The Guardian (Adrian Pabst) helpfully gives us one, by blowing thick layers of dust off the ideas of one Karl Polyani, a Hungarian who in the 1940s (says the Guardian) repudiated market liberalism and state socialism.

What he advocated, according to this bewilderingly strange article, is this:

Crucially, Polanyi’s vision for an alternative economy re-embedded in politics and social relations offers a refreshing alternative to the neo-liberalism of left and right. In practice, an embedded model means that elected governments restrict the free flow of capital and create the civic space in which workers, businesses and communities can themselves regulate economic activity. Instead of free-market self-interest or central state paternalism, it is the individual and corporate members of civil society who collectively determine the norms and institutions governing production and exchange.

Far from romanticising older, simpler societies and economies, Polanyi, with extraordinary prescience, warned that financial crises would recur because markets are not self-regulating – they require political direction. So what can governments do? Specific measures include, first of all, extending fair trade prices and standards from agriculture and the food industry to other parts of the economy. Second, replacing the minimum wage with a just wage that reflects the true value of labour. Third, pushing for global capital controls, coupled with new incentives to reconnect finance to the real economy by promoting investment in productive, human and social investment.

Don’t you just love that Dave Spart adverb beginning the sentence? Crucially, …

Was Polayani really so extraordinarily prescient in predicting periodic financial crises?

There have been plenty before he came along, and there will be plenty more.

Why?

Because they are a feature, not a bug!

They occur in the way that a car driver sometimes drives dangerously despite road traffic being heavily regulated. The car gives him the option of moving speedily from A to B, and of avoiding trouble through fast acceleration and strong brakes. But those same excellent qualities of the car also allow reckless people to do reckless things now and again.

Financial crises thus reflect the fact that we favour Choice over Coercion. This gives us all the vast benefits of intelligent risk-taking, but also periodic pain from the consequences of stupid risk-taking.

Financial crises are a loud bleeper on the control-panel telling us all to slow down and drive more carefully, preferably not lending money to people/institutions who are unlikely to pay it back.

As for the specific Polyani proposals themselves, did this Hungarian really believe that his policy goulash could be workable?

On the one hand it seems to envisage national ‘civic spaces’ in which ‘workers, business and communities’ regulate (sic) economic activity.

On the other it presages some uber-authority determining global capital flows.

The only thing certain in this tumultuous confusion is that it would need armies of unelected bureaucrats to decide on ‘fair’ trade and ‘just’ wages, and so create stunning new forms of confusion and conflict.

This whole article turns on the assumption that the economic crisis has confirmed the bankruptcy of economic liberalism.

Er, no, Adrian Pabst-Spart.

So what we really need now is to collectivise everything? Are Poly Ani and Polly Toynbi by some strange chance related?

Here’s an idea.

Let the owners of the Guardian sit down with all the workers and journalists and shareholders and start to negotiate a new basis for deciding ‘just wages’ for all.

Then come back in ten years’ time when the preliminary results have been achieved and let us know how it is working out.