Polanyi, commodified labour and school lunches

Market myths and social realities: Karl Polanyi's lens on New Zealand's political economy

I have been reading The Great Transformation, a book published by the Hungarian political economist Karl Polanyi in 1947. I discovered Polanyi through Bruce Jesson, who relayed Polanyi to a New Zealand context in a piece in Auckland Metro in August 1994, On the seesaw.

Just as Jesson saw the relevance of Polanyi’s analysis to the politics that followed the election of the neoliberal Forth Labour Government in 1984, Polanyi also serves as an interesting lens though which to assess the current National/ACT/NZ First government.

In The Great Transformation, Polanyi describes the birth of the market economy in the 17th and 18th centuries in England, and argues that markets cannot be understood without the social and political logics in which such markets are embedded. In contrast to the orthodox liberal account of the development of capitalism, which posits that markets represent the natural order, Polanyi argues that “laissez-faire was planned”. The imposition of a market economy then starts a dialectical process between the push towards marketisation, and the demands for social protection against that marketisation, a phenomenon Polanyi called the ‘double movement’.

Social protections, such as labour laws and tariffs, are an attempt to re-embed the economy.

As Jesson put it, a market economy becomes “a matter of seesawing back and forward between the alternatives. As one problem is corrected, another develops.”

While Polanyi recognises the crucial role of the labour movement in resisting market overreach, he also gives examples of where conservative political forces have sought social protections from the market.

For Polanyi, a self regulating market is a utopian project.