Chapter 7
Exchange and Economic Systems
Chapter Outline



Reciprocity
Redistribution
Market Exchange
Reciprocity

1.
2.
3.
Individuals or groups pass objects back
and forth with the aim of:
Helping someone in need by sharing
goods.
Creating, maintaining or strengthening
social relationships.
Obtaining objects for oneself.
Reciprocity
Redistribution

Collection of goods or
money from a group
followed by a
reallocation to the
group by a central
authority.
Market

Products are sold for
money which is used
to purchase other
products, with the
goal of acquiring
more money and/or
accumulating more
products.
Three Types of Reciprocity
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General - parents and children
Balanced -birthday gift exchanges
Negative - barter
Generalized Reciprocity

The giving of goods without expectation
for return of equal value at any definite
time in the future.
Balanced Reciprocity

The exchange of goods considered to
have roughly equal value; social purposes
usually motivate the exchange.
Negative Reciprocity

Exchange motivated by the desire to
obtain goods, in which both parties try to
gain all they can from the exchange while
giving up as little as possible.
Reciprocity and Social
Distance
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
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Reciprocity changes as relationships change.
Changing the form of reciprocity can change
the nature of the relationship.
Social distance is the degree to which cultural
norms specify that two individuals or groups
should be helpful to, intimate with, or
emotionally attached to one another.
Redistribution



Provides goods, services and assistance to
individuals and groups in need.
Common conflicts over who should provide the
resources and how much should be given to
those who collect and distribute them.
Those who make decisions about redistribution
often use resources for themselves.
Tribute

The rendering of goods (typically
including food) to an authority such as a
chief.
Requirements for Market
Exchange




Some object to use as a medium of exchange
(money).
A rate at which goods exchange for money
(prices).
Parties to exchanges who have alternative
buyer or sellers and are free to make deals
(supply and demand).
Most resources are privately owned (private
property)
Money







Serves as a media of exchange
Serves as a standard of value
Also a store of value
Has symbolic significance (social status)
Durable and divisible
Controllable
Portable
Limited-purpose Money

Money that may be used to purchase only
a few kinds of goods.
Market Economies



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Whole economy is based on market principles
Most goods and services can be bought and
sold
Most people make their living selling
something on the market
Factors of production are allocated by the
market
Economy is self-regulating
Peasant Marketplaces


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Less dependent on market forces.
Categories of products sold are limited.
Producing and marketing goods for profit
are part-time activities for many vendors.
Peasant vendors usually sell products
they or their family members produce.
Quick Quiz
1. The one type of economic system found
in all human populations is:
a)
b)
c)
d)
redistribution
reciprocity
market
all of the above
Answer: b

The one type of economic system found
in all human populations is reciprocity.
2. Negative reciprocity:
a)
b)
c)
d)
is like market exchange without using
money
is usually motivated by the desire to
obtain material goods at minimal cost
can take the form of barter
all of the above
Answer: d

Negative reciprocity includes all of these
features: it is like market exchange
without using money, it is usually
motivated by the desire to obtain
material goods at minimal cost, and it
can take the form of barter.
3. Which of the following is not a
requirement of market exchange?
a)
b)
c)
d)
money or money objects
prices
governmental regulation of prices
prices determined by supply and
demand
Answer: c

Market exchange requires money or
money objects, prices, and that prices are
determined by supply and demand, but
does not require government regulation
of prices.