Knowledge as a fictitious commodity
Fred Block recently highlighted the relevance of Karl Polanyi’s ideas to current debates about wages. Stimulated by an article in which Paul Krugman claims that wages don’t always follow market mechanisms (he cites empirical evidence in support of this), Block suggests that this might be because “workers are not, in fact, commodities.” Block argues that something resembling Polanyi’s concept of fictitious commodities lies behind this. If famous economists are to give countenance to Polanyi’s assertion that labor is a fictitious commodity (or at least that, as a productive factor, it does not fully obey textbook market mechanisms), then are there other productive inputs that should also undergo such a classification?
While other candidates have been suggested (e.g. the commodification of nature through ecosystems services, education, etc.), this post is about one of these: knowledge.1
The commodity status of labor is fictitious, for Polanyi, because:
Labor is only another name for a human activity which goes with life itself, which in its turn is not produced for sale but for entirely different reasons, nor can that activity be detached from the rest of life, be stored or mobilized. ( The Great Transformation, p. 75)
Polanyi also classifies land (“only another name for nature, which is not produced by man”) and finance (“merely a token of purchasing power which, as a rule, is not produced at all”) as fictitious commodities. Contrary to real commodities—”objects produced for sale on the market”—fictitious commodities are either not produced for sale, or not produced at all. They merely have a price, and are treated as commodities, because “a market economy must comprise all elements of industry.” Polanyi’s underlying thought is that a market society demands all social processes/institutions in society be subordinated to economic motives, because “a market economy can exist only in a market society.”
The question for us then is: is knowledge produced for sale on a market? As with any nuanced discussion of land and labor—which would at least recognise that the existence of a market society encourages the adaption of land a labor (if not their creation) for sale the answer is both yes and no. Yes, we often create/unearth (depending on your preferred conception of knowledge) knowledge with the aim of selling it. And yes, due to a number of institutional changes, the weighting of this aim over others has increased (see for example Mirowski’s Science-Mart). But there are at least four reasons to doubt that this is all that is going on:
- It is not clear that the world is such that knowledge can be said to be produced in any way similar to a commodity; it is not the case, for example, that there is a simple relationship between input and output. Particular features of the world that we seek to understand prevent knowledge from having a clear production function (e.g. variable amounts of complexity, epistemic limitations that might be unavoidable in some domains, etc.), and even question the relevance of the word ‘production’ for it.
- Both now and in the past, the ways that we attain knowledge seem to depend on and be formed by many factors (e.g. this and this about economics) that are not market motivated. Thus, even ignoring (1), there are reasons to doubt knowledge is ‘produced’ via a purely economic (or market orientated) production function.
- Evidence suggests that the ‘production’ of knowledge via market based incentives (i.e., for sale) does not produce the most valuable/useful (in terms of price or many other societal values) forms of knowledge. This adds support to (1) and (2).
- Partially underlying all of (i-iii), knowledge is far more diffuse and contingent than talk of ‘the knowledge economy’ seems to imply. Consequently it is normally produced collectively and not inherently scarce: “[I]nformation is not inherently [economically] valuable… a profound social reorganisation is required to turn it into something valuable” (Schiller in this, page 32).
Why does this matter? Well, because the assumption that knowledge is a commodity is manifest in a variety of policies spread across a remarkably wide area. It is present in the marketisation of scientific (and other higher education research) outlined and shown to be problematic by Mirowski’s aforementioned book. It is present in the related string of innovation policies that have ignored the significant role the state funding of research plays, as outlined in Mariana Mazzacuto’s recent blog post on this site and the book linked to above. It is present in the increasing protection of IP rents (e.g. in the TPP). More recently, it is (partially) present in the drive to both redefine what counts as knowledge for policy (data analysis and randomised control trials) and the drive to outsource the production of that knowledge (e.g. some of the value-added scores used in teacher assessment). And, it is central to the whole idea that large scale data analysis by private companies (i.e. ‘big data’) can and should redefine the way we interact with knowledge and information.
Like the idea that there is more to labor than market relations, the idea that knowledge might not be a commodity is not new. But, as with other productive inputs that are assumed to be commodities, the questionable nature of knowledge’s commodity status cannot be repeated often enough. This is because it is only with such repetition that we might be able to get a serious analysis of the institutional factors and social processes (paraphrasing Block) involved in the production of a key economic input (knowledge) back into (new) economic thought.
1 Throughout this piece I’m going to assume a very simplistic ordinary language idea of knowledge. The reality is obviously more complicated; a more complicated conception of knowledge is likely to further support to my point.
