Re: The Prize by Any Other Name

[Clifford Poirot <cpoirot@xxxxxxxxxxx>]

There is an additional point that must be made about the "naturalness" of
the market and that is that it is a product of cultural evolution, and thus
not strictly "natural".

In looking at this process of cultural evolution one has to take into
account that the institutions of a market economy often required conscious
design and state action to be implemented. That is not to say that anyone
"designed" the market economy, but rather that various groups of actors,
sometimes relying on voluntary action, sometimes on state coercion,
sometimes on a mix of the two, responded to various developments in
designing institutions that could reduce uncertainty. This development was a
contingent development-not a unilinear, pre-determned process.

For example, when I started writing my dissertation on the Brenner Thesis, I
was absolutely convinced that the capitalist mode of production existed in
16th century England and went hunting for it. The only problem was, that I
could not find it, and I could not even find a clear, discernible pattern of
movement towards capitalist agriculture in 16th century England. Even such a
thing as market involvement(selling agricultural or hand made goods for
"distant" markets in specific urban  centers) often relied on the
continuation of a distinctive peasant form of agriculture. At best, the
English peasantry in the 16th century had an ambiguous attitude towards the
market, as did the so called "Gentry".

I have made these points at greater length and probably much more clearly in
an article based on my dissertation published in the September, 1993 Journal
of Economic Issues: "Institutions and Economic Evolution" or of course, one
can request the manuscript from microfiche "The Political Economy of Rural
Social Change in Early Modern England": Clifford S. Poirot Jr., 1992.

In an unpublished paper on the evolution of the market in Eastern Europe, I
have noted a similar process at work in Southeastern Europe. Markets evolve
in many ways, not always efficiently, and not alwats towards a well
functioning capitalism on the basis of conscious human action. This is
contrary of couse to Hayek's thesis that markets evolve "spontaneously"
based on something between "instinct" and "reason".

-----Original Message-----
From: Bruce McFarling [mailto:ecbm@xxxxxxxxxxxxxxxxxxx]
Sent: Tuesday, November 27, 2001 7:19 PM
To: pkt@xxxxxxxxxxxxxxxx
Cc: Harry L Cook
Subject: Re: The Prize by Any Other Name


At 09:00 27/11/01 -0800, Harry L Cook wrote:
>My point was that modern capitalism is a system made up of
>several independent institutions - money, banks, markets -
>and long driven by the incentive for economic improvement,
>that developed and evolved quite naturally throughout most
>of the Middle Ages.  They all began to come together as
>the Middle Ages gave way to the modern era and climaxed
>with the Industrial Revolution in England.

My point was that this story ignores the fact that most
of the commercial institutions evolved outside of the
economic backwater of Europe and was brought in ... but
of course that just changes the range of economic
histories that you have to look at to understand the
process, it is still an evolving process.

Polyani's point was that the inviability of the system
came about from the extension of commercial logic to
the determination of the major portion of the communities
labour and the major portion of the communities use of
natural resources.  Pointing out that the commercial
practices developed prior to taking over the major
role with respect to those two "fictitious commodities",
and that the adoption of commercial practices for
those fictitious commodities was itself an ongoing process
rather than a single event, doesn't really address
Polyani's argument about why the nineteenth century system
was inviable.  And *of course* there were outpost of
more developed economic systems in Europe, just as there
are outposts of more developed economic systems in almost
any less developed economy today.



Virtually,

Bruce McFarling, Shortland, NSW
ecbm@xxxxxxxxxxxxxxxxxxx