Chapter 7 Summary

Introduction

All economies are shaped by local social relationships, cultures, and moralities. Contemporary China is a particularly good example of these processes in motion. The result of “socialism with Chinese characteristics” was the rise of private control of capital, resources, and goods. This, in turn, has led to the growth of private entrepreneurs and, subsequently, reforms allowing for private property rights.
The new economic possibilities for entrepreneurs are framed within the Chinese notion that one should create guanxi (social networks based on reciprocity) and renqing (affective social relations). The importance of these cultural patterns suggests that what is happening in China is not a simple story of Westernization through capitalism.
This chapter asks, How do cultural processes shape what people want and need to live, and how do they shape the work people do to get it? And within this general question:

Is money really the measure of all things?
How does culture shape the value and meaning of money?
Why is gift exchange such an important part of all societies?
What is the point of owning things?
Does capitalism have distinct cultures?

Anthropologists have long debated the nature of the relationship between culture and economy. But the two clearly interpenetrate each other, and we cannot fully understand one without the other.

Is Money Really the Measure of All Things?

Many North Americans and Europeans are accustomed to the idea that money is the measure of all things—we tend to think in monetary values.
But we also understand that there are things that you can’t realistically put a “price” on: the original Declaration of Independence, childhood mementos, sacred religious sites or objects, family heirlooms, and so on.
To understand why there are certain things money can’t buy, we must understand that there is a difference between monetary price and value as defined in anthropology: the relative worth of an object or service that makes it desirable. Value is culturally constructed, and this is the focus of economic anthropology: the subdiscipline concerned with how people make, share, and buy things and services.

Anthropologists, like economists, have an interest in how economies work, but the anthropological emphasis is different.
Anthropologists are less concerned with predicting patterns and helping people earn and maintain wealth. They are more concerned with the cross-cultural study of economic systems: the structured patterns and relationships through which people exchange goods and services—and understanding how culture and economy affect each other.
Cultural anthropology applies four major theoretical approaches to economic value: neoclassical economics, substantivism, Marxism, and cultural economics (see Table 8.1).

Neoclassical economics: the study of how people make decisions to allocate resources like time, labor, and money to maximize their personal benefit.

This approach is reflected in Adam Smith’s influential book The Wealth of Nations (1776). Like most scholars of his time, Smith ranked human societies along a scale of “civilization,” with the more civilized societies exhibiting division of labor: the cooperative organization of work into specialized tasks and roles.
Smith used a sewing pin to illustrate the division of labor. If a pin is manufactured by one person, it takes greater time and labor. The value of the pin is determined by the amount of labor necessary to produce it. If pins are mass-produced by teams of specialists, each completing one step of production, the number of pins that can be made in a day increases exponentially.
In the latter case, the value of the pin is determined by its exchange (the transfer of objects and services between social actors) in a market (a social institution in which people come together to buy and sell goods and services).
To Smith, market exchange reflected a natural human propensity toward competitiveness and self-interest transformed into wealth and human satisfaction. (Smith’s formulation assumes that self-interest and unlimited desires are culturally universal.)

Economist Karl Polanyi addressed Smith’s assumption in The Great Transformation (1944). Polanyi argued that the rise of market economies wasn’t an inevitable expression of human nature but a system developed in a particular historical and cultural context. This contrasted with Smith’s ideas about capitalism: an economic system based on private ownership of the means of production, in which prices are set and goods distributed through a market.

Polanyi distinguished between formal economics (the branch of economics that studies the underlying logic of economic thought and action) and substantive economics (a branch of economics that studies the daily transactions people engage in to get what they need or desire).
In the substantivist view, daily transactions can’t be separated from other social institutions, like religion, kinship, and political systems.

Substantivists explored how these institutions shape redistribution: the collection of goods in a community and then redivision of those goods among members. They argued that the concept of “economy” did not properly capture the social relations and institutions that provided people with the what they needed to live.

In the 1960s, formalist (because they favored formal economics) critics accused substantivism of too little focus on individual behavior.
Formalists shared Adam Smith’s ideas about unlimited wants and the desire for satisfaction. As anthropologists, they understood that “satisfaction” was culturally relative. But they asserted that individuals used rational decision-making processes in pursuit of satisfaction, and these processes were culturally universal.
The substantivist-formalist debate was never formally resolved, in large part because the two sides were talking past each other. One side was talking about societies and their institutions (substantivism), while the other was talking about individuals, their rationality, and their market transactions (formalism).

An alternative perspective on economic systems is the one put forth by Karl Marx (1818–1883). According to Marx, the capitalist system, as it existed in Britain at that time, created constant conflict between the wealthy class and the working class.

Marxists sought to explain how an economy based on inequality perpetuates itself. How can an economic system that seemingly benefits the few at the expense of the many survive indefinitely?
Marxists focus on the concept of surplus value: the difference between what people produce and what they need to survive. In their view, the wealthy class, who control the means of production, effectively “steal” the surplus value of the working class and convert it into their own private wealth.
Marxist analysis directed anthropological focus toward issues of power, domination, and the unequal distribution of wealth. But, like many grand theories of economics, it did not place much emphasis on cultural variability in symbolic and moral systems and its influence on economic interaction.

One perspective that seeks to highlight cultural variability in economics is cultural economics: an anthropological approach to economics that focuses on how symbols and morals help shape a community’s economy.

Cultural economists approach economy not as something that overrides culture but as a category of culture like any other—and they explore an emic (insider’s) perspective on economics.
Part of this culture-specific focus is prestige economies: economies in which people seek high social rank, prestige, and power instead of money and material wealth.
Among indigenous Maya groups of southern Mexico and Guatemala, men traditionally participate in the cofradía system, a politicoreligious system that requires them to share generously with the community to gain and maintain high-status positions in the local hierarchy.
Importantly, an insider’s perspective is necessary to understand how this system converts labor and the currency of money into the currency of prestige and how acts of public generosity can include an element of self-interest.

So, given these varieties of economic theory, how is value created? None of the approaches covered here accepts money as a universal measure of value. All of them, to one degree or another, agree that sociocultural relationships and processes play a primary role in creating value and that economic systems cannot be considered independently of culture.

How Does Culture Shape the Value and Meaning of Money?

Money is an object used as a medium of exchange, a store of value, or a unit of account. Anthropologists are interested in money not just as a kind of currency but because of its significant cultural dimensions. Commodity money is money that has another value beyond itself, such as gold or other precious metals. Fiat money is created and guaranteed by a government, such as American dollar bills.
Why do people in various cultures want money? In market economies, we rely on general-purpose money: money that is used to buy nearly any good or service. Many societies also include uses for limited-purpose money: objects that can be exchanged only for certain things.

For example, among Tiv pastoralists of Nigeria, men must pay bride price before marriage. Bride price must be paid with the limited-purpose money of cattle, and cattle must be purchased with the limited-purpose money of brass rods.
The Tiv have three separate spheres of exchange: bounded orders of value in which certain goods can be exchanged only for others. During British colonial days, the infusion of general-purpose money caused social disruption because the Tiv consider it immoral to pay bride price with that particular currency.
In an academic setting, a diploma must be earned via a combination of tuition money and hard work. To simply buy a diploma is ethically and culturally hazardous. This is an example of transactional orders: realms of transactions a community uses, each with its own set of symbolic meanings and moral assumptions.

Different kinds of money reflect and shape the distribution of power in different ways. In Debt, Graeber looks at the historical relationship between money and debt cross-culturally. The rise of debt is rooted historically in the use of commodity money, and can produce violent social relations. Governments often intervene as tensions flare by producing fiat money and introducing debt forgiveness. The relationship between debtor-creditor is thus full of tension and conflict.
As significant, and taken for granted, as money is in our culture, the meanings and uses of money are not universal.

Why Is Gift Exchange Such an Important Part of All Societies?

Exchange is central to the flow of social life in any community and includes many economic aspects, including the expectation of reciprocity: the give and take that builds and confirms relationships.
Two classical anthropological approaches investigate the role of gift giving in economic systems, one associated with Bronislaw Malinowski and the other with Marcel Mauss. Both are functional interpretations (assuming that gift exchange fulfills some function within a society), but they differ in that Malinowski focused on how gift giving benefits individuals and Mauss focused on the overall societal benefits of gift exchange.

Malinowski famously documented the Kula, an interisland exchange network in which men pass ornamental shell armbands and necklaces along to recipients on other islands. This exchange cemented lifelong relationships between high-ranking men on each island. The Kula ring systematically conveyed armbands “counterclockwise” and necklaces “clockwise” (see Figure 8.6).
These material objects served no practical purpose or function but brought great prestige to their (temporary) possessors. (From a functional point of view, ritualized Kula exchanges also included material goods like food and tools.) The Trobriand Kula illustrates a system of delayed reciprocity: a form of reciprocity in which there is a long lag time between giving and receiving.
Unlike the brass rod exchange among the Tiv in Nigeria, the Kula was not undermined by colonialism and have expanded in recent decades.

In 1924, Marcel Mauss published The Gift, a comparative study of gift exchange in non-Western societies. Mauss focused on the function of group solidarity. In his view, individual self-interest was tempered by a societal notion of obligation surrounding gift exchange: the obligation to give, the obligation to receive, and the obligation to reciprocate in appropriate ways. Mauss considered the moral and spiritual dimensions of gift giving.

Marshall Sahlins (1972) built on Mauss’s work and identified three types of reciprocity:

Generalized reciprocity: a form of reciprocity in which gifts are given freely without the expectation of return.
Balanced reciprocity: a form of reciprocity in which the giver expects a fair return at some later time.
Negative reciprocity: a form of reciprocity in which the giver attempts to get something for nothing; to haggle one’s way into a favorable personal outcome.

Even in market economies, gift exchanges are imbued with cultural significance. Gift exchange establishes social status, reaffirms relationships, and gives people access to goods and sometimes, influence. American gift exchanges follow implicit rules and should embody the relationship between giver and receiver. Cash is often considered inappropriate because it places a concrete value of a relationship. Moderately personal gifts are things like commodities: mass-produced and impersonal goods with no meaning or history apart from themselves. But, wrapping them transforms them into something more personal.
Three major takeaways from gift exchange:

Gift exchanges are part of social relations.
Through personalization, we can transform commodities into gifts.
We invest symbolic meaning in the things we give, receive, and consume.

What Is the Point of Owning Things?

For anthropologists, the process of owning is a matter of interactions between people. Property ownership is about social relationships and actions.

In Melanesian and Polynesian societies, some objects cannot be given away or separated from their original owners. Annette Weiner called these “inalienable possessions” because their inherent value surpassed their exchange value.

In American culture, we invest heavily in being cool: “fashionably attractive or impressive” (http://www.oxforddictionaries.com). Part of being cool is knowing what’s cool, and what’s cool changes rapidly. An individual’s sense of “cool” might identify him or her as a member of a particular social group.

Clearly, the informal concept of cool has huge social consequences. To be cool (or any other outward expression of self) we often engage in consumption: the act of using and assigning meaning to a good, service, or relationship. Consumption creates cultural meaning, social relationships, and personal identities.

It hardly need be said that nothing is inherently cool. The idea is culturally constructed and locally specific. (Students who have moved to a different region or country have likely had to adapt to new styles and social expectations.)
Consumption begins with appropriation: the process of taking possession of an object, idea, or relationship.

Consider the “consumption” of a smart phone. To appropriate a phone, one must have money, so possessing a certain type of phone automatically identifies something about your socioeconomic status. But consumption continues with how you modify, decorate, and use the phone.

In many small-scale societies, it’s necessary for people to have the skills to produce “cool” things, as opposed to market economies where they are purchased. Consumption can be thought of as an avenue through which people continuously recreate and modify cultural meanings and social relationships.

For example, the Aitape of Papua New Guinea exchange handcrafted string purses. They are tangible manifestations of social relations and having bags from afar indicates a wide circle of friends.

In the chapter’s opening example, it is clear that China’s shift toward capitalism, Chinese people consume new things. But Chinese people have long been consumers, people who rely on goods and services not of their own making. But consumption patterns have changed and new consumer goods have shifted cultural meanings and social relationships.

Does Capitalism Have Distinct Cultures?

For most of the twentieth century, we lived in a perpetual state of Cold War between capitalism and socialism. In 1989, this war ended far more abruptly than many of us ever anticipated; almost overnight, capitalism appeared to have “won.” Capitalism has certainly spread since 1989, but it is not completely uniform from place to place.
Most importantly, anthropologists with many theoretical orientations view capitalism as a cultural phenomenon. Capitalism makes the fundamental cultural assumption that well-being can be achieved through consuming material things.
Karen Ho (2009) studied Wall Street investment banks using the traditional anthropological methods of participant observation and open-ended interviews. Many informants described Wall Street as an entity that mediates vast anonymous flows of capital throughout the world. But Ho’s findings did not line up with this emic outlook.

Through participant observation, Ho learned that bankers market global coverage to clients when, in fact, firms had minimal coverage in most parts of the world. Only through new investment opportunities would firms’ nearly dormant relationships with local firms and clients be reactivated. Personal relationships and local knowledge are essential to successful transactions; massive financial markets depend on these factors as much as any merchant in a rural village.

Patricia Sloan (1999) studied Malay entrepreneurs in Kuala Lumpur, Malaysia. These Malaysian capitalists had a very different business ideology from Wall Street, intentionally local rather than insatiable global ambitions.

They see capitalism as a modern, self-interested enterprise but adhere to Islamic values, family, and community obligations—even at the cost of business failure. Malay entrepreneurs attempt to balance improving their material lives through capitalism with maintaining traditional cultural norms and practices.
See “Anthropologist as Problem Solver: Jim Yong Kim’s Holistic, On-the-Ground Approach to Fighting Poverty”

Conclusion

Economic ideas and behaviors never exist independently of culture, morality, and social relationships. Culture shapes what is acceptable to transact, how and why a transaction occurs, and how the goods and services being exchanged are valued.