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TitleFred Block, Margaret R. Somers - The Power of Market Fundamentalism - Karl Polanyi's Critique
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Table of Contents
1. Karl Polanyi and the Power of Ideas
2. Beyond the Economistic Fallacy
3. Karl Polanyi and the Writing of The Great Transformation
4. Turning the Tables: Polanyi’s Critique of Free Market Utopianism
5. In the Shadow of Speenhamland: Social Policy and the Old Poor Law
6. From Poverty to Perversity: Ideational Embeddedness and Market Fundamentalism over Two Centuries of Welfare Debate
7. The Enduring Strength of Free Market Conservatism in the United States
8. The Reality of Society
Document Text Contents
Page 2


Page 155

T H E P O W E R O F M A R K E T F U N D A M E N TA L I S M140

decline from the peak reached in 1810–1814. The respected historian
K. D. M. Snell calculated trends in annual wages for farm servants in
a number of southern counties from a unique data set drawn from set-
tlement examinations. For most counties or groups of counties, Snell’s
(1985) fi ndings move in the same pattern as weekly wages cited else-
where in the literature, but in some counties he did fi nd that wages fall
steadily from the 1820s onward.

Interpreting these patterns of nominal wages has been extremely di� -
cult because of the dramatic price changes that occur across this period.
There is no question that in the famine years, such as 1795, 1802–1803,
and 1812, the price spike in grains lead to dramatic, albeit temporary,
declines in the real wage. Nevertheless, the view advanced by Prothero
(1912, 313–315) that wage levels during the Napoleon War doubled
while prices actually tripled is no longer accepted. When one brackets
the famine years, real agricultural wages clearly rose between 1790 and
1815. Second, since the post-Napoleonic period was one of steadily fall-
ing price levels, the small recovery in nominal wages between 1824 and
1834 reported by Bowley understates the gain in real wages in this period.

In the end, we come to the conclusion that the question that has preoccupied
so many analysts—were agricultural real wages higher or lower in 1834 than
they were in 1795—is the wrong question for three di� erent reasons. First,
the reality was that real wages—with the critical exceptions of the famine
years—fi rst rose, then fell, and then rose. Second, when rural workers are
compared to the inhabitants of urban England, who had greatly expanded
access to a wide variety of manufactured goods between 1790 and 1834,
there can be no doubt that their relative standard of living declined sharply
during this period of industrial transformation. Finally, translating weekly
wages into a standard of living depends critically on the number of weeks of
employment available per year, and we know that seasonal unemployment
rose dramatically in the countryside after the Napoleonic Wars (Snell 1985).

Instead of focusing on the wrong question, then, it is the Royal Com-
missioners’ claim that Speenhamland policies damaged rural productiv-
ity that must be scrutinized. The argument is already undermined by
evidence that the bread scale was neither pervasive nor continuous. It is
further weakened by both the data on agricultural output and the trends
in weekly wages that provide no support for a claimed collapse of rural

Page 156

In the Shadow of Speenhamland 141

Household Income and the Poor Law

It is precisely because of the variety and variability of the income sources
on which families relied that it is extremely diffi cult to identify any clear
trends in average family income across this period. The best estimates
that we have come from surviving family budget data that have been
compiled by Horrell and Humphries (1995). They indicate that for the
low-wage agricultural sector—that tends to overlap with the southeast-
ern counties—there was a small upward trend in real household income
between 1790 and 1834. But this average fi gure conceals much varia-
tion, and poor relief outlays represented a rising component of family
income, rising from a negligible level in the early period to 8% of family
income for the 1821–1840 period. In this context, poor relief can best
be understood as a mechanism to sustain family income in a context in
which it had become increasingly diffi cult for the rural poor—through
no fault of their own—to piece together an adequate income.

The increasing importance of poor relief can be seen as compensating
for three broad trends. First, rural craft industries suff ered a dramatic
decline in the southeastern counties in the period after 1790 (Snell 1985;
Boyer 1990; Allen 1992). Some of this decline had been going on for
centuries, but the pace of decline was clearly accelerated by the rapid
rise of industrial production in the northern part of the country (Hud-
son 1986, 1989, 1992; Kriedte, Medick, and Schlumbohm1991). This
meant that opportunities for family members, especially women, to sup-
plement income with labor on rural craft production simply disappeared
in many places. Second, enclosures and consolidations of holdings meant
that many rural laboring families lost the capacity to earn additional
income by keeping farm animals or maintaining a vegetable garden. In
fact, during the Speenhamland period, a major alternative to the Poor
Law that was widely debated was to provide laboring families with allot-
ments—small pieces of land—that would make self-provisioning a real
alternative to poor relief in hard times (Barnett 1967). But while the
idea was widely discussed, it was implemented only in a few localities.
Third, particularly after 1813, the demand for farm labor diminishes, so
that there are reduced earning opportunities for wives and children while
men experienced longer periods of unemployment in the winter and early
spring months.13 Reay, for example, fi nds that in one Kent parish, 60%
of farm laborers and small farmers required poor relief during the winter
months in the 1830s (Emmison, 1933; Reay 1996, 129).

Page 310

Index 295

Soros, George, 2, 150
Specter, Arlen, 213
Speenhamland: analysis of, 51–54;

bread scale and, 133–138, 140–142;
causal gaps of, 124, 129–133; com-
plexities of, 124–129; contribution
to, 123–124; critique of, 114–149,
159–163; gold standard and,
143–147; household income and,
133, 141–142; impact of, 87–91,
114–124, 138–149; New Poor Law
and, 86–89, 118, 121–122, 143–149;
Old Poor Law and, 87–88; produc-
tivity and, 118, 131, 134, 138–142,
148; reality of, 133–138; revisionist
narrative of, 142–148; stories of,
36–37, 86–91, 117–149; system of,
51–54, 114–116, 133–134, 145,
159–163; wages and, 115–123,
131–133, 137–142, 149

Speenhamland Act, 36, 49–50, 114,

Spencer, Herbert, 104
stark utopia: explanation of, 13;

free-market utopianism, 150; of
self-regulating market, 41–42, 80,
92, 101, 187, 233; view of, 13, 26,
174, 187

Stiglitz, Joseph, 2, 4
substantive economy, 29–30, 59–60,

226, 241n5

Tawney, R. H., 122
tax cuts, 1, 21, 39, 42, 110–111, 195,

Temporary Aid to Needy Families

(TANF), 161, 188–190
Thatcher, Margaret, 2, 6
theoretical realism: causal mechanisms,

169–170, 181; defi nition of, 39–40;
explanation of, 175; ideational
embeddedness and, 174–175; perver-
sity thesis and, 158, 166, 169–171;
philosophy of, 230–231

Thompson, E. P., 62
Townsend, Joseph, 102–103, 118–120,

145, 167–168, 172, 185, 228–230
Toynbee, Arnold, 166

Trade and Markets in the Early
Empires, 47

trade unions, 28, 54, 63, 93, 100, 131,

Tragedy of American Compassion, The,

“undeserving” poor, 175–177
United States: business alliances in,

204–217; countermovements and,
201–204; crisis of Great Society in,
160–161; cultural attitudes in, 197;
diff erent directions of, 195–198,
216–217; Europe and, 193, 195–198,
217; free market conservatism
in, 193–217; funding support in,
199–200; health policies in, 195–196;
ideological fusion and, 200–201;
income inequality in, 2–3, 20,
196–197; organizational autonomy
in, 199; regional concentrations in,
201; religious beliefs in, 197; social
movements in, 198–201; traditional
values in, 197–198

utopia: dystopian consequences of, 9,
108–111; elements of, 100–101; ideal
scheme, 100–105; as planned project,
105–107; stark utopia, 13, 26,
41–42, 80, 92, 101, 150, 174, 187,
233; tragedy of, 108–113

utopianism: critique of, 98–113; eco-
nomic liberalism and, 150, 233–234;
economic utopianism, 233–234; ele-
ments of, 100–101; free-market uto-
pianism, 34–35, 98–113, 150, 187,
218–220; ideals of, 101–113; market
fundamentalism and, 227, 233–234;
as planned project, 105–107; “reality
of society” and, 233–234; social
naturalism and, 105–106; stark uto-
pianism, 26, 41–42, 233; as tragedy,

von Mises, Ludwig, 42, 83, 85, 101,
104, 123

Wall Street Journal, 181
Wallerstein, Immanuel, 68–69

Page 311


Waxman, Harry, 21
wealth inequality, 2–3, 20, 196–197
Wealth of Nations, 168
Webb, Beatrice, 121–122
Webb, Sidney, 121–122
Weber, Max, 8, 27, 81
Welfare, 87, 116
welfare capitalism, 196
welfare debate, 150–161, 178–198
welfare dependency, 157, 178, 184
welfare legislation, 116, 184, 188, 192
welfare policies, 14, 116, 155–157,

195–196, 217, 225

welfare reform, 160–161, 188–189,

welfare revolutions, 158–163
welfare state, 25, 32, 186, 194–198,

204–208, 223–224
welfare system, 178–180
Weyrich, Paul, 41
White, Harry Dexter, 16, 27
Winters, Jeff rey, 3
Wolin, Sheldon, 99, 200
World Bank, 18, 202, 239
world market collapse, 67, 82–84
World Trade Organization, 202, 239

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