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Hayek and Polanyi on Choice and Inevitability

Revistas Teoria Politica Teoria Politica 2015 Hayek and Polanyi on Choice and Inevitability

Hayek and Polanyi on Choice and Inevitability

Hayek and Polanyi on Choice and Inevitability

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Bugra, Ayse - Hayek and Polanyi on Choice and Inevitability
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Hayek and Polanyi on Choice and Inevitability

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Hayek and Polanyi are two prominent 20th century writers who have significantly contributed to the criticism of formal economic theory by insisting on the necessity of looking beyond the economy of homo oeconomicus to understand the economy of «man» as a social being. This article explores the methodological differences underlying this shared position and argues that the insistence on the limits of human reason and the fallibility of man central to Hayek's criticism of the rationalist tradition and Polanyi's approach to the economy as an instituted process lead to diametrically opposed views on human freedom. Central to Hayek's lifelong work is the inevitability of the choice between two types of submission, either to the impersonal forces of an institution such as the market which is not the product of human design or to the arbitrary power of personal character which would lead to serfdom. For Polanyi, what is inevitable is the society's resistance against the self-regulating market economy which he sees as an aberration incompatible with human society. In Polanyi's work, however, accepting the reality of society in its incompatibility with market economy opens the way to political action and defines a realm of choice which Hayek's approach to the relationship between society and politics completely denies. The discussion presented in the article was inspired by the global protests of 2013, particularly by those in Turkey which were against the market fundamentalism imposed on the society by a religiously conservative government. Seen as a manifestation of political will to control one's social and natural environment, these protests constitute the background against which the contributions of Hayek and Polanyi are revisited in a comparative perspective.
Palabras clave
Hayek. Karl Polanyi. Economic Rationality. Market Economy. Spontaneous Order.
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Hayek and Polanyi are two prominent 20th century writers who have significantly contributed to the criticism of formal economic theory by insisting on the necessity of looking beyond the economy of homo oeconomicus to understand the economy of «man» as a social being. This article explores the methodological differences underlying this shared position and argues that the insistence on the limits of human reason and the fallibility of man central to Hayek's criticism of the rationalist tradition and Polanyi's approach to the economy as an instituted process lead to diametrically opposed views on human freedom. Central to Hayek's lifelong work is the inevitability of the choice between two types of submission, either to the impersonal forces of an institution such as the market which is not the product of human design or to the arbitrary power of personal character which would lead to serfdom. For Polanyi, what is inevitable is the society's resistance against the self-regulating market economy which he sees as an aberration incompatible with human society. In Polanyi's work, however, accepting the reality of society in its incompatibility with market economy opens the way to political action and defines a realm of choice which Hayek's approach to the relationship between society and politics completely denies. The discussion presented in the article was inspired by the global protests of 2013, particularly by those in Turkey which were against the market fundamentalism imposed on the society by a religiously conservative government. Seen as a manifestation of political will to control one's social and natural environment, these protests constitute the background against which the contributions of Hayek and Polanyi are revisited in a comparative perspective.

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