The concept of decommodification springs from the idea of Esping-Andersen who made an examination of the concept of decommodification with influences of the works of Marx and Polanyi. Esping-Andersen concentrated on the idea of the threat commodification poses on the basic consumption needs of laborers while Marx and Polanyi were concerned about the economic scheme for a laborer’s self-development and a later form of social modification and improvement.
The concept of decommodification is stressed by Esping-Andersen in his book, The Three Worlds of Welfare Capitalism. However, attention should be paid to commodification before the concept of decommodification can be understood.
Commodification is the idea of evolving labor into a market commodity. In this sense, laborers depend on the market for livelihood as there is no economy outside the market structure of capitalist communities. In capitalist societies like the US, a laborer is found trading his skills for the monetary privileges involved.
At this, the treatment of labor as a commodity isn’t novel. In the period before civilization and enlightenment, say the hunting period in different societies before man evolved to man, people exploited labor to achieve a level of public and common well being. This is because they were involved in the act rather than wait on anyone to do it. As Esping-Andersen stressed here, there was no labor contract, only the need for survival which lays solely on anyone who wants to bear the responsibility. No one practically depended on money, they depended on food.
However, when the age of industry set in, beginning in Europe, people emerged into the office while unskilled persons were sent into the mines and other industrial outlets. At this state, labor became commodified. Although at first, people were respected as the market was; people had a choice of what job to do and what master to serve. However, as time evolved and the market became hegemonic, the laborers had fewer options.
The freedom of workers as quoted by Esping-Andersen is the freedom behind the wall structure. During this period, labor became a commodity that is both hired and paid for. A laborer becomes involved in a market system that could be evaluated as a financial good. Although, without labor, the market cannot work. But with the gross amount of laborers, the market could function by integrating labor as another (cheap) commodity.
Polanyi in the 1980s coined the word “decommodification.” He expressed that in capitalist economies, labor is another market product, an asset that you can sell and purchase later. Esping-Andersen, following this same perception and discovery, exploited it in explaining the modern welfare system.
Hence, the concept of decommodification is a system/state in which families and the unskilled population could uphold a society’s precept of living without the involvement of the market system. That is a system where people could obtain a satisfactory standard of living outside the market economic structure.
By this, a person does not need to sell his/her labor to earn a living. Esping-Andersen expressed that a person’s well being is a right that should not be bought from a marketplace. He further expresses that even if someone is unemployed, he has an entitlement from the government of such a society.
In decommodified societies, people’s attainment of welfare status and welfare benefits is sourced mainly from the government rather than from private individuals or companies. In commodified economic structures, the form of well being relies on the inhabitants and the market of such a society. By this, if a laborer works hard enough and his contribution to social involvement is high enough, he retains a higher value to maintain a social class and well being than a laborer who cannot work as much as laborer 1 in this context.
In commodified markets, a laborer exists solely on the value he provides for the market, not his value as a human. Hence, as a person becomes a commodity, there is no form of welfare provision from the government. The analysis of decommodification, however, varies depending on the type of the federal welfare system. The three welfare systems to be considered are liberalism, conventionalism or conservatism, and socialism.
In the welfare system of liberalism, the government provides the fundamental needs for the market to function maximally while the obligation of eking out a living from the purpose of the market becomes the people’s responsibility. That is, people are reliant on the market after the provision of the smooth-running of the market structure by the government of a liberal welfare society.
Further, this individualism, the ability, and the challenge to only look out for oneself exempt the government from taking an essential role in the laborer's life. In this welfare plan, employers and employees make decisions and the market is primary to the objective of the regime which makes the extent of decommodification very, very low.
In conservative and/or conventional welfare plans, the family takes up the role of procuring their welfare interest. At this, the concentration on the market place becomes minimal and the extent of state participation is low. This is keen to preindustrial social structure in which the traditional social system is highly important and the degree of a person’s livelihood depends on the extent of his participation in it.
This structure exemplifies decommodification on a moderate level. However, for those who contribute more to the community in this regime, there is a plausibility that they’ll be respected and heeded as significant because of their contributions. Hence, the people in a higher social class will live comfortably than those who still engage in the consolidated form of labor which is tantamount to meager earnings.
The third world for the welfare structure he considered is socialism or public democratic government. In this economic structure, the government is invested with the capacity to provide for the people’s welfare state. At this, socialism which is the opposite of capitalism is embodied with this welfare structure in which the state takes up the main role in public provision to ensure a standard of social well being.
In this, the government motivates the people to occupy the labor space after providing them with crucial skills for labor and an adequate welfare scheme to survive. However, they need to work in this economic system while unemployed persons can still rely on fundamental benefits from the government. Therefore, this doesn’t bring in the full doctrine of decommodification but it permits a practical and reasonable level of government intervention in the market and social structure of the state.
It should be noted that the valid strategy of the decommodified economy is that people gain access to beneficial programs without difficulty and revenue syndication is parallel. That is, the social profit isn't tied to the contribution made into the market or the community although the reverse is the case. Although there are pension schemes for retired laborers as well as sick medical advantages for the sick, however, there must be legal proof of this state before a person enjoys the benefit of whatever state.
Also, the benefits for the unemployed are received from his skills. That is, even if someone is unemployed, his skills would be useful for him in the future, and he would pay taxes in its regard. More so, as the government cannot provide welfare benefits without the contribution of the people, the state relies on taxes paid from employed persons to keep up with such a social-economic plan and welfare demand.
However, if the labor provides returns and gains for a limited period, the commodity of the capacity invested is diminished. This means that access to a long-term benefit is difficult and a decommodified system is difficult to attain.
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