Sozialalmanach - Caritas Luxembourg

ecently offered the following prescription for the faltering world economy. First it proposed
raising the retirement age and means-testing social security benefits, so as to restrict state
spending without hampering growth. Secondly, ‘the rich world’s economies must spur
productivity, encourage investment and foster competition. That points to a renewed focus
on freeing trade, cutting spending rather than raising taxes and agreeing new financial
regulations’. 11 As an admirer of The Economist’s analyses, I am often bewildered by the
amazing consistency of its conclusions: almost whatever the problem, the proposed solution
is more free trade, lower taxes, faster growth.
Yet as the great economic historian Karl Polányi showed 12 , market economics is so far
from common sense that the hegemony of the market model rooted on growth is rather
unique to the last 200 years. As Polányi argues, in earlier societies the human passions were
mainly directed towards non-economic ends, and in many societies the accumulation of
goods was (and still is) regarded as anti-social, a failure in reciprocity. (For example the
goal of honour, or social status, was acquired by giving, not by accumulating.) Polányi
agrees that all societies are limited by economic factors, by the material conditions of their
existence. The achievement of survival and sufficiency is always and everywhere a central
societal project. But from the nineteenth century onwards, our Western societies have been
‘economic’ in a new and distinctive sense, for they have chosen to base themselves on a
motive only rarely acknowledged as valid in the history of human societies, and certainly
never before raised to the level of a justification of action and everyday behaviour, namely,
gain. This model is culturally specific and is not inevitable: which is not to say that it will
be easy to abandon.
A contemporary version of Polányi’s fundamental critique was offered by the Archbishop
of Canterbury, Rowan Williams, in November 2009. He recalls that the words ‘economy’
and ‘economics’ derive from the Greek word for ‘housekeeping’. Yet we are still haunted by
the dogma that the economic world, ‘economic realities’, economic motivations and so on
are abstracted from the sort of human decisions we usually make and from considerations
of how we build a place to live. Dr Williams went on to question the notion of ‘growth’:
‘The ability to produce more and more consumer goods (not to mention financial products)
is in itself an entirely mechanical measure of wealth. It sets up the vicious cycle in which it
is necessary all the time to create new demand for goods and thus new demands on a limited
material environment for energy sources and raw materials. By the hectic inflation of demand
it creates personal anxiety and rivalry. By systematically depleting the resources of the planet,
11 ‘New dangers for the world economy’, The Economist, February 13th, 2010, p. 9.
12 Polányi (1944).
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