A Session on Economics and Cultures was hold at Network Cultures in Brussels from 9 to 11 September 1993. It enabled us to take stock of our collective knowledge on the interaction between local cultural dynamics (values, modes of social organizitions, skills) and the economic life of local communities. Speakers originated from or reported on local routines in Zaire, Senegal, Morocco, Chile, France, Nicaragua, Belgium, and Haiti. This session was particularly stimulating as readers will gather from the report which follows.

1. The crisis of mechanistic economism

Political economy grew in the 18th century as a separate and mechanistic science, cut off from other concerns and realities. Development theories were derived from the economistic, productivist paradigm of the homo economicus. The homo economicus is an atomized competitor involved in a self-seeking cost-benefit analysis, engaged in the struggle for the survival of the fittest. His action is based on the division of labor according to the "law" of comparative advantages. This reductionistic view of human beings and social life led to pro-capitalist (W. Rostow) or socialist theories equally imbued with productivism and deep ethnocentricity. The experience of the North is seen as the model. The failure of development (at macro and at micro levels) as well as the tremendous progress of science today necessitate the formulation of a new paradigm and a new economic system. The paradigm must be based on complexity; Economics must be based on both an interdisciplinary and an intercultural approach.

2. The social and cultural embeddedness of the economy

An economy is always embedded into a local society, a local culture. The economy has a culture in and of itself. Karl Polanyi developed from the previous work of Karl Marx this concept of embeddedness. This concept enables one to break away from the mechanistic and ethnocentric view of economics; it allows one to open up to an interdisciplinary and intercultural approach to economics. Since capitalism ripped away economy from other social concerns and regulations, its profit-based logic tends to dominate all aspects of social life. Hassan Zaoual and Thierry Verhelst stressed the need to re-embed economics into society. This is a political, ethical and environmental necessity. It is also an important key to understanding those societies which are relatively more traditional and less Westernized (less capitalise that is). Thus, the idea is raised that culture (the immaterial dimension of life) is a central element. Far from being reduced to a superstructure determined by economics and technology, as many simplistic "Marxists" wrote, culture is part and parcel of social and economic relations. There is a dialectical relationship between culture and so called "hard" facts. Culture organizes life and is influenced by life. Social change cannot be imposed upon a community by external factors such as a State or a project. It necessarily results from a relatively endogenous (local) cultural transformation.

3. Harmony versus domination as cultural indicators

The interdisciplinary and intercultural approach induced by the notion of an embedded economy requires one to be as open to anthropological knowledge as to economics. The former allows us to identity some of the underlying trends which concurrently shape culture in contemporary hybrid societies where "tradition" and "modernity" mix in varying degrees. Regarding these "ideal-types", or indicators pointing towards underlying but more complex realities, one must keep in mind several factors. Firstly, "traditional" society's cosmocentrism describes humans as only a link amidst cosmic, divine and social energies. This is opposed to the modern homocentric view of man as the center of creation. Secondly, "traditional" society's quest for harmony is based on a holistic vision in contrast to modern dualism and competitiveness with nature, humans and gods.
Thirdly, the sense of sacred and/or magical interdependence contrasts with the urge to understand rationally and to dominate. Fourthly, prescribed status (by caste, age-group, chief, tradition) is in contrast with freely acquired social position. Further, in "traditional" society, the group and its collective interest matter more than the individual. Constraints and reprisals sanction individualism and the solitary pursuit of wealth. Production is not fundamentally encouraged as it raises a surplus which can be a cause of social imbalances, concentration of power and war. Redistribution of that surplus is therefore encouraged in social functions which allow for the build-up of social relations, prestige and/or mutual dependence. Accumulation, saving and private enrichment for private interest are modern values, not universal social habits. The "relational" economics of "traditional" societies contrasts with the "rational economics" of modernity. Land or cattle are seen traditionally as goods to take care of and as sources of prestige, not primarily as economic resources to exploit. In merchant society, circulation of goods happens primarily through sale (price fixed by market) whereas "traditional" societies also barter, exchange and enter in complex and subtle forms of gifts which serve either to dispose of a surplus or to acquire prestige, credibility and friends. These friends, at a later stage, will somehow render that which has been given (see Marcel Mauss).

4. When local beliefs, knowledge and practices resist and innovate

The failure of development is due to the fact that the "Third World" is not a void to be filled with turn-key development projects. Local societies resist and react. Hassan Zaoual suggests that beliefs, indigenous knowledge and practices mix into particular "sites symboliques" (a symbolic locus) such as a village, a region, a slum, an enterprise, or a district. This concept avoids describing culture as if it existed somewhere in a "pure" unadulterated and immobile form. The notion of symbolic locus also refers to the invisible part of reality such as creeds, myths, and symbols. The failure of projects is often due to the fact that they only address the visible, physical part of reality and ignore its invisible, metaphysical dimension. In much of black Africa and the Arab world, development strategies often bring in an artificial economy, which maintains the positions of a sterile elite and produces endebtedness. However, underneath and all around the artificial economy, popular economy (the so-called "informal sector") is lively and ensures, much to the economists' surprise, jobs, savings and goods for millions of urban "marginals". The popular economy corrects the failures of formal capitalism.

5. The poor’s vertical solidarity links

Non-governmental organizations (NGO's) in Africa claim to mobilize the existing social cohesion (group spirit, solidarity, etc.), sometimes naively labelled "African solidarity," in order to achieve community development. At the same time, however, they earnestly attempt to exclude from the body social those considered as exploiters or parasites (money lenders, landlords, chiefs or "notables"). Their aim is to help the poor liberate themselves and become autonomous. This is respectable and understandable from a westernized point of view. However, the poor do not think that way and they do not want to act accordingly. Social cohesion, without any exclusion, is part of their strategy for survival. Emmanuel Ndione's experience in Senegal has made it clear to his own NGO (ENDA-GRAF) that the poor ensure their survival and social security through participation in various networks (or "grappe"). Solidarity is then more vertical (including the rich and the powerful) than horizontal (egalitarian). Money and time are invested in social relations and in attempts to enter into the ascending magnetic field of a "big man". The strategy of the poor is the enlargement of their social web. They look for inclusive, integrative harmony and do not practice the selection and the social ruptures which are encouraged or even demanded by NGO'S. The poor seek to communicate with everything (investment in magic) and everybody (investing in social networks). NGO projects seeking to isolate the poor from the rich are seen as counterproductive. These projects tend to isolate the poor in order to achieve autonomy. In fact, this separation cuts their lifeline. As a Wolof proverb goes "The poor is not he who has no clothes, but he who has nobody."

NGO's usually set up new groups such as co-ops, community development projects, and the like rather than recognizing and building upon existing institutions. Again this goes against the logic of the poor whom NGO's claim to help and respect.

In the eyes of the donor agency and local NGO'S, money granted to projects must be securely channelled into accounts and institutions clearly separated from private and/or family interests. Money is looked upon by NGO's as exclusively "economic". In actual fact, it is not. Money is social and is taken care of scrupulously when it is acquired through hard and freely chosen labor and when it circulates within the recognized networks. It is their "warm money". Conversely, money which transits through anonymous channels, such as money from the project, the State, or the white man, is "cold money" which is likely to be "misappropriated".

According to the social and economic logic of the poor in Dakar, the whole of society is a series of credit banks. Credit banks such as family, lineage, civil servants, politicians and even the local NGO are integrated into social webs, offered services or money and considered as potential debtors in case of want or crisis. Even the money-lender is seen as part of a network. Trying to out off links with him only weakens the social web. Local communities may pretend to participate in an NGO project which attempts aforementioned, rupture (e.g. setting up a credit co-op among the poor). However, through their smoke-screen strategy, they will ensure that former links are preserved. These links constitute, in the eyes of the local communities, their foremost security. Survival in the difficult city-and-slum life is linked to social integration and to the prevention of becoming "a social orphan".
In view of all this, what kind of renewed NGO action is needed ?

6. African sociological concepts to renew NGO action

To renew their action, NGO's must acquire "new spectacles," in order to produce and use new concepts which are more adapted to the African scene than classical European sociology. Among those concepts, Emmanuel Ndione of ENDA-GRAF suggests :
(1) The notion of vertical solidarity which softens the dichotomy of rich and poor and promotes social networks.
(2) The concept of "a social orphan" since the western definition of poverty is relatively inadequate.
(3) The notion of network (grappe). The economic unit is not the household but the whole of those persons with whom somebody entertains reciprocity based on gift and counter-gift.
(4) The mechanism of gift and counter-gift. The logic of the donor is one of extension of his/her social web within a multilateral (more than interpersonal) exchange.
(5) The idea of festivals and feasts as "relational market places" where huge sums of money are spent to show the strength and credibility of one's own network.

7. Economic projects can be successful after all !

As to renewed practices by NGO's or other development actors in the "economic" sphere in sub-saharan Africa, ENDA-GRAF suggests :

(1) Do not attach too many strings and conditions to your project or to the money that will be granted under the auspices of the project. Partnership implies that the donor accepts that his/her cash flows through relatively unknown or (in his view) dubious channels such as lineage or family for purposes which (according to the donor) have nothing to do with the aim of the project. Do not focus on strictly "economic" use; everything is social and cultural, including money. As long as the loan is refunded, why bother ? Experiences show high rates of reimbursement in the cases where ENDA-GRAF gave up its will to control and direct.

(2) The evaluation of the efficiency of a loan or gift cannot be made at the level of an identifiable economic unit (household, co-op) but at the level of the social network (grappe). However, this means that control by an outside agency is very difficult. The limits or frontiers of such networks are mobile and ill-defined. All kinds of things occur as a result of cash being granted, since its circulation is incredibly fast among the poor.

(3) The project is not to be a straight racket to direct people's behavior. It should rather be a tool for action-research, creative communication and mutual training. The project then allows local cohesion and sense to be manifested. It is similar to a laboratory. Failures are very instructive, as are people's strategies to pervert the rationality of the project so as to make it more suitable to their real aspirations. Such a project becomes a maieutic experience, in other words, a chance to deliver a pregnant community from its ideas and resources. (See Cultures and Development - Quid Pro Quo special issues on Research Action, particularly no. 12, January 1993; pp 4-13).

(4) Never act in the place of the people themselves. A grant or loan must only complement existing local savings. It also serves to give legitimacy/credibility (credit-worthiness) to a local network. In this way, the donor, far from dominating the scene, becomes a "moral share-holder" among others. The network acquires "drawing rights" on the NGO and the NGO acquires similar rights on the network.

(5) Use folk theater to help identify abuses and conflicts. Experience with folk theater shows that the interaction between actors, audience and NGO is extremely instructive. This interaction takes place after the "performance" and enables, without much debate, for the immediate resolution of a variety of concerns. People-inspired conditions are thus added to the project and are likely to be more respected than NGO-imposed conditions. The latter pertain much too often to social autonomy and material accumulation. The former pertain to reciprocity and social security.

(6) Let us not idealize people's economy as "the alternative" to capitalism. What matters is to watch people's practices and identify with them the sense which these practices embody. It is important to legitimize these practices both in the eyes of the people themselves and vis-à-vis institutions and experts which tend to monopolise the creation of meaning. Do not compare people's economy to the "formal sector" but legitimate it from the inside, by giving good reasons to believe in it.

8. The enterprise as a big family

Business management in Africa does not correspond to what is taught in Western MBA programs. Placide Muamba's report on his study of a major mining company in Kolwezi, Zaire, shows the importance of family relations and age in authority level, conflict resolution, salary scales and promotion. Labor in Africa is not reduced to its monetary dimension; work is also done for one's friend, for enjoyment, or outside utilitaristic motives. "Labor", like "enterprise", "production" and concepts such as "social" or "economic" do not have much meaning in Africa as they belong to a fragmentary and disembedded economistic notion of reality. Thus, it is wrong for development projects to speak for example of "a small carpentry firm" if the carpenter is seen outside the larger social web to which he/she belongs. The big mining company (Gecamines) studied by Muamba is similarly abstract and anonymous to its employees. Therefore, it cannot command enough royalty and commitment. On the contrary, this enterprise will be taken advantage of, as is the case for other alien and "cold" institutions like the State and, to the dismay of many development workers, the development project !

Emmanuel Ndione stresses the importance of not judging these attitudes from a so-called objective point of view. The researcher must show empathy towards the people he or she studies. Without this, his or her knowledge is not acceptable to the people concerned. Research must look at the way people at the bottom look at their problem. It must help to legitimate the poor's ways of perceiving and acting. Ndione pleads for an "emancipatory science" (See Cultures and Development- Quid Pro Quo no. 12, January 1993; articles by N. Note, E. Ndione, Rob. Chambers, and Parmesh Shah). Such emancipatory science helps the poor to become autonomous, also at the level of their symbolic representation of reality.

9. What future for African enterprises ?

Big firms, like the Gecamines studied in Kolwezi, would be well advised to look into sub-contracting to small indigenous units, no matter how complex this is considering technological and managerial constraints. In actual fact, the solution is not to turn from big to small size if the same old managerial model is used. The formal sector may have to seek inspiration from the "informal" sector, which can be very efficient indeed.

The many failures of formal entrepreneurship and of development must not stop us from seeing how remarkably efficient some ethnic groups can be in Africa, such as the Haoussa (Nigeria), the Nande (Zaire), and the Bamiléké (Cameroun). Traditional associations or families serve as the starting base for very prosperous small and medium sized enterprises. They offer more flexibility and allow a better management of human resources than huge conglomerates. (Network Cultures' research programme on "Entrepreneurship and African Cultures" is to contribute to a deeper understanding of how business life functions in Africa's culturally mixed background.)

Africa is characterized by its hybrid culture; everything is mixed. As G. de Villers has shown, the "informal" has crept into the formal (State, enterprise). There is a sort of perversion of the formal logic by informal ways and rationalities. This sub-version may have a positive outcome if and when it leads to a new synthesis and a new culture. If it only leads to the destruction of the State, of infrastructures and of existing production units, one has to wonder about the future. Looting may redistribute some wealth among the poor and perhaps favor a few micro-units. However, their efficiency may not go much beyond mere survival and they may be very short lived.

(…)

11. The Community factor in economics

The Chilean economist Luis Razeto was presented by Marthe Nyssens. He describes "factor C" ("C" for community) as the central feature of the OPE (Organization of Popular Economy). Community spirit is central in it, and constitutes an aim in itself. Admittedly, the community spirit is not totally absent from real-life capitalism. However, intensifying the community is not a specific aim of capitalism.

The existence of OPE raises a number of questions. How can they be officially recognized? Can OPE avoid being co-opted by the capitalist system ? Can they play the game of market relations without being ultimately turned into a regular capitalise enterprise ? Can the State and development aid assist this type of economy and the social values it embodies ? Are there similar OPE in the North ?

OPE are often looked at as merely a refuge, a temporary survival mechanism. Yet millions of poor are found in OPE and they are likely to remain there, considering the foreseeable failure of capitalism to integrate them. This is why OPE must be studied with great care.

12. Is an alternative viable?

Research in the South belies the dogmatic Marxist theory about the "informal sector" as a backward system which is condemned to disappear as "progress" continues, pushing everyone into a modern capital-labor relationship. For Marx, capital-labor (salary) relationships are necessarily to intensify as history moves from pre-capitalist to capitalist, and after a social revolution, to socialist relations. But currently in the communities of the South, only a minority of people enter into a salary relation. This is not a "transitional period" but a lasting situation. Capitalism does not need to integrate these masses of poor people. OPE's therefore are not merely pre-capitalist ! The popular economy sector appears instead as a lasting reality. It not only presents some aspects of the pre-capitalist economy but also exists quite contemporarily and is, in fact, the fruit of the capitalist system which has produced large-scale poverty and huge cities. François Houtart reports on the present situation in Managua, Nicaragua where neo-liberal policies favor free market relations. Sixty percent of the population is unemployed. Jobs are insecure; salaries are low; working hours are long. Individualistic survival strategies develop; the atomization of society, violent competition and self-exploitation among the poor are other results of this situation. There is constant conflict between solidarity promoted by the social consciousness of popular economy and crude individualism spurred by both neo-liberalism and the need to survive. Among the poor, OPE are a reality which co-exist next to an anarchic, extremely individualistic and competitive culture. The latter may absorb the former unless a sufficiently powerful cultural production towards another economy succeeds.

13. For a new, culture sensitive Political Economy

Maldonado distinguishes between the following production systems : artisanal production (the owner is also the producer), simple capitalist production (some division of labor, accounting, wages), quasi-wage enterprises (sub-contractors for big firms), and associative patterns of production (OPE's embedded in a social base which is not just economic/professional). The aid of NGO's and official donors goes primarily to the second category whereas these simple forms of capitalist production only cover 10 to 20% of production units (excluding ambulant vendors, etc.). This aid may damage the social fabric which is a key factor in their (relative) success. While Henry Panhuys welcomes Maldonado's typology, he pleads for other approaches using concepts such as "the symbolic locus" or the "social territory". Concepts like economic units or households are largely artificial and erroneous. Political economy is at once necessary and cultural.

The notion of informal sector is ethnocentric (it compares to the expert's own so-called formal sector) and is a very poor concept in terms of scientific research. Idealizing the "informal sector is wrong for two reasons. Firstly, the existence of the "C" factor in the "informal sector does not preclude self-seeking manipulation of communitarian values. Secondly, it does not always allow more than mere survival. Belittling the informal sector is equally wrong because capitalism is not likely to eradicate or integrate it and hundreds of millions of persons live in it all over the planet. One might learn much from this social reality.

To conclude, looking into culture-in-action as it is to be seen in the field of economics is of vital importance to anyone seriously concerned about development aid and the plight of a growing number of people in the world. It may lead to a new approach to Political Economy, a Cultural Political Economy.