I don't want to go to work… and why should I?
Most mornings, I struggle to get out of bed and be productive. Despite this, I still wake up relatively early, work hard, and often sacrifice immediate pleasures for the future betterment of myself, a better life for my future children, the prosperity of my community, and who knows what else. So, can I skip setting an alarm for tomorrow morning?
This blog post is based on readings and discussions in Anar Ahmadov's class on ‘Advanced Political Economy’ Reading Karl Polanyi's The Great Transformation: The Political and Economic Origins of Our Time.
Firstly, Polanyi questions the very basis of rational choice theory: the existence of Homo Economicus — the self-interested individual, an ideally rational decision-maker with perfect access to information and fixed preferences. This wet dream of most economists, is according to Polanyi, not only constructed on unrealistic assumptions to lend economics the veneer of a hard science but is also historically inaccurate.
“As far as ethnographical records are concerned, we should not assume that production for a person's or group's own sake is more ancient than reciprocity or redistribution. On the contrary, orthodox tradition as well as some more recent theories on the subject have been emphatically disproved. The individualistic savage collecting food and hunting on his own or for his family has never existed. Indeed, the practice of catering for the needs of one's household becomes a feature of economic life only on a more advanced level of agriculture; however, even then it has nothing in common either with the motive of gain or with the institution of markets (Polanyi, 1944 p. 55).”
This claim might not sound too far-fetched unless you have been studying classical economics for a long time, in which case most of your predictions about markets or life in general may have just imploded.
Many classical economists (I include Marx here) made another assumption Polanyi criticized. Marx and Smith and others, were the children of the European Enlightenment and assumed humans to be rational actors and history to be set on a linear path of improvement.
For example, for Marx, these are the stages of economy:
Primitive Communism: A pre-class society characterized by collective ownership and egalitarianism, eventually undermined by the emergence of power imbalances.
Imperialism: The rise of a strongman leader who grants land in exchange for military service, creating a land-owning aristocracy.
Feudalism: An aristocratic class owns and controls land, exploiting peasant labor. A surplus leads to the rise of merchants and capitalists.
Capitalism: The bourgeoisie (wealthy merchants and owners) seize political power and exploit the proletariat (workers). This stage is inherently unstable due to class conflict.
Socialism: The proletariat overthrows the bourgeoisie, establishing a workers' dictatorship and redistributing resources according to need.
Communism: A stateless, classless society emerges, marked by cooperation and the elimination of money and competition, leading to global peace.
To today's social scientists, the idea of a "final stage" of human society seems unlikely, given the nature of institutions, international relations, environmental changes, and other factors. Whether we consider Fukuyama's end of history or Marx's communist utopia, one can be certain that political and economic systems more or less come and go.
Anyone who has lived through major political and economic change understands its impact on their long-term visions and dreams. These changes can include the loss of savings due to currency reforms after a state collapse (e.g., the fall of the Soviet Union), the loss of life savings during a global financial crisis, business bankruptcies due to pandemics, or environmental catastrophes and more.
Even understanding that these events could destroy our life's work and savings, most of us still choose to work hard and plan for long-term profits, envisioning our efforts positively impacting future generations. The possibility of a major political or economic change in our lifetime is not enough to discourage productivity.
We assume that if our political and economic system remains stable, our hard work today will yield future rewards. Our influencers tell us, "Wake up at 5 a.m. today so that you don't have to set an alarm in 10 years" and we generally believe them.
Polanyi argues, however—and Keynes or Schumpeter would agree—that the capitalist economy left by itself is extremely prone to crisis. He goes further to suggest that there is no empirical evidence to support the belief that one's sacrifices and efforts today will result in a higher standard of living tomorrow, at least on an individual level. If you work hard today, there is no guarantee your children will have a better life standard than you did. We are far more likely to lose our savings due to political or economic change, environmental catastrophe, or another economic crisis than most realize.
Why then do many of us force ourselves out of bed to work for our bosses? Why do we strive to earn more money than we need and obsess over savings? Is this rational behavior, given the low probability that our efforts will translate into future prosperity?
It seems that without the collective, unjustified belief that "things will get better if we make sacrifices today," our current economies cannot function. Not believing in this illusion would have the same effect on the economy as if we stopped believing our currency held its claimed value.
Perhaps a certain level of optimism about the future and a vision of a better world are necessary conditions for progress. Nevertheless, next time, before you have a panic attack because of a bad grade, decide not to go to a party because of work the next morning, or refuse to play Monopoly with your child because you need to earn money for their tuition, consider the probability of that sacrifice directly translating into a better future for everyone - and maybe don’t think ahead for once.
Bibliography:
Polanyi, K., Block, F., & Stiglitz, J. E. (2001). The great transformation: The political and economic origins of our time. 2nd Beacon Paperback ed. Boston (Mass.): Beacon press.
