Introduction To Modes of Exchange
* Article: Introduction To Modes of Exchange. By Kojin Karatani.
"The history of social formations should be seen in terms of hybrid forms that include multiple modes of exchange. But the various modes of exchange themselves also undergo transformations within the transformations of social formations. The first social formation arises with clan society, in which mode A is dominant. Even at this stage, however, the germs of modes B and C are present, albeit to a barely noticeable degree. In state society, mode B becomes dominant, but this does not mean that mode A disappeared. It persists in the form of the agricultural community that submits to state rule. It is submissive to the power that stands above it, but within its interior is a collective characterized by self-government and egalitarianism. On top of this, under the dominance of mode B, trade carried out between different communities causes cities to flourish and leads to an expansion in mode of exchange C. At the same time, however, mode B also expands. Through this process “world-empires” take shape. These in turn undergo a transformation when they reach a stage at which, together with the establishment of a global market, mode C undergoes an explosive expansion. At this time, the modern social formation comes into being. Viewed in this way, it becomes clear that we need to see transformations in social forms not simply along the temporal axis, but also along the spatial axis. What I have just described is a simplified model of the social formation. But no society exists in isolation. All societies engage in ‘intercourse’ with other societies. In other words, they engage in ‘exchange’ relations with other societies. I call this sort of grouping of social formations “world systems,” after the work of Fernand Braudel. They differ depending on which mode of exchange is dominant within them. (See figure 4). For example, even clan societies form ‘mini world systems.’ These are not necessarily on a miniature scale; some, such as the Iroquois Federation in North America, were of an enormous scale. The special characteristic of this system is that the bonds between different clans are based in mode of exchange A. The next world system is the ‘world-empire.’ This is grounded in mode of exchange B. The next to appears is the world system that Braudel calls the ‘world-economy.’ In it, mode of exchange C is dominant, but even here B and A persist, albeit in altered form. Namely, B in the form of the sovereign state and A in the form of the nation (imagined community). Accordingly, the modern social formation takes the form of a combination of three modes of exchange—that is, capital-nation-state. Borrowing Wallerstein’s 16 language, this can be call the ‘modern world system.’ (See figure 5). As we have seen, the history of social formations can be explained in terms of their combinations of modes of exchange, the economic base.
Why Kojin Karatani Switched from Modes of Production to Modes of Exchange
"I proposed the notion of switching “from modes of production to modes of exchange” in The Structure of World History (2010; English trans. 2014). Here, I would like to provide a simple explanation of this. Orthodox Marxist theory, using an architectural metaphor, explains the history of social forms in terms of modes of production, which form the economic base (foundation), and of the political or ideational superstructures that are determined by that base. A mode of production consists of the productive forces, which arise from the relations between humans and nature, and the relations of production, which are constituted by the relations between humans. I do not oppose the idea that the history of social forms is determined by the economic base, but in my view that base consists not of modes of production, but rather modes of exchange. What I call modes of exchange includes both relations between nature and humans and relations between humans.1 I came to see things this way as a result of various critiques that were mounted in response to problems in the Marxist view that modes of production constituted the economic base—critiques that ultimately resulted in a rejection of the idea of an economic base.
This does not amount to a rejection of Marx. At the stage of writing The German Ideology, Marx himself used the expression “productive forces and intercourse,” not “productive forces and relations of production.” The concept of intercourse (Verkehr) includes relations of production, transportation, trade, sexual intercourse and even war. In other words, it includes all the various types of “exchange” that occur among that occur among communities.Accordingly, the various forms that I call modes of exchange can be said to correspond to what Marx called intercourse. A perspective centered on modes of production (productive forces and relations of production) fails to see that the relation between people and nature is itself a form of exchange (metabolism) and as a result loses sight of the ecological awareness that was included in Marx’s use of the term."
Historical Materialism and the focus on Modes of Production Originated from Engels, not Marx
"Historical materialism based on modes of production was a view originally proposed by Engels. After Marx’s death, Engels would describe this as Marx’s own epochal invention, but this was not the case.5 Engels had already adopted this line of thought back when Marx was still under the intellectual sway of the German Young Hegelian school. This was because Engels lived in England, where he witnessed the development of a capitalist economy and the class struggle (the labor movement) that characterizes it. From that point, he turned his gaze back on the history of society. The formulas of historical materialism amounted to the projection back onto pre-capitalist society of a perspective that was established on the basis of capitalism. In that sense, it might be of some use as a “guiding thread” for understanding pre-capitalist society, but cannot be used for grasping a capitalist economy. Accordingly, Marx brought in a different approach. According to the theory of historical materialism, the base of capitalist society lies in the relations of production between capitalists and workers. But Marx in Capital does not begin from there, but rather from exchange (money and commodity). Why? In general, according to historical materialism and those forms of Marxism based on it, production is of primary importance, and exchange is secondary. Yet this is, if anything, a view grounded in the thought of the classical economists such as Adam Smith, who were the object of Marx’s critique. Smith and his ilk were rejecting merchant capital, which earned its profits from exchanges, as well as the theories of their mercantilist and bullionist predecessors, whose thought was grounded in merchant capital. Smith asserted the legitimacy of the earnings of industrial capital, as opposed to those of merchant capital. In sum, for classical economists like Smith, exchange was of only secondary importance. But for Marx, exchange was fundamental. This was because he was taking up questions that had been disavowed by classical economics. In that sense, we could say that he analyzed capital by returning to mercantilism and bullionism. He considered merchant capital and moneylending capital to be the essential forms of capital. Mercantilism and bullionism demonstrated that what drove capital was not the desire for material goods, but rather for money—in other words, the drive to accumulate the ‘power’ that enables one to acquire material goods through exchange with the money one has.Moreover, this accumulation of power could only by realized through differences generated through exchange (surplus value).6 The real question is, where does this ‘power’ (exchange value) come from? Marx saw it as a kind of spiritual power adhering to the commodity—as, that is, a fetish.
The essential characteristic of a capitalist economy cannot be explained through its mode of production. This is because that characteristic lies in its mode of exchange. For example, the relation between capitalist and worker is based on an agreement/contract between the capitalist who has money and the laborer who has the labor power commodity. Accordingly, this is qualitatively different from the relation in medieval Europe between feudal lord and serf, just as it is qualitatively different from the relation in classical Greece and Rome between citizen and slave. In sum, the difference between relations of production in capitalism and those in earlier relations of production is a difference in mode of exchange. Under the theory of historical materialism, transformations in the social formation are understood as a series of stages in the development of relations of production. But in reality, transformations in mode of exchange exist at a more fundamental, basic level. A variety of modes of exchange continue to exist in a modern capitalist societies, but the commodity mode of exchange is dominant. The “productive forces and relations of production” of these societies are simply the results of this. Accordingly, when Marx undertook his consideration of the capitalist economy, he began from its mode of exchange. He relied on historical materialism as a “guiding thread” only with regard to earlier societies. But, in fact, even in the case of pre-capitalist stages, trying to understand them in terms of modes of 10 production leads to difficulties. Had Marx tried to tackle this on his own, probably he would have ended up taking a different approach to pre-capitalist social formations as well. This is clear, as I will discuss below, from the study he made of Morgan’s Ancient Society in his later years.
Engels’s words: “These two great discoveries, the materialistic conception of history and the revelation of the secret of capitalistic production through surplus-value, we owe to Marx.” (Engels, Socialism: Utopian and Scientific; Marx and Engels, Collected Works, 24:305). After Marx’s death, he began to describe these as constituting “Marxism.” But as Wataru Hiromatsu long ago demonstrated, this is not correct. It was Engels who in the 1840s first proposed the “materialist view of history” (historical materialism). Moreover, it is also clear that their collaborative work The German Ideology (especially its first section, “Feuerbach”) was also written largely at Engels’ initiative."
"Generally speaking, Marxists have made few contributions to our understanding of pre-capitalist societies. This was because they relied on the formulas of historical materialism. As a result, the epochal breakthrough in our understanding of the social formation in clan societies came not from a Marxist but rather Marcel Mauss.
He analyzed it not in terms of productive forces or means of production, but rather of exchange. This was not commodity exchange, but rather the reciprocal exchange of gift/counter-gift. I call this mode of exchange A to distinguish it from commodity exchange (mode of exchange C). This kind of exchange is comprised of three rules: one must give gifts, one must accept gifts, and one must reciprocate for gifts received. These rules are not something that people invented. They are instead imposed by a ‘magical power’ (hau) that people are compelled to obey. The social formation of clan society is created through this principle of exchange. For example, the form of kinship is established through reciprocal exchanges in which one gives one’s daughter or son to another community and then receives in turn a reciprocal return gift. In this sense, the clan society social formation was established by exchange in this broad sense, and this is what constitutes its true economic base. Incidentally, the Marxist anthropologist Marshal Sahlins argued for the existence of a “family mode of production” at the root of reciprocal exchanges, while Maurice Godelier proposed a mode of inalienable communal ownership.7 Both are trying above all to salvage the theory of historical materialism. But in reality it was the reciprocal mode of exchange that brought about the family mode of production and communal ownership, not the other way around. Accordingly, we have to start from modes of exchange in understanding primitive societies—as we can see from consulting Marx’s own views on the matter. In his later years, when Marx praised Morgan’s Ancient Society and discussed clan society, he did not invoke mode of production. Marx paid less attention to the economic equality of clan society than to the freedom and autonomy of its individual members. “All the members of an Iroquois gens personally free, bound to defend each other’s freedom; equal in privileges [and] personal rights. Sachem [and] chiefs claiming no superiority; a brotherhood bound together by the ties of kin. Liberty, Equality, and Fraternity, though never formulated, were cardinal principles [of the] gens….”8 If that is the case, what is the source of the principles of liberty, equality, and fraternity in the clan society? This cannot be explained by way of mode of production or communal ownership. Marx never argued this point explicitly himself, but in my view, they arise from the principle of reciprocal exchange, and this is what formed the economic base that determined clan society. Moreover, Marx described future communism as being ‘the return in a higher dimension’ of the principles of clan society. This shows that he did not regard future communism as a situation arising simply out of the further development of modes of production. While he didn’t explicitly spell this out, Marx did hint that future communism should be sought through modes of exchange."
"What was the situation with state society that emerged after clan society? It may appear to be grounded primarily in violent exploitation, but in fact it is also based on a kind of ‘exchange.’ While not ordinarily regarded as a kind of exchange, what we find here is an exchange of submission for protection.9 The state has its beginnings in conquest and violent domination, but it can only become a sustained form of rule when the ruled willingly submit to it. This becomes possible when they receive protection in return for their submission—in other words, when the relation of ruler/ruled becomes a kind of exchange. This gives rise to a form of ‘power’ other than violence. This power binds not only the ruled, but also the rulers, because if the rulers are unable to protect the ruled, they will lose their position as rulers. In this sense, this relationship is bilateral (reciprocal), so that in a sense it is related to mode of exchange A. I call this form of exchange mode B. Just as with mode of exchange A, a kind of nonmaterial ‘power’ is at work in mode B. But this is something born out of ‘exchange’ itself, not something that somehow bubbled up from within the ideational superstructure. If we consider mode of exchange to constitute the economic base of a social formation, the state is not something that originates in the superstructure, outside the realm of the economic, but rather is directly rooted in a specific form of exchange—that is to say, in the economic base, broadly conceived. Gramsci’s “hegemony,” Althusser’s “ideational apparatuses,” and Foucault’s “knowledge-power” all come not from a superstructure that is autonomous from the economic base, but rather from the economic base itself. Moreover, those entities that Freud regarded as “psychological factors” in order to distinguish them from the economic realm also in fact originate from modes of exchange and hence are, in the broad sense, of the economic base.
Note: In Leviathan, Hobbes argued that the condition of peace was produced via a social contract from out of the ‘natural condition’ of struggle of all against all. This social contract was, he says, a covenant “extorted by fear.” This means it was a kind of exchange, because those who submitted were granted their lives in exchange for submitting. Moreover, the rulers were placed under an obligation to carry out their end as well. In this sense, we can say that Hobbes understood the state in terms of mode of exchange B. But theorists from Locke on have thought of the ‘social contract’ only in terms of mode of exchange C."
"What about mode of exchange C? As I noted above, this may appear at first glance to be a simple exchange of material goods, but that is incorrect. Here too an ideational power is at work—and it too arises from ‘exchange’ itself. Marx describes it the following terms. “The exchange of commodities, therefore, first begins on the boundaries of such communities, at their points of contact with other similar communities, or with members of the latter.”10 In other words, exchange takes place with an unknown, perhaps dangerous other. Hence, the need arises for a ‘power’ to control the other—a ‘power,’ moreover, that is different from those that hold sway at the level of community or state. It is, moreover, of an ideational/religious nature. It is, in fact, what we call ‘credit’ or ‘trust.’ Marx called this sort of power a fetish. “Hence the riddle presented by money is but the riddle presented by commodities; only it now strikes us in its most glaring form.”11 In this way, Marx was trying to demonstrate how the commodity fetish, in the form of the money fetish and then the capital fetish, comes to dominate society as a whole. To repeat, what Capital made clear is that the capitalist economy is controlled not by the material, but rather by the power of fetishism—that is, by the idiational power. (See figures 1, 2, and 3). From the above it should be clear how modes of exchange A, B, and C each gives rise to an ideational ‘power’ that compells people. All of these are born out of ‘exchange’ itself."
"when we view feudal societies in terms of relations of production, we expect to find class struggle between feudal lords and serfs—and yet instances of this are hard to find. When struggle did occur, it was mainly due to misgovernment by the feudal lord. In other words, when he failed to meet his obligations under bilateral mode of exchange B. Accordingly, even when struggle emerged, it could only take place within the terms defined by mode B. In the middle ages, cases of class struggle that transcended mode B were those between feudal lord and city people. In other words, resistance to mode of exchange B came from mode of exchange C, which emerged in the cities. In sum, the ‘class struggle’ that took place during the medieval period was not an issue of modes of production; it was a conflict between mode of exchange B and mode of exchange C, which was spreading from the cities. And in the end, it was the latter that won out. That being the case, this may have been a ‘struggle between classes,’ but it was not a ‘struggle to abolish class in itself.’ In fact, these various struggles did harbor within themselves elements that could ‘sublate class in itself.’ That is what rendered these struggles into epochmaking ‘class struggles.’ But those elements were never realized and in the end only aided in replacing one ruling class with another. For example, the French Revolution with its slogan of “Liberty, Equality, Fraternity” ended in the realization of capitalist society. That being the case, where does the movement to ‘sublate class in itself’ come from? Generally, it seems, this arises from the dimension of religion and thought. In other words, not from the economic base, but from the ideational superstructure. In my view, however, these actually come from the economic base—that is, from modes of exchange—but in form of a mode of exchange that is different from A, B, and C, and that in fact aims to sublate them. Moreover, 18 unlike a simple concept or idea, these has its own ‘power’ of compulsion. I will discuss this again below. What is clear by now is that the class struggles we can identify from the premodern period arise not from mode of production, but rather mode of exchange. And we can say the same thing with regard to class struggle in capitalist society. For example, as I noted above, Engels observed the class struggle in 1840s England and from this hit upon the idea of ‘historical materialism,’ but in 1848 when revolutionary movements swept across Europe, the quickest cessation of class struggle was seen in England. Moreover, this happened not because of the defeat of the Chartist Movement—but rather because of its partial victory. After this, the labor movement in England was legalized and before long there appeared the so-called labor aristocracy. What emerged subsequently was Fabian Socialism (Social Democrats). In sum, the class struggle that occurred in England disappears with the victory, to a certain degree, of the working class. Why? The disappearance of class struggle at this time did not mean the disappearance of the capitalist mode of production. As a result of the struggle, it became legal for labor unions and others to engage in negotiations over wages. Seen from the perspective of modes of exchange, this means that the relations of capitalists and laborers, which had resembled modes B or A, started to move towards mode C. Looking back from this perspective, the fierce class struggle of the Chartist Movement arose not from ‘relations of production’ or ‘contradictions between productive forces and relations of production,’ but rather from the emergence of a new mode of exchange that was in the process of replacing the previously dominant mode. And when this was achieved, the labor movement became an accepted part of the labor market—that is, of the capitalist market economy. And with this, while it appeared that the class struggle continued, in 19 fact any ‘consciousness to sublate class in itself’ had vanished. In the advanced capitalist countries, class struggle and socialist revolutionary movements were destined to fade away after an initial period of activity. Faced with this situation at the end of the nineteenth century, following the death of Engels, Engel’s desciple Bernstein proclaimed the end of Marx-Engels revolutionary theory. But Lenin concluded that because the proletariat would naturally come to acquire a bourgeois-like consciousness and lose its class consciousness that would abolish class in itself, and for that reason believed that class consciousness had to be introduced from ‘outside.’ Lukacs’s History and Class Consciousness (1923) aimed to provide the philosophical basis for this. In their case, the ‘outside’ meant the ideas provided by vanguard intellectuals (or the vanguard party). But this was no different from Plato’s philosopher-king, and in the end its result was to legitimize dictatorship by the party. By contrast, from early on Ernst Bloch pointed out the limitations of historical materialist theory, and in Thomas Müntzer as Theologian of Revolution (1921) he attempted to link the socialist revolution with religion. Lukacs criticized this as a deviation from correct Marxism, but what I want to point out here is that already in 1848, Engels had confronted the same problem and adopted the same point of view. At the moment when ‘class struggle’ in England had died away, he revisited the question of how class struggle or even socialist revolution might be possible. This could not be resolved from an approach centered on ‘productive forces and relations of production.’ In other words, the person who was the first to propose this approach was also the one who came to this realization about its limitations. Specifically, he began to research peasant movements from sixteenth-century Germany (The Peasant War in Germany, 1850). In this work, he tried to find ‘communism’ in the thought of the millenarian movement leader Thomas Müntzer.
Engels’s previous position was that the 20 ‘power’ that drives socialism and movements to sublate class in itself comes from the economic base (contradictions between productive forces and the relations of production). But here he acknowledged that these come instead from the ideational/religious dimension. He would then launch into a study of the history of primitive Christianity that would continue until the end of his life. It is also true, however, that he was never able to go beyond this stage and bring this question to its logical conclusion.14 Bloch was in many ways the heir to this approach. He would write that, “Only a athiest can be a good Christian; only a Christian can be a a good atheist.”15 (Atheism in Christianity). Even before this, the Christian theologian Karl Barth would write that, “A well-known theologian and author has recently argued that these two ought not to be joined together as they are in our topic: ‘Jesus Christ and the movement for social justice,’ for that makes it sound as if they are really two different entities which must first be connected more or less artificially. Both are seen as one and the same: Jesus is the movement for social justice, and the movement for social justice is Jesus in the present.”16 We can say that these thinkers were confronting the same problem that Engels had faced. Through a paradoxical logic, they were trying to repair the rupture between religion and social movements—in other words, the rupture between ideational superstructure and economic base. But this problem can be resolved if we view the economic base in terms of modes of exchange rather than modes of production."
Towards Mode D: How Post-Capitalist Class Struggle Is Different
"Up until this point, I have been speaking only of three kinds of modes of exchange, but here I would like to introduce mode of exchange D Strictly speaking, D is not one of the modes of exchange. It is a drive that seeks to negate and sublate ‘exchange’ (whether of mode A, B, or C). It appears in the form of an ideational/religious power. Nonetheless, it is deeply connected to the economic base—that is, to exchange. It is precisely for this reason that D is able to oppose the various powers that arise from A, B, and C. It is not some imaginary being created through human desire or intention; to the contrary, it possesses its own ‘power’ of compulsion over humans. D is undoubtedly religious in nature. But if that is so, A, B, and C are also each in their own way religious. Weber referred to religion as ‘Gotteszwang or coercion of the god,’ which is nothing other than ‘mode of exchange A,’ in which one makes a gift to the gods in order to compel them to reciprocate. The state, too, can be called a religion grounded in mode of exchange B. Mode C, on the other hand, gives rise to religion in the form of commodity fetishism. This may at first glance seem to be nonreligious. For example, in today’s advanced capitalist countries, we see increasing secularism and rejection of religion. Yet this does not amount to a criticism of religion: it shows instead the situation of neoliberalism, in which mode C has become the dominant fetish. Mode of exchange D, by contrast, arises in the form of a criticism of those kinds of religion. In concrete terms, it emerges in all regions at the stage of world-empire, where modes A, B, and C have achieved a certain degree of maturity, in the form of universal religions.
Universal religions, that is, emerge in the form of ‘critique of religion.’ Of course, these later transform to become the religion of the community (mode A) or the religion of empire (mode B), and yet within these elements of mode D will ceaselessly reappear in the form of heretical movements—for example, Thomas Müntzer’s movement. Accordingly, historically mode D has played an active role in transformating social formations. In that sense, despite the fact that mode D is not an element of the social formation, which is a combination of multiple modes of exchange, it nonetheless persists as an active force within it. In modern social formations, mode C is dominant. This does not mean, however, that modes A and B are absent. They remain, albeit transformed under the sway of mode C. For example, even in the modern state which has adopted bourgeois forms of law, mode B persists in the form of ‘state power.’ And after the dissolution of the tribe or community at the hands of mode C, mode A is revived in the form of the ‘imagined community’ (Benedict Anderson). Hence, the modern social formation takes to form of capital-nation-state. Today, mode A functions as an impulse toward the restoration of community—as, that is, nationalism. But it can never overcome modes B or C.
To the contrary, taking the form of xenophobia, it serves to bolster capital-state. In the past, it led to Fascism, and it is likely that something similar will reoccur in the future. By contrast, mode D does not seek the restoration of a past community. It bears only a superficial resemblance to mode A.
Insofar as modes A, B, and C continue to exist, D will persist as a drive toward their negation. Where does it come from? D might seem to come from the heavens. But in fact, it issues from the economic dimension. Or again, it might seem to come from the future. But in fact, it issues from the past. From where does D’s ‘power’ arise? The answer to this cannot be separated from the question of where A’s ‘power’ comes from. In short, how did reciprocal exchange begin?
This cannot be demonstrated empirically. I would like to refer here to something Marx wrote in the preface to Capital. “In the analysis of economic forms, moreover, neither microscopes nor chemical reagents are of use. The force of abstraction must replace both.”18 As this indicates, he carried out his investigation into the origins of commodity exchange C via the “force of abstraction.” Accordingly, we can adopt the same approach with regard to the other modes of exchange. In primitive societies, the principle for the establishment of the social formation undoubtedly lay with reciprocal exchange. This did not, however, exist from the start. When the human race was at the sage of nomadic hunter-gatherers, modes B and C did not exist—but neither did mode A. Most likely, all products were distributed equitably at this stage. Nomadism made the accumulation of goods impossible. The size of the nomadic band was determined by the scale needed to engage in hunting and did not grow larger or smaller than this. Nothing compelled members of the band to remain. When they encountered other bands, probably they carried out simple exchanges, but these did not develop into warfare. I call this situation nomadism U. What caused this situation to change was the shift to fixed settlement in many parts of the world, itself a result of global climate change. After this, interpersonal conflict and disparities of wealth began to appear within the collective. Fixed settlement made exchanges with other collectives necessary — y—which in turn gave rise to new difficulties. It was at this time that mode of exchange A, the reciprocity of the gift, began. Needless to say, this was not something that people invented or thought up. It arrived as something that transcended human intentions.
After the appearance of clan society, human society came to be dominated by the ideational ‘power’ that is produced by modes B and C. When mode B is dominant, mode A is limited to functioning as the principle of the community. As I noted above, however, when modes A, B, and C have reached a certain stage—that is, at the stage of world-empire—mode D appears in the form of universal religion. In other words, universal religion cannot exist in isolation from the economic base. Mode D is not the return of mode A; it is the return of U.20 Accordingly, it intends not the past but the future. Nonetheless, it is different from human hopes and fantasies: it has the character of a repetition compulsion. What D makes possible is various forms of resistance to the ‘powers’ possessed by A, B, and C. We can include literature and art among these. The ability of literature and art to escape direct determination by the productive forces and relations of production and to present a utopia that transcends these comes from mode D.
Insofar as the powers of modes A, B, and C persist, mode D will always return as a kind of compulsion that attempts to sublate these. Accordingly, insofar as it consists of mode D, ‘communism’ is historically necessary and inevitable."