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FIXING THE ECONOMY

Timothy Mitchell
Available online: 21 Oct 2010

To cite this article: Timothy Mitchell (1998): FIXING THE ECONOMY, Cultural
Studies, 12:1, 82-101
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Timothy Mitchell

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FIXING THE ECONOMY

Abstract
Fixing the Economy, shows how the modern understanding of the
economy as the totality of the relations of production, distribution and consumption of goods and services within a given country or region arose in a
mid-twentieth-century crisis of economic representation. The economy,
represented as an autonomous domain, participated in the (largely postSecond World War) re-imagining of the nation-state and the postcolonial
international order, and provided a concept of development without political upheaval. In considering the economic life of an Egyptian village,
however, Mitchell demonstrates that market and domestic production and
consumption are irreducibly hybrid and that the practical foundations of the
economy as representation make it impossible any longer to see its imagined referent as the very type of the non-discursive and the material.

Keywords economy; economics; state; Keynes; representation; Egypt;

agriculture; households; water buffalo

It stands across the Nile from Luxor and

tourist buses going to Tutankhamuns tomb pass through its outer hamlets.
One of these hamlets was built in 1947 by the neo-traditional architect Hasan
Fathi, as the rst and only part of an unsuccessful programme to rebuild every
village in Egypt in a faux-traditional Nubian style. The villagers who were to be
forcibly relocated there sabotaged its completion. In the 1960s another hamlet
grew up adjacent to the temple of Ramses III, housing local families hired as
archaeological labourers by the Metropolitan Museum of New York. This hamlet
is the setting of the book Shahhat, an Egyptian (Critch eld, 1978), a bestselling
account by an American journalist of life in the Third World village. The books
realism in portraying the lives of the modernizing poor was praised in the scholarly journals and celebrated by the New York Times for making the village of B`erat
a metaphor for Egypt.
`ERAT IS NOT A TYPICAL VILLAGE.

C U LT U R A L S T U D I E S 1 2 ( 1 ) 1 9 9 8 , 8 2 1 0 1

Routledge 1998

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FIXING THE ECONOMY

I have written elsewhere about the manufacture of this kind of realism

(Mitchell, 1990, 1991a). The books realism is constructed by omitting from the
picture the tourist industry, the archaeologists, and any sense of the recent
history of the place or of the authors own presence in and relationship to the
village. The realism is enhanced by the books frequent use of passages plagiarized from old, out-of-print studies of the Egyptian peasant. The physical
description of Shahhat, the books protagonist, is patched together from the catalogue of racial types in a 1938 study of The Egyptian Peasant. The description of
the house in which the author, Richard Critcheld, stayed when visiting the
village is borrowed from the account of Houses of the Lower Orders in Edward
Lanes Manners and Customs of the Modern Egyptians, published in 1836. Richard
Critcheld was supported by Ford and Rockefeller grants, became a consultant
to the US Agency for International Development, and in 1981 was named one
of the rst recipients of the MacArthur Foundation genius awards for the outstanding intelligence and originality of his work.
It is fairly simple to dismantle this kind of representation of the village, but
more dif cult to provide an alternative. Part of the problem is that the families
of B`erat are themselves caught up in these forms of representation although
only at the margins. The archaeological and tourist industries prescribe that the
village stage itself as a traditional place. The government antiquities authority
restricts the spread of building in B`erat and stipulates, not always successfully,
the use of mud brick in all village architecture. Families that make money from
tourism and decide to replace their mud-brick houses with stronger concrete
structures must leave the exterior walls intact, raising the concrete pillars and
platforms inside the old mud skin.
Shahhat himself made some money for a year or two selling copies of Critchelds book to tourists at the Colossi of Memnon, before returning to his winter
job as a labourer and foreman on French archaeological expeditions. Dozens of
other men from the village work in the archeological and tourist industries, as
archaeological labourers, hotel and cruise ship employees, guards and petty
ofcials, and small entrepreneurs selling souvenirs. A couple of households own
tourist taxis, and three or four families run budget-class local hotels. But it is now
illegal to build hotels in the village, and those that already exist seldom have guests.
The tourist industry relies upon the picturesque panorama of the village, but
is organized as far as possible to exclude local people from contact with tourists
and from the income derived from them. Most tourists to Upper Egypt are
accommodated on oating hotels that cruise the Nile between Luxor and Aswan,
delivering the tourists directly to archaeological sites along the route and isolating them from all except the most eeting contact with the local population. The
hotel eets are operated by international hotel chains, who also run ve-star
hotels in Luxor and Aswan, or by large Egyptian entrepreneurs. Local residents
are restricted largely to providing the wage labour required by these enterprises,
at subsistence wages.

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A fuller picture of B`erat must include the agricultural economy, in which

most villagers are employed but again only at the margins in activities that
can escape adequate representation. The major industry of the village is sugar
cane production, but this is dominated by a handful of large farmers. Most of the
villages two thousand households survive by operating partly outside this
economy, supplementing their incomes from wage labour or small plots of sugar
cane with subsistence farming: raising domestic animals and growing small
amounts of wheat and other basic crops. This household-based production is not
monetarized or accurately recorded, so much of it goes unrepresented in the
calculations of the national economy. Just as they are kept out of the picture of
the tourist industry, the villagers live on the margins of the nationally and internationally articulated agricultural economy. To make sense of this situation, one
has to consider how the national economy, no less than Critch elds book or the
mud-brick houses of the tourist industry, is something xed yet never properly xed as a representation.
The economy is a concept that seems to resist analysis. It appears to have
escaped the kind of critique that now disturbs so many other concepts of
modern social theory. The nation can now be seen as something imagined, the
state as an indeterminate political project, the public sphere as a structure of
exclusion, and class, ethnicity and gender as contingent and unstable constructions. It is unclear why the concept of the economy has not been placed in question in the same way. Perhaps it is assumed to be a much older and somehow
more basic term than the other, mostly nineteenth-century constructs. Perhaps
the term seems more basic because it is still thought to refer to a material substrate, a realm with an existence prior to and separate from its representations,
and thus to stand in opposition to the more discursive constructs of social
theory.
Yet these assumptions have no basis. Far from being older than modern social
theory, the concept of the economy is much younger. In the sense of the term
we now take for granted, referring to the structure or totality of relations of production, distribution and consumption of goods and services within a given
country or region, its usage dates only from the mid-twentieth century. Both in
academic discourse and in popular expression (the Egyptian economy, the
economy is a mess), this meaning of the term emerged during the years around
the Second World War. Adam Smith, dubiously claimed as the father of modern
economics, never once refers in The Wealth of Nations to a structure or whole of
this sort. When he uses the term economy, the word carries the older meaning
of frugality or the prudent use of resources:
Capital has been silently and gradually accumulated by the private frugality and good conduct of individuals. . . . It is the highest impertinence and

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presumption . . . in kings and ministers, to pretend to watch over the

economy of private people.
(Smith, 1950 [1776]: 3278)
As recently as the 1920s, the second edition of Palgraves Dictionary of Political
Economy contained no separate entry for or denition of the term economy. It
used the word only to mean the principle of seeking to attain, or the method of
attaining, a desired end with the least possible expenditure of means (Palgrave,
19256: 678). In 1932, Lionel Robbins classic Essay on the Nature and Signi cance
of Economic Science described The Subject-Matter of Economics (Chapter 1) as
human behaviour conceived as a relationship between ends and means (p.21)
and never employed the term economy in its broad contemporary sense.
To trace the appearance of the idea that the economy exists as a general structure of economic relations, the obvious place to begin would be in 1936 with the
publication of John Maynard Keynes The General Theory of Employment, Interest and
Money. Although tending to use phrases like economic society or the economic
system as a whole where today one would simply say the economy, The General
Theory conventionally marks the origin of what came to be called macroeconomics. The signicance of Keynes is easy to exaggerate, however. Keynes
himself was critical of what was arguably a more important development of the
1930s: the birth of econometrics, or the attempt to create a mathematical representation of the entire economic process as a self-contained and dynamic
mechanism.
To understand the shift that occurred in the 1930s it will help to look back
brie y at the period since the 1870s, when professional, academic economics
emerged by making a break with the tradition of political economy from Smith
and Ricardo to Marx. The break in the 1870s is usually described in terms of the
birth of marginal utility theory the analysis of economic phenomena as the
interaction of buyers and sellers seeking to maximize their individual values or
utilities. But the new eld marked out by the idea of marginal utility was not the
space we know today as the economy. To understand the eld of marginal utility,
and its transformation in the 1930s, one must rst understand its relation not to
political economy but to physics.
Physics emerged as a coherent scientic discipline during the second half of
the nineteenth century, uni ed by the new idea of energy. The diversity of what
had seemed to be different types of matter associated with heat, light, mechanical force and electricity, each appearing to involve different forces of attraction
and repulsion, was replaced by the singular concept of energy, imagined as the
unique, protean, yet basically unknowable force at work in all physical processes.
As Philip Mirowski (1988) has shown, scientic economics was created in
the 1870s by translating the new language and imagery of physics into a vocabulary and set of metaphors for imagining the eld of economic processes. The

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terminology of the new discipline words like equilibrium, stability, elasticity,

in ation, expansion, contraction, distribution, movement, friction was
borrowed intact from physics. And the central concept of economics, individual
utility, was modelled directly on the new idea of energy. It represented the same
unique, protean, unknowable force, giving the elements of the economic eld
their animation.
Economics also borrowed from physics its models of explanation, in particular the prescription to express causal relations in mathematical form. The fact
that the central concept of both disciplines was conceived as an invisible and
unknowable force encouraged this tendency. This in turn encouraged a predisposition to substitute mathematical description and quantitative measurement
for an analysis of the actual nature of the phenomena being described, and to
accept such description as a form of proof (Mirowski, 1988: 17). (Despite the
aping, a big problem: the law of conservation of energy in physics the principle
that made it possible to constitute diverse phenomena as a single eld had no
parallel in economics, creating a fundamental contradiction in the mathematics
of the new science. When mathematicians pointed out to economists the basic
aw in their mathematics, the economists told them not to be so picky while
continuing to berate non-mathematical economists for their lack of scienti c precision: see Mirowski, 1988: Chapter 2.)
At the same time, professional economists continued to imagine mechanical
analogies for the functioning of economic processes. Irving Fishers 1892 doctoral dissertation, which Paul Samuelson called the best of all doctoral dissertations in economics (Samuelson, 1950: 254, cited Mirowski, 1988: 31),
developed a mechanical model of an economic market consisting of a network
of cisterns, levers, pipes, rods, sliding pivots and stoppers, through which the
ow of water represented the working of the principle of utility. In 1892 he built
a working model of this contraption which he used in his classes at Yale for years,
until it wore out, and in 1925 he replaced it with an improved model. Fisher
argued that the model provided not just a picture of the market but an instrument of investigation, and that the effect of complex variations in the market
could be studied by altering the positions of the various stoppers, levers and
pivots (Fisher, 1925: iii, 44).
The work of economists like Fisher was the precursor of the emergence of
the eld of econometrics in the 1930s, through the work of scholars such as the
Norwegian Ragnar Frisch and the Dutch scholar Jan Tinbergen. Like their predecessors, these scholars imagined and modelled the economic process as a
mechanical apparatus. Frisch, for example, developed a complex mechanical
analogy consisting of a small pipe attached to a pendulum suspended beneath a
bowl of water, the pipe ending in a valve whose operation depended on the direction of the pendulums swing (Frisch, 1933: 2034). Tinbergen actually trained
as a physicist before taking up economics.
The transformation in the 1930s marked by the founding of econometrics

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FIXING THE ECONOMY

was understood at the time not, as I am proposing, in terms of the birth of the
idea of the economy but as a shift from a static conception of economic processes
to a dynamic one. (Even to those looking back after the Second World War, for
example, Schumpeter in his History of Economic Analysis, it was this rather than
Keynesianism that appeared as the major development of the interwar period.)
However many rods, levers and stoppers could be made to move in Fishers
model of the market, these represented discrete movements within what was
largely a stationary apparatus. What if the apparatus as a whole could be thought
to move? What if, as Frisch asked, certain exterior impulses hit the economic
mechanism and thereby initiate more or less regular oscillations? (Frisch, 1933:
171). To conceive, however, of the kinds of external forces that would produce
a dynamic impulse affecting the entire economic machinery requires two related
conceptual shifts. First, a clear distinction has to be elaborated between what
Frisch calls the intrinsic structure of the mechanism and its exterior. Second,
this intrinsic structure can no longer be imagined as a single market, with a
limited number of buyers, sellers and commodities. As a dynamic whole, it must
now be thought of as the whole economic system taken in its entirety (p. 172).
The reworking of the mechanical imagery in the 1930s to imagine the possibility
of an external force creating an impulse that reverberates through and sets up
oscillations within a completely closed system marks the birth of the idea of the
economy.
Replacing the study of business cycles, in which uctuations in the price of
a single commodity (usually wheat) were correlated with a non-economic cause
(usually the weather, or sunspots, or the position of Venus), econometrics tried
to construct representations correlating every change in economic life.
The rst dynamic model claiming to represent an entire economy was published in 1936, the same year as Keynes The General Theory, by the Dutch economist Jan Tinbergen who was later to share the rst Nobel Prize in economics
for this work. In 1939, working for the League of Nations, he produced the rst
large-scale model of the US economy (Morgan, 1990: 10130). He had initially
trained as a physicist.
We may start from the proposition that every change in economic life has
a number of proximate causes. These proximate causes themselves have
their own proximate causes which in turn are indirect deeper causes with
respect to the rst mentioned change, and so on. Thus a network of causal
relations can be laid out connecting up all the successive changes occurring
in an economic community.
(Tinbergen, 1937: 8; cited in Morgan, 1990: 103)
As in The General Theory, phrases like economic life and economic community
express the new idea of the network of relations that would come to be termed
the economy.

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The economy was formed as a new discursive object in the context of broader
developments. Tinbergen developed his rst econometric model in response to a
Dutch government request for policies to combat the depression (Morgan, 1990:
102). Keynesian theory was also a response to the experience of mass unemployment and depression and to the emergence of New Deal, fascist and other general
economic programmes that addressed not just individual human behaviour but the
interaction of aggregate and structural factors such as employment, investment
and money supply. Also important was the emergence after the First World War
of welfare and development programmes for European colonies (Keynes rst job
was in the Revenue, Statistics and Commerce Department of the India Of ce), in
response to the growing threats to colonial rule.
But to place the emergence of the economy in this larger context is not a
question of supplying the new discursive object with a non-discursive origin. The
larger context was itself a discursive one, for the political crises of the 1920s and
1930s were marked by the collapse of systems of monetary representation and
the forms of social order and collective identity dependent upon them. The currencies of Russia, Germany, Austria, Hungary and other European countries
were destroyed, mostly in less than a year. Recall Polanyis (1944: 24) account
of these events:
Nations found themselves separated from their neighbors, as by a chasm,
while at the same time the various strata of the population were affected in
entirely different and often opposite ways. The intellectual middle class was
literally pauperized; nancial sharks heaped up revolting fortunes. A factor
of incalculable integrating and disintegrating force had entered the scene.
As the crisis spread, Britain (in 1931) and then the United States (in 1933) were
forced to abandon the gold standard. The foundation of the international nancial order, the belief that bank notes had value because they represented gold,
was abandoned. It was as the system of monetary representation began to fall
apart and the social orders it underpinned lost their coherence that the notion
of the economy as a coherent structure came into circulation.
It seems to have taken at least two decades, from the mid-1930s to the mid1950s, for the economy to come to be understood as a self-evident totality. Even
in the early 1950s, the notion of the economy as the total economic process had
to be explained, invoked with awkward phrases like the economics of the
economy. This was the expression of Edwin Nourse (1953: 15), rst Chairman
of the Council of Economic Advisors, a body created by the 1946 Employment
Act to institutionalize the role of economic expertise within the White House.
The Council had only minor in uence over presidential policy making, but great
inuence in placing the voice of economic expertise at the centre of political discourse. No other academic discipline was represented as a eld of knowledge
within the executive power, a position that enabled economics to situate itself in

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the postwar period as the true political science. Nourses attempt to picture the
economy as an integrated whole occurs in a statement laying claim to this role
of scientic expertise:
Economic theorists have done a great deal of work in recent years in the
area of private business in analyzing the economics of the rm. Of no less
importance is the economics of the economy, that is the total economic
process. . . . Passage of the Employment Act not only constituted a formal
recognition of the integral character of the economics of the economy, but
also set up a speci c machinery for dealing with this problem in the spirit
of science, with the best tools that economic science can provide, and with
trained scientic personnel.
(Nourse, 1953: 1516)
There is no space here to trace the steady emergence of this idea of total process
over two decades. Instead I will mention three aspects of the new totality: how
it provided a new way for the nation-state to represent itself, a new representation of the international order, and a novel conception of politics as growth.
The emergent discourse of the economy represented, in the rst place, a reimagination of the nation-state. For orthodox, pre-Keynesian economics the
sphere of economic behaviour was the individual market. This was the abstraction in terms of which the relations between costs, utilities and prices were to be
analysed. The General Theory replaced this abstraction, which had no geographical
or political de nition, with the economic system as a whole, a system whose
limits corresponded to geopolitical boundaries. The system was represented in
terms of a series of aggregates (production, employment, investment and consumption) and synthetic averages (interest rate, price level, real wage, and so on),
whose referent was the geographic space of the nation-state (Radice, 1984: 121).
This idea of the national economy was not theorized, as Radice points out, but
introduced as a commonsense construct providing the boundaries within which
the new averages and aggregates could be measured. Subsequently, the division
of economics into the separate elds of macro- and micro-economics inscribed
this commonsensical reference in the structure of the discipline, where it
remained unnoticed. Thinking of the national economy as simply the macro level
provided a substitute for a theoretical analysis of its geopolitical construction.
The development of macro-economics and econometrics was accompanied
by the creation of a novel vocabulary and methods in statistics for estimating and
representing the new aggregates. Simon Kuznets of the National Bureau of Economic Research systematized a method for estimating the national income, which
was published in 1941. Kuznets warned that a national total facilitates the ascription of independent signi cance to that vague entity called the national economy
(Kuznets, 1941: xxvi) which is precisely what happened. (After the war these
calculations were taken up elsewhere. In Egypt, for example, the Fouad 1st

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Society of Political Economics began the rst efforts to compute the countrys
national income around 1950 (Badawi, 1951: 6).) The subsequent elaboration of
what came to be called the Gross National Product of each economy made it
possible to represent the size, structure and growth of this new totality. Thus the
development of the economy as a discursive object between the 1930s and the
1950s provided a new language in which the nation-state could speak for itself
and imagine its existence as something natural, bounded and subject to political
management.
The second aspect of the new discourse of the economy was the reimagination of the international order. The dissolution of European empires
before and after the Second World War disturbed the representation of the world
in terms of position in an imperial order. Here too the economy provided a new
way of imagining geopolitical space. Previously it made little sense to talk of, say,
the British economy, so long as Britains economic realm was thought to include
India and its other colonies. More generally, a world that was pictured as consisting outside Europe of a series of extensive but discontinuous European
empires could not easily be imagined to contain a large number of separate
economies, each economy coinciding with a self-contained geographical space
and consisting of the totality of economic relations within that space.
The collapse of empire and the growing hegemony of the United States
created a new order, consolidated rst by the League of Nations and then by the
UN, the World Bank and the International Monetary Fund, in which the world
was pictured in the form of separate nation-states, with each state marking the
boundary of a distinct economy. Again, the new macro-economics took these
imagined objects as its untheorized referents: international trade was measured in
terms of aggregates (imports and exports of goods and capital) and averages (terms
of trade, exchange rates) that were dened in terms of the transactions between
national economies (Radice, 1984: 121). The UN and the World Bank helped construct the new global imaginary through the publication of statistics and the proliferation of programmes dening as their object these separate economies.
A third aspect of the geospatial representation of the economy was that the
new object could be imagined to grow without altering its physical limits.
Mainstream, pre-Keynesian economics did not develop a concern with economic
growth. If growth was discussed, it was imagined as a natural process of spatial
and material expansion the opening up of new territories, the growth of new
cities, the development of new manufactures and markets, the expansion of trade
and, above all, the necessary expansion of population. Because the object of economic discourse was not itself a spatially xed entity, economic growth was not a
problematic question. Once economic discourse took as its object the xed space
of the nation-state coinciding with the crisis of over-production and stagnation
in the 1930s it became both possible and necessary to imagine economic
growth in new terms, not as material and spatial extension but as the internal
intensication of the totality of relations de ning the economy as an object.

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The idea that the economy was an object whose basic characteristic was to
grow transformed political language in the postwar period in both the First
World and the Third. In the United States, the architects of the cold war seized
upon a form of militarization that, for the rst time, did not appear to require
sacri ces from the civilian population. War, it was said, could be nanced by
growth. In reference to countries outside the West, to develop ceased to be
just a transitive verb (referring to the exploitation of a particular territory or
resource) and began to refer to an intransitive political and economic process:
development. The prewar concern with colonial welfare was transformed into
the postwar ideology of developing what was now called the underdeveloped
world (a label that initially shocked Egyptians when they discovered it was to
include them (Lackani, 1951)). Urged on by the United States, postcolonial
regimes took up the theme of economic growth to organize and represent their
relationship to the populations they now governed. Foreign assistance programmes were introduced, graduates were sent to the United States and Europe
for training in the new sciences of development, and local departments of economics were set up although not until 1962 in the case of Cairo University.
All these innovations in the name of development took the economy as their
object and helped establish it within countries like Egypt as a self-evident structure.
The emergence of the economy, then, should not be examined merely as a
conceptual innovation within the discipline of economics or in general social
theory. These intellectual developments accompanied and interacted with a
broader discursive change in which political and social practice constructed a
new object. The economy came into being between the 1930s and 1950s as the
eld of operation for new powers of planning, regulation, statistical enumeration and representation. Through these novel forms of political rationality and
practice it became possible to imagine the economy as a self-contained sphere,
distinct from the social, the cultural, and other spheres.
The economy now plays such a powerful role in political discourse it
is dif cult to imagine that it emerged so recently that only since the
middle third of the twentieth century has it been imagined to exist. If the
economy is just a discursive construction, moreover, the question arises why it
has become so powerful. If it is a mere representation, why do we not see through
it? The problem with the question lies in the word mere, for a representation
is never, as it always pretends to be, a mere representation. The word implies a
more substantial reality hidden beneath or behind the discursive order, a reality
unmarked by representation. This is precisely the effect of the modern order of
representation, the effect of a world divided into material reality and the mere
representations through which we know and organize it (Mitchell, 1988). The
construction of the economy is a particularly powerful instance of the production of this effect, for the real economic relations to which economic discourse
refers have become the epitome of a material, non-discursive reality.

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The power of the economy as a discursive process lies exactly with xing this
effect of the real (economy) versus its representation. The proliferation of
models, statistics, plans and programmes of economic discourse all claim to represent the different elements and relationships of a real object, the national
economy. Yet this object, as one could show at length, is itself constituted as a
discursive process, a phenomenon of values, representations, communications,
meanings, goals and uses, none of which can be separated from or said to preexist their representation in economic discourse.
The invention of the economy required a great work of imagination on the part
of economists and econometricians, to nd methods of representing every
relationship constituting a nations economic life and giving each one a value. At
the same time, the invention also required a process of exclusion. To x a selfcontained sphere like the economy requires not only methods of counting everything within it, but also, and perhaps more importantly, some method of
excluding what does not belong. No whole or totality can be represented without
somehow xing its exterior. To create the economy meant also to create the noneconomic.
Two aspects of what came to be excluded as standing outside the sphere of
the economy deserve to be mentioned: the state and the household. The state
presents itself as the site of the modes of planning and regulation that take the
economy as their object. It is also the apparatus principally responsible for constructing representations of the economy, by de ning, gathering and publishing
economic data. In the form of the nation-state, this same apparatus establishes
the spatial boundaries of the economy, creating the currency, the customs barriers and geographical borders that appear to separate one economy from the next.
For all these reasons it seems clear that the state stands outside the economy,
de ning, representing and regulating the entire eld of economic relations.
Indeed, without these forms of regulation and representation, as one could
demonstrate at some length, the economy would not exist.
This raises an obvious problem. If the economy cannot exist apart from its
modes of regulation and representation, it is not clear that these modes can be
excluded from the de nition of the economy. If capital, for example, exists in the
form of private property and property can only exist as a certain structure of
legal and political relationships, then these relationships are not something
outside of and separate from the economy. It is not clear, in other words, that the
state does form an exterior, non-economic sphere, de ning the limits of the
economy. The geopolitical aspect of the state offers another example: the borders
of the state do not in fact contain the economy, for economic powers and relations
often extend beyond the geographical limit that represents the imaginary space
of an economy. The border is just a mode of intervening in and representing
certain larger economic relations. Neither the economy nor the state forms a
self-contained, free-standing sphere. To put this the other way round, the

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discursive practices that appear to separate the economy from the state should
be grasped not as signs marking the border between two spheres but as powerful organizing practices that create the material effect of the economy as an apparently self-contained structure (cf. Mitchell, 1991b, 1992) material, in the sense
that the everyday force of the political order of capitalism is structured out of
these discursive effects.
The second signi cant sphere de ned as non-economic, the household, can
be examined in a similar fashion. The economy is a sphere de ned to exclude
forms of productive activity, exchange and consumption that do not involve the
system of money. If you travel to work on foot, the journey is not part of the
economy. If you take a bus, your trip becomes part of the economy. Walking,
whatever the distance, does not contribute to GNP, but riding a bus does. If you
stay at home and do unpaid domestic labour, your work itself is outside the
economy. It is a well-studied feature of capitalist economies that the domestic
labour of child-rearing, cleaning, washing and preparing meals, done largely by
women, is placed outside the system of monetary exchange (e.g. Smith et al.,
1984). It constitutes the so-called non-economic sphere of the private household.
The household marks another boundary of the economy, the one where
monetary relations cease and the private or family sphere begins. Yet this boundary is as uncertain as that represented by the state. In the rst place, the functioning of the economy depends on externalizing the costs of reproducing the
labour force, by having domestic labour performed without pay. What is organized and represented as external and secondary is actually central to the continued existence of the monetary economy. This dependence underlies a more
general phenomenon. The conception and arrangement of the economy as a selfcontained sphere requires from the beginning, and at every point, in every interaction and exchange, the maintaining of a difference between the monetary and
non-monetary, the economic and the personal, the public and the private. This
process of differentiation, very fuzzy and uncertain in its details, precedes and
makes possible the effect of the economy as a self-contained sphere. In this
broader sense, then, what is depicted as the non-economic is implicated at every
point in the creation of the economy.
In a country such as Egypt, lying towards what we picture as the margins of
the world economy, this uncertainty of the distinction between the economic and
the non-economic takes on a greater signi cance, for several reasons. First, the
formation and relative strength of the state-capitalist class and the nature of its
capital gives a special signi cance to supposedly non-economic relationships of
patronage, nepotism and corruption, so that at the very centres of economic
power distinctions between the public and private realm, between the economy
and personal wealth, between work and private life, are often likely to be
blurred. Second, on the fringes of the economy lies the vast so-called informal
sector, the household or neighbourhood-based production and distribution of
small-scale goods and services, unregistered with the state and operating outside

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its system of revenue and regulation, whose activities represent a large but
unknown proportion of the countrys productive life (Abdel-Fadil, 1983). This
sector is traditionally excluded from calculations of GNP and other representations of the economy (although the development industry has recently become
interested in penetrating this sphere, in an effort to compensate for the failure
of development in the formal sector). Finally, there is the rural phenomenon of
household-based agricultural production. With the village of B`erat in mind, it
is here that I want to focus.
Despite the global spread of capitalist agriculture, peasant- or household-based
agricultural production has survived and shows no sign of disappearing. This has
stimulated a long debate, with its origins in discussions of the Russian peasantry
but taken up over the last two decades first in African and South Asian Studies
and more recently in writing on the Middle East. The research on the Middle
East, including Egypt, points to a basic distinction in rural society between the
small peasant household, where production is oriented towards subsistence and
the reproduction of the household, and capitalist farming integrated into the
national and international economy. The work on Egypt by Georg Stauth (1983,
1990) has provided part of the theoretical basis for a proposed new approach
to the study of agrarian society in the Middle East, one that does justice to the
phenomenon of peasant agriculture and attempts to explain its persistence.
Stauth terms the particular relationship between capitalist farming and subsistence households found in contemporary Egypt the `izba system, reemploying the term for the large landed estate that developed in Egypt from
the mid-nineteenth century. The word referred originally to the housing
complex built on the estate for its workforce, who were typically given a small
plot to grow food to support themselves while their labour, housing, domestic
animals and farm implements remained the property of the estate owner. The
agrarian reforms of the 1950s and 1960s broke up these estates, dispossessed
the largest, mostly absentee owners, and redistributed the land. Many small
farmers benefited from the redistribution, but the biggest beneficiaries were
large landowners living in the countryside. They were able to preserve and
often enlarge their holdings, usually dividing the title among different family
members to avoid the ceiling on ownership while continuing to manage the
property as a single farm. In B`erat, for example, about 1300 acres of sugar
cane estate were taken over by the state and redistributed in plots of two to
three acres to small farmers (although many of these are about to lose the land
again, following the 1992 reversal of a central part of the Nasserist land reform
programme). Meanwhile, three or four large landowning families within the
village bought up or rented land from absentee owners who possessed more
than the legal limit of 300 acres (later reduced to fifty acres). By dividing the
title among brothers, these families created farms ranging in size from over fifty
to several hundred acres.

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The effect of these changes, argues Stauth, has been to re-embed the `izba
system within the communal structures of the village. Large farms, from ve to
several hundred acres in size, are organized for production for the market.
Smaller holdings are oriented towards subsistence farming, with the smallest
owners and the landless supplying the wage labour required by the market-sector
farms. In place of the old method of housing and reproducing the labour force
within the estate, the market sector now externalizes the process of reproducing
its labour force. The costs of reproduction are carried by the subsistence sector,
which is dependent for its survival on jobs in the market sector. This new form
of the `izba system, says Stauth, keeps the small peasantry alive, providing the
mechanism for incorporating their labour into an internationally articulated
market economy.
The `izba relationship, according to Stauth, can also explain why apparently
traditional social and cultural forms persist within the village even among the
large, capitalist landowning families. Under the `izba system, those who are
employed on the large farms do not form an uprooted proletariat, fully integrated into the capitalist economy. Because they sustain and reproduce their lives
outside the capitalist sector, they escape the economic discipline and regulation
that govern the lives of a capitalist workforce. So the large landowners have to
substitute non-economic methods of integrating and regulating the peasantry.
They employ political means the direct coercive control exercised by those
who supply and supervise the gangs of wage labourers but also social and cultural means. The large landowners typically control the village headmanship and
the membership of village arbitration committees. They also play a leading role
in the village mosques and as the heads of powerful `a9 ilas (the extended families
or clans of which the village is composed). These positions, says Stauth, enable
them to interfere in the moral life of the subsistence sector, by maintaining the
valuation of kinship ties, associated patterns of deference and obligation, and
religious norms of piety and generosity. The symbolic and obligatory framework maintained in this manner prescribes the speci c boundaries of social
practice in the village and compensates for the failure to integrate the small peasantry into the regulative forms of the capitalist economy (Stauth, 1990: 125,
136).
Glavanis and Glavanis (1983, 1990) draw on the work of Stauth, as well as
the earlier contribution of Islamoglu and Keyder (1977) and the broader debate
on the articulation of modes of production, to propose a new approach to the
study of agrarian society in the Middle East. The aim is to explain the persistence
of the peasant or household form of production, without reducing the phenomenon to the stubbornness of tradition or a mere delay in the process of proletarianization driven by the global expansion of capitalism. By taking seriously the
subsistence household as a form of production and examining closely the `izba
system or other methods of articulation between the household and capitalist
sectors, the aim is to uncover the diversity of strategies with which rural

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populations try to resist or accommodate the penetration of capital. Such an

approach, it is hoped, will relocate the principal dynamic of change within rather
than outside Middle Eastern societies and enable them to recapture their own
history (Glavanis and Glavanis, 1983: 36).
There have been strong objections to this way of looking at agrarian social
relations. David Seddon (1986), drawing on the work of Bernstein (1981), argues
that trying to help peasants recapture their own history represents an illusory
and reactionary form of peasant populism. To focus on the subsistence-oriented
peasant household as a form of production, with its own internal logic, assumes
that the household sector remains intact as it is incorporated into the wider capitalist system. Its articulation with the capitalist sector is thought of as an external
relation. The household-based peasantry is considered to be a single class,
without signi cant internal divisions, and as a class it tries to resist external
exploitation. This resistance and survival of the peasantry is given a false analytical priority and historical signi cance.
Instead, Seddon and Bernstein argue, one should begin the analysis from the
point of view of the global development of capitalism and its destruction of what
Bernstein (1981: 5) schematically terms the natural economy of the precolonial period meaning an economy dominated by production for subsistence,
whatever the degree of marketing of a surplus or its appropriation as tribute.
Pre-capitalist forms or units of production are subsumed into the circuit of
capital as they become caught up in an increasing dependence on commodities.
As the need to produce commodities grows, peasants become subject to the
process of capitalist class formation. This happens not only through relations of
exchange, but through increasing efforts by the capitalist sector and the state to
intervene in the production process in the countryside, setting price controls,
creating market monopolies, instituting compulsory cropping, and policing
village disputes. The peasant or household sector may remain in immediate
control of the organization of production, but its survival or even re-emergence
is a consequence, not a determinant, of agrarian change.
Rather than restoring the peasant as a historical actor, says Seddon, we should
dissolve the category altogether. There is no distinctive, independent, undivided
peasant identity. The position of the small commodity producer in the countryside represents a contradictory unity of the class positions of capital and labour
(Seddon, 1986: 167). In other words, the peasant is to be denied a particular historical role of his own, and identi ed as the local bearer of the global contradiction of capitalism.
Is there a way to go beyond the increasingly familiar terms of this debate? First
of all, thanks to works such as Ken Cunos (1992) study of eighteenth-century
rural Egypt, we know that cash-crop agriculture, the commoditization of land
and a highly strati ed rural society existed in places like the Nile Delta decades,
and probably centuries, before the nineteenth-century colonial transformation.

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The notion of a precolonial natural economy cannot capture this complex

mixture of subsistence and market-oriented agriculture or account for the
contribution of local institutions and social forces to the later development of
Egyptian capitalism. One does not have to resort to peasant populism to argue
that, from the beginning, the emergence of a capitalist world system was dependent on dynamics at work in places that were to become the peripheries of that
system.
On the other hand, the attempt to theorize about the persistence within the
capitalist system of the apparently non-capitalist peasant household encounters a
serious dif culty. The dif culty lies in how to draw the distinction between the
capitalist sector and subsistence or household sector. Studies of rural Egypt are
never certain at what point small peasants get big enough to be considered capitalists. At rst, Stauth (1983: 889) seems to de ne the capitalist sector as landholdings of more than twenty acres. Elsewhere (1990: 139) he denes the
subsistence sector as holdings of less than ve acres, but adds that even holdings
from one to ve acres should be excluded from this sector if they employ one or
other variation of the `izba system.
Perhaps it would be better to focus on the orientations of the households
themselves rather than trying to base the distinction between subsistence and
capitalist sectors on different sizes of landholding. But here the distinction
becomes even less clear, as one can see if we return to the evidence from the
village of B`erat. We can begin there with the gamoosa.
The most common form of subsistence household production in the village
is the raising of domestic animals. The majority of small plots that are not committed to sugar cane production are used to grow fodder, in particular for the
raising of water buffalo. The buffalo calf is purchased not from accumulated monetary savings, which almost no one has, but by creating an informal savings
cooperative (a gam`iyya, or rotating credit union) with neighbours and relatives.
When the animal is fully grown and can give birth, its calves are sold on the
market. Alternatively, they can be kept as a form of savings (a form that, unlike
money, cannot be frittered away accidentally or lched by ones husband) and
sold when a large sum of cash is needed. In the meantime, milk from the buffalo
is consumed directly or processed into cheese, yoghurt, curds and whey, which
supply an important part of the household diet. The animals dung provides fuel
for the other major domestic food production, the baking of bread. Larger households, or smaller ones without young children, where women have more labour
time available, may raise three or four buffalo and cows and market some of the
milk products as well. So the buffalo is simultaneously a means of producing for
the market and a means of subsistence. The distinction between market and subsistence sectors runs down the middle of the gamoosa.
If one turns to the major market crop, sugar cane, there are similar dif culties in drawing a line between household and market. Although sugar cane is
Egypts second largest industrial crop, it requires almost no market-purchased

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inputs. There are no seeds to buy, as the cane stays in the ground for three to ve
years and is then replanted using ratoons from the last years crop. It requires no
pesticides, little fertilizer, and relatively infrequent irrigation. The one major
input, the labour of harvesting, costs almost nothing. Cutting the cane, stripping
the leaves and bundling it to be loaded on to carts is often done without payment,
by women and older children, in exchange for taking the leaves to use as animal
fodder in the household. The cultivator pays only for the labour of loading the
cane on to the tractor carts and light-railway trucks that take it to the mill. Thus
even the most market-oriented agricultural production contains and depends
upon subsistence-oriented labour.
To give another example, the households of B`erats largest capitalist
farmers, owners of several dozen or even hundreds of acres, in most cases differ
only in size rather than kind from more subsistence-oriented households. In fact,
as they are capable of supplying almost all household food consumption from
their own elds, they are more self-supporting and less market-dependent than
smaller households. The women of wealthy households still bake bread and raise
domestic animals. They do not work in the elds collecting fodder, it is true, but
nor do the women of smaller households where circumstances permit.
Numerous other examples could be described that show the dif culty of
drawing a distinction between the market sector and the household sector. To
put this in the context of our earlier discussion, in B`erat one would nd it dif cult to determine where the economy ends and the household begins. The
economy has no distinct edge. Within the village, the national and transnational
discursive regime that attempts to establish the economy as a self-contained
sphere and to organize its development seems to lose its denition.
Rereading, in this light, the analysis of scholars like Stauth, one is struck by
the neatness with which they divide the Egyptian village into a market sector and
a subsistence sector, into what is economic and what is non-economic (or as Stauth
puts it, cultural or traditional). This analytical neatness fails to correspond to
the uncertainty and ambiguity of relationships in the village, where lives are constructed on the edge of the economy in ways that often seem to escape its terms.
Moreover, the neat categorizations with which this ambiguity is overlooked
tend to reiterate the ordered discourse of capitalism itself. This kind of analysis,
in other words, is unintentionally complicitous with the discursive order of
capital, with its attempt to establish the economy as a distinct, self-contained
sphere a sphere in whose construction the cultural, the traditional, the personal, supposedly play no part, except by their exclusion. All the debates that
follow about the `izba relationship, the articulation of the household sector with
capitalist economy, the subsumption of subsistence forms of production by the
expansion of global capitalism, the insistence that all explanations start from and
return to this historical movement of capital, fall within rather than outside the
discourse of capitalist modernity. They cannot consider that the lives of a village
might somehow not quite t the categories and identities offered by this history.

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The argument of those like Seddon that small peasants embody the contradiction of capital and labour at least acknowledges that their lives escape the
singular identities into which capitalist modernity attempts to organize them.
But rather than take this hybridism seriously, the argument retains the identities
intact as the foundation of the explanation and reduces the villagers themselves
to temporary contradictions destined to resolve themselves in the future into one
or other of their underlying identities.
The insistence on identities that do not break down and on categories that
are self-contained ignores the discursive process of exclusion and differentiation,
always incomplete, by which such unities are constructed. Stauth and others
point out that the non-economic or subsistence sector in the village depends on
the market economy to reproduce itself. At the same time, it should be said, the
economic sector depends on the so-called non-economic realm. This is true in
the more straightforward sense, as Stauth himself makes clear, that the market
sector needs to place outside the market economy the costs of reproducing its
labour force. But this dependence coincides with the more general phenomenon
addressed in our earlier discussion of economic discourse: the economy must be
constructed as a whole, with a boundary that marks its exterior. The boundary
is established by excluding what is determined as non-economic. In this more
complex sense, too, the economy depends upon the non-economic and never
quite succeeds in excluding it. It is in this contradictory border region of exclusion-yet-dependence that the lives of the villagers of B`erat acquire their indeterminacy.
Instead of extending the debates over the identity of contemporary peasantries, the nature of the non-economic or subsistence sector, and its relationship to the capitalist economy, we should take seriously the phenomenon that
small rural households seem to be xed within the categories of economic discourse. At the limits of the economy the distinctions between economic and noneconomic, modern and non-modern, capitalist and non-capitalist, becomes
ambiguous. This is not to say that we should celebrate this ambiguity as an act of
resistance by a deant peasantry. That would make the mistake of setting up the
peasantry once again as a self-formed historical actor, with an identity outside
the origins and spread of capitalism and heroically opposing it. Rather, by looking
beyond the discourse of identity, of capitalism and its others, we can consider
how the categories of capitalist modernity in this case the economy are
necessarily incomplete. The categories themselves cannot mark their own edges,
and the attempt to create an edge forms a margin of indeterminacy that modernity cannot erase.
Is there a sense, after all, in which we can take the villagers of B`erat as
typical of something? Not of the Egyptian peasant, or the Third World poor, or
any other determined identity that the tourist brochures and popular books
might offer. Rather, recall that even today, a century or more after the global consolidation of the capitalist order, half a century or more after the invention of the

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economy, a majority of people live hybrid lives, neither market nor subsistence,
neither capital nor labour, neither within the national economy nor quite outside
it, escaping the xed categories of economic discourse. The undetermined identities of those whose lives place them at the edge of the economy represent
neither a non-economic exterior, nor a temporary contradiction destined to
resolve itself.

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