Created Παρασκευή 09 Φεβρουαρίου 2024
Marxist Monetary Theory Collected Papers of Costas Lapavitsas
Gift transactions and the moral aspects of reciprocity have long been the focus of theoretical interest in social science. Mauss’s renowned essay on the gift has continually attracted heavyweight commentary, including from Levi-Strauss and Sahlins.2 Polanyi and his school have made reciprocity one of the pillars of their analysis of non-market-based societies.3 Gouldner has found in reciprocity a universal ‘moral norm’ for all human societies.4 There have been entire theories of ‘social exchange’ resting on reciprocity.5 If Levi-Strauss is properly included in this field, there have even been theories of the origin of human society based on the reciprocal exchange of women.6
Nevertheless, since the early 1980s analytical interest in gift giving as opposed to commodity exchange has reached a higher level of intensity. The ‘commodity’ has come to stand for rationality (especially of the instrumental variety), individualism, a strict calculus of material gain and loss, impersonal relations, and the holding together of society through the invisible glue of the market. In contrast, the ‘gift’ stands for moral obligation, collective concerns,
^* First published as ‘Commodities and Gifts: Why Commodities Represent More than Market Relations’, /Science & Society/, 2004, 68, 1, Spring, 33–56. We are grateful to the publishers for the reprint permission.
1 This chapter contains a critical examination of anthropological literature on gifts and commodities. Anthropologists would undoubtedly notice weaknesses due to lack of the requisite disciplinary training on my part. I should state in my defence that my sole aim in reviewing anthropological work has been to obtain insights that could facilitate analysis of capitalist commodity exchange. Thanks are due to Ben Fine, Makoto Itoh, and Danny Miller for helpful comments on various drafts. Michiaki Obata made penetrating remarks at a seminar presentation at the University of Tokyo. All errors are my responsibility.
2 See Mauss 1925, Levi-Strauss 1950, and Sahlins 1972.
3 See Polanyi et al. 1957.
4 See Gouldner 1960.
5 See Homans 1958, and Blau 1964.
6 See Levi-Strauss 1949.
© koninklijke brill nv, leiden, 2017 | doi: 10.1163/9789004272712_009
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power, personal relations that survive and continue after exchange, imprecise and often non-material rewards, the holding together of society through visible and open relations based on volition, rank and the like.7
Thus, ‘commodity versus gift’ has often come to be employed as metaphor for ‘market versus non-market relations’, as is shown in the next section. In this light, the theoretical contrast between commodity and gift has a direct bearing on the analysis of advanced capitalism, especially since the demarcation line between market and non-market relations is blurred in several fields of economic activity, including the family, education and health provision. The demarcation line is also blurred in developing countries, given that ‘development’ has been traditionally associated with production of marketable output at the expense of output distributed through non-market mechanisms.
Is capitalist economic activity a coldly ‘rational’ endeavour that leaves no room for reciprocal association, social obligation and mutually conditioned power among economic agents? Does capitalist development imply the destruction of non-market relations, the shrinking of the realm of custom, trust and moral obligation? Is the world of the gift irrelevant to capitalist calculation of returns? Are commodity transactions alien to non-market concerns and relations?
This chapter reconsiders the binary opposition of ‘commodity versus gift’ from the standpoint of Marxist political economy. It shows that non-market relations are an intrinsic part of capitalist commodity exchange, and of the economic activities generally associated with commodities. Non-market concerns matter to commodity exchange partly because commodity markets are underpinned and surrounded by social relations.
To a certain extent, this point has already been established in sociology as, for instance, in Granovetter’s work on ‘embeddedness’ and ‘networks’.8 However, from a Marxist standpoint, the salient social relations that underpin capitalist exchange are those of class. Non-market relations are represented in economic interactions among capitalist commodity owners in two fundamental ways, both of which reflect underlying class relations.
First, non-market relations of trust, custom and power arise among capitalist commodity traders because of the role played by use value in commodity transactions. The literature on ‘commodity versus gift’ focuses overwhelmingly
7 Hyde, for instance, associates commodity exchange with ‘logos’ (reason) and gift exchange with ‘eros’ (attraction) (Hyde 1983).
8 See Granovetter 1990.
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on exchangeability as the typical economic characteristic of commodities, ignoring use value. But use value is also a fundamental economic aspect of commodities. When its place in market transactions is considered analytically, it becomes clear that use value gives rise to non-market relations between buyer and seller.
By the same token, use value is a source of trust, commitment and power among capitalist enterprises that regularly engage in commercial give-and-take. Non-market relations between capitalist enterprises are particularly important because they underpin credit operations and sustain profit-making activities; they are one of the foundations of the institutions, markets and instruments of the credit system. At the same time, the relations of trust and power among enterprises that participate in credit operations also revolve around securing money returns, thus reflecting underlying capitalist class relations.
Second, social (non-market) relations of class among commodity owners are represented in the most prominent ‘economic’ aspect of the commodity – its value. Commodity value (including money price) is not exclusively a phenomenon of market interaction, whose determinants are unrelated to moral and customary influences. Rather, commodity value is a social substance (abstract human labour) that takes the form of ‘exchange value’ (a quantitative ratio, or relative price) in the course of commodity exchange. For commodities to possess the substance of value there must be capitalist property relations over the means of production, autonomy and competition among producers, capitalist authority at the workplace and relative indifference of workers to job performed.
Moreover, under capitalist social conditions, the form of value (the quantitative ratios of exchange value) is determined by the substance of value. In non-capitalist societies, on the other hand, the substance of value is largely absent, and the form of value heavily reflects customary and moral social practices. However, even in capitalist societies there are activities that possess the form of value (quantitative ratios, prices, monetary returns) despite being unrelated to the substance of value, for instance, in insurance, real estate, or financial services. The exchange values and prices generated by these capitalist economic activities depend on moral and customary (i.e. non-market) factors.
It is misleading to consider capitalist markets as terrain for strictly ‘rational’ and self-centered interactions among participants. On the contrary, fresh non-market relations continually arise among traders, existing ones are marshalled and placed at the service of economic activity, and broad social relations provide the framework within which commodity exchange takes place. The
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commodity as economic phenomenon does not stand exclusively for market give-and-take, but also integrally represents non-market relations through both its value and use value. The putative contrast with the gift is misplaced in this regard.
Moreover, non-market relations of trust, custom and power among capitalist commodity owners are also stamped with the aura of money-making, strict comparison of returns, and narrow calculation of means and ends. The core class relations of capitalist society have a bearing on non-market relations among commodity owners. Relations of trust, in particular, are systematically mobilised through the institutional structures of the credit system, focused closely on profit-making, and deployed to sustain capitalist accumulation. Capital as a set of exploitative class relations and economic mechanisms articulating production and exchange provides a framework of motives, aims and social practices within which the interaction of market and non-market relations in the capitalist economy may be analysed.
The chapter is organised as follows. Section 2 shows that the literature on ‘commodity versus gift’ focuses on commodity exchangeability, at the cost of ignoring the use value of commodities. Section 3 puts forth an original analysis of the role of use value in commodity exchange and demonstrates that non-market relations are generated between buyer and seller as transactions occur repeatedly. It is also shown that use value is a source of relations of trust and power among capitalist enterprises, which provide a foundation for credit practices. Section 4 turns to exchange value and considers the influence of moral and customary factors on exchange value in capitalist and non-capitalist societies. The final section summarises and concludes the chapter.
The work of Gregory has been influential in the recent debate on ‘commodities versus gifts’.9 Gregory’s elegant formulation of the distinction between commodities and gifts goes as follows:
Marx was able to develop a very important proposition: that commodity exchange is an exchange of alienable things between transactors who are in a state of reciprocal independence … The corollary of this is that non-
9 See Gregory 1980, 1982, and 1997.
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commodity (gift) exchange is an exchange of inalienable things between transactors who are in a state of reciprocal dependence. This proposition is only implicit in Marx’s analysis but it is … a precise definition of gift exchange.10
Gregory has used this distinction as foundation for a theory of ‘gift-based’ societies, characterised by kinship-based groups (clans), as opposed to ‘commodity-based’ societies, characterised by social classes.11 Analytical interest in the literature has subsequently concentrated on demonstrating more fully the impact of non-market factors (moral, customary, kinship, religious, and so on) on gift exchange, while also discussing the social relations expressed in the latter. Thus, Gregory’s distinction has been (critically) deployed in analysing the different roles of men and women in the process of production and exchange.12 It has also been used as analytical benchmark in an attempt to distinguish among things that are exchanged and things that are not exchangeable at all.13
To be sure, the neatness of Gregory’s distinction has also been subjected to sustained critique. Parry, for instance, has claimed that certain gifts are alienable in traditional Indian society.14 Appadhurai has found the distinction ‘overstated’, preferring to focus on a ‘cultural perspective’ that stresses the universality of the commodity form.15 Scepticism has also been expressed on whether the ‘gift’ is an adequate notion for the characterisation of an entire economy.16
Still others have rejected the notion of a sharp dichotomy between commodity and gift, preferring to see the two as poles in a ‘spectrum of give-and-take’ that extends from transactions ‘dictated by a sense of obligation and commitment’ (the gift pole) to transactions ‘merely or principally dictated by a desire to obtain certain objects by means of exchange’ (the commodity pole).17 Accord-
10 Gregory 1982, p. 12.
11 Though, in later work he has argued that his aim was to analyse the ‘efflorescence’ of gift exchange in a world dominated by commodities (see Gregory 1997, pp. 47–8).
12 See Strathern 1988.
13 See Weiner 1992.
14 See Parry 1986; see also Parry and Bloch 1989; Gregory has, in turn, claimed that Parry overemphasises the importance of Brahminical ideology in the context of the ‘Indian gift’ (Gregory 1997, ch. 2).
15 See Appadhurai 1986.
16 See Thomas 1991.
17 See Valeri 1994, p. 18.
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ing to this view, ascertaining the precise point on the spectrum at which particular transactions lie is much less important than specifying the nature of the relationship between transacting parties.
Nonetheless, what matters most for our purposes is that Gregory’s distinction between commodities and gifts (and the social and personal relations between the parties in related transactions) evidently rests on the characteristic features of the exchangeability of commodities in contrast to that of gifts. In subsequent literature there has been no quarrel with this aspect of Gregory’s distinction. Rather, its implicit acceptance has contributed to the emergence of the previously mentioned notion of a ‘spectrum’ or ‘continuum’ of exchange transactions, with gift at one end and commodity at the other, which is accepted by those who are critical of Gregory’s distinction, as well as those who are sympathetic to it.18
Significantly, close analytical focus on the exchangeability of commodity and gift is not limited to recent literature but goes back to the originators of this debate, that is, to Malinowski and Mauss. In his classic text on the gift, Mauss was most heavily exercised by the obligation to reciprocate gifts in primitive society, while also seeking an explanation for the obligation to give and the obligation to receive gifts.19 His answer, couched in terms of the ‘spirit’ of the gifted object – the Maori /hau /– that is attached to the person of the giver, has been very controversial.20
Nevertheless, it is indisputable that the power of Mauss’s great essay derives from his erudite discussion of the rules of ‘legality and self-interest’ that make for gift reciprocation. For Mauss, these rules show that even very simple communities are far removed from a ‘state of nature’, and that the obligation to reciprocate has a ‘contractual’ aspect. Thus, Mauss was primarily concerned with the determinants of the gift’s exchangeability (as property of the gift, even if not as quantitative proportion), and sought them in the moral aspects of the gift relationship and in the social ties that bind the transactors.
18 See, respectively, Valeri 1994, and Carrier 1994a, p. 361; see also Carrier 1991, and 1995. Note that Gregory has vigorously rejected ‘continuum’ arguments in favour of binary or polar oppositions (1997, ch. 2). The analytical stance adopted in this article is, in principle, close to that of Gregory, but the binary opposition he has suggested (commodity–gift) cannot adequately serve the purposes for which he intends it. This is because the commodity contains the more fundamental binary opposition between use value and exchange value, which Gregory ignores.
19 See Mauss 1925.
20 Firth showed very early on that Mauss misinterpreted the Maori text (Firth 1929), and Radcliffe-Brown has noted the mystical aspect of his argument (Radcliffe-Brown 1950).
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On the other hand, Malinowski considered it an impossible task to draw a sharp line between gift-type and commodity-type transactions.21 Exchange transactions are a continuum, with pure (i.e., non-reciprocated) gift on one end and pure commodity on the other. In his essay on the gift, Mauss, as is well-known, rejected Malinowski’s notion of the pure gift (/mapula/). Whatever other reasons might have caused this rejection, it is undeniable that the existence of a ‘pure gift’ would directly contradict Mauss’s own emphasis on the ‘contractual’ obligation to reciprocate, thus effectively denying the existence of the gift’s exchangeability.
It is significant that Malinowski eventually accepted Mauss’s strictures and postulated the principle of ‘reciprocity’ as the foundation for analysis of all early societies.22 In effect he grasped that the notion of ‘pure gift’ would be analytically incompatible with his exclusive focus on exchangeability as the distinguishing feature of gifts and commodities.
Strong concern with exchangeability was also evident in Malinowski’s methodical listing of the series of gift exchanges incumbent upon marriage parties in the Trobriands.23 The questions that attracted his attention were primarily related to the exchangeability of the gift: Does it exist (i.e. is the gift reciprocated)? What forms does it take? How is it different from transaction to transaction? What are its moral and customary constituents? Furthermore, in dealing with exchangeability, Malinowski took great pleasure in showing that quantitative ratios among products exchanged in these communities were neither stable nor transitive.24 Other anthropologists have also made the same claim in subsequent work.25
Preoccupation with exchangeability in the current and in the older literature on gifts and commodities rests on the largely unspoken assumption that the property of exchangeability fully captures the character of the commodity. Commodity exchangeability appears intrinsic, complete, and precise: /quid pro quo/.26 If this view was accepted, gifts could subsequently be located analytically
21 See Malinowski 1922, ch. 6; also 1935, pt. i.
22 See Malinowski 1926. His discussion of ‘reciprocity’ is based on naïve psychological foundations, and aims at disproving the notion of ‘primitive communism’. He was not unduly troubled by considering the /quid pro quo /of capitalist markets to be a universal principle of human interaction.
23 See Malinowski 1929, ch. 3.
24 See Malinowski 1935, p. 45.
25 See, for instance, Firth 1959.
26 ‘Appears’ is the operative word here. Commodity exchangeability is none of these things immediately and automatically, but must become them, and must continue to do so
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according as the properties of different gift transactions approximated the features of exchangeability that were presumably exhibited by commodity transactions.
Thus, gifts are not inherently exchangeable; they are not given as things that will necessarily elicit the return of another. Their ability to do so is circumscribed by a host of non-economic factors, moral, religious and customary. Not least, even when they bring a return gift, there is no precise quantitative equivalence between give and return. Gifts, moreover, penetrate into areas of social life that are not immediately and obviously touched by the market: to give in order to establish a relationship and in expectation of a reciprocal gesture is fundamental to interpersonal relations, to family relations, to friendship, to relations at work, to political and social intercourse. By this token, gift-giving appears to possess a transhistorical aspect that captures something of the deeper reality of human beings.27
In this light, and given that commodity exchangeability (especially in the form of exchange value and money price) is the province /par excellence /of economics, the appeal of the gift as vehicle for analysis of the non-market aspects of social life becomes apparent. The gift could act as terrain and metaphor for the analysis of social relations that differed in kind from the cash nexus at the heart of markets. Gifts appear conducive to analysis of social obligation, trust, hierarchy, prestige, solidarity, and so on, in ways that are not available when analytical focus is on commodities and markets.
Even when new analytical directions are sought in this field, for instance, attempting to define things that are non-exchangeable, the underlying approach remains the same.28 It is implicitly assumed that the character of commodities derives from their complete exchangeability, while the character of gifts derives from an exchangeability that is less complete than that of commodities. Thus, the character of things-non-exchangeable (for instance, religious /sacra /or the crown jewels) appears to derive from the complete absence of exchangeability.
For Gregory, who did in later work adopt the notion of ‘goods’, i.e. things-non-exchangeable, ‘a good is a priceless non-commodity whose value as a good is to be explained with reference to historically specific relations of consanguin-
even in developed capitalist conditions. Seeking sale, for one thing, is always fraught with uncertainty.
27 In this vein, analytical analogs have been sought between gift-giving and language. For a well-researched attempt, see Caplow 1982, and 1984.
28 See Weiner 1985, and 1992.
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ity’.29 For Godelier, things-non-exchangeable are even seen as the true foundation of society – they are fixed points of reference, which provide meaning and continuity to social intercourse.30 Yet, it is clear that ‘things-non-exchangeable’ is a derivative concept, defined (negatively) in terms of the exchange value of the commodity.
The literature’s extraordinary focus on exchangeability is itself problematic. The commodity as economic phenomenon is inadequately understood when it is analysed merely from the perspective of its exchangeability. The commodity is also inherently a useful product, and its usefulness (more accurately, its use value) interacts with its exchange value in the course of exchange transactions. Formal analysis of commodity transactions is incomplete when it ignores use value. For exchange of commodities to take place at all, use value must exist for each participant in the product of the other. If use value were not present, or rather, if it were not precisely defined and functional for each party in the other’s commodity, there would be no transaction. For commodity transactions to have any content at all, moreover, the use value of one party’s commodity must be different from that of the other.
However, when use value is explicitly considered as an aspect of commodity transactions, it becomes apparent that commodities continually generate non-market relations. In capitalist circulation these include relations of trust, custom and power, which are mobilised to sustain capitalist accumulation. The following section demonstrates this claim by analysing the role of use value in commodity exchange, comparing it to that of usefulness in gift transactions, and showing its implications for credit relations among capitalist enterprises.
Use value is a source of non-market relations between buyer and seller. The point of departure for analysis of these relations is that the commodity has no use value for the seller. Whether it counts as a use value for society at large, as well as how its use value will be deployed after purchase, are matters that the seller must deal with prior to exchange on the basis of information and expectations about the future. Sellers, moreover, cannot know in advance
29 See Gregory 1997, p. 71.
30 Godelier 1999.
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whether their anticipations would hold true for a particular buyer.31 The most that the seller can do is to ensure that sufficient of the postulated use value would have been imparted to the commodity prior to exchange.
For the buyer, in contrast, the use value of the commodity must have a precise character deriving from the private use to which it will be put after purchase, be that consumption or production. Whether the required use value would be found in the commodity actually bought would depend on the properties of usefulness that would have been imparted to the commodity by the seller in expectation of sale, and on the accuracy of the buyer’s judgement at the time of purchase. None of these conditions could be assumed perfect (other than as an analytical assumption for particular purposes). If use value did not fully meet requirements, if it had superfluous aspects, if it needed to be calibrated more accurately for a particular buyer, then non-market relations would emerge between sellers and buyers that would involve power, trust, moral obligation, custom and hierarchical ranking.
Such non-market relations are apparent between small retailers and consumers, and they are the source of various folkloric types in both non-capitalist and capitalist societies (the trusted baker, the garrulous barber, the friendly butcher, the needy widow, and the like). They evidently hinge on the need precisely to specify and guarantee the use value of the products concerned.32
On the other hand, if large merchants’ capital came to dominate the circulation of commodities (supermarkets, department stores, and so on), there would be standardisation of quality, homogenisation of packing, availability of several ranges of the same product, and display of a great variety of goods in large stores. Consequently, both the use value imparted to the product and its perception by the buyer would be drastically affected. In short, the emergence of advanced capitalist relations in the circulation of commodities would directly influence the generation of non-market relations among buyers and sellers. In this vein, Carrier has shown that advanced capitalism implies the rise of more impersonal retail trade, but is unable fully to extinguish the non-market relations that are inevitably attendant on commodity circulation.33
31 Custom-made commodities confirm rather than negate this statement: use value is stipulated in advance by the buyer, relieving the seller of the need to arrive at a forecast.
32 They also arise out of the simple fact of the repetition of particular transactions, i.e. the regular purchase of a good or service from a particular outlet leading to habit and a sense of moral obligation among the parties. Repetition is also important in the emergence of non-market relations in transactions among capitalist enterprises. The analysis of its significance, however, seems more suitable to psychology than to economics.
33 See Carrier 1994a, 1994b.
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These conclusions hold for commodities traded in the markets for final consumption, whether these are non-capitalist or capitalist. However, non-market relations hinging on use value also emerge in transactions specifically among capitalist enterprises. These are important for the following two reasons. First, because they show clearly that capitalist circulation creates a fresh terrain for relations of trust, moral obligation and commitment. Second, because the economic significance that these relations have for capitalist enterprises leads to their systematic marshalling through institutional economic forms, above all, through the credit system.
To be more specific, in any line of business, capitalist enterprises are connected to each other in chains of productive and trading activities that spring from the technical and physical characteristics of their products, and which create relations of seller and buyer. As producers, for instance, cotton goods makers are connected with cotton cloth makers, who are connected to cotton spinners, who are connected to raw cotton merchants, and so on.
The division of labour within a particular branch of economic activity is based on the characteristics, the requirements, and the specification of the use value of the product in question. The need to impart requisite use value to the product, to judge it accurately and to guarantee that it will remain functional entails the rise of non-market relations of trust, moral obligation, and reputation among enterprises. At the simplest level, buyers come to expect a certain quality of product and service from their sellers, while sellers expect a certain commitment from their buyers. The importance of such relations among capitalist enterprises is immediately apparent in the practices of credit that spontaneously emerge in capitalist markets.
Trade credit (the practice of buying commodities now and paying for them later, which should be distinguished from the practice of money lending) thoroughly permeates capitalist commercial activity.34 The normal commercial operation of capitalist enterprises involves selling output and procuring inputs not against cash but against promises to pay at a time in the future. Money does not mediate these transactions but simply settles balances when credits are due. Thus, trade credit relations rely on a complex institutional and legal framework of guarantees, payment practices and clearing.
Even more fundamentally, however, trade credit relies on non-market relations of trust, reputation and commitment among enterprises, and is unlikely to be extended in their absence. The advance of trade credit might also sig-
34 For more on the qualitative difference between trade credit and money-based (banking) credit, see Itoh and Lapavitsas 1999, ch. 4.
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nify (and sustain) disparities of power among enterprises. In short, trade credit tends to emerge among capitalist enterprises that are already connected in chains of activities which result from the use value of products and entail frequent buying and selling among participants. Without non-market relations among enterprises, the practice of trade credit and its instruments, markets and institutions would be largely impossible.
On the other hand, once the mechanisms of trade credit were in place (as part of the credit system) the nature of trust, reputation and commitment among transacting parties in a capitalist economy would be profoundly affected. Generalised access to credit and the permeation of economic activity by credit relations would imply that all non-market relations associated with exchange would acquire a monetary aspect. Whatever other characteristics they might have, non-market relations emerging in capitalist circulation would have a narrow monetary dimension that would translate into interest foregone, implicit interest rate differentials, debt duration and rolling over of credits.
In sum, the relations of trust that underpin capitalist credit pivot exclusively on the repayment of (money) value according to terms agreed. Hence trust among capitalists is noxious and likely to give way to outright fraud. Extensive institutional mechanisms are necessary to police the edifice of promise and counter-promise that comprises the capitalist credit system. Neoclassical theory captures the inherently insidious aspect of capitalist trust through the concept of ‘moral hazard’, that is, reneging on promises made, or defrauding credit counterparties when it comes to making payments.
Consider now the place of usefulness in gift transactions. For the giver of the gift, the gifted thing might or might not be useful, without any appreciable qualitative effects on the act of gift-giving. For the recipient, on the other hand, the perception of the usefulness of the gift matters only insofar as it affects the gift-giver’s assessment of the appropriateness of the gift. It is entirely up to the giver to ascertain the right degree of usefulness of the gift for the recipient, while also deciding how appropriately this usefulness would mesh with the symbolic, sentimental, and moral aspects of the gift-giving transaction.
The contrast with the commodity is sharp. For if the buyer perceived that use value did not exist, the commodity transaction would not take place at all. Indeed, for the gift, usefulness might derive exclusively from the act of giving itself, as, for instance, from the prestige and social standing of the giver or past holders of the gift. Unlike the commodity there is no imperative for the gift-giver to impart usefulness to the gift.
Indeed, for the gift-giver, assessing the appropriate usefulness of a gift is a perilous and deeply uncertain undertaking. A thing of negligible usefulness
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is as likely to offend as to gratify the recipient. An eminently useful thing could produce a very different effect on the recipient according as the latter’s circumstances changed. A gifted thing that is typically used by ‘the wrong sort of person’ (in terms of social standing) is also likely to cause offense, as is a thing typically used by the ‘wrong’ age group.35 Examples of this kind could be easily replicated, thus reinforcing the main point: usefulness is neither a fundamental nor a necessary aspect of the gift, though it cannot be extricated from the gift’s symbolic and other aspects. While the commodity must be an intensely useful thing or activity, the gift might or might not be so. The precarious presence of usefulness in the gift is a source of uncertainty and danger among the parties to a gift transaction.
Classical anthropology offers abundant evidence in support of this claim. In the marriage gift-exchanges in the Trobriands discussed by Malinowski, essentially similar things frequently changed hands, but in different quantities.36 This meant, above all, raw and cooked food that was not significantly different in kind between the exchanging parties. Indeed, much the same food already existed in the parties’ possession.
It is, however, easiest to see this point in connection with the great gift exchange systems, kula and potlatch. In kula, the precious items exchanged were not sought for their usefulness, indeed they seemed to be very rarely used for personal decoration, which might have been their original use.37 If they had a notable usefulness, that derived exclusively from the system of exchange itself and had no meaning outside it – typically to confer kudos and prestige upon their holders according as other powerful and important men had held the objects in the past. Similarly, in potlatch exchanges discussed by Mauss, the items used were also clearly specified, such as copper ingots and elaborately woven blankets, but the participants accrued kudos and prestige primarily from the process of exchange itself.38 Indeed, so secondary was the original usefulness of these items that the process could sometimes take the form of their ceremonial destruction, frequently discussed for its psychological, moral, and other implications.
35 See Carrier 1994b.
36 See Malinowski 1929, ch. 3.
37 Malinowski had an ill-disguised contempt for the aesthetic qualities of kula items and appeared to think that they had no usefulness at all (1922, ch. 4). However, the fact that the original use to which a thing is put has become submerged under some other does not mean that it has disappeared. Usefulness is necessarily built into a thing in the process of its production. A ceremonial ax is still an ax even though it might not be used to cut wood.
38 See Mauss 1925.
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It should be stressed that usefulness is far from irrelevant to the gift. Return gifts, for instance, might be thoroughly checked for their qualities as goods, and sometimes might be accepted grumpily and with suspicion. But while usefulness (more precisely, use value) is an indispensable aspect of the commodity, it would not be so for the gift. The indispensability of use value to the commodity is also a fundamental reason for the emergence of a broad range of non-market relations of trust, reputation, custom and power among commodity owners. In this light, commodity exchange is the terrain for, and the source of, non-market relations that would pivot on commodities as useful things. These relations would be an inherent part of market activities and could not be separated from pure buying and selling (other than by assumption for purposes of theoretical analysis). Moreover, non-market relations of trust, reputation and commitment would be systematically marshalled in capitalist markets to support trade credit practices and to sustain capitalist accumulation.
Non-market relations based on use value, far from being extraneous to market practices, would actually have direct economic significance in the capitalist economy. However, relations of trust and commitment among capitalist enterprises, especially when mobilised by the credit system, would focus narrowly on money-making, and would be prone to fraud and deception. In this respect too, relations of trust, reputation and commitment among commodity owners are different from those between gift-givers and recipients. The commodity represents non-market relations, but it does so in ways that are not open to the gift.
Surprising as it might sound, a similar conclusion is also reached in the following section which considers commodity value, and in particular exchange value (quantitative ratios or relative prices among commodities). The contrast between commodities and gifts with reference to market and non-market relations will then be seen in a fuller light.
It is incontestable that a particular type of reciprocity characterises commodities: they are brought to market as exchangeable things and they bring back a quantitatively precise equivalent. However, for full commodity reciprocity to prevail, certain underlying social conditions are necessary, namely capitalist conditions.
In capitalist society, commodity reciprocity is sustained, on the one hand, by the institutional framework of markets (consumers’ associations, producers’ bodies, best practice agreements, and so on), and, on the other, by the
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combined forces of the law of contract and the law of tort. At a deeper level, capitalist commodity reciprocity rests on an extremely detailed social division of labour, and on capitalist property rights over productive resources. Thus, it cannot be immediately assumed that what holds for the reciprocity of capitalist commodities also holds for commodities in different social settings. This point can be established by briefly considering the social underpinnings of the ‘market’, i.e. of generalised commodity exchange.
The various forms taken by generalised commodity exchange (prices, exchange ratios, and so on) are apparent and have been widely analysed by social scientists. If for a moment we disregard those particular forms, generalised commodity exchange emerges simply as the exchange of matter with different useful properties (products) across society. It is obvious that such an exchange of matter must necessarily take place in all societies that are based on a developed division of labour, if these are to reproduce themselves socially and economically. But it is equally obvious that the exchange of matter need not take place through generalised commodity exchange.
History and anthropology provide ample evidence of the diversity of social and institutional arrangements under which useful products have actually been exchanged across society. Commodity exchange is typically one of those, found in many different societies and coexisting with disparate social structures and relations. Nevertheless, in non-capitalist societies, market mechanisms play a secondary role in the distribution and exchange of the aggregate social product compared to non-market mechanisms that include kinship, hierarchy, customary rights and privilege.39 Generalised commodity exchange becomes the primary form of product exchange only in specifically capitalist societies because these are largely characterised by the following two social conditions.
First, capitalist producers are independent of (and in competition with) each other, as well as appropriating products privately. These terms are necessary to explain why the bulk of the output of capitalist society would be offered for sale, rather than being consumed directly by its producers, or passed onto others along kinship, customary or hierarchical lines. But they are not sufficient.
39 The concepts proposed by Polanyi et al., including ‘redistribution’, ‘reciprocity’ and ‘exchange’, also capture the different economic and social arrangements through which use values find their final destination in society (Polanyi et al. 1957). They have posited those as methods of integration of society, i.e. as mechanisms for securing social coherence. For a full examination of social integration, however, it is more important to deploy the concept of reproduction (social and economic), which possesses greater analytical potential.
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The second condition that is required is the existence of a labour market. Capitalist producers must have access to flexible and disciplined labour power that could be freely employed, if they are flexibly and rapidly to shift their activities among different products and areas (which is of course necessary, if the bulk of social output is to be produced for the market). In Marxist terminology, a working class must be present: a class that neither owns nor controls the means of production and earns its living mainly through sale of the capacity to work. Moreover, if such a social class were present, extensive markets would have to exist for foodstuffs, clothing, housing, and so on, that is, for goods necessary for its reproduction.
There is no doubt that both of these conditions could be found in partial, or elementary, form in non-capitalist societies. However, they would be fully present only in an industrial capitalist society. The implication for our purposes is clear: the capitalist mode of production inevitably entails generalised commodity exchange, but commodity exchange is not capitalism.
Commodities produced and exchanged under capitalist class relations
possess more fully developed exchangeability (exchange value) than other
commodities. This holds, above all, because capitalist relations assign
value to commodities as social substance (abstract human labour) and not
only as form (relative prices and quantitative ratios). For capitalist
commodities, the substance of value provides regularity and transitivity
to the form of value.
By this token, the exchange value of capitalist economic activities which have the form of value but do not involve production of commodities (for instance, the operations in financial markets or real estate) would strongly represent non-market and not merely market relations. The same would hold for the exchange value of non-capitalist commodities, as is shown below.
Commodities always exhibit a determinate quantitative equivalence with one another, in contrast to gifts, for which there is none, other than by chance. Yet, the prevalence of particular exchange ratios among commodities is a very complex process. For one thing, if the exchange of commodities occurred haphazardly rather than systematically, exchange ratios would be highly changeable and arbitrary. These changeable exchange ratios would correspond to what Marx called the ‘simple, isolated, or accidental’ form of value, i.e. to shifting expressions of the form, x of a = y of b, which would not be consistently transitive among commodities.40
40 See Marx 1976b, p. 139.
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Greater regularity of exchange would bring less arbitrariness and more transitivity to quantitative ratios among commodities. The form of value would develop correspondingly. For Marx, the ‘simple form’ of value would become the ‘expanded form’ (i.e. x of a = y of b or = z of c or = w of d or =…), which would become the ‘general form’ (i.e. y of b, z of c, w of d, … = x of a) eventually to give rise to the ‘money form’ of value.41 The ‘money form’ would be similar to the ‘general form’ except that commodity a would have become the money commodity. When the ‘money form’ of value would have emerged fully, exchange would have reached such regularity that unstable exchange ratios would have become transitive money prices.
The social conditions under which abstract labour would become a social reality are the same as those that would give rise to generalised commodity exchange, namely capitalist conditions. When producers are autonomous and compete with each other, and workers have no property rights over resources and output, as well as moving freely between jobs, the various concrete labours behind commodities would be in practice commensurated with each other. Abstract labour as the substance of value would be a socially and historically specific phenomenon, established as social norm through the process of market competition. This would happen fully only under conditions of industrial capitalism.
41 Marx 1976b, pp. 154–63.
42 See Marx 1976b, ch. 1.
43 Marx 1976b, pp. 131–7.
44 It is worth stressing that concrete labour offers little insight into the social relations that emerge among those who undertake it. In itself, concrete labour is a set of natural and physiological processes. This stands in sharp contrast with our earlier result, namely that usefulness and its deployment are socially determined. This issue is more fully discussed in Fine and Lapavitsas 2000.
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MARX: Lapavitsas 2017 | economic mechanisms through which value limits price
If, for instance, the price of a commodity were systematically above what its value content would justify relative to others (i.e. its exchange ratio with others were above what it ought to have been), capital would move into the industry to take advantage of ensuing above-average profitability. Supply would consequently increase and the relative price would fall until it was in line with the dictates of value content and average profitability. The opposite would take place if relative prices were below what they should be. Through the movement of capital, exchange ratios among commodities would come to possess objective determination based on the underlying social reality of value as abstract labour.46
Nevertheless, even under capitalist conditions, there are many types of labour that do not count as value. Similarly, there are products and activities that cannot, or do not, count as commodities. The capitalist economy comprises a territory with its own structure for the reproduction of both capital and the mode of production as a whole. It contains the broad economic spheres of production and circulation of capital, which subsume plain circulation of commodities and money, turning it into an aspect of the circulation of capital. These spheres negatively define labours that do not produce commodities even though they may appear so to do.
That is typically the case for the labour of workers employed in commercial activities (retail and wholesale), workers employed in the diverse activities of the financial sector (such as banking and the stock market), workers employed in much of state-run health provision, and so on. Analogously, there are capitalist activities and goods that assume the commodity form without actually
45 This does not mean that price ratios would be ‘proportionate to’ abstract labour ratios. It has been well understood since the time of Adam Smith that the labour theory of value does not provide a precise theory of relative prices. This is precluded by formation of a general rate of profit among capitalist enterprises (and by the rent paid for property in land).
46
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producing commodities, but purely because of money payments made.47 A typical instance would be trading in land, which involves no labour in production but entails the appropriation of surplus value as rent due to property in land. Another would be trading in insurance, which similarly involves no labour in production but allows appropriation of surplus value in view of concentration of money reserves aimed at covering accidents and unforeseen events. In the same category would belong any number of purely social relations to which money would be attached, even though commodities might be entirely absent, such as the payment of fines, or the payment of money in bribes and other forms of corruption. The form of the commodity would be attached to these activities despite commodities being neither produced nor present.
47 This issue is more fully discussed in Fine and Lapavitsas 2000.
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typically lack a broad and stable labour market, and thus a society-wide working class separated from the means of production and moving freely among jobs.
Consequently, the exchange value of commodities in non-capitalist
societies is a formal property, largely unrelated to the deeper reality
of production of social life. Exchange value would take the ‘accidental’
form when commodity owners would meet each other randomly and
occasionally, and could even develop toward the ‘expanded’, the
‘general’ and the ‘money’ forms according as commodity transactions
achieved frequency and regularity.48 Quantitative ratios among
commodities, and even their money prices, would reflect partly the
superficial changes of demand and supply in particular markets.
We seem to have moved a long way from distinguishing between commodity and
gift, yet the argument in this section is important for an analysis of
the interplay of market with non-market relations. Market transactions
involve buying and selling and, as such, could be found across the
capitalist economy as well as in widely different social formations.
48 The commodity form could also be adopted simply as a result of transition from non-capitalist to capitalist society as economic activity would take place simultaneously under different modes of production, or at different stages of the same mode of production. Typically, the more developed mode of production would heavily influence the less developed. If, for instance, large-scale farming capital coexisted with subsistence cultivation, it would force upon the latter several aspects of the commodity form, such as the monetary valuation of inputs and outputs, as well as purchase and sale in open markets.
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the movement of capital across sectors of the economy. Even under capitalist conditions, however, the commodity form would be adopted by a variety of activities that would be unrelated to value as abstract labour or even unrelated to the economy altogether. Prices of land, of shares, of stocks, of insurance, of bribes, and so on, would be strongly influenced by non-market factors.
This analytical result need not imply the complete absence of economic mechanisms in determining such prices, as, for instance, in the discounting mechanisms of the financial markets. However, it does mean that economic forces would play a far weaker role in determining them compared to the prices of produced commodities that actually contain the substance of value. Non-market factors (for instance, moods of optimism or simply the transactor’s probity in payment) would critically affect the determination of prices that are unrelated to value substance. In sum, commodity value and exchange value would represent much more than strictly market relations.
The binary opposition between commodity and gift is problematic as a guide to the analysis of market and non-market relations. A fundamental reason for its inadequacy is that capitalist commodities represent both market and non-market relations. Capitalist markets continually generate non-market relations among participants, while mechanisms exist within the capitalist economy to organise non-market relations and place them at the service of profit-making. The underlying class relations of capitalist society put their imprint on commodities as economic phenomena. This was demonstrated in two separate but related ways.
First, it was shown that the analysis of commodity exchange is
incomplete when the theoretical focus is exclusively on the /quid pro
quo /of exchange value or relative price. Commodities are also intensely
useful – they must possess use value. Analysis of the role of use value
in commodity transactions shows that non-market relations are
systematically generated among commodity owners.
By implication, capitalist markets do not simply entail destruction and marginalisation of non-market relations, but also the continuous generation of fresh non-market relations among participants in commodity exchange. The latter are systematically mobilised in support of capitalist accumulation through the operations of the credit system. When relations of trust and com-
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mitment are placed at the service of capitalist accumulation through credit mechanisms, they acquire a money-making aspect, making them prone to fraud and deception.
Second, it was shown that the exchange value of commodities represents both market and non-market relations. Differentiating between value substance and value form is critically important in this respect. Value substance (abstract human labour) is established under explicitly capitalist conditions of production and exchange. For commodities produced by capital, value substance determines the form of value (quantitative ratios and relative prices). Nevertheless, there are several economic and social activities in advanced capitalism which adopt the form of commodities and acquire money prices despite being unrelated both to produced commodities and to the substance of value.
Typical examples are trading in land, insurance and financial assets. Non-market, and even non-economic, factors are important in determining prices (the form of value) for such activities. Similarly, the form of value is regularly found in non-capitalist societies, despite the substance of value being typically absent. The exchange value of commodities in non-capitalist communities and societies strongly represents non-market relations of custom, power and social obligation.