Colin Leys & Barbara Harriss-White
April 2, 2012.
The dominant process underlying the transformation of life in all societies, since at least the mid-nineteenth century, is the conversion of things and activities into commodities, or commodification. In advanced capitalist countries this process is now outstripping our political and social capacity to adjust to it. Any useful economic analysis needs to foreground this process. Mainstream economics does not do this.
Commodities & commodification
Not everything useful is a commodity. What makes anything a commodity is the possibility of trading it for profit. Apples grown in someone’s back yard are not commodities; apples become commodities only when they are grown for sale. Under capitalism, nothing is produced that can’t be sold for profit, so the production of commodities is capitalism’s raison d’etre. The Italian economist Piero Sraffa ↑ even defined capitalism as ‘the production of commodities by means of commodities’ – meaning, by means of production that are also traded: i.e. not only raw materials and machinery, but also labour which under capitalism is sold by workers and bought by employers.
Competition forces employers to maximise profits or go under. They can maximise profits in various ways, many of which tend to convert things or services into new commodities. The conversion of independent farmers and craftsmen into wage labourers created a demand for ‘wage goods’ – i.e. everything from bread and beer to shoes, which were needed by workers who could no longer produce them for themselves - and for commodified services, such as transport. Each of these became fields of new capitalist production, with similar knock-on commodifying effects in other fields of activity.
Over time, everything that enters into capitalists’ costs of production, whether it is a material good or an activity, becomes commodified, while more and more things enter into capitalist production. A major driver of commodification is the need to cut labour costs, but it can also have knock-on effects: for example, the technology developed to cut labour costs in one field creates possibilities for creating new wants or needs in another. The internal combustion engine was invented and developed for a variety of industrial purposes before its widespread use for transportation was realistically envisaged. It took half a century before petrol-driven cars became a consumer good and a universal want, and eventually a universal need. Similar new wants that may become needs, from mobile phones to electronic books, have been and are constantly being created by the development of digital communication technology.
The logical outcome of this process is the commodification of everything, unless political or social barriers prevent it. Karl Polanyi ↑ famously proposed that there was a ‘double movement’ in history which repeatedly led to the reassertion of state control to bar the commodification of everything, but failed to identify a mechanism which assured this. With the advent of global capitalism, and in the absence of a global state, no such mechanism is in sight. Recent examples of such barriers are the intervention by the US government to prevent the human genome becoming a commodity belonging to Craig Venter’s ↑ Celera company, and the public reaction which led to the abandonment of the British government’s plan to privatise publicly-owned forests ↑ . But more often the obstacles are overcome, circumvented or removed, as in the successful patenting of individual genes and viruses by profit-oriented researchers, or the (often violent) privatisation of the Brazilian rain forest and common lands [pdf] ↑ in many parts of the world from Bangladesh to Colombia.
When the commodification of all of nature ↑ (including human nature – our dreams and fears, as well as our genes) becomes so familiar as to be seen as normal, few effective limits to commodification will remain. The process has already gone very far. Most of the world’s agriculture and food production has already been commodified. So have many domestic activities, at least in middle-class households – keeping food fresh has been replaced by fridges, washing clothes by washing machines, cooking by buying pre-cooked food and restaurant meals. Not only have farmland and fresh water supplies been commodified, but also parts of the oceans (through the creation and sale of exclusive fishing and drilling rights), and even air itself (carbon trading is - in theory - a market for fresher air).
Even the functions of the state are being commodified: not just the provision of public goods and services, such as electricity and airport operations, but activities hitherto seen as quintessentially public, such as prisons and policing, and even including core responsibilities like policy ↑ . Policy-formulation is contracted out to think tanks, foundations and management consultancies; publicly-collected data is entrusted to private companies to keep and sell.
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