Learning from Great Transformations Past and Present

Reflecting on Karl Polanyi at the Resilience 2014 John_ThompsonConference

By John Thompson, STEPS Centre Food and Agriculture Convenor

In June 2013, I served on the Scientific Steering Committee of the international conference on Transformation in a Changing Climate, which was held at the University of Oslo. One of my duties for that event was to facilitate a ‘deep conversation’ on the ‘Economics of Transformation’ to explore what transformation of socio-ecological systems would look like from an economic perspective. Feeling that the politics of transformation were being largely neglected in the conference proceedings, I decided to introduce some of the ideas of the Hungarian political historian Karl Polanyi, particularly his pioneering The Great Transformation: The Political and Economic Origins of Our Time (1944), in which he traced the establishment of laissez-faire capitalism in the nineteenth century and its transformation in the first half of the twentieth century into various forms of integrated societies, with the economy controlled in different ways and to different extents by the state. My aim was to use Polanyian insights to provoke debate on how the market fundamentalism of the late twentieth and early twenty-first century had come to dominate economic and political discourse and social systems around the world. We were experiencing lock-in to an unjust and in some respects ungovernable economic and financial system on a grand scale which was leading to increasing instability, inequality and unsustainable patterns of production and consumption.

I put it to the conference delegates that Polanyi understood that modern market economy is a special, historically rooted form of social organisation. It is not a natural, universal system for organising societies, as its champions assert. It is, in fact, an historical aberration in the long sweep of human history – one that has produced many benefits, to be sure, but it has also introduced deep structural tensions that today threaten to overwhelm human societies. When ‘the Great Transformation’ occurred, Polanyi argued, markets became regarded as autonomous forces – ‘self-regulating systems’ – in their own right. The presumption was that these market forces should organise all of society. We have been dealing with the consequences ever since.

These interventions were well received and sparked considerable discussion among the participants. Afterwards I had a coffee with two of the most knowledgeable and enthusiastic contributors to that session – David Manuel-Navarrete of the School of Sustainability at Arizona State University and Maja Göpel of Wuppertal Institute for Climate, Environment and Energy, Berlin – who shared my passion for Polanyi and my interest in injecting more historically informed, political economic analysis into debates on sustainability and transformation. We agreed to prepare a proposal to convene a special panel on Polanyi for the upcoming Resilience 2014 conference, which was to be held in Montpellier, France, in May the following year and focus on ‘Mobilizing for Transformation’. On Maja’s advice, we invited another Polanyi enthusiast, Moritz Remig at the Institute for Advanced Sustainability Studies in Potsdam, Germany, to join our small circle.

I am now writing this note on my flight back from Montpellier, back to the STEPS Centre in the UK. David, Maja and Moritz were able to convince the Resilience 2014 organisers to allow us to organise our ‘dialogue panel’ session on ‘Towards a Sustainable and Socially Just Transformation: Reflections on Karl Polanyi and the Emergence of New Forms of Governance and Social Relations in Uncertain Times’. To our surprise, they gave us a premium time slot and we played to a packed house.

I kicked off proceedings with a brief overview framing the debate and introducing some of Polanyi’s key concepts from The Great Transformation – the ‘stark utopia of the market’, the ‘double movement’ of the self-regulating market and social protection, ‘fictitious commodification’ of land, labour and money and related ideas. This was followed by three rapid-fire presentations by the rest of the team, picking up some of those themes and applying them to different aspects of the resilience and transformation agenda. Together they addressed:

  • Polanyi’s counter-movement concept and it’s relation to polycentric governance and socio-ecological systems (David)
  • Well-being in the economic ‘gain’ system and the need for ‘re-purposing’ the system (Maja)
  • Moving from fictitious commodification of ‘land’ to behavioural incentives for ecosystem services management (Moritz)

Together we argued that if Polanyi were alive today, he would recognise our crisis-ridden, neoliberal moment all too well, as he would see it as a further, intensified stage of the nineteenth century’s profound shift to market rationality – in a way, a second Great Transformation. Of course, this is not the kind of transformation that those attending the Resilience 2014 Conference or our particular session are seeking, but it is the one we are facing today.

According to Polanyi, prior of the rise of the market as an ordering principle for society, politics and social norms were the prevailing forces of governance. land, labour and money were not regarded chiefly as commodities to be bought and sold. They were embedded in social relationships, and subject to the moral consideration, religious beliefs and community management. The basic dilemma is that the free market cannot self-regulate itself. A laissez-faire economy is, in fact, planned. It necessarily needs government management and social control. In addition, because markets treat nature as essentially limitless and human beings and their labour as commodities, they are always pushing human societies and nature to the breaking point. Invariably, crises erupt that require societal interventions. The relentless imperatives of markets cannot prevail indefinitely against the irreducible needs of people or nature.

At our Resilience 2014 session, we argued that Polanyi’s ideas offer a promising basis for a more integrated structural analysis that connects the three key dimensions of our present crisis – the economic, the social and the ecological – and opens up opportunities for a critical reflection on governance solutions that might help bring about more ‘sustainable transformations’ at a time of increasing complexity and uncertainty.

In our session, we posed a number of questions that, because of time limitations, we were not able to address in any depth. Nevertheless, we think they will need to be examined if we are to move away from the current market lock-in and towards more sustainable and socially just transformations:

  • From an embedded system perspective, how can more resilient socio-ecological systems and governance arrangements emerge that resist the power of the overarching market system that promotes fictitious commodification? Following Polanyi, how can markets become re-embedded in social relations, and how can social forces affect these?
  • Taking a closer look at the ‘human’ part of coupled human-environment relations or socio-ecological systems, how do findings from wellbeing studies relate to the market system’s drive for ever-more productivity and competition of social processes that affect people’s relationship with nature and ecological processes?
  • How can governance solutions for ecosystem services bring about resilience if they do not break with the path dependencies of current forms of commodification? What can approaches like Payments for Ecosystem Services (PES) teach us?

The enthusiastic response of the session participants to our arguments indicated to us that there is room to enlarge the scope of the Resilience and Transformation conversation by include insights from the work of Karl Polanyi. Thinking through the profound implications of his key ideas might offer a way to avoid getting bogged down in stale debates about ‘states vs. markets’ and instead enlarge the repertoire of political and governance innovations available to us so that we can begin to configure a more fundamental renegotiation of the relationship between economic and social systems – one that is less ‘gain’ driven and more ‘gemeinschaftlich’ – while taking account of their dynamic interactions with ecological systems.

More from the STEPS Centre at Resilience 2014