The impossibility of exchange

Posted: 22 December 2015 in Uncategorized


Once again, as every year around this time, mainstream economists (and a whole host of others who take their cues from mainstream economic theory) make a spectacle of themselves trying to make sense of the impossibility of the gift.

What they fail to do, however, is even consider the impossibility of commodity exchange.

Tim Hartford, for example, writes “in praise of Scrooge.” He begins with the familiar neoclassical notion of the deadweight loss of gift-giving (“We spend money on things that people don’t really like — and thereby we waste energy, material resources and labour that could have been far better deployed making something people did want.”) and then proceeds to discuss the “the discrepancy between how we see the world when giving gifts and when receiving them” (such as the fact that “People feel awkward giving money yet are perfectly happy to receive it”).

Which brings us back to Scrooge himself. When he finally did decide to embrace the conventional spirit of Christmas, he didn’t waste his money on demonstrative extravagances for people whose desires he didn’t really understand. Instead, he gave three superb gifts. First, a prize turkey that he knew — thanks to a ghostly premonition — was much needed by the Cratchit family. Second, the gift of his time and attention, playing games and making merry with his nephew. Finally, he gave Bob Cratchit the greatest Christmas gift of all: a pay rise.

And then there’s the American Enterprise Institute’s Michael Strain, who tries to reconcile Christmas gifts (which, when conceived in a properly Christian manner, “are given and received in the service of love”) with what he considers to be the virtues of capitalist markets:

Markets generate wealth on a vast scale, which, used properly, enables the Christian life: It is much easier to live the Christian virtues and to meet our obligations to family and community when we aren’t worried about finding our next meal or freezing to death on a cold winter night. Markets require freedom, which is a virtue too easily overlooked. Markets are structured to enable the mutual benefit of participants.

The true gift may be impossible but, according to Hartford, Scrooge manages to get it mostly right and, in Strain’s view, so do Christians.

And yet neither economist considers even the possibility that markets are impossible. For them, as well as for many advocates of the gift, monetary or market exchange is somehow—in the usual utility-determined, supply-and-demand models—completely transparent and perfectly able to represent already given value considerations (including the meeting of trading partners’ needs) and already constituted subjectivities.

Yet, as I wrote (with my coauthor Jack Amariglio) in Postmodern Moments in Modern Economics,

there is nothing at all “certain” about any act of exchange, and nothing less symbolic and/or less “about” power, responsibility, meaning, and so forth. Likewise, there is something fundamentally “constitutive” about identities and subjectivities in every act of market exchange. Buying and selling are overloaded activities: trading partners not only may be and are of several different minds about transactions; they are also often uncertain as to what exactly such transactions “mean” in terms of their own and others’ wealth and property, the effects on their well-being, who or what subject positions they occupy, and what exactly is being traded.

Consider, for example, market exchanges for turkeys, sweaters, and apartments. All of them involve a significant degree of uncertainty and waste (since we often don’t know what we’re getting, and we are constituted and changed by the act of engaging in market exchanges for our food, clothing, and shelter—including knowing that many others aren’t able to afford the basics). And they often constrain our freedom, since we know that the only way to meet our needs and desires is to purchase commodities, which in turn means selling our ability to work to someone else (who, like Scrooge, gets to decide whether or not we “deserve” a raise) and/or going into debt (and thus being subject to exorbitant interest-rates as well as credit checks and other invasions of our privacy).

Now, to be clear, marking the impossibility of exchange is not intended to erase the real differences between gift and market exchange (or, for that matter, the range of other transactional activities). It’s just a reminder that exchange is just as impossible as the gift—and that, like the gift, it is fragile, indeterminate, and incomplete, not to mention often times violent and unequal.

This is the season of giving gifts—and, perhaps even more important, to consider all the ways commodity exchange itself is impossible.

  1. […] (as in the ghost of Christmases past, e.g., here, here, and here), attention is given over to neoclassical economists, who bemoan the inefficiencies caused by the […]

  2. […] Finally, in this season of the gift, something other than the usual, tired discussion of “deadweight loss” by mainstream economists. […]

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