Progressives, Neoliberalism, and Austerity: Beyond the Polanyian Impasse
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- Published on Monday, 13 July 2015 22:30
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A Socialist Project e-bulletin .... No. 1141 .... July 14, 2015
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Progressives, Neoliberalism, and Austerity:
Beyond the Polanyian Impasse
Martijn Konings
It is now sometimes hard to remember -- and for the generation that is now in college and wasn't necessarily reading the opinion pages at the time, it may seem nothing short of perverse -- but there was a period following the onset of the crisis when progressive commentary on economic and financial life was pervaded by intense optimism about the future. As overleveraged financial structures crumbled, progressive intelligentsia rang the death knell for the neoliberal principles that were so obviously responsible for the problems. At the height of the crisis in September 2008, the excitement about the ‘return of the state’ was palpable. That the bailouts had some morally problematic aspects did of course... not go unnoticed, but those were nonetheless seen as secondary in importance to the basic lesson they taught -- that the capitalist economy does not regulate itself and needs the state. The future seemed to belong to public regulation and Keynesian intervention.
In the social sciences, such reasoning has become closely associated with the revival of the work of Karl Polanyi. The key concept here is that of the "double movement," which sees history as evolving in cycles: periodic "disembedding" movements, when the speculative and individualizing logic of the market becomes unmoored from its social and political foundations, will be followed by "re-embedding" movements, when society regroups and once again subordinates markets to the public good. This model sees financial crises as powerful reminders of the inability of markets to regulate themselves, and accordingly takes them as political turning-points. The influence of this model of capitalist development has been significant throughout the neoliberal era, but has grown dramatically since the financial crisis, with some of the most prominent public intellectuals embracing it. Indeed, anyone who has misgivings about the role of markets and financial institutions in contemporary life and consults the social science literature for some deeper insight will soon encounter the name of Karl Polanyi.
