Chapter 7 EconomicsChapter 7 Economics

Questions to PonderQuestions to Ponder

"What power resides in a given "What power resides in a given object that causes its recipient to object that causes its recipient to pay it back?" pay it back?" – M. Mauss (M. Mauss (1872-1950; 1872-1950; 1990:3).1990:3).

Is there such a thing as a gift Is there such a thing as a gift “freely given/recieved”?“freely given/recieved”?– James Mullooly (1964-???)James Mullooly (1964-???)

Chapter OutlineChapter Outline

Economic Economic SystemsSystems

ProductionProduction DistributioDistributio

n: n: Systems Systems of of ExchangeExchange

by Shirvanian, Vahan

Economic SystemEconomic System

The “part” of society that deals The “part” of society that deals with production, distribution, and with production, distribution, and consumption of goods and services.consumption of goods and services.

The way production is organized The way production is organized has consequences for the family has consequences for the family and the political system.and the political system.

Economics is embedded in the Economics is embedded in the social process and cultural pattern.social process and cultural pattern.

Economic BehaviorEconomic Behavior

Economics Economics is the study of how the is the study of how the choices people make determine how choices people make determine how their society uses its resources to their society uses its resources to produce and distribute goods and produce and distribute goods and services.services.

Economizing behaviorEconomizing behavior is choosing is choosing a course of action that pursues the a course of action that pursues the course of perceived maximum course of perceived maximum benefit.benefit.

QuestionQuestion

A fundamental assumption of Western A fundamental assumption of Western theories of microeconomics istheories of microeconomics is

a)a) that resources are unlimited.that resources are unlimited.b)b) that humans primarily operate in an altruistic that humans primarily operate in an altruistic

manner.manner.c)c) the idea that "wants" are unlimited, but the idea that "wants" are unlimited, but

means for achieving them are limited.means for achieving them are limited.d)d) financial profit drives the vast majority of financial profit drives the vast majority of

peoples' choices.peoples' choices.e)e) social obligations take precedence over social obligations take precedence over

material gain.material gain.

Answer: cAnswer: c

A fundamental A fundamental assumption of assumption of Western theories Western theories of of microeconomics is microeconomics is the idea that:the idea that:– "wants" are "wants" are

unlimited,unlimited, but but– means means for for

achieving them achieving them are are limitedlimited..

Allocating ResourcesAllocating Resources Each society has rules to regulate Each society has rules to regulate

access to resources: access to resources: – Land, water, labor, and the materials from Land, water, labor, and the materials from

which tools are made.which tools are made. ProductiveProductive resources are used to resources are used to

create other goods or information:create other goods or information:– Material goods, natural resources, or Material goods, natural resources, or

information.information. Usufructory rights Usufructory rights (e.g., mineral (e.g., mineral

rights)rights)– The right to use something (usually land) but The right to use something (usually land) but

not to sell it or alter it in substantial ways. not to sell it or alter it in substantial ways.

Productive Resources Productive Resources and Subsistence and Subsistence StrategiesStrategies Foragers - weapons to hunt Foragers - weapons to hunt

animalsanimals Pastoralists - livestock and Pastoralists - livestock and

landland Horticulturalists - land, tools, Horticulturalists - land, tools,

and storage facilitiesand storage facilities

Organizing Organizing LaborLabor

In small-scale In small-scale preindustrial and preindustrial and peasant economies, peasant economies, the the householdhousehold or or some extended kin some extended kin group is the basic group is the basic unit of production unit of production and consumption.and consumption. Labor is just one Labor is just one

aspect of aspect of membership in a membership in a social group such as social group such as the family.the family.

Peasants by Diego Rivera

Organizing LaborOrganizing Labor

In Western societyIn Western society, work, work has has very important very important social social implications.implications.

For many people, particularly For many people, particularly members of the middle classes, members of the middle classes, work is a source of self-respect, work is a source of self-respect, challenge, growth, and challenge, growth, and personal personal fulfillment.fulfillment.

HouseholdsHouseholds In most nonindustrial In most nonindustrial

societies, production is societies, production is based around the based around the household.household.

The household is an The household is an economic unit, people economic unit, people united by kinship or other united by kinship or other links who share a residence links who share a residence and organize production, and organize production, consumption, and consumption, and distribution among distribution among themselves. themselves.

FirmsFirms

In industrial In industrial societies the societies the basic unit of basic unit of production is the production is the business business firmfirm. .

A firm is an A firm is an institution that is institution that is organized organized primarily for primarily for financial gain.financial gain.

Sexual Division Sexual Division of Laborof Labor Universal Universal

characteristic characteristic of society.of society.

-In -In foragingforaging societies, men societies, men generally hunt generally hunt and women and women generally generally gather.gather.

-In -In agriculturalagricultural societies, both men societies, both men and women play and women play important roles in important roles in food production.food production.

QuestionQuestion

The division of labor by sex is a The division of labor by sex is a cultural universal, but cultural universal, but anthropologists disagree as to anthropologists disagree as to how much biology determines how much biology determines differences in sex roles between differences in sex roles between cultures.cultures.

a)a) True True

b)b) False False

Answer: a - TrueAnswer: a - True

The division of labor by sex is a The division of labor by sex is a cultural universal, but cultural universal, but anthropologists disagree as to anthropologists disagree as to how much biology determines how much biology determines differences in sex roles between differences in sex roles between cultures.cultures.

Fin (mwf) Fin (mwf)

Three Main Three Main Systems of Systems of ExchangeExchange

1. Reciprocity 1. Reciprocity

2. 2. Redistribution Redistribution 3. Market exchange3. Market exchange

ReciprocityReciprocity

Mutual give-and-take among Mutual give-and-take among people of equal status.people of equal status.– Generalized reciprocity - A distribution of Generalized reciprocity - A distribution of

goods with no immediate or specific return goods with no immediate or specific return expected.expected.

– Balanced reciprocity - Exchange of goods of Balanced reciprocity - Exchange of goods of nearly equal value, with a clear obligation to nearly equal value, with a clear obligation to return them within a specified time limit. return them within a specified time limit.

– Negative reciprocity - Exchange conducted for Negative reciprocity - Exchange conducted for the purpose of material advantage and the the purpose of material advantage and the desire to get something for nothing.desire to get something for nothing.

Bronislaw Malinowski: Bronislaw Malinowski: Identified the Identified the Kula RingKula Ring of the Trobriand of the Trobriand Islanders Islanders

The Kula ringThe Kula ring

The Kula ring spans 18 island communities of The Kula ring spans 18 island communities of the Massim archipelago, including the the Massim archipelago, including the Trobriand IslandsTrobriand Islands

Participants travel at times hundreds of miles Participants travel at times hundreds of miles by canoe in order to exchange Kula valuables by canoe in order to exchange Kula valuables which consist of which consist of shell-disc necklaces shell-disc necklaces (veigun) (veigun) – that are that are traded to the northtraded to the north (circling the ring in (circling the ring in

counter-clockwisecounter-clockwise direction) direction) Sand shell armbandsSand shell armbands (mwali) (mwali)

– that are that are traded in the southern directiontraded in the southern direction (circling (circling clockwiseclockwise). ).

The terms of participation vary from region to The terms of participation vary from region to region. (Wikipedia)region. (Wikipedia)

Kula Kula RingRing

A pattern of exchange among many trading partners A pattern of exchange among many trading partners in the Trobriands and other South Pacific islands.in the Trobriands and other South Pacific islands.

Fig. 7-2, p.193

Generalized Reciprocity: Generalized Reciprocity: WhalingWhaling (see following image)(see following image) Inuit whale hunting involves 10 to 15 Inuit whale hunting involves 10 to 15

boats.boats. The first 8 boats to harpoon the whale The first 8 boats to harpoon the whale

receive stipulated portions of the meat.receive stipulated portions of the meat. The captain of the first boat gives the The captain of the first boat gives the

shaman a narrow strip cut from the belly shaman a narrow strip cut from the belly between the 8th boat’s strip and the between the 8th boat’s strip and the genitals. genitals.

The top of the head is cut up and eaten The top of the head is cut up and eaten at once by everyone in the villageat once by everyone in the village

Portions of the tail are saved for feasting Portions of the tail are saved for feasting in the spring and autumn.in the spring and autumn.

Fig. 7-1, p.190

Generalized Reciprocity: Generalized Reciprocity: WhalingWhaling

RedistributionRedistribution

Exchange in which goods are Exchange in which goods are collected from members of the collected from members of the group and then redistributed to group and then redistributed to the group.the group.– Potlatch Potlatch is a competitive giveaway is a competitive giveaway

practiced by the Kwakiutl and other practiced by the Kwakiutl and other groups of the northwest coast of groups of the northwest coast of North America.North America.

Potlatch-1 classic Potlatch-1 classic imageimage

Potlatch-2 Potlatch-2 Modern image Modern image A potlatch is a A potlatch is a ceremony among ceremony among certain certain Native Native AmericanAmerican and and First Nations First Nations peoplespeoples

from the from the Pacific NorthwestPacific Northwest coast of the coast of the United States and the Canadian province of United States and the Canadian province of British Columbia such as the Haida, Tlingit, British Columbia such as the Haida, Tlingit, Tsimshian, Salish, Nuu-chah-nulth, Tsimshian, Salish, Nuu-chah-nulth, Kwakiutl (Kwakwaka'wakw).Kwakiutl (Kwakwaka'wakw).

Potlatch-3Potlatch-3

The potlatch takes the form of a The potlatch takes the form of a ceremonial feast traditionally featuring ceremonial feast traditionally featuring seal meat or salmon. In it, seal meat or salmon. In it, hierarchical hierarchical relations between groups were relations between groups were observed and reinforced through observed and reinforced through the exchange of gifts and other the exchange of gifts and other ceremoniesceremonies. .

Potlatch-4 as Potlatch-4 as gift economygift economy

The potlatch is an The potlatch is an example of a example of a gift gift economyeconomy; the host ; the host demonstrates demonstrates their wealth and their wealth and prominence prominence through giving through giving away their away their possessionspossessions and and thus prompts thus prompts participants to participants to reciprocate at their reciprocate at their potlatch.)potlatch.)

RedistributionRedistribution

Leveling mechanismLeveling mechanism is a practice, is a practice, value, or form of social organization value, or form of social organization that evens out wealth within a that evens out wealth within a society.society.

Cargo systemCargo system is a ritual system is a ritual system common in Central and South common in Central and South America in which wealthy people are America in which wealthy people are required to hold a series of costly required to hold a series of costly ceremonial offices.ceremonial offices.

Market ExchangeMarket Exchange

Economic system in which goods and Economic system in which goods and services are bought and sold at a price services are bought and sold at a price determined by supply and demanddetermined by supply and demand

Impersonal and occurs without regard to Impersonal and occurs without regard to the social position of the participants.the social position of the participants.

When this is the key economic When this is the key economic institution, social and political goals are institution, social and political goals are less important than financial goals.less important than financial goals.

CapitalismCapitalism

Economic system:Economic system:– People work for wages.People work for wages.– Land and capital goods Land and capital goods

are privately owned.are privately owned.– Capital is invested for Capital is invested for

individual profit.individual profit. A small part of the A small part of the

population owns most population owns most of the resources or of the resources or capital goods.capital goods.

Miss Fitch, I've forgotten. Which conglomerate now owns us?' Artist: Farris, Joseph

Surplus Value of LaborSurplus Value of Labor

Marxist term for the difference Marxist term for the difference between the wages a worker is between the wages a worker is paid and the value of their paid and the value of their contribution to production to the contribution to production to the capitalist.capitalist.

Quick QuizQuick Quiz

1. If you act with "economizing behavior," as 1. If you act with "economizing behavior," as Western economists would say you do,Western economists would say you do,a)a) you are doing it because you value hard work.you are doing it because you value hard work.

b)b) you are doing this to ultimately get a better you are doing this to ultimately get a better job and thus, a higher salary.job and thus, a higher salary.

c)c) you will make a choice to benefit in some way.you will make a choice to benefit in some way.

d)d) you are motivated by thrift, and even might you are motivated by thrift, and even might be called stingy.be called stingy.

e)e) you are consciously aware of what you are you are consciously aware of what you are doing.doing.

Answer: c Answer: c

If you act with "economizing If you act with "economizing behavior," as Western behavior," as Western economists would say you do economists would say you do you will make a choice to you will make a choice to benefit in some waybenefit in some way..

2. When you pay your taxes to 2. When you pay your taxes to "Uncle Sam" the U. S. "Uncle Sam" the U. S. Government , you are part of a Government , you are part of a system ofsystem of

a)a) negative reciprocity.negative reciprocity.

b)b) redistribution.redistribution.

c)c) balanced reciprocity.balanced reciprocity.

d)d) generalized reciprocity.generalized reciprocity.

e)e) exchange similar to the Kula Ring.exchange similar to the Kula Ring.

Answer: b Answer: b

When you pay your taxes to When you pay your taxes to "Uncle Sam" the U. S. "Uncle Sam" the U. S. Government , you are part of a Government , you are part of a system of system of redistributionredistribution..

3. A tradition of hosting 3. A tradition of hosting redistributive community feasts or redistributive community feasts or distributing gifts as a way of distributing gifts as a way of gaining prestige and often power gaining prestige and often power by those who have more wealth by those who have more wealth than others is known asthan others is known as

a)a) balanced reciprocity.balanced reciprocity.

b)b) a leveling mechanism.a leveling mechanism.

c)c) penny capitalism.penny capitalism.

d)d) an instance of pure altruism.an instance of pure altruism.

e)e) charity.charity.

Answer: b Answer: b

A tradition of hosting A tradition of hosting redistributive community feasts redistributive community feasts or distributing gifts as a way of or distributing gifts as a way of gaining prestige and often power gaining prestige and often power by those who have more wealth by those who have more wealth than others is known as than others is known as a a leveling mechanismleveling mechanism..

More Notes On Gift,More Notes On Gift,

Only if you are interested.Only if you are interested.– i.e., if we had more time in class, we i.e., if we had more time in class, we

would go through this stuff as well.would go through this stuff as well.

Marcel Mauss Marcel Mauss (May 10,1872-1950)(May 10,1872-1950)

Marcel Mauss (1872-Marcel Mauss (1872-1950)1950)

"What power resides in a given object "What power resides in a given object that causes its recipient to pay it that causes its recipient to pay it back?" -M. Mauss (1990:3).back?" -M. Mauss (1990:3).

Marcel Mauss (1872-Marcel Mauss (1872-1950)1950) The GiftThe Gift One of the most promising members of One of the most promising members of L’L’

Annee SociologiqueAnnee Sociologique,, he spent much of his he spent much of his scholarly time publishing the work of his scholarly time publishing the work of his collegues who died in WWI (Durkheim collegues who died in WWI (Durkheim dies soon after).dies soon after).

The GiftThe Gift was his only major gift to us. was his only major gift to us.

L'Année sociologique (Emile Durkheim, Marcel Mauss und Paul Fauconnet), 1987

Marcel Mauss (1872-Marcel Mauss (1872-1950)1950) The GiftThe Gift

Mauss’ noted that reciprocity is not only an Mauss’ noted that reciprocity is not only an economic system. Like birthday gifts, the economic system. Like birthday gifts, the sentimental value is often more important than sentimental value is often more important than its monetary value. Mauss argues that gifts its monetary value. Mauss argues that gifts index social relations in significant ways. index social relations in significant ways.

Contrarily,Contrarily, Mauss argues that "gifts" are often Mauss argues that "gifts" are often not what we think of as gifts. As part of an not what we think of as gifts. As part of an economic system, they can be thought of as economic system, they can be thought of as payment of goods or services owed. Imagine payment of goods or services owed. Imagine receiving a birthday gift of considerably less receiving a birthday gift of considerably less value than one you gave!value than one you gave!

gifts are never "free".gifts are never "free". Human history is full of examples of Human history is full of examples of

gifts that give rise to reciprocal gifts that give rise to reciprocal exchange.exchange.

The famous questionThe famous question

"What power resides in the object "What power resides in the object given that causes its recipient to given that causes its recipient to pay it back?"pay it back?"

The answer:The answer:

the gift is a "total prestation", the gift is a "total prestation", imbued with "spiritual imbued with "spiritual mechanisms", engaging the mechanisms", engaging the honour of both giver and receiver honour of both giver and receiver – the term "total prestation" or "the term "total prestation" or "

total social facttotal social fact" (" (fait social totalfait social total) ) was coined by his student was coined by his student Maurice LeenhardtMaurice Leenhardt after Durkheim's after Durkheim's social factsocial fact..

The object is tied to The object is tied to the giverthe giver Such transactions transcend the Such transactions transcend the

divisions between the spiritual and the divisions between the spiritual and the material in a way that according to material in a way that according to Mauss is almost "magical". Mauss is almost "magical".

The giver does not merely give an The giver does not merely give an object but also part of himself, for the object but also part of himself, for the object is indissolubly tied to the giver: object is indissolubly tied to the giver:

""the objects are never completely the objects are never completely separated from the men who exchange separated from the men who exchange them" (1990:31).them" (1990:31).

social bond with an social bond with an obligationobligation Because of this bond between Because of this bond between

giver and gift, the act of giving giver and gift, the act of giving creates a social bond with an creates a social bond with an obligation to reciprocate on obligation to reciprocate on part of the recipientpart of the recipient. .

To not reciprocate means to lose To not reciprocate means to lose honour and status, but the spiritual honour and status, but the spiritual implications can be even worse.implications can be even worse.

three obligationsthree obligations

Mauss distinguished between three Mauss distinguished between three obligations: obligations: – givinggiving - the necessary initial step for - the necessary initial step for

the creation and maintenance of social the creation and maintenance of social relationships; relationships;

– receivingreceiving, for to refuse to receive is to , for to refuse to receive is to reject the social bond; and reject the social bond; and

– reciprocatingreciprocating in order to demonstrate in order to demonstrate one's own liberality, honour and wealth.one's own liberality, honour and wealth.

KEY to NOTE: KEY to NOTE: The nature of The nature of gifts can be gifts can be ambiguous ambiguous and political and political in all in all cultures, our cultures, our own culture own culture as well.as well.

ExchangeExchange narrowly narrowly conceivedconceived

Money

Exchange

Exchange Exchange broadlybroadlyconceiveconceivedd

Gift

Theft

MoneyTrade

Kinship

Exchange

Gift as gift or as Gift as gift or as Burden?Burden?

Possible Exam ItemPossible Exam Item

How does Lee’s “Eating Christmas in the Kalahari” illustrate the Mauss’ principle that there is no such thing as a free gift?

finfin

p.183

Mauss and Gift-Mauss and Gift-Simple SocietiesSimple Societies Gift-giving, according to Mauss, is the Gift-giving, according to Mauss, is the

fundamental glue in these societies fundamental glue in these societies for the maintenance of social for the maintenance of social structures. structures.

Through gift giving social bonds are Through gift giving social bonds are created, individuals are joined, created, individuals are joined, sharing with each other the back and sharing with each other the back and forth of the social power that is forth of the social power that is associated with the gifts exchanged. associated with the gifts exchanged.

Mauss and Gift-Mauss and Gift-Simple Societies 2Simple Societies 2 It places the individual into a It places the individual into a

structure of "total services." structure of "total services." – In typical Durkheimian fashion, he In typical Durkheimian fashion, he

emphasizes the collaborative, emphasizes the collaborative, consensual social structure of consensual social structure of an economic systeman economic system as opposed as opposed to the to the rational calculation of rational calculation of individualsindividuals. (Kosalka 12/99). (Kosalka 12/99)

Mauss and Gift-Mauss and Gift-Complex SocietiesComplex Societies In other societies, however, Mauss In other societies, however, Mauss

related that this notion of related that this notion of gift-gift-exchange rises to another level exchange rises to another level where gift-exchange takes on a where gift-exchange takes on a competitive aspect.competitive aspect.

The textbook case of this type of this The textbook case of this type of this kind of gift is found in the kind of gift is found in the "potlatch""potlatch" practiced among the tribes of the practiced among the tribes of the American Northwest. (Kosalka 12/99)American Northwest. (Kosalka 12/99)