Monday, September 15, 2008

All Now Clear on Polany's Error

Arnold Kling responds to our criticism of his apparent endorsement of Karl Polanyi and clears his name decisively: "My Most Incorrect Belief" by Arnold Kling (HERE).

In response, I posted the following as a comment on the EconLib Blog:

"Hi Arnold
I did not mean to 'beat you up'. My target was, and remains, Karl Polanyi.
The 'propensity to truck, barter, and exchange' was embedded in human behaviour (according to Adam Smith) deep within prehistory. It occurs in non-monetised subsistence economies, including 'frontier' economies.

My neighbours in France, selectively exchange their labour and machinery among themselves, especially during the vindage (when the grapes are picked) without cash changing hands and it does not appear in National Income statistics. I assume something similar used to happen among 'Moonshiners' in the Appalachians...

Early British colonies in North America traded between the motherland and themselves in cargo-sized amounts, which percolated inwards over time. The 'second-hand' market in artifacts, capital goods and materials is often neglected by Historians (see Smith's remarks about King James VI's marriage bed ending its days in an Inn in Fife).

Monetised markets evolve over time but are rarely totally absent within a territory.
I know now you agree; hence, I shall withdraw unreservedly and gracefully, and with apologies for indicting you for 'errors' you are not committing, and preserve my ire for Polanyi and Co.”



Blogger MattYoung said...

Cows trade space on the grassy plain. They use the same economic principles we do.

How does anyone think a cow herd stays organized and maximizes its chance of prosperity? They continually adjust their respective spaces to maximize the product of cow kisses times cow grass, which is actual wealth.

11:24 am  

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