Making sense of our current economic turbulence


The financial bad news keeps getting worse and is here to stay for the next decade we are told.  Austerity measures in the UK, Greece and Spain in danger of causing the Eurozone to collapse, a double dip recession on the horizon, British Airways on strike, and the possibility of public sector strikes taking place in the UK like Greece/Spain.

How do we navigate and understand these times?  Keep our heads down and hope they pass, be fearful and pray that it doesn't affect us, or seek some understanding of what is happening, and the place all of us have in these times?  And given how important capitalism is to us all, how many of us have ever taken time to understand what it is, how it works?  Polanyi's books is very readable, and might make an interesting and thoughtful summer holiday read for many of us.
As I've tried to make some sense and understand the bigger picture and the implications for myself, I've found myself returning to one book, 'The Great Transformation', by Karl Polanyi.  This is one of those books that is in my top 10 of books ever, that has changed how I understand the world and life, and I recommend to everyone when I can.
This book is an economic history written in 1944 to explore how we ended up with capitalism, and why a previous credit crunch led to fascism, socialism, war, and warns of future credit crunches and the affects on markets and societies.  It is eerily prescient of all that has taken place these past few years.
Polanyi exposes the myth that markets are free and self regulating, and a thing in and of themselves.  Markets only exist because governments made them in the first place, they require laws and regulations.  Markets were planned, despite the fact that most people now think of them as 'natural'.
Capitalist markets are a recent invention, in that whilst markets have always existed, they had limits set around by society.  Relationships of people in societies determined the limits of markets and what they were allowed to do.  Now we have the reverse.
Governments and states enacted laws and planned and produced markets, that were seen to free from societies and relationships.  Labour, land and money are the fictions of our new markets.  We now trade and sell free from the restraints of society and relationships.
And we are prepared to put up with the costs of this arrangement as long as they don't affect to many of us, as long as most of us prosper under the system. But what happens when it breaks down?  The myth of a market free from society, that stands on its own is revealed.
 And protectionism kicks in, as governments realise that when markets affect too many people, social unrest happens and they need to put controls around the market and protect their people.  And people realise that markets shouldn't blight their lives and need to have boundaries set by relationships and values.
For Polanyi there is a 'double movement' of governments seeking to extend the 'free market' whilst on the other hand having to protect people from the damages that free markets cause.
Polanyi shows how these dynamics have worked in the past, and predicts we'll see them in the future, one you and I now live in.  

Some people in other countries who uphold 'free markets' are wondering why people in Greece are all going on strike to protest cuts that are needed because they are nearly bankrupt as a country.  Surely the people in Greece should understand how markets work, they spent too much and this is the price of that?
Yet the people in Greece are doing what people have always done in history in relationship to the collapse of free markets.  Realising how what was free wasn't free at all and that they have allowed their society to be 'disembeded' from the market.  Social unrest is what happens when the down side of markets affects too many people.
People rise up, and want protection, and refuse to collectively let the markets affect society. Which leave people in countries not so affected wondering what all the fuss is about.
Social unrest toppels governments, and leads to protectionism by fascists and socialist who promise societies that will control markets for the benefit of people.  It's why governments are looking nervously at what is happening in Greece and Spain.
And you can detect it over here in the UK with the rise of language that question jobs immigrants have taken, 'our' jobs etc.  In a secular liberal society based on nothing more than competition of free markets and evolutionary theory that has us competing with each other around rights and freedoms, it wouldn't take much for strikes to become riots and unrest to become a change in government.
And if we think otherwise, that we can sleep peacefully at night because the market will take care of us we are greatly mistaken, as Polanyi would warn us.  And Christians have an opportunity to examine what economy they have organised and invested their hopes and aspiration and life in.
This could be one of the most amazing times in western history for Christians to order their lives with others around a different market reality, and offer people something other than 'business as usual', and prayers that we get back to economic growth.
And as I write this with sympathies to Polanyi's analysis, I'm no facist or socialist or anti-capitalist.  I just refuse to have the market as my ground of being, and my hope for life and my future.
How do you see this, and what is helping you make sense what is happening?