Marxisms in the 21st Century. John Saul

Great Transformation examines the political and social consequences of the rise of the market from the end of the eighteenth century to the Great Depression. The market, Polanyi argues, had such devastating consequences that it generated a countermovement to protect society. The countermovement, however, could be as destructive as the market it sought to contain. Thus it included fascism and Stalinism as well as the New Deal and social democracy. Indeed, Polanyi concluded that such were its consequences that never again would humanity experiment with market fundamentalism. He was wrong – market fundamentalism struck our planet once again in the 1970s, threatening human existence and annihilating communities.

      The reason for Polanyi’s false optimism lies in his failure to take the logic of capitalism seriously. While he embraces Marx’s early writings on alienation, he rejects Marx’s theory of history, whether understood as a succession of modes of production, the self-destroying dynamics of capitalist competition, or the intensification of class struggle. But in rejecting the idea of laws of history, Polanyi also jettisons the logic of capital, in particular its recurrent deployment of market fundamentalism as a strategy for overcoming its internal contradictions. This, of course, is where David Harvey (2003 and 2005) steps in regarding ‘neoliberalism’ as an ideological offensive of capital against the gains made by labour in the period after World War II.²

      Recognising the contemporary wave of market fundamentalism leads to questioning Polanyi’s homogenising history of capitalism as a singular wave of marketisation giving way to a singular countermovement – what he calls the ‘great transformation’. Referring specifically to the history of England, Polanyi recounts in detail the way the Speenhamland system protected labour from commodification until the passage of the 1834 New Poor Law that banished outdoor relief. The year 1834 marked, then, the establishment of a pure market in labour that, through the nineteenth century, generated movements against commodification – from the Chartist movement of 1848 that sought to give workers the vote, to the factory movement that sought to limit the length of the working day, to the abolition of the Combination Acts that sought to advance trade unions, to demands for unemployment insurance and minimum wages. These struggles were not about exploitation, argues Polanyi, but about the protection of labour from its commodification. Society was fighting back against the market.

      In Polanyi’s history, the commodification of labour was but part of a long ascendancy that continues from the end of the eighteenth century through World War I to the Great Depression. Facilitated by the commodification of money, itself ensured through the regulation of exchange rates by pegging them to the gold standard, the market expanded into the realm of international trade. Opening up an unregulated global market in trade with the fluctuating value of national currencies so destabilised individual national economies that states successively went off the gold standard and undertook protectionist policies. Protectionist regimes took the form of fascism in countries such as Italy, Germany and Austria, took the form of the New Deal in the US, took the form of Stalinism with its collectivisation and central planning in the Soviet Union and took the form of social democracy in Scandinavian countries. In Polanyi’s eye the upward swing in commodification ultimately gives way to a counter-movement that could lead to socialism based on the collective self-regulation of society but was just as likely to give way to fascism and the restriction of freedom.

      Knowing that Polanyi was wrong about the future, calls into question his account of the past. Thus re-examining Polanyi’s argument reveals that there was not a singular upward trajectory in marketisation but at least three waves of marketisation (see Figure 2.1). The first takes us from Speenhamland to World War I and is primarily driven by the commodification of labour, followed by its protection, whereas the second wave takes us from World War I to the middle 1970s. The second wave originates with the commodification of money (and a renewed commodification of labour), leading to a countermovement involving the regulation of national economies. The third wave, known to many as neoliberalism, begins in 1973 with the oil crisis and initiates a third wave of marketisation featuring the recommodification of labour and money, but also the commodification of nature. We are still in the midst of the ascendancy of this third wave of marketisation. Along the way we have passed through structural adjustment administered to the failing economies of the South and shock therapy adopted by the post-Soviet regime and its satellites in East and central Europe. Successive economic failures of state-regulated economies served to energise the ascendant belief in the market. The succession of financial crises in Asia and Latin America during the 1990s, culminating in the financial crisis of 2008, served to consolidate the power of finance capital.³

      What is unique about the third period, however, is the way the expansion of capitalism has given rise to environmental degradation, moving toward ecological catastrophe. Whether we are referring to climate change or the dumping of toxic waste, the privatisation of water, air and land, or the trade in human organs, the commodification of nature is at the heart of capitalism’s impending crisis. The countermovement in the third period will have to limit capitalism’s tendency to destroy the foundations of human existence, calling for the restriction and regulation of markets and a socialisation of the means of production which would be as compatible with the expansion of freedoms as with their contraction.

Figure 2.1: Three waves of marketisation

      Polanyi’s single great transformation, from ascendant marketisation to countermovement, gives way to three waves of marketisation, each with its own real or imagined countermovement. Each wave of marketisation is marked by a leading fictitious commodity. As well as incorporating a new fictitious commodity, each wave of marketisation recommodifies that which had been commodified before, but in new ways. Labour, for example, is commodified, decommodified and then recommodified in successive waves. We should not think of the three waves as compartmentalised and separated from each other, but rather as a form of dialectical progression or, perhaps better, regression.

      The rhythm and experience of these waves is different in different parts of the world. Polanyi himself recognises how the first wave of marketisation in the nineteenth century had especially destructive consequences in the colonies where there was, he argues, no capacity to resist the annihilation of indigenous societies. Much as he exaggerated the destruction of the working class in nineteenth-century England, he also exaggerates the destruction of indigenous communities in South Africa.⁴ We now know that colonialism actually limited land dispossession, so as to create the basis of indirect rule as well as labour reservoirs for industry. Still, in his exploration of colonialism, Polanyi does raise the question of the differential consequences of marketisation according to position in the world capitalist order.

      No less important is the historical context. Thus Russia and China today, emerging from a period of state socialism – itself a reaction to second-wave marketisation – face the simultaneity of all three waves of marketisation, that is, simultaneity in the commodification of land, labour and money. In the Russian case, marketisation, at least for the first seven years of the post-Soviet era, was accompanied by an unprecedented economic decline just as in China it was accompanied by unprecedented economic growth. In Russia, wanton destruction of the party state was inspired by market fundamentalism and the belief in a market road to market capitalism, whereas in China the market was incubated under the direction of the party state. The staggering pace of Chinese economic development is a resounding confirmation of Polanyi’s own argument that markets require political organisation.

      In short, each wave of marketisation is marked by successive articulations of the commodification of labour, money and nature with corresponding countermovements of different scales and defending particular rights. Each wave differentially affects countries according to their history and placement in the world economy. Moreover, as I will now show, each wave also reflects particular contradictions of capitalism, and a particular vision of socialism as well as the defence of a particular set of rights. This movement of history gives rise to a succession of Marxisms: classical Marxism, followed by Soviet, Western and Third World Marxism, which in turn give way to what I call sociological Marxism. Let us take each in turn.