At the turn of the millennium, a number of economists who should have known better nonsensically claimed that we now live in a weightless economy and world. Well, the recent rescue of the miners in Chile, the boom in commodities and the super-cycle in metals in the last decade attests that the raw material industries are central to our existence.
Theses facts also point out that every time a new economy or business activity is proclaimed, the old version comes and bites us on a part of the anatomy. This bite is borne out by the chart that shows the stocks and prices of copper set by the London Metal Exchange (LME).
The drivers of the commodity boom are strong demand in the emerging economies, especially China, which have sought to stock pile raw materials they cannot produce in order to sustain their economic growth objectives
Ironically, China lacks many basic hard commodities like copper, nickel and so on but accounts for about 97% of the world’s rare earth materials. These are the raw materials that go into the production of 'new' economy goods like PCs and electric cars among others.
The revival in raw material markets reminds us that in a capitalist economy, everything can be commodified, That is, turned into something that has use-value (intrinsic utility) and exchange-value (extrinsic monetary worth) or as Karl Marx put it in The Communist Manifesto, "the 'callous' cash payment" .
The recent increase in the prices of soft commodities, like cereals and naturally occurring fertilisers have generated emotional concerns about things that we have always tended to take for granted in our daily lives.
This global and rapid price rise has also created concerns about security and sustainability. A large proportion of this increase is accounted for by financial derivatives secured against commodities.
For example, financial funds have been created from changes in water supply and its price. Thus, an essential part of our continuing existence to which we have visceral and emotional attachment becomes hardened through its commodification and financialisation.
Anything that can be commodified includes feelings and emotions: turning our touchy-feely propensities into business opportunities. The French Sociologist, Henri Lefebvre wrote about the city:
“The city historically constructed is no longer lived and is no longer understood practically. It is only an object of cultural consumption for tourists, for aestheticism, avid for spectacles and the picturesque”
His point was that the city is no longer the locus of shelter, warmth and sustenance, built with asphalt, bricks, concrete and steel but the marketing of an experience that can be transformed into use and exchange values.
This city was built on rock and roll. Cross Starship's palms with silver, and they'll tell you how
Performing one of the worst pop songs in history, Starship wailed “we built this city on rock and roll” in 1985. Paradoxically, their emotion and feelings for their home city of San Francisco was being turned into a raw material to be exploited.
Is being touchy-feely in business just another raw material to be exploited? Well, in mining or construction or investment banking, 'soft' behaviours appear subservient to the 'hard' ones of the bottom line: whether it is meeting production targets, on time on cost building completion or shareholder returns.
Yet all these hard outputs have soft inputs. You can only deliver production targets or shareholder value if you understand the emotions embedded in the companies and businesses that produce them.
This conclusion may have got lost in the publicity given to touchy-feely businesses that have grown up around the concept of “emotional intelligence”. These include training as therapy, life-style coaching and a whole range services designed to release your inner self from feelings of inadequacy.
A somewhat tautological definition of emotional intelligence is given by Sigal Barsade, a professor at the Wharton Business School:
"Emotional intelligence is one, the capacity to think intelligently about our emotions and, two, to have our emotions help us learn how to think more intelligently."
Yet management is fundamentally is about having a sense of “other”. That is, as a manager your own interests are tied up with those of the staff you manage. Neglect the emotions and feelings of your staff and your own emotions and feelings will get neglected. A manager that ignores this self-evident fact will spend more emotion and feeling correcting this ignorance.
The problem with the 'new age' industries that have grown up is that they are just another example of commodifying feeling and emotion. They can often only be taken seriously if they are experienced through the medium of taking hallucinogenic raw materials.
The bottom line is that commodifying our feelings and emotions is central to the kind of economies we inhabit, but not all use-values can be turned into exchange-values. Yet they are not so distinct, as the former are informed by the latter.
We tend to contrast the old and the new; the hard and the soft but we constantly negotiate between them as they are the raw materials by which we make sense of business and society.