Was Karl Polanyi wrong? Land, labor, and private authority in the global economy

by Tim Bartley*

Karl Polanyi famously argued that land, labor, and money are “fictitious commodities.” They cannot be fully subjected to the dictates of the market without spurring backlashes that seek to re-embed them in society. It is easy to find examples at the present moment. The project to make the world into “one big market” has fueled populist backlashes in the U.S., UK, and Europe, especially of a far-right, exclusionary variety. In parts of Asia, Africa, and South America, massive investments in agriculture, land speculation, and urban expansion are generating varied forms of resistance to “land grabs” that displace local people. And as the value of bitcoin and other cryptocurrencies spikes and plummets, the fictitious character of money has taken on a new level of intrigue.
Theoretically, scholars have taken Polanyi’s basic insight in several directions. For economic sociologists, the “always-embedded market” has become the most prominent riposte to the assumptions of economics. For labor scholars, Polanyi’s diagnosis resonates with the Marxist argument that labor is a “special commodity” because the product and the seller are ultimately inseparable. Meanwhile, scholars of land and environment have revised the Polanyian framework in making sense of nature, neoliberalism, and accumulation by dispossession.
But rarely do these lines of research meet. Workers and factories have long been the province of sociologists, as well as scholars of industrial relations, business, and political science. Land and environment have more often been the domain of anthropologists and geographers—as well as environmental sociologists and rural sociologists whose work is often geared more toward these other fields than to the rest of the discipline.
The burgeoning body of research on corporate responsibility, sustainability, and transnational governance is similarly segregated. On one side are studies of corporate social responsibility for labor standards in apparel, footwear, and electronics factories. On the other side are studies of sustainability standards for timber, coffee, seafood, biofuels, and a number of other products. There are a handful of excellent comparisons, but especially when it comes to consequences “on the ground,” most of what we know comes from studies of a single industry, initiative, or issue area.
In my new book, Rules without Rights: Land, Labor, and Private Authority in the Global Economy (Oxford University Press, 2018), I sought to get past the land-labor divide—and to show what a comparison of the two can offer to economic sociology and political economy more broadly. The book looks at the consequences of corporate responsibility and sustainability projects by comparing two fields—sustainable forestry (in the timber, paper, and furniture industries) and fair labor (in the apparel and footwear industry). This includes multi-stakeholder initiatives like the Forest Stewardship Council and Social Accountability International as well as a variety of other initiatives and company-specific codes. In both cases, a form of “transnational private regulation” has expanded as large retailers and brands (such as IKEA, The Home Depot, H&M, and Nike) have pushed standards for sustainability or fairness through their global supply chains.
To look at the implementation of these rules, I focused on two key countries—Indonesia and China—where I interviewed a variety of practitioners and assembled or analyzed other data. This allowed me to consider how transnational standards are shaped by different forms of domestic governance—a new democracy in one case and a resilient form of authoritarianism in the other. I found some intriguing cross-country differences (described in part here) and developed a general critique of private regulation and its “hope of transcendence” (reviewed in part here). But I also found some important differences between land and labor standards.
First, despite some problems and blindspots, the Forest Stewardship Council’s standards have remained relatively stringent and challenging for forest managers to meet. These pertain not only to logging practices and protection of ecosystems but also to land rights and community claims. The closest analogue on the labor side, Social Accountability International’s SA8000 standard, suffered from weak oversight in China (allowing at least a few dismal factories to get certified and little in the way of systematic differences from uncertified factories) and a puzzling lack of application in Indonesia, where its standards should have been easier to implement. Other labor standards were either similarly compromised or narrow in their focus. The fields of fair labor and sustainable forestry, I argue, are different in ways that existing theories—including prominent forms of field theory—are not well-poised to explain.
Second, despite the Forest Stewardship Council’s comparative rigor, its standards on the rights of workers were almost never implemented or carefully audited. Auditors rarely even noted that timber workers’ rights to organize were legally restricted in China and routinely trampled in Indonesia. The difference, then, is partly about land and labor as issues, not only about initiatives or fields.
So was Polanyi wrong? Are land and labor inherently different in ways that would account for these differences in transnational governance? Some would say so, arguing that environmental issues are more “technical” or more open to win-win solutions than are labor issues, where distributional conflicts are central. But these answers are hard to sustain as one looks closely at sustainability standards, which often traverse deep distributional conflicts over land and natural resources.
Ultimately, Rules without Rights argues that the observed differences between land and labor have more to do with the power of watchdogs inside and outside multi-stakeholder initiatives, the mobility and visibility of industrial operations, and the framing of labor and environment relative to the public good. (See especially the latter half of chapter 2.) Polanyi was right to see land and labor in parallel, but we should now go further in unpacking globetrotting versus place-based industries and ask why “common good” frames have been so frequently embraced for environmental issues and rejected for global labor issues.
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* Tim Bartley is a Professor of Sociology at Washington University in St. Louis. In addition to his new book, he has an article on “Transnational Corporations and Global Governance” forthcoming in the Annual Review of Sociology and a new project on the ethics of big data analytics in the private sector.