Published as Chapter 59 of The Way: An Ecological Worldview, originally published in 1992.
This text is taken from the revised and enlarged edition, University of Georgia Press, Athens, Georgia, 1998.
“Whenever the timber trade is good, permanent famine reigns in the Ogowe region.”
“Free trade for a country which has become industrial, whose population can and does live in cities, whose people do not mind preying upon other nations and, therefore, sustain the biggest navy to protect their unnatural commerce, may be economically sound (though, as the reader perceives, I question its morality). Free trade for India has proved her curse and held her in bondage.”
M. K. Gandhi
“The charkha (the spinning wheel) is the symbol of the nation’s prosperity and, therefore, freedom. It is a symbol not of commercial war, but of commercial peace. It bears not a message of ill-will towards the nations of the Earth, but of goodwill and self-help. It will not need the protection of a navy threatening a world’s peace and exploiting its resources, but it needs the religious determination of millions to spin their yarn in their own homes as today they cook their food in their own homes.”
M. K. Gandhi
“Let goods be homespun whenever it is reasonably conveniently possible; and above all, let finance be preferably national.”
John Maynard Keynes
“Free traders, having freed themselves from the restraints of community at the national level and having moved into the cosmopolitan world, which is not a community, have effectively freed themselves of all community obligations.”
Herman Daly and John Cobb
As evolution proceeds, so do natural systems become increasingly self-sufficient, reducing their dependence on forces outside their control. This is an essential strategy for increasing their capacity for homeostasis and hence their stability. Thus Eugene Odum notes how in the case of ecological succession, ecosystems, as they develop, become increasingly self-sufficient and less dependent for their maintenance on resources derived from the outside. Food chains become more complex, with detritus providing an increasingly important source of nutrients.
“In a mature forest less than ten percent of annual net production is consumed (that is, grazed) in the living state: most is utilised as dead matter (detritus) through delayed and complex pathways involving as yet little understood animal-micro-organism interactions.” 
Similarly, inorganic nutrients which were originally derived from outside the ecosystem, slowly become ‘intrabiotic’, being constantly recycled within it. This is an essential strategy for increasing an ecosystem’s ability to maintain its homeostasis and hence its stability. Similarly, with the development of a vernacular community, self-sufficiency increases as dependency on outside sources decreases. Food and artefacts become largely distributed via procedures that observe the rules of reciprocity and redistribution and that are entirely under social control.
In many vernacular societies, what appear to be commercial transactions are, in reality, highly ritualised exchanges embedded in social relations. Thus certain goods are often traded with goods of another sort and even with socially valuable objects, which closely resemble what we would regard as money. But even such trade is not conducted for ‘economic’ motives, as Malinowski insists, with reference to the Trobriand Islands, for
“there is not even a trace of gain, nor is there any reason for looking at it from the purely utilitarian and economic standpoint, since there is
no enhancement of material utility through the exchange. . . Thus it is quite a usual thing in the Trobriands for a type of transaction to take place in which ‘A’ gives 20 baskets of yams to ‘B’, receiving for it a small polished blade, only to have the whole transaction reversed in a few weeks time.” 
The same applies to trade with other related social groups. Thus both Mauss and Malinowski have described the large trading expeditions periodically undertaken by the same people. They transported certain types of valuable objects to people living in distant islands visited in a clockwise sequence, while other expeditions carried other kinds of valuable objects to islands lying counter clockwise. The object of these expeditions was not an economic one, writes Polanyi:
“We describe it as trade though no profit is involved; either in money or in kind.” 
Even in the vernacular Indian village where social structure has diverted somewhat from the tribal norm, what one might regard as commercial transactions were, until recently, under social control. A farmer obtained his pots from the village potter and his tools from the village blacksmith, giving them an amount of food in exchange at a rate established by tradition, rather than by blind market forces. What is more, if the local potter were an indifferent craftsman and better pots could be bought elsewhere, this was not regarded as a sufficient reason for abandoning him.
Judged by the values of modern economics, such a system provided no inducement to potters to increase production, or indeed, improve the quality of their produce but this objection misses the point. The trading relations between the different members of a traditional Indian village were primarily designed to satisfy social rather than economic goals. After all, the quality of the available pots is not the primary consideration. The maintenance of social cohesion and stability is much more important.
Mahatma Gandhi understood this well. One of the basic concepts of his philosophy was that of swadeshi, which he describes as that “spirit in us which restricts us to the use and service of our immediate surroundings to the exclusion of the more remote”.  Sunderlal Bahuguna, the leader of the Chipko movement in the Himalayas, regards swadeshi as the most fundamental of Gandhi’s teachings.
Economic development, of course, totally undermines the practice of swadeshi since it is based on the very principle that all considerations, whether moral, social or ecological, must be ruthlessly subordinated to short-term economics. The village community is thereby sacrificed to the overriding ideal of churning out ever greater quantities of bigger and better pots, and of influencing villagers, by every possible means, to increase their consumption of pots way beyond what they need and without any concern for whether there is enough clay for producing them, the effect on the environment of digging up the clay or whether the villagers can, in fact, afford them. Production and consumption, in such circumstances, are no longer subject to any controls, social or ecological. Pots simply proliferate like cancer cells.
In tribal societies, it is only when dealing with complete strangers that the laws of the market are allowed to operate free of social constraints and exclusively market transactions are allowed to occur. For Bohannan,
“A ‘market’ is a transaction which in itself calls up no long-term personal relationship, and which is therefore to be exploited to as great a degree as possible. In fact, the presence of a previous relationship makes a ‘good market’ impossible. People do not like to sell to kinsmen since it is bad form to demand as high a price from a kinsman as one might from a stranger. Market behaviour and kinship behaviour are incompatible in a single relationship and the individual must give way to one or the other.”
This is very much in keeping with the Old Testament precept that
“unto a stranger thou mayest lend upon usury; but unto thy brother, thou shalt not lend upon usury.”
Sahlins shows that it is possible to distinguish between the economic relations within different sectors, such as the house, the lineage, the village, the tribe and those outside the tribe. As we proceed from the former to the latter, so reciprocity and solidarity are slowly replaced by haggling and profit-making, and so do economic relations become increasingly commercial.
That is why the development of the market system within a society could only occur once solidarity and reciprocity within the inner social groupings had waned and the essential difference between social relations within and without these groupings had become sufficiently blurred; in other words, before economic wealth could become man’s principal preoccupation, he had first to be deprived of his social wealth.
Though all societies have possessed an economy of some sort, no economy previous to our time, as Karl Polanyi notes, “has ever existed that, even in principle, was controlled by markets”.  This is not surprising, since only by resisting the power of market forces could “the integrity of our social and ecological systems . . . be maintained for so long”. Once markets became more than incidental to economic life, the societies in which they operated, together with the ecosystems in which the society existed, were condemned to rapid disintegration.
During the Middle Ages in Europe, only resources of secondary importance – spices, candle-wax, oriental silks and luxury articles primarily of interest to the Church and aristocracy – were traded via the market at annual fairs, held at a few major European cities. In the 12th and 13th centuries, however, an economic revolution occurred: the market expanded rapidly until it came to dominate the economic life of many European societies.
Essential to this revolution was the transformation of the key resources – labour and land – into commodities. This was of key significance, for as Polanyi points out,
“Labour is only another name for human activity that goes with life itself, which is not produced for sale but for entirely different reasons, nor can that activity be detached from the rest of life; be stored or mobilised: land is only another name for nature.” 
In medieval Europe, neither labour nor land had previously been exchanged via the market. Mediaeval serfs were bound to their land, but their relationship to their lord was one of mutual obligations rather than of sheer economic expediency, and in exchange they normally had security of tenure. The occupation of land was thus determined by ‘status’ rather than ‘contract’. However, once human life came to be treated as a mere commodity, work ceased to be embedded in social relations, and the ‘whole man’ was replaced by the worker, a new human category.
Whereas vernacular man – the whole man – is a member of a family and community, and has access to land on which to grow his food, the worker lives in a largely atomised society; has been deprived of his land; and can be mobilised to fulfil any function – however socially and ecologically disruptive or morally repulsive – so long as it provides the wage on which he has now become dependent for the satisfaction of his most basic biological and social needs.
The transformation of land into a commodity also had enormous social and economic implications. Contract, established via the market system – rather than status established by tradition and reflecting the society’s social structure – now determined where individual families lived and worked the land.
The resulting pattern of land-ownership may well have satisfied the requirements of the new economic system but it set in train the disintegration of society into mere congeries of strangers. The disintegrated community, what is more, was often deprived of its livelihood, since food was sold via the market and bought by whoever paid the most for it, regardless of the community or society to which he belonged.
Indeed, Polanyi attributes the severe famines, that occurred in India under the British Raj, to the operation of the newly established market system, which destroyed the Indian village community:
“While under the regime of feudalism and of the village community, noblesse oblige, clan solidarity and the regulation of the corn market checked famines; under the rule of the market the people could not be prevented from starving according to the rules of the game.” 
It is the very basis of the market system, once freed of social constraints, that goods should be bought as cheaply as possible and sold at the highest price. This means that there must be one-way traffic of the essentials of life to the rich from the poor, who are thereby condemned to malnutrition and famine. Thus Redcliffe Salaman notes how, in Ireland, during the great famine, corn continued to be exported to England even though millions of people were dying of hunger.
“If it was not available to the local people, it was partly because it was being shipped to England at the rate of 16,000 quarters a week and also because, even if it were not, the Irish could not have afforded it.” 
Today, this traffic is one of the major causes of malnutrition and famine in the Third World, where a high proportion of the arable land – up to 70 percent in certain countries – is used for export crops, marginalising the staple food crops on which the local population depends for its sustenance.
What is more, according to the rules established by the General Agreement on Tariffs and Trade (GATT), the crops, which a country produces, must be exported so long as a market demand exists. Only when malnutrition and hunger prevail can an exception be made, and US delegates at the current Uruguay Rounds of the GATT insist that even in such dire circumstances, food must continue to be exported.
If they have their way, it will thus become ‘GATT-illegal’ for a country to feed its starving people rather than export its goods to the already over-fed. For as cynical as this may seem, it is by doing so that it can maximise its expenditure on the manufactured goods of the industrial countries that control GATT, no human considerations of any kind being allowed to compromise the achievement of this sordid goal. This illustrates the principle that production, governed by ‘market forces’, is not designed to satisfy biological, social or ecological needs.
Kenneth Lux points out that economists must deny the very existence of such needs if modern economic theory is to make any sense at all. The market is seen as catering only for our ‘wants’ which are reflected in ‘effective demand’, and a country is seen as becoming ‘self-sufficient’ once this ‘effective demand’ is satisfied. Thus the modernisation of agriculture through the adoption of the ‘Green Revolution’ is said to have enabled India to achieve food self-sufficiency.
This sounds very impressive, because it suggests that all the citizens of that country are now properly fed; but nothing could be further from the truth.  A recent report by the United Nations Children’s Fund (UNICEF) reveals that about 85 percent of India’s children are now affected by malnutrition and many will be stunted physically and mentally as a result.
To state that India is self-sufficient in food merely means that to put more food in the shops would not lead to further sales, for those who are malnourished do not have the money to buy it – their biological needs not being reflected in the pathetic “effective demand” that they can exert.
Once the market rules our economic life, the natural world is seen to be no more than a source of resources to be commoditised and transformed into cash on the global market. The process is a malignant one. By means of it forests, wetlands, coral reefs, rivers, estuaries and seas everywhere are systematically cashed in, together with all the living things that inhabit them. What happens when all these are gone and the countries are transformed into virtual deserts, does not seem to concern either our politicians, industrialists or economists.
To preserve any resource at all that is capable of being commoditised and cashed-in is only possible by keeping it outside the orbit of the global market. In New Zealand, it is illegal to sell trout in shops. They are reserved for anglers and it is for this reason that there are still trout to be caught in the country’s lakes and rivers. Only by setting up National Parks in which living things are kept out of the orbit of the market can many species be preserved, though one can unfortunately predict that if economic development proceeds for very much longer, the pressures on many of these parks will become irresistible.
Significantly, in certain parts of Tanzania where the economy has largely collapsed and there is not enough money to repair the roads, people are once again beginning to eat properly for, no longer able to export their food on the global market, they are free once more to eat it themselves.
The export process, what is more, is often as destructive to the importer as it is for the exporter: it is, in E. F. Schumacher’s phrase, “a process of mutual poisoning”. For, the import of cheap food from areas where it can be grown particularly cheaply, or is heavily subsidised by the state, to areas where, for various reasons, it is more expensive to produce, has ruined farmers throughout the Third World.
The adoption of modern agricultural methods – imposed by international agencies such as the IMF on its debtor countries – increases the dependence of farmers on imported farm machinery, hybrid seeds, fertilisers and pesticides, which they can ill afford, especially as the prices of these off-farm inputs continue to increase and farmland becomes increasingly degraded. Such farmers are condemned to becoming ever more impoverished until eventually they must leave their land and seek refuge in the slums that surround the nearest conurbation, a fate which, on current trends, awaits the bulk of the Third World’s rural population.
The lot of the traditional craftsman or artisan is very similar. Mahatma Gandhi’s constant theme was how Lancashire’s mass-produced textiles had destroyed India’s artisanal, village-based textile industry, causing the degradation of rural life. Carders, dyers, spinners and weavers – droves of them, who kept the village economy going – were ruined and the Indian village was deprived of its economic and social life.
It is for the same reasons that the small farmer and the artisan have been virtually eliminated in Britain and North America and are rapidly disappearing in the rest of Europe. Even the medium-sized farmer and the medium-sized company are everywhere under stress. During the present recession (1991), the European agricultural community is in a state of near bankruptcy and only the biggest farms have any prospect of survival. In the USA, agriculture is in similar straits. The plight of small to medium businesses is scarcely better, with 900 or so going bankrupt every week in the UK at the time of writing.
That the future (temporarily at least) lies with the large corporations – in particular the transnational corporations – no-one familiar with current trends can doubt. As the market expands to encompass the entire world and becomes progressively ‘freer’, the greater must be the niche it provides them.
Free trade sounds highly desirable; its proponents make it appear that it frees the oppressed individual from yet another set of shackles previously imposed on him and on his ancestors by tyrannical customs and governments. But the transnational corporation is the ‘individual’ that benefits from free trade; and the freedom it provides is the freedom to cut down virgin forests in order to produce plywood, lavatory paper and the Sunday edition of the New York Times.
It is the freedom to erode, salinise, waterlog, compact and desertify agricultural land so as to produce the cheap raw materials for the food-processing industry. It is the freedom to pillage the oceans with vast trawlers that literally annihilate fish populations with ‘wall of death’ drift nets that are often 60 miles long. It is the freedom to grub up the world’s remaining coral reefs that protect vulnerable islands from the waves and that are among the most productive of all ecosystems, in order to provide specimens for souvenir shops.
It is the freedom to drain the pathetic remains of the world’s once extensive wetlands in order to provide more pastureland for the world’s over-inflated livestock population, or to make available ever more building land for the developers. It is the freedom to churn out ever greater amounts of ever-more toxic chemicals to spread on our fields, release into our rivers and ground waters, dump into holes in the ground, or inject under pressure into deep bore-holes – from where they find their way into our food and drinking water.
It is the freedom to destroy the ozone layer, which protects us from lethal ultraviolet radiation, in the interests of using patented CFCS in cosmetic sprays, refrigerators, and air conditioners, rather than non-patentable substitutes that would reduce the profits of the main producers, Du Pont and ICI. It is the freedom to increase poverty and misery; malnutrition and disease; to extinguish tens of thousands, if not hundreds of thousands of species of living things every year, all in order to satisfy the short-term financial interests of a few utterly irresponsible industrialists and the bureaucrats and politicians who live off them.
This is the freedom that free trade provides and those are the interests that the current GATT proposals are designed to serve. If approved, they will have delivered the world to its pillagers on a plate, to do with it as they like.
What is required is just the opposite – a transition to a world of largely self-sufficient communities, carrying out their economic activities at the level of the family, of a the small artisanal enterprise and the community itself, largely to satisfy local needs via local markets. Only in this way can economic activity be subordinated to biological, social ecological and moral imperatives, as indeed it must, if we are to survive for long on this beleaguered planet.
|1.||Eugene P. Odum, “The strategy of ecosystems development”; pp.262-270. Science 164, 1969.|
|2.||Bronislaw Malinowski, Argonauts of the Western Pacific; p.176. E. P. Dutton, New York, 1961. First published 1922.|
|3.||Karl Polanyi; p.57. 1945.|
|4.||M. K. Gandhi, An Autobiography; p.350. Phoenix Press, London, 1949. Translated by M. Desai.|
|5.||Polanyi, ibid.; p.56.|
|6.||Polanyi, ibid.; p.78.|
|7.||Karl Polanyi, The Great Transformation; p.160. Beacon Press, Boston MA, 1957. First published 1944.|
|8.||Redcliffe Salaman, The History and Social Significance of the Potato; p.293. Cambridge University Press, Cambridge, 1949.|
|9.||Kenneth Lux, Adam’s Mistake: how a Moral Philosopher Invented Economics and Ended Morality; p.107. Shambhala, Boston MA, 1990.|