For a New West

Essays, 1919-1958

Karl Polanyi

• Publisher: Polity
• Year: 2014
• ISBN:
  9780745684475
• Edition: 1
• Topic: Volkswirtschaftslehre
• Subtopic: Wirtschaftsgeschichte

At a recent meeting of the World Economic Forum in Davos, it was reported that a ghost was haunting the deliberations of the assembled global elite - that of the renowned social scientist and economic historian, Karl Polanyi. In his classic work, The Great Transformation, Polanyi documented the impact of the rise of market society on western civilization and captured better than anyone else the destructive effects of the economic, political and social crisis of the 1930s. Today, in the throes of another Great Recession, Polanyi's work has gained a new significance. To understand the profound challenges faced by our democracies today, we need to revisit history and revisit his work. In this new collection of unpublished texts - lectures, draft essays and reports written between 1919 and 1958 - Polanyi examines the collapse of the liberal economic order and the demise of democracies in the inter-war years. He takes up again the fundamental question that preoccupied him throughout his work - the place of the economy in society - and aims to show how we might return to an economy anchored in society and its cultural, religious and political institutions. For anyone concerned about the danger to democracy and social life posed by the unleashing of capital from regulatory control and the dominance of the neoliberal ideologies of market fundamentalism, this important new volume by one of the great thinkers of the twentieth century is a must-read.

Part I
Economy, Technology, and the Problem of Freedom

1
For a New West^*

Some of us still recall World War I, which awakened our generation to the fact that history was not a matter of the past, as a thoughtless philosophy of the hundred years' peace would have us believe. And once started, it did not cease to happen.

I will seek to evoke the scenes we have witnessed and take the measure of our frustrations. Great triumphs and grave disappointments have been met with. However, it is not a balance of our experiences, achievements and omissions that stands to question; nor am I scanning the horizon for a mere break. The time has come to take note of a much bigger change.

There are signs of a barrenness of the cultural West in its encounter with the world at large. What matters here is not the level of its achievements in science or the arts, which flourish as only rarely before, but the weight of its mind and life values as measured by the rest of mankind. The material and scientific products of the West are avidly consumed by the nascent nations, but with an unconcealed contempt for the interpretations set upon them by ourselves. That cultural entity, the West, of which the thinkers and writers were the traditional vehicles, is no longer listened to; not on account of a hostile public, as we persuade ourselves to believe, but because it has nothing relevant to say. We must face this fact squarely, even if it means laying bare the essential nature of our civilization, as it is now revealing itself, together with the unexpectedly changed circumstances in which our ultimate convictions will have to prove themselves from now onward.

Since this is not a theoretical disquisition, I will simply imagine myself addressing a public that is fairly sure to remember the opening scenes.

The Russian Revolution of 1917 was patently a continuation of the French Revolution of 1789 in its eastern advance. It smashed autocracy, gave land to the peasants, liberated oppressed nationalities, and in addition promised to rid the industrial system of the blemishes of exploitation. In its heroic age, Soviet socialism was given selfless support by the writers and artists of the West. They steeled their muscles in an epic defence of freedom, democracy, and socialism against the pagan upsurge of Teutonic fascism. Hitler's persecution of Bolsheviks and Jews was in the last resort directed against Christian universalism and its derivatives in the industrial present. His onslaught on traditional values, root and branch, created the modern West. Hence its ascendancy over the civilized world and beyond, to the tribal communities of inner Asia and tropical Africa – a moral triumph crowned by the victory of the political West and its ally, the Soviet people, those beggars of yesterday, over Germanic might. But the raising of the level of economic life in Russia from the ethical indifference of a capitalist market system to the conscious responsibility of a socialist basis did not by itself prevent human degradation. The defeat of fascism was almost reversed by Stalin's crimes. The disillusioned West lost status, stature, and self-confidence. A shift in the continental balance of power then evoked the specter of a third world war. A power vacuum had resulted from the disappearance of German and Japanese hemispheric structures, creating enmity between America and Russia – islands of world power in an empty ocean – which inevitably was a permanent menace to peace. The blast of Hiroshima multiplied a thousandfold the threat of that vacuum. By sheer weight of numbers Russia's army overshadowed Eurasia and was a nightmare to Washington. The replacement of Chiang by Mao on the Chinese continent hit America as if it had been defrauded of its heritage. The British felt threatened in the Near East and the Balkans. The West now emerged as a designation for a political power grouping. An atomic attack on Soviet Russia became a possibility. Even a Bertrand Russell advocated preventive war. Thinkers, writers, and artists, deprived of a substance of their own, shut their eyes to reality. The national uprisings in Asia – a link in the chain reaction started by the American, French, and Russian Revolutions – were misread for a communist ramp. Propaganda for policies set by government officials, themselves mere cogs in the wheels of history, appeared as the only function to which western intellectuals now felt confident to aspire. Yet at the root of this lack of creativity there lay a real change in the life conditions of the world as a whole.

As the dust settled, the awe-inspiring feature of the moral landscape emerged. Not the Cold War, nor the civil wars in Asia stood out. The mushroom was the symbol of unspeakable perils, born from forces responsible for our own origins. And mankind began to grasp the true nature of the development that held it in its grip.

The Industrial Revolution was a watershed in the history of mankind. Three forces – technology, economic organization, and science, in this sequence – each from separate and undistinguished parentage, linked up, inconspicuously at first, to form, hardly a hundred years ago, into a social maelstrom that is still engulfing new and new millions of people, in an irresistible rush. The contraptions were the beginning; a movement toward a deliberate organizing of markets followed; science – almost a century later, but with an explosive effect – joined up last. All three then gathered speed: technology and science formed a partnership, economic organization made use of its chance, forcing the efficiency principle in production (both by market and planning) to vertiginous heights. Western culture is what science, technology, and economic organization, mutually reinforcing one another, unbridled and unrestrained, are making of man's life. Their subordination (science and technology, as well as economic organization) to our will to a progress that is human and to the fulfillment of a personality that is free has become a necessity of survival. It falls to the West to discipline its children. For the sociologist, nuclear fission, the atom bomb, and the Asian revolutions may well seem to fall into unrelated fields: science, technology, and politics. Actually they are proximate steps in the growth of an industrial civilization. Progress may be geographical, theoretical, practical. The directions vary, the tendency to advance is the same. For the West, they represent one problem: How to find creative answers to responsibilities to which it is committed by its past.

The tasks of the cultural West are interlaced with the rebirth of a continent. Industrialization is, for Asia, not an absolute; it is accomplished under reservations. What these imply, only time will unfold. The West is held responsible for the industrial, scientific, and economistic road on which our world has embarked. We are in the dock. Also, the leaders of western thought, entangled in power politics, were the moral victims of the Cold War and its violent perversion of minds. They lost caste, when democracy was made synonymous with capitalism – in the USA – and national status was identified with colonial possessions – in Britain and France. Western spiritual ascendancy, gained in the long battle against Hitlerism, was frittered away in the hopeless support of a decaying past.

But the perspectives in which we grew up have dissolved. Universalism postulated our identification with the wide world, the oikoumenē. Its conquest by a technological civilization is unexpectedly producing separate and distinct cultures, all of them industrial, yet not only different on the capitalism–socialism axis but different, moreover, on other scales, some which are based on incommensurable core values. To penetrate and internalize the position in which the West is placed is the task. A circumscribed, reduced West is both a concentrated and radical West and an adjusted, tolerant West. It is the parent of the industrial society as well as of its derivatives, and an equal member of a family of such societies. It is the offshoot of a universalism of a preindustrial type and the first representative of a universalism of a postindustrial type. It is a result of early illusions and of late recognitions of a unique sort. It has passed through the liberal utopia of unrestricted freedom and the illiberal utopia of general regulationism. It has probed authoritarianism and libertinism; traditionalism and anti-traditionalism; class elite and mob rule. It has passed through the methodological discoveries of general law and historical specificity; of empiricism and phenomenology; of logical positivism and symbolism; of Thomism and existentialism. So have other cultures. But none in the same way. Western universalism – this is the Jewish–Christian inheritance – was the claim to a way of life of universal validity. This received a massive topical content when the West became the bearer of an industrial civilization which, whether capitalist or socialist, soon comprised almost half of the planet. We were somehow thinking about and for the rest. It was not a conversation, rather a spirited monologue. Since no answer came, we carried on in our train of thought – unsustained, but also uncontradicted. No one was overruled, bossed around, or made to listen. It was just that we were without a partner.

Note

* File 37–12, Karl Polanyi Archive: typescript dated October 16, 1958, with corrections in the author's hand. There are two older versions of this same text, namely from September 21, 1958 and from July 28, 1958: “For a New West,” 37–12 and “The New West,” 37–12, respectively.

2
Economics and the Freedom to Shape Our Social Destiny^*

Dogmatic belief in economic determinism in its different forms has become a chief obstacle to the progress of mankind. The total view from which pessimism results is this:

All thinking persons recognize the precariousness of the human condition today. Man is not a simple being, and he can die in more than one way. War or no war – man, in the material and moral cast for the sake of which we cherish our humanity, may be unable to maintain himself in the future in the technological environment which he has created. The Moscow Trials, Oswiecim, Hiroshima are portents.

Since the venture of a progressively artificial surrounding cannot – and indeed should not – be voluntarily discarded, we must adapt life in such a surrounding to the requirements of human existence. The problem of restoring meaning and unity to life in a machine civilization must be faced. But, on whatever level we approach the question – whether that of cultural unity or emotional balance, or even only that of bare national survival – adjustment implies fulfilling the requirements of social justice, as a consciously pursued human aim. It is here that grave doubts set in. For, among the requisites of meaningful purpose, the safeguarding of the freedom of conscience stands out for us – a demand that cannot be compromised without voiding all our other aims as well. Yet justice appears unattainable except at the cost of freedom, and this is so for reasons that seem to be rooted in economics. Laissez-faire appears therefore as the price we pay for^a freedom. For the freedoms we cherish – and this cannot be gainsaid – grew up in the interstices of our economy and must (it is argued) necessarily disappear with it. Behind this and rigid ominous economic determinism, which we meet more and more often, there stand strong convictions, both as to the preeminent role of the economic agent in our present world and as to its decisiveness in human history in general.

This appreciation of our total situation contains, I submit, both an essential truth and a radical fallacy. Justly, we deem our institutions to be determined by the economic aspect of life; but, quite mistakenly, we ascribe this fact to some immanent and timeless quality of the economic as such.

The society we live in: In contrast to tribal, ancestral, or feudal societies, ours is a market society. The institution of the market is here the basic organization of the community. Blood tie, ancestor worship, or feudal allegiance is replaced by market relations. Such a state of affairs is new; for an institutionalized supply–demand–price mechanism – a market – was never more than a subordinate feature of social life. On the contrary, the elements of the economic system were found, as a rule, imbedded in other than economic relations, such as kin, religion, or charisma. The motives for which individuals participated in economic institutions were not usually themselves “economic,” that is, they did not arise from fear of otherwise going without the necessities of life. It is precisely such a fear of individual starvation as an inducement to hunt, catch, till, or harvest that was unknown in the majority of societie...