Using Polanyi to Understand Globalization

In a 2006 issue of Globalizations, Ronaldo Munck has an interesting article on the relevance of Karl Polanyi‘s conceptualization to understand neo-liberal globalization and the current social movements promoting  alternatives (Globalization and Contestation: A Polanyian Problematic, Globalizations, June 2006, Vol. 3, No. 2, pp. 175-186).

"What I am proposing is the possible usefulness of Polanyi’s problematic of the ‘double movement’ as a heuristic device for advancing our understanding of globalization and contestation at the start of the twenty-first century. (…) Its basic thesis is that: ‘Society protected itself against the perils inherent in s self-regulating market system – this was the one comprehensive feature in the history of the age’ (Polanyi, 2001, p. 80). It was hardly surprising that this broad sweeping ‘double movement’ thesis would attract attention, insofar as it provided support for the building mood that ‘another world is possible’ to that of neo-liberal market-driven globalization." (175-6)

"Another world is possible" being, of course, the rallying slogan of the alter-globalization movement, initiated by Susan George of the Transnational Institute and who wrote a book of the same title. For Munck, there is much in Polanyi’s conceptualization of the ‘double movement’ that should be useful to those who seek to create an alternative to the dominant neo-liberal globalization.

Under the ‘double movement’, the alter-globalization movement is not fighting the dominant ideology and economic system, it is actually ‘swimming with the current.’ Contestation against the system is built into the system.

"Protests against environmental degradation, the hypocrisy of ‘free-trade’ policies, or workplace closures may find a unifying thread in Polanyi’s ‘double movement’, whereby society resists its dissolution by a self-regulating market. Polanyi offers a discursive legitimation: it is not the seemingly quixotic anti-globalization movements that should be seen as ‘utopian’, but rather the socially disembedded self-regulating market that Polanyi describes as a utopian goal, in the sense that it simply cannot be achieved." (176)

In other words, contestation (progressive AND reactionary as well) is a ‘normal’ part of the system once the neo-liberal utopian view of never-ending bubbles (high-tech, housing, take your pick) and ever-increasing house prices. Once the self-regulating market part of the cycle has accomplished its ‘creative destruction’, then, mechanisms of societal protection are set in motion, pushed by social movements, as Munck rather than Polanyi, demonstrates (it is one of Munck’s observation that Polanyi paid little attention to social movements).

Finally, Munck considers that Polanyi’s narrow definition of socialism as the democratic component of the reaction to the self-regulating market has the potential to unify the different threads of the alter-globalization movements pushing for social change.

Munck defines the ‘double movement’ as follows:

"Polanyi’s problematic was based on the notion that a ‘great transformation’ at the start of the nineteenth century leading to the dominance of free market principles. But this social transformation led to a counter-movement through which society protected itself from the effects of untrammeled free market expansion. History thus advances through a series of ‘double movements’, according to Polanyi, whereby market expansions create societal reactions ." (177)

[My emphasis] Also, referring to "self-regulating market" allows for the idea that the market is never "free" but it is deeply regulated only outside of social governance mechanisms. The concept of free market is then a utopia. It can never be realized and if it were, the effects would be devastating on the environment and societies, to the point of destruction. In other words, this utopia is sustained by a discourse similar to religious fundamentalist dogma based on economic determinism that tends to exclude other non-economic factors.

From this perspective, globalization is the ‘natural’ extension of the market beyond national borders where the scale of economic relations got extended and intensified.

"The world, naturally enough from this perspective, becomes just one giant marketplace where everything and everybody can be bought and sold. Social relations are reduced to market relations. The ‘opening up’ of the world market becomes the raison d’être of development, with only some token gestures paid to social and human development." (178)

Key to this is the concept of embeddedness : the idea that the economy is embedded in social relations. This was especially the case in pre-capitalist societies wher economic relations are thoroughly regulated by non-economic considerations such as morality. The market order required a disembedding of social relations with an autonomization of the economy. At the same time, a reverse process occurs where social relations become embedded in the economic system through mechanisms such as commodification or marketization (I guess we could compare that to Habermas’s colonization of the lifeworld by the system). Non-economic factors and social relations pertaining to culture, community and other aspects of social life are involved then in what looks like another double movement: disembedding of economic relations from non-economic ones, and embedding of non-economic relations into market ones.

Indeed, this disembedding / economic re-embedding is an aspect of globalization that is heavily contested by alter-globalization groups, both progressive and reactionary. It is not surprising, in this context, to see at the forefront of the protests against neo-liberal globalization movements as diverse as a variety of localist groups ("the local community knows best" kind of groups… never mind that local communities can be just as  oppressive than larger-scaled ones… actually, protection against local oppression often come from national or regional authorities), nationalist movements / political parties, religious fundamentalist groups of various tripes along with groups more thoroughly grounded in global imaginaries.

This partly explains the lack of unity in the alter-globalization camp even though they are all societal responses to the social dislocations wrought by market forces unleased on a global scale and they all seek to re-embed social relations into a non-economic determinist order, be it based on fundamentalist religion or global human rights or global environmentalist paradigms.

These various social movements can be analyzed as the vanguard army of the second wave of the double movements. Societies can put in place various mechanisms. Between the 1930s and the late 1970s, Western societies witnessed regulations, protectionism, unionization, the development and expansion of the welfare state, strong labor relations regulations, appeals to patriotism and nationalism, etc.

When it comes to the contestation of neo-liberal globalization, the forms of contestation are different and the measures considered are of a different scales: new social movements invoking identities beyond social class on the one hand, demands for global governance ("global problems demand global cooperation and global regulation through global institutions") on the other.

Contestation of the neo-liberal economic order also occur through the promotion of alternative ideologies and here again, according to Munck, Polanyi provides useful pointers through his study of pre-capitalist societies and the non-market exchange types such as reciprocity ("sharing the burden of labour and through the exchange of equivalencies") and redistribution ("the allocation of goods takes place by virtues of custom, law or active central decision"). Such mechanisms (or their various combinations) are often promoted by alter-globalization groups, as, for instance, solidarity economics.

Similarly, culture is also used as a powerful tool of contestation as it is seen as a victim of social dislocation caused by market-regulated globalization.

"When people are dispossessed of their traditional means of livelihood, when customs and ways of life are disrupted and ‘alien’ cultural values are imposed this affects the very way in which people ascribe meaning to their condition. So, argues Polanyi, it is not ‘economic exploitations, as often assumed, but the disintegration of the cultural environment of the victim is then the cause of the degradation’ (Polanyi, 2001, p. 164, emphasis added)" (183)

And as mentioned above, contestation may also focus on political processes such as democratization or alternative forms of governance (localisms and religious fundamentalisms). Again, these movements can be either progressive or reactionary but they are unified in their contestation of neo-liberal globalization, or as Munck puts it, borrowing from David Harvey, accumulation by dispossession.

In conclusion, Munck makes the point that several aspects of Polanyi’s conceptualization need concretization as well as some expansion (such as a greater emphasis on social movements). Nevertheless, Polanyi provides extremely useful analytical frameworks to analyze both the Global Revolution (comparable in its impact to the Industrial Revolution) and the movements contesting it. This is an article that give a lot to think about.

5 thoughts on “Using Polanyi to Understand Globalization

  1. This is completely unrelated but I had to make some noise before the Christmas break.There are five brilliant sociology books I would suggest as a read over this long holiday vacation that lean a little bit more towards overall teaching sociology :

    1. Naomi Klein, NoLogo
    2. Gosta Esping-Anderson, Three Worlds of Welfare Capitalism
    3. Same Author, Why we need a new Welfare State
    4. Goran Therborn, Why some people are more unemployed than others
    5.Claus Offe, The Contradictions of the Welfare State

    Hit me back if you read some of these before…

  2. You know what? This is a great idea. I’ll put up a post later with book recommendations for the holiday break and bump yours into it and add a few more.

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