Libertarian / Austrian Insights

Joseph Schumpeter

Entrepreneur Progress

Creative Destruction Renews

Enterprise Economy
Antidote to Marx

Karl Polyani

Market Imposed by State

Substitute for Marx

Market Skeptics

Karl Polanyi
Gunnar Myrdal
Raul Prebisch Hans Singer
W. Arthur Lewis
Michael Kalecki Nicholas Kaldor

Karl Polanyi
The Great Transformation

Market Economy is Historically Rare

Laissez Faire is Unnatural

Enforced by Strong, Oppressive State

Resistance to Market is Natural

Reaction to Liberalism Welfare

State

Social Protection vs Self

Regulating Market

Karl Polanyi
The Great Transformation

Pre industrial society

Reciprocity: produce & share

according to social role
Redistribution via public consumption

Market economy

Behavior guided directed,

dictated by prices
Resistance emerges naturally, quickly

Reclaiming Humanity: The Social Theory of Karl

Polanyi
by Hlseyin Vzel (ozel@lidya.cc.hun.edu.tr)

Dissertation examines Karl Polanyi's social theory,

which underlies his critique of the market economy.

The market system, which is organized on the basis of

three fictitious commodities, namely labor, land, and
money, generates a dehumanization process

The result is the disintegration of society.

It is natural for human beings to protect the social

fabric
against the market.

Ph. D. dissertation, The University of Utah, August 1997

Gunnar Myrdal, 1898 1931 Monetary Equilibrium

1987
1933 Chair in Political Economy, University of Stockholm
1934 Elected to Swedish Senate, Social Democratic Party
1938 Carnegie Corp Grant to Study Situation of American
Negro
1944 An American Dilemma
1942 Reelected to Swedish Senate: Board, Bank of
Sweden/Chair, Post War Planning Commission/1945 1947
Minister of Commerce
1947-57 Executive Secretary, UN Economic Commission for
Europe
1957 Rich Lands and Poor
1957-61 Twentieth Century Fund
An Asian Drama: An Inquiry Into the Poverty of Nations
The Challenge of World Poverty: A World Antipoverty
Program

Gunnar Myrdal
Cumulative Causation

Thems that gots gits.

For unto everyone that hath shall be

given, and he shall have in abundance; but

from him that hath not shall be taken away
even that which he hath.
Matthew

Gunnar Myrdal
Cumulative Causation
Critique of Equilibrium Approach
Harmony of Interests
Laissez faire
Free Trade

Increasing Inequality

Gunnar Myrdal
Cumulative Causation
Critique of Equilibrium
Approach

The other things that are assumed

to remain equal particularly social
and political relations change with
economic outcomes.
They change in ways that lead to
divergence, not equilibrium.
Thems that gots gits.

Gunnar Myrdal
Cumulative Causation

Spread Effects

Peripheral regions supply the

dynamic center

Backwash Effects
Dynamic regions suck the best
resources from the backwater
Free trade and free migration
hurt the periphery

Gunnar Myrdal
Cumulative Causation

In Rich Lands

Spread Effects > Backwash Effects

But in Poor Lands

New Dynamic Centers

Backwash Effects > Spread Effects

Poor regions of poor lands fall

farther and farther behind

Gunnar Myrdal
Myrdals Prescriptions
Cumulative
Causation

Rational Generosity

Foundation for continued progress

Welfare State Greater Regional Equality

Prosperity Democracy ~ Oppressor

State

Equality Promotes Development

Balanced Growth Position

Harmony through intervention, not

laissez faire

Gunnar Myrdal
Cumulative Causation

Myrdals Prescriptions
Break out of primary goods trap

Prebisch: ISI Jump Start

Institute Capital Controls

LDCs: Bargain as Bloc
National Economic Planning

The inherent tendency of a social

system is dispersion. Only
interventions can constrain these
tendencies and promote
convergence.

W.W. Rostow
Stages of Economic
Traditional Society
Growth

Transition: Preconditions to Take Of

Emergence of Capitalist Sector
Nationalism: Weakening of Regional
Elites

The Take Of

Drive to Maturity

Accumulation Compound Growth

Diversification / Import Substitution