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Wednesday 14 September 2011

Economic Anthropology

Empirical approach: provisioning. 2

The substantivists: Polanyi 2

Formalist – Substantivist debate. 3

The impact of neo-classical economics: the formalists. 4

The anthropological concerns: 4

Political economy and anthropology: 6

World systems and anthropology: 6

Recent synthesis: 9

Further reading: 10

At the most basic, economic anthropology is the description and analysis of economic life, using an anthropological perspective. It is therefore important to understand what an anthropological perspective in economic life of people mean? The anthropological perspective approaches and locates aspects of people’s individual and collective lives, which is to say their lives and societies, in terms of how these aspects relate to one another in an interconnected, though not necessarily bounded or very orderly, whole. Economic anthropologists study how humans use the material world to maintain and express them-selves in social groups. Researchers examine both the material practices in which humans engage and the ideas they hold about them. As a field, economic anthropology developed in the twentieth century, but it encompasses studies of the past and draws on theories from earlier eras. A single opposition informs much of the subject: either humans live by what they produce or they produce to exchange with others from whom they secure their livelihood. All economies represent combinations of the two practices, but the patterns vary, and their interpretation occasions controversy.

Economic anthropology focuses on two aspects of economics: (1) provisioning, which is the production and distribution of necessary and optional goods and services; and (2) the strategy of economizing, often put in terms of the formalist-substantivist debate. Earlier anthropologists devoted almost all their time to the study of provisioning, but in the last half-century economizing has received substantially more attention.

Empirical approach: provisioning

The first of the approaches that gained prominence in anthropology is that the perspective is fundamentally empirical and naturalistic. It rests on the observation (empirical) of people’s lives as they live them (naturalistic). Extended participant observation, empirical naturalism, has come to define the field. Their findings report how humans gain their livelihood? The answer was a thorough understanding of Production, distribution and consumption. Subsistence strategies including agriculture, pastoralism, fishing, hunting and gathering and industrial production has been locus and focus of study. Ethnographers gather information about these and other economic features through intensive observation, through lengthy conversations and by using a variety of sampling techniques to secure quantitative data. They have been especially alert to how people are recruited and rewarded for their work, to the gender division of labour, and to the ways that burdens and rewards for women shift as the market expands into new areas.

Since the early studies of Mauss ([1925] 1990) and Malinowski (1922), exchange has also been of special interest to anthropologists who have explored how transactions may range from pure gifting to obligated gifting to barter, theft and market trade; this research in turn has stimulated studies on consumption and display. Economic anthropologists have examined as well the many ways that resources are distributed, goods are allocated, and political regimes are supported. Early on, this led to lengthy discussions concerning the conditions under which a surplus is produced in society, who secures it, and how it may be measured in non-monetary contexts. More broadly, economic anthropologists focus on the ties between material life and power, ranging from gender control of food in households to financial control of monopolies in capitalist markets. Much ethnographic data defies our common sense categories, however: for example, today farmers on marginal land may work the earth with wooden implements and seed potatoes for home consumption, while listening to tapes on headphones.

The substantivists: Polanyi

Karl Polanyi (1886–1964) was a Hungarian lawyer turned journalist and economic historian whose reading of anthropology, especially the work of Bronislaw Malinowski and Richard Thurnwald, led him to produce work that made major contributions to economic anthropology, classical Greek studies and post-Soviet eastern European social policy (Polanyi, 1936, 1944). Polanyi attempts to explain the causes of great depression and the fascism of the 1930s and 1940s (Goldfrank, 1990). His larger aim was to lay the groundwork for a general theory of comparative economics that would accommodate all economies, past and present (see Polanyi 1957; Halperin 1988, 1994a; Stanfield 1986, 1990).

In anthropology, his influence was great during the 1960s and 1970s; subsequently, his work became strongly identified with the ‘substantivist’ side of the strident and irresolvable ‘formalist–substantivist’ debate, and his prominence faded when the formalists largely won the day.

Polanyi’s master work was The great transformation (1944), in which he analysed the emergence and (in his view, disastrous) consequences of a new type of economy, market capitalism, first in England during the early nineteenth century and then in the rest of the industrialising world and its global extensions. This new economy was unique in being disembedded from the social matrix; in ideal form, at least, it commercialised and commoditised all goods and services in terms of a single standard, money, and set their prices through the self-adjusting mechanism of supply and demand. At all previous times, in contrast, ‘man’s economy … [was] submerged in his social relationships’ (Polanyi 1944: 46), and the factors of production were neither monetised nor commoditised. Instead, access to land and labour was gained through ties of kinship (birth, adoption, marriage) and community. Many pre-capitalist economies had marketplaces, but they did not have self-regulating, supply-and-demand market economies. Similarly, many employed money but only in transactions involving a limited range of goods and services.

By commoditising not only goods but also labour (‘another name for a human activity which goes with life itself’) and land (‘another name for nature’), the disembedded capitalist (market) economy of nineteenth-century England threatened to remove ‘the protective covering of cultural institutions’, leaving the common people to ‘perish from the effects of social exposure’ (Polanyi 1944: 72–3). Accordingly, the nineteenth and twentieth centuries saw a ‘double movement’: first, the disembedding of the economy under the self regulating market, then the emergence of countermeasures ‘designed to check the action of the market relative to labor, land, and money’ (1944: 76). These countermeasures accomplished their purpose politically, by partially re embedding the economy, typically culminating in state socialism or the welfare state.

Formalist – Substantivist debate

Formalist-Substantivist debate is the dispute in ECONOMIC ANTHROPOLOGY between those scholars who argue that formal rules of neoclassical economic theory derived from the study of capitalist market societies can be used to explain the dynamics of premodern economies ("formalists") and those who argue that goods and services in the substantive economy are produced and distributed through specific cultural contexts ("substantivists"). Formalists contend that because all economies involve the rational pursuit of, access to, and use of, scarce resources by self-interested, maximizing social actors, formal economic rules can be used to explain them (H. Schneider 1974). The subject of economics, according to the formalists, is a kind of behavior—“economizing”—that is universally applicable to situations where only limited means are available for achieving a range of ends. Herskovits endorsed this position in the 1952 reissue of his 1940 text The Economic Life of Primitive Peoples. Scarcity, he maintained, is universal, as is maximizing behavior on the part of the individual. It is only the cultural matrix within which these occur that varies. The same means are everywhere applied to achieve different ends.

The opposing view was championed by Polanyi and a group of his students from Columbia University. Polanyi analyzed the identity of the economy in contemporary capitalist society and argued that the extent of its autonomy was an absolutely novel historic development. Therefore, not only could other societies not be assumed to have assigned the same independence to economic processes, but the science premised on that independence was, ipso facto, only appropriate to our own society. The difference between the industrial capitalist economy of the West and both contemporary and historic premarket economies was one of substance—hence “substantivist”— and different forms of economy were not susceptible to analysis by a uniform method. It contends that different forms of exchange have different sets of rules and expectations (Dalton 1961). Following Karl Polanyi the substantivists argue that there are three major forms of exchange: reciprocity, redistribution and market exchange (K. Polanyi et al. 1957). By this view, the rational, maximizing strategizing that lies at the heart of neoclassical economics and formalist economic anthropology is characteristic only of market economies.

The impact of neo-classical economics: the formalists

Starting in 1966, a formalist school of economic anthropology arose in opposition to the Polanyi group’s substantivist school (see Cook 1966a , 1966b , 1969; LeClair and Schneider 1968; Schneider 1974). The formalist attack was two-pronged: (1) that the models developed by microeconomics were universally applicable and, thus, superior to substantivism for both economic anthropology and comparative economics; and (2) that economic anthropology was no longer primarily concerned with the kinds of economies (primitive, ‘archaic’ state, peasant) for which the substantivists’ tools were developed.

Harold Schneider (1974: 9), who eventually became the dominant figure in the formalist school, stated it this way: ‘The unifying element among … formalists is, in contrast to substantivists, the partial or total acceptance of the cross-cultural applicability of formal [microeconomic] theory’. The underlying methodological question was that of the proper unit of analysis. Because the formalists focused upon choice, which is always individual, their approach necessarily entailed methodological individualism. The substantivists, on the other hand, focused upon the institutional matrix in which choice occurs (see Cancian 1966: 466).

To illuminate their diverse findings, anthropologists draw upon four theories or approaches to economy, three of which were developed outside the field. Most economic anthropologists employ concepts from neo-classical economics to interpret their data. Material behaviour is seen as an organized way of arranging means to secure valued ends. The human is assumed to be self interested and rational; land, labour and capital are said to be the scarce and productive components in the economy. Livelihood practices are presumed to occur as if they were in a market: they demonstrate ways that humans calculate marginal returns, diversify risk, and measure benefit/cost ratios, often in light of imperfect information. Because social arrangements in other cultures frequently limit the working of markets, neoclassical theorists find their challenge in showing how their model of behaviour can be adapted to diverse ethnographic contexts.

The anthropological concerns:

While economists are concerned with how markets direct the actions of profit-maximising actors, anthropologists have been interested in exploring how actors’ perceptions, social relations and obligations affect their economic decisions.

The Farming Systems Research:

This wider social perspective became necessary when agricultural research stations began to design programmes to increase the productivity of small farmers in Africa, Asia and Latin America. It became clear that an economic evaluation of the technical packages designed by agronomists did not suffice. To avoid failures, researchers had to incorporate in their analysis an evaluation of the ecological, social and political conditions of the region and the goals and preferences of farmers. They also had to consider the information that was available to producers and the risks that they had to assume. This wider approach was known as Farming Systems Research and relied on interdisciplinary teams that included anthropologists and sociologists, though in secondary roles.

One of the key findings that anthropologists and sociologists brought to Farming Systems Research was that, in non-Western societies, resources were often controlled by household or larger kin-based units rather than by individuals. Hence, production and investment decisions had to be made at the household or homestead level. Farming Systems Research adopted their recommendation; the household became the unit of analysis in surveys and assessments of production decisions (Mook 1986; Shaner, Philipp and Schmehl 1982; Turner and Brush 1987).

Research on Problem solving actors:

Rational choice is the heart of the microeconomic model of economic man, who is portrayed as a logical thinker who evaluates options and inputs consistently and coherently, and selects those that maximise his utility. Economic men and women are expected to decide ‘rationally’ how much to produce or buy and sell. If their decisions do not conform to predictions, it raises questions about social or market impediments to an efficient allocation of resources. Some economists even argue that when rational choice is possible, it is unnecessary to protect individuals from the consequences of their choices.

Anthropologists have challenged some of the assumptions of microeconomic models by focusing on how culture and social relations frame the decision process. Mayer and Glave (1999: 345) suggest that Peruvian ‘peasants evaluate profit and losses in terms of a simple cash-out and cash-in flow, ignoring household inputs and family labor’. Appadurai (1991) shows that food provision decisions by Indian women are made as part of other decisions, in a pre-attentive manner except when the problem becomes crucial. Other anthropologists have focused on how power and social conditions define options. Psychologists, instead, have focused on how decisions are made. They have examined how individuals simplify information in order to attend to their preferences and how they evaluate the uncertain outcomes they experience. Some of their findings and propositions have been used by some anthropologists to explore cropping decisions (Gladwin 1975, 1979a, 1979b, 1980) or marketing decisions (Quinn 1978).

Bargaining decisions:

Most peasants are not lone decision makers. They are forced to interact with others in order to gain access to land or labour. Peasants can expand production by borrowing, renting or sharecropping land. However, unless they have a large family they will also need to hire labourers or negotiate a reciprocal labour exchange. In either case, peasants cannot solve their problem by simply evaluating costs, risks and preferences. They have to negotiate a solution with others for labour and land. Bargaining peasants must cope with preferences and consider the transaction cost associated with each offer and counter-offer. Borrowing land may engage him in some future debt, sharecropping may limit how he can use the land.

Studies on sharecropping by anthropologists focus on power imbalance in bargain. A powerful landlord can limit access of inputs and bias the outcome of the bargain. Wells’s (1984, 1996) account of the adoption of share contracts by strawberry producers in California and the subsequent return to day- and piece-rate contracts serve to illustrate the multiple characteristics of sharecropping and the role played by government, unions and growers’ organisations in defining the nature of the contract.

Political economy and anthropology:

From the point of view of economics, the central concept in political economy is that of the ‘mode of production’. This focus on production is in sharp contrast to various forms of exchange theory, which characterised the work of both the formalist and substantivist schools of economic anthropology and which continues unabated in recent work on anthropological theories of value (Graeber 2001). The discussion begins with the themes raised in the work of the most influential group of political economists in the field of anthropology to date; the French structural Marxists, also known as the ‘articulation’ school. This trend arose in the late 1960s and exerted a major influence on economic anthropology and anthropology in general through the entire decade of the 1970s. Here the critical representatives were Claude Meillassoux, Maurice Godelier, Emmanuel Terray, Pierre-Phillipe Rey, Georges Dupré, Marc Auge as well as historians of Africa – Jean Suret-Canale and Catherine Coquery- Vidrovitch – with whom they worked closely (Seddon 1978). Today all of these anthropologists have abandoned or substantially modified their theoretical outlook with the consequence that this once highly influential school of economic anthropologists is now largely defunct. Where their influence is still strongly felt is in South African anthropology and social science, where structural Marxism was one of the inspirations leading to the efflorescence of neo-Marxist political economy (Asad and Wolpe 1976).

Structural Marxism was primarily an Africanist school, except for Godelier whose speciality is Melanesia. Their work was characterised in particular by a detailed empirical knowledge of the societies of West and Central Africa and Madagascar, which had been a part of the French African colonial empire. This was by no means the first application of a Marxist-influenced political economy in anthropology. The work of Godfrey Wilson and of Ronald Frankenberg, strongly influenced by the more processual functionalism of Max Gluckman, preceded that of the French by decades (Frankenberg 1978; Wilson 1939). This group of early British political economists was not theoretically oriented. They were primarily interested in analysing and documenting empirically the impact of British colonialism: the transformation of land tenure relations; the effects of copper mining in Zambia and of diamond and gold mining in South Africa; the breakdown of ‘tribal cohesion’ in the economies and societies of Central and Southern Africa; the rise of large scale labour migration, forced or otherwise, leading to urbanisation and ‘detribalisation’. Their work in the application of political economy in anthropology, economics and history was pioneering. It provided an invaluable account of the dire economic and social impact of colonialism in the inter-war and early post-war years.

World systems and anthropology:

Popularised by Wallerstein in his three-volume work The modern world-system (1974, 1980, 1989) and in numerous essays (for example, Wallerstein 1975, 1979, 1983, 1984, 1991, 1995, 2000, 2001). Once again there was a period of intense theoretical debate, but by the late 1980s many of the main features of world-system theory had been generally agreed (for a synthesis, see Shannon 1989).

1. The world-system arose as the different regions of the world became linked through exchange and trade into a single economic system with a distinctive division of labour between core and peripheral areas.

2. The system is based on capitalist exploitation: the appropriation of surplus value through the exploitation of the labour of the poor by the rich.

3. Individual parts of the system cannot be analysed in isolation from the others, but only in relation to the whole.

4. The world-system is an inter-state system: the world is divided into nation-states which vary widely in size and wealth, and which compete with one another for power and wealth within the capitalist system.

5. Zones within the world-system can be divided into ‘core’, ‘semiperipheral’ and ‘peripheral’ regions. The core consists of the most technologically advanced and powerful states. These rise and fall over time, so that the core moves over time. Since the start of international maritime trade in Europe, the core has been centred on Spain and Portugal, followed by Holland and England, and more recently by the United States. The states in the periphery are poorer, less advanced technologically, and their economies are often based on the export of raw materials. In between the core and the periphery lies the semiperiphery. This consists of states which are poor relative to the core but which are capable of making the transition to core status if the conditions are right. This may come about through the use of their low-wage advantage to take over some forms of production from the core countries, thus generating economic growth. The usual pattern in worldsystem theory is not for the most advanced states to continue to develop, but rather for them to be overtaken by new arrivals that find it easier to adopt the latest technology.

6. The concept of social class takes on a new meaning in world-system theory as classes are seen as transcending national borders, to become world-wide strata. They include not only capitalists and proletarians, but also petty commodity producers and a middle class of skilled and professional workers. In some cases different forms of production may exist in the same household. For instance, wage earners whose wages do not cover their living costs may have to supplement their incomes through various forms of petty commodity production. These workers have been described as ‘semi-proletarian’ and ‘super-exploited’: wages can be kept low because part of the cost of reproducing the household is met through non-wage labour economic activities. Much of the debate about the ‘informal sector’ of the economy in the 1970s and 1980s revolved around the status and role of these nonwage forms of production within the capitalist system.

7. The global class system is also cross-cut by status groups whose unity is based on culture, including nations. Nationalism is seen as a major factor preventing members of the same social classes from uniting across international boundaries.

8. Political relations with the periphery can involve various forms of domination, ranging from seizure and colonial occupation to the establishment of networks of client states by a major power, as during the Cold War. Semi-peripheral states may therefore be co-opted as regional allies of the major powers.

9. Even though the interests of the state and the national capitalist class may not be identical, they are often symbiotic. The capitalist class provides the resources on which the state depends, while the state performs a number of important roles for the capitalist class: control of the workers, foreign relations initiatives in support of local businesses and opening up new areas for exploitation as part of the periphery.

10. In the core areas, states have acquired legitimacy by allowing workers political rights and bargaining powers, concessions made possible by the inflow of resources from the periphery. On the other hand, continued exploitation of the periphery tends to result in protest and instability, and in the growth of repressive and authoritarian states.

The work of Frank and Gills (1993) on the date of the origins of the worldsystem, mentioned above, has led to other interesting possibilities for worldsystems analysis. If the world-system developed long before the capitalist period, then pre-capitalist and non-capitalist world-systems are also theoretically possible. Frank and Gills’s own analysis was historical, tracing the origins of the modern world-system back to ancient Mesopotamia, via the civilisations of Mediterranean Europe. But another possibility for the use of the world-system concept is to refine it as an ideal type for use in comparative analysis, and this has been carried out most systematically in the work of Chase-Dunn and Hall during the 1980s and 1990s. They define their core concept in the following way:

We define world-systems as intersocietal networks that are systemic … [that is] they exhibit patterned structural reproduction and development. We contend that the developmental logics of world-systems are not all the same, though they do share some general properties … We envision a sequence of changes in which thousands of very small-scale world-systems merged into larger systems, which eventually merged to become the global modern world-system … How and why did these many small systems coalesce and transform over many millennia into a single, global world-system? (Chase-Dunn and Hall 1997: 4–5)

This brings out well three propositions that are central to their work. First, world-systems are intersocietal; that is, they link together societies. This derives from the old political-economy critique of modernisation theory, that societies cannot be studied in isolation from one another. Second, they are systemic, sharing general properties of development. Third, over time many world-systems have merged together, finally creating the single integrated capitalist world-system that we see today.

Chase-Dunn and Hall offer other variations on the world-system theme. Unlike many authors, they do not take core–periphery relationships for granted, but as something to be investigated in each case. In their view, a world-system could theoretically consist of a network of partners of equal status (1997: 28). They also spell out the different kinds of networks through which societies are connected with one another, based on flows of information, prestige goods, power, basic foodstuffs and raw materials. The largest networks are usually those within which information flows, followed by those in which prestige goods are exchanged. Next in size are what they call ‘political/military networks’ (PMNs), forming political units, while ‘basic goods networks’ based on the exchange of foods and raw materials tend to be smaller still.

The key dynamic for the evolution of world-systems, however, lies not in modes of production as in orthodox Marxist theory, but in modes of accumulation, defined as ‘the deep structural logic of production, distribution, exchange and accumulation’ (1997: 29). Chase-Dunn and Hall (1997: 30) distinguish four modes of accumulation: kinship modes, ‘based on consensual definitions of value, obligations, affective ties, kinship networks, and rules of conduct’; tributary modes, based on political (including legal and military) coercion; capitalist modes, based on the production of commodities; and socialist modes (which they describe as ‘hypothetical’), that is, democratic systems of distribution based on collective rationality. Different modes can co-exist within the same system, and there are also transitional and mixed systems. The final concept they use to tie all this together is that of incorporation, the process through which separate systems become linked (1997: 59). The nature of this process changes with the mode of accumulation (1997: 249).

This leads to a typology of world-systems based on the mode of accumulation, which incorporates many of the classic categories of earlier anthropology (Chase-Dunn and Hall 1997: 42–4):

1. Kin-based mode dominant

a. Stateless, classless

i. Sedentary foragers, horticulturists, pastoralists

ii. 2. Big-man systems

b. Chiefdoms (classes but not states)

2. Tributary modes dominant (states, cities)

a. Primary state-based world-systems (Mesopotamia, Egypt, Indus Valley, Ganges Valley, China, pre-Columbian Mexico and Peru)

b. Primary empires in which a number of previously autonomous states have been unified by conquest (Agade, Old Kingdom Egypt, Magahda, Chou, Teotihuacan, Huari)

c. Multicentred world-systems composed of empires, states and peripheral regions (Near East, India, China, Mesoamerica, Peru)

d. Commercialising state-based world-systems in which important aspects of commodification have developed but the system is still dominated by the logic of the tributary modes (Afroeurasian worldsystem, including Roman, Indian, and Chinese core regions)

3. Capitalist mode dominant

a. The Europe-centred sub-system since the seventeenth century

b. The global modern world-system

Recent synthesis:

The most recent ‘grand narrative’ to provide a framework for explaining the political economy of the modern world is that of Castells in his three-volume work, The information age (1996, 1997, 1999). This work traces the impact of information technology on the world economy and social structure. It brings together a number of Castells’s earlier interests, including the role of the state in consumption (compare Castells 1977), social movements (Castells 1983) and the relationship between information technology and urban development (Castells 1989; Castells and Hall 1994). It also shows how the new technology is leading to a process of polarisation between the rich and the poor, as well as to the erosion of the nation-state and the internationalisation of organized crime. A large part of the third volume deals with regional polarization between a ‘fourth world’, consisting of much of Africa and the former Soviet Union, and the major growth poles of Europe, North America and East Asia (Castells 1999).

Further reading:

Carrier, J. G. (2005). Handbook of Economic Anthropology. Cheltenham, UK: Edward: Elgar

Castells, M. 1996. The information age: economy, society and culture, volume I. The rise of the network society. Oxford: Blackwell.

Castells, M. 1997. The information age: economy, society and culture, volume II. The power of identity. Oxford: Blackwell.

Castells, M. 1999. The information age: economy, society and culture, volume III. End of millennium. Oxford: Blackwell.

Dalton, G. 1990. Writings that clarify theoretical disputes over Karl Polanyi’s work. In The life and work of Karl Polanyi (ed.) K. Polanyi-Levitt. Montreal: Black Rose Books.

Dalton, G. and J. Köcke 1983. The work of the Polanyi group: past, present, and future. In Economic anthropology: topics and theories (ed.) S. Ortiz. Lanham, Md.: University Press of America.

Polanyi, K. 1944. The great transformation: the political and economic origins of our time. New

York: Holt, Rinehart & Winston.

Polanyi, K. 1957. The economy as instituted process. In Trade and market in the early empires

(eds) K. Polanyi, C. Arensberg and H. Pearson. Glencoe, Ill.: Free Press.

Polanyi, K. 1977. The livelihood of man. (H.W. Pearson, ed.) New York: Academic Press.

Polanyi, K., C. Arensberg and H. Pearson (eds) 1957. Trade and market in the early empires.

Glencoe, Ill.: Free Press.

Schneider, H.K. 1974. Economic man. New York: Free Press.

Wallerstein, I. 1989. The modern world-system III: the second era of great expansion of the capitalist world-economy, 1730–1840s. San Diego: Academic Press.

Wallerstein, I. 1991. Geopolitics and geoculture: essays on the changing world system. Cambridge: Cambridge University Press.

Wallerstein, I. 1995. After liberalism. New York: New Press.

Wallerstein, I. 2000. The essential Wallerstein. New York: New Press.

Wallerstein, I. 2001. Unthinking social science: the limits of nineteenth-century paradigms. Philadelphia: Temple University Press.


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