Re-reading Friedrich Hayek and Karl Polanyi in the Late-Modern Condition of Fragility

Abstract

The cardinal role of complexity in Friedrich Hayek’s theory of the market has hardly gone unnoticed. Indeed, there is now a considerable corpus of literature that has established the importance of spontaneity as a central concept around which neoliberal economic theory revolves. However, as William Connolly analyzes, its closed conception of economic processes simplifies real economic volatilities and ignores both modes of self-organization and creativity found in democracy and social movements that periodically irrupt into market processes. This article builds upon this critique of neoliberalism and employs Karl Polanyi’s genealogy of modern capitalism to understand historical imbrications between the market and the social and their contribution to the fragility of capitalism. Polanyi’s notions of “(dis-)embeddedness” and the “double movement” not only show us a more “complex” view of modern political economy but also provide us with important lessons for political responses to the recent crisis of neoliberal capitalism. Connolly WE (2013) The Fragility of Things: Self-Organizing Processes, Neoliberal Fantasies, and Democratic Activism. Durham: Duke University Press. Hayek F (1973) Rules and Order. Chicago: University of Chicago Press. Hayek F (1976) The Mirage of Social Justice. Chicago: University of Chicago Press. Polanyi K (1944) The Great Transformation: The Political and Economic Origins of Our Time. Boston: Beacon Press.