Photis Lysandrou’s brilliant new book deploys the Hegelian-Marxist method of abstraction in order to understand the heavily financialised regime of capitalism in the twenty-first century.
Classical political economy begins from the premise that capitalism must be understood as an integrated social, political and economic order. This presents a number of methodological challenges. The capitalist world is multifaceted, operates at numerous geographical scales and is embedded within an intricate web of social relations. Given this complexity, how might we capture the ‘holistic’ character of capitalist development?
One approach, rooted in the Hegelian-Marxist tradition, deploys a method of abstraction in order to answer this question. From this perspective, theory should begin with capitalism in the ‘concrete’: that is, as an actually existing social configuration. The theorist then abstracts from this context in order to isolate its underlying developmental logics. The task of theory is to analyse how these abstract tendencies come to be articulated in specific historical conjunctures. This was the method famously deployed in Capital, where Karl Marx moved from the ‘abstract-simple’ conception of the ‘commodity form’ and its various contradictions to an analysis of how these tendencies come to be articulated in ‘concrete’ historical situations, such as in the formation of capitalist property relations and in workplace struggles over the length of the working day.
In his excellent new book, Commodity, Photis Lysandrou deploys this method of abstraction in order to understand the heavily financialised regime of capitalism in the twenty-first century. The result is a pithy critical analysis of the ‘global commodity system’ and its various developmental tendencies. The book deftly charts how financialised capitalism rose to ascendance and how it has come to shape the world economy today.
The book is divided into five chapters which progressively uncover a different element of the ‘global commodity system’. In the first chapter, entitled ‘Structure’, Lysandrou advances the core theoretical proposition of his book. Two underlying logics shape the capitalist world economy. The first is the logic of ‘physical space’. This includes the vast array of tradeable goods and supporting physical infrastructures, such as raw materials, manufactured products and complex machine goods which circulate throughout the world economy. This ‘physical space’ has two key properties. First, it is heterogenous. It contains an innumerable set of qualitatively distinct objects and material processes which are rooted in a complex network of territorially-grounded sovereign jurisdictions. Second, this domain of physical space develops over time through a logic of ‘progression’. Through the application of innovative new production techniques, technological capacity and material capabilities constantly expand, laying the foundations for increased abundance on a global scale.
However, this ‘physical space’ co-exists with a second logic, which Lysandrou terms ‘commodity space’. This is the central concern of the book. ‘Commodity space’ is quite distinct from ‘physical space’. ‘Commodity space’ is homogenous. The commodity principle constantly seeks to reduce the vast sum of qualitatively distinct physical products to one metric, as reflected in the relative value or price of each commodity on the market. Second, Lysandrou claims that the commodity principle is ‘regressive’. The expansion of commodity space involves the projection of the price mechanism into numerous social domains. This in turn results in a process whereby one group (in particular, the owners of financial assets) can increasingly exert social power over another (those excluded from extensive asset ownership). ‘Physical’ and ‘commodity’ space are interlocked in an increasingly antagonistic but mutually dependent relation, as the superior organisational logic of the latter colonises and subjugates the former.
Lysandrou then traces in the chapter ‘Genesis’ the rise of the ‘commodity principle’ from the mid-eighteenth century to the present day, deploying a longue durée perspective reminiscent of Fernand Braudel, Immanuel Wallerstein and Giovanni Arrighi. In the subsequent chapter ‘Operation’, Lysandrou moves from this long-term perspective towards an account of the financial agents, mechanisms and instruments which together constitute the global commodity system. This chapter uncovers the shock troops of ‘commodity space’ – the asset managers, institutional investors, private equity funds, real estate brokers and ‘high net worth individuals’ – whose daily calculations and rent-seeking activities open up new horizons for finance-led accumulation and intensified commodification.
The commodity system is highly dynamic. Its ‘simplicity’ – reducing the complexity of the world into a series of calculable asset values and price movements – grants it a superior operational logic relative to other forms of social organisation. But commodity space is also highly dysfunctional. It generates unsustainable patterns of distributional inequality, as exemplified by the continued decline of labour’s share of economic output and by the grotesque levels of wealth and income inequality both within and between capitalist societies. These asymmetries are intensified as bond markets increasingly exert pressures on welfare systems and on the fiscal capacity of the state.
The chapter on the 2008 financial crisis captures the profound dysfunctionalities of this ‘global commodity system’. Lysandrou views 2008 as the first truly ‘global’ crisis of the commodity system, on the grounds that its origins lie not in one national configuration of capitalism but instead in the complex linkages which have emerged within global capital markets, or in what Adam Tooze has referred to as the ‘inter-locking matrix of corporate balance sheets’. Lysandrou guides the reader through the list of complex financial instruments and pricing dynamics which led to the the near-collapse of the global financial system.
Commodity raises a number of questions which could create the basis for future scholarly enquiry. Lysandrou often appears to view ‘commodity space’ as an almost omnipotent force which has come to dominate every dimension of social life. But, in many respects, the very ‘success’ of the commodity principle relies upon the existence of ‘non-commodity’ space: that is, social relations which are organised outside of the price mechanism. Feminist scholars, for example, rightly point to the household sphere as a key domain wherein the broader reproductive needs of society are realised. Similarly, large swathes of the labour force in the Global South continue to secure their livelihood through informal work and subsistence agriculture. As my colleague Genevieve LeBaron has shown, forced labour is rife amongst the supply chains of some of the world’s best-known global corporations. These practices are not reducible to the ‘logic’ of the commodity form, where the price mechanism coordinates exchange and distribution. Interrogating the relation between the ‘non-commodity’ domain of direct domination and ‘commodity space’ therefore represents a fruitful area for future intellectual enquiry.
Lysandrou’s text is bookended by two quotes from Marx’s Capital and the Grundrisse. But one cannot help but think that a more systematic application of the dialectical method on Lysandrou’s part might have better illuminated some of the dynamic tensions and contingent processes which have characterised the evolution of commodity space. To take one example, Thatcherism embodied a far-reaching project of commodification. The abolition of exchange controls in 1979, rapid interest rate hikes in the early 1980s and the financial deregulations of 1986 together unleashed a wave of de-industrialisation which undermined the ‘de-commodifying’ power of the trade unions and threatened non-market forms of social provision.
However, at the same time, Thatcherite restructuring unleashed important counter-tendencies which erected new barriers to future commodification. For example, the rapid increase in unemployment – which exceeded three million in the early 1980s – resulted in large increases in the welfare bill and frustrated attempts to cut public expenditure. The creation of a large workless underclass in turn necessitated the redeployment of state power over subsequent decades to ‘re-commodify’ the lives of those ‘outside’ of formal labour market institutions, initially through the iterative implementation of ‘workfare’ programmes and crystallised in today’s punitive sanctions regime.
The extension of ‘commodity space’ is therefore best understood as a dynamic and contingent process which, as Karl Polanyi might have put it, produces numerous ‘de-commodifying’ counter-tendencies and forms of social resistance. Commodification generates a relentless process of restructuring, not only of productive activities but also of the social fabric itself. In so doing, it brings into existence new social and political constituencies which have the potential, and increasingly the material incentive, to fight back.
This book review was originally posted by the London School of Economics British Politics and Policy blog, and can be found here.