There Is No Such A Free Market

That title comes across my mind every time I recast Karl Polanyi's argument on the social construction of markets. Two weeks ago, I read two articles that largely drew its contentions from Polanyi's work. One of the texts is what I will share below. Inspired by Polanyi, it is not a surprise that the two articles are under the heterodox economics realm.

One of the text is a piece written by Lourdes Beneria, a well-known feminist scholar. The title of the text is "Economic Rationality and Globalization: A Feminist Perspective". The article is a chapter of a book with the title " Feminist Economics Today: Beyond Economics Man". Beneria smartly sketches that understanding the impact of globalization on women should be started by digesting what is meant by globalization. Often enough is globalization associated with integration of the world market or global division of labour in that free market is a necessary plight. In other words, speaking about globalization is, partly, speaking about free market.

Here is the point where Beneria brings in Polanyi's work. According to Polanyi, free market is not something that happens by itself (which is undeniably true), but such laissez faire mechanism is "the product of deliberate state action". For Polanyi, what happened during the nineteenth and early twentieth century in Europe is the construction of market economy. Market economy needs market society, which changes significantly human behaviour. Here is the point why Polanyi argues it as "A Great Transformation". That means it changes human behaviour, including their perception, in such a way that human cannot imagine otherwise. Not only does it change human behaviour, but it also gives impetus for the preponderance of economic man. Homo economicus  is a figure necessitated as well as perceived to be able to play in the market. This figure profoundly portrays western male, which implies that women's experiences are excluded. Altruism, caring, connectedness - those characters mostly attached to women - are not suitable for the market.

Stemming from what Polanyi claims on what actually happened during the nineteenth and early twentieth century in Europe, Beneria contends that the same logic also occurs nowadays in the era of what people call as globalization. Interestingly, Beneria begins the section on this argument by quoting a comment attributed to Westerners in the New York Times,

"capitalism without bankruptcy is like christianity without hell"

The comment was taken from an article on Asian Crisis that maintains that Asian corporations failed during the crisis but without disappearing from the market, or in other words, without "going to hell". This points to, as Beneria argues, a salient question about the nature of market and of capitalism. She attests that the integrative process of the world market, which has been unprecedented, is not something that should be taken for granted. While Polanyi argues that the construction of national market during  the nineteenth and early twentieth century in Europe was a product of state action, Beneria claims that the construction of global market occurs through the intervention of international institutions, such as free trade areas, common markets, etc., international organizations, such as the World Bank and the IMF, and powerful state governments, as well as private actors, such as banks and TNCs.

At this point, we have been briefly explained, that market (with invisible hand) is a product of state action, that the social construction of market has excluded women in market realm, that global market has been constructed by international institutions, international organizations, powerful state governments and private actors. This gives a way to understand gender and globalization. As mentioned earlier, globalization, or more precise to say, global market requires free market. This plight of free market has been excluded women. This, at the first place, seems to be contestable especially because it has been argued that globalization has brought about positive impact on women, such as women participation in the labour market. However, globalization actually, and unfortunately, reinforces a gender-biased market. Despite increasing women participation in the workforce, they are predominantly concentrated into low-paying jobs, into labour-intensives industries characterized with high violation of labour rights, into sectors that highly depend on cheap labour. Women's domination in these types of jobs, industries and sectors is, among others, attributed to the construction of women or femininity as cheap labour. Moreover, the concentration of women in, for example, garment industry, is because women are perceived to be nimble finger. However, it still leaves the question why their nimble finger talent is not highly paid? Well, as the scholar argues, the skill itself is a gendered notion. Why women's skills to do the housework are regarded as low skills, which then justify their low wage/payment? This kind of rationale connects to the claim on the construction of women as cheap labour. Not only are their skills regarded as low skills, but also their characters, such as docile, make them as perfect figures for cheap labour.