WEBVTT

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colpal on he was born in eighteen eighty
six indiana and he passed away in

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nineteen sixty four

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he's not an economist in the traditional
sense

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but his book the great transformation

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has had a lot of influence on economic
thinking pol and he was himself a mix of

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a philosopher historian an economic
historian daniel for politics

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what he did in this book great
transformation is provided general

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framework for thinking about the decline
of classical liberal fought and the

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decline of lays a fair capitalism from
the nineteenth century

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plenty starts the book with a very
dramatic sentence

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nineteenth-century civilization has
collapsed

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by nineteen th century civilization he
was referring to your

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and he had in mind for a particular
components

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the balance of power system between
competing nation states

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the gold standard

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the idea of self regulating markets

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and the notion of the liberal might
watch and state

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which protected property rights but
otherwise would lead a kind of

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capitalism run its course

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to spoke was published in nineteen forty
four so perhaps it's not surprising that

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it's a pessimistic about the course of
european history

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the palani saw pretty clearly that

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some previous world order

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really had passed on and probably was
not coming to return anytime soon

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what we're for poland you the congress

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well the great transformation is a very
complex book it has a lot of history

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and also a lot about foreign policy

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but let's consider just three of
politeness culprits

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the first is a risk

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the notion that in a self regulating
market economy

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individuals are exposed to too much risk
on their wages on their capital returns

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on their rents

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on their business prospects

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pool and he saw self regulating market

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as bringing too much risk up on most
individuals in the society

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the second culprit

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can be seen as deflation

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palani understood that the gold standard
knit together most of europe

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in a network of self regulating trade
relations and a self regulating monetary

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order

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it prevented rampant inflation

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but at the same time

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under the gold standard they were
periodic financial crises

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credit would collapse money supplies
would fall

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economic activity would slow

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then there would be deflationary
pressures on the economy's

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these deflationary pressures

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were also were source of risk

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and furthermore they tended to make
politics and the deflationary economies

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more brutal or more oppressive or more
liberal

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the third culprit which pauline year
that among others

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is this idea that a self regulating
market

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annihilate sits underlying social
context

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part of the land use other work
schoolwork written from an

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anthropological point of view

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and claimed

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that the market was a relatively recent
human invention

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and that the four markets were so
prominent in human affairs

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that social orders had their own
regulating principles which are quite

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distinct from those of market economies

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by no means do all historians and
anthropologists agree with this point of

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view but to return to pull on these
perspective

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he saw this underlying social context

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as important as helping to give rise

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to a market in order to a liberal
trading order

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but that the market itself would become
so rampant and soka modified so

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commercialized human activity

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that eventually the self regulating
market would do a or we can this

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underlying social context

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unless they would be a kind of cultural
contradiction to capitalism

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and economic contradiction

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delays a fair capitalism

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arising from excess risk deflationary
pressures anderson violation of the

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underlying social context

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it's a very complex nuanced historical
argument

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but those are just some of its main
features

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when he was mostly a diagnostic shin

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and he was not in this book concerned

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with producing proposals for concrete
form

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he simply wanted to understand

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why european history had taken the
course that effect

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and he saw this age of lays a fair
capitalism as very much over

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palani has proved an extremely
influential thinker

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perhaps his book the great
transformation can be compared to a book

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by friedrich a high-tech wrote to
serfdom published around the same time

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individuals from conservative
libertarian points-of-view

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outlook anti-tax work

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as a kind of patron saint of kind of
explanation for what went wrong

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and individuals from left-wing
progressive or social democratic point

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of views has read paul and his work
along the same lines as a kind of

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overall treatise or track on where we
came from

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the key question looking forward which
of course is still debated

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is what about our new world order

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has weak overcome

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the mechanisms of instability identified
by palani

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by having the social democratic welfare
states

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or have we just in some ways rebuilt the
old world the old world order

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i'm somewhat new principles

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but perhaps a new world order also has
some cultural an economic self

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contradictions and that may disappear as
well

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this debate continues to go on but one
thing seems pretty sure

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along his influence has risen and the
great transformation for all of its

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controversy is still a book which people
read

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