Commodification, decommodification and social rights

Should we be free to enjoy our life in a way that we do not depend on market forces? In the seminal work The Three Worlds of Welfare Capitalism, Espling-Anderson (1990) provided a definition of “decommodification” that is very popular in academia to the present (Bambra 2005, 2006; Scruggs & Allan 2006; Huo, Nelson & Stephens 2008). Because this definition focuses on the way market forces can impede social rights, it may be tempting to say that commodification (the opposite of decommodification) should be seen as a sort of “enemy” to social rights, and should consequently be minimized, but to what extent?

Decommodification –freedom to enjoy social rights without bowing to the market

At its heart, Espling-Anderson’s argument is that social rights and social stratification “are shaped by nexus of state and market in the distribution system" (Esping-Anderson 1990, 4). The reason this can be called “decommodification” is because social rights diminish a person’s status as a “commodity”—and the state and the market are the two major forces that can impact that status.

Hou, Nelson & Stephens (2008) paraphrase Espling-Anderson by saying that decommodification means "exit from the labour market with little or no loss of income" (2008). This may seem incomplete or contradictory, but it is right on target with the point Espling-Anderson (1990) seems to be making: that “outstanding criterion for social rights must be the degree to which they permit people to make their living standard independent of market forces”. Perhaps it is Espling-Anderson’s point, or maybe it is an extension of it to say that the fundamental consideration in balancing the market and the state is the degree to which human beings are able to enjoy some basic standard of living without having to bow to powerful market forces.

At first, this conjures to mind ideas about the “neoliberal project” –a sort of “market über alles” political economy. As Espling-Anderson (1990) points out, contemporary neoliberalism is little more than the political economic project of favoring and enacting neoclassical economic principles in a country. Many have written about neoliberalism as a project of conquest—a sort of neo-colonialism—that ends up benefitting wealthy elites in the name of “trickle-down economics” (Szirmai 2005, Harvey 2007, Duménil & Levy 2011). While this cannot be undertaken in full in this article, those familiar with this literature may see a connection between Espling-Anderso’s (1990) notion of decommodification and the way that state deregulation of the market can decrease social rights—specifically for the poor or underprivileged.

In short, “commodifying” people—allowing the market to become so important in society that people are only “worth” what they can produce or exchange in the market—has the potential to almost destroy social rights for non-elites in society. Therefore, are we to conclude that commodification is dehumanizing and should be extinguished?

The paradox of commodification as “undesirable”

While it may seem easy to argue against commodification as it is an enemy to social rights, I am reminded of a statement I once heard from Dr. Lawrence Bush (University Distinguished Professor of Sociology at Michigan State University) referring to bureaucracy that seems to apply equally well to commodification.  We all like it! Commodification moves exchanges into regulated, efficient and predictable markets. We like that we can have our labor “monetized” based on certain standards, precedents or conventions. It is easy and predictable to know and compare prices and use money—the monetized “version” or “substitute” of our labor—to buy products. We like that we can see real estate listings with prices when buying a home. Markets can be very efficient and it seems unlikely that any of us would sign up to have markets completely banned. So as much as we do not want markets to get “out of control” or take over our lives, we must not forget that we all look to them for their redeeming qualities of transparency and efficiency.

Conclusion—what should the balance be?

Do not misunderstand that I am arguing in favor of markets. Rather, I am making the point that what most of us are really looking for is a balance between state power and market power. Espling-Anderson (1990) provided the theoretical foundation for conversations that center around finding that balance. Favoring the market in a society can lead to the undesirable outcome of commodification of human beings. My own research on the neoliberal project in Colombia in the 1990s supports the idea that favoring the market can commodify people.

Many indigenous people in Colombia have had their “inalienable” lands sold off to transnational corporations. For many of these individuals, land is not a commodity, but a part of who they are—a part of their identity. Even putting a price tag on land is a commodifying process in the eyes of many of these indigenous people. The question then remains, what is the role of government—or what should it be—in regulating the reach and influence of markets. In 1984, the United States government made it illegal to sell your own organs (National Organ Transplant Act). This is an expression of the way governments can override market forces in favor of the “decommodification” of people. In other words, governments can and have stepped in to situations that will make people lose their “humanity” and become more like a commodity. One might argue that prostitution laws have the same desired outcome—the keep people from selling themselves like a commodity. Where and how this line must be drawn is largely a matter of perception and culture that must be decided by stake holders in any given context.

Works Cited

Esping-Andersen, Gosta. 1990. The Three Worlds of Welfare Capitalism. Princeton University Press.

Scruggs, L., & Allan, J. (2006). Welfare-state decommodification in 18 OECD countries: a replication and revision. Journal of European Social Policy, 16(1), 55-72.

Bambra, C. (2006). Research Note: Decommodification and the worlds of welfare revisited. Journal of European Social Policy, 16(1), 73-80.

Bambra, C. (2005). Cash versus services:‘worlds of welfare’and the decommodification of cash benefits and health care services. Journal of social policy, 34(02), 195-213.

Huo, J., Nelson, M., & Stephens, J. D. (2008). Decommodification and activation in social democratic policy: resolving the paradox. Journal of European Social Policy, 18(1), 5-20.

Szirmai, A. (2005).The Dynamics of Socio-Economic Development: An Introduction. Cambridge University Press.

Harvey, D. (2007). Neoliberalism as creative destruction. American Academy of Political and Social Science, 610. 22-44.

Duménil, G. and Levy, D. (2011). The crisis of neoliberalism. Harvard University Press. Cambridge, Mass