Massin and Tieffenbach (2017) have argued that what they call the Standard Theory of Exchange (STE) should be replaced by their Action Theory of Exchange (ATE). One important argument is that the STE is goods-centered and fails to adequately capture exchanges of services, which the STE treats as intangible goods. On the other hand, their ATE easily deals with services and treats exchanges of goods as a subspecies of actions. This paper argues that the dichotomy between goods and services can be altogether overcome if we follow the seminal suggestion by the institutional economist Commons (1931, 1936) that what is exchanged are neither goods nor services, but ownership of goods and services. This can provide a more general account of exchange, irrespective of the nature of goods or services.
For Commons, legal control is future physical control, and this paper develops this into an account of legal control as possible physical control, i.e. as a range of possible alternative actions that is recognized by others as belonging to a certain person. Property rights thereby delineate these ranges of possible actions, which easily accounts for services. Rights over (im)material goods delineate ranges of possible actions which rely on that (im)material good, so goods serve to delineate a range of possible actions rather than constitute another category of rights. Metaphysically, these possible actions are powers or dispositions whose manifestation is contingent upon the free decision and action of the person, relying on a standard libertarian conception of the alternative possibilities.
The proposal does agree with the ATE on the propositional and convergent nature of exchanges relative to a certain state of affairs, whereby the parties involved in the exchange prefer the state of affairs in which the ownership is exchanged to the counterfactual state of affairs in which it is not exchanged. But what grounds these interpersonal exchanges is the permanent intra-personal exchange whereby a person is always exchanging another possible but lesser valued state of affairs for the one that is made manifest because it is valued more. Taking this counterfactual aspect of intra-personal exchange into account can explain some of the alleged problematic aspects of the STE, resulting in an overall improved account of the metaphysics of exchange, in line with a dispositional metaphysics of property.
Commons, John R. 1931. “Institutional Economics.” The American Economic Review 21, no. 4: 648–57.
———. 1936. “Institutional Economics.” The American Economic Review 26, no. 1: 237–49.
Massin, Olivier, and Emma Tieffenbach. 2017. “The Metaphysics of Economic Exchanges.” Journal of Social Ontology 3, no. 2: 167–205.