Ending Polanyi’s Double Movement

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Preamble

More than 80 years ago, political economist Karl Polanyi warned in The Great Transformation that subordinating society to market principles of competition and self-interest would inevitably provoke a protective response.

He called this the double movement.

As market forces undermine social stability and human welfare, society demands protection through government intervention, regulation, social services and other measures designed to mitigate the damage.

This creates an ongoing tension between the economic demands of the market and the human needs of society.

Today, this tension is particularly evident in the growing demand for healthcare, disability support, aged care and other essential social services.

These services are fundamental to human wellbeing. Yet their growing costs, combined with relatively low measured productivity growth in many labour-intensive services, place increasing pressure on government budgets and the wider economy.

Where additional expenditure outpaces the economy's capacity to deliver goods and services, it can contribute to inflationary pressures, prompting higher interest rates and creating further economic hardship.

The result can be a recurring cycle in which efforts to protect society generate new economic pressures, requiring further intervention.

What if we could break this cycle by changing the relationship between society and the market itself?

The proposed Global Social Capital Fund offers a fundamentally different approach.

Rather than relying primarily on taxation, government spending and regulation to address the social consequences of market activity, the GSCF would provide a mechanism for integrating social capital directly into the economy.

Through voluntary participation, consumer choice and the Social Capital Levy, it could help restore the balance between the human needs of society and the financial objectives of the market.

This raises the possibility of resolving the underlying tension identified by Polanyi — not through ever-increasing government intervention, but by restoring human values and social capital to the core of economic activity.

Question:

A Global Social Capital Fund could help overcome the economic tensions and instability associated with Polanyi's double movement?

​(Agree/ Disagree →)

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