Socio-Economic Insecurity in Emerging Economies

Building new spaces

Khayaat Fakier, Ellen Ehmke

• Publisher: Taylor & Francis
• Year: 2014
• Print ISBN: 9781138017825
• eBook ISBN: 9781317701583
• Edition: 1
• Topic: Economics
• Subtopic: Development Economics
• Index: Economics

Taking a unique comparative approach to the respective development paths of India, Brazil and South Africa (IBSA), this book shows that people and governments in all three countries are faced with similar challenges of heightened insecurity, caused by liberalization and structural adjustment. The ways in which governments, as well as individuals and worker organisations in IBSA have responded to these challenges are at the core of this book.

The book explores the nature of insecurity in the Global South; the nature of the responses to this insecurity on public and small-scale collective as well as individual level; the potential of these responses to be more than neo-liberal mechanisms to govern and contain the poor and lessons to be learnt from these three countries. The first section covers livelihood strategies in urban and rural areas as individual and small-scale collective response to the condition of insecurity. Insecurity in the countries of the South is characterised by a high degree of uncertainty of the availability of income opportunities. The second section looks at state responses to insecurity and contributions on social protection measures taken by the respective IBSA governments. The third section discusses whether alternative development paths can be identified. The aim is to move beyond 'denunciatory analysis.' Livelihood strategies as well as public policies in some of the cases allow for the building of new spaces for agency and contestation of a neo-liberal mainstream which provide emerging and experimental examples.

The book develops new thinking on Northern welfare states and their declining trade unions. It argues that these concepts, knowledge and policy innovations are now travelling in three directions, from North to South, from South to North, and between Southern countries. This book provides unique insights for researchers and postgraduate students in development studies, social policy and industrial sociology.

1 Work, livelihoods and insecurity in the South

A conceptual introduction

Edward Webster and Sharit Bhowmik

It is often argued that knowledge flows unilaterally from the Global North to the Global South.¹ Indeed, Jimi Adesina (2012) argues that even progressive Northern scholars seek to induce ‘epistemic dependence’ by expropriating the voice and experiences of the South. While the North clearly continues to dominate the production of knowledge, we believe a more interactive approach is emerging, in the form of an exchange model where knowledge is co-constructed (Kiem 2012).

We would argue that this volume is an example of the co-construction of knowledge production. It is the result of a three-year research project of scholars from the International Centre for Development and Decent Work (ICDD) network, titled ‘Work, Livelihood Strategies and Insecurity in the Twenty-first Century: Comparing India, Brazil and South Africa’. The aim was to research how the governments of the three countries were responding to social and economic insecurity through social protection and public work programmes, and the role of civil society and trade unions in formulating and implementing these policies. The project was initiated by the ICDD host university in the North in Kassel, Germany, and driven by two Southern scholars, one from India and the other from South Africa. It has given voice to Southern scholars and built the capacity of emerging Southern scholars through its PhD programme. It has contributed to new thinking on social policy that not only circulates between Southern countries, but also contributes to new thinking on Northern welfare states and their declining trade unions. These concepts, knowledge and policy innovations are now travelling in three directions – from North to South, from South to North, and between Southern countries.

This introduction is divided into three parts. In the first part we introduce the concept of insecurity through a theoretical reconstruction of Karl Polanyi (2001 [1944]), challenging the hegemonic Northern interpretations of his theory by contrasting the Great Transformation in the South with that of the North. In the second part, we ground the network in a historical and cross-national comparison, identifying similarity among and difference between the three countries. In the third part, we introduce the three themes of the book, which may be summarized as:

• urban and rural livelihood strategies: informal clothing, recycling, street vendors and the charcoal producers in rural areas;

• state responses to insecurity: employment guarantee schemes and conditional cash transfers;

• alternative paths to development: green jobs, Lulism, the solidarity economy and cooperatives.

Armando Barrientos and David Hulme (2009) suggest that a ‘quiet revolution’ is taking place in social policy in the South. They argue:

Social protection is now better grounded in development theory, and especially in an understanding of the factors preventing access to economic opportunity and leading to persistent poverty and vulnerability. The initially dominant conceptualization of social protection as social risk management is being extended by approaches grounded in basic human need and capabilities.

(Barrientos and Hulme 2009: 439)

In practice this has involved the ‘rapid up-scaling’ of ‘programmes and policies that combine income transfers with basic services, employment guarantees or asset building’ (Barrientos and Hulme 2009: 451).

Many of these programmes and policies have been dismissed by the left as neo-liberal (Barchiesi 2011; Satgar 2012). The question raised by our research is whether, as Ferguson (2009: 173) provocatively puts it:

Can we on the left do what the right has, in recent decades, done so successfully, that is, to develop new modes and mechanisms of government? And (perhaps more provocatively) are the neoliberal ‘arts of government’ that have transformed the way that states work in so many places around the world inherently and necessarily conservative, or can they be put to different uses? To ask such questions requires us to be willing at least to imagine the possibility of a truly progressive politics that would also draw on governmental mechanisms that we have become used to terming ‘neoliberal’.

That is the challenge posed in this volume. It is a challenge to government, civil society, policy makers and all those concerned with overcoming economic and social insecurity in the Global South.

Part I: economic and social insecurity: a Southern perspective

We live in an age of insecurity. As the late Tony Judt (2010: 33) wrote,

we have entered the age of insecurity – economic insecurity, physical insecurity, political insecurity. The fact that we are largely unaware of this is small comfort: few in 1914 predicted the utter collapse of their world and the economic and political catastrophes that followed. Insecurity breeds fear and fear of change, fear of decline, fear of strangers and an unfamiliar world – corroding the trust and interdependence on which civil society rests. The choice will no longer be between the state and the market, but between two sorts of state. It is thus incumbent upon us to reconceive the role of government. If we do not others will.

An aspect of insecurity ignored by Judt is the rapid deterioration of the environment and the challenges posed by climate change. This is dramatically illustrated in Claudia Levy and Brigitte Kaufmann’s case study of southern Mozambique where agro-pastoralists have turned to charcoal production as a livelihood strategy resulting in deforestation and further destruction of their livelihoods. This commodification of nature is a growing phenomenon in Brazil, India, South Africa and other Southern countries. A sustainable developmental path will require livelihood strategies that do not further exacerbate insecurity.

Above all, the North, as Comaroff and Comaroff (2012: 14) argue,

is now experiencing those practical workings ever more palpably as labor markets contract and employment is casualized, as manufacture moves away without warning, as big business seeks to coerce states to unmake ecolaws, to drop minimum wages, to subsidize its infrastructure from public funds, and to protect it from loss, liability, and taxation. … Which is why so many citizens of the West – of both labouring and middle classes – are having to face the insecurities, even the forced mobility and disposability, characteristic of life in much of the non-West.

Insecurity is the theme of Guy Standing’s Work after Globalization: Building Occupational Citizenship. He argues that the restructuring of the global market economy has created a new class, which he calls the ‘precariat’:

They flit between jobs, unsure of their occupational title, with little labour security, few enterprise benefits and tenuous access to state benefits. They include the most fortunate of the vast informal economy. … the precariat is the group that has grown the most. … [It] comprises a disparate group in non-regular statuses, including casual workers, outworkers and agency workers.

(Standing 2009: 109–10)

But, argues Standing (2009: 239),

the political consequences of a globalizing labour market based on insecurity and inequality are frightening. Much of the remnants of the industrial working class in rich countries have drifted into the precariat, some have fallen into the detached albumenized stratum. As they have done so, they have turned politically to the right … [deserting] traditional parties of the left.

Faced with insecurity, persons tend to retreat into the familiar – their country, their neighbourhood, their homes, their family and their religion – and sometimes their ‘race’. Indeed, at times when the world faced similar levels of insecurity in the past, we saw the rise of some of the worst atrocities of human history. One author who reflected on such times was Karl Polanyi, who wrote his major work at the end of World War Two. At the forefront of his mind was the rise of fascism. Why do people turn to fascist leaders, and under what conditions does fascism become salient as a political ideology? It is no wonder that people are returning to Polanyi in order to make sense of the response to current insecurity.

In his classic study of the industrial revolution, or what he called the Great Transformation, Polanyi (2001 [1944]) showed how society took measures to protect itself against the disruptive impact of unregulated commodification. He conceptualized this as the ‘double movement’ whereby ever-wider extensions of free-market principles generated countermovements to protect society. Against an economic system that dislocates the very fabric of society, ‘the social countermovement’, he argued, ‘is based on the varying support of those most immediately affected by the deleterious action of the market – primarily but not exclusively, the working and the landed classes – and using protective legislation, restrictive associations, and other instruments as its methods’ (Polanyi 2001 [1944]: 138–9).

During the Great Transformation, early capitalism in the industrialized countries essentially constructed regimes of control around market despotism. The whip of the market was used to discipline workers. If they did not perform, they were dismissed. Since workers were treated like commodities – as objects – they lacked voice in the workplace and hence there was no regulation of conditions at work. However, as Polanyi showed, society took measures to protect itself against the disruptive impact of unregulated commodification. Society responded by making certain demands on employers and the state. The fear of communism and the strength of labour after World War Two encouraged the countries of the North to strike a historical compromise between capital and labour. New regimes of control were established based on the regulation of working hours, the setting of minimum wages, putting in place health and safety standards, and mechanisms for trade unions to organize and bargain collectively over wages – in short, various ways in which labour is decommodified and made less insecure. Central to this shift is the emergence of a form of counter-power to the power of management.

As the historical compromise of the North came under pressure in the 1970s and 1980s – the Second Great Transformation – so did these regimes of control. Burawoy (1985) argues that these made way for what he calls hegemonic despotism. This implies that the institutions of collective bargaining are now utilized to enter into a process of concession bargaining, where workers agree to the recommodification of their labour under the threat of factory closures or lay-offs. The ideology of globalization legitimizes this.

However, the Northern class compromise did not involve the colonies. There, the possibility of establishing hegemonic forms of control was constrained by coercive labour practices. The workplace regime was often based on what Burawoy (1985) calls colonial despotism. Because colonialism only partially penetrates society and only partially proletarianizes its subjects, options outside wage labour are still available to disgruntled workers. Hence in South Africa, coercive measures, including compounds and restrictive contracts of employment, are used as a form of control. The importance of ‘race’ in the occupational hierarchy and supervision should not be underestimated in the construction of this regime, as vividly illustrated in the South African case (Von Holdt 2003).

Similarly, partial proletarianization characterizes countries that have undergone prolonged colonization (Wolpe 1972). It could be argued that Lenin’s propositions on multistructural socio-economic formations are more relevant to India, Brazil and South Africa than Polanyi’s formulation of the European transition. In colonial situations, as Lenin argued, a number of socio-economic formations co-exist (Lenin 1920, cited in Lowy 1981: 65). In other words, capitalism is only one such formation. In India, for example, primitive accumulation exists alongside capitalism. In addition the caste system has excluded the lower castes (especially the scheduled castes, formerly called the untouchables) from the Great Transformation.

In the South there has been a transition to capitalism, but it has been uneven. This is not merely because of the coexistence of different socio-economic formations but also because this transformation happens within a capitalist structure. The existence of urban informal employment may be an innovative response to insecurity, but it also emphasizes the widespread use of manual, unskilled labour in the production process. Instead of contributing to a Northern-type transformation, it leads to the reproduction of traditional occupations within the urban informal sector. For example, the home-based workers in India are all from the lower castes who used to perform s...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of illustrations
• List of contributors
• Acknowledgements
• Acronyms and abbreviations
• 1 Work, livelihoods and insecurity in the South: a conceptual introduction
• PART I Urban and rural livelihood strategies
• PART II State responses to insecurity
• PART III Alternative development paths
• Index