Notes on The Great Transformation Part 3

The great variety of forms in which the ‘collectivist’ countermovement appeared was not due to any preference for socialism or nationalism on the part of concerted interests, but exclusively to the broader range of the vital social interests affected by the expanding market mechanism. (p. 145). Although it is true that the 1870's and 1880's saw the end of orthodox liberalism, and that all crucial problems of the present can be traced back to that period, it is incorrect to say that the change to social and national protectionism was due to any other cause than the manifestation of the weaknesses and perils inherent in a selfregulating market system. (p. 145). Polanyi argues that this can be shown in more than one way and address some liberal interpretations of the crisis of liberalism. I simply highlight the four points he notes below: 1. There is amazing diversity of the matter on which action was taken (hence, it wasn’t concerted/uniform as the liberals claim). (p. 145). 2. The change from liberal to ‘collectivist’ solutions happened sometimes over night and without any consciousness on the part of those engaged in the process of legislative rumination. (p. 146). 3. There is indirect, but most striking proof provided by a comparison of the development in various countries of a widely dissimilar political and ideological configuration. (p. 147). 4. There is significant fact that at various times economic liberals themselves advocated restrictions on the freedom of contract and on laissez-faire in a number of well-defined cases of great theoretical and practical importance. (p. 148). In other words, if the needs of a self-regulating market proved incompatible with the demands of laissez-faire, the economic liberal turned against laissez-faire and preferred - as any anti-liberal would have done- the so called collectivist methods of regulation and restriction. (p. 148). Now Polanyi offers us a sweeping critique of liberal interventionism: …this is far from saying that market system and intervention are mutually exclusive terms. For as long as that system is not established, economic liberals must and will unhesitatingly call for the intervention of the state in order to establish it, and once established, in order to maintain it. The economic liberal can, therefore, without any inconsistency call upon the state to use the force of law; he can even appeal to the violent forces of civil war to set up the preconditions of a self-regulating market….The accusation of interventionism on the part of liberal writers is thus an empty slogan, implying the denunciation of one and the same set of actions according to whether they happen to approve of them or not. The only principle economic liberals can maintain without inconsistency is that of the self-regulating market, whether it involves them in interventions or not. (p. 149). Even free trade and competition required intervention to be workable. (p. 150). For if market economy was a threat to the human and natural components of the social fabric, as we insisted, what else would one expect than an urge on the part of a great variety of people to press for some sort of protection? This was what we found. (p. 150). Chapter Thirteen: and Social Change: Birth of the Liberal Creed (continued) Class Interest Polanyi opens the chapter by arguing that the liberal myth of the collectivist conspiracy, which holds that protectionism, was merely the result of sinister interest of agrarians, manufactures, and trade unionists, who selfishly wrecked the automatic machinery of the market, stands in our way of understanding the true basis of 19th century policies. (p. 151). Here, Polanyi argues that if we make class our central subject, we end up vindicating the liberal since the liberal points to opposing classes as well as Marxists for the protectionism that eventually thwarted the market. (p. 151). To focus solely on class, says Polanyi, we obstruct ‘an overall view of market society, and of the function of protectionism in such a society.’ (p. 152). Here Polanyi seems to suggest that ‘mere class interests’ cannot offer a satisfactory explanation for any long-run social process since the challenge (of social change) is to society as a whole; the response come through groups, sections, and classes. (p. 152). Though human society is naturally conditioned by economic factors, the motives of human individuals are only exceptionally determined by the needs of material want-satisfaction. (p. 153). The classes and groups which intermittently took part in the general movement towards protectionisms after 1870 did not do so primarily on account of their economic interests. (p. 153). Once we rid of the obsession that only sectional, never general, interests can become effective, as well as of the twin prejudice of restricting the interests of human groups to their monetary income, the breadth and comprehensiveness of the protectionist movement lose their mystery. (p. 154). Precisely because not the economic but the social interests of different cross sections of the population were threatened by the market, persons belonging to various economic strata unconsciously joined forces to meet the danger. (p. 155). …if the rise of the industrialists, entrepreneurs, and capitalists was the result of their leading role in the expansionist movement (of the market system), the defense fell to the traditional landed classes and the nascent working class. And if among the trading community it was the capitalists’ lot to stand for the structural principles of the market system, the role of the die-hard defender of the social fabric was the portion of the feudal aristocracy on the one hand, the rising industrial proletariat on the other. (p. 155). …it is the relation of a class to society as a whole which maps out its part in the drama; and its success is determined by the breadth and variety of the interests, other than its own, which it is able to serve. (p. 156). In order to fix safely the blame on the alleged collectivist conspiracy, economic liberals must ultimately deny that any need for the protection of society had arisen. (p. 156). …the elemental force of culture contact, which is now revolutionizing the colonial world, is the same which, a century ago, created the dismal scenes of early capitalism. (p. 158). …the cultural catastrophe of black society today is closely analogous to that of a large part of white society in the early days of capitalism. (p. 159). Nothing obscures our social vision as effectively as economistic prejudice. So persistently has exploitation been put into the forefront of the colonial problem that the point deserves special attention…Yet it is precisely this emphasis put on exploitation which tends to hide from our view the even greater issue of cultural degeneration. (p. 159). The catastrophe of the native community is a direct result of the rapid an violent disruption of the basic institutions of the victim…These institutions are disrupted by the very fact that a market economy is foisted upon an entirely differently organized community; labor and land are made into commodities, which, again, is only a short formula for the liquidation of every and any cultural institution in an organic society. (p. 159). Briefly, not single groups or classes were the source of the so-called collectivist movement, though the outcome was decisively influenced by the character of the class interests involved. Ultimately, what made things happen were the interests of society as a whole, though their defense fell primarily to one section of the population in preference to another. It appears reasonable to group our account of the protective movement not around class interests but around the social substances imperiled by the market. (p. 162). Markets for labor, land, and money are easy to distinguish; but it is not so easy to distinguish those parts of a culture the nucleus of which is formed by human beings, their natural surroundings, and productive organizations, respectively. (p. 162). Chapter Fourteen: Market and Man: Polanyi opens with the following remark: To separate labor from other activist of life and to subject it to the laws of the market was to annihilate all organic forms of existence and to replace them by a different type of organization, an atomistic and individualistic one. Such a scheme of destruction was best served by the application of the principle of freedom of contract. (p. 163). The natives are to be forced to make a living by selling their labor. To this end their traditional institutions must be destroyed, and prevented from re-forming, since, as a rule, the individual in primitive society is not threatened by starvation unless the community as a whole is in a like predicament. (p. 163). It is the absence of the threat of individual starvation which makes primitive society, in a sense, more human than market economy, and at the same time less economic. Ironically, the white man’s initial contribution to the black man’s world mainly consisted in introducing him to the uses of the scourge of hunger. (p. 164). Thus the colonists may decide to cut the breadfruit trees down in order to create an artificial food scarcity or may impose a hut tax on the native to force him to barter away his labor. In either case the effect is similar to that of Tudor enclosures with their wake of vagrant hordes. (p. 164). Now, what the white man may still occasionally practice in remote regions today, namely, the smashing up of social structures in order to extract the element of labor from them, was done in the 18th century to white populations by white men for similar purposes. (p. 164). The protection of society, in the first instance, falls to the rulers, who can directly enforce their will. However, it is all too easily assumed by economic liberals that economic rulers tend to be beneficial, while political rulers do not. (p. 165). In the remainder of the chapter Polanyi discusses Owensim and the Chartist Movement (demanded popular suffrage). He concludes with the following: To argue that social legislation, factory laws, unemployment insurance, and, above all, trade unions have not interfered with the mobility of labor and the flexibility of wages, as is sometimes done, is to imply that those institutions have entirely failed in their purpose, which was exactly that of interfering with the laws of supply and demand in respect to human labor, and removing it from the orbit of the market. (p. 177). Chapter Fifteen: Market and Nature: Traditionally, land and labor are not separated; labor forms part of life, and land remains part of nature, life and nature form an articulate whole. (p. 178). …to separate land from man and organize society in such as way as to satisfy the requirements of a real-estate market was a vital part o the utopian concept of a market economy. (p. 178). …it is in the field of modern colonization that the true significance of such a venture becomes manifest. Whether the colonist needs land as a site for the sake of the wealth buried in it, or whether he merely wished to constrain the native to produce a surplus of food and raw materials, is often irrelevant…for in every and any case the social and cultural system of native life must be first shattered. There is close analogy between the colonial situation today and that of Western Europe a century or two ago. (p. 178). …stages in the subordination of the surface of the planet to the needs of an industrial society: 1. 2. 3. The commercialization of the soil, mobilizing the feudal revenue of the land. The forcing up of the production of food and organic raw materials to serve the needs of a rapidly growing industrial population on a national scale. The extension of such a system of surplus production to overseas and colonial territories. With this step, land and its produce were finally fitted into the scheme of a self-regulating world market. (p. 179). …between 1830 and 1860, freedom of contract was extended to the land. This powerful trend radically reversed only in the 1870’s when legislation alter its course radically. The ‘collectivist’ period had begun. (p. 182). Presently, the problem of protection arose in regard to the agricultural populations of whole countries and continents. International free trade, if unchecked, must necessarily eliminate ever-larger compact bodies of agricultural producers. (p. 182). But if the organized states of Europe could protect themselves against the backwash of international free trade, the politically unorganized colonial peoples could not. The revolt against imperialism was mainly an attempt on the part of exotic peoples to achieve the political status necessary to shelter themselves from the social dislocations cause by European trade policies. (p. 183). …economic liberalism was wedded to the liberal state…(p. 185). The stupendous industrial achievements of market economy had been bought at the price of great harm to the substance of society. The feudal classes found therein an occasion to retrieve some of their lost prestige by turning advocates of the virtues of the land and its cultivators. (p. 186). …in Germany as in Italy, the story of the immediate post-war period proved that Bolshevism had not the slightest chance of success. But it also showed conclusively that in an emergency the working class, its trade unions and parties, might disregard the rules of the market which established freedom of contract and the sanctity of private property as absolutes – a possibility which just have the most deleterious effects on society, discouraging investments, preventing the accumulation of capital, keeping wages on an unremunerative level, endangering the currency, undermining foreign credit, weakening confidence and paralyzing enterprise. Not the illusionary danger of a communist revolution, but the undeniable fact that the working classes were in the position to force possibly ruinous interventions, was the source of the latent fear which, at a crucial juncture, burst forth in the fascist panic. (p. 190). Chapter Sixteen: Market and Productive Organization: Polanyi opens with the following remark: Even capitalist business itself had to be sheltered from the unrestricted working of the market mechanism. (p. 192). The need for protection arose on account of the manner in which the supply of money was organized under a market system. Modern central banking, in effect, was essentially a device developed for the purpose of offering protection without which the market would have destroyed its own children, the business enterprises of all kinds. Eventually, however, it was this form of protection which contributed most immediately to the downfall of the international system. (p. 192). But in the expansion of production and trade unaccompanied by an increase in the amount of money must cause a fall in the price level- precisely the type of ruinous deflation which we have in mind. (p. 193). Yet nothing else but commodity money could serve this end for the obvious reason that token money, whether bank or fiat, cannot circulate on foreign soil. Hence, the gold standard – the accepted name for a system of international commodity money – came to the fore. (p. 193). …commodity money was vital the existence of foreign trade; token money, to the existence of domestic trade. (p. 193). With money, the threat was to productive enterprise, the existence of which was imperiled by any fall in the price level caused by the use of commodity money. (p. 195). A new set of ruling ideas superseded the world of the self-regulating market. To the stupefaction of the vast majority of contemporaries, unsuspected forces of charismatic leadership and autarchist isolationism broke forth and fused societies into new forms. (p. 200). Chapter Seventeen: Self-Regulation Impaired: …a self-regulating market system implies something very different, namely, markets for the elements of production – labor, land, and money. Since the working of such markets threatens to destroy society, the selfpreserving action of the community was meant to prevent their establishment or to interfere with their free functioning, once established. (p. 201). America has been adduced by economic liberals as conclusive proof of the ability of a market economy to function. Polanyi argues that this might hold true for a time since the US was still expanding westward and a free supply of land, labor and money continued to be available…As soon as these conditions ceased to exist, social protection set in: As the lower ranges of labor could not any more be freely replaced from an inexhaustible reservoir of immigrants, while its higher ranges were unable to settle freely on the land; as the soil and natural resources became scarce and had to be husbanded; as the gold standard was introduced in order to remove the currency from politic and to link domestic trade with that of the world, the US caught up with a century of European development: protection of the soil and its cultivators, social security for labor through unionism and legislation, and central banking – all on the largest scale – made their appearance. (p. 202). How far the state was induced to interfere depended on the constitution of the political sphere and on the degree of economic distress. As long as the vote was restricted and only the few exerted political influence, interventionism was a much less urgent problem that it became when universal suffrage made the state the organ of the ruling million – the identical million who, in the economic realm, had often to carry in bitterness the burden of the ruled. And as long as employment was plentiful, incomes were secure, production was continuous, living standards were dependable, and prices were stable, interventionist pressure was naturally less than it became when protracted slumps made industry a wreckage of unused tools and frustrated efforts. (p. 206). Now Polanyi talks about national disparity in wealth-producing capacity (uneven development), liberal theory, and the repayment of national debts: The world market mechanism could not afford to run such risks (repudiation of foreign debt). Instead, gunboats were dispatched on the spot and the defaulting government, whether fraudulent or not, faced with the alternative of bombardment or settlement. (p. 207). But the more often repayments were made only under the threat of armed intervention, the more often trade routes were kept open only with the help of gunboats, the more often trade followed the flag, while the flag followed the needs of invading governments, the more patent it became that political instruments had to be used in order to maintain equilibrium in world economy. (p. 208). Chapter Eighteen: Disruptive Stains: From such uniformity of underlying institutional arrangements derived the intriguing similarity in the pattern of events which in the half century 1879-1929 was spread out over an enormous expanse. (p. 209). …the similarity concerned the function of concrete events in the historical context of life, the time-bound component of collective existence. An analysis of these typical strains and stresses should reveal much of the mechanism that produced the singularly uniform pattern of history during this period. (p. 209). The strains can be readily grouped according to the main institutional spheres…the typical scourge of unemployment…the tension of classes, the pressure on exchanges…imperialist rivalries. (p. 209). While in the imagination of the 19th century engaged in constructing the liberal utopia, in reality it was handling over things to a definite number of concrete institutions the mechanism of which ruled the day. (p. 211). But in vain would one seek in liberal literature for anything in the nature of an explanation for the patent facts. An unending stream of abuse of the governments, politicians, and states-men whose ignorance, ambition, greed, and shortsighted prejudice were supposedly responsible for the consistently followed policies of protectionism in an ‘overwhelming majority’ of countries was the only answer…Not since the Schoolmen’s defiance of the empirical facts of science was sheer prejudice displayed in so fearful array. The only intellectual response was the supplement the myth of the protectionist conspiracy by the myth of imperialist craze. (p. 211). The liberal argument, in so far as it became articulate, asserted that sometime in the 1880s imperialist passions began to stir in the Western countries, and destroyed the fruitful work of economic thinkers by their emotional appeal to tribal prejudice. (p. 211). Only in narrowly defined cases were diplomatic representatives supposed to be active on behalf of the private interests of their nationals, and the surreptitious extension of these occasions was publicly denied, and if proven, reprimanded accordingly. Not only at home but also abroad, the principle of non-intervention of the state in the affairs of private business was maintained. (p. 213). …foreign investments were still deemed a gamble, and the frequent total losses incurred by investors were regarded as amply compensated for by the scandalous terms of usurious lending. (p. 213). …to expect that a community would remain indifferent to the scourge of unemployment, the shifting of industries and occupations and to the moral and psychological torture accompanying them, merely because economic effects, in the long run, might be negligible, was to assume an absurdity. (p. 215). Since the purpose of the intervention was to rehabilitate the lives of men and their environment, to give them some security of status, intervention necessarily aimed at reducing the flexibility of wages and the mobility of labor, giving stability to incomes, continuity to production, introduction public control of national resources, and the management of currencies in order to avoid unsettling changes in the price level. (p. 216). Economic imperialism was mainly a struggle between the Powers for the privilege of extending their trade into politically unprotected markets. What Polanyi means by this is that while (more or less) industrialized countries blocked their economies through high tariffs and could do so because they were military strong, the weaker nations could not enforce the same sort of protection – hence imperialism. (p. 217). …civilization was being disrupted by the blind action of soulless institutions the only purpose of which was the automatic increase of material welfare. But how did the inevitable actually happen? How was it translated into the political events which are the core of history? Into this final phase of the fall of market economy the conflict of class forces entered decisively. (p. 219). Part Three Transformation in Progress Chapter Nineteen: Popular Government and Market Economy: The fascist attack on popular democracy merely revived the issue of political interventionism that haunted the history of market economy, since that issue was hardly more than another name for the separation of the economic from the political sphere. (p. 223). Speenhamland had been justly described as a preventive act of intervention, obstructing the creation of a labor market…And still the demoralizing Speenhamland Law was spreading from county to county, deterring the laborer from honest work, and making the very concept of independent working man an incongruity. (p. 224). The Poor Law Amendment of 1834…created an entirely new category of the poor, the unemployed who made their appearance on the social scene. While the pauper, for the sake of humanity, should be relived, the unemployed, for the sake of industry, should not be relieved. That the unemployed worker was innocent of his fate did not matter. The point was not whether he might or might not have found work had he only really tried, but that unless he was in danger of famishing with only the abhorred workhouse for an alternative, the wage system would break down, thus throwing society into misery and chaos. (p. 224). When the Chartist Movement demanded entrance for the disinherited into the precincts of the state, the separation of economics and politics ceased to be an academic issue and became the irrefragable condition of the existing system of society. It would have been an act of lunacy to hand over the administration of the New Poor Law with its scientific methods of mental torture to the representatives of the self-same people for whom that treatment was designed…Sir Robert Peel called the Charter an impeachment of the Constitution. The more viciously the labor market contorted the lives of the workers, the more insistently they clamored for the vote. The demand for popular government was the political source of this tension. (p. 225). Under these conditions constitutionalism gained an utterly new meaning. Until then constitutional safeguards against unlawful interference with the rights of property were directed only against arbitrary acts from above. Locke’s vision did not transcend the limits of landed and commerical property, and aimed merely at excluding high-handed acts of the Crown such as the secularizations under Henry VIII, the robbing of the Mint under Charles I, or the ‘stop’ of the Exchequer under Charles II. Separation of government from business, in John Locke’s sense, was achieved in an exemplary fashion in the charter of an independent Bank of England in 1694. Commerical capital had won its tilt against the crown. (p. 225). A hundred years later not commerical but industrial property was to be protected, and not against the Crown but against the people. Only by misconception could 17th century meanings be applied to 19th century situations. The separation of power, which Montesquieu had meanwhile invented, was now used to separate the people from power over the own economic life. (p. 225). The American Constitution, shaped in a farmer-craftman’s environment by a leadership forewarned by the English industrial scene, isolated the economic sphere entirely from the jurisdiction of the Constitution, put private property thereby under the highest conceivable protection, and created the only legally grounded market society in the world. In spite of universal suffrage, American voters were powerless against owners. (p. 226). In England it became the unwritten law of the Constitution that the working class must be denied the vote…the mere demand for the ballot was often treated as a criminal act by the authorities. (p. 226). The Chartists had fought for the right to stop the mill of the market which ground the lives of the people. But the people were granted rights only when the awful adjustment had been made. Inside and outside England, from Macaulay to Mises, from Spencer to Sumner, there was not a militant liberal who did not express his conviction that popular democracy was a danger to capitalism. (p. 226). Here also the 1920’s were foreshadowed by the 1790’s. Bentham was the first to recognize that inflation and deflation were interventions with the right of property: the former a tax on, the latter an interference with, business. (p. 226). The French Revolution and its assignats showed that the people might smash the currency, and the history of the American states didn’t help to dispel that suspicion. Burke identified American democracy with currency troubles and Hamilton feared not only factions but also inflation. But while in 19th century America the bickerings of populists and greenback parties with Wall Street magnates were endemic, in Europe the charge of inflationism became an effective argument against democratic legislatures only in the 1920’s, with far-reaching political consequences. (p. 227). Parties concerned for the safety of the currency protested as much against threatening budget deficits as against cheap money policies, thus opposing ‘treasury inflation’ as much as ‘credit inflation’ or, in more practical terms, denouncing social burdens and high wages, trade unions and labor parties. (p. 227). …going off gold would have been deemed a sacrilege…(p. 228). The financial markets govern by panic. The eclipse of Wall Street in the thirties saved the United States from a social catastrophe of the Continental type. (p. 229). Indeed, the utopian nature of a market society cannot be better illustrated than by the absurdities in which the commodity fiction in regard to labor must involve the community. The strike, this normal bargaining weapon of industrial action, was more and more frequently felt to be a wanton interruption of socially useful work, which at the same time, diminished the social dividend out of which, ultimately, wages must come. Sympathy strikes were resented, general strikes were regarded as a threat to the existence of the community. (p. 230). …the worker has no security in his job under as system of private enterprise, a circumstance which involved a grave deterioration in his status. (p. 231). Economic liberalism made a supreme bid to restore the self-regulation of the system by eliminating all interventionist policies which interfered with the freedom of markets for land, labor, and money. (p. 231). Socialism is, essentially, the tendency inherent in an industrial civilization to transcend the self-regulating market by consciously subordinating it to a democratic society…socialism is merely the continuation of that endeavor to make society a distinctively human relationship of persons which in Western Europe was always associated with Christian traditions. (p. 234). …the mere possibility that [socialist policies] might decide to [interfere with the economy] undermines that type of confidence which in liberal economy is vital, namely, absolute content of property rights might undergo redefinition at the hands of legislation, assurance of formal continuity is essential to the functioning of the market system. (p. 234). Check BOOK for accuracy. Chapter Twenty: History in the Gear of Social Change: If there was a political movement that responded to the needs of an objective situation and was not a result of fortuitous cause it was fascism. (p. 237). …it would everywhere produce sickness unto death. That is the manner in which civilizations perish. (p. 237). The fascist solution of the impasse reached by liberal capitalism can be described as a reform of market economy achieved at the price of the extirpation of all democratic institutions, both in the industrial and in the political realm. (p. 237). …there was no type of background – of religious, cultural, or national tradition – that made a country immune to fascism, once the conditions for its emergence were given. (p. 238). …fascist tactics were invariably those of a sham rebellion arranged with the tacit approval of the authorities who pretended to have been overwhelmed by force. (p. 238). Fascism, like socialism, was rooted in a market society that refused to function. (p. 239). …fascism was a revolutionary tendency directed as much against conservativism as against the competing revolutionary force of socialism. (p. 240). In its struggle for political power fascism is entirely free to disregard or to use local issues, at will. Its aims transcend the political and economic framework: it is social. It puts a political religion into the service of a degenerative process. In its rise it excludes only a very few emotion from its orchestra; yet once victorious it bars from the band wagon all but a very small group of motivations, though again extremely characteristic ones. (p. 241). It was…after 1929…that the true significance of fascism became apparent. The deadlock of the market system was evident. Until then fascism had been hardly more than a trait in Italy’s authoritarian government, which otherwise differed but little from those of a more traditional type. It now emerged as an alternative solution to the problem of an industrial society. (p. 243). Russia turned to socialism under dictatorial forms. Liberal capitalism disappeared in the countries preparing for war like Germany, Japan, and Italy, and, to a lesser extent, also in the US and Great Britain. But the emerging regimes of fascism, socialism, and the New Deal were similar only in discarding laissez-faire principles. (p. 244). While history was thus started on its course by an event external to all, the single nations reacted to the challenge according to whither they were bound. Some were averse to change; some went a long way to meet it when it came, some were indifferent. Also, they sought for solutions in various directions. Yet from the point of view of market economy these often radically different solutions merely represented given alternatives. (p. 244). Chapter Twenty-One: Freedom in a Complex Society: Polanyi opens the chapter by reminding the reader that 19th century civilization was destroyed by ‘the measure which society adopted, or order not to be…annihilated by the action of the self-regulating market.’ (p. 249). If industrialism is not to extinguish the race, it must be subordinated to the requirements of man’s nature. The true criticism of market society is not that it was based on economics…but that its economy was based on selfinterest. Such an organization of economic life is entirely unnatural, in the strictly empirical sense of exceptional. 19th century thinkers assumed that in his economic activity man strove for profit, that his materialistic propensities would induce him to choose the lesser instead of the greater effort and to expect payment for his labor; in short, that in his economic activity he would tend to abide by what they described as economic rationality, and that all contrary behavior was the result of outside interference. It followed that markets were natural institutions, that they would spontaneously arise if only men were let alone. (p. 249). …the market has been the outcome of a conscious and often violent intervention on the part of government which imposed the market organization on society for noneconomic ends. (p. 250). Industrial civilization will continue to exist when the utopian experiment of a self-regulating market will be no more than a memory. (p. 250). The restoration of the past is as impossible as the transferring of our troubles to another planet...Within the nations we are witnessing a development under which the economic system ceases to lay down the law to society and the primacy of society over the system is secured…the market system will no longer be selfregulating, even in principles, since it will not comprise labor, land, and money. (p. 250-1). …the end of market society means in no way the absence of markets…(p. 252). Institutions are embodiments of human meaning and purpose. We cannot achieve the freedom we seek, unless we comprehend the true significance of freedom in a complex society. (p. 254). Though restriction applies to all, the privileged tend to resent it, as if it were directed solely against themselves. They talk of slavery, while in effect only an extension to the others of the vested freedom they themselves enjoy is intended. (p. 254). The passing of market-economy can become the beginning of an era of unprecedented freedom. (p. 256). With the liberal idea of freedom thus degenerates into a mere advocacy of free enterprise – which is today reduced to a fiction by the hard reality of giant trusts and princely monopolies. This means that fullness of freedom for those whose income, leisure, and security need no enhancing, and a mere pittance of liberty for the people, who may in vain attempt to make use of their democratic rights to gain shelter from the power of the owners of property. (p. 257). …liberal philosophy, which claims that power and compulsion are evil, that freedom demands their absence from a human community. No such thing is possible; in a complex society this becomes apparent. This leaves no alternative but either to remain faithful to an illusionary idea of freedom and deny the reality of society, or to accept that reality and reject the idea of freedom. The first is the liberal’s conclusion; the latter the fascist’s. No other seems possible. (p. 257). No society is possible in which power and compulsion are absent, nor a world in which force has no function. (p. 257). But power and economic value are a paradigm of social reality. They do not spring from human volition; noncooperation is impossible in regard to them. (p. 258A). Man accepted the reality of death and built the meaning of his bodily life upon it. He resigned himself to the truth that he had a soul to lose and that there was worse than death, and founded his freedom upon it. (p. 258B).