Abstract
Recently, market-based strategies for poverty alleviation have emerged central to discourses on global poverty. One of the main proponents of market oriented strategy for poverty eradication was C. K. Prahalad whose publication Fortunes at the Bottom of the Pyramid paved the way for future work on business and poverty. It is curious that despite widespread discussions on the validity and relevance of the Bottom of the Pyramid (BOP) proposition by supporters and critics, there has been little sustained analysis of the foundational ideas, concepts and themes as outlined in the original BOP proposal. While by no means representative of the entire BOP field, Prahalad’s ideas deserve close attention because they provides the enabling conditions for the emergence of what I identify as the BOP ‘metanarrative’. In this article, I engage critically with Prahalad’s BOP proposition to highlight some of the theoretical and conceptual issues at stake in the BOP arguments. Specifically, I look at how globalization, partnerships, informality and enterprise, among others, are mobilized to accommodate and legitimize market development at the bottom of the pyramid. I conclude the article by emphasizing that the BOP project would be well served if it engaged in critical self-reflection as it may help to orient future iterations of the BOP strategy in ways that are less celebratory and more circumspect about the possibilities and potentials of linking the pursuit of profit with the goals of poverty relief and empowerment.
Keywords
No longer viewed as adversarial and resistant, the relationship between business and development has undergone a radical shift in the past couple of decades. Specifically, in the sphere of global poverty alleviation, market based solutions have acquired a new force and urgency among international donor agencies, think tanks, non-governmental agencies and development experts. 1 In recent years, one of the main proponents of market based approach to poverty alleviation was C. K. Prahalad (1941–2010), management professor and consultant, whose work (along with co-authors Stuart Hart, 2002 and Allen Hammond, 2004) on market development at the bottom of the economic pyramid is credited with reinvigorating the idea of large private sector involvement in poverty reduction. With the publication of his culminating work Fortune at the Bottom of the Pyramid, Eradicating Poverty Through Profits (Prahalad, 2006) the notion that the unique capabilities of large private firms can be employed successfully to achieve the goals of profit generation and poverty eradication has gained considerable purchase within and beyond the academe.
C. K. Prahalad’s initial forays into the potentials and possibilities of business solutions for poverty alleviation have served as a catalyst for subsequent iterations of the BOP approach. In its latest incarnation it has been rechristened ‘Base of the Pyramid’ (BOP) protocol which emphasizes an enterprise based model of poverty eradication involving ‘creatively marrying corporations’ and communities’ resources, capabilities, and energies’ (Simanis and Hart, 2008: 2). Even as scholars from different fields driven by competing agencies and talking to different audiences deliberate on the role of private sector in development, in general, there has been a growing recognition that business strategies such as microenterprise, social enterprise and BOP have become central to discourses on global poverty (Blowfield, 2005; Conney and Shanks, 2010; Newell, 2008, Roy, 2010). More than any other, the BoP ‘movement’ (Simanis and Milstein, 2012) which has spawned a ‘veritable industry’ 2 of learning labs, conferences, consultants, training programs, and organizations has emerged at the forefront of business initiatives for poverty reduction.
Viewed in this manner, the BOP approach, I argue can be thought of as an emergent ‘metanarrative’—a grand synthesizing framework which provides scholars and practitioners at diverse sites with a template for future research and action aimed at creating market based solutions for poverty eradication (see Anderson and Markides, 2007; Karamchandani et al., 2011; Kasturi Rangan et al., 2007; London and Hart, 2004; Seelos and Mair, 2007; Vachani and Smith, 2008). Metanarrative can be defined as a ‘synthesizing framework constructed around a central organizing principle’ (Barnes and Gregory, 1997: 509) within which different ideas and perspectives are reconciled to produce what is treated as a coherent and rational view of the world. Metanarratives, as Allen Issacman (2003) writes, are not inconsequential or wrong but they ‘necessarily constitute only one set of intellectual conventions and representations of reality’ (p. 8). These metanarratives are the ‘big stories’ (Klein, 1995) that ‘hold positions of dominance’ (p. 297) but they are not immune to contestation and challenge from smaller local narratives. In general, however, metanarratives privilege a certain kind of worldview, knowledge formation and commitments which energize some kinds of debates while effectively foreclosing others. In our context it means that the emergent BOP metanarrative provides a limited set of interpretative frameworks which within which a whole of host of issues related to business and poverty get represented and analysed. So, while the BOP metanarrative may invite certain kinds of discussions and debates, it silences or ignores those that lie outside its interpretative framework. For instance, among others, the BOP metanarrative may render silent questions that interrogate the position of BOP vis-à-vis issues related to power, domination and equality; persistence of massive exploitation and inequities under the ‘hegemonic hold of corporate capital’ (Chatterjee, 2008: 62); and rise of newer patterns of exclusion, marginalization and dispossession alongside increasing trends in marketization, commodification and consumerism. Even if these questions are raised occasionally they may be articulated within existing BOP framework in ways that refuse to fundamentally challenge the mainstream thinking on BOP.
The present article attempts to engage critically with the emergent BOP metanarrative by looking at an important moment in its production and dissemination: C. K Prahalad’s best-selling book Fortune at the Bottom of the Pyramid (2006). The article redirects attention to the foundational ideas and themes in Prahalad’s 3 seminal work, which in spite of its popular appeal, remains insufficiently engaged insofar as critical explorations of ideas and concepts are concerned. By focusing on Prahalad’s proposition, the intent here is not to deny the heterogeneity of the BOP scholarship; rather it is to capture an ‘enabling moment’ (Said, 1989) in the articulation of many of the themes and ideas related to the BOP approach which continue to reverberate in current BOP literature. For example, while drawing on a more sensitized vocabulary, the latest incarnation of the BOP thesis (often referred to as the ‘second generation’ BOP strategies—although this characterization of BOP as first and second generation implies a linear teleology which is problematic in itself) (BOP 2.0) echoes many of the themes presented in the early BOP formulations thereby reinforcing inevitably the drawbacks of the earlier version (see Arora and Romijn, 2012; Bonsu Polsa, 2011; Jackman, 2011). 4 What this critique underscores is the need to revisit some of the central arguments of Prahalad’s BOP proposition which catalyzes current BOP strategies, even as it reinvents itself anew. 5
Because of the wide range of themes and topics subsumed under the BOP programmatic, any critique of the BOP proposition requires that it be interdisciplinary combining insights and perspectives from different fields. Primarily, this critique is located at the confluence of anthropology, geography, sociology, development studies and management. Prompted by newer intellectual currents emanating from postmodernism, poststructuralism, postcolonialism, feminist theory and Marxist thought, these disciplines in varying degrees have witnessed a shift in thinking about concepts such as language, power, subjectivity, marginality, difference and knowledge. Widely discussed and debated, these newer intellectual encounters have thrown open questions related to essentialism, the notion of language as the neutral transmitter of information, rigid separation between fact and value judgements and social constructedness of knowledge, among others. The present critique attempts to bring the weight of these theoretical and conceptual developments, especially those arising from poststructuralist/postcolonial, Marxist and feminist inspired traditions, 6 to bear on some of the fundamental notions and ideas underpinning the BOP approach. Even as the critique meanders through different disciplines picking up fertile silts and pebbles of thought, the issues and concerns it raises are thoroughly grounded in the well-established tradition of critique within management specifically ‘Critical Management Studies’ (CMS). 7 In critiquing the BOP project thus, my main purpose is to examine conceptual and theoretical issues at stake in the BOP arguments as well as throw open some of the larger political, social and ethical ramifications of the project. What compels the present critique is the realization that critique, in the words of Judith Butler (2009) ‘is not merely or only a sort of nay saying, an effort to take apart and demolish an existing structure … ’ (p. 787) rather it ‘opens up a new possibility for elaborating the subject or … creating a new subjectivity’ (p. 790). The challenge here is: can we mobilize and activate the subject and subjectivities of BOP in ways that confront openly the complexity of relationship (at once ‘collaborative/parasitical/contrary/resistant’ to borrow from Spivak, 1993: 142) between the privileged and the lesser privileged groups. Ultimately then, this critique hopes to initiate conversations and dialogues about business and poverty across ‘lines of theoretical difference, topical interest, [and] even ethical cleavages’ (Comaroff, 2010; 530).
Broadly then, I argue that the BOP project rests on an ahistorical and depoliticized understanding of processes and practices that affect the lives of the people at the bottom of the economic pyramid. It builds on a triumphant view of globalization that diverts attention away from the asymmetrical impact of global economic processes; and presents multinational companies, the central force behind what anthropologists Comaroff and Camaroff (2000) call, ‘messianic millennial capitalism’, as salvific figures whose energies could be harnessed to transform the lives of the marginalized and disempowered. The BOP proposition draws on an essentialist understanding of human nature as reflected in the arguments related to the ‘enterprising consumers’ where the entrepreneurial trait is seen as natural and intrinsic to the consumers at the BOP. Informed by an atheoretical understanding of power and domination, the BOP project advances an overly optimistic view of partnerships between large private sector firms and ‘the poor’. It takes a purely instrumental view of knowledge which leads to abstractions and generalizations about the conditions of life surrounding ‘the poor’ thereby desensitizing poverty. The BOP project, as Zein-Elabdin and Charusheela (2004), in a different context (critique of economics as a hegemonic discourse of modernity) put it, is ‘epistemologically comfortable’ with generating disembodied, context-free and value-neutral knowledge. Indeed, the conceptual and theoretical limitations of the BOP proposition as reflected in how it frames some of its signature themes ends up resurrecting the very biases and prejudices about ‘the poor’ which it allegedly set out to challenge in the first place.
The article is structured as follows. Following a brief introduction to the BOP premise, I undertake a close look at Prahalad’s BOP proposition. Toward this end, the discussion of the BOP proposition is organized around the following five overlapping themes: globalization; partnerships and power; enterprise; ‘the poor’, poverty and informality; and discipline and profit. The aim here is to grapple with some of the signature themes of the BOP project to understand how and in what ways they are mobilized to substantiate and render inevitable the central claims of the BOP arguments. In the concluding section, I emphasize that the BOP project would be well served if it remains reflexive (self critical) about its own claims and perspectives as it may allow for a more deliberate and creative reflection on the perils and possibilities of connecting profit making with poverty alleviation.
The discussed and the undiscussed
First some background. In a radical reimagining of the role of businesses in developmental efforts, especially poverty relief, Prahalad put forth the idea that instead of viewing people who live on less than $2 a day as marginal to the process of globalization, they should be seen as ‘resilient entrepreneurs and value conscious consumers’ (Prahalad, 2006: 3). If large multinational companies are able to direct their core processes toward serving the underserved markets at the bottom of the economic pyramid they would be ‘doing well by doing good’. Motivated not by philanthropy or corporate social responsibility but by enlightened self interest companies can reap both profits as well as reduce poverty. In a highly accessible manner, Prahalad (2006) in his book combined business concepts, strategies and models to map the broad contours of the BOP programmatic. It is no surprise that following his untimely death in 2010, one of the premier newspapers in his native country, India, referred to him as the ‘guru of poverty and profit’ (Times of India, April 18, 2010).
While the BOP project has met with considerable academic and popular acclaim, a smaller albeit growing number of studies have taken a more critical stance on the scope and relevance of the BOP project (see Bendell, 2005; Cross and Street, 2009; Davidson, 2009; Jaiswal, 2008; Kirnani, 2007a, 2007b, 2009; Kuriyan et al., 2008, Landrum, 2007; Pitta, 2008). In most cases, criticisms of the BOP proposition focus mainly on the validity and relevance of the empirical data from which Prahalad draws his conclusions. While noteworthy, these empirical criticisms do not engage sufficiently with the conceptual and theoretical shortcomings of the BOP project. In what follows, I shift the focus of attention from empirical to conceptual and theoretical issues by taking stock of some of the implicit assumptions and tacit understandings that underwrite the BOP proposition. The present critique, then, complements the more empirically grounded critiques of the BOP proposition.
Globalization uncomplicated
The BOP proposition begins with the notion that since the poor are viewed as ‘wards of state’ large private sector firms have not been involved in addressing the issues related to global poverty. As Prahalad writes: ‘the large-scale private sector was only marginally involved in dealing with the problems of 80 percent of humanity’ (2006: xiv). This seemingly commonsensical 8 observation warrants close scrutiny as it is informed by an uncomplicated view of globalization which reifies and reproduces a certain understanding of global economic processes where large private sector firms are cast as disembodied and distant entities far removed from the wider socio-economic contexts within which they operate. 9 This understanding of globalization which forms the backdrop of the BOP program negates two key motifs of contemporary patterns of globalization: first, increased interconnectivity resulting from global networks of production, distribution and consumption which brings distant and proximate geographies into the ever expanding circuits of the global capitalist system (see Amin, 2004; Dicken, 2011; Inda and Rasaldo, 2008; Sheppard, 2002; Tsing, 2000) and; second, the uneven and unequal nature of global economic processes where growth and prosperity in one part of the world can engender dissonance and disruption in other parts of the world (see Amin, 2004; Bridge, 2002; Ferguson, 2005; Inda and Rasaldo, 2008; Stiglitz, 2007).
With regard to the first: commentaries on globalization highlight that among other attributes, globalization is characterized by time-space compression (Harvey, 1989) and time-space distanciation (Giddens, 1990). The former has the effect of speeding up of time and shrinking space; and, the latter involves the stretching of local social and economic practices across frontiers where ‘happenings, decisions, and practices in one area of the globe can come to have consequences for communities and cultures in other, often quite distant, locales around the world’ (Inda and Rasaldo 2008: 11). This direction of analysis is helpful in thinking about how multinational companies with multi-scalar interdependent networks of operations pull in local and situated arrangements, affecting economic, social and political processes in near and distant geographies. With regard to the second, studies indicate that economic processes that underpin contemporary globalization both connect and distinguish places in a ‘see-saw movement of equalization and differentiation’ (Brenner, 2009 quoting Smith, 1997) and, in the words of Neil Brenner, ‘this dialectic of simultaneous interconnection/differentiation reworks inherited geographical differences’ (2009: 29). The idea that economic processes that characterize globalization simultaneously promote equalization and differentiation suggests that while some places and peoples benefit from increased mobility, inclusion and order, others face intensifying immobility, exclusion and disorder (Bayart, 2007; Ferguson, 2005; Smith, 1997). Thus, globalization, in general, and its principal participant, the multinational companies, in particular, do not have ‘simple homogenizing effects’ (Camaroff and Camoroff, 2000; 305) but produce highly contingent and arbitrary results which at once enables and constrains possibilities of a better life in diverse regions of the world. Viewed in this light, the notion that multinational companies were only marginally involved in dealing with problems of 80 percent of humanity becomes problematic for the following reasons. First, it disavows the deep links that tie operations and transactions of multinational companies with the resources, skills and abilities of a vast number of peoples and places across the globe. Indeed, when viewed within the network of connections, the activities of multinational companies blur boundaries between local and global, and real and virtual arrangements in ways that ‘routinely affect processes and outcome in least expected places … ’ (Amin, 2004: 223). The notion of ‘separation’ of multinational companies from happenings that affect 80 percent of the humanity sets up an arbitrary and externally imposed divisions between processes required for effective functioning of multinationals (such as flows of goods, services and capital and availability of labour), and the effects and outcomes of these processes on socially and politically grounded human beings from whom they draw value (Comoroff and Comoroff, 2000). Second, it absolves multinational companies from taking any responsibility for remaining indifferent to wider societal concerns and challenges. I contend that by taking indifference and nonchalance ‘as given’, the BOP project normalizes corporate disengagement from the contradictory results and outcomes of their actions in a global economy. By making corporate disengagement appear as ‘natural’ or ‘inevitable’, the BOP thesis precludes any discussion that calls into question the legitimacy of large private firms as potential collaborators and partners in projects that require ‘deep embeddedness’ (London and Hart, 2004) and involvement in communities at the BOP. 10 At best, these abstract and ahistorical readings of the global economy and the role of large private sector firms within it, ignores the complex and contested histories of collaboration forged between multinational companies and other institutions and communities (however limited in scope) to tackle societal challenges such as poverty, environmental degradation and dispossession, to mention a few. At worse, it restricts debates on corporate complacency and complicity in exacerbating societal challenges issuing from the ‘inhospitable economic logic’ (Margolis and Walsh, 2003: 268) of profit maximization. It is against this backdrop of a sanitized and neutral reading of globalization and its main agents, the multinational companies that Prahalad poses what he calls a ‘natural’ question: ‘[w]hat if we mobilized the resources, scale, and scope of large firms to co-create solutions to the problems at the bottom of the pyramid … ?’ (Prahalad, 2006: xiv) Given the fraught histories of private sector (dis)engagement from wider socio-political and economic concerns, why is it ‘natural’ or ‘self-evident’ that the large private firms would mobilize their resources to ‘co-create’ solutions to alleviate poverty under scenarios which may be only potentially profitable? Perhaps, the answer lies in the ascendency of neoliberal rationality within contemporary global capitalism wherein marketization, corporatization and commodification are seen as a veritable panacea for all societal ills (Harvey, 2007).
Partnerships and power
The task of poverty reduction, as Prahalad states, depends on ‘co-creating markets’ focused on the needs of the poor. The emphasis is on forming a partnership between the private sector and the poor wherein the poor are seen as ‘equally important joint problem solvers’ (Prahalad, 2006: xiv). The Indian ICICI Bank’s Self Help Group (SHGs) program is held as an example of a successful partnership between private firms and the poor in rural India. Instead of loaning to individuals, the Bank deals with the SHGs, composed of 20 women, who decide how to allocate money among its members and are held responsible for paying back the loan with interest. Project Shakti, a direct distribution system practiced by Hindustan Unilever Limited (HUL), serves as another example of successful partnership between private firms and the poor. These ‘village women entrepreneurs’ or Shakti Ammas (empowered mothers) educate and advise villagers on HUL products for which they receive a monthly salary. Extolling the virtues of these collaborations, Prahalad states that ‘[t]he local communities take charge of what they want. They make their own decisions and choices … They know they can deal with the large firm on an equal basis’ (2006: 61). While more empirical research is needed to evaluate the negative and positive aspects of the relationship between large private firms and the poor, the notion that poor local communities can deal with the large private firms on an ‘equal basis’ reveals a serious gap in the understanding of issues of power, authority and domination, and how it operates to structure social and economic relations. The possibility of an equal partnership between the wealthiest institutions of our times (large multinational companies) and people who survive on less than $2 a day is rather naïve. Clearly this is an unequal partnership since one is invariably placed in a dominant position by virtue of its massive wealth, reach and presence (both economic and political), and the other, in a subordinate position with minimal economic or social leverage.
Recent analysis of power reveals that instead of emanating from a single concentrated source (state, institution, etc.), power in societies exists in a more diffused and decentralized way continually constituting and legitimizing itself through a multitude of social practices and institutions (Allen, 2004). Drawing on the French philosopher and historian, Michel Foucault, Nicholas Rose points out that power traverses through all practices from micro to macro ‘through which persons are ruled, mastered, held in check, administrated, steered, guided, by means of which they are led by other or have come to direct or regulate themselves’ (Rose, 1992: 142). Therefore, power is seen as a condition of subjection as well as a network of relations within which subjectivity and agency is produced and articulated. The diffused and omnipresent character of power does not mean that one cannot locate power or that it impacts everyone equally. Rather, following Charusheela, it means that the large private firms and the poor are ‘differentially located subjects within the field of power’ (2004: 41) where one has undoubtedly more social and economic clout (and hence more power) than the other.
Arora and Romijn (2012) in their recent critique of the BOP 2 (Base of the Pyramid) protocol note that the newer terminologies of ‘new communities’, ‘partnerships’, ‘participation’ and ‘inclusivity’ advanced in the second generation BOP discourses (BOP2) do not take into account the unequal power relations that shape business ventures and innovations involving transnational companies, NGOs and the poor. I concur with Arora and Romijn (2012) that missing from both, the early as well as the later versions of the BOP thesis, is a theoretically informed understanding of power which brings to the fore not only the unequal power relations that exist between transnational companies and the poor, but also the productive capacity of power to create controlled and disciplined subjects (the entrepreneur-consumers like Shakti Ammas and those belonging to SHGs) whose interests and concerns can be easily aligned to those of the corporations. Further, the members of the SHGs and those referred to as Shakti Ammas are all women who enter into a gendered relationship with the mostly male authority figures (employees of the firms) where they must accommodate and negotiate societal norms related to gender. Clearly, the partnerships between the multinational companies and the poor are mediated through issues of class, caste, gender, religion and so forth, and any simplistic representation of the collaboration between large private firms and the poor is theoretically and historical reductive. This atheoretical and ahistorical notion of power also raises ethical concerns as it may unwittingly serve to legitimize the interests and concerns of the powerful, in this case large private firms, at the expense of the poor communities, hence defeating the entire premise of the BOP proposition.
The good ship ‘enterprise’
The women referred to as Shakti Ammas and those belonging to SHGs are prototypes of the ideal BOP consumer, someone who is at once involved in advertising, credit management, risk analysis and market development, in short a ‘consumer-entrepreneur’ (Prahalad, 2006: 60). An important facet of the relationship between private firms and the poor is the role of the consumer who is called upon to be not only ‘active, informed, and involved’ (Prahalad, 2006: xiv), but also engaged in wealth creation through entrepreneurial activities. The consumer-entrepreneur closely resembles the ‘enterprising consumer’, one of the central figures of the ‘Enterprise Culture’, a larger project espoused by Margaret Thatcher’s conservative government in Great Britain throughout the 1980s. Aligned with the larger neoliberal political philosophy, this initiative gave priority to the autonomous enterprising self where qualities and values such as self reliance, self-respect, responsibility and freedom from state control were seen as essential for prosperity and wealth creation (see Heelas and Morris, 1992; Keat and Abercrombie, 1991). The economic culture of enterprise thrives on ambitious and competitive producers alongside consumers who actively seek to increase their own wealth by saving and then investing in commodities ‘which, if managed, properly by means of enterprising skills, becomes a remunerative asset’ (Heelas and Morris, 1992: 6). Indeed, the enterprise culture attempts to effect a certain transformation of selfhood where individuals are encouraged to participate in their own economic well-being by using their talents and resources to produce wealth or become enterprising consumers. Prahalad’s consumer-entrepreneur is evocative of the enterprising consumer except that in the BOP proposition the focus is solely on the poor. The poor, according to Prahalad, must not only save and shop for the best products but also involve themselves in distribution and sales of those products (as exemplified by Shakti Ammas) and constantly find other ways to tap into the entrepreneurial drive fostered by open markets. The construction of the BOP consumer as an active, involved and rational economic actor is also consistent with the neoliberal political rationality which ‘produces citizens as individual entrepreneurs and consumers whose moral autonomy is measured by their capacity for self care—their ability to provide for their own needs and service their own ambition’ (Brown, 2006: 694).
This is not the place to rehearse all the controversies that surround enterprise culture or neoliberal political rationality, however, suffice it to say that enterprise culture drew sharp criticism for working unsatisfactorily to generate wealth among the poor (Heelas and Morris, 1992: 12). Writing in the context of South Africa, anthropologists Jean Comaroff and John Camaroff (2002) note that neoliberal market rationality which is accompanied by the withdrawal of the welfare state, deregulation of markets and increased emphasis on consumption and entrepreneurialism has not lived up to its promise of prosperity and well-being for a vast majority of the people. Clearly, the notion of enterprising consumers must not be abstracted from challenges accruing from unequal distribution of resources which skews success in favour of those who are better able to command and control resources and technologies. Indeed, for people at the bottom of the economic pyramid who are disproportionately disempowered and dispossessed, it may be extremely difficult to clamber aboard the ‘good ship Enterprise’ (Comaroff and Camaroff, 2002: 785)
‘The poor’, poverty and informality
Even as Prahalad alludes to the need for understanding the implications of language, the BOP project uses terms like ‘the poor’, ‘poverty’ and ‘informal sector’ among others, as if they are self evident requiring neither context nor conceptual clarification. 11 For instance, ‘the poor’ is used as a generic term to refer to the four billion people who are spread across continents but share a common predicament: poverty. It is widely acknowledged that experiences of poverty vary significantly depending on historical, socio-cultural and political contexts (see Arora and Romijn, 2012; Escobar, 2008; Latouche, 1993; Seabrook, 1996). The decontextualization of poverty empties the lives of the poor of the rich histories of struggle and survival and glosses over the historical, socio-political and economic conditions responsible for perpetuating poverty. It reinforces stereotypical images of ‘the poor’ as ‘dormant’ (Prahalad, 2006: 66) who are waiting passively for the private sector to bestow on them, as Prahalad put it, ‘attention and dignity of choice’ (2006: 20).
Despite calls for a renewed understanding of the BOP consumer as individuals, a close reading of the BOP proposition reveals that it draws on a desensitized version of poverty. While there is ample discussion on the need to innovate for the different markets at the BOP, there is little examination of what life is like at the BOP. For instance, in a detailed discussion on innovations for BOP markets, Prahalad contends: ‘[p]roducts must work in hostile environments. It is not just noise, dust, unsanitary conditions, and abuse that products must endure’ (2006: 26). There appears to be asymmetry in the attention paid to services and products for the BOP markets and the people for whom these services and products are intended. In the above statement, the author focuses on ‘hostile environments’ for products but nowhere in his analysis is there a similar reference to the ‘noise, dust [and] unsanitary conditions’ that people at the BOP must endure, and how it may be mitigated by extending innovative products and services. Consider the following example in which the author urges businesses to develop energy efficient products for the BOP market. Given the resource scarcity, Prahalad asks: ‘[c]an we wash clothes without water? Can we refresh ourselves without a shower?’ (2006: 33) These questions ignore contentious issues related to unequal access to water, a basic amenity of life, and legitimizes political and economic processes that lead to skewed patterns of resource distribution whereby washing clothes and bathing without water becomes ‘normal’ (evitable, natural) for a large number of people across the world. In another instance, Prahalad claims that higher densities in urban areas can be successfully utilized to build distribution access to the urban BOP markets. According to Prahalad, rural to urban migration trends in the developing countries, and the resultant growth in urban densities which in some places are as high as 15,000 people per hectare ‘will allow for intense distribution opportunities’ (2006: 12).
This purely instrumental knowledge (context free and value neutral knowledge) packaged in the language of management and marketing (‘expert knowledge’) offers distressed urban geographies (featuring: congestion, dilapidation, pollution) as solutions for the potential problems of distribution and marketing. Informed by instrumental rationality, the BOP project takes socio-spatial isolation, economic instability and state negligence as given. It normalizes extremely difficult realities of life that affect poorer communities by depoliticizing social and economic inequities responsible for the marginalization of the poor. An unqualified translation of overcrowding, congestion and pollution, in short, of socio-spatial marginalization into ‘distribution opportunities’ renders invisible ways in which people struggle and survive extremely harsh conditions of life; how they mobilize scarce resources (both individually and collectively) to create local solutions (however incoherent and inchoate) to deal with their problems and the unexpected and unforeseen arrangements, actions and solidarities that they engendered in the pursuit of a good life. By ignoring the rich and diverse lived experiences of people at the BOP we commit ourselves to theories and strategies that are bound to fail in the face of complexities and ambiguities that frame the lives of people in the poorest communities around the world. 12
In the BOP programmatic, the informal sector in the developing economies occupies a marginal space outside the mainstream economy. It is seen as ‘economically isolated’ (Prahalad, 2006: 60) and as an ‘extralegal system’ (Prahalad; 2006: 65) which is in urgent need of empowerment through projects such as SHGs and Shakti Ammas. This characterization of the informal economy is highly reductive. Born of necessity and compulsion, the informal sector, despite poor working conditions and low wages, has emerged as one of the ‘most dynamic segments of the Third World labor market’ (Shaw and Pandit, 2001: 194). Writing in the context of Africa, anthropologist Janet Roitman writes that informal sectors must be viewed not as ‘deviations from a model’ (1990: 675) but as products of African socio-cultural and political histories. The author contends that there is a tendency among experts (economists, development scholars and others) to see any contemporary phenomenon that does not fit the ideal type as ‘aberrations, deviations, and dysfunctions, or even pathologies’ (1990: 674) in need of urgent therapeutic interventions.
With reference to India, Kabra (2003) notes that despite concentration of resources and power in the organized sector, the unorganized sector (informal sector) continues to produce about 60 percent of the India’s GDP and provides livelihood to approximately 93 percent of the workforce. ‘It is the sector’, writes Kabra ‘which absorbs and supports India’s vast reserve army of labor and thus helps the large organized sector to acquire low cost supply of labor’ (2003: 30). Apart from supplementing its more formal counterpart, millions of people in the developing economies regard the informal sector as a source for basic goods and services and a venue for employment generation. Thus, far from being isolated and closed, the informal economy is characterized by ‘ … all sorts of bridges and ties into “formal” national and international structures’ (Latouche, 1993: 134). In her study of urban informality Ananya Roy (2005) argues against the ‘standard dichotomy’ of the two sectors and suggests that ‘informality is not a separate sector but rather a series of transactions that connect different economies and spaces to one another’ (p. 148). Seabrook’s (1985) study of Mumbai’s Dharavi slums highlights one such transaction where slum-dwellers manufacture products for global market thereby linking Dharavi slums to global economic processes (quoted in Roy, 2005: 148).
Insofar as being labelled ‘extralegal’, the informal/unorganized sector (both in the urban and rural areas) encompasses a wide range of heterogeneous enterprises many of which are legal in the sense that they have license to operate (as in the case of hawkers in many cities in India) or may be registered with public authorities such as sales tax departments, electric supply companies and, in the case of small and marginal farmers, with revenue authorities and banks (Kabra, 2003: 31). Issues related to illegality of the informal sector (be it encroachment, housing or markets) must be situated within the context of local political processes, as in many cases, at least in Indian cities, the informal sector is sanctioned by local politicians who depend on these ‘vote banks’ during election times (Rajagopal, 2002: 72). In many African countries, far from being regarded as illegal, the informal markets, both rural and urban, are facilitated by the state and its agents in collusion with interests groups for mutually beneficial political and economic gains (Roitman, 1990: 682).
A historically situated reading of the informal sector in developing economies reveals that it is bestowed a certain degree of legitimacy when viewed in the context of larger socio-political and economic processes and practices. Thus, legality, as Latouche (1991: 131) writes, must be ‘ … understood in a wider sense than the purely juridical’. Prahalad’s views on the informal sector falls prey to what Bordieu and Wacquant refers to as ‘neutralization of historical context’ (1999: 41) which involves forgetting of the originating historical circumstances of phenomena. As a result, processes and practices that have ‘roots in complex and controversial realities of a particular historical society’ (Bordieu and Wacquant, 1999: 42) begin to appear to be incoherent and irrational. In all fairness, it must be noted that in the latest version of the BOP approach, the informal sector gets redefined as an integral and dynamic part of the low income markets at the BOP. This shift in perception is in keeping with the larger neoliberal celebration of informality where informal activity is no longer viewed as a vice resulting from excessive government regulation of labour markets; instead it exemplifies ‘voluntarism and the flexibility of efficient labor markets’ (Jonakin, 2006: 291) under market oriented adjustments. These revisionist accounts of informal activity, however, conflate questions of choice and compulsion and ignore how rising unemployment, declining real wages for many in the formal sector and increasing inequality may have contributed to the growth of the informal sector (Jonakin, 2006).
Discipline and profit
Central to the BOP project is the idea of developing market based ecosystems at the BOP. Leaving aside for the moment the question that the insistence on market development presupposes that there are no markets at the BOP (a Western modernist assumption), it is instructive to look at what is entailed in creating these ‘markets’ at the BOP. The process of market development at the BOP involves creating what Prahalad calls ‘transaction governance capacity’ (2006: 73) which in turn hinges on building the capacity for ‘self governance’ (2006: 73) among the poor. Madura Bank’s micro lending practices which focus on building Self Help Groups (SHGs) is held as a prototype for creating capacity for self governance at the BOP. The three principles that guided the formation of the SHGs were: the poor must learn to save; they must trust themselves; and that there are latent leaders among the poor who will become the ‘custodians of transaction governance instead of lawyers and slum lords’ (Prahalad, 2006: 73). In the context of SHGs, the notion of self governance involves inculcating fiscal discipline (saving) among the poor, encouraging the capacity for self management and care (the poor must trust themselves) and harnessing ‘latent’ leadership qualities among the poor—all of which would create the preconditions for market development related to micro lending practices. Indeed, for Prahalad, transaction governance capacity, like that demonstrated by the SHGs, starts with creating self governance among the poor through education, training and discipline to create commercially viable systems at the BOP.
This idea of self governance as a prerequisite for market development at the BOP corresponds quite neatly to Michel Foucault’s (1991) notion of ‘government’ or ‘governmentality’ 13 which can be understood as ‘“the conduct of conduct” [that is] a form of activity aiming to shape, guide, or affect the conduct of some persons or persons’ (Gordon, 1991: 2). Rather than coercing individuals to conduct themselves in a certain manner, governmentality is about ‘ … educating desires and configuring habits, aspirations, and beliefs’ (Li, 2007: 275) of the governed to bring about regulation and control of personal conduct. Governmental rationality goes hand in hand with the emergence of newer forms of knowledge, that is, particular ways of knowing, organizing, ordering and coding the population that was to be governed (Foucault, 1991: 92). Governmentality then redirects attention to the ways in which ‘governing always involves particular representations, knowledge, and expertise regarding that which is to be governed’ (Larner and Walters, 2004: 496). This understanding of governmentality is particularly helpful in thinking about how the BOP project attempts to guide and shape the conduct of ‘the poor’ in ways which are consistent with the goals of market development at the BOP.
Despite its focus on co-creation or co-invention, the partnerships between private firms and the poor communities are not immune to governmental rationality (Bonsu and Polsa, 2011). In their recent article authors Bonsu and Polsa (2011) demonstrate how the BOP initiatives constitute BOP consumers as self governing entrepreneurial agents whose choices and actions are ‘amenable to corporate intervention and control’ (2011: 7). This is equally true for the Shakti Ammas and SHGs where cultivating market discipline is shot through with governmental rationality as institutions and agencies (be it multinational companies or banks) engage in guiding and regulating the conduct and actions of the consumer-entrepreneurs to align their interests and motivations with those of the firms. Aided by newer ways of knowing and representing the population at the BOP, in general, either through surveys, ethnography, interviews and so forth, the BOP consumer-entrepreneur is made knowable and thus governable rendering them ‘amenable to intervention and regulation … ’ (Townley, 1993: 520). Recall the case of Madura Bank’s SHGs. When viewed through the prism of governmentality, training of the SHGs amounts to disciplining and regulating the BOP consumer entrepreneurs in ways which are consistent with the goals of large private firms seeking markets and profits at the BOP. 14 They must learn to save; they must learn to be independent and engage in self management and somehow they must learn to draw on their leadership qualities to become ‘custodians’ of the process of market development at the BOP. What must be emphasized here is that relations of power between the poor and the private firm (Madura Bank, in this case) is not about constraining or repressing individual capacity or vitality rather it is ‘the creation, shaping, and utilization of human beings as subjects’ (Rose, 1992: 142). Thus, power lies in training and educating the consumer-entrepreneurs in a new kind of subjectivity (self knowledge, self understanding) that can be reconciled with market objectives and goals. The aim here is to create ‘subjects’ who are, as du Gay et al. in a different context (personal characteristics of managers in ‘excellent’ organizations) put it, ‘ “market-oriented”, “proactive ”, “empowered ”, “entrepreneurial ”’ (1996: 226).
Along with self governance, commitment to contractual obligations is central to the success of the consumer-entrepreneurs. Thus, Prahalad advises: ‘[r]espect for contracts must transcend people you see every day … contract with another legal entity, large or small, seen or unseen, is critical’ (2006: 75). The centrality of contractual obligation and relationships in everyday lives of the people calls for a renewed understanding of the nature of social relationships in general. 15 More and more, relationships based on communal, regional and other kinds of social norms and affiliations are displaced by those that are based on contractual obligations and responsibilities. Contractual relationship (respect for the contract) must override social obligations, norms and solidarities that have hitherto shaped and structured the basis of individual and collective identities in communities at the BOP especially in the non-Western world. 16 The attempt to steer subjectivities of the poor toward certain aims and objectives which serves the goal of market creation is accompanied by the introduction of legal norms into newer areas of life. 17 The introduction of litigiousness into newer facets of life, in general, has profound implications as it may help redress blatant social injustices as well as diminish ‘the quality of those social relations [that are] newly absorbed into these forms’ (Connolly, 1983: 337). In their study on microcredit as a gendered global development initiative, Keating et al. (2010) reveal that social coercion (peer pressure) and social and material collateral enhances not only loan monitoring capacity of the industry but since peer borrowing groups are closer to the loan recipient than the bank managers, microcredit ‘facilitates an intensification of surveillance and regulation’ (2010: 162) of social relations. Similarly, the consumer-entrepreneurs such as Shakti Ammas and the SHGs, in order to maintain their contractual obligations with the firms, might be faced with the need for surveillance and regulation of self and of others. In some ways, then the emphasis on building contractual relationships recasts social relationships as ‘resources’ (competitive, productive, efficient and accountable) which could be harnessed to create conditions conducive for market development at the BOP. Hence, market considerations and imperatives (‘economic life’) become overwhelmingly the ‘invisible coordinator’ (Connolly, 1983: 339) of social life. The disciplining of the consumer-entrepreneur, the emphasis on building contractual relationships (involving constant referring and disciplining of oneself and of each other) and its corollary, that is, extension of legal norms into newer spheres of social life are, perhaps, unintended by-products of the BOP project. If this be the case, then it obligates us to investigate the cultural and socio-economic implications of commodification 18 of social relations and practices at the BOP; and pose the following question: whose interests are best served by the activation and promotion of market discipline among people at the peripheries of global economies?
Conclusion
Located at the intersection of business and development, the BOP approach has gained wide support within business and development communities. Given its reach and scope, I argued that the BOP approach can be thought of as a metanarrative (grand narrative) that provides what is considered to be coherent sets of ideas and themes linking business and poverty alleviation. The present critique focused on one formative moment of this emergent metanarrative: Prahalad’s proposition. I argued that the BOP project, by and large, is based on a decontextualized, ahistorical and apolitical understanding of processes and relations that characterize the lives of people in the poorest communities around the world. By taking private sector disengagement from wider societal concerns as given, the BOP proposition is able to present large private firms as legitimate and ‘natural’ participants in the fight against poverty. Curiously, their histories of disengagement are not taken as a sign of weakness but accepted unproblematically as a natural condition of the current global capitalist system. In the context of partnerships, the BOP project obfuscates how power works to shape interactions among differentially (hierarchically) located entities in ways which limits the field of possible actions that can be initiated by the more vulnerable ‘partner’.
The reification of consumers at the BOP as ‘entrepreneurial’ prone to self-management and self-care draws on an essentialist understanding of human nature where ‘the poor’ are bestowed with innate entrepreneurial traits. As the argument goes, given the right incentives, these ‘latent’ entrepreneurial traits could be harnessed for the betterment of the poorer communities. Such essentialist reading of human nature leads to a skewed understanding of the social conditions at the BOP. Further, the focus on entrepreneurialism as a solution for all forms of social problems leads to depoliticization of social issues as it rests on an implicit understanding that the locus of problems (poverty, joblessness, dispossession, environmental degradation and so forth) lies not in institutional, social, political and economic dysfunctions but rather in the individual themselves (Giroux, 1980: 338). Taking a disinterested stance on poverty, the BOP program presents economic distress and socio-spatial marginalization of the poor as ‘exploitable observations’ (Wilson, 1977 quoted in Giroux, 1980: 334) which is then used as ‘knowledge’ for market development at the bottom of the economic pyramid. This purely instrumental view of knowledge becomes part of the expert vocabulary (expertise) of business disciplines, be it, management or marketing which ultimately (although unwittingly) desensitizes poverty. It hides more than it reveals as it normalizes acute economic upheavals and instabilities by making ‘the crisis’, appear as a normal condition of life at the BOP.
As mentioned earlier, as an emergent metanarrative the BOP project both enables and constrains the way we think, imagine and represent socio-economic and political conditions at the BOP. This, in turn, frames our understanding of the ‘problems’ as well as of what passes for reasonable and legitimate ‘solutions’ for dealing with these problems. One way of disrupting metanarratives is to engage in reflexive inquiry which includes rethinking taken-for-granted ideas and concepts, questioning the self evidential claims of phenomena and taking a more ‘ironic stance’ (Connolly, 1983: 335) towards the knowledge we produce. This might helps us to recognize the limits of our understanding of the worlds of ‘the other’ especially those who are removed from us spatially, socially and economically. The recognition that all knowledge is partial is helpful as it prevents us from partaking in the ‘god trick,’ that is, the claim of ‘seeing everything from nowhere’ (Haraway, 1988: 581). In place of transcendence of meanings and totalizing constructions of ‘realities’, what is called for is socially and historically inflected knowledge (Frazer and Nicholson, 1989). Without taking a relativist stance, epistemic reflexivity (Johnson and Duberly, 2003) valorizes partial perspectives, plurality of knowledge, and insists that our accounts of reality take into consideration the diverse historically specific social conditions. I argue that the BOP project could do with a healthy dose of reflexivity, as it would, among other things, bring to the fore the social, political and economic circumstances that surrounds the formation and dissemination of this popular approach; the kinds of positions, perspectives and claims it endorses and whose particular interests it serves; and the shifting configurations of power engendered by neoliberal rationality and the social costs and benefits of promoting market values and practices at the BOP. These concerns, along with others, will help the BOP program to recognize the limits of its own vision and confront the contradictions and tensions between the goals of profitability, efficiency and enterprise, on one hand and poverty alleviation, empowerment and development, on the other.