A Final Note on Extractive Capitalism: Can Technology Save us?

After looking over my last blog post, I thought it necessary to discuss an additional element regarding natural resource extraction: the future of sustainable technology.

In his 2008 book Common Wealth, economist Jeffrey Sachs argues that environmental pressures on the planet from human activity boil down to the following equation:

I = P * A * T

I is Environmental Impact, P is Population, A is Average Wealth, and T is Negative Effect of Current Technology.

This equation represents the three principal factors that negatively affect the environment: population growth, economic growth, and growth of dirty technologies (polluting factories or cars, for example). Sachs argues that, in a world where poorer countries are rapidly accumulating wealth (a fact that should be celebrated), we must control population growth and learn to adopt environmentally sustainable technologies in order to limit our environmental impact. With rapid demographic change expected to stabilize the world population within one hundred years, a technological revolution, Sachs claims, is the key to saving our planet.

I strongly agree with Sachs that technology is vital for our future survival. Here in Brazil, old trucks roam the highways belching out long tailwinds of dirty exhaust, creating a haze of smog around cities. The scene is reminiscent of Los Angeles of old, until regulations introducing air pollution controls began to make cars, trucks and factories significantly cleaner. In dealing with water and air pollution, environmentally-friendly technology has already demonstrated its use. And with energy supplies dwindling and the threat of global warming looming on the horizon, mankind is beginning to put more and more effort into developing carbon sequestration techniques, solar power, electric cars, and all sorts of other technologies that we will need to save us from impending catastrophe. Sustainable technologies are pivotal for us to continue growing and developing as a society while limiting our future impact on the planet.

However, I believe it is misguided for us to look to technology as our savior. Simply put, even the most sustainable technologies depend on continued exploitation of natural resources that lead to the dangerous extractive capitalist approach I discussed in my last post. Take energy storage, for example. Humanity has a lot riding on the potential of renewable energy: using natural, unlimited supplies of wind, sunlight, and underground heat to store energy into electric form and then transmitting it to battery-powered appliances like computers, telephones, and in the future, cars. But what are these batteries made of? Lithium, an underground mineral currently known to exist in several large deposits across the world, primarily in Bolivia and Afghanistan. Our idea, then, to save us from dwindling energy supplies is to begin to extract this new mineral in ever-increasing quantities. This brings us back to the original danger of extractive capitalism, plundering our natural resources in ever-increasing quantities until we completely despoil our natural environment and use up the resource. And that’s without even mentioning the steel, iron, aluminum, rubber, and other materials necessary to produce many of these energy-transmitting products. Even though solar energy may be infinitely more appealing than dirty coal, it is still not a technology that we can truly call 100% sustainable.

Adopting sustainable technologies will not save us from our dependence on extraction. The problem is much larger than the one Sachs describes, and one that we ignore at our own peril.

Minas Gerais and the Future of Extractive Capitalism

As its name might suggest, Minas Gerais (“General Mines”) is the mining capital of Brazil. It has a rich history as an exporter of precious metals and its most famous tourist attraction, the colonial town of Ouro Preto (“Black Gold”), was once the linchpin of Portugal’s lucrative gold trade in the Americas. This legacy continues into the present day through the activities of Vale, Brazil’s former state mining company that was semi-privatized in 1997 along with Petrobras, the state-owned oil giant. The second largest mining company in the world (2010 net revenue of $52.5 billion), Vale is one of Brazil’s most important “national champions” and an anchor of its economy. As this map shows, Vale’s activities are concentrated primarily in Minas.

Globally, the mining industry has been riding high in recent years. With a surge in commodity prices coming from skyrocketing Chinese demand (I mentioned in a previous post the idea of a “supercycle”), international mining companies have seen record profits in recent years. Vale’s success has driven Minas to the forefront of Brazil’s economic expansion: the state’s economy grew by 10.9% in 2010, the fastest rate in the country. The Fundação João Pinheiro, a think-tank, attributed these results almost entirely to mineral industrialization and exportation.

Eduardo Galeano wrote a book several years ago entitled “The Open Veins of Latin America.” A historical masterpiece that recounts 500 years of resource expropriation and exploitation by imperialist powers, the book proved an instant hit among the region’s prominent leftists, including President Hugo Chavez of Venezuela. From the silver mines of the Andes and the rubber factories of the Amazon to the banana, coffee and sugar plantations of Central America and the Caribbean, Galeano recounted the horrors by which greedy international and local elites plundered the continent’s riches and exploited the labor of its people. While I believe the book’s overly socialist tone and its glossing-over of the shortcomings of the Latin American revolutionary left oversimplify and diminish its argument somewhat, it nevertheless paints a vivid picture of the region’s history of extractive economics. Flying across Minas into Belo Horizonte, I was struck by the way in which the picturesque mountain countryside was regularly broken up by aerial views of massive, dirty craters dug deep into the earth, pouring runoff into the streams and slowly swallowing up the nature around them. For the first time, I was seeing the open veins of Latin America not only as a metaphor but as real, bleeding wounds burrowing down into the heart of the planet.

The more time I spend in Minas, the more I fear the monster that we have created: an immense machine of extraction and consumption whose unquenchable hunger for natural resources only grows with time. In small cities across the state, Vale has set up such vast operations that it has essentially usurped the role of the local government. During our visit to Itabira, a mining outpost that sits on the edge of an artificial lake created by Vale to dump its polluted mineral byproducts, I was struck by the way in which people referred to the company as the de facto authority in the town. This is a pretty common story for any small town that serves as a base of operations for a large company, but it was nevertheless surreal to witness in person. What are the implications when a company beholden only to its shareholders begins to wield more authority than local, democratic institutions based on community consensus? But that's a whole other issue I won't even begin to touch here...

Residents often tell me about how the steady expansion of mining in the region means that, over time, more and more mountains are swallowed up for the sake of economic growth. Based on our traditional economic indicators, the results have been fantastic. Mineiros have made lots of money from selling this natural capital and the BH region has been flourishing as a result. But will there be a point where it finally stops, where local people decide that enough mountains have been destroyed and that they prefer to maintain the little nature they have left? Probably not. People will continue to demand minerals such as iron ore and aluminum to manufacture new products, and Mineiros will be happy to sell what they have if it means more money in their pockets. Our economic system works in a way that we go after resources until none are left, and then we move on to look for more somewhere else. It does not bode well for the future of Minas Gerais.

E.F. Schumacher, a German economist, wrote eloquently in his 1972 book “Small is Beautiful” about the eminent dangers of extractive capitalism. The entire system of modern capitalism is precedented on unlimited economic growth. Our economy must constantly produce more and more in order for us to stay satisfied and continue to improve our quality of life. A recession occurs when our economy fails to grow, causing extreme economic anxiety. Slow economic growth in the industrialized world following the 2008 recession has led to international panic, and everyone is an agreement that the immediate goal must be to once again resume a “healthier” 3 to 4% growth rate. But, as Schumacher sagely pointed out, is unlimited growth truly possible in a world of finite resources? Mining is one of the best examples of this dilemma. There is a certain quantity of iron ore and aluminum on the planet. Eventually, that will run out. Even before it runs out, we may need to go to such extreme lengths to extract the remainder that we irreversibly damage our planet, such as devastating the entire natural landscape of Minas Gerais. The argument for environmentalism, in this sense, can be boiled down to economics. Extractive capitalism cannot last forever, and we better start planning an alternative before it’s too late.

This is not, I should mention, a hypothetical scenario. In several cities in Minas, residents are facing an unknown future as minerals begin to dry up. In Itabirito, a recent study found that local deposits will be exhausted within 15 years, and the municipal government is now trying desperately to invest money in new economic development programs to prevent the city’s imminent collapse. While this effort should be applauded, it will most likely come to naught. Such is the fate of the vast majority of the world’s mining towns: when the riches run out, the world moves on.

Seeing this reality here in Minas serves as a constant reminder of the importance of recycling in our society. Although recycling has become such a nearly universal symbol for the modern environmental movement, people often tend to laugh it off as a mere feel-good action to build societal consciousness while doing little to solve the big picture issues. But recycling matters. Not only does it help reduce the quantity of waste we generate, it also cuts to the heart of the problem at the center of extractive capitalism: dependence on non-renewable resources. If we do not learn how to conserve and reprocess natural resources such as energy, minerals, water and timber on a massive scale, fundamentally transforming our economic model away from nonstop extraction, then we are going to be in for a rude awakening at some point down the road. There is no point in “developing” our society if we do it in a way that is fundamentally unsustainable. Across the world, recycling is not only about protecting and improving the livelihood of the catadores; it is also about protecting our way of life as we know it.

Gender Dynamics in the Cooperatives

Since beginning my research here, one element of the cooperatives that has most caught my eye is the gender dynamics within the movement of catadores. Gender plays a huge role in the cooperatives and serves as a fascinating case study of the relationships between men and women in cooperative endeavors, particularly among the working class. This is not an issue I have studied in depth, but it is one that carries huge implications and certainly merits future attention.

The most obvious starting point to understand gender dynamics is the predominance of women in the cooperatives. A recent study by the Minas Gerais State Waste and Citizenship Forum showed that while women make up only 30.1% of street catadores and 28.2% of catadores in dumps, they make up 66.2% of catadores working in organizations. That is, even though women represent less than a third of total catadores, they form a significant majority among organized catadores. In fact, of the nine enterprises in the Cataunidos network, only ASMAC is majority-men, and even this is probably due only to the unique profile of ASMAC, which emphasizes individual collecting and sorting methods.

There are two key factors that enable gender to have such an important influence within the cooperatives. First, there is a clear division of labor in most enterprises, with women doing the sorting while men handle collection, transport, and press operation. (This fits within our traditional expectations of competitive advantage: men are better at activities that demand greater physical strength and women are better at activities that require careful attention to detail.) Of the production processes, sorting is certainly the most time-consuming, and thus the action that demands the greatest focus within the cooperative. As such, it makes sense to employ more women than men.

Second, women tend to have an easier time accepting the team mentality that is essential for working effectively in a cooperative. While this is not to say that men do not know how to work in teams, it is certainly true that female catadores are generally more willing to work together. The treasurer of Coopert mentioned in a recent conversation that they were having a difficult time recruiting more men to join their ranks, even though many women seemed quite interested in the idea. If you imagine the idea of the traditional male catador pulling his cart through the street, trading his materials for drinks and sleeping wherever he pleases, it becomes easier to understand why such individuals may prefer to keep their independence instead of becoming beholden to a group of peers. Women, on the other hand, often have families to support and may be attracted to the stability that cooperatives offer. This is not to say, of course, that women are better at avoiding conflicts than men. Indeed, constant gossiping and bickering are common among both sexes within the cooperatives, just as they are in other work environments. But it does mean that women are often more willing to tolerate and overcome such disagreements within the group.

Fabiana Goulart, a former student of Dr. Lima who wrote her master’s thesis on social relationships within three local cooperatives, found that gender can be a source of conflict. Due to the gender separation through division of labor, men and women often view their own tasks as more valuable and accuse the other of not carrying their weight within the group. Furthermore, women have tried to incorporate work schedules that allow them to leave early to prepare for their “second shift” of domestic duties such as cooking, cleaning and caring for the children. This progressive approach to ameliorating unfair societal household practices is often a source of tension among the men of the group, who insist that work and home are separate activities and that women should not be given special privileges within the group. Nevertheless, because women usually make up such a strong majority of members, they often get their way.

The implications of these dynamics are enormous for our understanding of the relationship between gender and socioeconomics in general, especially as women continue to enter the labor force in large numbers throughout the world, upending traditional social and economic structures. These questions loom large here in Brazil, where National Geographic’s recent “Girl Power” article profiled the interaction between economic development, demographic change and female empowerment. Will women’s growing clout in the workplace help force dramatic changes in our model of economic organization? Could women’s heightened appreciation for cooperative production and stability as well as their greater understanding of the interplay between work and family life help our society to reconsider our previous assumptions about individualism, hierarchy and the separation of the social and economic spheres in our daily lives? Will women simply be absorbed into our existing capitalist structure, or will they change it in ways we cannot yet predict?

A recent gathering of over 500 female leaders of the MNCR in Curitiba led to calls for greater understanding of how economic marginalization, environmental degradation, oppression of women and sexual minorities, and lack of adequate social support structures operate in tandem to reinforce existing societal inequalities and undermine our collective ability to form more prosperous communities for ourselves and our children. With every day that goes by, I recognize more and more that, through my work with the catadoras, I am witnessing the vanguard of the international feminist movement.

Outsourcing Management

If there is one theme that has emerged from this blog so far, it is probably this: managing cooperatives is tough work, and easy solutions are in short supply. The constant struggle to respect the primacy of the catadores while trying to install structures that enable the organizations to grow is the big issue that keeps me up at night.

One possible approach to this dilemma, and one that is used quite often in practice, is outsourcing: hire professionals to do the books and other administrative work of the organization. ASMARE has often used this approach in the past, and several other members of the Cataunidos network are considering this as well as a way to help them reach our goal of standardizing financial management across the enterprises. If the catadores have trouble handling the administrative responsibilities of their organization, it makes sense to hire someone with that type of needed expertise. This is especially commonplace in organizations that began through the intervention of an outside actor, such as Pastoral da Rua.

The implications of this, however, are very significant to the cooperative model. If non-catadores are hired by the organization to handle management responsibilities, then you have the development of two tiers within the organization: catadores as the laborers, professional administrators as the managers. In that case, who really controls the cooperative? In ASMAC, for example, the municipal government provides financial support to contract several members of a local Catholic charity to do administrative work for the association. This provides the organization with greatly needed professional direction and managerial expertise, but it also raises the complex question of where the ultimate decision-making really lies within the group. And besides, if catadores begin to contract this work out, does this imply an acceptance that they will never be able to handle managerial duties themselves? And if this is indeed the case, will more and more management need to be hired as the cooperatives grow and develop? And will the cooperative turn into more of a traditional corporation? As of right now, I don’t think we have really fully considered what this outsourcing really signifies in the broader sense.

That is not to say, of course, that I am against the prospect of outsourcing managerial responsibilities. In fact, I think that having a greater level of professional expertise will certainly help the organizations grow and prosper. In a regular corporation, there are three principal actors: shareholders (those who actually own the business and have final say on decisions and strategic planning), managers (those contracted by the shareholders to actually run the business), and workers (hired by the managers to perform most of the daily tasks of the businesses). The idea of the cooperative is that these three roles are essentially blended into one: the workers themselves are the shareholders and managers, with an elected, rotating board assuming more specific administrative duties. Is it possible for a cooperative to outsource some management functions, thus assuming only the roles of laborers and shareholders?

I have a hard time imagining that this would work effectively in the long term. Managers run the business, making most of the day-to-day decisions, and they are expected to have some degree of authority over their workers. If workers were the shareholders as well, however, then they would have final authority over the managers. So why would they ever listen to what their manager tell them to do? Sounds like a classic example of a principal-agent problem.

In practice, though, some outsourcing may be necessary, simply because it is the least bad solution. By contracting out some management functions, catadores would still remain in control of most of their organization, but would be able to benefit from professional expertise. The question then becomes, what specific form should this outsourcing take? I have already mentioned the cases of ASMARE and ASMAC. Another interesting example is ACAMAR, in the municipality of Lavras. In practice, the association is managed by the supporting Fundação Pro Defesa Ambiental, with the catadores as the principal beneficiaries. I hope to visit this association and learn more about their specific model, so I will hold off on any commentary for now.

My main concern with outsourcing is as follows: to what extent is it a real, sustainable solution for the practical difficulties of management within the cooperatives, and to what extent does it represent an approach of mere muddling-through without creating a clear, replicable model to solve management difficulties within these organizations? That is a question I hope to better understand with time.

One interesting comparison is the Redesol network, a separate group of organizations of catadores in the metropolitan area of BH that is managed principally by the municipal government and partner organizations. One of the main criticisms I often hear of Redesol is that it is simply run by the government, has no independent character of its own, and does not represent any sort of meaningful social movement (it does not participate in the MNCR), but at the same time the Redesol network does seem to have achieved an enviable degree of managerial competence in its activities. As I continue my research, I hope to learn more through in-depth comparisons of Redesol and Cataunidos.

The Value of Middlemen

As I learn more about the current structure of Cataunidos, I have come to realize that the commercialization network right now exists almost exclusively on paper. Each enterprise sells its materials separately with no coordination outside of occasional sharing of information regarding price quotations and purchasers. The plastic processing unit is currently closed for restructuring and the question of its future operational model is still somewhat up in the air. While one of the main goals of the Cataunidos-Petrobras project is to develop a management and business model for the commercialization network, these activities are essentially on pause until we have standardized financial management across the enterprises in order to have precise data and a unified operational structure. However, as I have mentioned in previous posts, sound financial management continues to be beyond the reach of the cooperatives and I do not get the sense that we have figured out how to progress on that front. This, in turn, means that the entire commercialization network is essentially stuck in neutral.

One reflection I have had recently while observing this process has been the importance of middlemen to the recycling industry. We often criticize the middlemen for unfairly exploiting the catadores by buying the materials for them at unreasonably low prices and then selling them at incredibly marked up values directly to industry while adding little actual value to the materials themselves. This is certainly true, and I myself have explained this in a previous post about the cardboard recycling industry. Middlemen often make generous profits by exploiting some of the poorest members of society. The goal is to cut these people out of the process as much as possible and allow catadores to sell directly to industry. But if this approach so obvious, how come we haven’t been able to achieve it yet? Why do even the largest associations like ASMARE still have to sell to middlemen?

The truth is that middlemen have a very important competitive advantage lacking in the associations and cooperatives: information. The middlemen are very good at controlling their production process, carefully weighing materials, recording data and price shifts in the market, and tracking how much material is coming in and out of their businesses. This helps them to be reliable suppliers of raw materials directly to industry, because they are able to combine their scale with reliability and exact information. The catadores, by contrast, have thus far proved unable to establish this control, thus undermining their ability to achieve scale through commercialization networks.

Going around the middlemen, therefore, is a larger challenge than simply pooling materials for sale or adding more value to the products. Rather, the principal challenge is establishing the control structures to better gather information in the production process and thereby eliminate the competitive advantage middlemen currently enjoy. This is the big question facing the Cataunidos network.

The Expansion Debate - To grow or not to grow?

As with any business, one of the most important strategic decisions facing the cooperatives is the question of size. This issue has fascinated me since the beginning of my research. Upon first glance, we naturally assume that one of the goals of the cooperatives is steady growth. In order to achieve a greater scale (and thus negotiate better prices for materials), integrate more unorganized catadores, gain political influence, and improve the reach of services, long-term expansion would seem to be a reasonable goal. Size has been a crucial component behind ASMARE’s success: as a roughly 200-member association it maintains a large profile in the city and produces 42% of the total material in the Cataunidos network.

Yet expansion can often be as much a curse as it is a blessing, due to the fluid nature of decision-making within the cooperatives. Several INSEA technicians have explained to me that ASMARE’s size has made it unwieldy, undermining carefully constructed group dynamics of solidarity and teamwork. With more associates, more conflicts emerge between individuals, creating new headaches for the leadership team. The assemblies become more tense and harder to control, which makes it harder for the enterprise to maintain direction and make strategic decisions. Simply put, it is easier to manage a smaller group of people. Several people I have talked to have expressed the opinion that maintaining roughly 25-35 associates is more ideal. Expansion exposes the weaknesses in the organizational structures of the cooperatives.

The difficulties of expansion carry large implications for the future of this movement. If associations and cooperatives do not continue to grow, how will they ever expand beyond their currently limited role in solid waste management? Has ASMARE’s success reached a plateau? Can new models of organizational management within the associations overcome these difficulties? And if so, would this require centralization of decision-making within a smaller group and thus limiting democracy within the cooperatives? And without expansion, how will the catadores achieve the necessary scale to circumvent middlemen and market their products directly to industry?

One interesting possibility to avoid the problem of large, unwieldy cooperatives is the creation of several smaller local cooperatives that work in partnership to achieve full coverage within a municipality and jointly market their goods. But it is hard to imagine this really being any more effective than a large, single organization. As the Cataunidos project has shown, coordinating among several cooperatives creates a whole other set of organizational challenges. With either model, the root question remains the same: how to create management structures that will allow for long term dynamic development, and not stagnation?

An interesting case study I will be considering is ASMAC-Contagem. The municipal government just built a new sorting warehouse next to the sanitary landfill and will turn use of the new facility over to the association. However, the new warehouse is quite large and has space for up to 110 workers working in two separate shifts, whereas only 14 catadores from ASMAC will be moving to the facility. Therefore, the municipal government has decided to install a second group of workers from the neighborhood next to the landfill, a low-income community that has to deal with all of the negative effects of a trash repository as a neighbor. (As you can imagine, the smell does wonders for one's appetite.) INSEA has trained roughly 80 of these residents in the CATAFORTE program, and they will be integrating themselves into the new ASMAC team in three waves (30 workers initially, growing to 80 in December, and then 110 in July 2012). I will be accompanying this process along with two UFMG students in order to better understand some of the challenges and opportunities involved with integrating new members into the collective.

The situation with ASMAC is especially complex because the association currently has three different warehouses, with each one operating somewhat independently. One of these will be closed and the members transferred to the new warehouse, but the other two will remain functioning. So in addition to researching the process of assimilating new workers, we will research the relationship between members of the three separate warehouses and the implications for management structures of organizations of catadores. I plan to report back on this project on a regular basis.  

Infrastructure Improvements

One of the focuses of the Cataunidos-Petrobras project has been the improvement of infrastructure for organizations of catadores. Lack of physical space and equipment is a key difficulty facing many fledgling associations and cooperatives. Individual catadores often begin their work on the street, sorting material on the side of the road and sleeping under their carts. In the dumps, catadores often store their materials in bags out in the open air, and some even sleep in the dumps to protect this accumulated wealth. Many organizations of catadores in their infancy simply continue this same activity in groups. As I mentioned before, ASMARE actually got its start when street catadores began to look for a safe space to sort their materials after repeated harassment by the police on the sidewalks and alleyways of Belo Horizonte. The cooperatives thus often begin with clear material needs.

The most crucial infrastructure element is the warehouse. As the physical location where material is collected, sorted, pressed, and stored, a good, functional warehouse is one of the most important traits of a successful cooperative. Equipment such as conveyor belts for sorting, push carts for transporting bags, presses to compact and organize material, scales to weigh loads and record data, grinders for shredding paper and glass, and forklifts for loading the trucks all help to improve the production process and work conditions within the warehouse.

However, none of this infrastructure comes cheap. Accumulating capital to build warehouses and purchase equipment is extremely difficult for the cooperatives given their limited revenue and the understandable desire among catadores to divide profit amongst themselves rather than investing in the long-term growth of the organization. In practice, therefore, catadores depend on support from the government and partner institutions to finance these infrastructure projects.

Often, municipal governments are the most important actors in this regard. Some municipalities build warehouses, and others agree to pay rent or “cede” (legal term providing temporary operating rights) existing spaces to the cooperatives. Recently, the national Accelerated Growth Program (PAC) of the federal government has allotted significant resources to improve infrastructure among the organizations. The ultimate goal is for the cooperatives to fully own this infrastructure instead of depending on the long term generosity of government actors, as this undermines their autonomy and leaves them vulnerable to political volatility. (In many cases in Brazil and elsewhere, cooperatives of catadores have been decimated by turnover of political administrations, especially at the municipal level.)

Through its working partnerships with municipal governments, federal authorities and Petrobras, INSEA has been able to make new infrastructure projects a focus of its efforts. The original nine enterprises of Cataunidos as well as the seventeen new organizations have a wide variety of needs that we are trying to fulfill. These range from very basic (some of the new organizations do not have warehouses and lack even the most basic equipment) to more advanced (several organizations are upgrading to new warehouses). One thing that is interesting to note is that by comparing the needs of the newer organizations to those with more advanced concerns, you get a better appreciation of how much progress the older cooperatives have made in their short period of existence.

However, the process of infrastructure improvement is not just about accumulating funds. Often, bureaucratic delays can create nightmares for the catadores. Brazil as a whole is famously slow in overcoming bureaucratic impediments to infrastructure projects, as the current fiasco regarding preparation for the World Cup has clearly illustrated. This reality applies equally to the catadores. Although PAC funds have been in the pipelines for years, many projects have yet to actually begin. And even when they do begin, random hurdles can appear out of nowhere. ASCAP in Nova Lima broke ground on its new warehouse last year, but the project ground to a halt when the transport authority decided midway through construction that the site was too close to a main highway and thus shut it down. (Pictures of the stalled construction to come later.) Overcoming these hurdles is essential, but as even Sports Minister Orlando Silva has discovered, it is not always easy.

It is also important to note that these infrastructure projects are not one-time-only initiatives. As the organizations grow and develop, their needs are continually changing. Most commonly, materials increase over time as catadores expand their partnerships with businesses and residents and as municipalities implement recycling programs. Even the most advanced organizations are constantly looking to renovate their existing spaces, expand their warehouse, or move to a more strategic location. (Regarding location, many warehouses are often built on the cheapest and least desirable land in the city, creating all sorts of transport and logistics issues.) Continual improvement of physical capital is an important goal for the cooperatives, just as it is with most private enterprises. Over the long term, however, our goal is for the catadores to be able to make some of these investments themselves as their businesses grow and develop. It remains to be seen, however, if this will indeed be possible.

Dr. Lima and his team of engineers have a long history accompanying infrastructure projects and production processes within the cooperatives. One of the key aspects of our work at the research laboratory is to guide this process of infrastructure improvement to make sure capital investments are well suited to the actual needs of the catadores. While it is impossible to talk of an ideal layout for a warehouse due to the peculiarities of each organization (how material is collected and stored, how the production process is organized, division of labor, etc), we do have a set of general guidelines that good warehouses should follow. For example, it is important to have a separate entrance and exit in order to maintain a directional flow of materials. Also, there should be a way of controlling overflow of materials so that newly arrived recycling is not sprawled throughout the warehouse, thus impeding the flow of the production process. We are currently visiting sorting warehouses throughout the region to study and record various layouts and techniques. Hopefully, this will allow us to provide better guidance on future infrastructure projects. Without good scientific study of principles of sorting warehouses, many warehouses are hastily designed and constructed and the entire production process within the new spaces quickly becomes a mess. Our goal is to avoid that problem and make infrastructure improvement not just fast, but also strategic.

Efficiency vs. Social Inclusion – Irreconcilable?

As I have mentioned in previous posts, some of my greatest struggles in understanding the work of the catadores here involve the perceived tradeoffs between efficiency and social inclusion.

Efficiency, of course, is the traditional model in our society. We try to promote the most effective businesses possible, focusing entirely on producing the highest value end-product at the lowest possible cost. Labor is simply an input in this process. In order to get the “most bang for the buck,” business owners thus try to weed out inefficient labor. Anyone who routinely slacks off, who lacks ingenuity, or who is otherwise found to be a subpar employee is subject to dismissal. The idea is to “weed out” the bad labor until only the best and brightest workers are part of your team.

Social inclusion focuses on very different goals. The issue in question is not the quality or cost of the final product. It is about promoting the worker as a human being, guaranteeing that everyone has decent working and living conditions, reducing exorbitant inequalities and integrating marginalized groups into broader society. After all, what is the point of development if some are excluded from the process? The concept of social inclusion is that we advance all together, or not at all. This means allowing the least productive members of our society to participate fully as equals and for all work to be valued.

The common discourse in center-left politics focuses on the idea of the “social safety net.” That is, we are all part of the same system, but there must be a net to catch those who fall to the bottom and provide them some basic support to integrate themselves once more into mainstream society. In conservatives circles (best exemplified by the modern Republican Party in the U.S.), the idea of the social safety net is undesirable because it creates a two-tiered system separating productive and unproductive members of society: those who produce through the labor market and those who mooch off government welfare programs and depend on the hard work of others to prop them up. While I certainly abhor the conservative solution to simply abandon the pretext of a social safety net altogether and let those at the bottom continue to fall further from society, it does raise a very interesting point about the dangers of a two-tiered system. An economy that categorizes people into two groups (those in the capitalist labor market and those dependent on government welfare) does not promote social inclusion. What, then, is the solution? I for one certainly do not know, and unfortunately I do not think anyone really does. The first step is to better understand the problem.

There can be no doubt that efficiency is important in all work. People have needs and desires for goods and services that others produce. Getting the job done well is important in any area, be it a government agency promoting adoption services, a barbershop offering cheap but excellent haircuts, or a factory producing the latest cell phone models. Without efficiency, we would not be able to take advantage of all that our society is capable of offering us. Anyone who has been in a work environment with people who are lazy or incompetent knows just how frustrating this can be. Without this drive for efficiency, we would not have achieved the quality of life we now enjoy today.

How then, to reconcile efficiency and social inclusion? How do we create a single-tiered system of work and production where we are able to increase the quantity and quality of goods and services while enabling everyone to benefit, while perhaps not completely equally, at least to an extent that is reasonably fair? And in this system, how do we reward and incentivize our best and brightest individuals, those natural leaders and inventors whose ingenuity and determination has propelled our societal success for generation upon generation? Is it possible to harness their unique abilities without placing them on a pedestal above the rest of humanity?

When I look at our current capitalist economy, which has never been able to operate at full employment and depends on seeking out the cheapest labor possible (think: sweatshops) and on “weeding out” the weak, I find it harder to believe that it will be possible to reconcile efficiency and social inclusion within our current paradigm. We need to think outside of the box, taking all of these questions into account.

(And for the record, when I talk about a new paradigm I am certainly not advocating a transition to the stale, state-led communist development model that has historically failed in numerous countries around the world.)

Understanding and reconciling efficiency and social inclusion is, I believe, the greatest socioeconomic challenge facing our world community.

Artisanship - Opportunities and Limitations

Although the recycling industry comprises a huge international market, it is one that operates largely out of the public eye. Sure, we know that local governments as well as private businesses operate recycling programs that feed materials into production supply chains, but we have no real sense of how this process works or on what scale it exists. As soon as the materials leave our doorstep, they are gone as far as we are concerned. In Brazil, the recycling market is more present in our daily lives; we see constant reminders simply by driving through town and noting the number of catadores pulling their carts through the streets. Even so, it is not easy to connect these images with the large manufacturing plants that actually process materials into products we use in our daily lives.

In fact, the most visible element of recycling is not the industrial process but rather a unique and important niche market: artisanship. Almost all of us have come across these artisanal products at some point or other: artwork, musical instruments, or household goods decorated with recycled materials. These items are meant to move us emotionally: to invoke wonder and amazement at their creation, to remind us of the beauty and potential of the products we so carelessly discard, and to inspire us to rethink our patterns of consumption and our relationship with Mother Earth. This artisanship helps us to remember why recycling matters.

For the catadores, using artisanship to build consciousness is a tremendous boon to their work. It provides visibility for their organizations and encourages residents to sign on as local partners in their efforts by separating their waste, donating materials, and putting political pressure on municipal government actors. Artisanship helps to connect catadores to society.

But it is about more than just building consciousness. It is about helping the catadores to develop pride and learn to value their work. For people who are often used to being considered “dirty” and “marginalized,” seeing the inner beauty of recycling can be incredibly moving. As ordinary people marvel at a sculpture molded from aluminum cans, catadores begin to recognize the role they play in society. As I have mentioned before, pride is one of the key elements of this movement.

In addition, artisanship provides an outlet for catadores to demonstrate and develop their creativity. With the direction of a talented artist, catadores can take time to make their own artisanal products, providing a nice change of pace and a new learning experience. The most visible example of this was the art produced by Vik Muniz, captured in “Lixo Extraordinário” (see earlier post). Here in Belo Horizonte, ASMARE hires local artists to work with them on artisanal projects. Many of the projects produced in the association are then put on sale at Reciclo, a popular restaurant in downtown Belo Horizonte run by ASMARE itself (more on Reciclo in a later post on income diversification).

However, it is important not to become too bullish on the potential for artisanship in the cooperatives. Yes, its potential for promoting consciousness, pride and creativity is significant, and the extra income it provides cannot be discounted. But at the end of the day, artisanship is a niche market with limited room for expansion. As I mentioned at the beginning of this post, the recycling market is huge. Its base is the industrial manufacturing process used to create new products, not artwork used to decorate living rooms. The art market saturates very quickly and cannot possible accommodate all of the inorganic waste generated by society on a daily basis. It is important to develop artisanship in the cooperatives, but it is certainly not a panacea for waste issues. While the catadores should embrace artisanship and learn how to use it to their advantage, they must continue to focus on their role in the industrial recycling process.

A related issue is the question of recycling finished products. On a daily basis our society discards quality products still available for use: computers, couches, televisions, all sorts of items that others would be happy to take off our hands. In Itauna, Coopert maintains a museum of some of these materials – lamps, chairs, etc. This phenomenon raises an important question: can we use recycling as a way to transfer materials from the wealthy to the poor on a voluntary basis? This is, of course, incredibly common already in modern day society. People donate old clothes, toys, and other items they no longer want. But often, these items are not properly matched with what recipients want or need. Furthermore, donations can have unexpected consequences, principally the “dumping” of goods (most commonly food and clothes) into a market, thus undermining domestic industrial production of such goods and promoting long-term dependency. Recycling such products through the work of catadores offers an alternative model. By selectively picking through waste and choosing the objects that have value to them, catadores invert the system. Rather than having the donors simply force their products onto recipients, recipients are able to choose what they accept. Could organizations of catadores help to expand and systematize the donation process and recyclable valuable goods that the poor actually want? It is an idea that presents many challenges, but it is certainly interesting to consider.

oHo