2nd Workshop on Popular Economies in South Africa
LSE, 24th-25th May 2010
WORKSHOP SESSION 1
“Don’t throw away the cradle because of the death of a child”: Deception, simulation and a “get-richquick” culture in the context of increasing economic inequality and the financialisation of everyday life
Author:
Detlev Krige
Discussant: Fraser McNeill
Detlev Krige:
Let me start with the aim of this paper: On a previous workshop I presented a paper based on a case
study of Miracle 2000, and Sibusiso Radebe, and tried to develop some conclusions based on one
specific case study, trying to understand the techniques that informal pyramid schemes utilized in order
to attract people, trying to understand why they are popular.
So I tried to draw some conclusions on a mid-analytical level. This time I decided to do a combination
of both a longer ethnographic introduction coupled with ideas about the broader context of
contemporary South Africa.
And in the process I appropriated a couple of concepts from other literature in order to make sense
about the current political economy in South Africa.
So it’s part ethnographic. It’s part historical reflection. It’s a sort of a complementary narrative about
change in South Africa to move from relative forms of certainty to uncertainties. And then also about
structural conditions in South Africa at the moment.
When I talk about structural conditions in contemporary South Africa – I am interested as an
anthropologist in both the objective fact of those conditions such as increased inequality, but also the
experiences of people. How they talk about increased inequality, what role that plays in their lives,
what sort of subjectivities are produced under those conditions, and ultimately citizens’ expectations.
So there is always those subjective and objective dimensions to these structural conditions. I find the
idea of a public culture very useful, also to avoid the history of what in South Africa is called racialised
fetishism. So the idea of a public culture is also to transcend older divisions arising from studying
“black people”. The term public culture tries to bridge that and hopefully opens the way and also
allows us to explore how the media and how advertising are shaping citizens’ expectations and public
culture.
So it’s slightly uneasy because it moves between various micro and macro levels, but that in a sense is
also the challenge.
The story of broadening inequality is fairly central to what is happening and the question is how that
plays into the very operation of pyramid schemes. I think the state is increasingly central to what many
of the papers are talking about.
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The state is not only part of this redistributive regime. There is a value in using the term to ask why
redistribution has become prominent in post-apartheid South Africa as opposed to production or
exchange. Why are scholars focusing on that term? One reason is that the nature of the post-apartheid
state means that wealth transfers are central to how it is governing, both in terms of Black Economic
Empowerment, and welfare grants.
For a number of reasons the post-apartheid state seems to govern through the redistribution of wealth,
piggy-backing on very strong or developed financial infrastructure.
So wealth transfer is not necessarily happening in the domain of property rights, but it happens on the
level of transfer of wealth through the field of finance. It’s either through grants or through debtfinance, Black Economic Empowerment.
And this is where I found the concept of financialisation to be useful: to talk about both the historical
process of the increasing importance of finance in the financial services industry on both micro and
macro levels, but also as a way to capture something about the increasing influence politically of banks
and also the finanacialisation of everyday life – specifically through advertising, marketing. This is
different from monetarisation, which is the incorporation of non-monetary economies into a monetary
system. This is specifically about financialisation. In the literature, this is said to involve the hollowing
out of standard economic definitions. So much so that the definition of say “speculation” and
“investment” is increasingly challenged and is given the logic of finance in financial markets. And that
plays out in how banks and cell-phone companies in South Africa advertise. And the sort of images of
the good life, personal wealth management, how their marketing campaigns create certain citizens’
expectations, certain subjectivities.
So the idea of financialisation tries to capture that, and I think this is important because when we talk
about financial literacy (and its something that is crucial to understanding finance in South Africa) it’s
not just a case of “people are illiterate because of a lack of educational campaigns, misdirected
campaigns, or even a lack of education under apartheid”, it’s also because of the hollowing out of the
standard definitions of the economic terms, and also on top of that the deliberate attempt by banks and
the financial industries to create confusion. It’s not as if they are particularly helpful in educating
people. Instead they see in this moment – call it a post-modern moment of confusion around what is an
investment and what is speculation – an opportunity to exploit that.
So in this context of redistribution - the transfer of wealth - the concept of rent seeking is also quite
important, usually defined as the socially costly pursuit of wealth transfers.
Where redistribution becomes an important part, or where that part of the economy is emphasized or
where it plays a bigger role in terms of governance or in governing, it creates a lot of opportunities for
rent seeking, brokers. Intermediaries arise and they use this growing feature of the economy that is
often not well regulated as an opportunity to pursue wealth.
And there is an ethnic dimension to this. In South Africa in many of the financial services sector are
dominated by Afrikaners who would previously have worked in the financial services industry or in the
civil service, and because of affirmative action have retreated from the state and have created these
other financial industries, micro-lending for example.
But also in pyramid schemes. So both the legal and the illegal financial sector are dominated by people
who had retreated from the state and are now active in this new context.
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Fraser McNeill:
Basically this paper deals with the notions of deception, simulation and speculation and the
financialisation of everyday economic practices in the context of increased economic uncertainty in
post-apartheid South Africa.
I like the notion of the title – which basically means “Don’t lose hope” and that rings true with me. A
lot of Venda proverbs are based on that “perseverance” which is similar to your notion, in the context
of increased economic uncertainty. Perseverance is what you are trying to get at in the title.
The opening vignette I enjoyed. A pyramid scheme which gives away air time and money the more
people you can recruit into the scheme. Not surprisingly it just collapsed at the end, and it gave us a
sense of how schemes seemed to pop up and topple down with great frequency, and I got a sense that
the people who were involved in this were not surprised that it collapsed.
It raised the question of the different modes of intentionality for the people that attend these things. It’s
clearly not just about money. There is some wider sociality involved: people seem to be checking out
the competition, and there may be a sense in which these schemes are trying to be the next best thing.
But everyone knows that there is a slim chance that they are going to be. So the ethnography hinted at
what people were not seeing about this: for me that was a very interesting ethnographic dynamic that
could have been played out a bit more.
You raise an important question about the use of language. You talk about investing and gambling –
Illana also raises this point in her paper – I think it’s a very important point that these terms have
multiple meanings. We don’t necessarily use these terms in the same ways that our informants might
do. This is certainly the case in Venda where I was asking people about investments that they make.
People don’t use that in terms of money at all – they use it in terms of relationships with traditional
leaders and investing in traditional leaders through initiation schools, and through various forms of
patron-client relationships.
So it shouldn’t be assumed that we’re singing from the same hymn sheet in terms of the language that
we use when we are in the field. It’s something that we should be sensitive to in our discussions and
fieldwork.
You also raised the notion of new forms of dependence on the state in post-apartheid South Africa.
One is welfare – notions of potential distributional economy which seems to be taken well care of in
the literature. A new form of dependence is that of tenders. You give good background about the term
“tenderpreneur” and where it came from – Blade Nzimande and the Communist Party, and various
other politicians and businesses. Although you didn’t mention Malema who recently sang “kiss the
boer, and shoot the killer”.
An important point to remember in terms of this tenderization and tenderpreneurs, its not as ubiquitous
as we might think and there are a lot of parts of South Africa that are far away from tenderization –
there are spaces that seem to be away from that. So we must remember, even though it’s in the media
and we talk about it a lot, there’s places that aren’t affected by it.
Financialisation: I was confused by how you used this term, to discuss the global nature of capitalism. I
thought at one point you were trying to criticize it and say it doesn’t really capture the character of
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tenderization and the nature of debt-ridden BEE. I’d like you explain the way that you are using it as a
useful analytical term.
You talk about gambling under the apartheid government, and say that you can relate to post-apartheid
uncertainty – employment insecurity, crime and AIDS, and you argue (and I would agree) that people
are unsure how things work and aren’t able to explain how things happen. This raises the issue of
nostalgia for apartheid which is certainly the case in Venda. And a framework of this could be a
Comaroffian perceived crisis of social reproduction, within which magic works to secure capacities to
act meaningfully in the world.
I would argue that this is not a romanticized analytical inhibitor. For many informants, life is controlled
not by what we can see and touch but by the invisible forces that, whether we like it or not, are of great
significance for how most South Africans see the world.
Ilana van Wyk:
… there was a book published by Dlamini, Native Nostalgia, which has less to do with the invisible
and so on, showing that this nostalgia is a lot more complex. It is not just about stability – there’s a lot
of complicity, a lot of guilt involved because not everyone was protesting apartheid. That’s why it
continued working.
Maxim Bolt:
… you contrast a particular type of uncertainty of the apartheid era with the kind of uncertainty now –
obviously its not necessarily a rosy certainty in the past. People know what their role is supposed to be
but it’ not necessarily what happens. I want to know if that can be complicated by the different kinds
of uncertainty. One kind is to do with your livelihood but there are other wider everyday risk
uncertainties characteristic of the apartheid era, for example, going to work you ran the risk of being
harassed and being put on a farm. So that’s a particular kind of uncertainty you are contrasting.
Detlev Krige:
Partly why I moved to a more view geographical mode when I wrote that section is because I don’t
have enough sources – historical or ethnographies from the apartheid days that can make those
arguments or that can document those realities.
Fraser McNeill
There’s a real sense in which under apartheid you were more likely to have a job… There is a very
perceived crisis about how people are going to continue their family on.
Deborah James:
I know you say that this is a paper in which you are primarily discussing ideas, and that the
ethnographic part doesn’t necessarily connect intrinsically to it, but can you say more about how the
idea of financialisation helps you to understand the specific case you have put forward and how it
connects to the Radebe example you gave. As Fraser said you are using it in two ways: you try and
criticize the concept and say it doesn’t capture what its supposed to, but you are also using it. You are
criticizing one version of it and say it could be a different thing.
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DK:
Its used as both micro and macro level concept. On the macro level it is about international finance …
Fraser McNeill:
To quote you: “It does not address or capture the pervasive inputs of the financial sector, logics of
tenderization, state procurement practices… “
DK:
Maybe I’m not clear but there I am critiquing Ben Fine’s view of financialization. As a political
economist he focuses on the growth of the financial services industry in South Africa, but he disagrees
with the concept and its applicability to South Africa.
I would say the other sense in which the concept is used is more on a micro level. People such as
Randley Martins talks about how through marketing, advertising, and through the development of new
financial instruments, people are socialized into the logic of finance. This happens through toys,
through plans of personal packaging. So I want to use the concept on both levels.
There’s definitely something happening with South Africa’s incorporation into financial markets. It
contributes more than mining to GDP so there are structural changes that have taken place.
But the concept also captures something about everyday life – about the sorts of images of the good
life, about wealth, that are circulating in the media and the public culture which I find is very
influential. In fact it’s more influential than state discourse on issues of wealth or financial
management.
Whereas the state is very important in this, in facilitating the redistribution of wealth – the images and
discourse that accompany the material transfer of wealth do not emanate from the state but often from
the media and from financial service providers.
So what I’m trying to say, and I need to spell it out better in the paper, is that I think the concept is
useful in both those senses – on a historical macro level argument, but also on the level of everyday
life.
And exactly how that links to my specific case studies, such as Radebe, is still something I need to
work out. But what I want to do here is insert this concept perhaps into a discussion that is linked to
the narrative about neo-liberal policies, financialisation and this move from – a move that seeks to
explain the rise in apartheid nostalgia. I think there is something important there.
Sophie Chevalier:
I wonder if on a micro level you shouldn’t use the term monetarisation - I’m not sure if I understand
what you say, because it gives the impression that before money was not so important to get things.
Compare with Eastern Europe, where people didn’t need so much money to get things before whereas
now money is very important. They need to know how to operate this money, how to open an account
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in the bank and so on during the 90s. It also created a big nostalgia for socialism where you didn’t
really need money, and you could get things without money.
DK:
Its not the same. I think money is not something new in SA.
SC:
Its not new but it determines whether you get things. Maybe extend it?
DK:
That’s not what I’m trying to capture here. I think this is slightly different, and it relates specifically to
the financial services sector.
Ultimately I see parallels between what’s happening in formal finance and informal finance – the
pyramid schemes and how they play off each other, how they simulate each other, and the role of the
state in both informal financial schemes and formal financial schemes.
So its more than just about the monetarisation. It is perhaps narrower than that.
IvW:
I have a question about the historical dimension – this shift that you are talking about – there is a lot of
evidence in KwaZulu-Natal especially, about people starting with moloswano which is peoples’ bank.
They were run by mission churches. People joined banks, they joined a lot of these pyramid schemes,
they had to fill in cards with their budgets on it. It was part of the mission project since 1940. Part of
the mission project was to educate people – it was part of being civilized Christians – to know how to
work with your money and to budget and how to invest it.
So there were a lot of banks around back then. I don’t know that this is so much a shift and if
financialisation is that new.
DK:
What the concept of financialisation tries to do is say that aspects of it is new. Of course these things
have been around for long, Paul de La Hausse writes about these things from the 1940s. But back then
the influence of international high finance didn’t impact on the operation of those churches.
And this is something that has changed given the conditions of globalization, the importance of
financial markets, and of information technologies, which has allowed the logic and the rhetoric of high
finance to penetrate peoples’ everyday lives in a way that was not possible in the 1940s.
CA:
But the pyramid scheme you described you also said very explicitly that it wasn’t influenced by
international links or …
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DK:
Perhaps not on the level of organization but on many other levels.
DJ:
I would like to ask again to try and push you a bit more even if you haven’t written about it, to bring
out a few more of the things you found out from actual investors in these schemes – do they in fact
conceptualize it in the same way? There’s a lot of mimesis going on: you have the financial role and
then you get people doing pyramid scheme investments. Do they do it in that way or do they do it as
one of a package of things - including the lottery? Do they take their grants and invest these in the
pyramid schemes? How do the schemes interact with the other financial instruments? Are they just
mad people going for these schemes, or are they just doing it on the side as a little bit of a flutter, while
they are at the same time lending money out to other people for a more stable income?
DK:
It’s an important question. I don’t have the data to make arguments about exactly what role his plays in
relationship to other things or whether they play the lotto as well, or whether they gamble.
There was a sense in especially the pensioners that I interviewed that a lot of them also play the lotto, a
lot of them gamble. And many of them, especially the middle class pensioners that I spoke to, and
these were mainly women, conceived of their participation in these schemes as a form of gambling,
which was contrasted with working class women who would emphasize their vulnerability, higher cost
of living and so forth.
So there was a sense in which middle-class pensioners who played these schemes were doing it
knowing that they were gambling and as a form of leisure time activity. And often they would move
between these informal schemes and formal ones. In other words, formally registered, multi-level
direct-sales companies.
In their eyes there wasn’t this stark distinction between participating in one or the other. It’s very
difficult to give a sense of the scale: like, is it a small group of people who participated in it? My
sense is that it is, and that it’s not something that is pervasive.
It’s not something where there is this sort of mania that sweeps the neighbourhoods, and everyone has
to come and get in. It seems a rather well-established network of people. Obviously it’s based on
recruitment - you have to constantly recruit other people. People don’t recruit at their places of
residence because of fear that once the scheme collapses they introduce a discomforting element in
their relationship with their neighbours.
Women often try to join some of these schemes en masse. So the whole factory floor will decide “let’s
go into this together,” and often people recruit each other on their way to work. So they take the same
bus route every day and they get to know each other, and they recruit people through that.
I do have some of the statistics that are produced by the serious economic crimes office, and that gives
a sense of the scale but not how widespread it is within a certain population. Those are really difficult
questions to answer and I think its important that I must write that into the paper, that I don’t give the
sense that this is all-pervasive.
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DN:
Some people conceptualize this as a leisure activity and another group of people conceptualize this as a
way to make money, I just wonder about the extent to which, in those lay conceptions of pyramid
schemes, people aren’t more economically rational than we sometimes give them credit for? I mean
pyramid schemes work – the secret is to get in early. Is there that kind of rationality?
DK:
Exactly: especially on the level of agents. Because the closer you are - as an agent that’s been involved
in these schemes, you constantly stay aware, you move in the circles of people so that you are the first
to hear when the next scheme arrives. So the inner circle of agents are all well connected. Some are
connected via facebook to each other, and they stay in touch. And they constantly move around
between presentations to hear when the next scheme is happening. And those are the ones that
ultimately benefit from it.
DN:
Isn’t there amongst them the idea that “I’m not an agent, I’m a few tiers down, but if I get in at the
right time and if I mobilize sufficient people behind me I can still make a go of it?
DK:
Absolutely. That’s the logic of it, and that’s not just the logic of informal finance.
CA:
… thinking about different strategies, If you actually changed the unit of analysis that you are looking
at – so if you look at the individual, you look at the households, the communities, and you follow
networks, you are going to get very different pictures coming out of what you are looking at. Just to
bring that out in your paper.
………………………………………….
"Snuk's work": informal means to formal ends in South Africa's rural economy
Author:
Lizzy Hull
Discussant: David Neves
David Neves:
It was a really lovely paper with ethnographic richness.
Right at the outset maybe something that could be a bit clearer for me is the precise nature of this
community bank initiative. I know you cite the relevant bits of policy but I’m not entirely sure - is it
registered with the a reserve bank, is it a formal deposit-taking bank and how precisely does it fit into
the terrain of banks? Is this really a bank, or an elaborate formalised rotating savings society, or is it
basically a credit co-op? Maybe make that more explicit.
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I think the second economy concept which you invoke, has been very problematized within both the
policy and academic discourse in South Africa, so I think it’s useful rhetorical shorthand but maybe the
problematisation around the idea of a second economy needs to be sketched out. Because it reinforces
this idea that there’s an informal sector in South Africa that is disconnected from the formal sector
when in fact a very distinctive feature is that they are so thoroughly intertwined.
And I think a lot of the social exclusion type of discourse and ideas of informality being around
exclusion, those ideas start to buckle and break in the South African context where even very poor
people have been incorporated into monetisation and into large-scale corporate penetration, so its
ambiguous.
With regard to actual descriptions of for example the Simunye community bank, something I wasn’t
entirely sure about and maybe this reflects my concern with political economy is the precise class
position of these people. I couldn’t work out – you describe them as farmers, so are they like
smallholders, do they own commercial land or are they grant receiving survivalists etching out a living,
or are they people one tier up who have managed to accumulate a little more? Because that would
shape the sorts of opportunities they have and the sorts of things they can bring to it.
Your ethnographic account is lovely and I really like the nuances that you got and the microexchanges, and the jostling and the positioning that occurred, and your observations of the often quite
an ambiguous role that intermediaries and brokers provide. And I enjoyed your account of Mr Siyaya,
the deputy mayor: a kind of shadowy figure.
Something that I think you could have developed a bit more in your account is, there is this strong
sense of “trust in the formal”, “trust in the state and formal banks” and the appearances of formality –
banks that have proper branches, and proper cards. I think there is an aside there about historical
legacies and about path dependency and about the way in which people are conditioned to accept that if
it’s a bank it has to look like a bank.
I am thinking of some of the work of Helena Barnard at Gordon’s Institute of Business– she has done
fascinating comparative work about the South African film industry versus the Nigerian film industry
and how South Africa because of its links to Jewish capital South Africa actually got into screening and
making films very early on which kind of cued expectations as to what would constitute an acceptable
level of quality which set up path dependency, whereas in Nigeria there was no domestic film industry,
and consequently the expectations and barriers to entry were never very high. So consequently you
have a very diminutive film industry in South Africa. Whereas in Nigeria you have Nollywood, the
world’s third largest film industry. (Someone else disputes this and said it’s the second largest).
So the kind of reciprocal interaction between history and path dependencies and interjectory, and the
way expectations as to what is expected.
You talk about violence and the threat of violence and violent coercion and how that underpins
bureaucratic power, but I was wondering about the extent to which, if not violence then the threat of
violence, doesn’t underlie the jostling contestations. In my experience informalities are often
underpinned by the threat of violence. It seems very far from the surface, but I got the impression that
you were almost saying “well this is the realm where that’s not on the cards”.
The individual case studies - The whole account of this community bank is Corbridge’s idea of seeing
the state which inverts J C Scott’s idea of seeing like a state and says that a lot of subaltern dynamics
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are about people making themselves visible to the state. I am thinking about your account – you are
almost suggesting that but maybe it would be useful to make that explicit.
I got the impression when I got to the end of the case studies that people wanted a community bank,
and I wondered about the extent to which, rather than primarily wanting a community bank, they really
wanted to make themselves visible to formality, to the state. And I think that is often an important
dynamic amongst the poor people in South Africa, allying themselves to patrons, to brokers, to
intermediaries, to people who can connect them up to be developed.
On the issue of the tenders, I wondered about the extent to which tenders and tenderpreneurs have
monopolized our imaginations, maybe there is a little bit of South African exceptionalism worked in
here. Tenders are an important way in which relationships to the state are configured and reconfigured,
but they are ubiquitous: see the idea of public private partnerships and bringing in the private sector.
That is everywhere, even in the UK, so what is distinctive about this South African context? And
maybe this isn’t a question I am raising just in relation to your paper. Maybe it’s a general thing which
cuts across several papers. Analytically, should tenders be getting primacy in our analysis and
discussion?
I thought that “Snuk’s work” around respectability and propriety, appearances and appearance
management came up and that is lovely.
To conclude you say something about formalization, formality – similar to what I was saying, that its
not a linear trajectory – instead it’s a kind of vacillation - but I was wondering about whether they are
complete reversals, or backsliding.
Someone that I have been very influenced by here is James Ferguson’s account of the Zambian
copperbelt and how you can get to modernity and you can backslide again – you can reach formality in
the formal economy and then it can be undercut and eroded.
LH:
… its not really a bank, in the official sense – and something I’ve tried to convey is the ambiguity of
this word, it being described as a ‘bank’ means that it is pitted against ABSA as a kind of comparison so it’s not that kind of thing. It’s a government funded micro-finance institution. The idea of economy,
I don’t have time to go into a discussion but I am aware of the critique about it, as well as the critique
about the formal and informal dichotomy.
I used those terms partly because they’ve been incorporated into peoples’ own language as has ‘the
second economy’. The SAMAF representative was always talking about how the bank was a means of
catering for the second economy. So my title ‘informal means to formal ends’ is slightly ironic in the
sense that there aren’t really ends, neither is it a split between formal and informal, but people do see it
in that way.
The class dimension is quite variable – from smallholders, renting land, even just farming in their
backyard, to people who are more established and people who already have agreements with the
government.
The issue of trust in the formal, i in the process of standardization. That is what the paper is about.
This idea of a linear trajectory you spoke about is quite a powerful yardstick that people use to
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understand their own situations, and if their own situations don’t conform to that then they have the
perception that it is somehow inadequate.
On your last point of the idea of backsliding, that was the tension always. The bank had this idea that
everyone would just collapse and everyone would revert to their informal realm, and no-one could
ever make any real money and there was always that threat - and everyone kept going on about ‘we’ve
got the certificate’, to consolidate the idea that they were on that upward slope but there’s always that
risk of slipping back.
The idea of violence, coercion and whether that was underpinning what was going on here was
provoked by Alson’s comment saying that the banks are excluding us but its good that we are now
working with the state because they can just lock people up in jail and that’s much better because we
won’t all suffer the consequences. This idea that the state and physical violence is preferable to the
generalized sense of exclusion.
On that point of social exclusion you mentioned I wasn’t trying to put that forward as my own
analytical concept, rather just drawing out that quite powerful comment made by Alson that there was
this sense that people do really feel cut off and do feel excluded from the mainstream economy. And
even though we are all trying to look at ways to say that isn’t really the case, actually in that area
people really feel that powerfully.
So I think people do feel quite cut-off, and his comment about the banks not lending to anyone from
Makhathini because some people didn’t pay back - I found that a poignant expression of that sense of
exclusion. So I didn’t want to use that analytically, just the problems surrounding the idea.
I didn’t approach the topic of tenders that much in the paper, but when I got to South Africa I did
discover that a lot of people are applying for these CK forms and registering. I think there is a massive
shift in how people see the various options available to them.
IVW
A question about Ubumbano. When I was in that area in 1999 there was Ubumbano craft market.
They’ve been going since the 80s. And they were targeted by the Lebombo Social Development
Initiative, who set up this financial banking idea. And I went to lots of workshops where people were
trained in how to budget and pool their money. The LSDI doesn’t feature in your background
information. Because this was a 5 billion rand project in the area, and it was all geared towards small
crafts markets, music groups, people from Ithala bank got involved. They spent so much money on this
training business and budgeting. And I think that they might have very interesting stuff in their
archives.
DJ:
On page 10 where you talk about the person who is selling amacansi, she in fact does have a pay slip,
not a real pay slip but a second income stream, and so in a sense she experiences less risk and trusts the
bank more, because she presumably trusts herself to come up with whatever you need to come up with
to accompany your other income stream.
This reminds me about the issue of ‘multiple livelihoods’, for a while that was the talk and now its
about ‘informal and formal economies’. People who wanted to do farming had to have a migrant wage
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in order to do it; so they weren’t farming, they were farmers using another source of income. This
seems to be the same sort of thing; this is not a unique phenomenon. What I liked in your paper is the
sense that they wanted to trust the state, they want the state to be there as a definite force, but in the
meantime all the official policy direction is going in the opposite direction. It’s saying ‘you must look
after yourselves, we don’t want to look after you, you must be entrepreneurs, you must have businesses
and you must have self-motivated banks and you mustn’t rely on us’. There is a contradictory tension
in these two directions. And I think that’s what the nostalgia is for, it’s for the strong state. Even if it
didn’t do much to help you. it is nevertheless strong and you can take shelter underneath it if you
wanted to. But the terrible insecurity of just being thrown to the wind and told to get on with it – it’s a
neo-liberal phenomenon I suppose. That was very well conveyed.
LH:
There was always this confusion around ‘do we belong to the state or don’t we?’, it’s our bank but it’s
not really. Some people wanted the state and others saying the bank is theirs. There was always this
constant dialectic between the two.
KH:
I’ll make an assertion that the bourgeoisie is the only class in history whose private practices has been
the opposite of its public ideology, which is to say that they have presented this notion of a formal
order which they have taught and administered through the law and in various ways, and their private
practices have been always corrupt and involving massive erosion in the divisions between private and
public sectors.
For example, Britain made a world society around projecting this notion of, ‘we play cricket’, fair play,
and so on, while they beat everybody up and made all these lousy deals. In Britain there has been a
cement cartel for 50 years that has been responsible for making sure that the motorways crumble after
about 5 years.
The whole of the British economy is involved in this massive stitch-up between private capital and
public bureaucrats and politicians and yet we teach our children that its something else. So if you look
at this tender notion, the fact is that black people in South Africa can only make money through the
state. They are only ever going to get hold of capital through the state in some form or another. And so
the phenomenon of tenders is in fact universal, what is universal is the corruption of public and private
partnerships, but it’s given that kind of publicity in SA because it’s black people doing it and they are
not so good at covering it up.
Secondly, on the relationship between the formal and informal sectors: what neo-liberalism is, is a
counter revolution against the social democratic revolution of the post-war period, and it involves
massive deregulation. And deregulation means an enormous increase in informality at every level
including the fact that the banks are now openly criminal. The concept was invented at the time around
1970 when everybody believed that the state was the only institution that could engineer development
and that has been overturned since.
Thirdly, I think there is a tremendous difference between the formality of the banks, let’s say, and the
formality of the state. Why do you think these banks in London have massive Romanesque columns to
try and persuade you that they are really there as opposed to some guy pulling a scam, making money
in ways that you wouldn’t want to know about?
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So there’s need to create a formal façade, that supports the credibility of the bank. But it’s not the same
as the state’s bureaucratic structures and roles.
At the core of this is that social science is basically a way of trying to launder and make legitimate the
corrupt activities of the bourgeoisie. And we kind of reproduced this, except that anthropologists
because they’re so weakly socialized in the ways of the bourgeoisie, go out and find that people are
doing stuff that makes nonsense of the formal rules
DJ
…but who are so desperate to be part of the formal system, that is what’s so interesting about your
paper - that people actually want to be part of that thing.
RR
…and there are advantages to being part of it. It’s not irrational)
KH
Even 10 years ago when Mandela was still in power they were trying to get the banks to poor people,
and the banks were saying ‘sorry it’s too expensive’. And Mandela said ‘look, we’ve let you keep all
this stuff; you are going to have to deliver something’, but in the meantime after 10 years they
discovered sub prime mortgages, and then that unfortunately was exposed for what it is.
Now the American banks are trying to target the poor through mobile phones. They discovered they
can reach the poor by mobile phones and extend credit to them and so on. So there’s been a
tremendous turnaround, even in the last decade in the attitude of the banks to the poor as a source of
income. But 10 years ago in South Africa the banks were resisting it on the grounds that getting to
these people was too expensive.
And now the banks have pioneered biometric ID which has completely transformed the economics of
dealing with the poor. They are selling biometric ID as a system of credit to Nigeria and Ghana and
others on the African continent. So there have been some recent developments in the relationship
between formality and the poor. And in South Africa the banks have taken the lead.
DN:
Just to echo what Keith is saying, all this stuff about the roll-out of the Mzanzi account brought in
about five million new bank accounts. In some ways this isn’t a bank, but most of the big 4 banks have
this. The one I know best is Standard Bank, they have a division called community banking. And its
not corporate social investment, its not PR, it’s a profit centre: they expect to turn a profit from it. And
they have all these technologies of organizing people. And the person I know at Standard Bank is quite
reflexive, he will say ‘banks are psychopathic institutions (even though I’m a director in one)’.
MB:
Drawing all these links between large-scale banking and formal banking and the examples here raises
more complicated questions. Like what you were saying about David Graeber and how this idea of the
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threat of violence stands behind things: clearly it does. What he means is less direct than what you’re
saying. It’s not actually that there’s a guy with a gun, visible. One sentence after you mention it, you
talk about… two lines later ‘the government simply draws money’ – that is a threat of violence.
LH:
Yes I know. And afterwards I said that ultimately these things end in coercion
MB:
… these banking institutions or credit institutions more generally you can do more with this -how the
threat of violence is in the background and by what direct and indirect means.
LH:
I haven’t really fully worked through that one yet. I was trying to get to what the state was trying to do
by devolving everything, responsibility, the onus of care, for everything away from itself and onto the
citizens so that they are ultimately the ones responsible for providing services of every kind now
including banking and financial services and how that shifted the ideological understanding the people
had of what was going on. Yes, It ultimately ends in structural violence – both ways end in that, but
through slightly different ways.
MB:
I’m not suggesting you are not right. I think there is a lot to explore there – with these very indirect
forms of structural violence, that make things look organic and exciting and fluid, but actually are just
much better obfuscated versions of the same kind of things.
LH:
But in some ways things are less obfuscated than they were because before the state at least had the
pretense that it was separated from economic activities and now it seems that the state even celebrates
its economic endeavors and for its assistance of the business realm, and so on. Its even more explicit in
certain kinds of ways. But I think this shift for people having to take on responsibility for what the
state formerly assumed is one form of concealment.
MB:
But that discourse of taking responsibility and doing it yourself can coexist with an obfuscation of a
threat of violence. You could push that discourse.
LH:
That’s exactly what I was trying to get at.
CA:
There are also various parallels … I think its lovely, this language could lift to a lot of the situations
here - someone called Graham Hawson made this point, a geographer at Hull. It’s the market that
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serves the middle class very well, but it’s always the poor and the people with nothing that are enjoined
to be empowered and self-help and this kind of thing, usually when there is absolutely no basic
infrastructure available, basic provisions … but that language is very split – its not just that all citizens,
it’s a very particular kind of people that they say – ‘ get up, help yourself’.
KH:
The world bank took up the informal economy especially when they were dismantling governments
through structural adjustments. So people said how are they going to get help and education and all the
rest of it. And they said they are going to do it themselves in the informal economy.
CA:
And they talk about tapping into the energy of community ... It’s always in those areas of inner city
deprivation where there’s nothing, and they say ‘let’s set up a community organic shop’. The only other
thing which seemed to link as well is this formalization seems to translate into being independent from
the state, so the state will tap into that organic energy of the community, giving out grants and so on.
But in Britain its always on capital start up grants with the ideas that these organizations somehow
finding this energy will go on and become independent and have continuation strategies and so on.
And time and time again they start up and collapse … whereas what people don’t tend to do is have a
look at the value of the system that’s been created in a very wide sense which is very difficult to
account for.
Getting more value back if there is a constant cash flow – money coming in from the state, where its
possible to get a continuation from them and what actually comes back - its difficult to find accounting
for – the accounting procedures aren’t there, you just have to talk to lots of people from all the
departments like housing or in health, you’re getting something back. There are very few things that
connect those different things together.
IvW:
An ethnographic question on amacansi. I met this lady making money from crafts. You might make
money for a bit but you also have to either buy the grass or reeds depending on what she uses, and you
have to pay the guards at the nature conservation areas entrance when you go and harvest. Apart from
that who they sell to, they usually sell to these middlemen and they don’t always pay on the day, they
might pay a month later. So there are all these kinds of debt relationships with them as well – debt
networks around this craft business. It’s not always a stream of income.
People borrow against future earnings. So there is a kind of banking system. It’s more of a bank than
the bank that you have. And they lend out, because it doesn’t sound like your guys are lending out yet.
DK:
I want to make a comment about the title “Snuk’s work” - I think its crucial both on an analytical level
and in his eyes - your informant - his reference to hard work, what underpins that is a certain theory of
value: by being productive that’s how you are creating value so the reggae artist also exploits that
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theory – and what he was saying is something similar. Is the distinction between informality and
formality those different kinds of value – labour or whatever it is that makes a business.
Because business is somehow different, its not hard labour. So is it between formality and informality
the different conceptions of value? So is it something that’s bigger than just a form of work? Is there
something about, lets say, the increase in redistribution in the economy as a more important element?
Isn’t there a different theory of value that is suggested by the increase in redistribution? That
somehow the redistribution of wealth through grants and through BEE is not underpinned by a labour
theory of value but by another theory of value.
LH:
I think that’s something that’s very interesting but in that particular instance, Thami has definitely a
very upwardly- aspiring … he sees different status, values associated with the different kinds of work,
even though his wood collection he could get a lot of money for. I have other examples which I didn’t
have space for, where its really to do with the amount of money that people get and how lucrative it is
and that’s the kind of value that is placed on the activities. So there’s different kinds of value systems.
DK:
Capitalism in South Africa what drove it is the quest for cheap labour. That has been a constant story.
There’s also something about people not wanting to do hard labour because of that history of cheap
labour.
KH:
I think this is very interesting. I’m not so sure about the value question, it kicks it out into a level or
direction that may not be helpful. The fundamental point is throughout history if you want to get ahead
get a gun. Basically politically and military organized transfers have been the way to accumulate in
history.
And what is really bizarre and exceptional, is that for a very brief moment the way to make money was
by producing things for profit at a lower price than your competitors. And that’s the model we have of
capitalism as an industrial process, it includes seeking cheap labour and so on.
What is very clear is that capitalism for some time has been moving back towards rent not profit and
the political power, politically sanctioned property rights have become the central issue of capitalism in
our world: intellectual property, keeping exclusive rights on rents on DVDs for example. So Sony
makes 75% of its profits from DVDs not from flat screens and play stations.
And this company reproduced costlessly anywhere, and this property right can only be secured by
political and military, or legal, means, so I think what we are looking at is a world economy that is
actually reverting to the old regime – to a system in which wealth is fundamentally politically managed
property. Rights and transfers organized by the state or by a political force in a less centralized form.
And to some extent the value discourse about labour value and so on is a derivative from that. Locke
came up with the labour theory of value because he wanted people who produced things to keep the
value and not have it stolen by thugs.
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