Lecture 10 : The Integration of Economic Systems




We will deal here with economic anthropology,  a field which in many ways was founded by Malinowski.  Malinowski’s fieldwork with the Trobriands was perhaps the first really good study of economic institutions in a non-literate society, and revealed the extent to which economic life in non-literate societies was s complex as our own, although in very different ways.

Economic anthropology is not easy to teach, because Westerners regard our economic system as "right" or at least that humans have a "natural" tendency to want to "truck, barter and exchange" (A Smith). And we all today (both economist and the man in the street) have largely accepted marginalist economic thinking which assumes that marginally (in "close call" situations) supply demand mechanisms work to determine prices [in the long run of course the cost of production is primary]

Anthropology [like the other social sciences] has a kind of ambivalent attitude toward economics as a discipline. Economics has (for the last fifty years or so] attained acceptance as a "science" in both the popular mind as well as among the academic and political elites, to an extent envied by other social scientists. Never mind the fact that economists are not "right" anymore than anyone else — they are perceived as being so. (This is a problem in the sociology of knowledge —— why do we continue to heap prestige of economists in spite of their dismal record? This probably has to do with the fact that economic knowledge ——even if wrong—— serves as a means of legitimating power in our society, and thus we need to believe that it is "scientific".]


Most economic analysis (excepting, of course. economic history] is based on the simple technique of holding "culture" [that is non—economic factors] constant. Based on a notion of a rational self interested, greedy, calculating, foresightful individual one assumes that, even if such an individual did have other (non-economic) motives, they can be safely ignored or held constant. Given a rational, calculating, self interested economic actor, and assuming that he lives in an unchanging culture, you can then presumably develop models to predict and understand changes in the economy.



The problem is, of course, that this is all a fiction: man is not intrinsically a self interested, greedy, calculating, money making machine, and he does live in a culture which is constantly changing.

Most economic analysis (excepting, usually, economic history] is based on the simple technique of holding "culture" [that is non—economic factors] constant.

"Reason" and rationality are always subject to culture. People may choose to buy something because the price is right, but they may also choose because they are under some social pressure to do so. Prestige and taste are very powerful economic factors. Lobster, today, is a big delicacy, but 100 years ago they were regarded as inedible nuisances (as the Tausug mostly do today —— I was regarded as rather weird because I ate lobster.)


Does a Rolls—Royce function more efficiently that a Honda? Maybe a little, but ten times as much? (this of course raises the important distinction between use value and exchange value – a Rolls has a lot of exchange value but (to me at least) very little use value, while a glass of water normally has lots of use value but little exchange value).

It would be much more efficient to slaughter all cattle as veal, rather than feed them, but we do like beef on the whole more than veal.

Aristotle was right: man is not an economic animal, but a social one, not searching after acquisition of material possessions, but social good will, status, prestige. Possessions are only valuable to achieve this.

That we managed to have convinced ourselves that Aristotle was wrong, and that man is primarily an economic animal, made in the image of Milton Friedman, tells us more about our culture than it does about man in general.

In non—literate societies, indeed in probably all human societies prior to the industrial revolution, the economy was submerged by, and embedded in, social relationships. The idea of an autonomous "economy" is a very recent idea —— not much more than about 200 years old. But it has so dominated our sensibilities that the tail has increasingly come to wag to dog. That is, the "economy" was abstracted first from the rest of social relations, and then increasingly the "economy" has cannibalized the rest of society. So that there is precious little in our world today which is not powerfully constrained by what appear to us to be autonomous economic institutions.

We assume that the economy "runs" because of certain very simplistic ideas of human motivation: people want to avoid pain (deprivation, starvation, etc] and ultimately to gain (that is, acquire more in the way of "the good life"]

"No pain, no gain" —— basic (and very simplistic] premise of our system. Now this is a most peculiar idea, indeed and it is not shared by most of the world’s cultures.

For example, Tausug work very hard, probably harder than most Americans do —— although they do so at their own pace ——no nine to five mentality! But when I asked why they worked, they invariably said it was to fulfill social obligations— expectations of others. Not to get ahead, and certainly not to avoid starvation.

Their motives for economic activity were as diverse as their motives for any other kind of social activity.

Unmixed simple motives are not a good basis for any complex human institution. Basic human institutions abhor unmixed motives. Economic institutions can no more reliably depend on fear of hunger, or greed, or "desire for a better life" than, say, the family could be based entirely on sex. (The only institution which could be entirely and only based on sex would be a brothel. The family is in fact based on a great mixed bag of motives, as is any complex economy. )The peculiar thing is that we continue to think, about our economy as if it were based on very simplistic motives, which of course it is not.

Our own Western society is unique in the extent to which the economy has been abstracted from the rest of society, and then in turn has cannibalized that very society. How did this come about?

1.       First, the technological innovations of the industrial revolution itself, which made possible a vast increase in material production. There were many basic inventions involved here (steam engine, spinning jenny, cotton gin, mechanical clock, etc).. most of these actually came from China. the most fundamental invention of all was the discovery that it was possible to derive energy from heat. Everything else depends on this one fact, and even atomic power is for practical purposes based on it. Most mechanical devices in use today were known to the Classical civilizations, but they depended entirely on human, animal, and to a lesser extent, water and wind power for energy.

2.       Second, there was, for the first time, the treatment of land and labor as subject to market forces. A fully free market for labor and land is only about 200 years old or so. What is meant here is that for the first time labor and land could be traded (bought and sold) as if they were commodities. The price of labor as a commodity is called "wages", and the price of the use of land was called "rent." Now this transformation is more profound that it first appears. Traditionally the value of labor (that is, what it was "worth") was fixed by custom, or notions of justice and fairness rooted in religion, or social obligations deeply embedded in ongoing social relations. And the value of land was similarly figured in relation to the land’s place in the social system. But once land and labor became part of the market, they began to have a "price" and it was not long before it was assumed (as we do today) that its "value" was merely its "price" neither more nor less. There is of course a legacy of the old medieval ideas of "just price" rattling about in the background, and the socialists have their own take on this problem, but the ideology of free market capitalism just keeps on going, particularly in the US.


To us, all value is merely "price", and price is determined by the market, and the market is just what willing buyers are willing to pay willing sellers, then value becomes nothing more than individual subjectivity. In short, all value is desire -- the more people desire something, the more value it has. There are no objective standards of (economic) value, and we have indirectly come to think, no objective standards for other values either. ‘Different strokes for different folks"

Furthermore, the matter is even more complicated. Because if you have general purpose money [that is, money which is usable for all economic transactions] then everything become convertible to anything else. Money is the universal general purpose solvent — everything (or almost everything] "has its price", as we say.  (General purpose money is money which is used as a means of exchange, a standard of value, and a means of differed payments)


Actually the complexity of Western economic life is the complexity of our technology and system of production, The system of allocation is actually very simple, being based solely on the principle of market driven prices, In many non—literate societies, the system of production may be simple, but the system of allocation quite complex.

There are two major subsystems in economic life: the system of production, and the system of allocation and distribution. It is easily confused in the West, because allocation and production are linked by the fact that both the goods themselves, as well as the principles of production, enter the market.

Now the basic problem of economic anthropology is to study the way in which the factors of production and allocation can be institutionalized in the relative absence of a supply demand market.

An extremely brilliant economic historian by the name of K. Polanyi has identified three "principles of allocation," These are market exchange, reciprocity, and redistribution.


1. Market Exchange

This is exchange based on the principle of the exchange of goods at prices fixed by the so-called law of supply and demand. Now supply means the availability of any good or service at any given price, and demand means the demand at any given price. In theory the demand curve and the supply curve will meet at some point -- the so called equilibrium price. But this is seldom ever realized in practice.

Market exchange in the capitalist West presupposes on a system of contracts between comparative strangers, and a state apparatus and legal system to enforce them. We must note that supply and demand are present in most exchange situations, but in only the market economy is supply and demand the basis of the system for the allocation of prices.


2. Redistribution

This is a system in which goods move toward some administrative center and then are reallocated by the authorities at the center. An example of this principle are modern tax institutions. which function indirectly to redistribute the wealth in the society,


In Bible considerable mention of collective grain stores under the headship of the king. Apparently large quantities of grain moved toward an administrative head under the king, and then were redistributed out again.



3. Reciprocity

Reciprocity is the principle of the reciprocal gift. Marcel Mauss, a brilliant French sociologist (in his Essai sur le Don), has shown that there are really no completely "free" gifts, but rather the receipt of a gift involves some obligation to repay. This is the "rule of reciprocity": a gift given must be repaid (however variable the cultural terms of repayment may be). There is also a "sentiment of reciprocity" which in general is probably universal, which is that it feels good to give and to receive in some emotional sense.

Christmas is one great American institution of reciprocity. Basic rule of Christmas: equal status means equal gifts, unequal status -- unequal gifts. Two brothers supposed to exchange roughly the same value -- may give each other a necktie, which makes as much sense as doing each others washing, but the purpose is not just economic but to solidify a bond. If one cousin breaks the rule and gives the other 100 dollar gift, other cousin feels that this is really aggression, and that he has been up staged. Reciprocity is certainly common in some subcultures in American society (e.g. political favors, reciprocity in organized crime) but hardly holds the economy together -- you could eliminate it without major catastrophe.

We can distinguish between specific reciprocity and generalized reciprocity. In specific reciprocity there is clear obligation to directly repay the person from whom the gift was received, and people more or less keep track of who owes whom. In generalized reciprocity the assumption is that the gift will eventually be repaid by someone, sometime, but the details are not specific – a bit like the Buddhist idea of karma, if you will.

Good example here: drinking behavior. Depending on the subcultural context and variability in small groups of friends, if you buy someone a drink in a bar( or are bought one) there may be a specific obligation to repay on that occasion, or there may be an assumption that eventually the favor will be returned, perhaps at some future time. In Australia (in my experience) there is a mixture of generalized and specific reciprocity at play among mates drinking together. If you find yourself in a "school" --as in school of fish – of mates in a bar, everybody has to buy a round. If you have been bought a drink you cannot ( or should not) leave until you have bought a round. In a large school I soon discovered that the trick was to get your "shout" in early. By waiting to the end to buy your round you would spend less money, but probably end up on the floor.

Most actual economies display more than one of the above principles, In America, the market is dominant, but there is some redistribution (in the form of government taxation) and reciprocity in the form of gift giving, but is peripheral.

In other societies, while the market may be present it is peripheral, while some other principle is central in the integration of the economy.


The Trobriand Economy

Trobriand economy well recorded system, by the work of both Malinowski and Weiner, and others. All of the principles of allocation are present, but reciprocity is central.


Domestic Labor, Domestic Consumption

A Trobriand household, primary unit of subsistence production, is also the setting for everyday subsistence consumption. (In most non literate societies – indeed even among the ancient Greeks-the household was the primary economic unit). {The origin of the word economy refers to the Greek oikos or household

The division of functions within the household is strictly defined. The woman has to cook the simple food and does not require much preparation. The main meal is taken at sunset, and consists of yams, taro, or other tubers, roasted in the open fire—or, less frequently, boiled in a small pot or baked in the ground— with the occasional addition of fish or meat. Next morning the remains are eaten cold, and sometimes, though not regularly, fruit, shellfish, or some other light snack may be taken at midday.


One important point about the planting of gardens is that people plant more yams than they can possibly use themselves, and overall the Trobrianders end up letting a fair portion of their total yam production rot (although some of the surplus is fed to pigs). Most of the yams are used in elaborate patterns of exchange, which is at the foundation of the Trobriand economy. It is interesting that when a man plants a garden he distinguishes between an subsistence garden a yams produced for domestic consumption) and an exchange garden (yams intended for exchange). In fact, a man who plants and tends an exchange garden does not really own the yams They belong to the persons for whom they are intended.

(Important note here: men use magic exclusively in their exchange gardens. This is important in the light of Malinowski’s theories about magic. The Trobrianders are expert gardeners, and there is little uncertainty about being able to produce enough to satisfy subsistence needs. But there is uncertainty in the extent and quality of one’s exchange obligations – and this is where magic is needed)


It is necessary to identify six institutions identified by the Trobrianders:

1. Wasi

A kind of "fish and chips reciprocity" in which fishing villages exchange fish with villages in the interior. The exchange is done on the basis of a system of standing partnerships with a fixed rate of exchange, At harvest time a man from an interior village comes down and sets quantities of yams in front of his partner’s house, This is an indemnification and the partner is obligate to return an equivalent amount of fish, The fishermen bring in a haul of fish which is then taken directly by the inland people. When a large haul of fish arrives in an inland village it is distributed by an institution called sagali. The number of bundles of fish is strictly equivalent - the number of bundles of yams but the number of yams and fish may vary with the supply, These exchanges cannot be made with just anyone but only ones trading partner, These partnerships have a religious sanction,


Wasi creates a debt structure among the villages, but this is a system of indemnification rather than credit, If one is faced with a supply which is unusually large, this is expressed not in terms of fluctuations in the "price" (there really is no "price" in this at all) but rather in pressures on the trading partner to take more.



2. Kula

While wasi is an exchange of necessities for subsistence, Kula is an exchange of treasure items only, there is no point in keeping these treasures, but the moral value only resides in getting them so as to give them away again. Two major kinds of valuables (or vaygua) : large white arms shells, and shell necklaces. These travel in opposite directions in the ring.

The Trobriand Islands form part of a larger Archipelago off the SE Coast of New Guinea. While the cultures of these islands have mutually influenced each other by diffusion, the customs and languages of each group are quite different. Yet they are united into a giant ring of ceremonial exchange several hundred miles across, so that each "tribal" group is a unit within the whole circle.

What they exchange around the ring are two kinds of ceremonial valuables also classed by Trobrianders as vaygu’a. Each kind is exchanged around the ring of islands in a different direction. Soulava, long necklaces of shell discs, move clockwise around the circle. Mwali, white armshells travel counterclockwise.

It is hard for Americans to understand what makes man engage in such exchanges, The answer lies in what Veblin called conspicuous consumption, As the treasures circulate , value attaches to them in terms of who owned them, and value is infused to the valuable in terms of its history.

Every man has seldom less than five or six kula partners, and a chief may have thirty or forty. The trick is to get your partners to give you more valuables than they give their other partners. This is done partially by giving second grade treasures likes boars tusks or dogs teeth, which further indemnify the other,

The closest analogy in our culture is stamp trading or baseball card collecting, or collecting and trading memorabilia from famous movie stars, etc. However, this often works on the market principle where kula works on the principle of reciprocity, Kula is not economic in the sense of providing livelihood but it does indicate that people often trade merely for the prestige of doing so.

Why don’t people cheat, you may ask? Well, the question itself tells us more about our culture and its assumptions . We might well ask "Why do we pay our poker debts?" The answer is clearly because we want to continue to play the game, and the game is usually more important that the money.


3. Gimwali

Accompanying the kula expeditions, but not limited to them is another form of exchange, called Gimwali, This is the moneyless exchange on treasure goods in terms of a market principle, Just as the acceptable behavior in kula is ceremony and decorum, so the acceptable behavior in Gimwali is higgling and haggling, A man will never have Gimwali with his kula partner but he may have gimwali with the kula partners of other men on the expedition. Gimwali also refers to the everyday barter of yams, fish, manufactured articles such as pots, spatulas. knives, etc.

4.  Pokala

Pokala is an asymmetrical presentation to a status superior. There are a number of different kinds of transactions which fall into the category: presentations from junior members of a subclan or clan to senior members, or to other high status persons. The obligation to return on the person of superior status is protection, the prospect of future status, prospect of future material reward.

One kind of Pokala is a "tribute" which a man gives to the headman of the village. The headman then redistributes it in terms of sagali.


5. Sakali

This is a huge feast in which a man returns the payment given him in pokala or urigubu, This is a redistributive institution.

A sagali is a distribution of food in connection with some ceremonial or special occasion—a mortuary feast , a commemorative feast, a competitive enterprise, or the like. Prestige in the system is achieved, expressed, and validated by being able to give away large quantities of food, to sponsor a feast, a war (formerly) a cricket match, a work project etc. Thus an important leader of a village or district gives away in sagali much of what he receives.

The most spectacular distributions of food and valuables apparently come in the mortuary distributions after a death. Here, women play a dramatic and central role, even though Malinowski published no detailed information on women’s exchange systems Only with Weiner’s research in the Trobriands in the early 1970’s did it become apparent that the men’s world of high finance and exchange is complemented by and intertwined with a system where women publicly exchange symbolically female valuables and compete for high stakes of prestige.

When a person from a woman’s own subclan dies, she and her fellow subclan women give away vast quantities of women’s skirts and especially of banana-leaf bundles (as many as 15,000 of them) at a special sagali mortuary distributions, one of long series mortuary distributions. "In this ceremony women are the major actresses on-stage in the. center of the hamlet playing a role every bit astough kind aggressive and competitive as a - - - man" (Weiner 1974).

A woman also plays a central part in the distribution after her father death, and o lesser part after the death of another person in her father’s subclan. We have seen how a woman acquires skirts and bundles from her husband and from her husband’s kinswomen to whom she has given baskets of yams. She also acquires wealth to finance lavish mortuary distributions by strategically investing yams she and her husband have received as harvest presentations from her male subclan relatives, and by making salable craft goods

6. Urigubu

This is an annual contribution of food to the sister’s husband As much a three quarters of a yam crop is given as urigubu or Pokala, hence a man is dependent for much of his prestige food on his wife’s brother, Actually, the gifts might be seen as going to their sister, although that is a question of perspective.

The presentation of yams to another household -- which stores them in a special building for display purposes—is very different from cooking them for food. Cooking yams for food, in Trobriand terms, is not a realization of a real productive effort, but something one avoids if at all possible.

The reciprocation of this at least part is that skirts and bundles, distributed at a mortuary feast flow from the sister (who gives them to her husband) and then back to the wife’s brother.

Another aspect of urigubu is that fact that since only chiefs can marry polygynously , they get more yams than others, but eventually have to convert part of it to pigs and then give a big sagali..

If a chief received wither urigubu or pokala, he returned often minor kula valuables. This functioned in a sense of keeping the kula valuables from being held by one man.


The class saw the film: "The Trobrianders" made by Annette Weiner