Book Review: Çalışkan, Koray. Market Threads: How Cotton Farmers and Traders Create a Global Commodity
Çalışkan, Koray. Market Threads: How Cotton Farmers and Traders Create a Global Commodity. (Princeton University Press; Princeton and Oxford, 2010)
Market studies as a field of research is not new and many theoretical frameworks have been put forward to approach and understand the phenomenon of markets and their interactions with commodities and pricing. Çalışkan’s book takes the commodity of cotton and follows its path of production, from the level of the farmers in their rural field setting all the way to the market level, using this commodity to question what a global market is and how this particular market is produced and maintained. Beginning with an analysis of the theoretical material and approaches available, Çalışkan locates the gaps in the existing literature through empirical analyses of the real market realm, highlighting most specifically the ‘… relations of power maintained every day by constant interventions; the production of mercantile tools such as prosthetic, associate, and rehearsal prices; and the waging of various forms of struggle among market actors.’
In his introduction, Çalışkan boldly states ‘[f]or more than a quarter of a century, a social experiment unprecedented in world history has been in progress; neoliberal market reform on a global scale. This experiment has revealed a remarkable fact: we do not know how markets work, let alone what the term “global market” means in practice.’ In this assertion, he sets the tone and argument for the entire book firstly by acknowledging the changes that have occurred globally that effectively create an interdependent global marketplace, however, he highlights that this has simultaneously left us none-the-wiser as to the way in which they work; the multiple levels on which markets exist and function, the power relationships between actors and institutions and the translation of the production of the product to a price on the global market. He then proceeds onto a brief review of the literature in the field focusing on the neoclassical and the institutionalist approaches to illustrate where they fall short of explaining the market experiment.
In order to understand the groundwork upon which the book is based upon, the theoretical ideas regarding global markets must be understood. Çalışkan puts forward the way in which two mainstream approaches and social studies define the market; neoclassical, instutionalist, formalist and substantivist approaches. Accordingly neoclassical approach defines the market ‘…as a natural balances of the forces of supply and demand…with a standard method for pricing the interaction of risk and time, thus exerting an effect on the price movements in futures and spot markets’ in options markets. Institutionalist approaches on the other hand believe ‘…that all free markets require an institutional structure to mediate the convergence of market forces… [and that] institutions directly affect economic outcomes, and the agents of markets use them to reach their individual ends.’ Whereas substantivists view ‘the emergence of markets as dependent economic encounters, always made and embedded in society or culture’ and formalists argue that ‘…regardless of the specifics of market or exchange contexts, the long-term economic rationality of individuals is universal.’ Though Çalışkan states that Market Threads shows how global cotton market prices are in fact realised through neoclassical market assumptions; such an overview introduces the reader to the complexities involved in analysing global markets. Each different approach offers a different kind of understanding of the market and the forces that are involved in price making, the controls over markets and how outcomes are altered through these interconnected processes. Similarly, social studies approaches focusing on society or culture in market processes also provide an alternate framework for understanding the local levels of commodity production in particular.
In terms of research and gathering data, the difficulty of market research is due to the dislocation between model and reality, the correspondence of which ‘…can be sustained only by continuous market maintenance work, carried out by market boards, regulatory bodies, and formulary formatting of market exchange.’ Hence, the real life aspects of these processes must first be understood and then followed in order to test the degree to which these above described theories hold true. Methodologically, by embarking on an extensive trail of ethnographic research, Çalışkan essentially follows an idea put forward by Appadurai relating to the social life of things which looks at how ‘…human actors encode things with significance [while] from a methodological point of view it is the things-in-motion that illuminate their human and social context.’ Hence rather than purely understanding the processes that occur in the market, Çalışkan goes further to try to uncover the agents that actually make the market. He takes three separate geographical locations, the USA as ‘a test case of the developed West’, Turkey as a middle-income country and lastly Egypt, the country that ‘…is now struggling to continue the production of the world’s best cottons’ and focusing on two rural towns that were among the first cotton-producing villages in both Turkey and Egypt at the commodity production level to understand each stage in the production of cotton. As a ‘…non-perishable cash crop whose only usage is to exchange it for money’ and with the largest area of the production in the world the choice of cotton as the commodity of this book is then arguably due to the ability of it to penetrate through different locations across the globe as a product travelling along the chain of exchange, production and consumption.
The book then proceeds to follow the chain of production, commencing with price realization in the world cotton market, highlighting the different types of prices and markets that exist along with their interdependent relationships with each other, building on these ideas through an examination of commodity circulation. Within these first chapters, Çalışkan is aware of the need to engage the reader with the main ideas and concepts of the market, which aids in their understanding the remainder of the book. As a reader unrehearsed in the concepts of the market, let alone the language, these first two chapters were crucial in appreciating the overall argument Çalışkan makes. Prices are in fact a symbol of the world economy and to make sense of these prices one must understand the concept of ‘price realization’ in terms of making a price real so that it can be effectively conceived as real in relation to a product and subsequently converted into money and leaving us with the end price of cotton.The fact that price realization is a result of various technical processes under the influence of various actors results in what Çalışkan terms as the ‘prosthetic price’, a creation in itself. One of the most important ideas that emerge from these first two chapters is that nothing on the market is concretely real; the processes of price realization are directly related to human interactions and understandings. Details such as the types of cotton, general prices versus individual trader prices, duration of the quoted price and date of delivery are all compacted into the language of the market. Yet through these interactions, the seller does not necessarily need to own a single bale of cotton because these sales work on a contractual basis, meaning that a trader sells and purchases contracts, balancing the value of these against each other. Any delivery of cotton moves the trader from the spot market into the futures market because the resultant action is a derivative of ‘relation of actual commodity exchange.’ In fact the actual price of cotton disappears as quickly as it appears given its short life span. This abstraction becomes clearer by a discussion of the rumours of the markets; an ‘…obligatory skepticism that traders always embrace and use effectively.’ Nothing is certain, their accuracy or validity can never be known and have no professional value in terms of power to act, yet they are taken seriously, even deemed as ‘crucial’. Hence, the pricing routine goes ‘…beyond the price itself and [locates] the way in which the politics of representing and negotiating the price is performed.’ A set of power relations in itself.
The transition between the first two chapters and the rest of the book also translates to crossing the bridge into the world of global merchants in both Izmir and Alexandria and how these agents then interact with the local level of cotton production as a kind of in between. The beginning point of the Izmir Mercantile Exchange (IME) invokes itself in ‘rehearsal prices’ used as a device in pit trading in which the power of body language and actions to gauge self-confidence play an intricate role, again displaying a social power play between actors. This in itself is a ritualization of cotton trade, knowing how and when to enter ‘the pit’. The market price on the other hand in this setting is a balance of interests and power between three groups; traders, merchants and brokers who have directly opposing interests to the large-scale landlords and lastly the ministerial representatives. Alexandria as a location is used to build on the interactions observed at the IME, despite being built out of ‘war and ruin’ and suffering under the introduction of liberal economic policies, these processes still function outside of an institutionalized cotton exchange through associate and market prices yet again. At each different level, pricing and the perceptions of these prices embedded in social interactions are key to the functioning of the entire chain of supply and demand. The final chapters relating to the local level of production touch upon the daily routine of cotton production, but also offer a perspective on how these groups view the commodity, prices and actors involved in the chain.
The structure of the book is systematically constructed with a clear introduction and argument at the beginning of each chapter. Çalışkan then supports his argument through various key observations, all highlighted through sub-headings in the individual chapters and concisely summarized in a conclusion for each chapter. This serves to aid the reader in following the argument and takes them in the direction Çalışkan wishes to take them on this journey of cotton. As he states ‘[t]he very growing of cotton, its “production”, entails a simultaneous engagement of relations that consists not only of exchange and production, but also of a series of activities that make up a rich and undertheorized world of encounters and struggles…’ Each of these relations and activities are portrayed, pinpointing the points at which these intersect with one another.
The ethnographic research proves to be a major strength for the book as not only does it not only provide direct evidence and grounds for each individual argument Çalışkan poses, it also draws the reader in through brief anecdotal moments in which Çalışkan brings himself closer to the reader through statements which embody the task he set out for himself in learning the market, in the first chapter he states ‘[m]y problem was coming to terms with the fact that “real cotton” did not have a price in futures markets, although “real cotton” was priced according to futures.’ A question which is subsequently clarified by John Hogan, a cotton trader with 40 years of experience ‘I know you’ll write this, too. You’re always thinking about what the real price of cotton is. You always want to learn what the price is in real life. But the market does not trade on reality. It trades on perceptions.’ As a reader you cannot argue with a man of such experience, however, this interaction also puts the reader on the level of the author, together with him you are gradually becoming enlightened on the topic of cotton trade. This trend continues throughout the book, with Çalışkan touching upon how Mehmet, a cotton farmer from Panukköy in Turkey, humbles the work he does saying “This is not real work… we are just working with our muscles. What we do does not require mental work…’ a statement rebutted by Çalışkan. Again, as a reader we are given an insight into the lives and personalities of these individuals, the distrust farmers have for traders because they are always trying to buy cotton for a lower price by finding faults in its quality and bringing in ‘hidden costs’, yet another costing formed in the supply – demand chain. While this has a positive effect on the reader, it simultaneously undermines the focus of the argument.
By focusing on certain cultural and social issues emerging from the research, the text brings up critical issues that are left without discussion, relatively untouched. Again recalling an account from Pamukköy Çalışkan describes the work in the fields; ‘… Turkish women, however, refuse to throw their cotton into their husbands’ sacks, since, as one of them explained during the harvest “men tend to be lazy and hide behind the joint sack.” Kurdish, Arab and Turkish workers hardly ever work together in the same field…’ Thus, in addition to the complexities of labour in the cotton fields and the exploitation of the poorest worker’s in society, Çalışkan touches upon issues of gender, ethnicity and division of work in one single paragraph which leaves the reader thinking about larger political issues evident in the process of cotton production. It is certain that these broader issues are already existent on the political scene in global politics in general; however, if these are touched upon in a Turkish and Egyptian context, at the market level in the US, Izmir and Alexandria there are surely parallel patterns that exist or translate from this local level. In order to keep the reader focused on the argument at hand, it would have been beneficial to perhaps not delve into these recaps, which are loaded with subtle messages that arguably indicate a judgment made by Çalışkan. Similarly, reflecting back on topics such as rumours, there is no discussion on an alternate voice. The reader must take the books portrayal of these processes as truth, without the provision of a counter argument, or at the very least discussions of the absence of a valid counter argument.
Overall it is difficult to give the book justice in a short review as it has been so carefully researched, filtered and put together. The key ideas of the book revolve around the existence of several different types of prices, which thus ultimately proves that there is no static price that overrides all others, instead it depends on your position in the overall cycle, the degree of your power dependent on this role and therefore how you and others perceive this price. As Çalışkan states ‘…markets are neither embedded in social relations, nor disembedded from them. They are fields of power operating on dynamic and heterogeneous platforms of power relations.’ It is precisely this idea of power that is required as a new area of research in the study of markets – they are ‘…particular configurations of power whose workings cannot be understood by revealing a central logic of operation, for they have none’ - a point which Çalışkan builds on, broadens and enriches with each additional chapter in his book.