[P2P-F] How the Polanyan double movement operates at a meta-historical (and meta-capitatalist ?) level

Mon Jan 29 05:59:39 CET 2018

fascinating new history book which sees a polanyan double movement operate
at a larger historical scale:

** Book: The invisible hand?: How market economies have emerged and
declined since AD 500. by Bas van Bavel. Oxford University Press, 2016*

URL =
https://global.oup.com/academic/product/the-invisible-hand-9780199608133?
Review[edit
<https://wiki.p2pfoundation.net/index.php?title=How_Market_Economies_Have_Emerged_and_Declined_Since_AD_500&action=edit&section=1>
]

"The recently published “The invisible hand?: How market economies have
emerged and declined since AD 500” (Oxford University Press, 2016, 330
pages) by Bas van Bavel has, like all important books, a relatively simple
core theory which Van Bavel, a well-known economic historian teaching at
the University of Utrecht, illustrates on five historical examples: Iraq
between 500 and 1100, Central and Northern Italy 1000-1500, the Low
Countries 1100-1800, England 1800-1900, and the United States 1800-today.
(The first three cases are discussed in detailed separate chapters, each
running to 50-60 pages, while the last two, to which Western Europe may be
appended, are discussed in a single chapter called “Epilogue”).

Van Bavel’s key idea is as follows. In societies where non-market
constraints are dominant (say, in feudal societies), liberating factor
markets is a truly revolutionary change. Ability of peasants to own some
land or to lease it, of workers to work for wages rather than to be
subjected to various types of corvées, or of the merchants to borrow at a
more or less competitive market rather than to depend on usurious rates, is
liberating at an individual level (gives person much greater freedom),
secures property, and unleashes the forces of economic growth. The pace of
activity quickens, growth accelerates (true, historically, from close to
zero to some small number like 1% per year) and even inequality, economic
and above all social, decreases. This is the period so well recognized and
analyzed by Adam Smith. Van Bavel, in a nod to Braudel, shows that very
similar “essors” have existed in the pre-medieval Iraq (then the most
developed part of the world), medieval Central and Northern Italy
(Florence, Venice, Milan, Genoa..) and on the cusp between the late
medieval Europe and early modern period in the Low Countries.

But the process, Bavel argues, contains the seeds of its destruction.
Gradually factor markets cover more and more of the population: Bavel is
excellent in providing numerical estimates on, for example, the percentage
of wage-earners in Lombardy in the 14th century or showing that in Low
Countries wage labor was, because of guilds, less prevalent in urban than
in rural areas. One factor market, though, that of capital and finance,
gradually begins to dominate. Private and public debt become most
attractive investments, big fortunes are made in finance, and those who
originally asked for the level playing field and removal of feudal-like
constraints, now use their wealth to conquer the political power and impose
a serrata, thus making the rules destined to keep them forever on the top.
What started as an exercise in political and economic freedom begins to
look like an exercise in cementing the acquired power, politically and
economically. The economic essor is gone, the economy begins to stagnate
and, as happened to Iraq, Northern Italy and Low Countries, is overtaken by
the competitors.*

As this short sketch shows, Bavel’s theory has many links, or can be
juxtaposed, to several contemporary views of economic history. Bavel is
dismissive of a unilinear view that regards the ever widening role of
factor markets, including the financial, as leading to ever higher incomes
and greater political freedom. His view, although not fully cyclical (on
which I will say a bit more at the very end of the review) is “endogenously
curvilinear”: things which were good originally, when they hypertrophy,
become a hindrance to further growth. It is thus a story of the rise and
fall where, like in Greek tragedies, the very same factors that brought the
protagonists grandeur, eventually hurl them into the abyss." (
http://glineq.blogspot.com.es/2017/04/a-theory-of-rise-and-fall-of-economic.html
)

-- 
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