Markets and Society

Draft of chapter for Routledge Handbook of Ecological Economics: Nature and Society. Editor Clive Spash. Forthcoming


In face of the strong conflict between market norms and social norms, peaceful co-existence is impossible. In traditional societies, markets were subordinated to society. Modern society emerged via a number of revolutions which made society subordinate to markets. This led to a reversal of traditional values of social cooperation and harmony with nature. Instead, men, nature, society became objects to be exploited for creating profits. A market society generates profits by exploiting men and nature, and requires increasing profits to sustain itself. This process has run into its limits as planetary resources are being destroyed on a scale large enough to threaten the planet. Saving the planet requires reversing the transition to modernity by subordinating markets to society. This is a difficult task.


As industrialised human society barrels down the fast track to ecological suicide, there is a well-funded campaign to spread stories that create confusion about problems such as climate change, because environmental protection interferes with corporate profits. Species of plants and animals which evolved over billions of years, and cannot be replaced, are becoming extinct at a rapidly increasing rate. Precious environmental treasures like coral reefs and rainforests are being destroyed. The cost of what has already been destroyed cannot be calculated. In addition, industrialised society is using up planetary resources at a rate which is much higher than the ability of the planet to replenish or renew. The wastes being produced by human beings are changing the composition of the atmosphere, oceans, lakes and rivers, and affecting all forms of life. How can some elite groups act as “Merchants of Doubt” (Oreskes and Conway, 2011) prepared to destroy the planet to make a profit?

Experiments show that humans have radically different sets of internalised norms for markets and society. On appeal to social norms, many will gladly volunteer to donate blood, but will refuse to give the same donation for payment. The conflict between the norms of markets and society means that the two cannot coexist peacefully. Throughout history, markets have been subordinate to society. Modern society is unique in having sought to reverse this relationship, subordinating social relations to market norms. This chapter follows the framework of Polanyi (1944), who describes the bloody battles between markets and society as the “Great Transformation”. The operation of a market society required the conversion of human beings and their habitat into marketable commodities, leading to the dissolution of society and environmental destruction. Current efforts to ‘solve’ environmental problems within the market framework fail to either recognise these fundamental conflicts or to go far enough to address the structural causal mechanisms. In line with social ecological economics [Chapter 1], I will argue that radical remedies are required to address the root causes of the problems. In particular, the great transformation needs to be reversed and the subordinate role of markets to society recognised.

One of the key theses of Polanyi (1944) is that unregulated markets are so extremely harmful to society, that society must take steps to protect itself. In order to understand the history of market societies Polanyi introduces the concept of the “double movement”—on the one hand the expansion of markets, and on the other the efforts to protect humans and Nature against harms caused by commodification. The second movement means that society always blocks complete freedom for markets, but this also means that free market ideologues can argue that any failure of capitalism was due to the failure to fully follow policies of laissez faire.

In this chapter the struggle between market societies and traditional societies is explained as occurring simultaneously on two fronts. One is the front of practice—the replacement of traditional institutions and customs by market institutions. The other is the ideological front—the practice of capitalism that requires faith in the accompanying ideology, which is often strongly opposed to natural instincts and traditional social norms.

For full article (5000 words) see: Markets and Society

One thought on “Markets and Society

  1. As an overview of capitalism I have never seen a better. What I have previously worked out for myself in bits is here presented coherently with its history, motivation and strategy all given due weight. The explanation of the strategic significance of enclosures is brilliant, while the Hodgson quote of McLeod on the sale of debt took my breath away, it says so much. Thank you for a splendid piece of writing.

    If this is still a draft, I would have liked to see your concluding remarks pointing beyond the scope of your chapter to the issues of the real nature of money (credit limits represented as interest-bearing debt?), the significance of the money markets (c.f. the famous quotation from Lord Stamp?) and human responsibility for working to maintain and regenerate the earth we live on. On this last, it still needs to be stated and emphasised that tree cover not only recycles carbon dioxide and oxygen, but directly cools the earth by providing shade and absorbing the sun’s energy in new growth.

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