Neoliberalism and Protective Responses: Populist and Nationalist Insurgencies
Friday, Jan. 4, 2019 8:00 AM - 10:00 AM
- Chair: William Redmond, Indiana State University
Polanyi’s Double Movement and the Asymmetrical Power Struggles
AbstractKarl Polanyi argues that last two hundred years of capitalist societies have been formed by an intrinsically antagonizing double movement. The first one is laissez faire front which consists of recalcitrant free market supporters, and the second movement contains various social groups and institutions which try to defend their societies from the destructive effects of unfettered capitalism. Polanyi believes that this double movement will come to an end by establishing a society-wide consensus on the unfeasibility of self-regulating markets, and societies will then re-flourish around new paradigms and institutions which give way to even more complex societies and more freedom for humanity within the framework of rationality. However, the developments beginning in mid 1970s show that these two movements have different and asymmetrical powers to reach the desired ends. While market-oriented powers are centripetal and monopolistic by nature, defensive powers are centrifugal and tend to be individualistic. Therefore, the latter movement has gradually lost its countervailing powers on behalf of the former by the disempowerment of trade unions which has been the most powerful of protective institutions. Consequently, double movement has not come to an end as Polanyi hoped for. On the contrary, the abrupt disappearance of trade unions’ power has caught the masses unprepared and unguarded against the free market movement. As a result, this movement has gained an unchallenged global power in the form of neoliberalism. The aim of this study is to discuss the fading course of Polanyi’s double movement.
The Rise of Populist Movements in Europe: A Response to European Ordoliberalism?
AbstractObserving the collapse of liberalism in the 1930s and the self-destructing war that followed, Polanyi (1944) came to the conclusion that “the idea of a self-adjusting market implied a stark Utopia”. For Polanyi, if “a market economy can function only in a market society” this society is not sustainable in practice. It would imply free markets of fictive merchandises (labor, money and land), a system that would “annihilate” the human and natural substance of societies.
Polanyi’s lesson has clearly been forgotten, especially in the European Union. Since the Single Act treaty (1986), European economy took a path that aims to create a supranational free market economy that rest on three dimensions: 1/ a Monetary Union based on a supranational currency; 2/ a Single Labor Market that generates competitive pressures on national social systems; 3/ Competition Authorities that prevent public interventionism and support a total capital mobility.
The way the European economy is regulated is a direct product of the ordoliberal philosophy stating that public intervention should concern only the legal system surrounding the markets without any discretionary intervention. Implementing ordoliberalism was also a way to diminish the role of national states in an attempt to create a continental economy. But by detaching the economic sphere from the reach of national societies, this process created a European economy with no real European society to control it. The result is destructive and may explain the rapid development of populist movements. According to Polanyi double movement framework, the emergence of these political forces may be seen as protective measures from societies weakened by difficult market adjustments.
Advising Politicians in the New Age of Uncertainty: The Role for Institutional Economists
AbstractRichard Parker argues in John Kenneth Galbraith (2005) that, in part, The Age of Uncertainty project was a response to the growth of technically sophisticated research that no longer could serve effectively in public policy discussions. A similar trend has occurred in this new “age of uncertainty,” where economists increasingly sit on the sidelines in political debates. This paper seeks to discover how institutional economists could better bridge this divide. Initially, it will review the discussion about ways for economists to work most effectively with politicians. Then it will compare these best practices with the ways in which institutional economist have approached conversations with politicians. It will conclude by making recommendations for the ways institutional economists could most effectively advise politicians.
The Last Gasp of Neoliberalism
AbstractThe ideas of both Thorstein Veblen and Karl Polanyi shed light on understanding the last gasp of neoliberalism. The last gasp refers to Donald Trump’s abandonment of free trade, long considered a corner stone of the neoliberal agenda, and his overt attacks on democratic institutions. In Trump, neoliberalism’s attempt to overcome the gridlock of liberal democracy has revealed its fascist leanings. Both Polanyi and Veblen warned about the trend towards fascism. Trump got elected, in part, by filling the void left by the factioning of neoliberalism, in part by the injustice felt by people in rural areas, those with stagnant incomes, males, and others. Trump has transcended the neoliberal agenda, approaching market relations from the point-of-view of the fight. The emergence of a predatory culture, in both the domestic and international realms, resembles the cultural outlined in Veblen’s Theory of Business Enterprise. Trumps actions reveal the need to extend Polanyi’s idea of social protection given the the negative effects of modern technology and Trump’s efforts to limit some regulatory agencies. Changing demographics and the adverse reaction to Trump’s fascist leanings may yet see the emergence of a new progressive era, suggesting, at least, that Trump represents the last gasp of neoliberalism.
- B5 - Current Heterodox Approaches
- D7 - Analysis of Collective Decision-Making