La tragedia de la cultura

Under whatever name, value chain analysis generally seeks to provide frameworks to analyse political economies of international trade, production, and consumption. The theoretical foundation and inspirations for these approaches lie in the works of Wallerstein (1974), Hopkins and Wallerstein (1986), and Porter (1990) as the discussion below identifies.

3.3.1 World systems theory

Influenced by the thoughts of the neo-Marxist dependency school, in his work on world systems Wallerstein (1974) describes an uneven, structural, modern, capitalist world social system of interdependencies. The hierarchies and exploitations within this system, he argues, create a historically formed international division of labour that structures the social organisation of work.

To describe historical production systems and associated divisions of labour, Hopkins and Wallerstein (1986: 159) seek to provide a framework to ‘construct and track relations among production operations across time and space’. To achieve this they developed the term commodity chain which they envision to be ‘a network of labour and production processes whose end result is a finished commodity’ (1986: 159).

Their paper is often credited as the founding definition of the commodity chain term and their theory is still applied in historical research analyses (for instance by Roche, 2008).

In tracing commodity chains, Hopkins and Wallerstein’s arguments acknowledge that relationships between societies take place in a transnational global system of

increasing networks of mutual dependencies and interactions of actors. Their construction of a chain to depict the division of labour in the production of a

commodity starts with the final production operation and moves backwards to sources of primary raw material inputs. They term each major point of operation in a chain as a node, in which they identified four properties. Hopkins and Wallerstein (1986: 160-4) outline those properties to be ‘the commodity flows to and from the node and those operations that occur immediately prior to or after it…the relations of production (forms of labour force) within the node…the dominant organisation of production including technology and the scale of production unit…and the geographic loci of the operation in question’.

The utility of the conceptualisation can be seen in the sugar industry. There are clearly a variety of processes involved in the production of consumable sugar that take place in a number of different places. For instance, starting with one raw material, sugar cane, two examples of nodes would be sugar cane harvesting and milling. At another scale in the chain there are sugar refining factories. Within each of these nodes of

commodity production there are different production processes, labour relations, technologies, and form of production facility, each impacting on geographies of ownership, control, and influence over production and livelihoods. The commodity production nodes of sugar cane are examined in more depth in Chapter Four.

Whilst their work can be critiqued for being structural with a now out-dated focus on inter-national relations of production, Hopkins and Wallerstein highlight the historical influences of ownership and control of economic exchanges on the international division of capital and labour. This has reference to the influence of regimes of practices discussed earlier in this thesis. Also, there is postcolonial reference to legacies that have ‘locked-in’ certain parts of the world into producing raw materials with the use of cheap labour, an issue facing many embedded in postcolonial places.

Finally, the four properties at each node of production outlined above have remained central components of subsequent value chain analysis approaches as the following sections detail.

3.3.2 Value Chains

In addition to the influential introduction of the term commodity chains to recent analyses of commodity production and distribution in contemporary global processes, a second influential term is that of a value chain which has its origins in the work of Porter (1990). In his work on competitive advantage, Porter (1990) moves the analysis from the macro level of Hopkins and Wallerstein (1986) to a meso level of analysis of activities within a firm. As with nodes in macro level operations, these activities can be divided into a series of stages of tasks or processes such as production or

marketing.

The concept of a value chain is introduced when it is argued that firms create value, and all activities within the operations of a firm contribute to that value. Therefore, the sum of a firm’s activity represents its value chain. One value chain does not operate in isolation, but instead through a series of linkages it is embedded in what Porter (1990: 42) terms a value system. A value system then represents all of the value chains involved in the production and marketing of a particular firm’s product or service and so includes not only the firm’s operations but also those of

‘downstream’ suppliers and ‘upstream’ buyers.

In conceiving value chains and systems with a focus on competitive advantage, Porter argues that ‘firms gain competitive advantage from conceiving new ways to conduct activities’ (1990: 41) in their value systems. The level of advantage a firm can gain depends upon its ability to influence and manage the entire value system. This links to the importance of abilities to govern that runs through this thesis and the impacts of control of the appropriation and distribution of value generated from production and exchange.

Porter’s work created a road map intended to be adopted by both corporations and governments to increase their competitive advantages in international competition.

In applying his theory to developing countries, Porter felt that ‘the central task facing developing countries is to escape from the strait-jacket of factor-driven national advantage’ by reducing ‘dependence on such industries [for example, primary

commodities] where exports are invariably sensitive to price’ (1990: 675). This relates to the issue of ‘lock-in’ highlighted by dependency theorists and Hopkins and

Wallerstein (1986) that contributes to the constrained environment in which low income producers such as those in this research are located.

3.3.3 World systems and value chain contributions

Although the terminology changes as new approaches have been developed for analysis, the ideas of commodity chains and value systems are at the core of all subsequent theories and models. The principal conceptual contributions of these ideas for this thesis are as follows.

First, relating to issues of governance, the above works introduce the notion that commodities are produced within complex systems that contain power relations, and the levels of influence or control over each node in a commodity chain vary.

Furthermore, those governance systems have been structured and influenced by historical processes. Second, Porter’s work highlights that value is appropriated as economic actors seek cost advantages in their operations at different stages in the production and consumption of a commodity. Understanding the flow and control of the appropriation of value from commodity chains has become central to the notion of challenging unfair forms of governance and unequal exchanges.

The introduction of a focus upon governance and value at different points in the production and marketing of goods and services has been widely influential in social science research. The idea of commodity chains has facilitated processes to identify the roles of a broader set of actors and processes at a meso level beyond merely focussing upon nation states. Arguably meso level actors such as multi-national companies (MNCs) and processes such as foreign direct investment (FDI) have become more dominant than state actors and processes in determining the governance of and value appropriations from commodity chains. This is in line with a

post-Marxist approach that seeks to critique relations and processes beyond structural levels.

Identifying and analysing these actors and processes within production systems at this scale and linking the concept of value appropriation to governance has enabled

research to examine those controlling key nodes in a value chain (by creating barriers to entry³²) who determine winners and losers from production in a chain. For instance, linking commodity chains and value, Dicken (2003: 306) uses the term production chains which he defines as a ‘transactionally linked sequence of functions in which each stage adds value to the process of production of goods or services’. In general, value is added to a product as its development moves from low to high value goods, where economic value is extracted at various stages by increasingly powerful operators. Kula et al. (2006) also discuss the use of value chain analysis to build a picture to help identify where constraints and opportunities to add value exist in a chain.

In support of this notion, Hoogvelt (1997:144) notes that the ‘historical development of capitalism on a world scale concentrated higher value activities at the final

consumer end of the production chain, while largely leaving low value activities in underdeveloped lands’. Castells (1996) also notes the dominance of higher value goods in a global trading environment that is increasingly shrinking in time and space.

Despite these significant contributions that have informed subsequent forms of value chain analysis, world systems and value systems theories in themselves have

32 Barriers to enter particular markets or value chains may be in the form of protective subsidies or lack of infrastructure in rural areas, or lack of market knowledge, for instance.

shortcomings in terms of application to this thesis due to their principally structural focus. There is a tendency to over simplify by not grounding analysis in particular networks or commodities and not focussing upon specific analysis of the

co-ordination of markets, the roles of different actors, and sites of significant governance in a chain. As Peet (1999) argues, such approaches offer little account of the

complexity of reality. The following sections explore the subsequent forms of value chain analysis developed as this chapter looks toward more complex approaches to generate grounded accounts of postcolonial agricultural networks.