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How to Radically Empower over 2/3rds of the World’s Population

December 10, 2011

Police Evict Traders from Muthurwa Market, Kenya

Globe-trotting journalist Robert Neuwirth has an astounding presentation at Poptech on the ‘informal sector’ around the world. It turns out that, in less than 10 years, 2/3rds of the world’s population will be working ‘off-the-books’, in some kind of informal trade like hawking DVD’s in an alleyway or selling bottled water to passing cars. His book, Stealth of Nations, is highly recommended and is an absolutely riveting read.

Although I believe Neuwirth makes a false conflation between corporatist Western economies and a ‘free market’, he makes excellent concluding points about how our current institutions blind us to the possibilities of social organization.

All the definitions of our economic system are developed by the people in power,” Neuwirth says, channeling philosopher (and methodological anarchist) Paul Feyerabend.

Neuwirth argues that the informal economy offers a glimpse into a vibrant future unbounded by today’s methods of political order. People work in cooperatives, they barter, they swap using their own evolved currencies. They bring themselves electricity, trash collection, public transportationwelfare for the destitute and sick, even law and order. These markets are messy and not necessarily ‘rational’ from the perspective of an outsider or a State. But the tumultuous process is growing by leaps and bounds, spilling over international borders, and giving livelihoods to masses.

Yet they are off the map. They are not recognized by Nation-States and, tragically, they are often victims of predatory political forces at home and abroad.

By pointing out this absurdity, Neuwirth is reaching something truly fundamental. He has charted the limits of our reigning ‘social technology’ — the Nation-State system.

Today, only elites have the power to build large scale rule-creating institutions, to access modern networks of dispute resolution and arbitration, and to operate under good commercial law. We can see what this has done by looking at the informal sector: elites have shaped the rules and institutions to their benefit and marginalized the majority of humanity in the process.

The displacement, the invisibility that Neuwirth sees of half the world working outside ‘the System’ is a symptom of how the Nation-State has congealed into an outdated, unjust monopoly. Formal businesses, especially crony-capitalists in more corrupt States, enjoy the force of the Nation-State and its perceived legitimacy. Informal entrepreneurs — which is to say a growing majority of mankind — do not.

When we call for ’empowerment’ of the poor, we should not just be calling for a broader recognition of the poor’s dignity and hard work. Nor should we just be calling to integrate marginalized groups into currently existing institutions. We should be calling for the tangible, practical, progressive movement towards democratizing access to rule-creating institutions themselves: bringing good commercial law and methods of dispute resolution to as many people as possible.

We should open this institutional toolkit to entrepreneurship and devolve political power to as low a level as possible. We should clear the field to allow a thousand nations to bloom, and we should recognize the legitimacy of the voluntary, community institutions and services that already govern billions in the informal sector.

Informal entrepreneurs have proven their ingenuity and their resilience in building parallel institutions to govern themselves and overcome their problems despite their disenfranchised position in the world.

By allowing bright minds now laboring in the obscurity of the informal sector to build entrepreneurial communities, to grow their own methods of governing themselves, we can reach beyond the exclusive and unjust Nation-State and into the vibrant world Neuwirth envisions. We can erode the power of elites, break through archaic definitions of the economy, unleash economic growth, and invite a 21st century of true connectedness that transcends the artificial (and tragic) lines of the Nation-State system.

  1. Paul X permalink
    December 10, 2011 10:11 pm

    Reading this, I get a feeling of “Meet the new boss, same as the old boss.”

    Do we really need “empowerment”? (Ugh, an ugly word.) I don’t want people to have more power, because we know what people do with power, don’t we? We just need less parasitism, that’s all. As to rule-creating institutions, are you crazy? How many rules do people really need? The institutions are the problem.

    Instead of a thousand nations blooming, we need nations to disappear. Let individuals deal with individuals, without some ruling elite interfering with their business.

    • Z. Caceres permalink
      December 10, 2011 10:37 pm

      I think you are severely misreading what I wrote. By ’empowerment’ I’m not arguing to give ‘the new boss’ the powers that ‘the old boss’ now uses for such harm. I am advocating for radical decentralization in a way that actively CHECKS the abuse of institutions. This is the route out of parasitism — by opening up governance to competition. Today informal traders are powerless. I am asking that we clear the way for them to build their own communities and for the ‘old boss’ to stop destroying the communities that they’ve already built.

      Nothing about the phrase ‘rule-creating institutions’ suggests ‘many rules’ or ‘complex rules’. For example, in Kenya I’ve seen instances where Street Traders had unanimously agreed to have their disputes settled by a single representative from their ranks. This was not a State representative, it was self-governance at its finest. The word ‘institutions’ does not mean a building with plush offices filled with bureaucrats.

      I’m not sure how you came to the conclusion that I am somehow praising ‘ruling elites’. I am, indeed, asking individuals to deal with individuals — by allowing people to associate freely with low-cost entry/exit competitive institutions. The goal being to achieve a voluntary world of consensual decision making, for all parties.

  2. Lokyra Stone permalink
    December 10, 2011 6:42 pm

    I loved this. This is exactly what my husband and I are attempting to create.

    • Z. Caceres permalink
      December 10, 2011 7:42 pm

      That sounds great! Would you mind sharing more about your project?

  3. December 10, 2011 2:05 pm

    Very nice. I too am now subscribed to your feed.

    • Z. Caceres permalink
      December 10, 2011 5:00 pm

      Thanks Curtis, happy to have you following.

  4. Libby permalink
    December 10, 2011 4:50 am

    This is really fantastic. Color me subscribed-to-the-RSS-feed!

    • Z. Caceres permalink
      December 10, 2011 5:00 am

      So glad you liked it, Libby!


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