First Published in jimsresearchnotes 24 Nov 2011
Karl Polanyi The Great Transformation (1944 ) is particularly relevant to my early work on the way land ownership rights were changed from clan chief in relation to clan members, to tenants who could be evicted by the landowner at will. On this see Squirearchy. However, I did not use Polanyi in my early publications, quite simply because neoliberalism was only born in the early 1980s. It was the Swedish neoliberal turn during the Persson Government around the turn of the millenium that made me realise its applicability to conditions in Sweden. And it was Tom R. Burns who introduced me to the work of Margaret Somers that led to the publication of “Society versus the State: the social construction of explanatory narratives in social policy research” (Housing, Theory and Society 2002, 19: 185-195). Another of Polanyi’s successors is Fred Block. In conjunction with the current situation in the USA and increasingly in the EU, with the combination of heavy debts and the rejection of Keynesian economics, I have drawn on the Polanyi-inspired researchers more and more for ideas and understanding.
So the work of Polanyi, Somers, Block and others suddenly became understandable as relevant to neoliberalism in the form of a modern throwback – or revisionist throwback – to the old Speenhamland system of outdoor relief that was introduced in England in the late 1700s, which subsidised the wages of agricultural workers to keep the agricultural labour force in work. I might add here that the late 1700s also saw the rise of feminist ways of coping with this by the building and organising of integrated communities following the ideas of Robert Owen and the co-operative movement. Publications by E. P. Thompson, Sheila Rowbotham and others in the U.K. researched and wrote about the work of the early collective feminists, which caught my interest early on in the American publications, especially of Dolores Hayden.
Speenhamland was replaced in England with the New Poor Law in the 1830s (later in Scotland and Ireland), with indoor relief in the form of workhouses and other institutions, deliberately designed with conditions intended to be worse – and so to be a deterrent to wage labour as its alternative.
The Karl Polanyi Institute of Political Economy continues this work and that of his modern successors. As its website describes, the Institute was founded in 1987 in response to the growing recognition of the relevance of Karl Polanyi’s work to contemporary society. The Institute holds international annual conferences and keeps an archive of work related to his ideas.
The year of the Karl Polanyi Institute’s founding – 1987 – is not co-incidental. A series of major reforms of US taxation were introduced up to and including the 1986 tax reform and mortgage interest deductions. 19 October 1987 marks the first major stock market crash – dubbed Black Monday – since the rise of the new laissez-faire of Reaganomics, when sub-prime mortgages were introduced, just a few years earlier.
This U-turn is, in a sense, one part of a cyclical theory of social and economic change, even if the return journey can easily take many generations – just as the original but continuing U-turn clearly will need before it unravels. The centrality of the financing of housing with mortgages that can be bought and sold on the “free market” so that the “ower” occupier does not know which finance house or bank “owns” the mortgage at any point in time, makes Polanyi’s ideas of considerable interest to housing researchers. Or at least it should do!
I will take a closer look at the re-emergence of the underclass in research notes in preparation. Even if ordoliberalism will indeed be eliminated by the free market utopianism currently dominant in the USA as well as in its client states, the underclass is also one of the major problems that remains chronic to the new laissez-faire.
Since Germany is now once more Europe’s power house, and despite the loss of much territory its ordoliberalism remains an important part of its postwar success, I do not think it is reasonable to question the continued existence of ordoliberalism any more than we can question the continued existence of neoliberalism.