Abstract
This article endeavors to describe and explain the constitution of modernity, its different trajectories, and its ongoing crisis using the Weberian concept of ‘legitimate order’, and by considering the changing relations between orders. One possible basis for the interpretation of the changing constitution of modernity – which involves, most significantly, a move beyond the great public/private dichotomy – is drawn from economic theory, or rather theories, of goods. The ability of certain orders to produce certain types of goods and to allocate them defines different types of society; in different societies, the same good will differ in nature and occupy a place within different property regimes. Changing relations can also be analyzed on the basis of the capacity of an order to impose upon others its negative externalities, and to manage effectively the production and allocation of its characteristic goods at different territorial scales.
In a previous piece of work (Pichierri, 2012), I chose to focus on the ‘European social model’ in order to test several theoretical tools arising from a constitutive problem of social sciences: what structural-functionalist sociology sums up with the conceptual pair of differentiation-integration (Pichierri, 2012). In the functionalist interpretation of modernization, society is divided into spheres of activity – subsystems of the social system, institutional areas, etc. – which become more distinct and specialized as the society advances; specialization and separateness create problems of integration and coordination which some believe are best resolved through universalizing procedures while others appeal to historical and geographical specificities as a foundation for integration. In the case of the European social model, and in particular the relationship between economic competitiveness and the social cohesion that it attempts to reconcile, on the other hand, contemporary (modern) societies’ tendency to differentiation would appear to be interrupted or corrected.
Adopting an institutional approach, I retrieved the Weberian concept of ‘legitimate order’, as well as certain neo-Weberian developments that center on the relationship between orders and managing the externalities that every order produces. 1 In the following pages, I return to this approach, starting from one of the three core problématiques of modernity identified by Peter Wagner (2013), namely, the economic problématique (the others are the political and the epistemic). The relationships between the economy and the other spheres of life associated with it (but also between the different institutional areas in the economic sphere) are viewed as relationships between orders. The change in the relationships between orders is what constitutes the shift called modernity, as well as its variants and its different trajectories. In particular, this change concerns the disembedding of the economic sphere from the other spheres.
In the previous article, and specifically in connection with how economic competitiveness and social cohesion are related in the ‘European model’, organization and territory were proposed as key dimensions for understanding the status of the relationship between orders. The independence or the subordination of an order, its production of externalities or its ability to manage externalities produced by others depend on its characteristic organizations, and take different shapes at different territorial scales.
While maintaining these assumptions, here I intend to propose a further basis for interpretation, which can contribute to describing and explaining the transformation of the relationship between orders that constitutes modernity, its different trajectories, its ongoing crisis. This basis for interpretation is drawn from economic theory, or rather theories, of goods. The ability of certain orders to produce certain types of goods and to allocate them defines different types of society; in different societies, the same good will differ in nature and have different property regimes. In this article, I will present a number of reflections on this theme, after a short general overview of the relationship between orders.
Relationships between orders in modern societies
The idea that society is not compact, but is divided into areas of activity that follow their own values and their own logics of action, is recurrent in the classics of sociology, as is the idea that that which is divided must in some way be integrated and coordinated if society is to function. Equally recurrent is the idea that the division of labor and differentiation are accentuated with the passage of time, that advanced societies are highly articulated societies, and that such articulated societies thus have an unprecedented need for integration mechanisms. The association between differentiation, modernity and progress has been particularly marked in the theories of modernization advanced after World War II, and especially in the versions that saw progress as an inescapable passage, through successive stages, to the American model: in Parsonian social systems theory, a society divided into subsystems that are highly specialized but cooperate harmonically.
Despite structural-functionalist sociology’s attempts to incorporate the Weberian theory of social action, the Weberian reading of society is quite different, and is more of a basis for subsequent institutional theories, not only in sociology. The idea of ‘legitimate orders’ that dictate ‘maxims’ which guide actors is far more flexible than structural functionalism’s social action, and perhaps even more flexible than contemporary institutionalism. 2 There can be many orders; they may be contradictory; their hierarchy, their relationships, their evolution, none of this is deterministically established; the link between the validity of an order and ‘representation’ which defines the ‘meaning-content of a social relationship’ draws our attention to the significance of the cognitive dimension that late-twentieth-century institutionalist theories have often ignored, given their concentration on the normative aspects of institutions. For Weber, as we should also recall, every form of power, and thus any order that can command obedience to its maxims, requires an administrative apparatus, an action directed continuously towards its actuation, an organization.
To paraphrase Marx, we could say that the history of all hitherto existing societies is the history of the struggle between orders. 3 This struggle often takes the form of an attempt at emancipation, at disembedding an order that was formerly subordinate to or embedded in another. In the grand narrative of Marx and Polanyi, modern society is born from the successful attempt of market orders to disembed themselves from all other social orders, whether religious or political: the exchange-value of things obscures their use-value, the market becomes ‘self-regulated’, the hand that regulates it becomes invisible. The Weberian notion of struggle between orders helps us understand that this disembedding is indeed an attempt, whose varying success in time and space marks different trajectories of modernity.
An emergent order seeks to differentiate itself simply by claiming its autonomy only in an early stage; its rise translates very quickly into an attempt to subordinate other orders, in some cases forcing them to assume the burden of its ‘negative externalities’ (Lepsius, 2006). This is what happens when the market transforms society into a market society. Commodification is tendentially totalizing; money, land, labor become for the first time in history objects of exchange. But even when commodification seems to be total, it is only a tendency: as Stiglitz (2001) notes in his Foreword to The Great Transformation, Polanyi essentially explores the myth of a free, self-regulating market, because radical self-regulation would destroy the market itself.
In Polanyi’s account, a society threatened by the rise of the self-regulating market turns to the state for its defense: when concrete measures are taken, they are typically legislative, i.e. of the state. In modern Europe, where the first industrial revolution takes place, in fact, economic orders must come to grips with another fundamental assertion of the modern: the state, a legal order par excellence (Kelsen, 1960). [The state] as a political institution operated according to a rationally enacted ‘constitution’ and rationally enacted laws, and administered by civil servants possessing specialized arenas of competence and oriented to rules and ‘laws’, has existed with these distinguishing features only in the West, even though rudimentary developments in these directions have crystallized elsewhere. (Weber, 1920–21, I, Vorbemerkung)
Despite the market’s ostensible disembedding and self-regulation, no market and no enterprise are free from public constraints. Of the hundreds of possible examples, a few strike the imagination: in 2013, when many considered the state to be the docile executor of the desires of international finance, Switzerland with a referendum and the European Union with a directive opposed only by the United Kingdom drastically regulated the banks’ freedom to decide the compensation paid to their executives. ‘Beneficial constraints’, as Streeck (1994) would say, but constraints for all that.
This problem has long been so evident that Marxism had to try to explain it. It did so with the idea of the state as a committee for managing the common affairs of the whole bourgeoisie (Marx and Engels, 1848), of the state as a ‘collective capitalist’ (Engels, 1878) which defends the capitalist mode of production from the attacks, not only of the workers, but also of the individual capitalist.
That said, the Kelsenian vision of the uncontested superiority of the state’s legal order is an ideal-type that is not to be found in reality, where what we have is a contested terrain, characterized by the ‘constitutive tension’ between capitalism and democracy and by the ‘asymmetric handling’ of economic and political membership (Wagner, 2012).
The balance between orders seems to tilt against the state when globalization works as a mechanism for escaping from political regulation (Wagner, 2013). 4 This is a terrain where we find other problems that have not been solved by theoreticians of modernity. Giddens, for example, considers the state to be an essential component of modernity; but he also considers modernity to be ‘inherently globalising’, and the disembedding which is its cause and effect to be essentially modern, in apparent contradiction to the weakening of the state that globalization produces.
On this terrain as elsewhere, fundamental indicators of the change in the relationship between orders can be obtained by observing their characteristic organizations: for instance, the enterprise’s ability to skirt the rules that the state is no longer able to enforce.
The social construction of economic goods
Goods and orders
In a definition that seems to be effective, modernity consists of the way in which epistemic, political and economic problématiques are faced: ‘at the center of the economic problématique is the question as to how best to satisfy human material needs’ (Wagner, 2013: 86). Modernity entails a shift in the relationship between the economic order and other orders: these shifts (also) entail changes in the ways the goods that will satisfy needs are produced and allocated.
The theme of economic goods runs through the entire history of economic analysis, but begins to coalesce into a lasting theoretical position only in the second half of the nineteenth century. As regards the relationship between goods and needs, Menger’s definition is unsurpassed in its precision: If a thing is to become a good, or in other words, if it is to acquire goods-character, all four of the following prerequisites must be simultaneously present: 1. A human need. 2. Such properties as render the thing capable of being brought into a causal connection with the satisfaction of this need. 3. Human knowledge of this causal connection. 4. Command of the thing sufficient to direct it to the satisfaction of the need. (Menger, 1871: 1–2)
As we know, Marx disputes this type of relationship between economic goods and needs. Or rather, though it is true that a good satisfies a need, this ‘use-value’ is entirely independent of the ‘exchange-value’ that arises at the time of the exchange. It is beyond our scope here to discuss the value theories underlying the various definitions. What is of interest to us as the starting point for the reflections that follow is the fact that Marx, and after him Polanyi, maintain that the radical transformation in the nature of the goods that satisfy needs and in the relationship between needs and the goods that satisfy them marked a decisive turning point in the passage to the modern market society. The transformation, for the first time in history, of money/land/labor into economic goods triggers dramatic consequences (negative externalities) that the state will have to shoulder: it is through the state and its coercively imposed norms that the ‘self-defense of society’ becomes effective. In connection with the rise of the market society, in any case, Polanyi notes that laissez-faire could not have come into being had it not been enforced by the state (Polanyi, 2001: Chapter XII). For Polanyi, the turning point coincides with what we would now call ‘privatizations’. The property regime changes for certain key goods, which become for the first time saleable, and can thus be private property.
Although Adam Smith already in The Wealth of Nations clearly indicated that there are goods that are useful to society that no private party has an interest in producing, designating goods as ‘public’ or ‘private’ property, which we can today consider as one of the indicators of the passage to modernity, only partially reflects contemporary self-understandings. A long time was to pass before property regime would receive rigorous theoretical treatment. In 1970, the Nobel Prize was awarded to Samuelson, the economist who more than any other contributed to defining public goods, and several more decades went by before the Nobel Prize was given to the economist who contributed most to a rigorous treatment of the commons: Ostrom.
We can say, however, that in modern societies, more and more explicitly, the property regime has been defined on the basis of the public/private dichotomy. 5 This is a ‘great dichotomy’ as the expression is used by Bobbio: the two terms are ‘mutually exclusive and jointly exhaustive’ (Bobbio, 2007: Chapters VI, VII). In the self-understanding of contemporary societies, it often overlaps the state/market dichotomy, which refers more explicitly to the orders that bring it into being. I repeat, however, that we are not dealing here with an alternative between two orders at the same level.
The constitutive tension between capitalism and democracy is produced by the constant attempt of the economic orders to shirk the demands of an order that seeks – often successfully – to limit their autonomy. 6 True, there have indeed been countries and periods in which the state did seem to be the ‘committee for managing the affairs of the bourgeoisie’ described by Marx. But even if we have reservations about the Kelsenian theory of the absolute supremacy of the state’s legal order, we must admit that it has long and strenuously defended its own autonomy and specific nature against other orders in fields where the latter seem only now to be in retreat. For example, despite the formidable and in many respects convincing Weberian attempt to portray the bureaucracy as a unitary model of administrative apparatus (which thus applies to the state as it does to the enterprise), public employment retains an unyielding specificity: if work is a particular type of good, that of the bureaucrat (Beamte, fonctionnaire, civil servant) is even more particular. The fact that this particular nature is now threatened – by rampant outsourcing on the part of the state, by the increasing extension of private law to public employment – is one of the signs of the transformation in progress.
The state’s specificity/superiority also applies in the area of goods and how they are treated by the state’s legal order. It would seem obvious that public goods be produced by the state (in its various forms and components) and that access to them be limited to citizens of the nation state. But even private goods are such only on the basis of a state legal order, and only the state guarantees that non-owners are excluded from using them.
The self-understanding of a society is (also) marked by how it defines the goods it needs. The most important institutional areas are characterized by the fact that they produce and allocate goods of different kinds (or rather, as we shall see shortly, with different property regimes). At the two opposite poles, we will have a market society which tends, or finds it necessary, to satisfy needs with private goods, while a socialist society will tend, or find it necessary, to satisfy the same needs with public goods.
But this polarity (and any mixed types of regulation that combine state and market) is no longer sufficient to define the societies we live in. Recent developments in the theory of economic goods propose definitions and classifications in which the character of goods – at least in some cases – does without the nation-state’s legal order: though the implications of this change are still not clear, it is nevertheless indicative of the current upheaval in the relationships between orders. The theoretical line of thought known as the property rights approach has implications that go in this direction. 7 In certain developments of property rights economics, ‘it was recognised that property rights may exist in the absence of the state, that is, under wholly anarchic conditions … Physical force or strong social norms may guarantee de facto control over the uses of and income from a resource’ (Foss, 2009: 3).
As part of this approach, Elinor Ostrom suggests that a distinction be made between the ‘nature of the good’ and ‘property rights’ to the good: [T]he problems resulting from confusing concepts were particularly difficult to overcome given that the term ‘common-property resource’ was frequently used to describe a type of economic good that is better referred to as a ‘common-pool resource’. For many scholars, the concept of a property regime and the nature of a good were thus conflated. (Hess and Ostrom, 2001: 53)
The fact that the same good (or rather, the same tangible or intangible object) has different potential for satisfying needs also characterizes the capability approach founded by Sen. Here we are dealing with ‘resources’ that, if effectively converted, produce different types of functionings, which are in turn combined in capabilities: neither the conversion factors of resources nor the characteristics of the capabilities can be classified a priori as public or private.
Essentially, it can be said today that goods that are not defined (at least, not exclusively) by the state’s legal order, and are not linkable (exclusively) to the market, acquire (and in some cases re-acquire) decisive importance. In the two-by-two matrix obtained by mapping goods along the dimensions of excludability and subtractability of use, there are two quadrants (club goods and common-pool resources) where the role of the state is not constitutive (Table 1).
Excludability and subtractability of use of goods.
Source: Ostrom et al. (1994).
But there are other goods that are not regulated by the state that Table 1 does not include, such as the global public goods we will discuss in a moment. And then there are the cases in which needs are satisfied through goods and services provided as a gift. The gift, patronage, the ‘third sector’, non-profits and others again are part of a composite universe where reciprocity in the Polanyian sense is only one of the principles at work; in this area, Hugon (2003) proposes using the notion of ‘community logic’.
More and more often, an order produces the goods belonging to it through logics of action, organizational tools and legal rules belonging to other orders. This will be the first of the themes addressed in the following paragraphs. For each, there is an extensive literature and a wide-ranging theoretical debate which I can only touch on here. What I will try to emphasize is their relevance to the standpoint taken in this article: changes in the property regime of goods and their territorial scale as the basis for interpreting the epochal transformations now sweeping across the map of orders.
On the need to distinguish between actors and principles of regulation
While the two decades following World War II were marked – not only in Europe – by increasing state intervention and a wave of ‘nationalizations’, starting in the 1980s, if not before, we have seen – at least in Europe – a dramatic tendency towards ‘privatization’, or in other words, the passage to a market regime of production and allocation of goods that formerly were produced and assigned by the state. The most extensive case, naturally, is that of the ex-socialist countries in the 1990s, but the trend is highly visible even as early as the 1970s. The decline of the ‘old’ industrial sectors, combined with that of the ‘semi-state’ IRI formula, triggered – to cite an example – a drastic contraction in Italy’s large state-controlled industrial sector and its passage to private ownership.
It would, however, be hasty to interpret the wave of privatizations as a pure and simple retreat on the part of the public orders ahead of advancing market forces. As Cella (1997: 183–4) points out: ‘The processes of privatization, to be brought to a successful conclusion, often requires institutional creation that is even more intense than that which characterized the regulation in the form of politics, or of redistribution.’ Especially in the case of privatizations resulting from industrial crises or from the end of real socialism, it is the state (or public organizations created for the purpose, such as Germany’s Treuhandanstalt in the 1990s) that manages the process. In the Western Europe of the 1970s and 1980s, the decline of the coal and steel industry (as well as that of other ‘heavy’ industries such as shipbuilding) went hand in hand with a new development that was completely unprecedented, and in many respects would not be followed through: strong and effective intervention by the European institutions, which guided and even determined that of the national institutions.
The need for ‘institutional creation’ becomes even more pressing and complicated in cases where there is no longer a correspondence between type of ownership and type of allocation/regulation of goods, a correspondence characteristic of the Polanyian model (Cella, 1997: 184–5). In other words, a public good may be produced by actors who differ in nature, and through different mechanisms or principles of regulation (Cella, 1997; Pacetti, 2008). This is a situation that occurs with increasing frequency, and can be seen with particular clarity in the case of ‘partial privatizations’, public/private partnerships and the like. To avoid the confusion and the ideological distortions surrounding these cases, it is advisable to make a distinction here, as Stiglitz (1999) among others suggests, between the nature of the good and the ways it is allocated. 8
The change in regime of the enterprises that provide public services takes place in ways that can be situated along a continuum: from forms that still entail control by the public order, through the partial conservation of ownership and/or a rigorous regulation of how the service is produced and regulated, to cases where public policies are contracted out, and beyond that to cases where, at least according to certain interpretations (Perulli, 2012), we see public goods being produced as the result of private governance, i.e. of contracts between private parties.
‘Leftist’ criticisms generally view all of these alternatives as signs of weakness, subordination, loss of control by the public order in favor of now-dominant private orders. But we cannot rule out, at least in theory, the possibility that sufficiently strong and legitimatized public actors can establish the rules of the game that private actors must follow. Nor should we forget that the processes of privatization are reversible, for reasons and in circumstances that are not particularly revolutionary: as is witnessed, for example, by the recent German cases of ‘remunicipalization’, where townships re-acquire direct control of service companies that previously had been privatized.
Even in cases of highly regulated privatizations, however, the public order allows, or goes as far as to promote, recourse to a rationality and a logic of action that is not its own. This is a terrain where organizational analysis is fundamental. ‘Institutional creation’ becomes effective when the ‘maxims’ of an order, in this case public, are implemented by dedicated organizations. In the case of fully-fledged privatizations, the new goods-producing organizations are enterprises, in some way influenced by the institutional context. But even when the public actor retains ownership control (partial, in some cases) of the service-producing enterprises, it is possible that the original agency relationship is essentially distorted, with the organization that should be the agent tending to become autonomous, and ending up playing on its own: the current stage of evolution of urban and regional governance offers many cases of this kind.
Mapping goods and resources
Club goods
In Ostrom et al.’s matrix (Table 1), club goods are characterized by non-rivalry together with excludability: the characteristics that in the case of public goods are valid in general (for the state) here are valid for a smaller group, namely, the club. The club can be defined as a ‘voluntary group deriving mutual benefits from sharing one or more of the following: production costs, the members’ characteristics, or a good characterized by excludable benefits’ (Sandler and Tschirhart, 1997: 335). The economic theory of clubs is anything but recent: the impression of a non-economist such as myself is that the other social sciences have made very little use of the theory in areas where it could prove invaluable, but that it has also entered into very little dialogue with other relevant currents of the economic theory of public goods.
The paper I have just mentioned demonstrates the complexity of the theory, or rather, of the theories, because there is no single theory of clubs. From the standpoint adopted here, it is important to recall that in Buchanan’s foundational article (1965), the club good is explicitly considered as a nongovernmental alternative to the optimal provision of certain public goods. Subsequently, some versions of the theory even postulate that a population can be divided into a certain number of clubs that are optimal in terms of size and provision of goods (Sandler and Tschirhart, 1997: 339).
The theme of the group and its size, which is crucial in all versions of club theory, and in the theories that can be linked to it, such as that advanced by Olson (1965), is strangely deterritorialized. And this is despite the fact that economic theory has long acknowledged the importance of the geographical range of public goods – and the possibility that this range is not limited to the state alone – in particular with the notion of local public goods. 9
The non-territorial character of club theory makes it enormously useful for research into networks, organizational networks in particular (another case where dialogue has been lacking), and to some extent explains the fact that it has been ignored by the scholars dealing with the composite area known as ‘local development’. This is all the more remarkable, given that a question quite near to that of clubs is already found in the analyses presented by Sabel (1994), using the notion of learning by monitoring, and is highly visible in the governance approach to local development (Crouch et al., 2001), which employs the notion of local collective competition goods. 10
In this case, belonging to a geographical area is itself the basis of membership in the club (Pacetti, 2008). This is a type of belonging that is by definition sub-national, which, according to the more radical versions of the local development paradigm, has contributed to the erosion of the state’s prerogatives. The joint action of local actors and European supra-national actors is a good example of that.
In the perspective proposed here – obsolescence of the public/private distinction, relative weakening of state orders – the more we bear in mind not only the geographical dimension, but also the organizational dimension, the more useful the economic theory of clubs proves to be. The economists we have quoted normally speak of the club as a ‘group’. But the group in question is also an organization, especially when we mean the organization in the sense used by Elinor Ostrom in the case of common-pool resources (infra), and as such entails various management problems: finding the optimal number of members, managing the reasons for joining and staying, mechanisms for exclusion, and so forth. The club can be viewed as an organizational network, where the state’s boundaries are relatively unimportant in determining the location of the network’s nodes, whether it be an industrial district or a trans-national cluster.
Global public goods
In the paper by Stiglitz (1999) quoted above, which was written while he still worked at the World Bank, the geographical dimension is explicitly thematized: the public goods defined by Samuelson are such inside the state’s boundaries, whereas a local public good is such within a more limited geographical area (sub-national, as would appear from Stiglitz’s text). But there are other non-national goods: global public goods. The latter’s benefits ‘accrue to everyone in the world’, as is the case of international economic stability, international security, and knowledge. Current definitions of ‘global public goods’ are not uniform. Another and even more complete classification of public goods on the basis of their geographical range includes local (sub-national), national, regional (belonging to groups of states) and global public goods (Sankar, 2008). Alongside strictly global public goods, we thus have, for example, ‘European’ public goods.
Some definitions and examples of ‘global public goods’ originate, as can readily be imagined, with international organizations such as the World Bank or the United Nations (Sankar, 2008): these definitions dwell in particular on the intergovernmental cooperation needed to produce such goods, and on the fact that this cooperation calls for widespread consensus regarding their general utility. This insistence on cooperation between traditional actors to some extent reflects the absence of dedicated, legitimate authorities who can produce these goods effectively. The nation state continues to be present when global public goods are the result of international agreements; quite often, however, the state is more of a constraint or an obstacle, as in the case of authoritarian regimes that censor books or the Internet, or of the states who block exports of certain types of knowledge to protect their own interests or for reasons of national security (Gallino, 2007: Chapter VIII).
The (economic) actors who operate within a nation’s boundaries use the public goods produced and made available by their own state: goods that the private, market orders have no interest in producing (unless they can be ‘privatized’). But even the enterprises that operate on a planetary scale need public goods; just as they are needed on the planetary scale by tourists, visiting professors, refugees, etc.
The same logic can be applied to the reduction of negative externalities, sometimes called public bads (Musgrave and Musgrave, 2002), that are produced inside a state, but move past its borders: air pollution and global warming are typical examples.
Nation states are thus under direct and indirect pressure from their citizens and enterprises to guarantee the availability of public goods in some way. This, as we have mentioned, can be done through agreements between states that contribute to the production of global public goods (or perhaps more often, ‘regional’ public goods) through cooperative conduct by their administrative apparatuses. But delegation to specialized international organizations is frequent, and important, where these organizations derive their legitimacy from the participating states’ consensus regarding certain needs for global public goods. 11
In this case, however, the agency relationship, if this is indeed what we are dealing with, is quite complex, if for no other reason than the fact that there is no single principal. The plurality of principals, and their contrasts, may be used by the international organization-agent as a resource to increase its autonomy. The role of the member states, then, is still visible and important, but it is exerted in a terrain where the purview of the nation state is far from being exclusive. Indeed, in the case of a global public good par excellence such as knowledge, the producers are a fluid and indeterminate plurality, only partially linkable to the participating states and their borders.
Considering knowledge as a global public good par excellence – as do a number of major scholars – should entail a certain mistrust of the definitions that regard globalization as a recent, or at least ‘modern’, process, given that ‘whether in the form of books, reports, documents, letters, or memoirs, for millennia knowledge has always crossed every border, every frontier’ (Gallino, 2007: 233).
Other doubts about conceptualizing and dating modernity emerge when the existence of global public goods appears to confirm the disembedding characteristic of globalization. As Giddens (1990: 21) puts it, ‘the “lifting out” of social relations from local contexts of interaction and their restructuring across indefinite spans of time-space’ are a typical consequence of modernity. A consequence, however, that at least in the case of global goods, contributes to the crisis of another essential component of (Western) modernity: the state.
Common-pool resources
One of the four categories of goods obtained by mapping goods along the dimensions of excludability and rivalry is, like club goods, neither public nor private. Common-pool resources share with public goods the difficulty in excluding potential beneficiaries, with the consequent risk of free-riding; they share with private goods the fact that one person’s consumption subtracts from the quantity available to others, with the resulting problems of ‘congestion, overuse, pollution, and potential destruction unless harvesting or use limits are devised and enforced’ (Hess and Ostrom, 2001: 54). Going beyond the public/private dichotomy is at the foundations of Elinor Ostrom’s work. In producing and allocating common-pool resources – goods that are chiefly but not exclusively ‘natural’ – both the ‘bureaucratic Leviathan’ and the enterprise are inadequate. Neither the state nor the market are suitable orders for managing common-pool resources, which require other types of institutional approach that ‘appropriators’ have shown themselves, and continue to show, capable of inventing with considerable creative ingenuity. Though often cited in their defense, Ostrom’s work lends only partial support for the movements that today call for the re-appropriation of common-pool resources. With due allowance for the terminological difficulties, ambiguities and differences between them, these groups frequently seem to clamor for a return to the public in the sense of a return to the state, even in cases where Ostrom would consider the ‘bureaucratic Leviathan’ to be inadequate. As Vitale (2013: 44) correctly points out in his polemic against the ‘common-gooders’, Ostrom in her best-known work expressly states that she concentrates on relatively small groups and on resources whose geographical base is relatively limited. 12 Nevertheless, we must add, attempts to apply the findings thus obtained to broader areas are not hard to find in Ostrom’s work and that of her collaborators.
From the standpoint of this article, the inadequacy of both the state and the market in managing a certain class of goods is in any case the crux of the matter. Pace Polanyi, it is not only the advent of the market that is deleterious to, and may even destroy, common-pool resources; in developing countries, common-pool resources have often been destroyed by governments that have ignored existing institutional arrangements in order to transform them into public goods without providing the resources needed to control access to them (Hess and Ostrom, 2001). A similar view can be taken of certain destructive effects – on tangible and intangible rural resources that can be defined as common-pool resources – of Europe’s Common Agricultural Policy, which has espoused both a state approach (providing subsidies to enterprises) and a market approach (through subsidies designed to strengthen the market presence of European enterprises) (Oostindie et al., 2010). Today, the official model of Europe’s agricultural policy is quite different, at least in its intentions, and strives more to encourage the rise of niche, or ‘nested’, markets, which can to some extent be seen as common-pool resources (Polman et al., 2010).
From Ostrom’s institutionalist perspective, the production and allocation of common-pool resources call for ‘institutional creation’: the variety of institutional stances taken for common-pool resources and the general rules that can be derived from them are rightly seen as the central issue of her research. Often, however, too little attention has been paid to the fact that institutional creation becomes effective only through organizational creation, and that in this terrain Ostrom’s organization concept is connected (how consciously I cannot say) to that area of organization studies that adopts a broad definition of organization, seeing an organizational dimension in situations that do not necessarily involve formal organization. 13
Reciprocity, gift-giving, solidarity
The foregoing paragraphs have dealt with goods that have now been defined with a fair amount of accuracy in the economic disciplines, and that do not fall within the public/private dichotomy characteristic of modernity.
These conceptual categories can be linked to a set of approaches and theories that in the second half of the twentieth century radically criticized the theories of modernization, and contributed to a relativistic interpretation of modernity: modernity is arrived at through a plurality of trajectories; modernity can effectively absorb pre-modern elements; modernity is not irreversible; effective ways of satisfying needs are not necessarily modern. A few brief remarks are in order here concerning several particularly fruitful lines of thought.
To use Polanyi’s terminology, the modern is characterized by the alternative or simultaneous presence of two principles of regulation, redistribution and exchange; however, many sociological and economic studies have demonstrated the persistent importance of the third principle, that of reciprocity. In socialist as in market societies, a considerable proportion of goods and services have continued to be allocated on the basis of membership: of the family, of the geographically based group, of the community of practice.
Much of what Polanyi defines as reciprocity falls within the sociological concept of community. But whereas the traditional views of community, though perhaps sympathetic to it, saw it as an obstacle to the unfolding of modernity, and thus to economic development, much research has shown that the existence of community ties can be a formidable factor for economic development. The literature on local development, and in particular on industrial districts, has demonstrated beyond all doubt that this is true, especially in Italy, and the success of certain types of Asiatic capitalism can also be interpreted in this light.
The gift economy has long been considered one of the most important and fascinating components of pre-modern societies. These are the societies to which Mauss (2002: 4) refers in asking: ‘What rule of legality and self-interest, in societies of a backward or archaic type, compels the gift that has been received to be obligatorily reciprocated? What power resides in the object given that causes its recipient to pay it back?’
The gift, in the form of charity or patronage, for example, can also be of major importance in contemporary societies. We cannot say that it follows, in general, the iron logic of reciprocity, of the gift ‘obligatorily reciprocated’, but it is interesting to note that these types of gift are often explained by the givers as reflecting the intention of ‘returning’, giving back something to society.
In addition, mechanisms that are quite similar to gift-giving have been identified by a number of scholars as essential in explaining the development of the most ‘modern’ of technologies, the Internet (Berra and Meo, 2001). The Internet was not born from the market; that needs that are typical of the state (military considerations) had a role in its birth is undoubted, but the extent of this role is debated. What is beyond doubt is that orders that are neither of the state nor the market have played and continue to play a decisive part in its development.
Types of logic that are similar, though not identical, to gift-giving can be found in the variegated archipelago known as the ‘third sector’ (non-profits, volunteerism), which supplies goods chiefly to the more disadvantaged portion of the population in forms that range from charity to civil service. Some of the more interesting developments can be seen in the growth of this type of activity in an area that is no longer that of the state, or not only that of the state: many global public goods are now supplied by NGOs, organizations that declare themselves to be ‘non-governmental’ without therefore being ‘private’.
The expression ‘fair trade economy’ covers an important part of the ‘third sector’, referring explicitly to the ‘hybridization’ between different principles of regulation (Laville, 1994). But the idea of hybridization comes up against difficulties of interpretation and contradictions associated with the fact that the orders inspired by solidarity cannot be considered as alternatives to market orders, and above all to those of the state.
In certain cases, voluntary, charitable or cooperative organizations and the like supply goods and services that the market and the state have never provided or now have increasing difficulty in supplying. Here, however, it is often incorrect to speak of them as substitutes or alternatives. The notion of ‘subsidiarity’ rarely covers cooperation between equals.
In a growing number of cases, on the one hand, the public orders simply outsource activities whose costs would otherwise be excessive: organizations like social cooperatives often could not survive without some form of public support.
On the other hand, there is no lack of cases in which private (or rather, non-public) organizations, associations or cooperatives are strong enough to exercise de facto public functions, thus changing the balance of power between orders. In Italy, I would suggest that the vicissitudes of ‘red’ cooperation in regions such as Emilia-Romagna provide fertile ground for research, as do the theory and practice of subsidiarity represented by Comunione e Liberazione and its Compagnia delle Opere in regions such as Lombardy.
Today, at least in Europe, the situation of volunteer and charitable organizations belonging to the third sector is paradoxical and contradictory. Their role in managing the negative externalities produced by other orders is vital when the production of these externalities is the result of state failures and market failures. On the other hand, the orders that produce negative externalities, whether they are of the state or the enterprise, are less and less willing to provide economic support to those that deal with these externalities. Only a portion of the ‘third sector’ is thus in a position to maintain, and perhaps increase, its power and capacity for action.
Conclusion
We can now draw a few provisional conclusions from the foregoing notes. On the whole, what we have attempted to do is to contribute to a research program which acknowledges ‘the planet’s unstoppable metamorphosis’ and counters ‘worldwide anomy with the need for a new order’ (Perulli, 2014: 3). Our focus has been the debate – confused, to say the least – surrounding ‘public’ and ‘common’ goods, and our conclusions are threefold.
First, it would appear that one of the sources of this ‘worldwide anomy’ is the crisis of the ‘great dichotomy’ of public and private, where public essentially means state. A manifestation of this crisis is the increasing ‘hybridization’ (Laville, 1994) between the two spheres, and between them and other emerging or re-emerging orders that can satisfy needs with different types of goods or goods produced in different ways.
Hybridization takes different shapes: production of the same good by different actors; joint production of the same good by different actors; production of the same good, by the same actor, with production approaches and means of implementation belonging to another order. If we also consider the variations in geographical range, we arrive at the conclusion that there is no longer one best way (if there ever was) to produce and allocate the different types of goods, but a variety, not necessarily dichotomic, of possible solutions. The same good can be produced and allocated, even simultaneously, by more than one order. Situations thus arise where ‘in the same social group, a plurality of contradictory systems of order may all be recognized as valid.’ And situations arise where ‘it is even possible for the same individual to orient his action to contradictory systems of order. This can take place not only at different times, as it is an everyday occurrence, but even in the case of the same concrete act’ (Weber, 1922, Chapter I: 29–30).
Today, it is generally easier to criticize the inadequacy of the existing actor or mechanism than to indicate and plan alternative actors and mechanisms. Suggested alternatives are usually disarmingly simplistic, and ‘common-pool resources’ often take the form, in the mythology of contemporary movements (Vitale, 2013), of a new and vaguely defined property right, which sometimes seems to be a totalitarian reformulation of the public.
Second, we can say that despite the tendency, implicit in dichotomic formulations, to consider public and private, state and market, on the same plane, the relationship between the two orders has never been symmetrical. The disembedding of the market has never been complete, the state has never stopped constraining it. The market’s attempt to become independent takes a step ahead with globalization, but even in globalized markets regulation is not entirely absent. In part, it still arrives from nation-states, law and international organizations, in part from institutions in statu nascenti or in any case difficult to define, as in the case of knowledge seen as a public good. Further consideration should also be given to the fact that these incipient forms of regulation affect both public goods and public bads.
In a growing number of cases, it can be said that the production of public goods, especially at the global level, meets the need to address the problem of public bads, negative externalities produced by other orders. Given states’ diminishing ability to deal with the negative externalities arriving from other orders, and the tendency to produce them at home, as it were, managing these externalities entails (as in the case of global public goods) the appearance of new actors and the production of new goods. The ability to regulate negative externalities is potentially a fundamental criterion whereby orders gain legitimacy.
Finally, it seems clear that there is a relationship between the different ways of producing collective goods and the presence – or absence – of different forms of democracy, or at least of collective decision-making. It appears to have been proven empirically that common-pool resources (as rigorously defined, and not a generic ‘common good’) and club goods are proving grounds for new forms of collective decision-making that are not necessarily ‘democratic’.
At the supranational level, the problem of democratic, or in any case collective, choices regarding the production and allocation of goods is even thornier. As these concluding remarks are chiefly intended to point the way for further research, I suggest that particular attention be devoted to analyzing what is now happening at the ‘regional’ level, i.e. that of more or less integrated systems of states such as the European Union (Pichierri, 2012). It is at this level that major efforts have been and continue to be made, though they have not always met with success, and it is at this level that the institutional capacity to produce public goods and reduce negative externalities is a fundamental prerequisite for integration and legitimation.
Footnotes
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.