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colpal on he was born in eighteen eighty six indiana and he passed away in
nineteen sixty four
he's not an economist in the traditional sense
but his book the great transformation
has had a lot of influence on economic thinking pol and he was himself a mix of
a philosopher historian an economic historian daniel for politics
what he did in this book great transformation is provided general
framework for thinking about the decline of classical liberal fought and the
decline of lays a fair capitalism from the nineteenth century
plenty starts the book with a very dramatic sentence
nineteenth-century civilization has collapsed
by nineteen th century civilization he was referring to your
and he had in mind for a particular components
the balance of power system between competing nation states
the gold standard
the idea of self regulating markets
and the notion of the liberal might watch and state
which protected property rights but otherwise would lead a kind of
capitalism run its course
to spoke was published in nineteen forty four so perhaps it's not surprising that
it's a pessimistic about the course of european history
the palani saw pretty clearly that
some previous world order
really had passed on and probably was not coming to return anytime soon
what we're for poland you the congress
well the great transformation is a very complex book it has a lot of history
and also a lot about foreign policy
but let's consider just three of politeness culprits
the first is a risk
the notion that in a self regulating market economy
individuals are exposed to too much risk on their wages on their capital returns
on their rents
on their business prospects
pool and he saw self regulating market
as bringing too much risk up on most individuals in the society
the second culprit
can be seen as deflation
palani understood that the gold standard knit together most of europe
in a network of self regulating trade relations and a self regulating monetary
order
it prevented rampant inflation
but at the same time
under the gold standard they were periodic financial crises
credit would collapse money supplies would fall
economic activity would slow
then there would be deflationary pressures on the economy's
these deflationary pressures
were also were source of risk
and furthermore they tended to make politics and the deflationary economies
more brutal or more oppressive or more liberal
the third culprit which pauline year that among others
is this idea that a self regulating market
annihilate sits underlying social context
part of the land use other work schoolwork written from an
anthropological point of view
and claimed
that the market was a relatively recent human invention
and that the four markets were so prominent in human affairs
that social orders had their own regulating principles which are quite
distinct from those of market economies
by no means do all historians and anthropologists agree with this point of
view but to return to pull on these perspective
he saw this underlying social context
as important as helping to give rise
to a market in order to a liberal trading order
but that the market itself would become so rampant and soka modified so
commercialized human activity
that eventually the self regulating market would do a or we can this
underlying social context
unless they would be a kind of cultural contradiction to capitalism
and economic contradiction
delays a fair capitalism
arising from excess risk deflationary pressures anderson violation of the
underlying social context
it's a very complex nuanced historical argument
but those are just some of its main features
when he was mostly a diagnostic shin
and he was not in this book concerned
with producing proposals for concrete form
he simply wanted to understand
why european history had taken the course that effect
and he saw this age of lays a fair capitalism as very much over
palani has proved an extremely influential thinker
perhaps his book the great transformation can be compared to a book
by friedrich a high-tech wrote to serfdom published around the same time
individuals from conservative libertarian points-of-view
outlook anti-tax work
as a kind of patron saint of kind of explanation for what went wrong
and individuals from left-wing progressive or social democratic point
of views has read paul and his work along the same lines as a kind of
overall treatise or track on where we came from
the key question looking forward which of course is still debated
is what about our new world order
has weak overcome
the mechanisms of instability identified by palani
by having the social democratic welfare states
or have we just in some ways rebuilt the old world the old world order
i'm somewhat new principles
but perhaps a new world order also has some cultural an economic self
contradictions and that may disappear as well
this debate continues to go on but one thing seems pretty sure
along his influence has risen and the great transformation for all of its
controversy is still a book which people read