Economies and Cultures:
The formalist-substantivist debate
Anthropology 531
Kristine Oliveira
Introduction to the
formalist-substantivist debate
•
•
At the peak of the debate in the
1960s, most anthropologists were
employed teaching anthropology in
university departments in the
United States and in Great Britain
Early period of postmodernism
– Moderate anthropologists’ opinion
of science during early
postmodernism:
• Science is a mix of the objective
and subjective
• Science is set within the
social/cultural/political context
– The debate between the formalists
and subjectivists led to the
creation of “economic
anthropology”
2
Introduction to the
formalist-substantivist debate
•
1922
– Malinowski criticizes Western economics’ ability to understand
“primitive” economies (Trobriand Islands)
• 1941
– Melville Herskovitz (anthropologist)
• Culture must be understood within its own terms
– Frank Knight (economist)
• Universal laws that explain human behavior
•
Up to the 1950s
– Economic anthropology was descriptive, focusing on describing how
people made a living
• Economic anthropologists saw economists as ethnocentric
• Most economists ignored the economic anthropologists
• Some economists began to argue for a diversity of economic systems (like the
economic anthropologists)
3
Formalist-substantivist debate:
Reflexivity and science
•
Relativist position
– “cultures are so different from
one another, especially
primitives from moderns, that
they cannot be understood with
the tools of Western science,
tools that are themselves
fundamentally a product of
modernity” (Wilk and Cliggett p.
6).
•
Formalist position
– “all human experience is
fundamentally the same and can
be understood using objective
tools that are universal. To the
universalist, science is not bound
by a single culture and therefore
can make general comparative
statements” (p. 6)
4
The Substantivist position and Karl Polanyi: The
anthropologist’s economist
•
(1944) The Great Transformation
–
–
–
–
–
•
Modern capitalism (market capitalism)
Profit more important than human value
All things are a commodity
Economics is a servant of market
capitalism
Economics naturalized capitalism
(1957) Trade and Market in the Early
Empires
–
–
Edited volume; early empires built without
market capitalism, nonmarket economies
Questioned the naturalness of market
capitalism as an economic structure will
5
The Substantivist position and Karl Polanyi: The
anthropologist’s economist
• Two meanings of economics
– Formal economics: the study of the
rational decision-maker
– Substantive economics: the material
acts of making a living
• Only in the West is capitalism
institutionalized through the
marketplace and the flow of
money
• Substantivist economics:
– Observe nonmarket institutions
– Identify the rules of the logic of the
social and economic structures and
how the systems hold each other
together
– “Economics should seek to find out
how the economy is embedded in
the matrix of different societies” (p.
7).
– In the West, the economy is
submerged in the institution of the
marketplace
– In other cultures, the economy is
embedded in social institutions
6
The Substantivist position and Karl Polanyi: The
anthropologist’s economist
•
3 ways that societies integrate economics:
1.
2.
3.
Reciprocity: helping and sharing based on a mutual sense of obligation and
identity (simplest; most “primitive”)
Redistribution: central authority collects and redistributes
Exchange: calculated trade; modern market exchange using money and
bargaining is one example (most complex; most “modern”)
• All societies use some combination of the 3 types of economic systems
• Relativism to evolutionism
– Types form historical series
7
The Substantivist position and Karl Polanyi: The
anthropologist’s economist
• Substantivist model is relativist: economic rules are based on societal
logic
– “Therefore, the tools for understanding capitalism are as useless for studying
the ancient Aztecs as a flint knife would be for fixing a jet engine” (p. 8).
• Social economics:
– Focus on economic institutions
• social groups that moderate production, exchange, and consumption
• Society is the unit of analysis (not the individual)
8
The Substantivist position and Karl Polanyi: The
anthropologist’s economist
George Dalton: Development and economic
change (1971)
Marshall Sahlins: Classification & evolution of
“stone-age” economies (1960, 1965, 1972)
9
Formalists strike back:
Formalism and scientific inquiry
• Connected to the 1960s’ focus on
the scientific method
• Align anthropology with other
sciences
• Fieldwork intended to test laws
• Economics could help to explain
individual agency
10
Formalists strike back:
Formalism and scientific inquiry
• Key propositions of the formalists
1.
2.
3.
4.
5.
“Maximizing” does not require money or markets–anything can be
maximized
Substantivists are romantics
Formal tools can be adapted in order to observe the rational
behavior of non-capitalist societies
Deduction is a better tool for explaining general laws of human
behavior
Polanyi misunderstood early empires and “primitive” cultures;
markets and exchange have always existed in one form or another,
as far as we can tell.
11
Formalists strike back:
Formalism and scientific inquiry
• Formalists demonstrated that economics could be applied to noncapitalist economies
–
–
–
game theory
linear programming
decision trees
• Behavior which seem strange to outsiders is indeed rational and
understandable once a person comes to understand the cultural logic and
real circumstances that frame people’s lives
12
Key ideas of the
formalists and substantivists
Formalists
Substantivist
Economic rationality of the maximizing
individual is to be found in all societies
and in all kinds of behaviors.
The economy is a type of human activity
which is embedded in different social
institutions in different kinds of societies.
The individual is the unit of analysis.
The society is the unit of analysis.
Individual choice shapes the economic
system.
The social structure shapes the individual.
Society is created from the patterned
actions and decisions of individuals;
society is changed by individual choices.
Society sets the rules of the game, and
individuals have limited choices.
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Alternatives to the
formalist-substantivist debate
Alternatives to formalism
Alternatives to substantivism
•
•
•
•
•
People are also irrational or
nonrational
Rationality is not always based on
maximization
Economic rationality is not universal
Economic rationality “ as defined by
economists is meaningless, circular,
or vague, because it can never be
proven” (p. 12)
•
•
•
•
The economy is not embedded but is
an autonomous subsector of society
Society is embedded in the economy
The economy is partially embedded
in social institutions
There are no “types” of economies
but the economy is embedded in
every single society in different ways
The economy is pervasive in all
human activity
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The end of the formalist-substantivist debate: A
whimper, not a bang
• Contemporary anthropologists in
development and social change
have adopted formal analytical
methods with their ethnographic
work
• (1973) Richard Salisbury:
“postmortem spasms”
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The end of the formalist-substantivist debate: A
whimper, not a bang
• The debate is important
– It is unsolvable because it gets at the
core issues about selfishness and
altruism, about the ability of humans
to change their own lives and society,
and about the merits of logical
thought and of emotion.
– It initiated conversations about social
change, evolution, and economy and
how those things relate to other
classic objects of an ecological study
(ritual, kinship…).
• 1970s
– The debate gave way to Marxism in
economic anthropology
– The growth of applied
anthropologists in government
agencies, foundations, and social
service organizations
– Shift in focus towards nation-states
and modern life.
• Emergence of diverse approaches
to economic anthropology
–
–
–
–
–
Neo-Marxism
Feminism
Ecological Anthropology
Development Anthropology
Peasant Studies
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Emergence of diverse approaches to economic
anthropology
Approach
Description
Neo-Marxism
• Economics describes the power relations of the structure; individuals are
not free actors in an open marketplace.
• People linked together through colonialism and trade through the
violence of power.
• Peasants, small scale industry, gender inequality, social stratification, land
tenure, state intervention in markets.
Feminism
• Economics is a powerful influence on modern patriarchy, universalizing
force of 19th century Western cultural norms about gender; rejection of
the gender binary as well as the domestic-economic binary
• Criticizes microeconomics for being a reproductive ideology for capitalism
• Uncover exploitation, inequality, and injustice in global society
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Emergence of diverse approaches to economic
anthropology
Approach
Description
Ecological
Anthropology
• “Overlaps considerably with economic anthropology, and at times they
appear indistinguishable, especially in the work of archaeologists” (p. 20).
• Julian Steward and Leslie White from Franz Boas: variation in social
organization among different groups. Analysis of subsistence systems.
Ecosystem as a complex web of relationships that bind humans to other
species in the natural environment.
• Roy Rappaport (1968) Pigs for the Ancestors: warfare regulates
population density without participants’ knowledge. Systems theory,
demography, evolutionary theory, biological ecology.
• (1980s) Societies are dynamic; focus on people’s perceptions and
understandings of the natural environment. Formal methods for modeling
human decision-making.
• Risk and Uncertainty in Tribal and Peasant Economies (1990);
maximization questions and utility
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Emergence of diverse approaches to economic
anthropology
Approach
Description
Development
Anthropology
• (1970s and 1980s) Applied; concerned with economic and agricultural
problems in ‘developing’ world. Cold War tensions, Peace Corps, Food for
Peace, Green Revolution; anthropological knowledge to help smooth the
process of development.
• Disillusionment with Vietnam War; anthropology misused.
• Government agencies, tax systems, urban squalor, mass migration,
underground economies; dependency theory; ‘structural adjustment’ and
neoliberalism. Ambivalence between agents and victims.
Peasant Studies
• Largest single group of people on the planet.
• AV Chayanov: drudgery of work versus return; economic purpose of
demand and production to explain why Russian peasants and Midwestern
American corn farmers act differently–is it culture or individual economic
behavior?
• Samuel Popkin (1979) The Rational Peasant “ creation of feudalism and
capitalism”; state owned the land, peasants worked it, lord would collect
taxes. Political economy; commoditization of land and labor.
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