Finally, when money is used to make money, for example through currency speculation, then its value becomes so uncertain that it can no longer be used as a means of exchange, putting businesses out of business and generating economic crises. Today we have to add a fourth fictitious commodity – knowledge – a factor of production that is not only an essential ingredient of the modern economy but crucial to the production of the other three factors.
How do fictitious commodities partake in shaping the lived experience of marketization? What is it about the commodification of labour, land, money and knowledge that contributes to social movements? Polanyi points to the act of exchange itself as violating the essential nature of land, money and labour. It is true that trafficking of human beings or trading of human organs may arouse such abhorrence that they can lead to social movements, but they are unlikely to be movements of those who are trafficked or who sell their organs. Alternatively, social movements may be a response to the lifting of protections won against commodification, as when welfare benefits are reduced, trade unions are decertified, labour laws violated or withdrawn.
There are, however, other ways of attributing movement responses to commodification distinct from the process of exchange itself. Polanyi devotes little attention to the processes through which entities are turned into commodities, processes of disembedding the commodity from its social integument. Marx’s original ‘primitive accumulation’ focused on land expropriation for the creation of a labour force dependent on wage labour. Today the dispossession of peasantries is designed to commodify land rather than create a dependent labour force. Whatever the goal, land expropriation has generated much determined resistance. Equivalently, the expropriation of knowledge from the craft worker has historically generated much labour protest. Today, however, it is not only the deskilling of the worker that is at stake, but the appropriation and commodification of the product, namely knowledge itself. In the privatization of universities, for example, dispossession involves turning knowledge from a public good into a sellable asset. This, too, is the source of much protest.
Fictitious Commodities as Sources of Social Movements
| Inequality | |
| Ex-Commodification | LABOR (precarity) |
| Commodification | MONEY (debt) |
| Dispossession | |
| Ex-Commodification | NATURE (destruction) |
| Commodification | KNOWLEDGE (privatization) |
In addition to the dispossession that produces the commodity, another source of social movements is the growing inequality that follows from commodification. For example, in the sale of labour power ‘precarity’ or insecurity has become the dominant experience of increasing proportions of the population. The commodification of labour power has been compounded by the commodification of money, making money from money by gambling on debt.
Another process Polanyi overlooked is the process of excommodification – the expulsion of entities from the market, entities that were formerly commodities but no longer. Excommodification captures the idea that there are lots of useful things that, to their detriment, are expelled from the market. In the face of excommodification, commodification can be a very attractive prospect. In relation to labour, in many places, and increasingly all over the world, expanding reservoirs of surplus labour make it a privilege to be exploited. Vast populations are exiled or confined to the informal sector of the economy where they eke out a hand to mouth existence. In relation to nature it is its incorporation into a capitalist economy that is so wasteful, yet often the absence of the market is responsible for its undervaluation. We are able to plunder nature because it has insignificant market value. Very different are knowledge and money where commodification leads not to waste but to distorted utilization – the production of knowledge is geared to those who can pay for it while the production of different types of money is used to create profit from debt.
Moving beyond the characteristics of fictitious commodities it is important to examine their interrelations in specific historical contexts. Indeed, social movements have to be understood not as a reaction to the (ex)commodification of a single fictitious commodity, but as responses to the articulation of the (ex)commodification of labour, money, nature and knowledge. In the Arab Spring uprising, the intersection of the precarity of labour and indebtedness due to micro-finance proved to be a motive for protest; the student movement can be analysed in terms of precarity of labour and privatization of knowledge production; environmental movements lie at the intersection of the destruction or commodification of nature and the precarity of labour. This framework of fictitious commodities provides an account of the underlying forces driving protest. The articulation of the (ex) commodification of fictitious commodities can also be used to understand different historical periods of marketization.
Polanyi believed that we would never again experiment with market fundamentalism
In truth Polanyi pays little attention to fictitious commodities, more concerned to develop his majestic history that begins with the advance of marketization at the end of the 18th century and ends in the 1930s with a countermovement that brings about new forms of state regulation – both those that advance freedoms, such as the New Deal and social democracy and those that restrict freedoms, such as Fascism and Stalinism. The double threat – on the one hand to the survival of society and, then, to freedom ravaged by the reaction to the destruction of society – led Polanyi to believe that humanity would never again experiment with market fundamentalism. Polanyi was wrong. Beginning in 1973 there developed a new round of market fundamentalism which has had far reaching consequences for the history of capitalism and the specificity of the contemporary period.
Three waves of marketization and the countermovements
Indeed, looking back on the history of capitalism that Polanyi analyses and its development to this day, one can see three waves of marketization, each with their associated, real or (in the case of the third wave) potential countermovement. Referring to English history – the main focus of Polanyi’s analysis – the first wave can be said to begin at the end of the 18th century with the Speenhamland Law of 1795 which became a critical obstacle to the development of a national labour market that would only crystallize with the New Poor Law of 1834. The abolishment of the Speenhamland Law and the unleashing of market forces generated countermovements through which society sought to protect itself: the formation of a working class though the factory movement, cooperatives, trade unions, Chartism and the formation of a political party, factory laws and social legislation.
The second wave of marketization began after the First World War with a renewed ascendancy of the market that included the recommodification of labour, and the opening up of free trade based on the gold standard. This worked very well for imperial countries like the US and UK, but for competing countries such as Italy and Germany the constraints of rigid exchange rates resulted in catastrophic decline in the economy and rampant inflation that led them to break with the international economy and turn to a reactionary regime of market regulation. This redounded back to the US and the rest of Europe with the Depression that was only counteracted by state intervention and market regulation, in this case of a progressive character. With the defeat of Fascism in the Second World War, the more liberal regimes prevailed. Even in the USSR there was a certain liberalization in the 1950s. In advanced capitalism this period was ruled by Keynesianism and ‘embedded liberalism’ in economics and the end of ideology in sociology,
