State, region and revolution in African development

Africans wait for emancipation in an unequal world

We live in a racist world. Despite the collapse of European empire and the formal adoption of a façade of international bureaucracy, the vast majority of black Africans are still waiting for meaningful emancipation from their perceived social inferiority. The idea that humanity consists of a racial hierarchy with blacks at the bottom is an old one. But the Caribbean economist, W. Arthur Lewis, argued that the division of the world economy between rich manufacturing exporters and poor raw material exporters became entrenched in the decades before the First World War.[i] That bipolar economic order has been shifting for some time now, largely as a result of the emergence of Asian powers as engines of capitalist growth.

Now there is much talk of economic growth in Africa. In the present decade, 7 out of the 10 fastest-growing economies (as conventionally measured) are African.[ii] In 1900 Africa was the world’s least densely populated and urbanized continent with 7.5% of the total. Today it is double that, with an urban share fast approaching the global average. According to UN projections, Africa will be home to 24% of all the people alive in 2050, 35% in 2100. This is because its annual population growth rate is 2.5% when the rest of the world is ageing. The Asian manufacturing countries already recognize that Africa is the fastest-growing market in the world. This could provide an opportunity for Africans to play a stronger hand in international negotiations. If they succeed in standing up for themselves, it would be a world revolution, the end of the racist world order, no less. Continue reading ‘State, region and revolution in African development’ »

A tale of two currencies: the euro and Argentinian peso compared (2002)

It was the best of times, it was the worst of times. — Charles Dickens

The euro coins and notes were introduced on 1 January, with mildly euphoric expectations of a new era for Europe. The national currencies of twelve countries, which had been linked together for some time, now ceased to be legal tender, being replaced by what is in effect a federal state currency like the dollar. By contrast, at the other end of the world in Argentina, the crisis of the peso, which is linked to the dollar, provoked a proposal for a parallel currency, the argentino. This lasted no longer than Adolfo Rodriguez Saa, one of five presidents in less than two weeks, who announced it. Then the peso itself was made new, this time at a dollar price 30 percent lower than before.

Both cases are an admission of the failure of national currencies and involve coining new currencies to remedy this. I would like to reflect here on some inadequacies of national currencies and the possibility that their eventual failure can and does open avenues for ordinary citizens to take initiatives in their own hands with community currency systems. Such a topic is worthy of anthropological investigation, which is why I am writing a book about it. Continue reading ‘A tale of two currencies: the euro and Argentinian peso compared (2002)’ »

Money in the making of a human economy: beyond national capitalism

 

  1. LETS and me
  2. The euro crisis
  3. The collapse of national capitalism
  4. A human economy approach
  5. Harnessing bureaucracy to grassroots democracy

 

LETS and me

All my life money has been an obsession. I have always been keener to understand it than to have a lot of it. When I was 5, I was bewildered by the relationship between rationing coupons and pocket money (Hart 2000:176). When I was 12, I took up betting on the horses. Gambling saw me through university (Hart 2013). I even became an entrepreneur in the slums of a West African city as part of my doctoral fieldwork. I put together a small real estate fortune during the 70s and then lost it when I was divorced. So, when I was asked to give a public lecture to my fellow anthropologists in the mid-80s, it was not surprising that I hit upon the topic of money. I brought plenty of personal experience to my subject, none of which showed in my official presentation. I called this ‘Heads or tails?’, referring to the two sides of a coin, one representing money as an aspect of political society, the other its value as a commodity in exchange. My argument was that both sides, state and market, were indispensable to money, but for much of the 20th century we had been subjected to ruinous swings between theories emphasizing one side to the exclusion of the other. The lecture was published in Man (Hart 1986). Continue reading ‘Money in the making of a human economy: beyond national capitalism’ »

The case for an African customs union

Introduction

I first explain what I mean by saying that the informal economy, a concept I was associated with coining in the early 1970s, has taken over the world, largely as a result of neoliberal deregulation over the last three decades. After a brief account of my own early exposure to West Africa, I turn to the question of how and why Africa has long been a symbol of global inequality. Even after independence, Africans are still waiting from emancipation. Even so Africa’s development prospects in the twenty-first century are brighter than for a long time. In the course of the twentieth century, regional differences in the forms of African political economy converged on the model of agrarian civilization that was once known as the Old Regime. The antidote to the Old Regime is a liberal revolution. Accordingly I next consider the role played by free trade and protection in the revolutions that made modern France, the United States, Italy and Germany, with particular reference to the latter’s Zollverein (customs union) in the nineteenth century. Turning to the Southern African example, which includes the oldest extant customs union in the world, I examine the organization of international trade there. In conclusion I review the prospects for greater integration of trade regimes in Africa. Is an African customs union possible or desirable? How might it come about? Continue reading ‘The case for an African customs union’ »

Responsibility in finance

Is it possible to institute a moral politics, moral law or moral economics that would help most people to humanise the impersonal social forces that govern their lives? This question does not come to us out of nowhere and certainly not just in the circumstances of the recent financial crisis. It concerns the possibility of legitimate government in capitalist states.

The genealogy of this problem begins with Locke and the liberal (bourgeois) revolution of the 18th century Enlightenment culminating in Kant. Locke sought a protected zone for private property free of interference by public agents (of the king). This led to the normative separation of public and private interests which was never actually achieved (as in the establishment of the Bank of England, a private institution, to nationalise the king’s war debts). This confusion was resolved in two ways: by the invention of ulititarian economics (Smith, Bentham) which reduced public outcomes to the interplay of private individual interests or by Kant’s attempt to discover the grounds for a cosmopolitan moral politics. State laws ended at territorial boundaries and geography generated endless cultural variations. So how could humanity make society in the world as a whole? His answer was the categorial imperative. We all want to be good or at least to be seen as being good. Cultures define the good differently, but the desire to be good makes a conversation across them possible. This project is still liberal, nourished by the American and French revolutions, plus the drive to abolish slavery. The liberal legacy emphasises personal responibility for ones actions, especially in common law traditions, where intention is key to legal culpability. Civil law traditions, as in Continental Europe, retain a strong division between law and right, lex and ius, loi et droit.

Continue reading ‘Responsibility in finance’ »

Manifesto for a human economy

Ronald Coase won a Nobel prize in economics for inventing the idea of transaction costs in his famous paper “The nature of the firm” (1937). He has just announced his desire, with Ning Wang, to found a new journal called “Man and the economy”. Their manifesto, “Saving economics from the economists”, was published in the Harvard Business Review for December 2012. Coase argues there that “The degree to which economics is isolated from the ordinary business of life is extraordinary and unfortunate…In the 20th century, economists could afford to write exclusively for one another. At the same time, the field experienced a paradigm shift, gradually identifying itself as a theoretical approach of economization and giving up the real-world economy as its subject matter. This separation of economics from the working economy has severely damaged both the business community and the academic discipline. “.

He continues, “Economics thus becomes a convenient instrument the state uses to manage the economy, rather than a tool the public turns to for enlightenment about how the economy operates. But because it is no longer firmly grounded in systematic empirical investigation of the working of the economy, it is hardly up to the task….The reduction of economics to price theory is troubling enough. It is suicidal for the field to slide into a hard science of choice, ignoring the influences of society, history, culture, and politics on the working of the economy. It is time to reengage the severely impoverished field of economics with the economy. Market economies springing up in China, India, Africa, and elsewhere herald unprecedented opportunities for economists to study how the market economy gains its resilience in societies with cultural, institutional, and organizational diversities (sic). But knowledge will come only if economics can be reoriented to the study of man as he is and the economic system as it actually exists.”

This plea echoes a movement of economics students a decade ago, calling itself “post-autistic economics”, which later took the form of the real-world economics review. In addition, the legions of heterodox economists multiply and an interdisciplinary World Economics Association, formed in 2011, soon acquired over 10,000 members. So there is plenty of resistance within the profession to an economics whose dominant model is one of rational choice in “free” markets. From Coase’s summary and these other developments we may infer several priorities: to reconnect the study of the economy to the real world; to make its findings more accessible to the public; and to place economic analysis within a framework that embraces humanity as a whole, the world we live in. A century ago, Alfred Marshall defined economics as “both a study of wealth and a branch of the study of man” in his synthesis of the marginalist revolution, Principles of Economics (1890). Marshall was Keynes’ teacher at Cambridge, a cooperative socialist who also developed a Hegelian theory of the welfare state.

The “human economy” approach shares all these priorities. Our focus definitely draws inspiration from and seeks to contribute to the tradition of economic thought, but, more explicitly than the currents within economics described above, we are open to other traditions in the humanities and social sciences, notably anthropology, history and development studies. The Human Economy Program at the University of Pretoria has been shaped more directly by another movement of the last decade which now goes by the name of “alter-globalization”. It is the third phase of an international project that originated in the first World Social Forum held in Porto Alegre in 2001. The first phase (2002-2009) was a series of volumes in several languages, produced by a network of researchers and activists in Latin America and France, which aimed to introduce a wide audience to the core themes that might organize alternative approaches to the economy. These books, called Dictionary of the Other Economy, brought together short essays on the history of debate on particular topics and offered some practical applications of concepts relevant to building economic democracy. Taken together they pointed to a new language for addressing common problems of development. Continue reading ‘Manifesto for a human economy’ »

The limits of Karl Polanyi’s anti-market approach in the struggle for economic democracy

I am a fully paid-up member of the Karl Polanyi fan club. In the past few years I have published, with my collaborators, a collection of essays on the significance of The Great Transformation for understanding our times (Blanc 2011, Holmes 2012) and have made him a canonical figure for my versions of economic anthropology, the human economy and the history of money. I have also published two short biographical articles on him. I have contributed in this way to the recent outpouring of new work on Polanyi to which this book is a significant addition. I am a believer, but some believers also have doubts. I still have reservations about a Polanyian strategy for achieving economic democracy and these are linked to his historical vision of “market society”.  Theories are good for some things and not for others and, in my view, the plural economy would be best served by a plural approach to theory and politics. But first let me summarise what I most value personally in what I have learned from Polanyi.

Most anthropologists take their lead from the academic work done by Polanyi and his collaborators at Columbia University after the war. Trade and Market in the Early Empires (1957) established the “substantivist” school of anthropologists and historians who were committed to analysing the economies of “non-industrial” societies. I reject that division of economic anthropology’s subject matter and so did Polanyi when he wrote The Great Transformation (1944). I love his masterpiece for its vivid, erudite and passionate writing. It is truly a work of literature as well as being visionary. I know of few works of any kind with similar power to make such an impact on first-time readers. His discussion of money there is a source of endless inspiration for me and I have recently drawn on a late paper, “Money objects and money uses” (1964), to explain the collapse of the twentieth-century money system. Polanyi, with Georg Simmel, is the key figure for me in helping to explain the current world economic crisis. Polanyi sees money and markets as ways of extending societies beyond their local insularity, thereby introducing a permanent tension between their external and internal dimensions. If nature, humanity and society should not be treated as “fictitious commodities” (land, labour and capital), Polanyi implies that money is the most inclusive means of our social interdependence and must not be bought and sold like a sack of potatoes.

I have never found much use for Polanyi’s typology of modes of transaction as a set. But his vision of human economies as being articulated by a limited number of institutional forms found widely across human history is an essential part of how I think now. So too is his reminder that the social solidarity embodied in associational life is as vital for economic democracy as the interaction of states and markets. The concepts of “solidarity economy”, “plural economy” and “human economy” overlap considerably and find common inspiration in Polanyi’s work, possibly more than any other single author. This undoubtedly accounts for his current popularity at a time when many people around the world are seeking to move beyond the sterile contrast between “revolutionary” and “reformist” approaches to improving the economy.

The core of a “human economy” approach (Hart, Laville and Cattani 2010), in my view, is its emphasis not just on local institutional particulars or its humanism, reflecting what people concretely do, think and want wherever they live, but also on the need for an economic vision to bridge the gap between everyday life and humanity’s widest associations which are inevitably impersonal and lie beyond the actor’s point of view. It is urgently imperative (a “new human universal”) for all humanity to learn how to live together in world society. Polanyi, writing towards the end of what has been described as “the second thirty years war”, epitomises this idea in his masterpiece, where the word “human” crops up repeatedly in the context of economy. The question is how far opposition to large-scale bureaucracies, whether governments or business corporations, along with a preference for initiatives grounded in local social realities, can take us when our aspirations for economic democracy must somehow embrace the movement of the world we live in. And here Polanyi’s theoretical framework shares some deficiencies with other strands of the socialist tradition. Continue reading ‘The limits of Karl Polanyi’s anti-market approach in the struggle for economic democracy’ »

Opening Anthropology: An interview with Keith Hart at Savage Minds

December 2012

This interview is part of an ongoing series about open access (OA), publishing, communication, and anthropology.  The first interview in this series was with Jason Baird Jackson.  The second interview was with Tom Boellstorff.  The third installment of this OA series is with Keith Hart.
Part 1

Ryan Anderson: Thanks for doing this interview, Keith.  Let’s just jump right in here: What do you think about this whole ‘open access’ conversation going on in anthropology?

Keith Hart: Obviously I am in favor of it. The form that the discussion takes in contemporary anthropology seems to be specifically American, where the contradictions of established practice are most acute. In the most general sense, OA is a strategy of resistance to privatization of the commons, any commons. As such it is central to the intellectual property wars. But here I think we are talking about a much narrower issue of how to make research publications freely available without undermining their role as cultural capital in academic career advancement. This reflects the interests of a mass of unemployed young researchers who can’t afford to pay for information and yet still hope to find academic employment some day. The tension is between maintaining the intellectual commons and conserving ideas as private property. The situation is exacerbated in American anthropology by the peculiarly obdurate policy of the professional association (AAA) which elevates a closed regime of private production for profit above sharing knowledge with the general public. I am reminded of Marx’s early journalism against restriction of peasants’ access to fallen wood in the Westphalian forests. Most OA activists can’t fight privatization with his polemical intensity because they have already bought into the premises of an academic career. I met some anthropology friends on Twitter in 2009 who were as agitated then by the AAA’s restrictive (I am inclined to say “insane”) policies as they are now. We formed the Open Anthropology Cooperative–but we will return to that later. I am still struck by the insularity of American anthropologists who rarely consider if the French, for example, have come up with interesting responses to this general problem. Is OA an issue in Brazil or Scandinavia, in Japan or India? American anthropology isn’t the world and I hope that the OAC’s global membership will discuss these questions fruitfully. But then we run up against the limitations of language. Being able to read and write in English is not universal, yet how often is concern with OA extended to the issue of language barriers? Continue reading ‘Opening Anthropology: An interview with Keith Hart at Savage Minds’ »

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’ »