Artisanal Development and Institutions

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In the world of development economics, one paradigm has been widely recognized as the model for development – the so-called Washington Consensus. This model operated throughout the 1980s and 90s as the dominant vision of how developing countries could achieve economic growth. It was dominant, however, not because of its intrinsic value as the best model (as I’m sure most readers know, it was and is widely criticized as being biased towards the groups that benefit from neoliberal policies), but rather dominant because it was the paradigm adopted by the institutions with the money – the IMF and the World Bank, most notably. For various reasons (political, theoretical, institutional, etc.) it was believed that the Washington Consensus provided the only model that would achieve economic growth (which would eventually lead, it was argued, to decreased poverty and increased well-being).

The drastic failure of these policies when they were implemented in Latin America and Africa, however, eventually made it clear to all that the Washington Consensus was incapable of living up to its expectations. It couldn’t even achieve the growth levels it promised, let alone the promised derivative rises in the standards of living. Despite some stragglers who retain that their strict neoliberal policies are correct, and it’s merely these “other” cultures who can’t live up to capitalism’s promises, it’s widely recognized today in development economics that the Washington Consensus is a failure (even in its augmented form, which adds institutional reforms to its original trade and financial reforms).

What has become a mystery, then, to development economics is how does development proceed? Now there have been a multitude of answers put forth to this question, but the one I want to focus on here is that voiced by Dani Rodrik (One Economics, Many Recipes; and see here for a Crooked Timber discussion of the book: PDF). To be clear up front, Rodrik’s long-term goal is economic growth, which is itself a debatable aim. Others have suggested a larger set of aspirations such as human development, freedom and overall well-being. For Rodrik, as with most economists, these goals require economic growth to first raise individuals out of absolute poverty, so the goal of growth is simultaneously the aim of providing the necessary conditions for these larger aims. We’ll accept this line of reasoning here, but solely for the purposes of remaining focused on Rodrik’s project, and not because we necessarily agree with it (at least as it's formulated by most economists).

Now, unlike most economists who are well aware of the economy’s influence and power in world affairs, Rodrik explicitly proclaims that economists must become more modest. Despite their usual pretensions to mastery, they don’t, in fact, understand how development occurs and any rigid belief that they do is likely to cause the terrible consequences seen in Latin America and Africa. The first point to be noted with Rodrik’s approach therefore, is that he refuses the position of an authority that would stand outside of the context it’s working with. There is no single universal model of development that must be implemented without regard for the specific circumstances. Or, in more philosophical terms, there is no single form of development that can be forced upon a passive material. Rather each (the development ‘model’ and the country it’s applied to) has its own particular form and substance that must be taken into account.

What can development economists say then? For Rodrik, there are principles that can be followed – such as protection of property rights, guaranteed contracts, competition, appropriate incentives, and sound money. The trick is that these principles don’t map onto a single set of institutions or policies. In certain cases, what may be needed for economic growth is the liberalization of trade, while in other circumstances barriers should be retained (e.g. to protect nascent industries – Rodrik shows that developing countries, contra the principle of comparative advantage, initially diversify their industries rather than focusing on a single competitive industry). In order to implement these economic principles (which form what we might see as a ‘topological essence’ that admits of a multiplicity of actualizations), the individual responsible for development must take into account the singular tendencies involved in the specific situation. In other words, the economist must become an artisan working with the immanent material and its singularities rather than an architect independently modeling and commanding. To bring out the potentials involved in the situation, in line with the economic principles, the economist must have local and contextual knowledge. The artisan must experiment, playing with always uncertain tendencies and their ultimately unpredictable consequences.

One of the concrete examples Rodrik gives of this experimentation is China’s transformation. When globalization proponents speak of its benefits, they often point to the fact that globalization has decreased the number of people living in absolute poverty (less than a dollar a day). While factually true, the vast majority of these people live in India and China, the two most populous countries in the world. India and China, meanwhile, achieved their economic growth not by following the Washington Consensus’ principles, but by creating novel institutions and novel policies. They, in other words, experimented with the immanent conditions posed to them, and directed these tendencies towards the principles which produce sustainable economic growth. In China, therefore, the problem was of shifting from a system without private property to one with. As the experiences in post-communist Eastern Europe and Russia showed, this is not an easy realignment – it’s not at all clear how the previously nationalized industries and land should be delegated to private individuals, leading in Russia’s case to widespread corruption and the creation of numerous oligopolies. In China, on the other hand, land was delegated to families on the basis of their size, and industries were placed under the control of “township and village enterprises” or TVEs. These TVEs generated income directly for the community and so there was an invested interest to keep them profitable and to keep them honest and accountable. These TVEs, therefore, functioned to provide some of the economic principles outlined earlier, yet they operated within a society that found individual property rights to be alien concepts.

In another example, China liberalized its agricultural production, but only at the margins. In other words, the planned quotas were kept intact, but any surplus product could be sold for the benefit of the producer. Again, the ingrained habits and customs of the local population are kept, yet through a novel institutional setup, their potentials are extended into new fields and incited towards economic growth. The key to all of this is that there is not a priori model that could be used to produce these novel institutions, as though it were a matter of adding economic principle A to institutional situation B to get effect C. Each situation is radically singular and requires local knowledge to create novel institutions and policies. They are artisanal rather than architectural.

As a final note of curiosity, I’d add too that these sorts of examples are precisely in line with Deleuze’s thoughts on institutions formulated in his first book, Empiricism & Subjectivity. Contra psychoanalysis’s vision of the Law as limiting, Deleuze sees institutions as providing the positive means for instincts and tendencies to be expressed. They are positive constructions that extend our capacities rather than limiting them. “The institution, unlike the law, is not a limitation but rather a model of action, a veritable enterprise, an invented system of positive means or a positive invention of indirect means.” (46) The TVEs and the marginal liberalization undertaken in China were examples of this sort of positive institution that made possible new habits, new desires, and new material relations – one, moreover, that avoided that dire consequences involved far too often in the economic transitions of developing and post-communist societies.

A Critique of Populist Reason

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Ernesto Laclau’s latest (On Populist Reason) aims to elucidate the workings of populist movements – movements that have traditionally been academically marginalized as incoherent, irrational, and transitory. In these traditional academic studies of populism, the reason of the mass movement has been explained only in terms of what it lacks compared to a archetypal political reason. It has never, in other words, been given its own immanent explanation. As a result, Laclau sees himself setting out to examine this specifically populist form of reason.

As with any study, the first order of business it to ensure a clear definition of one’s object. For Laclau, populism is not defined by the content of its instances – there can be a conservative populism, as well as a leftist populism; a revolutionary populism as well as a reactionary populism. What defines the specificity of the populist movement is rather its form. Following upon his earlier analyses with Chantelle Mouffe in Hegemony and Socialist Strategy, Laclau will argue that the ‘people’ constitutive of populist movements arises from the establishment of a chain of equivalences. In other words, rather than taking the group as an already-established entity, Laclau wants to explain how groups emerge in the first place. A populist movement, therefore, is a particular way of organizing a group of people. To this end, Laclau takes as his “minimal unit of analysis” (72), the ‘social demand’. This is a simple enough concept – an individual has a particular grievance over some social problem, and s/he demands that the government (or otherwise relevant authority) do something about it. In its individual form, Laclau refers to this as a 'democratic demand' (highlighting the individualism as the center of democracy). But, with the repeated failure of the local authorities to resolve this demand, more and more demands arise. In the beginning, these demands are all separate and individual (say, one for poor schooling, and another for lack of health care access). Yet at a certain threshold, these democratic demands become articulated together through a common equivalence – they become specifically ‘populist demands’, made equivalent through their common antagonist (real or imagined).

Laclau goes on from here to build an entire edifice upon these basic foundations, examining how populist movements congeal into something more than a transitory phenomenon (through master signifiers), and how the purported irrationality of the crowd in fact has its own reason ('irrational' rhetoric is one major way to articulate a group identity and establish a master signifier), among other insights. But for our purposes, I want to raise the issue of whether or not the demand is a viable ontological unit to begin with. The problem here isn’t a theoretical one (although it may be that too), but rather an empirical one – important studies of conflict have found that grievances play a very small role in predicting the likelihood of a mass movement arising and fighting for its demands. If grievances are rarely correlated with the occurrence of conflict, then despite the theoretical elegance of Laclau’s formulation, it seems we must simply declare that it is not validated by the facts.

The acute reader will note an elision in process already – the slight shift from a discussion of populism to a discussion of conflict. Our justification for the combination of these two is that populism is a form of conflict. Either open and violent, or hidden and subtle, populism is a struggle against an antagonistic other. While the conflict in question here focuses on the most openly violent form (namely, civil war), it is nevertheless clear that civil war is the ultimate form of the populist logic that Laclau outlines – namely the antagonistic drawing of a line between two adversaries, formed through an equivalential logic and structured according to a master signifier. If this ultimate form doesn’t adhere to Laclau’s logic, then it can plausibly be argued that the pre-civil war antagonisms won’t be found to adhere to it either.

With that in mind, let’s look at the most notable study to find that conflict isn’t based on grievances or social demands – Paul Collier and Anke Hoeffler’s controversial “Greed and Ignorance in Civil War” (for some qualifications of their paper, see Chris Blattman and Edward Miguel's comprehensive review of the civil war literature here - in particular, pages 31-34). Collier and Hoeffler's basic premise is simple: it is not the scarcity of motivations for conflict which accounts for the rarity of civil wars, but rather the infrequency of the opportunities which explains the rarity of civil wars. Looking at the data from 750 five-year samples during the period from 1960-1992 (including both peace and conflict samples), they come to the conclusion that grievance variables have only a minor statistical significance on the likelihood of civil war. It is rather the opportunity variables (defined by the economic costs of starting a rebellion) that are most determinant when it comes to predicting the likelihood of a violent conflict. These include the proportional size of the natural resources extorted (more resources meaning more money for financing a civil war), the proportional size of the diaspora and the capital received from it, the foregone costs of joining a rebellion (e.g. it is cheaper to join a rebellion if one need not give up a well-paying job), and the geographical distribution of the population (with greater dispersion making it easier for a rebellion to mobilize outside the government’s reach). In terms of grievances, an ethnic majority has some significance, but only to a point – past a certain threshold, increased fractionalization appears to make it less profitable for the majority to exploit small minority groups. Without this economic incentive, the chances of violent conflict drop. Notably, grievance variables that Laclau would cite – such as political repression, inequality, ethnic polarization and religious fractionalization – add no significant explanatory value on top of the other variables. Collier and Hoeffler’s controversial conclusion, therefore, is that grievances play only a small part in the genesis of conflicts, relative to the economic costs and opportunities. This being the case, where does it leave Laclau’s analysis?

To be certain, Collier and Hoeffler's study doesn't disprove the validity of grievance-based theories - their results are also consistent with grievances being widespread and long-lasting, with the rare economic opportunities being what allows these base-level grievances to be voiced without necessarily decimating one's financial standing. In this theory, grievances would be a near constant, and opportunities the important variable. If that's the case, however, Laclau's theory of populist movements is underdetermined. While significant for recognizing the need and role for master signifiers in the construction of a 'people' and its continuation throughout a prolonged period of struggle, Laclau's populist reason ultimately is unable to account for the emergence of a populist movement in some situations and not others. Why, for example, do widespread grievances often go uncontested by any group of people? Collier and Hoeffler, while admittedly focused on civil wars, answer by pointing towards the mundane economic costs and opportunities that facilitate protest, rebellion and contention. In a sense, perhaps, what Laclau requires is a more developed theory of how individuals are attached to their everyday lives, prior to becoming involved in a populist movement. He's well aware of the intense attachments that can be sparked in the midst of a populist uprising, but seems to neglect how certain attachments to one's everyday lifestyle can make the cost of rebellion seem prohibitively unattractive. Relatedly, if these attachments shift as a result of material changes (influxes of capital from resources and diasporas, shifting geographical distributions of people, cheaper foregone costs, and even rainfall shortages), it perhaps also points to the ways in which desire is altered as a result of its embeddness in a dynamic socio-economic-natural context.

[UPDATE:] For an alternative perspective on similar issues, see Understanding Society's post, "Moral Economy as a Historical Social Concept".

[UPDATE #2:] And for even more, see Jon's in-depth discussion of populism, Laclau and other topics here.

Speculative Heresy

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I'll return to some more substantial posts soon, but for now I just wanted to point anyone interested in speculative realism over to a new group blog that Ben from Naught Thought, Taylor from Fractal Ontology, and myself have started up: Speculative Heresy.

Our hope for the blog is for it to provide a central English website for resources on speculative realism, non-philosophy and the like. For the moment, the website is still in the construction phase, but it's being added to everyday, and there's already a few posts up to read, including some translations. So with any luck, the blog will rapidly grow and ideally become a great place for the discussion of all the issues surrounding speculative realism.

New Badiou Journal Issue

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The upcoming issue of Symposium promises to be an interesting read, devoted as it is to a look at Badiou's work from multiple angles. It includes a discussion between Badiou and Simon Critchley on ethics and Infinitely Demanding, as well as numerous other intriguing articles from the likes of Alberto Toscano, Gabriel Riera, Todd May and Tzuchien Tho, among others. My own piece managed to find its way in too, and I'm rather honoured to be included among such preeminent Badiou scholars. The whole issue (and indeed, the journal itself, which has been consistently great) comes highly recommended!

[UPDATE: Here's a copy of my own contribution.]


ALAIN BADIOU: SYMPOSIUM: Canadian Journal of Continental Philosophy/Revue canadienne de philosophie continentale

Preface: Alain Beaulieu (Laurentian University): A general discussion of who Badiou is and why his work has been so influential in Europe and abroad.

Introduction: Antonio Calcagno (King’s University College): Presentation of the themes, authors and content of the volume.

I. Alain Badiou and Simon Critchley: Alain Badiou on Infinitely Demanding, Slought Foundation, Philadelphia, November 15th, 2007 [A Discussion between Simon Critchley and Alain Badiou on finitude and infinite ethical responsibility]


II. Tzuchien Tho (University of Hong Kong): The Consistency of Inconsistency: Alain Badiou and the Limits of Mathematical Ontology


III. Nick Srnicek: What is to be Done? Alain Badiou and the Pre-Evental

IV. Jeff Love and Todd May, (Clemson University): From Universality to Equality: Badiou’s Critique of Rancière


V. Gert-Jan van der Heiden (Radboud University Nijmegen): The Scintillation of the Event: On Badiou’s Phenomenology

VI. Gabriel Riera (University of Illinois at Chicago): “Living with an Idea”: Ethics and Politics in Badiou’s Logiques des mondes


VII. Nandita Biswas Mellamphy and Dan Mellamphy (UWO): Paulitics

VIII. William Rowe (University of Scranton): Badiou and the Excluded Sacred


IX. Alberto Toscano (Goldsmiths, University of London): Emblems and Cuts: Philosophy In and Against History