Capitalism: A temporary solution
In reading The Great Transformation by Karl Polanyi, I paused frequently, reflecting that this man seems to be a prophet ahead of his time. His seminal work outlines the history of the liberal self-regulating market, now a globalized phenomenon and is an inescapable structure within societies. Written in the latter years of World War II, he predicted the end of market capitalism by 1944.[1] Prophets may not always be perfect with their timelines. But perhaps the end of market capitalism as we have known it is still to come.
We are certainly seeing signs of the disintegration of market capitalism. While at one time, so much good came from the power of the markets to raise living standards around the world, we now see major cities becoming unaffordable for the young[2], a widening chasm between the haves and have-nots, and a retraction from decades of movement to freer markets towards protectionism, exemplified by Brexit and Donald Trump’s crusade against NAFTA.
The chief problem with market capitalism, according to Polanyi, is that it assumes that land, labour, and capital are commodities to be exchanged. As a result, problems such as human trafficking, food insecurity, expensive healthcare, and unaffordable housing remain intractable social issues in most globalized contexts. Capitalism tolerates the existence of poverty in our midst. Within an amoral system where the quest for gain is the main driver, there will always be winners and losers. People, those made in Christ’s image, are commodified and reduced to a barcode to be scanned. Polanyi believed that self-regulating capitalism lacked a moral centre. He states, “The true criticism of market society is not that it was based on economics … but that its economy was based on self-interest.”[3]
A critique of Polanyi as a moral economist came from William Booth’s more recent work, On the Idea of the Moral Economy. Reviewer Sener Akturk reveals contradictory evidence for the morality of market capitalism:
“Booth asserts that, contrary to Polanyi’s view, market society has moral foundations (1994: 661). Market liberalism is embedded’ both institutionally via property rights made operative in the form of law, and normativity-ethically via the egalitarian universalism of market exchange (1994: 661). Free markets as arenas of exchange do not discriminate on the basis of race, religion, ethnicity, sex, or any other criteria apart from having enough money to purchase the desired goods.”[4]
Polanyi’s thesis surprisingly coincided with themes present in David Bebbington’s survey of British evangelicalism[5], particularly during the Victorian Age. Motivated to tackle perpetual societal problems of poverty, homelessness, child labour, and hunger exacerbated by being on the wrong side of the Industrial Revolution, evangelicals crusaded to reform their society through a pietistic message of salvation and good works. However, Polanyi provides the context. He states that social injustices existing because of free-flowing capitalist expansion became the evangelical focus. But because the gospel was focused on the individual and not the redemption of society, the full extent of the good news was not proclaimed.
“…[T]he more readily the poor acquiesced in their condition of degradation, the more easily they would turn to the heavenly solaces… But these empty husks of Christianity on which the inner life of the most generous of the upper classes was vegetating contrasted but poorly with the creative faith of that religion of industry in the spirit of which the common people of England were endeavouring to redeem society.”[6]
Hannah More’s Cheap Repository Tracts could only offer a “practical transcendentalism,”[7] not a renewed, just society. Evangelicalism just didn’t go far enough. We need faith that speaks into society and changes systems as well as individuals.
In our capitalist societies today, grave inequalities continue to create opportunities for evangelicals to assist. Indeed, evangelicals are often on the front end of campaigns to offer their support. It is ironic that philanthropy, representing the proceeds of capitalistic success, is channelled towards areas of need in society which have been destroyed by capitalistic excess. I believe that philanthropy is a stop-gap solution for the period we are living in. It isn’t the permanent, ideal way to assist those who have need – it is often just a band-aid covering a gaping, bloody wound.
As a former board member of Opportunity International Canada, I’ve had multiple occasions to see their work firsthand in countries as diverse as Colombia, Ghana, and Indonesia. Opportunity is a Christian NGO which offers microfinancial products – small loans and insurance – to the poorest of the poor who can’t qualify for a bank loan but often depend on loan sharks charging egregious repayment rates. I’ve walked through dozens of slums, visited clients in hundreds of simple shacks, and seen the gratitude on the faces of the entrepreneurial poor as they discover a way out of endemic poverty. Opportunity is a big believer in the power of creative capitalism. But it’s an even bigger believer in the power of Christ to heal and transform society. The first solution is just a temporary one. It’s Jesus who will lead us in a societal transformation towards justice and peace for all.
Isaac William Martin, sociologist at the University of California, San Diego, states: “In place of the image of society as a coherent, unified subject with mysterious powers of self defense, their reconstructed Polanyi gives us a vision of society as an articulated set of arrangements for living—or as a congeries of ‘‘multiple social institutions and dense networks of social relationships’’ (p. 226).”[8] In this picture, there is a seat at the table for the church. May we step up, offer our networks, systems, and faith in Christ coming to reorder all things, and to reformat how we live in this world tomorrow.
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[1] Martin, Isaac William. “Reading The Great Transformation.” Contemporary Sociology 44, no. 2 (March 1, 2015), 163. Accessed on February 1, 2018. https://doi.org/10.1177/0094306115570270b.
[2] http://www.macleans.ca/economy/torontos-unaffordable-why-cant-halifax-or-saskatoon-take-advantage/, Accessed on February 1, 2018.
[3] Polanyi, Karl. The Great Transformation: The Political and Economic Origins of Our Time. (Boston: Beacon Press, 2001), 257.
[4] Akturk, Sener. “Between Aristotle and the Welfare State: The Establishment, Enforcement, and Transformation of the Moral Economy in Karl Polanyi’s The Great Transformation.” Theoria: A Journal of Social & Political Theory, no. 109 (April 2006), 102.
[5] Bebbington, David W. Evangelicalism in Modern Britain: A History from the 1730s to the 1980s. Routledge, 2002.
[6] Polanyi, 180.
[7] Polanyi, 179.
[8] Martin, 165.
About the Author
Mark Petersen
Mark Petersen is the CEO of Stronger Philanthropy, a Canadian firm specializing in maximizing family philanthropy. He leads a diverse group of visionary individuals, foundations and organizations to collaborate in leveraging wealth for charitable impact.16 responses to “Capitalism: A temporary solution”
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Mark,
Good economist nugget from you here, “There will always be winners and losers. People, those made in Christ’s image, are commodified and reduced to a barcode to be scanned.” Satan just loves that, taking the image of Christ out of His creation, so that he can destroy, kill, disrupt, and render useless anyone trying to find or associate with Christ the Lord.
You got graphic with the “gaping, bloody wound” even for you! I like it! I can tell you are passionate about philanthropy as the short-term solution for some long-term problems of hunger, poverty, shelter, and safety.
Unfortunately, this world has a shelf-life that is ticking away according to God’s sovereign master clock. Since He is not time bound, He knows our ending before we get there. I like the parable of the talents when it comes to philanthropy (Matt. 25:14-30 and Luke 19:12-27). How do you think Polanyi would square his socialist economy theme against this teaching from Christ?
Stand firm,
M. Webb
I can’t understand how pure socialism could work, just as I have problems with pure capitalism. Fortunately we have the example of how philanthropy can modify the excesses of capitalism.
I think when the faithful stewards reaped massive gains from investing their talents, that their faithfulness to their Master compelled them to share their earnings with those who had need. Of course, in this parable, we don’t hear that part, but we do see this behaviour modeled by Christ and evident in the early church.
Hey Mark, I really like this statement: ” I believe that philanthropy is a stop-gap solution for the period we are living in. It isn’t the permanent, ideal way to assist those who have need – it is often just a band-aid covering a gaping, bloody wound.” And then you later talk about the church having a seat at the table. What do you see as the role of the church? How do we (the Church being the people of God) take our place at the table?
Jenn,
I see the church showing up by choosing to participate in our societies, not by judging or moralizing or proselytizing, but by actively contributing to the well-being of culture. In other words, we need Christians who live out their faith and ethics as lawyers, entrepreneurs, city planners, engineers, teachers, accountants, etc.
An organization that has done good work in this regard in Canada is Cardus, a Christian think tank dedicated to the renewal of social architecture. There’s lots at the link below to whet your appetite.
https://www.cardus.ca/
Hi Mark,
My mind gravitated to your thought, “It’s Jesus who will lead us in a societal transformation towards justice and peace for all.” Amen, my Brother.
It was a bold and daring statement to say that Philanthropy is just a temporary band aid. Wow, well said!
Not that we should just give up (and I don’t think at all you were saying that), we must continue to be generous and philanthropic!
Both of our dissertations will back that up…
I’m not giving up! Thanks Jay for your support.
Great post as usual Mark! This last statement nailed it for me: “Isaac William Martin, sociologist at the University of California, San Diego, states: “In place of the image of society as a coherent, unified subject with mysterious powers of self defense, their reconstructed Polanyi gives us a vision of society as an articulated set of arrangements for living—or as a congeries of ‘‘multiple social institutions and dense networks of social relationships’’ (p. 226).” In this picture, there is a seat at the table for the church. May we step up, offer our networks, systems, and faith in Christ coming to reorder all things, and to reformat how we live in this world tomorrow.” I completely agree the church needs to step up to the table and offer the amazing resources we have in order to give lasting hope to the world. Good word sir!
And your work as a therapist is definitely part of the mix, Jake! Thanks for commenting.
Mark,
I never put the idea of philanthropy together with capitalism until your post. You are right though that philanthropy can only exist because of the successes, and thus exploitation of both people and resources.
If the Church utilizes well its seat at the table to reconfigure life for the poor and dispossessed than maybe we will have been part of advancing God’s plan of love, justice and peace for humanity, even through a broken system like market capitalism.
Yes, that is what I believe. Thanks Dan for your comment.
Hi Mark! As always a compelling post. This statement stimulates further discussion “In our capitalist societies today, grave inequalities continue to create opportunities for evangelicals to assist. Indeed, evangelicals are often on the front end of campaigns to offer their support” – yes I agree inequalities (or systemic oppression) create opportunities for evangelicals to assist…not sure if I’m on board with evangelicals being on the front end to offer their support? Maybe it feels more so in Canada? To be honest I’m cynical about evangelicals working enough to be the hands and feet of Jesus…
I understand the cynicism.
If evangelicals are serving with a self-serving agenda (ie converts, money, fame), then I agree, it is better to not participate.
But I have seen great evidence of evangelicals and mainline Christians being on the front end of solid society building with no benefit to themselves. Stephen Lewis, the UN AIDS Ambassador during the AIDS epidemic, and a well-known Canadian socialist, lauded faith-based efforts in Africa for being the first ones on the ground to serve those with AIDS, when governments and other agencies dragged their feet. That’s the kind of leadership we need.
Mark, great points on poverty in the midst of capitalism; especially on self-interest. Does there need to be those oppressed for others to be successful? Obviously as believers we don’t think there needs to be. Human nature and our drive to be someone special, many times helps us justify actions that we might not do ordinarily. I think you have ministry to continue to guide those that have the means to reach out and counter that effects of the greedy and the consequences of choices by governments. Good challenge to the church to help fill the gap and see beyond itself.
Hey Mark, this was very rich. Thank you. What a line: “Capitalism tolerates the existence of poverty in our midst.” I appreciated your depth of understanding of Polanyi as evidenced by how you integrated him with Bebbington. Seems we’ve lost our roots! But I’m curious about the critique that free markets do not discriminate. It seems that Polanyi’s concept of embeddedness would push back on that claim, but I might not have a deep enough understanding of this concept. Anyway, I was tracking with you with “amens” the whole way through.
Mark,
Thanks for your post on this book and the reflection on capitalism and the role of church. I really enjoy hearing about your own engagement in work that links and bridges the church and the marketplace, or ways in which Christians might bring their faith to bear on systemic issues and problems. Gracias
Hi Mark, So interesting to read your article just after Andrew and I also discussed the “band-aid” of philanthropy. Your article is very insightful and articulate. Obviously a perfect balance cannot be obtained but we certainly can, and need to, do much better.