etnobofin

In this time of crisis it’s possibly useful to rethink our concepts of economy and the role that business plays in our society. I recently moved to a new apartment in a different part of Montpellier, but something was bugging me about my old place. I’ve been trying to work out how all the shops in my old neighbourhood survived.

Within 150 metres of my front door there were:

• 5 boulangeries
• 3 épiceries Marocaines (selling fruit, vegetables and groceries)
• 1 Lidl that never has the same products on sale two days in a row
• 1 SPAR that sells things at ridiculously high prices (just like SPAR in the UK)
• 1 Casino that sells exactly the same stuff as SPAR and Lidl, but 100 metres further away
• 1 Schlecker that mainly sells dish detergent and cat food
• 1 halal butcher
• 1 Tabac-Presse which is also a bar and PMU (betting shop)
• 3 hairdressers

If you drew a Venn Diagram of all the overlapping products, and graphed the potential demand from local consumers, one might conclude that none of these businesses could be profitable. Yet somehow they all open daily and serve customers, and apparently all make a living profit.

A little further thought provided the clues to how this ecosystem works. First of all, the dwellings in the neighbourhood were large apartment complexes. By my conservative calculation, 25,000 people (the population of Taupo) live within a 300m radius of the shopping centre. So in fact, local demand for groceries and basic services is significant and sustained.

Secondly – and more importantly – none of the businesses is any bigger than any other, and none of them is trying to expand, so competitive pressure is fairly low. So long as each business can achieve a turnover sufficient to feed a household, and nobody rocks the boat, everyone is happy.

On an MBA course, (a degree designed to train managers for a globalising industrial economy), the teaching tends to emphasise the “logic” of achieving growth and shareholder value in an environment where intense competition for customers is an unquestioned reality.

By contrast, my old Montpellier neighbourhood illustrates a concept of a fairly equitable ecosystem, where everyone’s activities are bound by social convention to achieve mutual benefit: rather different to the sort of capitalism we’ve come to expect in Western economies.

A few weeks ago our MBA class was lucky to have a flying visit from Dr Leo-Paul Dana (who coincidentally teaches in NZ at the University of Canterbury). His doctoral research among the Inuit of northern Canada revealed startlingly original attitudes towards entreprenership.

The rate of entrepreneurship in Inuit communities is very high, but not because Inuit want to grow profitable businesses or to become wealthy. For many Inuit, (according to Dr Dana), being an independent businessperson simply means that you can organise your own time around communal activities such as whaling and house construction. To work for a salary ties you to shifts and you cannot participate fully as a member of your community.

This is not an argument against capitalism or market forces. But it seems pertinent to re-examine how individuals use capitalist practices to serve themselves, society and the planet. The current crisis is partly the result of a loss of focus: we have been encouraged to see unfettered capital growth and consumption as an end in itself, rather than a tool to help us live together.

Now I’m off to buy a baguette at the boulangerie on the corner.

(All photos were taken in Burgundy in 2007, not in Montpellier in 2009)