Karl Polanyi and return of the "primitive" in institutional economics.

Author:Ozveren, Eyup
 
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In the wake of the neoliberal policies of the 1980s, a new wave of interest has grown in Karl Polanyi's work as a source of inspiration for a new theoretical and social countermovement. Within this context, Polanyi's work has been gradually incorporated into the body of institutional economics. Therefore, this work does not aspire to represent Polanyi's main line of argument or its policy implications, what it purports to achieve instead, is to bring to light a basic supporting structure of Polanyi's thought that has until now remained in the dark. The idea of progress was of central importance to what Polanyi called the "nineteenth century civilization" (Polanyi 1944, 3). We also know that the nineteenth-century civilization dragged its feet well into the twentieth century, and Polanyi was writing The Great Transformation (1944) very much against the habits of thought characteristic of the social sciences that bore its imprint. As such, the questioning of this basic idea of progress was fundamentally important for Polanyi's work and constitutes one of several important themes of the book. This paper chooses to focus on this single hitherto neglected theme that is of utmost importance for institutional economists as well. At least one institutional economist has already asked if institutional economics is an economics of progress and stated that "there exists more than an ambiguity about the topic in the work of institutional economists" the origins of which are traceable to Clarence Ayres's highly debatable reinterpretation of Thorstein B. Veblen's work (Miller 1992, 115).

Polanyi loudly objected to the uncritical acceptance of the idea of progress by often referring to his mainstream adversaries within the social sciences as "dogmatic evolutionists" (Polanyi 1944, 60). The purpose of this paper is to probe the reality beyond such remarks and to identify the pillars on which Polanyi built his systematic and well-grounded dissent from the conventional idea of progress. We argue that one such pillar is the underlying notion of time we find in Polanyi's work and show how it differs from the metaphor of time inherent in neoclassical economics that treats time as a "movement along a straight line" (Hayden 1993, 99). It is surprising to see that "modern institutionalist literature provides few examples of use of temporal analysis" at a time when this remains one of the more vulnerable attributes of mainstream economics to an institutionalist offensive (106). The contentious nature of time in Veblen's work has recently been raised (Eby 1998) within the domain of institutional economics, but to the best of our knowledge, Polanyi's work waits to be explored. In addition, we single out the discursive function of "primitives" as another pillar. The main reason for our insistence on using this term in quotation marks is to acknowledge the value-laden nature of this concept that makes it unacceptable from the viewpoint of proper anthropology and cultural studies. Furthermore, the inherently retrospective definition of "primitives" vis-a-vis the position of "moderns" as all those who preceded the latter, provides us with a golden opportunity. In this way, by virtue of the quotation marks, we can refer conveniently to tribal humans as well as ancients in one category. While the concept has acquired a popular degenerate meaning, it is its instrumental deployment to prove the opposite case (that the "primitives" could have outperformed their successors by the proper standards of social life) that concerns us here. It goes without saying that nowhere in his work did Polanyi imply "primitivism," that is, a return to the "primitive" state of things, as a social policy. What he did instead, was to cast a shadow on the exaggerated achievements of modernity to demonstrate that quantitative advances did not necessarily mean qualitative improvements and that in the future post-"great transformation" social order, not a return to the past, but a qualitative progress should be accomplished. More specifically, we will demonstrate how Polanyi deployed the actual state of "primitives" of his own time in order to replace the economistic cost-benefit analysis of the Industrial Revolution with an incommensurable "social cost" alternative. In addition, he formulated human needs and motives by recourse to an analogy with "primitives." Therefore, Polanyi deviated from the current mainstream social sciences of his day by bringing back the idea of "primitives" as a functional discursive instrument into his analysis. This could not have been, but for the effect of a conscious interdisciplinary venture into the domain of anthropology that waits to be discussed. Finally, we will link Polanyi with a broadly defined tradition of institutional economics that includes Veblen and Joseph A. Schumpeter and stands out within the social sciences as one countervailing approach where the anthropological evidence of "primitiveness" was systematically deployed in order to part ways with the dogmatic idea of progress. This also laid the foundations for an alternative economic theory that cherished the "impurity principle" as the key to understanding actual economic systems that breed institutional diversity and innovation.

On the Nature of "Time's Arrow"

One is often far too easily misled to think that the commonplace vision of time is natural and, furthermore, uniquely scientific. (1) With this conviction in mind, one quickly loses sight of the fact that in reality, two competing visions of time have coexisted since time immemorial. On one side, there is the vision of unilinear time, strongly characteristic of modernity, to which common wisdom subscribes. The idea of progress, a compulsory intellectual commitment of modernity, has been inextricably linked to this unilinear conception of time as the constitutive axis of history. This viewpoint implies that time moves irreversibly like an arrow traveling in a particular direction, and consequently, history is equivalent to progress. On the other side, there is a much older vision of time that emphasizes the role of recurrence. That is, cyclicality as a result of which history becomes an ordered sequence of repetition. Until the advent of modernity, this vision dominated the scene for two reasons. First, the routine of material daily life in primarily agrarian societies depended heavily upon the harvest cycle. Second, the belief systems entailed a messianic notion of cyclical time, the ultimate end of which was given in the beginning, thereby, implying a cycle operating on a grandiose scale (Eliade 1949).

If many of us now tend to dismiss the cyclical vision of time as archaic and unscientific, this is because our consciousness and judgment of time have been deeply affected by the consequences of modernity. In fact, during the greater part of human history, the cyclical conception of time prevailed over its alternative. If anything, modernity put a brake on this continuity and introduced a novel vision of time. The nineteenth-century civilization, coinciding with the heyday of liberalism, was characterized by a dogmatic faith in this particular linear conception of time:

During the whole of the nineteenth century, philosophers of history as well as professional historians had only a linear conception of time. The rare exceptions to this rule carried little weight. Cumulative and irreversible linear time was so identified with the time of history itself that peoples who had not succeeded in discovering it were simply peoples without a history, the Naturvolker. On the ideological level, the identification of historical time with cumulative and irreversible linear time thus justified Eurocentrism. Sometimes, at the very center of European history, it justified the division into 'historic peoples' and those who were not. It also justified the feeling of superiority that was felt (sic) looking at the past and comparing it with the present. And finally, it justified a faith in the future. (Pomian 1979, 612) However, the crisis of modernity ended this process and reopened the question of the philosophy of time, or "chronosophy" as a leading contributor to the field called it (Pomian 1979, 566). A recent re-questioning of chronosophy has led to the conclusion that a combination of the legacies of both the linear and cyclical approaches to the conceptualization of time may prove to be more useful. In other words, the dichotomous formulation depending on the eternal metaphors of arrows and cycles has important lessons of its own that ought not to be overlooked. Whereas time's arrow captures "the intelligibility of distinct and irreversible events," time's cycle brings to the foreground "the intelligibility of timeless order and law-like structure" (Gould 1987, 14-5). The conception of time and history's privileged relationship to chronosophy are of utmost importance for grasping the true meaning of Polanyi's dissent from the progress-ridden orthodoxy of his time.

While acknowledging the importance of the Industrial Revolution from the viewpoint of giving birth to the possibility of the market society, (2) and thereby bearing responsibility for a watershed in human history, Polanyi nevertheless insisted that the balance-sheet of such a social event as this, could not be calculated in economic terms alone (Polanyi 1944, 33). By so doing, Polanyi paved the way to the theoretical reconstruction of the "social." Such an intellectual undertaking had to step out of the confines of the narrowly defined academic discipline of economics and rediscover the totality of the subject-matter that had been broken up on the way to the market society. By setting up the intellectual problem in this way, Polanyi legitimized forays into the neighboring domains of the disciplines of economic history and social anthropology (45).

Polanyi argued that the conventional assumption of an ahistorical homo economicus went hand in hand...

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