1. Exchange and Economic Systems
Chapter 7
Exchange and Economic Systems

2. Chapter Outline
Reciprocity
Redistribution
Market Exchange

3.  Reciprocity
Individuals or groups pass objects back and forth with the aim of:
Helping someone in need by sharing goods.
Creating, maintaining or strengthening social relationships.
Obtaining objects for oneself.

4. Reciprocity

5. Redistribution
Collection of goods or money from a group followed by a reallocation to the group by a central authority.

6. Market
Products are sold for money which is used to purchase other products, with the goal of acquiring more money and/or accumulating more products.

7. Three Types of Reciprocity
General - parents and children
Balanced -birthday gift exchanges
Negative - barter

8. Generalized Reciprocity
The giving of goods without expectation for return of equal value at any definite time in the future.

9. Balanced Reciprocity
The exchange of goods considered to have roughly equal value; social purposes usually motivate the exchange.

10. Negative Reciprocity
Exchange motivated by the desire to obtain goods, in which both parties try to gain all they can from the exchange while giving up as little as possible.

11. Reciprocity and Social Distance
Reciprocity changes as relationships change.
Changing the form of reciprocity can change the nature of the relationship.
Social distance is the degree to which cultural norms specify that two individuals or groups should be helpful to, intimate with, or emotionally attached to one another.

12. Redistribution
Provides goods, services and assistance to individuals and groups in need.
Common conflicts over who should provide the resources and how much should be given to those who collect and distribute them.
Those who make decisions about redistribution often use resources for themselves.

13. Tribute
The rendering of goods (typically including food) to an authority such as a chief. 

14. Requirements for Market Exchange
Some object to use as a medium of exchange (money).
A rate at which goods exchange for money (prices).
Parties to exchanges who have alternative buyer or sellers and are free to make deals (supply and demand).
Most resources are privately owned (private property)

15. Money Serves as a media of exchange Serves as a standard of value
Also a store of value
Has symbolic significance (social status)
Durable and divisible
Controllable
Portable

16. Limited-purpose Money
Money that may be used to purchase only a few kinds of goods.

17. Market Economies Whole economy is based on market principles
Most goods and services can be bought and sold
Most people make their living selling something on the market
Factors of production are allocated by the market
Economy is self-regulating

18. Peasant Marketplaces Less dependent on market forces.
Categories of products sold are limited.
Producing and marketing goods for profit are part-time activities for many vendors.
Peasant vendors usually sell products they or their family members produce.

19. Quick Quiz

20. 1. The one type of economic system found in all human populations is:
redistribution
reciprocity
market
all of the above

21. Answer: b
The one type of economic system found in all human populations is reciprocity.

22. 2. Negative reciprocity:
is like market exchange without using money
is usually motivated by the desire to obtain material goods at minimal cost
can take the form of barter
all of the above

23. Answer: d
Negative reciprocity includes all of these features: it is like market exchange without using money, it is usually motivated by the desire to obtain material goods at minimal cost, and it can take the form of barter.

24. 3. Which of the following is not a requirement of market exchange?
money or money objects
prices
governmental regulation of prices
prices determined by supply and demand

25. Answer: c
Market exchange requires money or money objects, prices, and that prices are determined by supply and demand, but does not require government regulation of prices.