Session 3A: Risk in the marketplace

Session 3A: Risk in the marketplace, Tate Hall, room 137. Chair: Ty Matejowski.

8:30-8:50         Jessica Chelekis, Risks and strategies of Amazonian households: Retail sales and mass-market consumption among caboclo women

Problem statement: The Amazon is widely regarded as a peripheral world region, connected to international economies primarily as a supplier of forest materials. Research on Amazonian household economies is largely based in cultural ecology approaches concerned with models of human – environment interaction, especially the relationship of household production and land use/ deforestation (Wagley 1973; Chibnik 1994; Brondizio 2008). However, little research investigates other ways Brazilian-Amazonian caboclos are connected to global markets, especially through the sales and consumption of mass-produced goods. This paper presents research investigating how Amazonian sales representatives for global beauty brands use their work not only for household income, but also as a means for social inclusion.

Theoretical frame: Institutional theory informs the theoretical perspective of this study, which views the economy as a process of social provisioning, where people use culture to establish resilient livelihood strategies within an institutional environment comprised of the state, household, and market (Folbre, 2004; Jennings 2009; Oughton and Wheelock, 2006). I follow Oughton et al.’s (2003) use of social exclusion and inclusion concepts, in which inclusion occurs “through civic, economic, social and personal integration into society” (333). I therefore examine women’s motivations for working in direct sales at two levels: the first at the household level, regarding household provisioning. The second is the societal level, considering the degree to which direct sales facilitates participation and inclusion in the local community as well as the global, imaginary world of beauty brands and products.

Methodology: Ethnographic fieldwork, primarily participant-observation and semi-structured interviews, was carried out in three different communities in the Ponta de Pedras municipality over an 11 month period. The fieldwork sought to capture the role of direct sales within the distinct environments and predominant economic activities of each community. A survey was also conducted comparing households with and without direct sales representatives regarding demographics, income, economic activities, household goods, and decision-making.

Results: While direct sales offers the potential of significant contribution to household income, in practice most representatives earn meager profits or just break even; many lose money and some fall into debt due to non-payment or delayed payments from customers. Considering the economic risk of direct sales, women appear to be motivated by one (or both) of two distinct yet overlapping operating logics: “selling-to-save” as a household provisioning strategy, and “global sociality” as a pursuit of social inclusion.

Implications: While the traditional focus on household production and land/forest use in the Amazon region remains an important area of research, it does not fully capture the ways in which Amazonian households articulate with national and global markets. Consequently, this focus reinforces prevalent views of the Amazon as a supplier of raw materials to the world, overlooking the rapidly growing consumer culture and relationship to mass produced goods. This paper aims to address these issues by examining how selling and consuming direct sales beauty products offers provisioning opportunities and risks, as well as a platform for local and global social inclusion.

8:50-9:10         Discussion

9:10-9:30         Brandon Lundy, Drivers and deterrents of entrepreneurial enterprise in the risk prone Global South

Problem Statement: What encourages or discourages foreign entrepreneurship in a country such as Guinea-Bissau with protracted political and economic underdevelopment? How and why do small-scale, cross-border entrepreneurs mitigate risk and establish resilient businesses able to cope with ongoing political and economic shocks?

Theoretical Frame: “One might argue that in the activities of the entrepreneur we may recognize processes which are fundamental to questions of social stability and change” (Barth 1963, 3). The entrepreneur, as a manager of a business aimed at making a profit through innovation, is a “risk and uncertainty bearer” (Belshaw 1955). The entrepreneur enacts inter-personal relationships that may progress into corporate groups and associated activities. In understanding an entrepreneur’s motives as shaped by incentives and barriers, we can begin to address both social and structural effects that have broader implications for understanding south-south investment.

Methodology: Over two months in June 2011 and January 2014, 19 purposefully selected semi-structure interviews with government officials, business leaders, traders, entrepreneurs, and non-governmental organization managers were carried out. Additionally, through diversity sampling, 153 formal surveys of businesses were conducted within major business districts and markets of Guinea-Bissau to assess entrepreneurial contributions to the economy in terms of nationality, investment drivers and deterrents, employment, wages, and economic impact.

Results: Findings show that small-scale private investment from the Global south in Guinea-Bissau is increasing. Many of these enterprises, however, are being forced to downsize or close for a variety of reasons including a lack of traffic/sales, inadequate infrastructure, a lack of available credit, small profit margins, a poorly trained labor force, high stock prices, political instability, and insecurity. Some of the main reasons given for initially investing in Guinea-Bissau were already established socio-economic networks, regional integration, business expansion opportunities, and less competition compared with comparable markets in other countries.

Implications: Our findings show that as foreign investors further integrate and expand in the overall economy, their interests in increased stability, security, and transparent regulatory policies also increase. We argue that “entrepreneurship is not a binding constraint on growth and development in the poorest countries” (Naudé, 2011), although economic growth in the face of risks such as instability and capital flight is slow (Ajayi & Ndikumana, 2015). Commercial enterprises complement official aid, which is in decline. The entrepreneurial landscape of Guinea-Bissau shows a perceptible rise in trade partners from the Global south for very specific reasons even though they face great risk in doing so. Similar to Barth’s assertions, many of these actors have limited assets and therefore, limited opportunity. Resiliency for these investors is improved and risks are mitigated through established social capital that can be converted into financial capital, linked social-business networks across borders, micro-environmental knowledge, and by maintaining relatively small businesses able to fly “under the radar.” Improved understanding of regional and scalar integration of economies through the study of small-scale entrepreneurs signals the overall health of an economy and where it might look for future partnerships.

9:30-9:50         Discussion

9:50-10:10       Laurel Zwissler, Markets of the heart: Negotiating economic and ethical risks at Ten Thousand Villages

Problem Statement and Theoretical Frame:? This project seeks to explore tensions at the heart of fair-trade organization Ten Thousand Villages’ seemingly two contradictory projects: helping producers in the developing world do more than scrape by, while, as a retail organization, it does just that.  Advocates of fair-trade emphasize the movement’s potential to ameliorate the risks of global capitalism for small-scale producers (e.g. Jaffee 2007, Besky 2014, Lyon and Moberg 2010).  Villages promotes an alternative value system that includes the well-being of producers  in calculating what products are worth monetarily (Brown 2013, McMurtry 2009, Lyon 2006).  Yet, the organization operates as a business within the global economy and is subject to the rules of the market, placing it somewhat at risk.

Methodology:? This paper draws on fieldwork with stores in Toronto (2011-2012) and on-going  fieldwork (summer 2024 and 2015) with the flag-ship store in Ephrata, Pennsylvania.

Results:? Villages understands its main role to be reducing financial risks for and promoting resilience among producers in the developing world (Myers 2013) and it communicates that role to employees, volunteers, and consumers in North America.  Within the broader context of the economic recession, however, corporate leadership must deal with the uncertainty of its own existence within a risky retail market; they must balance their commitment to care for others abroad with a bad economy at home.  The recession throws into question some of the tacit assumptions within the Villages worldview: that life in North America is always more fortunate than life in the developing world; that living-wage work is available to North Americans; that the inevitable excesses of the economy here can be redirected to ameliorate poverty abroad. These new challenges for the organization emphasize continuing tension between its founding Mennonite values and the more recent orientation chosen by leadership, the goal to compete successfully in “regular” retail space against non-fair-trade brands, such as Crate and Barrel.  Villages’ practices, meant to provide “fairness” to producers (e.g. commitment to repeat orders, providing half-payment in advance),  are somewhat inconsistent with treatment of North American store employees.  Most are part-time and paid less than they perceive peers in more traditional retail settings as receiving.  Implicit messages, also common to other non-profits, are that Villages cannot afford to pay more and that employees receive extra benefit by being able to do fulfilling work.  This element of volunteerism is further promoted by the presence of actual volunteers in store environments, who perform nearly all the same tasks as paid employees.

Implications: ?At a time of increasing dialogue about alternative value systems that expand notions of economic worth (e.g. triple bottom line Elkington 1997, Savitz 2006; B Corps), the fair-trade movement offers a useful model for one such attempt to work within the market system and adapt to its risks.  Understanding how one organization negotiates its own competing value systems can provide useful perspective on other revaluation projects.

10:10-10:30     Discussion

10:30-10:45     Break

10:45-11:05     Mark Brahier, Going green: Unintended consequences in informal sector recycling

The idea of “Going Green” has become a global phenomenon in the 21st century. First for sustainability and now for profitability, consumers have an incentive to recycle. In most of the developed world, waste management systems consist of a formal recycling sector; however, many developing countries lack this capacity and instead experience Informal Sector Recycling (ISR). This sector consists of a fleet of informal workers who remove and sell recyclables from trash bin to garbage dump. ISR presents opportunities for double and triple-bottom-line solutions related to the 2015 Sustainable Development Goals, such as the opportunity to achieve environmental sustainability and economic prosperity simultaneously. The informality of such practices currently poses significant health risks and inconsistent incomes. In “La Joya” garbage dump outside Granada, Nicaragua, over 70 informal sector recyclers depend on discarded recyclable materials for their income and livelihood. This study seeks to explain unintended consequences within ISR and the impact on personal income and healthcare. We surveyed recyclers in La Joya regarding finances, spending prioritization, any changes in recycling practices, medical history, and access to healthcare services. We then interviewed government officials, recycling companies, and a variety of entities that profit from recycling such as households, schools, and hotels. Our results showed that incomes have been decreasing among informal sector recyclers – and specifically garbage pickers. Incomes have decreased by 39% in the last year and 68% over the past five years. Results indicated that due to the ease and profitability of household and industrial recycling, fewer recyclables now arrive at La Joya. As a result, average incomes have dwindled below $1.25 USD per day in these communities for the first time in over a decade. Reduced incomes impact many aspects of life – from nutrition and healthcare to education and housing. We go on to describe economic barriers to healthcare within this population. This study inspires a search for similar trends in larger garbage dumps throughout the world. It also raises questions of how to reconcile the green movement with the risk of suppressing recyclers and invites policy reform that could achieve sustainability while protecting these vulnerable populations.

11:05-11:25     Discussion

11:25-11:45     Sarah Hitchner, John Schelhas, and J. Peter Brosius. “Even our Dairy Queen shut down:” Risk and resiliency in bioenergy development in forest-dependent communities in the U.S. South

Problem Statement and Theoretical Frame: Over the past several decades, outmigration of young adults, mechanization in agriculture, conversion of agricultural lands to forests, and declining forest industries have played a role in the weakening of economies in many parts of the rural South. Recently, existing commercial-scale wood pellet production for the European renewable energy market and a nascent liquid biofuels industry using wood and grasses as feedstocks have been enthusiastically embraced in many sectors of this region for their potential contribution to energy independence and rural development. At the same time, the promise of this new bioeconomy has also garnered opposition and concerns about social, ecological, and environmental sustainability, as well as concerns about tax breaks, subsidies, and government incentives for bioenergy companies and about competition with established forest industries. Due to heavy state and local investment in new bioenergy facilities in forested areas, local communities, which are often small and economically depressed, face particular economic risks when these large-scale and sometimes experimental facilities are located within their towns or counties. Using an integrative analytical framework designed to illuminate different perspectives and trade-offs, this research aims to elucidate public perceptions of bioenergy development, as well as the socio-economic dynamics of the communities in which bioenergy facilities are located.

Methodology: Funded by a 3-year USDA/NIFA grant, we used a multi-sited ethnographic approach to analyze the views of various stakeholders (landowners, local development leaders, community members, bioenergy and forestry industry representatives, and others) regarding the economic risks of bioenergy development to rural towns and the potential contribution of such development to community development and resilience through economic diversification. We conducted ethnographic research in several communities in the southeastern U.S. with different types of bioenergy facilities: Soperton, GA (site of the failed Range Fuels cellulosic ethanol plant and current LanzaTech experimental plant), Waycross, GA (site of the currently operating Georgia Biomass pellet mill), and Columbus, MS (site of the KiOR cellulosic biocrude facility, which was operating when we conducted fieldwork, but has since gone bankrupt).

Results: Bioenergy development opportunities are often pursued by rural communities as they struggle to maintain declining economies in the face of larger economic and social shifts. While bioenergy promises rural development compatible with existing economic and social patterns, it is highly contingent on policies and broader energy markets, and many bioenergy facilities have failed to deliver on their promises. Our research illustrates diverse processes by which rural communities navigate tensions between desire for economic development and continuity in rural lifestyles, while at the same time highlighting social tensions within those communities.

Implications: Understanding how bioenergy development may change economies and land use, and how it is viewed by and may affect various stakeholder and interest groups, is critical to both enhancing the long-term social and economic sustainability of the bioenergy sector and to relieving the economic burden on local communities and forest landowners when bioenergy projects fail.

11:45-12:05     Discussion