Family, Fungibility and Formality: Rural Advantages of Informal Non-farm Enterprise versus the Urban-formal State

The alleged confusions surrounding the definition of the informal sector (IS) have proved creative. They point to the family mode of production (FMP) as the concept that bridges the gaps among the confused ideas. FMP, the core of IS, is substantial (Section II). It can prosper to the extent that it is concentrated in products, sectors and spaces where FMP’s central advantage — fungibility — can be combined with self-provisioning and advantages of small scale (Section III). This paper stresses the internal, survival-oriented strengths of family productions. Elsewhere, I review its alleged growth-inhibiting, external weaknesses — its supposedly inevitable marginalisation or exploitation by big capital. In practice, FMP’s success-even in appropriate product lines-depends not only on sturdiness due to fungibility (which may go so far as the selection of a spouse for flexibility between producer and consumer activities) but also on location. For demographic, geographic and economic reasons, FMP’s prospects are best in rural areas (Section IV) yet an urban-biased pro-formal state, if it stimulates IS at all, will stress urban ‘small industry’ rather than rural FMP (Section V). This implies that, if IS (or petty commodity production and distribution, PCPD) survives and accumulates,1 it will be due to the sector’s internal economics, rather than to State action.