by From Jorge Buzaglo “Under the gold standard the leaders of the financial market are entrusted, in the nature of things, with the safeguarding of stable exchanges and sound internal credit on which government finance largely depends. The banking organization is thus in the position to obstruct any domestic move in the economic sphere which it happens to dislike, whether its reasons are good or bad. In terms of politics, on currency and credit, governments must take the advice of the bankers, who alone can know whether any financial measure would or would not endanger the capital market and the exchanges … The financial market governs by panic” (Polanyi, 1944, p. 229). The present globalization wave is a financialization wave. The previous waves described in Karl Polanyi’s The Great
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from Jorge Buzaglo
“Under the gold standard the leaders of the financial market are entrusted, in the nature of things, with the safeguarding of stable exchanges and sound internal credit on which government finance largely depends. The banking organization is thus in the position to obstruct any domestic move in the economic sphere which it happens to dislike, whether its reasons are good or bad. In terms of politics, on currency and credit, governments must take the advice of the bankers, who alone can know whether any financial measure would or would not endanger the capital market and the exchanges … The financial market governs by panic” (Polanyi, 1944, p. 229).
The present globalization wave is a financialization wave. The previous waves described in Karl Polanyi’s The Great Transformation also involved financialization. The financial sector appears as the major and most consistent leader and beneficiary of the general marketization policies of deregulation, liberalization and privatization. One of the main lessons of The Great Transformation is that previous globalization waves radically undermined established systems of social relations, thus provoking, in time, socially and/or nationally “protectionist” reactions, within a “double movement” (for more on Polanyi, see Zaman, 2016).
As Polanyi also observes, political reactions could be extreme:
“After 1930 market economy was in a general crisis. Within a few years fascism was a world power” (Polanyi 1944, p. 242).
It seems that, if the lesson from The Great Transformation holds also for the present globalization wave, we should expect social and national reactions trying to “re-embed” the de-regulated, unbridled forces of the market within new networks and rules of social life. Nationalism seems to be the more primitive and irrational form of “protectionist” reaction. An eroded and divided society, in which political parties and elites have lost legitimacy, is unified around the myth of the great — and abused — Nation. Minorities become potentially treasonous; other nations become potentially enemies. Fascism can present itself in several different guises, from the more folkloristic and semi-democratic, to the aggressively imperialistic and genocidal. We are perhaps already witnessing different forms of implementation of evolving, “post-modern” fascism.
The social protectionist, or socialist reaction, on the other hand, is a more rational reaction, which is based on an analysis — by the social movements and their intellectuals — of the nature of the existing social conflict and its possible progressive resolutions. The socialist response is therefore less visceral and more difficult. It requires generous class solidarity, even at the international level. It requires an ability to form wide programmatic alliances, and to unify the plurality of social forces characteristic of modern, late capitalism. It requires endurance and patience, clarity about long term interests and objectives, and a capacity to postpone and negotiate for further advancement.
Human growth and avoiding European disintegration: lessons from Polanyi