A Polanyian paradox: money and credit as fictitious commodities, financialization, finance-dominated accumulation, and financial crises

Polanyi explored the moral and economic dimensions of a “market society†and of the “double movement†through which “society†fights back against efforts to establish self-regulating markets in land, money and labour. His remarks were directed at the epoch of commercial, industrial and financial capitalism. Recent developments in financialization, its crisis tendencies, and their blowback effects on society invite a reconsideration of his analyses for the twenty-first century. To do so, this chapter compares the views of Marx and Polanyi on money, credit and capital and indicates that Polanyi was unaware of the overlap between his analyses and those of Marx on fictitious commodities. It then shows that Polanyi did not build on his recognition that there are distinctions between money, money as credit, and money as capital. This limits the heuristic power of his approach to contemporary economies compared with Marx, who wrote sixty years earlier. Moreover, compared with Polanyi’s time, there is less evidence of an effective double movement against neoliberalism than liberalism. For, while resistance has developed, the political conjuncture is less favourable to serious constraints on the one-sided neoliberal treatment of fictitious commodities in terms of their contribution to the profitability of capital. The analysis concludes by identifying a paradox that, in order to apply a Polanyian analysis to neoliberalism and its double movement, we need to go beyond the conceptual and theoretical scope of Polanyi’s account of money even as we retain his broader understanding of the relation between the market economy and market society.