Market economies , society and the environment

One of the key ideas of Karl Polanyi, expounded in The Great Transformation, is that the creation of markets in labour and land that are required for a self-regulating market economy destroys society and nature. In this paper I explore three elements of the conceptual framework such markets impose in an attempt to understand why such markets are so destructive. I draw on the work of Eric Fromm and on the recent experience of Ladakh, a remote Himalayan region, now within the boundaries of the modern Indian State, which has been transformed in the past few decades by development. The rapid pace of changes, which in other countries have taken place over centuries, makes the impact of the change to a more market-based society more obvious in Ladakh than elsewhere (see Norberg-Hodge, 1992). I then discuss an alternative conceptual framework to that of neo-classical economics – that provided by Aristotle in his writings on economics and consider what the alternative to the market economy might be.