MARKETS, NETWORKS, AND RISK - AN ANALYSIS OF LABOR REMUNERATION IN THE LAKE VICTORIA FISHING INDUSTRY

This study applies concepts from Habermas' Theory of Communicative Act ion to the problem of identifying the circumstances under which networ ks replace markets as the primary governance mechanism for economic ac tivities. The suggestion derived from this theory is that markets gove rn economic activities tied to material phenomena; whereas networks co ntrol such activities when they are tied to social relationships. This suggestion is subjected to an empirical test. Labor transactions in t he Lake Victoria fishing industry are used to test the hypothesis that risk factors arising from natural contingencies will distribute accor ding to a risk market model, whereas those arising from social relatio nships will be distributed through a logic of social power tied to net works and identities. The hypothesis is generally supported by data on the effects of kinship and, more strongly ethnicity.