From a wierd wedding to a minefield

“Let us return to what we have called the double movement. It can be personified as the action of two organizing principles in society, each of them setting itself specific institutional aims, having the support of definite social forces and using its own distinctive methods. The one was the principle of economic liberalism, aiming at the establishment of a self-regulating market, relying on the support of the trading classes, and using largely laissez-faire and free trade as its methods; the other was the principle of social protection aiming at the conservation of man and nature as well as productive organization, relying on the varying support of those most immediately affected by the deleterious action of the market - primarily, but not exclusively, the working and the landed classes - and using protective legislation, restrictive associations, and other instruments of intervention as its methods.” – Karl Polanyi

I have just finished Gregory Clark’s much lauded A Farewell to Alms, which weirdly weds the New Growth apercu – that knowledge, unlike other resources, gives us increasing returns, which is why there is no upward bound to growth – to Malthus – who is, if anything, known for having the very fierce view that the upward bound to growth is determined by the iron relationship between population and subsistence. Imagine, if you will, the bride of Frankenstein marrying Dracula. I won’t go into all the ins and outs of Clark’s view – I’m saving that for my Austin Statesman review – but I did find the attack on the institutionalists a little weird. Clark goes after the founders of the school for setting the beginning point of the industrial revolution at 1688. For the institutionalists, the pre-conditions for capitalism were institutions that preserved property rights, secured social stability, and produced, however modestly, a political feedback system between the rulers and the ruled.
Polanyi’s name is never mentioned in Clark’s text, partly because orthodox economist despise Karl Polanyi. But it should have been. Polanyi unpacks that notion of a feedback much more aggressively than it was later to be unpacked by Douglass North.
My ultimate goal, in tracing the rise of a particular happiness ethos and the ruin of all previous systems of emotional custom and charactermaking, is to embed this process in the Great Transformation. This is why the early nineteenth century – when the lineaments of heaven and hell on earth become, suddenly, much clearer – is so important to my thesis. And this is why it opens the thesis up to show the ‘esoteric’ contribution to psychology made by animal magnetism in creating the polar affect model, since this, too, is clearly marked by the double movement – at once aligning itself with the need for an administrative psychology and registering a deep discontent with the system that requires that psychology. We fight the enemy within, who fights his own enemy within, who is – us. It is a war of mental telepaths, I’m telling you! Or, to put it in other terms – it exactly outlines the epistemological problem of the realistic novel.

My next move is to take one of the men of 1789, Carl Gustav Carus – actually born in 1789 – and show how he used polarity, by way of Schelling, to produce a psychology now known, if at all, for the fact that it foreshadowed Freud’s notion of the unconscious – but known to use connoisseurs of PAM for the straightforward introduction of magnetic terms. Carus was not just a psychologist, he was a painter, a friend of Caspar David Friedrich. Which is, of course, almost too perfect, like discovering that your fieldwork is set in a minefield.


northanger said…
hmm. "Polanyi's story of the tensions in and collapse of the self-regulating economies that developed in the first half of the nineteenth century differs sharply from the story that Marx anticipated and from the story that Marxian economists have told. Though Polanyi argues that perception and response to the damages of the SRM varied by class, and therefore "the outcome was decisively influenced by the character of the class interests involved," (p. 161) it was not unfair distribution of total output via exploitation that caused the tensions and ultimate collapse of the SRM system. The working class did not rise up to overthrow the system. Rather, land owners and bankers as well as merchants, whose interests were often threatened by fluctuations in trade, joined workers in seeking protection."
northanger said…
This paradox was topped by another. While laissez-faire economy was the product of deliberate state action, subsequent restrictions on laissez-faire started in a spontaneous way. Laissez-faire was planned; planning was not. The first half of this assertion was shown above to be true. If ever there was conscious use of the executive in the service of a deliberate government-controlled policy, it was on the part of the Benthamites in the heroic period of laissez-faire. The other half was first mooted by that eminent liberal, Dicey, who made it his task to inquire into the origins of the "anti-laissez-faire" or, as he called it, the "collectivist" trend in English public opinion, the existence of which was manifest since the late 1860's. He was surprised to find that no evidence of the existence of such a trend could be traced save the acts of legislation themselves. More exactly, no evidence of a "collectivist trend" in public opinion prior to the laws which appeared to represent such a trend could be found. As to later "collectivist" opinion, Dicey inferred that the "collectivist" legislation itself might have been its prime source. The upshot of his penetrating inquiry was that there had been complete absence of any deliberate intention to extend the functions of the state, or to restrict the freedom of the individual, on the part of those who were directly responsible for the restrictive enactments of the 1870's and 1880's. The legislative spearhead of the countermovernent against a self-regulating market as it developed in the half century following 1860 turned out to be spontaneous, undirected by opinion, and actuated by a purely pragmatic spirit.

Economic liberals must strongly take exception to this view. Their whole social philosophy hinges on the idea that laissez-faire was a natural development, while subsequent anti-laissez-faire legislation was the result of a purposeful action on the part of the opponents of liberal principles. In these two mutually exclusive interpretations of the double movement, it is not too much to say, the truth or untruth of the liberal position is involved today.

Liberal writers like Spencer and Sumner, Mises and Lippmann offer an account of the double movement substantially similar to our own, but they put an entirely different interpretation on it. While in our view the concept of a self-regulating market was utopian, and its progress was stopped by the realistic self-protection of society, in their view all protectionism was a mistake due to impatience, greed, and shortsightedness, but for which the market would have resolved its difficulties. The question as to which of these two views is correct is perhaps the most important problem of recent social history, involving as it does no less than a decision on the claim of economic liberalism to be the basic organizing principle in society. Before we turn to the testimony of the facts, a more precise formulation of the issue is needed.