Can We Have Self Regulating Markets?

3071 Words13 Pages
Department of Political Economy

Candidate Number: V26832

Essay Title: Can we have self-regulating markets?

Word Count: 2747

Date of Submission: 06/ 12/ 14

There exists an enduring scholarly disagreement as to whether the assumptions of a free market hold, imperative to this is the question of whether laissez-faire is self regulating. The neo- liberal school of thought, with advocates such as Hayek, take diametrically opposing viewpoints to academics such as Polanyi. The former wish to run the economy as a separate entity from society, the latter proposes the embedding of the economy within societal relations. This essay will focus on the opposing views of Hayek and Polanyi. Firstly, society’s role in the
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To begin with, the maintenance of society and liberty’s compatibility with self-regulation will be examined. Polanyi claims that one “does not act to safeguard his individual interest in the possession of material goods; he acts to safeguard his social standing, his social claims, his social assets…. human passions, good or bad, are merely directed towards noneconomic ends (Polanyi, 1944: 46-47)”. It is deducible that the existence of a society where the free market regulates the economic system, though inherent to self-regulation, fundamentally goes against what the system is ultimately trying to achieve, namely satisfaction of its participants. The all-encompassing demands of the free market fail to take other social desires into account. Society is disfranchised by the self-regulating notion of the economy that values resources and decides who is most deserving. Burgoon’s findings evidence that “investment and immigration…may spur both net autarky and net nationalist autarchy when welfare protection is weak, but are actually forces reducing both measures of backlash in generous welfare settings (Burgoon, 2009: 171)”. Free-market capitalism leads to the destruction of countries self-sufficiency as influx of labour and investment reduces domestic employment. If countries do not provide substantial welfare provisions to offset this, then it
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