Thursday, June 04, 2020

Capitalism Alone (2) Commodification

In his book called Capitalism Alone, Branko Milanovic says that the reverse side of atomization is commodification.

In atomization, we become alone because all of our needs can be satisfied by what we buy from others, in the market. In a state of full commodification, we become that other, we satisfy the needs of people through maximum commodification of our assets, including our free time.

What capitalism does is to give us, as consumers, the ability to purchase activities that used to be provided in kind by family, friends, or community. But to us as producers, it also offers a wide field of activities (precisely the same ones) that we can supply to others.

The most obvious case is the commodification of activities that used to be conducted within extended families and then, as people became richer, within nuclear families. Cooking has now become outsourced, and families often do not eat meals together. Cleaning, repairs, gardening, and child-rearing have become more commercialized than before or perhaps than ever. Writing homework essays, which used to be “outsourced” to parents, can now be outsourced to commercial companies.

The growth of the gig economy commercializes our free time and things that we own but have not used for commercial purposes before. Uber was created precisely on the idea of making better use of free time. Limousine drivers used to have extra time between jobs; instead of wasting that time, they began to drive people around to make money. Now anybody who has some free time can “sell” it by working for a ride-share company or delivering pizza. A portion of leisure time that we could not commercialize (simply because jobs were “lumpy” has become marketable. Likewise, a private car that was “dead capital” becomes real capital if used, to drive for Lyft or Uber. Keeping the car idle in a garage or parking lot has a clear opportunity cost. Similarly, homes that in the past might have been lent out for a week without compensation to family and friends have now become assets that are rented out to travellers for a fee. As soon as this happens, such goods become commodities; they acquire a market price. Not using them is a clear waste of resources. Whereas in the past their opportunity cost was zero, now it is positive (p.190).

This does not mean that everyone will use every free moment to do a gig, or will rent out their home every day that it is empty. Similarly, we do not use every minute of our lives to try to earn money. However, once the opportunity cost of the hitherto free activities becomes positive, we are ultimately led to think of these activities as commercial goods or services. It then requires greater effort of the will to let opportunities go and not succumb to benefiting from them.

Just as there is a logic in the way hypercommercialized capitalism obliterates the divide between the production and family spheres, so is there a certain historical logic in the progression of what becomes commodified. First, agriculture was commodified through the commercialization of surplus production, that is, through a movement out of subsistence agriculture. Then came the commodification of manufacturing activities, especially clothing production. New markets emerged as the goods that had traditionally been produced by households started to be produced commercially. At the origin of the Industrial (and industrious) Revolution in Europe was wage work outside the home and, together with it, the practice of using the wages thus earned to purchase commodities that had previously been produced within the household by these same workers (with productivity much higher under the new system). This is exactly the same that we observe today with respect to services. The commodification of services, and ultimately of free time, is just an additional logical on the road to development.

Personal services are more difficult to commodify because productivity increases are slower than in the production of goods (so the advantages of commodification are less obvious), and the gains from the division of labor are less: the advantage of a delivered meal compared with a home-cooked one is not as clear as the advantage of buying mass-produced shoes compared with making them at home.

The commodification of our economy is easy to get sucked into.

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