Markets As A Form Of Production, Use And Consumption.The Meaning Of Property And Water Rights - Article Example

2. Markets as a form of production, use and consumption: The concept of a market has been around for a long time ever since man had the capability toproduce or gather a commodity in excess of his personal needs. But the nature of markets itself had undergone changes over the years starting from a system of crude barter, to the sophisticated market economy that is seen in most advanced societies. This much is seen as acceptable to most theorists and economists, but the motive behind the marketing function is not. Adam Smith, considered to be the father of modern economics, stresses that division of labor which is characteristic of a reasonably large market has come about due to the propensity of man to barter excess goods in exchange for other commodities which he needed for his family needs. He adds that man is motivated by the element of profit in marketing and that the price fixed for a commodity should essentially have a margin over and above the input costs of labor and rent. According to him, "the whole price of any commodity must still finally resolve itself into some one or other or all of these three parts; as whatever part of remains after paying the rent of the land, and the price of the whole labor employed in raising, manufacturing, and bringing it to market, must necessarily be profit to someone" (Smith 22). Smith goes on to argue that this propensity for bartering and profit will best be supported by a free market economy. Economists over the years have subscribed or gone against this view. But here again, only very few have really contradicted Smith's views on bartering and profit. Marx stated that such a situation will result in greed and eventual exploitation of workers. But two prominent writers namely Karl Polanyi and Robert Heilbroner vehemently argue that a study of history of markets around the world, even in the famous ancient kingdoms goes against the view of Smith with regard to marketing and bartering. The views of these two writers will be analyzed to review the distinguishing features of the new market economy in comparison with earlier market systems followed. The paper also tries to make a comparative study between Donald Worster's view on water as a commodity and Marx's own views. Polanyi had definitive views on marketing motivations and customs regarding the evolution of marketing and states that the views of other theorists on this area were erroneous in a number of areas. As an economist, Polanyi is known for his substantivist approach, a situation where the marketing function was closely aligned with culture, social practices and beliefs of a particular community. The author states that "to start with, we must discard some nineteenth century prejudices that underlay Adam Smith's hypothesis about primitive man's alleged predilection for gainful occupations" (Polanyi 45). He goes on to argue that the current market environment is of recent origin and that most of Europe followed the same standards and sophistication carried on from over the centuries with very little change. To substantiate this, he studies various civilizations and societies from a variety of periods and regions and provides specific examples. In essence marketing has a social function based on survival and growth of the society rather than for individual gain. Polanyi agrees to the fact that a marketing function is essential in organized societies, but its aim is for overall benefit and growth. A person is expected to share his surplus commodities, whether it is an agricultural or animal product. This generosity will enhance his position in the society. Its benefits are not immediate, but will only come at a later stage, when others respond to this generosity by helping him out with his needs of the time. There are two ways in which this can happen. It can come from individual or common reciprocation. In other words, a particular individual who has benefited from an act of generosity will respond when in a position to reciprocate. The society will also have a common store of products which is collectively used to help its members. He gives an example of the Trobriand Islanders where the help is directed towards the matrilineal relatives of a person. He will provide all help to his sister and her family. The long term benefit goes to his family when this act is reciprocated by them since they are in turn helping out matrilineal relatives. It has even risen to the level of a ceremony whereby the goods that are gifted is exhibited to reflect his ability as a farmer. Polanyi also brings in the concept of redistribution which is an element essential in the marketing apart from reciprocation. In this above tribe, a part of the excess produce over and above personal and extended family assistance goes to the chief. This will be used to feed the community during festivities and other celebrations or when they act as hosts to other tribes and communities when they come to visit. Moreover this reciprocity and redistribution is extended beyond the borders of the village. Each village may have a counterpart in a village situated on a separate island where the practice of individual and community help is carried on. The author states that this dual concept exists in various forms in practically all the communities in the world (including Greek and Roman empires) and is even seen today in some of the rural areas. These market practices had strong regulations developed over the years through laws, customs, and practices. Polanyi also had his own views on land, labor, and capital, claiming that they were not they are not commodities for purchase and sale as viewed by other economists. He states that labor is a human activity that is part of the society; land is nature and not produced by man, and capital (money) as a means of exchange. Adam Smith (and many others) views them in another way and states that rent, labor and profit are the profits that are available to the owners or providers of land, labor, and capital respectively. Polanyi feels that the concept of division of labor rose from this way of marketing and not through mans propensity for barter and profit (Smith & Skinner 40). Polanyi is of the view that a total free market economy is not possible and some form of regulation (laws and statutes in modern times) will need to be in place. This could be viewed as true in the light of the current economic disaster seen in the United States and other regions of the world. Robert Heilbroner, economist and author, also share similar views as propounded by Polanyi. He states that a modern community is faced with a lot of uncertainties and dangers. According to the author, "over the centuries, man has found only three ways of guarding against this calamity. He has ensured his continuity by organizing his community and tradition, by handing down the varied and necessary tasks from generation to generation according to custom and usage" (Heilbroner 18). Studies of different societies in the past have shown that man has been motivated by greed to own great wealth, but not by the concept of profit through trade. Even religious beliefs in England prohibited men from becoming traders. The current profit seeking scenario has been brought about by three reasons, he argues. Europe began to be politicized clearly along national lines. There arose a feeling of national pride and competition between the nations. Religious decay also contributed to thinking along the lines of profit from trade. Advancement in transport and trade across boundaries resulted in people being used to money. Neither Polanyi nor Heilbroner deals specifically with water as a commodity of trade. But if water can be equated to land, then Polanyi would argue that it is not a commodity, but part of nature. Donald Worster, known as a scholar of water, takes the opposite view and sides with Adam Smith. It is no longer seen as a divine product essential for the survival of life. "It has now become a commodity that is bought and sold and used to make other commodities that can be bought and sold and carried to the market place" (Worster 52). Water can now be stored, harvested, used to generate power, and used as a means of transportation. It has now become a commodity and not a source of power or object of reverence as in the olden days. He refers to communities capable of the above as hydraulic societies where water is manipulated for its myriad uses. One of the most prominent thinkers who advocated against a free market economy was Karl Marx. He also shares some of the views of Polanyi and Heilbroner. Production is for survival and growth of societies and not for profit. Marx feels that individuals in society (exploitation for example) are subject to forces of production. "What they are, therefore, coincides with their production, both with what they produce and how they produce" (Marx 161). Private property will lead to feudalism and exploitation of workers. In that sense, Marx is closely aligned with the concept of reciprocation and redistribution as viewed by Polanyi and Heilbroner though the latter two are not primarily against private ownership of land and other resources. Works Cited Marx, Karl. Selected writings. Ed. David McLellan, Oxford University Press , (Provided by the customer). Polanyi, Karl, The Great Transformation. Beacon Press: Boston (Provided by the customer). Heilbroner, Robert L. The Worldly Philosophers. 6th Edition. Simon & Schuster: New York (Provided by the customer). Smith, Adam. An inquiry into the nature and causes of the wealth of nations. T. Nelson: Original from the New York Public Library, 1864. Smith, Adam & Skinner, Andrew S. The wealth of nations, Books 1-3. Revised edn: Penguin Classics, 1986. Worster, Donald. Rivers of empire: water, aridity, and the growth of the American West. Illustrated Edition: Oxford University Press US, 1992. 1. The meaning of property and water rights: Any society that is wholly capitalistic and inclined towards the concept allows citizens and members of the society to own property in their own name. It can be owned by either individuals, bodies of individuals such as partnerships and stock companies or those formed for non-profit. Property can also owned by the state or state owned organizations and can include those controlled by individual state governments or the federal (central) government. While it is easy to identify and define property in most instances, there are several items of property that may not be so. For example, a piece of land, a building, or an enclosed water body like a pond or lake can easily be identified as belonging to a certain individual. In the case of the above mentioned water bodies, if it exists solely within the boundaries of a property, there is no scope for confusion. But the problem occurs when it borders more than one property or the said water body is a stream or river. In both instances, it covers or runs through more than one property which may be owned by several owners. A river for instance will run through many private and public properties during its flow into an ocean or a lake. It would be worthwhile to define the basic requirements of what a property is before moving on to those that are difficult to define as in the case of water rights. McPherson argues that property has different connotations in different contexts. To the layman, a property is something tangible which could include land, buildings, and other assets. But in legal terms, property basically denotes the right to enjoy a particular property. McPherson rightly argues that property is a right and not physical possession. A person may be in possession of a house on rent or for safekeeping on behalf of a friend or a landlord, but that does not mean that the current occupant is the owner of the property. Assuming that rights will settle the matter as to who owns the property there are several instances where the boundaries of rights can become confusing. One is where the property is described as a common one and the other is where the property in question is water body. for example, the "society or state may declare that some things - for example, common lands, public parks, city streets, highways - are for common use. The right to use them is then a property of individuals, in that each member of the society has an enforceable claim to use them. It need not be an unlimited claim" (McPherson 4). On the other hand, there are state owned properties like for example, NASA or other properties owned be state and federal governments. These properties due not provide the same rights to citizens as do common properties. Such properties are maintained for some specific purpose aimed at the benefit of the society or individual sections of the society and not for individual enjoyment. A court of law is an ideal example, which does not provide an enforceable claim to use sections of the property as in the case of a park or a highway. It may be used under certain conditions to address the rights of citizens to enforce law. The question here is where water bodies that cannot be defined clearly fall in the case of property rights. In an area where there is abundant rainfall or availability of common water bodies, this might not be much of an issue. But the case of the American west, where availability of water is more of an issue, the rights of property becomes an issue that needs legal and statutory assistance to find a settlement. Gillian and Brown, in their paper titled 'Instream flow protection' has discussed this issue in some detail, referring to the history of water disputes and laws right from the start of colonization of the country. The Spaniards followed their own domestic water laws which provide the property owner to use water flowing through their property. But public benefit would override private needs and in such an instance, the latter would prevail. British settlers, who back home had few problems with water, were not as well prepared. After attaining independence, different states in the union had to develop their own laws regarding management of water and most were made according to current demands at the time. For example, the California gold rush prompted lawmakers to allow property owners to use water for their own use. American law following British statutes aimed at implementing what is known as the Riparian law whereby any owner who has access to flowing water (watercourse) adjacent or through his property can make reasonable use of it for his own use. A watercourse can be defined as "any channel through which water flows and can be open or enclosed underground as a culvert. Watercourses may be classified as either main rivers or ordinary watercourses" (Tonbridge & Malling Borough Council). Gillain and Brown adds that the law was modified to a certain extent after the onset of the industrial revolution in USA to include reasonable usage of water for industrial purposes as well. Another factor that affected laws and statutes in western United States was the practical use of scarce water for irrigation and domestic needs by Mormons who had settled in large numbers in this arid area of the country. The concept of Prior Appropriation Doctrine began to conflict with the Riparian law where the former favored those who applied for water rights first on the first come first saved basis. On the whole, the general law was that any individual had the reasonable right to use water that flowed through his property without taking exclusive rights to dam the stream or river so that the remaining water will not reach those residing downstream. Current law in most water deficient states require owners to apply for water rights specifying the volume of water required to satisfy their personal and business needs. Gillian and Brown specify the requirements for such an application. "Applications usually contain information about the source and amount of water to be used, the nature and location of the proposed diversion works, the amount of time needed to complete the work, the purpose for which the water is to be used, and any other information deemed relevant (Gillian and Brown 36). According to Macpherson's definition, water rights could come under the purview of private property and state property. It is up to the state agencies to provide a right to an individual regarding a flowing water body. It is up to the individual states to decide upon the circumstances of the case to decide whether a particular water body belongs to an individual and how much of the water can be used by him for his own personal and business use. Here again, the complexities of law will prevent a clear definition of rights. But overall, the rights of society members to make use of a water body may supersede any individual rights that may harm the community in general. There is no dispute here regarding water bodies with regard to ownership according to Marxian concepts. No citizen should own any private property including water bodies. The only issue that will come up is appropriation of available resources. This again will require legal opinion and decision according to the facts of each case. The common thing among the two ideologies is the ambiguity with regard to reasonable usage. But ownership and personal rights is allowed under US law whereas ownership is not appreciated in communist doctrine. Works Cited McPherson, C B. Property - Mainstream and critical positions. University of Toronto Press, Toronto (Provided by the customer). Tonbridge & Malling Borough Council. "A guide to the rights and responsibilities of living by a watercourse-Riparian Ownership". 08 Oct 2009 < http://www.tmbc.gov.uk/cgi-bin/buildpage.pl'mysql=318> Gillian, David M and Brown, Thomas C. Instream flow protection - Seeking a balance between Western Water Use. 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