Abraham Rotstein

The chapter reviews aspects of the possible transformation of the financial system into a banking complex, that comprises both embedded Too Big to Fail (TBTF) financial institutions and disembedded ones. The transformation of the financial system into a two-tier banking complex is the result of the disconnection of the TBTF embedded institutions and the right size to fail disembedded financial institutions. The chapter revises the scope and consequences of this change on the monopolization of financial capitalism and international financial governance. It contains two sub-sections. The first reviews Polanyi’s concept of embeddedness/ disembeddedness and TBTF; the second reviews the concept of a complex. This chapter aims to use Polanyi’s concept of embeddedness and disembeddedness in order to understand how the category of TBTF financial institutions came into being through the double movement of market deregulation and social regulation. The concepts of embeddedness in social regulation and disembeddedness under market regulation permit an understanding of how, as the few TBTF financial institutions re-embedded themselves, becoming risk proof, the majority remained disembedded and subject to failures. We argue that, given this, the financial system may no longer be considered a system.

in Karl Polanyi and twenty-first-century capitalism
From the Bennington Lectures to our presentage of transformation
Kari Polanyi Levitt

Continuing previous work on the power of ideas, this chapter frames developments since the publication of The Great Transformation in terms of the successive intellectual influence of John Maynard Keynes and Friedrich von Hayek, and explores the historical possibility that a, if not the, critical intellectual influence in our time will be Karl Polanyi’s. Surveying Polanyi’s Central European experience, reflections and writings from Budapest, Vienna and England, as well as brief visits to the United States, it focuses on the recently discovered Bennington Lectures on ‘The Present Age of Transformation’ delivered late in 1940. While the first three lectures anticipate The Great Transformation, the last two outline original approaches to America and Russia. The chapter concludes with hypothetical reflections of Karl Polanyi on the future of humankind. We roll back the canvas of history to the advent of the machine age 200 years ago and contemplate what Polanyi would have to say on the current state of world affairs. We tell him of the successes of his intellectual adversary Mises and ask him how he might conceive of a socialist response to the challenges facing humanity in our own age of transformation.

in Karl Polanyi and twenty-first-century capitalism
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Karl Polanyi’s quest for an alternative to the liberal vision of freedom
Michael Brie

Karl Polanyi’s call, in The Great Transformation, for a re-embedding of markets, is widely understood to have come to fruition in the American New Deal and in the post-war order of ‘embedded liberalism’. Based on archival sources, this chapter shows that Polanyi’s political project was far more radical. Polanyi initially considered the New Deal a vital response to the problems of American capitalism, but one that would have little relevance to the problems and dynamics of European societies. There, he considered a socialist transformation both possible and necessary. But eventually, Polanyi realised that the US, far from remaining an exceptional outlier of ‘nineteenth-century civilisation’, was imposing its model on Britain and Europe. The internationalisation of the American New Deal in the Bretton Woods order marked the defeat of Polanyi’s political project.

in Karl Polanyi and twenty-first-century capitalism
Christopher Massey

This chapter investigates Labour’s Partnership in Power reforms which fundamentally altered the party’s constitution, conference agenda, and NEC composition. This project aimed to provide a partnership between the government and the party, which had not necessarily taken place on equal lines in past Labour administrations. Although the intentions of Partnership in Power were honourable, the final product detrimentally diminished the role of the party’s members and increased the power of the party’s leadership and, far from a partnership, created a simmering divide between the two groups. Whilst the unsatisfactory operation of this partnership did not lead to an immediate divorce between the party’s leadership and its members, Labour’s decline in membership from 1997 to 2010 suggests that many of the party’s ‘partners’ became disengaged after not receiving enough attention.

in The modernisation of the Labour Party, 1979–97
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The modernisation of the Labour Party, 1979–97
Christopher Massey
in The modernisation of the Labour Party, 1979–97
Christopher Massey

This chapter examines the Labour Party’s modernisation in the period between 1983 and 1986, emphasising in particular the circumstances surrounding the realignment of the party’s left-wing in the mid-1980s, chiefly on the National Executive Committee, due to a number of factors headlined by the miners’ strike and an investigation into the Militant Tendency in Liverpool. The research into the miners’ strike and the Militant Tendency investigation provides new evidence that the realignment of Labour’s left, into soft-left and hard-left factions, was not complete until 1986. It is argued that the creation of this soft-left alliance around the party leader was crucial to Labour’s pursuit of modernisation in the Kinnock era. Without the soft-left’s support in 1983–84 and 1984–85, Kinnock’s majority on the NEC was paper-thin, whereas, following the soft-left’s conversion in 1986, Kinnock was able to wield a 2:1 majority at the party’s Executive.

in The modernisation of the Labour Party, 1979–97
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Christopher Massey

The position inherited by Neil Kinnock upon his election to the leadership in 1983 is central to understanding the reasons for Labour’s modernisation in the 1980s and 1990s. In the late 1970s and early 1980s, Labour’s traditional left made incredible advances and fundamentally changed both the policy direction and constitution of the party. These constitutional victories, alongside far-reaching policy changes, left Labour out of touch with the country’s median voter and consequently, in a position from which the party needed to be modernised in the 1983–1997 period. This chapter investigates the successes of left-wing groups in securing the mandatory reselection of MPs and an electoral college, weighted in favour of the trade unions, for leadership elections. The controversy provoked by both Labour’s swing to the left in policy terms, but crucially also the changes to the party constitution, led directly to the foundation of the Social Democratic Party and the beginnings of Labour’s own modernisation.

in The modernisation of the Labour Party, 1979–97

This monograph recasts the modernisation of the Labour Party and sheds new light on Labour’s years in the wilderness between 1979 and 1997. The monograph uniquely traces the party’s major organisational changes across its eighteen years of opposition. Labour’s organisational modernisation in this period fundamentally altered the party’s internal structures, policy-making pathways and constitution. The study begins with an investigation into the scene inherited by Labour’s leadership in the early 1980s and examines Neil Kinnock’s quest for a stable majority on the party’s ruling National Executive Committee between 1983 and 1987. From this position the monograph surveys the major organisational changes of the Labour Party in their period of opposition: the Policy Review (1987–92), One Member, One Vote (1992–94), Clause IV (1995–96) and Partnership in Power (1996–97). Through a re-examination of Labour’s modernisation, in the light of new source material and extensive primary interviews, this research significantly contributes to the understanding of the rise of New Labour.

Christopher Massey

This chapter examines Tony Blair’s change to Clause IV, part 4, of the Labour Party constitution. The chapter investigates the historical antecedents of the clause alongside the campaigns for and against the change. It is argued, in contrast to the existing historiography, that Blair’s change to Clause IV was both symbolic and revolutionary. Whilst Labour policy has alternated between left and right throughout the party’s existence, the constitutional change secured by the revision of Clause IV made an indelible mark on Labour’s future outlook, firmly distancing the party from its past. Beyond mere symbolism, the rewriting of Clause IV cemented the changes made under Kinnock and Smith, and placed an identifiable ideological, organisational and constitutional gap between old Labour and New.

in The modernisation of the Labour Party, 1979–97
Christopher Massey

The modernisation of the Labour Party had a multitude of authors. The fightback of the traditional right in the early 1980s ensured that there was a party left to save. The defection of the soft-left in 1986 established a clear majority for modernising changes in the Kinnock years under the Policy Review. Smith’s move towards One Member, One Vote symbolically distanced the party from the trade unions in the eyes of the public, even if little power shifted within Labour’s internal mechanisms. These changes put Labour on course for a general election victory. However, Blair’s further modernisation led Labour to a landslide majority at the 1997 general election. Without Blair’s change to Clause IV Labour could not prove, beyond doubt, to the public that the party had changed from the days of the old left, or the 1983 manifesto. Without the Partnership in Power reforms the all too familiar attacks on Labour governments from the left, and from some within the trade unions, could have doomed Labour to another one-term government. Blair’s modernisation built and extended the Kinnock and Smith reforms and provided the apparatus for Labour to win three successive general elections.

in The modernisation of the Labour Party, 1979–97