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

Decent Essays
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).
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Polanyi nonetheless highlights that while labour, land, and money are essential to the market economy; the fact is that they are not commodities, in the sense that they are not objects produced for sale on the market. As Polanyi points out, ‘labour’ is ‘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’ (Polanyi 2001, 75). Similarly, ‘land’ is ‘another name for nature, which is not produced by man’; while ‘money’ ‘is merely a token of purchasing power which, as a rule, is not produced at all, but comes into being through the mechanism of banking or state finance’ (Polanyi 2001, 75). To include these ‘fictitious commodities’ in the market mechanism means to ‘subordinate the substance of society itself to the laws of the market’ (Polanyi 2001, 75). For Polanyi (2001. 76), this would inevitably result on the demolishing of society. The commodity description of labor is entirely fictitious

Polanyi's critique goes to the core of neoclassical economics and its claims about equilibrium prices and self-regulation. The imperative for non-market
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