concepts in the second and third column of this table can best be understood by
remembering that they were born in an era when
• the emphasis lay on the human intellect and its capacity to dissect complex
processes and investigate them empirically;
• natural scientism and its law-like predictions of developments replaced religion
as the prime source of explanations of the world;
• discourse around natural limits to population size met an energy revolution that
fuelled the managerial-industrial drive to improve productivity; and
• the securing of private property and pursuit of self-interest became basic tenets
of citizens’ freedom and were declared important drivers of progress.
Modernity and neoclassical economic developments of the twentieth century
have continued to employ the same mechanistic-additive view and basic concepts,
pushing quantified modeling and its extrapolating predictions into yet more dominance when computation made massive calculations possible. There is no emphasis
on a deep or diversified understanding of the ends that transactions should serve
(human need satisfaction) or the scarce means that are required (nature’s resources).
These are subsumed into the container terms ‘utility’ and ‘(natural) capital.’ This is
in line with Robbins’ definition and understandable when reflecting back on the
context in which these concepts were born. Saturation with goods and services was
reserved for a very small part of the population and poverty was widespread. It was
rational to equate more with better. Meanwhile, in a world of one billion people
with plenty of ‘undiscovered’ territories, there was simply no expectation that more
effective exploitation of nature would threaten its health and existence.
From a transformation point of view it is thus easily understood why the
Enlightenment movement claimed the term ‘liberalism’: its ideas inspired collective
action toward overcoming an old system that no longer delivered (as far as
Enlightenment protagonists were concerned). The premise was to overcome the
‘dark’ epoch of the Middle Ages. These ideas were key aspects of a paradigm shift
that first challenged the old order and its legitimizing narrative and later, as Polanyi
showed, served as the gelling consensus between philosophers, scientists, businessmen, politicians and even church representatives working on alternative
institution-building and rule-formulation. Polanyi also concluded that imagining all
of society as one big market system and treating humans, nature, and money as
fictitious commodities inevitably leads to sustainability problems.
So here we come to an interesting question: if Robbins says that the application
of economic concepts should be limited to situations of exchanges and choice
making but Polanyi argues that all aspects of the planet have been subsumed under
the imaginary and logic of a market system, where does the application of economics end? Having analyzed current discourse and observed the marketization and
privatization trends of the last 30 years I would say that their application is almost
ubiquitous—and that is precisely the problem. It means that neither ends nor means
become the center of attention and investigation. Instead, it focuses only on the
choice-making of selfishly calculating and insatiable individuals. The 250-year-old
56
3 Why the Mainstream Economic Paradigm Cannot Inform …
remembering that they were born in an era when
• the emphasis lay on the human intellect and its capacity to dissect complex
processes and investigate them empirically;
• natural scientism and its law-like predictions of developments replaced religion
as the prime source of explanations of the world;
• discourse around natural limits to population size met an energy revolution that
fuelled the managerial-industrial drive to improve productivity; and
• the securing of private property and pursuit of self-interest became basic tenets
of citizens’ freedom and were declared important drivers of progress.
Modernity and neoclassical economic developments of the twentieth century
have continued to employ the same mechanistic-additive view and basic concepts,
pushing quantified modeling and its extrapolating predictions into yet more dominance when computation made massive calculations possible. There is no emphasis
on a deep or diversified understanding of the ends that transactions should serve
(human need satisfaction) or the scarce means that are required (nature’s resources).
These are subsumed into the container terms ‘utility’ and ‘(natural) capital.’ This is
in line with Robbins’ definition and understandable when reflecting back on the
context in which these concepts were born. Saturation with goods and services was
reserved for a very small part of the population and poverty was widespread. It was
rational to equate more with better. Meanwhile, in a world of one billion people
with plenty of ‘undiscovered’ territories, there was simply no expectation that more
effective exploitation of nature would threaten its health and existence.
From a transformation point of view it is thus easily understood why the
Enlightenment movement claimed the term ‘liberalism’: its ideas inspired collective
action toward overcoming an old system that no longer delivered (as far as
Enlightenment protagonists were concerned). The premise was to overcome the
‘dark’ epoch of the Middle Ages. These ideas were key aspects of a paradigm shift
that first challenged the old order and its legitimizing narrative and later, as Polanyi
showed, served as the gelling consensus between philosophers, scientists, businessmen, politicians and even church representatives working on alternative
institution-building and rule-formulation. Polanyi also concluded that imagining all
of society as one big market system and treating humans, nature, and money as
fictitious commodities inevitably leads to sustainability problems.
So here we come to an interesting question: if Robbins says that the application
of economic concepts should be limited to situations of exchanges and choice
making but Polanyi argues that all aspects of the planet have been subsumed under
the imaginary and logic of a market system, where does the application of economics end? Having analyzed current discourse and observed the marketization and
privatization trends of the last 30 years I would say that their application is almost
ubiquitous—and that is precisely the problem. It means that neither ends nor means
become the center of attention and investigation. Instead, it focuses only on the
choice-making of selfishly calculating and insatiable individuals. The 250-year-old
56
3 Why the Mainstream Economic Paradigm Cannot Inform …