Often cited as one of the most influential political economists and social democratic theorists of the twentieth century, Karl Polanyi has – of late – enjoyed an upsurge in popularity. A fact that is in no doubt due to the search for alternatives to neoliberal capitalism. In his book ‘Reconstructing Karl Polanyi’, Gareth Dale writes that the symptoms of the ‘self-regulating market’, carefully unpicked by Polanyi in his book ‘The Great Transformation’, closely resemble ‘the social and economic malaise, and ecological Armageddon’ of late capitalism. Polanyi’s writings offer insight into the machinations of the neoliberal apparatus (as well as soothing our angst against the ‘Terminator-like’ resilience of the political system). In this article for the Pluto blog, Dale considers the contemporary relevance of Polanyi, examining the debate on the proposed dissonance of capitalism and democracy and citing Trump, Streeck and Habermas along the way:
In response to anti-establishment insurgencies from right and left, we have seen a sharpening of the debate on the clash of capitalism and democracy.
For Stephen Moore, co-founder of the Club for Growth and economic adviser to Donald Trump, ‘capitalism is a lot more important than democracy.’ In the eyes of another Trump backer, the Silicon Valley billionaire Peter Thiel, the compatibility between freedom and democracy expired long ago. The 1920s was ‘the last decade in American history during which one could be genuinely optimistic about politics.’ Since then, ‘the vast increase in welfare beneficiaries and the extension of the franchise to women—two constituencies that are notoriously tough for libertarians—have rendered the notion of ‘capitalist democracy’ an oxymoron.’
Essentially the same instinct—to defend capitalism against democracy—has also guided liberal elites in their defence of the established order against populist assault. For them, the upsurges of right and left in the US and UK, and the Brexit vote too, appear as monsters unleashed by an excess of democracy. The language of the ‘mob,’ of the ‘ignorant masses,’ has come out of the shadows. Democracy should no longer be trusted. It panders to the demos, a group that Plato had long ago shown to be fickle, irrational and paranoid, easily weaponised by demagogues.
The empirical flaw in these arguments is obvious. In reality, as Astra Taylor observes in respect of the United States, ‘our political system is far less democratic than it was a generation ago. Over the past 40 years, we’ve seen unions crushed, welfare gutted, higher education defunded, prisons packed to overflowing, voting rights curbed, and the rich made steadily richer while wages stagnated.’ Protests and populist political movements, she adds, ‘are signs that people have been locked out of structures of governance, not that they have successfully ‘hijacked’ the system.’
These excerpts from the ongoing debate exemplify a broader phenomenon: the revival of the thesis on the incompatibility of capitalism and democracy. This notion was widely held in the interwar period, including by Karl Polanyi, as I discuss in detail in a chapter of Reconstructing Polanyi.