Universal Capitalism or Regional Planning?

From Karl Polanyi
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I

[8] Of all the great changes witnessed by our generation, none may prove more incisive than that which is transforming the organisation of the international life. Behind the routine of power politics which either serve or, more often, are served by ideologies, we can catch a glimpse of far-flung and meaningful policies which may, albeit incidentally, fulfil the deeply rooted aspirations of the common man. It is probable that the chances of democratic socialism (which most people, even quite recently, would have pronounced to be nil) are greatly improved, although by unexpected paths. But whatever may be the fate of domestic affairs, the political system of the world as a whole has undoubtedly reached a turning point and, as a consequence of this, Great Britain is now standing at the cross-roads. The event is still too close, and too vast, to be clearly discernible, but the sooner we take our bearings the better.

One comes to realise this when making the attempt to describe more precisely the tendencies underlying the foreign policies of Great Britain, Russian, and America; for here it is quite certain that the traditional pattern is not enough. What is at issue between the powers is not s much their place in a given pattern of power, as the pattern itself. Broadly speaking, the United States fits {iato} one pattern, that of nineteenth century society, while all other powers, including Britain herself, belong to another, which is in course of transition to a new form. Each side will, or at least, in reason, should, favour that pattern which tends to keep its side of the balance secure. Obviously it is of paramount importance to read the meaning of these patterns aright.

The tremendous event of our age is the simultaneous downfall of liberal capitalism, world-revolutionary socialism and racial domination - the three competing forms of universalist societies. Their sudden exit followed upon drastic, unheard of changes in human affairs, and the beginning of a new era in international politics. World-revolutionary socialism was overcome by 'regional' socialism in the sufferings and glories of the Five Years Plans, the tribulations of the Trials, and the triumph of Stalingrad; liberal capitalism came to an end in the collapse of the gold standard, which left millions of unemployed and unparallelled social deprivation in its wake; Hitler's principle of domination is being crushed on a battlefield co-extensive with the planet he attempted to conquer; and out of the great mutation various forms of inherently limited existence emerge - new forms of socialism, of capitalism, of planned and semi-planned economics - cach of them, by their very nature, regional.

This process was almost exact replica of the establishment of the European states-system about the end of the 15th century. In both cases the change sprang from the collapse of the universal society of the period. In the Middle Ages that society was primarily religious, while in our time it was economic. It is obvious that the break-down of the nineteenth century system of world economy inevitably resulted in the immediate emergence of economic units of limited extent. In terms of the gold standard, that true symbol of universalist economy, this is self-evident since its passing forced every country to look after its own “foreign economy”, which had formerly “looked after itself”[1] New organs had to be developed, new institutions had to be set up to cope with the situations. The peoples of the world are now living under these new conditions, which are compelling them to evolve a new way [9] of life. Their “foreign economy” is the government's concern: their currency is managed; their foreign trade and foreign loans are controlled. Their domestic institutions may differ widely, but the institutions with the help of which they deal with their “foreign economy” are practically identical. The new permanent pattern of world affairs is one regional systems co-existing side by side.

There is one notable exception. The United States has remained the home of liberal capitalism and is powerful enough to pursue alone the Utopian line of policy involved in such a fateful dispensation - a Utopian lie since, ultimately, the attempt to restore the pre-1914 world-order, together with its gold standard and manifold sovereignties is inherently impossible. But the United States has no alternative. Americans almost unanimously identify their way of life with private enterprise and business competition - though not altogether with classical laissez-faire. This is what democracy means to them, rich and poor alike, involving, as it does, social equality for the vast majority of the population. The Great Depression of the early thirties left predilection unimpaired, and merely dimmed the aura of adulation which surrounded laissez-faire economics. Except for a new socialists, mainly of the world revolutionary type, and perhaps a somewhat greater number of conscious fascists, the stupendous achievements of liberal capitalism appear to Americans as the central fact in the realm of organized society. Factory legislation, social insurance tariffs, trade unions, and experiments in public services, even on the scale of the T.V.A., have affected the position of liberal capitalism as little as similar departures towards interventionism and socialism had done in Europe up to 1914. The New Deal may well prove the starting point of an independent - American - solution of the problem of an industrial society, and a real way out of the social impasse that destroyed the major part of Europe. That time, however, has not yet come.

With a free supply of land, unskilled labour and paper money, a liberal economy functioned in the United States, at least until the period beginning in 1890, without producing the lethal dangers to the fabric of society, to man and soil, which are otherwise inseparable from “self-adjusting” capitalism. That is why Americans still believe in a way of life no longer supported by the common people in the rest of the world, but which nevertheless implies a universality which commits those who believe in it to reconquer the globe on it behalf. On the crucial issue of foreign economy, America stands for the nineteenth century.

It follows that, potentially at least, Great Britain and the Soviet Union, together with the other countries, conform to one pattern, the United States to another. The British Commonwealth and the U.S.S.R. form part of a new system of regional powers, while the United States insists on a universalist conception of world affairs which tallies with her antiquated liberal economy. But reactionaries still hope that it is not yet too late for Britain's own system of foreign economy to be changed back so that it may fall in line with that of America. This is the real issue to-day.

II

It is from the regionalism to which she is committed that Russia draws her greatest strength. The victory of Stalinism over Trotskyism meant a change in her foreign policy from a rigid universalism, relying on the hope of a world revolution, to a regionalism of revolutionary policy, while Stalin was a daring innovator. By denying these facts, Communists caused hopeless confusion and made it unnecessarily difficult for us to realise the startling novelty of Stalin's policy.

To begin with, there is an entirely ne attitude towards the uses of social change. The victorious Russian empire takes its independence for granted, and its dominating interest is durable peace. [10] [11]

III


Text in English to type

[12] [13]

Text Informations

Reference:
Original Publication: “Universal Capitalism or Regional Planning?”, The London Quarterly of World Affairs, January 1945, p. 1-6
KPA: 18/28
Recent Publications:

Lge Name
EN
DE „Universaler Kapitalismus oder regionale Planung?“, in POLANYI 2003, p. 338-350
FR « Capitalisme universel ou planification régionale ? », chap. 35 des Essais de Karl Polanyi, p. 485-494
  1. By “foreign economy” we simply mean the movement of goods, loans and payments across the borders of a country.