Pope Francis and, clockwise from top
left: Keynes, Polanyi, Hayek, and Marx
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***
Karl
Polanyi
***
It
would make for some pretty amazing headlines if Pope Francis turned
out to be a Marxist.
Between
his hints at rehabilitating liberation
theology—condemned
by his predecessors—and talk about
casting off "the economic and social structures that enslave
us," Marxism isn't totally out of the question.
But
happily for nervous church
leaders, Francis's first Apostolic
Exhortation,
issued Tuesday, doesn't quite suggest someone who would get "Marx"
in an Internet-style "Which Economic Theorist Are You?"
quiz. Granted, he wouldn't exactly get Friedrich von Hayek or
Ayn Rand, either.
But
you know whom he might plausibly be matched with, though? A favorite
political economist of anti-free market academics: Karl Polanyi.
Karl
Polanyi is most famous for his book The
Great Transformation,
and in particular for one idea in that book: the distinction between
an "economy being embedded in social relations" and "social
relations [being] embedded in the economic system."
Polanyi's Big Idea: The Economy Has to Serve Society, Not the Other Way Around
Economic
activity, Polanyi says, started off as just one of many outgrowths of
human activity. And so, economics originally served human needs. But
over time, people (particularly, policy-making people) got the idea
that markets regulated themselves if laws and regulations got out of
their way. The free market converts told people that "only such
policies and measures are in order which help to ensure the
self-regulation of the market by creating the conditions which make
the market the only organizing power in the economic
sphere." Gradually, as free market-based thinking was
extended throughout society, humans and nature came to be seen as
commodities called "labor" and "land." The
"market economy" had turned human society into a "market
society."
In
short (as social sciences professors prepare to slam their heads into
their tables at my reductionism), instead of the market existing to
help humans live better lives, humans were ordering their lives to
fit into the economy.
What
Pope Francis Said
Now,
back to the pope. Pope Francis, in his exhortation, notably does not
call for a complete overhaul of the economy. He doesn't talk
revolution, and there's certainly no Marxist talk of inexorable
historical forces.
Instead,
Francis denounces, specifically, the complete rule of the market over
human beings—not its existence, but its domination.
"Today
everything comes under the laws of competition and the survival of
the fittest," he writes. "Human beings are themselves
considered consumer goods to be used and then discarded," and
"man is reduced to one of his needs alone: consumption." He
rejects the idea that "economic growth, encouraged by a free
market, will inevitably succeed in bringing about greater justice and
inclusiveness in the world." Instead, he argues, growing
inequality is "the result of ideologies which defend the
absolute autonomy of the marketplace and financial speculation,"
which "reject the right of states, charged with vigilance for
the common good, to exercise any form of control." And he
repeats the exact
language he
used in an early address: "Money must serve, not rule!"
Seeing
the similarities yet?
Polanyi, the Pope, and Blaming the Market for Big Crises
Where
things get really interesting is when Pope Francis brings up the
financial crisis. "One cause of this situation," he writes,
"is found in our relationship with money, since we calmly accept
its dominion over ourselves and our societies. The current financial
crisis can make us overlook the fact that it originated in a profound
human crisis: the denial of the primacy of the human person!"
It's
nothing new to say the financial crisis came from a lack of
regulation. That's a fairly popular analysis. But what Pope Francis
is saying is more Polanyan, hearkening back to the idea that the
tipping point has to do with the relationship between the market and
society/humanity, and which is subordinate to the other. Just as
Polanyi argued that the extension of the market economy across the
globe (through the gold standard) was the root cause of World War I
(and you'll have to go back to the original
book for
that, but it's a beautifully, hilariously gutsy, Guns,
Germs, and Steel kind
of argument), Francis is arguing that failing to keep humanity at the
center of our economic activity was the root cause of the financial
crisis.
A Vision for the Future
One
of the tricky and crucial parts of Polanyi's argument is that he
doesn't actually believe (at least, back in the 1940s, when he was
writing) that we're living in a world where the economy has become
fully disembedded from society. This "Utopia," he writes,
that many economic theorists and policymakers are foolishly striving
for, "could not exist for any length of time without
annihilating the human and natural substance of society; it would
have physically destroyed man and transformed his surroundings into a
wilderness."
HEATHER HORN is a senior associate editor at The Atlantic. She is a former features editor and staff writer for The Atlantic Wire, and was previously a research assistant at the Carnegie Endowment for International Peace.
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