Thursday, August 23, 2012

Concise writing is usually clear writing (29) – Karl Polanyi

The Hungarian economic historian Karl Polanyi (pictured) was a clear writer who wrote about complex subjects. His best-known work is The Great Transformation: The Political and Economic Origins of Our Time (1944). Below is an excerpt from Chapter 6, “The Self-Regulating Market and the Fictitious Commodities: Labor, Land, and Money.” It’s not as difficult as you might expect.

...A market economy is an economic system controlled, regulated, and directed by markets alone; order in the production and distribution of goods is entrusted to this self-regulating mechanism. An economy of this kind derives from the expectation that human beings behave in such a way as to achieve maximum money gains. It assumes markets in which the supply of goods (including services) available at a definite price will equal demand at that price. It assumes the presence of money, which functions as purchasing power in the hands of its owners. Production will then be controlled by prices, for the profits of those who direct production will depend upon them; the distribution of the goods also will depend upon prices, for prices form incomes, and it is with the help of these incomes that the goods produced are distributed amongst the members of society. Under these assumptions order in the production and distribution of goods is ensured by prices alone.

Self-regulation implies that all production is for sale on the market and that all incomes derive from such sales. Accordingly, there are markets for all elements of industry, not only for goods (always including services) but also for labor, land, and money, their prices being called respectively commodity prices, wages, rent, and interest. The very terms indicate that prices form incomes: interest is the price for the use of money and forms the income of those who are in the position to provide it; rent is the price for the use of land and forms the income of those who supply it; wages are the price for the use of labor power, and form the income of those who sell it; commodity prices, finally, contribute to the incomes of those who sell their entrepreneurial services, the income called profit being actually the difference between two sets of prices, the price of the goods produced and their costs, i.e., the price of the goods necessary to produce them. If these conditions are fulfilled, all incomes will derive from sales on the market, and incomes will be just sufficient to buy all the goods produced.


On the world’s favorite readability test, Flesch Reading Ease, this excerpt scores a high 52.9 (The Wall Street Journal usually scores in the 40s and most academic writing falls below 30).

In this excerpt, the topic is difficult, the average sentence is long (35.2 words), and 40 percent of the sentences are in harder-to-read passive voice. But the author compensates for these impediments by using short words (average 4.8 letters per word), good sentence structure, and a concise style. Compared to the output of most economists, this is easy reading.

The Takeaway: To improve the clarity of your writing, spend at least 10 minutes a day reading aloud from writers who write clearly. You will see, hear and feel the stark contrast between careful, grown-up diction and the careless, infantile diction that besets us every day.

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