Chapter 6

Exchange and EconomicSystems

Contents

ReciprocityGeneralized ReciprocityBalanced ReciprocityNegative ReciprocityReciprocity and Social Distance

Redistribution

Market ExchangeMoneyMarketplaces

The exchange of products is part of theeconomic system. Market sale, illustrated here in Guatemala, is one of several formsof exchange.

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Although generalized reciprocity is an exchangeform that occurs between some people in all societies,among many foragers it is the dominant mode. This !Kungman butchers a small animal, which he will share withothers in the camp.

he previous chapter covered the major typesof pre-industrial adaptations and discussedsome of the important ways adaptation af-

fects cultures. How people produce the food andother products they need and desire is part ofwhat is commonly called their economic system.Producing things, though, is usually only the firststep toward the final use (consumption) of theproduct. Commonly, products are exchanged be-tween individuals and groups between the timethey are produced and consumed. In fact, in someeconomic systems, things are produced explicitlyfor exchange, and once the value acquired fromthe exchange has been gained, the producer haslittle further interest in the product.

Depending on other aspects of their adaptationand overall culture, different societies organizethe exchange of products (goods) in differentways. Economic anthropologists, who specializein the comparative study of economic systems,often classify exchanges into three major modes,or types:

▲ Reciprocity, in which two individuals or groupspass goods back and forth, with the aim of (1)helping someone in need by sharing goods with him or her, (2) creating, maintaining, orstrengthening social relationships, or (3) obtain-ing goods for oneself.

▲ Redistribution, in which the members of anorganized group contribute goods or moneyinto a common pool or fund; a central author-ity usually has the privilege and responsibilityto make decisions about how the goods ormoney later will be reallocated among thegroup as a whole.

▲ Market, in which goods are sold for money,which in turn is used to purchase other goods,with the ultimate goal of acquiring more moneyand accumulating more goods.

Although most products change hands throughthe market mode in modern industrial capitalist

economies, enormous quantities of goods also aretransacted through reciprocity and redistribution.Examples of reciprocity are various gifts we giveand receive on holidays, birthdays, weddings,baby showers, and other culturally special occa-sions. If you are employed, every pay period youparticipate in redistribution, for federal, state, andcity governments collect a portion of your wage orsalary as taxes, which they expend on public pur-poses or transfer to other members of society. Al-though all these exchange forms exist in modernsocieties, not all pre-industrial cultures have allthree. Some kind of reciprocity occurs in allhuman populations. But redistribution implies the existence of a central authority to organize thecollection of products from the group and to makedecisions about how they will be reallocated. Redistribution, therefore, is an insignificant exchange mode in societies that lack strong lead-ers who make decisions on behalf of the group.The market mode of exchange requires money,private property, and certain other features thatare absent in many preindustrial populations.The concept review shows the three exchangeforms graphically.

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Reciprocity refers to the giving and taking of ob-jects without the use of money or other media ofexchange. It can take the form of sharing, hospital-ity, gift giving, or barter. To cover these varieties,anthropologists identify three forms of reciprocity.

Generalized Reciprocity

The defining feature of generalized reciprocity isthat those who give do not expect the recipient tomake a return at any definite time in the future.Generalized reciprocity occurs between individu-als who are (or are culturally expected to be) emo-tionally attached to one another and, therefore,have an obligation to help one another on the basisof relative need. In North America, parents whoprovide their children with shelter, food, vehicles,college educations, and interest-free loans arepracticing generalized reciprocity. Giving withoutexpectation of quick and equivalent return alsoshould occur between parties to certain otherkinds of social relations, such as wives and hus-bands, siblings, and sometimes close friends.

ReciprocityThis exchange mode occurs in all human popula-

tions. Among some peoples it is the dominant formof exchange, meaning that more goods are passedaround using this form than any other. For example,most foragers expect band mates to share food andbe generous with their possessions. (This fits withthe fact that most members of a small hunting andgathering band are relatives of some kind.) Amongthe !Kung (see Chapter 5), the band or camp itself isa social group within which food sharing is cultur-ally expected, and those who are stingy with pos-sessions or who fail to share food with band matesare subjected to ridicule (or worse). Broadly speak-ing, generalized reciprocity is the dominant modeof exchange in very small human groups in whichall or most members are relatives.

Balanced Reciprocity

In balanced reciprocity, products are transferred to someone and the donor expects a return in prod-ucts of roughly equal value (i.e., the exchangesshould “balance”). The return may be expectedimmediately, or whenever the donor demands it, orby some specified time in the future. With general-ized reciprocity, the giver continues to provide

Concept Review Three Forms of Exchange in Economic Systems

collection of products and valu-ables by a central authority, fol-lowed by distribution according tosome normative or legal principle

free exchange of products (P1, P2)or services (S1, S2) for money($) atprices determined by impersonalforces of supply and demand

MarketRedistribution

back and forth exchange of prod-ucts, gifts, and objects, symbolicof relationships as well as satisfy-ing material needs and wants

Reciprocity

P1,S1

P2,S2$

$

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material assistance even though the receiver isunable to return anything for a long time. Withbalanced reciprocity, the giver refuses to continueto transfer objects to the receiver if the latter doesnot reciprocate within the appropriate time period.Donors may merely be angry if the receivers fail toreciprocate, may complain or gossip to others, maytry to force reciprocation, or may suspend all rela-tions until objects of equal value are returned.

Although the value of the objects exchanged issupposed to be equal (at least roughly), balancedreciprocity is characterized by the absence of bar-gaining between the parties. In some pre-industrialeconomies, the exchange of goods without havingto negotiate for each transaction (How much of Awill you give me for my B?) frequently is organizedby a special relationship between two individualsknown as a trade partnership. Individuals of onetribe or village pair off with specific individuals(their “partners”) from other regions with whomthey establish long-lasting trade relationships.

For instance, in the Trobriand Islands off theeastern tip of the island of New Guinea there was aform of balanced reciprocity called wasi. Residentsof coastal villages traded fish for yams and othergarden crops produced in the mountainous inte-

rior. The wasi exchange was formalized: a coastalvillage paired off with an interior village, andwithin each village individuals formed trade part-nerships. The rates at which garden produce wasexchanged for fish were established by custom, sothere was no haggling at any particular transaction.

In wasi, each trade partner received foods notreadily available locally, so parties to the transac-tion gained a material benefit. In many other cases,balanced reciprocity takes the form of mutual exchanges of gifts or invitations for social andpolitical purposes. That is, the exchange is notmotivated primarily by the desire of the parties forthe objects (unlike wasi) but by their desire to es-tablish and maintain good relations with one an-other. (On your friend’s birthday, instead of givingher a CD in exchange for a gift of about equalvalue on your own birthday, you both could savethe cost of wrapping paper and cards by buyingthe objects for yourselves. But then the social valueof the gift—expressing and strengthening yourfriendly relationship—would not be attained.)

We all are familiar with the anger ordisappointment felt at not having our gifts orinvitations reciprocated. Many of us also knowthe embarrassment of being unable to return a

Balanced reciprocity often isused to create and sustain relation-ships between groups and individuals.Reciprocal invitations to feasts is onecommon form of balanced reciprocity, as illustrated by this killing of a pig on the island of Tanna in the nation of Vanuatu.

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gift of equal value to a gift we have received. Wealso are familiar with the use of gift giving forsocial and political goals. We know that friendsmake gifts to one another because giving a gift tosomeone re-creates and strengthens feelings ofgoodwill. Gifts are a material symbol of goodrelations. They sustain relations of friendship andmutual aid between individuals and groups. Thisis why, cross-culturally, gift-giving ceremoniesfrequently are part of diplomacy and peacemak-ing between formerly hostile groups; the giftssymbolize the beginning of a new period ofpeaceful co-existence.

In our personal lives, too, the back-and-forthflow of tangible objects often symbolizes warmpersonal feelings about a relationship—perhapsbetter than words, since “talk is cheap.” The fail-ure to present objects of appropriate value on cer-tain occasions also symbolizes one’s personalfeelings, although in a less “warm” way.

But gifts not only express with material sym-bols existing social relations; they can also be usedto create social bonds that are useful to the giver,and to obligate people from whom the giverwants something. Gift giving makes someoneindebted to you, and therefore can be used to cre-ate an obligation to return a favor. Political lobby-ists and sales representatives know this use ofbalanced reciprocity.

For a pre-industrial example of how balancedreciprocity helps to create and sustain politicalalliances, we turn to the Maring of highland PapuaNew Guinea. These people live by a combinationof shifting cultivation, pig keeping, and hunting.Each Maring settlement is engaged in periodicwarfare with some of its neighbors. Unless a settle-ment is unusually large, its members form a politi-cal alliance with one or more nearby settlements.When warfare occurs, the warriors of each settle-ment rely on their allies for military support and,in the case of defeat, for refuge. Most Maring set-tlements must establish and sustain military al-liances if they are not to be defeated in warfare.

An important expression of continued goodwillbetween allied groups is periodic invitations tofeasts and exchanges of wealth objects and other

valuables. Every few years, whenever they accu-mulate sufficient pigs, the members of a settlementinvite their allies to an enormous feast, appropri-ately called a pig feast. At the pig feast, which isattended by hundreds of people, allies bring largequantities of wealth objects to exchange and payoff debts; they consume enormous quantities ofpork provided by their hosts; they are on the look-out for potential spouses and sexual partners; andthey aid the host community in the ceremonialdancing that the Maring believe is ritually neces-sary for success in the fighting that will soon occur.The host group uses the occasion of their pig feastto gauge the amount of military support they canexpect from their allies: the more people who at-tend the feast, the more warriors the host settle-ment will be able to put on the battleground. Later,the guests will have accumulated enough pigs toreciprocate by hosting a pig feast for their allies,who come with wealth objects and pledge theirmilitary support by helping the host group in theirceremonial dancing.

The Maring pig feast, with its reciprocal ex-changes between the hosts and guests from alliedgroups, is an important event in maintaining goodrelations between allies. A group sponsors a pigfeast to compensate their allies for their previousmilitary aid as well as to reciprocate previous pigfeasts they have attended. The failure to organize a pig feast large enough to compensate one’s alliescan result in the weakening and sometimes eventermination of an alliance. Thus, balanced invita-tions to feasts are critical to the military success andcontinued survival of a Maring community.

Negative Reciprocity

The distinguishing characteristic of the third kind ofreciprocity—known as negative reciprocity—is thatboth parties attempt to gain all they can from theexchange while giving up as little as possible. Nega-tive reciprocity usually is motivated largely by thedesire to obtain material goods at minimal cost.

Insofar as it is motivated by the desire for mate-rial products, negative reciprocity is like marketexchange; it is different mainly because no money

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changes hands between the participants. In econo-mies that use money to purchase goods and ser-vices, market exchange partly or largely replacesnegative reciprocity.

But in economies with no money, negative reci-procity is an important way for individuals andgroups to acquire things that they do not producethemselves. Few populations are entirely self-sufficient: Some foods they like to eat do not occurin their habitats; some materials they need to maketools are not found locally; or they lack the skill toproduce some of the objects they use. To acquirethese products, people produce other products toexchange for “imports.”

Negative reciprocity in the pre-industrial worldoften takes the form of barter. In the interior high-lands of Papua New Guinea, many indigenouspeoples manufactured money or wealth objects bystringing shells together into long chains or belts.Because these shells did not occur naturally in theinterior, they were traded from people to peopleuntil they reached their final destination. Salt alsowas a trade object because it occurred in only afew areas.

In western North America, the obsidian (vol-canic glass) used to make stone tools occurred inonly a few areas; other peoples acquired it throughtrade. In some cases these trade routes stretchedfor hundreds of miles, with the obsidian passingthrough the hands of numerous middlemen beforefinally being made into a tool.

Reciprocity and Social Distance

Each of the three types of reciprocity tends to beassociated with certain kinds of social relation-ships. As Marshall Sahlins, who first distinguishedthe three varieties, noted, the kind of reciprocitythat occurs between individuals or groups de-pends on the social distance between them. Bysocial distance is meant the degree to which culturalnorms specify they should be intimate with oremotionally attached to one another.

This is seen clearly in North American culturalnorms of reciprocity. We expect an individual topractice generalized reciprocity with his or her

children and perhaps with siblings and elderlyparents; in fact, we are likely to judge people asuncaring or selfish if they do not. But if a middle-income person repeatedly lends money to a cousinor puts a niece through college, we are likely toregard him or her as either unusually generous ora bit foolish. He or she has extended generalizedreciprocity beyond the range of relatives to whomwe culturally consider it appropriate.

A normative association between exchangeform and social relationship applies to markettransactions, which, as we have seen, have largelyreplaced negative reciprocity in modern societies.In market exchange, individuals are supposed tobe “looking out for their own private interests,”“trying to get the most for their money,” and soforth. We regard this as fine—in fact, as smartshopping—with transactions between strangers ina department store or car lot. But when the sellerand buyer are friends or relatives, it is difficult forthem to disentangle their economic transactionfrom their personal feelings for each other. Kinshipand friendship bonds cannot easily be mixed withmarket exchange, because kinship and friendshipare supposed to have an element of selflessness,whereas buying and selling are assumed to haveselfish motives. Therefore, although I may buy myfriend’s used car, I feel uneasy about the transac-tion: What will I do if the car is a lemon?

Further, as our social relations with other peoplechange, so does the kind of reciprocity we practicewith them. Most adults have experienced one wayin which this occurs: as we grow up, our increasingindependence from our parents is manifested by achange in the way we exchange goods with them.We go from being the recipients of generalizedreciprocity to more of a balanced reciprocity as webecome more independent, and finally—at leastuntil the advent of Social Security—to being theprovider of generalized reciprocity.

Finally, changing one form of reciprocity intoanother can be used as a way of changing the na-ture of a social relationship. Because the form ofreciprocity practiced between two individuals isrelated to the degree of social distance betweenthem, the social distance can be decreased or in-

Redistribution 101

creased by one party beginning to initiate a newform of exchange. Or someone can signal his orher wish to draw another person closer (reduce thesocial distance between them) by tentatively initi-ating a relationship of balanced reciprocity. Reci-procity has social uses in our culture, just as it hasamong pre-industrial peoples such as the Maring.

Thus, I can let you know of my desire to becomeyour friend by giving you an unexpected gift orinvitation to dinner. In turn, you tell me whetheryou share my feelings by whether you return mygift on an appropriate occasion, repeatedly findreasons to refuse my dinner invitation, or come todinner several times at my place without reciprocat-ing. If we both use this “strategy of reciprocity,”neither of us needs to be put in an embarrassingposition of verbalizing our feelings. I signal mywish by my initial gift or invitation, and you declineor accept my offer of friendship by your response.

In sum, forms of reciprocity tend to be associ-ated with types of social relations, so the reciproc-ity practiced between people changes as theirrelationship changes. We can use reciprocity toachieve social goals: reciprocating or refusing to reciprocate gifts or invitations sends messagesthat are too embarrassing to say outright. Finally,reciprocity can serve as a way to shorten orlengthen social distance.

The major difference between reciprocity andredistribution—the second major mode ofexchange—is the way the transfer of goods isorganized. With reciprocity, goods pass back andforth between two participants, with no thirdparty to act as intermediary. With redistribution,goods or money collected from many individualsor groups are taken to a central place or put into acommon pool or fund. Some overarching author-ity (empowered to make decisions on behalf ofthose who contributed) later draws from this poolor fund in returning public goods and servicesthat allegedly benefit the group as a whole.

Redistribution

In modern nations, redistribution takes the formof taxes on wages, profits, retail sales, property, andother income and assets. To understand redistribu-tion it is instructive to review how our tax system issupposed to operate. Federal tax revenues, for ex-ample, are used for two main purposes. First, theyare expended in such a way as to benefit the wholecountry. The citizens receive law enforcement, na-tional defense, infrastructure (e.g., dams, roads,airports), parks, regulation of polluting industries,and so forth. Resources collected from the citizenryare expended on public goods and services. Sec-ond, taxes are used to provide assistance for indi-viduals in need. These are “transfer payments” inthe form of Aid to Families with Dependent Chil-dren, Social Security, Medicaid and Medicare, dis-aster relief, and so forth. Such public expendituresare based on moral norms and cultural valuesabout social justice, equal opportunity, and helpingthose in need. Redistribution systems around theworld are used for similar purposes: to providepublic goods and services and to provide assistanceto individuals and groups in need.

But there is another side to most systems of re-distribution, a side with which we also are familiar.First, there often is conflict over who should pro-vide the public resources, how the resources shouldbe expended, and how much of a share of themshould be given to those who collect and distributethem. One common social and political problemwith redistribution is disagreement: when manyindividuals have contributed to the public pool orfund, not everyone is likely to agree on how the“public resources” should be spent for the “publicgood.” Much of the conflict between political par-ties in modern industrial democracies is rooted indisagreements over who should be taxed and howmuch, and over how government revenues shouldbe spent. Parties and various interest groups are, inmany cases, quarreling over redistribution: whopays? who gets what? and how much?

Second, those who make important decisionsabout redistribution frequently use public resourcesfor their own pleasures or ambitions, rather than tobenefit the entire population. In modern demo-cratic nations, for instance, officeholders make

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deals to allocate federal tax dollars to finance high-way construction in their districts. Commute timesmay be lowered in the short term, but the real pur-pose is to provide jobs for their constituencies or to serve special interest groups who help withtheir re-election. More generally, political consid-erations frequently enter into decisionmakingabout redistribution.

A common form of redistribution in the pre-industrial world is known as tribute. The subjectsof a chief or other title-holder contribute products(usually including food) into a common pool underthe control of the central authority. Often the trib-ute is culturally viewed as a material symbol show-ing that the subjects continue to acknowledge thechief’s sacred authority. Some of the accumulatedproducts are consumed by the central authoritiesand their relatives, some are distributed to support

the work of crafts specialists (e.g., potters), andsome are redistributed to the whole population at public feasts, celebrations, and ceremonies.

Examples of redistribution systems using tributepayments exist on many of the islands of Polynesiaand Micronesia, in the Pacific. On many islands, theentire population was divided traditionally into tworanks or classes, noble and commoner (see Chapter10 for more about rank and class). Members of thenobility did little agricultural or other manual work,but instead managed the political system and orga-nized religious ceremonies. Commoners producedthe food and other forms of tribute, which fed thenobility and their families and which supportedother kinds of specialists. On some islands, the trib-ute rendered by commoners was used mainly forpublic purposes, such as feeding people whoworked on trails and public buildings, providingrelief from temporary food shortages, and publiclycelebrating special events. On other islands, thenobles were sufficiently powerful to use the tributeto make themselves materially wealthy: they livedin the best houses, slept on the softest woven mats,wore special clothing, had numerous servants, andate only the finest foods.

To say that objects or services are exchanged “on the market” means that they are bought and sold at a price measured in money. Person A possessesgoods that person B wants to acquire; B acquires the goods by giving A some quantity of money thatboth A and B agree on; A then uses the money toacquire goods from other people. Market exchangethus requires (1) some object used as a medium ofexchange, that is, money; (2) a rate at which goodsexchange for money, that is, prices; and (3) parties toexchanges who have alternative buyers or sellersand are free to make the best deal they can, that is,prices determined by supply and demand. On thethird point, markets imply the absence of physicalcoercion: if prices are set by supply and demand,neither party to a transaction can be forced to buy

Market Exchange

The market form of exchange requires money andprices of goods and services determined by supply anddemand rather than by centralized authority. People aretherefore “free to shop.”

Market Exchange 103

or sell from the other party. This is what we meanby a “free” market—no third party (a government,for example) sets prices or forces anyone to buy orsell from anyone else, and no single supplier of aproduct controls enough of the market to force peo-ple to buy from him, her, or it (in the case of firms).

Because markets (as we define them in this text)require the presence of money, we begin by dis-cussing some of the diversity in money objects andmoney uses.

Money

Money consists of objects that serve as media ofexchange in a wide range of transactions of goods,services, or both. This facilitation of exchange isthe main function of money. If an economy usesmoney, individual A can acquire something fromindividual B without having to return an objectdesired by B; money can be given instead, and Bcan then use the money to buy an object or a ser-vice of her or his choice.

Some other characteristics of money are derivedfrom its function as a medium of exchange. Forexample, money serves as a standard of value: the value of the goods and services that can beexchanged for money can be compared with oneanother because money serves as a common mea-sure of “how much things are worth.” Money alsois a store of value: because it can be used to pur-chase various goods, it represents wealth in aportable form.

Notice that if one individual, A, sells a product(including labor) to B in return for money, then Ahas (as we say) “made money” off the sale. Individ-ual A may think he or she has made a good deal,but B may turn around and sell the product tosomeone else, C, in return for more money than waspaid to A for it. This is the simplest form of what wecall profit, and profitmaking is greatly facilitated bythe use of money. Notice also that, in our example,individual B has not produced anything tangible,but has merely sold a product to C that was boughtfrom A, the producer. If B does this often enough, solong as C wants the product and is willing to pay Bmore than B paid A for it, then B can grow very

wealthy, for money serves as a store of wealth.Wealth accumulation, therefore, is facilitated by mar-kets and money, although it also exists in someeconomies with neither markets nor money.

Not just any object is suitable to be used asmoney. Money objects must be durable, or the valuethey store deteriorates over time. The supply of themoney object must be controllable, because if peoplecan get all they want of it, its value inflates and itbecomes worthless as an exchange medium. Themonetary supply can be controlled by a govern-ment, which manufactures the only “legal tender” inthe society; or the supply can be controlled by usingonly imported or rare objects as money. Importedshells are especially common in pre-industrialeconomies, partly because of their durability. Thesupply also can be controlled by having the moneyrequire a lot of labor to manufacture: money remainsscarce because it takes time to make it.

An enormous variety of objects serve as moneyin one or another region of the world. We alreadyare familiar with currencies of modern nations,issued by governments that control the moneysupply. In pre-industrial economies, the kinds ofobjects that take on the characteristics of moneyare surprisingly diverse. In Africa, for example, thefollowing objects served as money in one or an-other part of the continent: iron, salt, beads, cowryshells, cloth, gin, gold dust, metal rods, brassbracelets, and livestock. In Melanesia the list ofmoney objects is also diverse: assorted shells (oftenmodified in some way and sewn into fibers toform long belts), salt, the red feathers of a certainbird (also woven into belts), and pigs.

There are nonmonetary economies in which allexchanges are based on one of the three forms ofreciprocity. But even in economies that do have anexchange medium, the range of goods that can beacquired with money varies greatly. In some therange is broad: many kinds of resources and goodscan be bought and sold, including labor, land, tools,and sometimes even people (slaves). In these sys-tems, money serves as a generalized medium of ex-change; that is, it can be used to acquire many kindsof goods and services, including land and labor.Anthropologists call this multipurpose money.

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Money is multipurpose in modern North Amer-ica. In principle, money can buy privately ownednatural resources, labor, and goods. Even moneyitself can be sold for a price (interest). Some pre-industrial peoples also have multipurpose money.For example, the Kapauku people of Irian Jaya,which is now part of Indonesia, used importedcowrie shells and two types of necklaces as cur-rency. Kapauku money could be used to purchasealmost anything, including land, labor, crops, pigs,tools, and medical services. Leopold Pospisil(1963), the ethnographer, writes:

Among the Kapauku an overwhelming amount ofgoods is exchanged through sales. . . . In their sellingand buying most of the Kapauku are strictly profitmotivated. Often they invest money in pigs, chick-ens, large woti (bailer shell), inner bark, or animalteeth, for the purpose of breeding the animals forprofit, speculating on sales of the bailer shell, or formaking artifacts for sale. . . . Besides the necessity of having to buy with money such commodities as land, manufactured products, labor, and servicessuch as surgery, curing, and midwifery, the Kapau-ku have to pay for favors and acts for which even inour capitalistic society there is no charge. For exam-ple, one pays a bride price for a wife, the services ofa foster father have to be paid for by the grown boy,a grief expressed by strangers or distantly relatedpeople over the death of a close relative has to berecompensed in money, and almost all crimes can be settled through a proper transfer of shell cur-rency (21–22).

Kapauku sales occurred on a daily basis, much aswe make purchases of one or another item regu-larly. Periodically, however, Kapauku politicalleaders (called big men) organized enormous cere-monies attended by hundreds of people who cameto sell and buy and to make and pay off loans.

The Kapauku represent an extreme in the rangeof uses to which money can be put, as well as intheir intense desire to accumulate wealth. Moreoften we find the range of money uses in pre-industrial economies to be narrow: only a fewcategories of goods are purchased with money. Forexample, it may be possible to buy food, clothing,and a few other goods, but land is not available forsale at any price and labor is almost never sold.Here, money is called limited-purpose money.

A famous example of limited-purpose moneycomes from among the Tiv of Nigeria, studied byPaul Bohannan. Tiv money consisted of metal rods,but the rods could not be used as an exchangemedium for all other goods. For one thing, landcould not be sold, and labor was exchanged amongrelatives on the principle of generalized reciprocity.For another thing, among these people goods circu-lated in different exchange spheres. Certain kinds ofgoods could only be transacted for certain otherkinds of goods. Goods were culturally classified intocategories, within which they were freely exchange-able, but between which exchange was difficult.

The “subsistence sphere” category includedcultivated crops, chickens and goats, and sometools and household goods. Goods within thissphere were exchangeable for one another bymeans of barter. The “prestige sphere” includedslaves, cattle, a special kind of white cloth, andmetal rods. Within the prestige sphere, metal rodsfunctioned as an exchange medium: one could sellcattle for metal rods and then use the rods to ac-quire white cloth or slaves, for example, but themonetary function of metal rods normally waslimited to the prestige sphere.

However, it was possible to acquire subsistencegoods in exchange for metal rods; but these trans-actions were rare, for two reasons. First, few peo-ple were willing to trade their metal rods forsubsistence goods. This is because goods that cir-culated in the prestige sphere had much greatercultural value to Tiv than subsistence goods. Sec-ond, metal rods were worth an enormous amountof subsistence goods. Yet the metal rods had nodenominations; that is, unlike dollars and cents,they were not divisible into fractions. So for a Tivto try to exchange one metal rod for subsistencegoods would be like an American taking a thou-sand-dollar bill into a grocery store to buy food,with the clerk unable to make change. As a resultof these two factors, Tiv metal rods were largelylimited-purpose money.

The Tiv example serves to remind us that justbecause we find it convenient to call some object“money” does not mean that it has all the charac-teristics of our own currency. Indeed, some anthro-

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pologists believe that money objects are lacking inpre-industrial economies and that money is aWestern concept that we should not attempt toapply to other cultures. This problem is mainlysemantic, however: if we define money simply as a medium of exchange, it is found in many othereconomies. To avoid confusion and false impres-sions, we do need always to specify its uses and its cultural meaning to the local people.

As we discuss next, we also need to be carefulwith the use of the term market, because many non-Western markets do not work the same way as ours.

Marketplaces

Those of us who live in modern, industrializedeconomies are accustomed to purchasing most ofwhat we need and want in restaurants, car lots,supermarkets, and shopping malls. That is, we relyon the market to satisfy our desires—we earnmoney from our jobs and spend the money ongoods and services. In the process, we depend on other organizations (companies) to produceand sell the products we wish to buy.

Even in the modern world, hundreds of mil-lions of rural peasants are not nearly so dependent

on market forces. Rather than selling their labor to others in return for a wage, they work the landand fish the waters to supply food for their fami-lies directly. Rather than producing goods thatthey turn around and sell at a price to others, theyconsume most of what they produce themselves.There are places in most peasant communitieswhere goods are bought and sold—there are mar-ketplaces. But people do not rely on marketplacesfor most of what they consume, nor do they spendmost of their working hours producing goods tosell at the marketplace.

Such peasant marketplaces are common in WestAfrica, southern and Southeast Asia, the Carib-bean, and Central and South America. Peasantvendors sell food, cloth and clothing, leather prod-ucts, livestock and other goods produced by theirfamilies. Traveling merchants (middlemen) bringcommodities imported from the developed worldor from elsewhere in the region to sell to local peo-ple at the marketplace.

Although much buying and selling occurs, peasant marketplaces are not the same as modernshopping malls or department stores. Several notable differences exist between peasant marketsand the markets with which people of urbanized,

In many countries, the stores atwhich market transactions occur areoften family enterprises, like this onein China.

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industrialized societies are familiar. First, the cate-gories of products sold at the marketplace are lim-ited, and in fact, most people produce most of theirown subsistence using family labor. Most peopledo not acquire their livelihood from selling theirlabor for a wage. Rather, they rely on the market-place for only certain categories of goods that theycannot produce for themselves efficiently. Mostpeople are not making their living by selling some-thing (objects, labor) on the market.

Second, producing and marketing goods formonetary profit are part-time activities for manyvendors. Many marketplaces are staffed mainly bypeasants, who sell small quantities of food, pot-tery, furniture, fibers, crafts, or other objects theyhave produced with family labor. Indeed, market-places frequently are periodic, meaning that theydo not open every day, but only for a day or two aweek. Peasant vendors sell their products on what-ever days the market is open in their region. Trav-eling merchants typically visit several markets indifferent regions in a single week, often buyingproducts for sale at one market and reselling themat a distant market a day or two later.

Third, peasant vendors usually sell productsthat they or their family members, rather thanhired laborers, produce. This means that the kinds

and quantities of goods offered for sale by anysingle vendor usually are small. Most market-places also feature products sold by people whospecialize in buying them wholesale and sellingthem retail. Such people are dependent on themarket—with all its insecurities and risks—fortheir livelihood. They therefore have developedvarious marketing strategies to reduce the risksthey face. We conclude this section by consideringsome of these strategies.

When we who live in a market economy visit amarketplace—a store or car lot, for instance—wenormally buy goods from strangers. We do not ex-pect any special treatment. We pay the same price aseveryone else. If we need credit, we expect to paythe market rate of interest. We expect sellers to belooking out for themselves, just as sellers expect usto be trying to get the most for our money. This char-acteristic of our market exchanges is referred to asthe “impersonality of the marketplace.” This imper-sonality is expressed nicely by the old saying that“one person’s money is as green as anyone else’s.”

Marketplace vendors in much of the pre-indus-trial world frequently develop more intimate andpersonal relations with their customers. In theCaribbean nation of Haiti, for example, the parties toa market exchange commonly establish long-lasting

In peasant marketplacessuch as this one in Guatemala, mostsellers produce or manufacture theirwares themselves, and most buyersdo not rely on purchased productsfor all their needs.

Summary 107

special relationships with one another. The marketintermediary (whom we know as a middleman,although most of them are women in Haiti) pur-chases food and other goods wholesale from severalfarmers for transport and retail sale at a market-place. She establishes a special relation, known aspratik, with many of her suppliers and customers.Pratik involves certain concessions an intermediarymakes. For instance, when she buys produce from afarmer, she may pay a little more than the marketrate or give the producer a loan against a futurecrop. A market vendor gives special treatment tosome of her best customers as well. When a pratikpartner approaches her stall, she quotes the goingprice for the product on that particular day; butwhen the transaction is consummated, the sellerthrows in a few extra items of produce.

According to Sidney Mintz, who studied Haitianmarketplaces, pratik relationships are beneficialbecause they increase the economic security of ven-dors, who sacrifice short-term gains for long-termreliability of suppliers and customers. Because theythemselves usually are poor and because competi-tion between them is severe, vendors seek to main-tain long-term relationships by granting better dealsto their pratik than the current market prices. Thisallows them to develop a steady clientele who re-turn to them again and again.

The same personalistic relations are reported fora marketplace in a Philippine town studied byWilliam Davis. Here, also, sellers attempt to reducetheir risks by gradually building up a steady, largeclientele of customers, rather than by squeezing allthe money they can from a single transaction. Eachvendor maintains “special customer” relationships(called suki) with numerous people who regularlybuy his wares. The customer receives credit, favor-able prices, extra quantities of goods at a givenprice, the best quality goods his suki partner has tooffer on a particular day, and certain services. Thevendors benefit as well: their suki customers areexpected not to patronize any other suppliers ofgoods they carry. This is a great advantage in cal-culating the minimum quantities of goods theywill be able to sell and, hence, helps to keep themfrom unintentionally stocking more of some cate-gories of goods than they can sell.

In both Haiti and the Philippines, the imperson-ality of the marketplace is modified by the forma-tion of personal ties between sellers and buyers.Both pratik and suki increase the security of mar-ketplace trade for vendors, their suppliers, andtheir customers.

Summary1. This chapter covers exchange, or the patterned ways

in which products are transferred between the timethey are produced and the time they are consumed.Economic anthropologists find it convenient to clas-sify the variety of exchanges that exist in humaneconomies into three major modes, or types: reci-procity, redistribution, and market.

2. Reciprocity is the giving and receiving of objectswithout the transfer of money. Generalized reciproc-ity usually occurs between parties who are culturallyobliged to assist one another in times of need, asamong relatives and sometimes close friends. Withbalanced reciprocity, a return of an object of equiva-lent value is expected. The goal of balanced reciproc-ity may be the acquisition of goods for their utility, asin the Trobriand wasi. More often it is motivated bythe desire to create or sustain good relations betweenindividuals (as in gift giving) or political alliancesbetween groups (as with the Maring pig feast). Nega-tive reciprocity is characterized by the desire of bothparties to acquire as many goods as possible whilegiving up as few as possible, as in barter.

3. The variety of reciprocity that is likely to character-ize transactions between individuals and groupsdepends on the normative degree of social distancebetween them. This implies that exchange relationsalter if social relationships change. Conversely, oneparty can initiate an attempt to alter a relationshipby an offer of a good, and the other party can signalacceptance or rejection by his or her response. There-fore, varying the type of reciprocity can be used todraw people closer together or to push them furtherapart. In effect, a reciprocal exchange of goods (andservices) can also serve as an exchange of messagesabout feelings and relationships.

4. In redistribution, the members of a group contributegoods or money into a pool or fund, and a centralauthority reallocates or uses them for public purposes.Taxes in modern nations and tribute in chiefdoms areexamples. Normatively, redistribution is supposed to

108 Chapter 6

provide resources to increase public welfare, either toprovide public goods or to support those in need. Infact, there is much conflict over collection and alloca-tion, and those officials who do the collecting andallocating frequently use their authority for privateambitions rather than public interest.

5. Market exchange involves the buying and selling ofgoods; it therefore requires money and prices deter-mined by supply and demand. Money makes theexchange of goods and services more convenientand also facilitates the making of profit and theaccumulation of wealth. Money functions as amedium of exchange, a standard of value, and astore of value. These functions mean that moneyobjects must be durable, and their supply must belimited or controlled in some way. The range of

goods and services that can be bought with moneyvaries between economies. Money types can becharacterized as multipurpose (like modern curren-cies) or limited-purpose (like Tiv metal rods).

6. The affluent citizens of most modern urbanized,industrialized countries make their living by sellingtheir labor on the market and purchasing commodi-ties at stores and other retail establishments. Ruralpeasants of many countries are not so reliant onmarkets, for they produce most of their food them-selves and shop at local marketplaces for only someof their needs and wants. In peasant marketplaces,most vendors are small-scale and part-time. In manyregions they develop special relationships with sell-ers to reduce their risks, as illustrated by pratik inHaiti and suki in the Philippines.

Key Termsreciprocityredistributionmarket

generalized reciprocitybalanced reciprocitynegative reciprocity

social distancetributemultipurpose money

limited-purpose money

Suggested ReadingsBelshaw, Cyril S. Traditional Exchange and Modern Markets. Englewood Cliffs, N.J.: Prentice-Hall, 1965.

A well written and brief introduction to exchange systems.

Davis, William G. Social Relations in a Philippine Market.Berkeley: University of California Press, 1973.

An empirical study of a marketplace in a Philippine town,emphasizing market relationships.

Douglas, Mary, and Baron Isherwood. The World ofGoods: Toward an Anthropology of Consumption. New York:W. W. Norton, 1979.

An examination of cultural theories of consumption.

Neale, Walter C. Monies in Societies. San Francisco: Chan-dler and Sharp, 1976.

A brief book about the uses, forms, and functions of moneyin a variety of economies.

Plattner, Stuart, ed. Economic Anthropology. Stanford:Stanford University Press, 1989.

A collection of recent articles on economic systems.

Rubel, Paula G., and Abraham Rosman. Your Own Pigs YouMay Not Eat. Chicago: University of Chicago Press, 1978.

Based on existing ethnographic accounts of numeroussocieties in Papua New Guinea, this comparative studyanalyzes the symbolic nature of exchange relations.

Rutz, Henry J., and Benjamin S. Orlove, eds. The SocialEconomy of Consumption. New York: University Press ofAmerica, 1989.

A collection of articles focussing on consumption in vari-ous regions of the world.

Sahlins, Marshall. Stone Age Economics. New York: Aldine, 1972.

Deals with the organization of production and modes ofexchange in preindustrial economies.

Wilk, Richard R., Economies & Cultures: Foundations ofEconomic Anthropology. Boulder: Westview Press, 1996.

A readable and thoughtful overview of the field of economicanthropology, focusing on major issues and debates.