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5. Capitalism from Below?: Small Firms, Petty Capitalists, and Regional Transformations in Eastern Europe
- State University of New York Press
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5 Capitalism from Below?: Small Firms, Petty Capitalists, and Regional Transformations in Eastern Europe Adrian Smith Introduction Since the collapse of the Soviet systems in East-Central Europe (ECE), a wealth of “Western” policy discourses have found their way into thinking about the post-Communist “transition to capitalism” (Bateman 1999; Gowan 1995; Pickles and Smith 1998; A. Smith 1997, 1998, 2002a, 2002b). The majority and most powerful of these discourses have been centered on the twin pillars of neoliberalism and global economic integration. Market-led transition , a rolling back of the state, and a globalization of economic life quickly became the central tenets of policies to engineer the “transition to capitalism.” One of the key aspects of this discursive repositioning of economic policy has been in the realm of small firm development. It is argued that a new reliance upon small, locally agglomerated, dynamic, and flexible firms can provide an alternative to the outdated legacies of the Soviet system of centralized planning based on large, autarkic enterprises (Joffe 1990; Murray 1992; Schmitz and Musyck 1993; Hüber 1995; Lorentzen 1995; Said 1995).1 Indeed, a romanticized picture has been constructed of a lost past of small, petty capitalist production in pre-Soviet ECE (Teichova and Cottrell 1983; Charap 1993; EBRD 1995:139). A return to such systems of economic life is, it is argued, required. In this chapter I explore the efficacy of such policies. Through an 83 examination of the experience of Slovakia I argue that widespread attempts to support petty capitalist and small and medium enterprise (SME) development have had only partial success and have done little to overcome profound and enduring regional inequalities . I also explore the ways in which SME development and petty capitalist production, where they have occurred, have been integrated globally, through an examination of the garment sector. Such forms of global integration of SMEs and petty capitalists, while providing interesting alternatives to the dominance of regional economies by large, autarkic enterprises in Soviet societies , bring with them their own contradictions and limits. In this sense, then, the chapter examines two forms of global integration of petty capitalist organization. First, it considers the transference of “Western” discourses on SME development as part of the more general “globalization” of neoliberal economic policies to Eastern Europe. Second, it examines the uneven global integration of SMEs and the limits set by such forms of global engagement. Small Firms, Petty Capitalism, and Flexible Production in the “Transition to Capitalism” Since the 1980s a vast literature has emerged on the so-called new industrial spaces and flexible specialization that has played an influential role in the construction of a discourse of local development theory and practice. It is not my purpose here to review these literatures. Rather, I seek to elaborate the key components of these arguments and explore how they have been “put to work” in the construction of an SME and petty capitalist discourse in Eastern Europe.2 Drawing upon the experiences of the Third Italy, BadenW ürttemberg, the “high tech” spaces of the M4 motorway corridor in Britain and Silicon Valley in California, among others, an emphasis has been placed on the role of small-firm-oriented local industrial organization and agglomeration, leading to new forms of regional economic growth. First, the small firm, locally integrated clusters of the successful Third Italy economic region (mid peninsula ) are seen to be one element in a model of flexible production agglomerations and local economic dynamism in traditional sectors such as clothing, textiles, leather, and footwear (Amin 1999; Brusco 1982; Garofoli 1991; Martinelli and Schoenberger 1991; Paniccia 1998; Piore and Sabel 1984; Storper 1997). Typical of 84 Adrian Smith [34.201.8.144] Project MUSE (2024-03-29 14:43 GMT) such industrial districts are extensive interfirm divisions of labor with clusters of input-output relations, strong productive specialization , a plurality of local economic actors primarily in small firms, the use of “face-to-face” cooperation and consultation between firms to guarantee a locally supportive industrial structure (Garofoli 1991), a renewed craft tradition employing flexible working practices rather than Fordist standardization, and locally institutionalized practices and conventions that provide the glue holding together such complex divisions of labor (see Amin 1989; Scott 1988; Storper 1995, 1997; Whitford 2001). Second, the importance of locally integrated cooperative production between regionally dominant, often large, engineering firms and small suppliers is seen as central to the dynamic growth of the BadenW ürttemberg region in Germany. Such forms of local agglomeration are said to...