Polanyian Reading of the Socio-Economic Transformations of the European Union

Abstract

In an attempt to analyse the socio-economic transformations of the European Union, an increasing number of scholars have resorted to Polanyi's double movement thesis. In doing so, some scholars, by looking at the evidence of intensified marketisation of social relations, consider the EU disembedded; whereas others identify a re-embedding tendency in the recent surge of socio-environmental protection. The paper follows Lacher, Burawoy, Dale and Streeck's readings of Polanyi and argues that the exiting socio-environmental provisions do not re-embed the economy. Socio-environmental protection does not eclipse the neoliberal accumulation strategy which continues to propagate the disembedding tendency, because it fails to decommodify fictitious commodities. The EU is characterised by a heightened intensification of both disembedding and protective tendencies, which Polanyi contends is disruptive in nature. What emerges out of the dialectics between neoliberalisation and socio-environmental provisions is a decelerated rate of change, which, although it temporarily secures the habitation of man, prevents the inception of a synthesis that is capable of sublating the contradictions of the marketisation/protection binary. Moreover, we have a paradoxical situation wherein the socio-environmental measures, despite their protective invocation, are predicated on deepened commodification.

Keywords::

• Polanyi
• disembedded
• commodification
• European Union
• double movement

Notes

¹ Neoliberalism is understood as contingent manifestation of the idea of the self-regulating market in the period following the crisis of Keynesianism. It is not a single homogenous project but is implemented with compromises. It consists of policies that constitutionalise the removal of capital controls, financial deregulation, privatisation, independent central banks, low inflation, budgetary rectitude, price and exchange rate stability.

² Polanyi has been criticised for generating contradictions between his general understanding of the economy as being organically interrelated with society and his historical explanation of the self-regulating market as disembedded (Lie 1991). Namely, it is difficult to merry his assertion that the economic activity is deeply embedded in societal relations with his conclusion about the laissez-faire economy as being insulated from the social fabric. As a response to those allegations, one can use Block's (2003) assertion that Polanyi had the idea of the ‘ever-embedded market economy’, he just failed to give it a proper name. Dale has provided yet another way of resolving the alleged contradiction by proposing the term ‘instituted’ as a more appropriate indication of Polanyi's ideas. Thus, ‘to say that the liberal market is “embedded” in the sense of “instituted”, then, does not negate its “disembeddedness” at the other levels’ (2010, 201).

³ A wide array of empirical evidence has been presented to challenge Polanyi's assertion that the market society is disembedded compared with the fully embedded pre-capitalist societies. Numerous studies have demonstrated the operation of the price-setting mechanism in the medieval period, which in turn shows that disembeddedness cannot be counted as an exclusive feature of the market economy (Latham 1997; Silver 1983). Holmes (2012) has rightly observed that Polanyi has been criticised both for portraying primitive societies as embedded and capitalists as disembedded. Although the jury is still out on the question of the existence of fully embedded and disembedded societies, one can still circumvent this problem if we treat them not as all-or-nothing phenomena, but as tendencies.

⁴ The recent Service Directive has tried to further the competition in the provision of cross-border services by guaranteeing the freedom of establishment. Regardless of the fact that the country of origin provision was removed from the Service Directive because of the huge divergence in labour costs which might lead to a race to the bottom, the ECJ, through the Laval and Viking cases, has secured the de facto operation of the country of origin principle (Höpner and Schäfer 2010; Lindstorm 2010).