Procedimiento para medir el capital intelectual en empresas del conocimiento

While studies have acknowledged the continued presence of welfare state models in both developed and developing countries their sustainability is productively understood through Karl Polanyi's theoretical concept of the double movement, which is explained as resistance to the expansion of market forces. Yet, before this is done Polanyi first deconstructs the notion of the self-regulating market and provides, through his work, a powerful historical anthropological review of the evolution of the market system. He concludes that the emergence of market liberalism was a deliberate state intervention brought about through market friendly legislation and policies (Polanyi 2001: 67).

Polanyi takes us on a virtual chronological odyssey, starting with pre-industrial society and ending with the emergence of the social democratic welfare state in the 1950s; and by doing this through his empirical research he discloses that:

economic history reveals that the emergence of national markets was in no way the result of the gradual and spontaneous emancipation of the economic sphere from government control. On the contrary, the market has been the outcome of a conscious and often violent intervention on the part of government which imposed the market organisation on society for noneconomic ends. And, the self- regulating market of the 19th century turns out, on closer inspection, to be

41 radically different from even its immediate predecessor, in that it relied for its regulation on economic self-interest (Polanyi 2001: 258)

For Polanyi, the markets were in earlier times 'accessories of economic life' (Polanyi 2001:71) and in previous civilisations 'the economic system was absorbed into the social system' (ibid). Therefore, from this observation he concludes that the self-regulating market proposed by the liberalists was not based on the evolution of market relations, but instead is an abnormality of the system. Polanyi revealed that only in the 19th century with the emergence of liberal ideology was there an attempt to extricate the economy from society, where social life became influenced and determined by economic characteristics and determination. This act was once again repeated in the 1920s with the re-emergence of liberalism where society was subordinated to the economy. The market reigned supreme over human wellbeing, and life revolved around, and became intrinsically linked to, the functioning of the market economy (Polanyi 2001:26)

Polanyi's careful and detailed analysis reveals that market liberalism was only made possible by deliberate political action by the state, through legislation which supported economic liberalisation (Bugra 2007: 174). Strong state intervention was required to pave the way for the free market, and great efforts were made through legislation to remove any barriers to market liberalisation (ibid: 176). According to Polanyi, 'there was nothing natural about laissez faire, free markets could never have come into being merely by allowing things to take their natural course - laissez faire was enforced by the states' (Polanyi 2001: 145). The government played an active role in facilitating a laissez faire market system not only through legislation but working on behalf of capitalist interests it was also charged with the task 'to collect statistics and information to foster science and experiment' (Polanyi 2001: 145). Hence, the free market economy required more not less government intervention. In other words, the government

42 performed the dual role of enabler and facilitator. Administrators had to be constantly on the watch to ensure the free working of the system. Thus, it is disclosed that those whose whole philosophy demanded the restriction of state activity could not but entrust the same state with new powers, organs and instruments required for the establishment of laissez faire' (Polanyi 2001: 147)

Polanyi, therefore, concluded that the concept of a self-regulating market was a myth, a very dangerous myth (Stiglitz 2001: viii). His research demonstrated that free market ideology was deliberately conceptualised to support capitalist interests in both the 19th century with the Industrial Revolution and the 20th century just before the Great Depression (Stiglitz 2001: viii). He argued that far from having an invisible hand the market economy had a very noticeable helping hand in the form of strong state invention. The state, through deliberate legislative action, was responsible for expanding the market and hence facilitated the emergence of the free market (Birchfield 2011: 36; Bugra and Agartan 2007: 2).

Key instances of this included state legislation in the 19th century that resulted in the commodifying of labour and land, allowing them to be incorporated into the market system. Labour, once it becomes a commodity, means that human beings are not just employers but employees, and their usefulness or employability is only made certain if their skills are desired by the market thereby becoming subjected to the demands and vagaries in the market system (Polanyi 2001: 79).

This is very relevant to our analysis of the influence of neoliberal philosophy on ordinary people's lives in the contemporary period, and the subsequent reaction and resistance to its imposition. In the 20th century, the market economy had been resurrected with great force

43 (Bugra 2007) and similar to 'their predecessors, neo-liberals insist that all nations have to do is trust in the effectiveness of self- regulating markets' (Block 2001: xxxiii). Yet, the architects of the contemporary period have gone further (Bugra 2007: 176). The expansion of neoliberal ideology has meant that everything everywhere, and in some countries anyone, is for sale and can be traded (Latham 2000: 76). The expansion of the market system has meant that previously protected areas and public services are now commodified and drawn into the market to be bought, sold and traded as private entities. Public services such as education, healthcare, welfare and public utilities are all now incorporated into the global market sphere with 'no connection to (the) social needs that there were initially created for, under the guise of efficiency' (Latham 2000: 78).

The neoliberal ideological stance is the antithesis to social democratic welfare states, as it is 'deeply opposed to social public sector expenditures devoted to welfare, job creation, environmental protection, health care, education and even the alleviation of poverty' (Chin and Mittleman 2000: 46). Instead, the state has been redefined, moving from a welfare status to a competitive position. Its previous role of protecting its citizenry (social welfare) has been transformed to promoting economic growth and free trade. The state has now redirected its interests to developing market friendly policies, although it no longer plays an overtly direct role in economic affairs as before, it, nevertheless, actively participates in the process. The state no longer protects its citizens from the harmful effects of the world economy, 'rather, it… increasingly facilitates globalisation, acting as an agent in the process' (Desai and Potter 2002: 431).

Nonetheless, we are reminded by Mendell and Salee (1991) that neoliberal polices were not accepted or 'adopted because neoconservatives had won some academic debate, they were

44 adopted because ... memories of the horrors of the 1930s faded' (Mendell and Salee 1991:16). It is here that Polanyi's work becomes crucial to our understanding of why the concept of a self- regulating market is a dangerous myth, and why he hoped that through his work, and vivid descriptions of the horrors that took place in the name of liberalism, those policies would never be revisited.

Polanyi warned that 'to allow the market mechanisms to be the sole director of the fate of human beings and their natural environment ... would result in the demolition of society' (Polanyi 2001: 76). The continued havoc wreaked on society by market liberalism could not 'exist for any extended period without annihilating the human and natural essence of society' (Bugra 2007: 173). When economics and finance take precedence over societal needs and social wellbeing the effects are disastrous: increased organised crime, political protests, and social turmoil (Stiglitz 2001.) According to Polanyi (2001), liberal ideology applied during the Industrial Revolution provided a clear example of the devastating impact which unrestrained market liberalism had on society. It resulted in a situation where 'country folk had been dehumanised into slum dwellers, the family was on the road to perdition, and large parts of the country were rapidly disappearing under the slack and scrap heaps vomited forth from the satanic mill' (Polanyi 2001: 41).

Parallels can be drawn between the effects of market liberalism in the past and events of the contemporary period. Despite historic evidence which shows the destructive nature of market forces (Bienefeld 2007), 21st century society, as it did under the liberal political influences of the two preceding centuries, is once again at the mercy of the market. However, the current situation is direr than in the 1930s with the Great Depression, since 'global capitalism is proving increasingly incompatible with social justice, ecological sustainability and the rule of law nationally and internationally' (Devine 2007: 45). The application of neo-liberal laissez faire has

45 meant that a 'substantial proportion of the world's population lives in vast seas of poverty and in situations characterised by insecurity, economic deprivation, ecological degradation and violence' (Gill 1995: 70)

As they did in the past, 'once again, exchange rates have become weapons of economic warfare ... once again those debts have become hammers that are used to crush demands for social improvement on the anvil of fiscal responsibility' (Bienefeld 2007: 19). Within this contemporary period, as in the 1920s and the 1930s, governments have to choose between protecting and looking after their citizen's wellbeing or reducing their deficits (Block 2001: xxxv). As the debt burdens increase to dangerous levels governments' focus becomes more about economic outcomes as less attention and consideration are directed to social matters (Bienefeld 2007: 17). The financial crisis of 2008 bears testimony to the fact that unchecked and unregulated markets can have disastrous effects on the general population.

One example of this is that governments, particularly in developing countries, are no longer in control of their national budgets or development plans; these are now being dictated to, and fashioned by, external forces, mainly in the form of International Financial Institutions (IFIs) loyal to the neo-liberal project (Gill 1995: 77). Those states that fall out of line are disciplined by neo-liberal proponents, particularly in their insistence on stringent structural adjustment programmes (Gill 1995: 69). IFIs act as 'enforcers of the global logic of the market, especially in those parts of the developing world for whom the 1980s had been such a disaster' (Mendell and Salee 1991:17). Implementation of these policies were further accelerated by the Washington based institutions such as the World Bank and the International Monetary Fund, and their regulatory arm the World Trade Organisation in Switzerland.

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2.6 Unplanned Resistance to Unrestrained Markets: The Double Movement,