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The Power of Market Fundamentalism

The Power of Market Fundamentalism

Fred Block
Margaret R. Somers
Copyright Date: 2014
Published by: Harvard University Press
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  • Book Info
    The Power of Market Fundamentalism
    Book Description:

    What is it about free-market ideas that gives them staying power in the face of such failures as persistent unemployment, widening inequality, and financial crises? The Power of Market Fundamentalism extends economist Karl Polanyi's work to explain why these dangerous utopian ideas have become the dominant economic ideology of our time.

    eISBN: 978-0-674-41634-5
    Subjects: Political Science, Economics, Business, History, Sociology

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
    (pp. ix-xiv)
    (pp. 1-43)

    It was a little more than twenty years ago that the decades-long Cold War between the United States and the Soviet Union ended. When the Soviet Union collapsed, some analysts optimistically claimed that we had reached the “end of history” because the institutions of Western societies had definitively proven their superiority over all others (Fukuyama 1992). Since then the United States has suff ered the trauma of the September 11, 2001 terrorist attacks, fought extended wars in Afghanistan and Iraq, and has experienced the worst economic downturn since the Great Depression. Over this same twenty-year period, politics in the United...

    (pp. 44-72)

    Karl Polanyi’s major contributions to the social sciences can be best understood by tracing the essential touchstones of his life—from his youth and young adulthood in Budapest’s hothouse intellectual and political environment, his time as editor of an Austrian financial newspaper, through his difficult but life-transforming years in England, his brief time in Vermont, and then to Columbia University. After acquainting ourselves with his remarkable life, this chapter explores Polanyi’s most widely recognized contribution,The Great Transformation(hereafter referred to as GT).

    We attempt to distill from his complex and sprawling historical writings some of his most important theoretical...

    (pp. 73-97)

    Now that Polanyi’s masterpiece,The Great Transformation(referred to as GT hereafter) has begun to gain the attention it deserves, it is vitally important that Polanyi’s text be subjected to the kind of close, critical scrutiny that scholars normally direct at classical works. This is particularly important because Polanyi advances complex and sometimes contradictory arguments from which readers can easily derive sharply divergent interpretations. Although there have been a number of important secondary writings on GT (Sievers 1949; Somers 1990; Polanyi-Levitt 1990, 1994; Block 2001), there have been few efforts to place the arguments of the book in the context...

  7. 4 TURNING THE TABLES: Polanyi’s Critique of Free Market Utopianism
    (pp. 98-113)

    InThe Rhetoric of Reaction, Albert Hirschman (1991), identifies three distinct “rhetorics” that conservatives have used to discredit reform movements since the French Revolution. Chapter 6 of this volume is devoted to the “rhetoric of perversity”—the claim that a reform will have exactly the opposite of its intended effects and will hurt the intended beneficiaries. The second, “the rhetoric of jeopardy” is exemplified by Friedrich Hayek’sThe Road to Serfdom(2007 [1944]). It is the claim that a reform will erode the freedoms we depend on. Hirschman’s third is the “rhetoric of futility”—the insistence that a reform is...

  8. 5 IN THE SHADOW OF SPEENHAMLAND: Social Policy and the Old Poor Law
    (pp. 114-149)

    Karl Polanyi devoted two chapters (6 and 7) ofThe Great Transformation(hereafter GT) to an analysis of the Speenhamland Act—a reference to late eighteenth-century English history that is often puzzling for readers. Yet for two full centuries the Speenhamland story has had a very real impact on social policy debates in England and the United States. Moreover, over the last half century, even Polanyi’s interpretation of Speenhamland has had a surprising impact on policy debates. One striking incidence of this influence occurred during the Nixon Administration, when Daniel Patrick Moynihan developed his Family Assistance Plan. As Moynihan recalled:...

  9. 6 FROM POVERTY TO PERVERSITY: Ideational Embeddedness and Market Fundamentalism over Two Centuries of Welfare Debate
    (pp. 150-192)

    Over the past thirty years market fundamentalism has moved from the margins of debate to become the dominant policy perspective across the global economy (Bourdieu 1998; Campbell and Pedersen, eds. 2001; Fourcade-Gourinchas and Babb 2002; Stiglitz 2002). As we discussed in Chapter 1, the term was popularized by George Soros (1998; 2000) to capture the religious-like certitude of those who believe in a sacred imperative to organize all dimensions of social life according to market principles. Market fundamentalism is the contemporary form of what Polanyi (GT, 3) identified six decades ago as economic liberalism’s “stark Utopia” and what we call...

    (pp. 193-217)

    This chapter brings Polanyi’s insights to bear on some contemporary political differences between the United States and Europe since the 1970s. Chapter 6 explained why the United States passed legislation that significantly reduced income transfers to poor families in 1996 despite ever-rising numbers of children growing up in poverty.¹ Those legislative changes, moreover, contributed to both the social disaster of Hurricane Katrina as well as the impoverishing impact of the 2008 economic crisis.

    Behind both welfare retrenchment and the repeated loosening of financial regulations that accompanied it lies the extraordinary strength of an organized conservative movement. Polanyi’s concepts can help...

    (pp. 218-240)

    It cannot be denied that however great a thinker Karl Polanyi was very much a failed prophet. InThe Great Transformation(hereafter GT), he predicted that with the turmoil of the 1930s and 1940s, the idea of the self-regulating market had suffered a final and catastrophic defeat. While the early post-World War II decades seemed to confirm his prediction, this volume has told a different story. From the mid-1970s onward, free-market utopianism has been revived with disastrous consequences, including vastly increased inequality and greater economic instability.

    The very mark of towering intellectuals, however, is that we can learn from them...

  12. NOTES
    (pp. 241-252)
    (pp. 253-286)
  14. INDEX
    (pp. 287-296)