why that was nice

[faulkton 5,000+ posts]

I read through it.
Here is where I am stuck.

What's good for society versus what's good for the individual (more specifically, myself). I feel I can protect myself and navigate any waters. I don't think much of society is concerned with 5 year plans (although Stalin killed 20M people, he was an excellent has creating/executing plans).

However, I am suspect of any inclination that the US has a free market. That was gone a long time ago.

The only point of contention I have with the author is that he seems to imply that "pushing the limits of nature and turning humans into commodities" is a bad thing. I think it is not. Therefore, I don't, on first reading (to give an honest effort, I'd have to read it atleast twice. Some may call me 'stupid' for this but whatever) have many objections to the article based on the facts presented. Because I align myself with a corporatist perspective (which again, has issues...mainly my inability to show empathy), I don't believe many of the things he claims as bad, are indeed bad.

Here is some more on Fictitious Commodities:

5 Polanyi’s first concept is that of the ‘fictitious commodities’: that of land, labour and money. According to Polanyi, the realisation of the liberal market society required the commodification of land, labour and money in accordance with classical economy theory; prior to such a development, pre-industrial societies had not been subjected to such commodification. Polanyi argues that ‘fictitious commodities’ are not true commodities, because true commodities are things that are produced for sale on the market. However, the liberal vision of the self-regulating economy rests on the pretence that the supply and demand for these fictitious commodities will be effectively equilibrated by the price mechanism just as if they were true commodities (Block 2003: 281). Hence by ‘allow[ing] the market mechanism to be the sole director of the fate of human beings and their natural environment indeed, even of the amount and use of purchasing power, would result in the demolition of society’ (2001: 76). Polanyi’s concept of the fictitious commodities serves in itself as a powerful critique of allowing labour to find its natural price, yet The Great Transformation goes much further than this. Following from the concept of the fictitious commodities, Polanyi analyses the creation of the contemporary market society within the first industrial nation of Great Britain and argues there to be nothing natural with regard to the liberal state. The replacement of the Speenhamland system with the Workhouse signified the establishment of a competitive labour market and hence ‘industrial capitalism as a social system cannot said to have existed before that date’ (ibid: 87). 1834 marks the beginning of the rise of the liberal market society within Great Britain and subsequently its spread to the rest of the world 2 . The marketisation of the British labour market was done so by the direct intervention of the British state and it is through such an example which Polanyi wishes to illustrate that, contrary to Adam Smith, there is nothing natural about the liberal state. The pure marketisation of labour and the abolition of the ‘right to live,’ necessitated individuals to become ‘economic man’. Hence, the new conditions of the economy required individuals to become rational, even if rationalism was something which the majority found alien 3 . The self regulating market with its fictitious commodities required the subordination and shaping of society to the requirements of the market economy. From such an argument Polanyi formulates his second concept, that of the embedded economy. Accordingly, the economy is a set of social relations which is embedded within its respective society. Market liberals want to dis-embed society from the economy and subordinate it to the market mechanism 4 . Contrary to Liberalism and Marxism, there is no analytically autonomous economy that is subject to its own internal logic. That is, to view the state and economy as separate entities is misleading as market 2 The Speenhamland system (1795-1834) of poor relief was a locally administered system of transfer payments in which revenue was collected at the parish level through the local taxation of land owners. Low income families and those who were unemployed then had their wages supplemented from the parish rate in accordance with the price of bread. The New Poor Law of 1834, which ended outdoor relief and established the work house, signified the establishment of a competitive labour market. See Polanyi (2001), Block (2003), Block and O’Riain (2003) and Block and Sommers (1985). 3 Indeed, Polanyi’s account and subsequent critique of the rise of liberalism has formed the foundation for some methodological studies within political theory / philosophy: see Adaman and Madra (2002). 4 According to Polanyi, this has the potential to ‘destroy society’.

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[Flipx99 5,000+ posts]

Polanyi argues that ‘fictitious commodities’ are not true commodities, because true commodities are things that are produced for sale on the market.

I disagree with this. I strongly believe I am a product....no better than a box of crackers. The only difference is, I am the producer of my product. I produce me. And I am for sale.

The pure marketisation of labour and the abolition of the ‘right to live,’ necessitated individuals to become ‘economic man’. Hence, the new conditions of the economy required individuals to become rational, even if rationalism was something which the majority found alien

This I agree with. I am often confounded by people's decision making skills. If Polanyi is correct, people are not intended to be rational by nature, yet we force them to be rational to fit an economic system. Although I don't like it, I can find strong anecdotal evidence to support this.

 

[faulkton 5,000+ posts]

I take limited offense (as offense is such a strong word) to the notion of "saving capitalism from itself". It appears (from some economists) that capitalism can only work during veiled regulation. I am not so certain, except for this instance: When capitalistic economies come crashing down, the value of social contracts become highly valuable. I suppose this is because once the money is gone, all you have is each other. Thus, a fall in capitalism could indeed cause a rise in acceptance of socialism. Preventing a crash in capitalism saves it from itself because people won't consider socialism.

But people do consider socialism in the face of the blind forces of capitalism. You agree that a truly free market doesn't exist and hasn't for a very long time. Why is this? Because society has protected itself from such harshness by employing protectionist--often socialist--measures and regulations. Now if you are referencing the Modern American public refusing to accept socialism i would say that its just semantics. The term itself is used pejoratively yet the measures adopted are qualitatively socialist.

Social contracts are always highly important, but i think perhaps you mean social relationships and insurance? Both personal and public?

What's most unfortunate is how capitalism is embraced during economic upswings and socialism during downturns. It shows that concern for living supercedes (for the majority) any ideology.

Is this improvement in the circumstances of the lower ranks of the people to be regarded as an advantage or as an inconveniency to the society? The answer seems at first sight abundantly plain. Servants, labourers, and workmen of different kinds, make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed, and lodged.

 

[faulkton 5,000+ posts]

I disagree with this. I strongly believe I am a product....no better than a box of crackers. The only difference is, I am the producer of my product. I produce me. And I am for sale.

But you werent produced for sale in the market. You are a human being, and what ever the reason we exist may be, i doubt it was to be sold as a commodity on an open market. Being treated like an actual commodity is dehumanizing.

 

[John3000 10+ year member]

D@mn you for making me read and think, this is not the time or place for that!

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[faulkton 5,000+ posts]

I take limited offense (as offense is such a strong word) to the notion of "saving capitalism from itself". It appears (from some economists) that capitalism can only work during veiled regulation.

Polanyi's story of the tensions in and collapse of the self-regulating economies that developed in the first half of the nineteenth century differs sharply from the story that Marx anticipated and from the story that Marxian economists have told. Though Polanyi argues that perception and response to the damages of the SRM (Self Regulating Market) varied by class, and therefore "the outcome was decisively influenced by the character of the class interests involved," (p. 161) it was not unfair distribution of total output via exploitation that caused the tensions and ultimate collapse of the SRM system. The working class did not rise up to overthrow the system. Rather, land owners and bankers as well as merchants, whose interests were often threatened by fluctuations in trade, joined workers in seeking protection. As they got protection, the SRM was "impaired," eventually the point of collapse. Increasing protection so impaired the SRM that it could no longer coordinate the world's economy when World War I destroyed Europe's balance of power. The struggle to restore the nineteenth century system by reestablishing the gold standard destroyed the international financial system.

 

[faulkton 5,000+ posts]

D@mn you for making me read and think, this is not the time or place for that!
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hey even if you just read it and didnt think at all.. you're still WAY beyond most of the people here //content.invisioncic.com/y282845/emoticons/smile.gif.1ebc41e1811405b213edfc4622c41e27.gif

 

[Flipx99 5,000+ posts]

But people do consider socialism in the face of the blind forces of capitalism. You agree that a truly free market doesn't exist and hasn't for a very long time. Why is this? Because society has protected itself from such harshness by employing protectionist--often socialist--measures and regulations.
Social contracts are always highly important, but i think perhaps you mean social relationships and insurance? Both personal and public?

The bolded parts answer the part in red and bold. People, I think, are too afraid to go at it alone. Even the "rugged individualism" upon which this country is founded is somewhat of a farce in that these people relied on families and other friends. Consider the Oregon Trail...they didn't ride alone.

A truly free market is anarchy...and few reasonable people want that.

Social contracts are important because of the insurance they provide. One is free to go at it alone without such concern for the social wellbeing of his fellow man. However, few reasonable people wouldn't instigate relationships as a backstop in the event of a free-fall.

Because I believe man is naturally evil and selfish, I cannot agree that gift and reciprocation is no more of a natural state than the one that requires people to think rationally. The advantage of the "regulated capital" state is at least one knows the rules.

But you werent produced for sale in the market. You are a human being, and what ever the reason we exist may be, i doubt it was to be sold as a commodity on an open market. Being treated like an actual commodity is dehumanizing.

I choose to sell myself on the open market. I choose to acquire skills and sharpen my mind so I can compete with others to acquire materialistic goods because I am selfish. I do not believe there is anything particularly important about being a human vs. a cat or a tree.

 

[Flipx99 5,000+ posts]

Polanyi's story of the tensions in and collapse of the self-regulating economies that developed in the first half of the nineteenth century differs sharply from the story that Marx anticipated and from the story that Marxian economists have told. Though Polanyi argues that perception and response to the damages of the SRM (Self Regulating Market) varied by class, and therefore "the outcome was decisively influenced by the character of the class interests involved," (p. 161) it was not unfair distribution of total output via exploitation that caused the tensions and ultimate collapse of the SRM system. The working class did not rise up to overthrow the system. Rather, land owners and bankers as well as merchants, whose interests were often threatened by fluctuations in trade, joined workers in seeking protection. As they got protection, the SRM was "impaired," eventually the point of collapse. Increasing protection so impaired the SRM that it could no longer coordinate the world's economy when World War I destroyed Europe's balance of power. The struggle to restore the nineteenth century system by reestablishing the gold standard destroyed the international financial system.

Bold + red = fact.

However, with the bolded part I'd argue that if sufficient "hedges" were available the need for protection via regualtion would be reduced. Those with assets at risk (like mentioned above) turned to government because financial markets were not sufficiently matured to allow them to mitigate that risk. I follow Shiller's argument that regualtion is not needed if one can mitigate all risks.

 

[faulkton 5,000+ posts]

The bolded parts answer the part in red and bold. People, I think, are too afraid to go at it alone. Even the "rugged individualism" upon which this country is founded is somewhat of a farce in that these people relied on families and other friends. Consider the Oregon Trail...they didn't ride alone.
A truly free market is anarchy...and few reasonable people want that.

Social contracts are important because of the insurance they provide. One is free to go at it alone without such concern for the social wellbeing of his fellow man. However, few reasonable people wouldn't instigate relationships as a backstop in the event of a free-fall.

Because I believe man is naturally evil and selfish, I cannot agree that gift and reciprocation is no more of a natural state than the one that requires people to think rationally. The advantage of the "regulated capital" state is at least one knows the rules.

I would argue that man, by nature is a social animal. We are not solitary creatures. We have evolved dependent upon each other and social contracts.

We have a much longer history with a system that was not based upon a free market but other principals:

Redistribution is involved where a chief or leader gathers together a harvest or the kill of a hunting expedition into a safe storage place. Having made it safe he then redistributes it to members of his group by holding communal feasts and festivals. This serves both to share the communal wealth fairly, and also to reinforce the social structure, allocation (and indeed seating arrangements !) indicating status and importance. These festivals may also be used to reinforce relationships with neighbouring tribes, and the store may be used to supply the community's warriors if circumstances require (Polanyi 1945 50-56).

Polanyi recognised that market places existed in ancient times, and were present in primitive economies, but he argues their existence away by saying they were not important, and existed within a context of reciprocity. Money too was often present, but it was unimportant, and also operated within the context of reciprocity. These money using daily markets were merely convenient localised exchange places operating within the broad system of reciprocity. There were also market places for long distance trade, such as ports. But these were only for items which could not be obtained within the area, and therefore could not be provided within the local system of reciprocity. These 'ports of trade' were specifically isolated from the prevailing reciprocity area and served to separate it from external influences. So local craft and provision markets were not linked to long distance markets and the 'ports of trade' were controlled by the authorities to ensure the isolation was maintained (Polanyi 1945 64-69: See also Polanyi 1963 30- 45).

If ancient and primitive economies had market places but were not market economies, how does Polanyi define a market economy ? How is it different from a system of reciprocity ? According to Polanyi, a market economy is an economic system controlled by prices, these prices determining how much is produced, and how what is produced is distributed. Social considerations have no part in this system. Money exists, which serves as purchasing power and enables its possessors to acquire goods and services, which are priced in money terms. People are motivated to acquire money with which they can then purchase whatever they want (Polanyi 1945 74). Polanyi believes this monetary based market economy sprang suddenly into existence in the nineteenth century thrusting aside the old systems based on reciprocity and redistribution.

To return to Polanyi's basic point, he argues:-

''The outstanding discovery of recent historical and anthropological research is that man's economy, as a rule, is submerged in his social relationships. He does not act so as to safeguard his individual interests in the possession of material goods; he acts as to safeguard his social standing, his social claims, his social assets. He values material goods only in so far as they serve this end.' (Polanyi 1945 53)'

I choose to sell myself on the open market. I choose to acquire skills and sharpen my mind so I can compete with others to acquire materialistic goods because I am selfish. I do not believe there is anything particularly important about being a human vs. a cat or a tree.

What other choice do you have?

I believe there are substantial qualitative differences between a human being and a cat. If you deny these are important you are denying your humanity, which separates you from the majority.

 

[jmanpc 5,000+ posts]

The direction the United States is heading in, is unfortunate. With the explosion of the size and scope of the US government in the post-great depression era, it has been slowly chipping away at the American citizens' liberty.

With an increased amount of government spending and entitlement programs, comes a necessity to raise taxes on citizens, especially those on the upper end of the earning spectrum. These funds subsidize, and lower taxes on those on the lower end of the spectrum. This transfer of wealth creates a disincentive for the movers and shakers of our society to continue to produce and innovate.

What if, back in the days of Manifest Destiny, the people who ventured out west were told prior to leaving "Hey, at least 50% of the land you claim, will belong to the government, and 50% of the cattle you raise will, too," do you think there would have been an incentive to do that? I doubt people would be willing to put forth the effort, only to have their efforts leeched by the government.

The way to stimulate the economy is not through tighter restrictions, higher taxes and more regulations. It is for the government to go back into its shell and let the people prosper without a monkey on their back.

I am aware that it's wishful thinking, but what the government is doing now, sure isn't working.

 

[Flipx99 5,000+ posts]

I believe there are substantial qualitative differences between a human being and a cat. If you deny these are important you are denying your humanity, which separates you from the majority.

Like I said, I don't think there is anything inherently special about being a human being. The only "goal" is reproduction and continuation of the species. Everything else is either to achieve that goal, or make the time doing so more pleasant.

It's a very rational outlook.

 

[Flipx99 5,000+ posts]

The fact that people have the ability to critically think about their circumstance is no more than a parlor trick and serves no useful purpose. Not saying we shouldn't employ any skill available, just that in the scheme of things, it isn't important.

 

[faulkton 5,000+ posts]

Bold + red = fact.
However, with the bolded part I'd argue that if sufficient "hedges" were available the need for protection via regualtion would be reduced. Those with assets at risk (like mentioned above) turned to government because financial markets were not sufficiently matured to allow them to mitigate that risk. I follow Shiller's argument that regualtion is not needed if one can mitigate all risks.

The instance in which the individual would be protected from all risks is minimal. The individual, the basic unit of society, would still be subject to the destructive and blind forces of the market. This alone, in my opinion would justify protection. What is good for the largest portion of society cannot be bad for the whole.

We both know i am way out of my area of knowledge here, and perhaps this is naive, but i do not believe that such markets could even mature to the point which you describe before society itself was destroyed and the system collapsed. Further i fail to see how they could have developed to the level you described without some intervention from a governmental forces. This could explain why the interests outlined above joined forces in the protectionist movement with the individual. The joining of their interests was the most efficient means to gain their ends and intervention/regulation held a greater advantage to all parties than a SRM.

 

[Flipx99 5,000+ posts]

If ancient and primitive economies had market places but were not market economies, how does Polanyi define a market economy ? How is it different from a system of reciprocity ? According to Polanyi, a market economy is an economic system controlled by prices, these prices determining how much is produced, and how what is produced is distributed. Social considerations have no part in this system. Money exists, which serves as purchasing power and enables its possessors to acquire goods and services, which are priced in money terms. People are motivated to acquire money with which they can then purchase whatever they want (Polanyi 1945 74). Polanyi believes this monetary based market economy sprang suddenly into existence in the nineteenth century thrusting aside the old systems based on reciprocity and redistribution.

Polanyi seems to imply that this is wrong or against nature. It seems to me that this is the evolvement of mankind. We are evolving out of social contracts, and to an extent, society in general. I would argue that the mechansims of distributing "the hunt" are inefficient and as we found more efficient ways to distribute goods and services social contracts do indeed break down. Not because of a de-evolution of society, but upon the realization that it is not needed when the market is performing correctly. However, I contend the market is always performing correctly. What happens is fear (a very basic instinct) causes us to revert back to a more primitive state -- ie social networks and social contracts. If we were unafraid of the pitfalls of capitalism and willing to work through them with the FAITH that the end result would be greater, communal distribution of goods and services wouldn't be needed.