Shock therapy: Escaping the Karl Polanyi matrix: The impact of fictitious commodities: money, land, and labor on consumer welfare

Things have kept me on the hook for a while, ranging from complexity of economics and finance to math to physics and obviously philosophical heres and theres. But, seriously getting back on to the bitcoin, blockchain and its political consequences have been in the lurch for a while now and would still remain there for some time to come. Yes, I have been on the lookout for such a nexus and who better than Nick Land to get me there, but his books on the Kindle are still pending to be read. But, time would have its way on these for sure. In the meanwhile, I am sharing a paper that was a talk of the group I belong to some while back in my professional capacity, and which has pummeled me to once again discover economies of the right-wing finding adequate subscription and where those on the other side of the spectrum, the left find it efficiently adequate to ignore as usual, thus slipping and sliding away into the economies of the scalar as against any directed-ness to taking the same headlong.


When economists address the issue of the production of goods they begin with the concept of ‘factors of production’: these can be thought of as akin to resources, but fundamental productive resources that are necessary to make anything that can later be sold in a market. This is important because, as Karl Polanyi pointed out, labour is not labour until there is a labour-market. Before this momentous transformation people are people or citizens or even workers, but not labour.

Land also undergoes a transformation when it becomes available for sale in a market, although it does not undergo a change of name. What an economist means by land, however, is not what the layman means by land. As a factor production land includes everything that can usefully be extracted from land (including from deep beneath it) to become part of a productive process. Thus ‘the economic notion of resources is strictly anthropocentric. That is, the economic value of any resource is defined by human needs and nothing else’. There is no space in this definition for land to have a spiritual or relational importance, what economists would call an ‘intrinsic value’, as it does for many indigenous people, who see the land as their mother.

Polanyi referred to land and labour as ‘fictitious commodities’. Real commodities are ‘objects produced for sale on the market’. Land, by contrast, ‘is only another name for nature, which is not produced by man’ while labour ‘is only another name for a human activity’. To refer to these basic economic elements as equivalent to goods that were produced specifically to be sold he considered to be a fiction.

Commodity land, money, and labor remain a largely unseen matrix as they have been part of the market economy since “The Great Transformation” from a feudal to market society. Market competition raises the price of land and money through increased demand for fixed assets, rather than lowering it through increasing supply as in the case of microchips or other competitive product. Commodity labor in flexible labor markets normally results in wages being driven down due to the oversupply of labor. Labor is also subject to periodic unemployment and loss of income during recessions resulting from booms and busts in commodity land and financial products. Therefore commodifying land, money, and labor reduces consumer surplus, and lowers economic welfare…..

The rest is the paper, which should at least be attempted @reading.

Escaping the Polanyi matrix: the impact of fictitious commodities: money, land, and labor on consumer welfare by Gary Flomenhoft


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