Early Work on third-wave neoliberalism

Block and Somers have a chapter “Beyond the Economistic Fallacy: the Holistic Social Science of Karl Polanyi” in a book published in 1984 edited by Theda Skocpol Vision and Method in Historical Sociology Cambridge University Press (pp. 47-84). This shows the thinking of Fred Block and Margaret R. Somers at the start of the third era of neoliberalism, which gave impetus to their work on Karl Polanyi.

This chapter should be read by anyone interests in the critique of the return to “the magic of the market” in which belief that “economic problems can be solved through a systematic reduction in the role of government.” (p. 48) Block and Somers continue:

“For those who are sceptical of these arguments, Polanyi is a crucial resource because his work took shape as a critique of earlier efforts to justify noninterference in the market. The figures Polanyi was polemicizing against – Hayek and von Mises [see Ludwig von Mises Institute – known as the Austrian School – my square brackets added] – are the intellectual idols of the present generation of free marketeers and Polanyi’s critique of their ideas is perhaps the most devastating ever produced in that it demonstrates the fundamental flaws and contradictions in the idea of self-regulating markets.” (p.48)

Finally, in this introduction, Block and Somers point out how Polanyi developed a distinctive theoretical and political position recognising that Marxism was flawed by what they term “the economistic fallacy” and so avoided the Hungarian extremism that developed out of the loss of territory at the end of the First World War and that became permanent in the 1920 Treaty of Trianon. From Béla Kun in the 1930s to Jobbik in 2009 extremism of both left and right have plagued Hungary.

All this explains the continuing power of Polanyi’s book, completed before the end of the Second World War. The Hungary that Polanyi left is, of course, no more. But Polanyi’s achievement remains enduring.

Finally, I would just note that Theda Skocpol and Margaret Somers jointly authored an article “The Uses of Comparative History in Macrosocial Inquiry” Comparative Studies in Society and History Volume 22, Issue 2 (April 1980) pp 174-197. This was not about third-wave neoliberalism, no doubt because when it was written that had not happened yet. Margaret Thatcher only became prime minister for the first time in May 1979 while Ronald Reagan was first elected only some 18 months later, in November 1980. The timing is crucial as it was only with Reagan that third-wave neoliberalism became U.S. policy.

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