Commodification matters, because it is one of the ways that capitalism shapes the technological and social systems that consume energy. A movement towards post-capitalism would, by destroying the social relations of which commodification is part, put an end to it, and pave the way to an energy commons.
Such a movement would be by far the most effective way of tackling dangerous global warming, because it would enable society to use energy for need, and not for profit.
These arguments are made in a paper published today by People & Nature.
To early 21st century city people, gas for a stove, electricity for a factory, or fuel for a vehicle, is presented as “energy”. People often refer to “energy” as something that is, or even must be, bought and sold. Actually, that buying and selling is very recent in historical terms, and even now is not ubiquitous.
Marx’s concept of “commodity fetishism” is useful here. Marx believed that social relations between people, and the fruits of their collective labour, were presented to them in “the fantastic form of a relation between things”. This was truly weird, he thought; it reminded him of the “mist-enveloped regions of the religious world”. The contradiction between the commodity’s use value and its exchange value in markets was obscured.
This mystification persists today in energy research: the idea of “energy demand” elides the need for energy services (the need for a use value) with the economist’s concept of demand for a commodity.
For thousands of years, humans accessed types of energy – human or animal labour power, or mechanical energy from windmills or water wheels – directly from nature. Fuels became commodities only in the 18th and 19th centuries. As capitalism rose to dominance, it turned labour power into a commodity, and much else besides, including energy sources such as wood and coal.
The energy carriers associated with the second industrial revolution – electricity and oil – were treated as commodities from the start.
But there were countervailing tendencies. The provision of municipal services to urban working populations – public health, water supply, and then also gas and electricity – was in many countries taken over by the state.
This was a key trend in the growth of the labour movement and its struggles within capitalism to defend and extend the rights and living standards of working people. So the treatment of energy as a commodity was challenged, right through the late 19th and 20th centuries, by ideas of energy as a service, and indeed as a right of urban working people.
In the late 20th and early 21st centuries, the commodification of energy reached its peak, in the era of so called globalisation, the supremacy of financial capital, and the privatisation drive of the 1990s that is particularly relevant to electricity provision.
On the other hand, the resistance to the logic of this commodification also grew.
□ First, there was organised resistance to the way that the prices of energy products were driven up in the global south, by governments whose economic policies were often closely controlled by international financial institutions;
□ Second, a broader resistance by urban populations, particularly in the newly-urbanising parts of the global south, to the idea that electricity or fuel is a commodity. There have been big social struggles by communities who see electricity as a right.
These struggles are usually waged by people living on the edges of the commodified energy system. They might typically use a small amount of electricity for heating, lighting and charging phones, and wood fuel for cooking. Much of this energy is not bought and sold at all. And there are hundreds of millions more people, mostly in the countryside in the global south, who remain completely outside the commodified system.
That system is a central and powerful manifestation of capitalist social relations, but it is not ubiquitous, not a monolith and not all-powerful. It can be challenged.
Looking to the future, the idea of decommodification is relevant, first, to changing the technological, social and economic systems through which energy is consumed; second, to changing electricity systems specifically; and, third, to political platforms that social and labour movements are working out that combine tackling climate change with our aspirations to social justice.
First, with regard to the technological, social and economic systems that consume fossil fuels: social and labour movements should focus more consistently on energy conservation as a key to changing these systems. And to do this means breaking through the analytical frameworks in which energy as seen as a commodity.
There are four overlapping ways in which the amount of fossil-fuelled energy going through technological systems can be reduced:
1. reducing the amount of energy services provided (e.g. by not making unnecessary work-related journeys, not making and using military jets);
2. reducing the amount of final energy needed to provide energy services (e.g. by insulating buildings to reduce heat demand, or substituting SUVs with bicycles);
3. reducing conversion losses in technological systems (e.g. by reorganising electricity networks, reducing waste in industry, etc); and
4. replacing systems dependent on fossil fuels with systems powered by renewable sources.
In public discussion of decarbonisation, the first three of these are almost always bundled together under the label “demand reduction”. “Energy services”, a concept devised in the 1970s to make energy flows through the system more transparent, has been given a new meaning inflected by economics.
Energy is understood to be a commodity. Some politicians argue that “the economy” needs a fixed amount of this commodity, and ways must be found to provide it without fossil fuels; some others argue that more attention should be paid to reducing demand for this commodity.
But neither of these viewpoints questions the nature of the technological systems by and through which energy is consumed, nor the social and economic systems that underpin them.
For example, urban transport. Politicians talk about replacing fossil fuelled cars by electric cars, and about “demand reduction” by convincing people to drive less. Such approaches leave the systems unquestioned – the technological systems in which cars are the predominant mode of transport, economic systems in which car manufacturers and oil companies are so powerful, and political systems that reinforce these power relations.
Once large-scale production and use of energy commodities is seen as a function of these systems, rather than as a response to “demand”, strategies to supercede these systems can be more effectively worked out.
Second, with regard to electricity systems specifically, the technical potential for energy conservation can only be realised if social and economic changes are also made. The most advanced technologies could, in the context of decommodification, take energy conservation forward by leaps and bounds.
In the coming years, it is very very likely that (i) electricity will become even more dominant in technological systems, (ii) it will increasingly be produced from renewables, and (iii) systems will technologically become more decentralised (more smaller sources of electricity). Electricity networks will be adapted to renewably-generated supply; there will be more microgrids; electricity networks will be integrated with other networks.
These changes will take place whether or not social and economic systems change. Electricity corporations are aware of this, and in some cases are investing huge sums of money into managing these changes and finding ways to make them profitable.
Could society, as opposed to governments and corporations, use this technology to its advantage, to supply energy services that enable people to live better, and to reduce the consumption of fossil fuels? In principle, yes. Breaking with the idea of electricity as a commodity to be bought and sold is central to doing so.
Could microgrids, combined with the most recent information and communication technology, provide the basis for more far-reaching decommodification? Yes, they could, say electrical engineers and ICT specialists who see the potential for an “electricity commons”. Others have written about the potential for an internet “commons” free from corporate control.
A central question, raised by this literature but not answered by it, is how we envisage the transition from the current situation, in which both electricity networks and the internet are almost completely enclosed under corporate control, to any such future situation.
Third, an understanding of decommodification is important for the political platforms and demands that social and labour movements adopt.
As things stand, most versions of the “Green New Deal” attempt to reconcile decarbonisation with “economic growth”. Social democratic political action, such as envisaged by the “Green New Deal”, is constrained by the relationships of wealth and power inherent in capitalism.
Social movements at local and community level, rather than national level, also come up against these constraints.
In these movements the idea of an “energy commons”, which implicitly stands in opposition to commodification, is being discussed. Some of these discussions have focused on how society, communities can act “in, through and beyond the state”.
Decommodification of energy implies social relations in which humans take sources of energy from the natural world, and use them, free of commodified forms of exchange. In such a situation, the current technological systems based on fossil fuels, and the social and economic systems in which they are embedded, would have to be transformed.
While these relationships can be prefigured at community level, such projects will always be constrained by the larger, more powerful commodified energy system that overshadows them.
This does not mean that co-operative, local or municipal attempts to carve out spaces for “energy commons” should be abandoned. But we need to be aware that not only the state, but also the commodity form and the power relations inherent in the capitalist economy, are obstacles that we have to confront. Simon Pirani, 18 November 2021.
■ The full article, How energy was commodified, and how it could be decommodified, is here. It can be downloaded as a pdf here.