Question

Relate economist Karl Polanyi’s idea of the fictitious commodity of labor to Kalecki’s Political Aspects of Full Employment. Make sure explain what makes labor a fictitious commodity, and to situate Kalecki’s full employment in Polanyi’s double movement.

Answer 1

The Great Transformation, Karl Polanyi problematised the commodity status of labour. He described it as ‘fictitious' and asserted the human aspect of labour necessitates ‘protection’.

$\Rightarrow$In bringing Polanyi's mature works to bear on these claims, this article uses the ‘fictitious commodity’ concept to highlight the tension in neoclassical theory between concrete reality and its idealist construction of the economy.

$\Rightarrow$This contradiction directly challenges the veracity of the self-regulating market.

$\Rightarrow$Karl Polanyi argued in The Great Transformation [1944] that the development of market societies over the past two hundred years has been shaped by a double movement.

$\Rightarrow$ On one side is the movement of laissez faire--the efforts by a variety of groups to expand the scope and influence of self-regulating markets“capitalism” is the product of both of these movements ; it is an uneasy and fluid hybrid that reflects the shifting balance of power between these contending forces.

Beyond the double movement.

$\Rightarrow$The Great Transformation, Polanyi anticipated that the era of the double movement might finally have ended since much of the world had come to recognize the folly of organizing human society around self-regulating markets.

$\Rightarrow$ Bretton Woods and the system of “embedded liberalism” did represent a sharp break with the logic of the Gold Standard, but we now know that the break proved to be only temporary.

$\Rightarrow$ one of Polanyi’s antagonists in theoretical debates in Vienna in the 1920’s, survived to become the favored theorist of Margaret Thatcher and Ronald Reagan.

$\Rightarrow$ Polanyi believed that institutional procedures and rights could be established that would effectively prevent the state’s coercive power from being used in ways that were illegitimate or designed to preserve the position of particular individuals or interests.

$\Rightarrow$. The Gospels, in short, did not recognize the “reality of society”, that people necessarily live together in complex interdependence.However, Polanyi’s theoretical framework helps to explain his own failure as a prophet.

$\Rightarrow$These changes could mean that today’s protective counter movement has the possibility not only of protecting societies and the planet from the grave dangers posed by global markets, but of finally ending the double movement itself.