A Transformation that Works
Perhaps more than anything else, The Great Transformation highlights the incredible power of human ideas, the need for these ideas to benefit all, and what could result when these ideas miss the mark. Polanyi argues that market liberalism, regardless of how good the intentions of Friedrich Hayek and other proponents may have been, is significantly responsible for disrupting 100 years of global peace, creating World War I[1], as well as precipitating the Great Depression[2], widespread poverty and unemployment in developing nations[3].
These far-reaching effects suggest the need for a serious critique of the thinking behind leadership decisions and its potential ramifications for present and future generations within and beyond our immediate contexts. Subsequently, Jim Collins urges marketplace and social-sector leaders to lay aside sentiments and “confront the brutal facts” about their current realities and where today’s decisions might lead to[4]. In other words, there is no room for political correctness. Instead, we must stand firm, albeit diplomatically and respectfully, on decisions born out of rigorous research. Following the discovery of our unique and wholesome ideas, Collins calls us to pursue these with humility and fierce resolve[5]
Therefore, if pursuing either market liberalism or socialism is not the way forward, judging from the observations of Polanyi and the collapse of the Soviet Union, perhaps the answer lies in a combination of the two ideologies in a way that synthesizes the best of both and is contextualized to meet the unique needs of each country by indigenous, God-fearing, enlightened, and globally-minded leaders in the public and private sectors. Kishore Mahbubani, a Singaporean academic and former president of the UN Security Council, encourages developing nations to adopt this type of unconventional wisdom. According to him the conventional development theory passed on to Third World societies has “truly not worked[6].” Therefore, in addition to free markets, Mahbubani advocates for self-examination, integrity, hope, and other important values in the journey to development.
Similarly, Collins insists that free markets may result in prosperous societies but not great ones. To have great societies, Collins suggests a combination of great companies and great social-sector organizations. In other words, a combination of market liberalism and socialism. Perhaps, as The Protestant Ethic teaches, this is a time to revive the connection between Biblical values and economic progress[7]. Indeed, in Biblical times, Israel and the early church were invited to work hard[8]. But beyond hard work, they were also instructed to be compassionate towards[9] and remember the poor[10]
In contemporary times, Israel has pursued market liberalism so well that she “represents the greatest concentration of innovation and entrepreneurship in the world today[11]” and has been described as the Startup Nation. Consequently, the nation has attracted investments from some of the greatest companies on earth, although there is an ongoing threat from less-than-friendly neighbors[12]. Yet, from the early days of the re-birth of the nation, modern-day Israel also recognized the need to care for the less-privileged through a socialist practice described as “the world’s most successful commune movement[13].” Israel established and continues to run a significant number of Kibbutzim. These are a “gathering” or “collective” created as “agricultural settlements dedicated to abolishing private property and to complete equality[14].” So, taking a cue from The Great Transformation, may we all move forward with an understanding of the strengths and weaknesses of market liberalism, and craft an economic model that will work for the common good.
[1] Polanyi, Karl. The Great Transformation: The Political and Economic Origins of Our Time. (Boston: Beacon Press, 2001), 99.
[2] Polanyi, The Great Transformation, 20.
[3] Ibid, 15.
[4] Collins, Jim. Good to Great: Why Some Companies Make the Leap and Others Don’t. (New York: HarperCollins, 2001), 65.
[5] Collins, Good to Great, 39
[6] Mahbubani, Kishore. Can Asians Think? (Singapore: Marshall Cavendish, 2009), 68.
[7] Weber, Max and Talcott Parsons. The Protestant Ethic and the Spirit of Capitalism. (Kettering, OH: Angelico Press, 2014), 15.
[8] Proverbs 22:29
[9] Proverbs 19:17
[10] Galatians 2:10
[11] Senor, Dan and Saul Singer. Start-Up Nation: The Story of Israel’s Economic Miracle. (New York: Twelve, 2011), XVI.
[12] Senor and Singer, Start-Up Nation, 145.
[13] Ibid, 108.
[14] Ibid, 108.
About the Author
Henry Gwani
Follower of Jesus, husband, father, community development practitioner and student of leadership working among marginalized communities in South Africa13 responses to “A Transformation that Works”
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Henry, I am envious of your grasp of economic issues on a global scale and how well read you are on this topic! I’m curious – you reference Jim Collins in this post and you have done so before – is he one that you would recommend to read on this issue from a Christian perspective? If so, how have you put into practice his ideas in your context? If not, who do you recommend as someone to read? I ask because this topic looms very large to me at the moment.
Roy, you are very gracious. Although I am quite passionate about economic issues, I often wish I had a bit more understanding into the subject, especially how to help alleviate poverty. Anyway, about Jim Collins, I think he is one of those few people who are not followers of Jesus, yet have been repeatedly featured in Christian leadership events (Willow Creek’s Global Leadership Summit). I think one reason for this is that his ideas agree a lot with scripture. Outside of the Bible, his books are some of the best I have read on excellence in business and the social sectors. One of his ideas that I am trying to implement in my context is what he refers to as first who … then what. This is about investing more time and energy in recruiting the right people than developing the right vision, mission, strategy, goals, etc. Because if you get the right people, who are intrinsically motivated to do right thing to the best of their abilities regardless of compensation, and are a good fit for their job and organization, they will help you shape the vision, etc. He suggests this based on research. Screening this idea through the lens of scripture, I realize Jesus invested a lot in recruiting His team of 12. Like all of us, they were not perfect. But we all agree they’ve done an outstanding job. My two cents!!
Your views about synthesizing different ideologies are well articulated. Debates about macro-economic policy can get entrenched in philosophical battles and less and less attached to the real world economy. Capitalism does not have to be a cookie-cutter template for every nation to use. It is flexible enough that it can be adapted, tweaked, altered to fit into the historical/political situation of every country. Have you seen how it can be altered in your own country and other surrounding countries?
Troy, I fully agree that capitalism must be tweaked to fit into the unique historical/political situation of every country. Considering the extreme levels of corruption we see in my context – among senior public and private sector leaders as well as at the grassroots – I think the way capitalism would best serve my context would be to have benevolent dictators lead, not democrats or self-centred dictators. Benevolent dictators should lead until a culture of integrity has been given a chance to replace the culture of corruption, then we all will be ready for a western model of democracy and capitalism. I think this is what happened in Singapore (under Lee Kuan Yew) and is happening today in Rwanda (under Paul Kagame). The only biblical example I can think of now is when Jesus went into the temple and overthrew the tables of the moneychangers (Mark 11). He was radical, but we all know He had the best interest of the people at heart. Likewise, we need leaders (public and private sector alike) who will manage our capitalism with zero tolerance for corruption until we abandon our current inclination for corruption in favor of an inclination for integrity/meritocracy.
Henry: I echo Roy’s comment on how inspiring your knowledge of global economics is and your ability to look at different contextual frameworks and how concepts can be applied in your own.
You state, “perhaps the answer lies in a combination of the two ideologies in a way that synthesizes the best of both and is contextualized to meet the unique needs of each country by indigenous, God-fearing, enlightened, and globally-minded leaders in the public and private sectors.” Do you think this is something that could be realized in South Africa? Are there any efforts currently underway that point towards this end that you know of?
Kayli, much thanks. Yes, I think combining capitalism and socialism in South Africa is possible. But I think it will take a critical mass of public and private sector leaders that are prepared to be unpopular today in their pursuit of a future that will benefit the majority of the country. I think some of current leaders are on this direction but a bit more are needed to reach the tipping point. One effort in that right direction is being run by a Christian NGO. They train and mobilize unemployed youth to clean up some beaches/parts of my city and operate a recycling program that is making a difference in the city. I like this model because it highlights the role of all stakeholders (not government alone) in community transformation. By selling the recycled material to big companies, this NGO practices capitalism. By training and employing economically-disadvantaged youth, this could be a form of socialism, I think.
Henry,
I loved reading this post and your ability to wrap in so many different sources to make your point. For me, your statement at the end is spot on: “may we all move forward with an understanding of the strengths and weaknesses of market liberalism.” The reality, we are where we are, history is what history was, and now it is time for us to learn from the past (our failures as well as successes), the Bible (and Holy Spirit), and lead toward the common good.
In your place of ministry and life, in the ideal world, what does this “common good” look like?
Much thanks Eric. I agree that we must use the past to redeem the future and also seize the moment. In my mind, the “common good” would be empowering the poor in the five critical areas Rick Warren describes as the five Goliaths: spirituality, education, health, leadership and economics. I think if we get it right in these areas, it will catalyze transformation in other areas of need.
Ty Henry for your great connections in post.
I loved your insight on “perhaps the answer lies in a combination of the two ideologies in a way that synthesizes the best of both and is contextualized to meet the unique needs of each country by indigenous, God-fearing, enlightened, and globally-minded leaders in the public and private sectors.” I am curious what are some values you try to teach into your ministry community to help them to grow up as an “indigenous, God-fearing, enlightened, and globally-minded leaders in the public and private sectors?”
Henry I always appreciate your gift of tying our readings back to scripture.
Although I do appreciate this idea you quoted, “Israel established and continues to run a significant number of Kibbutzim. These are a “gathering” or “collective” created as “agricultural settlements dedicated to abolishing private property and to complete equality” a number of the Kibbutiz are developed on land that the government acquired in less than honorable ways…truly at the expense of Palestinian people. How might we find ways that engage these “ideals” of taking care of poor or finding “equitable” living without doing so at the expense of other human beings?
Thank you, Nicole…I was going to ask the same question, knowing that a good part of the modern State of Israel’s economic success has been built on land and resources stolen from Palestinian families.
Henry, thank you so very much for your thoughtful and thought-provoking post on Polanyi’s work. Like others, I very much appreciate your proposal–that somehow a way forward could include the best of both market liberalism and socialism. I also appreciated your comment on the roll of stakeholders in holding companies accountable to values and realities wider than merely profit (in your reply to Kayli). I’m wondering if you have read anything about stakeholder capitalism and how you think Polanyi would evaluate this proposal for holding capitalism accountable? I’m just starting to delve into this topic (of stakeholder capitalism).
Henry, I appreciate your engagement with Polanyi’s book. I found your opening statements to be powerful and engaging, particularly “The Great Transformation highlights the incredible power of human ideas, the need for these ideas to benefit all, and what could result when these ideas miss the mark.” I would be interested to hear more about what you mean by “there is no room for political correctness.”