Monday, May 3, 2010

Precis: Chapter 12 of Polanyi's Great Transformation

For my precis, I have decided to write on Chapter 12 "Birth of the Liberal Creed" in Polanyi's The Great Transformation because I believe it is one of the most polemical chapters in the book, not to mention one of the strongest cases presented against "economic liberalism" of all the "Team B" players. After inundating readers with vast conjurations of historical information in the first half of his text, Polanyi shifts gears around page 140 and begins his explicitly polemical work in Chapter 12. In an effort to show how Polanyi formulates a cogent, polemical argument, I will trace Polanyi's arguments in the text and map out his rhetorical moves, charting: first, his narrative account of the origin and development of economic liberalism, in which he paints a portrait of "economic liberalism" as a religion with all the unsavory qualities of fanatacism; second, his construction of a "trial" setting, in which he positions the readers as a jury who, bearing witness to the economic liberal's case (a case which he constructs), will ruminate on the "testimony of the facts" and ejudicate on which of the two contending views--economic liberalism or his view--- has more weight. In conjuring up his opponent's viewpoint and then refuting this viewpoint with the "evidence of history," Polanyi seeks to decimate his opponent's position. In tracing these various rhetorical movements in this chapter, we can see that Polanyi's primary mode of argumentation is based on his appeal to logos-- he will let "the facts" speak. In contrast to his construction of the "Other"-- the followers of economic liberalism-- who he aligns with blind faith and irrationality, he constructs his position as correct because it has the force of "logos" and reason behind it.

Before putting the "economic liberals" case on trial, Polanyi first sketches out the rise of the "liberal creed," from its birth ("born as a mere penchant for non-bureacucratic methods" (141) to its "spasmodic tendency" (142) to its stable form as a fanatical religion that demands "complete acceptance" (144). While Polanyi's narrative of the origin and development of economic liberalism was interesting in itself for its historical content, I found Polanyi's rhetorical tactic, in which he uses language to figure "Team A" as religious fanatics, most interesting in this section. When tracking the origin of "economic liberalism," Polanyi immediately discusses the three pillars or "tenets" of economic liberalism as it emerged in the 1820s: competitive labor market, automatic gold standard, and international free trade. After discussing how laissez faire was interpreted narrowly at first, he then explains how economic liberalism gained velocity and took shape as a creed during the 1830s: "it was not until 1830s did economic liberalism burst forth as a crusading passion and laissez faire became a militant creed" (145). In this segment of the chapter, Polanyi's language is saturated with words suggesting that economic liberals are "religious fanatics." In employing a host of religious words when unveiling the narrative account of economic liberalism--such as "fanaticism"(141), "evangelical fervor" (141),"fervently," (143) "creed" (143x2), "crusading passion" (143), "faith" (141), salvation (141)"act of faith" (144), "unshakable belief (144)," "religion" (145)-- Polanyi paints a particular portrait of the economic liberal: a stubborn, narrow-minded religious zealot who makes decisions based on blind faith-- not reason.

When delineating a historical narrative of the origin and development of economic liberalism, Polanyi moves from making subtle rhetorical attacks at first (like aligning his opponents with religious fanatics) to more explicit attacks. In fashioning his own narrative, Polanyi throws his first punch about 5 pages into the chapter: unlike the myth told by economic liberals, "there was nothing natural about laissez faire" (145). According to Polanyi, from its origin, state intervention was necessary to implement a laissez faire economy. In exposing this paradox, Polanyi weaves in the story of utilitarianism and Bentham during the heroic period of laissez faire. Polanyi uses the historical example of Bentham-- who believed that government, with all its administrative organs, was an agency for achieving happiness- as evidence which testifies to the fact that laissez faire economy does not have a natural, "spontaneous" origin; rather, the "road to free market was opened and kept open by an enormous increase in continuous, centrally organized and controlled interventionism" (147). In addition to "de-naturalizing" the myth that laissez faire economy emerged from a spontaneous order, Polanyi also precedes Davis and Klein by arguing that this interventionism is marked in blood, as Bentham maintained that political repression and coercive measures are necessary to implement a laissez faire economy.

After throwing forward his first punch, in which he shows that the laissez faire economy was the product of deliberate state action, Polanyi makes another offensive move when recounting the narrative of economic liberalism. In a moment of dramatic reversal, he states that "subsequent restrictions on laissez-faire started in a spontaneous way. Laissez faire was planned; planning was not". When mobilizing this aphorisim "laissez faire was planned; planning was not," we can observe that Polanyi is directly speaking to Hayek, who argues that "planners," or proponents of an interventionist government, would lead citizens on the road to "serfdom" (as we saw in the Road to Serfdom comic when he obnoxiously inserts "planners" into every frame of the comic). Speaking in Hayek's language, Polanyi appropriates Hayek's terms and cleverly re-orders them to pummel Hayek's argument and assert dominance with his argument. When explaining how "planning was not planned," Polanyi replicates his previous gesture and employs a mode of operation that relies on its force from its empirical methodology. Like his story of the Bethamites, Polanyi roots his argument in a historical example, discussing how Dicey--who made first inquiry into origin of "anti-laissez-faire" collectivist trend-- came to the conclusion that there was "no evidence of a 'collectivist trend' in public opinion prior to the laws which appeared to represent a trend could be found."

After sketching out a background of economic liberalism--in which he subtly and explicitly attacks it when constructing its narrative (or rather deconstructing its mythical narrative?)--, the landscape of the text changes, as Polanyi brings the audience into the context of an imaginary "trial," where the two contending myths will be fleshed out and put up for deliberation. Before dipping into the arguments involved in the case, Polyani first establishes the question/issue that the audience needs to deliberate upon: "While in our view the concept of af self-regulating market was utopian and its progress was stopped by the realistic self-protection of scoiety, in their view all protectionism was a mistake due to impatience, greed, shortsightedness, but for which the market would have resolve its difficulties" (150). Once establishing the issue, Polanyi then delves into sketching out the economic liberal's case, stating that the only argument economic liberalists have is that laissez faire economy failed because there was not complete application of its principles: "Liberal leaders never weary of repeating that the tragedy of the nineteenth century sprang from the incapacity of man to remain faithful to the inspiration of the early liberals" (151). According to economic liberals, the laissez faire policy never had a chance because it was "strangled by trade unionists, Marxists, greedy manufacturers, and reactionary landlords" (157). Polanyi points out that because they are unable to "adduce evidence" of a concerted effort, economic liberals, like politicians of our own day mobilize an "irrefutable" conspiracy theory of "covert action." Having sketched out the "defense of the economic liberals," Polanyi states that he will let the "testimony" of the facts speak for themselves.

In refuting the liberal defense's case, Polanyi mobilizes four different proofs, each of which draws heavily on empirical support: 1) he uses Herbert Spencer's list of diversity of measures of restrictive legislation to show that it could not be a concerted effort 2) the "collectivist" solution was a result of people responding to contingent circumstance "without any consciousness," as we see in the instance of the Workmen's Compensation Act 3) a cross-cultural comparison of the development in various countries shows that "under the most varied slogans, with very different motivations a multitude of parties and social strata put into effect almost exactly the same measures" 4) the behavior of the economic liberals shows that they even at times advocate state intervention, as we see in the case of trade union law and antitrust regulations. In sum, when examining all the facts," Polanyi argues that the liberal myth of the "collectivist" conspiracy of the 1870s and 1880s crumbles. On the other hand, his own case or interpretation of the double movement is "borne out by evidence." In the end, Polanyi states that "nothing could be more decisive than the evidence of history as to which of the two contending interpretations was correct: "that of the economic liberal who maintained that his policy never had a chance, but was strangled by shortsighted trade unionists, Marxist intellectuals, greedy manufactures, and reactionary landlords; or that of his critics, who can point to the universal "collectivist" reaction against the expansion of the market economy in the second half of the nineteenth century as conclusive proof of the peril to society inherent in the utopian principle of a self-regulating market" (157).

In mapping out the contours of Chapter 12, we can observe that Polanyi is engaging in explicitly polemical work. In employing specific rhetorical moves-- constructing a portrait of the "Other," mobilizing a historical narrative of the origin and development of economic liberalism, and using the "trial" setting as a construct--, Polanyi creates a compelling, clever, cogent argument.

--Tess Ranahan

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