Polanyi’s Paradox Revisited: A Proposal for Reconceptualizing Capital Accumulation
By Richard H. Robbins
State University of New York at Plattsburgh, Plattsburgh, New York
Our thesis is that the idea of a self-adjusting market implied a stark utopia. Such an institution could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness. Inevitably, society took measures to protect itself, but whatever measures it took impaired the self-regulation of the market, disorganized industrial life, and thus endangered society in yet another way. It was this dilemma which forced the development of the market system into a definite groove and finally disrupted the social organization based upon it
--Karl Polyani, The Great Transformation (1944)
In The Great Transformation, Karl Polanyi posed what he considered the major paradox of the past 200 years. How is it possible to maintain the dynamism of the market on which our society is based without destroying, as he put it, “the human and natural substance of society?”
The nineteenth century, Polanyi suggests, was dominated by attempts to protect society against the ravages of the market (1957:40), and a creed that, as he put it, “was utterly materialistic and believed that all human problems could be resolved given an unlimited amount of material commodities (Polanyi 1957:40).
The idea that trade is the source of all well-being and that economic growth can solve virtually every problem from hunger and poverty to environmental devastation remains the bedrock of the culture of capitalism (see Robbins 2005a). Nineteenth century social and economic theorists, ranging from Auguste Comte, Herbert Spencer, and Karl Marx, while disagreeing on the processes, all postulated the ultimate emergence of an industrial society in which life’s necessities would be supplied to all. In spite of the optimism, however, the nineteenth century was, according to Polanyi, characterized by societies taking action to protect itself from the ravages of the market. The story of the twentieth century, however, might aptly be called the revenge of the market,” as nation-states frantically implement policies to maintain economic growth and remove barriers that might hinder the operation and global expansion of the market. Under pressure from multilateral institutions such as the World Bank, IMF, and WTO to whom nation-states have largely ceded their economic sovereignty, governments have systematically downsized wealth redistribution programs, state-supported education, public health programs, environmental safeguards, labor unions, and adopted a host of other neo-liberal economic policies that are explicitly designed to aid the growth and vitality of the market. Accompanying this growth, however, has come unprecedented global poverty, inequality, environmental destruction, social protest, conflict and other problems reminiscent of those of the worst of the nineteenth century (Robbins 2005a).
The question I want to explore is how can anthropologists and economists, working together, understand the global expansion of the market and its consequences, and how can we address Polanyi’s paradox? That is, is it possible to maintain the dynamism of the market on which societies now depend without destroying, as Polanyi put it, “the human and natural substance of society”? To explore this question I will examine, first, how the language of economic growth obscures the manner that growth is achieved, and, second, propose an alternative way of understanding the process of capital accumulation that highlights the problems of the market that Polanyi described.
The Nature of Economic Growth
Addressing the paradox requires first recognizing that prime directive of our market society and the global economy in general is maintaining continual capital accumulation, creating what Ernest Gellner (1983: 24) called a “society of perpetual growth.” For our economy (and indeed our society) to function we must produce and consume more this year than last and more next year than this in perpetuity. Failure to do so will result in political, economic and social upheaval.
In spite of occasional economic downturns, the remarkable feature of the past two centuries is the extent to which world markets have sustained economic growth. As Angus Maddisen ( 2003) has documented (see Chart 1), while economic growth by regions has varied considerably over the past two centuries, overall, in dollar terms, the wealth of every person on earth has increased 13 times; in Western Europe it has increased 40 times, and in Western offshoots (e.g. U.S. and Australia) some 65 times. The greatest increase in the world economy occurred from 1950 to 1973 when the global GDP almost doubled, growing at a rate of 5% a year. While these gains are impressive, it is important to note that even small increments in the growth rate can have significant effects. For example, had the annual economic growth rate of the United States from 1870 to 2000 been 1% less than it actually was (0.8% as opposed to 1.8%) the per capita GDP would be $9450 (about that of Mexico or Poland), instead of $33,330. If it has been 1% higher (2.8%, approximately that of Japan from 1890 to 1990), per capita GDP would be $127,000.
Chart 1. Rate of Per Capita GDP Growth from 0-1998 A.D. by Regions
Data from Maddison 2003.
To appreciate the effects of perpetual growth, if, in the year 2005, an individual was earning or spending $30,000 or a company was earning $300,000,000, with a modest growth rate of three percent and no inflation, they would have to more than double their income and spending in 25 years. At a more desirable six percent growth rate, or three percent growth rate with a three percent inflation rate, their spending or income would have to more than quadruple (See Table 1).
Table 1: Individual and Corporate Income Growth Over 25 Years with Growth Rates of 3% and 6%
Required Income Growth at 3%
(with 0 inflation)
Required Income Growth at 6%
(with 0 inflation)
Income Growth at 3% and Inflation at 3%
For economists, of course, the growth of GDP is the most important indicator of national economic health and has been ever since 1932, when the United States Commerce Department asked a young economist by the name of Simon Kuznets to develop a uniform way of representing national accounts (see Cobb et al 1995). Kuznets’s efforts gave birth to what was to become the GDP and since then economic progress has been measured in terms of how much money people spend. Harvard economist Benjamin Freedman in his recent book The Moral Consequences of Economic Growth, (2005: 4) goes as far as suggesting that economic growth reflects, not only progress, but a society’s moral state as well. Economic growth, he says, promotes such moral characteristics as social tolerance, social mobility, commitment to fairness, and dedication to democracy.
Because of its importance for our economic and social well-being, economic growth is a central topic in economic theory and research. Robert Barro along with his colleague Xavier Sala-i-Martin have probably done the most extensive work on determinants of economic growth. Barro (1997: xi), comparing high growth with low growth economies, concludes that the most important factors are: (1) starting level of GDP; (2) higher education levels; (3) lower fertility; (4) lower government consumption; (5) better maintenance of the rule of law; (6) lower inflation, and (7) improvements in the terms of trade
In the latest edition of their text on economic growth, Barro and Sala-i-Martin (2004) test 67 factors that may or may not contribute to or inhibit economic growth. Of those examined, 21 show at least some correlation to growth (see Table 1).
Table 2. Factors Contributing to or Inhibiting Economic Growth in Order of Importance
Fraction of GDP in mining (positive)
Primary school enrollment in 1960.
Former Spanish colony (negative)
The average price of investment goods between 1960 and 64
The initial level of GDP growth
Tropical country (negatively correlated)
Density of population in costal areas (positive)
Index of ethnolinguistic fractionalization (negative)
Prevalence of Malaria (negative)
Amount of government consumption (negative)
Life expectancy in 1960
Overall density in 1960
real exchange ate distortions (negative)
Sub-Saharan Africa (negative)
Fraction of population speaking a foreign language (positive).
Latin America (negative) 
Data from Barro, Robert J. and Xavier Sala-i-Martin. 2004. Economic Growth. Cambridge: The MIT Press, pp 556-558
Yet, in spite of their research and in spite of the centrality of perpetual capital accumulation to our society, economists, such as Robert Barro conclude that determinants of economic growth "remain one of economics' biggest mysteries." (Barro: 1997:3)
Demystifying Capital Accumulation
I want to propose that one of the reasons that determinants of so-called economic growth remain mysterious, is that the language of capital accumulation used by economists tends to ignore, obscure or mask social, political, and cultural factors that are central to process of economic expansion. Let me give four examples.
(1) Barriers to Capital Accumulation Instead of ‘Determinants of Growth’
First, instead of talking about “determinants of growth,” it might be useful if we focused, instead, on “barriers to capital accumulation.” By focusing on so-called “determinants,” economists mask the fact that the market requires for its successful operation the dismantling of social, political and cultural institutions. Thus barriers to capital accumulation may consist of cultural beliefs, social institutions, patterns of social relations, political arrangements, patterns of economic behavior, and physical limitations that, while serving positive non-economic functions nevertheless to inhibit capital accumulation. For example, a basic barrier to capital accumulation is a non-market system of exchange. A system of exchange built on reciprocity—“I will share with you in the expectation that you will share with me”—while important as a component of social bonding, is not at all conducive to capital accumulation. The collective ownership of resources, which supports community solidarity, represents a severe drag on capital accumulation for it inhibits the exchange and economic development of resources. Value systems that attribute spiritual significance to objects in nature—animals, trees, plants, mountains, etc.—while serving important social and ecological functions, are barriers to capital accumulation because they limit the exploitation and destruction of the environment and must be removed, modified, or ignored for capital accumulation to occur. Prohibitions on consumption, such as religious dietary laws, inhibit the accumulation of capital as do strong family relations that require collective family activities as well as egalitarian relationships in which there is little need for material displays of status. One of Polanyi’s main points, of course, was that the operation of the market and the commodification of land and labor, not only required new forms of social relations, but, also, that existing patterns of relations be modified or eliminated.
(2) The Overload Factor Instead of “The Convergence Factor”
Second, in their research, Barro and Sala-i-Martin note that one of the most important determinants of growth is the initial level of GDP growth; that is, the lower the starting level of real per capita gross domestic product, (GDP) the higher is the predicted growth rate (Barro 1997:1-2). Economists refer to this as the convergence factor. However, another way of articulating “the convergence factor,” is to say simply that the wealthier a country becomes, the more difficult it is to maintain capital accumulation at an acceptable rate of at least some 3 percent a year. In other words, at some point the economy simply becomes overloaded as it strains to grow. Thus whatever a country is doing to promote capital accumulation, it must also do even more of it to maintain it. The implication of the need for perpetual capital accumulation along with the convergence factor is profound. It implies that, among other things, barriers to capital accumulation, whatever they are and however vital they may be to social well-being, must be continually eliminated, regardless of the social, political, or environmental consequences.
(3) Endless and Pointless Accumulation Instead of “Progress”
Third, the general tendency of economists and others to speak of perpetual capital accumulation in terms of “progress,” “growth,” or even “morality” overlooks one essential point: the goal of our market economy is not to enable people to attain wealth and a viable standard of living. One would think that, at least in the West, those aims would have been reached 50 years ago when the lifestyle of the average European was globally sustainable for all. But the goal is perpetual capital accumulation itself; it is not reaching some ideal material state in which people have what they need. In a society of perpetual growth, there is no ideal end state. There can never be concrete needs or ideals (material or moral) to which we aspire; we can only aspire to attaining more of whatever it is we already have. If there are problems, these can solved simply by yet more accumulation. Polanyi captures this fact when he says that the liberal economic creed was, as he put it, “utterly materialistic and believed that all human problems could be resolved given an unlimited amount of material commodities” (Polanyi 1957:40).
(4) Market Internalities Instead of “Market Externalities”
Finally, obscured also by the language of economics is the price we pay for perpetual capital accumulation. Other than a few critics from economics, (see e.g. Meadows 1974, Schumacher 1989, Daley 1996), perpetual capital accumulation is assumed by most economists to be non-zero sum game in which there are only winners and no losers. If negative consequences of capital accumulation are acknowledged, they are dismissed as “market externalities” and are rarely integrated into economic models of growth. In fact, most economists see negative externalities, such as environmental destruction or social conflict, remedied by perpetual capital accumulation itself. Yet from an anthropological point of view, externalities are the crucial elements. It is the market externalities that comprise what Polanyi called “the human and natural substance of society.” Table 3 illustrates the relationships between market factors and externalities.
Table 3: Market Factors and Externalities
Possible Market Externality
Low wages, slavery, poverty, disease, hunger, alienation,
Extraction of Raw Materials
Habitat devastation, pollution, military expansion
Transportation and Distribution
Infrastructure creation and environmental consequences, pollution, etc.
Pollution, disease, habitat destruction
Manufacturing and Production Costs
Environmental pollution, resource depletion
Advertisement and Market Expansion
Exploitation of children, conversion of relations of reciprocity into market relations, etc.
Maintaining market friendly laws and regulations
Corruption, military expansion, distortion of the political process, etc.
I want to suggest that we need a new way of conceptualizing the operation of the market, a way that recognizes that perpetual capital accumulation (1) requires destroying environmental, political, social and cultural barriers to economic expansion, (2) recognizes that the maintenance of necessary levels of capital accumulation becomes more difficult as high rates of wealth are attained, (3) that makes explicit the fact that the goal of the market economy is not to reach some acceptable standard of living, or fulfill concrete needs, but simply to expand, and (4) that makes the cost of growth, the “externalities,” so to speak, internal to the process. I want to suggest that rather than talking about economic growth, that we borrow a concept from Pierre Bourdieu (1986) and speak of the operation of the market as a process of capital conversion.
Capital conversion involves transforming non-monetary capital, that is natural capital, political capital, cultural capital, and social capital, into money. We can conceptualize the process as in Diagram 1.
Fresh water, for example, is part of our natural capital. Whenever we use water for agricultural or industrial use (some 90% of the total), we are converting some of that capital into money. The conversion of forests into saleable wood or paper products is, of course, a major component of capital accumulation, as is the externalization of the cost of disposing of our waste.
We convert political capital into money by making access to power dependent on wealth or by converting our freedoms and privacy into money through the use of electronic devices. We convert political capital into wealth by ceding to corporations control over our political and social systems or cultural heritages. We convert political capital into money by relinquishing local and national sovereignty over economic decisions to multilateral organizations such as the World Bank, International Monetary Fund (IMF), and the World Trade Organization (WTO). When the Supreme Court of the United States ruled, as it did in 2005, that the state may expropriate private property for private developers, they promote economic development, but remove long-recognized political rights of individuals to control their own property. One of the conclusions that Robert Barro (1997) reaches in his studies of determinants of growth is that democracy may serve as a drag on capital conversion; as he puts it,
At low levels of political rights, an expansion of [democratic] rights stimulates economic growth. However, once a moderate amount of democracy has been attained, a further expansion reduces growth.
The reason for this, he suggests, is that as growth increases, citizens become more concerned with economic inequality and social justice and demand social programs and income redistribution, neither of which are conducive to the uninhibited accumulation of monetary capital.
Capital accumulation also requires the expenditure of social capital. One of the best recent examples involves the economy of Japan, which, by adopting various neo-liberal economic policies, has restarted its economy, but, at the same time, introduced levels of social inequality that undermine the social foundation of the society (Onishi 2006). The most comprehensive work on social capital is that of Robert Putnam in his book Bowling Alone (2000) in which he documents the significant decline of social capital in the United States over the past 50 years. It is significant, of course, that most of the factors Putnam identifies as contributing to the decline of social capital, such as two-income families, suburban sprawl, and television are also major contributors to capital conversion.
In sum, by speaking of capital accumulation as a process of capital conversion, we are better able to appreciate why it requires removing social, political, cultural and environmental barriers, why maintaining growth becomes more and more difficult as we convert more and more non-monetary capital into money, how we have gotten into a pattern of growth for growth’s sake, and how externalities are, in fact, an integral part of the system.
Finally, there may be some objection to the idea of representing the damaging impact of the market with the economic metaphor of capital conversion. However, if we are to reconceptualize the workings of the market in ways that best communicate the negative consequences of perpetual growth, we need to choose language that vividly communicates those consequences. If it is capital (i.e. money) that people are trying to accumulate, and if, in the process of accumulation, others items of value (e.g. the environment, political rights, social relationships, etc.) are lost, it makes sense to speak of the process as one of capital conversion. In addition, since the end product of the process is money, it makes sense to portray what is lost, if possible, in monetary terms. How else to demonstrate that by accumulating money we are actually spending at ever increasing rates the legacies of future generations?
The Mechanisms of Capital Conversion
If we are to reconceptualize economic growth as a process of capital conversion, one of the tasks that anthropologists and economists and other social scientists have is to detail the mechanisms that are used in the process. Three of these mechanisms are particularly important—commodification, individuation and acceleration. These mechanisms are not mutually exclusive, as one may contribute to the other, but they suggest ways of building so-called market externalities into our models.
Commodification: Converting the Commons into a Market
Polanyi (1957: 68-69) noted that the commodification of land, labor, and money, made necessary by the machine, was instrumental in the industrial revolution. The commodification of land was required to make capital investment prudent, the commodification of money was necessary in order to raise the large capital expenditures required by machines, and the commodification of labor helped supply the workers for the machines. But commodification is an ongoing process for in order for perpetual capital accumulation to occur at all there must be goods and services for people to buy. In other words, for non-monetary capital to be converted into money it must first be converted into goods or services that can be bought and sold in the market.
For example, the environment, as a shared resource, generates no income. However, when environmental resources are turned to wood products, ores and metals, and irrigation systems, they can be converted into money. Water in itself is part of the commons, is a valuable resource, but, until it can be bought and sold, contributes little directly to the GDP. As a commodified resource it can be withdrawn and used to contribute to capital accumulation.
Political capital can, of course, also be commodified as those who seek access to power must pay for it. Access to information is a prime feature of political capital but in the “information economy” is generally now accessible largely to those who can pay for it.
Social capital consists of relationships of trust and reciprocity, but these also are rapidly being commodified. The classic example, of course, is the conversion of the social capital gained by the breast feeding of infants, into the money-producing practice of bottle feeding. Family gatherings have been converted into money-making operations by, for example, taking the traditional practice of family music-making or game-playing and replacing them with age-specific forms of entertainment (television, ipods, video games, etc.) Some have noted that much of the economic gains of the second half of the twentieth century are attributable to turning household functions—food preparation, education, entertainment—into money-making activities.
Cultural capital consists of those systems of meanings, values, and symbols that guide the way we view the world. These values, beliefs, and symbols are being transformed from their traditional uses into items that can be bought and sold in the market place. The commodification of indigenous art, or ritual paraphernalia comes to mind as an excellent example of the process.
Individuation: Enabling People, Disabling Community
It is obvious that the rate of capital accumulation is increased when there are a greater number of what we might term “consumption units.” For the reason, the more that groups can be fragmented and converted into individuals, the greater the potential for capital accumulation. Laws, commonly initiated by colonial powers in the nineteen century, that transferred the rights in property from collectivities, such as villages or clans, to individuals, accelerated the conversion of natural capital into money by allowing land and resources to be expropriate by agricultural or lumber developers. The transformation of landscapes from multi-family dwellings--a process often prompted by government programs (see Robbins 2005a: 19-20)—to single-family suburban housing, multiplied the number of consumer items to be purchased. Richard Wilk (2002) explains how the process of individuation encourages consumption. “In farming cultures,” he says,
families often act like a small company, in which each person is expected to work their hardest and contribute everything to the common good. When they have some extra money or resources, the family invests in improving the farm and getting more land, not in personal extravagance. So most individuals, especially while they are young, simply have little money of their own to spend. When large numbers of people leave the farm economy, and families can no longer claim all their childrens’ earnings, consumer culture becomes possible.
“Outside the family,” he continues,
many societies have strong institutions that define classes, castes, guilds or occupations, and people are generally not allowed to rise “above their station” in their consumption. In many societies, sumptuary laws define modest and proper dress, diet, and housing for each group. When these rigid categories become more fluid, and it becomes possible to change status, consumption often becomes a key element in defining new identities and roles. A more fluid society where people each find their own individual identity is therefore likely to have much more diverse and flexible forms of consumption.
Whereas consumption was driven by competition between groups, as in the Potlatch or the Northwest Coast or the feasts of “Big Men” in New Guinea, competition in our modern market society is now highly individualized. In a consumer culture, says Wilk,
because competition is much broader with more contestants and a broader audience, novelty is more important. People compete to get the newest items, as well as the most, and the best. Competition drives a fashion system, which demands new styles and goods all the time.
With the breakdowns of groups, individuals are required to define their identity on their own, and this requires more and more possessions. In a consumer culture, Wilk says, “in a very real sense, you are what you own, what you wear, what you consume.”
Acceleration: Placing the Economy on Steroids
The one factor that economists agree most contributes to capital conversion is technology. Polanyi (1957), in fact, saw technology, or the machine, as central to the great transformation. Economists are divided about what it is about technology that makes it so important; some argue that technology is responsible for developing new consumer products that contribute to consumption, while others suggest that technology introduces “efficiency” to the production process. However, “efficiency” is one of those terms that are vague enough to sound positive, without revealing much about what the term really means. Technology certainly contributes to commodification and to individuation. But, most importantly, I believe, technology attacks one of the most rigid barriers to capital conversion--time itself (see Gleick 2000).
Elsewhere (Robbins 2005b) I have noted that the history of Western technology can be seen as the continuing application of knowledge and practice to create technological systems designed to accelerate the rate of capital accumulation. “Time is money” captures the essence of the process. We have elaborated technology in order to accelerate the production of crops and animals, to accelerate the pace of work, to accelerate the production, distribution, and consumption of goods, and to accelerate the rate of killing in war.
Technology helps convert natural capital into money by accelerating the pace of natural processes. For example, virtually all of the food crops and domesticated animals that comprise today’s western diet existed 2000 years ago. Contemporary Western farmers and ranchers just grow and raise them faster. In the nineteenth century the advent of mechanized agriculture—steel plows, the mechanical reaper, the “combine” which combined the machines for reaping and thrashing wheat-- cut the labor time for each bushel of wheat harvested from sixty-one to three hours. In the latter half of the twentieth century the so-called “green revolution” with its use of chemical herbicides, pesticides, and fertilizers and greater use if water, vastly accelerated the growth of crops, at great environmental cost. Technology has also contributed to the accelerated growth of domesticated animals. A grass-fed steer in 1750 would not attain maximum weight until it was five or six-years-old. By 1950, grain-feeding would bring the steer to market in two or three years. But with today’s use of herbicides to increase pasturage, protein supplements, growth hormones, forced feeding of grain, and antibiotics to ward off infections, a typical steer can reach its slaughter weight of some 1200 pounds in 14 to 16 months, but again at considerable environmental, and perhaps, health, costs.
Technology has helped convert social capital into money by accelerating the pace of labor. This was one of Polanyi’s major points; the “satanic mill,” as he called it, transformed labor and resulted in what he called the “catastrophic dislocation of the lives of the common people” (Polanyi 1957: 33). The increased demand for more rapid production led to the introduction of the factory system and development of systems of mass production. In the United States, Frederick Taylor’s Theory of Scientific Management, instituted a system that carefully analyzed every stage of the worker's task to determine how quickly it could be done. By applying his methods in one steel plant he increased the capacity of he pig-iron handler from 12 1/2 to 47 1/2 tons per day (Williams 1982). In 1912 Henry Ford introduced assembly line production for the Model-T to further accelerate the speed at which laborers performed their tasks. Within a year, assembly time of the flywheel magneto of the Model-T dropped from 20 person-minutes to 5 minutes; of the engine from 594 to 226 minutes; and of the chassis from 12.5 hours to 93 minutes (Hounshell1984). Ford, however, had to double the daily wage rate to keep workers at their mind-numbing tasks. With the continued application of labor-accelerating and labor-saving technologies the production of the average automobile today requires less than 20 hours of human labor.
But we can perhaps best illustrate the effects of technology on social, political, and natural capital by examining the impact three items that, taken together, occupy one-quarter of the lives of members of Western society-- the automobile, the computer, and the television. On average, persons in the West spend about 180 minutes a day watching television, about 90 minutes a day at the computer and 70 minutes a day driving an automobile.
Each of these activities makes demands on the environment; each has political consequences in terms of the concentration of power, and each reduces social autonomy and increases access of others to the private lives of users.
Television, for example, has been a major engine of accelerating capital conversion and consumption; but, in addition, critics claim that it is the technology most responsible for the decline of social capital, particularly in the United States (Putnam 2000). Critics claim that the increase in television watching reduces political participation and face-to-face social and civic activities (Sclove 1995).
Automobiles, of course, accelerate our travel and communication, but are responsible air pollution, urban sprawl, loss of natural landscapes, and growing dependence on corporate monopolies. Twenty-five to thirty percent of the energy needs of the United States, an amount greater than that of China and India combined, are required to move personal vehicles beyond the speed of a bicycle (Illich 1973: 82).
The personal computer accelerates communication, but also destroys political, social, and natural capital (see Turkle 1995); it opens up personal lives to whoever gain access to computer files, and creates vast garbage heaps of toxic materials. The end result of each of these technologies, along with all the others, has been an acceleration, not only of capital accumulation, but of a documented increase in the pace of everyday lives. As Robert Levine (1997:10) documents, the accelerated pace of everyday life is directly correlated to the rate capital accumulation. Thus, through technology, and in the interest of capital conversion, people in advanced industrial societies must work, play, exercise, eat, and interact faster than ever before.
Anthropologists and Economists Confront Market Externalities
As long as the “standard of living” is measured in terms of per capita GDP, and money is the ultimate good, and capital conversion is considered the cure to all our problems, indeed is seen as intrinsically moral, we will continue to face the global problems we do. The question is, what role can anthropologists and economists together play in addressing these issues?
First, I believe that both economists and anthropologists must address the question of whether or not perpetual capital accumulation is desirable (or even possible). This requires that we find some way of measuring non-monetary capital, if only to be able to judge the external costs of perpetual capital accumulation. How do we measure relationships of trust and reciprocity in order to judge whether or not their conversion into money is worth it? How do we measure our political freedoms in order to determine whether or not they ought to be turned into money. What is the human cost of commodifying our culture or accelerating the pace of human lives and the natural world? There are certainly precedents for quantifying environmental, political, social and cultural capital. The work on “ecological footprints” by Mathis Wackernagel and William E. Rees (1996) and the development by Clifford Cobb, Gary Sue Goodman and Mathis Wackernagel of the Genuine Progress Indicator (1999) serve as examples of how environmental, social, and cultural variables can be measured.
Second, economists, perhaps with the help of anthropologists, must find ways of making market externalities internal to the models that they generate for policy considerations. Finally, I think that economists must begin to focus on why perpetual capital accumulation is necessary and whether or not, given the present economic regime, it is possible to have a zero-growth economy, and, if it is possible, how can it be implemented. Economists and anthropologists must examine alternative economic arrangements. Some people propose that we return to a gift economy, where reciprocal exchanges replace market exchanges. Are such arrangements possible and, if so, on what scale?
The alternative to focusing on these questions is the continued rapid acceleration of the destruction of non-monetary capital and, ultimately the annihilation of “the human and natural substance of society.”
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