If It's Free, Why Is It Choking You?

The mantra of modern free-marketeers, who try to justify the failure of neoliberalism (as a revival of the liberal model that had already failed—admittedly—during the 19th century, culminating in two devastating world wars), is that the free market economy has not been implemented "correctly", and that this alone is the reason why we have not reaped its true benefits. This position is, in itself, perhaps the strongest piece of evidence—coming from the very supporters of the free market—that the Invisible Hand is nothing more than a fictional construct that can only exist in a sterile, laboratory-like environment, where its utopian laws are allowed to function without disruption.

Even Adam Smith himself, the father of economic science, did not develop an economic theory per se, but rather a theory designed to promote the views on individual freedom espoused by his philosophical idols, John Locke and David Hume. The Invisible Hand was more of a theoretical tool than an ideological principle.

The “closed circuit” of the market economy was also revealed by Karl Polanyi, who described the 19th-century system and explained why it collapsed, bearing the seal of both World Wars, in his seminal work The Great Transformation. The market economy was wholly dependent on specific conditions and institutions that supported its principles and laws—albeit to a much more limited extent than liberals themselves believed regarding the scope and ability of the market to self-regulate. These institutions were: the Westphalian (accounting-based) liberal nation-state, the balance-of-power system developed among the dominant Western European nation-states to prevent unpredictable wars, and the gold standard. To these pillars, one must add the belief in the self-regulating free market itself as the ideological glue. This was the framework within which the market economy managed to function, maintaining the illusion that it operated according to natural law.

It must be stressed that the Westphalian-type nation-state is inherently liberal, as it was structured upon bourgeois notions of the social contract—regardless of the ideology dominant within it. In fact, all modern ideologies, whether of the left or the right, were built on the pursuit of an equal position within this closed circuit and the fulfillment of human economic needs within a framework of progress. All ideologies view historical time linearly and evolutionarily, each with its own vision of progress (even conservatism), and within this framework, they conceive of the human being primarily as an economic entity—albeit to varying degrees—relative to its political dimension.

In essence, Western hegemony is reflected in this institution, even through the tendency to fuse it with the globalized market system imposed by Western imperialism. And in order to function under the utopian conditions it requires, it must become global and universal.

In Polanyi’s book, it becomes clear—and demonstrably so—why the market economy is not a natural process aligned with human nature, but rather an artificial program. A clear distinction is made between free transactions and the free economy, since free transactions in pre-modern societies were socially embedded and shaped largely by the cultural demands of each society. After all, the central core of a market economy’s existence is the focus on individual profit. Without this condition as an absolute, foundational principle, a free market cannot exist with its own autonomous laws independent of collective interventions.

There are anthropological examples, used and analyzed by Polanyi, that demonstrate that even the concept of profit in pre-modern societies was embedded in social expectations. This of course does not mean those societies were centrally planned and ruled by despotic leaders, as liberals want us to believe by constantly invoking the specter of communism. Rather, they obeyed the organic demands of the unwritten laws of their communities, where the pursuit of individual gain at the expense of society was considered morally reprehensible.

Finally, if freedom within liberalism is reduced to the level of individual profit and constrained within an artificial environment that provides a false sense of universality—universality in fact imposed through power—then it becomes easy to understand what kind of “freedom” we are talking about, and what kind of “freedom” the modern technocratic West preaches. By definition, it is degenerate and constrained. A fictitious illusion of freedom within convenient boundaries.

Also consider what kind of political identity is envisioned for modern man: one not based on collective cultural realities, nor even on identities rooted in shared material interests, but on an identity that is politically atomized to the absolute. What human elements can be extracted to elevate this individuality to a political characteristic? Clearly, it is the basest instincts that fuel contemporary subjectivism and the fluidity not only of social structures, but even of biological constants.

Polanyi K – Ο Μεγάλος Μετασχηματισμός

Дугин A. - Конец экономики