Economic Systems and Forms of
Exchange
Economic systems
Production and allocation of material
goods and services
 Do not operate independently of other
aspects of society
 Especially closely associated with
political systems which are concerned
with the allocation of power and
authority

economic systems – three
interrelated aspects
Patterns of subsistence – the means by
which environmental resources are
converted for human use
 Systems of distribution – the means by
which goods and services are made
available to members of a particular
group
 Patterns of consumption

Non-Western Economic Systems
Are there any?
 Anthropological approaches to the study
of economic systems of production,
distribution, and consumption
 The Formalist vs. Substantivist
Debate
 The birth of economic anthropology

Formalist Approach: the NeoClassical Toolkit
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Adam Smith (19th cent.) and the descriptive
analytics of western capitalism
Profit motive as human universal
Maximizing utility
Scarcity, cost/benefit, price
Market governed by laws of supply and
demand
Rational economic behavior – human
universal
Formalist Approach: Marxism
and Neo-Marxism
Karl Marx (19th cent.)
 Marxist and Neo-Marxist approaches

– How economic systems and economic
relations sustain relations of power and
control over labor
– The “mode of production”
• Means/Forces of production
• Relations of production
• Superstructure (ideology)
Marx’s Modes of Production
Emphasizes social relations & conflict
within the system
 Emphasizes role of economy (a system
of production, distribution, and
consumption) in establishing and
maintaining social relations
 Substantivist concern with the social
embeddedness of the economy

Smith, Marx and Political
Economy
Both Smith and Marx grappling with the
meaning of emerging industrial system
 Rational economic behavior – everyone
will work to further his or her own
individual interests (Hobbes)

– Neo-classical economists (Formalists) see
the profit motive as universal
Anthropologists and the formalist
approach

look at activities in societies without a market
system, or that do not use money in ways that
make sense in a system like a capitalist
market
 using language of formal economic theory
 emphasizing universals of economic behavior
Substantivist Economic Theory

formal neoclassical theory cannot be used to
explain economic activities in non-western
societies
 patterns of economic exchange must instead
be interpreted within a society's cultural
context
 rationality is culturally, not universally defined
The Substantivist Approach

Studying the cultural particulars of any group
and economic system
 Economic maximization and cultural
specificity
– Economizing: the rational allocation of scarce
means (or resources) to alternative ends (or uses)

Idea of the moral economy
 Socially embedded economy with other
values than profit and maximization
Forms of Exchange (Polanyi)

Formalist approach ignores some forms
of exchange
– Reciprocity
– Redistribution
– Market forms of exchange (contract)
What Can be Exchanged or
Distributed?
Material goods
 Symbolic goods
 Labor
 Money
 Services
 Rights
 People

Reciprocity

two individuals or groups pass goods
back and forth with the aim of:
– helping someone in need by sharing goods
with him or her
– creating, maintaining, or strengthening
social relationships
– obtaining goods for oneself
Forms of Reciprocity (M.
Sahlins)

generalized - those who give goods or
services do not expect the recipient to make a
return of goods and services at any definite
time in the future
 balanced - goods and services are given to
someone with the expectation that a return in
goods and services of roughly equal value
will occur
 negative - both parties attempt to gain all they
can from the exchange while giving up as
little as possible
Reciprocity and Social Distance
In time and space
 Establishes and maintains social
distance
 Can change already established social
distance

Reciprocity and “the Gift”
(M. Mauss)
Obligatory & interested exchanges
 The gift received has to be repaid
 The persons represented are moral
persons (relational) -- clans, tribes,
families, etc
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Redistribution

the members of an organized group
contribute goods or money into a common
pool or fund
 usually a central authority has the privilege
and responsibility to make decisions about
how the goods or money later will be
allocated among the group as a whole
– i.e. taxation
Market or contract exchange

forces of supply and demand determine
costs and prices, goods or services are
sold for money, which in turn is used to
purchase other goods, with the ultimate
goals of acquiring more money and
accumulating more goods
– Disinterested
– Legally defined
KULA RING - TROBRIAND
ISLANDERS, Papua New
Guinea
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kula ring: a system of ceremonial,
non-competitive, exchange practiced
in Melanesia to establish and reinforce
alliances
Kula Ring as System of
Exchange

Classic example of balanced reciprocity
– ceremonial exchange of valued shell ornaments
– scheme for trading food & other items with people
of neighboring islands
– trading between trading partners

Malinowski's study of the Kula ring exchange
system was influential in shaping the
anthropological concept of reciprocity
Kula Ring Objects of Exchange
Bagi and Mwali - traditional trading
items used in the Milne Bay Kula Ring
 white arm shells (mwali) and red shell
necklaces (bagi)
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Kula Shells and Exchange
Kula shells traditionally move through a
series of islands, along a particular path
 mwali move in a counterclockwise path
through the villages in which the various
kula partners live
 bagi pass through the same hands, but
move clockwise, or the opposite
direction to the mwali
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shell armbands and necklaces makes this
circuit in anywhere from two to five years
mwali and bagi are both assessed for their
value based on size, colour, and how well
they are polished or finished
shells increase in value with age and both
men and shells gain prestige in their
association with one another
man may gain fame and notoriety for having
possessed a particularly fine armband
similarly, a necklace may be highly regarded
for having been owned by a great man
Kula Exchange Relations

kula partners
– Important social bonds
– Inter-generational relationships
– Peace pact

basic rule is that one cannot keep a
valuable bagi or mwali indefinitely nor
withdraw it from circulation unless one
owns it personally
Ceremonial Exchange
balanced reciprocity - goods and
services are given to someone with the
expectation that a return in goods and
services of roughly equal value will
occur (armbands and necklaces)
 fit with myths of adventure, ritual history,
continued repossession of valued things
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Ceremonial Exchange and Other
Forms of Exchange
during ceremonial trading "real" trading
goes on, gift giving, exchange or barter
 different islands differing resource
availability, some no food resources,
build canoes, other islands surpluses of
yams, taro, pigs
 scheme for trading food & other items
with people of neighboring islands
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Balanced Reciprocity and
Unequal Exchanges – The Lese
and Efe of the Congo, W. Africa
N. American Northwest Coast
Potlatch -- Redistribution
Consumption
Not just what we eat but the resources
we use
 Modes of consumption
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– Minimalism vs. consumerism
Demand (consumption) and desire
 Consumption is an aspect of the overall
political economy (Baudrillard & Marx)
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Consumption (A. Appadurai)
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Consumption, demand, desire
– Not culture free
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Collective regulation of
demand/consumption
– Social regulation of the desire for goods
and services
• Free trade
• Ethos of limited good
Consumption
A way of sending and receiving
messages (M. Douglas)
 Goods and services consumed circulate
regimes of value (Appadurai)
 Prestige group, class, and
taste/demand/consumption (Bourdieu)
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– The social life of things (Appadurai)