Intersectoral flows

Table 4.1 shows the intersectoral flows in six of the eight communities studied; that is, it replaces the symbols of Table 2.1 with empirical data, with one modification: the production of each separate sector of intermediate goods – the first three columns of Table 2.1 – has been consolidated into one column. This has been done for the sake of simplicity and also because it is often difficult to separate the production of intermediate goods by sector. The N column refers to non-monetary barter transactions, and the M column to monetary transactions. The former principally measures transactions with other communities, the latter transactions with the rest of the economy, above all the urban economy. Two of the communities – Ttiomayo and Sihuina – have been omitted on account of the incompleteness of the data, but the other six are sufficiently well distributed among ecological levels for the representativeness of the sample not to be affected significantly. Of course, whenever only these six communities have been used in tabulations, the weights of the sampled families have been changed accordingly to get the expanded values for ‘sample total’ and ‘southern sierra’.

The reader will note that Table 4.1 contains certain identities. The figure at the bottom of column 1 is the same as the A + P + Z in the last column. The former represents the value of production viewed from the side of the cost of production whereas the latter is the value of production by destination (deliveries), and both must be equal. Because of this identity, self-employment (row 20) was estimated by difference.

In order to study the functioning of the peasant economy the basic economic unit of such a system must be clearly established. Who has the control of resources? Who makes the decisions on the allocation of these resources? Who makes the decisions on consumption and accumulation? This chapter is devoted to answering such questions.

Size of family and labor force

In this study, the family is defined as all those persons who habitually live in the same house. The criterion of residence poses some difficulties on account of permanent and temporary migration, and the rule adopted was to consider as resident any person who lived in the house a total of six months or more in the preceding year.

The average family size varies between 4.2 and five members in the communities (Table 3.1). The variation in these average sizes seems to bear no particular relation to the community's ecological level. Although the value of the standard deviation between family size within each community is high, the differences between communities seem to be small. These data show that it is difficult to identify a ‘typical’ peasant family size, at least without taking into account the stage of the household cycle reached by each one.

This study uses two definitions of labor force. The first, designed to take into account the role of children in production, and thus to show the family's productive capacity, includes all members of six years or more of age. The second includes persons of 18 years or more of age and measures the ‘adult labor force’.

1. Potatoes: Solanum spp., the majority of native potatoes grown in Peru; Solanum tuberosum subspecies indigena.

2. Oca: Oxalis tuberosa.

3. Olluco: Ullucus tuberosus.

4. Mashua: Tropaeolum tuberosum.

5. Achira: Canna edulis.

6. Quinua: Chenopodium quinoa.

7. Cañihua: Chenopodium pallidicaule.

8. Achita: achis = quihuicha. Amaranthus caudatus.

9. Maize: Zea mays.

10. Tarhui: Lupinus mutabilis.

Hypotheses on peasant economies

The persistence of poverty in the peasant economy in Latin America calls for an explanation. For this, the study of the functioning of the peasant economy and its relation to the rest of the economic system is required. In fact, the relevant hypotheses can be classified according to the emphasis given either to the production process or to the process of exchange as the main cause of the economic backwardness of the peasantry.

The production process

There are two common views concerning peasant economies: (1) they are inefficient in their use of resources; (2) they are overpopulated, due to the absence of capitalist rules of production and distribution. Against these two hypotheses, Professor Theodore Schultz (1964) has developed a new proposition in terms of ‘traditional agriculture’. His hypothesis is basically the following: there is no significant inefficiency or overpopulation in peasant economies. Poverty here can be explained by the poor quality of resources and the traditional technology in use. Peasant families are poor but efficient. As he put it: ‘the community is poor because the factors on which the economy is dependent are not capable of producing more under existing circumstances. Conversely, … the observed poverty is not a consequence of any significant inefficiencies in factor allocation’ (p. 48).

In a dynamic sense, Schultz argues that ‘the factors of production on which a community depends are expensive sources of economic growth’ (p. 97).

Growth

The series of real GNP per capita estimates for the period 1950–74 was obtained from the Cuentas Nacionales published by the Banco Central de Reserva del Perú in various volumes (1950–65,1960–7, 1960–9, 1960–74). For the period 1975–80, we used the series published by the Banco Central in its annual Memorias.

Inflation

The index is the Lima CPI. Published data obtained from the Instituto Nacional de Estadistica were used for the entire period. (The Institute's name changed at various points during the period.)

Growth pattern

The series of manufactures and exports as percentages of GNP were obtained from the same sources that were used for the GNP series. In the case of exports there was no significant discrepancy between the Cuentas Nacionales and the Memorias during the period of superposition in the calculations (1972–4). Thus both series were used as if there were only one. In the case of manufactures there were discrepancies between the sources during 1972–4. The figures which appear in the Cuentas Nacionales are, on average, 83% of the figures in the Memorias. In order to have a long-term series which did not display important methodological changes in the calculations, it was considered appropriate to correct the figures in the Memorias by that coefficient (83%) for 1975–80.

Income distribution

National income and functional distribution

The series of national income and firms' profits were obtained from the Cuentas Nacionales and the Memorias of the Banco Central. Both estimates coincide for the period 1970–4. Thus it was assumed that for the period 1975–80 we could expand the series with the data of the Memorias.