Archive for the ‘World’ 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)’ »

Money and finance: For an anthropology of globalization

Keith Hart (London School of Economics and University of Pretoria) and Horacio Ortiz (Centre de Sociologie de l’Innovation, Paris)

There is much talk today of a financial and economic crisis comparable to the 1930s. With the threat of a currency war and the euro’s collapse looming, the specter of the Great Depression’s bloody aftermath has returned with a vengeance. Several versions of how to make human beings and build society co-existed during the Cold War, when much of the world won independence from colonial empire. Yet, discussion of humanity’s growing interdependence is today limited to a one-world capitalism driven by finance. What have anthropologists to say about that? It would seem very little. But a positive case can be made for the discipline’s contribution to public debate. We make such a case here. We review recent developments in the anthropology of money and finance, listing its achievements, shortcomings and prospects, while referring back to the discipline’s founders a century ago. Economic anthropologists have tended to restrict themselves to niche fields and marginal debates since the 1960s. We hope to reverse this trend by focusing on money’s role in shaping global society and bringing world history into a more active dialogue with ethnography.

Money and finance have been prominent in anthropology since its formation as a modern discipline. Rather than emphasize what money does, as the economists do — a medium of exchange, reserve fund or means of accounting – anthropologists can approach it as an integral part of the hierarchies and networks of exchange through which it circulates. Its multiple meanings in turn keep society together and reinforce the roles played by each member. Money’s capacity to transcend group boundaries drives the extension of society to more inclusive levels and transforms identities in the process. It is a commonplace for our discipline to show that money’s meanings and relations cannot be confined a single theory. Fieldwork-based ethnography – a commitment to joining the people where they live in order to discover what they do and think — was the principal achievement of twentieth-century anthropology; but it is insufficient for studying money (Hart 1986). The ethnographic revolution eventually removed world history from twentieth-century anthropologists’ repertoire. This is hardly conducive to the task of investigating money’s global role in our historical moment. Progress in economic anthropology depends on combining ethnography and world history within a critical perspective (Hann & Hart 2011). Continue reading ‘Money and finance: For an anthropology of globalization’ »

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’ »

In Rousseau’s footsteps: David Graeber and the anthropology of unequal society

A review of David Graeber Debt: The first 5,000 years (Melville House, New York, 2011, 534 pages)

Debt is everywhere today. What is “sovereign debt” and why must Greece pay up, but not the United States? Who decides that the national debt will be repaid through austerity programmes rather than job-creation schemes? Why do the banks get bailed out, while students and home-owners are forced to repay loans? The very word debt speaks of unequal power; and the world economic crisis since 2008 has exposed this inequality more than any other since the 1930s. David Graeber has written a searching book that aims to place our current concerns within the widest possible framework of anthropology and world history. He starts from a question: why do we feel that we must repay our debts? This is a moral issue, not an economic one. In market logic, the cost of bad loans should be met by creditors as a discipline on their lending practices. But paying back debts is good for the powerful few, whereas the mass of debtors have at times sought and won relief from them.

What is debt? According to Graeber, it is an obligation with a figure attached and hence debt is inseparable from money. This book devotes a lot of attention to where money comes from and what it does. States and markets each play a role in its creation, but money’s form has fluctuated historically between virtual credit and metal currency. Above all Graeber’s enquiry is framed by our unequal world as a whole. He resists the temptation to offer quick remedies for collective suffering, since this would be inconsistent with the timescale of his argument. Nevertheless, readers are offered a worldview that clearly takes the institutional pillars of our societies to be rotten and deserving of replacement. It is a timely and popular view. Debt: The first 5,000 years is an international best-seller. The German translation recently sold 30,000 copies in the first two weeks. Continue reading ‘In Rousseau’s footsteps: David Graeber and the anthropology of unequal society’ »

Money in the making of world society: lessons from the euro crisis

Europe in the global economic crisis

I have been writing about the euro for a decade (Hart 2002, 2007a, 2012), always from a critical perspective, since I have long believed that a single currency cannot address the needs of a large and diverse region. Moreover, the European Union’s ambition to transcend national capitalism by becoming a federal power in the world economy was always compromised by yoking member states to a system whose logic harks back to the gold standard. The contradictions of this fixed exchange-rate regime, conceived of in the euphoria of the “free market’s victory” in the Cold War, were disguised by the long credit boom. Even the financial crisis brought about by the fall of Lehman Brothers in September 2008 was at first represented by Europe’s elites as largely an “Anglo-Saxon” problem. The Italian finance minister joked that his country’s banks were sound since their managers didn’t speak English! The French social model, which Sarkozy had been elected to reform, began to look more attractive overnight. The last three years have seen one failed half-measure after another as the region’s leaders consistently underestimated what was needed to fix the growing sovereign debt crisis in Southern Europe. Germany has become at once a lot stronger and more isolated in the process.

A brief sketch of the history of the global economic crisis is in order. The conversion of the whole world to free market capitalism (“neoliberal globalization”) in the early 1990s coincided with a digital revolution in communications. Wall Street took the lead in exploiting these new possibilities. After the dot com boom crashed in 2000, a regime of low interest rates fuelled speculation in property. American bankers discovered that there was more to be made from lending to people without any money (mortgages, credit card debt) than to people who have some, since higher interest rates could be charged and assets could be seized on default. This led to the invention of “sub-prime” mortgages, lending to borrowers who could not hope to repay, then packaging these debts with other sounder loans for sale in the capital markets with the highest credit ratings possible (Jorion 2007). The banks also insured against bad loans using new instruments such as “credit default swaps” and “collateral debt obligations” (Tett 2010). As the bubble picked up steam, leverage rates escalated; some banks and especially the insurance group, AIG, became wildly over-exposed. The expectation that the bubble would last for ever led to the use of computer models that had no place for a decline in housing prices. Continue reading ‘Money in the making of world society: lessons from the euro crisis’ »

A Crisis of Money: the demise of national capitalism | openDemocracy www.opendemocracy.net

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

The collapse of national capitalism: a Sophoclean tragedy

The global economic crisis is not merely financial, a moment in the historical cycle of credit and debt. The removal of political controls over money in recent decades has led to a situation where politics is still mainly national, but the money circuit is global and lawless. Events since 2008 should be seen as the collapse of “national capitalism”, the money system that the world lived by in the twentieth century. This has been unravelling since the US dollar went off gold in 1971 and money derivatives were invented the following year. The idea of central bank money or legal tender is tenacious despite this development. As the need for international cooperation intensifies, the disconnect between economy and political institutions undermines effective solutions. The crisis of the eurozone in 2011-2012 may be understood best as a Sophoclean tragedy in which good intentions cannot remedy the consequences of past mistakes.

2011/12 is the political consequence of the financial crisis of 2007/8. There is still a tendency to see the crisis in economic rather than political terms. In this respect, neoliberalism’s detractors often reproduce the free market ideology they claim to oppose. The euro is by no means the only symptom of this crisis, but it may well be seen in retrospect as the decisive nail in the coffin of the world economy today. One way of approaching our moment in history is to ask not what is beginning, but what is ending. This is not straightforward.

As a partial antidote to the daily news, I find it useful to attempt a historical periodization of the last two centuries or more, mainly to indicate that the present rupture in history opens up the prospect of several decades of turbulence.

1776-1815            An age of war and revolutions

1815-1848            The industrial revolution

1848-1873            Origins of national capitalism

1873-1914            First age of financial globalization

1914-1945            The second thirty years war

1945-1979            Les trente glorieuses of social democracy

1979-2008            Second age of financial globalization

2008-                     Another age of war and revolutions?

My aim is not to predict the inevitably dire outcome of the present global crisis, but to invite public debate at a more serious level that may help us to avoid such an outcome. Continue reading ‘The collapse of national capitalism: a Sophoclean tragedy’ »

The human economy in a revolutionary moment: political aspects of the economic crisis

Edited transcription of an improvised talk for a seminar, “Social movements and the solidarity economy”, organized by Jean-Louis Laville and Geoffrey Pleyers, EHESS, Paris, 2 February 2012.

I was asked to report on the project I am involved in which has the same name as The Human Economy book; but, given this course’s focus on social movements, I decided that I should try to insert the perspective on economy I have developed into contemporary political processes and events. I have been writing, editing and researching about alternative approaches to the economy for a long time and blogging about politics more recently, but never the two together. In the last year, as a result of the North African revolutions and then the Occupy movement, I have come to see that the economic and political arguments have to be brought much closer together. Taking our lead from this moment in world history, we need to ask how the work that Jean-Louis and I have long been engaged in – on human economy, économie solidaire, social economy – needs to be modified in order to lend support to what has become a serious political movement at the global level. Continue reading ‘The human economy in a revolutionary moment: political aspects of the economic crisis’ »

Jack Goody’s Vision of World History and African Development Today

The first Goody lecture given at the Max Planck Institute for Social Anthropology, Halle, Germany on 1st June 2011. The lecture is available from the Institute in a handsome print version. I am grateful to Chris Hann for the chance to reflect here on the debt I owe to my teacher.

Part One Jack Goody’s Vision

In a short preface to Production and Reproduction, the first in his series of comparisons between Africa and Eurasia, Jack Goody (1976:ix-x) tells us that ethnography, the aspiration to write about another culture studied intensively through fieldwork, never defined his intellectual horizons. His subject has always been historical comparison and beyond that “the development of human culture”. He deliberately sets himself at odds with his greatest contemporary, Claude Lévi-Strauss (1962), as being uninterested in binary oppositions between the modern and the primitive. Rather he places himself as an actor in a historical period, coming of age in the Second World War, encountering the Eastern Mediterranean, escaping from a prison camp into the mountains of Abruzzo, entering Africa at the decisive moment of its anti-colonial revolution and in its epicentre, Ghana. With European empires collapsing everywhere, he rejects the eurocentric idea that the West is special, looking instead for forms of knowledge that are more truly universal, better suited to the new world society launched by the war. Continue reading ‘Jack Goody’s Vision of World History and African Development Today’ »

The second American revolution?

Saul Wainwright commented on the previous post in this series, CLR James and the idea of an African revolution:

“I have been wondering about how to tie the Egyptian revolution into the larger world system. I was not aware that CLR thought there would be two more revolutions, one being Russian and other being American. Yet, as you rightly point out, the America that we understand extends beyond the borders of the geographic America. What does this mean for the potential of a second American revolution? Where would it be triggered? Much as the Egyptian revolution was triggered by the events in Tunisia it is possible that America’s revolution would be triggered from a far-off land.”

Saul, Now that the Egyptian revolution is definite, we can pose your question in a new light. Everyone likens events there now to 1989, not least Obama, who also links Egypt to Gandhi, King and the Ghana revolution. If the fall of the Berlin Wall was the beginning of the second Russian revolution, could Tahrir Square be the beginning of the second American revolution? After all, it wasn’t Russians who started the former, but Germans and Czechs, the Eastern European victims of the Soviet empire.

We know that the American empire was launched by World War 2 and has gone through two phases since. The French called the first les trente glorieuses from 1945 to roughly 1975, which was the heyday of the Cold War, but also a period marked by a developmental state on both sides of the Cold War committed to expanding public services and the purchasing power of working people. It was also the time when European empire was abolished by the anti-colonial revolution. After the watershed of the 1970s, we went through three decades of what came to be known as neoliberal globalization in which the power of big money to organize the world for its own benefit was unfettered. The end of the Cold War, the rise of China, India and Brazil as economic powers and the digital revolution in communications speeded up the formation of world society under American hegemony, even as these developments undermined it. This ended with the financial crisis of 2008 and we are now in the uncharted waters of the third period which might take in a full-scale depression, world war, a global democratic revolution, the end of life on earth, who knows? Whatever happens, it will be different. Continue reading ‘The second American revolution?’ »