Monthly Archives September 2019

The End of the African Mining Enclave? by Ben Radley

The End of the African Mining Enclave? by Ben Radley

During much of the twentieth century, the African mining sector was seen by many as an enclaved economy, extracting resources to the benefit of the global economy while offering little ...

What is happening to civic space in India? by Nandini Deo, Dorothea Hilhorst and Sunayana Ganguly

What is happening to civic space in India? by Nandini Deo, Dorothea Hilhorst and Sunayana Ganguly

We were fortunate to be part of a two-day workshop on civil society relations in India, organised in the framework of a research on advocacy in the Dutch co-financing programme. ...

Are We Having One or Two Capitalist Crises? Mapping Social Reproduction in Capitalism by Maryse Helbert

In June, a colloquium called ‘capital accumulation: Strategies of Profit and Dispossessive Policies’ was organised for the 50th anniversary of the University of Paris Dauphine. The colloquium provided a snapshot of the current debates and concepts within the field of Marxism. The discussion between the main key Marxist speakers – David Harvey and Nancy Fraser– revolved around conceptualising various challenges that capitalism is facing. The different conceptual mapping of the crises provides different paths to emancipatory changes.


Capitalism is facing many heterogenous ills: Economic, financial, environmental and care deficits. Harvey analyses these ills under the single umbrella of economic crisis that found its origin in the contradictions that the capitalist system carries. Basically (and we all know the drill), capitalism is a process of circulation. Capitalists put some money to buy labour power and means of production, make them work together under a given technology and organisation to produce a commodity that will be sold on the market for a value. In this process, workers are not being paid according to the value they have produced but rather are being paid wages that barely cover the socially necessary costs of their own reproduction. The difference between waged labour and the real value produced by the workers fuels capitalist profit. Given that the capitalist system is a process, a part of that profit has to be capitalised and put again into circulation to extract more profit. The quest for more profit compels capitalists to promote endless growth rates.

In David Harvey’s view, the two classes’ social relations of exploitation are at the crux of the accumulation process of capitalism, overaccumulation and consequent crisis. Overaccumulation as a crisis is defined as surpluses of labour and capital which cannot get together in a profitable enterprise. In this understanding, social reproduction of labour and nature are what Harvey calls free gifts for the capitalist system and are not conceptualised as independent mechanisms of accumulation.

The economic crisis or overaccumulation gets temporarily solved through spatio-temporal fixes or what Harvey also calls accumulation by dispossession[1]. The crises of capitalism are being temporarily tamed by geographical expansion and restructuring. Indeed, capitalist accumulation works within a fixed space where there are built environments such as transport, factories, roads etc. leading to dispossession of the local population to produce profit. The process of capitalism destroys the space as it needs to increase profit through growth. Once the space is destroyed, at a later point, capitalism re-creates a new space to reproduce the capitalist system of overaccumulation. So, this process of creation and destruction is at the very core of globalisation and understanding the geographical principles of globalisation will help to find a path for emancipatory changes.

While Fraser agrees that the crux of accumulation lies in the two classes’ social relations, she thinks that this view is too narrow[2] as it focuses only on social processes and social relations that are accorded value in the capitalist system by the capitalists and that the capitalists themselves define as having economic value. It does not integrate the non-economic phenomena of global warming, care deficits and the hollowing out of public power. Rather, Fraser believes that currently, capitalism is having two crises: the economic and the non-economic crisis. While the economic crisis is the one described by Harvey, the non-economic crisis is coming from activities which are not recognised by the capitalist system. The non-economic activities are the borders of the capitalist economy. These activities are for instance the non-wage labour of social reproduction which provides the supply of labour but also activities such as social bounds, solidarity and forms of trust. There are other spaces than the private home where activities of social reproduction and its associated care activities are occurring. For instance, public education and health care systems as well as leisure facilities are all part of the activities of care. Slavery and immigration are the two most common ways capital has replaced labour. The separation between social reproduction and production enables capitalist forms of women’s subordination while being the indispensable background precondition for the possibility of capitalist production (Fraser, 2014).

Particularly, Fraser focused on the crisis of the activities of social reproduction.  The division between social reproduction and production have shifted overtime. In the 20th century there has been mutations of social reproduction activities within the state. After the Second World War, some aspects of the social reproduction moved from the realm of the private home to the realm of public services and public good while in the Neoliberal era, social reproduction and care mutated from the realm of public services to the realm of the market forces.

The last mutation has accentuated care extractivism and hence the crisis of care. The concept of care extractivism as development by Wichterich is an analogy to the concept of resource extractivism and posits the increasing reliance of the extraction of care, through commodification and, economisation in the market forces . For instance, this concept can be used for transnational reproductive networks where the Global North recruits through the free market care workers from the Global South to provide care activities. This process creates a deficit of care in the family of the care worker of the global south. In other words, care workers who work in a family in the Global North do not have as much time for their own families in the Global South. As Wichterich argues, the neoliberalisation of care ‘depletes care as commons in societies and families of the Global South’. Moreover, the extraction of care workers in the Global South are not the only source of crisis.

The neoliberal mutation has led to a deficit – crisis – of care in other domains. It has led to a deficit of teachers and care givers because the state abandoned supporting these public good services. It also has led to a deficit of the quality of care as the persistent drive for growth and expansion while focus on profit has pushed capitalism to intensify efficiency to reduce costs. As Witchery points out, in many domains such as industrial process, efficiency can lead to quality. However, care is different. For instance, it is not possible to increase efficiency and productivity of feeding a baby or a dement person. It means that the emphasis of efficiency to cut on cost will impede the quality of the care provided.

Last, the privatisation of care has reconfigured the gender and race order as these activities are mostly carried out by cheap workers constructed along social hierarchies of gender, class, race and North South and, post-colonial division. By looking at social reproduction and care extractivism, Marxist theory opens up then to feminism, and colonialism while still acknowledging class struggles.

Mapping social reproduction is at the core of Marxist discussions. While traditional Marxists such as Harvey places it at the point of production and value, others such as Fraser wants to go at the border of the capitalist activities and consider social and care activities that occur outside and inside the private home. It also recognises social resistances outside class struggle such as movement for free education or free childcare. Finally, the points of resistances at the border of the capitalist system can be seen as sources of emancipatory changes.


References
[1] David Harvey, “The ‘New’ Imperialism: Accumulation by Dispossession,” Socialist Register 40 (2004): 63–87.
[2] Nancy Fraser, “Behind Marx’s Hidden Abode: For an Expanded Conception of Capitalism,” New Left Review 86 (2014): 55–72.

Mryse.jpgAbout the author:

Maryse Helbert is a Post-doctoral Research Fellow at the ISS. Prior to that, she was a Post-doctoral Research Fellow at the Rachel Carson Center for Environment and Society. She has been an advocate for women’s rights for decades, having worked for AWID (Association for Women in Development), DIPD (Danish Institute for Parties and Democracies), and she is a gender-based violence research expert to achieve the Sustainable Development Goals for the United Nations Development Programme. Taking an ecofeminist approach, her PhD looked at oil industry and its economic, social and environmental impacts on women in three countries. In her latest work, she takes on the lessons learnt from the fossil fuels industry to explore the challenges of a post-carbon society.

 

 

Legal mobilization to end impunity for international crimes by Jeff Handmaker

Legal mobilization to end impunity for international crimes by Jeff Handmaker

In 2014, on the 20th of July, the Israeli military targeted and bombed a home in a refugee camp in Gaza, killing several family members of Saad Ziada, including his ...

Can technology ‘decode’ developmental problems? by Oane Visser and Manasi Nikam

Can technology ‘decode’ developmental problems? by Oane Visser and Manasi Nikam

This article presents an interview with Dr. Oane Visser, Associate Professor in Rural Development Studies, at the International Institute of Social Studies. It shows ways in which technology can be ...

Do Natural Disasters Stimulate Trade? by Chenmei Li

Typically, disasters are seen as disruptions of normal economic activity and thus reducing trade. However, the existing empirical evidence for a negative relationship between disasters and trade is contradictory. On the contrary, it has been recognised that disasters may stimulate trade. How come? And what are the policy implications of this finding?


While this article deliberates on these central questions in brief, the motivation to write this article stems from my recently published collaborative work (Li and van Bergeijk 2019 in Nitsch and Besedes) on the same subject where this topic is discussed in greater detail.

Ensuring economic resilience and preventing trade disruptions has been an important issue for research and policymaking. The impact of natural disasters, closely related to this issue, is thus a topic of rising relevance for development studies. This is particularly true for countries that suffer often from natural disasters, especially the Small Island Development States (SIDS). In general, the occurrence of natural disasters has also been increasing over the past decades.

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Pic 2.pngFurther, disasters are commonly seen as disruptions in the normal economic activity and thus causing reduction in trade (e.g. Gassebner, Keck and Teh 2010; Oh and Reuveny 2010; Martincus and Blyde 2013; Hayakawa, Matsuura, and Okubo 2015). However, the existing empirical evidence does not convincingly support a negative relationship between disasters and trade, both when it comes to imports and exports (Li and van Bergeijk 2019).

Creative destruction

Disasters could also potentially impact trade positively, as recognized by more recent studies, through demand, technology upgrading and firm productivity. For example, disasters generate import demand in order to replace the lost production (Adam 2013). From a supply side perspective, Pelli and Tschopp (2012) pointed out the creative destruction aspect of disasters, supported by micro evidence from Yogyakarta Indonesia (Brata, De Groot and Zant 2018). The evidence suggests that the 2006 earthquake in Indonesia had a ‘cleaning effect’ on the manufacturing sector, forcing out unproductive firms, and opening rooms for new firms, which are recognized to be even more productive and have higher productivity growth than the surviving firms.

Recent macro level empirical evidence from 63 countries supports the counterintuitive idea discussed above (Li and van Bergeijk 2019). The main finding is that the natural disasters are associated with higher trade growth, both regarding imports and exports. In addition, the evidence suggests lower level of development is associated with higher disaster resilience. In particular, Least Developed Countries (LDCs) appear to have higher trade resilience, possibly due to better access to aid and greater awareness of the aid community. Preliminary evidence suggests Foreign Direct Investment (FDI) enhances trade resilience by different mechanisms for imports and exports. The enhancing effect for imports is associated with FDI flows while for export it is linked to FDI stocks. It is suggested that the political system, i.e. level of democracy, the often-assumed significant factor to resilience, is not determinative.

Implications

What does this finding imply? First of all, the study suggests that trade is even more important than normally thought. The countries that encounter more natural disasters, i.e. SIDS, are often the ones that largely depend on global markets. In a world of de-globalization (van Bergeijk 2019), trade resilience and preventing trade disruptions should be given attention for research and policy-making, and should be considered as a global joint task.

Second, mechanisms that are primarily discovered to cope better with, or even take advantage of natural disasters, offer new insights to policy makers. For example, giving priority to attract FDI could be an effective method to remain resilient. After natural disasters, a group of new firms with great growth potential is likely to emerge. Providing appropriate support to these firms could contribute to better economy. However, this requires more research on firm behavior after a natural shock as suggested by Brata, De Groot and Zant (2018).

It may be difficult to conclusively state whether disasters are good or bad for trade. The conclusiveness suffers from limitation of econometric methods. And there is a lack of country case studies on this subject. However, the importance of trade and investment flows for the resilience against natural disasters is clear. This gives extra reasons for policy makers and the international communities to be alert to possible trade disruption. This might be of particular significance given the current global dynamics, where the China-US trade war, Trumpism, and Brexit often dominate the headlines and create threat to global trade.


References:
Adam, C. (2013). Coping with adversity: The macroeconomic management of natural disasters. Environmental science & policy, 27, S99-S111.
Bergeijk, P.A.G. van (2010). On the Brink of Deglobalization: An alternative perspective on the world trade collapse. Deglobalization 2.0
Brata, Aloysius GunadiA.G. & de Groot, Henri H.L.F. & Zant, Wouter. (2018). Shaking up the Firm Survival: Evidence from Yogyakarta (Indonesia). Economies. 6. 26. 10.3390/economies6020026.
Chenmei Li and Peter A.G. van Bergeijk. (2019). Do Natural Disasters Increase International Trade? In Nitsch, V. and T. Besedes (eds), Disrupted Economic Relationships, MIT Press: Cambridge, MA. (Book chapter A). https://mitpress.mit.edu/books/disrupted-economic-relationships
Gassebner, M., Keck, A., & Teh, R. (2010). Shaken, not stirred: the impact of disasters on international trade. Review of International Economics, 18(2), 351-368.
Hayakawa, K., Matsuura, T., & Okubo, F. (2015). Firm-level impacts of natural disasters on production networks: Evidence from a flood in Thailand. Journal of the Japanese and International Economies, 38, 244-259.
Oh, C. H., & Reuveny, R. (2010). Climatic natural disasters, political risk, and international trade. Global Environmental Change, 20 (2), 243-254.
Pelli, M., & Tschopp, J. (2012). The Creative Destruction of Hurricanes. http://www.freit.org/RMET/2012/SubmittedPapers/Martino_Pelli03.pdf.
Trade and Openness During the Great Depression and the Great Recession Edward Elgar: Cheltenham.

About the authors:

Chenmei

Chenmei Li is currently a Project Specialist at Institute of New Structural Economics at Peking University, Beijing. She was in Economics of Development program, Batch 2014-15 at ISS. During the program she worked with Professor Peter van Bergeijk on the DEC research project “Crisis, deglobalization and developing countries”.pag van bergeijk

Peter van Bergeijk (www.petervanbergeijk.org) is Professor of International Economics and Macroeconomics at the ISS.

 

 

The credibility problem of United Nations official statistics on Internally Displaced Persons by Gloria Nguya and Dirk-Jan Koch

The credibility problem of United Nations official statistics on Internally Displaced Persons by Gloria Nguya and Dirk-Jan Koch

Our research, notably Gloria Nguya’s PhD research, which she recently defended at the ISS, focused on Internally Displaced Persons (IDPs) in urban settings in eastern DRC, particularly Bukavu and Goma. ...