The informal economy between market and reciprocity

Since the 1970s the informal economy was one of the topics more debated among academics and political actors, such as anthropologists, economists, sociologists, policy makers and urban planners, just to name a few. During the years various theoretical approaches and several empirical attempts have tried to define this social and economic phenomenon, without the prevalence of one vision over the others. In general, the long debate has demonstrated that neither the highly parsimonious paradigm of the isolated individual driven solely by self-interest, nor a structural view of the informal economy - interpreted, first as an “intermediate stage” between a traditional society and a modern capitalist one, and then as a segment detached from, but functional to, the reproduction of the capitalist model of society - have been able to furnish an entirely convincing explanation of informality. Analytical tools, such as the antitheses between formal/informal, legal/illegal, and traditional/modern, have not yielded full understanding of this complex phenomenon and their constant interweaving with the formal or regular part of economy. Recently a renewed interest in the informal economy has coincided with a tendency to adopt less pretentious explanatory approaches to social realities. Theoretical analysis has become more centered on the understanding, at least partial, of sectorial or regional phenomena, rather than on constructing master narratives or producing decontextualized categorical assertions. The focus has shifted to the relative nature of the notion of informal economy, and analysis concentrates on the space between the two poles of economy, on partial events necessarily restricted in time and space, and on specific aspects of the interplay between the formal and informal parts of economy. The paper follows this recent trend, presenting some insights from a “thick” description of some informal economic activities conducted in Brazil. In particular, I focused the attention on fragments of life of informal garbage collectors and street vendors who operate in Porto Alegre. They are workers who are often defined as “invisible” – in the sense that they have neither social rights, nor legal working contracts – although they frequently work open-air, in highly populated and crowd areas. Indeed, the urban public space represents the main workplace and, habitually, the main life place for these people; it makes them physically visible to the rest of the citizens. During the fieldwork, I used specific tools of economic ethnography - such as participant observation and non-structured interview - with the aim of understanding the “mechanisms” that regulate economic transactions in the contexts observed. Some basic questions oriented the empirical research: who are the social actors performing the informality? What are, in practice, their strategies for survival? How do they interpret their condition as informal workers and what does it mean to them? Which are the institutions governing transactions in the informal economy? When and how are the resources embedded in the informal economy mobilized in order to favor economic development and social emancipation? In order to investigate the point of view of people operating in the informal economy and analyze the processes through which informality produces and reproduces its forms, I decided to interpret what I observed mainly on the basis of Karl Polanyi’s model of the three forms of integration between economy and society. At first glance, informality might seem an indeterminate set of work situations displaying, more strikingly than elsewhere, the degenerative effects of the dynamics of individualization and fragmentation, which, in different ways and to various extents, have transformed the social and economic texture in many advanced and less-developed areas of the world. In fact, garbage collectors and street vendors – who, for many respects, belong to the category of “shipwrecked people of development” - are individuals interconnected by extremely difficult life circumstances and excluded from the official circuit of the economy and, in practice, from rights of citizenship. They procure the means to live by acting in the informal economy, that seems adopt forms typified of free markets unconstrained by the state or the community These workers seem wholly marginal to society and, for this reason, “de-socialized”. But it is precisely in order to defend themselves against the free operation of the market that the social actors in the informal economy seek to rebuild sociability. To survive, these informal workers sought to reconstruct social bonds, often with people in the same situation as themselves. It was especially in the case of the garbage collectors, that the uncertainty and costs of their informal economic activities seemed alleviated by community bonds and reciprocity mechanisms. For instance, the garbage collectors were able to do their work by establishing informal agreements with the shopkeepers in the city center, or with the inhabitants of the suburbs, so that they could ensure themselves a constant supply of recyclable waste. But, they also worked together to rebuild sociability and new collective identities. In particular, some grassroots organizations, promoted both by street vendors and garbage collectors, have been able to redefine its initial objectives (linked to the need to cope with an emergence situation) and shift its action to gaining important improvements for its members. Using Albert O. Hirschman’s “exit/voice” framework, some associations of informal workers have improved the efficacy of voice, increasing its attractiveness in a context where the incentive to act independently (exit option) seemingly predominates.