22 Economic Exchange

Dr. Abhijeeta Das

CONTENTS

Learning Outcomes

Introduction
Anthropology and economics
Historical background of economic field of study
Production
Distribution and exchange
Market place system
Trading Partnership
Inter and intra community trade
Ceremonial Exchange
Exchange of gifts
Kula
Potlatch

Learning Outcomes

After studying this module:

You shall be able to learn the the historical background of economic anthropology.
You would be able to know about the production, distribution and exchange.
You would be able to identify the market place systems.
You would also be able to identify the trading partnership, inter and intra community trade.
In addition to all these cited above, you would also understand the ceremonial exchange and the exchange of gifts i.e., the kula system and the potlatch system of exchange.

Introduction

Economic anthropology has evolved from a nameless embryonic idea to a recognized and quasi-revolutionary sub-discipline of social and cultural anthropology. In the 1920s, few scholars devoted special attention to the general problems common to economics and in anthropology today there is considerable debate among its sectarianized practitioners as to whether the term “economic anthropology” should continue to denote its original meaning. In his seminal essay N. S. B. Gras, an economic historian, coined the term “economic anthropology” and conceived it as a “synthesis of anthropological and economic studies” which entailed “the study of the ways in which primitive people obtained a living.” Gras distinguished economic anthropology from “anthropological economics,” which he defined as “a study of the ideas that primitive people held about economic matters.” Among his suggestions for future research was collaboration between anthropologists and economists so that “anthropologists could provide those in the economic field with facts in return for ideas and the fundamental issues involved in getting a living”.

In retrospect, Gras’s contribution seems to have had relatively little impact upon anthropologists in comparison with the works of Malinowski, Mauss and Leroy. This was unfortunate, since Gras’s well-reasoned arguments would have provided effective alternatives to three negative aspects of Malinowski’s dominant contribution: his :”anti-economics,” his inconsistent handling of the separate analytical operations distinguished by Gras under the rubrics of economic anthropology and anthropological economics, and his neglect of the diachronic-evolutionary perspective in the name of synchronic-functionalist inquiry. Only during the last two decades, under the influence of scholars like Polanyi, White, and Godelier, has economic anthropological inquiry systematically focused on diachronic evolutionary problems, which, with the important exception of Thurnwald’s work, had been essentially ignored since Malinowski’s days. It was not until the 1960s, in accordance with the spirit of the so-called new ethnography and ethno science movement in cultural anthropology, that Gras’s notion of anthropological economics (with some modifications) was reemphasized by Salisbury under the label of “ethno-economics.”

Anthropology and Economics

The mainstream of work in economic anthropology today is characterized by a growing spirit of cross-fertilization and collaboration between economists and anthropologists-a spirit that has been concretely manifested in a series of publications (e.g., Firth and Yamey, eds., 1964; Raymond Firth, ed., 1967; Le Clair and Schneider, eds., 1968; Wharton, ed., 1969; Brookfield, ed., 1969; Mc Loughlin, ed., 1970). This spirit is a relatively recent phenomenon, especially from the standpoint of economics. In an incisive essay comparing the scope and method of economics and anthropology written in 1960, the economist Joseph Berliner (1962) was apologetic for the constricted perspective of his colleagues, who, when engaging themselves in the study of “comparative economic systems,’’ habitually considered only the variant forms of Western-industrial economic systems; nevertheless, he argued that this habit did not merit the stigma of being categorized as ethnocentrism but rather was simply a natural intellectual response by economists to the analytical complexities and possibilities of the western institutional field. Berliner reasoned that economists of a decade ago were willing to forgo knowledge about relations between changes in other economic variables and changes in other cultural variables, as well as about culturally specific versus universal properties of economic systems, in order to acquire a more intensive and precise understanding of the “systematic regularities among economist themselves.”

From today’s perspective, however, it is clear that many economists-especially those involved in problems of agricultural and industrial development in modernizing peasant societies-have decided that the complexities of the nonwestern institutional field also offer intellectual challenges and possibilities for mensurational ingenuity. In fact, what is emerging through the collective efforts of these economists is a tradition of comparative, empirical micro-economics-a long overdue development, clearly envisaged by Veblen in 1898, which offers the possibility of promoting a process of cumulative feedback into the received wisdom of conventional economic theory. This process will be nourished by a continuing series of analytical excursions by economists into the “far-flung territories, underworlds, and hinterlands” of economics, and by economically more sophisticated excursions by anthropologists.

This trend toward increased cross-fertilization should not be interpreted as indication that the basic problems in epistemology and method of the economics/anthropology relationship have been resolved. On the contrary, as more empirical cases are examined with the tools of formal theory, and as more scholars seek to adapt their analytical operations to a selective alternation between anthropological inductionism and economic deductionism, we can anticipate more, not fewer, problems of applicability and relevance. The burden here falls squarely upon the individual economic anthropologist, who must be ultimately responsible for operationalizing the concepts and propositions of formal theory in the study of empirical economies. Moreover, it is in the results of the operationalization process that the explanatory value of formal concepts and propositions in anthropology will be determined.

In addition, the study of economics can provide the anthropologist with some understanding of the ways in which quantitative data may be analyzed through the application of such tools as supply and demand analysis, time series analysis, matrix analysis, game theory analysis, input-output analysis, and so on. More broadly, the anthropologist, who is trained in empirical-inductive method, can expect his study of economics to bring him a basic understanding of the nature and significance of deductive model-building as a heuristic tool. He can expect to learn to appreciate, as the economic theorist does, the explanatory possibilities of a method that is based on the assumption that knowledge of what might occur (i.e., problematic) or of what must occur (i.e., apodictic) can lead the investigator to a more

comprehensive knowledge of what is actual or occurring (i.e., assertoic) in a given situation. Finally, and more pragmatically, the study of economics provides the anthropologist with increased awareness of the need and rationale for collecting systematic quantitative (or quantifiable) data, especially data focused on the frequency of observed and on its representativeness.

For the anthropologist, of course, economic values and facts reflect cultural norms, and every economic statement is a shorthand account of human behavior and relationships between individuals and groups. He is never interested in quantities and their relationships as ends in themselves. These orientations apply to the laws of supply and demand, to investment and saving, to time series, and to all the rest.

There is a very healthy trend in economic anthropology away from argument in favor of the applicability of formal economics and toward its actual application to hypothetical and real situations. For example, Lee has adapted the transactional models of input-output economics to the analysis of Kung Bushman subsistence; Edel has utilized econometrics to measure variations in the adoption of cooperatives by Jamaican fishing villages; Joy has applied matrix analysis to Barth’s data on the division of labor and exchange in the mountain fur economy; Orans has used the maximization principle to formulate a model of caste relations in India, Pakistan, and Ceylon; Cook has employed time series and supply and demand analysis in a study of price and output variability in a peasant-artisan stone working industry in the valley of Oaxaca, Mexico; and Schneider has analyzed economic relations among the Wahi Wanyataru as a competitive decision-making process.

This trend is represented in the scope-and-method literature by a sophisticated essay by Edel who focuses on certain methodological problems that emerge from the application of the economic analysis to a variety of hypothetical and real anthropological cases. He restricted his views of economic analysis to only two basic problem-solving strategies (i.e. ways for determining the unknown values of selected quantifiable variables): the “maximization” strategy, which defines a problem in terms of the allocation of limited resources to alternative ends, and the “fixed target” strategy, which seeks to find out whether certain fixed targets can be attained from the available means. Edel’s concise and explicit elucidation of these two strategies in anthropological problem-solving provides an illustration of economic analysis as “a system for organizing information in a framework amenable to the manipulation of mathematical functions and values”. Moreover, it supports his conclusion that “in every society the physical means of subsistence and means for the provision of other wants must be fitted to the ends of subsistence, and there must be some degree of satisfaction” which is another way of saying that economic analysis will be applicable to some extent in all societies.

Unlike many other formalists, Edel emphasizes three special requirements and limitations of economic analysis: (1) There are three elements that must be stipulated before such an analysis can begin (a) preference function-a mathematical representation of the things actors in the economic process desire to obtain or maximize; (b) resources-availability and ownership patterns; and (c) technical production or exchange possibilities (see Le Clair and Schneider, eds., 1968:457-59). (2) There is no way to deal with the diachronic dimension of the function; i.e., economic analysis is purely synchronic. (3) The economic process may not be the only system relating values, technology, and resource ownership; consequently, complementary types of analysis are required to provide complete coverage of relevant relationships. Because of these requirements and limitations, Edel contends, economic analysis cannot cannibalize the traditional domains of other social sciences. Quite the contrary, he argues that the field of economic anthropology is necessary and viable precisely because economic analysis cannot rope effectively with interpersonal relations and relations between customs, which are the focus of anthropology. Edel concludes his essay by proposing that economic anthropology deals with the “economic process of matching the resources to targets with reference to the social milieu to which it is fitted.” A growing number of economic anthropologists share this view of the scope of this discipline.

The General Relation of production to Distribution, Exchange, and Utilization

Economics and economic anthropology are characterized by a lack of clarity in the theory and analysis of the relations between production, distribution, exchange, and utilization. Among other things, this situation reflects the fact that each of these categories is a component of one process, a distinct aspect of one system. These categories are postulated as separate by the analyst, yet the results of empirical analysis invariably demonstrate their interrelatedness. The fact that these categories do not exist ontologically as self-contained, independent spheres of phenomenal reality does not imply that they do not exist epistemologically, nor does it invalidate their heuristic utility as abstract theoretical categories. The problem is not whether these categories themselves represent empirical reality, but whether as heuristic tools they enable the analyst to arrive at progressively more accurate approximations of that reality.

The nature of the relations between these categories may be briefly described as follows: production is the process by which the members of a society appropriate and transform natural resources to satisfy their needs and wants; distribution determines the extent to which the individual participates in this production; exchange enables him to acquire the particular products into which he wishes to convert the quantity allocated to him through distribution; and through consumption products are individually appropriated as objects of use and enjoyment.

Production yields good adapted to our needs; distribution distributes them according to social laws; exchange distributes further what has already been distributed, according to individual wants; finally, in consumption the products drops out of the social movement, becoming the direct object of the individual want which it serves and satisfies when used. Production thus appears as the starting point; consumption as the final end; and distribution and exchange as the middle; the later has a double aspect, distribution being defined as a process carried on by society, while exchange, as one proceeding from the individual.

These relationships are not without their ambiguities. For example, production implies consumption in the sense of using up the means of production just as consumption implies production in the sense of the nutritive process through which means foodstuffs consume are so far, in effect, to produce their own bodies. Yet these ambiguities can lead to new insights and may reinforce the validity of the categories as a general framework of analysis. This seems to be true in those instances when they have been systematically applied in the analysis of economic life in preindustrial societies.

Production

Under the stimulus of a critical reappraisal of the contributions of Marx and Engels, and a convergence with cultural materialist inquiry, the formal versus substantive problem in economic anthropology can be redefined as a production problem. In essence, this problem is to determine how basic environmental, ecological, and technological processes relate to economically productive social activities (i.e., those involving labor power and other energy expenditure), together with flows of appropriation, transformation, transfer, and utilization. In essence, this is the problem of ecosystem/economy differentiation and articulation, which has proved elusive to contemporary social scientists.

It is not over simplifying to argue that economic anthropologists have been very much concerned with production activities and organization in their ethnographic and analytic work, but that with few exceptions their general theoretical views have been framed in terms of distribution and exchange. I need to cite only the three most prominent figures in the development of economic anthropology-Malinowski, Thurnwald, and Firth-to document this generalization. Production activities are included within the scope of their work, yet each has made his major contribution to the development of economic anthropological thought in the realm of exchange and distribution: Malinowski (1922, 1926) with the kula and other forms of ceremonial, utilitarian, and gift exchange among the Trobrianders, and reciprocity as a generalized social mechanism; Thurnwald (1932) with political economic processes and relations, linked to reciprocity and redistribution mechanisms, in various preindustrial economies; and Firth (1961, 1967) with a transactional or exchange view of social organization, showing how decision-making and economizing in the disposition of scarce means are systematically patterned in every society. In short, all these major contributors to the development of economic anthropology share a common view that exchange processes and relations, not production processes and relations, are fundamental in human economy and society.

Nor does this emphasis change in the contribution of Polanyi and his followers-which of course are paradoxical in view of their great concern with the material provisioning of society; this concern logically entails a focus on production processes and organization, which in fact is not present in their work. Transactional modes, not production modes, emerge as the dominant concern of the substantivist writers. They do not analyze or theorize about the forces and relations of production or about the creation of commodities, but invariably restrict themselves to the circulation and destination of commodities already produced. Polanyi’s tripartite scheme of reciprocity, redistribution, and market exchange presupposes production modes but does not link up with them; the social concomitants of transactional modes, not of production modes, are of dominant concern to him and his followers.

Ironically, the following statement by Firth, the founder and major figure in neoclassical economic anthropology serves to characterize his approach as it does to that of the Polanyi group: “… while the material dimension of the economy is regarded as a basic feature, the significance of the economy is seen to be in the transactions of which it is composed and therefore in the quality of relationships which these transactions create, express, sustain, and modify”, In both approaches, then, the focal concern has been with the transaction, the exchange or transfer aspect, which often serves to link the economic with another field of activity, rather than upon production, the appropriating and transformative aspect, which directly links the economic field with its natural environment.

What we understand by the economic conditions which we regard as the determining basis of the history of society are the methods by which human beings in a given society produce their means of subsistence and exchange the products among themselves (in so far as division of labor exists). Thus the entire technique [original italics] of production and transport is included here. According to our conception this technique also determines the method of exchange and, further, the division of products, and with it, after the dissolution of tribal society, the division of classes also and hence the relations of lordship and servitude and with them the state, politics, law, etc. Under economic conditions are further included the geographical basis on which they operate and those remnants of earlier stages of economic development which have actually been transmissed and have survived also of course the external milieu which surrounds this form of society.

Interestingly enough, a societal detached, synchronic version of the Marxian production focus has been thoroughly absorbed into bourgeois or neoclassical economics. “Economists seem to agree,” say Parsons and Smelser,” that the paramount goal of economic activity-and hence of an economy as a system-is best defined as production.’’ There are, nevertheless, several influential economic theorists like Kenneth Boulding who consider exchange processes, not production, as central in any economic system. Many economic anthropologists support this position because, as Belshaw states,. . . all enduring social relations involve transactions which have an exchange, then, is to study social behavior, and an economic strategy becomes-in this formalist or transactionalist approach-a general strategy for the study of all social relations. In contrast, it is precisely this ubiquitousness of exchange that suggests to some economic anthropologists that production must serve as the principal criterion for differentiating between the economy and other subfields of a socio-cultural system. This, incidentally, is the position favored by Parsons and Smelser, as is implicit in their assertion that “when the process of production is completed the economy has ‘done its job.’”

In economic anthropology Maurice Godelier argues persuasively for the concept of production as a departure point for synchronic and diachronic analysis. Defining production as the “totality of operations which supply a society with its material means of existence” he argues that it encompasses all operations of this type regardless of the specific societal context in which they are performed. Thus hunting, gathering, and fishing economies, in which man occupies nature and exploits it without transforming it, as well as more advanced agricultural and industrial economies, in which material necessities are produced by transforming nature, are included within the same analytical framework. In a formal sense the modes of production in these societies are reducible to an identical series of relationships: to produce in all cases entails a combination of certain technical rules (Tr), raw materials or resources (Rs), tools (Ts) , and human labor (H1) to obtain a product (P) that is socially beneficial. This is, in essence, what economists call the production function-a functional mix of the factors of production which takes different forms according to the nature of the variables and the possible ways of combining them in a given society.

Distribution and Exchange

This section includes separate discussions of two processes that anthropologists often lump together: distribution and exchange. As we saw earlier, distribution determines the proportion of total output that the individual will receive, whereas exchange determines the specific products into which the individual wants to convert the share allocated to him by distribution. Distribution implies a reward system in which produce is channeled out among individuals or groups by reason of their control over the factors of production or for the labor they expended in the productive process. Exchange, on the other hand, refers to the various processes by which goods (and services) move between individuals or groups, as, for example, between producer and consumer, buyer and seller, donor and recipient. From the standpoint of functional analysis, these two processes are closely interrelated in all societies, but there is a higher degree of correspondence between them in band and tribal societies than in more advanced preindustrial and industrial societies.

In every society the producer-product relation, once the product is finished, is not necessarily or immediately one of possession; the return of the product to the individual depends on his relations to other individuals. More precisely, the distribution process intervenes between the producer and his product to establish his share (i.e., to transfer rights of possession) in total output according to prevailing norms. Every society has explicit or implicit norms governing the way its total pool of products is to be shared out among its members. It is analytically important, however, to remember that sharing-out behavior is a process guided only partly by norms, not simply a series of acts in response to norms. It may turn out that the producer of a given product has a primary claim on it-but this always depends on the prevailing distribution system. Thus the “primary claimant” might be a non-producer who is trustee or steward, administrator, owner-boss, lineage head, a reluctant distributor of largess, or a benevolent despot. Whatever the outcome of a given distribution process, it must revolve around some person or persons. In hunting societies, for example, when a number of hunters cooperate to kill a utilizable animal, there are strict rules for ascribing ownership of that animal to only the hunter, who distributes its parts among the others, again in accordance with recognized norms. Likewise, in fishing societies when a number of fishermen work together on a fishing expedition, it is the owner of the boat and/or net who usually distributes the catch.

Aside from producer claims (i.e., some individual as producer of a good has a primary claim on it) and claims arising out of some relation of the claimant to the productive process (as in the cases of hunting and fishing cited above), at least two other kinds of claims to output operate in primitive and peasant societies: those arising out of some non-productive relationship between producer and claimant (e.g., real or fictive kinship) and those arising out of some relationship of the claimant to his community as a whole, of which the individual producer’s obligation represents a portion of the whole, as in the case of a tribal village chief .

The system of distribution in primitive and peasant economies must incorporate mechanisms: (1) the division of a joint product among the members of cooperative groups, and (2) the compensation of the factors of production, especially labor, from a source other than their immediate product. In dealing with the first problem, it is necessary to discover the principles that guide the sharing-out process; the second problem entails a determination of the source of compensation (i.e., money or goods in kind), and the basis for equation of the services of labor and other productive factors with goods of a kind other than those immediately produced.

Firth’s summary of his analysis of the principles of distribution in the Tikopia economy applies to many primitive economies: there is a “definite concept that all participants in a productive activity should receive a share of the product, but that social considerations do not make it necessary for this share to be exactly proportionate to the contribution in time, labor, or skill that each individual has made. Underlying this lack of emphasis on differential performance as a criterion for allocation is the concept of “total contribution”. To place one’s labor at the disposal of another is a social, not merely an economic, service; what is important is not simply the provision of labor power to be converted into material products, but the fact of participation, of assistance and moral support in the activity (Firth 1865a: 303). In contrast, among the system of distributing earnings involves monetization, Firth (1966 : 256) found that “proportionate returns to capital and labor . . . tend to correspond to the degree to which each contributes to the total yield.

A proper understanding of the role of distribution in an economic system cannot be achieved by focusing only on the methods and operations by which individual rewards are determined and allocated; it is also necessary to study the results of allocation, which are expressed as lists of quantities of goods apportioned to various status occupants or groups. Through this dual focus on the system of distribution and the pattern of distribution, the non-economic ramifications of the control and use of material wealth in a given society emerge more clearly. Societies at the band level of adaptation are usually characterized as egalitarian: fundamental inequalities between different sets of persons unequivocally emerge in tribal and peasant societies, where social and/or political achievement entitle some individual to more than an equal share of material reward. Thurnwald, one of the pioneers of the systematic comparative study of political economy, observed that “in graded and stratified societies distribution is the function of powerful families of influential men, of the ruling aristocracy, or of the administrative bureaucracy; and it is often abused distributors of any political power who reserve a percentage of the profits for themselves.

It was noted earlier that distribution and exchange processes are closely interrelated in all societies. For purposes of analysis, the distribution system can in effect be conceived as consisting of norms regarding certain transfer events (i.e., from production unit to consumption unit or between consumption units), the norms stipulating those conditions under which particular transfer events must or should occur. Two distinct kinds of transfer events are objects of anthropological analysis: physical transfers and jural transactions. The first involves locational movement and physical control; the second involves the transfer of culturally defined ownership and use of rights. In a typical transfer situation one individual physically exchanges one thing for another and in so doing relinquishes physical control over that thing to another individual. It must be emphasized that in such a situation the individual actor does not himself transfer ownership or use of rights; his culture in effect “transfers ownership by reading intentions into the minds of participants in a transaction”. In other words, cultural norms (i.e., the exchange system) intervene between transacting parties and their goods (or services) to determine the course and consequences of their mutual transfer.

The transfer aspect of the economic process has long been a major topic of anthropological inquiry. In the 1920s both Malinowski and Mauss made major contributions to the study of transfer phenomena, Malinowski concentrated on the varieties of trade and gift-giving among the Trobriand islanders (1961) and Mauss made the first systematic comparative study of gift exchange (1954), in which they emphasized its function in articulating the social system (via the concept of “total prestation”). While Malinowski and Mauss were first in demonstrating how gift exchanges are created, symbolize, and maintain status relations, it was Raymond Firth, in his classic 1929 study of the Maori economy, who first dealt analytically with the theoretical economic problems of gift exchange.

A later comparative contribution to the systematic understanding of transfer processes was made by Polanyi et al. This group of scholars made a basic distinction between goods-handling and goods-receiving processes, and asked the following basic questions of the ethnographic cases analyzed (1957: vii): “who passed on goods to whom, in what order, how often, and with what response among those listed under whom?” As a result of their synthesis, three basic types of transfer were isolated (1957: vii-ix): (1) reciprocative sequence among fixed partners (AB/BA or AB/BC/CA); (2) redistributive sequence between a central actor and many peripheral actors (BA/CA/DA/EA/FA, followed by A/BCDEF); (3) random market sequence (A/BCDEF or B/ACDEF or F/ABCDE, etc.). Their inquiries led them well beyond the limits of economic exchange into the realm of related institutions; and they regarded reciprocity, redistribution, and market exchange as mutually exclusive socio-cultural processes that characterized total economics or integrated total societies. Most contemporary economic anthropologists agree with Salisbury’s judgement (1968a: 480) that these “are not terms that characterize ‘entire economies’ or ‘modes of integration’, nor are they terms which fit economies into a unilineal progression from ‘primitive’ to ‘archaic’ to ‘market’, as is so often implied in the writings of Polanyi and others. For example, John Bennet, departing from the position that we are essentially ignorant about the nature and role of reciprocity behavior in market economies, has described and analyzed reciprocal economic exchanges among North American farmers, who of course are completely committed to market economic operations.

Sahlin (1965b) has reduced Polanyi’s three types of transfer activity into two broader types, which he calls “reciprocity” or “vice-versa” movements between two parties (A B) and “pooling” or “redistribution”- centralized movements involving “collection from members of a group, often under one hand, and redivision within this group”, as follows (1965b: 141):

Sahlin points out that redistribution is a system of reciprocities associated with collective action within a social unit, as distinct from the reciprocity system, which is associated with individual action between parties. The redistribution system implies social unity and centricity; the reciprocity system implies social duality and symmetry.

As the economic anthropologist examines the ethnographic record, he finds that a few fundamental forms of physical transfer are multiplied into a wide variety of transactional systems through the operation of cultural, social, and situational circumstances. It is now recognized that the differences among these various kinds of exchange system are not adequately clarified by efforts to describe the total system with which they articulate. Rather, as Salisbury expresses it, “they are better understood through closed analysis of the specific situations, in both monetary and tribal societies, where it is mutually advantageous to use recurrent rather than isolated exchanges, or where imbalances in volumes rendered can be, or must be, tolerated for long periods.”

Sahlin has sought to impose order on this ethnographic diversity of transactional modes through a “scheme of reciprocities”-a continuum that takes as its major criterion the stipulation of material returns; i.e., the “spirit of exchange” moves from disinterested concern for the other party to mutually to self-interest. This is essentially a descriptive synthesis of insights culled from works of Malinowski, Mauss, Thurnwald, and Polanyi. The continuum is defined by its poles and its mid-point as follows:

(1) generalized reciprocity, the solidarity extreme (A <–> B), involving unstipulated reciprocation;

(2) balanced reciprocity, the midpoint (A <–> B), involving direct reciprocation with time and equivalency stipulations; and

(3) negative reciprocity, the unsociable extreme (A <–> B), involving a two party confrontation in which each party seeks to maximize utility at the other’s expense. Sahlin (1965b:149-74) also proposes a relationship between types of reciprocity and kinship distance, suggesting that reciprocity is inclined toward the generalized extreme by close kinship and toward the negative extreme in proportion to a diminution in kinship propinquity, and that it varies with other factors such as social rank, relative wealth and need, and type of goods.

As the results of more and more specific ethnographic case studies accumulate, it appears that two-party (vice-versa) transactions are, with few exceptions, unbalanced and engendered conflict as one party seeks to gain as much advantage over the other as possible, short of terminating the relationship and initiating another with a new partner (see, e.g., Dole 1956, Salisbury 1960). Thus while reciprocity incorporates elements of conflict, bargaining (haggling) also incorporates elements of cooperation. From the conceptual standpoint, this implies that any economic transaction involving a two-party transfer of goods may be considered as generating a market situation and may be analyzed accordingly the market being defined not as a location or as an allocational system, but as an institutional arena created by regular transactions of goods between a multitude of transactors.

Given this framework of analysis, five basic types of economic transactions (i.e., interpersonal and/or intercommunity encounters involving the transfer of material goods) have been dealt with by economic anthropologists:

(1) those occurring in the market place;

(2) those involving partnerships between two individuals;

(3) those between two discrete communities;

(4) those between an individual distributor and many receivers within a single community; and

(5) those that involve the giving of gifts in a ceremonial context. It must be emphasized that these “types” are taxonomic conveniences for purposes of analysis, and that in any given ethnographic case they are by no means mutually exclusive or unrelated. For example, among the Australian aborigines of the Daly River the merbok system involved deferred gift exchanges between partners in the same community and, ultimately, between networks of partners in different communities-thus combining transactional types 2, 3, and 5.

Markets

Although gift-giving has a larger place than market transactions-buying and selling, exchange with a view to a good bargain-in the economy of societies of simple technology, they are by no means lacking in markets in the concrete sense; that is, appointed places where people meet to ex-change goods. One could say that the beach where the kula canoes land is a market-place for those members of the crew who are not taking part in the ceremonial exchange. And just as the kula exchange is a means of establishing peaceful contact between people who without it would take mutual enmity for granted, so is a market a place where persons belonging to otherwise hostile groups can meet on amicable terms. The political significance of the ‘market place’ may be equal to its economic significance as a recognized point where goods can be exchanged.

Of course the fullest development of markets is found where there is a great variety of goods to be exchanged, and above all where traders come from long distances. In such circumstances one finds what have been called ‘solar systems’ of markets. The long-distance traders will bring their goods to a large central one, and from these they will be conveyed to ‘satellite markets’ which again form centres for a ring of smaller ones. These last will be held in turn in a recognized sequence which is sometimes called the ‘market week’, a cycle of named days, not necessarily as many as seven. Such market systems have been observed in regions as far apart as Central America, West Africa, and China.

A good description of such a system comes from the Kon-korn Ba of northern China.” The Kon kom Ba, like most or their neighbours in this region, are ‘acephalous’ people, divided into small autonomous clans each claiming its own territory where most of the members live. Each clan recognizes a cycle of six markets in its vicinity, all held at six-day intervals and each on a different day; some clans call the days of their six-day week after these markets. The more important markets figure in the cycles of a larger number of tribes. Yendi is the principal one for the whole country and figures in nearly every cycle. Each of the other markets that form the Yendi people’s cycle is the principal one in a cycle of smaller markets. Each market was traditionally under the control of the clan whose land it was, who collected dues and were responsible for keeping peace. This was the duty of the market elder, who was also the custodian of the shrine associated with the market; a thief who was caught had to give a fowl to be sacrificed by the elder at this shrine. But in one market it was believed that undetected thieves would be attacked by a swarm of bees which live in the trees around the market-place.

The economic functions of market place trade (e.g., bulking of dispersed produce, distribution, storage) are combined with a wide variety of non-economic ones. The typical peasant trader arrives in the market place not only to convert his embodied labor power into cash and to acquire complementary goods and services, but also to handle political, legal, or administrative affairs, to attend public meetings, to engage in religious worship or have ritual services performed (e.g., marriage, baptism, confirmation), to seek medical advice or treatment, to visit friends and relatives, and also a long list of other activities. To satisfy these multiple needs, the population of a typical market place community is characterized by a more highly diversified occupational role inventory than are the population units in its hinterland.

The main price-determining mechanism in market place is negotiation though price fixing is reportedly practiced in some areas; but there is evidence that sellers’ calculation and bargaining strategies vary in accordance with the statuses they occupy (i.e., producer, middlemen, agent) and the type of goods they sell (e.g., durable or perishable). The typical peasant marketer does act in accordance with an “extremum principle”-i.e., maximizing money receipts as a seller and minimizing money expenditure as a buyer but determining the extent to which his decisions follow this principle requires working out the relationships among relevant functions, as well as defining or at least specifying their general characteristics. For example, a preliminary analysis of sales data in a Mexican peasant-artisan industry suggests that it is much more difficult to work out these relationships quantitatively in the case of middlemen-traders, who, unlike the producers, do have a direct money cost basis that enables them to calculate profit margins and serves as a guide in the quotation-bid interaction of marketplace negotiations. In contrast, the producer-seller is limited to an “opportunity cost-plus” formula in calculating returns and negotiating-a formula that entails estimating the value of labor and expenditures for raw materials, tools, transportation to point of sale, etc., and obviously lacks the quantitative simplicity and precision of the trader’s money cost formula. Not with standing these important differences, it is clear that most peasant marketers practice double pricing (e.g., higher prices for tourists and other non-locals than for locals for the same product), which reflects, among other things different degrees of market knowledge and haggling skill. Another characteristic of market place system is the variability of prices and output of local products. While there have been relatively few intensive studies of such variability, it is clear that, in addition to price fluctuation generated by supply and demand conditions on any given trading day, prices and output of agricultural and artisan products vary (1) from market day to market day within the same season, (2) from season to season, and (3) from year to year. The causes underlying such variability include (in addition to natural and ecological factors affecting agricultural output) general price levels of a given product, buyer outlay or demand patterns, producer expectations about future market conditions, special house hold provisioning requirements related to ceremonial or festive cycles, the labor requirements of the agricultural cycle (which determines how much labor time is available for supplementary productive activity), the availability and other conditions of alternative employment opportunities outside the village-based peasant artisan, and the quantity and quality of the annual crop harvest (which determine the amount of cash the peasant cultivator will have for complementary goods and services). The relative influence of these and other factors on aggregate price and output variability can be fully understood only in the context of an analysis of the total economic situation of the household unit served by the peasant-artisan producer.

Trade in peasant market places is often portrayed as closely approximating the economist’s model of perfect competition, with price established through the interaction of buyers who do not buy enough to set price with sellers who do not control enough of the supply to set price. There is empirical support for this generalization from many studies; however, by no means, sufficient data are available to warrant and consider any variation from this pattern as anomalous. It is quite possible that more intensive studies of single-product markets in peasant-artisan market place systems, focusing on the structural relations of buyers and sellers and their interaction through time-preferably during at least one complete annual cycle-will provide data indicating that these market situations are more complicated than the perfect-competition analogy implies, and may be characterized by significant degrees of imperfection. Indeed, given the widespread emergence in peasant marketing systems of entrepreneurs who accumulate substantial funds of capital as a basis for credit and mercantile operations, it is to be expected that significant transformations will occur in traditional, atomistically competitive markets.

Market place trade is also characterized by temporal patterning or sequencing, which is evidenced both within and between discrete trading days. While the data are insufficient to support anything beyond tentative generalizations, two basic patterns (inferred from indices like size of trading population, size and variety of product inventories, and volume of transactions) may be discerned in the course of trade on any given market day: (l) a cycle of expansion-peak-contraction, and (2) a series of discontinuous wave like fluctuations, with each peak comparable to each other. The specific timing of each phase in these cycles varies among marketplaces in the same system but tends to be repetitive from one trading day to the next in the same market place, other things remaining equal e.g., seasonal factors, meteorological conditions, cultural factors. Individual market places may operate daily or at fixed intervals of several days (usually not more than seven, though special fiesta markets are also held annually or when conditions merit). The interval between market days is fixed by custom. In areas with multiple market place systems, trading is staggered on a sub-regional basis, with trade occurring at set intervals in each component marketplace. For example, in the valley of Oaxaca, Mexico, there is a system of rotating or periodic market- places, each sub-regional marketplace being the focus of trading activity once a week on its own day, the same from week to week and from year to year, among the Tiv of central Nigeria there is a five-day marketing cycle and a four-day cycle is reported for Dahomey.

Trading Partnerships

A trading partnership exists when relations between a particular buyer and a particular seller (or giver and receiver) persist beyond a single transaction. Such partnerships are wide-spread in nonmarket economies (i.e., those without marketplaces or organized factor and commodity markets, and with no all-purpose money or undergoing monetization), where they are a major trading mechanism involving individual traders in material transactions with real or fictive kinsmen, affine, or friends. They are also found in monetized peasant market economies, where they serve as effective means of adapting to the risks and uncertainties inherent in competitive trading. A common type of partnership in peasant market economies is based on the extension of credit by one of the parties. Transactions in the market place between partners, whether based on the extension of credit or not, do not preclude haggling, whereas those conducted in non market economies often preclude it in favor of balanced reciprocity or barter according to prevailing notions of “set equivalences”. Even in nonmonetary economies, how-ever, there is evidence to suggest that superior knowledge or skill on the part of one trader may be exercised to considerable material advantage over his partner. Finally, it appears that individual trading partner relationships cannot be properly understood without tracing the total network of relationships in which both partners are enmeshed with others in the same group, and that the terms of trade of anyone set of traders must be studied in the context of this total network of relationships-much as economists handle international trading relations.

The fact that exchange ratios are customarily not negotiated by trading partners in nonmonetary economies does not mean that all goods ipso facto change hands without deviation from the prevailing schedule of equivalences. On the contrary, there is a wide indeterminacy in such exchanges, so that similar products change hands at different ratios in different transactions. In specific ethnographic cases this variability of exchange values does reflect sensitivity to forces of supply and demand, but only as these operate throughout the entire network of trading relations. As a general rule, however, it appears that supply-demand disequilibrium in partnership trade is brought into balance by pressure on trade partners rather than on exchange rates; i.e., the transaction price remains constant and the goods flow in the direction of either the giving or the receiving partner, depending on the nature of the disequilibrium. If the situation becomes intolerable to either partner, the relationship may be renegotiated or terminated, with each partner then entering into new negotiations with new partners. Given these and other complications of partnership trade, the extent of individual involvement is surprisingly extensive in some instances; Malinowski cites one Trobriander who had more than a hundred individual partners dispersed among several localities, although he notes that the typical individual had only four to six partners.

Trade partnerships in preindustrial, nonmonetary societies are also characterized by a potential for converting dyadic relationships into links in a system of intergroup relationships. In his study of themerbok system of the Daly River tribes in northern Australia, Stanner shows how trade did not set individual partner against individual partner so much as family or closely related kinship group (all of whom traded with each other) against an individual partner in another horde or tribe.

Trade partnerships in peasant market economies assume two general forms: asymmetrical (partners of unequal socioeconomic and/or ethnic status) and symmetrical (partners of equal socio- economic and/or ethnic status). In the former, the terms of trade (prices) habitually favor the partner of higher status (who is buyer) in comparison with open market prices at the expense of the partner of lower status (who is seller). This occurs, among other places, in Mesoamerica (e.g., Mixtec highlands of Oaxaca, Chiapas highlands), where peasant Indian hinterland populations are dominated by mestizo (ladino) populations in towns and cities, and where buyers who specialize in bulking and re-selling on a wholesale basis (acapara dares) are invariably recruited from the dominant mestizo class. This relationship may be reinforced through the extension of loans (cash advances) by the buyer to the seller, and persists, among other reasons, because of a series of market conditions that create a structure characterized by quasi-atomistic competition and relatively undifferentiated production on the supply side, and by minimal competition and relatively few big-lot buyers (i.e., quasi-oligopoly) on the demand side. There are, on the other hand, asymmetrical quasi-partnerships in other areas of Mesoamerica (e.g., Oaxaca valley), where the bargaining advantages of the big-lot buyer are partially offset by the fact that the sellers are representatives of closed production units (corporate villages) with natural monopolistic aspects (though without conscious, coordinated planning and control of output and pricing). In this market situation the big-lot buyer who habitually abuses his superior bargaining power risks the possibility of antagonizing the sellers-perhaps with the consequence of eliminating his only viable, direct, and regular supply source for specialist products.

Symmetrical partnerships result in terms of trade (prices) that do not regularly favor one partner in comparison with on going market prices; market prices, together with the value placed on maintaining the partnership, form a basis for settling each transaction. A classic ethnographic example or WIS type is the pratik relationship of Haiti, in which the participants are equals for trading purposes. This relationship may link together producer and middleman, middleman and middleman, or middleman and consumer. But whatever the specific linkage may be in any given case, the pratik relationship operates on the same ·principle as other varieties of symmetrical partnership: partner A accepts what-ever goods partner B offers, on the understanding that partner B will either accept whatever partner A offers later or continue to supply him when goods are scarce. Stipulations as to the class or type of goods traded are specified in each situation (e.g., in Haiti various kinds of fruits and vegetables are the principal trade goods). The important thing is that the relationship reduces mutual risk, since both partners ensure against total failure to sell or total stoppage of supplies).

The extension of credit is an important basis for both asymmetrical and symmetrical trade partnerships between middlemen of various types and producers of agricultural and artisan goods. In most cases the creditors in such arrangements have very limited capital, which limits the number of potential borrowers they can serve. Such arrangements are customarily established on a foundation of mutual personal trust between the partners, and even if a creditor may have a relatively large stock of capital, he will not know enough individuals well enough to justify his establishing a significantly larger number of credit-reinforced partnerships than he would otherwise. The most common arrangement is for a peasant producer-seller (agriculturist, fisherman, artisan) to borrow from a middleman-buyer (e.g., shopkeeper), who also provisions him with consumer goods or cash for capital replacement purposes (e.g., repair or purchase of tools and equipment, purchase of seed). An interesting variation is reported from Java, where farmers extend credit to middlemen by giving up a portion of their crop harvest in exchange for a claim on the sales returns to the middleman, either at a predetermined price or at a price geared to the actual sale price. Considered from the perspective of economic development, trade generated through credit relationships is significant, since it facilitates the risky transition from subsistence production to a cash economy (Salisbury 1968b). On the other hand, from the perspective of political economy, trade arising out of asymmetrical credit relationships may, as a functional equivalent to debt peonage, operate to perpetuate economic under- development and class exploitation.

Intercommunity Trade

Intercommunity trade involves the acquisition of products (foodstuffs, raw materials, or manufactured goods) which are unavailable in the importing community. Such trade often reflects permanent inter-community and/or interregional production specializations and always arises through mutual interest in comparative advantage, each trading unit gaining materially or symbolically. Since this trade customarily requires traveling considerable distances across political or ethnic boundaries, the potential for hostility and conflict is high, thus creating a need for peacekeeping or solidarity-promoting mechanisms. Various modes of intercommunity trade are found in the ethnographic record, including “silent trade,” “visiting trade” (i.e., extension of generalized reciprocity to intercommunity sector “administered trade” and extension of market systems with or without itinerant middlemen. Archaeological research yields no evidence of regular intercommunity trade before the end of the Pleistocene, but scattered data suggest the existence of sporadic trade in non subsistence goods during the late Pleistocene and early post-Pleistocene.

The so-called silent trade or dumb barter was an exotic mode of trade in which goods was transferred at customary rates without any meeting or discussion. Representatives of one group would deposit goods to be traded at a customary place, retreat some distance, and give a signal, perhaps a shout or a stroke on a gong; then the representatives of the second group would bring their trade goods to the same place and retreat. The first group then return and remove the newly deposited goods (assuming these met the established criteria of equivalences), the second group took the original goods, and everyone went home. A classic example of this kind of trade between the Carthaginians and African tribesmen was recorded by Herodotus; subsequent reports indicate that it also was operative in Siberia, Lapland, West Africa, Timor, Sumatra, India, Ceylon, New Caledonia, New Guinea, and aboriginal California. It usually occurred where relatively primitive people regularly traded with people of a more technologically advanced culture; in Africa; for example, the Bambuti pygmies gave bananas for meat from the neighboring agricultural Bantu. Unfortunately, we may never achieve a more complete understanding of this now extinct institution and its social and economic ramifications for lack of detailed statement of what was traded, when, under what conditions, and how often.

Visiting trade is commonly, but not exclusively, found among relatively unspecialized tribal societies with clearly demarcated boundaries. It is closely articulated with ceremonial, ritual, and kinship spheres of behavior, and may involve the transfer of token, symbolic, or utilitarian objects that are given as gifts (rather than bartered). When this is the case, the trading activity is based on the principle of deferred (rather than immediate) reciprocation. In other words, it extends the rules and norms of a kinship-based, generalized reciprocity system operating within a given community into a transactional system operating between communities. Instances of visiting trade culled from the ethnographic record can be classified and compared in two dimensions: (I) content of transactions vegetables, regional specialities, like Turkish obsidian or Guatemalan quetzal feathers or Amphletts pottery; permanent, like stone quarries; or occasional and shifting, like food during times of shortage and surplus in California and in the Northwest Coast; symbolic, as in the transfer of kula tokens, ritual patterns (Navaho-Ute dances), or social patterns (Yap Empire kin ties, Arapesh trading partnerships); and (2) mode of transaction e.g., alternating visits between equals, as in kula voyages; unilateral trips, like those of the “tribute bearers” of the Caroline Islands; rendezvous, as in Australian aborigine regional ceremonies.

“Administered trade” is typically conducted in “ports of trade” between political agents of the trading societies. Goods are traded on a long-term set equivalency basis, with haggling restricted to non price matters like measures, quality, or means of payment. In such trade the import interest of both communities is dominant over their export interest, and goods typically move long distances in fleets or caravans through unpoliced areas to a neutral port, which has not always been a coastal or river site; such “ports” have often been located in an ecological border area between highlands and lowlands, desert and jungle, or forest and savannah. This form of trade was operative in many areas of the world as an aspect of preindustrial state organization. Ports of trade are known to have existed in the Aztec and Maya regions of Mesoamerica; on the Malabar coast, in Madras, Calcutta, Rangoon, Colombo, Batavia, and in China; in the north Syrian coast and in certain Greek city-states of Asia Minor and the Black Sea; and, finally, in the African kingdoms of Whydah-Dahorney on the upper Guinea coast and of Angola on the lower Guinea coast.

Intercommunity trade conducted outside of (or alongside) systems of partnerships and/or elaborate ritual, and not subject to administered pricing or set equivalences, is best understood in the context of market principles. In areas like Mesoamerica, Africa, and Melanesia, which yield classic examples of nonmarket forms of trade, we also find substantial evidence from aboriginal times of market forms of trade. The Aztec trading class (pochteca) included sixty-nine separate special trader categories, and there is documentation showing that many of their trading operations, involving the marketing of goods between separate regions and communities in Mesoamerica, not only were conducted on the principle of buying cheap and selling dear, but also often entailed complex sequential exchange transactions calculated to yield material profit. On the frontier between the eastern Sudan and Uganda, and in highland-lowland border zones in Mesoamerica, specialized in tribal or intercommunity production, together with reinforcing ecological conditions, promoted inter tribal trade, with certain groups dominating as middlemen. Thus the Kokir and the Didinga made yearly profits from their trade in grain, goats, and metal products with other tribes. A similar situation occurred in Melanesia, where the Sinaketans served as intermediaries between Trobriand and Dobuan production centers.

Intracommunity Distribution

Economic transactions between an individual distributor and many receivers within a single community-in so far as they occur regularly and involve the circulation of a significant proportion of total goods produced-characterize band and tribal societies. Such distributions typically are restricted to foodstuffs and, like ceremonial gift exchanges, usually (though not explicitly or necessarily) generate a deferred counter flow of equivalent goods. Thus the circulatory process in this type of intracommunity distribution approximates the general pattern of economic exchange: goods changing hands through an initial act of distribution result in a return flow (to the distributor) of goods different from yet equivalent to those originally given. In other words, the distributor disposes off goods that he can’t or won’t consume himself (goods that are often products of his own labor) and obtains in return a claim on the future output of others. Distributive acts of this kind, while not occurring under conditions of prolonged, anomalous food shortage, do serve to even out the impact of temporary shortages or differences in output between households, which to greater or lesser degree characterize all primitive and peasant economies. Sharing through distributive acts, however, is by no means a culturally imperative mode of adaptation to conditions of food scarcity (e.g., Holmberg 1950). In many societies it appears to be one advantageous way of coping with inadequate technology for the storage and preservation of perishable foodstuffs.

The ethnographic record clearly shows that intracommunity distributive activities have kinship and political aspects. Typically, food distributions are made along kinship lines; even when consanguineal or affinal ties are not the sole basis for such distributions, there is often a concomitant political process in which the putative generosity of the giver is a display of his power and may be associated with his occupancy of chiefly status. This is true not only of redistributive systems based on networks of tribute and/or taxation in kind, but also of less elaborate systems in which the most efficient or successful producers tend to be net givers (Henry 1951). In all of these systems a continuous series of one-way transactions between two individuals serves to differentiate their positions in the social hierarchy.

Ceremonial Gift Exchange

Like non- ceremonial distribution, ceremonial gift exchange consists of an initial transfer of goods which in the short run appears as a one-sided give-away, but in the long run leads to a deferred counter-transfer. Unlike non ceremonial distribution, however, ceremonial gift exchange often involves ritual items not intended or suitable for consumption (e.g., shells in Melanesia, copper dish among the Kwakiutl), and gives rise to symbolic or incorporeal returns (e.g., political support, esteem, courtesy, fealty , friendship). Indeed, the term “prestation” is preferable to “gift” in this context, because an initial ceremonial transfer-circumscribed as it is by various religious, political, and ritual sanctions-often is not voluntary and always creates the obligation to return As Mauss (1954) emphasized in his seminal essay on the relationship between gifts and return gifts (see also Panoff 1970), the most compelling force toward reciprocation by the recipient of a given donation is the fact that he is minister to the magister donor until such time as he reciprocates. Failure to reciprocate results in social disapproval and loss, of prestige.

Ceremonial prestations regularly occur in all societies, but quantitatively (e.g., volume of goods traded) and functionally (i.e., role in the economy and elsewhere) they are considerably more important in primitive and peasant societies, where they are often associated with life cycle celebrations or feasting related to other social or political events. Mauss’s study, for example, includes illustrative cases of ceremonial prestations in Samoa, New Zealand (Maori), the Andaman Islands, Melanesia, northwest North America (Kwakiutl, Tlingit, Haida), ancient Rome, the Hindu classical period, and feudal Germanic societies.

In any society a prestation cycle is based on three kinds of obligations: to give, to receive, and to repay or return. In primitive and peasant societies, various cultural and situational pressures encourage the individual to give gifts to others. For example, among the Zapotec-sp-caking peoples of the valley of Oaxaca, where an ancient reciprocity system known as guelaguetza still operates (Beals 1970), individuals occupying certain social statuses vis-a-vis ego (consanguineal or affinal kinsmen, fictive kinsmen, neighbors, friends) will suffer disapproval or loss of prestige if they fail to cooperate when he asks them for a donation. The obligation to give, on the other hand, carries with it an obligation to accept a donation when it is offered. A refusal of the donation is tantamount to a rejection of social relations, and might be interpreted as a declaration of hostility. Finally, the obligation to return the donation closes the prestation cycle. In the Zapotec case, the recipient is required to reciprocate in kind when the donor requests him to do so. This requirement is reinforced by an accounting procedure according to which the exact specifications of the donation are measured and recorded in an account book, which is consulted when the counter donation is subsequently offered. Failure to reciprocate with an equivalent donation when requested to do so may result in the intervention of local political or judicial authorities and the levying of a fine on the reneging party. However, the usual pattern in Zapotec society is for any donation to be reciprocated with “interest” or on an incremental basis (e.g., a turkey weighing ten pounds is reciprocated with one turkey weighing twenty pounds or two turkeys weighing more than ten pounds; ten dozen eggs are reciprocated with twenty dozen eggs and four kilo-grams of chocolate). This practice can be viewed not only as a response to the prestige associated with generosity but as a means of saving, as well as a means of extending the inter household do-nor/recipient -recipient/ donor relationship indefinitely. Of course, when a donation is reciprocated equally (without increment) the former economic equilibrium between the two households is restored and the future prestation potential is maintained.

The exchange of gifts

The answer lies in the analysis of gift exchange. A theory of the significance of gift-giving in simple societies was first advanced by Durkheim’s follower Marcel Mauss in his Essai sur Le Don? Mauss used as his most telling examples the Kula sailing expeditions for the exchange of shell ornaments, which Malinowski had described in his study of the Trobriand Islands, and the potlatch competitive distributions of property made by the Kwakiutl and neighboring tribes of ‘British Columbia and Alaska, for which an important source is the texts collected by Boas. Since he wrote his essay, anthropologists have studied many more systems of gift exchange. They have also developed their understanding of the social significance of gifts for which no direct return is made.

Most of the people who practice ceremonial gift exchange are also engaged in trade, and if it is necessary to make a long sea voyage in order to exchange gifts, they usually make the voyage an occasion for some barter deals. But they distinguish clearly between the two, and in a manner that would be readily understood in western society.

We often say that relatives should not engage in business transactions because they are bound to quarrel; some go further and say they won’t have business dealings even with their friends. Implicit in this attitude is the recognition that in a trade or business you are trying to make the best bargain you can, you are entitled to something you can legally claim, and if you don’t get this you can either go to law with the person you think has cheated you or have nothing more to do with him, or both. But it is very difficult to make up your mind to have nothing more to do with your relations or even to break off a friendship; and in small-scale societies it is all but impossible. From another point of view, it is hard to refuse credit to a kinsman and even harder to press him for payment.

Friends and relatives in western society expect to give and receive help when this is needed; they expect to give presents on appropriate occasions (birthdays, weddings, Christmas), and to offer one another hospitality. It would be unheard of to make money repayment for such gifts, and most people would not dream of calculating what they were worth; but most people, nevertheless, have an idea that the balance between giver and receiver should be kept roughly equal.

Gift-giving in small-scale societies follows the same principles. You do not haggle, you accept what you are given with ceremonious politeness, gnashing your teeth in private if it is not what you expected, and it is left entirely to you to decide the appropriate return. Of course there is a general notion of the relative value of different. Objects, as there is a general awareness of what people will consider mean.

If we see gift-giving in western society in this light, we realize that it is not a spontaneous expression of affection by the giver but a socially expected component of certain relationships, we shall be half-way to an understanding of its significance for people of simple technology. “Materials objects,’ said Evans-Pritchard, are the chains along which social relationships run”. Gifts are one way of maintaining social relationships in all societies, and in small-scale societies they are a particularly important way.

It is not only in small-scale societies that the objects given are usually in some way different from those of everyday use. In the western world people do not give, as serious presents, minor objects of household equipment; this would imply that the recipient was too poor to buy such things. Typically a gift is something that it might be considered extravagant to buy for oneself (even if it is returned in kind; there was once a family in which for years two brothers-in-law each gave the other a bottle of champagne for Christmas). Similarly in small-scale societies ceremonial gifts consist of highly-prized objects, and sometimes the only use of such objects, or so it seems at first, is as Counters in the game of gift exchange. Characteristic of this game is the combination of social with economic considerations; recognition of the value of the goods exchanged is an essential part of it, but equally important is the social relationship that the exchange creates.

The Kula

One of the most famous gift-exchange institutions is the kula, which was first described in detail by Malinowski and which appears to be similar in essentials to many other systems in Melanesia and Australia. In the Trobriand Islands, where Malinowski worked, every man who can form partnerships for the exchange of shell ornaments with other men in his own and in other islands. These ornaments are of two kinds, necklaces of red shell and armlets of white shell. The exchange is not a single transaction in which both partners give and receive. When they meet, the one whose turn it is makes a gift; the return gift is made at their next meeting. If the partners are neighbours the two meetings may follow close on one another’s heels. But the spectacular part of the exchange takes place when people travel by canoe to visit their partners in other islands. Exchanges are not made in all directions, but in a fixed order like a grand chain in a dance. Each man’s overseas partners are in the islands on either side of his own, and each man receives necklaces from the partners on one side and armlets from those on the other. The most highly prized of these objects are named, and some are so highly valued that the history of the men who have possessed them, and their whereabouts at any given time, is known: a man who knows that one of these is on its way to his home is likely inwardly to be eagerly calculating his chance of getting it. But no one may retain possession of a kula object for long. For a little time he has it to boast of, and wear on ceremonial occasions; then it must go on to one of his partners.

Those who went on kula voyages did not take their gifts with them; they arrived empty-handed, offerings only, by their presence, a reminder that a ‘debt of honour’ was due to them. Success in the kula was achieved, it was supposed, by using magic to soften up the partner and make him feel generous, The principle on which these ‘delayed exchanges’ were made was what has already been mentioned. That every gift should be the equivalent of that received, but that it was for the giver to calculate the equivalence. Although there was general agreement as to the relative value of different objects, there was no question of treating the inferior ones as ‘small change’.

Clearly, in distributing their gifts, men were not influenced by magic, but by calculation, and this calculation must have been of two kinds-what gift would be most likely to elicit a prized counter gift known to be on its way to one’s partner’s home, and whom one could least afford to offend. This is not a calculation of material return, but certainly it is a rational way of allocating resources.

The kula partner ‘buys’ glory; he also ‘buys’ friendship. His partners in distant islands are allies to whom he can look for protection in what would otherwise be hostile country; his partners at home arc members of other lineages than his own, usually his affine, people from whom he is not in actual danger but on whose goodwill he cannot absolutely count.

Salisbury’s, writing of the Siane people of the New Guinea Highlands as he saw them in 1951 shows how they distinguish the exchange of valuables-pigs, shell ornaments, and bird of paradise plumes-between members of different autonomous groups from the transfer of less valued kinds of property between kinsmen and neighbours in the course of everyday life. The first kind of transaction is called gimaiye, the second umaiye. Gimaiye presentations are made on the types of occasion that are held to call for gift-giving in most societies of simple technology; at birth and marriage ceremonies, when peace is made after a homicide, as well as at the seasonal first-fruits rites. The gift is regarded as a-transfer between descent groups, not between individuals; it is presented by the representative of one side and received with a formal speech of thanks by that of the other. The quantity given is carefully recorded; each valuable is represented by a bamboo chip, and when the return presentation is made the different objects are checked off by removing chips from the pile.

But within the descent group the accepted principle is that ‘help’-umaiye-is given without any reckoning of scores. This is the context in which work parties are rewarded with food or a share of the crop harvested, and hospitality offered to casual visitors. In fact, approximate reciprocity is secured by the diffuse sanction of public opinion. Salisbury shows that there is sometimes more calculation than the Siane will admit. They obtain salt-a rare commodity in the highlands of New Guinea-by ‘help’ – umaiye from ‘friends’ or trading partners in the villages where it is produced. A party visits a salt-village taking with them pigs, which the hosts kill to entertain them, and when they leave the farewell present they take with them-a departing guest always gets a farewell present consists of cakes of salt. The conventional description of this transaction is that they have been generously entertained on a friendly visit, but there is a pretty good idea that one pig ought to earn one cake of salt.

What. Salisbury’s account shows are that the type of exchange is determined primarily by the structural relationship between the parties. A formal gimaiye exchange could not be made between persons conceiving themselves as members of a group recognizing the obligation of umaiye; it is a way of creating and maintaining alliances between groups which without such exchanges would be strangers or enemies.

The potlatch

Just as the Trobriand kula is a particularly well studied example of an institution that is found over a very wide area of Melanesia, so the potlatch of the southern Kwakiutl of British Columbia is the most fully documented instance of an exchange system that is characteristic of four groups of the American north-west, the Haida. Tlingit, Tsimshian, and Kwakiutl. But the documentation of the two systems illustrates the contrast between old and new theoretical assumptions and methods of fieldwork. Malinowski’s ‘functional’ approach had as one of its principles that one should look for logical coherence and system in the behaviour one observed, and thus find a rationale for the institutions in question. Boas recorded what he saw and was told in most painstaking detail, but, since he believed that culture was a haphazard collection of traits, he did not look for coherence. His records tell more of what the Kwakiutl thought about the potlatch than what they actually did, and later anthropologists have had difficulty in picturing it as what Malinowski would have called a ‘going concern’. However, a new reading of the data, based largely on the recollections of two Indians who had been active in potlatching in the past, enables us to see it in this way.

‘Potlatch’ means ‘give’, and in principle of a counter-gift was important in this institution as in the kula. But it had significance beyond that of linking pairs of individuals in a relation of friendship. A potlatch was a public distribution of goods made both to establish certain claims of the giver and to recognize the claims of the recipients. The Kwakiutl had an elaborate ranking system which placed every man in order according to his degree of closeness in descent to the remotest remembered ancestor. The line of eldest sons was senior and provided the chiefs of the different descent groups. Chiefs had special ritual privileges- titles and the rights to use songs, dances, carved mask, and so forth. But in order to demonstrate his claim to these that is the claim to be a chief a man had to give a potlatch at which he recalled the famous potlatches and other deeds of his ancestors, and made the distribution to his guests in strict order of rank. Thus, he proved both that he has the command over enough wealth (contributed by his descent group as a whole) to be given away and that he was properly informed about the accepted order of rank. As the Kwakiutl came to earn money and so acquire wealth from outside the system, lesser men began to potlatch and now it became the rule that a man who had previously made a present to the giver should get a larger gift in return, even if this was out of proportion to his rank order. Rivals for a title or for precedence would assert their claim by trying to outdo each other in the amounts they distributed.

Another way-in which the Kwakiutl used their property is a manner that might be considered ‘uneconomic’ was in what has been called the ‘rivalry gesture’. Among their prized objects were large shield-shaped plaques of copper which- like the kula valuables were used only in potlatch exchanges. The rivalry gesture consisted in publicly destroying such an object; this act is committed by an enemy as an act of revenge or to humiliate. It put him in a worse position than the receiver of a gift who had later to make a return since he received nothing. Such gestures might be made at a potlatch where they got the maximum publicity, but they were not an integral part of the potlatch ceremony.

Nevertheless they had in common the principle that material goods may be used deliberately and with calculation to attain non-material ends. The potlatcher ‘buys’ recognition of his status; the destroyer of a ‘copper’ ‘buys’ the humiliation of a rival. Both must certainly give much thought to the allocation of their resources.

As Mauss pointed out, one can find analogues of kula and potlatch in many such societies. The Mandari of the upper Nile, who were lesser known to ethnographers, illustrate the characteristic features of both. Mandari chiefs exchange valuables with their fellow chiefs, not in a fixed order as with the kula, nor with the same elaborate preparation; this is not necessary, as their journeys are made over dry land. These exchanges do not apparently create permanent partnerships or rivalries (the latter word was used by Jean Buxton, who studied these people) between pairs of chiefs. A chief who has seen a fine weapon in another’s house makes a formal visit to ask for -it, bringing with him a band of retainers with presents of a more everyday kind, food and tobacco to distribute in his rival’s house. Later on, a return visit is made to demand a return gift. It is noticed here that the calculation of equivalence is not left to the giver. But the potlatch principle is operative in that he who refuses to give what is asked is shamed; he is said to be ‘afraid’ and is an object of ridicule. Another Mandari custom is for a band of youths to go to the home of a neighbouring chief and offer to honour him with a dance, for which they will expect to be rewarded with gifts like bulls and spears, earlier but now bulls and money. This is not a challenge in the sense that the youths are in competition with the chief, but there is the obligation to return a service which has not been solicited but cannot be refused without loss of prestige.

In Africa, as in many other parts of the world, the most conspicuous way in which social relationships are created by transfers of property is the payment which legitimizes marriage. This can be described as an exchange of goods for women; to Levi-Strauss it is a substitute for an earlier direct exchange of women. But as the chapter on marriage has argued, it is certainly not the type of once-for-all trans-action that we think of when we speak of a sale; on the contrary, it initiates a permanent relationship between the givers and receivers of the bride wealth, o ther types of relationship rest on the exchange of cattle alone, and in that respect are analogous to the kula. The Turkana of northern Kenya establish, friendships with individuals by gifts of cattle in remote parts of the country through which they wander with their herds. On his home ground the partner in such an exchange is an ally and protector to his fellow. Here-again there is no formal arrangement for making the return gift; it may be made at the initiative of the giver, or asked for by a partner who is in some urgent need, notably for bride wealth cattle. As the Turkana move about in small bands through their inhospitable country these transfers are made with the minimum of publicity, and there seems to be no sanction of shame or ridicule against the man who fails to make a gift when it is his turn; indeed sometimes it is necessary to refuse a partner because a close kinsman, whose claim is stronger, is also asking for help, simply, if a gift remains too long unreciprocated, the friendship lapses.

These exchanges maintain partnerships between equals. In other cases a gift which cannot be repaid in kind creates a relationship of inequality, and in societies where political authority is not vested in recognized offices the deployment of superior wealth is one of the roads to leadership. A leader must have the qualities considered appropriate to the role, but he must also be in a position to put others under obligation to him, In this case he will not seek out persons on whom to confer gifts but will render help to those in need, and they, if they can make no material return, will become his ‘henchmen’; either in the full sense of being available to work for him when he needs them or in the narrower: sense of simply giving him their support in public discussion.

The procedure and values of gift exchange may operate also in peasant societies where value for exchange purposes is regularly measured in terms of money. The making of feasts that is, in effect, the distribution of food on a lavish scale to celebrate significant occasions in people’s lives, notably marriages, seems to be characteristic of all societies, and ‘entertaining’ without any such specific justification is characteristic of many. In non-monetary economies the distribution of the food itself constitutes the economic aspect of the feast; in industrialized societies this kind of distribution is an infinitesimal part of the giver’s total economic activity. But there is an intermediate stage where the continuing exchanges created by reciprocal feasting include money as well as goods. When a Malay peasant in Kelantan gives a feast the guests, most of the people who have previously entertained him, bring presents of money. The host expects that these will amount to more than the outlay on the feast; indeed, a man often gives a feast when he wants to raise cash for some heavy item of expenditure such as a new fishing net. Firth has described these feasts as a means of calling in credit. Everyone who has earlier received a similar money contribution from the host is under a social obligation to attend the feast and bring his gift. But this procedure is quite different from pressing for the repayment of a loan. There is no legal obligation to return the equivalent of what was originally received, or indeed to return anything at all. The procedure is what would anywhere be associated with the making and returning of gifts. Sometimes the host makes a glossary of his outlay for the gifts. The ways of using property which have been described might indeed suggest to a superficial observer a failure to appreciate the value of material possessions. People whose major preoccupation is accumulating vast stocks of blankets just to give away, people who keep ‘open house’, people like the Swat chief who was said to come down to his men’s house with his shirt full of coins to hand out to whoever was there, in western society would get the name of spend thrifts. A leading economist has called the potlatch a ‘deviation from the acquisitive behaviour of competition’. But whatever may be said of the potlatch, there is nothing reckless about the long-term; elaborate preparations that are made for it; and other types of ‘free’ distribution are not reckless or irrational either. In this kind of transaction people ‘buy’ if one likes to use the word, honour and power; and though honour and power are not material goods, most men account them good. In societies of simple technology people allocate their resources among various possible ends on a different scale of priorities from that to which the western business world is accustomed, but they allocate them consciously and rationally. Firth has written in a discussion of gift exchange from the economist’s point of view: ‘It is possible to conceive of an economic system in which the items of productivity, of concern in maximization, are status tokens and symbolic ties.’ Of course, as he also makes clear there is no actual economic system in which property is valued solely as a source of status, whether this is gained by possessing and displaying it or by giving it away. But this way of describing institutions of competitive gift exchange brings home the fact that they are not illustrations of inability to make economic calculations, but the very opposite.

In many societies more wealth circulates in transactions which are as much social and political as economic-payments of bride wealth and blood wealth, gifts to create and maintain friendships and alliances, tribute to superior authorities than in trade or barter where commodities are exchanged by a process of bargaining with overt calculations, however rough, of their relative value. But there are others in which barter is recognized and differentiated from gift exchange. The Trobriand Islanders have a word for it is called gimwali. It may be conducted on various occasions. Makers of wooden objects, men from inland villages where there are more trees for their raw material, visit the coast and hawk them around for coconuts and fish. Sometimes coastal people visit these villages to look for some object they need. On kula voyages people barter such goods for the special tiesof the islands they visit, but a man must barter with his own kula partner only.

Summary

Economics and economic anthropology are characterized by a lack of clarity in the theory and analysis of the relations between production, distribution, exchange, and utilization. Among other things, this situation reflects the fact that each of this category is a component of one process, a distinct aspect of one system.
The nature of the relations between these categories may be briefly described as follows: production is the process by which the members of a society appropriate and transform natural resources to satisfy their needs and wants; distribution determines the extent to which the individual participates in this production; exchange enables him to acquire the particular products into which he wishes to convert the quantity allocated to him through distribution; and through consumption products are individually appropriated as objects of use and enjoyment.
Production yields goods adapted to our needs; distribution distributes them according to social laws; exchange distributes further what has already been distributed, according to individual wants; finally, in consumption the products drops out of the social movement, becoming the direct object of the individual want which it serves and satisfies in use. Production thus appears as the starting point; consumption as the final end; and distribution and exchange as the middle; the later has a double aspect, distribution being defined as a process carried on by society, while exchange, as one proceeding from the individual.
In addition, the study of economics can provide the anthropologist with some understanding of the ways in which quantitative data may be analyzed through the application of such tools as supply and demand analysis, time series analysis, matrix analysis, game theory analysis, input-output analysis, and so on. More broadly, the anthropologist, trained as he is in empirical-inductive method, can expect his study of economics to bring him a basic understanding of the nature and significance of deductive model-building as a heuristic tool. He can expect to learn to appreciate, as the economic theorist does, the explanatory possibilities of a method that is based on the assumption that knowledge of what might occur (i.e., problematic) or of what must occur (i.e., apodictic) can lead the investigator to a more comprehensive knowledge of what is actual or occurring (i.e., assertoic) in a given situation. Finally, and more pragmatically, the study of economics provides the anthropologist with increased awareness of the need and rationale for collecting systematic quantitative (or quantifiable) data, especially data focused on the frequency of observed and on its representativeness.
In every society the producer-product relation, once the product is finished, is not necessarily or immediately one of possession; the return of the product to the individual depends on his relations to other individuals. More precisely, the distribution process intervenes between the producer and his product to establish his share (i.e., to transfer rights of possession) in total output according to prevailing norms. Every society has explicit or implicit norms governing the way its total pool of products is to be shared out among its members. It is analytically important, however, to remember that sharing-out behavior is a process guided only partly by norms, not simply a series of acts in response to norms. It may turn out that the producer of a given product has a primary claim on it-but this always depends on the prevailing distribution system. Thus the “primary claimant” might be a non-producer who is a trustee or steward, administrator, owner-boss, lineage head, a reluctant distributor of largess, or a benevolent despot. Whatever the outcome of a given distribution process, it must revolve around some person or persons. In hunting societies, for example, when a number of hunters cooperate to kill a utilizable animal, there are strict rules for ascribing ownership of that animal to only the hunter, who distributes its parts among the others, again in accordance with recognized norms. Likewise, in fishing societies when a number of fishermen work together on a fishing expedition, it is the owner of the boat and/or net who usually distributes the catch.
Although gift-giving has a larger place than market transactions-buying and selling, exchange with a view to a good bargain-in the economy of societies of simple technology, they are by no means lacking in markets in the concrete sense; that is, appointed places where people meet to exchange goods. One could say that the beach where the kula canoes land is a market-place for those members of the crew who are not taking part in the ceremonial exchange. And just as the kula exchange is a means of establishing peaceful contact between people who without it would take mutual enmity for granted, so is a market a place where persons belonging to otherwise hostile groups can meet on amicable terms. The political significance of the ‘market place’ may be equal to its economic significance as a recognized point where goods can be exchanged.
A trading partnership exists when relations between a particular buyer and a particular seller (or giver and receiver) persist beyond a single transaction. Such partnerships are wide-spread in nonmarket economies (i.e., those without market places or organized sector and commodity markets, and with no all-purpose money or undergoing monetization), where they are a major trading mechanism involving individual traders in material transactions with real or fictive kinsmen, affines, or friends.
Intercommunity trade involves the acquisition of products (foodstuffs, raw materials, or manufactured goods) which are unavailable in the importing community. Such trade often reflects permanent intercommunity and/or inter regional production specializations and always arises through mutual interest in comparative advantage, each trading unit gaining materially or symbolically. Since this trade customarily requires traveling considerable distances across political or ethnic boundaries, the potential for hostility and conflict is high, thus creating a need for peacekeeping or solidarity-promoting mechanisms. Various modes of intercommunity trade are found in the ethnographic record, including “silent trade”, “visiting trade” (i.e., extension of generalized reciprocity to intercommunity sector “administered trade” and extension of market systems with or without itinerant middlemen. Archaeological research yields no evidence of regular intercommunity trade before the end of the Pleistocene, but scattered data suggest the existence of sporadic trade in non subsistence goods during the late Pleistocene and early post-Pleistocene.
Economic transactions between an individual distributor and many receivers within a single community-in so far as they occur regularly and involve the circulation of a significant proportion of total goods produced-characterize band and tribal societies. Such distributions typically are restricted to foodstuffs and, like ceremonial gift exchanges, usually (though not explicitly or necessarily) generate a deferred counter flow of equivalent goods. Thus the circulatory process in this type of intracommunity distribution approximates the general pattern of economic exchange: goods changing hands through an initial act of distribution result in a return flow (to the distributor) of goods different from yet equivalent to those originally given. In other words, the distributor disposes off goods that he can’t or won’t consume himself (goods that are often products of his own labor) and obtains in return a claim on the future output of others. Distributive acts of this kind, while not occurring under conditions of prolonged, anomalous food shortage, do serve to lessen the impact of temporary shortages or differences in out-put between households, which to greater or lesser degree characterize all primitive and peasant economies. Sharing through distributive acts, however, is by no means a culturally imperative mode of adaptation to conditions of food scarcity. In many societies it appears to be one advantageous way of coping with inadequate technology for the storage and preservation of perishable foodstuffs.

Like non ceremonial distribution, ceremonial gift exchange consists of an initial transfer of goods which in the short run appears as a one-sided give-away, but in the long run leads to a deferred counter transfer. Unlike non ceremonial distribution, however, ceremonial gift exchange often involves ritual items not intended or suitable for consumption (e.g., shells in Melanesia, copper dish among the Kwakiutl), and gives rise to symbolic or incorporeal returns (e.g., political support, esteem, courtesy, fealty , friendship). Indeed, the term “prestation” is preferable to “gift” in this context, because an initial ceremonial transfer-circumscribed as it is by various religious, political, and ritual sanctions-often is not voluntary and always creates the obligation to return As Mauss emphasized in his seminal essay on the relationship between gifts and return gifts, the most compelling force toward reciprocation by the recipient of a given donation is the fact that he is minister to the magister donor until such time as he reciprocates. Failure to reciprocate results in social disapproval and loss, of prestige.
One of the most famous gift-exchange institutions is the kula, which was first described in detail by Malinowski and which appears to be similar in essentials to many other systems in Melanesia and Australia. In the Trobriand Islands, where Malinowski worked, every man who can form partnerships for the exchange of shell ornaments with other men in his own and in other islands. These ornaments are of two kinds, necklaces of red shell and armlets of white shell. The exchange is not a single transaction in which both partners give and receive. When they meet, the one whose turn it is presents a gift; the return gift is made at their next meeting. If the partners are neighbours the two meetings may follow close on one another’s heels. But the spectacular part of the exchange takes place when people travel by canoe to visit their partners in other islands. Exchanges are not made in all directions, but in a fixed order like a grand chain in a dance. Each man’s overseas partners are in the islands on either side of his own, and each man receives necklaces from the partners on one side and armlets from those on the other. The most highly prized of these objects are named, and some are so highly valued that the history of men who have possessed them, and their whereabouts at any given time, is known: a man who knows that one of these is on its way to his home is likely inwardly to be eagerly calculating his. chance of getting it. But no one may retain possession of a kula object for long. For a little time he has it to boast of, and wear on ceremonial occasions; then it must go on to one of his partners.
Just as the Trobriand kula is a particularly well studied example of an institution that is found over a very wide area of Melanesia, so the potlatch of the southern Kwakiutl of British Columbia is the most fully documented instance of an exchange system that is characteristic of four groups of the American north-west, the Haida. Tlingit, Tsimshian, and Kwakiutl. But the documentation of the two systems illustrates the contrast between old and new theoretical assumptions and methods of fieldwork. Malinowski’s ‘functional’ approach had as one of its principles that one should look for logical coherence and system in the behaviour one observed, and thus find a rationale for the institutions in question. Boas recorded what he saw and was told in most painstaking detail, but, since he believed that culture was a haphazard collection of traits, he did not look for coherence. His records tell more of what the Kwakiutl thought about the potlatch than what they actually did, and later anthropologists had difficulty in picturing it as what Malinowski would have called a ‘going concern’. However, a new reading of the data, based largely on the recollections of two Indians who had been active in potlatching in the past, enables us to see it in this way.
‘Potlatch’ means ‘give’, and the principle deserves a counter-gift was important in this institution as in the kula. But it had significance beyond that of linking pairs of individuals in a relation of friendship. A potlatch was a public distribution of goods made both to establish certain claims of the giver and to recognize the claims of the recipients. The Kwakiutl had an elaborate ranking system which placed every man in order of his degree of closeness in descent to the remotest remembered ancestor. The line of eldest sons was senior and provided the chiefs of the different descent groups. Chiefs had special ritual privileges-titles and the right to use songs, dances, carved masks, and so forth. But in order to demonstrate his claim to these that is the claim to be a chief a man had to give a potlatch at which he recalled the famous potlatches and other deeds of his ancestors, and made the distribution to his guests in strict order of rank. Thus to prove both that he commanded enough wealth (contributed by his descent group as a whole) to be able to give it away and that he was properly informed about the accepted order of rank. As the Kwakiutl have started to earn money and so acquire wealth from outside the system, lesser men perform the potlatch and now it became the rule that a man who had previously made a present to the giver should get a larger gift in return, even if this was out of proportion to his rank order. Rivals for a title or for precedence would assert their claim by trying to outdo each other in the amounts they distributed.

you can view video on Economic Exchange