Tuesday, May 31, 2016

Karl Polanyi For President

Karl Polanyi was a critic of the so called free market society.  He believed that markets were useful in society but that they should not be the primary means for organizing society.  In fact, he argued that markets are determined by the direct intervention of the state.  For example, the state deregulated financial markets and that led to the financial crisis.  The state also saved the financial system by taking dramatic steps to rescue it from the crisis that it created.  The industrial revolution in England could not have taken place without an active state which provided a path from feudalism and the means to source raw materials and sell its products in a global market.  Polanyi regarded the idea of a free market as utopian idea that has never existed and cannot exist in the real world.  Central banks are also a necessary condition for a market economy.  We would have market chaos without the means to provide price stability and to moderate swings in the business cycle.  This article provides a good introduction to the ideas of Karl Polanyi.  It also argues that Bernie Sanders makes an argument that is very close to the social democratic ideas of Polanyi.  Sanders holds that healthcare and education are rights that should be guaranteed by the state.  They should not be subject to the dictates of market forces.  Sanders also takes a position similar to that of Polanyi.  He holds that political decisions were taken that have fostered the rise in inequality in the US.  Those policies can be reversed as easily as they were created in a democratic society.  It is the job of a democratic government to determine the operation of the market system.  The market system is subordinate to the democratic state.

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