Karl Polanyi (1886-1964), was an Austrian born philosopher, political economist and economic anthropologist. His work made huge contributions to social theory and his seminal book, “The Great Transformation” published in 1944, gave rise to his (arguably) most important concept, “the Double Movement” thesis. Here, Polanyi questioned the ability of a market to regulate itself and argued that the state should react to protect society from the negative consequences of a laissez-faire market, which left unchecked would lead to the exploitation of land, labour and capital. He argued that much of the 19th century was characterised by such actions. Where the market expanded, this movement was checked by a countermovement of a strong state which acted to protect society.
But what should we do if both the market and the state collapse?
This is arguably the position we are in today. The global financial crisis, brewed by the greed, self interest and foolishness of a few powerful actors in the financial industry, has lead to the collapse of businesses, the loss of homes and mass unemployment, with the poor disproportionately affected. Governments allowed this to happen, they have since been tightening regulation, but there is little confidence left in them. The Euro zone crisis was one of the major causes for the resignation of 3 leaders, José Sócrates of Portugal, George Papandreou of Greece and lastly Silvio Berlusconi of Italy.
Societies have taken to the streets in protest of austerity measures, which are being put in place because of the flaws of markets and governments. Protestors are demanding a shakeup of the capitalist system, where leaders in both government and industry think beyond their self interests and work towards longer term goals. The crisis has proved to them at least that self interest will ultimately lead to the demise of their business and it is in their interest to operate in a manner which encourages shared value, where their success is linked to the success of society. This is what protestors are pleading for and who their votes and buying power will ultimately follow. It will be interesting to see where this new form of capitalism will takes us; it may well be towards a more sustainable future.