Some Readings in Economic Anthropology

Perhaps in a subconscious attempt to distract myself from writing my dissertation prospectus I am currently taking an Economic Anthropology class [and loving it] with Jim Ferguson, author of Expectations of Modernity, among other famous works in Economic Anthropology.

The class has a fascinating reading list that includes works like Debt (by the anarchist David Graeber) and Karl Polanyi’s The Great Transformation, among other works in economic anthropology and general anthropological ethnography.

Over the past week we read Karen Ho’s Liquidated, a captivating ethnography of Wall Street, outlining how the recruitment, orientation and work experience of Wall Streeters give them both a false sense of being one in the market and a misguided belief that the real economy is just as liquid as Wall Street.

Reading the book gives one a better understanding of why Wall Street has no qualms with downsizing. Turns out they downsize a lot on the street, to the extent that it is only natural to them that the real economy ought to operate that way as well. It was one of  the most interesting ethnographies I have ever read (out of the five I have read thus far; most of them from some remote part of the world).

Watch this space for more takes on the class reading list as the quarter progresses….

 

selective unconditional convergence and growth

Rodrik has a finding that reinforces the importance of politics and other macro conditions for economic development. He points out the existence of the paradox of unconditional convergence at the industry level but not at the national level. Rodrik stresses the importance of structural change that channels labor into the right industries. To this we should add political change that provides certainty and the requisite legal and physical infrastructure for economic growth.

Industries that thrive in poorly run places – like telecoms, banks and construction firms in Nigeria or Kenya’s retail giants – do so despite their governments. Non-existent roads, underdeveloped railway systems, sporadic and expensive electricity, bad schools, legal uncertainty and massive amounts of political risk all serve to limit the extent to which within-industry gains can be extended to other sectors.

The massive uptake of mobile telephones across Africa suggests that consumerism in SSA is alive and well, just under-exploited. Sectors like textiles, agriculture and construction remain largely untouched because of cheap imports and bad regulation.

Development is a complex enterprise that requires massive amounts of (implicit) coordination. There has to be a link between California’s Silicon Valley, Massachusets’ Route 128 and New York’s Wall Street, in addition to other growth clusters. In this game synergy is King. The provision of the legal, human capital and physical infrastructure to facilitate coordination of this scale is largely dependent on well-functioning governance structures.

Here’s Rodrik.

Poor countries have access to new technologies already developed elsewhere so should grow more rapidly than richer economies. This is one of the implications of standard growth models, as well as of common sense.

But in reality, there is no automatic tendency for economic “convergence” among countries at different levels of income. Convergence depends instead on a number of additional determinants. It is only those developing nations with the “appropriate” preconditions – for example, adequate schooling or physical investment – that manage to absorb new technologies sufficiently rapidly and therefore to catch up. In the language of growth economics, there is conditional convergence, but not unconditional convergence.

When we look at the same question at the level of individual industries rather than countries a surprising finding emerges. Suppose we focus on, say, plastics, furniture, or the auto industry in developing countries. Does productivity in these (and other) industries experience automatic convergence with the technological frontier? Or is convergence once again conditional, depending on a host of country-level variables?

The interesting (and I think new) finding is that productivity convergence appears to be unconditional at the industry level – at least for manufacturing industries and for the period since the 1980s.