Waves of Populism: A Recent Manifestation of Polanyi’s “Double Movement”?

Abstract:

Since the Global Financial Crisis (GFC) of 2008, there has been a new wave of populism in the United States and in Europe. The hypothesis of this article is that this GFC has created the conditions for the resurgence of populism. According to Polanyi’s work of 1944, The Great Transformation, the market is “utopian” and must be imposed by the state. Further, there is a disciplinary dimension, which separates the individual worker from the community, for the purposes of allowing the “prod of hunger” to be effective. This disciplinary dimension of the market, which is based on Polanyi’s analysis of the nineteenth and early twentieth centuries, can be extended. Several phenomena in the late twentieth and early twenty-first centuries have intensified the tensions inherent in the market: fragmented production by means of finely divided global supply chains, increasing inequality due to the market structure; automation, declining labor share; increasing indebtedness; financialization; and erosion of protective labor market institutions, such as welfare and unionization. Populist movements are part of the backlash or “double movement” against these tensions inherent in the market.

Polanyi’s analysis may contribute to a greater understanding of what may be a global inflection point at present.     

Financialization and Society’s Protective Response: Reconsidering Karl Polanyi’s Double Movement

Financialization challenges Karl Polanyi’s thesis of double movement, the thesis that efforts to extend the market evoke efforts to protect humans, nature, and means of production from market forces. Financialization refers to the increased power of financial institutions. The government protects the incomes and assets of financial institutions, but it does little to protect the incomes and assets of households, which are necessary for people to afford healthcare, education, emergencies, retirement, and so on. Polanyi criticized nineteenth-century civilization for transforming land, labor, and the means of production into commodities, using economic insecurity to motivate humans. The development of intangible property allowed business to expand the market in two ways: (i) restricting output to drive up profits and (ii) liquefying consumer assets to provide credit to consumers to increase spending. The implications of that process manifested themselves in the financial crisis of 2008. Market capitalism represented the attempt to organize commodities based on economic rationality. Similarly, the twentieth- and twenty-first-century capitalism represents the effort to “rationally” organize society according to the value of intangible assets. Both efforts failed, indicating the continued relevance of Polanyi’s thesis.     

The Nordic Model on the Global Market of Ideas: The Welfare State as Scandinavia’s Best Brand

This article analyses the contemporary deployment of the Nordic welfare state model as a centrepiece of Nordic competitive identity and strategic communication on the global market of ideas. First, it looks at the interrelated phenomena of global competition, competitive identity and region branding. Second, it studies the interplay between Nordic transnational public diplomacy and national public diplomacy of individual Nordic countries, in particular Sweden, on the one hand and international media outlets’ reporting on the Nordic countries on the other. In analysing this cross-fertilizing genre, the article identifies how the welfare state is being repackaged for export along with a set of “progressive values” which are coded as specifically “Nordic.” The article discusses (1) the interaction between outer images and inner visions; (2) the place and significance of the Nordic model, progressive values and the welfare state in today’s Nordic branding; and (3) the possible function of outward competitive identity as a kind of “compensatory imagination” directed inward as well as outward.     

The effects of international remittances on expenditure patterns of the left‐behind households in Sub‐Saharan Africa

This article explores the effects of international remittances on the expenditure patterns of households in Sub‐Saharan Africa (SSA). This article focuses on five countries in SSA, which are some of the destinations that account for the highest receipt of international remittances. We analyze both aggregate and distributional effects of international remittances on expenditure patterns of households. To investigate the distributional effect of international remittances, we adopt the instrumental variable quantile (IV‐quantile) regression framework that allows us to simultaneously address the endogeneity of international remittances and possible heterogeneity in the impact of international remittances on households’ expenditure patterns. We instrument for international remittances by using the economic conditions in migrants’ countries as an instrument for international remittances. Our results show that the receipt of international remittances increases expenditures on food, durables, education, and health. Using the IV‐quantile regression, we find the effects of international remittances on household expenditure on food, durables, education, and health increase across the different expenditure quantiles.     

Remittances and healthcare expenditure: Human capital investment or responses to shocks? Evidence from Peru

This paper estimates the effect of international remittances on healthcare expenditures, taking into account both the interdependence with other consumption goods and the effects of health shocks. More precisely, we assess whether the budget allocation decisions of remittance‐receiving households reveal different preferences to invest in health capital, even when the simultaneous effect that health shocks may have on the demand of remittances and on other types of nondurable expenditures is accounted for. Using data from the “Peruvian National Survey of Households,” we find that remittances have a positive impact on healthcare budget shares, net of the remittance‐related income effect and independently of the occurrance of a health shock. They also have a positive impact on housing and a negative one on other expenditure items, that is, clothing, transport, and education. Hence, our results indicate a “pure” tendency of remittance‐receiving households to devote larger shares of their budget to health capital investment, rather than to other types of consumption goods.     

Polanyi and Post-neoliberalism in the Global South: Dilemmas of Re-embedding the Economy

Although Karl Polanyi Studied a different epoch and focused on Europe, his ideas have inspired an outpouring of studies on contemporary problems and prospects in the neoliberal era. The bulk of these studies pertain to industrial countries or global economic issues. However, the human, environmental and financial impact of market deregulation is arguably more devastating in the ‘developing’ countries than in the core. A question thus arises: do Polanyi's reflections on progressive alternatives to liberalism clarify contemporary debates on development alternatives in the Global South? I contend that democratic socialism – Polanyi's preferred remedy to the ‘demolition’ of society and nature occasioned by market civilisation – is problematical in light of what we have learned from the twentieth century, but his framework for evaluating alternatives – featuring the re-embedding of economy in society – remains as powerful as ever, I support this argument with an exploration of socialism and social democracy – as well as community – based alternatives arising from ‘reciprocity’. Each possibility raises distinctive dilemmas, as an analysis of cases reveals.     

The Last Gasp of Neoliberalism

The ideas of both Thorstein Veblen and Karl Polanyi shed light on understanding the last gasp of neoliberalism. The last gasp refers to Donald Trump’s abandonment of free trade, long considered a cornerstone of the neoliberal agenda, and his overt attacks on democratic institutions. In Trump, neoliberalism’s attempt to overcome the gridlock of liberal democracy has revealed its fascist leanings. Both Polanyi and Veblen warned about the trend towards fascism. Trump was elected, in part, by filling the void left by the factioning of neoliberalism, in part by the injustice felt by people in rural areas, those with stagnant incomes, white males, and others. Trump has transcended the neoliberal agenda, approaching market relations from the point-of-view of the fight. The emergence of a predatory culture, in both the domestic and international realms, resembles the culture outlined in Veblen’s The Theory of Business Enterprise. Trump’s actions reveal the need to extend Polanyi’s idea of social protection given the negative effects of modern technology and Trump’s efforts to dismantle or reduce some regulatory agencies. Changing demographics and the adverse reaction to Trump’s fascist leanings may yet see the emergence of a new progressive era, suggesting, at least, that Trump represents the last gasp of neoliberalism.     

China's Post-Listian Rise: Beyond Radical Globalisation Theory and the Political Economy of Neoliberal Hegemony

While China's rise has been much discussed, its meaning continues to be contested. This is true in radical international political economy, where, for example, it was the subject of (often polarised) debates between Giovanni Arrighi and David Harvey prior to Arrighi's death in 2009. This reflected a broader debate in IPE between development theory and radical globalisation analysis. The key point of contention is whether China's rise represents a challenge to or further consolidation of neoliberal hegemony on a global scale. This article critically scrutinises some of the key assumptions of the radical globalisation approach, specifically, that China represents another form of the ‘competition state’ whose development aspirations have been radically constrained by global ‘new constitutionalism’ and American monetary power so as to conform to neoliberalism. Deploying a structurationist approach to global governance and an eclectic/regulatory analysis of the Chinese state, I argue that China has challenged neoliberalism by projecting its growing power through constitutionalised global governance. In the face of (declining) American power, global constitutionalism has provided an opportunity structure that may help China consolidate its long-term strategy of consensual development. Far from anchoring ‘neoliberal hegemony’, global economic governance is increasingly central to its unravelling.     

Labour effects of foreign and domestic remittances – evidence from Pakistan

Remittances are playing an increasingly important role in the economies of developing countries. In this paper, we study the effects of these flows on Pakistan’s labour market. We employ the 2007–2008 Household Integrated Economic Survey and Probit as well as Propensity Score Matching techniques to examine the impact on labour participation, quantity of work and activities of working as well as non-active members of remittance-receiving households. We find that both foreign and domestic remittances tend to lower labour supply of the recipient households. This impact is higher among women and among the young. The impact is more pronounced in the rural areas. In addition, foreign remittances increase the likelihood of household members attending middle school. We also examine the quantity of labour supplied by the remittance-recipient households. Results show little difference in the number of months and days worked between the households receiving and not receiving remittances. Furthermore, we find that the likelihood of being self-employed and cultivating one’s own land is higher among remittance recipients. In sum, our analysis highlights a higher role of foreign remittances in the labour market as compared to internal remittances.     

Migrant remittances and fertility

This study examines the role of migrants’ remittances in developing countries’ fertility transition. Employing an unbalanced panel of South Asian countries and controlling for various economic and socio-demographic factors, we find that remittances are significantly associated with a lower number of children born to women of childbearing age. This suggests the remittances’ substitution effect to be at play rather than the income effect, and may result from decreased need for children for financing the household’s future needs as well as from better access to healthcare and contraceptive methods available to migrant households. Remittances’ association with fertility appears to be more important than the transfer of fertility norms from migrants’ host countries. The monetary aspects of international migration may therefore be more important for the region’s demographic transition than social remittances.     

The Trans-Political Nature of Southwest China’s Energy Conduit,Yunnan Province

Transboundary flows of energy across Yunnan Province in China and to Southeast Asian states provide insight into the changing nature of borders and border areas. Rather than monolithic symbols of state sovereignty, China’s southwest borders in Yunnan can be more accurately characterised as zones of connectivity and exchange, serving a range of local, national and regional objectives. Energy production and distribution in and across Yunnan can be understood as functioning in a set of dynamic transnational processes that serve as economic and political bridges – increasing interaction and deepening regional integration – while also working to mitigate risk to China’s energy demands. In this article, energy projects in Yunnan and Southeast Asia demonstrate the ways border regions can respond to increasing globalisation, simultaneously strengthening national energy security while promoting regional interconnection and diplomacy. Thus, connections to and through a once peripheral region present an apparent contradiction: once rigid territorial borders are increasingly characterised by transboundary infrastructure development and exchanges of energy, capital and diplomacy, while promoting broader, diversified national energy security objectives – essentially strengthening national security through transnational energy projects. This article investigates how energy development works to shape Yunnan’s role as an “energy conduit,” while advancing both transnational and national geopolitical objectives, and thus, suggesting that these projects can be understood as trans-political in nature.     

Consumption Effects of Foreign Remittances in Jamaica

The term remittances refers to proceeds from the migration of labor that are sent to aid individuals remaining in the migrants’ home communities. In this paper, we investigate whether remittances alter the consumption pattern of recipient households in Jamaica. We present results from an Engel curve estimation specifically using the Working (1943) approach and a two-part fractional response model with instrumental variables to account for selection bias and endogeneity of remittances. The dependent variables are a subsample of the categories of consumption as defined in the Jamaican Survey of Living Conditions and include expenditures on food, schooling, health, gambling, alcohol and donations. We find that receipt of remittances significantly alters the recipient households’ expenditure allocations relative to other sources of income, although this effect occurs more through the participation decision. Overall, total effects of remittances are largest in the areas of luxury expenditures and home production, and to a lesser extent for education and grocery store purchases. These findings have significant implications for those remitting, those receiving, and governments looking to understand this large flow and less documented source of income.     

Representing Mountains: From Local and National to Global Common Good

Since the United Nations Conference on Environment and Development in 1992, mountains have acquired global recognition as a specific issue in the promotion of sustainable development policies. Starting from the traditional roles of mountains for local societies and in modern geopolitics, this paper analyses the status that mountains have been acquiring though globalisation, and the modes of global mobilisation and recognition that have taken shape since 1992. Particular attention is given to the role of scientists, international organisations, some mountainous states, and “mountain people”. The specific characteristics of this process are discussed and compared to those pertinent to other goods, especially ‘geographical’ or ‘ecological’ goods such as tropical forests and Antarctica. Though the globalisation of mountain issues is part of a wider process of the recognition of environmental and cultural goods at a global level, it may be seen as the first example of a new category of global common good: “global common regions” or “glocal common good”.     

开放型技术双元促进中国制造业全球价值链攀升了吗——基于微观数据的实证检验

以2008—2018年中国制造业13个子行业1853家企业微观数据为基础，构建Translog模型，分析开放型技术双元及其不同技术组合对中国制造业全球价值链（GVC）攀升的异质性影响。结果表明，企业有效平衡与吸收开放型技术双元形成的协同效应，能够降低进口竞争引致的要素替代成本，促进中国制造业GVC攀升向高技术探索与开发组合的内生驱动转化。技术开发成为中国制造业GVC攀升的充要条件，技术探索为充分不必要条件。在竞争效应和协同效应双重作用下，内资企业高技术开发组合成为推动中国制造业价值链攀升的主要驱动力，受技术门槛和技术控制约束，技术探索只有在内资企业具有足够开发能力时才能对价值链攀升产生显著影响。异质性双元组合催生形成中国制造业GVC攀升的多元化路径。劳动密集型行业依赖进口竞争攀升的低技术双元特征；资本密集型行业较高的外资吸收效率对母国开发与跨国开发技术组合吸收更具适应性，呈现出显著的市场竞争攀升特征；技术密集型行业积极的母国探索倾向与较高的技术开发能力形成技术协同攀升特征。     

Consumption risk-sharing under terror shocks: Evidence from value-chain network rosters in Nigeria

Households in Nigeria live in inherently risky environments; accentuated by the preponderance of terror incidences, banditry, and farmer–herder-related clashes that are more concentrated in the northern than southern parts of the country. This study examines the proposition that households with a robust network roster—especially networks related to ethnicities and financial remittances from outside their communities—are better able to weather the idiosyncratic and aggregate impact of terror-related shocks; and thus, experience less consumption variability to terror-related shock than other similar households without the “insurance” of an external network. Our main empirical strategy applies a panel difference-in-differences specification to three waves of the LSMS-ISA surveys for Nigeria. The results from the study indicate that having external networks outside the community is an important coping mechanism for terror-related shocks, both for overall welfare and food consumption. The difference in consumption variability between groups with outside network “insurance” and those without could be as high as 20 percentage points. Thus, risk-sharing arrangements for households should exploit outside network insurance mechanisms to mitigate welfare losses from terror-related shocks.     

Post-Crisis Experiments in Development Finance Architectures: A Hirschmanian Perspective On ‘Productive Incoherence’

Abstract

The Asian and especially the global crisis of 2008 have catalyzed decentralization of the developing world’s financial governance architecture. I understand this state of affairs via the concept of “productive incoherence” which is apparent in a denser, multilayered development financial architecture that is emerging as a consequence of heterogeneous practical adjustments to changing circumstances rather than as the embodiment of a coherent doctrine. Drawing on Albert Hirschman, I argue that the absence of an encompassing theoretical blueprint for a new economic system—i.e. a new “ism” to replace neoliberalism—is in fact a vitally important virtue. If we cannot live without a new “ism,” I propose “Hirschmanian Possibilism” as a new doctrine—one that rejects an overarching theoretical framework from which to deduce the singly appropriate institutional structure of the economy. Hirschmanian Possibilism asserts instead the value of productive incoherence as a framework for pursuing democratic, ethically viable development institutions.     

“Social Freedom” in the Twenty-First Century: Rereading Polanyi

Karl Polanyi’s analysis of the genesis, crises, and institutional transformations of contemporary society is grounded on a theory of the basic features and dynamics of capitalism as a peculiar form of society. This article intends to develop this thesis on the basis of a reading of Polanyi’s The Great Transformation, with references to Polanyi’s preceding and later research. Polanyi’s theoretical and methodological achievements suggest a wide comparative outlook and offer a critique of economics, in addition to being deeply connected with his political philosophy. Polanyi’s approach seems to be nearer to the original institutional thought — from Karl Marx to Thorstein Veblen, from Max Weber to Adolf Löwe and Karl William Kapp — than to current neo-institutional tendencies in economics, sociology, and historiography. The hard problems society presently faces suggest the need to adhere to Polanyi’s radical point of view — that is, to a radical approach to Polanyi’s thought.     

Altruism: primary motivation of remittances

This article examines primary incentives of remittances. After controlling for host country’s GNI per capita, real exchange rates and real interest rates, a rise in home country’s GNI per capita leads to fewer remittances. A rise in host country’s GNI per capita motivates migrants to remit more. Real interest rates have no effect on remittances. These results indicate primary incentive of remittances is altruism.     

Where did all the remittances go? Understanding the impact of remittances on consumption patterns in rural China

We focus on the impact of migrants’ remittances on consumption patterns in China. Using a large homogenous sample of rural households surveyed in 2001 and 2004, we find that remittances are spent on nonhousing consumption expenditures at the margin, virtually dollar-for-dollar, when we instrument remittances and local employed earnings using proxies of social networks. Our findings are robust to intra-household division of labour and to fixed-effect for the county in which the respondents are registered. These results imply that rural households largely take remittances as permanent income and are consistent with the prevalence of circular and repeat migration in China.     

Remittances and income diversification in Bolivia’s rural sector

This article examines the role of remittances in income diversification strategies in Bolivia’s rural sector. Remittances can be consumed or invested by the recipient. As an investment, funds can be used for farming or to finance other nonfarm productions. In this article, we use a large and nationally representative survey to estimate the effect that remittances have on the probability of producing income from nonfarm activities (diversification) by using a bivariate probit model. Our evidence shows that remittances increase the probability that a rural family engages in nonfarm activities, at least in some regions of Bolivia. We also find evidence that the sender’s decision to remit and the recipient’s decision to diversify may be jointly determined. As such, this suggests that remittances may serve as a mechanism to overcome localized failures in Bolivia’s capital markets.