norms of behaviour at the macro-level is of critical importance for conditioning group
behaviour.
The argument presented has parallels with earlier debates about the development of 19th
century capitalism. Initially, it was believed that commerce would increase civility: “it is
almost a general rule that wherever manners are gentle (moeurs douces) there is commerce;
and wherever, there is commerce, manners are gentle” (Montesquieu, Vol.2, p 8, quoted by
Hirschman, 1982); “through commerce, man learns to be prudent and reserved, in both talk
and action” (Ricardo, 1781, p 463, quoted by Hirschman). But the reverse was also strongly
argued: Adam Smith himself predicted that the division of labour would lead to a situation
where ‘all the nobler parts of human character may be in great measure obliterated and
extinguished in the great body of people” (Wealth of Nations, p736).20 According to Robert
Owen ‘The general diffusion of manufactures throughout a country generates a new character
in its inhabitants; and as this character is formed upon a principle quite unfavourable to
individual or general happiness, it will produce the most lamentable and permanent evils,
unless its tendency be counteracted by legislative interference and direction’ (Owen, 1818 -
my italics). Polanyi pointed to “the dislocation caused by such devices [the market system]
must disjoint man’s relationships and threaten his natural habitat with annihilation” (p42). It
involves the “liquidation of every and cultural institution in an organic society” (Polanyi,
p159).
The end of the nineteenth century and the first half of the twentieth century saw strong
reactions to the consequences of an unregulated market, embodied in economic interventions
and social legislation. So strong were these reactions that in the 1940s Polanyi wrote:”In
retrospect our age will be credited with having seen the end of the self-regulating market”
(p142). He wrote this in the Keynesian era. Since then much of the moderating interventions
have been unravelled, while attempts to preserve or increase them are increasingly
constrained by global forces.
20 Quoted in Heilbronner, 1993 who refers to the ‘widespread disquiet with regard to the
moral basis of capitalism’, p 131.
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