A Look at Petty Capitalism

Petty Capitalists and Globalization: Flexibility, Entrepreneurship, and Economic Development. Eds. Alan Smart and Josephine Smart.

Michael Blim (2005) makes an interesting argument of petty capitalism as a way to decenter the power of large corporations. Who are the petty capitalists? They are “individuals or households who employ a small number of workers but are themselves actively involved in the labor process” (3). There was some concern in the past that petty capitalists were marginalized, but David Harvey’s observation that Fordism has given way to more flexible accumulation seems to point to increasingly significant roles of petty capitalists. This volume exposes the diversity of petty capitalists and its unstable and complex position, drawing from its potential for both economic advantages and heightened exploitation.

Simone Ghezzi’s article about family-run enterprises in Brianza and Frances Rothstein’s article on small-scale garment manufacturing firms in Mexico demonstrate the grim reality of surviving the global market that make family exploitation necessary. I find Ghezzi’s explanation of exploitation useful: “in discursive terms exploitation may be articulated in various sublimated ways: one of the most recurrent seems to be the ideology of ‘hard work’….The exploitative character of the social relations of production within and among workshops is intertwined with the artisans’ increasing concern for the potential loss of competitiveness in the region” (118). In many cases, it seems, petty capitalists lose out because they have to subcontract to remain competitive, and subcontractors end up investing in technology which puts them in debt and both groups face economic challenges in trying to keep up and yet remain lucrative.

Compare this to Jinn-yuh Hsu’s research on petty capitalists in Taiwan’s semiconductor industry. Trust and social networks involving friends and classmates rather than kin play crucial roles in facilitating connections in Hsinchu and Silicon Valley, which keep petty commodity production (PCP) firms competitive and successful. “Technical cooperation proliferates as personal networks spread. More importantly, a repository of specialized industrial skills and capabilities is formed within the social networks in the HSIP” (156).

Close collaboration with engineers in Silicon Valley partners helps them develop new technologies and also keep up with the latest trends. Yet these collaborations are not fostered by multinational corporations. They are, however, mediated by overseas organizations which aid workers in tapping into local social networks to gain access to technology and “absorb them effectively.” Thus, in this case, the social networks benefit both Silicon Valley and Hsinchu firms. A key feature of the two-way flows of capital and technology is the encouragement of joint ventures and equal partnership at the local level. This is undoubtedly enhanced by a common language, culture and level of experience among the workers. As Hsu points out at the end of the article, it seems this kind of mutually beneficial collaboration occurs under certain conditions — more commonalities than not. Culture as perceived by the workers seems to be most salient in fostering social solidarity.

Then, there’s Michael Blim’s account of the petty capitalists of the central Italian Marche region who inspired some disappointment in him due to their “failures to invest in radically upgrading their production processes so as to assure their own survival and the region’s well-being” (257). Blim offers a very thoughtful reflection of why academics tend to sympathize with petty capitalists: “given the depths of our own domination, and by the perfection of craft in teaching as well as in thought, our appreciation of petty capitalists may derive as much from our own confinement as from their relative freedom to take on the world economically on at least a few of the terms they choose.”

Despite the multiple challenges petty capitalists face, there is something admirable about their determination to persist despite the odds and risks. But, as Blim shows, this might have as much to do with a particular representation of petty capitalists as possessing attributes of loyalty and thrift and hard work as the academic’s own desire for more autonomy projected onto the people they study. Nonetheless, Blim tells us, studies on petty capitalists generate mixed results.

With regards to microlending, Blim asserts that this particular form of petty capitalism may not lead to greater economic inequality, even though it may in some instances strengthen “petty bourgeois values such as thrift and hard work…among women entrepreneurs” (268). It’s particularly fascinating that the ideology of the individual pulling herself up by the bootstraps becomes so prevalent in the realm of microlending, but Blim does not elaborate on whether this is an outcome of microlending or petty capitalism in general or simply a justification used amid growing economic inequality.

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