Nikil Saval, in The Nation, offers an intriguing look at Karl Polyani’s critique of capitalism. Among his chief arguments is one that contradicts the libertarian market orthodoxy that assumes free markets require limited government intervention. In fact, Savil points out that the opposite is true. Polyani rightly believed that markets require as much state intervention as more socialist economic forms to manage “disruptions”:
as Polanyi shows, liberals also turn to the state to ensure that the “self-regulating” market could emerge despite these disruptions. Many of the central elements of this economic system—a “competitive labor market, automatic gold standard, and international free trade”—were far from naturally occurring, and they also required a state to ensure that “self-regulation” didn’t cause too much damage. The free market could not simply come into being on its own; it had to be legislated.
The difference, ultimately, is that socialist and social democratic systems seek to limit the commodification of human needs — or at least mitigate the negative impact on humanity that commerce will inevitably create. Markets, because they incentivize profit and shareholder value above all other motivations, are not adequate to protect clean water or air, ensure that everyone has access to healthcare, or that workers have a say in their workplaces.
Environmental protection, universal education and healthcare and the minimum wage are not interventions in a naturally occurring free-market but a set of rules intended to shift power in favor of workers and the community.
Hank Kalet 