24
International Household & Family Research
Conference 2002, Helsinki, Finland
(Revised 2007)
BASIC ELEMENTS OF HUMAN ECONOMY
A SKETCH FOR A HOLISTIC PICTURE
Preface 2
Introduction 2
1. The household - a core of human economy 3
1.1. The origin of the picture 3
1.2. The value of nonmarket, unpaid work 6
1.3. The breadwinners of the world? 9
2. The households as strongholds against globalization 12
2.1. Developing a new picture of national economy 12
2.2. Interplay between public and private 14
2.3. Turning a trap into an asset - a good life Utopia? 15
2.4. The household as a counterforce to market globalization 16
3. Cultivation economy - the interface between economy and ecology. 16
3.1. Cultivation versus industrial production. 17
3.2. Food or commodities? 19
4. Conclusion: The Triangle of Human Economy 21
References 23
Hilkka Pietilä, M.Sc.
Independent researcher and writer affiliated to
University of Helsinki,
Christina Institute for Women Studies
e-mail:
BASIC ELEMENTS OF HUMAN ECONOMY
A sketch for a holistic picture
Preface
Today, there is a pressing need for a new, more comprehensive and relevant perception of human economy as a whole in order to understand the prerequisites for sustainable livelihood for the whole of humanity and to be able to create a lifestyle which could provide a dignified quality of life for all people, with due respect to the ecological boundaries of the biosphere.
The presupposition in this paper is that human economy is composed of three major, distinct components instead of one, monetized industrial economy, as usually taken for granted in mainstream economics. Those components are the household economy and the cultivation economy in addition to the industrial economy. In fact, households and cultivation have always existed, long before money and industry ever emerged, but they have remained invisible in the eyes of mainstream economists.
It is the purpose of this paper to make all these three components visible and elaborate their background and characteristics, and to argue for the necessity of their inclusion. The ultimate aim is to challenge alternative and feminist economists into collaboration for the creation of a new theory of human economy and to expand the domain of economic inquiry accordingly.
Hopefully, this paper would also prompt us to consider to what extent we would like to acquire more control over our livelihood and to decrease our dependency on factors beyond our control, such as the globalized free market with all its consequences, and to what extent this would be possible without putting at risk other important elements and needs in life.
Introduction
Human well-being consists of material and nonmaterial "goods", of monetized and nonmonetized production. The historical transition from the subsistence economy to monetarized economy has had many repercussions on basic conditions of human life, and particularly on the life of women. Not all of these effects have been positive, and neither have they all been understood and taken into account.
Understanding the history and the composition of human economy more comprehensively may give us new visions and insights on how to solve the problems of living in a global economy of increasing scarcity. We in the North need visions for transition from a wasteful, consumerist market economy towards a more sustainable way of living.
The concept of human economy is used in this paper to signify all work, production, actions and transactions needed to provide for the livelihood, welfare and survival of people and families, irrespective of whether they appear in statistics or are counted in monetary terms. It implies also a basic understanding of the necessity to manage the human household in a sustainable way.
The major blind spots in the prevailing economic thinking seem to be:
- the household economy, which is used here for the nonmarket, unpaid work and production by a family or a group of people having a household together for the management of their daily life, irrespective of whether they are kindred or not; or even a group of small households living close enough to create a joint economic unit, and
- the cultivation economy, i.e. the production based on the living potential of nature, which is the interface between economy and ecology, human culture facing the ecological laws.
These constituents of human economy are either misconceived or ignored. The doctrines of economics seem to be derived from physics and mathematics, the sciences dealing with non-living objects and material in the universe (Mäki, 1991; Vorlaeten, 1995). Thus, economics does not take account of biology, the science of living creatures and processes in nature; and that explains why economists seem to be blind to the logic of living nature.
Both of these economies are very basic from the point of view of a sustainable way of living, and thus for human survival and people's ability to control their own lives. A particular feature of the households is the extent and significance of nonmarket labour of people without pay for direct production of welfare, and thus as an essential contribution for human livelihood. A particularity of the cultivation economy is its profoundly unique nature by being based on living potential of nature.
Human beings are not considered in this paper merely as part of living nature - as many ecologists do - but as the only rational and responsible species in the universe, which is accountable for its behaviour and its management of the only planet suitable for its existence and welfare. Neither does this paper take a human being as mere "Homo Economicus", whose only motivation is the pursuit of self-interest and maximized satisfaction of needs on lowest possible costs and efforts.
1. The household - a core of human economy
The household as a basic economic unit in a society lends itself easily to use as a new angle from which to look at the economic process as a whole. For all human purposes, the household is the primary economy, which all other economic functions should serve as auxiliaries. If we start looking at production, trade and economic activities of any kind from the household point of view, the whole picture will change.
1.1. The origin of the picture
In the course of history, most societies have at some stage of social evolution been agrarian societies consisting primarily of fairly self-sustaining farming families. Such families had their fate in their own hands for the good and the bad, i.e. they had much more self-reliance and control of their livelihood - though at a very modest standard of living - than people living in the affluent, consumerist society.
The basic structure of the society at that stage is the often quite extended private family, which provides for most of the basic needs of the family members: for food, clothing, shelter, caring, entertainment etc. On a modest level, the family is a fairly autonomous unit, depending only on the provisions of nature and the capabilities of its members.
In spite of the often very patriarchal nature of traditional agrarian families, women had a central role in this kind of society because of their vital contributions to the livelihood of the family. Since only women knew certain essential tasks, this gave them a leverage of power in the society, where the services and goods could not be bought on the market. Thus the gender-based distribution of labour into male and female tasks does not necessarily imply inequality, as so often maintained in the feminist debate.
In the process of so-called modernization, industrialization, monetization, commercialization of the society, many traditional functions are transferred outside the family. Making of furniture and clothing, growing of food, child and health care, training and education, even entertaining, have been transferred outside the family and monetized. They have become either public services, provided by the society, or commodities purchased on the market.
A Swedish researcher, Ulla Olin, analysed this process profoundly in her paper prepared for a seminar on women and development, just before the first UN World Conference on Women in Mexico City, 1975 (Olin, 1975). She considers the family as a general model of human social organization and thus also of a society at large. Since an emerging state formation increasingly takes over the functions earlier performed by the family, she suggests terming the nation state as a symbolic family or public family. This fits the Nordic welfare states in particular. (Figure 1.)
We have to study also the interplay between private and public families. In traditional cultures, the societal structure outside private families was fairly thin. In the process of modernization, the structures of industrial production, trade, administration, public services, security and education grew stronger and increasingly powerful.
In this process, the tasks and skills of people became dispensable. It became possible to substitute almost everything with industrial products. Nobody is indispensable any
more in the economic sense. This was the beginning of commercialization of life and ultimately even human relations. For women, this development has naturally given new knowledge, tools and gadgets to make life easier, but it has been detrimental, too. The skills and tasks which used to be particularly women’s strengths have become dispensable and thereby their inherited leverage has virtually vanished.
In the course of this process, women were the last to remain in the private sphere, when men went to war, work and politics, children were sent to school, the sick were taken to hospital, and the aged were put into old people's homes. Thus women were also the last to enter the labour markets. That is one of reasons why they got the most monotonous and mechanical jobs, or those requiring manual skills and patience. Men were not able or willing to do these kinds of jobs - therefore they are also poorly paid even today (Friberg, 1983).
Figure 1. The Origin of the Picture
In human history after the transition from the gathering economy to the cultivation economy the extended farming family has been a basic unit of livelihood for long periods. Along the time the people’s skills and means developed to enable qualitatively better satisfaction of their basic needs. This kind of “a house-hold” (note: holding the house/farm) was fairly independent and self-reliant economic unit at the modest level. The livelihood was based on the quality and accessibility of natural resources and skills and assiduity of the people living together.
In the course of time various kinds of production and trade, independent artisania, exchange of goods and services, public institutions and administration were emerging around the farming families. The public society and economy was in the making. A means of exchange came into the picture, and people started to buy and sell goods and services. The people and knowhow, i.e. the labour and skills, started to move from the private families to the public market. The construction of monetarized economy and public structures took place. Gradually the public society emerged around the private households and the transition process of functions and people from the private to the public has continued ever since. Women were the last ones remaining in the private sphere.
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The process described above imply that - in the course of history - the public family, production, politics, culture and organization outside the private family, was designed, planned and built up exclusively by men, who possessed neither the particular gifts nor the experience which women had acquired over centuries of managing the private family and nurturing its members.
Ulla Olin considers this long-term imbalance between the male and the female rate of influence in planning and conduct of modern industrial societies to be the virtual source of most of the social, economic, human and international problems which we face today
1.2. The value of nonmarket, unpaid work
Seeing the process of emergence of the market economy through gender lenses helps us to understand better the lopsided state of industrial societies today, and the exclusion of and discrimination against women in these societies. It also gives an insight into the dynamics which still prevail between the home-based subsistence production of goods and services, on the one hand, and the public services and market on the other.
It is obvious that the amount of unpaid work is significant in the developing societies, but what is the amount and value of non-market production of goods and services in the industrialized countries? Even though industrial production and public services have taken over a major part of this, a lot of work is still done in homes and families.
A lot of surveys has been made in different countries concerning the time and amount of unpaid work in the households. And plenty of work is done for developing appropriate methods for measurement and valuing of the work and production done within the households outside the monetary economy and market ( INSTRAW, 1995).
The usual pattern of approaching this issue is that first the amount of work done in the households is measured in time, hours and minutes, the so called time-use survey being done. Even this is a complicated matter, since the housework usually implies several jobs being done parallel, for example tending to children while cooking and laying the table or ironing and mending the cloths. Is the issue just counting hours spent or counting the hours per function as to how many hours for tending to children and how many hours for cooking and laying the table?
For the statistics the value of work has to be calculated in money. This is even more problematic. What is the time wage or market price of the work which has an incalculable human value - like taking care of lively and dear children - and which requires a command a great number of skills? Or the work which is composed of low paid and highly paid components like washing the cloths requiring simple washing work plus the knowledge of the technician for managing the washing machine and the chemist knowing the composition and effect of the detergent?
The Organization for Economic Cooperation and Development, OECD has done a lot of work for creating the data sources and methods for measurement of unpaid, non-market household work and production in the OECD countries(OECD, 1995). The main categories of methods they have elaborated are the following: