The Invisible Hand? by Bas J.P. van Bavel

Moreover, Van Bavel’s discussion of their dynamics owes nothing to mere ethical critique or moralizing about the limits of the market sphere in civil society, as many ‘communitarian’ critics have done in recent years. In focusing on these factor markets, Van Bavel goes directly to the heart of the mainstream case for commercial society. Polanyi once called these ‘fictitious commodities’ to emphasize the essential difference between market exchange in the products of labor, which he saw as economic activity potentially compatible with a humane society, and the ‘unnatural’ phenomenon of commodification of land, labor, and capital themselves, which unleashed the terrible logic of the market and subjugated society to it. Instead of a neo-Whig argument about the institutional order of freedom and enterprise, Van Bavel presents a more cyclical narrative inspired by the work of Karl Polanyi and Giovanni Arrighi.įirstly, he distinguishes clearly between output markets and factor markets, and focuses his narrative on the latter: the markets in land, labor, and capital. Van Bavel’s argument is that, unlike the boosterist argument about the glorious unfolding of the energies of the market leading these societies to prosperity and success, the actual story in each of these cases is quite different. He takes as case studies a number of the most frequently invoked ‘success stories’ of commercial society: medieval Iraq under the Abbasids, the Italian city-states of the Renaissance, the Dutch Republic, and finally Britain and the United States. His book aims to undermine the case that market societies are characterized by “virtuous cycles” while all other types of society have “vicious” ones.

Van Bavel challenges this narrative by re-examining the role of markets in economic history.

The Invisible Hand? by Bas J.P. van Bavel