Monday, December 27, 2010

On Polanyi Again and a New Critic

David Ruccio writes in Occasional Links and Commentary (HERE)

What may be a useful contribution to the debate that I am having with Dan Hirschman on Polanyi’s Theories (see also earlier posts).

David writes:

“…Polanyi’s major contributions, which I think are three: (1) the distinction between markets and the market-system; (2) the argument that a market-system was not the outgrowth of a so-called natural propensity to “truck, barter, and exchange” but, instead, of the activity of the state; and (3) the claim that the market-system, if allowed to develop without controls, would more or less inevitably lead to economic and social crises. Clearly, the three contributions place him at odds with Adam Smith and many others who have celebrated the existence of a market system.

Exchange relations as identified by Smith and practised by feudal/ monarchial/warlord societies, prior to the emergence (‘at last’) of “commerce”, which was the ‘Fourth Age’, in Smith’s progression (Lectures on Jurisprudence, [LJ(A) i.32: 16)]. Incidentally, Smith’s Four Ages of Man (1762) show quite clearly, Smith was well aware of the differences among the ages of Hunting, Shepherding, Agriculture and Commerce, and undermines Polanyi’s narrow views of Smith’s concept of exchange relationships.

The exchange propensity (Wealth Of Nations) preceded the commercial Age; it was a consequence of human ‘reason’ and ‘language. It was a facet of tribal societies too (in fact, it was and remains a ‘universal’). It is counter-factual to assert that the “market-system was not the outgrowth of a so-called natural propensity to “truck, barter, and exchange”. Polanyi and his disciples focus on their 20th-century notions of “truck, bartering”, confusing these terms with a purely modern commercial role, which swamps the historic role of human “exchange” behaviour.

The earliest Homo sapiens handled exchange transactions even in the daily choice of which direction to set off in their gathering, scavenging, later hunting – they had a 360º multiple-choice decision, for which brutal experience taught teach them that scattering aimlessly in all directions was sometimes dangerous and life-threatening. The decision required mediation through exchange behaviours and eventual agreement.

Smith’s ‘celebration’ of the market system – or the ‘Age of Commerce’ - was conditioned, not by some ideological obsession, but by the simple observation that the meanest of labourers in 18th-century Britain had access domestically to far greater ‘necessities and conveniences’ of life than the most powerful of tribal ‘chiefs’ in Africa and North America. He credited this to the Age of Commerce, rude and crude as it was in his day, and which its subsequent history to the 21st century has magnified those discrepancies in one direction only - upwards.

Now those discrepancies had long historical roots that combined the remarkable fact that the per capita income of the labourers – the majority numerically throughout the millennia remained near subsistence yet population grew slowly, and the rising total “GNP” was appropriated by the elites, who deployed the ‘surplus’ on stone-built civil monuments, churches and palaces, and warfare.

The Age of Commerce developed from the exchange propensity – buying-selling from ‘truck, barter, and exchange – already present from the preceding millennia, first manifested in the evolution of language (agreement on which word sounds meant whatever). See Smith’s 1761 essay on the Origins of Language, part of a major 18th-century debate; and Moral Sentiments (1759) on the mediation amongst early and later humans on acceptable moral conduct. While the exchange propensity was and remains universal, the world produced thousands of different languages and many different moral codes (those since Classical Greek and Roman times were taught by Smith 1751-64). Neither of these phenomenon evolved by human design (the Left's designed 'Esperanto' is dead) .

The ideas of “commodification” have Marxist roots, though that alone does no disqualify them, but they are part of an ideology – no counter-facts can disprove them – as is the myth that exchange behaviours are alien in tribal societies. They are even present in some animal societies (Chimpanzees, for instance) in reciprocation behaviours, and certainly in human societies from the earliest times and to the present. To deny them is ideological. That is why I say Polanyi invented a theory and then sought evidence. Smith observed; he had no plans to change the world. Neither have I. The most dangerous breed on Earth are philosophers who think they can change the world - they only make it worse.

Smith recognized the importance of the Age of Commerce, and noted how it had collapsed after the Fall of Rome, when warlords took over Western Europe, until it re-emerged, slowly and gradually, a thousand years later and it spread and deepened, not because of the State, but despite it. No state invented agriculture 10,000 years ago.

Laissez-faire played no part in Smith’s thinking (he never used such words) – that was a 19th-century invention by propagandists of Mill and Mine owners in Parliament and politics.

I assure David I am an economist who has looked closely at the works of modern anthropologists (and sociologists); I find in them confirmation of Smith’s conjectures, and repudiation of Polanyi’s narrow, political focus. He should have looked beyond Engels and Marx - as should David.

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