Now, how do we determine how economies are organized and how we distribute goods and services? Also, what *should* we be asking of our economies?
In order to answer this, let’s think about our own lives for a minute. Think about a recent moment in which you did the following: (1) prepared food for friends; (2) felt forced or obliged to prepare meals for others; (3) bought food for yourself or someone else.
When you prepared a meal for friends or family, did you charge them for it? The vast majority of you will probably say, “of course not!” But why does that seem ridiculous? Often when we prepare food for loved ones, we do it out of love. These economic forms of distribution can be referred to as communalism, mutual aid, or reciprocity. These principles reflect the fact that we share, we take care of each other’s needs, and we often do things out of a sense of concern for others.
In other cases, we might do something because we have felt forced, obliged, or pressured to do so, especially in the context of socially constructed hierarchies. Take, for example, the fact that women shoulder a disproportionate burden for care work, including cooking, in the household. They often do this because women may be seen as inferior to men, and therefore it is their “natural” role to work for them or serve them. We call this “command” because in this case people of lower social status are supposed to obey the orders of those with higher social status.
What about the third option– buying food? This represents a commodity-based production and distribution schema. A commodity is simply something that is produced to be sold for a profit. So communal, command, and commodity– these are the three big ways that all economic activity– our material lives– are organized.
We could come up with many more examples, like medicine. First, traditional healing practices, the so-called “medicine woman” or “witch doctor,” were produced in communal ways. These individuals were respected members of the community, who either did medicine on the side or, if they practiced medicine full-time, were fed and housed by the community. Conversely, healthcare is produced as a commodity in the United States– hospitals and insurance plans are run in a for-profit way, with those who cannot afford care being denied it. One example of a command-type provisioning of health care is Medicare and Medicaid in the United States, and the National Health Service in the UK. In these programs, the government owns the hospitals, remunerates doctors and nurses from public taxes, and provides medical care for free at the point of service.
Everything in our society can be produced and distributed in one of these three ways, either communally where we take care of each other, or as a commodity where it is produced for potential profit and goes to the highest bidder, or under command, where people work for those above them in the social hierarchy.
To help us evaluate these three different schemas, we’re going to introduce four terms that we use to make sense of any economic system. Those are ownership, allocation, governance, and division of labor.
What do you mean by ownership?
Ownership is simple– it refers to who owns what is produced? Under communal economic systems, everyone in society is considered an equal owner of the wealth that exists in society. When European settlers first arrived in the Americans and asked the natives who owned the land, for example, the natives were confused because they didn’t think individuals could own and sell land. That’s why the entirety of Manhattan was sold for the measly sum of 60 Dutch guilders, or the equivalent of roughly $1,000 today. Conversely, under a commodity regime, individuals or corporations that hire workers to produce commodities are the owners of what is produced. And under a command form, either those at the top of the hierarchy or the government owns the output of production.
What the hell is allocation?
The second term, allocation, is a fancy way of saying, “who gets what?” Communal allocation is based on need, reciprocity, and mutual aid. Commodity allocation happens through the market– whoever is willing to pay for a commodity will get it. And command allocation is based on orders, or commands. Those in power simply decide who will get what good or service.
What do you mean by governance?
Governance is a term that refers to who has power to decide fundamental questions about how the economy operates. In communal forms of governance, we all decide– there is some form of assembly or political process that seeks consensus amongst group members. Under a commodity-based system, the rich govern, with an entire repressive apparatus of courts and police to enforce their “property rights.” Command systems, by contrast, are top down. They’re often based on patriarchy at the household, or micro level, and on centralized government control at macro level.
What is the division of labor?
Finally, the division of labor asks, “who does the work, especially the grunt work?” Under communal economic forms, all those who are capable of work share in the work. Under command systems, those at the bottom of the hierarchy are ordered to work. Typically, the most interesting and fun work is done by a small group of highly paid people.