Map of life expectancy at birth from Global Education Project.

Thursday, December 31, 2020


I'm not going to provide any links today, but you're all welcome to propose some if there are sources you like. My purpose today is to offer my own perspective on the economic history we've started to discuss with the help of The Communist Manifesto, Karl Polanyi, and Bret Devereaux. By the mid-18th Century the economy of manors and cottage industry and local reciprocity was dissolving into into capitalism. This was sufficiently well underway in England by that Adam Smith's famous treatise, the Wealth of Nations, was published in 1776. 

Smith had a particular understanding of the present in that era which was not well informed by history. He saw the economy of his time and place, which was dominated by monetized market transactions, as a natural state. He argued -- with some caveats that many people who invoke him ignore or are unaware of, because they haven't really read him -- that when people unrestrainedly pursue their individual self-interest in a market economy, the overall welfare is maximized. Self-interest is (without much examination) defined as personal enrichment, along with making consumption choices. The implication is that interference in this pursuit by government is necessarily harmful. This doctrine became known as laissez-faire, which is French for "allow to do," or liberalism. Yep, the people who made this argument in the 19th Century called themselves liberals. That's what the word originally meant.

Note the rhetorical implications. This form of economic organization was called the "free market," and the people who propounded it called themselves "liberals," which means proponents of liberty. The laissez-faire economy not only maximized the wealth of society, and the welfare of individuals, it also maximized freedom and liberty, which are taken to be essentially the same thing.

This idea failed spectacularly, which is the main idea in Polanyi's telling of the tale. It is based on historical myths and many false assumptions, and the undeniable events of history have proved it wrong again and again. Yet it lives on, an unkillable zombie doctrine. It is so obviously wrong that it shouldn't need debunking, yet here we are. There are even tenured professors at Harvard who still believe this, and it's one of the main ideas propounded by Republican politicians, although they don't actually believe it. So I'm forced to discuss it as though it should be taken seriously. That's what I'll be doing in the days ahead.


Don Quixote said...

It is indeed a seemingly unkillable zombie doctrine.

And its adherents and practitioners--the Randists, the ubercapitalists--seem like unkillable zombies, blind to rational thought, empathy, or compassion.

mojrim said...

The foundational mistake, that which poisons all but the most finely honed critiques of capitalism, is its conflation with "free markets" and "free trade." While both are mythical their attenuated forms have been with us (sans capitalism) for at least 3000 years.