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Adapted from Introducing Cultural Anthropology, Jenell Williams Paris and Brian M. Howell
Exchange systems are the social processes by which people give and receive goods and services.
Anthropologists use three major categories to classify systems of exchange: reciprocity, redistribution, and markets.
1. Generalized
2. Balanced
3. Negative
1. Taxation
2. Potlatch
1. Buying and selling
There are three forms of reciprocity: generalized, balanced, and negative. Generalized reciprocity refers to gift exchanges with no precise accounting of value and no precise expectation for type or time of return. In many tribal societies gifts may be given to those in need with no specific expectation of repayment. The expectation is that at other times the recipients of the gifts will contribute by helping others in need. This generalized circulation of goods among members of a group helps to spread the risk of shortage and also creates bonds between the members of the group. Generalized reciprocity was the primary mechanism of exchange for most of our human ancestors, but for those of us living under contemporary market systems, generalized reciprocity is reduced to family and friends. Parents do not expect each child to repay them exactly for all the meals, laundry, toys, and other expenses involved in raising the child. Of course, many families have an expectation that each member will contribute to the family's well-being, but this is usually based on physical strength, age, and aptitude. Likely, there is often a hope that when children are grown, they may express gratitude by visiting, calling, or gift-giving for close relatives. There may be some expectation that grown children will eventually provide financial, housing, or health care support for parents, though that is less common in some societies than in others.
What family members do for one another is not "repayment," but rather part of the rhythm of relationships that create bonds of indebtedness, expectation, obligation, and trust.
Balanced reciprocity is a form of exchange in which roughly equivalent goods or services are exchanged with or without the use of money. In public markets around the world, this is a common form of exchange. People barter and swap eggs for carrots, cloth for firewood, and so on. Balanced reciprocity may or may not involve ongoing relationships between the partners. Balanced reciprocity often involves more than just the satisfaction of immediate needs. As with generalized reciprocity, the expectation of balance can create important links of indebtedness. For most contemporary U.S. Americans, gift-giving follows a form of balanced reciprocity. For example, you may choose a gift for a friend based on your sense of closeness with him or her. If, after several birthdays or other occasions, that friend does not reciprocate at all, or gives gifts that are much less valuable (giving a card after receiving concert tickets), you may begin to question the relationship. We expect, informally, balanced exchange as a symbol of mutuality in the relationship. The "free gift" may seem to be an ultimate act of generosity or altruism, but balanced reciprocity suggests that accepting gifts incurs an obligation to reciprocate.
Reciprocity systems are not all about mutuality and strengthened relationships. Negative reciprocity involves exchanges in which one or both parties seek to receive more than they give. This may be as blatant as stealing, lying, or conning someone into an unequal exchange. In small-scale societies, negative reciprocity is less frequent, because the society requires positive, ongoing relationships. Even

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90 when practiced with strangers or enemies, negative reciprocity often creates conflict, but sometimes the short-term gain is considered worth the trouble. A salesperson might lie or use pressure tactics to convince someone to pay more for an item than it's worth. If there are many potential customers out there, the salesperson may not be concerned about the negative reputation from one dissatisfied customer.
Redistribution is a system of exchange in which a centralized authority collects goods and services from a group of people and redistributes them. The most familiar redistribution system is taxation in which the government or other authority collects money from most citizens and uses the funds to finance projects for the benefit of the general population. The ideal form of a taxation system has been described in the sentence: “From each according to his ability, to each according to his need.” However, this ideal is never perfectly achieved and dissatisfaction with taxation systems as unfair is common.
Another famous form of redistribution is called the potlatch, a ceremony practiced by some Native
American groups. Clan leaders would gather large amounts of valuable goods to give as gifts to rival leaders. The actual exchange would take place when one clan would hold a large feast and invite their rivals to attend. The large feast would be accompanied by giving generous gifts. Receiving such generosity placed the receiver in a subordinate position until the gift was repaid. In order for the receiver to shed the shame of having received an embarrassingly large gift, he would have to give an even larger gift, creating an ongoing process of exchange.
One of the effects of a redistribution system of economic exchange is to place a greater burden on the wealthy and greater benefit for those in need, thus reducing the amount of inequality within a society.
When a redistribution process reduces social inequality, it is called a leveling mechanism, though redistribution may also increase social inequality by rewarding those faithful to those in power.
A market economy is a system of exchange in which people exchange their labor (physical, mental, creative, etc.) for money, which can then be exchanged for other goods and services. The value of goods and services is precisely accounted and represented with money. Exchanges are typically precise and impersonal. Paying cash for an item at the store, for instance, is an exchange that results in no ongoing relationship between customer and cashier.
Markets can exist within any culture, as they are designed to deal with the distribution and exchange of resources no matter how those resources have been produced. In modern societies, actual money is often replaced by more invisible and impersonal forms: checks, bonds, credit cards, and exchanges of commodity “futures” and “options”, buying and selling goods that the buyer and seller will never see, which do not yet exist, and perhaps never will.
Today, market economies are growing larger and more dominant, and replacing reciprocity-based exchange systems around the world. The image of a literal marketplace—a physical location where people who knew each other came together to exchange goods—has become a metaphor for the virtual impersonal workings of the contemporary global economy. However, through most of human history economic exchange was based on more personal systems of reciprocity or redistribution. There was nothing like money to symbolize value. In some societies today, while cash may be used in dealing with states or outside groups, people continue to exchange goods and services according to local norms of reciprocity.