Decommodification in the twenty-first century

Hull telephone box: Creative Commons

Decommodification was a defining feature of the welfare states that were set up in the mid-twentieth century to counter the destructive effects of capitalism. But, since the crisis of the mid-1970s, neoliberalism has set in motion a process of recommodification, bringing utilities, public services and many other aspects of life once more under direct capitalist sway. Now that the pandemic has demonstrated for all to see the falsity of the mantra ‘there is no alternative to the market’, has the time come for a new wave of decommodification for the twenty-first century?

As Marx observed, an inexorable feature of capitalism is that it must keep growing. As the rate of return on existing capital falls, it must engage in a breathless, desperate race to find new activities from which it can milk value. Its growth is thus fuelled by a constant plundering of resources from the planet, and the life it supports that currently lie outside its scope. From the genetic ingredients of rainforest flora to undiscovered life forms in the ocean depths, from musical performance to sociality itself, if it can be appropriated to yield a new commodity, then, using the magic of human ingenuity and labour power, that commodity will be produced, and reproduced. Commodification is thus capitalism’s driving force.

But, as Marx also noted, these processes set in motion new contradictions, triggering conflicts and crises that require the intervention of the state – if not to restore equilibrium to what is, after all, an inherently unstable system, at least to enable capitalism to survive. Over the years such interventions have taken a number of forms. States have, for example, enforced the enclosures of commons and rights to mine the soil, divert and dam rivers. They have provided the transport infrastructures that enable the circulation of goods and the legal infrastructures to enforce contracts. They have tried to break up monopolies when these seem to threaten competition. And they have created education systems to provide their populations with the skills that capitalists need.

In the twentieth century, a whole gamut of state strategies was deployed to keep the capitalist show on the road. The first part of the century saw frenetic investment in infrastructure, including railways and grids for the newly emerging telegraphy and electrical power grids, which, though privately owned and run, needed state intervention to ensure the necessary permits and land purchase. This was also an era in which anti-trust laws were used in the USA to break up the enormous monopolies that had developed in industries such as oil and steel.

After World War II, especially in Europe, the pendulum swung decisively away from giving capitalist corporations as free a rein as possible. Transport infrastructure was brought directly under public control, as were telephone and electrical networks, now redefined as public utilities. In many countries other key industries with strong monopolistic tendencies, like steel and coal, were nationalised, alongside airlines, broadcasting and post office services. In a parallel process, many formerly private services, such as health, social care and post-primary education, were also brought under a public umbrella and made universally available, as primary school education already was.

The formation of the post-war welfare state included other elements, varying from country to country, such as new universal rights to forms of employment protection, pensions and national insurance, but – in relation to capitalism as a whole – one of its crucial features was a massive decommodification. This included the introduction of universal services such as health and higher education, free at the point of use, replacing those that had only been available at a price to a minority before the war. It also included the nationalisation of key industries such as road haulage, milk distribution, coal mining and steel production, as well as of infrastructure such as railways, energy and telecommunications.

There were several features of the post-war landscape that made capitalists willing to make these concessions to national states. Some companies were struggling to recover from the damage inflicted on their assets during the war and so were open to deals. Others saw the support of their governments, including investments in training and modernisation, as protection against competition from larger, multinational companies. More broadly, as Western powers came to terms with their new relationship with their former ally, the Soviet Union, amid the first stirrings of the Cold War, there was a real fear that, if substantial concessions were not made to their representatives, the working classes of Europe might turn to Communism.

Nevertheless, we should not underestimate the extent to which working people themselves, acting through their unions and – in the UK – the Labour party, took an active role in shaping the new institutions of these welfare states. The creation of the National Dock Labour Board in 1947, for example, was a direct response to a major dock strike in 1945. And it is doubtful whether the National Coal Board, which took over UK collieries in 1947, would have taken the form it did without the long history of miners’ militancy, going back to the General Strike of 1926.

An important role was played in developing blueprints for this mid-twentieth-century wave of decommodification by prefigurative models developed in local communities. One of Aneurin Bevan’s main inspirations for the National Health Service was the Tredegar Workmen’s Medical Aid Society. Originally made up of miners and steelworkers this mutual aid society employed its own medical staff and, expanding during the depression to extend its services to cover the unemployed and their families, was providing medical care for 95% of the town’s population by the mid-1940s.

The Pioneer Health Centre in Peckham, which brought a holistic approach to health prevention and care in a working-class community, involving health education, nutrition and social care as well as medical treatment, was another big influence. Without such pioneering experiments, the NHS might have taken a very different shape, perhaps resembling some of the insurance-based models developed in other parts of Europe.

The history of telephone networks in the UK also bears the stamp of local experiments. Most famously, Hull corporation set up its own telephone company in 1902, pioneered a number of innovations subsequently adopted nationally.

The uneasy political consensus that held this Cold War truce between capital and labour together in the social democracies of the Global West began to fall apart under the strains of the aftermath of 1973 crisis. By the end of that decade, spearheaded in the UK by the Thatcher Government, a new neoliberal economic orthodoxy was in place which held that state control was inherently wasteful and incompetent and only unfettered market forces could deliver innovation, efficiency and responsiveness to customer demand. A process of recommodification was set in train that continues to this day. Capitalism was allowed to restructure itself using public assets as part of its raw material. The outright fire sale of nationalised industries and utilities like telecommunications, energy and water networks, public housing, postal services and airports was complemented, more stealthily, by a creeping process of outsourcing those aspects of public administration and service delivery that were harder to justify as potentially independent industries.

An Institute for Government report estimated that by 2017 more than a third of all UK public spending was spent on procuring goods, works and services from external suppliers – a trend that accelerated during the Coronavirus pandemic, when procedures were brought into disrepute by the open flouting of tendering rules in the rush to award contracts to the political cronies of Boris Johnson, Dominic Cummings, when more than £10 billion of contracts were awarded without competition.

In the process of this global wave of recommodification, not only were profitable new corporations built, but working conditions worsened as deskilled, low-paid, precarious jobs were substituted for the reasonably well-protected ones that unions had fought for in the 20th century. In an ironic twist, many of the now-privatised former national incumbents, such as the French national electricity supplier EDF, the German postal supplier DHL and the Spanish national telephone supplier Telefónica became major global players, delivering their services, at a profit, of course, to international customers, including other states.

The opening up of the whole world to capitalism that took place after 1990, assisted by the spread of digital technologies and standardisation processes that created near-seamless global supply chains, led to a huge concentration of capital. The empires built by the likes of Bezos and Zuckerberg – and their personal fortunes – dwarf those accumulated by Carnegie and Rockefeller a century earlier. But is there now a public will to start taming them, by breaking them up or taxing their profits or even nationalising them wholly or partially?

There are further echoes of the ‘gilded age’ in our present circumstances. Just as the period preceding World War I saw the emergence of new kinds of utilities, such as electricity and telephone networks, so the most recent waves of economic restructuring have introduced new kinds of infrastructure, increasingly necessary to support everyday living, work, consumption and social life, in the form, for example, of social media platforms, broadband and electrical charging facilities. Some of these, too, are already near-monopolies or in danger of becoming so. Has the time come to bring these too under public ownership or, at least, control?

Another important current trend – especially since the 2008 crisis – has been the emergence of new kinds of digitally-managed means to supply people with such things as ready-cooked food, household services and taxis – services formerly seen as luxuries but increasingly becoming necessities as public services are cut back and households face a time squeeze that does not allow for producing these things oneself in the old time- and labour-intensive ways. The online platforms that provide these services exploit the labour of vulnerable workers and give little, if anything, back to the local economies in which they operate in the form of taxes. Perhaps it is also time to decommodify these?

In Reinventing the Welfare State: Digital Platforms and Public Policies, I argue that, now that the neoliberal myth that ‘there is no alternative’ has been decisively exploded, there is an urgent need to develop new, twenty-first-century models of decommodification.

Just as twentieth-century social democracies developed new forms of public services using the then-existing technologies, the time is ripe for the creation of new twenty-first-century public services using digital technologies. These could contribute in practical ways to addressing the great crises that currently face us: first, the crisis in social reproduction, which is closely linked to the crisis in social care; and second, the crisis in the sustainability of our planet and the urgent need to address global heating.

The development of the technologies that gave us Uber, could, for example, under public control, provide us with an extension of public transport services to include on-demand personal transport services that make the use of privately owned cars redundant. To take another example, the ability to match supply and demand in (almost) real time currently exploited by the likes of Deliveroo or Amazon could be used to develop sustainable local food delivery policies by which those in need are supplied with the food of their choice. In the process, this could contribute to the shortening of supply chains making it easier for them to be fed by small local suppliers. Distributing surpluses efficiently could also help eliminate waste. Publicly run platforms that also provide decent conditions for their workers could also be used to supply care services as and when they are needed. We have reached the stage where experimental prefigurative models can teach us a lot.

In developing alternative models it is important to learn the lessons from the failures of decommodification in the twentieth century. We learned then that when publicly owned employers start to mimic the behaviour of private employers, they lose the commitment and loyalty of their staff. Public sector workers are motivated by wanting to serve the needs of their clients, not meeting bureaucratic targets. And the more democratic engagement there is by service workers and users in the design of new services, the less chance there is of the interests of either being sacrificed. We may not have a socialist government but, if the pandemic has taught us anything, it is that there is a lot of creative energy and altruism in local communities that can be channelled towards public good. We need to build on that optimism. Now.

© Ursula Huws, 2021


Ursula Huws is Professor of Labour and Globalisation at the University of Hertfordshire and the editor of the journal Work Organisation, Labour and Globalisation. Her most recent books are Reinventing the Welfare State: Digital Platforms and Public Policies (Pluto Press, 2020), Labour in Contemporary Capitalism: What Next? (Palgrave Macmillan, 2019) and Labor in the Global Digital Economy: The Cybertariat Comes of Age (Monthly Review Press, 2014). She blogs at