Loomnie

From a WSJ review of Stealth of Nations: The Global Rise of the Informal Economy:

Mr. Neuwirth introduces us to a woman named Jandira who for a decade has peddled coffee and homemade cakes to the unlicensed vendors at São Paulo’s early-morning wholesale market for pirated movies. Her street-corner business, she proudly tells him, has enabled her to buy two cars and a house and to pay her children’s fees at private school. Another of Mr. Neuwirth’s sources, Chinese handbag designer Ethan Zhang, prefers to stay illegal. For him it’s a matter of costs and benefits: “If I want to get a license, then I will need a bank account and an office in an office building.” These are not people who lack the skills to survive through legal employment; they just see no good reason to join the legal economy.

System D is full of surprises. From Linda Chen, who trades counterfeit auto parts, we learn that China has a hierarchy of fake merchandise: The manufacturers of high-quality fakes offer guarantees and take back defective products, but with low-quality fakes it’s caveat emptor. Ogun Dairo buys woodchips from a sawmill and uses them to smoke fish, for sale by street vendors; her unlicensed grill is in an illegal squatter settlement in Lagos, but she buys fish that have been imported from Europe. At the euphemistically named Guangzhou Dashatou Second Hand Trade Center, where Arthur Okafor obtains the pirated mobile phones that he later smuggles into Nigeria, the cash turnover is so high that almost every (unlicensed) kiosk has a battery-powered currency counter.

The review reminds me of a chapter in my dissertation, in which I follow a container of secondhand clothing from the Cotonou port to the used clothes market in the Beninese city, and from the market to the Seme border and then into Nigeria. I show the different regulatory regimes under which batches of the imported used clothing fall – when taxes get paid on them and when not, and how the final retailer in Lagos sometimes actually pay some form of tax on the goods he has in his small stall on Lagos Island – even when secondhand clothing is not legally supposed to be imported or sold in the country (there is a ban on the importation of secondhand clothing into Nigeria). It also reminds me of the importance of ethnography for understanding microeconomic interactions that eventually feed into macroeconomic figures of a country. (Try understanding why Benin would always have a balance of trade deficit without knowing that almost all consumer goods it imports ends up being smuggled into Nigeria.) Of course, the whole idea of the informal economy itself arose from Keith Hart’s ethnographic study of urban slums in Ghana in the 1960s.

Read the review here. H/T to Bunmi Oloruntoba on Twitter.

On naked capitalism:

My first take on the question came when The Guardian asked me to write an oped on Occupy Wall Street a few days later. At the time I was inspired mainly by what Marisa Holmes, another brilliant organizer of the original occupation, had discovered in her work as a video documentarian, doing one-on-one interviews of fellow campers during the first two nights at Zucotti Square. Over and over she heard the same story: “I did everything I was supposed to! I worked hard, studied hard, got into college. Now I’m unemployed, with no prospects, and $50 to $80,000.00 in debt.” These were kids who played by the rules, and were rewarded by a future of constant harassment, of being told they were worthless deadbeats by agents of those very financial institutions who—after having spectacularly failed to play by the rules, and crashing the world economy as a result, were saved and coddled by the government in all the ways that ordinary Americans such as themselves, equally spectacularly, were not.

“We are watching,” I wrote, “the beginnings of the defiant self-assertion of a new generation of Americans, a generation who are looking forward to finishing their education with no jobs, no future, but still saddled with enormous and unforgivable debt.” Three weeks later, after watching more and more elements of mainstream America clamber on board, I think this is still true. In a way, the demographic base of OWS is about as far as one can get from that of the Tea Party—with which it is so often, and so confusingly, compared. The popular base of the Tea Party was always middle aged suburban white Republicans, most of middling economic means, anti-intellectual, terrified of social change—above all, for fear that what they saw as their one remaining buffer of privilege (basically, their whiteness) might finally be stripped away. OWS, by contrast, is at core forwards-looking youth movement, just a group of forward-looking people who have been stopped dead in their tracks; of mixed class backgrounds but with a significant element of working class origins; their one strongest common feature being a remarkably high level of education. It’s no coincidence that the epicenter of the Wall Street Occupation, and so many others, is an impromptu library: a library being not only a model of an alternative economy, where lending is from a communal pool, at 0% interest, and the currency being leant is knowledge, and the means to understanding.

In a way, this is nothing new. Revolutionary coalitions have always tended to consist of a kind of alliance between children of the professional classes who reject their parents’ values, and talented children of the popular classes who managed to win themselves a bourgeois education, only to discover that acquiring a bourgeois education does not actually mean one gets to become a member of the bourgeoisie. You see the pattern repeated over and over, in country after country: Chou Enlai meets Mao Tse Tung, or Che Guevara meets Fidel Castro. Even US counter-insurgency experts have long known the surest harbingers of revolutionary ferment in any country is the growth of a population of unemployed and impoverished college graduates: that is, young people bursting with energy, with plenty of time on their hands, every reason to be angry, and access to the entire history of radical thought. In the US, the depredations of the student loan system simply ensures such budding revolutionaries cannot fail to identify banks as their primary enemy, or to understand the role of the Federal Government—which maintains the student loan program, and ensures that their loans will be held over their heads forever, even in the event of bankruptcy—in maintaining the banking system’s ultimate control over every aspect of their future lives.

Read it here.

Joris Luyendijk, Dutch anthropologist and journalist, is currently blogging an anthropological study of bankers he’s doing in the City of London for Guardian. From the introduction to the blog:

It is quite a change for me, exploring bankers. I used to do anthropological fieldwork among students in the slums of Cairo, then worked as a Middle East correspondent going back and forth between Hamas leaders and Jewish settlers. The latter were people who knew they might die at any moment for their convictions, and had made their peace with that. Meanwhile those students lived off less than a dollar a day.

Compare this to the bankers and I have moved from freestyle boxing to billiards. Then again, readers’ responses may not be that different.

When I wrote about Israel and the Palestinians some readers would judge an article exclusively by whether it was likely to make one camp look good or the other. In particular, pieces that humanised their objects of hate elicited very aggressive letters to the editor – or worse. I expect the same thing with bankers.

The Middle East is a pretty intense place but unless you have family living or serving there, for most readers it is also a pretty far away place. Finance is not. If somebody told you your savings aren’t safe, she’d have your full and immediate attention, wouldn’t she? But if she then said the words “bank reform” many would have to suppress a yawn.

This is paradoxical. Finance directly affects everyone’s interests, but many have a hard time maintaining their interest in it. But as the collapse of Lehman Brothers and the following three years have shown, the financial world is too important to leave to the bankers – in fact in some countries democracy is beginning to look like the system by which electorates decide which politician gets to implement what the markets dictate. The people in this very powerful sector are worth learning more about. And the good news is, when you listen to them in their own words, that can actually be pretty entertaining. And humanising.

The first batch of posts is a series of profiles of different actors who work in the City. You can read the whole thing here.

The closest thing to this on Wall Street is Karen Ho’s book Liquidated, which I wrote about here.

1. Another one strikes black gold (trying desperately to resist using the line from Queen’s popular song)

2. Can stocks be safer than bonds (strange times, right?)

3. Dr Ngozi Okonjo-Iweala, formerly of World Bank, then of Nigeria’s finance ministry, then of World Bank, returns to take charge of Nigeria’s economy

4.  Commentary on Islamic finance in Nigeria

5. Robert Skidelsky’ – Life after Capitalism (Let me just quote Mark Twain: The reports of my death are greatly exaggerated).

The Economist’s Babbage blog describes it in great details. If you are still interested in more, listen to this hour-long Econtalk podcast with Gavin Andresen, Principal of the BitCoin Virtual Currency Project.

Imagine how gratifying it is for me to wake up this morning and find this post by Edward Caar through a Twitter link:

What brings me to today’s post is the new piece on hunger in Foreign Policy by Abhijit Banerjee and Esther Duflo.  On one hand, this is great news – good to see development rising to the fore in an outlet like Foreign Policy.  I also largely agree with their conclusions – that the poverty trap/governance debate in development is oversimplified, that food security outcomes are not explicable through a single theory, etc.  On the other hand, from the perspective of a qualitative researcher looking at development, there is nothing new in this article.  Indeed, the implicit premise of the article is galling: When they argue that to address poverty, “In practical terms, that meant we’d have to start understanding how the poor really live their lives,” the implication is that nobody has been doing this.  But what of the tens of thousands of anthropologists, geographers and sociologists (as well as representatives of other cool, hybridized fields like new cultural historians and ethnoarchaeologists).  Hell, what of the Peace Corps?

Whether intentional or not, this article wipes the qualitative research slate clean, allowing the authors to present their work in a methodological and intellectual vacuum.  This is the first of my problems with this article – not so much with its findings, but with its appearance of method.  While I am sure that there is more to their research than presented in the article, the way their piece is structured, the case studies look like evidence/data for a new framing of food security.  They are not – they are illustrations of the larger conceptual points that Banerjee and Duflo are making.  I am sure that Banerjee and Duflo know this, but the reader does not – instead, most readers will think this represents some sort of qualitative research, or a mixed method approach that takes “hard numbers” and mixes it in with the loose suppositions that Banerjee and Duflo offer by way of explanation for the “surprising” outcomes they present.  But loose supposition is not qualitative research – at best, it is journalism. Bad journalism. My work, and the work of many, many colleagues, is based on rigorous methods of observation and analysis that produce validatable data on social phenomena.  The work that led to Delivering Development and many of my refereed publications took nearly two years of on-the-ground observation and interviewing, including follow-ups, focus groups and even the use of archaeology and remotely-sensed data on land use to cross-check and validate both my data and my analyses.

You really should read the whole thing.

As one who has a Masters degree in Development Studies but who chose to do a PhD in anthropology because I found that development research is all too often dealing with quantitave, “generalisable” data, and who has concluded said PhD, I find it really interesting that the RCT movement in economics seem to be taking credit, in the media and in policy circles, for what ethnographers – anthropologists, rural sociologists, historians, human geographers – have been saying all along. This is that things are a lot more complicated than people want to think, that it is extremely difficult to find a generalisable explanation, and that at the end of the day, what leads one to better understanding of issues is attention to personal stories, and an attempt to tease out how those stories are linked to larger structures, like local politics, regional politics, the economic structures, colonisation, culture etc. etc. One cannot arrive at this sort of understanding without spending time trying to understand the interaction between all these elements. Now that economists have discovered qualitative research it seems as if it were never there, as if there aren’t people who have been pointing to the importance of understanding nuances and personal stories.

I have deliberately refrained from commenting on RCT in economics because I wanted to read some of the texts, but since Edward Carr took thoughts out of my head I thought I would quote him and call attention to the fact that these kinds of studies have been going on for a long while. If economists are not aware of that (I think some of them are) it is their fault for not looking at other social sciences.

My copy of Karlan’s book is in the post to me, and I look forward to reading it. I doubt that I will learn anything new from it, but I feel it is important, as an economic anthropologist, to know what economists are doing. I wish economists would extend the same courtesy to other disciplines whose works often overlap with theirs.

And on RCT itself, check out the link that my brother, a medical doctor and researcher, sent me. It is a Lancet article titled “A philosopher’s view of the long road from RCTs to effectiveness”. Remember, RCT has been in medical and pharmacological research for a while.

PS, I promised a while ago to blog a list of must read economic anthropology books. I should get to it pretty soon.

The Economist:

Once feted as saviours in much of Africa, Chinese have come to be viewed with mixed feelings—especially in smaller countries where China’s weight is felt all the more. To blame, in part, are poor business practices imported alongside goods and services. Chinese construction work can be slapdash and buildings erected by mainland firms have on occasion fallen apart. A hospital in Luanda, the capital of Angola, was opened with great fanfare but cracks appeared in the walls within a few months and it soon closed. The Chinese-built road from Lusaka, Zambia’s capital, to Chirundu, 130km (81 miles) to the south-east, was quickly swept away by rains.

Here for more.

G. Pascal Zachary in Fanzine:

The master narratives about Africa are inevitably political; art about Africa and Africans, especially art created by non-Africans, inevitably becomes intertwined with the historical use and abuse of the African imaginary. The political entanglements of literary artists engaged with African affairs are complicated by the emergence of a new humanitarianism, which presents African problems as a litmus for the moral capacity of wealthy societies to respond to the plight of less fortunate souls around the world. Just as the response to the genocide against the Jews defined the contours of conscience following World War II, so today does the engagement with Africa define the moral condition of the developed world. Because the engagement with Africa is a test, often narratives about the region and its people are consciously fabricated and fantastic; bad means are justified by good ends. Master narratives from a century ago have been revived and renovated, aimed at generating vast global audiences, with lies and distortions rationalized as part of what the storytellers themselves view as a legitimate “campaign” to help liberate Africans from various maladies—from disease, bad leaders, environmental hazards, wars and other menaces we’ve come to associate with the region. These “progressive,” or developmental, storytellers have even gone so far as to willfully ignore or distort African realities in order to tell the worst stories possible—and thus attract the greatest possible support, financial or moral or otherwise, for “saving” Africans. Such stories that diminish or degrade Africans have been justified (though rarely publicly) as necessary; for without such stories—true or not, exaggerated or strictly accurate—it is believed that people around the world would not express sympathy for the plight of needy Africans.

Here.

There has been much speculation recently about the role Facebook Credits could play in becoming a global virtual currency, and even the possibility of Facebook becoming a bank. In many ways, it already is becoming a bank – just not in the traditional sense. Facebook is harnessing the power of the social graph, and has certainly adopted an expanded definition of what ‘currency’ means. It’s time for the rest of us to hop on board.

As I’ve been conducting research for The Future of Facebook Project, the experts and thought  leaders interviewed shared some compelling views about the evolution of virtual currencies, and Facebook’s potential role in their development. A big takeaway is that while we typically associate currency directly with money, the rise of the social web and quantification is shifting that reality to become more inclusive of kinds of capital that were formerly intangible.

Money is a tool we use for arms-length transactions, where there isn’t an assumption of any kind of relationship or trust between parties. But as data is being mapped at an accelerating rate – from self-quantifiation, to the contextual and relational data about our location and interactions, to our preferences and opinions, to our exchanges and transactions – we are being granted access to a much richer base of information in our decision-making toolkit.

Read it all here.

This is a guest post by Keith Hart (cross-posted). It is partly in response to Benson Eluma’s piece here on Achebe and Hart. You can leave your comments here or at Hart’s blog.

Benson’s post refers to my previous one, Africa’s hope, which in turn took off from Chinua Achebe’s NYT oped piece. I will not tackle Benson’s critique point for point. What follows is only indirectly triggered by what he wrote. It matters more to me to make a positive case than to refute his or for that matter Chinua Achebe’s.

I should begin by clarifying my use of history. For me the point is to realise some version of what is possible while starting from the actual present of our moment in history. That vision of possibility should be grounded in what we know of the past, but such historical knowledge is always selective and relative to the forward-looking project. We can pitch rival stories into competition with each other, suggesting that A is not B. I did that for polemical purposes with Achebe’s historical vision and Benson does it with me; but in practice most stories are not mutually exclusive and it is usually futile to treat them as such.

At the end of Talking World War III Blues, Bob sings:

Half of the people can be part right all of the time,
Some of the people can be all right part of the time.
But all the people can’t be all right all the time.
I think Abraham Lincoln said that.
“I’ll let you be in my dreams if I can be in yours,”
I said that.

West Africans have been waiting a long time for political emancipation and this is closely tied to slavery, colonialism and recent aspirations to economic development. Each century, as we go back, reveals further layers of the problem and, to come to grips with the sources of the region’s economic backwardness probably requires us to take in the whole of the previous thousand years. I believe that Chinua Achebe’s version of that history was tired, if not lazy. Depending on what we have in mind, the historical significance of all the key terms needs to be interrogated.

Slavery is endemic to West Africa. I have a post on it here. The slave trade was a partnership between Europeans and Africans. It took most of the 19th century to be officially abolished and it has persisted in places until now. Domestic slavery can only be understood in relation to kinship and that too has not been abolished. It is contemporary in one form or another. The abolition of slavery in the West, especially as a result of the American civil war, generated much turbulence in West Africa during the latter decades of the 19th century, a situation exploited by the colonial scramble for Africa. Slavery is living history in Nigeria (as Achebe’s novels pointed out), not just something to be pinned on Europeans and Americans long ago.

Colonialism too needs to be thought about outside the box. As John Peel has demonstrated, many Yoruba intellectuals embraced Christianity, western education and the British empire as a way of taking their nation into the modern world. Ghana had an economy larger than Indonesia’s at the time of independence and per capita income on a par with South Korea. The political and economic failures of the last half-century have cast doubt on how the transition to post-colonial states should be viewed. It is not obvious when in the period from the 1940s to the 70s various colonial regimes started to pull out or how independent the successor regimes often were. What is clear is that political recipes for emancipation lacked an effective understanding of conditions in the world at large and over-estimated local powers of self-determination. The result in the early 21st century is that West Africans, especially Nigerians, are still waiting for political forms adequate to their needs and aspirations as world citizens.

What economic system might underwrite these political aspirations? Rather than invoke “capitalism” as a way of avoiding economic analysis, we need to interrogate this term more than any other. I use it in a way similar to Marx to mean a social complex of people, machines and money that over the last two centuries has driven population growth, urbanization and higher energy use in a very uneven way. It takes many concrete forms and is always combined with other economic forms. Capitalism’s mission is to break down the insularity of traditional communities and bring cheap commodities to the masses. It is not the just society humanity deserves, but a temporary bridge to that society. It is of course highly moot where different parts of the world have reached in this process, where they might want to go next and how.

The present moment is specific in that, for the first time, global capitalism has been diversified beyond its North Atlantic origins. In a book published three decades ago, I argued that modern states were being erected in West Africa on the basis of backward agriculture and that, unless significant progress towards machine industry (in the broadest sense) were made soon, these states would devolve to a level congruent with their economic backwardness. I intend to revisit this argument in the present book.

Once again, I have covered a lot of ground in a very telegraphic way which lends itself to polemical distortion. But what can you do in a blog post? I think the triad — pre-colonial, colonial, post-colonial — is a weird periodization of West African history and one that will not serve attempts to improve the region’s political economy well now. Rather than insist on my own highly selective account, I would like to discuss the key relevant terms in an open-ended way. But more than that, I believe there are substantial grounds for hope of significant African development at this time. The politicians and the intellectuals (at home and abroad) will probably be the last to find out about it.