The Silence of Polanyi and Unconditional Basic Income

The Silence of Polanyi and Unconditional Basic Income Min Geum 1. Introduction Karl Polanyi argued in his famous The Great Transformation that “Labor is only another name for a human activity which goes with life itself, which in its turn is not produced for sale but for entirely different reasons, nor can that activity be detached from the rest of life, be stored or mobilized” (Polanyi 2001: 75). This view of labor as a fictitious commodity, which seems to strongly support the validity of Basic Income Guarantee, the income unrelated to labor, however, does not automatically result in that support. This is because the focus of Polanyi’s theory of fictitious commodities does not lie in the aspect that commodities such as labor, land, and money are fictitious, but those fictitious are actual. Polanyi attempts to show in his book what he has defined as a “double movement,” the movement by which the fictitious commodities destroy and moderate what can be regarded as “the social” and, at the same time, by which the society strikes back, to preserve humanity and nature, against the force of the self- regulating markets constructed on those fictitious commodities. Thus, the actuality of fictitious commodities is a liquid, rather than given, actuality that is formed and transformed in the incessant struggle between the fictitious commodities’ actualizing force and the equally forcing self-enactment of society. In this paper I argue that, if we want to draw out an idea of Basic Income in Polanyi, it is necessary to approach the Basic Income Guarantee as the other part of the “double movement,” the actualizing lever of society, in the era when the perfect employment hypothesis, the hypothesis built upon the idea of society to be well accommodated under the regime of the regulated capital, has become completely bankrupt. 1 2. Polanyi’s ‘Substantivism’ and Unconditional Basic Income In The Great Transformation (1944), Polanyi first developed his relentless critique of laissez-fair by pointing out the problem of regulating labor entirely through the market process of supply and demand. The nineteenth-century proponents of the “self- regulating” market envisioned the national economy as a realm where all the production inputs such as “land, labour and money” should be purchasable in the domestic market and thus regulated by the market’s supply and demand forces (Polanyi 2001: 71). An equilibrating international economy was imaginable, according to those architects of free market, through the similarly free circulating inputs and outputs whose amounts were moderated only by the price system. However, according to Polanyi, this utopian vision is untenable because it neglects completely the social character of the economic process, not to mention its ecological character. Polanyi’s agenda of the unsustainability of the “self-regulating” market system is grounded on his substantivist perspective of economy. According to him, market economy can be characterized most by the transformation of economic relations from the substantial ones that were created to meet the material needs of human beings to those exchangeable ones to procure profits. Economy thereby became an institutionally autonomous realm being separated from society. This does not signify merely that each structuring element of economy has become mediated by the “self-regulating” market but also that all the other elements that compose society have been made to follow this principle of market. Polanyi has found the most negative effect of the transformation of the substantial economic relations to the exchangeable economic relations less in the problems of lowered income or of living standard. He thinks it is more the disintegration of individual lives and community or of society than the pauperization itself, which is a problem on the phenomenal level, that truly matters. Polanyi especially pays his attention to the commodification of labor, land, and money as the basis for an analysis of the rule of the “self-regulating” market. According to him, labor is not something that has been produced for sale but a part of life: it is not 2 a separable entity from other aspects of life to be stored or to be mobilized. Land, too, is not a product of human activities but just another name for nature. Thirdly, money as a symbol of purchase power is merely a device created by bank or state finance (to help economic transactions). The unsustainability of the self-regulating market means the untenability of very commodification of these uncommodifiable elements. Polanyi’s substantivism is better revealed, as George Dalton has pointed out (1990: 251; cf. Paton: 2010), in his later works, Trade and Market in the Early Empires (1957) and Livelihood of Man (1977). Here he has manifested a model of substantive economy based upon the “the interaction between man and his surroundings” and “institutionalization of that process” (1977: 32). The model is consolidated on the belief that the systematic process of “material provisioning” or “the ordered advance of all material means towards the consumption stage of livelihood” is a basic requirement for any social reproduction, even that in the society where the division of labor was minimally achieved (Polanyi 1957: 248). Thus, every society has had various forms of integrating institutions that govern the economic process in the purpose of bringing order to “production and distribution process” (Polanyi 2001: 47). The idea of Basic Income Guarantee, which is not based on the concept of commodified labor unlike wage, seems to be justifiable through this substantivist method and the concept of labor as a fictitious commodity as propounded by Polanyi. Polanyi’s perspectives on land and money may also validate the system that guarantees Basic Income out of the benefits to be gained by establishing the commons of land and money. The justification of the Basic Income Guarantee based on the substantivist view of Polanyi’s also sounds close to the ideas of its early advocates such as Thomas Paine, Thomas Spence, and Clifford H. Douglass. However, I argue that an attention should be paid to the aspect that the forms of decommodified labor which Polanyi seems to advocate as alternatives to wage labor cannot be easily identified with the labor form, awareness of which the Basic Income Guarantee has argued for as its subsisting ground. To decommodify labor, various measures are needed, and the Basic Income Guarantee is just one of the methods to enact it. What I propose is that, if we would justify the Basic Income Guarantee on the ground of Polanyi’s perspective of labor and its 3 decommodification, this should be done so by actively incorporating Polanyi’s concept of “double movement” as a concept tightly intertwined with his idea of decommodification of labor. Polanyi has argued that the “self-regulating” market is a highly unstable system and that this unsustainability is expressed as the “double movement” of commodification and decommodification at the same time. He has supported his cognition of unsustainability of the “self-regulating” market by the conceptualization of the “double movement” to be found in history (2001: 79). When we can defend the Basic Income Guarantee as a historical form of the decommodifying force in the “double movement” of the early twenty first century, a truly Polanyian justification of the Basic Income Guarantee would be accomplished. 3. Fictitious Commodification, Fictitious Decommodification, and Combination of Full Commodification of Labor and Full Decommodification of Work Kari Polanyi Levitt (2011), daughter of Polanyi and an economist, has suggested three reasons of why she expects her father would have supported the principle of unconditional Basic Income if he would have survived to see the current state of the world: they are economic, social and political ones. Firstly, for the economic reason, she mentions the augmented necessity of Basic Income Guarantee according as labor inputs into industrial production have been being decreased and the instability of labor market has been being drastically increased. This is the aspect that has been widely discussed in the arguments for the Basic Income Guarantee. José Luis Rey Pérez (2007), who has tried a conceptual analysis of the “Right to Work” and a study of its historical development, has concluded his article that the function of labor market to guarantee the “Right to Work” to the members of society as an entitlement to the social wealth for a long period of time is no longer valid now and thus Basic Income Guarantee can be an alternative measure to provide citizens of society with an effective way to claim for 4 social wealth and to integrate a society. Pérez has well pointed out that Polanyi is one of the early thinkers, together with Marx, who paid an attention to the negative effect of the commodification of labor on the efficacy of economy as a realm to meet the human material needs. For social and political reasons, Polanyi Levitt proposes that, even though Polanyi kept his silence on the issue of Basic Income Guarantee, he would have noticed the huge damage made to the social justice by the recent development of domestic and global economy if he lived up to now and could not but be supportive of the unconditional Basic Income principle. The wide-spread sense of injustice will disintegrate society and take vitality from its members under pressure of having to cope with the uncertainty of future without power to organize their life. Economy, as a necessary human activity, thereby will suffer its hugely negative effect. Basic Income Guarantee, in the meanwhile, helps citizens of society believe in the just and equal distribution of wealth that the society produces. It is worth remembering that Polanyi was keen on the issue of “freedom in a technologically advanced society.” As expressed in the last chapter of The Great Transformation, he was skeptical of the role of technology as an agent to endow human being with more freedom.

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