21 Economic Organization

Dr. Abhijeeta Das

CONTENTS

Learning Outcomes

1. Introduction
2. Historical Background of economic organization
3. The Division of Labor
4. Distribution and Exchange
5. Redistribution
6. Economies of Indian tribes

Learning Outcomes

After studying this module:

• You shall be able to learn the economic activity and types of economic organizations through the prehistoric times.
• You would be able to know Thurnwald’s classification of economic organization with Indian examples.
• You would be able to identify the division of labor by gender and age, exchange of goods and gifts such as the Kula, the Potlatch one of the most famous gift exchange institutions.
• In addition to all these cited above, you would also understand the economies of Indian tribes along with three modes of distribution and exchange i.e. reciprocity, re-distribution and market exchange.

1. Introduction

Like law and politics, economics is an aspect of social organization. Those who conceive economics as essentially concerned with money and prices are on firm logical ground in saying that there can be no society which do not exchange goods for money and so cannot make exact calculations of price. But this is a narrow view of economics as compared to the view of politics which holds that there cannot be politics without the state. There are many wider definitions of this field. Some have called it the science of choice. Economics is concerned with the way people manage their resources (mainly but not entirely material) and particularly the choices they make between different uses of these – ‘the allocation of scarce means to competing ends’. Raymond Firth, a leading student of the economics of small-scale societies, has called it as ‘that broad sphere of human activity concerned with resources, their limitations and uses, and the organization whereby which are brought in a rational way in relation with human wants.

2.Historical Background of economic organization

Contemporary primitive economics are very similar to those of prehistoric times. This will be clear when we look at the various types of economic life listed by Thurnwald, some of which concern us directly. They are:

1. Homogeneous communities of men as hunters and trappers, women as collectors. The Kadar, the Chenchu, the Kharia, the Korwa are some of the Indian tribes falling into this category.
2. Homogeneous communities of hunters, trappers and agriculturists. The Kamar, the Baiga and the Birhor are examples of this type from tribal India.
3. Graded society of hunters, trappers, agriculturists and artisans. Most of the tribes in India fall under this category. The Chero and the Agaria, among so many others, are famous artisans.
4. The herdsmen, The Toda and some sections of the great Bhil tribe furnish classic examples in India.
5. Homogeneous hunters and herdsmen. This category is not represented among Indian tribes. The Toda do not hunt, nor do they catch fish or birds.
6. Ethnically stratified cattle-breeders and traders. The Bhotiya, of the sub-Himalayan region of Uttar Pradesh, breed yaks and jibus (cross between yak and cow) and are itinerant traders; they come down to the plains in winter and go up the hills right up to Tibet in summer.
7. Socially graded herdsmen with hunting, agricultural and artisan population. 

3.The Division of Labor

The development of technology consists essentially in the invention of tools and processes by means of which material goods can be produced in greater quantity and with less physical effort. Along with this goes greater and greater specialization, and a conspicuous aspect of this specialization, as we are familiar with it, is that the production of food is left to a small number of people, while the rest exchange for food the reward they get for their contribution to the total product of their society; this may consist in hewing coal, fixing in place some part of a motor-car, programming a computer, or even writing a book. So when we talk of societies in which there is little specialization. In such societies every household expects to provide for itself the essentials of food, clothing, and shelter.

Adam Smith pictured the progressive division of labor in a rather simple way. At first, he said, human labor was directed wholly to the production of food. But there is a limit to what people can eat, and so a time came when men’s stomachs were full and there was a surplus of food. This was available to exchange for other material goods, in which, he maintained, there are infinite possibilities of variety insatiable demand.

So the division of labor in societies of simple technology is not a matter of the full-time practice of different special skills. For most purposes it rests on differences of age and sex. Children and old people cannot do heavy work; children, though, begin to be taught the work of farming and household work almost as soon as they can start to walk. On the whole it is men who do the work that takes them away from the homestead and as such hunters and herdsmen are men.

Division of Labor by Age

Division of labor according to age is also typical of human societies. Among the Ju/’hoansi, for example, children are not expected to contribute significantly to subsistence until they reach their late teens. Freed from food taboos and other restrictions that apply to younger adults, they may handle ritual substances considered dangerous to those still involved with hunting or having children.

In some food-foraging societies, women do continue to make a significant contribution to provisioning in their later years. Among the Hadza of East Africa, the input of older women is critical to their daughters, whose foraging abilities are significantly impaired when they have new infants to nurse.

In many traditional farming societies, children as well as older people may make a greater contribution to the economy in terms of work and responsibility which is common in industrial or postindustrial societies. For instance, in Maya peasant communities in southern Mexico and Guatemala, children not only look after their younger brothers and sisters but also help with housework. Girls begin to make a substantial contribution to the work of the household by age 7yrs or 8yrs. By age two they are constantly busy with an array of chores-grinding corn, making tortillas, fetching wood and water, sweeping, and so forth.

Similar situations are not unknown in industrial societies. In Naples, Italy, children play a significant role in the economy. At a very young age, girls begin to take on responsibilities of housework, leaving their mothers and older sisters free to earn money for the household. Nor is it long before little girls are apprenticed out to neighbors and kin, from whom they learn the skills that enable them, by age 14yrs, to work in a small factory or workshop. Typically, girls have over their earned wages to their mothers. Boys, too, are apprenticed out at an early age, but they may achieve more freedom from adult control by becoming involved in various street activities which is not so among girls.

Division of labor by gender

Anthropologists have studied extensively the social division of labor by gender in different cultures. In every culture the way whether men or women do a particular job varies from group to group, but typically work is divided into the tasks of either one or the other. For example, the practices most commonly regarded as “women’s work” tend to be those that can be carried out near home and that are easily resumed after interruption. The tasks historically often regarded as “men’s work” tend to be those requiring physical strength, rapid mobilization of high amount of energy, frequent travel at some distance from home, and encountering of high levels of risk and danger.

Some exceptions occur, as in those societies where women regularly carry burdensome loads or put in long hours of hardwork cultivating crops in the fields. In some societies, women perform almost three-quarters of all work, and in several societies they have served as warriors. For example, in the 19th century West African kingdom of Dahomey, in what is now called Benin, thousands of women served in the armed forces for the Dahomean king, and some considered women to be better fighters than their male counterparts.

Societies following a segregated pattern define almost all work as either masculine or feminine, so men and women rarely engage in joint efforts of any kind. In such societies, it is conceivable that someone would even think of doing something considered the work of the opposite sex. This pattern is frequently seen in pastoral nomadic, intensive agricultural and industrial societies, where men’s work keep them outside the home for much of the time.

In the pattern of labor division by gender, sometimes called the dual sex configuration, men and women carry out their work separately, as in societies segregated by gender, but the relationship between them is balanced complementarily rather than inequality. Although competition is a prevailing ethic, each gender manages its own affairs, and the interests of both men and women are represented at all levels. But in integrated societies, neither gender exerts dominance over the other. The dual sex orientation may be seen among certain American Indian people whose economies were based upon subsistence farming, as well as among several West African kingdoms, including that of the aforementioned Dahomeans.

4. Distribution and Exchange

Anthropologists often classify the cultural systems of distributing material goods into three modes:

reciprocity, redistribution, and market exchange.

Reciprocity

Reciprocity refers to a transaction between two parties whereby goods and services of roughly equivalent value are exchanged. This may involve gift giving. Notably, individuals or groups in most cultures like to think that the main point of the transaction is the gift itself, yet what actually matters are the social ties that are created or reinforced between the givers and receivers. Reciprocity is about a relationship between the self and others, gift giving is seldom really selfless. For example, when an animal is killed by a group of indigenous hunters in Australia, the meat is divided among the hunters’ families and other relatives. Each person in the camp gets a share, the size depending on the nature of the person’s kinship tie to the hunters. Typically, if the animal is a kangaroo, the left hind leg goes to the brother of the hunter, the tail to his father’s brother’s son, the loins and the fat to his father-in-law, the ribs to his mother-in-law, the forelegs to his father’s younger sister, the head to his wife, and the entrails and the blood to the hunter. If arguments were to arise over the apportionment, it would be because the principles of distribution were not followed properly. Such sharing of food reinforces community bonds and ensures that everyone eats. By giving away part of a kill, the hunters get social credit for a similar amount of food in the future.

The Kula Ring: Gift Giving and Trading in the South Pacific

Balanced reciprocity can take more complicated forms, whereby mutual gift giving serves to facilitate social interaction, “smoothing” social relations between traders wanting to do business and make profits or between politicians seeking favorable deals for themselves, their parties, or their countries. One classic ethnographic example of balanced reciprocity between trading partners seeking to be friends and do business at the same time is the Kula ring in the southwestern Pacific Ocean, as first described by Bronislaw Malinowski.

Case Study

Kula participants are men of influence who travel to islands within the Trobriand ring to exchange prestige items-red shell necklaces (soulava), which are circulated around the ring of islands in a clockwise direction, and white shell armbands (mwali), which are carried in the opposite direction. Each man in the Kula is linked to partners on the islands that neighbor his own. To a partner residing in the island in the clockwise direction, he offers a Soulava and receives in return a mwali. He makes the reverse exchange of a mwali for a soulava to a partner living in the counter clockwise direction. Each of these trade partners eventually passes the object on to a Kula partner further along the chain of islands. Saulava and mwali are ranked according to their size, their color, how finely they are polished, and their particular histories. Such is the fame of some men that, when they appear in a village, they create a sensation.

Traditionally, men make their Kula journeys in elaborately carved dug out canoes, sailing and padding these 20- to 25-feet long boats across open waters to shores some 60 miles or more away. The adventure is often dangerous and may take men away from their homes for several weeks, sometimes even months. Although men on Kula voyages may use the opportunity to trade for practical goods, acquiring such goods is not always the reason for these voyages- nor is Kula exchange a necessary part of regular trade expeditions.

5.Redistribution

Redistribution is a form of exchange in which goods flow into a central place where they are sorted, counted, and reallocated. Commonly, it involves an element of power. In societies with a sufficient surplus to support some sort of government. Goods in the form of gifts, tribute, taxes, and the spoils of war are gathered into store houses controlled by a chief or some other type of leader. From there they are handed out again. The leadership has three motives in redistributing this income: The first is to gain or maintain a position of power through a display of wealth and generosity; the second is to assure those who support the leadership an adequate standard of living by providing them with desired goods; and the third is to establish alliances with leaders of other groups by hosting them at lavish parties and giving them valuable goods.

The potlatch

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.

‘Potlach’ means ‘give’, and the principle that a gift deserves a counter-gift was important in this institution as in the kula. But it had significance beyond that of the linking of 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 right to use songs, dances, carved masks, and so forth. But in order to demonstrate his claim to these i.e. the claim to be a chief a man had to give a potlatch which he recalled the famous potlatches and other deeds of his ancestors, and made the distribution to his guest in strict order of rank. Thus he proved 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.

Market Exchange

To an economist, market exchange is the buying and selling of goods and services, with prices set by rules of supply and demand. Personal loyalties and moral values are not supposed to play a role, but they often do. Since the actual location of the transaction is not always relevant in today’s world, we must distinguish between the “marketplace” and “market exchange”.

Typically, until the 20th century, market exchange was carried out in specific localities or market places. This is still the case in much of the nonindustrial world and even in numerous centuries-old European and Asian towns and cities. In food-producing societies, market places is often seen as a place where centralized political authority provide the opportunity for farmers or peasants in the surrounding rural territories to exchange some of their livestock and produce for needed items manufactured in factories or in the workshops or craft specialists living (usually) in towns and cities. Thus, some sort of complex division of labor as well as centralized political organization is necessary for the appearance of markets.

The traditional market is local, specific, and contained. Prices are typically set on the basis of face-to-face bargaining rather than by unseen market forces wholly removed from the transaction itself. Notably, sales do not necessarily involve money; instead, goods may be directly exchanged through some form of barter among the specific individuals involved.

In industrializing and industrial societies, many market transactions still take place in a specific identifiable location-including international trade fairs such as the semi-annual Canton Trade Fair in Guangzhou, China, which in Spring 2005 featured some 10,000 Chinese enterprises and drew buyers from over 200 countries. However, it is possible and increasingly common for people living in technologically wired parts of the world to buy and sell everything from cattle to cars without even being in the same city, let alone the same space. For example, think of Internet companies such as eBay where all buying and selling occurs electronically and irrespective of geographic distance. Thus, when people talk about a market in today’s industrial or postindustrial world, the particular geographic location where something is bought or sold is often not important at all.

6. Economies of Indian tribes

The sources of subsistence and livelihood are varied so far the Indian tribals are concerned. Starting from the pure and simple parasitic habit of the nomadic hunters and food gatherers who depend mostly on nature for the sources of subsistence to the settled agriculturalists and the group of industrial laborers, we have the views of different economic set-up of the Indian tribals. From this view point, we can classify the Indian tribals into six broad economic clusters.

1. Food Gatherers and hunters

Among food-gathering tribes, we have the Birhor, the Kharia, the Chenchu, the Malapantaram, the Kadar, the Andamanese, the Onge, the Jarwa, the Yanadi and the Kurumba. They collect fruits, edible roots and honey from the forest and combined the same with the game of hunting and of chase. They usually live far away from rural-urban way of life and live a simple type of social organization.

2. Permanent settled cultivators

Men and women are nearly equal participants in agricultural pursuits. Thus, agriculture gets the central place in the economic activity of the tribal people in India. However, economic life is nowhere static and rapid changes are taking place. Prominent examples of agricultural tribes are the Oraon, the Munda, the Bhil, the Santhal, the Majhwar, the Kharwar, the Baiga, the Korwa, the Gond, the Ho, and the Assam tribes. They practice wet cultivation by transplanting method. Rotation of crops is within the knowledge of these cultivators they work in their own fields as well as in the fields of others as share croppers (Bhag Chasi).

3. Pastoralism

In India the famous Toda furnish a classic example of pastoral economy, their social and economic organization being built around their buffaloes. The Bhotiya of north U.P. are midway between pastoral and agricultural economies. The Toda obtain their living from the milk products and by exchanging the same with neighbouring people to acquire other necessities of life. They form the economic base of Toda culture. They, or their milk, play the prominent part in the socio-religious and ritual life of this tribe. The daily life of the Toda men is mainly devoted to the maintenance and care of their buffaloes and dairies.

4. Shifting Axe-Cultivation

In tropical and sub-tropical zones all over the world is practiced some form or other of what is called shifting cultivation. In tribal India shifting cultivation is widely prevalent, though it is known by different names. The Naga call it jhum ; the Bhuiya distinguish two forms of it, dahiand koman; the Maria of Bastar call it penda; the Khond refer to it as podu; and the Baiga call it bewar. A hilly forested tract selected for this purpose and have to be abandoned after three successive cultivation seasons as this soil is likely to lose fertility. The plants are cut down and left for drying for a month or so. Then they set fire to them. The ashes serve as manure to the soil. On the onset of monsoon the soil is slightly loosened by a simple digging stick or hoe. Seeds of different Kharif crops, millets like bajra, jowar, kurthi, pulses, potato, tobacco and sugar cane are grown in this type of cultivation.

5. Handicrafts

Many subsidiary occupations like handicrafts are undertaken in the various tribal zones. These include basket making, spinning and weaving. The Maria Gonddistils spirit from forest produce. Functional classes among the Saora, the Kondh and the Gond devote themselves to cow-herding, metal working, weaving, cane work, pottery and so on. The Korwa and the Agaria are well known iron-smelters, producing tools for local use only, and their techniques are very crude. The Ghasi made gut from the fibrous tissues of animals. The Tharu depend upon farming, manufacture of furniture, household utensils, baskets, musical instruments, weapons, rope and mats.

6. Industrial Labor

Indian tribal people have come into contact with industrial life in two ways. Either they have migrated to industrial areas or industries have sprung up in the areas they inhabit. Large numbers of the Santhal, the Kond and the Gond have migrated to Assam and taken up various jobs in tea plantations.

Summary

• Like law and politics, economics is an aspect of social organization that small-scale societies have often been thought to lack. The division of labor in societies of simple technology is not a matter of the full-time practice of different special skills.
• Division of labor according to age is also typical of human societies.
• Anthropologists have studied extensively the social division of labor by gender in different cultures.
• Anthropologists often classify the cultural systems of distributing material goods into three modes: reciprocity, redistribution, and market exchange.
• Reciprocity refers to a transaction between two parties whereby goods and services of roughly equivalent value are exchanged. This may involve gift giving.
• Balanced reciprocity can take more complicated forms, whereby mutual gift giving serves to facilitate social interaction, “smoothing” social relations between traders wanting to do business and make profits or between politicians seeking favorable deals for themselves, their parties, or their countries. One classic ethnographic example of balanced reciprocity between trading partners seeking to be friends and do business at the same time is the Kula ring in the south western pacific Ocean, as first described by Bronislaw Malinowski.
• Redistribution is a form of exchange in which goods flow into a central place where they are sorted, counted, and reallocated. Commonly, it involves an element of power.
• 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. ‘Potlatch’ means ‘give’, and the principle that a gift deserves a counter-gift was important in this institution as in the kula.
• To an economist, market exchange deals with the buying and selling of goods and services, with prices set by rules of supply and demand. Personal loyalties and moral values are not supposed to play a role, but they often do. Since the actual location of the transaction is not always relevant in today’s world, we must distinguish between the “marketplace” and “market exchange”.
• The sources of subsistence and livelihood are varied so far as the Indian tribals are concerned. Starting from the pure and simple nomadic hunters and food gatherers who depend mostly on nature for the sources of subsistence to the settled agriculturalists and the group of industrial laborers, we have the views of different economic set-up of the Indian tribals. From this view point, the Indian tribals can be classified into six broad economic clusters.