Archive for the ‘Economy’ Category.

Globalization from below: The world’s other economy (New Preface)

1. The great transformation
2. Globalization from above
3. Globalization from below (and above)
4. The informal economy has taken over the world
5. The digital revolution and intellectual property
6. Anthropology and economics

The great transformation

We are forming a world society and call it “globalization”. There is nothing inevitable about this. Globalization on a similar scale occurred before 1914 and was then reversed by an age of war and revolution. Emergent world society is the new human universal – not an idea, like the catholic or bourgeois versions that preceded it, but the fact of 7 billion people living together on this planet. We urgently need to find new principles of association that will make our world habitable. In approaching such a task, I imagine modern world history as a sequence of three centuries, 1800-2100, each profoundly different from the others. Indeed, if the 21st century repeats the pattern of the 19th or the 20th, there will not be a 22nd.

In 1800 the world’s population was roughly one billion. At that time only 3% lived in cities. The rest lived mainly by extracting a livelihood from the land. Animals and plants were responsible for almost all the energy produced and consumed by human beings. A bit more than two centuries later, world population has reached seven billions. The proportion living in cities is about a half. Inanimate sources converted by machines now account for the bulk of energy production and consumption. For most of the intervening period the human population has been growing at an average annual rate of 1.5%; cities at 2% a year; and energy production at around 3% a year. This last figure is double the rate of population increase, a powerful index of the economic expansion of the last 200 years. In consequence, many people live longer, work less and spend more than they did before. But a third of humanity still works in the fields with their hands; and the distribution of all this extra energy has been grossly unequal. Americans each consume 400 times more energy than the average Ugandan.

This hectic dash from the village to the city is widely assumed to be driven by an engine of economic growth and inequality known as “capitalism”. But several social forms have emerged to organize the process on a large scale: empires, nation-states, cities, corporations, regional federations, international organizations, capitalist markets, machine industry, global finance and telecommunications networks. There is a pressing need for more effective social coordination at the global level and the drive towards local self-organization is strong everywhere. Special-interest associations of every kind proliferate. Those who resist this unequal society often denigrate the dominant bureaucratic institutions — “the state” and “capitalism” being favourites – in favour of promoting small-scale self-organized groups and networks. Yet it is inconceivable that any future society of this century could dispense with the principal social forms that have brought us to this point. So we must work out how states, cities, big money and the rest might be selectively combined with citizens’ initiatives to promote a more democratic world society. A first step would be to emancipate ourselves from viewing the economy exclusively in national terms. Continue reading ‘Globalization from below: The world’s other economy (New Preface)’ »

How the informal economy took over the world

“The informalization of the world economy”, keynote lecture for the 24th Conference of the Societa’ Italiana di Economia Pubblica: “Informal economy, tax evasion and corruption”, Pavia, 24-25 September 2012

A la recherche du temps perdu

The idea of an informal economy was born at the moment when the post-war era of developmental states was drawing to a close. The 1970s were a watershed between three decades of state management of the economy and the free market decades of one-world capitalism that ended with the financial crisis of 2008. It seems now that the economy has escaped from all attempts to make it publicly accountable. What are the forms of state that can regulate a world of money that is now essentially lawless? The informal economy started off forty years ago as a way of talking about the Third World urban poor living in the cracks of a rule system that could not reach down to their level. Now the rule system itself is question. Everyone ignores the rules, especially the people at the top – the politicians and bureaucrats, the corporations, the banks – and they routinely escape being held responsible for their illegal actions. Privatization of public interests is probably universal, but what is new about neoliberalism is that, whereas the alliance between money and power used to be hidden, now it is celebrated as a virtue, wrapped up in liberal ideology.

This is the context for my lecture. The informal economy seems to have taken over the world, while cloaking itself in the rhetoric of free markets. We are witnessing the world-historic collapse of the twentieth-century attempt to impose national controls on the economy. Inevitably, when witnessing this collapse, we dream of restoring the era of social democracy, of Stalinism and of developmental states. The rules operated then with some degree of success. This nostalgia for the heyday of what I call “national capitalism” will not serve us well today. We need to analyse the contemporary world economic crisis at a number of levels. Above all, we should acknowledge that the core problem is not narrowly economic, but one of political failure, both national and international. Money and markets have escaped from public control and cannot be put back in that straitjacket. The question then concerns what democratically accountable structures might be capable of regulating the world economy and under what social conditions? I will try to answer that question today by reflecting initially on the history of a concept with which I have been closely associated. Continue reading ‘How the informal economy took over the world’ »

A Crisis of Money: the demise of national capitalism | openDemocracy

This is a more polished and hopefully accessible version of the essay below. Go to openDemocracy for the link here.

The privatization of public interests

The story about voting giving the people democratic power is an example of the cover-up that passes for education at every level in our societies. Politicians need money and money men need political cover. Central banking was invented to institutionalize their partnership. The Bank of England, Banque de France and Federal Reserve are all private institutions which were given the appearance of public authority in return for absorbing the “national debt”, that is of the King,  Napoleon and Congress respectively. I am not sure about the ECB’s constitution, since one problem with the euro is that monetary union preceded political or fiscal union. Of course, the educators, including the vast bulk of academic social scientists, insist that our societies are built on the separation of public and private interests, when it hasn’t been so for over 300 years.

Perhaps the main thing that is new about neo-liberalism is not the privatization of public interests, which has long been normal, but rather its ideological promotion as an ideal, where before it was clandestine. As Umair Haque noted recently, this makes the Gilded Age look Leninist in comparison. In both cases any social contract between rulers and masses was torn up and revolution seemed inevitable. It is chastening to contemplate what happened after three decades of financial imperialism last stopped — in 1913/14. Continue reading ‘The privatization of public interests’ »

One-day Conference: Anthropology of the Crisis of Contemporary Capitalism, Paris, May 3rd 2011

International Study Day

Anthropology of the Crisis of Contemporary Capitalism

3 mai 2011, 10h-17h, musée du quai Branly, 37 Quai Branly, 75007 Paris, Cinema Theater

Convened by Jonathan Friedman (IRIS/EHESS) & Laurent Berger (LAS/MQB)


10h-10h15 Jonathan Friedman (IRIS-EHESS) & Laurent Berger (LAS-MQB) « Introduction: Towards an anthropology of the crisis in capitalism »

10h15-11h Paul Jorion     « How to become the anthropologist of the crisis »

11h-11h30 Discussion

11h30-12h15 Don Kalb (Central European University, Budapest and Utrecht University) « Financialization and Neo-nationalism in the New Old Europe »

12h15-12h45 Discussion


14h30-15h15 Keith Hart (Goldsmiths University of London)     « The financial crisis and the end of all-purpose money »

15h15-15h45 Discussion

15h45-16h30 David Graeber (Goldsmiths University of London)     « Debt and crisis in historical perspective »

16h30-17h Discussion

The informal economy: a story of ethnography untold

There is no doubt that my life was transformed by the two and a half years I spent in Ghana, 1965-68, much of it doing ‘fieldwork’ in a slum of the capital city Accra. Writing a doctoral thesis was straightforward enough, although I felt I had to disguise my own participation in what I described. But I spent the next decade trying and failing to write a monograph based on it. I returned to the project again in the early 90s and failed once more. This book is the one I ended up writing to make sense of an experience that I have reflected on ever since. The movement of my work has been from ethnography to world history, but its origin in that moment over four decades ago is foundational.

When I started planning this book three years ago, I wrote an unbuttoned personal account of that fieldwork called Africa on my mind. Maybe something like it will find a place in the present version. Maybe not. But the point of this post is to trace how the idea of an ‘informal economy’ grew out of that ethnographic fieldwork. Forty years later, it seems to me that the concept stands in the way of understanding how Africa’s unregulated urban commerce might generate sustained development in the coming half-century. Continue reading ‘The informal economy: a story of ethnography untold’ »

Marx between Mill, Mayhew and Dickens

Phil Swift’s brilliant post on the relevance of Henry Mayhew’s 19th century investigations of London’s working classes for a politicized ethnography today has set off many reverberations inside my skull. One issue is the relationship between Mayhew’s project and Marx’s. Both are highly critical of the social causes of the condition of the working class, but Mayhew’s ethnographic realism offers insight into their lives with some ethical commentary, while Marx was a radical journalist, philosopher, economist, anthropologist, political activist and on a par with the great novelists of his day, such as Dickens, Balzac and Zola. Capital has an imaginative scope that places it in my iconography alongside Moby Dick. Continue reading ‘Marx between Mill, Mayhew and Dickens’ »

Iceland’s revenge

At the height of the credit boom, three Icelandic banks built up a huge trade by offering higher interest rates on deposits in Britain especially, but also in some other European countries, notably the Netherlands. At one time these banks had liabilities much larger than Iceland’s GNP. Their owners bought football clubs and the like. Iceland has a legally ambiguous relationship to the European Union and it wasn’t clear which regulatory bodies were responsible for supervising these activities.

When the crash of September 2008 occurred, the British government used emergency anti-terrorist legislation to seize the banks’ assets. Many local government authorities were compromised by having taken advantage of the higher interest rates. The Icelandic economy went into freefall, but the people accepted draconian austerity measures as a way back to solvency. Then the British and Dutch governments, backed by the IMF, insisted that Iceland’s taxpayers should meet the full cost of the defaulting banks’ liabilities. Continue reading ‘Iceland’s revenge’ »

Mauss on gifts, markets and money

The First World War was more than a watershed; it was an irreversible fissure in modern European history. The state had acquired undreamt of powers in the course of the war: to mobilize and kill off huge armies, to control production and distribution, to monopolize propaganda; from now on it was a struggle between rival state forms for world domination. The claim of Western societies to lead the rest of humanity in reason and civilization had been mortally wounded by the senseless slaughter of the trenches. Life after the war was quite unlike what had gone before. Marcel Mauss, who admitted to a sense of relief when the war first allowed him to escape from his scholarly burdens, took his time to resume his academic and political activities. The death of Émile Durkheim and numerous colleagues during the war took some adjusting to, while some close friends told him it was now time to grow up. So, to a double life as a professor of the religions of uncivilized peoples in the marginal École pratique des hautes études and as a political activist-cum-dilettante, he now had to add responsibility for the movement launched by his uncle at a time when the sociology project still felt rather precarious.
Continue reading ‘Mauss on gifts, markets and money’ »

Is Haiti to be another victim of disaster capitalism?

The Haitian disaster has boosted Naomi Klein’s theory of ‘disaster capitalism‘. In an article entitled Disaster capitalism headed for Haiti, Stephen Lendman provides a summary of Klein’s argument and a trenchant account of recent events in Haiti as a powerful reinforcement of her central thesis, featuring American imperialism at its worst.

“Neoliberalism dominates the world with America its main exponent exploiting security threats, terror attacks, economic meltdowns, competing ideologies, tectonic political or economic shifts, and natural disasters to impose its will everywhere. As a result, wars are waged, social services cut, public ones privatized, and freedom sacrificed when people are too distracted, cowed or in duress to object. Disaster capitalism is triumphant everywhere from post-Soviet Russia to post-apartheid South Africa, occupied Iraq and Afghanistan, Honduras before and after the US-instigated coup, post-tsunami Sri Lanka and Aceh, Indonesia, New Orleans post-Katrina, and now heading to Haiti full-throttle after its greatest ever catastrophe. The same scheme always repeats, exploiting people for profits, the prevailing neoliberal idea that “there is no alternative” so grab all you can.”

This is a fair summary of the thesis and much of Lendman’s account is valuable, even if it is inevitably selective and its main points have been made by a number of journalists at less length (including this one and this). My interest is in the theory itself, in what sort of handle it gives us on the Haitian disaster and what to do next. Although I admit we are an insignificant minority, I am also interested in the lessons we might draw from this event for anthropology as an intellectual project, especially since the Haitian crisis forces us to ask what anthropologists have done and might do.

I argue that anthropologists are a prime constituency for Naomi Klein’s ideas, since she paints a bleak picture of the world without offering any political or intellectual program capable of addressing the problems she identifies. This allows her adherents to retreat into their habitual myopic passivity while claiming to be radically engaged. Continue reading ‘Is Haiti to be another victim of disaster capitalism?’ »