Who is Kayl Polanyi and what does he want?

I've been reading a lot about John Maynard Keynes recently (The General Theory of Employment, Interest and Money is on the reading list) in the context of the recent global credit crisis and coming recession.

Another name that occasionally crops up is Karl Polanyi.

Polanyi was a Hungarian academic who fled fascism and ended up in Canada. He wrote a book called The Great Transformation (also on the reading list).

Anyway I suspect Adrian Pabst has got the wrong end of the stick in this article:

Crucially, Polanyi's vision for an alternative economy re-embedded in politics and social relations offers a refreshing alternative to the neo-liberalism of left and right.

(((I'm almost certain our current economy is embedded in politics.)))

In practice, an embedded model means that elected governments restrict the free flow of capital and create the civic space in which workers, businesses and communities can themselves regulate economic activity.

(((So I'd be helping regulate the economy? Cripes! But what if I'm not smart enough?)))

Instead of free-market self-interest or central state paternalism, it is the individual and corporate members of civil society who collectively determine the norms and institutions governing production and exchange.

(((So: Instead of building a system of free-market self-interest where people ask for stuff and other people supply that stuff, and instead of a system where we elect politicians who decide which stuff gets made and then gives that stuff to people we have a system where ---- what?

I just don't understand what he means by "individual and corporate members of civil society who collectively determine the norms and institutions governing production and exchange." It sounds pretty much the same as the system of liberal democracy combined with free, regulated markets that we already have.)))

I honestly don't know what to make of this article. I will have to read Karl Polanyi's book.

Madeleine Bunting also comments on Polanyi with reference to Friedrich von Hayek (author of The Road to Serfdom, also on the reading list)

Hayek became the founding father of a model of economic management which has brought us to the current crisis; Polanyi, with extraordinary prescience, warned that the crisis would come; he rejected the idea that the market is a "self-regulating" mechanism which can correct itself. There is no "invisible hand" such as the neoliberals maintain, so there is nothing inevitable or "natural" about the way markets work: they are always shaped by political decisions.

FWIW I feel like I've come late to the party vis a vis this particular argument.

I don't much care how general happiness is achieved, as long as it is achieved. I have yet to decide if globalisation works or not, or if it is even a meaningful question.

By way of a conclusion, I'd like to point to this fascinating article on Keynes the hippy in The Times:

For Keynes, economics was a dirty game, and the business of earning and spending was a sordid obligation that humanity should shrug off as soon as possible. In the 1930s he believed that until we had developed our economy and technology sufficiently to support our human material requirements “we must pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still.”

But once we had got ourselves “out of the tunnel of economic necessity into daylight”, he predicted: “I see us free to return to some of the most sure and certain principles of religion and traditional virtue - that avarice is a vice, that the exaction of usury is a misdemeanour and the love of money is detestable...We shall once more value ends above means and prefer the good to the useful. We shall honour those who can teach us how to pluck the hour and the day virtuously and well.” He thought that we would flourish in the arts, in culture, and even perfect the ultimate refinements of beauty and friendship.

Capitalism then, should be thought of as a multi-generational project (like the Enlightenment project) the sole aim of which is to develop humanity to an economic and technological level where wealth and prosperity are such that we can stop working and consuming and concentrate on the things that actually matter, like science, art, friendship, and all that good stuff.

The job we have now is to identify the systems of resource allocation (e.g. free markets, state-supervision) that will get us to the end game of collassal personal wealth for everyone and low growth rates (because of the finite resources at our disposal).

This state could be called "eco-affluence."