Markets in Historical Contexts: Ideas and Politics in the Modern World, and: Financial Missionaries to the World: The Politics and Culture of Dollar Diplomacy, 1900-1930 (review)

In his book The Great Transformation, Karl Polanyi posed what elsewhere I termed "Polanyi's Paradox"¹: the self-adjusting market, Polanyi suggested, "could not exist for any length of time without annihilating the human and natural substance of society."² Society must, therefore, take measures to protect itself. However, "whatever measures it took impaired the self-regulation of the market, disorganized industrial life, and thus endangered society in yet another way."³ It is not going too far to suggest that the past two hundred years of global history represent attempts—largely unsuccessful—to resolve this paradox.

Polanyi's paradox has taken on increased meaning over the past few decades with the global domination of neoliberal economic policies and the heightened control exercised over global economies by the International Monetary Fund (IMF), the World Bank, and the World Trade Organization (WTO). We inhabit a historical epoch in which freeing the market from any regulation, democratic or otherwise, takes priority over attempts to maintain "the human and natural substance of society."

The two books under review here both address, in different ways, the history of the debate over minimizing the harmful effects of the market without destroying its dynamism. They also illustrate that the neoliberal push to free the market from any sort of democratic control has a long and contentious history.

Markets in Historical Context contains eleven essays by some of the most distinguished international scholars of economic history. They address the cultural and social factors affecting on the market and range in time and space from eighteenth-century Europe to twentieth-century India and Japan and into the globalized present. In their introduction, Bevir and Trentmann argue that "all economic institutions, including markets, are necessarily established and transformed in the context of political, social, and cultural authorities. All economies have to be governed through complex patterns of rule that connect and regulate economic actors, organizations, and interactions" (p. 1). The question, they say, is not whether markets are good or bad, but rather what is to be the nature of economic governance. The articles in the book are bound together first, they say, by "a concern with meanings or beliefs as constitutive of social and economic practices, an interest in the plurality of historical sites, an emphasis on contingency and context, and recognition of the role of critique in the formation and development of modes of economic governance" (p. 5). Globalization, they say, has resulted in "a shift from government to governance or ahollowing out of the state. In this view, a new semisovereign type ofstate has emerged whose authority has been eroded internally and externally so that it can act only in conjunction with other organizations within interdependent networks" (p. 6).

Financial Missionaries to the World examines the attempts of the United States in the early twentieth century to bring stability to foreign markets through a program of controlled loans in which the United States would arrange for foreign countries to receive loans from private banks in exchange for relinquishing a measure of control over their own economies, a practice that became known as "dollar diplomacy." But, as Rosenberg brilliantly describes, the practice involved more than simply economic arrangements and policy issues. It involved cultural contexts that promoted the growth of professionalism, scientific theories that accentuated racial and gender differences, and a mass media propagating primitive stereotypes of the Other (p. 3). More importantly, dollar diplomacy allowed the United States to press fiscal reform on other countries without having to assume the...