Abstract

Karl Polanyi in The Great Transformation diagnosed what had happened in the Nineteenth Century that led to poverty, increasingly wild economic fluctuations, increasingly severe depressions, and social dislocation and oppression on a massive scale – the market had been disembedded from communities which were then subjected to the imperatives of a supposedly autonomous market. In fact, such disembedding and imposition of these imperatives was a deliberate strategy developed as a means to impose exploitative relations on people, in opposition to ideas of republican democracy. Recognizing this, after such disembedding had engendered a major global depression in the 1890s and an even more severe depression in the 1930s, along with two world wars, reformers largely succeeded in re-embedding markets. This achievement was fought by neoliberals, and their triumph in the 1970s was a really a project of reversion to the Nineteenth Century economic and political order, now upheld by much more powerful forces, including immensely powerful transnational corporations and financial institutions, corrupt politicians, and much more effective mind control industries. As in the Nineteenth Century, it has concentrated wealth and income, destabilized economies, and threatens a new Great Depression and, as a by-product of the tensions generated by global ecological destruction, possibly a new world war. As opposed to Marxist analyses, Polanyi’s analysis provided a much clearer goal to aim at that has not been discredited by the failures of supposedly communist countries. However, there are still huge problems to be overcome if we are to re-embed the market in communities, including the problem of grappling with the immense power of transnational corporations and financial institutions and those who serve them and the success they have had in corrupting the institutions and culture of democracy. This includes not only undermining the power of nations to control their economies and their subversion of democratic processes, but also in promoting passivity in the population to render them inert and powerless. In this paper I will examine proposals, such as those promoted by Arild Vatn in his book Institutions and the Environment, to develop institutions able to achieve this re-embedding.