“Nineteenth-century civilization rested on four institutions. The first was the balance-of-power system which for a century prevented the occurrence of any long and devastating war between the Great Powers. The second was the international gold standard which symbolized a unique organization of world economy. The third was the self-regulating market which produced an unheard-of material welfare. The fourth was the liberal state. Classified in one way, two of these institutions were economic, two political. Classified in another way, two of them were national, two international. Between them they determined the characteristic outlines of the history of our civilization.
Of these institutions the gold standard proved crucial; its fall was the proximate cause of the catastrophe. By the time it failed, most of the other institutions had been sacrificed in a vain effort to save it. But the fount and matrix of the system was the self-regulating market. It was this innovation which gave rise to a specific civilization.”

— Karl Polanyi , book The Great Transformation

The Great Transformation (1944), Ch. 1 : The Hundred Years' Peace

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Karl Polanyi 10

economist, philosopher and historian 1886–1964

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“Writing in 1944, the year of the Bretton Woods Conference, Polanyi suggested that the extension of the institutions of the market over the course of the nineteenth century aroused a political reaction in the form of associations and lobbies that ultimately undermined the stability of the market system. He gave the gold standard a place of prominence among the institutions of laissez faire in response to which this reaction had taken place. And he suggested that the opening of national economic decision making to parties representing working-class interests had contributed to the downfall of that international monetary system. In a sense, this book asks whether Polanyi’s thesis stands the test of time. Can the international monetary history of the second half of the twentieth century be understood as the further unfolding of Polanyian dynamics, in which democratization again came into conflict with economic liberalization in the form of free capital mobility and fixed exchange rates? Or do recent trends toward floating rates and monetary unification point to ways of reconciling freedom and stability in the two domains?”

Barry Eichengreen Introduction

Source: Globalizing Capital (2008), Chapter 1. Introduction

“The true nature of the international system under which we were living was not realized until it failed. Hardly anyone understood the political function of the international monetary system; the awful suddenness of the transformation thus took the world completely by surprise. And yet the gold standard was the only remaining pillar of the traditional world economy; when it broke, the effect was bound to be instantaneous. To liberal economists the gold standard was a purely economic institution; they refused even to consider it as a part of a social mechanism.”

Karl Polanyi book The Great Transformation

The Great Transformation (1944), Ch. 2 : Conservative Twenties, Revolutionary Thirties

“Old institutions have shattered, but new ones have not yet emerged. The twenty-first century will be a period in which a range of new institutions, moral systems, and practices will begin their first tentative emergence. The first half of the twenty-first century will be marked by intense social conflict globally. All of this frames the international struggles of the twenty-first century.”

George Friedman (1949) American businessman and political scientist

Source: The Next 100 Years: A Forecast for the 21st Century (2009), p. 64

“The Emancipation Proclamation had four enduring results. First, it gave force to the executive power to change conditions in the national interest on a broad and far-reaching scale. Second, it dealt a devastating blow to the system of slaveholding and an economy built upon it, which had been muscular enough to engage in warfare on the Federal government. Third, it enabled the Negro to play a significant role in his own liberation with the ability to organize and to struggle, with less of the bestial retaliation his slave status had permitted to his masters. Fourth, it resurrected and restated the principle of equality upon which the founding of the nation rested.”

Martin Luther King, Jr. (1929–1968) American clergyman, activist, and leader in the American Civil Rights Movement

1960s, Emancipation Proclamation Centennial Address (1962)

“These same institutions produce quite different effects while they are still being fought for; then they really promote freedom in a powerful way. On closer inspection it is war that produces these effects, the war for liberal institutions, which, as a war, permits illiberal instincts to continue. And war educates for freedom. For what is freedom? That one has the will to self-responsibility. That one maintains the distance which separates us. That one becomes more indifferent to difficulties, hardships, privation, even to life itself. That one is prepared to sacrifice human beings for one's cause, not excluding oneself.”

Friedrich Nietzsche book Twilight of the Idols

Twilight of the Idols (1888)

“Both the control of territory and the political domination of one state over another have profound consequences for international economic relations. However… market power or economic power has itself become a principal means by which states seek to organize and manipulate the international division of labor to their own advantage.”

Robert Gilpin (1930–2018) Political scientist

p, 125
War and Change in World Politics (1981)

“Our political organization, based as it is on an eighteenth-century separation of powers and on a nineteenth-century nationalist state, is generally recognized to be semiobselete.”

Carroll Quigley (1910–1977) American historian

Source: The Evolution of Civilizations (1961) (Second Edition 1979), Chapter 4, Historical Analysis, p. 123

“The nineteenth-century liberal regarded an extension of freedom as the most effective way to promote welfare and equality; the twentieth-century liberal regards welfare and equality as either prerequisites of or alternatives to freedom.”

Milton Friedman book Capitalism and Freedom

Introduction, p. 5
Capitalism and Freedom (1962)

“The orthodox doctrines of economics which were dominant in the last quarter of the nineteenth century had a clear message. They supported laisser faire, free trade, the gold standard, and the universally advantageous effects of the pursuit of profit by competitive private enterprise.”

Joan Robinson (1903–1983) English economist

Introduction, p. vii
Economic Heresies (1971)

“I reduce to two the systems of philosophy which deal with man's soul. The first and older system is materialism; the second is spiritualism.”

Julien Offray de La Mettrie book Man a Machine

p, 125
Man a Machine (1747)

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