Abstract
In 1944, two seminal works of political and social theory appeared: F.A. Hayek’s The Road to Serfdom and Karl Polanyi’s The Great Transformation. Both works focused on society’s spontaneous resistance to the “marketization” of life. Yet, the authors arrived at opposite normative conclusions. This article attributes the normative distance to a methodological clash over the role and limits of normative theorizing in the concrete and sometimes uncooperative world of politics. This clash, in turn, illuminates recent debates about “ideal” and “non-ideal” theory, and suggests limits to the applicability of the former.
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Notes
While both books arguably have suffered from neglect in recent decades, Hayek, the winner of a Nobel Prize, has surely been the more recognized name of the two authors, notwithstanding a “Polanyi revival” during the past 35 years. See Daniel Immerwahr, “Polanyi in the United States: Peter Drucker, Karl Polanyi, and the Midcentury Critique of Economic Society,” Journal of the History of Ideas 70 (July 2009): 445–66; Fred Block, “Karl Polanyi and the Writing of ‘The Great Transformation,’” Theory and Society 32 (June 2003): 275–306. Perhaps Polanyi has received less recognition because of the difficulty in fitting him neatly within a single discipline. As Block and Somers put it, “[Polanyi’s] work cannot easily be classified within one or another of the major social science traditions. There are echoes throughout The Great Transformation of Marx, Weber, Durkheim, and other classical thinkers, but Polanyi was not a direct disciple of any of these theorists. In fact, in anthropology, where Polanyi’s influence has been the greatest, the uniqueness of his contributions is suggested by the recognition of a distinctly Polanyian paradigm on economic anthropology that stands in conflict with both Marxist and substantivist traditions.” Fred Block and Margaret Somers, “Beyond the Economic Fallacy: The Holistic Social Science of Karl Polanyi,” in Vision and Method in Historical Sociology, ed. Theda Skocpol (Cambridge: Cambridge University Press, 1984), 47. O’Riain and Block likewise report that a recent conference on Polanyi’s thought attracted sociologists, anthropologists, political scientists, economists, and geographers. Sean O’Riain and Fred Block, “Introduction,” Politics & Society 31 (June 2003): 187. In addition, scholars tend to read Polanyi as a representative of disparate intellectual traditions. He has been labeled an Aristotelian, by William James Booth, “On the Idea of the Moral Economy,” The American Political Science Review 88 (September 1994): 653–67; a non-Aristotelian by Sener Akturk, “Between Aristotle and the Welfare State: The Establishment, Enforcement, and Transformation of the Moral Economy in Karl Polanyi’s ‘The Great Transformation,’” Theoria: A Journal of Social and Political Theory 109 (April 2006): 100–22; an “American Institutionalist” by Walter Neale, “Karl Polanyi and American Institutionalism: A Strange Case of Convergence,” in The Life and Work of Karl Polanyi: A Celebration, ed. Kari Polanyi Levitt (Montreal: Black Rose Books, 1990); a Central European intellectual who participated in the U.S. intellectual scene by Guenther Roth, “The Near-death of Liberal Capitalism: Perceptions from the Weber to the Polanyi Brothers,” Politics & Society 31 (June 2003): 263–82; and by Immerwahr, “Polanyi in the United States,” 485; and the progenitor, with Gramsci, of Sociological Marxism by Michael Burawoy, “For a Sociological Marxism: The Complementary Convergence of Antonio Gramsci and Karl Polanyi,” Politics & Society 31 (June 2003): 193–261 ). For a fascinating account of Polanyi’s frustrations over making a name for himself, see Tim Rogan, “Karl Polanyi at the Margins of English Socialism, 1934–1947,” Modern Intellectual History 10 (August 2013): 317–46.
Laura Valentini, “On the Apparent Paradox of Ideal Theory,” Journal of Political Philosophy 17 (2009): 332.
John Rawls, The Law of Peoples: With “The Idea of Public Reason Revisited” (Cambridge: Harvard University Press, 2001), 89. For a critical overview of Rawls’ distinction, see A. John Simmons, “Ideal and Nonideal Theory,” Philosophy & Public Affairs 38 (January 2010): 5–36.
As with most distinctions, there are many levels beyond the general. Even the notion of “ideal” can be understood in various different senses. See Charles W. Mills, “‘Ideal Theory’ as Ideology,” Hypatia 20 (Summer 2005): 165–84. In what follows, I offer only the level of specificity required for the points I am pursuing.
Laura Valentini, “Ideal vs. Non-ideal Theory: A Conceptual Map,” Philosophical Compass 7, (2012): 654. Valentini offers a helpful “conceptual map” of the ideal/non-ideal debate and distinguishes between three meanings of the terms. Of the three, her second meaning comports most obviously with our common use of the terms: ideal theories are utopian and non-ideal are realistic.
Joseph H. Carens, “Realistic and Idealistic Approaches to the Ethics of Migration,” International Migration Review 30 (April 1996): 156. The division can, of course, occur within the same general theory. To quote Rawls: “The intuitive idea is to split the theory of justice into two parts. The first, or ideal part assumes strict compliance and works out the principles that characterize a well-ordered society under favorable circumstances …. Nonideal theory, the second part, is worked out after an ideal conception of justice has been chosen.” John Rawls, A Theory of Justice (Revised Edition) (Cambridge: Harvard University Press, 1999), 122. Conceived in this manner, the relationship between the endeavors is complementary. On this point, see also William A. Galston, “Realism in Political Theory,” European Journal of Political Theory 9 (October 2010): 401.
Amartya Sen, “What Do We Want from a Theory of Justice?” Journal of Philosophy 103 (May 2006): 236.
As Estlund notes, “The most realistic moral theory of all, of course, would recommend or require people and institutions to be exactly as they actually are already.” David Estlund, “Utopophobia,” Philosophy & Public Affairs 42 (2014): 115.
TRTS avoids a technical discussion of what, in economic terms, is entailed by free market social control. Hayek’s famous essay on knowledge, “The Use of Knowledge in Society,” American Economic Review 35 (September 1945): 519–30, published a year after TRTS, delved more deeply into this topic.
Friedrich A. von Hayek, The Road to Serfdom (Chicago, IL: The University of Chicago Press, 1944), 38–39.
Ibid., 43. He sees such fatalist reasoning in writings of E. H. Carr, a scholar Hayek considers to be the most quintessential of socialist-turned national socialists. Hayek cites Carr’s statement: “We know the direction in which the world is moving, and we must bow to it or parish.” Ibid., 188.
Hayek, The Road to Serfdom, 52–53.
Ibid., 43.
Ibid., 205.
Ibid., 204.
Ibid., 203.
Ibid., 101.
Ibid., 204.
Ibid., 213.
Ibid., 133.
He would replace “freedom” and “liberty” with “capitalist concept of freedom” and “capitalist concept of liberty,” respectively.
Using the term “freedom” is tricky here because the two thinkers had very different understandings of it. For more on these different approaches to freedom, see footnote 54.
Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time, 2nd Beacon Paperback ed. (Boston, MA: Beacon Press, 2001), 57. For a spirited debate over this claim, see Santhi Hejeebu and Deirdre McCloskey, “The Reproving of Karl Polanyi,” Critical Review 13 (1999): 285–314; Mark Blyth, “The Great Transformation in Understanding Polanyi: Reply to Hejeebu and Mccloskey,” Critical Review 16 (Winter 2004): 117–33; Santhi Hejeebu and Deirdre McCloskey, “Polanyi and the History of Capitalism: Rejoinder to Blyth,” Critical Review 16 (Winter 2004): 135–42.
Block (“Karl Polanyi and the Writing of ‘The Great Transformation’”) suggests that Polanyi used the term “market society” rather than “capitalism” to avoid the associations of the Marxist use of the word “capitalism.”
Polanyi, The Great Transformation, 237.
In Engels’ formulation, “The materialist concept of history starts from the proposition that the production of the means to support human life … is the basis of all social structure; that in every society that has appeared in history, the manner in which wealth is distributed and society divided into classes or orders is dependent upon what is produced, how it is produced, and how the products are exchanged. From this point of view the final causes of all social changes and political revolutions are to be sought … in changes in the mode of production and exchange.” Friedrich Engels, “Socialism: Utopian and Scientific,” in Marx and Engels: The Basic Writings on Politics and Philosophy, ed. Lewis Feuer (Garden City, NY: Anchor Books, 1959), 90.
Polanyi, The Great Transformation, 237.
Ibid., 42.
Ibid., 73.
Ibid., 131.
Townsend had said, “hunger will tame the fiercest animals, it will teach decency and civility, obedience and subjection, to the most perverse. In general it is only hunger which can spur and goad them [the poor] on to labor … ” (Quoted in Ibid., 113.)
Townsend had extrapolated from the population-balancing properties of the goats and dogs on Crusoe’s island in the Pacific. See Ibid., 112–3.
Ibid., 125.
Ibid., 102. For a critical appraisal of Polanyi’s history of Speenhamland, see Fred Block and Margaret Somers, “In the Shadow of Speenhamland: Social Policy and the Old Poor Law,” Politics & Society 31 (June 1, 2003): 283–323.
Polanyi, The Great Transformation, 165.
Ibid., 126.
Ibid.
Ibid., 155.
Hayek, The Road to Serfdom, 204.
Ibid., 123. Hayek later revised his understanding of justice to encompass only “deliberate allocations to particular people” and not “the outcome of a process the effect of which on particular people was neither intended nor foreseen.” Law, Legislation and Liberty, Volume 2 (Chicago, IL: University of Chicago Press, 1977), 64.
Hayek, The Road to Serfdom, 204.
Polanyi, The Great Transformation, 215.
Cunningham, while supportive of Polanyi’s thesis, suggests that globalization has dampened somewhat the inevitability of intervention, in “Market Economies and Market Societies,” Journal of Social Philosophy 36 (Summer 2005): 129–42).
Hayek, The Road to Serfdom, 5.
Ibid., 45.
Ibid., 19–20.
Ibid., 44.
Ibid., 47.
Ibid., 48.
Rahman argues persuasively that Polanyi emphasizes “democratic participation” as a response to the market. He therefore should be viewed as a corrective not only to Hayek, but also to another—and far more influential—market critic of the time, namely Keynes. K. Sabeel Rahman, “Conceptualizing the Economic Role of the State: Laissez-faire, Technocracy, and the Democratic Alternative,” Polity 43 (April 1, 2011): 264–86.
Karl Polanyi, “Our Obsolete Market Mentality,” in Primitive, Archaic and Modern Economies: The Essays of Karl Polanyi (New York: Anchor Books, 1968), 63.
Polanyi, The Great Transformation, 141.
Hayek, The Road to Serfdom, 133.
The truth of this inversion rests on an understanding of freedom radically different from the sort of freedom that Hayek had in mind (and that he was to explore in depth 16 years later in The Constitution of Liberty). Hayek’s understanding of liberty—or what Berlin later famously dubbed “negative liberty” and what Friedman called, “freedom to choose”—was, in the opinion of Polanyi, no freedom at all (or, at best, was a freedom to lose). For Polanyi, the market requires the sacrifice of a very different sort of freedom, one that takes account not just of the obstacles in our path, but also of our ability to attain our ends. Whereas Hayek saw those to whom the market had not been kind as free, Polanyi saw only squalor. Of course, this contrast is not new in the history of Western thought. Think of Rousseau, in “The Social Contract,” versus Hobbes in Leviathan, or Spencer in “The Man Versus the State,” versus Mill in Principles of Political Economy. It was also to play out after 1944. Here we can think of Berlin in “Two Concepts of Freedom,” versus Macpherson in “Berlin’s Division of Liberty,” or Nozick in Anarchy, State, and Utopia versus Cohen in Self-ownership, Freedom and Equality. No doubt, political theorists will always debate whether freedom entails a lack of impediments or whether it entails the ability to attain one’s ends. For an excellent discussion of some of these issues, see Charles Taylor, “What’s Wrong with Negative Liberty?” in The Idea of Freedom, by Alan Ryan (Oxford: Oxford University Press, 1979). In this respect, the exchange between Hayek and Polanyi is but a moment in a perennial discussion.
I confess that my presentation of TRTS misses some of its historical context and, as a result, may be slightly unfair to Hayek. His book assumes that planning and fascism differ by degree only and that the former leads irrevocably to the latter. Moreover, he repeatedly warns that “from the saintly and single minded idealist to fanatic is often but a step” (Hayek, The Road to Serfdom, 55). If we bear in mind that the book was written at the twilight of World War II, then his reluctance to accept intervention as an inevitable phenomenon is understandable. One cannot deny that from the perspective of 1944 Europe, intervention represented an ominous and somewhat uneasy alternative to economic dislocations. Hayek, like Von Mises whose Human Action came out in 1949 and was a product of the same period, refused to accept planning as inevitable. He, instead, saw his work as offering a glimmer of hope: “I am not … arguing that these [fascist] developments are inevitable. If they were, there would no point in writing this.” (Hayek, The Road to Serfdom, 4.) In the Preface to the 1976 edition of TRTS, he modifies his original position by means of a semantic distinction involving “socialism.” He now states: “at the time I wrote, socialism meant unambiguously the nationalization of the means of production and the central economic planning which this made possible and necessary.” However, today socialism has a new definition: “the extensive redistribution of incomes through taxation and the institutions of the welfare state.” After noting this linguistic evolution, Hayek writes: “It has frequently been alleged that I have contended that any movement in the direction of socialism is bound to lead to totalitarianism. Even though this danger exists, this is not what the books says.” F. A. Hayek, The Road to Serfdom (Chicago, IL: University of Chicago Press, 2007), xxiii–iv).
Milton Friedman, Capitalism and Freedom (Chicago, IL: University of Chicago Press, 1962) and Milton Friedman and Rose D. Friedman, Free to Choose: A Personal Statement, 1st Harvest/HBJ edn. (San Diego, CA: Harcourt Brace Jovanovich, 1990).
Nozick, Anarchy, State, and Utopia.
Charles A. Murray, Losing Ground: American Social Policy, 1950–1980, 10th anniversary edn. (New York: Basic Books, 1994).
Loren E. Lomasky, Persons, Rights, and the Moral Community (New York: Oxford University Press, 1987).
Jan Narveson, The Libertarian Idea, Ethics and Action (Philadelphia, PA: Temple University Press, 1988).
James R. Otteson, Actual Ethics (Cambridge; New York: Cambridge University Press, 2006).
Jason Brennan, Libertarianism, What Everyone Needs to Know (New York and Oxford: Oxford University Press, 2012).
A notable exception is John Tomasi, who argues that regime types cannot be considered just if their institutional strategies are “utterly unrealistic in light of the general facts of political sociology.” John Tomasi, Free Market Fairness, Reprint edn. (Princeton, NJ: Princeton University Press, 2013), 225. This argument helps explain why Tomasi (cf. 90–92) has parted company from Hayek’s more enthusiastically libertarian followers. While I disagree with many of Tomasi’s feasibility arguments against social democratic thought (see, for example, 60–68 and 197–203), I applaud his efforts to interject feasibility into normative debates, and I certainly accept his broader argument that libertarians are not alone in neglecting political and sociological realities. (Anyone who witnessed the downfall of Marxist-inspired regimes in the late twentieth century could hardly think otherwise.)
Chile under Pinochet being perhaps the most conspicuous—and notorious—example.
This historical lesson is well told in Mark Bevir and Frank Trentmann, Markets in Historical Contexts: Ideas and Politics in the Modern World (Cambridge: Cambridge University Press, 2004).
Nozick, Anarchy, State, and Utopia, 151.
Hobhouse made a similar point with respect to freedom earlier in the century: “there [is] a distinction between unsocial and social freedom. Unsocial freedom is the right of a man to use his powers without regard to the wishes or interests of any one but himself. Such freedom is theoretically possible for an individual. It is antithetical to all public control …. Social freedom, then, for any epoch short of the millennium rests on restraint.” L. T. Hobhouse, Liberalism, Home University Library of Modern Knowledge, No. 16 (New York: H. Holt and Company, 1911), 50.
I explore this question more thoroughly in Peter Lindsay, “Ownership by Agreement,” Political Studies 63 (October 2015). Currently available on-line at: Lindsay, P. M. (2014) “Ownership by Agreement,” Political Studies. doi: 10.1111/1467-9248.12138
“A concept of justice is stable if … the institutions which satisfy it tend to generate their own support.” Rawls, “A Theory of Justice (Revised Edition),” 171. Hampton’s distinction between “mastery,” “political authority,” and “morally legitimate political authority” provides an especially helpful framework for considering issues of legitimacy and stability. See Jean Hampton, Political Philosophy, Dimensions of Philosophy Series (Boulder, CO: Westview Press, 1997), ch. 3.
Hampton, Political Philosophy; David P. Gauthier, Morals by Agreement (Oxford and New York: Clarendon Press, Oxford University Press, 1986); Thomas Scanlon, What We Owe to Each Other, 1st Harvard University Press paperback edn. (Cambridge, MA: Belknap Press of Harvard University Press, 2000).
Jürgen Habermas, The Theory of Communicative Action (Boston, MA: Beacon Press, 1984).
Carole Pateman, Participation and Democratic Theory (Cambridge: Cambridge University Press, 1970); Benjamin R. Barber, Strong Democracy: Participatory Politics for a New Age (Berkeley, CA: University of California Press, 1984); James Fishkin, Democracy and Deliberation: New Directions for Democratic Reform (New Haven, CT: Yale University Press, 1993).
Will Kymlicka, Liberalism, Community, and Culture (Oxford and New York: Clarendon Press, Oxford University Press, 1989).
There is, of course, plenty of resistance to this style of normative reasoning. See, for instance, A. John Simmons, Moral Principles and Political Obligations (Princeton, NJ: Princeton University Press, 1979). The resistance underscores the enduring influence of social-contract ideas on contemporary political theorizing.
I have in mind here not only the social-contract ideas of Hobbes, Locke, Rousseau, and Kant, but also the many precursors to those ideas, some dating back to the Greeks. For a good discussion of Greek social-contract thinking, see Timothy O’Keefe, “Would a Community of Wise Epicureans Be Just?” Ancient Philosophy 21 (2001): 133–46.
Jean-Jacques Rousseau, Basic Political Writings (Indianapolis, IN: Hackett, 1987), 150.
G. A. Cohen, “Facts and Principles,” Philosophy & Public Affairs 31 (July 1, 2003): 211–45. See also Valentini, “On the Apparent Paradox of Ideal Theory,” 334, and Colin Farrelly, “Justice in Ideal Theory: A Refutation,” Political Studies, 55 (2007): 844–64.
Galston, “Realism in Political Theory,” 403. On this point, see also Elizabeth Anderson, The Imperative of Integration (Princeton, NJ: Princeton University Press, 2010), 3.
It is interesting to note that Marxist philosophers, including Marx himself, have for the most part focused on capitalist relations, not on some halcyon future. However, Marx, in a moment of weakness, did suggest that in some future society it would be possible “to hunt in the morning, fish in the afternoon, breed cattle in the evening, criticize after dinner, just as I like, without ever becoming a hunter, a fisherman, a herdsman or a critic.” Karl Marx, Selected Writings (Indianapolis, IN: Hackett, 1994), 151.
Lea Ypi, “On the Confusion between Ideal and Non-ideal in Recent Debates on Global Justice,” Political Studies 58 (June 2010), argues along similar lines with respect to ideal and non-ideal theories of global justice.
Nozick, Anarchy, State, and Utopia, 151.
Estlund, “Utopophobia,” 118.
Ibid., 122.
Ibid. My claim does not contradict Estlund’s example of a “concessive” theory. The empirical roadblock I have in mind is not a moral fact, but an empirical one (see 124–25).
As I mentioned in footnote 63, I applaud Tomasi’s recent efforts to rescue libertarianism (which he deems “a profoundly attractive political view”) from the skepticism of “left liberals,” as he makes those efforts with feasibility in mind. His feasibility standards might also work against Polanyi-inspired visions, but that finding would not be in contradiction with the present argument.
It was with this concern in mind that Rawls claimed to base his theory of justice on the nature of persons as well as empirical facts about human behavior or institutions, and, moreover, to insist that his conclusions be confirmed by reflective equilibrium.
John Rawls, A Theory of Justice (Cambridge: Belknap Press of Harvard University Press, 1971), 15.
Rousseau’s words were: “When a law is proposed in the people’s assembly, what is asked of them is not precisely whether they approve or reject, but whether or not it conforms to the general will that is theirs.” Rousseau, Basic Political Writings, 206.
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This essay repays a longstanding debt to a mentor who sparked the author’s interest in political economy over thirty years ago—Polanyi’s friend, student, and co-author Abraham Rotstein (1929–2015). The author owes an additional debt to the many participants of the 10th International Karl Polanyi Conference. Special thanks go to Ernie Zirakzadeh and the three anonymous reviewers at Polity.
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Lindsay, P. Polanyi, Hayek, and the Impossibility of Libertarian Ideal Theory. Polity 47, 376–396 (2015). https://doi.org/10.1057/pol.2015.14
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DOI: https://doi.org/10.1057/pol.2015.14