Critically discuss the notion of labour as a “fictitious commodity”. Provide examples where necessary.

Topics: Economics, Neoclassical economics, Supply and demand Pages: 3 (829 words) Published: October 19, 2014
Critically discuss the notion of labour as a “fictitious commodity”. Provide examples where necessary.

This paper outlines the argument of labour as a “fictious commodity” using Polanyi’s work. This paper first define what commodity is and what fictitious commodity is before going into deep details of this topic. Conclusions have been drawn base on the main core of the topic and critiques of fictitious commodity by Polanyi.

First, a commodity is a good or service that is actively produced for sale in a labour process. A commodity can result from peasant, petty commodity, state production, cooperative production, or social enterprise as well as capitalist production – what matters is its production for sale (Polanyi 2001, 71). Fictitious commodities as for instance labour are things that were not originally produced to be sold on a market. Even though under certain conditions labour can transformed into commodity (Polanyi 2001, 71).

Polanyi (2007:73) explains that the introduction of labour as a commodity was invented through factory systems because labour was a very important factor in the factors of production. Polanyi state that labour had to be transformed into commodity in order to keep production going. Even so, Labour couldn’t be really transformed into commodity, as actual labour was not produced for sale on the market. But the fiction of labour being so produced became the organizing principle of the society (Polanyi 2001, 79). Polanyi referred to labour as ‘fictitious commodities’. Real commodities are ‘objects produced for sale on the market’. Labour, by contrast ‘is only another name for a human activity’. To refer to this basic economic element as equivalent to goods that were produced specifically to be sold he considered to be a fiction (Polanyi 2001, 75). The impossibility of a fully self-regulating market economy is intrinsically linked to Polanyi’s critique of ‘fictitious’ commodities. Polanyi highlights that the extension of the...
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