Power and Progress: The Swing of the Pendulum

Abstract

This paper uses Polanyi’s 1944 analysis of policy change—in which there are long‐term swings from state regulation to markets and back again, as the consequences of one regime lead to political reactions that in turn reverse the policies. It shows how the Polanyi analysis continued to apply throughout the twentieth and early‐twenty‐first century, well beyond when he wrote, and that the swings also apply to developing country policy‐making. It argues that there are new signs of policy change—this time against market domination—in a number of developing countries. The paper concludes that Polanyi’s view of the conditions behind policy change—notably long‐term political movements, political struggle and political conflict—needs to be introduced into the analysis of policy change for the promotion of human development and the expansion of capabilities.

Key words:

• Human development
• Political economy
• Policy swings
• Polanyi

Acknowledgements

I am grateful to Graham Brown, Richard Gott and Severine Deneulin for their insightful comments.

Notes

1 According to Polanyi, “Enclosures have appropriately been called a revolution of the rich against the poor” (1944, p. 37).

2 By the Prescriptions Act, the Inheritance Act, the Fines and Recovery Act, the Real Property Act and the general Enclosures Act of 1801, as well as subsequent legislation.

3 The Speenhamland System essentially entitled every worker to a quite generous minimum income, irrespective of their work situation or earnings, discouraging work and imposing heavy burdens on the rates.

4 Worker combinations developed, nonetheless, and the Act was repealed in 1824 in the belief that if legalized they would be less threatening. In fact, they burgeoned, and in 1825 a new Combination Act was enacted that permitted trade unions to form but limited their right to strike (Briggs, 1959, p. 212).

5 Engels was among the first to record the conditions of the English working class in detail. Later in the century, Rountree started his pioneering investigation into poverty. Among many more recent accounts, see for example Thompson (1963), Daunton (1995) and Huck (1995).

6 For example, the Argentinian economist Prebisch was highly influential in Latin America, influenced by the western economist Hans Singer; in Africa, most plans were drawn up with western inputs, including, for example, advice from Dudley Seers; in India, the economist Mahalanobis was most influential, but was supported by visiting economists from the West.

7 Widely documented, including for example by Little et al. (1970) and Killick (1976).

8 In a famous statement, Truman announced that: “We must embark on a bold new program for the making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas. The old imperialism s dead—exploitation for foreign profit has no place in our plans” (President Truman, Inaugural Address, 1949, [https://trumanlibrary.org/educ/inaug.htm], accessed 20 June 2010).

9 Chile, perhaps, is an exception, where the dictator, Pinochet, introduced market reforms early on—although without any popular support. See Martinez and Diaz (1996); and see de Olarte (1991), who argues that there were domestic as well as international pressures for such policy swings in Peru.

10 I have drawn this account largely from Gott (2005).

11 Rodrik (1997) has shown, for developed countries, increased fluctuations associated with globalization and that governments reduced ability to protect people.

12 In 1820/21, spending on relief for the poor was estimated at 2.7% of the Gross National Product, a considerable increase on the pre‐Speenhamland system in 1997 of 1.6%; but after the 1834 Poor Law Reform, expenditure dropped to 1.1%—still more than many other countries (Lindert, 2004).

13 See also Ranis and Stewart (2000).