From the Roots Up: Economic Development as if Community Mattered

William T. Perks was Professor of Urbanism and Planning, Faculty of Environmental Design, University of Calgary.

This book is about the “informal economy” (IE), a life-way for such a substantial proportion of Third World urban and rural populations that IE is now a recognized term in the World Bank’s operating policies. Still, though no longer simply a “concept,” IE has by no means made sirnilar institutional breakthroughs in First World Canada. Ross and Usher would like to see that change. The basis of IE is bartered goods and services; since money is not exchanged, there is no institutionalized quantifying or accounting. If that were all there were to it, Ross and Usher would have little need to write a book. But more than a technical discussion, From the Roots Up is a moral proposition: “Whereas the formal economy focuses solely on output, in the informal economy, how things are done, who receives the output, and how people relate to one another are as important as what is produced.” Scale and control are the more important factors of this people-oriented condition — decentralized, small units of economic activity, owned and controlled not by anonymous, distant business corporations but by families, by households, by local communities. And the value system of an Informal E differs from that of the Formal E. The Ross and Usher argument is that the IE is not purely consumption-driven, nor is profitability the exclusive objective. Its values are an amalgam of qualities of human experience associated with crafting or manufacturing a product, or delivering a service — social bonds, friendships, and intimate interpersonal relationships forged in the doing of these; sharing; mutual aid; control over our lives; and such transcendant values as community-building and cooperative spirit.

Further to the case made, IE is depicted as a counter-model to dehumanizing industrial, capitalist society. In one dimension it is a “way out”; but in another dimension, it is a survival mechanism for communities where dependency on one or a few large-scale exporting enterprises has collapsed. According to Ross and Usher, the IE can operate “outside” and “alongside,” and people and communities can divide their time between the two. They argue for coexistence, not another millenarian society, and they plead for national-provincial social and economic development policies that would account for and support informality. But here is the rub: why would governments provide a non-monetized economy when you can’t get taxes from un-accounted business and “income”? Ross and Usher have no answer; their unstated assumption is that there will always be enough revenues collectable from the formal economy to feed the hungry state — and to subsidize localized community development!

Getting away from theory, Ross and Usher cite success stories of informal economy in places like Nanaimo, Sudbury, and Sydney, Nova Scotia. These cases are insubstantially discussed and analyzed. An appendix to the book illustrates “the workings of the IE ... the ‘village economy’ of small Inuit and Indian cornrnunities in the North.” These communities may be, as the authors assert, exemplars, but they are hardly apt case studies in support of transforming the mainstream industrial economies of communities in the South. In fact, what Ross and Usher illustrate here is the disintegrating effects of the formal economy thrust upon an ecologically balanced, reasonably healthy informal community economy. The point taken may be the opposite of that intended — the IE can really only work when dissociated from the FE and isolated from the industrial society.

Two-thirds of the book is dedicated to describing, analyzing, and comparing the “f ormal” and the “informal” economies in theoretical terms. This discussion is not at all a balanced one — a disfavoured economic system is critically appraised, the favoured system variously imagined and observed through tinted glasses. Then comes a chapter on “policy implications” which, for the most part, seeks recognition for the household economy and argues for greater male sharing in its performance. Two appendices make up the remainder of the book. One of these is a kind of throw-away — “How economists view economic life: past and present” — that adds only redundancy to the theoretical discussion in the book proper. The other deals with the northern Native communities.

Overall, From the Roots Up is an easily-read blend of academic treatise and polemic. Its idealism should not detract from the authors’ basic exposition of community life and economy as it now is and it is not beyond imagining to think that the IE may come more into its own as the post-industrial service economy grows.