The Great Transformation

Reading The Great Transformation by Karl Polanyi. It is certainly one of the great cross-disciplinary conceptual efforts of our time, and is the best book about economics I’ve read since Amartya Sen‘s Development as Freedom. Essential to Polanyi’s views is that our economic structures are embedded in a wider social and political context, and he makes the great point that men can not be reduced to economic automatons, as so many economists were (and still are) apt to do.

One of the insights he has is that there are some inherent conflicts within the dominant neo-classical liberal creed, specifically between the idea of laissez-faire policies and the institution of the self-regulating market:

“Strictly economic liberalism is the organizing principle of a society in which industry is based on the institution of the self-regulating market…For as long as such a system is not established economic liberals will call for the intervention of the state in order to establish it, and once established, in order to maintain it.” (page 149)

And I found a great example of this contradiction right over at that libertarian website, TLF:

An excerpt from Mark Cuban’s weblog post: How to Make US Broadband Competitive – Quickly and Cheaply is posted:

If we want to truly change the course of broadband in this country, the solution is simple. Just as we had an analog shutdown date for over the air TV signals, we need the same resolution for analog delivered cable networks.

Transition basic cable networks from analog to digital over the next 3 years and all of the sudden there will be hundreds of megabits available on the smallest cable systems and more than a gigabit of bandwidth available on the largest.

To which Jerry Brito adds::

“…Obviously this would entail a government mandate to an industry, which we’re all biased against.”

But then why post this on a libertarian website?  Because Jerry’s just come across one of the decisive contradictions of our time: A self-regulating market, of the kind that both Microsoft and China seek to impose upon society, requires state intervention. More specifically, democratic structures strongly mitigate against the type of a self-regulating market that corporate power structures would like to see built. This is the decisive conflict of our time.

The Great Transformation

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