Austerity, democracy and financialization: the relevance of K. Polanyi in a monetary economy of production in the post-crisis era

Abstract

The importance of money and credit money in Polanyi, base of the stability of exchange relations in a society, establishes a causal link between democracy and human freedom in a monetary economy of production. At the current juncture, The Great Transformation provides elements to discuss austerity policies from the perspective of the deterioration of democracy and freedom in the current post-crisis period. Austerity has hampered the terms of exchange by reducing the creation of wealth and employment opportunities. Not only has it subsumed the human being to rentier capital, but it has also disrupted the market itself. One of the pillars of a democratic society is the existence of a monetary system that guarantees the social relations of exchange and credit money under the principles of ethics, social justice and freedom. Democracy and freedom from the perspective of Polanyi coexist through the good performance of monetary and credit relations that define the to employment through a regulatory state to ensure economic welfare.