Karl Polanyi’s theory of fictitious commodification as a cultural political economy of institutionalization

ABSTRACT

This paper aims to offer a new reading of Karl Polanyi’s political economy by reinterpreting and reconstructing his institutional analysis as a cultural political economy that critiques capitalism as a historically specific symbolic system. For this purpose, it will draw on his earlier concepts from the socialist calculation debate to reinterpret Polanyi’s theory of fictitious commodification. In particular, it will examine how Polanyi conceptualized the symbolic structure of capitalism as an institutional articulation of particular economic facts, accounting concepts, and economic theory. Polanyi not only critiques the intrinsically cultural nature of foundational categories of the capitalist market economy such as profits, factors of production, and fictitious commodities but also shows how the gap between these categories and ‘the reality of society’ eventually brings about crises and crisis tendencies expressed in the ‘double movement’ and the ‘self-protection of society’. In this sense, Polanyi is a critical cultural political economist with contemporary relevance for the analysis of capitalism as a historically specific symbolic system in which culture plays both constitutive and ideological roles.

KEYWORDS:

• Polanyi, Karl
• fictitious commodity
• accounting
• institutionalization
• cultural political economy

Acknowledgments

Earlier versions of this paper have been presented to the Karl Polanyi Institute Asia (KPIA) and the 15th International Karl Polanyi Conference in 2021. The authors appreciate the critical comments from those who read this paper at various stages.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Notes

1 Thorstein Veblen contrasts industrial engineers concerned with efficient production (a substantive aspect of the economy) with the pecuniary class interested in maximizing profits (the formal aspect of the economy)(Veblen 2001).

2 Here ‘construction’ refers not only to discourse or interpretation (construal) but also materialization. For the distinction between construction and construal, see Sayer (2000, pp.90-93).

3 Similarly, Bettelheim (1975, pp.5-6) distinguishes between socialist and capitalist calculations, or between broader economic calculations and monetary calculations. Luhmann also suggests prices as a self-description of the economic system, which allows economic actors to observe economic activities and their environment (1988, pp. 113-114, 118 cited Boldyrev, 2013, p.273).

4 The Lancaster School comprises, most notably, Bob Jessop, Ngai-Ling Sum, Andrew Sayer, Norman Fairclough, and Ruth Wodak at Lancaster University.

5 The process of (fictitious) commodification not only involves labor, land, and money but also can extend to every sphere of human existence. For example, knowledge has become a fictitious commodity through intellectual property rights (Jessop 2007; Özel 2019).

6 Polanyi’s critique of the labor theory of value was also directed at Karl Marx. Polanyi assumed that Marx had simply appropriated Ricardo’s labor theory of value. However, to Marx, labor and value were not natural entities, but historically specific forms (Dale, 2016: 45). In this sense, Marx’s theory can be considered a ‘value theory of labor’, which questions why labor takes a value-form in capitalism (Elson, 1979: 123). Marx’s theory is, indeed, a critique of classical political economy which transforms and fetishizes labor power as a commodity (Marx, 1867/1976). Marx’s point is that labor can function as a measure of value only in capitalism. In this sense, Polanyi misunderstood Marx’s theory of labor. It should, however, be noted that Polanyi did not neglect that Marx distinguished between natural and historical/institutional processes: ‘Marx describes the economic process between 1) Man and Nature; and 2) Man and Man … the natural elements of economics are labor, raw materials, tools, human needs, and so on. In our present society these take on the historical (i.e., transitional) forms of wage labor, capital, demand, purchasing power, and so on’ (Polanyi, 1937/2018: 150; italics in original). All in all, Marx and Polanyi have in common in that they criticize the (fictitious) commodification of labor power in capitalism (cf. Jessop and Sum, 2019: 165).

Additional information

Funding

This work was supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea (NRF-2021S1A5A2A01071942).