Plunges into utter destruction and the limits of historical capitalism

The chapter argues that it is necessary to supplement Polanyi’s analysis with an explicit theory of capitalism as a world-historical system beset by a fundamental contradiction between profitability and social legitimacy in order to understand the project to create self-regulating markets (and its limits). This contradiction led to an alternation between crises of profitability and legitimacy, and to successive pendulum swings between periods when the predominant tendency is towards protecting “fictitious commodities†(e.g. in the era of Keynesianism and developmentalism), and periods when the predominant tendency is towards stripping them of protections (e.g. neoliberal era). The chapter identifies four crises of the long twentieth century and links them to this pendulum swing as well as to the establishment and limits of successive world hegemonies. The chapter concludes by interrogating why the world’s ruling groups (then and now) failed to shift course in time to avert a global slide into systemic chaos.