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What can I know (if trust in knowledge has been lost)? | 45
interests which eventually ensure that the required step be taken”!
‘There is therefore no economic rationality separate from circumstance
because economic activity takes place within the framework of social
institutions. These determine in each era what counts as reasonable
activity. The economic order depends on the social order. A self¬
regulating market is possible only if this relation is reversed and the
entire society is subjected to the logic of the operation of the market
and all relations become relations of products. This, however, would lead
to impossibilities. According to Polanyi, modern market-centred
economic theory can only provide a realistic picture of economic
processes if we assume
- that everything is produced so as to be sold on the market,
according to the changes in supply and demand
- and that the factors of the economic process are universally
comparable and theoretically interchangeable with one another;
therefore, the spontaneously developing rates can ensure the dynamic
balance of market processes by themselves.
Polanyi proves that both suppositions are untenable. The two most
important conditions of production, human work capacity and natural
resources, are not capable of following the fluctuations of supply and
demand, because they exist not for the purpose of sale, but according
to the order of life — the order of culture and nature. “To allow the
market mechanism to be the sole director of the fate of human beings
and their natural environment, even in the amount and use of purchasing
power would result in the demolition of society... Robbed of the
protecting covering of cultural institutions, human beings would perish
from the effects of social exposure; they would die as the victims of acute
social dislocation through vice, perversion, crime and starvation. Nature
would be reduced to its elements, neighbourhoods and landscapes
defiled, rivers polluted, military safety jeopardized, the power to produce
food and raw materials destroyed.”'* In the meantime the use of the
conditional has become superfluous. Since the time of Polanyi, a
multitude of species and habitats have been destroyed by the
economically completely reasonable and wonderfully profitable
exploitation and, sure enough, the market rates have not reflected the
value of lost raw materials and poisoned ecosystems. But this is not due
to prices but to the fact that nature is incapable of behaving like a
“Karl Polanyi: The Great Transformation, p.46. Octagon Books, New York, 1975.
8 Ibid. p.107.