Posts Tagged ‘commodity’

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Finally, after years of near-orgiastic celebrations of the internet of things—including, of course, Jeremy Rifkin’s extravagant claim that it would move us beyond capitalism and usher in the “democratization of economic life”—commentators are beginning to question some of its key assumptions and effects. What they have discovered is that the internet of things is, “in reality, a very queer thing, abounding in metaphysical subtleties and theological niceties.”

Nathan Heller, for example, finds that, while the gig economy can make life easier and more financially rewarding for many “creative, affluent professionals,” it often has negative effects on those who do the actual work:

A service like Uber benefits the rider, who’s saving on the taxi fare she might otherwise pay, but makes drivers’ earnings less stable. Airbnb has made travel more affordable for people who wince at the bill of a decent hotel, yet it also means that tourism spending doesn’t make its way directly to the usual armies of full-time employees: housekeepers, bellhops, cooks.

On top of that, the fact that the so-called sharing economy has become a liberal beacon (including, as Heller makes clear, among many Democratic activists and strategists) has meant the displacing of “commonweal projects that used to be the pride of progressivism” by acts of individual internet-based exchange.

Perhaps even more important (or at least more unexpected and therefore more interesting), Adam Greenfield focuses on the problematic philosophical assumptions embedded in the ideology of the internet of things.

The strongest and most explicit articulation of this ideology in the definition of a smart city has been offered by the house journal of the engineering company Siemens: “Several decades from now, cities will have countless autonomous, intelligently functioning IT systems that will have perfect knowledge of users’ habits and energy consumption, and provide optimum service … The goal of such a city is to optimally regulate and control resources by means of autonomous IT systems.”

There is a clear philosophical position, even a worldview, behind all of this: that the world is in principle perfectly knowable, its contents enumerable and their relations capable of being meaningfully encoded in a technical system, without bias or distortion. As applied to the affairs of cities, this is effectively an argument that there is one and only one correct solution to each identified need; that this solution can be arrived at algorithmically, via the operations of a technical system furnished with the proper inputs; and that this solution is something that can be encoded in public policy, without distortion. (Left unstated, but strongly implicit, is the presumption that whatever policies are arrived at in this way will be applied transparently, dispassionately and in a manner free from politics.)

As Greenfield explains, “Every aspect of this argument is questionable,” starting with the idea that everything—from users’ habits to energy consumption— is perfectly knowable.

Because that’s the promise of the internet of things (including the gig economy): that what individuals want and do and how the system itself operates can be correctly monitored and measured—and the resulting information utilized to “provide optimum service.” The presumption is there are no inherent biases in the monitoring and measuring, and no need for collective deliberation about how to solve individual and social problems.

The ideology of the internet of things is shorn of everything we’ve learned about both epistemology (that knowledges are constructed, and different standpoints participate in constructing those knowledges differently) and economic and social life (that the different ways the surplus is produced and distributed affect not only the economy but also the larger social order).

It seems the conventional ways of thinking about the internet of things are merely an extension of mainstream economists’ ways of theorizing the world of commodity exchange, allowing a definite social relation to assume the fantastic form of a relation between things.

That’s where metaphysics and theology leave off and the critique of political economy begins.

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In a society in which the products of human labor take the form of commodities, there’s a tendency to think a commodity’s exchange-value is equal to its value to society.

That’s what neoclassical economists do. So, apparently, does Marco Rubio.

Tuesday night, in the fourth Republican debate, Sen. Marco Rubio decided to make a point about the state of wages, education, and employment in America by comparing welders with philosophers. “For the life of me, I don’t know why we have stigmatized vocational education,” Rubio said. “Welders make more money than philosophers. We need more welders and less philosophers.”

Now, it is true, the labor embodied during the course of producing a commodity is not socially validated unless and until it is exchanged in a market. The same holds for the ability to work (although, to be sure, labor power isn’t actually produced like other commodities). In both cases, within capitalism, private labor is transformed into social labor via the market.

However, as philosopher (and friend) Avery Kolers explains, that doesn’t mean the “social worth of a profession tracks the market price it commands in the current economy.”

It is false for at least two reasons. First, it is false because current market prices are distorted by a wide range of diseconomies that have funneled virtually all gains from the recovery into the pockets of the wealthiest Americans. The US economy shovels massive externalitiescosts and risks that fall on those who don’t incur them – onto working people, future generations, and the natural environment, while the wealthy few hoard the benefits. One particularly important case is carbon pollution. Because market prices do not reflect these externalities, all prices in the economy are distorted, including the price of labor and the prices of the machines that replace human labor. So there is no reason to think that the price my labor commands in the current economy is the price my labor would command in an actual market — an economy where costs were internalized, that is, paid by those who produce them. The day I hear Republicans talk about making polluters pay is the day I’ll begin to believe that they care about genuinely free markets.

But even if we made it so that rich people could not offload costs onto poor people, it would still not be the case that the social worth of a profession would be determined by the price its members could command on a market. Market prices reflect supply and demand. If there is a glut of X and a shortage of Y, the price of X goes down and that of Y goes up. It has nothing to do with the social worth of either thing. Worth is a completely different issue; English teachers, social workers, poets, and of course, Republican presidential candidates, are currently in higher supply than demand; this diminishes their wages and employment opportunities in these fields, but it says nothing at all about their social role or value.

To be clear, even if a commodity’s value were equal to its exchange-value (i.e., in the absence of externalities), that doesn’t mean we, as a society, need to make our decisions based on exchange-values alone.

It is only the hubris of neoclassical economists and politicians like Marco Rubio that presumes a commodity’s market price is the sole criterion of its worth to society.

My Notre Dame colleague and friend Ben Radcliff restates his case for increased happiness. The key? The decommodification of labor.

As Radcliff sees it,

First, when people become commodities they become subject to pitiless market forces beyond their control. They face a world characterised by chronic insecurity, since the market for the sale of their labour is, like the market for any commodity, subject to uncontrollable fluctuation.  People become dependent on forces indifferent to them, or to any individual. As the Danish sociologist Gøsta Esping-Andersen put it in The Three Worlds of Welfare Capitalism (1990), ‘the market becomes to the worker a prison’. To survive and try to flourish, people adopt the values and norms of the market prison – competitive individualism, egotism, a focus on short-term material gain. In practice, these values detract from a satisfying life.

Commodification has another, equally destructive aspect. When people are reduced to commodities, they lack the ability to make moral claims on society. Just as we have no moral responsibility to bushels of wheat or consignments of mobile phones, we have no moral responsibility to workers who are conceived of as commodities, labour units instead of people. Not only is a commodity without a right to a job to begin with, it certainly has no right to paid sick days or vacation time, to pensions or healthcare, or to protection against arbitrary dismissal, to say nothing of a guaranteed severance package or similar redundancy benefits.

Rather than being treated with dignity and respect – as valued members of a community whose work contributes to the general good – workers as commodities are merely another factor of production, no more worthy of considerate treatment than the machines they manipulate.

Therefore, he recommends a series of changes—a real social safety net, stronger unions, and so on—that he considers to be essential to move in the direction of decommodifying people and of increasing happiness.

If he’s right—and I think he is—why not just accept the logic and eliminate wage-labor entirely?

I don’t know if it’s the promised land. However, if people were not forced to have the freedom to sell their ability to work to someone else, they (and all of us) would certainly be a whole helluva lot happier.

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The Federal Reserve Bank of Atlanta has confirmed what many of us have suspected for a long time: job tenure is declining not just for millenials, but for workers of all wages.

What we see in this chart—using the 20- to 30-year-olds, for example—is that the median job tenure was four years among those born in 1953 (baby boomers) when they were between 20 and 30 years old. For 20- to 30-year-olds born in 1993 (millennials), however, median job tenure is only one year. Similar—and some even more dramatic—declines occur across cohorts within each age group.

Declining job tenure is not just all about millennials having short attention spans. In fact, there is a greater (five-year) decline in median job tenure between 41- and 50-year-old “Depression babies” (born in 1933) and 41- to 50-year-old GenXers (born in 1973).

The authors of the report dispute the attention-span explanation for declining job tenure. But then they go on to paint a rosy picture of what this means—for workers (“a world of possibilities that our parents and grandparents never dreamt of”!) and for the economy as a whole (“the flexibility of workers seeking their highest rents and the flexibility of firms to seek better matches for their needed skills mean greater productivity—not to mention growth—all around”).

What the authors fail to mention is that declining job tenure across the board means much higher corporate profits (since employers can hire and shed workers more easily) and a lot more work for workers (since they have to spend more time and energy making themselves “attractive” to employers and figuring out how they’re going to survive between jobs).

Declining job tenure—what mainstream economists refer to as “flexible” labor markets—is the natural outcome of the commodification of labor power. The only solution to the problem, then, is to treat people’s ability to work as something other than a commodity. Then, we would have real flexibility in our work and in the rest of our lives.

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I guess I was right (back in 2011) about one thing: we were witnessing just the beginning of colleges and universities offering massive on-line courses. And, I thought at the time, the interesting thing to watch was how the institutions would turn those courses into commodities.

Well, that day has come. And quickly. We’re now in the midst of the transition from Massive Open On-line Courses to Massive—but no longer Open—On-line Courses. In other words, on-line courses are being turned into commodities.

Coursera is doing it, having put together deals with ten public universities. So is Semester Online, with six private universities (including my own). They’re both putting together courses for which students will receive credit and that will only be available for students (or their institutions) that pay fees. (The Chronicle of Higher Education has posted the University of Kentucky’s contract with Coursera.)

What’s the significance of this move? Duke, which has been actively involved in on-line courses through Coursera, has recently opted out of Semester Online, the for-credit version of on-line education.

Does this mean we’re going be seeing a handful of prestigious universities at the top, producing MOOCs and MOCs (but making sure their own students still study in classrooms and residential environments), and all the other colleges and universities at the bottom (like Massachusetts Bay Community College) forced to have the freedom to pay for those courses so that their students can have the appropriate certified literacies to make it in the world?

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So, what does this mean for aspiring, keep-up-with-the-Joneses universities in the middle? Two things, I think: first, it’s an attempt to develop the “branding” of the university, by producing and disseminating the kinds of MOOCs that have achieved such success at Stanford and elsewhere. MOOCs will take their place alongside athletic programs and branded T-shirts as ways such universities are using to attempt to make a name for themselves (even while they undermine the quality of the education they offer to their students). Second, the production and purchase of MOCs represent an attempt to increase in the productivity of faculty labor, by allowing more students to get course credit in activities beyond the classroom. It signifies a shift, in other words, from “more butts in seats” to “more butts in front of the computer”—under the presumption of course that education is a homogenous commodity, which can equally be produced on-line, in the classroom, and by professors at different universities.

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Paul Krugman is right: it’s extraordinary that, in this day and age—in the midst of the Second Great Depression—there are still many economists who invoke something akin to Say’s Law to describe what is going on in the economy.

To those not familiar with the term, the idea, attributed to Jean-Baptiste Say, is that there can never be overproduction or a general glut of commodities—and therefore a crisis of capitalism—because supply creates its own demand. That is, the presumption goes, no one produces except with the intention of either consuming what they produce or purchasing what other people produce. And, as long as free markets are allowed to operate, the result will be full employment.

Anyone who has studied even a bit of Keynesian economics knows such a view makes no sense.

But anyone who has studied even a bit of the history of economic thought knows that Marx criticized Say’s Law long before Keynes wrote the General Theory. It’s right there, in volume 1 of Capital—and, even before that, in Part 2 of Theories of Surplus-Value. In fact, Marx chides David Ricardo for relying on the “childish babble of a Say,” which he considered not “worthy of Ricardo.”

Marx develops his critique of Say’s Law almost at the very beginning, even before introducing capitalist production per se. All he needs is commodity production and the “metamorphosis” of the commodity into money. It’s precisely the introduction of money that, in Marx’s view, both expands and destabilizes exchange, because it is now possible to sell without purchasing (and thus to hold onto the money until the time is right to turn around and make another purchase).

Therefore, the only world in which Say’s Law might hold is nonmonetary or barter exchange: when, in fact, a sale (on the part of one producer) is also necessarily a purchase (by someone else).* Once money is introduced, Say’s Law no longer holds—and the possibility of crises exists.

What this means is that anyone who, today, holds to Say’s Law must be presuming a world of barter, and thus an economy without money. It’s no wonder, then, that neoclassical economics, based on the “childish babble of a Say,” has nothing to offer in terms of either imagining the possibility of economic crises or suggesting policies that might get us out of the current mess.

 

* And even then Say’s Law might not hold, if someone goes to market with the goods they’ve produced and doesn’t find someone who has what they want and wants what they have.

Thomas Locher, “The Mystical Character of Commodities
Does Not Originate, Therefore, in Their Use Value” (2007)

Right now, morality seems to be calling into question faith in free markets.

There is, of course, the new book by “rock star professor” Michael Sandel, whose views I have engaged here.

Putting a price on a flat-screen TV or a toaster is, he says, quite sensible. “But how to value pregnancy, procreation, our bodies, human dignity, the value and meaning of teaching and learning – we do need to reason about the value of goods. The markets give us no framework for having that conversation. And we’re tempted to avoid that conversation, because we know we will disagree about how to value bodies, or pregnancy, or sex, or education, or military service; we know we will disagree. So letting markets decide seems to be a non-judgmental, neutral way. And that’s the deepest part of the allure; that it seems to provide a value-neutral, non-judgmental way of determining the value of all goods. But the folly of that promise is – though it may be true enough for toasters and flat-screen televisions – it’s not true for kidneys.”

And then there’s the recent survey by the Public Religion Research Institute (whose web site is not working right now), cited by Thomas Edsall [ht: bn], on whether or not capitalism is compatible with Christian values.

As it turns out, the answer depends on the partisan political identities of the respondents.

By two to one, 53-26, Democrats believe that capitalism and Christianity are not compatible. Republicans, in contrast, believe there is no conflict, by a 46-37 margin. Tea Party supporters are even more adamant, believing that capitalism and Christian values are compatible by a 56-35 margin.

The general public, by a 44 to 36 margin, believes capitalism is not compatible with Christian values.

There are positive signs, then—from the worldwide interest in Sandel’s book and a survey of the U.S. population—that moral and religious discourse represents a challenge to free-market capitalism.

The only caution I’d add is that it may be a mistake to set up a simple opposition between moral values and markets, as if a return to values and morality represented a way out of the current crises. We need to recognize that the faith in free markets leading up to the financial crisis of 2007-08, like the call for austerity today, was itself a discourse dripping with moral values.

An alternative might be to declare the long dark night of values and morality finally over and move instead to a materialist critique of political economy—in order to uncover the secret of the mystical character of commodities.

I’m teaching a new course this semester, “Commodities: The Making of Market Society.”

Communion wafers are not one of the commodities I expected to be talking about.

And then there are convents like the Franciscan Poor Clare Nuns of Brenham, Texas, whose founding members fled Cuba in 1960 and began making altar breads for the Catholic Diocese of Corpus Christi. In 1975, the Poor Clare Nuns took over baking hosts for the Austin Diocese as well, stepping in for the Holy Spirit Adoration Sisters, already ripe in years and without new vocations. But only a few years later, as their website has it, “fate, and the Holy Spirit, intervened”:

The Cavanagh Company, that big monstrous secular competition, began changing their breads. They made whole wheat breads. We learned to make whole wheat breads. They made theirs a fraction larger. We had a machine built that would cut them larger. They made theirs a little thicker, with a cross incised in the middle. We couldn’t copy that.

In effect, what the Poor Clare Sisters describe above is the transformation of a good, or a useful object, into a product. For the first time, Communion wafers had arrived in the capitalist marketplace.