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
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)
The Substantivists’ and Marx’s
modes of production
Marx’s Modes of Production

Emphasizes social relations & conflict
within the system
– The dialectic
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

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
specificty

– Economizing: the rational allocation of
scarce means (or resources) to alternative
ends (or uses)
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Socially embedded economy with other
values than profit and maximization
Idea of the “moral economy”

the ways in which economic activities are
influenced or constrained to some degree by
moral considerations
– even though these sometimes get compromised
or overridden by other considerations

Self-interest, power and expedience are not
the only influences on economic life.
 Not only in the domestic sphere but in the
formal economy, within organisations, in
labour and product markets, moral
sentiments and norms influence behaviour
Patterns of Labor
 Sexual
Division of Labor
– Differentiation & integration
– The basis of society

Configurations of SDL
– Flexibility
– Rigid segregation & Dual Sex systems
Dual Sex Patterns of Labor

a dual-sex society in which both sexes are assigned
their special responsibilities
 Women are a sexual class that has a common
position with respect to another sexual class, males.
 a social relationship with each other
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partnership and cooperation
division of tasks
sexual relationships
relationships of domination and oppression.
complementary but at other times these two sexual
classes are in opposition to each other.
each class has a different set of interests, and
women often have interests opposed to those of
males.
Patterns of Labor

Age Division of Labor
– Typical of human societies

Cooperation
– Household is the basic unit

Craft Specialization
– Found in both industrial and nonindustrial
societies
Control of Land

All societies allocate land resources
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Food Foragers -- Where to hunt and gather
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Horticulturalists -- Distribution of
farmland
Pastoralists -- Water and grazing rights
 Industrial societies -- Private
ownership prevails
 Nonindustrial societies -- Often
controlled by kinship groups
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Technology

Tools and other material equipment,
together with the knowledge of how
to make and use them

The act of production

Foragers and pastoralists generally
have fewer and less complex tools than
sedentary peoples
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
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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
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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

kula ring: a system of ceremonial,
non-competitive, exchange practiced
in Melanesia to establish and reinforce
alliances
Kula Ring as System of
Embedded Exchanges

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
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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
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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
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basic rule is that one cannot keep a
valuable bagi or mwali indefinitely nor
withdraw it from circulation unless one
owns it personally
The Meanings of Kula
Exchanges
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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Consumption
Not just what we eat but the resources
we use
 Modes of consumption

– Minimalism vs. consumerism
– Or use vs. exchange values
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)