The Politics and Ethics of the Just Price

Ethnographies of Market Exchange

Peter Luetchford, Giovanni Orlando, Peter Luetchford, Giovanni Orlando

• Publisher: Emerald Publishing Limited
• Year: 2019
• Print ISBN: 9781787435742
• eBook ISBN: 9781787439597
• Topic: Social Sciences
• Subtopic: Business Ethics
• Index: Social Sciences

Prices permeate contemporary life. From the cost of basic foodstuffs in developing countries to the pay of CEOs in rich ones, the question of the politics and ethics of pricing everything through the market dominates public life. At the same time, we know that dilemmas about how to value fairly, but also efficiently, goods and services have been with us for more than two thousand years, since the times of Aristotle in Ancient Greece. Through the course of the centuries, important thinkers like Thomas Aquinas, Adam Smith and Karl Marx all devoted considerable effort to try to understand how prices could reflect the intrinsic worth of the objects workers produce and exchange with other people. This is the question of the "just price." This volume represents the first systematic attempt to address this ancient debate through the use of qualitative empirical research, particularly ethnography.  

The volume comprises a substantial introduction that sets out the terms of the debate, proposing four different approaches to the just price, plus eight case studies based on fieldwork carried out in four different continents (Africa, Asia, Europe and Latin America), ranging from topics such as fair trade, human rights and recycling, to organic agriculture, the rose oil industry, rural and urban marketplaces.  

Bringing together the most recent scholarship in economic anthropology and associated fields to investigate the social, political and ethical consequences of market prices on ordinary people, this book is of interest to researchers in anthropology, sociology, history and geography.

INTRODUCTION – TOWARD AN ANTHROPOLOGY OF THE JUST PRICE: HISTORY, ETHNOGRAPHY, AND CRITIQUE

Peter Luetchford and Giovanni Orlando

INTRODUCTION

Two elements of contemporary life, price and justice, are central to this volume. The first of these, price, is pervasive: from food and rent to gas, water, and electricity; from the cost of petrol to that of agricultural inputs, healthcare, and education; from value added tax to insurance, wages, and bonuses. Every time we interact with these entities – enjoying, enduring, or resisting them – we encounter prices. This encounter takes place through an incredibly complex web of material and informational channels that tend to naturalize prices; and yet, against the tendency to accept these as given, all the papers in this volume document political and ethical struggles over prices.

The second theme of the volume, justice, asks us to engage with those struggles. If the world is “overheating” (Eriksen, 2016), prices may be the spark that ignites the fuse. This happened during tumultuous events such as the global financial crash of 2008 (the price of collateralized debt obligations) and the Arab spring of 2011 (the price of basic foodstuffs). These phenomena are not entirely new, of course. In the developing world, price-related “austerity riots” have been one of the chief consequences of neoliberal policies for more than 40 years now (Walton & Seddon, 1994). The financial crash of 1929 led to a whole new way of dealing with markets and prices, the New Deal and the Bretton Woods agreements. The development of capitalism itself was partly the result of a long-term “price revolution” that cost millions of people their livelihoods, transforming them into the masses who manned the factories of the first industrial age (Graeber, 2011). But the present era is different. Trade through the use of money is now a global phenomenon. The creative energies of people and nature today are bought and sold millions of times a day on myriad different markets – for a price.

Saying unequivocally what prices are is far from straightforward, however. A simple answer would be that they are quantities of money most often expressed in Arabic numerals. Yet this is clearly unsatisfactory (Guyer et al., 2010; Zaloom, 2003). Prices are ciphers for a complex entanglement of actors, relations, ideologies, things, and environments. In a broad sense, prices appear to be consubstantial to our discipline, an intuition confirmed by the work of some of its earliest practitioners (Malinowski & de la Fuente, 1982).¹ It is thus somewhat surprising that there has been limited work in the discipline on the values and practices that contest mechanisms and outcomes of pricing, and on people’s everyday political, social, and ethical negotiations in search of just prices. Of course, anthropology does have a long history of documenting the corrosive effect of price-making markets on social life (e.g., Bohannan, 1955; Browne & Milgram, 2009; Polanyi, 1944/2001; Taussig, 1980). Most commonly, this is articulated through binary oppositions between gifts and commodities, personal relations and alienated ones, or mutuality and self-interest. Part of our remit in this Introduction is to break down this binary either/or approach to economic life.

Indeed, the papers in this volume describe people in a wide range of circumstances and with different agendas, employing multiple strategies and, perhaps more importantly, creatively combining them as they negotiate economic life in search of just prices for the products of their labor, and refuge from unfair market practices. The contributions provide diverse examples, from the scrap metal trade in Ankara (Dinler), to markets in Equatorial Guinea (Valenciano-Mañé), and the rose oil industry in Isparta (Yalçın-Heckmann). In rural Nicaragua (Ripoll), Tuscany (Pratt), and Spain (Luetchford), we discover how farmers and agricultural workers struggle and strategize around prices, in and outside markets. We also learn of struggles for just compensation and wages by human rights advocates on behalf of Bangladeshi garment workers (Prentice) and by fair trade customers in Sicily (Orlando).

The remainder of this Introduction is dedicated to interrogating analyses, discourses, and contestations over price, both historically and within anthropology. After reflecting on the relation of the just price to the more general question of commensuration and price composition, we turn to Aristotle, who first wrestled with the politics and ethics of prices. We then show how his legacy developed into a discussion about criteria for determining a just price in the modern period, with the advance of capitalism. From there, we consider approaches to commensuration and price composition as these relate to anthropology, and the bearing these concepts have on discussions of just prices.

IN SEARCH OF THE JUST PRICE

Economic thought itself has roots in price theory, insofar as its origins lie in speculations about value in a society that increasingly used money in commercial markets: Aristotle’s Greece. Most thinkers, though, saw price and value as distinct until about 1870 (Graeber, 2005, pp. 439–440; Hann & Hart, 2011, p. 143). Economists of the Marginalist School (to whom we return later) then conflated the two meanings, and it is in this sense that value can still be said to be central to their endeavors. “Value theory—the explanation of how prices are formed in a market economy […]—has long been central to economic analysis qua analysis” (Wilson, 1975, p. 56, our emphasis). In contrast, for anthropologists:

the promise of value theory has always been to do much more. It has been to understand the workings of any system of exchange (including free-market capitalism) as part of larger systems of meaning […]. [This] meant that the kind of moral and ethical questions that Aquinas or Smith felt were at the heart of the matter could not simply be pushed aside. (Graeber, 2005, p. 443)

Prices, then, are “conveyors of value” (De Neve, Luetchford, & Pratt, 2008, p. 15), but not in the restricted sense denoted by free-market economists (of information about supply and demand). Prices raise political and ethical questions that are ultimately questions of justice, hence our title for the volume. The reason for this is that prices imply an equivalence of sorts between the things being exchanged. They combine different objects or activities into a single number, an abstraction through which they become somewhat alike. Through prices, the “alchemy” of trade transforms one thing into another (Gudeman, 2008, p. 55); like alchemy, this power raises suspicion.

Accordingly, to interrogate the just price, we question the basis upon which two qualitatively distinct things can be compared both to each other (any two things) but especially, in the presence of markets, to money (this thing to this price). The problem in question can be posed in terms of “commensuration,” whereby the criteria employed to validate or contest comparison establish the grounds for determining a just price (Espeland & Stevens, 1998, p. 315; Grossberg, 2010; Gudeman, 2008, p. 51; Mei, 2009, p. 527; Meikle, 1995, p. 21). In other words, on what basis and under what circumstance might a price, or indeed any price, be deemed acceptable, appropriate, or just?

There is also a second reason that prices inevitably raise questions of justice. A price does not simply transform one thing (work) into another (money and commodities); it also embodies the social relations that ultimately determine how commensuration is performed and prices are formed (Roitman, 2005, p. 83). But it does so covertly. Prices reflect relations of power and yet, as abstractions, they don’t. A price appears to be a singular amount; in fact, this is a fiction, because all prices are composites (Guyer, 2009). From the price of what they sell, corporations need to pay the factors of production (including labor), shareholders, management, and taxes (states). Competing with each other for who can do so more efficiently, they squeeze out value where they see fit, thus changing the composition of the fictitious price of a pint of milk, a smartphone, or a t-shirt. The incredibly unequal world we live in means that the way prices are composed is subject to deep injustices and generates political contestations (Guyer, 2009, pp. 203, 206).

In a sense, the problem of price composition represents an extension of the commensuration one, as the many hidden portions that make up a price effectively multiply the problem of how to suitably match their numeric (monetary) value to objects and actions in the real world. Such dilemmas might be solved both positively and negatively. Positively, by referring to some version of natural law and to allegedly objective, universal measures of value like equilibrium between supply and demand or labor value, but also by employing more situated, relative criteria that consider morality, customary practice, and vernacular knowledge. They can be solved negatively, by believing that some things are unquantifiable and therefore untradeable, or by turning the problem on its head and declaring that prices determine commensuration, not the other way around. Crucially, we suggest it is often the clash between the two positive solutions – as when the social valuation of the worth of something departs from its given market price – that leads to disputes over what constitutes a just price and, if these remain unsettled, to the negative solution – the impossibility of determining a just price.

In this Introduction, therefore, we propose answers to the question of commensuration which comprise, but are not limited to, supply and demand, cost of production (especially labor), the social relationships through which prices are refracted, and the possibility that no commensuration is tenable. Our argument is that these different interpretations and resolutions to the commensuration problem co-exist and overlap in real life, and that people negotiate through them using multiple discursive and practical repertoires.

As many people experience, including those documented in the papers that follow, answers to conceptual questions have real consequences. Policies that promote price formation through supply and demand have generated both enormous wealth and great inequality. A number of strategies are open to people who face these forces. One is to “play the market game” in what is an uneven playing field. The spread of “calculative reason” has repercussions at the level of individual and collective psychology (Gudeman, 2016, p. 116). Many of us feel that to be successful in life we have to compete by calculating the “price” of our actions in terms of different possible outcomes, avoiding choices that could “cost” us dear. Within this sort of game, the just price is often the cheapest price to the consumer, or the highest return on investment to the producer. This leaves many people marginalized, struggling to make ends meet. A way to mitigate such marginalization is to valorize one’s own labor, knowledge, and skill in socially circumscribed markets (sometimes creating local monopolies) and to capitalize on personal qualities and social attributes. In such circumstances, a price may be considered “just” in as much as it is a “good” market price.

Another strategy is to seek a just price not in open competition, but indirectly, as reparation for the uneven effects of that competitive process. This may take the form of the upheavals documented by Thompson (1991) in eighteenth century England and of their contemporary equivalents: a way of demanding that governments or the powerful regulate markets and protect people from unaffordable prices, or that welfare payments, corporate compensation, and charity are offered under a social–democratic or liberal government.

A third response is informed by the conviction that exchange value and quantification are logically, and thus morally, flawed. One way to gauge this position is to say that commensuration enforces equivalence between the incommensurate or the incommensurable. This response can lead to suspicion toward commercial activity and the creation of areas of life in which unquantified and unquantifiable use values and creative energies are emphasized. In the next section, we look at the origins of the discussion on commensuration in Ancient Greece.

ARISTOTLE AND THE PROBLEM OF COMMENSURATION

Although he didn’t actually use the term,² Aristotle provides the starting point for discussions of the just price. This is because his distinction between use and exchange value, and the moral problematization of trade that he drew from it, have stimulated debates about the politics and ethics of economy down the ages. In discussing Aristotle, we are not arguing for or against any specific theory of value or exchange, nor do we wish to suggest that the Aristotelian legacy can cover all the contemporary approaches to the issue of the just price.³ Furthermore, as the papers in this volume attest, scholarly notions of the just price are not the only voices in the debate; popular ones are always present alongside them. Beginning with Aristotle is then simply a useful way of setting out different views on commensuration and how these lead to different conclusions about how to justify prices.

Aristotle lived in a society largely built on a rural economy geared toward subsistence and household reproduction, which was however witnessing the rapid spread of commercial activities (Hann & Hart, 2011, pp. 19–20; Meikle, 1995; Polanyi, 1957a). This situation compelled him to consider moral issues emerging in this transition. His signature contribution, in our reading, was to distinguish between production for use and production for exchange and to make ethical judgments about consequent economic activities (Booth, 1993). These included householding (subsistence activities) and trading (selling goods for a profit). The distinction between householding and money-making was, for Polanyi, “probably the most prophetic pointer ever made in the realm of the social sciences” (Polanyi, 2001, p. 56). Others credit this distinction with laying the foundations of economic thought (Gregory, 2011, p. 136; Meikle, 1995, p. 8).

In part one of The Politics, Aristotle argued that objects are made for specific ends, and proper use should reflect their natures (Mei, 2009, p. 530; Meikle, 1995, p. 36). For example, there are two ways of using a shoe – to wear it or to sell it – but the correct one is to wear it, as the shoe is not made expressly for purposes of exchange (Aristotle, 1992, pp. 81–82). Here Aristotle clearly privileged the dominant social structures of his time. The “natural” and “unnatural” uses of objects are then refracted into economic forms (p. 78). The household carries moral approval, while disdain is attached to trade. Exchanges between households are necessary; when they ar...

Table of contents

• Cover
• Title Page
• Introduction – Toward an Anthropology of the Just Price: History, Ethnography, and Critique
• Market, Morality and (Just) Price: The Case of the Recycling Economy in Turkey
• When The Big Ones Abandon the Marketplace: Morals and Politics of Price in Equatorial Guinea
• Pecunia non olet but Does Rose Money Smell? On Rose Oil Prices and Moral Economy in Isparta, Turkey
• What’s in a Just Price? Challenging Values at an Organic Cooperative in Southern Spain
• Market Relations as Social Relations: Prices and the Moral Economy of Corn and Bean Trading in Rural Nicaragua
• Tuscan Values
• Just Compensation? The Price of Death and Injury after the Rana Plaza Garment Factory Collapse
• Practicing the Just Price: Fair Trade and the Limits of Ethical Consumption in the Global North
• Afterword
• Index