Basic principles of possession-based economies

Hunter-gatherer economies

Hunter-gatherer economies have individual possession of artifacts, tools, ornaments, etc. but typically no individual possession of productive resources such as land (Ingold et al., 1988; Gowdy, 1998). Eleanor Leacock and Richard Lee (quoted in Ingold, 1999: 404) suggested that the group of hunter-gatherers has the collective possession of the means of production and that this common possession is associated with a ‘total sharing’ of production within the group, no accumulation, and free-access to productive resources (such as technology, raw materials and knowledge). Land is usually regarded as a constant from which the necessary resources are taken. Land is therefore not possessed as such but it is the ‘goods’ and ‘services’ of land that are appropriated, individually or collectively. However, in some hunter-gatherer societies, each community controls a given territory within which they are mobile. In that sense, the term ‘semi-nomadic’ may sometimes be more appropriate than ‘nomadic’ (Biesbrouck, 1999). Hunter-gatherer economies typically have complex possession rules related to the use of resources. For example, the hunting of valued animals, such as elephants, is strictly regulated.

Agrarian economies – ‘simple’

The subsistence-oriented agricultural (or horticultural) community is a form of economic organization that has existed since the Neolithic. Many leading authors have been interested in it, such as Engels (2010 [1884]), Georgescu-Roegen (1976 [1965]), Wolf (1966), Sahlins (1974 [1972]), Shanin (1973), Meillassoux (1975), Scott (1976) and Netting (1993). Nowadays, there are hardly any peasant communities that are strictly self-sufficient: each has one link or another with the market. Initially, most agricultural systems were based on shifting cultivation. When a forest is transformed into a field, the common possession of the village typically becomes an individual or domestic possession. After some years as fallow, the field is likely to transform into a secondary forest while individual possession disappears. This space becomes available again to the same household or to other members of the village or future generations. The implicit principle – still observable today – is that the land is ‘lent’ to the individual, whose possession can therefore only be temporary. ²

In most regions where traditional agriculture has survived, there are three main types of possession of the land and resources (Colchester, 2001; Gerber and Veuthey, 2011). First, there is the possession of the lineage, which goes back to a more or less mythical ancestor, and it is a segment of the lineage – often the clan – that regulates access to land. The land remains the ultimate possession of the past, present and future generations of the lineage – hence the customary impossibility to alienate land (see also Gregory, 1982). The strategic importance of the lineage led Rey (1971) to describe such economic formations as a ‘lineage mode of production’. Second, there is community possession: several lineages can coexist in the same village and share certain spaces such as pasture lands or forests. Game, for example, can be hunted on the land under community possession but then individually appropriated by the hunter. Third, there is individual or domestic possession, based on the ‘axe right’ (see below), but the lineage symbolically keeps its collective rights over the land.

Agrarian economies – ‘complex’

Around the Mediterranean Sea, a complex agrarian economy like the Roman Empire showed features of a modern market economy based on ownership rights in some ways comparable to modern property, i.e. with mortgages, credit, collateral, contracts, land markets, monetary evaluations, state enforcement, etc. (Harris, 2008). In the European context, however, ‘feudal’ systems represented a return to possession. In its typical form, ‘feudalism’ is characterized by a class of land possessors exploiting a class of peasants (Bloch, 1982 [1939]; Le Goff, 1984). The peasants can freely cultivate their land as long as the taxes, in labor and in kind, are paid to their landlord (and to religious authorities). Such economies remain essentially rural, but parallel relationships existed in cities.

Wolf (1982) coined the term ‘tributary mode of production’, thereby putting an end to increasingly sterile debates about whether the concept of ‘feudalism’ could be applied to regions such as Asia, Latin America or Africa. In the contemporary world, remains of the tributary mode of production may take the form of ‘client–patron’ relationships. These dyadic relationships are typical of traditional possession-based agrarian economies (Scott, 1972; Wolf and Mintz, 1957; Martínez-Alier, 1977). They encompass a broad spectrum of mutual obligations where the patron relates paternalistically to his client while the latter is expected to display a kind of filial loyalty to the patron. Such relationships customarily rest upon the provision by the patron of some subsistence rights for the peasant – mainly use rights on the land – but they are usually rooted, more prosaically, on rent and debt bondage.

Informal economies

The ‘informal economy’ is a conceptual by-product of property-based economies which have monopolized the ‘formal’ (Hart, 2009). The notion originates from the failure of standard economics – almost exclusively focusing on property-based dynamics – to address a large part of the world that it claimed to describe (although economist J.H. Boeke identified a ‘dual economy’ as early as 1930). The informal economy refers to various realities such as domestic work, street commerce, illicit trafficking, non-declared jobs in large companies, etc. It is usually defined in opposition to the formal sector: small-scale versus large-scale, low versus high productivity, unlisted versus registered, self-employment versus wage-based, and so on.

In the Global South, it is estimated that from 50 to 75 percent of the non-agricultural workforce is located in the informal (possession-based) sector. The latter typically follows a logic of simple reproduction. The form of ownership that dominates is individual or family possession. Accumulation with technical change is rare. In most cases, the low revenues are immediately consumed. There are at least three factors which limit accumulation (Lautier, 2004): (1) the nature of the activities (e.g. car washing, street selling) makes technical change irrelevant; (2) possession prevents access to formal credit – only small-scale ‘possession credit’ is possible, such as loans from friends or relatives, pawnbrokers, moneylenders, tontines, traders (with a guarantee on future harvests or labor) or microcredit (Gerber, 2015); and (3) the social or relational dimension of economic activities is a survival factor much more important than the technical aspects: the informal ‘microenterprise’ knows the individual needs of its clientele and may have no interest in modifying its techniques. Moreover, the illegality, at least partial, of the activity makes technical change or growth more risky as it increases visibility and possible sanctions. In the informal economy, therefore, accumulation mainly occurs through ‘dispersion’ (‘extensive accumulation’) rather than through the growth of a given workshop. While such possession-based activities cannot, or even do not, seek to grow, their primary goal is to ameliorate the available income and to create jobs for relatives (more later).

Soviet-type economies

Property-based economies have improved the lives of many people around the world, but they have also generated massive negative impacts, whether on workers (Marx, 1976 [1867]), the environment (Kapp, 1978 [1950]; Georgescu-Roegen, 1971), poor countries (Prebisch, 1950; Amin, 1970), communities (Marglin, 2008) and inequalities (Myrdal, 1957; Piketty, 2014). Alternative systems have thus sought to cure those ills, most notably by going back to new forms of possession. The first experiences in that direction were the industrial economies of the ex-Eastern block and its allies which were strategically based on state possession. Heinsohn and Steiger (2003: 486–7) succinctly described these systems as follows:

[Money, interest, credit and debt] had nothing to do with corresponding notions in a property-based economy. […] What were called the ‘state bank’ and ‘commercial banks’ formed a monobank system where the latter were branches of the former. […] The state bank’s ‘credit’ only gave access to those real goods whose production was intended in the plan of the central authority. Parallel to the production of goods, state means of payment were printed and distributed according to the plan in the form of notes of the monobank as well as demand deposits at its branches. These notes and deposits were called money, but they were simply anonymized ration cards and interest and collateral played no essential role in their credit assignment. These cards did not give an absolute command over resources but functioned as an entitlement to obtain the centrally-planned and produced goods. […] All forms of property, but not individual or common possessions, were prohibited. The socialist ‘firm’, therefore, could be neither bought nor sold, nor could it obtain credit by pledging its possessions. […] Naturally in such a system the ‘debtor’ did not face the danger of bankruptcy if he or she was unable to meet dues.

Post-capitalist economies

While Soviet-type economies did not work as expected, it does not mean, of course, that any possession-based alternatives are bound to fail. In fact, many alternative economic experiences based on possession – often community-based – are put into practice today around the world, and often with the explicit goal of gaining in autonomy against the dominant property-driven economy (Gerber, 2015). Gibson-Graham (2006) wrote that it is high time to recognize the institutional heterogeneity of ‘capitalism’ with its various forms of ‘capitalist’, ‘alternative capitalist’ and ‘non-capitalist’ activities. In our terminology, we would say that it is high time to recognize the different forms and logics of possession within economies where property tends to dominate. In the same vein, Graeber (2011: 100) argued that ‘the sociology of everyday communism is a potentially enormous field, but one which, owing to our peculiar ideological blinkers, we have been unable to write about because we have been largely unable to see it’ (by ‘communism’, this author means ‘a logic of common possession’). This point is also illustrated by Cohen (2009), who takes the example of a camping ground where the large majority of the people will prefer a ‘socialist’ organization of the camping (i.e. a logic of common possession) rather than a ‘capitalist’ functioning (logic of private property). Mauss (2007 [1925]) argued that alternative economic logics could be built gradually, from below, and that it would be possible to shape a new society ‘in the shell of the old’, based on mutual aid and self-organization. But the precise form of such a post-capitalist, possession-based economy is still to be defined. A lot can be learned from traditional economies.

1. Under possession, work creates entitlement

In most possession systems, whether rural or urban, personal work creates ‘rights’ or entitlements. This principle was already observed by John Locke, whose ‘labor theory of ownership’ (1689) argued that when a person works, that labor enters into the object; thus the object becomes the ownership of that person. ³ The idea that productive investment creates ownership is typical of possession systems but not of property-driven economies where rights have to be formalized and where the financial level of the economy has become strategic and largely disconnected from the personal productive work of economic agents.

In the rural context, for example, this principle is called the ‘axe right’: in clearing a field, the cultivator de facto becomes the possessor of this land. But his or her possession depends on the length of the investment: when the individual leaves no visible trace of his work, his entitlement disappears (see above). One of the implications of this principle is that one cannot claim other gains than those obtained through personal or family work. After the harvest, however, the land is not a ‘field’ anymore and it is therefore open to gleaning and to animals. Of course, there are many restrictions to this principle. The village’s commons, for instance, are not open to personal appropriation through productive investment. In addition, when a long period of time is needed between the investment and the fruits of work (as in the plantation of trees) the possession may last longer than the cultivator’s work period.

As populations and social differentiation grew, and as the possibilities of expansion became restricted, families had to continue exploiting the same fields for longer periods of time in a more intensive way. Ecosystems became more unstable and additional productive investments were necessary (Boserup, 1965). Terraces in mountainous regions were built, arid areas were irrigated, and more manure became essential – an important work that justified a longer-term possession. Technical change (e.g. fertilizer improvements) also extended the productive capacity of land, which strengthened land possession. But it is important to realize that all these examples do not imply property rights: if under possession, none of the key potentials of property were possible.

2. Possession coexists with a community-based subsistence ethics

Most rural and urban possession-based communities – except perhaps some hunter-gatherer and horticultural communities – are not socioeconomically homogeneous entities. They typically relate to an elite, more or less distant, that captures a portion of their productive work in the form of rent, tax, interest, labor or in kind (Wolf, 1966). Yet this does not prevent these communities from displaying what James Scott (1976) has called a ‘subsistence ethics’ (or ‘moral economy’), habitually grounded, among other things, in the principle of equality of opportunity to work for all the members of the community. If one starts with the premise that only work creates entitlement, it is not surprising that the ‘ethics of possession’ will demand that all must have the possibility of working: ‘The traditional village […] wants to enable as many of its people as possible, preferably all, to labor for a livelihood within its ecological niche without primary consideration of individual merit. Merit determines not who can labor but only how much one’s earnings shall be’ (Georgescu-Roegen, 1976 [1965]: 220).

Possession-based communities have typically elaborated various mechanisms intended to cope with special conditions – independent of personal work – such as a large number of children, the variable quality of soils, or unfortunate circumstances like sicknesses, accidents or a bad harvest. These mechanisms take the form of a periodical redistribution of lands, the expectation that richer community members must help the poorer ones (e.g. through loans), gleaning, production sharing, and collective works. At the height of the harvest season, for example, collective work is indispensable, not out of fondness for socializing labor but simply because of limited family workforce and because of the reciprocity it implies (Gregory, 1982). Mutual aid has been observed by many analysts of possession-based communities.

With increases in population and in cultivated land and with limited technologies, these coping mechanisms cannot solve all the problems anymore. A new tendency may then appear which has been documented in many possession systems: peasants prefer to live with the vital minimum rather than to exclude some members from the possibility of working. A high population density, therefore, often leads to a low productivity while avoiding unemployment. In this context, the marginal productivity of labor may reach zero – while in property-based economies (i.e. where profit maximization prevails) it is theoretically equivalent to the wage-rate (Georgescu-Roegen, 1960). Accordingly, the principle of marginal productivity of labor is incompatible with the ethics of many possession-based societies because it would result in an intolerable unemployment rate. Such extreme conditions – although not supposed to last for very long – illustrate how the ‘subsistence ethics’ of possession systems transfers risks from the individual to the group.

3. The economic logic of possession centers on the family

Rural and urban possession systems are characterized by productive activities primarily targeting the reproduction of the family household. This is of course also the case of many property-based activities, but the difference often lies in the priority granted to family relationships. This family-oriented logic may appear ‘anti-economic’ in the eyes of developers or economists – another way of saying that it does not correspond to the logic of property they are used to.

In many areas of Africa and Asia, for example, the extended family (including the clan or lineage) plays an important role in economic decision-making. But this role is double: solidarity and constraints. The solidarity of the extended family may allow the mobilization of a large network of relatives in order to obtain loans or donations which can then be used in personal economic activities. But family solidarity can also be a constraint. Referring to Burkina Faso, Jacob (2007: 18, our translation) wrote that: ‘the producers are never totally freed from the necessities of the moral economy, notably from their obligations to satisfy the solidarity or redistribution demands within the framework of the family, the lineage (particularly during funerals) or the village (contributions for sacrifices in order to call the rain for example)’.

The household-centric logic of possession-based communities has been observed by many anthropologists and agrarian analysts, most famously perhaps by Alexander Chayanov (1955 [1924]). His ‘consumption-labor-balance principle’ argues, among other things, that the labor of peasants usually increases only until it meets the needs of the household and therefore does not seek accumulation. The (possession-based) peasant farm thus follows a very different logic from the maximizing (property-based) capitalist firms. This phenomenon has also been observed today in the urban milieu. In Monterrey (Mexico), for example, an important credit program was implemented with the aim of helping informal production units (Cabello Zul, 1986, quoted in Lautier, 2004). At the beginning, one or two jobs were created, generally occupied by members of the nuclear family. But after that, the new loans and most of the surplus generated were used to improve housing conditions or simply the alimentation consumed, but not to expand the microenterprise’s size through the employment of people outside the family. Even if these practices negatively affect productivity or income growth, it would be a misinterpretation to call them ‘irrational’ as rationality always depends on the institutional context (an old substantivist claim). The ‘sub-optimal’ character of the social bonds that are in this way preserved is the ‘price to be paid’ to ensure the reproduction and cohesion of the social group.

Broadly speaking, the family-based productive unit is resilient enough to absorb short-term shocks (see above) but the prolongation of crises can de-structure the family in an irreversible way by pushing family members into individualized small jobs and migrations (Lautier, 2004). The generalized transition to property-driven economies has often had a negative impact on family productive units by increasing the atomization of its members.

4. Possession is embedded into larger sociocultural systems

Property-led economies are associated with an ideology emphasizing science, technology and a specific form of rationality that Marglin (2008) has called ‘algorithmic’. Algorithmic rationality is fundamentally driven by a calculating and maximizing approach to economic activities and tends to see nature (‘resources’) in an instrumental way. In contrast, following Karl Polanyi (1984 [1944]), possession systems have retained strong sociocultural, ethical or religious imperatives that property-led economies have lost. The rules defining the functioning of the economy – particularly the use of natural resources – cannot be dissociated from the rest of society and from the broader belief system. This normative, metaphysical dimension takes the form of taboos, expectations or interdicts – important institutions for anyone seeking to understand possession-based regimes (Berkes, 1999; Descola, 2005). The sociocultural embeddedness of the economy has been one of the main focuses of economic anthropology (and Veblenian institutional economics), including in more modern settings dominated by property.

In Cameroon, for example, Oyono (2002: 340, our translation) noted that the forest provides the frame for many myths and popular tales expressing all sorts of norms and codifications that should be respected:

Beneficent, [the sylvan beings] jealously look after the human beings who respect the rules of the social life and, accordingly, ensure their protection as soon as they enter agroforests. […] Conversely, malevolent geniuses, the minkug, distribute bad fortune to all those who, because of their non-respect of the regulation principles in effect in every clan space, deserve to be punished.

5. Possession and biotic resources, when combined, have a good chance to be sustainable

As explained by Nicholas Georgescu-Roegen (1971), different types of natural resources have very different economic potentials. Accordingly, mineral (nonrenewable) or biotic (renewable) resources combine more or less successfully with regimes based on possession or on property (Steppacher, 2008) (see Table 2).

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Table 2.

Relations between institutional regimes and types of natural resources.

	Institutional systems
	Property	Possession
Natural resources
Mineral	‘Explosive’ but unsustainable	Dissimilar potentials; no technological harmonization
Biotic	Conflictive potentials; creates unsustainable agriculture	Good match; potentially sustainable

The combination of property/mineral resources is particularly ‘explosive’ but clearly unsustainable. Historically speaking, it is likely to remain a flash in the pan. Indeed, mineral resources are capable of inducing the exponential economic growth so sought-after by property-led economies, but these resources are exhaustible and the related pollution may saturate the assimilation capacities of the environment. By contrast, possession combines very well with biotic resources – whose growth potential is naturally limited – and this arrangement is potentially sustainable. Possession systems have no imperative for short-term growth; they are also more reactive to the possible deterioration of funds because of their direct connection to the immediate environment (see below). Incidentally, the combination possession/biotic resources has dominated the vast majority of human history and it is likely to come back to the forefront when key mineral resources will be depleted.

The two other possible combinations of Table 2 (i.e. possession/mineral resources and property/biotic resources) have mismatching potentials. On one hand, the Soviet Union (i.e. an industrial system based on state possession) largely evolved by mimicking the technologies of property-based societies and finally collapsed. On the other hand, property-driven agriculture tends to imitate the industrial logic based on all kinds of mineral resources, a process that has generally led to catastrophic environmental results (Vandermeer, 2009).

6. Possession favors a multiple complementarity between combinations of resources and needs

People evolving under possession – whether in a traditional village or an informal ‘microenterprise’ – have to develop knowledge systems and technical practices that use mostly locally available resources and that orient them towards a culturally-defined need structure. ⁴ Possession systems cannot count on the abstracting potential of property which allows, as we have seen, ‘filtering out all the confusing lights and shadows of [an asset’s] physical aspects and its local surroundings’ (De Soto, 2000: 48). As a result, possession systems foster economic thinking in terms of a multiple complementarity between combinations of resources and needs, as opposed to the kind of reductionist thinking typical of property-driven economies. In the latter, the substantive decisions about the complementarity between local resources and culturally-specific needs are replaced by a formal decision based on the resources’ market prices and the needs that are expressed through purchasing power. The logic of property thus leads to extreme productive specialization and division of labor, and to a choice of products and services for which enough purchasing power exists. This is true for industry, agriculture and services.

Let us take a rural example. From an agro-ecological perspective, traditional possession-based agriculture is far from ‘simple’. At the household level, it typically involves complex successions of polycultures and a multifunctional management of agro-ecosystems aimed at diversifying yields and therefore securing livelihoods (Toledo, 1990; Vandermeer, 2009). Funds and services of resources are thus used in a complementary way and are connected to a system of human needs that may be material and non-material, including spiritual. At the community level, the village’s territory classically forms a complex mosaic equally multifunctional. This territory is to the village what the garden is to the farm. ⁵ In addition to the houses and gardens, the village’s territory includes the various fields but also pastures, orchards, bodies of water and portions of forest.

The same kind of approach based on complementarity of needs and resources has been developed in the modern field of industrial ecology. However, the concrete applications of this potential have unfortunately remained limited due to the frustrating logic of property (see below).

7. The logics of possession and of property are prone to clash

Systems based on possession and on property generate very different and often very conflicting logics. This can be observed within property-based societies as well as between societies where property dominates versus others based on possession. Let us briefly look at both cases.

Following Martínez-Alier (2009), modern economies can be divided into three conceptual levels: (1) the ‘virtual’ level of the financial economy, (2) the ‘real’ level of production, consumption and distribution, and (3) the ‘real-real’ level of the flows of raw materials, energy and wastes. There are rampant or open conflicts between these levels and they are largely rooted in the opposite logics of property and possession. The financial level is governed by the abstract and disconnected rationality of property while the other two levels are essentially regulated by the various forms of possession according to their specific contexts. This clash manifests itself in many ways, as in the class struggle between capitalists (i.e. proprietors) and workers (i.e. non-proprietors, often possessors), as explained by Karl Marx. ⁶

As far as the clash between possession-based and property-driven societies is concerned, the expansionist dynamics of the latter (i.e. the imperative of growth) has fostered colonial expansion and generated numerous conflicts. Ferro (2005: 22, our translation) noted that ‘it is high finance that has almost always been the organizer of imperialist policies’ and that today’s big banks continue to operate a similar control, most notably through structural adjustment programs. The conflicts that result from the intrusion of property-led regimes can be understood as a clash of institutional logics. Table 3 takes the example of agriculture and intends to capture the contradictory rationalities.

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Table 3.

Fundamental principles of possession-based versus property-driven agriculture (adapted from Gerber and Veuthey, 2011).

	Traditional farming	Modern plantations
Institutional foundation	Possession: universal, but specific in its cultural and historical forms	Property: culturally and historically very specific (Western), but now almost universal in its form due to colonization and ‘development’
Legitimacy	Customary rules enforced by tradition or village councils – e.g. ‘axe right’, kinship rules, reciprocity rules	State laws enforced by the government – e.g. property rights, contracts, market regulations
Strategic type of valuation	Use value of products within a strong socioecological embeddedness	Exchange value of products within a strong market dependence
Major economic pressure	Subsistence: sufficient food all through the year (otherwise: indebtedness)	Solvency: payment of interest and dividends (otherwise: bankruptcy)
Ecology	Strong sustainability: obligation to take into account local socioecological interactions	Weak sustainability: possibility to delink proprietors from their assets and to substitute forms of ‘capital’

These two institutional systems generate their own logic, that is, their own value systems, agro-ecosystem managements, and perceptions of the environment. While both use biotic resources (funds), property-driven agriculture typically exploits a very limited number of services coming from an equally limited number of funds, usually artificially created and simplified to the extreme (as in monocultures or greenhouses). Moreover, mimicking an industrial logic also means that property-based agriculture largely draws on mineral resources (as in mechanization, agrochemical products and food processing). Quite the opposite, possession-based cultivation typically uses a multiplicity of services (e.g. plants, animals) coming from many complementary funds (e.g. fields, agroforests, forests). Traditional possessors, unlike modern proprietors, have no choice but to deal with their immediate environment and therefore to take into account the complexity of local socioecological interactions. ⁷ As long as they are not indebted, they have no in-built imperatives for growth, cost-cutting and innovations (Gerber, 2014).