Chapter 8 Economic Systems

Economic System A means of producing, distributing, and consuming goods. Classic economic theory assumes that our wants are infinite and that our means are limited. – Thus people must make choices about how to use their resources; time, labor, money & capital. Maximize profit is the basic assumption. New Data suggests: People response to other motivations than profit: wealth, prestige, pleasure, comfort, or social harmony. Thus more complex than basic theory.

How Do Anthropologists Study Economic Systems? Anthropologists study how goods are produced, distributed, and consumed in the context of the total culture of particular societies. Two main questions: How are production, distribution, and consumption organized in different societies? (Modes of production; systems - organizational behavior; productive forces – labor, power, tools, ect.). What motivates people in different cultures to produce, distribute or exchange, and consume (individual behavior; social relations of production – property, power, associations, relationships, etc.). Rice farming remains socially and economically important to the Karen people in Northern Thailand, despite the increase of young people’s migration to cities since the 1980s. In the writings of Karl Marx and the Marxist theory of historical materialism, a mode of production (in German: Produktionsweise, meaning 'the way of producing') is a specific combination of: * productive forces: these include human labour power and the means of production (eg. tools, equipment, buildings and technologies, materials, and improved land). * social and technical relations of production: these include the property, power and control relations governing society's productive assets, often codified in law, cooperative work relations and forms of association, relations between people and the objects of their work, and the relations between social classes. Marx regarded productive ability and participation in social relations as two essential characteristics of human beings and that the particular modality of these relations in capitalist production are inherently in conflict with the increasing development of human productive capacities. According to Marx, the combination of forces and relations of production means that the way people relate to the physical world and the way people relate to each other socially are bound up together in specific and necessary ways. People must consume to survive, but to consume they must produce, and in producing they necessarily enter into relations which exist independently of their will. For Marx, the whole 'secret' of why/how a social order exists and the causes of social change must be discovered in the specific mode of production that a society has. He further argued that the mode of production substantively shaped the nature of the mode of distribution, the mode of circulation and the mode of consumption, all of which together constitute the economic sphere. To understand the way wealth was distributed and consumed, it was necessary to understand the conditions under which it was produced. A mode of production is historically distinctive for Marx, because it constitutes an 'organic totality' (or self-reproducing whole) which is capable of constantly re-creating its own initial conditions, and thus perpetuate itself in a more or less stable ways for centuries, or even millennia. By performing social surplus labour in a specific system of property relations, the labouring classes constantly reproduce the foundations of the social order. When however new productive forces or new social relations develop that conflict with the existing mode of production, this mode of production will either evolve without losing its basic structure, or else begin to break down. This then gives rise to a transitional era of social instability and social conflict, until a new social order is finally consolidated, with a new mode of production.

Nonindustrial Production In small-scale nonindustrial societies: Resources controlled by families or groups of relatives (water holes of the bushmen). Division of labor is by age and gender with some craft specialization. Production takes place at the time required, and most goods are consumed by the group that produces them. Traditional Nomadic Pastoralismon Tibet’s Northern Plateau (Goldstein, Beall, & Cincotta). Group of Bushman women collect water from a waterhole into ostrich egg shells , Nambia (Bannister; Gallo).

Non-economic variables - Culture Economics cannot be interpreted without an understanding of culture. Economics is NOT separate from social, religious, and political spheres – it is a social science. Yams in Trobriand Culture – Men’s Wealth -Not produced for provisions. -Men are expected to present yams to the relatives of his daughter’s husband when she marries & again when death befalls a member of his family. -A yam house is like a bank account; when full, a man is wealthy and powerful.

How Do Societies Organize Economic Resources and Labor? In large-scale industrial and postindustrial societies: There is much a much more complex division of labor. Individuals or business corporations own property. Producers and consumers rarely know each other. Transaction takes place with money.

Means of Production - Resources Means of production include land, labor, technology, and capital. Land: the importance of land varies according to method of production – land is less important to a foraging economy than it is to a cultivating economy. Labor, tools, and specialization: Technological innovations can change the way land is used rapidly.

Control of Land and Water Resources All societies regulate allocation of valuable natural resources—especially land and water. Food foragers determine who will hunt game and gather plants in their home range and where these activities take place. Farmers must have some means of determining title to land and access to water for irrigation. A Ju/’hoansi (bushman) water hole. The Chakram (Wheel) made of wood is used to move water between paddy fields and water channels

Control of Land and Water Resources Pastoralists require a system that determines rights to watering places and grazing land. In Western capitalist societies, private ownership of land and rights to natural resources generally prevails. Pastoralist’s cattle drinking. Hydro-electric Dam

Technology Resources Tools and other material equipment, together with the knowledge of how to make and use them, constitute a society’s technology. Food foragers and nomads (pastoralists) who are frequently on the move are apt to have fewer and simpler tools than sedentary farmers. The primary tools for horticulturists include the axe, digging stick, and hoe.

How And Why Are Goods Exchanged and Redistributed? People exchange goods through: Reciprocity Redistribution Market exchange

Reciprocity Reciprocity is the exchange between social equals and occurs in three degrees: generalized, balanced, and negative. Generalized reciprocity is most common to closely related exchange partners and involves giving with no specific expectation of exchange, but with a reliance upon similar opportunities being available to the giver (common among foragers). These Ju/’hoansi are cutting up meat that will be shared by others in the camp. Food distribution practices of such food foragers are an example of generalized reciprocity.

Reciprocity Balanced -A direct obligation to reciprocate in equal value for the relationship to continue. – Giving with the expectation of equivalent exchange (common in tribal societies with distant related partners) – Birthday parties, etc… Negative - The giver tries to get the better of the deal. Each partner tries to maximize profit with an expectation of immediate exchange. Usually very distant trading partners. Most economies are not exclusively characterized by a single mode of reciprocity. The United States economy has all three types of reciprocity.

Redistribution Food Bank Form of exchange in which goods flow into a central place where they are sorted, counted, and reallocated. Found in chiefdoms & industrial & non-industrialized states. 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 storehouses controlled by a chief or some other type of leader. From there, they are handed out again. Taxes

Motives in Redistributing Income Leadership typically have three motives in redistribution: Gain or maintain a position of superiority through a display of wealth and generosity. Assure those who support the leadership an adequate standard of living by providing them with desired goods. Establish alliances with leaders of other groups by hosting them at lavish parties and giving them valuable goods.

Market Exchange Buying and selling of goods and services, with prices set by rules of supply and demand. Money may be defined as something used to make payments for other goods and services. Its critical attributes are durability, portability, divisibility, recognizability, and fungibility. The wide range of things that have been used as money in one or another society includes salt, shells, stones, beads, feathers, fur, bones, and teeth. Russian Market Open air porcelain market in Taizhou, China.

Patterns of Labor Every society has a division of labor by gender and age. Division by gender makes learning more efficient. Division by age provides sufficient time to developing skills.

Division of Labor by Gender Often, work that is considered inappropriate for women (or men) in one society is performed by them in another. Here we see female stone construction laborers in Bangalore, India, who carry concrete atop their heads.

Three Patterns of Division of Labor by Gender Flexible/integrated pattern Segregated pattern Dual sex Configuration 35% of tasks are performed equally by men and women. Tasks deemed appropriate for one gender may be performed by the other. Boys and girls grow up in much the same way and learn to value cooperation over competition.

Segregated Pattern Almost all work is defined as masculine or feminine. Men and women rarely engage in joint efforts. Common in pastoral nomadic, intensive agricultural, and industrial societies. Both boys and girls are raised primarily by women.

Dual Sex Configuration Men and women carry out their work separately. The relationship is one of balanced complementary rather than inequality. Each gender manages its own affairs, and the interests of both men and women are represented at all levels. Egalitarian

Division of Labor by Age This Thai girl exemplifies the use of child labor in many parts of the world, often by large corporations. Even in Western countries, child labor plays a major economic role.

Question From an economist's point of view, "market exchange" is defined by the purchase of goods in a marketplace. the buying and selling of goods and services whose value is determined by supply and demand. the role of middlemen who bring buyers and sellers together. face-to-face bargaining for goods and services. the role of multinational corporations.

Answer: B From an economist's point of view, "market exchange" is defined by the buying and selling of goods and services whose value is determined by supply and demand.

Potlach A ceremonial event practiced by Northwest Coast native American groups in which a village chief publicly gives away stockpiled food and other goods while generating prestige for themselves. Potlatch tribes were foragers but lived in sedentary villages and had chiefs (lived in a rich environment).

Potlatch Usually held in connection with events such as marriages, house building, funerals, etc. Extravagant and lavish preparations including large food preparation & the creation of masks & art work are made by the host as gifts for the guests.

Potlatch Potlatchs are a significant representation of the host’s status and the display of rank & title. In return for giving away food and wealth they get recognition of their status and that of their lineage. Potlatches become very competitive. Aspiring leaders use competitive potlatching to move up the system.

Results of the Potlach Potlatches were once interpreted as wasteful displays generated by culturally induced mania for prestige, but these customs are adaptive, allowing adjustment for alternating periods of local abundance and shortage. The Potlatch also works as a Leveling Mechanism: A societal obligation compelling a family to distribute goods so that no one accumulates more wealth than anyone else.

Question ____________ are/is important in societies where the accumulation of wealth or property could upset the more-or-less egalitarian social order. Cooperative work groups Conspicuous consumption Leveling mechanisms Balanced reciprocity Barter

Answer: C Leveling mechanisms are/is important in societies where the accumulation of wealth or property could upset the more-or-less egalitarian social order.

Money Anything used to make payments for other things (goods or labor) as well as to measure their value; may be special purpose or multipurpose.

World Trade Organization A crowd of protesters demonstrating against World Trade Organization (WTO) policies that favor rich countries over poor ones during the organization’s December 2005 meeting in Hong Kong. Established in 1995 and headquartered in Geneva, the WTO is the only global international organization with rules of trade among its 150 member countries.

Malthusian catastrophe Is a return to subsistence-level conditions as a result of population growth outpacing agricultural production. - the growth of the population will eventually reach the limit of the resource base. In 2007 The New York Times claimed that the industrial revolution had enabled the modern world to break out of the Malthusian Trap. In 2008 the Wall Street Journal pointed out various limited resources may soon limit human population growth because of a widespread belief in the importance of prosperity for every individual and the rising consumption trends of large developing nations such as China & India.

World Population Estimates & Food Production In 1943 the U.S. imported half it’s wheat. In 1945 it established research station to increase wheat production to feed the rapidly expanding population. By 1956 the “Green Revolution” had made the US self-sufficient. By 1964 the US exported half a million tons of wheat.

Malthusian Catastrophie By 2000, children in developing countries were dying at a high rate from strictly preventable diseases. Data demonstrates the world’s food production has peaked in some of the very regions where food is needed the most; result famine. China loses arable land at a rate of 2,500 sq km per year. 30% of land in Madagascar previously regarded as arable is irreversibly barren.