I am always trying to get people to read Karl Polanyi's The Great Transformation, The Political and Economic Origins of Our Time, (1944) which, admittedly, can be tough slogging even if you like economic history. I read it while sitting in my mother's hospital room while waiting to see if she would live or die (she lived), and had no day-to-day distractions like telephones, work, children, etc., but it's not that tough of a read.
Polanyi, a Hungarian, was a socialist, and a refugee from the Nazis who lived and taught economic history in England and America during WWII. You might like his history of the development of free markets, because he writes that until the 19th century, there were no self-regulating markets, they were all regulated by states. Similarly, although this probably won't interest most people, the gold standard was also not self-regulating. Finally, and this is one part you'd probably find interesting, prices, production, wages, and employment were also not self-regulating before the 19th century, but controlled by states, at least in Europe.
Why did states regulate prices, production, wages and employment? In part, for their own benefit, but also in part to protect the lower classes from the hardships caused by unfettered capitalism. He doesn't used Shumpeter's term, "creative destruction," but he's talking about the same thing.
Freedom isn't just about sex and whiskey and porn. First and foremost, freedom means economic freedom, which may or may not include the ability to sell sex and whiskey and porn openly -- all three of these have ALWAYS been available all over the world for as long as there have been human beings, but not out in the open as we do in the US today.
Freedom means the right to charge what you want for what you produce, produce as much or as little as you want, and hire and fire at will. This freedom has its downsides.
Take Iraq as an example. Saddam regulated the price of every staple from bread to oil and kept the prices artificially low. Removing those price supports is great if you are a seller, horrible if you are a poor person on a tiny fixed income. Creative destruction, unfettered, may well mean that poor people on tiny fixed incomes are destroyed.
Polanyi, as a socialist, advocated for socialism as a brake on unfettered capitalism. I don't agree with him, but then, I don't have to. America is plenty socialist these days.
We have almost unfettered capitalism, and we have labor unions, Social Security, Medicare, WIC, food stamps, unemployment insurance, faith-based charities, "compassionate conservatism", as do all Western countries.
How to transform a traditional society to a Western-style modern society? Maybe Polanyi was right. Worth thinking about. Even if socialism isn't the answer, safety nets of some type appear to be, if not necessary, desireable.
In Islam, the safety nets are mandatory, just as they are in Christianity and Judaism. But then there is the problem of separation of church and state. If the society becomes secular, what happens to the safety nets? |
