Warnings About the Market Economy
The main thesis of Polanyi’s seminal work on the transformation of societies from traditional to market economies is that the “Industrial Revolution was merely the beginning of a revolution” that marked the end of an era that seemed to protect human dignity and relationships in a way that Polanyi assumed would be lost in the new market economy where everything will have a price. It was, according to Polanyi, “a revolution as extreme and radical as ever inflamed the minds of sectarians, but the new creed was utterly materialistic and believed that all human problems could be resolved given an unlimited amount of material commodities.”[1]
According to Block, “Polanyi argues that creating a fully self-regulating market economy requires that human beings and the natural environment be turned into pure commodities, which assures the destruction of both society and the natural environment.”[2] Block argues in the Introduction to the book that there are two “levels” to Polanyi’s argument: one is a moral argument against the objectification of persons that a market economy creates, and the second involves the role of the state in managing what the self-regulating market cannot do, which is to prevent over-inflation and over-deflation.[3]
With regard to the first, it is very easy to point to examples all over the world. For instance, the controversy over the building of the Keystone Pipeline for economic purposes over the way of life of the Native Americans who hold this land to be not only sacred but also essential for maintaining their sense of well-being in the world, proves Polanyi’s point. I think, however, it would be too simplistic to blame all economic exploitation of people in the last century on capitalism alone. Traditional societies were not immune to exploitation nor the violence that comes as a consequence of greed. The issue is not whether there is an economic system that can create a utopian society, but which economic system allows societies to function more humanely than others, and which economic system swings wide the door for abuse and the devaluing of human dignity.
With regard to the role of the state in managing what the self-regulating market cannot do, one economist who may be considered a Polanyi scholar from an Islamic perspective, Asad Zaman agues: “Unregulated markets are so deadly to human society and environment that creation of markets automatically sets into play movements to protect society and environment from the harm they cause. Paradoxically, it is this counter-movement, this opposition to markets, that allows markets to survive.”[4] Polanyi describes this kind of regulation as the “Double Movement” and therefore capitalism must be considered by examining both the forces that seek to liberate people from over-regulation and the forces that then seek to protect people from the consequences of “unregulated markets.”[5]
Like many, I’m concerned about issues of systemic injustice and oppression around the world. Polanyi has helped me see with a little more clarity how we got here. In North American capitalist society, as a Christian, I have always been taught that the church’s job is to stand in the gap to make up for what neither the government nor the market economy was able to do. In this view, the church then joins the government in this “Double Movement” to seek to protect people from the consequences of unregulated markets. So we set up homeless shelters and food banks, which seems to perpetuate the system. I wouldn’t recommend this, but I wonder if the church (and all religious groups for that matter) decided to stop standing in the gap and making up for the failures of capitalism, would capitalism survive, or would the world need to revert back to traditional societies?
This past week I was in Barranquilla, Colombia, with members from the Presbytery of Seattle. We are in the fourth year of our partnership with the North Coast Presbytery in Colombia. The partnership upholds values of mutuality, companionship, accompaniment, and advocacy. A multitude of complex problems currently the nation in it’s current fragile state of transitioning from civil war to peace. One of the challenges facing the North Coast Presbytery (and the Seattle Presbytery through partnership) is how to ensure the human rights of los campesinos. The campesinos are peasant farmers who basically became overlooked and exploited by the emergence of the market economy.
The community of campesinos we are working with have been displaced six times. In the traditional economy in Colombia, land was passed down with title from one generation to another. The campesinos have worked and lived on the land from generation to generation as organic farmers. Their identity is in the land and their work. But in the last fifty years, with the establishment of land ownership represented by title as proof of purchase, big business has colluded with government to displace los campesinos on a multitude of occasions, from farm lands that have been passed from generation to generation, because the land was deemed economically advantageous, seemingly more valuable than the economic life of los campesinos. Campesinos get thrown into a bus and literally dropped off on a new piece of land without economic value and are encouraged to start their lives over in a new place with no protection. So they go to work to rebuild a new farm.
Colleagues of mine stood with los campesinos on their farm and wept as bulldozers rolled through wiped their homes and crops away. Our presbyteries and a local Rotary Club are working with the local government to get the campesinos road access and solar panels for energy, along with a pump for their well and most importantly, official title for their new land. Progress is being made, healing is underway and hope is alive, but this story is an extreme case study of the travesty that the new market economy created for people who only knew a traditional economic social way of life, as Polanyi would argue.
Followers of Jesus are called to look at the world with a particular concern for the poor and the vulnerable. When Jesus reminded the dinner guests at Simon’s house that “the poor will always be with you,” he wasn’t suggesting the church should be so “heavenly that we’re no earthly good,” but he was implying that there is no economic system that will eliminate poverty and exploitation of the vulnerable, for this is ultimately a problem of the human heart. So, Christians are to challenge systems that encourage greed and exploitation, without assuming that they ultimate answer to poverty is a different economic system.
[1] Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time, 2nd ed. (Boston, MA: Beacon Press, 2001), 42.
[2] Ibid., xxv.
[3] Ibid., xxv-xxvi.
[4] Asad Zaman, “Summary of the Great Transformation by Polanyi,” WEA Pedagogy Blog, August 28, 2013, https://weapedagogy.wordpress.com/2013/08/28/summary-of-the-great-transformation-by-polanyi/ (accessed February 1, 2018).
[5] Ibid.
About the Author
Chris Pritchett
6 responses to “Warnings About the Market Economy”
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Hi Chris,
SOLID is your post. Especially with your recent experiences and first hand witness.
I loved your ending, “for this is ultimately a problem of the human heart.” Yep, I think you nailed it and I think Scripture would support you.
And I agreed with you on, “Christians are to challenge systems that encourage greed and exploitation…” We sure learned that in South Africa!
I have to be honest, I think the church is a much better vehicle to accomplish this than any government. Would you agree?
Happy Birthday Chris! Another great blog post as usual. I love this part of your post…”When Jesus reminded the dinner guests at Simon’s house that “the poor will always be with you,” he wasn’t suggesting the church should be so “heavenly that we’re no earthly good,” but he was implying that there is no economic system that will eliminate poverty and exploitation of the vulnerable, for this is ultimately a problem of the human heart. So, Christians are to challenge systems that encourage greed and exploitation, without assuming that the ultimate answer to poverty is a different economic system.” I couldn’t agree more! The church is called to meet the needs of our hurting world, not push it off to the government or economic system. I also appreciated you bringing in real-life examples from your mission trip. Great work for the Kingdom!
Hi Chris,
Reading your post brought me back to mi querida Colombia. Thanks for sharing from your trip. I’ve seen similar situations there and in other developing world locations as capitalism’s ugly side is experienced more acutely than we tend to see in North America.
Peruvian economist Hernando de Soto believes that the key to capitalism’s dark side being restrained in the developing world is for the poor to obtain title on the plots of land they work and for the simplification of bureaucracy to ensure that happens. He demonstrates this in his book, The Mystery of Capital – I think you’d enjoy it. Advocating for the poor to obtain land title may be a strategic way for the Presbyteries to collaborate. With the Seattle presbytery as a partner and strategic witness, they would be less likely to be ignored by the system.
https://www.amazon.ca/Mystery-Capital-Capitalism-Triumphs-Everywhere/dp/0465016154
Thanks for this book recommendation, Mark! That’s exactly what we’re doing. 2/3 of the campesino communities we’re working with have gotten title in the last year, and the third is in their final stages. What an affirmation! Buying the book now…
Hi Chris! Great post! This…”I wouldn’t recommend this, but I wonder if the church (and all religious groups for that matter) decided to stop standing in the gap and making up for the failures of capitalism, would capitalism survive, or would the world need to revert back to traditional societies?” speaks to me. I wonder the same thing, however I don’t think the church is filling enough of the gap? There are a lot of non-profits or NGO’s that aren’t necessarily faith based that meet needs. One thing is for sure – capitalism is not sustainable if someone doesn’t address inequality and systemic oppression. So glad to hear about your Columbia trip. You have the same heart for the vulnerable and oppressed that I do.
Chris, I was hoping you would include your experience in Colombia. There is so much we can learn from being outside our comfortable life. Globalization and interconnected systems make us all responsible in the abuse around the world. Thanks for your perspective.