SOLIDARITY NETWORKS IN PREINDUSTRIAL SOCIETIES - RATIONAL PEASANTS WITH A MORAL ECONOMY

The key characteristics of solidarity systems are outlined, and the author shows that mutual insurance can be sustained as an equilibrium of a repeated game. Incentive problems are then addressed and linked to the lack of privacy, the right to susbsistence, ex ante solidarity, and networks. Private accumulation of wealth and other asymmetries between players are shown to lead to asymmetries in the insurance mechanism itself. Patron-client relationships are reviewed in that light. Equilibrium refinements are reviewed, and their applicability to mutual insurance contracts is discussed. Finally, policy implications concerning the prevention of destitution are presented. In conclusion, Posner's view is reasserted: there is no contradiction between the fact that people in preindustrial societies pursue their long-term self-interest and the central idea of the moral economy of peasants, namely, that the ethical values of precapitalist societies emphasize solidarity as a moral obligation and subsistence as a right. -from Author