The environment and the Great Transformation

                  (from famouseconomists.net)

The latest Journal of Environmental Law has an interesting review article by Ben Pontin on two books: Michelle Maloney and Peter Burdon, Wild Law—In Practice (Routledge, 2014); and Bettina Lange, Fiona Haines and Dania Thomas (eds), Regulatory Transformations: Rethinking Economy–Society Interactions (Hart Publishing, 2015). Pontin writes:

This review article compares ‘Wild Law’ and Polanyian critiques of modern day environmental regulation, drawing on two recent edited collections. Each critique unfolds within a rather different intellectual tradition, but there are nonetheless important areas of common ground that justify reading the two together. One area of common ground is a concern with the regulation of social and economic impacts on the natural environment in the context of what it means to be ‘human’. Polanyi did not in his lifetime receive the credit he deserved for being among the very first to write explicitly about regulation in relation to ‘human beings and their natural environment’. This was decades before the word ‘environment’ entered into the lexicon of policy and law in the USA (National Environmental Policy Act 1969) and the UK (Environmental Protection Act 1990). To this extent the catchy neologisms of Wild Law (‘Earth Jurisprudence’, ‘Earth Community’, ‘Earth Governance’, ‘Earth Justice’ and of course ‘Wild Law’ itself), are building on a Polanyian heritage.

A second key area of common ground concerns the limitations of markets as a means of structuring economic and social relations. While neither standpoint rejects markets as means of conducting economic transactions up to a point, each is predisposed towards modes of regulation that are embedded (using Polanyi’s language) in ethical values, rather than the profit motive. Polanyi arrived at this market-critical position from a historical perspective, but as one contributor to the collection by Lange and others points out, Polanyi was preaching to the converted in criticism of 19th-century ideology in the 1930s and 1940s. The difference with Wild Law and modern exponents of Polanyian ideas is that they are facing a renaissance of classical political economy (so-called ‘neo-liberalism’), which is evidenced by an approach to environment regulation based on creating new markets in environmental ‘goods’. This is illustrated in areas such as nature conservation and climate change (eg tradeable biodiversity and carbon credits, respectively), and more broadly by the treatment of economic growth as a bottom line within environmental policy. Much hinges, therefore, on the guile with which these two critiques are articulated (including the scope for learning from one another where possible).

Introducing Polanyi to a legal audience that is largely unfamiliar with his work is a primary aim of the collection of Lange and others, and it is done well. By way of the briefest of distillations, Polanyi’s leading work is The Great Transformation (first published in 1944). In it he tells the story of colossal policy failure, when—in 19th-century Britain—the legislature and courts were persuaded to put into practice Adam Smith’s theory of meeting a nation’s needs through the invisible hand of the free market. That entailed the repeal of protectionist legislation (notably corn laws), and the introduction of economically liberal reforms to statute and common law relating to labour and care for the poor and vulnerable. Polanyi’s achievement was to have grounded a theory of regulation in the experience of this laissez faire experiment:

"Before the process [or planned marketisation] had advanced very far, the labouring people had been crowded together in new places of desolation, the so-called industrial towns of England; the country folk had been de-humanized into slum dwellers; the family was on the road to perdition; and large parts of the country were rapidly disappearing under the slag and scrap heaps vomited forth from the ‘satanic mills.’ Writers of all views and parties, conservatives and liberals, capitalists and socialists invariably referred to social conditions under the Industrial Revolution as a veritable abyss of human degradation."

Polanyi argued that this refuted Smith’s account of human beings as natural traders, with an instinct to bargain their way through life in search of personal material improvement. The universality of condemnation (‘writers of all views and parties’) suggested to Polanyi a naturally spontaneous resistance to free trade. Christopher Decker coins a distinction between Smith’s and Polanyi’s understanding of the human being in terms, respectively, of ‘economic man’ and ‘whole of man’. This makes for an interesting framework for exploring the differences between the Polanyian and the Wild Law critiques of markets (Wild Law looks to more than the ‘whole man’).

Polanyi uses the concept of a ‘double-movement’ to capture the transformation of society during the industrial revolution, and this is among the frames of reference of Lange and others’ collection. Economic relations, Polanyi argued, are naturally embedded in social ones, such that their ‘dis-embedding’ (as a consequence of the experiment with the theories of Smith and the wider Manchester School) elicited a ‘counter movement’, in which the economic sphere was re-embedded in the social sphere by means of regulation.

There's plenty more interesting discussion here.