Neoliberalism and changing conditions in commercialization, marketization and commodification

Kurtar Tanyılmaz[1]

1- Introduction

Today we live in a society where everything from air to water becomes for sale and produced for profit. From health to education and from shelter to water almost every product and/or service we know for years as “public” and as a “right” has been marketized for a long time and sold for a certain price.

What we have been experiencing for years clearly shows that the increasing tendency of commodification, which is an important aspect of neoliberalism, leads to a series of important social costs, from the unemployment to the destruction of nature, despite claims on increase of wealth. Moreover these social costs are paid by the working class constituting the majority of the population. It is critically important to understand the dynamics behind the tendency toward commodification and the conditions in which today’s capitalism is in, so that the struggles that arise against it can be successfully accomplished.

The aim of this study is to put forth that the increasing tendency of marketization in the production of public goods and services today is closely related to the tendecies of the development of capitalist mode of production in general, as well as to the structural crisis that marked the last 25-30 years of capitalism in particular.

“Public” goods and social rights in capitalism

While evaluating public goods and social rights, my starting point will be three basic premises which I will try to justify in the next section:

1- No commodity should be required intrinsically as a public good.

  1. Social rights (education, health, shelter, etc.) are not given, but “vested” rights.

3- When interpreting the history of capitalism, market-state antinomy is far from being explanatory.

The fact that the original source of wealth in a capitalist society lies in the sphere of production is the result of the dual character of a commodity in capitalist production. Every commodity, including labor power, has a contradictory nature. A commodity is produced both to meet a need (use value) and to be sold (exchange value). However in such a society where the means of production are privately owned and labor is for sale, creating exchange values (not only to sell but beyond that to sell for making profit) gets ahead of creating use values.

It is the dynamic of class struggle that fosters continously this contradiction, which is peculiar to capitalist societies. For on the one hand, the working class wants to keep the use values as much as possible under the name of “public utiliy” and on the other hand the capitalist class wants to convert these use values into exchange value as much as possible by distroying them.

We can argue that in the light of these determinations, no good or service (software program, seed, health etc.) is intrinsically public, as long as capitalist production conditions persist. Because the legitimacy of a need in bourgeois society and the widely acceptance of a need (its recognition as a right) are two separate matters. More specifically: On the one hand, capital in general needs a “healthy” labor force to work (which also serves the legitimacy of this system), on the other hand, each individual capital wants to spend less to keep workers healthy. At the same time, the capitalist’s need is to provide cheap labor, while the laborer’s need is to obtain a viable wage income. Both needs are equally legitimate in capitalism! In such an exchange relation realized on the basis of equal rights, both capital is indifferent to the reproduction of the workers (for health situation etc.) and also only to compromise with the struggle. Which side’s need will be recognized as a “right” depends on the political and class power balances in the country. In the section that reveals that the determination of normal working day is a result of intense struggles, Marx expresses the capitalists’ indifference to the labor force as follows:

In every stockjobbing swindle every one knows that some time or other the crash must come, but every one hopes that it may fall on the head of his neighbour, after he himself has caught the shower of gold and placed it in safety. Après moi le déluge! [After me, the flood] is the watchword of every capitalist and of every capitalist nation. Hence Capital is reckless of the health or length of life of the labourer, unless under compulsion from society.[2]

Marx explains in the section where he discusses the factors determining the limits of a workday, that there is no limit of the workday and therefore of the surplus labour, because of its nature based on commodity exchange and that it is power that will be determinant between equal rights:

We see then, that, apart from extremely elastic bounds, the nature of the exchange of commodities itself imposes no limit to the working-day, no limit to surplus-labour. The capitalist maintains his rights as a purchaser when he tries to make the working-day as long as possible, and to make, whenever possible, two working-days out of one. On the other hand, the peculiar nature of the commodity sold implies a limit to its consumption by the purchaser, and the labourer maintains his right as seller when he wishes to reduce the working-day to one of definite normal duration. There is here, therefore, an antinomy, right against right, both equally bearing the seal of the law of exchanges. Between equal rights force decides. Hence is it that in the history of capitalist production, the determination of what is a working-day, presents itself as the result of a struggle, a struggle between collective capital, i.e., the class of capitalists, and collective labour, i.e., the working-class.[3]

If we are to gather up our thoughts up to the present: We can assert that under the capitalist mode of production, in a given country and in a certain period, the basic factors determining whether a good or service has a “public” character and implies a “social right” and to what extent it is subject to commodification, are: 1) the requirements of capital accumulation (profitability of the conditions of production) and 2) power balance of class struggles.

The result we have is that it is class struggle that determines whether a product or service could be considered as “public”; and a “social right” is not intrinsically a “right”; actually they are vested rights. In other words, we state that the assumption that a society has general, common, and public interests, and accordingly demand for a minimum human need/right which all classes will accept and define it as legitimate, does not coincide with the capitalist reality.

On the other hand, it should be noted that almost all rights (education, health, shelter, etc.) defined as “social rights” are ultimately part of the costs of reproduction of the labor force. This point, that is, the existing social rights, in fact, are derived from the “right to work” and getting a job, being employed is the precondition of all other social rights. Because, as we shall see in the future, under the conditions when capital accumulation loses its vitality and profitability of production diminishes, structural unemployment would tend to increase. It is clear that the pressure on existing “social rights” (wage erosion, the state’s rising debts, etc.) will increase.

The main function of the state in a capitalist society is not to abolish the structural contradiction between labor and capital but rather to intervene in the direction of its existence and its continuity. In other words, it aims to “manage” the accumulation of capital in favor of profitable conditions of production; not to provide a “social consensus”. Countries (and states) themselves are embedded in capitalist economic relations. Government and state officials in a country have strong reasons to follow policies that support capital accumulation. In this respect, the understanding of capitalism on the basis of market-state dualism, which is also common today, is not realistic because it is based on the assumption that the state is independent of capital accumulation, neutral and can protect “public interest”, but actually “there is no state above the classes”. We can say that the function of the state in a capitalist economy is not being a “referre” in the context of capitalist production relations but rather being a “guard” of the system based on the basis of the private ownership of the means of production and the wage-labor-capital relation.

2 – What is neoliberalism?

The view that neoliberalism is the product of an ideology/mentality among the various left circles and currents is very common and it is also argued that its main aim is the withdrawal of the state from the economy (due to the “financial crisis” of the state). From this point of view, public expenditure is on the rise due to the high social expenditures and social wages, and the budget deficits that are caused by them are deterring private sector investments. We are convinced that neoliberalism is not a false mentality or the product of politics, and that the important historical transformations behind neoliberal transformation in world capitalism lay behind it. Before addressing this view, we would like to touch on the historical background and dynamics of the period from 1945 to 1970 when the practices of the “welfare state” were more common on the world scale. This period was historically quite a product of specific conditions and factors.

We can summarize these conditions and factors as follows:

  • The Great Depression has become is a threat to the capitalist world.

In particular, the widespread massive workers’ struggles, especially in the European countries, which followed the Second World War against the world economic crisis, which began in 1929 and deepened in many countries in Europe, were intensified.

  • The increase of the influence and hegemony of the Soviet Union on the world working class as a positive experiment of the post-October Revolution of 1917.
  • The revival of capital accumulation on the world scale in the wake of World War II.

The “welfare state” practices under these conditions and factors were the result of the international bourgeoisie having to make concessions in the face of the relative superiority of the working class in the political power balance. Let us emphasize in particular: These practices were not often the result of a policy of providing a kind of “social consensus” between social classes with the aim of stimulating demand, in the direction of continuing the existence of capital accumulation, as claimed. And even though it was not against it. Because, despite a growing public sector, capital accumulation did not slow down. A new period in which profitable production conditions prevailed (but only after the Second World War!) but also the increase in public expenditures was largely financed by taxes paid by laborers. In other words, this “concession” (increased social spending, social state practices) met the bourgeoisie not from its own pocket, but to a large extent from the taxes paid by laborers.

In summary, the period in which the state functions as a “collective insurer” was the product of specific historical conditions; It would be more appropriate to endure it as shift in the balance of forces of the class struggles during the period in favor of the laborers. As a matter of fact, in the post-1970 deepening economic crisis and under the changing conditions of power balance that have been deteriorated against the laborers, this tolerance has shifted to an immediate and brutal attack. For us, the true meaning of neoliberalism lies in the fact that the international bourgeoisie has not been able to produce a solution to the long-term crisis of the ongoing world economy since 1970s and has adopted a new strategy of attack on the working class. It is also necessary to add that the balance of power between the classes led by the collapse of the Soviet Union since the early 1990s has turned against the working class.

What is the purpose of neoliberalism?

We have noted that capitalism is going through a structural long-term crisis that has arisen as a result of the tendency of declining rate of profit, and as a consequence, the state’s “insurer” function has become a burden for capital. Although various Keynesian methods were followed, it was not possible to get out of the crisis and the international bourgeoisie had utilized neoliberal strategy as an attack to labour since the 1980s. The main goal in neoliberalism is to clean up the obstacles in front of capital accumulation so that the capitalists can make more profitable production. In other words, the aim is to eliminate the unprofitable units of the capital and to direct them to new investment areas that may be more profitable. The way to bring this strategy into life in order to eliminate all the obstacles in front of the capital logic is to atomize and discipline the world working class. For this reason, the attack against all the vested “rights” that the laborers had in the past was initiated.

In particular, it is worth emphasizing: Neoliberalism does not mean that the state has less intervention in the economy. The most important point is not the downsizing of the state, nor the strengthening of the markets against the states. One of the main tendencies of capitalist development is continuing growth of the state. As a matter of fact, in the last 25-30 years, the state (public expenditures, etc.) continued to grow. What is changing is not the function of the state in the capitalist economy (to ensure the continuity of capital accumulation), but rather the way it intervenes to the economy.

We observe that the neoliberal policies that were practiced for about 30 years since 1980s led to the following social consequences around the world:

  • The state has grown rather than to shrink (public expenditures, social expenditures).
  • Real wages tend to fall.
  • The angle between labor productivity and real wages (which approximately indicates that the exploitation rate is tendentially increasşng)
  • Fixed capital investments realized by the private sector are gradually slowing down.
  • Average profit rates continue to decline in many key sectors that are leading the global economy.
  • Unemployment rate is increasing.
  • Income distribution is deteriorating.
  • Working conditions (increasing workload, working hours, precarity, subcontracting, de-unionization) are worsening.
  • Borrowing is increasing in almost every sector from households to corporations and governments.

The meaning of neoliberalism for the health sector

Based on our findings on neoliberalism, we want to reach some conclusions about the health sector in Turkey. First of all, it is worth mentioning that health services have previously included some practices in commodification. In the past, when the stae was fully controlling the health sector many services (such as referral paper, health card, health insurance, drugs from pharmacy, sending patients to private health center for inspection etc.) Today, some of the goods and services produced in public enterprises are also preserving their commodity character. With neoliberalism commodification is more increasing, these servises are more encircled with market relations. This is one dimension of neoliberal politics in health.

The other dimension is the course of health expenditures. The share of health expenditures within national income or within the state budget does at least not decrease by years and public health expenditures are on the rise! However, when we look at who finances these public expenditures, we see the recognize the real meaning of neoliberalism much better. While the burden on public and private employers is reduced in health expenditures, the so-called private households, consiting highly from working class, are responsible for these expenditures.

There is another dimension that we particularly want to highlight. The ultimate goal of the neoliberal policies in the health sector is to open a new door of exploitation for capital through privatizations. In the first part of the article we tried to mention. The ultimate goal of commodification (marketization) is to increase the surplus value, in other words to maximize profit, not to increase productivity and/or reduce labor costs (for reasons of “savings”, “performance” criteria etc) as claimed.

This means that in the present-day capitalism under the influence of neoliberalism, the main purpose is to control the labor process (“subsumption of the capital”) to create more surplus value, by opening the public services to market relations and privatizations step by step. We can concretize these determinations through the health sector as follows: In the sphere of circulation (hospital construction via public-private-partnerships, transfer of health care services to contractors, subcontracting practices, lower wages/salaries etc. for health workers, pricing of health services, opening of private hospitals, subcontracting workers, employing imported doctors, etc.). growing commodification practices are important. These practices, on the one hand, contribute to the deterioration of the income distribution against the laborers, and on the other hand they function as a kind of “Trojan horse” of privatization. But what is more important for the capital logic is to get whole control over the labor process (diagnosis, treatments, etc.), especially in the sphere of production in order to get more surpus value from wage labour. Turning the hospital from a commercial enterprise to a large factory aims to make private sector investments profitable for medical device manufacturers, drug companies, private hospital owners. In other words, the basic strategy of neoliberal policies focused on privatization, which is called “transformation in health”, is to bring health workers as well as labourers in all public services to the real subsumption of the capital in the production/labor process. An important consequence of this transformation is increasing proletarianization of doctors and resemblance of their working conditions to the working class.

3- How to struggle?

Throughout this article we have put forward two basic views. The first is that the rights and needs have a opposite and contradictory character in bourgeois society, that rights and needs can vary according to class interests, and that the state is not above social classes and independent in defining them. Moving from here we have the following conclusion: It is not correct to define a need as a right from the beginning and lay claim to use value (to bring out a useful product in the labor process) while objecting or revolting against the exchange value (the sale of the product as a commodity). Because in capitalism, two are intertwined and form a contradictory unity and contain different class interests. To view one side of the contradiction as a “natural” right and to see the other one, that is the exchange relation, as the source of social inequality is to ignore the essence of the capitalist relations of production (that the labor power itself is for sale therefore open to exploitation in the production process).

A correct approach should try to find a solution transcending this contradiction.  This is a contradiction (between use value and exchange value) which is specific to the capitalist mode of production. The political implication of such an appraoch is that a discourse based on the slogan “health is a right” or “health is not a commodity” will not be sufficient to win the struggle. By shifting the axes of the struggle between capital and labor to the problem of between individual and state, rights-based struggles aim at reducing or removing the poverty resulting from this contradiction, rather than to abolish the capital-wage labor contradiction itself. Likewise, we believe that gains from rights struggle will be limited if they only try to rectify distribution in the sphere of circulation as a strategy to expand first the state and/or “public” sphere (by “surrounding” it, trying to democratize it) without aiming to transform production relations. If a right will be defended, it would be more appropriate to struggle over a political line that defends first the right to work (job security and removal of unemployment) and everyone else’s livable wage income.

Secondly we have tried to set forth that neoliberalism is not a failure of a certain political regime of capitalism, but rather a manifestation of and a reaction to the overaccumulation and profitability crisis deepening for a longer time. It is an expression of the crisis of the capitalist system itself. This means that policies that states are following, are not a consequence of false, “unfair” politics, which also favour financial markets. They are a part of the attack strategy to labour to open the way for the capital accumulation in crisis. We emphasized that in contemporary capitalism the real problem lies not in the state (in the policies it follows) but in the crisis of the capital. In that case, it is not possible for us to win in a struggle that only takes the state as interlocutor, does not battle against the capital and can not become independent from the capital, especially under conditions of crisis when class interests come face to face so sharply. The struggle for a health system to be shaped on the basis of social needs should be built around demands that include the right to work and job security, livable income, worker’s control, and the prohibition of subcontracting. Realizing these demands will be possible to the extent if it could be a part of a general expropriation strategy that takes possession of existing firms in public ownership, re-debates private property and aims to de-commodificate labour power.


[1] Assoc. Prof. Marmara University.

[2] Chapter 10, section 5. The footnote to this proposition also reveals that capital’s attitude towards workers is not unique to the neoliberal period: “But though the health of a population is so important a fact of the national capital, we are afraid it must be said that the class of employers of labour have not been the most forward to guard and cherish this treasure…. The consideration of the health of the operatives was forced upon the mill-owners.” (Times, November 5th, 1861.)

[3] Chapter 10, section 1.