The missing movement: a Polanyian analysis of pre‐crisis America

The purpose of this paper is to seek to apply Polanyi's theory of the double movement as a response to the effects of economic liberalization and globalization to the pre‐2007 American economy. In so doing, it seeks to ascertain the reasons why this assumed double movement did not materialize until after the post‐2007 global economic crisis. Design/methodology/approach – This paper is structured as a theoretical and historical analysis, building upon Polanyi's nineteenth century observations and applying them to contemporary policy economic and social experience in the USA in the late twentieth century. The argument proposes a correlation between the missing and/or delayed movement and the role of access to debt and participation in equity markets. Findings – This paper argues that Polanyi's concept of a societal countermovement has been absent from the post‐1970 period of economic liberalism and globalization until just recently due to an explicit attempt by the forces of capital to circumvent its role in lessening the harmful effects of American capitalism. In particular, the double movement that should have sought to lessen income inequality, unemployment and wage stagnation was instead replaced by access to cheap credit and the democratization of market investments that spurred consumer purchases and a false belief that what was good for the markets was good for working class Americans. Research limitations/implications – This paper highlights the need for ongoing research into the sociotropic nature of trade and of economic policy, and its evolution throughout the contemporary period of economic uncertainty and economic transition. Practical implications – The paper proposes several policy implications arising from the contemporary application of Polanyi's double movement, notably related to international trade and public and political support for ongoing trade liberalization. Social implications – This paper highlights important connections in the relationship between economic policy and the day‐to‐day lives of those who are governed by it. Building on “everyday political economy”, it provides a foundation for arguments that a new balance must be found between economic globalization and transnational capital interests and domestic stability. Originality/value – This paper promotes a novel approach to understanding the political economy of pre‐2007 America, in particular the reflexive nature of economic policy and societal perceptions.