Fred Block — Karl Polanyi and twenty-first century socialism

Polanyi’s views were the exact opposite of his contemporary, Joseph Schumpeter, who famously defined democracy as giving people a choice over which elite group would rule over them.…

In contrast to the Marxist tradition, Polanyi defined socialism in terms of the extension of democracy into the economic realm. He wrote: “Socialism is, essentially the tendency inherent in an industrial civilization to transcend the self-regulating market by consciously subordinating it to a democratic society.” Buried in this brief definition are a series of ideas that could be useful for building an alternative to the current dysfunctional global economy.…

And that extension also means abandoning the free market idea that the workings of the economy should be off-limits to democratic decision making. Polanyi’s argument was that free market advocates were always disingenuous in their arguments in favor of laissez-faire. His view was that imposing free markets on society always required extensive state coercion. That was what he was getting at with the fictitious commodities; they do not just emerge naturally; they have to be created every day through the exercise of governmental powers. Under laissez-faire, these government powers are used to enhance the power and wealth of the ownership class.…

Polanyi was hardly naïve. He recognized that those with wealth would resist this deepening and extension of democracy just as propertied elites had often resisted the expansion of suffrage and other democratic rights. Moreover, he was contemptuous of those who imagined that the coming of socialism was somehow preordained or inevitable. He believed that building socialism required an organized socialist movement that was able to create institutions of popular democracy through which people could learn how society works and become empowered citizens.…

Out of paradigm with MMT, but many useful social and political insights about an incremental transition from oligarchic capitalism to democratic socialism.

Open Democracy
Karl Polanyi and twenty-first century socialism

Fred Block