apparent lords of the economy, to do so [ . . . ] In this, he saw the [abyss] of humanity’s current predicament. Therefore, he preached not understanding or inclinations but the struggle for a society in which understanding could be effective. Therefore he, himself an idealist, refused to [concede to] idealism its own intrinsic power. This is not because he saw human society just like a mere agglomeration of physical atoms without the capacity for its own goals but because in capitalist society, despite individual will, despite the possible honest idealism of individuals, people have to behave as if they were mere atoms without will and all their idealism meant nothing in the face of the silent, inevitable force of an overwhelming dependence on the external conditions. This was the deep and frightful insight from which our world appeared to him to arise as an inferno. How corporeally he saw those invisible threads of price figures looming, which would here throw the individual and whole masses out of the factory into the misery of unemployment and there drag them into exhaustion from overwork on the tilted plane of piecework, and then suddenly, in the midst of feverish recovery, clamorously whip up the dead in the factories amidst the wailing of the capitalists and proletarians. And at the same time he saw how all the moaners were themselves weaving the strands, tying the noose and tugging it as in a dream until they lay prostrate and shackled. He saw how people groped like blinded slaves deciphering their fate through a mysterious script of knots that they had unconsciously tied themselves.

Appendix 2 [Effects of Alienation on Individual Lives] In every large society based on division of labour (that is, large enough so that, with a limited lifespan and our limited mobility, direct and mutual attention on the part of all members of society seems unfeasible), no direct socialization of people is possible. The unity of the whole can only be perceived here if certain social phenomena continuously appear and are mediated between persons. These social phenomena form a kind of third realm that stands between the realm of Being and of Consciousness. Marx calls this the phenomenal world of the social Being. It is the actual object of sociology. Its wealth of phenomenal forms is no less than that of nature or of the human soul. Alongside near-corporeal organs like state and market, they include laws that assert themselves with causal inevitability, such as those which govern price formation in capitalism, the

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reifications of personal relations of people to become the material relations between objects, as represented for example in the fetish character of commodities, as well as the continuous forms of interaction between people, as represented for example by the relations of super- and subordination. The socialization of a large number of people is necessarily bound up with the existence of such objectifications of the human content of consciousness, with these social objectifications, as we would like to call them. From this arise consequences that are important in two kinds of ways for the individual lives so associated. Social objectification can tie people as a community only at the cost of, first, separating individual lives, which are connected in this way, from each other and, second, internally splitting each individual life. These two effects necessarily result from the nature of objectifications. 1. The direct connection between the individual lives becomes a mediated one, because the individual lives are no longer related to each other but to their objectifications, by way of which their community is mediated. Through this, these individual lives are right away separated. 2. In terms of its content, however, the individual life itself is split, in that the part of our life which produces the cause of the objectifications is split off from the part that represents its effect. Two different contents of consciousness—which continually subsist separately alongside each other in us—belong to our active relation to the objectifications [acting on them] and to our passive relation to the objectification [being acted upon by it]. In this way, the unity of the personality is split. Social institutions, laws, reifications, all these phenomenal forms of social objectification have in common that they insert themselves between Man and Man, on the one hand, and between the diverse volitions of one and the same person on the other hand. In that they separate human beings from human beings, they prevent an unmediated personal community between them. In that, in relation to consciousness, they are inserted like an impenetrable isolating substance between our own volitions, they split our own consciousness in two and prevent the unification of the separated parts in our own mind. Thus the state transforms all of us into oppressors and oppressed—or, more precisely, into both at the same time in terms of our active and passive relation to it, a relationship that would be unsustainable within one and the same consciousness. This is what the thingness of the state as an objectification consists of: that this ghostlike substance is inserted between our volition, which has let it emerge, and that other volition, from which our complaint about its existence arises, so that a confrontation and compensation never occurs. However, we all stand in this same double relation not only to state power as an objectification but also to custom and law, and to market and price. Since we are all partly an active cause, partly a suffering effect of these phenomena, the active part of our consciousness is able to connect to the active part of the consciousness of other people, and our

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suffering part with the corresponding part of the consciousness of others. The result is the monstrous concept of two humanities as thing-like realities: of an egoistically active humanity that limits the other helplessly passive humanity in its freedom and pushes it into misfortune—without the ability of the theoretical knowledge to counteract against this semblance, that what is involved here is just two directions of intent of one and the same humanity. * “Über die Freiheit,” ms., 1927, Karl Polanyi Archive 2–16 (hereafter KPA, followed by the file number). Now in K. Polanyi, Chronik der großen Transformation, M. Cangiani, K. Polanyi-Levitt and C. Thomasberger, eds, Band 3, Marburg: Metropolis Verlag, 2005, pp. 137–70. Translated by eric Canepa. NOTeS 1 [The german term Schein is translated as semblance. The translation follows the english edition of Marx’s Capital (Capital. A Critique of Political economy, Vol. I, Collected works, Vol. 35, New York: International Publishers, 1996, p. 167 f.)]. 2

[Polanyi indicates that Appendix 1 is to be incorporated at this point.]

3

[The beginning of the following paragraph is struck through in pencil, which suggests that Polanyi wanted to reformulate this in the context of a revision.]

4

[From an allusion of Polanyi’s as well as the page numbering it is evident that Appendix 2 was to be incorporated in the following pages. In addition, several pages of the no longer legible manuscript addenda were glued to the manuscript page here.]

5

[The beginning of the question is missing. Simple pencil strokes covering the whole page in the manuscript indicate that Polanyi wanted to reformulate this passage (up to “as the immediate expression of living human will”). Since this did not occur, we have left the existing passage in the text.]

6

[This “philosopheme” goes back to François-René de Chateaubriand (1768–1848), who reconverted to Christianity in post-revolutionary France and was the founder of its literary Romanticism as well as an avowed Royalist. In 1802, in The Genius of Christianity, he wrote: “Conscience! Is it possible that thou canst be but a phantom of the imagination, or the fear of the punishment of men? I ask my own heart, I put to myself this question: ‘If thou couldst by a mere wish kill a fellow-creature in China, and inherit his fortune in europe, with the supernatural conviction that the fact would never be known, wouldst thou consent to form such a wish?’” (F.-R. Chateaubriand, The genius of Christianity; or the Spirit and Beauty of the Christian Religion, Baltimore: J. Murphy, 1871, pp. 187–8; on the philosophicalhistorical background, see C. ginzburg, “Killing a Chinese Mandarin: The Moral Implications of Distance,” Critical Inquiry 21, 1994: 46–60). This “philosopheme” found its way into literature with Honoré de Balzac, in whose novel Father Goriot we find the following dialogue, which plays simultaneously on the superficial education of the protagonist and the conventional reference to Rousseau as the intellectual father of the Revolution, of Sentimentalism, and at the same time of the Terror (see F. Falaky, “Reverse Revolution: The Paradox of Rousseau’s Authorship,” in M. Thorup and H. R. Lauritsen (eds), Rousseau and Revolution. London and New York: Continuum, 2011)].

7

[The german term Aufhebung in the tradition of Hegel implies both the abolition (negation) of an old form or institution and the conservation (of the “positive” or “functional” aspects) of what has been negated in a new form.]

8

[Polanyi uses this heading in the main text to refer to this section.]

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Part One: Problems The philosophical outlook of The Great Transformation (1944) is to be expanded here beyond the brief hints in which that book closed. Our technological civilization in its latest phase is resulting in a shift in the axis of concern—away from the economy, towards moral and political questions, some of them entirely new. From behind the veil of the market-economy questions arise that transcend the economy and are constitutive to a technological civilization. The self-regulating market may well have been the earliest sphere in society to carry those imprints of the machine: efficiency, automatism and adjustment. But not the economy alone, society itself seems to be reconstructed around the machine—taking its forms and objectives from the needs of the machine. For technology does not only spin us around as persons to focus our concern entirely on the external; it also turns society itself inside out. The material surroundings, projections of the machine, are not our only artificial environment; this environment also comprises a society, of which the machine itself is the texture. At the core of the human situation is the loss of freedom. The machine activated the mass as individuals in the market, factory and union, directing their minds towards the institutional realities on which their lives are dependent. Society became more mechanical and more intensely human at the same time. A climax in this polarity was reached with the transformation of matter and the simultaneous invention of mass media that attack the mind. The individual found himself trapped—turned into a mere lump of matter that could be vaporized by the hundred million, while as a moral being he was incorporated into a human structure from which no release is possible. The history of the past decade reflects the new perils. The threat of another general war came from three sources, which, insofar as they have a common origin, is the Industrial Revolution: the atom, the Afro-Asian industrial awakening, and the power vacuum separating two technological giants—each factor reinforcing the other two. Under the shadow of nuclear war and the fear inherent in a precariously based technological existence, there developed a challenge to liberty, in some great countries to the point of its utter extinction, in others to that of crippling conformity. But the violence with which the new fear undermined peace and freedom sprang from a passion for moral absolutes. The

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very notion of tolerance was banned. A roaring idealism was swinging a boundless technology. Pseudo-idealistic demands for value-fulfillment through war and devastation grew to a totalitarian vehemence entirely unrelated to the ethical realities, of either personal or social standards. At the root of it all is despair. Man’s inner life is at the point of extinction because he has lost hope of the individual freedom which nourished life. Inner and outer survival require a realism that we do not yet possess. No solution is in reach without a reform of our consciousness that postulates freedom in the face of the reality of society. we are groping for answers. Part Two: The growth of a complex society The human story of the machine is still to be written. Robert Owen’s vision encompassed its phases: that it would create a specific economy; change our physical environment; call for a reform of religion; test the limits of the value of society to man; and, produce a new form of human consciousness. Implicit in this act of penetration of the future, equaled only by Dostoyevsky’s anticipations, was the conviction that there must be acceptance of the machine as a liberator from toil; adjustment of habits and manners so that human life could continue in a machine world; institutional changes to secure justice for the common people. Then would man discover society and its power to set a limit to reform. Yet a premature resignation was not permissible. Man could not know how far human society could be shaped and molded. No sciences could ever tell us what was humanly possible at the boundaries. These must be ascertained in the very effort of transcending them in the selfless service of the good. Machine-created society caused some great calamities and helped to secure others. The market system maintained a century of peace between the great powers but infested the continents of the non-white people with cruel wars of conquest and subjugation. Rural servitude was replaced by the ambiguous freedom of the cash nexus. Satanic mills ground men to mire yet eventually they released a great flow of material commodities for all. Thus were peace, freedom and livelihood wrecked, but in the long run restored through the economic effects of the machine. Its cumulative impact on the forms of life reached an even greater depth. There came time when the external world it had created left man empty, frustrated and self-alienated. even so adjustments were possible, and technology itself helped to fill the gaps it had torn in the tissue of existence. However, the machine did not reverse its course. Society made the powerhouse and the factory its home; the ideal was the average, interchangeable man, the spare. Science, the handmaiden of the machine, created super-

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explosions and mass-media. The physical fear generated by the atom was of an order different from the common fear; and the congruence of mind patterns produced by the media was immediate and precise. The flash of Hiroshima lit up a human void. The promise and postulate of Jewish-Christian religion of the absoluteness of the individual’s inner freedom, freedom also from society, had yielded step by step to the complex society engendered by the machine. Part Three: Dilemma ever since man started out on existence, he owed the content of his life to the realization of truths with which he could not live as he was. There was the fact of physical death, the finiteness of his animal existence in time. From its acceptance sprang work, art, law and morality. He then found himself with the knowledge that he could also lose the life he had, by denying his true self; he could lose his soul. Such living death was as manifest as death itself. The more clearly the teaching of Jesus was understood, the more awful was that knowledge. Again, man as he was could not live with it. He was, in effect, transposed into a condition of the utmost singularity. He was now burdened with a load too great to be borne and yet of which he could not rid himself. This cross is what we mean by freedom. The hope and the duty of living in this state is the universally accepted content of the human condition familiar to the western world. Hence the unique significance to us of that hope. It will be realized that Robert Owen foresaw the end of the individual’s freedom of society. Once again the question is how then are we going to live. That threat has been growing upon us ever since the machine, used for production, first brought mechanical compulsion to the workingman. From that seed grew the roots and branches of our external existence which led to a reality as unyielding to individual volition as is the national system of powerworks that feeds the light to the lamp by which I am writing. Only by the lessons of our own history can we learn the limits of society. The liberal market utopia of the Nineteenth century, the anti-liberal socialism of the Russians have taught us some of the inevitable alternatives inherent in social existence. we are on the horns of a dilemma: either to ignore the reality of society in the name of moral absolutes and helplessly accept the semblance of freedom; or to relinquish such absolutes, recognize the reality of society and ground our institutional freedoms upon it. Part Four: Answers The way to prevent freedoms from disappearing is to expand them. Free institutions are a cultural trait which it is within our jurisdiction to discard or to restore. Conformity is a shrinking of our freedom to differ. Liberal arts shall neutralize this eroding of freedom by throwing the weight of their

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authority behind the opinion which protects the rights of minorities, on principle. The danger in occasionally fostering the intellectual exhibitionist and the moral egotist is no more than that of creating nuisance, while to fail to encourage, day and night, independence of character and mind brings upon the community the peril of extinction. A thousand pocket McCarthys, pursuing their several fads, each on his own, do not add up to the damage done by a single one brandishing the cat o’ nine tales of conformism. McCarthy was not responsible for McCarthyism—he merely picked up the deadly poison of conformism that the educators of the nation had concocted for medical purposes and left lying around. There were days when not a single American, even had he been the head of state, dared to question the authority of McCarthy in pronouncing a moral death sentence against any man, guilty or innocent. An inconspicuous culture trait, the polite social habit of conforming, had dissolved the Constitution of the United States. Yet another inconspicuous culture trait, the impolite habit of upholding one’s standards, may restore it over night. To deflate the authority of averagism, a stigma should attach to the winning of its competitive prizes. Freedom in a complex society requires an inviolable passport. The individual must be protected against undue pressure, whether from person or firm, association or corporation, custom or law. The principle of conscientious objection involves as its sanction a hardship clause that offers a fair alternative to the exempted. A niche that would rank only a second best with the conforming, but makes a real home for the nonconforming, shall shield us wherever possible from the implicit hazards of unavoidable compulsion. An extension of “Habeas corpus” into industry permits the representation of the works to attain complete unity and responsible national status, while protecting each single member against abuse of power. Courts can be relied upon to uphold inalienable rights against all comers as long as the laws are universally approved. Habeas corpus and conscientious objection are the Anglo-Saxon devices of tolerance, that show what direction civil liberties take as they expand into the industrial field. Other cultures may produce other devices. Tolerance shall rise from the status of a kind habit to the firm principle taming the demonic forces in us that seek an idealistic compensation for the failure to apply to our own life and environment the precepts we preconize. All men of good will shall rally on principle to the protection of minorities. world economy shall be restored by instituting the de facto application of economic policies that ignore differences between domestic economies. The modest culture trait of tolerance can become the polar star around which the moral virtues revolve. The reality of society is the indissoluble consequence and burden of our life as persons in an industrial society. we can not pursue our absolutes in search of salvation because we are flung

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headlong against that reality. It consists in our inevitable compelling involvement, however unwilling, in its basic constituents: the creation of power and determination of economic value. It is illusion in a complex society to imagine that we may pursue our freedom as personal salvation without reference to participation in society itself. The spiritual forces that are ready to take over in our personal lives are dispersed to-day in a windmill fight against the reality of society. Moral courage shall reveal the inner limitations of technological progress and freedom. The search for limits is maturity.

NOTeS 1 [Unpublished typewritten manuscript in english, April 24, 1957]