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An analysis of commodification in The Critique of Commodification provides useful insights, but the exploitation of labour remains key to the system, argues Dominic Alexander

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Christoph Hermann, The Critique of Commodification: Contours of a Post-Capitalist Society (Oxford University Press 2021), xvi, 218pp.

Capitalism is a system of accumulation for expansion, as competition between capitalists for profits drives each business to try to grow larger, and control more of the market, in order to survive. Growth is a by-product of competition which, even in the era of giant corporations, is still the overriding imperative. For capitalist markets to grow, more commodities must be produced, so more areas, geographically in the world and in depth within societies, must be geared towards commodity exchange. This is the process of ‘commodification’, a term that is often used, yet frequently without any profound understanding of the system which produces the phenomenon.

Christoph Hermann in The Critique of Commodification aims in part to distinguish his analysis from the more mainstream criticisms of commodification, where the question is only ‘which goods and services can properly be exchanged for money and which cannot’ (p.5). Criticism of commodification can therefore be found very widely, since there are limits to what is generally acceptable as a commodity: ‘Moralists, consequently object to prostitution, paid surrogacy’ and other trading in ‘non-economic goods’ (pp.5-6). Hermann makes a distinction between the moral and pragmatic objections to commodification, with the latter drawing the line at ‘markets that do not function properly and therefore demand some sort of government intervention’ (p.8). Outside the extreme libertarian right, almost anyone could agree on these kinds of limitations.

Damages of commodification

Hermann’s critique aims to be much more systematic in analysing the full damage done by commodification across the whole range of social life and ecology, as part of a general rather than a limited objection to this central aspect of capitalism. A substantial part of the book therefore draws together examples of the pernicious and destructive effects of commodification in education, in health care, in agriculture and many other areas.

Since only what is profitable will be produced under a commodity system, those that can’t afford the cost will be excluded, from housing, or from health care, where that is marketised, or from education, where that is private, to give just a few examples (pp.63-4). Healthy food becomes unaffordable for many in developed countries, let alone elsewhere (p.65). Drugs are only produced to treat diseases for which the pharmaceutical corporations will find it profitable to offer cures (p.66).

The list is long, and much of it will be familiar to many, but it is salutary to have it brought together in a way that emphasises just how much damage is done through production for profit rather than social use. As an implication, it also clarifies how many social ills are quite unnecessary from the point of view of economic and social capacities, and are merely the result of the system: ‘commodity production has become an obstacle to urgently needed social and ecological transformation’ (p.38).

Hermann is perhaps most interested in the areas where neoliberal capitalism has succeeded in rolling back the gains of the post-war period, saying that what unites various critical views on commodification is that it ‘has greatly expanded in recent decades and that in many cases it has gone too far’ (p.16). It is certainly true that in various ways throughout the world, the market has been imposed or re-imposed in areas like education and health care where it had been, to a greater or lesser extent, limited in operation.

However, he does make clear that the objection must be to the way the system operates as such, rather than simply demanding there be some moderate constraints on it in certain areas. In this, the ecological theme perhaps stands out most strongly, since the argument returns over and again to the corrosive effect of commodification upon natural systems. Most perversely, the destruction of nature increases its ‘marginal utility’, in neo-classical economic language, ‘because it transforms nature into a scarce good’ (p.134).

Since nature has no inherent exchange value within capitalist logic, it actually becomes profitable to destroy it. Capitalism has no ability to protect nature; its logic is inherently damaging to it. The argument throughout the book on this aspect would have been sharpened somewhat by reference to Bellamy Foster’s analysis of capitalism’s creation of metabolic rifts, but the essential point is there, nonetheless.

Hermann proceeds to argue from the destructiveness of commodification that we need to establish a society based on use value rather than exchange value. This will require ‘democratization, sustainability and solidarity’ (p.135), which are each explored in the final chapter. Those are, of course, goals which are widely shared across labour and socialist movements, but the key problem has always been how they are to be achieved. This is particularly so given that the social effects of capitalism have always damaged or limited democracy in general and, more profoundly, atomised people, dividing the working class. Labour movements have had to work constantly to counter these effects.

These are questions that lead away from the subject of this book, but they do highlight how important it is to understand the system in its totality, its tendencies and contradictions, in order to find the path to something better. Conspicuously absent in the closing chapter on the creation of a use-value society is a systematic consideration of the role of the working class, and a certain eclectic approach seems to flow from that. These problems are rooted in the starting points of the argument on the nature of commodities, exchange value and therefore the nature of commodification itself.

Labour as commodity

Hermann acknowledges that labour as a commodity is essential to capitalism, but does not consider it as a useful ‘example to explain the workings of commodification’ as it is an ‘atypical commodity’. This is because the purchaser of labour power is not able to separate that commodity from the person of the worker, and its use ‘depends on the consent and initiative of the worker to perform the required tasks’ (p.13). As a result, capitalists have historically tended to reduce skilled tasks into more quantifiable unskilled tasks, as one major strategy to gain more control over the expenditure of labour power.

Hermann seems to conclude from this that Polanyi was right to call labour a ‘fictitious commodity’, although later on he defines a ‘fictitious commodity’ as one ‘in which goods and services are commodified without the help of markets, money and the profit motive’ (p.38). This clearly doesn’t fit the case of labour, which is transformed into a commodity precisely through labour markets. Hermann’s term ‘fictitious commodification’ relates usefully just to a few special cases, such as the artificial markets created in public services, the NHS being a prime example. Regardless, labour as a commodity is effectively sidelined in the general discussion of commodification.

Yet, the labour commodity is the essential one for capitalism to exist, since it enables capitalists to pay workers less than the value of their labour power, and thus to extract surplus value. Hermann, however, at points seems to understand a commodity not in terms of the social relations in which it is embedded, but rather in the degree to which its nature has been transformed: ‘Commodification not only changes the social meaning of previously non-commodified goods and services, it also alters their materiality and manner of production and consumption’ (p.12). It is from this position that he analyses commodification as proceeding in three stages: formal commodification, real commodification and fictitious commodification.

This scheme is drawn by analogy from Marx’s distinction between the formal and real subsumption of labour to capital. In the earlier phases of capitalism, workers were often skilled artisans who owned their own equipment, a hand-loom, for example. They received materials from a merchant-capitalist, raw cotton say, from which they manufactured commodities, such as cloth, which was then sold back to the merchant. Market processes determined the price hand-loom weavers could expect from the merchant, and this enabled the latter to pay the workers less than the value of what they produced, for the merchant’s profit. Workers in this position were exploited by capital, but in the ‘formal’ sense, since they still owned means of production, and controlled their own labour time. This structure still remains in many areas, not least with millions of small farmers producing commodities on their own land with their own labour, but subject to market pressures which ensure that surplus value from their labour ends up in the hands of larger trading companies.

The real subsumption of labour to capital comes with the factory system, where workers no longer own the means of production, and are constrained to sell their labour power on the market for wages. This was a tremendous advance for capital, since it offered significantly more control over the labour process. Factory owners were able to invest in machinery, reducing the need for labour, as well as simplifying labour processes. Skilled labour was replaced, enabling wages to be lowered and profits raised. The real subsumption of labour was a major driver of capitalist expansion, but note that exploitation of the formal kind remains abundant, and even dominant in certain sectors, showing that it has far from exhausted its usefulness to capital.

Given the complexity of labour’s relationship to capital, it is certainly true that it is not a simple commodity, but it is the one upon which everything depends. How revealing, then, is the extension of the ‘real and formal’ conceptualisation to commodification in general? On one level, it can point to the intensification of capital’s investment in various stages of the production process, but the distinction is by no means a clear one, since any commodity can be said to have been changed by any degree of labour applied to it, whether or not capital is involved. What transforms labour into a commodity is the existence of the social relations of market production. Therefore commodification needs to be located within the totality of processes, rather than in internal determinations of the ‘materiality and manner of production’.

Value in the social totality

To return to the definition of commodification, after dismissing labour as an imperfect commodity, Hermann goes on to say that ‘a more accurate example’ of commodification comes from Horkheimer and Adorno’s analysis of the culture industry, which concerned how ‘the content of cultural programs changes when they are produced by large profit-seeking corporations’ (p.13). There are a host of problems with this approach, not least the fact that it is irrelevant whether it is a large corporation or an artisan producing a commodity, when it is the social relations of production which determine how production is taking place. Large corporations, certainly, tend to dominate, but that sets the terms in which artisan production can exist. The issue is not about the ‘materiality and manner of production and consumption’ as something inherent to what is produced, but in the dominance of exchange value over use value at the level of the totality of the system.

The diversion into Adorno and Horkheimer’s highly problematic analysis of culture seems to lead Hermann away from considering the place of the commodity in the capitalist system in Marxist terms, towards an approach influenced much more by Polanyi. There are some confusions as a result. One important example is on the nature of capitalist markets, where Hermann draws a distinction between ‘exchange value’ and ‘market value’; the latter, unlike the former, is ‘open to market manipulation’ (p.26). This seems to misunderstand the nature of value and its relationship to price (Hermann’s ‘market value’).

Value exists at the abstract level of social totality, but the ability of a particular capitalist to realise the surplus value in a commodity’s total exchange value is dependent upon the market. There has never been such a thing as a ‘pure’ market with some kind of ‘fair’ price generally emerging. In the capitalist system, larger capitals have always been able to secure more than their ‘fair’ share of the surplus value existing as the total social product. Markets therefore mediate the abstract ‘exchange value’ of a commodity into a price. The power of capital in markets explains why commodities produced under the formal subsumption of labour have not disappeared, because the usefulness of that structure to individual capitals depends upon particular historical and industrial conditions.

Hermann’s distinction between formal and real commodification seems to be related to a notion that some sort of market, based on artisanal production perhaps, would be relatively unobjectionable, if ‘real’ commodification could be avoided. Hence he offers some examples, one of which is farming:

‘small-scale (family) farming differs from industrial agriculture, even though in both cases agricultural products are sold for money and the growers intend to make a profit. In the first case, famers still have a close relationship to their plants and livestock and treat them accordingly. In the case of industrial farming, growers become increasingly indifferent to what they produce and how they produce it as long as it guarantees them sufficiently high profits’ (p.29).

This characterisation of the moral difference between small farmers and agribusiness seems to be highly questionable, and easily falsifiable, just by reference to the dust bowl in the USA of the 1930s, or desertification in the Sahel today. Small producers can be equally, sometimes more exploitative of workers and nature, precisely because they have to fight bigger capitals for a share of the total social surplus value. It is not the character of an individual producer that it is the issue with capitalist production, but the working of the system as a whole.

Socialism or anarchism

It is the eclectic combination of elements of Marx and Polanyi that undermine the theoretical side of the argument of this book. It leaves the final section on the creation of a use-value society shot through with problematic assertions, and without any convincing social actor which could bring it about. Describing a use-value society, in which ‘participatory planning’ is to have an important role, there also turns out to be an important role for markets, since ‘not all markets negatively affect use value’. This is because ‘local producers selling their products on local markets without being threatened by price competition usually care about the usefulness and the quality of their goods and services’ (p.144). Hermann goes on to say that the same would be true for ‘local shops, restaurants, and other community-based service providers’. This use-value society begins to look a lot like the old anarchist dream of a society of small producers, freely exchanging between themselves.

Apart from the idealisation of small producers here, the problem is that if extensive parts of society are composed of markets, including apparently labour which can be ‘allocated through markets’, what you have is a society of small capitalists. Either they are free to develop into bigger capitalists, in which case all the old problems begin again, or you need some kind of repressive state to prevent this. These small producers would struggle against such a regime, no doubt quite bitterly. This does not seem to be a stable model through which to establish the primacy of use value over exchange value.

It is questionable whether, in fact, a focus on an analysis of commodification itself is capable of providing the tools necessary to understand the system, or to struggle against it. In the case of this book, it seems to lead to untenable generalisations on the character of different types of market production, leading to an apolitical hope that co-operatives and farmers’ markets could provide an alternative. Furthermore, the attempt to distinguish between formal and real commodification is fraught with ambiguities, since the difference may be one of degrees rather than kind.

Despite the claim to be a critique of the exchange-value society, there remains an implication that the problem is not capitalism as such, but specifically a ‘financialised’ system dominated by great corporations. In terms of the impact on public services, this view risks marginalising the problems sectors like education and health care always suffered from being within a capitalist society, even before neoliberalism intensified their marketisation. Regardless, there never has been a pure or fair capitalist market. If we are to achieve a society where production is based upon social need, or use value, then the whole logic of commodity production for exchange value needs to be abolished. That is not going to happen through a return to small-scale commodity production, which never existed by itself without determining structures of class and exploitation all around it.

Small-scale production was historically a transitional moment between subsistence production and the fully capitalist market, so there is no social basis for recreating it now. Abolishing capitalism requires a social actor to accomplish the task, and that is the working class. Precisely because labour is an imperfect commodity, it is the working class which has the power to transform the present system into something else. Within the imperfection of labour as a commodity is the possibility for class struggle to challenge the logic of capital, and this is what has to lie at the centre of any challenge to the dominance of exchange value over use value. This struggle necessarily must rise to the political level, and be aimed at seizing the entire capacity of the productive system and turning it to different ends; as Marx said, to expropriate the expropriators.

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Dominic Alexander

Dominic Alexander is a member of Counterfire, for which he is the book review editor. He is a longstanding activist in north London. He is a historian whose work includes the book Saints and Animals in the Middle Ages (2008), a social history of medieval wonder tales, and articles on London’s first revolutionary, William Longbeard, and the revolt of 1196, in Viator 48:3 (2017), and Science and Society 84:3 (July 2020). He is also the author of the Counterfire books, The Limits of Keynesianism (2018) and Trotsky in the Bronze Age (2020).

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