Demand and Supply Appear,but for What? The Commodity Construct at a Crossroad

Abstract

The motivation for writing this article stems from the realization that the original ontological nature of commodities in modern society has changed, which necessitates a reconsideration of their ethical, epistemological, and teleological understanding to ensure the continuation of sustainability and sustainable development (SSD). The purpose of this study is to respond to the demand for effective climate policies by theorizing a new social kind, the “giftized commodity,” which adds value to the current paradigm in the general narratives of SSD. This article posits the following two main arguments to theorize the giftized commodity: (1) Internalizing the externalities. Consumers should bear the moral obligation for climate policies since market demand drives production, shipping, and disposal. (2) Reconceptualizing the meaning of commodity. The results from anthropogenic climate change should be considered a fundamental part of any commodity’s price. This article concludes that by acknowledging the new ontological, ethical, epistemological, and teleological status of market goods (i.e., commodities), it is appropriate for climate policymaking to recognize them as giftized commodities.

Introduction

In the Sixth Assessment Report (AR6) assessment in 2023, the United Nations Intergovernmental Panel on Climate Change (IPCC) has asserted unequivocally that climate change has anthropogenic causes. It also reports that adverse impacts are felt disproportionately by populations on the globe that have contributed the least to climate change, and that they are caused disproportionately by those with higher social and economic status. The report inveighs policymakers to prioritize equity, climate justice, social justice, inclusion, and just transition processes as a way to enable responses to climate change.

Calling for Effective Climate Policies

Many scholars in both pre- and postdated publications of IPCC AR6 expressed the importance of the connection between robust ethical thinking in climate-change issues and effective climate policies. For example, Ziervogel et al. (2022) show the importance of aligning entitlements with the ideals of rights and justice in the face of urban challenges in the Global South. They talk about many challenges that policymakers in the Global South must take on. However, these policymakers find considerable value in understanding the relation of entitlements, rights, and justice in the context of ecosystem resilience. Resilience, described as adapting and growing despite stresses, is a fitting descriptor for individuals and institutions, and policymakers are better enabled to bring it about when they consider fair claims to entitlements (rights) and the overall schema for the distribution of entitlements (justice). The importance of the connection between a critical ethical approach and appropriate policy is also expressed by Baer et al. (2009), who point to the need for careful consideration of rights and their distribution when crafting policies designed to mitigate global warming. While necessary, such policies incur burdens, and policymakers must be careful not to make trade-offs that result in an overall losing outcome regarding rights. The connection between serious ethical investigation and policymaking is also important in discussing compensation for climate change loss and damage. Given intergenerational complexities and relations between polluters and beneficiaries, ethical discussions about who should bear the burden for costs incurred by climate policies can shine some light on and guide these issues (Shue, 1999; Page, 2008; Baatz, 2014). Finally, two pieces explicitly written about IPCC AR6 spotlight the importance of research in ethics to promote effective climate policy. Cook (2023) states that policies experienced as fair receive better support from the public and are, because of this, more effective. Byskov et al. (2021) stress the need for an interdisciplinary approach, one that incorporates natural sciences, social sciences, and philosophy, to determine what is owed to people “after the occurrence of environmental change and depletion of natural resources (p. 4).” They aim to help facilitate the creation of effective policies prescribed by IPCC AR6, and they make the case that ethical thinking ought to be done upstream for this purpose. The ethical principle about which Byskov et al. (2021) are primarily concerned is justice in its distributive dimension (which they describe as the fair distribution of resources and responsibilities), its compensatory dimension (which they describe as the remedy for losses), and its procedural dimension (which they describe as fair access to participation in decision-making). Effectively, justice is the ethical principle that is paramount in all the works cited here. Our article features it in the same way.

The Purpose of This Study

This article posits the following two main arguments to theorize the giftized commodity: (1) Internalizing the externalities. Consumers should bear the moral obligation for climate policies since market demand drives production, shipping, and disposal. The burdens for paying for climate policies should be assigned to those responsible for the demand. In this article, consumers refer to any individuals (i.e., consumers) or entities (i.e., businesses, organizations, governments) that purchase goods or services. (2) Reconceptualizing the meaning of commodity. The results from anthropogenic climate change should be considered a fundamental part of any commodity’s price. The ontological nature of commodities has changed due to the recognition that human behavior affects the Earth’s climate. This change is normative and ontological, as the costs and burdens associated with climate impact must be acknowledged in market transactions. The Earth’s limited absorptive capacity makes this recognition a discovery rather than an added characteristic. This article concludes that acknowledging the new ontological, ethical, epistemological, and teleological status of market goods (i.e., commodities), it is appropriate for climate policymaking to recognize them as giftized commodities. Understood as a process social kind, the giftized commodity elaborates upon and extends from its depiction as the product of Hegelian synthesis in Zhang et al. (2023).

The Structure of This Article

The rest of this article unfolds as follows: In the theoretical framework and methodology, we discuss the process social kind, an innovation proposed by Storm (2021) as a means for theory formation and progress in fields stalled by postmodern critique. The significance of accepting a process ontology—that is, a commitment to change as fundamental rather than stability—is also discussed. In the theoretical background, we look at the objects of exchange in prestatal societies (which anthropologists like Mauss refer to as gifts) and industrial liberal societies (which early modern thinkers called commodities). We examine the conflicting purposes and obligations tied to exchanging and consuming gifts and commodities within distinct economic systems. The discussion section presents the possibility and plausibility of understanding the item of exchange in the current global economy as a giftized commodity, a new social kind that fits in a world where behaviors of production, shipping, and disposal impact virtually everyone through climate costs. At last, we conclude with an assessment of the limitations of our research and suggestions for future research possibilities.

Theoretical Framework and Methodology

We explain and adopt a metatheoretical innovation, the process social kind, proposed by Storm (2021) as a means for theory formation and progress in domains of human sciences stalled by postmodern critique. Storm addresses shortcomings using essentialism in the human sciences by developing Process Social Ontology. He presents process social kinds as socially constructed, dynamic clusters of powers anchored by causal processes.

Process Social Ontology and Its Importance

In Metamodernism, Storm (2021) addresses a decade-old core problem in the humanities and the social sciences. The influence of postmodernism in the academy, and especially that strand of postmodernism engaged in deconstruction, has succeeded in compromising the universality and utility of disciplinary objects in the human sciences. The result has been a corrosive effect on coherence and progress (i.e., Rosenau, 1991; Dear, 1988; Habermas and Blazek, 1987). Deconstructivist currents are correct in critiquing any tendency to look at social kinds, such as art or religion, as an immutable essence that performs like a genus and defines all members of the type. Generally, this tendency undergirds the strands of thinking that constitute modernism. According to Storm, deconstructionism has effectively shown that the social kinds in the human sciences are not encapsulated and immutable. What is more is that the search for such an encapsulated and immutable foundation stone is fruitless.

Storm embraces the insights and critique of deconstruction, but rather than leave the deconstructed remains of human sciences in his wake, he aims to provide a working definition for a social kind that will be foundational for progress. The key to understanding the dialectical nature of his project is to see the value in his commitment to a process ontology—that is, his commitment to a view of reality in which “variety and difference” are the default (Storm, 2021, p. 90). He traces this view back to Alfred North Whitehead’s (2010) process of metaphysics, and he adheres to this view because it better explains the evidence that gives rise to the critique of social categories as unstable. This default position implies that the ultimate nature of reality is process/change, and stability needs to be explained.

The Structure of the Process Social Kind

In describing the structure of the process social kind, Storm takes his cues from the works in biological theory formation by Richard Boyd. Boyd is interested in understanding the nature of species. Rather than looking at biological species as groups of individuals that belong together due to family resemblances, Boyd proposes that species should be regarded as clusters of properties brought into existence by the causal structure of the world and determined in an a posteriori manner (Boyd, 1991). In no way does Storm suggest that social kinds used in the human sciences are to be regarded as species as the term is used by biologists, but he does find great use in the fact that Boyd grounds the property clusters of species in causal mechanisms. Process social kinds are similarly anchored in causal events of the world. Storm identifies causal events by which process social kinds—groupings of individuals with similar properties—are brought into existence and recognized. These causal events are social behaviors that give birth to these processes; social kinds mean that these kinds are not categories discovered in nature. They are social constructs. Essentially, the causal mechanisms by which process social kinds come into existence are classification (which Storm calls “dynamic nominalism”), copying (which Storm calls “mimesis”), convergence in response to the need for function (which Storm calls “ergonic convergence”), and perhaps (although Storm asserts this cause with some hesitation) decent from a certain origin (which he calls “etiological processes”).

An important adjustment that Storm makes to the terminology that Boyd uses is the change from clusters of properties (Boyd—species) to clusters of powers (Storm—process social kinds). It is more apt to think of process social kinds as having powers, which Storm suggests can be thought of as the occasion to do or to have done to. Storm describes these powers as including “obligations and opportunities, liabilities and abilities” (p. 116). Critically, process social kinds exhibit these powers only insofar as they are part of a greater system. This means that as the system changes, so may the powers and processes of social kinds be properly understood as historical events rather than substantial essences.

The applicability of the process social kind to giftized commodity rests on the fact that changes to the global environment in which material exchanges occur have altered the powers that typify the item of exchange in the current global economy, and thus, the obligations, opportunities, liabilities, and abilities should be recast. We suggest that its similarity with both gift and commodity be explicitly recognized. The following section covers the characteristics of gifts and commodities. Focus is given to the ontological, epistemological, teleological, and especially the normative dimensions (obligations, liabilities) indicative of each.

Theoretical Background

Process social kinds are categories that provide scholars with a foundation to explain social reality. They do so, according to Storm, because they are temporary zones of stability. As such, they normatively direct human behavior and can be described as having powers of obligation, opportunities, liabilities, and abilities. Process social kinds have powers because they are intricately connected to a social system. Storm aptly refers to them as “zones,” one can think of them as regions of a system rather than as entities external to a system and of which a system makes use. They are not natural kinds, as are each of the elements on the periodic table, and thus enduring in properties regardless of any system that may make use of them. The features, or powers, of process social kinds depend on the overarching system of which they are a zone.

Items of material exchange are zones of economic systems insofar as they are used to explain economic behavior. In studies of some prestate societies, they are referred to as “gifts” because of the nature of the powers they exhibit on human activity.

The Gift Construct Described

In his anthropological study The Gift, Marcel Mauss explores transactions in archaic economic systems. He investigates primarily societies that are not organized around ideals of a free market, and he believes that the structure and aims of these systems reflect a transitional phase that predates modern market systems. He calls the item of exchange in such societies a gift, and this makes sense in that the initiation of exchanges in the societies he studies putatively comes from the motive of generosity, although, in truth, he asserts that such exchanges are obligatory and include the moral demand for reciprocation. Although markets of trade and barter exist in such societies, they are relegated to the fringes. The gift transaction and the reciprocity involved are the core around which all other behaviors are organized. Gifts differ from items of exchange in modern societies (commodities) in several ways. Two of them are very important.

First-Way Gift Exchange Differs from the Exchange in Modern Societies

First, the obligation for reciprocity differs in a gift exchange from that for a commodity exchange. Exchange of either morally necessitates a reciprocal act, but one might characterize reciprocity in gift exchange as thick and that of commodity exchange as thin (Block, 2008). This reciprocity is for equivalents within a relatively short amount of time. Transactors elect to conduct the exchange based on their calculation for gain, and both provider and recipient are stipulated (i.e., A gives B a good; thus, B owes A). Reciprocity that is thick typifies gift exchange. In this study, neither the amount reciprocated nor the time frame for reciprocation is determined by any kind of formal contract. That one must reciprocate in gift economies is the norm, and that one must reciprocate equivalently or with interest is the norm as well (Mauss, 2000). However, it is not the case that something like a set price or timetable for payment is contracted. Mauss describes the practice of barter as evolving from gift giving; he calls it a process of simplification in which arbitrary time limits to reciprocate were reduced. Honor induces families, clans, and tribes to reciprocate, and failure to do so in a timely way is dishonorable, but no timetable is determined.

Thick reciprocity is not strictly dyadic (Block, 2008). In other words, if an item of exchange passes from A to B, it might be the case that B reciprocates to multiple others. Indeed, in the introduction to his book, Mauss explains that exchanges are hardly ever between individuals in the gift societies he studies. Instead, they are usually between clans, tribes, and families. Benefits of gifts and reciprocal acts are dispersed among members of corporate bodies.

Along these same lines, Sahlins (2013) elucidates this theme by depicting acts of reciprocity as falling along a spectrum. Using as a template the continuum of reciprocal transactions that Bronislaw Malinowski records in his study of the Trobriand Islands, Sahlins elucidates it and argues that it can be generalized to all premarket societies. Sahlins’s spectrum can be imagined as a line divided into three regions, each delineating the sorts of reciprocal acts that fall within it. One end is described by acts that exhibit general reciprocity. At the extreme, one finds a pure gift. These are transactions that flow one way, as a gift is given without any return gesture expected or effected. Jacques Derrida makes the case that such a transaction is impossible (Derrida, 1992). Regardless of the possibility or impossibility of such an act, on the spectrum that Sahlin describes, it indicates the extreme (or ideal) form of general reciprocity in that it is selfless and social. Giving here flows from the self to others, and nothing is gained (neither materially nor in terms of esteem). Other acts that fall within the region of general reciprocity are more or less social to the extent that they approach or fall away from pure gift. Such acts specify neither the amount nor the timetable for the return flow. Sahlins cites the acts of parents toward their children as examples. The flow may be one way for years and may, in fact, never be returned. The terms for reciprocity are not specified.

The region at the other end of the spectrum is termed “negative.” Extremes here also flow one way, but not, as with the pure gift, from the self toward the other. Instead, the act is selfish and antisocial. Theft acts as an example of the extreme. Acts that fall within this region on the spectrum seek to enrich the self at the expense of the other. Those transactions that fall within the middle region are called “balanced.” Sahlins refers to them as more properly “economical”; these acts are marked by a contracted return on a timetable. They are balanced to the extent that they resist the one-way flow of either extreme of the spectrum. Demand on both sides of the exchange is satisfied.

The reciprocity in the premodern gift societies demands a kind of reciprocity that bends toward generalized. Time constraints are loosened, although not altogether abandoned, and the amount of return flow is not explicitly contracted. The exchange between clans or tribes strays away from the demand for immediate or regulated reciprocal acts. Sahlins believes that the aim is not to discharge the obligation but rather to extend the social interaction, and he interprets these acts as a means to attain the peace that Hobbes’s covenant attains in Leviathan. Warlike tendencies are overcome by the extended give-and-take of transactions marked by generalized reciprocity.

The Second-Way Gift Exchange Differs from the Exchange in Modern Societies

This brings us to the second-way gift exchange differs from the exchange of items in modern societies (commodity exchange). The form of commodity exchange aims at the preference satisfaction of the transactors. The form of gift exchange, however, aims at the good of a collective (a family, clan, or tribe). Polanyi (1944) makes the case that the place of markets (and by markets, he means points of contact where buyers and sellers truck and barter) was secondary for understanding economies in all societies, but those of recent history. He praises historians and anthropologists for having uncovered motivations in premarket societies as not for material gain but rather for social claims, standings, and assets. Economic activity, which in these societies consists of gift giving and reciprocal acts, serves to create mutual obligations and, thus, bonds between families, clans, and tribes. Sahlins, as already mentioned, viewed gifts and reciprocal gifts as a social contract that puts order in place of disorder. Indeed, Mauss claims that giving and counter-giving are obligatory, and failure on either count can result in warfare between families, clans, or tribes. With obligatory gift giving and reciprocation, “Lives are mingled together, and this is how, among persons and things so intermingled, each emerges from their own sphere and mixes. This is precisely what contract and exchange are” (Mauss, 2000, p. 25).

Philosophical Dimensions of Gift

Teleologically, gifts aim at social cohesion; thus, they are ontologically understood as a means for tying groups together. In line with this, they are epistemologically understood as having something of the giver in them. Ownership, then, is ethically linked to responsibility to others.

The Commodity Construct Described

Market societies emerge concomitantly with alterations in these philosophical dimensions. Items exchanged on the modern market, usually called “goods” by market economists but which we here refer to as “commodities” (following Karl Marx and Karl Polanyi), are produced and exchanged with a profit-oriented, autonomously determined, and calculative approach. Adopting commodities as items of exchange, as moderns have, has enhanced efficiency and the human powers of prediction. However, commodity exchange omits from its definition important aspects of the relations between self and other, person and thing, choice and obligation. Marx argued that this problem was due to a fetishization of commodities (Marx, 2016). Polanyi describes the problem as one in which economic analysis has become disembedded from social relations generally. Appadurai (1988) points to a need to integrate cultural, social, historical, and spatial dimensions in market societies. Inspired not only by these thinkers but also by figures such as Bourdieu (1977), Derrida (1992), and Bakker (2005), we aim to offer a survey of the construct of the commodity.

Contributions to the Commodity Construct by Alfred Marshall

In Book V of The Wealth of Nations, Adam Smith distinguishes the real value and the nominal price of commodities (Smith, 1937). This was followed historically by a long conversation in the field of economics in a similar vein. At stake for the economists engaged in the conversation was the need to explain the expression of the value that is a commodity’s price and its inherent, or real, value. Some, following Smith, pointed to the labor involved with a commodity as its source of value. Inoua and Smith (2023) characterize the conversation as a “metaphysical” pursuit, one that is beyond the scope of economics. Marshall (1890) marks an important point in the history of economics in that he corralled the many and various contributions by economists previous to his time and advanced the discipline by giving it measurable content. His insight was to see that those motives for living, moving, and thinking can be measured in terms of a definite amount of money. Although economists do not measure motives directly, the willingness for a man to pay a few pence for a cigar or a trolley ride or a cup of tea means that, by ordinary usage, one is allowed to judge that the man regards each of these commodities as equally pleasurable. According to Marshall, the rough nature of this indirect measurement does not give economics the precision and, thus, the stature of natural sciences like chemistry. However, he says, it does make economics much more amenable to treatment by scientific machinery than any of the other social sciences. The force of his argument and the success with which he analyzed and illustrated the interaction of supply and demand served to change the nature of the conversation within the discipline. Inoua and Smith (2023) point out that the efficacy Marshall brought to price theory by his scissors analysis served to show that seeking a metaphysical value for a commodity beyond price is impossible. Advances by Marshall and subsequent economists served to remove from economics a metaphysical pursuit and to further align its methods and goals with positivism. The existence of value beyond price is the concern of the consumer or philosopher, but not the practitioner of positive economics.

Contributions to the Commodity Construct by Karl Marx

Although he does propose a theory of value that could be called metaphysical in the aforementioned way, Karl Marx (1844) explains the importance that exchange value (i.e., price, or what Smith called “nominal value”) assumes in a mature capitalist market (Marx, 2016). Marx defined a commodity as anything produced for market exchange, and the production of commodities in a capitalist society involves contradictions. He elaborated on the following two contradictions inherent to the concept of “commodity”: (1) the contradiction of its production in the capitalist mode and (2) the dialectical contradiction that obtains within the commodity itself. Regarding the first, Marx argues that the workers who produce the commodity are, at the same time, buyers in the market. To save costs, capitalists tend to minimize workers’ wages, and at the same time, these capitalists’ interests depend on the purchasing power of workers to buy commodities. As reducing wages on the aggregate decreases purchasing power and market demand, doing so impedes capital accumulation. The very means (reducing wages to a minimum) that capital deploys to achieve its goal (the attainment of surplus value) undermines the very goal (Abazari, 2021).

Second, the commodity itself is dialectically contradictory. Drawing from Aristotle’s concept of the proper and improper use of a thing, Marx describes substrata of the commodity that bear properties of use value (Aristotle’s proper use) and exchange value (Aristotle’s improper use). According to Marx, these substrata fall apart from each other, while at the same time remaining interrelated and unified. The use value of a commodity is its capacity to satisfy human needs and desires. For example, cotton is naturally soft and fluffy. Its physical characteristics make it comfortable to wear. The use value, Marx argues, is the physicality of the commodity, so cotton’s natural characteristics are its use value. Cotton is produced and sold to the market. This exchange capacity reflects its exchange value, which can only be realized through its relation with other commodities. For example, the exchange value of cotton is determined, in part, by its relation to finished t-shirts and spinning machines in which social relations (the teamwork in the labor force) and organizations (factories and retailers that organize the production and distribution of economic activities) are attached to cotton’s natural characteristics. According to Marx, the exchange value of a commodity cannot be expressed in its use value but rather in the use value of other commodities. That is to say, cotton’s exchange value can be expressed by the use value of a soft t-shirt or a spinning machine. However, without its own use value, any commodity’s exchange value cannot be realized. The coexistence of use value and exchange value that constitutes any commodity dialectically interacts with one another.

Based on this dialectical contradiction within the commodity, Marx argued that the exchange value of a commodity can be expressed by other commodities’ use value. To form a standard exchange value without having to take into account an endless number of other commodities, one must make use of a universal and quantifiable commodity: money. Marx called money the means to put a value on a commodity.

Contributions to the Commodity Construct by the Chicago School

The distinctive philosophical underpinnings of neoliberalism were profoundly developed in the economic theories of the Chicago School in the 1930s. Prices can be efficiently determined by the supply and demand curves in a market with no or limited command-and-control interventions by the government (a free market). Neoliberals emphasize individual rationality as it guides resources to be allocated optimally (i.e., Pareto optimality), and the theories from the Chicago school finally evolved into a universal and secular strategy for solving many significant problems. Problems associated with climate change, for example, might be addressed through a voluntary carbon market (discussed below). In short, the Chicago School emphasized that individuals’ rationality (and the decisions that flow from it) should be valued over government control of the market.

Under neoliberal’s ideology, social meanings (social relationships involved in production and exchange) and a commodity’s fundamental duality (use values and exchange values) are minimized and instead replaced by free-market satisfaction of individual preferences concerning interests, motivations, values, and desires. As Kockelman precisely concluded, the neoliberal’s strategy is that it “reduces social interaction to individual action, individual action to purposeful behavior, purposeful behavior to strategic decisions, and strategic decisions to means-end calculations based on knowledge and value” (Kockelman, 2006, p. 77). What was social interaction in premarket societies becomes increasingly in the modern market means-end calculations to realize autonomously chosen preferences.

Contributions to the Commodity Construct by Free-Market Environmentalists

To the extent that the free market serves as an ideal for policymakers, social relations (like the duty to reciprocate in an exchange, for example) will find its guiding North Star at the intersection of the supply and demand curves. An example of such a policy exists with those responses to anthropogenic climate change that come from the school of free-market environmentalism (FME). FME, or market environmentalism, has been marked by a belief that the answer to environmental management matters still lies in economic growth. FME is a prevailing approach that favors unbridled capitalism, which has percolated since the Reagan–Thatcher era (the era of the belief in neoliberalism and expansionary capitalism). FME has been advocated as a mode of resource regulation that promises both economic and environmental ends via market means (Anderson and Leal, 2001) and offers hope of a virtuous fusion of economic growth, efficiency, and environmental conservation as a variant of ecological modernization (Hajer, 1995; Christoff, 1996; Mol, 1996; Hawken et al., 1999; Bakker, 2005).

FME is skeptical of government-led action, which has drawn major criticism from green communitarians (Nicholson, 2015). However, Anderson and Leal (2001) argue that the protection of environmental resources can be better achieved through FME than through policies in which resources are controlled by government action. This approach encourages adjustments to market institutions that focus on establishing property rights, fostering voluntary exchange, and implementing common law liability rules, all strategically aiming to solve climate issues while at the same time leaving resources in the hands of private interests. Pennington (1999, 2005) made a strong argument that even if one accepted all of the objections to FME that come from green communitarians—objections such as the general disregard shown by advocates of FME of the moral context of the ecological situation, the fundamental wrongdoing in commodifying public goods such as nature and resources, the transformation of citizens into consumers, and the dearth of incentives within the FME model that are strong enough to effect fundamental changes—no alternative policy proposals can provide as effective a means as one based on market institution and an environmental market. Both arguments from (Anderson and Leal, 2001) and those from Pennington (1999, 2005) highlight the ontological point of view of FME proponents, reflecting that FME is, in essence, a by-product of neoliberalism. Its primary goal is to transform natural resources such as water, lands, and forests into commodities so that they are allowed to be freely traded in capital markets.

In this study, we offer an example of a business case, Salesforce’s Net-Zero Cloud, to further articulate the concept of commodities and commodity exchange within the FME framework. Salesforce’s Net-Zero Cloud is a voluntary carbon market designed to address environmental issues by providing a digital open marketplace for the trading of carbon credits. This platform connects suppliers (Eco-preneurs such as farmers, landowners, solar panel manufacturers, innovators, and start-ups in the cleantech business) with buyers (companies or polluters needing to offset their environmental impact). For example, wetland owners might list their carbon credits at $10.00 per ton of carbon dioxide or equivalent greenhouse gases (GHGs), which an apparel manufacturer could purchase to mitigate its carbon footprint. This apparel manufacturer might pay the landowner $5,000.00 in this commodity exchange to offset 500 tons of GHG emissions produced during manufacturing. Within the FME context, the GHG emissions that are avoided, captured, or sequestered are assessed and commodified. They manifest as carbon credits, certified and priced by some third-party institutions. These commodified GHG emissions are marketized, commercialized, and exchanged in an open market. This mirrors the dynamics of supply and demand typical of other commodities freely traded on intermediaries or market proxies such as Amazon, eBay, or Esty.

Contributions to the Commodity Construct by Karl Polanyi

Karl Polanyi critiques the degree to which the neoliberal economists embraced and universalized the concept of commodity. According to Karl Polanyi, commodities are objects produced for sale on the market. In the same place, Polanyi describes markets as “actual contact between buyers and sellers.” At this point in his The Great Transformation, Polanyi argues that labor, land, and money are, in truth, fictitious commodities because they were not originally produced and aimed to be sold in the market. Polanyi stated the following:

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 sorted or mobilized; land is only another name for nature, which is not produced by man; actual money, finally, 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. None of them is produced for sale. The commodity description of labor, land, and money is entirely fictitious (Polanyi, 1944, p. 75).

Polanyi argued that the following three errors flow out of mistakenly understanding land, labor, and money as commodities: (1) That land, labor, and money behave in the same way as objects produced for the market; (2) a self-regulating market is the best system and should be prioritized, cultivated, and encouraged by the policies and laws of the state; and (3) market price reflects actual supply-and-demand equilibrium. Economic theorizing based on these assumptions will place human society at risk. Polanyi stressed that economic activities relating to the production and distribution of commodities under these assumptions lead them to “a singular departure” to fulfill a “distinctive motive” (p. 74). This motive is not embedded in human society (e.g., rules, customs, culture, nature, people, and so on) and the general organization of relations within the society (e.g., quality relationships, reciprocation, redistribution, and so on).

Polanyi questioned assumptions of the neoliberal market economy and concluded that its goals are not embedded in human social relations. Furthermore, the more complicated industrial production became, the more numerous elements had to supply themselves to the market. To grant production, everything, including nature, community, land, and people, must be reduced into elements and parts, in other words, commodities, for trading.

To elucidate Polanyi’s argument, we offer a commodity chain analysis of the production and consumption of t-shirts. In producing and selling t-shirts, the market needs commodities of land and farmers to plant cotton in location A. Then, the labor force in a factory turns raw materials into cotton threads, and another factory located in B takes charge of weaving the threads into cotton fabrics; threads for sewing t-shirts and trims for decorating t-shirts are produced by two factories located in C and D; the workforce from another factory in E assembles all those materials into t-shirts; after this, laborers distribute the t-shirts to a wholesaler located in F and then, subsequently, to different retailers located in G, H, and I. Finally, consumers buy t-shirts from stores in J, K, L, M, and N. This example shows how complicated the commodity chain in the free-market economy has become for producing t-shirts for exchange. Making a t-shirt available for consumers in a store in N involves significant labor, land, and amounts of natural resources from locations A to N. However, as with other commodities that consumers encounter in the market, available information about the product gives little more than its price, cotton and synthetic content, and brand. Typically, information about the people, nature, and land involved in producing and distributing the t-shirts is readily available. Either this kind of information is entirely ignored because the supply chain is too long or too complicated or it is simplified (e.g., labeled as “imported” or “made in X”) and/or replaced by some abstract symbols about fair trade or its organic production. The reduction of nature, land, community, and people to commodities that go into the production of this t-shirt is largely hidden from consumers. It is not too bold to say that this commoditized t-shirt has no roots. It comes from somewhere unclear, and it will go back (e.g., the realization of cradle-to-cradle or circular economy) to nowhere.

The critique in this article focuses on the meaning of commodity in terms of its value when it comes to the obligation to reciprocate. The terms for reciprocation in any market exchange are much more efficiently stipulated when money is used to express value, and the self-regulating features of the open market provide safeguards against subjective biases manipulating price. However, it has to be kept in mind that the impact on climate due to waste associated with high demand for commodities has created a sustained market failure (e.g., external costs suffered by the Global South). Ignoring it is a kind of price manipulation, and the degree to which a marketplace consumer must reciprocate in transactions.

Philosophical Dimensions of Commodity

Thinkers in this survey on the commodity disagree about what things should or should not be considered a commodity. As to the nature of the commodity, there is some general agreement. Teleologically, commodities aim at the satisfaction of the buyer, and thus, qua commodities, are ontologically understood as neutral abstractions (widgets). For the sake of efficiency, they are epistemologically understood quantitatively. Ethically, they signal a duty to protect contracts and autonomy.

Discussion

In her essay “The Concept of History,” Hannah Arendt talks about the progress of technology since the seventeenth century. Importantly, it has developed from substituting mechanical processes for human activities to starting new natural processes (Arendt, 1998). The difference rests in the fact that the first uses nature—its raw materials and laws—to do productive work, and the second breaks into nature and begins novel natural processes. Arendt uses the splitting of an atom as an example of the latter, but the example of anthropogenic climate change works just as well. Although splitting the atom was intentional and climate change unintentional, both examples are marked by an unpredictability that accompanies all human action. Previous to this moment in the history of technology, human action and the unpredictability that accompanies it were restricted, or confined, to the human world, as opposed to the natural world and natural processes. However, the technology that allowed the splitting of the atom has injected human agency into the process that had previously been the domain of nature alone. A similar injection—although unintended—occurs when the planetary limit for absorption of waste is surpassed and creates a processional chain in the ecosphere, one that causes destructive climate events.

This processional chain is mechanical in that it connects polluters with those who are external to the market and are suffering ill effects of climate change, and the chain creates an ethical connection between these same polluters and those incurring the external costs. As the threshold of the planetary limit for absorption is approached, the chain in both its mechanical and ethical aspects reveals itself. This is the case presently, and because of the deleterious effects caused by the mechanical, an ethical debt is owed by polluters. Certainly, one can assume that those market nonparticipants who suffer from destructive climate events would not, of their own accord, enter into this transaction. However, the industrial revolution has taken place, and the debt has been incurred. The moral principle of reciprocity is at play. Also at play is the ethical principle of proportionality, and consumers who create more demand for commodities—the production, transportation, and disposal of which create the conditions for climate disruptions—owe a proportionate amount of this debt. The moral demand for reciprocating becomes part of the meaning of the commodity. The place of this kind of reciprocity on Sahlins’ spectrum tends toward the social rather than the individual pole. It is found closer to the pure gift extreme than is the kind of reciprocity attached to the mantle of meaning for a commodity exchanged on a purely free market (which tends toward the balanced part of the spectrum).

Recent evidence from several scientific studies, most notably the IPCC AR6, makes it clearer that the production, transport, and disposal of commodities contribute significantly to climate change and its destructive consequences. In a consumer-driven economy, demand drives up production, transport, and waste, and thus, consumers bear responsibility—at least in part—for precipitating climate change. Price increases and/or taxes—the revenues for which should go to measures to remedy or accommodate the ill effects of climate change—are justified insofar as they are used to address a moral debt. The moral principle here is not benevolence, looking out for the welfare of others, but is rather the principle of reciprocity. Consumers, having benefited from commodity acquisition that resulted in harm to people outside the market (whether near or far, or contemporaneous or yet to be born), are obliged to make these people whole again.

The monetary value attached to this obligation involves a calculation that is ripe for contention, as do decisions about which countries owe and are owed. But as difficult as it is to quantify and determine who is explicitly owed, this obligation is contained in the object of exchange and the gifted commodity recognizes this explicitly.

The giftized commodity can be understood as a social kind. Like both the gift (as Mauss describes it) and the commodity of the neoliberal perspective, the giftized commodity has, as part of its meaning, obligations to reciprocate. The nature of these obligations includes both a general dimension—as gifts do—and a balanced dimension, as do commodities. As the giftized commodity is anchored in both the gift exchange system and the commodity exchange system, it acts as more than a mental conceptualization.

As a disciplinary object, the giftized commodity more adequately corresponds to reality than does the abstraction of the commodity. Social costs as externalities have always existed, but the present moment in history is marked by the knowledge of the causal chain between human activity and destructive climate events in places far away from the causes and during generations existing well after the causes. Just as advances in telecommunications make the world smaller, so does the fact that pollutants emitted by factories in North America contribute as causes to flooding events in South Central Asia. That planetary limits for the absorption of pollutants are being reached means that these social costs are not aberrations. They are sustained characteristics in a planetary reality that has been altered in the past 200 years by the production, use, transport, and disposal of goods procured on the market.

Items of exchange on the market contain as part of their meaning a moral requirement to reciprocate. To take an item without sufficient counter payment constitutes theft. The giftized commodity takes into account the sustained external costs that accompany its production, use, transport, and disposal. Its relevance and dimensions emerge as part of a historical/ecological process. The ontological, epistemological, ethical, and teleological dimensions of the giftized commodity are compared here with the gift and the commodity in Appendix A (see Table A1).

Table A1.

Philosophical Dimensions of Commodity, Gift, and Giftized Commodity

Social Kind	Ontology	Epistemology	Ethics	Teleology
Commodity	Qua commodity, the item exists as abstracted from its physical characteristics or its use value. True commodities exist in an open market (another abstraction).	Quantification is prioritized. Value is expressed as price in self-regulating market. Measurable utility tends to overshadow other values in the political arena.	Reciprocity is demanded in exchange. The time constraints, specific agents, and price are stipulated. In this way, reciprocity is balanced as the term is defined by Sahlins.	Preference satisfaction of the agents partaking in a transaction is the aim of commodity exchange. Technologies that enhance efficiency are by-products.
Gift (as described by Mauss)	Qua gift, the item exists as embedded in a social whole. It acts as a glue that fastens together families, clans, and tribes.	Origins are prioritized. The spirit of the human or nonhuman donor abides in the item as it moves through exchanges. Exchanges include transactors who are not immediately participating.	Reciprocity is demanded in exchange. The time constraints, agents, and specifics concerning quantity are not stipulated. Reciprocity is general as the term is defined by Sahlins.	Establish and maintain social ties and ecological well-being through exchange and counter-exchange. A common good is the target, and individual benefit is a by-product.
Giftized Commodity	The giftized commodity is a process (rather than an enduring essence) whose existence is anchored in the mechanical chain that connects consumer demand with climate change. It is a process social kind, as Storm defines this term. The features of this process are obligations, opportunities, liabilities, and abilities; these include the kinds of reciprocating obligations that are obtained in both commodities and in gifts.	Expressing the giftized commodity’s value in terms of price determined by supply and demand is necessary but not sufficient. The value contained in reciprocity must extend beyond the market price and include external costs incurred. Means to quantify and direct this additional value are an ongoing enterprise.	The principle of reciprocity that pertains to the giftized commodity includes aspects of this principle both as it obtains in Mauss’s gift and as it obtains in the free-market commodity. Insofar as the giftized commodity is a gift, it acknowledges the connection between consumer demand and the obligation to remedy previous instances of climate catastrophes and stave off future instances of such catastrophes. Insofar as the giftized commodity is a commodity, its buyer owes for the production and risk taken on by the seller side of the transaction, a value determined by supply and demand.	Includes preference satisfaction, but reaches intentionally beyond it to a “common good.” Does not purport to address common good in its entirety, but does include—as part of its meaning—the aim of making whole that part of the common good that is damaged by demand for commodities and the ecological chain of cause and effect that follows.

Implications and Future Studies

The pollutants in the environment are taxing the planetary limits, and progress has to be made concerning the distribution of burdens and benefits to tackle problems of remedy (i.e., for damages done to faraway people and future generations) and control (i.e., of future climate disasters). Before awareness of the planet’s limits on its capacity to absorb GHGs, the social kind commodity, which served as a disciplinary object for fields like economics, sociology, and anthropology, was not inherently linked to costs resulting from anthropogenic climate change (Lohmann, 2009; O’ Neill, 2013). In the self-regulating market prevailing since the Reagan–Thatcher era, external costs (i.e., negative externalities) generated by market demands are not reflected in commodity prices.

The current awareness of the planet’s absorptive capacity has burdened the marketplace commodity with a sustained external cost that, by right, ought to be internalized. The commodity takes on dimensions of gift when these costs are internalized. The giftized commodity is a more complete disciplinary object than the traditional commodity as it incorporates a properly adjusted norm for reciprocity in marketplace transactions. The implication of this new social kind is clear: the duty of paying for mitigation and adjustment is assigned to those who drive demand.

In terms of its contribution to theory development, the norm for appropriate reciprocation explicitly recognized in the giftized commodity aligns with the goals of contemporary policy models, such as stakeholder capitalism, Buen Vivir development, degrowth, and the circular economy. These theories, and ones like them, critique the current approach to economic development in postmodern society. As Schwab puts it, “GDP tells us about consumption, but it does not tell us about well-being. It tells us about production but not pollution or resource use. It tells us about government expenditure and private investment, but not the quality of life” (Schwab, 2021, p. 25). The giftized commodity offers these policy proposals a bolstered normative stance by replacing commodity with giftized commodity in deliberations related to supply and demand, national income accounting, utility, and welfare.

This process social kind can play a role in developing environmental policies, like those concerning carbon accounting or emission liability management (ELM). The giftized commodity concretely assigns financial responsibility to the source of commodity demand. The ELM approach proposed by scholars such as Kaplan and Ramanna (2021), Kaplan, Ramanna, and Roston (2023), and Roston, Seiger, and Heller (2023) suggests that buyers should track the direct emissions from their direct suppliers. Emissions generated from their direct suppliers will be considered the emission liability (i.e., the negative externality) that needs to be internalized by the buyers. The ELM system highlights the essence of the norm of reciprocity as manifested in ecological economy and carbon accounting.

Justice focusing on the fair distribution of benefits and costs throughout the population is understood better when the norm for reciprocity in the giftized commodity is brought to light. However, having concretely located part of the responsibility for the ill effects of climate change does not mean that policy formation becomes easy. Difficult questions arise as follows: Should it be the state’s administrative function to ensure that these supplemental costs are accounted for in prices on the market? Should the additional cost come in the form of taxes, and if so, how can these taxes be distributed so that they assign duty to where it belongs and are not at the same time regressive? Furthermore, knowing that there is a duty to pay a cost and knowing to whom it is that this duty belongs is different from knowing the amount of the cost. Also, the significance of being part of the Global North or the Global South needs to be explored, as many countries in both groups have very wealthy buyers and very impoverished buyers as part of the population. These questions face policymakers addressing calls like those from IPCC AR6.

Footnotes

Authors’ Contributions

J.D'A. and R.Z.: Drafting, reviewing, and approving the final manuscript. Both authors contributed equally.

Author Disclosure Statement

No competing financial interests exist.

Funding Information

No funding was received for this article.

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