Big transformation in a local context -Mestia.

Abstract

The presentation is based on a project, "Mestia: Embedding Economy in a Society," funded by TSU. Field research was carried out in September 2022 (Upper Svaneti, Tbilisi).More than 30 years it was passed after the dissolution of the Soviet Union and the independence of Georgia. Even more has passed since the beginning of neoliberal globalization and the third wave of democratization, to which the crash of the USSR was just one episode in a chain of events. The 2022 year invasion of Russia in Ukraine symbolizes the ending point of this lengthy period, at least of its peaceful part, a tipping point in history. Evolutionary historical periods end when new ideas and aspirations replace the dominant ideas and logic of the period. Such a shift can only happen after some time. The tipping point would be preceded by counter-movements, gradually growing tensions, and other evolutionary, incremental changes. The first great wave of economic liberalism, as described by Carl Polanyi, ended with World War II; contrary to Polanyi's expectations, a new wave started soon. The new wave hit all corners of the world but gradually reached its marginal utility. The strive for individual rights and freedoms, dominant in the first globalist development phase, gave way to the growing localism, democracy–populism, and authoritarian backslash. The anti-liberalism became increasingly visible in the changing political landscape of Europe, the US, and other countries. The cycling, the wave-shaped development character, headed towards its climax once more. "The end of a period" should not be understood as a starting point of a new institutional order, definitively following the previous one. The world has departed from the system equilibrium but has unclear chances to return to it or reach any other equilibrium in the observable future. Through polarization, destabilization, and war, the still-existing but fragile institutional order is heading toward a new "critical juncture." The upper Svaneti region is an excellent destination to study the macro process on a micro level. Observing the micro level, one can identify trends and controversies of macro development as they unfold in everyday life. In Upper Svaneti, Mestia, the interplay of globality and locality take the most salient forms compared to other regions of Georgia. A couple of decades ago, the intrusion of the tourist industry and the market-based economy started abruptly, initiated and led by the state. At the same time, the region has a long history of relatively isolated and independent existence, preserving its unique identity, language, and social tissue. The study concentrated on a case of the collective pledge in the 2021 year, undertaken by locals to reduce electricity consumption by crypto mining that caused overload on a privately owned electricity distribution system. Such practice as pledge is a part of the informal local justice system based on religion and tradition. There were several cases when it was applied in a modern context to ensure collective solidarity against free riding – many of them to protect local natural resources. The interplay of the formal economy and informal, traditional institutions may take two different forms. Either inefficiencies of the formal economy are substituted by the complementary informal practices, heading towards the stable equilibrium of the regulated market, or the local informalities compete with the formal institutions, creating a shadow realm of economic and social relations. The Polanyian counter–movements thus may thus be either complementary or restrictive to economic development.The study demonstrated that the informal institutions, applied by locals to fix the inefficiency of formal ones, are not competing with them but rather trying to substitute the missing regulations. Such efforts fail in most cases not because they compete with the dominant system logic but instead because the system needs the means or incentives to incorporate the informal social efforts.