"The flow of life must be controlled at its source" — Karl Polanyi

The Commonplace · No. 3

One thought from the past every so often — reflected upon briefly — because past intelligence left mothballed is present potential wasted.

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At the bottom of this post is a brief publication update

“It is a commonplace that to ensure peace one must eliminate the causes of war; but it is not generally realized that to do so the flow of life must be controlled at its source.”

— Karl Polanyi in The Great Transformation — The Hundred Years Peace, 1944

A brief thought

I am unsure whether to find this thought comforting or frightening. What Polanyi meant with “the flow of life” is the social, economic, and political processes that make states function and dynamically move. Such things include population pressures, dynastic disputes, trade wars, nationalist movements and even the silting of an estuary.

These processes move constantly according to the laws of life and the system we live in. Think for example of the rise of China, its large population was a source of its power and industrialization — its population decline will likewise now be the cause of instabillity in both the world economy and, likely, geopolitics. These processes continuously move, and must therefore be anticipated to prevent them from causing conflict.

What Polanyi therefore means with “must be controlled at its source” is that peace requires an intervention in this upstream section of the vitality of nations — the internal political and social life, before grievances or imbalances crystallise into interstate conflict.

What Polanyi describes in this chapter is how a complex system for maintaining relative peace took shape in the aftermath of the Napoleonic wars and the Congress of Vienna in 1815. The underlying mechanism was the balance of power — the principle, as Polanyi puts it, that three or more power units will always combine the weaker against the strongest. But the balance of power, left to itself, produces survival through war, not peace.

There had just been a revolutionary wave that had haunted the aristocracies of Europe. They had every interest in general peace and stability. But as Polanyi noted: “Interests, however, like intents, remain platonic unless they are translated into politics by the means of some social instrumentality.” The interest in peace was not enough, for the movement of “the flow of life” was continuous. Intervening institutions were therefore required.

In the first half of the century, there was the Holy Alliance, underpinned by a clergy that reached into every parish and an aristocratic kinship network that cut across borders. The hierarchies of blood and grace, as Polanyi calls them, could suppress the conditions for conflict at the level of social organisation itself, before grievances crystallised into interstate war.

In the second half, the Concert of Europe lacked those tentacles entirely. It was, at best, a loose federation of sovereign states meeting occasionally and eyeing each other with jealousy. And yet it maintained peace on a far larger scale than the Holy Alliance ever had. The explanation, Polanyi argues, was haute finance. International banking houses, the Rothschilds above all, functioned as the only supranational link between political government and economic life. They had no interest in general war, which would destroy the monetary foundations on which their business rested. By controlling credit, tying governments to the gold standard, and in some cases administering state finances directly — as when the Dette Ottomane was established in Constantinople after Turkey’s 1875 default triggered immediate military conflagration — haute finance reached into the internal life of states and shaped their political options before those states could generate destabilising moves.

It was, in other words, the social instrumentality the Concert of Europe itself could not be.

But once the balance of power was upset, this system too could no longer function.

“In 1904, Britain made a sweeping deal with France over Morocco and Egypt; a couple of years later she compromised with Russia over Persia, and the counteralliance was formed. The Concert of Europe, that loose federation of independent powers, was finally replaced by two hostile power groupings; the balance of power as a system had now come to an end. With only two competing power groups left, its mechanism ceased to function. There was no longer a third group which would unite with one of the other two to thwart whichever one sought to increase its power.”

While pondering the closure of the Strait of Hormuz, this quote came to mind. If there is a more literal metaphor for controlling the flow of life at its source, I would love to hear it. Unfortunately, the fertiliser crisis that is coming is going to lead to food shortages in poorer countries, but the economic interests of energy were probably even more important.

It also got me wondering whether we are lacking a similar binding social instrumentality today. The instability we are seeing is a crisis in the social fabric of world order itself. Political systems have become too divergent in character, and their leaderships increasingly find it difficult to speak to one another across that divergence. Finance now seems to be split between blocs, and it does increasingly seem that on the global scale, there is an emerging bipolarity, which is a worrying sign to me.

I had this chapter in the back of my mind while editing tomorrow’s interview on the Middle Eastern balance of power. Stay tuned for that!

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Brief publication update

I have decided to stop making this a weekly thing — I will publish this format when the moment calls for it. The publication has momentum right now, and that momentum is pulling me toward larger pieces. Better to follow the energy.

Tomorrow’s piece will be worth your time. The analyst I interviewed appears regularly on Dutch television and knows the Middle East as well as anyone I have spoken to. Once there is more clarity around the deal, I will also publish a conversation with an Iran expert.

By the time I wake up tomorrow, this publication will likely have crossed 3,000 subscribers. I am genuinely thrilled. In the way where you keep refreshing the page slightly embarrassed at yourself. Thank you for reading, and a particular thank you to my 73 paying subscribers. Once that number hits a hundred I get a verification badge, which will give me a little dopamine hit.

A practical note: once the partial paywall goes up, the price of paid subscriptions rises to €8 per month and €80 annually. Those of you who have subscribed before that point keep the current price permanently — as long as you stay subscribed. It is a small thank you for the early trust, and I mean it.