the role and position of petty producers in a west african city

The Role and Position of Petty Producers in a West African CityAuthor(s): Paul KennedySource: The Journal of Modern African Studies, Vol. 19, No. 4 (Dec., 1981), pp. 565-594Published by: Cambridge University PressStable URL: http://www.jstor.org/stable/160435 .

Accessed: 08/05/2014 12:52

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .http://www.jstor.org/page/info/about/policies/terms.jsp

.JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact [email protected].

.

Cambridge University Press is collaborating with JSTOR to digitize, preserve and extend access to TheJournal of Modern African Studies.

http://www.jstor.org

This content downloaded from 169.229.32.137 on Thu, 8 May 2014 12:52:37 PMAll use subject to JSTOR Terms and Conditions

http://www.jstor.org/action/showPublisher?publisherCode=cup

http://www.jstor.org/stable/160435?origin=JSTOR-pdf

http://www.jstor.org/page/info/about/policies/terms.jsp


The Journal of Modern African Studies, 19, 4 (1981), pp. 565-594

The Role and Position of Petty Producers

in a West African City by PAUL KENNEDY*

IN the last few years there has been a growing interest in that very considerable and hitherto mostly unrecorded part of the economic life of the Third World which flourishes outside the state and foreign-owned medium and large-scale concerns. This great mass of non-enumerated

enterprises and activities is a major source of employment and

production. For the purpose of this article, it will be argued that many of those undertaking research in this sector can be regarded as belonging to one or other of two fairly distinct schools of thought formed by (i) a number of officials from the International Labour Organisation, the World Bank, and other international and government agencies, as well as some purely academic writers,1 and (2) the majority of social scientists attached to the British Sociological Association Development Group, some of whom operate to a greater or lesser extent within a Marxian or neo-Marxian perspective.2 For purposes of abbreviation

only, these will be referred to as the 'I.L.O.' and the 'Radical' groups.

* Senior Lecturer in the Department of Social Science at Manchester Polytechnic. This research was made possible thanks to the financial assistance provided by the Social Science Research Council of the United Kingdom.

1 See, especially, the following: International Labour Office, Employment, Incomes and Equality: a strategyfor increasing productive employment in Kenya (Geneva, I972); Keith Hart, ' Informal Income Opportunities and Urban Employment in Ghana', in The Journal of Modern African Studies (Cambridge), xi, I, March 1973, pp. 61-89. For the discussion concerning the relative usefulness of these terms and of the Marxian position, see Caroline Moser, 'Informal Sector or Petty Commodity Production: dualism or dependence in urban development?', in World Development (Oxford), 6, 9-io, 1978, pp. 104I-64.

2 Papers presented to the British Sociological Association Development Group include the following: Chris Gerry, 'Petty Production and Capitalist Production in Dakar: the crisis of the self-employed', 1976; Joel Kahn, 'Mercantilism and Neo-Colonialism: petty commodity production and the social formation', 1976; Alison M. Scott,'Who are the Self-Employed?', 1976; John Bryant, ' The Petty Commodity Sector in Urban Ghana', 1976; Alan Middleton, 'Small-Scale Production and Capitalist Enterprises: heterogeneity and subordination in Quito, Ecuador', 1978; and Chris Birbeck, 'Women, Crime and Prostitution in Cali, Columbia', 1979. Contributions by some of these and other writers can also be found in Ray Bromley and Chris Gerry (eds.), Casual Work and Poverty in 7hird World Cities (London, I979). See also Chris Birkbeck, 'Self Employed Proletarians in an Informal Factory: the case of Cali's garbage dump', and Ray Bromley, 'Organization, Regulation and Exploitation in the so-called Urban Informal Sector: street traders in Cali, Columbia', in World Development, 6, 9-io, 1978, pp. i i6I-86.



566 PAUL KENNEDY

Those in the first category have tended to place the numerous small

producers in the Third World in the 'traditional' economy. They see the ubiquitousness and persistence of this 'informal' sector as resulting from the sluggish rate of economic change which has left vast areas of the economy available to small producers, and the capacity of traditional

life-styles to resist and impede the spread of new economic practices, at least in the short- and medium-term.

T'hose in the second category have argued that small producers form a subordinate 'petty commodity' mode of production, analytically distinct from, and yet at the empirical level inextricably linked to, the dominant capitalist mode of production made up of the large foreign and state corporations. By using this term they intend to avoid the

implication of separate economies, as in the dualist notions of 'in-

formal'/'formal' and 'traditional'/'modern'. Instead, they hope to draw attention to the unitary, interdependent nature of capitalism in

underdeveloped economies.1 On the other hand, some writers have doubted the usefulness of this rather formalistic attempt to draw a theoretical line between two different but empirically related and

co-existing modes of production within the same social formation. Jairus Banaji and Henry Bernstein both argue that the logic of a highly developed exchange economy compels all participants -- regardless of their scale of operations and degree of involvement - to take account of market forces or face the possibility of economic privation or even extinction in some cases.2 In this sense, even those who continue to rely partly on subsistence activities must be regarded as part of the capitalist mode of production rather than a distinct, subordinate mode.

Given the difficulties associated with using the concepts and terms

employed by both schools as they have been formulated so far, the

present analysis will simply use the term ' petty producer' or some

equivalent. The aim is to examine the different views held by the members of these two groups in the light of the evidence obtained from one particular sample of petty producers operating in a West African city: Accra in Ghana. The discussion is conducted with reference to two

specific issues: the role of urban petty producers in the Third World, and the nature of their relationships to, or links with, the wider national

economy. The I.L.O. group see petty producers as making a nurmber of

important contributions to developing economies, particularly the

1 Again, see the useful discussion in Moser's article, loc.cit. 2 Jairus Banaji, 'Modes of Production in a Materialist Conception of History', in Capital and

Class (London), 3, 1977, pp. 1-44, and Henry Bernstein, 'Notes on Capital and Peasantry', in Review of A4frican Political Economy (London), 10, I977, pp. 60-73.



THE ROLE AND POSITION OF PETTY PRODUCERS 567 creation of employment opportunities and the provision of low-cost

training. On the other hand, the problem of whether or not some

persons or classes may benefit more from these contributions than

others, thereby distorting the process of economic development and social change, does not appear to merit much consideration. On the

question of links to the wider economy, the view seems to be that despite their difficulties - shortages of capital, proper tools, and secure places of work, the problem of severe competition, and so on - petty producers enjoy some opportunities for growth and a good deal of autonomy like small enterprises in advanced western economies. It is also felt that additional government help, especially cheap credit, the allocation of a share of public contracts, and improved technical training, might enable small producers to flourish much more successfully.1

The Radical group believes that the function of petty production is to benefit the capitalist labour process in very concrete ways.2 The various services provided by small proprietors have the net effect of

increasing the profitability of mainly foreign-owned corporations and

interests, and this facilitates the process whereby capital is drained out of Third-World economies. The main ways in which petty producers benefit large firms are as follows: as a supply of temporary low-cost labour organised by 'jobbing-builders' or 'masons' ;3 as the providers of

cheap goods which effectively subsidise the low wages received by those who are legally employed in large firms; and as a source of 'unearned'

surplus squeezed out of petty producers through various forms of

unequal exchange. According to Ray Bromley and Chris Gerry, dominant capitalism is

able to obtain these benefits because petty producers do not operate in a situation of 'true self-employment'. This occurs where a proprietor owns his own means of production, exercises considerable autonomy over his firm's affairs by virtue of his 'relatively free choice of suppliers and outlets', and obtains an income without being engaged in wage-work

1 This has been disputed by Colin Leys, Underdevelopment in Kenya: the political economy of neo-colonialism, I964-I97I (London, 1975), and by John Weeks, 'Imbalance between the Centre and Periphery and the "Employment Crisis" in Kenya', in Ivar Oxaal, Tony Barnett, and David Booth (eds), Beyond the Sociology of Development: economy and society in Latin America and Africa (London and Boston, 1975), pp. 86-104.

2 For Marxists, the labour process consists of the various social and technical arrangements whereby workers and the means of production are organised in the pursuit of 'use values'. Under capitalism this operates in conjunction with a set of social relations of production that permit not only the extraction of the products of surplus labour time by a class of owners and/or managers/administrators, but also the accumulation or self-expansion of capital on an unprece- dented scale. See John G. Taylor, From Modernization to Modes of Production (London, I 979), for a useful account.

3 See Gerry, op.cit. and Olivier LeBrun and Chris Gerry, 'Petty Producers and Capitalism', in Review of African Political Economy, 3, May-October 1975, pp. 20-32.



for someone else.1 Instead, the great majority of the apparently self-employed are only superficially so engaged. In reality they are either

(i) 'disguised wage workers', employed indirectly by powerful enterprises to whom they supply goods and services on unfavourable terms whilst not enjoying the full benefits of legal employee status, such as redundancy payments and sickness benefits, or (2) 'dependent workers', who exist in a state of financial, supply, or market dependence on larger firms, or (3) both. Since these petty producers are unofficially 'employed' by outside organisations, and because, supposedly, they yield a surplus over and above that which would normally occur in the 'fair' and 'equal' exchange transactions between formally independent economic units, they are really semi-proletarians.

Thus, for the purposes of this article, the Radical group seem to be

saying two main things about petty producers: (i) that they primarily benefit international capital and its ally, the national bourgeoisie, contributing little to the process of national economic development as a whole; and (2) that they are essentially the subordinate appendages of large capitalist enterprises to whom they are linked by fairly direct ties. One of the difficulties with these views is that it is not clear if they are based on studies which focused on rather special cases, or whether the situations they depict are generally typical for petty producers as a whole.

THE ACCRA STUDY

Several features of the 1977 Accra study, and of the sample on which it is based, need to be borne in mind. The first is that a city provides a very different set of conditions for the operation of petty producers than, for example, a small town where a few large industrial enterprises provide the main or sole source of employment for the inhabitants.

Secondly, the survey concentrated on industrial or productive enter-

prises, as opposed to trade, illegitimate activities, and the provision of

personal services of various kinds. The following fields were covered: vehicle repairs (lorries as well as private cars and taxis), the manufacture of cement blocks, metal works, wood products (especially, but not only, furniture), upholstery (mainly repairs to vehicles), and the manufacture

and/or repairs of various kinds of footwear, bags, and cases. These particular economic activities were chosen for several reasons:

they included both manufacturing and service activities; they employed very considerable numbers; and they covered a wide variety of

enterprises - one-man firms, masters with apprentices and/or paid

1 Bromley and Gerry, op.cit. p. 7.

568 PAUIL KENNEDY



THE ROLE AND POSITION OF PETTY PRODUCERS

TABLE I

Accra Survey I977: Size of Firms by Field of Business Activity

Numbers employed: One-man Partners business onlya 1-2 3-5 6-8 9 + Total

Upholstery I 0 3 3 ? ? 7 Footwear 5 I I I o I 9 Bags 3 o I 6 o o Io Vehicle repairsb o o 2 3 5 I nI

Metal products o o 2 5 4 0 11 Wood products I I i 4 2 3 12

Cement blocksc o o 2 3 I 0 6

Io0 2 12 25 I2 5 66

a Several other firms involved partnerships, but these are listed elsewhere since they all had employees.

b The employees in vehicle-repair firms were much more likely to be apprentices than paid workers.

c The numbers employed by the cement-block firms refer to the 'permanent' core; temporary workers might swell the numbers employed considerably at certain times.

workers, skilled workers in partnership, and so on. The survey tried to cover a wide range of firms in terms of size and type - see Table I. Also an attempt was made to include fields of enterprise that, in one respect or another, catered for the whole spectrum of income groups in the city. Activities like vehicle and upholstery repairs, the manufacture of cement

blocks, and the metal-products industry were oriented mainly, though not entirely, towards the needs of the wealthy and those on medium incomes. On the other hand, bags and footwear, depending on style and

quality, are often produced with an eye to consumers on low and medium incomes. Wood products, too, often span the whole spread of consumer demand.

Thirdly, the sample does have certain limitations. Given a lack of resources, and in the absence of a ready-made frame, it was not possible to take a 'proper' random sample stratified by city location, size of

groups, and so on. Nevertheless, the firms were selected from a fairly extensive area - residential as well as mainly commercial - adjacent to, and bordering along, three of the main roads leading into Accra. A small number of shoe and bag makers working in the Kantomanto trading centre in the heart of the capital were also included. Moreover, there is no reason to suppose that the enterprises shared any systematic features in common - as compared to those that were excluded -

569



570 PAUL KENNEDY

stemming directly from the fact that their members were interviewed for the study.

However, the choice of business fields and the inclusion of some residential locations means that the study obviously contains a built-in bias towards petty producers dependent upon a more wealthy clientele than has often been the case with other surveys. It could be argued, however, that such a bias reflects the socio-economic structure not only of Accra - which along with Ghana's two other big industrial and commercial conurbations contains approximately one-sixth of the

country's population - but of many other Third-World cities as well, and that as such this aspect of petty production deserves rather more attention than it has so far received. In any case, as has been argued, the importance of low-income groups as consumers was by no means excluded.

Finally, it can be seen from Table i that although the study included a number of enterprises where there were employees, the great majority were 'small' by any standards. Over one-third contained less than four

people, including the proprietors, and in nearly three-quarters of the

enterprises studied there were six or less people engaged, including the owner. Further, if we consider the amount of capital which was used to establish most of these enterprises in the early or mid-Ig970s, the overall impression of' smallness' and vulnerability is reinforced: 50 per cent began with not more than ^o500,1 66 per cent with under I i,ooi, and 83 per cent with p2,ooo or less.2

LINKS TO THE WIDER ECONOMY: AUTONOMY

OR DEPENDENCE?

What was the basis and the terms of the exchange between the petty producers who were studied and the wider economy? It will be useful to consider several questions separately even though in reality they are interrelated. What were the main market outlets available to the

respondents? How far were they in a state of financial or credit

dependence on other firms or organisations? How did they obtain their

supplies of equipment and raw mnaterials? What was the role of the state vis-a-vis the petty producers?

1 At the time of the survey in ,977, the 'official' rate of exchange was about (2.45 for one pound sterling - as it had been for a number of years - although the real rate of exchange on the black market was then somewhere between 46-pio to a pound.

2 These average amounts of starting capital are swollen by three or four exceptional cases where 'considerable' sums had been raised through bank loans, gratuities, and capital pooling, and if these are excluded the average amount of starting capital available was ?892-- I,I20 in the case of those with one or more employees, and t(251 where only a proprietor and possibly a partner were involved.




i. Sales Outlets and Market Dependence

Some writers in this field have pointed to the distinction made by Lenin in The Development of Capitalism in Russia between artisans, who

produce made-to-order goods for individual clients, and small producers who are more directly involved with various commodities because they produce goods, probably in batches, for larger buyers who are themselves in business.1 In some Latin American countries, and perhaps elsewhere, there does indeed seem to be a considerable empirical basis for such a distinction. In Quito, Ecuador, for example, Alan Middleton found that 87 per cent of his sample of petty manufacturers produced goods chiefly to the order of individual clients.2

In the Accra survey it was not possible to make a straightforward distinction between artisans and others on the basis of clientele. The

majority of petty producers sold what they made both to organisations and to individuals, although the latter did not always require 'made- to-order' goods but sometimes selected a purchase from a batch already available.3 Thus, although 63 out of 66 firms that were studied sold some or all of their goods to individual customers (whether or not these were

provided on a 'made-to-order' basis), the proportion of their sales which came from this source varied considerably: one-fifth obtained oo00 per cent of their sales in this way; two-fifths depended on individual consumers for less than half (or none) of their overall market outlets (and often the proportion was substantially less than half); while another 8 per cent sold between a half and three-quarters of their

products to individuals. The most significant factor influencing the relative importance of

different kinds of sales outlets was not the size of the firms - those which sold less than half their products to individual consumers were evenly distributed throughout the entire range - but the nature of the industry in which the firm was engaged and therefore the product or service

provided. Thus, individual clients were most important for firms

engaged in vehicle repairs and upholstery, and were least valuable as a source of custom in the case of footwear and bag manufacturing, regardless of the numbers employed.

When asked to give an approximate estimate of the income levels of their individual customers, most of the petty producers said that some-

1 LeBrun and Gerry, loc.cit., Scott, op.cit., and Alan Middleton, 'Poverty, Production and Power: the case of petty manufacturing in Ecuador ', Ph.D. thesis, University of Sussex, Brighton, '979.

2 Middleton, op.cit. 3 Of course, it should be stressed that this practice varies from industry to industry; tailoring

and seamstressing, where' made-to-order' goods are very important, were not included in the study.

571



where between one-half and three-quarters were living on 'middle'

incomes, and that about one-quarter to one-third were 'very rich'.

They also felt that people employed in government positions of one kind or another made up roughly half of their individual customers, most of the remainder being small, self-employed businessmen of varying income levels. Ofcourse, this does not necessarily mean that lower-income consumers were unimportant for these petty producers. The products sold to traders and other firms, whether of high or low quality, for re-sale to direct purchasers, were no doubt often bought by the less well-off, as well as by consumers on higher incomes. This was particularly true in the case of firms engaged in the manufacture of footwear and bags, and, to a lesser extent, those producing metal products or furniture.

We have seen that about four-fifths of the firms in the Accra survey sold at least some of their products to various organisations as opposed to individual customers. Table 2 shows the incidence of the different

types of 'organisational' buyers who purchased from each petty producer (not the actual numbers of such firms) according to their size, legal status, and nationality of ownership.

Among the foreign firms mentioned were Kingsway Department Stores, Dorman Long, Mobil Oil, and Firestone Rubber. The large number of state-owned institutions included the Cocoa Marketing Board, the Ministry of Health, the State Housing and Water and

Sewerage Corporations, Tarkwa Goldmines, the Universities, various

colleges and schools, the State Insurance Corporation, the Army, Korle Bu Hospital, and the Department Stores of the Ghana National

Trading Corporation. Most of the building contractors were small- and medium-sized Ghanaian firms, although a few of these were quite large. The traders included Accra market-women, Northern Ghanaians

purchasing ploughs for sale to rice farmers, wholesalers buying shoes and bags to sell in up-country villages and towns, and merchants hoping to export goods to Nigeria, the Ivory Coast, and Liberia. Sometimes the latter were Ghanaians who re-sold what they bought at the Togo border, while others were foreign nationals who were no doubt engaged in importing and exporting activities which enabled them to profit from Ghana 's overvalued currency. The category of' Other Local Firms and

Organisations' in Table 2 included the following: haulage companies, taxi owners, furniture factories, Ghanaians who owned their own

transport fleet for distributing their products, small specialist firms who sub-contracted the work they could not do themselves, and voluntary associations, like some churches and clubs.

It is clear that the great majority of petty producers were not

572 PAUL KENNEDY




TABLE 2

Accra Survey I977: 'Organisational' Buyers by Type of Business Activity

'Organisational' Metal Wood Cement Up- Shoes/ Vehicle Buyers Products Products Blocks holstery Sandals Bags Repairs Total

Foreign Firms and Department Stores 2 4 o 2 I 3 3 15

Government Ministries and State Corporations 5 4 4 3 I 2 2 2I

Small African Traders 4 I 0 0 6 8 o I9 Local Building

Contractors (mostly) 6 I 5 0 0 0 I 13 Other Local Firms and

Organisations 3 2 I 3 0 0 4 I3

dependent on foreign firms for their markets. The usual proportion of sales going to the subsidiaries of overseas corporations was only between Io and 20 per cent. Only three of the petty producers regularly sold - or had in the recent past - more than 50 per cent of their goods to foreign firms. In fact, as far as the private sector is concerned, Table 2 shows

quite clearly that a variety of indigenous' entrepreneurs, including traders, were quite significant as a source of sales outlets, although their scale of operations was often not much larger than that of the petty producers themselves.1

The case of a small shoe factory, employing a total of nine apprentices and workers, is worthy of special mention since it provides a 'classic', compound example ofBromley and Gerry's two categories: 'dependent' and 'disguised' wage work.2 The firm's only 'customer' was the Ghana

subsidiary of a British-based company that arranged for local firms to manufacture shoes that were then retailed under their 'brand-name'

by various local agents up and down the country. However, the small

producer's dependence went far beyond the question of marketing, notably as regards his specialisation in making children's shoes: ' references' were supplied, enabling him to obtain credit from factories with whom the British company had close connections; transport for

supplies and finished goods was also available, if required; and, lastly, the 'raw materials' were mainly ready-made cut-out parts, so that the small factory was little more than an assembly operation using semi- skilled machine operatives.

1 Middleton, op.cit. also found that large-scale commercial concerns were relatively unimportant as a source of market outlets for his sample in Quito.

2 Bromley and Gerry (eds.), op.cit.

573



Another 'exceptional' firm must also be cited, since this illustrates a much more complex and possibly ambivalent kind of dependency on

foreign capital. The owner of the most successful vehicle-repair firm included in the study retained strong connections with the subsidiary of what was probably once the largest, most important European trading company in West Africa. The foreign subsidiary repaired motor vehicles in its modern engineering workshops, and supplied spare parts to smaller firms. The Ghanaian proprietor had previously worked there for 14 years, before leaving in I970 to establish his own repair yard. Clearly, he was heavily dependent on his former employers for his

training. Moreover, in common with many other small Ghanaian firms, he lacked the capital to buy certain pieces of expensive equipment - or would have been unable to utilise them economically had he done so - and was therefore compelled to hire some of the more sophisticated facilities from expatriate-owned workshops.

On the other hand, his involvement with the foreign firm cannot be

properly understood solely in terms of the concept of ' dependency'. Thus, his personal knowledge of the company's clients, established

during his long period of employment, had enabled him to 'take' the business offered by some of these customers when he set up by himself. In addition, he continued to receive a certain amount of business

through his long-standing friendship with a few of the mechanics who still worked for the old company.

Some private motorists and companies with transport to maintain tend to establish personal relationships with certain employees in the

large foreign-owned workshops, and insist on being serviced only by these individuals. This may involve a private arrangement for the

repairs to be done entirely 'outside of normal hours', or it may be

designated as part of the official job rota, with some of the work being done 'unofficially' in the evenings. In both cases, however, these mechanics had opportunities to earn extra money by using, to a greater or lesser extent, the plant, equipment, and time paid for by the foreign company. The clients probably benefited, too, since they obtained a

portion of their repairs at a 'subsidised' rate. The owner of the repair yard under discussion was sometimes drawn into these arrangements when his former workmates employed in the 'parent' firm could not

cope with all the 'private' work that came their way, and they acted as intermediaries by finding reliable, low-cost repair yards for their clients outside. Alternatively, they might help at the proprietor's workshop during the weekends, bringing with them the skills they had accumulated partly or wholly at the company's expense.

574 . PAUL KENNEDY



THE ROLE AND POSITION OF PETTY PRODUCERS 575 What these arrangements seem to indicate is that dependency on

foreign firms for training, technology, and business contacts can be a

two-edged weapon, sometimes used by present and former employees, as well as by other firms - many of them, indigenous - in order to extract benefits at the expense of foreign capital.

Reference has already been made to the importance of building contractors as a source of demand. Quite a few of the petty producers, especially those who manufactured cement blocks and metal products, regularly received work from building contractors - again, see Table 2 - to supply specialised inputs for their overall operations. The

question is, do these arrangements illustrate the subordinate but

important role of petty producers as suppliers of cheap labour on a

casual, sub-contract basis to large building companies? This system enables the latter to reduce costs and increase profits by off-loading the

responsibility for paying a full social wage onto the community and/or kinship system.

It is perfectly true that at the bottom level of the building industry in Ghana - below the large- and medium-sized firms which own their own equipment and sometimes carry out work for the Public Works

Department - there are many very small enterprises, with little or no

equipment, which retain only a tiny nucleus of permanent employees, if any. For much of the time their proprietors are little more than the hirers and managers of casual labour who sub-contract to provide specialised 'services' for larger firms. These are the 'jobbing-builders' or 'masons' described by LeBrun and Gerry.1 They divide up essentially the same kind of work into a series of lots, or else hive off the more labour- intensive, less-skilled aspects of the contract (digging foundations and

clearing plots, for example), and then allocate some or all of both of these processes to smaller, quasi-independent work-groups.

It is important, however, to distinguish this kind of sub-contracting from the arrangments found in the Accra survey between building companies and small firms. The metal manufacturers who provide the iron gates, doors, or burglar bars for a building, or the cement-block manufacturers who supply some or all of the essential ingredients for the actual construction, offer specialised inputs which the contractors cannot themselves provide without establishing a more diffuse kind of business enterprise spread over a number of activities and requiring greater investment in management and equipment. Thus, unlike

jobbing-builders, the firms in the sample operated independently, and in their own right for many different buyers, because they possessed a

1 LeBrun and Gerry, loc.cit.



576 PAUL KENNEDY

considerable level of skill and owned their own means of production. Clearly, the sub-contracts involved were more akin to the situation in certain western manufacturing industries, where a number of often

independent firms provide specialised components for one or more

companies which assemble the overall product. What was also notable about the relationship between the petty producers and the building contractors was that the latter appeared to be mainly Ghanaian-owned and not foreign.

African traders were by far the most important source of custom for the petty producers of bags and footwear. Of the 9 firms which engaged in their manufacture and/or repair, 13 were currently selling their

products to traders, while one was in the process of setting up such an

arrangement; indeed, 12 sold more than half of their goods in this way, and nine more than two-thirds. (In addition, five other firms - mainly metal manufacturers- also dealt with local traders.) Many were

regular customers who visited the workshops at, for example, weekly or monthly intervals, although none dominated any particular firm. The traders tended to purchase a few dozen items from several petty producers according to the quantity, quality, and style of their

products. How 'tied' were these proprietors to the traders who bought from

them? In order to gauge this we may consider two processes: the extent to which output was geared to producing batches of goods to order (as opposed to purchases from stock already available), and the degree to which the proprietors depended on cash advances from the traders. The evidence showed that only 33 per cent of the firms making footwear and

bags relied wholly or partly on the orders of traders who paid in advance of their sales; 44 per cent were 'independent' on both counts, and the rest were somewhere in between. Only seven or eight of the firms, including the special case of the shoe factory discussed above - or about IO-12 per cent of the sample as a whole -could be said to even

approximate to a condition of market 'dependency'. Moreover, in all but one of these instances the 'dominant' firms concerned were themselves relatively small Ghanaian concerns.

2. Financial Dependence on Buyers

Several writers have argued that the continued growth in the number of small commodity producers may increasingly bring them under the control of merchant capital as a result of financial indebtedness and

dependency. LeBrun and Gerry have examined the case of Lebanese



THE ROLE AND POSITION OF PETTY PRODUCERS 577 traders and African producers in Senegal.' Scott has also shown that the capital shortages of petty manufacturers in Peru may increase their

dependence on traders for credit in order to purchase materials; later, they may come to rely on those who buy their goods, and this leaves the owner of the means of production still in control of the entire process, albeit compelled to sell his goods at low prices.2 Eventually, this may lead to a situation of 'disguised' wage work where the producer may become entirely subordinate to a merchant capitalist - or to a large factory which sub-contracts much of its work to a chain of smaller

producers - for orders, materials, and production decisions, merely providing a place to work and his own tools. In the last situation the

petty producer and his apprentices or employees (if any) are little more than 'out-workers' who have lost the ability to control the organisation of production.

As far as the evidence from the Accra study is concerned, we will consider two questions. How did the petty producers finance their

day-to-day business operations as a whole? To what extent, and upon what kind of customers, were they financially dependent?

Almost by definition, petty producers lack the capital to purchase more than a minimum supply of tools and materials, and they have few, if any, outside sources of finance. Not unexpectedly, therefore, day- to-day receipts from sales (50 firms) and/or advances from individual customers (43 firms) were the sources of finance mentioned most

frequently. Their cash flow was, of course, vital to most of the petty producers. Advances from individual clients were especially important if the customer was new, if the order was quite substantial, or if unusual

products would be difficult to re-sell in the event of default. Advances, it was often emphasised, were therefore in the nature of deposits that

provided the producer with a certain amount of security. Other sources of finance were much less significant.

Money-lenders were virtually ignored (2 firms); the cost of borrow-

ing money in this way was extremely high, even when the necessary collateral and guarantors had been found. Banks and government lending institutions were also relatively unimportant (I 3 firms), because the majority of petty producers had no bank accounts. The exceptions tended, of course, to be the owners of the larger firms employing several

apprentices or workers. Proprietors who had secured financial help from a bank had usually done so in the form of an overdraft, but any loan

normally involved a relatively small amount of money, perhaps a

1 Ibid. and Gerry, op.cit. 2 Scott, op.cit.



578 PAUL KENNEDY

hundred pounds. In the case of financial help secured through personal networks (i6 firms), friends were mentioned most often (by 7 proprietors), followed by kinsmen (usually siblings or a parent), and the members or officials of ethnic, church, or mutual savings associations. The small amounts obtained in these ways were usually lent for short

periods, although kinsmen were more likely to offer gifts. Credit from

large or small firms which supplied raw materials (I o firms) was difficult to obtain. Those who had been successful in persuading firms to grant them materials in advance of payment said that only a few were

prepared to do this, generally small traders or other petty producers not very different from the respondents themselves - sand contractors or scrap-metal dealers, for example. Large companies were most

unlikely to offer supplies or credit, even to regular customers. In summary, it can be said that indebtedness, other than to friends

or banks - both of which were, in any case, relatively unimportant - was not particularly extensive among the petty producers. Advances from individual customers who placed private orders can be discounted, because these do not lead to outside interference or control over the

production process. Moreover, obtaining supplies on credit was not a fundamental source of indebtedness or loss of autonomy; few firms could do this, and they usually obtained only a small portion of their materials in this way, for the most part from relatively small firms.

As regards the question of financial dependence upon customers, the first point to note is that only one-third of the proprietors (21 firms) said that they could obtain cash credit from other organisations. Further, these advances could normally be obtained (or were demanded

by the petty producers) only in the case of fairly large orders (or occasional customers). Sometimes the proprietors sought advances not so much because of their cash requirements, but to cover themselves

against the risk of losses in the event of an order not being collected at the end.

Secondly, large firms and organisations of all kinds - whether government departments, state corporations, foreign or Ghanaian-owned

companies - were most reluctant to give advances of any kind to petty producers. It was claimed that they feared that such money would be

squandered, and that the goods would not ultimately be delivered. Only four of the proprietors had received cash advances from foreign firms, and only one had obtained credit from a government organisation. Even

then, advances were only available in the case of bulk orders.

Thus, thirdly, it tends to be other petty producers and small

indigenous capitalist firms which are most likely to be willing to offer cash advances - for example, building contractors and sand suppliers,



THE ROLE AND POSITION OF PETTY PRODUCERS 579

and, more especially, local traders. Even in the case of the latter, however, credit is not particularly important. Among the 19 proprietors who relied partly on local traders for their custom, Io did not normally ask for or receive cash advances from those with whom they dealt. Those who obtained credit usually did so for amounts that ranged from

one-quarter to two-thirds of the ultimate sales value of the finished

goods. Moreover, credit was normally requested or provided only in the case of large orders.

In short, there seems to be little evidence that petty producers in Accra are becoming subordinate to either local or foreign merchant

capital. There is certainly no question of a serious loss of control over

production to the point where proprietors are no more than' out-workers'

making specialised inputs for a system controlled by powerful external interests. Although the sample is not unbiased, there is no reason to

suppose that it concealed various forms of dependency. For example, although the numbers involved are few, the enterprises that produced footwear and bags had close contacts with traders, and their scale of

operations was small - only one or two apprentices, or none at all. It is precisely among firms like this that we might expect to discover clear evidence of dependency on merchant capital.

There is another important possibility - namely, that the position will

change in the near or distant future. For some time now, a number of

indigenous traders have flourished in Ghana: some of these importers, exporters, and wholesalers have become as dominant in certain spheres as European, Lebanese, or Asian firms. It remains to be seen whether or not they will be able to penetrate and take over the complex networks of small traders that currently operate in both urban and rural markets, and in the trade between the two (in such things as 'traditional' crafts, food products, and certain kinds of consumer goods), and whether this, in turn, will accelerate the process whereby petty producers are

proletarianised. In the meantime, the data available from the present study indicate that their subordination to merchant capital of any kind has not yet proceeded very far.

3. Obtaining Supplies: the Roots of Dependency

The problem of obtaining supplies of raw materials and equipment was much more crucial as a source of dependency than securing sales outlets and/or finance. Indeed, the general scarcity of almost every kind of commodity in Ghana provides a vivid demonstration of the general phenomenon of economic subordination whereby rising imports and

fluctuating primary-export prices cause a continuous outflow and 20-2



shortage of foreign exchange. Of course, additional factors have also

operated in Ghana's case to aggravate the chronic lack of foreign exchange, and not all of these can be said to derive directly or even

indirectly from the problem of economic dependency.1 It is clear that small- and medium-sized trading stores, predominantly

Ghanaian-owned, were the single most important source of supplies for the petty producers in the Accra sample. Nearly 60 per cent (39 firms) obtained three-quarters or more of their supplies from local traders, while altogether four-fifths (53 out of 66 firms) purchased at least some of their inputs in this way. In addition, I4 bought scrap-metal and second-hand spare-parts from the owners of various car-dumps in the

city. (The acute shortage of spare parts for machines and vehicles of all kinds has been a major problem in Ghana for a number of years, and since every enterprise is affected to some extent, even large foreign subsidiaries and state corporations, the merchants and dealers concerned

operate from a strong bargaining position.) By contrast, other sources of supply were relatively unimportant.

Only one petty producer had ever managed to secure an import licence, and the amount involved ((5,000) was relatively small. This is hardly surprising. Although it was not normally possible to purchase essential supplies direct from producers in Ghana - most large companies were unwilling to sell their manufactured products except through their

regular agents, and/or only in quantities beyond the means of small

enterprises - 12 proprietors reported that they were able to buy some local commodities, such as sand and timber, as well as manufactured

goods like plywood, foam rubber, steel bars, aluminium sheeting, rubber, artificial leather, and so on. More usually, supplies were obtained from the larger trading stores, notably the subsidiaries of

European or American companies - 26 proprietors bought some of their

requirements in this way, although only six stated that they were

completely dependent on the foreign companies. Indeed, 20 petty producers mentioned the State Trading Corporation as a main source of supply, while some of the large Ghanaian-owned trading stores, as well as a few of the Lebanese and Indian trading firms, were almost as important. The large European or American trading companies

1 The 'special' factors include (i) the misuse of foreign exchange, particularly during the Acheampong regime; (ii) the increased volume of made-in-Ghana consumer goods which have been exported to nearby countries without, apparently, earning a corresponding inflow of foreign exchange sufficient to replace the raw materials and equipment used in their production; and (iii) the legacy of economic problems left from the Nkrumah years. For a revealing analysis of the latter, see Tony Killick, Development Economics in Action: a study of economic policies in Ghana (London, 1978), passim.

580 PAUL KENNEDY




cannot, therefore, be said to dominate the market for scarce materials and equipment, although they were obviously very important.

How is it that Ghanaian traders of all kinds are able to occupy such a powerful and central position in the flow of scarce materials and

equipment, given that the majority do not receive import licenses? The situation is far from clear, although the explanation offered by some

proprietors probably gives an important clue. It appears that many local traders receive 'inside' information from the storekeepers and other staff employed by the large importing firms concerning the various

goods that are expected at the docks. This enables the traders to buy up large quantities before other customers are even aware that such

goods are available. Alternatively, their 'contacts' simply refuse to sell the stocks under their control to any but their 'special' customers, claiming that the awaited items have not yet arrived or are already sold out.

Scarcity and need mean that businesses and private individuals are

prepared, however reluctantly, to pay the much higher 'true' market

price rather than go without altogether. Meanwhile, the traders 'earn' handsome unofficial profits without necessarily having to fear prosecu- tion. Even if government inspectors did ask to see the official sale

receipts, these would not reveal the excess cash paid in addition to the controlled price. Indeed, by purchasing large quantities of stocks the traders effectively create an even greater shortage, and so push prices up even higher.

4. The State and Petty Production

It has long been argued that the state must inevitably play a key role in promoting and supervising economic life in dependent, satellite economies. This is because local business groups are often weak, foreign capital has only limited interests in the development of local resources, and the state must support itself and the national bourgeoisie (as well as investing in a number of' necessary' national development projects) by creaming-off a surplus from the export revenue earned by direct

producers, particularly cash-crop farmers.

Despite the prevalence of such views, very little attention has been paid to the relationships that prevail between the state and petty producers, certainly by comparison with the interest shown in large capitalist (especially foreign) enterprises, and the influence they supposedly exert over petty producers. In part, this neglect may be because the numerous agencies, departments, and institutions that make up the

581



public sector are unlikely to establish the same kind of obvious and dramatic controls over petty producers as those sought by foreign and local companies. Also, in addition to its fiscal, monetary, and general economic and political priorities, the main way in which the state affects small producers is in its capacity as a source of both direct and indirect demand stimulus, and much of the latter is 'hidden' from view.

What are the main ways in which the state channels wealth into the

economy? And what does the evidence from the Accra study tell us about the importance of state agencies as a source of demand for petty producers?

First of all, the state creates demand by paying out money to private firms which have contracted to supply products to one or more of the numerous units in the public sector. We have already seen how public corporations and government departments of various kinds were overall at least as important as foreign companies - and often more so - as a source of markets for those who were studied. This was particularly so for metal and wood products, and for cement-block manufacturers.

Secondly, as a major employer of labour, the state acts as an

important source of consumer demand since a considerable proportion of the salaries paid to government employees is spent on acquiring the

goods and services produced by large and small enterprises that operate within the national economy. In fact, those who were interviewed believed that approximately half their individual customers were

government employees of one kind or another, the percentage varying slightly according to the industry in question and the style of the

product. This is hardly surprising because the Accra Capital District is a major industrial centre in its own right, where the headquarters if not the entire operations of numerous state corporations are situated: Tema Port and Docks, Black Star Shipping Line, Ghana Airways, Ghana National Trading Corporation, the State Insurance Corporation, the Water and Sewerage Corporation, the Steelworks, State Distilleries, and Metal Products factory, to name but a few.

In addition to these two obvious and direct consequences of state

expenditure, there are several indirect and intricate processes at work. These are the 'accelerator' and 'multiplier' effects of the wealth channelled into the economy by the state, such that various chains of

activity are created which, in turn, activate others.

Thus, thirdly, government expenditures - whether in the form of salaries for employees or contracts given to particular firms - also

generate the following kinds of important exchanges between the various categories of petty producers themselves:

582 PAUL KENNEDY




(i) Government employees throughout Ghana spent a certain proportion of their income on consumer goods which they purchased, in

part, from small traders - these, in turn, obtained part of their stock from petty producers.

(2) Government employees hired building contractors who then

placed orders with petty producers for specialised inputs, such as cement

blocks, iron gates, fencing, burglar bars, wooden doors, and window frames - no doubt other small specialists like electricians and plumbers also received sub-contracts in this way.

(3) Because very few petty producers had sufficient resources to own their own means of transport, taxis and especially 'mammy lorries' for

passengers and luggage were hired on a short-term basis, as and when

required, from any available owner or driver for the purpose of shifting finished goods or procuring supplies - alternatively, small haulage companies delivered such bulky items as sand or cement blocks.

(4) In the case of vehicle repairs and upholstery, several proprietors operating from the same site often undertook different but comple- mentary work for the same customer - if particular specialists were not available, then regular arrangements with nearby producers would be utilised.

(5) Although most kinds of tools and machines are not manufactured in Ghana, certain 'investment' goods and services are provided locally, and can sometimes be produced, repaired, and exchanged by and between petty producers - the most notable examples are found in the metal products industry, and a fuller account of some of these transactions is given below. Of course, the demand stimulus provided by the Government as a major employer is not the only source of business

exchanges between petty producers. The contracts offered them by large foreign and indigenous firms, as well as a portion of the incomes

spent by their employees, no doubt also helped to provide a further source of inter-firm business activity among the smallest producers.

In addition, a portion of the earnings of each proprietor and his workforce generated by state expenditure may be spent on purchasing the goods and services provided by yet other petty producers, thereby giving rise to a mutual demand for one another's products, either for investment purposes or for private consumption. Finally, the state itself 'picks up' some of the new wealth generated among private firms, notably by taxation and the sale of government services and products, thereby giving rise to new and larger cycles of economic activity.

583



PAUL KENNEDY

PETTY PRODUCERS AND THE NATIONAL ECONOMY

Although the members of the Radical school have drawn attention to the different ways in which the operations of very small enterprises apparently benefit foreign capital, they have rather neglected the

question of how they may contribute to the workings of the local

economy. The members of the I.L.O. school have mainly taken the

opposite position, and seem oblivious to the possibility that certain

groups or interests may gain disproportionately from the general advantages provided by petty producers as a whole.1 In our discussion of this question with reference to the Accra sample we shall look briefly at the most important and obvious ways in which those who were studied did appear to benefit the national economy.

I. Employment

A number of writers have pointed to the creation of employment opportunities as the single most important function of petty production.2 What is perhaps less often stressed is that very small enterprises often

provide a livelihood not only for one or more proprietors but for several

'employees' as well. Although the Accra sample cannot be regarded as

completely representative, because the research was focused on enter-

prises where a number of people were employed, it was not completely untypical. Apprentices, relatives, and/or workers are frequently found in small enterprises. Moreover, it is the creation of employment opportunities at a relatively low capital cost which is, perhaps, equally important from the point of view of the economy as a whole. Here, the Accra petty producers 'scored' quite well.

Altogether approximately 310 people were employed in the 66

enterprises studied - not including the proprietors themselves - of whom i82 were apprentices and 128 were paid workers.3 The average number employed was 4-7 per enterprise, and this increases to 5-7 if

1 Of course, any attempt to provide an appraisal of the contributions that petty producers may make to the local Ghanaian economy, either in addition to or in place of their r6ole with respect to foreign capital as sources of unearned profits, will, of necessity, be rather crude and in part impressionistic. There is no precise way in which these different elements can be separated out, since the detailed records of accounts and so on are not generally available where petty producers are concerned.

2 See, for example, Hart, loc.cit. and I.L.O., Employment, Incomes and Equality; also the comments on the latter made by Leys, op.cit. and Moser, loc.cit.

3 For a detailed analysis of the different kinds of contracts and arrangements under which the paid workers were employed, see Paul Kennedy, 'Workers and Employers in the Sphere of Petty Commodity Production in Accra, Ghana: towards proletarianization?', injustin Labinjoh (ed.), Themes in Modernization and Development (London, forthcoming).

584




account is taken only of those enterprises (54) where at least one person was engaged besides the proprietor. If we consider the initial investment used to establish these enterprises, mainly in the early and mid-I970s, we find that the average amount of starting capital invested per employee was $34I in those 54 enterprises where at least one person was engaged. Obviously, this amount was higher in some industries than others. It was lowest in vehicle repairs($79) and shoes (489), rising in the furniture workshops ($250) and metal manufacturing (4535). The firms making cement blocks were included in the study because they offered an opportunity to 'tap' the pool of floating, unskilled casual workers who gain a livelihood outside the modern sector in Ghanaian cities. However, initial investment was higher in this industry, so the

figures were recalculated in order to exclude these firms and their workers. The average amount of initial investment per employee for the

remaining 48 firms was (249. Even allowing for the high rate of inflation in Ghana during the last

few years, and the need, therefore, to 'update' these approximate figures, the capacity of many petty producers to generate work for others on the basis of quite modest amounts of capital looks impressive, particularly when we compare this with the situation in the advanced industrial countries. Furthermore, in other areas of economic activity, outside the directly 'productive' sectors, petty producers may require even smaller amounts of starting capital.

2. Low-Cost Training

Several writers have discussed the subject of informal training much more thoroughly than is possible here.' However, two points can be made arising out of the data obtained for the Accra survey.

In the first place, the apprentices in these firms were receiving their instruction in 'training centres' whose cost in terms of initial capital investment had been relatively low. Further, many of the proprietors had previously trained other apprentices who were now working as paid employees in the same firm. Alternatively, some of these earlier

apprentices may have transferred their skills to the large foreign and state corporations so that the petty producers had effectively helped to subsidise their operations. Of course, the reverse process had also taken place in some cases.

1 See, for example, Margaret Peil, 'The Apprenticeship System in Accra', in Africa (London), 40, 1970, pp. I37-50; and Kenneth King, The African Artisan: education and the informal sector in Kenya (London, 1977).

585



Secondly, in so far as informally trained workers circulate to the benefit of Ghana 's economy, the cost of their training is not borne by the Government, the taxpayer, or by the large organisations which may eventually employ them. Instead it is carried, as we have just seen, by the proprietors concerned, in the form of capital investment and time

spent on training, by the guarantors who pay the 'learning fees ', and

by the apprentices themselves. In the Accra survey the guarantors were

normally (82 per cent) the parents, siblings, or close kinsmen of the

apprentices in question. The 'price' of informal training varied quite a lot, but at the time of the survey the usual figures quoted by the

respondents were as follows: an initial outlay of between Q(20 to (50 (or its equivalent in drinks and other consumer goods), followed at the

completion of the training period by another payment of about 01o00 to $200. Although these are not vast sums of money the amounts involved are not negligible, particularly where a family has a number of children seeking help in this way. Moreover, even if parents and older relatives receive reciprocal help from their children in later years, the

point is that however the cost is ultimately distributed within the family it is the latter which bears the cost, not the wider economy.

It could be argued that the apprentices also 'pay' quite heavily for the privilege of securing a trade. Although they are often provided with somewhere to stay (the workshop or the master's rooms) and 'chop money' for everyday needs, their situation is not enviable. Thus, the

average monthly food allowance received by the apprentices in the

sample was Q(20 - indeed, for 6i per cent in the sample this was their

only source of income during the 2-5 years of training, apart perhaps from occasional kinship aid. The remainder sometimes obtained additional amounts of money in the form of 'tips' from customers, bonuses during favourable work periods, permission to undertake 'private' work on their own behalf, and so on. However, the amounts involved were small as well as generally infrequent, so that the majority of apprentices were virtually dependent on 'chop money' for their sustenance. More-

over, they were often living away from home so that their 'cost of living' was higher, anyway.1

3. Earning or Saving Foreign Exchange

While it is important not to exaggerate the role that petty producers may play in helping to earn and/or to save scarce foreign exchange,

1 There is also the difficult and controversial question of the unpaid labour which apprentices might be said to provide for their masters. Again, this is discussed more fully in Kennedy, loc.cit.

586 PAUL KENNEDY




there were a number of instances of this among those included in the Accra survey, and they deserve a brief mention. Basically, there were three main ways in which this happened: by participating in the

production of goods that were eventually exported to one or more of the surrounding African countries; by re-cycling raw materials; and by showing ingenuity in using old spare parts and/or basic materials in order to build substitutes for, or reconstructions of, various pieces of

equipment. The petty producers concerned were effectively reducing the country's import needs by lengthening the life of existing resources and by creating substitutes for unattainable items.

Mention has already been made of the first process. Thus, several of the small firms that manufactured bags and footwear reported that some of their products were bought in batches by small traders and sent to other African countries for re-sale. Liberia, Nigeria, Togo, and the Ivory Coast were most often cited in these cases.

More important were the various ways in which discarded materials

and/or machines were 're-cycled' or re-constructed. This process was most common among some of the metal-products firms: oil cans, petrol barrels, and pieces of scrap metal from the bodies of old cars and trucks were used alongside new materials in the manufacture of charcoal pots, wheelbarrows, watering cans, cassava-grating machinery, and so on. Some of the small shoe-makers produced cheap sandals from old rubber

tyres, while flour sacks were also 're-cycled' by those who made or

repaired upholstery for vehicles. As regards machines and equipment it was the vehicle-repair yards that provided some of the most interesting examples: local blacksmiths helped to re-build damaged trucks from

parts purchased from scrap yards, while working engines from one vehicle could be fitted onto the chassis and/or to the cab of another, or vice versa. To a certain extent, and no doubt with a resulting loss of fuel economy or power, second-hand gearboxes from one 'make' of

lorry could be adjusted to operate in a different vehicle, while a

low-consumption carburettor could be fitted to a high consumption engine. Of course, in making these various alterations it was often

necessary to incorporate some new parts and materials, as well.

Finally, five of the proprietors in the sample had made equipment for use in their own workshops with a little help from specialists, particularly welders. The owners of two vehicle repair-yards had improvised hoists out of chains, wooden posts, angle bars, and so on, while the proprietor of a metal workshop had built his own cutting machine. Also, two of the furniture manufacturers had assembled some of their own equipment out of various parts that were relatively easy

587



to obtain and fairly cheap, including a lathe, a table saw, and a

sand-papering machine. It is perhaps relevant to conclude this section by mentioning that

many of the proprietors in the sample said that the availability - or

rather, the non-availability - of simple items of equipment, and at a

price they could afford, was one of the greatest problems they faced as would-be businessmen. Some suggested that a very useful and relatively inexpensive form of aid would be the supply of second-hand, probably out-dated machine tools and other equipment, on an easy credit basis, shipped from the workshops and factories of the advanced countries.

4. The Scope of Inputs into the Economy

Several writers have argued that petty producers help to subsidise the

profits made by large firms since they provide a vast array of inexpensive goods and services.1 These are purchased and consumed primarily by the low-paid employees working in the large, modern-sector enterprises, and are essential if the former are to reproduce their means of social existence while the latter reap the benefits of cheap labour. While it is no doubt true that a considerable number of petty producers do operate mainly in this way, it is important to remember that many are also involved wholly or partly in other kinds of economic activity. It seems

likely that there is a good deal of variation depending on the particular socio-economic structure and history of the country, as well as the type of settlement,2 and the economic activity in question.3 Thus, in the case of the present study, this view needs to be both broadened and qualified in several ways.

In the first place, in a large industrial, commercial, and administrative centre like Accra, the proportion of consumers in the middle- and

high-income groups is well above average for the country as a whole.

Accordingly, as in other urban areas, large numbers of petty producers are engaged, either in whole or in part, in catering specifically for the tastes and needs of the 'better-off' consumers, or the bourgeoisie - for

example: the repair and maintenance of electrical goods, especially

1 For example, LeBrun and Gerry, loc.cit. and Gerry, op.cit. 2 The economy of Tarkwa in Western Ghana, studied for example by Bryant, op.cit., is heavily

dependent upon a few large corporations employing many workers. Here, it might be expected that petty producers would be largely preoccupied with supplying the needs of modern-sector employees. See also John Bryant, 'Southern Ghanaians in the Commodity Economy: a study of economic relations in a West African town', Ph.D. thesis, Sussex University, Brighton, I979.

3 Tailors, seamstresses, and shoemakers/repairers seem much more likely to be engaged in catering for the everyday 'utility' requirements of the less well-off than certain other kinds of small enterprises - although even here the situation may not be clear cut.

588 PAUL KENNEDY




refrigerators and washing machines, as well as vehicles, including paint spraying and upholstery; the manufacture of burglar bars, iron gates, and fencing; and the making of cement blocks for 'modern' houses.

Secondly, some of these products owned by the wealthy are indirectly consumed by the members of all income groups, including the lower

paid. Taxis, vans, and mammy-lorries, probably carry middle- and low-income passengers more often than the rich, while many small bars, eating places, and amusement shops, with a-far-from wealthy clientele, serve 'cold' drinks from a 'fridge'. Although owned by the well-off, modern' cement-block houses in Accra are rented out to tenants who are often in receipt of quite low or average incomes, usually one room to a family.

Thirdly, in many industries, individual petty producers offer goods and services for direct purchase by consumers of all income groups. Often, the same small carpenter, tailor, bag or shoemaker, metal worker, or photographer, provides both 'quality' and standard goods for the better-off customers, while producing mainly, although not

always, poorer quality, perhaps less stylish, inexpensive items for sale to those on middle and low incomes.

Fourthly, in some industries many petty producers are involved

wholly or partly in turning out 'investment' goods which are purchased by other firms and used in the production of further wealth. In the I977 Accra study, approximately half of the following categories of firms were

engaged to a greater or lesser extent in the production or maintenance of investment goods: namely, those making cement blocks, wooden frames and doors; metal products (for food processing machinery, farm carts, and wheelbarrows); and the repairers of trucks and lorries.

Finally, in view of the food shortages that often occur in countries like Ghana, and the continuing concern with agricultural development, it may be useful to note that some of the metal-products workshops were, in fact, providing inputs directly for use in agriculture, especially metal

ploughs.

5. The Saving of Scarce Capital

It is clear that petty producers can often provide goods and services of all kinds at reasonable prices by utilising relatively small amounts of capital. This is one of the main reasons why so much interest has been shown in them in recent years, not least in several Latin American countries, where some writers have agreed that capital accumulation is taking place despite the realities of underdevelopment and



dependency.1 The problem, however, is that industrialisation in the late twentieth century requires enormous amounts of capital, and this needs to be concentrated in those areas of the economy where the rate of

potential economic growth is highest. By helping to provide low-cost services of all kinds - transport and distribution, shanty housing, consumer goods and services, entertainment, and so on - the tertiary sector, or petty production, plays a vital function, not so much in relation to foreign firms, but by enabling 'scarce' capital to be saved and concentrated from the point of view of national development as a whole. According to this scenario, therefore, the persistence - as well as the sheer magnitude - of petty production is both vital and likely to continue. If these arguments are held to be valid for Latin America, they may be relevant to the African situation, too.2

SOME CONCLUSIONS

Pretty producers in Accra undoubtedly make a useful contribution to the wider economy in both very general and practical ways. For

example, they supplied low-cost goods and services, and they helped to increase local purchasing power through the generation of employment, income, and investment.

However, some groups or interests in Ghana's economy almost

certainly gained rather more from these contributions than others. The two categories which may have benefited disproportionately were (i) public-sector employees, who, as a major source of clientele, obtained

goods and services at very competitive prices, and (ii) the local medium and small-scale traders, both in their capacity as buyers and, more

particularly, as sellers. Their ability to do this depended, in turn, on certain structural

conditions at work in Ghana 's society and economy, and were not solely the result of market pressures - particularly the extreme competition among many small producers which kept prices low - and/or the additional vulnerabilities to which small-scale enterprises are prone. One such factor is the system of dominant state power legitimised by the ideologies of induced modernisation, development planning, and

1 Bryan Roberts, Cities of Peasants (London, 1978), especially ch. 7, where Vilmar E. Faria and Francisco de Oliveira's work are discussed.

2 Of course, the question of whether, and to what extent, petty production really is so much more prominent and persistent in the economies of the Third World today than at a comparable stage in the development of the West, as most writers in this field seem to assume, deserves much more careful consideration than it has so far received.

590 PAUL KENNEDY




national autonomy, buttressed by the legal, administrative, and coercive

apparatus of law and order. This enables a considerable share of the national resources to be channelled through the public sector into the salaries of numerous government officials and the budgets of various state bureaucracies. The other structural factor is the national shortage of foreign exchange coupled with government policies as regards price controls. These create a series of supply bottlenecks which certain kinds of capitalist entrepreneurs are in a strong position to exploit. Naturally, the scarcity of foreign exchange is neither unrelated to Ghana's

peripheral position in the world economy, nor to the policies and

preferences shown by various governments during the last 20 years or so.

There are few indications that the petty producers studied in Accra had direct ties to foreign firms over and above the quite 'normal'

exchange relationships that necessarily prevail in any capitalist economy. Apart from one clear-cut case, they were not in the process of being subordinated to some form of market, financial, or supply 'dependence' leading ultimately to a condition of'disguised' wage employment. This is not to say that such cases do not exist in Ghana and elsewhere; clearly, they do. No doubt future research will uncover many other examples, like thejobbing-builders, garbage pickers, street traders, and shoemakers described by some of the writers mentioned in this article.

In the vast majority of cases, foreign industrial and commercial

capital was rather less important as a source of raw materials, market outlets, and credit than (i) individual clients, particularly government employees, (ii) other, mostly small-scale, local firms, and (iii) traders of one kind or another.

While individual proprietors were sometimes glad to rely upon the advances provided by small traders or the orders placed by larger firms, and while many faced the problem of securing supplies of raw materials and had to pay highly for the goods they bought from local stores, there were virtually no instances (i) where all these 'problems' existed

simultaneously, (ii) where 'dependence' involved a monopoly of the same one or two creditors/buyers/suppliers continuously, and (iii) where the situation was in the process of being systematised into some kind of exploitative, 'disguised' wage relationship. Thus, local merchant

capital in Accra has also 'failed' so far to seriously proletarianise large numbers of petty producers, although this situation could change in the future. This conclusion - supported by earlier evidence - suggests that in certain Third-World economies a great deal of petty production approximates more to the condition of' true self-employment' as defined

59I



592 PAUL KENNEDY

by Bromley and Gerry than to anything else.1 The implication of this in terms of the possible development of an influential local bourgeoisie, through the gradual process of socio-economic differentiation, requires perhaps more consideration than it has so far received.

The capitalist mode of production affected those who were studied, not so much through the existence of direct ties with the subsidiaries of multinational corporations, but through the more subtle and complex workings of the international and national market economy along the lines indicated by Bernstein and Banaji.2 Perhaps the most important of these market forces were the following: (i) The limits imposed by the

availability of capital. Those with few resources will mostly be confined to economic fields that are overcrowded, where the small-scale nature of operations and the absence of potentially advantageous technology will all combine to reduce the opportunities for proprietors to benefit from certain economies, to make occasional windfall profits, and to earn a sustained and reasonable return on capital, time, and effort. (ii) The constraints resulting from competition. It will be necessary to maintain, if not improve, productivity to the same level as that achieved by business rivals, through investment, rational business organisation, or the

manipulation of socio-political connections, in order to obtain

regular and secure contracts (or finance) for expansion, or else face the prospect of relegation to an even weaker position in the market.

(iii) The pressures of consumer demand. It is obviously important to

provide what consumers want, and at a price they are prepared to pay, or else lose custom to others.

Thus, although the petty producers in the Accra sample were not

particularly dependent on, or subordinate to, foreign or local capital in the sense that they were subject to direct controls, neither were they in a situation of complete autonomy. Indeed, as we have just seen, they were subject to the same general market forces which affect enterprises in any capitalist economy. In addition, apart from the structural constraints mentioned earlier, they were probably rather more suscep- tible to market forces than larger enterprises because their 'smallness' and lack of capital would reduce their capacity to survive adverse

conditions, to make adjustments, and to respond to new opportunities.

At a deeper level of analysis there would appear to be a number of difficult theoretical problems in the literature concerned with this

2 Bernstein, loc.cit. and Banaji, loc.cit. 1 Bromley and Gerry, op.cit.




subject which so far remain unresolved. It is maintained that like the

peasantry, urban petty producers either experience or make possible some kind of' unequal exchange' in their dealings with larger enterprises. Hence the whole argument about peripheral capitalism and under-

development, because it is this unearned surplus which benefits big capital, while deepening and perpetrating the underlying condition of economic dependency. At the same time, surplus extraction impoverishes petty producers and inhibits the usual capitalist process of accumulation

by the few, alongside the proletarianisation of the many, resulting in the rise of a local bourgeoisie. Leaving aside the question of whether or not this kind of argument is ultimately circular - 'unequal exchange' is at one and the same time a consequence, a cause, and a manifestation of economic dependency - several questions arise.

According to Marxian theory, under capitalism, surplus extraction is predominantly to be thought of as a characteristic of the wage relationship, not of 'normal' commercial exchange per se. It may be

asked, therefore, whether 'unequal exchange' can in fact be said to occur as a result of exchanges between small and large enterprises in the absence of any evidence that the former are really 'disguised wage workers' rather than independent producers - that is, a kind of

quasi-proletariat. A second problem is that since no one maintains 'unequal exchange'

is essential and endemic to all the relationships between petty producers and the larger enterprises, the 'normal' capitalist exchanges that occur in many other economies must also be at work, at least some of the time, in the Third World.-; But if this is the case we need criteria to enable us to distinguish between the two types of exchange, and between the different sets of circumstances in which they occur. For example, is the

'super' exploitation which many petty producers supposedly face caused

by the prevalence of extra-economic forces? Alternatively, is it the result of the heavy stresses and strains that operate with greater intensity because the condition of economic dependency aggravates the usual contradictions of capitalism? Do these extreme pressures cause such an uneven and slow penetration of traditional activities, such a dearth of

employment opportunities, such vast inequalities in the distribution of

capital and related opportunities for enterprise, such intense competition and such limited results, that they reduce to a minimum the profit margins that petty producers are in a position to negotiate? In the latter case it is not clear whether we are dealing merely with a difference of

degree, because pressures arise under capitalism everywhere, or with

something that is appreciably and qualitatively different.



Finally, given that 'normal' capitalist exchanges are common to both

developing and advanced economies, and since, additionally, 'unequal exchange' may also occur in the latter, it is not clear whether, and to what extent, the relationships that occur between large and small firms in the Third World are particularly 'special'. If they are not, the

question arises of how exactly underdevelopment in the periphery differs from self-centred development, at least as regards the role of urban petty producers. It may be argued that the crucial problems of

analysis in this field are methodological and theoretical rather than substantive or empirical. Thus the belief that petty producers function to assist metropolitan capitalism in various ways hinges upon, and in turn helps to substantiate, the claims put forward by many influential neo-Marxist writers - namely, that the processes of capitalist development in the Third World and the West have been significantly and

perhaps irretrievably different, to the lasting detriment of the former and to the benefit of the latter.

It may now be pertinent to ask whether these perceived differences in the patterns of world capitalist development owe more to the theoretical 'requirements' of certain kinds of Marxist thinking than to the actual processes of change going on in the 'real' world. If under-

development theory has outlived its usefulness yet continues to structure much of our current thinking, this is because serious theoretical

alternatives, which might enable us to locate, substantiate, and interpret empirical reality in a rather different way, have only recently begun to appear, and much more work of this kind remains to be done.'

1 See the seminal and lucid study by Bill Warren, Imperialism: pioneer of capitalism (London, I980).

594 PAUL KENNEDY



the role and position of petty producers in a west african city

Documents