Tag Archives: political economy

Economy Such Complex, Culture Much Simple

“For every complex problem there is an answer that is clear, simple, and wrong.” — H.L. Mencken

In a recent blog post, Paul Krugman argues that economists and policy makers have deliberately mystified the current economic situation for political reasons and that the solution to our current woes is actually very simple: we need more government spending to boost demand. He plays off the above Mencken epigram, saying “For every simple problem there is an answer that is murky, complex, and wrong.”

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DeLong and the economists on Debt, Chapter 12

UPDATE 2/9/13: A bit of a correction to the title here.  I called this post “DeLong and the economists on Debt” but it should have been called “DeLong, the political scientist (Farrell), and the sociologist (Rossman) on Debt.”  Apologies for that–I didn’t do my homework there.  Thanks to Gabriel Rossman for pointing this out.

I was reading through some of the comments to Rex’s latest post about Jared Diamond, in which he ultimately argues that David Graeber’s Debt might be seen as the anti-Diamond (in terms of argument).  Debt, Rex argues, is one of the few “big picture” books that have been written by an anthropologist since Wolf’s Europe and the People Without History, which was published more than 30 years ago (1982).  Three decades is a pretty long time (and we anthros wonder why so few people seem to know what we do).  Diamond gets a lot of attention from many anthropologists, in part, because he is writing exactly the kinds of books that we really do not produce anymore.

Personally, I think we give him a little too much attention and air-time when we put so much energy into combating his arguments.  If anthropologists disagree with the version of world history that Diamond is putting out there, my answer (as it was when I wrote this) is to write solid books that make our case.  Yes, of course that’s easier said than done–but please tell me one thing that’s truly worthwhile that doesn’t require a ton of work.  Nobody said any of this should be easy.  If we have different–or “better”–ideas, then we need to find ways to get them out there (through books, or blogs, or interviews or smoke signals or whatever).  Going directly after Diamond every time he publishes is kind of a dead end if you ask me.  It continually sets us up for claims that we’re just reacting because of jealousy or sour grapes.  The way around that is to jump in the ring, take part, and produce the kinds of books that mark the way to a different explanatory path.*

Debt, argues Rex, is one of those books.  And I think he’s right. Continue reading

Good reads: Antrosio on Eric Wolf; Hart on Polanyi

I have been traveling from one place to another the past couple of weeks, but I have still had some time to keep up on the goings-on in the anthro-blogosphere.  The first one I want to share is Jason Antrosio’s post Eric Wolf, Europe and the People Without History–Geography, States, Empires.  Antrosio links the discussion to Jared Diamond and his famous answer to “Yali’s Question”:

Starting in the 1960s, Eric Wolf was already asking what Jared Diamond in the 1997 Guns, Germs, and Steel called Yali’s Question: “Why is it that you white people developed so much cargo and brought it to New Guinea, but we black people had little cargo of our own?”

Answering that question, as Eric Wolf understood, means accounting specifically for how Europe went from being a land that in A.D. 800 “was of little account in the affairs of the wider world” (1982:71) to those effective polities that could launch overseas adventures. Diamond would have us believe that the answer lies in the shape of the continents, latitude and longitude gradients, and agriculture, particularly large domesticated animals. Although this much older story may account for the fact that many of the most powerful polities have been in Eurasia, it cannot account for the rise of Europe 800-1400 A.D.

Everyone agrees that geography matters. Eric Wolf’s survey of the world in 1400 is full of maps, descriptions of terrain, and accounts of available resources. But serious historians reject Jared Diamond’s rationale for the rise of Europe.

To truly get a grip on Yali’s Question, we have to turn back to Eric Wolf in 1982. Continue reading

In Rousseau’s (and Polanyi’s) Footsteps (Thoughts on Debt)

After writing my last post on David Graeber’s Debt: The First 5,000 Years I got a nice email from Keith Hart, which reminded me I still hadn’t read his long review of David’s book which I’d bookmarked back in July. I was waiting till I read the book myself as I like to read things with an open mind. But if you only read one review of Debt, this is the one you should read. Hart is himself one of the foremost economic anthropologists, and he has long been writing about some of the main issues discussed in Graeber’s book: money, the human economy, etc. His book on Money, The Memory Bank, is available online. (Keith is a long-time innovator in moving anthropology to the internet, and is also one of the main forces behind the Open Anthropology Cooperative.)

I’d really just like to leave this post here and make you all go read Keith’s piece, but it is long, and experience tells me few readers ever click on the links, so here are a few highlights for you [below the fold]:

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Moby Debt (Thoughts on Debt)

One of the things a good book does is to show you patterns which you start seeing everywhere. David Graeber’s Debt is one of those books. Right now I’m enjoying listing to the Moby Dick Big Read in which:

David Cameron, Tilda Swinton, Stephen Fry and Simon Callow jump aboard ambitious project to broadcast Herman Melville’s classic novel in its entirety – 135 chapters over 135 days

As I discussed in my last post, one of the central arguments in Debt is the constant tension between debt as a finite, calculable thing as defined by money (and backed by the authority of the state), and debt as an infinite moral obligation which can never be repaid. This tension is central to Moby Dick. Here, for instance, is a passage about captain Ahab from the end of Chapter 41:

They were bent on profitable cruises, the profit to be counted down in dollars from the mint. He was intent on an audacious, immitigable, and supernatural revenge.

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Graeber’s Marxism (Thoughts on Debt)

I recently finished reading David Graeber’s Debt: The First 5,000 Years and I hope to start a series of posts inspired by this book. Not so much reviewing it, as in dialog with it. For my first post I wanted to highlight what I understand to be the Marxist underpinnings of Graeber’s methodology. To do so it is useful to look at a recent critical review of the book in Jacobin by Mike Beggs, one of the journal’s editors. It is useful because Beggs get things very wrong, but wrong in a particularly interesting way.

Beggs seems eager to prove is that Graeber creates a straw man out of economic theory, but in doing so he himself makes a straw man out of Graeber. He starts by conceding that some forms of economics are overly individualistic:

The most simplistic renditions of neoclassical economics may reduce all human interactions to self-interested exchange.

He then promptly points out that this critique is not new, and that the importance of social structure “could almost be seen as a constant in social theory since the classics.” Here is where it gets interesting:

But most of these other approaches to grand socio-history differ from Graeber’s in treating these levels as structures, and not simply as the practices that create them. They are made up of complex, evolving patterns of relationships that cannot be reduced to or derived from deliberate individual or interpersonal action. They emerge, as Marx put it, “behind the backs” of the very people who collectively create them. They become the social contexts that frame our actions, the circumstances not of our choosing within which we make history. They are collective human products, but not of ideological consensus – rather, they are the outcome of often competing, contradictory pressures.

Graeber, in contrast, stays mainly at the level of conscious practice and gives a basically ethical vision of history, where great changes are a result of shifting ideas about reality.

Whether or not you agree with Graeber’s overall argument about the history of debt, this is a laughable characterization of what Graeber is doing in this book Continue reading

Financialising Development


Cash is Fashionable

Ryan’s recent post on money and its flows and blocks  prompts me to post this, something I wrote a few weeks ago in response to a request from colleagues in Leiden for their  ICA magazine, which is published by study association Itiwana of the department of cultural anthropology and development. After my post on brands and the UK riots they thought I could write something about brands.   Being in Tanzania which is buzzing with money talk,  prompted in part by its new status as  a destination for mining and gas companies in the current  natural resource rush, I wrote instead about how development is being re-branded. 

The 2015 deadline for the Millennium Development Goals is fast approaching. Few  countries in Africa  are expected to meet the targets.  Income poverty, food insecurity, rising inequality and poor health remain problems for the most of the continent.  Despite shifts towards democratic politics in many countries, civil conflict and political instability  are  entrenched  in others as legacies of colonial state  building and post independence power struggles.  Such conflicts, as in Mali and  the Sudans,  are fueled by the rising value of  resources  associated with particular regions within a global market that is revaluing Africa as a potential source of minerals, gas and oil  and as a  high growth location with an expanding  middle class. 

Annual growth rates  for African economies have averaged six or seven percent for much of the decade.  The extent to which growth is a consequence of political stability and sound macroeconomic management is open to question. A more pressing explanation for the recent transformation in Africa’s economic fortune is the global increase in demand for its natural resources enabled by regimes of economic management  which are increasingly open to foreign investment and partnerships.

This   continental push to promote the commercialization of  what can be claimed as `natural’ resources within a context of on-going economic liberalization is legitimating an emerging discourse about the wealth of African nations and the urgent need for investment  as the magic bullet which can liberate this capital and create national prosperity. The regionalization agenda which fosters economic integration is aggressively promoted by governments and donors, along with initiatives aimed at strengthening property rights, enabling foreign direct investment and transforming communications infrastructure. 

China’s  new position as the potential economic savior of a continent   signals  fundamental  shifts in the political ordering of international development. The poverty discourse  central to the MDGs and,  arguably, to the constitution of countries in sub Saharan Africa as  fitting subjects of development  intervention is  increasingly contested, not only  by politicians and media commentators across the continent,  but by  an authoritative cadre of technical experts promoting market led development. Development is being re-imagined not as a consequence of social sector spending but as an effect of marketization.

States across the  continent are  seeking to present themselves as  entrepreneurial and investment friendly. Tanzania is no exception.  Like Uganda, it has practically shifted the orientation of its poverty reduction strategy towards economic growth. The government of President Jakaya Kikwete, now in its second term, is pursuing  a policy of Kilimo Kwanza,  farming first, seeking to marketize agriculture and to promote `a green revolution’ with the support of  major donors including the World Bank.  While  the country continues to rely on donor support for around thirty percent  of its national budget, rationales for intervention are  now situated within  a discursive package that is market led.  Donor funded workshops  buzz with talk of  value chains and market information.

The more conventional investments in the social infrastructure of schools and health facilities financed by the Tanzania Social Action Fund  have been superseded by  what are designed to be income generating investments for farmer groups to enhance their own livelihoods.  Phase Three of this program, shortly to be implemented, is structured around an assumed transformation from indigence to entrepreneurship, enabling self reliance through savings and micro finance as the poorest get, in a phrase equally at home in US discourses of welfare reform, `a hand up not a hand out’.

The aspirations of private sector advocates, within and outside government, increasingly  converge with  the policy positions of development partners as development is re-branded  globally to occupy a new market position.  In Tanzania, as elsewhere, financialization, as means and end,  plays a central role in this convergence.   International accounting firms fight for market share of development implementation within extended contracting chains that  conflate financial  and political accountability. Civil society organizations are brought into being to play specific roles in monitoring public expenditure, along with new organizational forms and participatory practices.   Public expenditure tracking,  known as PETS, has a  set of methods  into which civil society volunteers must be  enrolled through seminars and allowances. Techniques equally at home in the world of market research  comprising score cards  and surveys  come to have political clout as modalities through which dissatisfaction with government can be articulated.

Outside these transient relations held tenuously  in place through development funding streams, a range of private institutions  are seeking to establish the architecture through which the financialization of Tanzanian  social life is possible.  The limited reach of existing banking infrastructure and the Savings and Credit Co-operative Societies creates potential opportunities for  new kinds of  financial  institutions. These include  private financial institutions providing loans  to  formal sector workers,  specialist microfinance lenders such as Pride,  and the money transfer services provided by mobile telephone companies, of which the market leader is Vodacom’s Mpesa.  The proliferation of  formal and informal financial services, and those which straddle  this divide,  is staggering.

Savings and loan groups are rapidly proliferating in both urban and rural areas, notably those organized on the  Village Savings and Loan model  promoted by the NGO Care International. These groups consisting of around  thirty members are a fascinating  organizational form,  using strategies of ritualization and formalization to ensure regularity of savings and financial transparency in a group structure where all transactions  take place at weekly meetings and hence in public. Group members  buy weekly shares up to a limit  of five  intended to  ensure that large profits cannot be made and to  restrict  the exploitative potential of  the better off making money from lending to their poorer neighbors. Savers lend to members of the group at a rate of interest  designed to  increase the value of the savings share.

Groups operate on an annual cycle  after which accumulated interest is divided among members according the  value of their purchased shares.These  `care groups’ as they have come to be  known in some districts are  wildly popular because they allow people to borrow money at limited rates of interest,  particularly useful in helping meet big expenses such as  school fees, funeral contributions and hospital  costs.  They also provide a predictable return on savings, depending on the extent of borrowing  within the group.  An additional  weekly contribution functions as a kind of social insurance for group members who are paid a  sum of money should they fall sick or  lose a close family member.

These kinds of groups are heralded by promoters as  a locally available form of micro financial institution serving the previously excluded, a social institution for the promotion of fiscal responsibility and the discipline of saving not so much as an end in itself but as the precursor to enterprise.  Savings  groups thus conceived may indeed be foundational to a new culture of economic change. They  also enable  a range of distinct practices which support  radically different cultures of economic practice, cultures which  simultaneously promote and obstruct the aspirations of  Tanzania’s economic transformation.

In Ulanga district, Southern Tanzania,  where I have been doing some fieldwork, a  large number of `care groups’ have been established over the past two years,  with the majority now entering their second  savings and loans cycle. Despite the core organizational  template which specifies  numbers of members and the management structure, the  practice of groups varies widely, even within the same geographical area. In addition to variations in the value of shares purchased and the timing and duration of loans,  some groups insist on   compulsory  borrowing as well as saving as a  condition of membership as a means of increasing the value of savings for all the members of the group. Many groups also insist that members purchase  necessities like laundry soap  from the group at a price which is the same as or higher than market prices  in order to increase group profit and hence the value of the shares which are divided at the end of the cycle.

Borrowing is socially construed as an emergency response to hardship   but valued as the means of increasing savings.  In this enactment of savings and loans  the group itself is the enterprise and saving  framed as entrepreneurial activity which generates a return for individual members.  The income generating strategies of group members focus on  gathering  sufficient cash to  make savings, in actuality purchasing  regular shares,  because  this is likely to  accumulate more value than  alternative forms of enterprise, including agricultural investment. Participating in `care groups’, for  people with cash to make regular  contributions,  is fast  becoming a recognized means  of making money   make money. Consequently,  traders and  middle income people  in the villages close to the district capital   are joining multiple groups, allowing them to them to escape the  limitation on share purchase within a single group and to access the kinds of loan amounts which can  yield profitable returns.

That money generates money though such practices does not equate to  the kind of financialization envisaged by the architects of Tanzania’s new development order,  a world premised on depersonalized economic action within a market frame.   `Care groups’ in  performing the social relations through which money begets money, via shares invested by group members and the interest they pay on loans , permit individual profit so long as costs are shared to some extent by members of the group.  Organized around distrust rather than trust groups rely on  the visibility of transactions made in public  and  the simple technology of the specially constructed cash with three separate locks for which  separate keys are distributed among ordinary members.  Such practices  make explicit the social labor required to make money do savings work and the essential embedding of money within  social relations.  It is this embedding which accounts for the success of  mobile money services in much of Africa rather than mobile banking- what people are interested in  is the capacity to transfer money between situated persons not the potential of investing money in abstract institutions. 

Political emphasis on accountability dovetails with cultural preoccupations around relations and money , articulated as concerns with the illicit appropriation and consumption of public resources which are  highly personalized.   The organizational structure of `care groups’ taps into fundamental cultural concerns about groups and individuals, collective responsibility, equity and enrichment in ways that permit adaptation to support  core ideals.  As anthropology consistently demonstrates, values rather than value are foundational to understanding economic practice in any context.  This is not a matter of resistance to global capitalism or neo-liberal economics so much as an assertion of  what   values count.



Giving Marx some credit

And now for some humorous and interesting, if not outright hilarious, socio-cultural phenomena for your anthropological Saturday morning.

The small background images on credit cards are a way in which people can personalize their credit cards and express a small part of their identity (along with everyone else who chooses the same theme, of course).  My Visa has a nice image of a Hawaiian seascape and sunset.  Very tranquil and beautiful.  It’s so I can feel like I’m on vacation from reality while I’m amassing debt, I suppose.

Well, the NPR Planet Money blog has a new piece about the latest version of the Mastercard in Germany: The Karl Marx MasterCard. Continue reading

Digital Money, Mobile Media, and the Consequences of Granularity

Nicholas Negroponte famously insisted that the dotcom boomers, “Move bits, not atoms.” Ignorant of the atom heavy human bodies, neuron dense brains, and physical hardware needed to make and move those little bits, Negroponte’s ideal did become real in the industrial sectors dependent upon communication and economic transaction. In the communication sector, atomic newspapers have been replaced by bitly news stories. In the transactional sector, coins are a nuisance, few carry dollars, and I just paid for a haircut with a credit card adaptor on the scissor-wielder’s Droid phone.

The human consequences of the bitification of atoms go far beyond my bourgeois consumption. This shift, or what is could simply be called digitalization, when paired with their very material transportation systems or networked communication technologies, combines to form a powerful force that impacts local and global democracies and economies.

What are the local and political economics of granularity in the space shared between the fiduciary and the communicative? To understand the emergent political economy of the practices and discourses unifying around mobile media and digital money we need a shared language around the issue of granularity. Continue reading

Darwinian Tax Reform

Prima facie the notion of applying ecological theory to challenge our understanding of the national economy sounds intensely intriguing. So it was with great expectations that I read economist Robert Frank’s recent NYT piece based on his new book, “The Darwin Economy.” He presents the same idea in precis, here. Unfortunately the results did not live up to the promise of such an innovative idea.

Frank’s stated ambition is to use Darwin to critique Adam Smith on the basis of their different understandings of competition. In “The Wealth of Nations” (1776), Smith argued that as an individual pursues his or her own self-interest the outcome, without the individual ever intending to do so, can be beneficial to all of society. For example, as merchants compete with each other in their efforts to win customers the result is technological innovation, a collective good.

As a counterpoint Frank offers an example from the animal kingdom that he argues illustrates how Darwin’s theory better explains market behavior. Bull elk have enormous antlers that they use to compete with other males for access to mates. As the bull with the largest rack of antlers typically wins, competition has encouraged an “arms race” resulting in ever larger racks of antlers. Truthfully, the antlers are much bigger than they need to be. Consequently when bull elk flee from predators such as wolves they often get their racks tangled in trees, slowing them down and making them susceptible to predation. Thus, Frank concludes with Darwin contra Smith, in a competition things that are beneficial to the individual can result in an outcome that is detrimental to the group.

I’ll pause here for you to snort derisively.
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Two or three things I know about corruption

I wanted to say a few words about corruption, a topic much in the news these days, especially in India. For those who haven’t been following, the big news last weekend was, as reported by the BBC, that “Indian anti-corruption campaigner Anna Hazare… ended a high-profile hunger strike in Delhi after 12 days.” Hazare’s campaign has been a topic of much debate, with some of the most interesting discussions taking place on the Indian blog Kafila.org where even the likes of Partha Chatterjee and Arjun Appadurai have seen fit to jump in the fray. This link, to their Anna Hazare tag, will give you an overview of all their posts on the topic. It makes for fascinating reading, and I encourage everyone to take the time to dig in.

There are a couple of issues dominating the discussion. The first is whether the protesters who supported Hazare are dupes of right-wing parties — a claim which echoes similar debates about the Tea Party Movement in the US? The second is whether the bill being proposed by Hazare will make India more democratic by cutting down on corruption, or less democratic by creating a government body with too much power over elected representatives of the people? And the third issue is whether or not ridding the nation of corruption will make for a more just society, or whether corruption offers the disenfranchised important wiggle-room in dealing with state power, wiggle-room usually preserved for the elite?

I don’t have much insight into the first two questions, although I’ll admit that my sympathies usually lie with writers like Arundhati Roy who has been very critical of Hazare and his supporters. I do, however, have some small insight into the issue of corruption in India, having recently completed a documentary film in which corruption was one of the central themes. My wife, Shashwati Talukdar, and I have spent the past five years making frequent trips to an urban ghetto in Ahmedabad, in Western India, where we filmed a troupe of young actors who use street theater to protest against police brutality and corruption. I have also published two academic articles about the history and ethnography of the community. Continue reading

Can We Still Write Big Question Sorts of Books?

[Savage Minds is very happy to welcome guest blogger David Graeber.]

About a year ago, I gave my old friend Keith Hart a draft of my new book, Debt: The First 5000 Years, and asked him what he thought of it. “It’s quite remarkable,” he ultimately replied. “I don’t think anyone has written a book like this in a hundred years.”

The reason I’m not embarrassed to recount the incident is because I’m still not sure it was meant as a compliment. If you think of most books of the sort people used to write a hundred years ago but no longer do—Frazer’s Golden Bough, Spengler’s Decline of the West, let alone, say, Gobineau’s Inequality of the Human Races—there’s usually an excellent reason why they don’t.

But in a way, Keith had it exactly right. The aim of the book was, indeed, to write the sort of book people don’t write any more: a big book, asking big questions, meant to be read widely and spark public debate, but at the same time, without any sacrifice of scholarly rigor. History will judge whether it’s still possible to pull this sort of thing off (let alone whether I’m the person who will be able to do it.) But it struck me that if there was ever a time, the credit crisis —and near collapse of the global economy in 2008—afforded the perfect opportunity. In the wake of the disaster, it was as if suddenly, everyone wanted to start asking big questions again. Even The Economist, that bastion of neoliberal orthodoxy, was running cover headlines like “Capitalism: Was It A Good Idea?” It seemed like it would suddenly be possible to have a real conversation, to start asking not just “what on earth is a credit default swap?” but “What is money, anyway? Debt? Society? The market? Are debts different from other sorts of promises? Why do we treat them as if they were? Are existing economic arrangements really, as we’ve been told for so long, the only possible ones?”

That lasted about three weeks and then governments put a 13-trillion dollar band-aid over the problem and started the usual chant of “move along, move along, there’s nothing to see here.” Continue reading

Anthros & Econs: Crossing the chasm

The more I read about political economy and economic anthropology, the more I have wondered about the discipline of economics. What, exactly, are those economists up to, how do they approach their field of study, and why? I have read a good amount about modern economics, and how it differs from anthropology, but I haven’t really read all that much from economists themselves (especially about method and theory). Sure, I read Krugman’s blog, and I follow sites like Calculated Risk, Economist’s View (Mark Thoma), and Economics and Ethics. One of my favorite econ blogs was written by the late Alison Snow Jones (aka “Maxine Udall”). She had a real talent for writing about and exploring the implications of economics in a very personal and fascinating way.* Still, I wonder why there isn’t more of a conversation between anthropologists and economists. Especially considering our overlapping interests.  So why is there such a chasm between the two disciplines?  Is it because our ways of thinking about and analyzing human nature are soooooo different that there is no room for dialog, or what? Continue reading

Making tourist destinations: To serve society?

Places all around the world are being transformed, restructured, and reinvented to appeal to the international tourism market. Developers, politicians, bankers, investors, hoteliers, and entrepreneurs contribute to reformulating places according to the wants, needs, expectations, desires, and hopes of a global mass of travelers who have the time (and money) to hop scotch around the planet in search of experiences.  The question, though, is this: Who benefits from all these changes?  Do these new tourist places really only benefit powerful politicians, developers, and investors? Or do they serve society* in some larger sense? Continue reading