As the recession begins to really kick in, the apparent rebirth of the ‘interventionist’ state has been one of the most fascinating aspects of recent events. Long derided by business types as inimical to the efficient operation of the market, we see British and US governments wading into the fray to try and offset the damage caused by reckless bankers, short-selling hedge fund managers and other reputed financial experts. The public purse has been emptied out in order to bring stability to what many of its supporters have long-insisted is a free and self-regulating system.

Much of this is intervention seen by market liberals as potentially damaging – dangerously socialist even – as the state now appears to be ‘meddling’ in the affairs of the free market, ‘distorting’ the operations of money and the economy. But what these interventions underline is not that the state has suddenly ‘returned’ – but that it never goes away, and, if capitalism is to proceed, never can and never will.

Such a view was long-ago advanced in Karl Polanyi’s wonderful book The Great Transformation. Here, Polanyi showed how the growth of a market society was dependent on the actions of the state in creating the social and legal frameworks that allowed markets to freely operate. Polanyi famously argued that ‘laissez faire was planned’ – observing that the market was not a ‘free’ and self-regulating entity but actually required the provision of a new set of institutional arrangements and social relationships in order to enable its apparently ‘free’ hand to work. These were not only regulations around what constituted fair and free trade, the drafting and fulfilment of contracts, financial regulations and so on, but involved state management of the supply of money and credit, as well as rules and regulations regarding the provision of land and labour (these latter constituting what Polanyi termed ‘fictitious commodities’). In short, the market relied on the state to provide the field conditions that enabled it to work.

Without state interventions ‘free’ markets cannot survive

Polanyi argued that trying to separate or ‘disembed’ the market from state and society (as market liberals are wont to do) was to misunderstand how markets work. Markets are part of society and cannot work without the legitimation and structures that states provide - nor the protection that states can offer from various crises and negative social impacts of market systems. Without state interventions ‘free’ markets cannot survive.

Polanyi also identified what he called a ‘double movement’ at work in the heart of the capitalist system. As the market became dominant, state and society sought to find ways to protect people from what Polanyi termed ‘the ravages of this satanic mill’:

Social history in the nineteenth century was thus the result of a double movement: the extension of the market organization in respect to genuine commodities was accompanied by its restriction in respect to fictitious ones. While on the one hand markets spread all over the face of the globe and the amount of goods involved grew to unbelievable dimensions, on the other hand a network of measures and policies was integrated into powerful institutions designed to check the action of the market relative to labour, land and money... a deep seated movement sprang into being to resist the pernicious effects of a market-controlled economy.
From The Great Transformation, pages 79-80

Market-led societies corresponded with the growth of a whole new social and welfare apparatus that could guarantee workers for the factory, but also protect them from excesses of capitalistic zeal. The idea that market-led societies must always contain measures for their moderation and repudiation (policies around work, welfare, housing, health and education) in order to stave off social collapse (and allow markets to continue functioning) is central to Polanyi’s approach. On the one hand, this could be seen as an apologetic for capitalism, but should more roundly be seen I think as an analysis of the constant potential for conflict that exists between market forces and social values. Polanyi wanted to show how the market and society existed in related tension, and particularly how, since markets were embedded within societies that contained non-market organizations and values, society had the power to shape and reform market operations – much like UK and US governments are attempting to do today.

The economist Fred Block has suggested a nice metaphor for Polanyi’s approach:

In this sense one might say that disembedding the market is similar to stretching a giant elastic band. Efforts to bring about greater autonomy of the market increase the tension level. With further stretching, either the band will snap – representing social disintegration – or the economy will revert to a more embedded position

At present, we seem to be entering a period where the tension on the band has been released – since the market liberals have stretched things too far – and states are attempting to temper the market in the interests of society. Whether this will work - and how far the band retracts - remains to be seen.

About the author

Mark Banks is Reader in Sociology at the Open University. His research interests include the cultural and creative industries, popular culture, cities and urban space.

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Arthur C Clarke rehearses for a 1953 BBC Television programme.
[Photo © copyright]

He was a constant presence as I was growing up, and now I hear that he has died. The man who wrote my favourite science fiction stories, but also a science fact book Voices from the Sky: Previews of the Coming Space Age that my parents gave me for Christmas in 1971. I have it in front of me now, a slim Mayflower paperback. I have forgotten most of what's in it, but it made a big impression on me as a schoolboy interested in science, and now I will read it again. The items within it that I do remember clearly are Arthur's accounts of his 'invention' of the geostationary communications satellite, and most notably a reprint of his amazing paper 'Extraterrestrial relays' that was initially published in Wireless World in 1945. Here he described how a 'space station' in a orbit with a 42,000 km radius must take exactly 24 hours to go round the Earth. If placed in such a orbit over the equator, to an observer on the rotating globe the 'space station' would appear to remain fixed in the sky, and would be ideally situated to relay messages to virtually  the whole hemisphere below. Moreover a set of three such stations, spaced at 120 degree intervals, would constitute a relay girdle capable of maintaining permanent global communications.

This was visionary stuff, because of course it is the principle upon which networks of communications satellites operate. Clarke did not get it quite right - he predicted large stations inhabited by teams of technicians (needed to replace burned out valves) rather than the small electronic satellites based on transistor technology. Even so, the basic idea was sound, and elsewhere in the book Clarke wonders whether he missed a trick (and an immense fortune) in not patenting the concept.

Clarke's proposal for satellites: From Wireless World Volume LI Number 10, October 1945.

I never had the pleasure of meeting Clarke in the flesh, but we spoke once, several years ago. He was in his home in Sri Lanka, but through the wonders of geostationary communciations satellites he appeared on screen as the guest of honour at a meeting organised in London by the British Interplanetary Society. I (a member of the audience) had the good fortune to ask him a question and recieve a reply that was both thoughtful and diplomatic. To have talked with the great man who invented the very means we used to communicate is a memory that will never fade.

About the author

Dave Rothery is a volcanologist and planetary scientist at the Open University. His current research includes studying volcanic eruptions on the Earth and characterising planetary surfaces, especially Mercury.

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Books by Giddens.
[Photo by Sue Hemmings,
© copyright Open University]

I first came across Anthony Giddens when I was an undergraduate at Bath, some time in what a six year old of my acquaintance insists were ‘the olden days’. It’s interesting the way in which we parcel up time – periodising both our personal biographies and societies as a whole. For me time and place stand for whole webs of social and cultural connections. The Bath years – when Ian Dury and the Blockheads were asserting that sex ‘n’ drugs ‘n’ rock and roll were all your brain and body needed and pleasant as they all were I found that actually studying for my degree also gave another kind of pleasure and freedom.

So I came to Giddens at some point in late, high or possibly reflexive modernity; mature capitalism, the zenith of the post-war settlement or the apogee and its collapse. Which is another way of saying that I was lucky as the first from a ‘respectable working class’ family which had maybe just clawed its way into the ‘lower middle class’ to benefit from a welfare sate which had educated me for free and was now sending me off to University with no thought of paying fees and with a grant which – topped up by £50 a term by my parents – was just enough with a little bit of waitressing and office temping through the holidays to get by.

My first Giddens was The Class Structure of the Advanced Societies and the second  Capitalism and Modern Social Theory: an analysis of the writings of Marx, Durkheim and Weber. For my generation of sociologists these are the Big Three, the trinity of my discipline’s foundational myth. The short introductory account would go that Marx offers us the historical, determinist account, man (yes, I do mean man) as product of his social conditions, subject of and to a history not of our own making; Durkheim the proto –functionalist concerned not with subjective experience but with the thing-like quality of social facts enduring and predictable regardless of which individuals occupy them; Weber who in the early years of the century struggled with the concerns of structure and meaning whilst, we were told, locked in a debate with Marx’s ghost - but then in the mid 70s who wasn’t.

The books have moved from house to house with me but probably haven’t been used for over a decade. Looking today at books which proceed from Marx’s contribution is like visiting another time, a time before post-structuralism, post-modernism and the cultural turn. Equally striking though is the extent to which some very contemporary concerns figure - the narrative of sociology’s development as a modernist account of modernity, debates around structure and agency , the future of social democracy, structuration and the critique of totalising thought are all here.

Both books deal with the interpretation, reinterpretation, misunderstanding, appropriation and misappropriation of ideas from an earlier time. Reading them again today I am very aware of how books can change over time. On the one hand I am taken back to an original reading from a different time and place whilst on the other very aware of how differently I am viewing them through older eyes in the context of a changed social world.

Related links:

• Anthony Giddens gives the 2007 Pavis Lecture - you can listen online
• For a guide to Giddens' work, explore our brief biography

[Image: books by Giddens by Sue Hemmings. © copyright Open University]

About the author

Sue Hemmings is a Social Science Staff Tutor, based in the Cambridge office of the Open University. She spends a lot of time encouraging students to explore issues of social structure, social change, identity and globalisation.

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