0:00:01.719,0:00:05.710 colpal on he was born in eighteen eighty six indiana and he passed away in
0:00:05.710,0:00:07.420 nineteen sixty four
0:00:07.420,0:00:09.969 he's not an economist in the traditional sense
0:00:09.969,0:00:11.999 but his book the great transformation
0:00:11.999,0:00:16.550 has had a lot of influence on economic thinking pol and he was himself a mix of
0:00:16.550,0:00:21.679 a philosopher historian an economic historian daniel for politics
0:00:21.679,0:00:25.159 what he did in this book great transformation is provided general
0:00:25.159,0:00:29.449 framework for thinking about the decline of classical liberal fought and the
0:00:29.449,0:00:34.630 decline of lays a fair capitalism from the nineteenth century
0:00:34.630,0:00:37.690 plenty starts the book with a very dramatic sentence
0:00:37.690,0:00:41.210 nineteenth-century civilization has collapsed
0:00:41.210,0:00:44.720 by nineteen th century civilization he was referring to your
0:00:44.720,0:00:47.640 and he had in mind for a particular components
0:00:47.640,0:00:51.370 the balance of power system between competing nation states
0:00:51.370,0:00:52.730 the gold standard
0:00:52.730,0:00:55.260 the idea of self regulating markets
0:00:55.260,0:00:57.890 and the notion of the liberal might watch and state
0:00:57.890,0:01:01.010 which protected property rights but otherwise would lead a kind of
0:01:01.010,0:01:03.350 capitalism run its course
0:01:03.350,0:01:07.630 to spoke was published in nineteen forty four so perhaps it's not surprising that
0:01:07.630,0:01:10.680 it's a pessimistic about the course of european history
0:01:10.680,0:01:12.840 the palani saw pretty clearly that
0:01:12.840,0:01:14.740 some previous world order
0:01:14.740,0:01:20.960 really had passed on and probably was not coming to return anytime soon
0:01:20.960,0:01:22.990 what we're for poland you the congress
0:01:22.990,0:01:26.939 well the great transformation is a very complex book it has a lot of history
0:01:26.939,0:01:29.130 and also a lot about foreign policy
0:01:29.130,0:01:32.220 but let's consider just three of politeness culprits
0:01:32.220,0:01:33.590 the first is a risk
0:01:33.590,0:01:36.599 the notion that in a self regulating market economy
0:01:36.599,0:01:41.189 individuals are exposed to too much risk on their wages on their capital returns
0:01:41.189,0:01:42.270 on their rents
0:01:42.270,0:01:44.170 on their business prospects
0:01:44.170,0:01:46.670 pool and he saw self regulating market
0:01:46.670,0:01:50.960 as bringing too much risk up on most individuals in the society
0:01:50.960,0:01:52.170 the second culprit
0:01:52.170,0:01:54.329 can be seen as deflation
0:01:54.329,0:01:58.310 palani understood that the gold standard knit together most of europe
0:01:58.310,0:02:03.590 in a network of self regulating trade relations and a self regulating monetary
0:02:03.590,0:02:04.280 order
0:02:04.280,0:02:06.380 it prevented rampant inflation
0:02:06.380,0:02:07.670 but at the same time
0:02:07.670,0:02:11.189 under the gold standard they were periodic financial crises
0:02:11.189,0:02:14.200 credit would collapse money supplies would fall
0:02:14.200,0:02:16.169 economic activity would slow
0:02:16.169,0:02:19.399 then there would be deflationary pressures on the economy's
0:02:19.399,0:02:21.279 these deflationary pressures
0:02:21.279,0:02:22.919 were also were source of risk
0:02:22.919,0:02:27.339 and furthermore they tended to make politics and the deflationary economies
0:02:27.339,0:02:30.849 more brutal or more oppressive or more liberal
0:02:30.849,0:02:33.930 the third culprit which pauline year that among others
0:02:33.930,0:02:36.590 is this idea that a self regulating market
0:02:36.590,0:02:39.669 annihilate sits underlying social context
0:02:39.669,0:02:42.009 part of the land use other work schoolwork written from an
0:02:42.009,0:02:43.999 anthropological point of view
0:02:43.999,0:02:45.260 and claimed
0:02:45.260,0:02:48.790 that the market was a relatively recent human invention
0:02:48.790,0:02:52.099 and that the four markets were so prominent in human affairs
0:02:52.099,0:02:55.429 that social orders had their own regulating principles which are quite
0:02:55.429,0:02:58.199 distinct from those of market economies
0:02:58.199,0:03:01.809 by no means do all historians and anthropologists agree with this point of
0:03:01.809,0:03:04.869 view but to return to pull on these perspective
0:03:04.869,0:03:07.489 he saw this underlying social context
0:03:07.489,0:03:10.129 as important as helping to give rise
0:03:10.129,0:03:12.650 to a market in order to a liberal trading order
0:03:12.650,0:03:16.390 but that the market itself would become so rampant and soka modified so
0:03:16.390,0:03:18.569 commercialized human activity
0:03:18.569,0:03:22.359 that eventually the self regulating market would do a or we can this
0:03:22.359,0:03:24.290 underlying social context
0:03:24.290,0:03:27.869 unless they would be a kind of cultural contradiction to capitalism
0:03:27.869,0:03:29.569 and economic contradiction
0:03:29.569,0:03:31.230 delays a fair capitalism
0:03:31.230,0:03:36.240 arising from excess risk deflationary pressures anderson violation of the
0:03:36.240,0:03:38.199 underlying social context
0:03:38.199,0:03:41.210 it's a very complex nuanced historical argument
0:03:41.210,0:03:45.879 but those are just some of its main features
0:03:45.879,0:03:48.260 when he was mostly a diagnostic shin
0:03:48.260,0:03:50.369 and he was not in this book concerned
0:03:50.369,0:03:53.239 with producing proposals for concrete form
0:03:53.239,0:03:54.950 he simply wanted to understand
0:03:54.950,0:03:57.819 why european history had taken the course that effect
0:03:57.819,0:04:02.029 and he saw this age of lays a fair capitalism as very much over
0:04:02.029,0:04:05.319 palani has proved an extremely influential thinker
0:04:05.319,0:04:08.419 perhaps his book the great transformation can be compared to a book
0:04:08.419,0:04:13.189 by friedrich a high-tech wrote to serfdom published around the same time
0:04:13.189,0:04:16.330 individuals from conservative libertarian points-of-view
0:04:16.330,0:04:17.829 outlook anti-tax work
0:04:17.829,0:04:21.659 as a kind of patron saint of kind of explanation for what went wrong
0:04:21.659,0:04:25.159 and individuals from left-wing progressive or social democratic point
0:04:25.159,0:04:29.560 of views has read paul and his work along the same lines as a kind of
0:04:29.560,0:04:33.349 overall treatise or track on where we came from
0:04:33.349,0:04:36.479 the key question looking forward which of course is still debated
0:04:36.479,0:04:38.530 is what about our new world order
0:04:38.530,0:04:39.770 has weak overcome
0:04:39.770,0:04:42.930 the mechanisms of instability identified by palani
0:04:42.930,0:04:45.979 by having the social democratic welfare states
0:04:45.979,0:04:50.469 or have we just in some ways rebuilt the old world the old world order
0:04:50.469,0:04:51.930 i'm somewhat new principles
0:04:51.930,0:04:55.889 but perhaps a new world order also has some cultural an economic self
0:04:55.889,0:04:58.959 contradictions and that may disappear as well
0:04:58.959,0:05:02.919 this debate continues to go on but one thing seems pretty sure
0:05:02.919,0:05:06.699 along his influence has risen and the great transformation for all of its
0:05:06.699,0:05:09.199 controversy is still a book which people read