Spending, Saving or Investing Social Capital: the Case of Shuttle Traders in Post-Communist Central Europe

The paper considers the 'embeddedness' of economic activities in the work of small-scale cross-border traders between the Central European 'buffer zone' countries of Poland, Czech Republic, Hungary and Slovakia and the countries further East. Shuttle trading has become a significant feature of post-Communist societies and the research, based upon interviews with traders and field work in markets in the region, explores the way in which it evolved and the different ways in which it is organised. The paper explores the tension between the need to establish safe and predictable patterns of economic activity in an extremely risky and changeable environment on the one hand, and the need to limit the extent of responsibility on the other - in other words, the tension between saving and spending social capital. Two main hypotheses are considered which emerge out of the literature on ethnic business in other parts of the world. The first is the hypotheses that where formal regulations of the market either do not work or do not exist, other forms of informal organisation arise to regulate trade and lessen the risks associated with it. The second main hypothesis is that there is a trader's dilemma operating - a dilemma between accumulating primary capital and disbursing it amongst the group to which the trader is obligated. Post-Communist Central Europe is a particularly interesting place in which to consider these factors because we are witnessing a very rapid transformation from one form of social organisation where private activity of this kind was discouraged or illegal to a new form of social organisation where market relations and private business are encouraged. In such circumstances small scale traders are developing new market cultures, new traditions of exchange. They could be seen as pioneers of capitalism. At the end of the paper we develop a schematic model of the way in which social, ethnic and familial networks operate under these conditions.