Review of a new book by Matthjis Krul

Book Review: Bas van Bavel, “The Invisible Hand?” Excerpt:
"....much of the discussion has been primarily concerned with the question “how did Europe come to dominate the world?”, and to some extent also the followup question, “when did, whatever it was that allowed this to happen, begin? “.

Bas van Bavel’s recent book, The Invisible Hand?, asks a very different kind of question. This book is not concerned with the rise of the West, but with the underlying economic framework that most mainstream economic historians use in understanding the long-run socioeconomic patterns that they study. Although the specifics differ by author, of course, most of the economic historical mainstream still presents the story of economic history, and with it the difference between poor and rich today, as that of the ‘unfolding’ of the free market. The main disagreements consist of what kind of institutional order was necessary to make that free market flourish in Western history, and to what extent such an order as the Western world has could be adopted by developing nations as a matter of policy. Although there are exceptions, for the most part the working assumption is still that more markets, freer markets, and strong property rights – read: strong enforcement of the power of property owners – were the core ingredients that the Western nations achieved and by which they prospered. Whereas others, failing to achieve such an institutional order, suffered and still suffer stagnation and poverty. It is in this light that these economic historians also read such historical sources on markets and merchants as we have: as analytical and political defenders of what Adam Smith called the ‘commercial society’.

Van Bavel challenges this narrative by re-examining the role of markets in economic history. His book aims to undermine the case that market societies are characterized by “virtuous cycles” while all other types of society have “vicious” ones. 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. 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. 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.

Firstly, he distinguishes clearly between output markets and factor markets, and focuses his narrative on the latter: the markets in land, labor, and capital. 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."

M.Krul seems to be some sort of Marxist, there are so many variations of. Marxism and I do not know his affiliation. Here is an interview with him four years ago when he was still doing his ph.d. New directions in Marxism