SC2218: Anthropology and the SC2218: Anthropology and the Human ConditionHuman Condition

Lecture 7: Economic Lecture 7: Economic Organization and ExchangeOrganization and Exchange

Eric C. ThompsonEric C. Thompson

Semester 1, 2008/2009Semester 1, 2008/2009

MONEY

Off the VerandaOff the Veranda

• What key contributions did Malinowski make to anthropology?

• How did Malinowski understand the role of magic (especially as compared to Evans-Pritchard)?

• How do the exchange relationships in the kula ring of Pacific Islanders (Film: Off the Veranda) and the potlatch of Northwest Coast Native Americans (Film: Shackles of Tradition) compare to exchange relationships among the Dobe Ju/’hoansi (Lee)? How do they compare to exchange relationships in contemporary Singapore?

Outline of the LectureOutline of the Lecture

• “Cultural” basis of economics & exchange.

• Thoughts on “Primitive Economics”

• Patron-Client Networks and Bureaucratic Rationalism (A Clash of Cultures)

• The “Magic” of Markets

Economics and ExchangeEconomics and Exchange• Economics: the study of the production,

distribution and consumption of goods and services.

• Economy: a system of production, distribution and consumption of goods and services.

• Exchange:– Distributing Goods and Services AND– Creating/Enacting Relationships among People

What is What is CulturalCultural about aboutEconomics and Exchange?Economics and Exchange?

• Economic systems do not just meet “basic needs” (foragers do that without exchange). Something more is going on.

• People enact relationships based on beliefs and knowledge without understanding the ‘whole’ system (e.g. kula ring; stock brokers)

• If modern economies are based on rational laws of supply and demand, why bother with “culture” in studying economics?

The Myth of ScarcityThe Myth of Scarcity(and why it matters)(and why it matters)

• Foragers have a generally easier life that people in agricultural and industrial societies.

• Foragers work 20-40 hours a week; We work 60-80 hours a week.

• Foragers are healthier and have longer life expectancies than agriculturalists.

Why it matters . . .Why it matters . . .

• It calls into question the idea that agriculture and industry emerged to “meet basic needs” (Foragers needs are met already!)

• Something else is going on…

• That something else is social relationships, based on exchange, and mediated by culture!

HxaroHxaro Exchange: Exchange:Basic Lessons in Gift GivingBasic Lessons in Gift Giving

• Hxaro is “a delayed form of nonequivalent gift exchange”… why?

• The delay and nonequivalency ensure that the exchange is perpetuated . . .

• The value is not in the things but in the social relationship.

• Social relationships are crucial in all kinds of ways. (More on this in tutorials . . .)

The Kula Ring: Lesson in Complexity

If I live here

I trade necklaces to get armshells from these people

I trade armshells to get necklaces from these people

We all know the rules;But none of us may understand the system!

Kula Ring: Functional and Kula Ring: Functional and Structural-Functional PerspectivesStructural-Functional Perspectives

• Malinowski emphasized functionalism: systems like the kula ring meet basic needs (e.g. in the exchange of goods and ideas that accompanied the kula exchange)

• But the kula exchange (armshells and necklaces) do not seem functional in that sense. Rather they have an important function within the structure (i.e. “structural-functionalism”)

Patron-Client NetworksPatron-Client Networks and and Rational BureaucraciesRational Bureaucracies

Comparing Two Cultural SystemsComparing Two Cultural Systems

(A Clash of Cultures)(A Clash of Cultures)

Patron-Client NetworksPatron-Client Networks• Patron: From “patri” (father). A person who

provides support to (takes care of) others.• Client: The ‘lesser’ in a relationship. One

who receives support from a patron and at the same time “serves” the patron.

• Many different cultural forms (for example):– European Patrimonialism (father as ideal)*– Chinese Filial Piety (son as ideal)*– Malayo-Polynesian “Big Men” (orang besar)**

*Julia Adams, “Rule of the Father: . . . In Early Modern Europe”** Benandari community in “A Man without Pigs”

““Rational” BureaucraciesRational” Bureaucracies

• Bureaucratic Rationalism (Max Weber)

• Displacement of “Patrimonialism” in Europe.

• Shift from Feudal Relationships (Kings, Lords, Peasants) to Nation-States (Government, Citizens) and Industrial-Capitalism (Owners, Workers)

A Clash of CulturesA Clash of Cultures

• Culture: Learned, Shared Knowledge. Systems of Meaning – Ideas, Beliefs, Values

• Patron-Client Networks (PCN) and Bureaucratic Rationalism (BR) are culturally different schemes for ordering human relationships

• From the point-of-view of PCN, BR is cold, impersonal and de-humanizing.

• From the point-of-view of BR, PCN lead to corruption and nepotism.

Comparing Comparing Patron-Client NetworksPatron-Client Networks to to Rational BureaucraciesRational Bureaucracies

Patron-Client Networks

• Personal Relationships

• Treat People as Individuals

• Individual Judgment

• “It’s not what you know, it’s who you know”

• Limits to “personal touch” (hard to treat masses as individuals)

Bureaucratic Rationalism

• Categorical Relationships

• Treat People as Categories

• Bureaucratic Rules

• Fairness and Meritocracy (what, not who you know)

• Effective for organizing relationships among “the masses”

Comparing American and Comparing American and Minangkabau Business CulturesMinangkabau Business CulturesAmerican Business Ideals

• Greed is good.• Competition (always beat

the other guy)• Work Hard• Be the Biggest• Make the most Money

(Profit Oriented)• Individualism (I am out to

maximize my benefits)

Datuk’s Business Secrets

• Treat people well.• Cooperation (work with

the other guy)• Work Smart• Be the Best• Work with the Best

(People Oriented)• Collectivism (I rise and

fall with my network)

Is a “Bureaucracy”Is a “Bureaucracy”an Economic System?an Economic System?

• Economy: a system of production, distribution and consumption of goods and services.

• Bureaucracies determine “who gets what”.

• Socialist, welfare, national states.

• “Neo-liberal” capitalism: State bureaucracies set rules of exchange (e.g. monetary policy)

• Modern corporations operate on the cultural principles of “bureaucratic rationalism”

The Magic of MarketsThe Magic of Markets

• What about industrial, capitalist societies?

• Our economy runs on rationality, right?

• “Laws” of supply and demand (rational, “natural laws” – not cultural?).

• There’s no magic, no arbitrary symbolism, nothing mysterious or irrational in our economy… is there?

Two Examples of the CultureTwo Examples of the Culturein “Market Rationality”in “Market Rationality”

• Money– Arbitrary symbolic value based on shared

beliefs

• Commodity Fetishism– Valuing the relationship among goods;

devaluing relationships among people

““Two Sides of the Coin”Two Sides of the Coin”(Keith Hart)(Keith Hart)

• Token of authority– Of states; top down

• Commodity with a price– In markets; bottom up

• Cultural governed by rules, norms, shared ideas

• Social mediated by exchange, interaction, relationships

SMARTSMARTa poema poem

by Shel Silversteinby Shel Silverstein

QUARTER (25 cents) DIME (10 cents) NICKEL (5 cents) PENNY (1 cent)

SMART!SMART!

My dad gave me one dollar bill‘Cause I’m his smartest son,And I swapped it for two shiny quarters‘Cause two is more than one!

SMART!SMART!

And then I took the quartersAnd traded them to LouFor three dimes – I guess he don’t knowThat three is more than two!

SMART!SMART!

Just then, along came old blind BatesAnd just ‘cause he can’t seeHe gave me four nickels for my three dimes,And four is more than three!

SMART!SMART!

And I took the nickels to Hiram CoombsDown at the seed-feed store,And the fool gave me five pennies for them,And five is more than four!

SMART!SMART!

And then I went and showed my dad,And he got red in the cheeksAnd closed his eyes and shook his head - - Too proud of me to speak!

Culture, Class Relations &Culture, Class Relations &Commodity FetishismCommodity Fetishism

What is a Fetish?What is a Fetish?

Fetish:– A fetish stands in the place of something else

(to the point that the ‘something else’ disappears).

– Religious fetish: An object of worship; a representation of a clan.

– Sexual fetish: Sexual attachment to or gratification from an object in place of a person.

What is a Commodity?What is a Commodity?

• Use Value vs. Exchange Value

• “Commodity” = A thing with Exchange Value

Commodity FetishCommodity Fetish

• A commodity stands in the place of the social relationships between exchange partners.

• “A commodity is … a mysterious thing… because the relationship of the producers … is presented to them as a social relation, existing not between themselves, but between the products of their labour.”

-Karl MarxCapital Vol. 1

MoneyMoney

• Money is a “pure commodity”; symbolic; cultural

• It has no use value, only exchange value

• Money is a “fetish” of (stands in the place of) social relationships

The Cultural Nature of The Cultural Nature of CommoditiesCommodities

• Markets are SYMBOLIC systems of VALUE

• Money – mediator of value• Social relationships are

abstracted into money and commodities.

• Social differentiation based on relationships mediated by money & commodities = Class

A Final Thought . . .A Final Thought . . .

• Who understands economics better?“Primitive” Foragers or “Civilized” Consumers?

• !Xoma broke into a broad smile, “I see what your problem is! /Tontah, you don’t understand our way . . . You see, we don’t trade with things, we trade with people.” (Lee, p.119)