Chapter 13 Outline

Introduction

• All economies are shaped by local social relationships, cultures, and moralities. Modern China is a particularly good example of these processes in motion.
• After Mao Tse-tung’s death in 1976 the state turned from policies of collectivization and centralized resource allocation to more private control of goods and services.
• As a result, private entrepreneurs have flourished economically and socially. At the same time, they are seen as morally suspect.
• The entrepreneurial sphere is strongly masculine and well-connected entrepreneurs frequent luxury clubs and hire sex workers. These activities strengthen quanxi, informal webs of social relationships that can help get things done when working with the government.
• Networks also build sentimental ties, renquing, like those between kin and close friends.
• Westerners have seen China’s new entrepreneurial class as a sign of movement to capitalism and liberal democracy, but the entrepreneurs are heavily state dependent. Their practices are not a form of western capitalism but embedded in Chinese political structures and cultural patterns.
• This chapter asks: How do people get what they want and need to live? And within this general question:
• Is money really the measure of all things?
• How does culture shape the value and meaning of money itself?
• Why is gift exchange such an important part of many societies?
• What is the point of owning things?
• Are there distinct cultures of capitalism?

• 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.
• 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 14.1).
• Neoclassical economics: the study of how people make decisions to allocate resources like time, labor, and money in order 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, the “invisible hand” of the market economy channeled “natural” competitiveness and self-interest 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 are not the result of an “invisible hand” guiding economics alone and can’t be separated from other social institutions, like religion, kinship, and political systems.
• They explored how these institutions shape redistribution: the collection of goods in a community and then redivision of those goods among members.
• Substantivism approached economic systems:
• From a culturally relative perspective
• As evolutionary, or changing through time
• Societally focused (rather than individually)
• Holistically descriptive
• Marshall Sahlins was a proponent of substantivism.
• See “Classic Contributions: Marshall Sahlins on Exchange in Traditional Economies”
• In the 1960s, formalist (because they favored formal economics) critics accused substantivism of too little focus on individual behavior. Formalists advocated scientific investigation of rational individuals and supply-and-demand markets, which, though not universal, have existed in a broad range of societies.
• 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, and most anthropologists today would support a basic compromise that recognizes the role of individuals and societies in economics; people everywhere are economically rational but rely on culturally specific measures of value and satisfaction.
• 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 heirarchical 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.
• See “the Anthropological Life: The Economics of Anthropology.”

How Does Culture Shape the Value and Meaning of Money Itself?

• Sometimes asking questions with seemingly obvious answers can reveal surprisingly complex answers. Anthropologists are well practiced in asking what cultural insiders likely consider “stupid” questions. To most Westerners, “What is money?” is such a question. Money is an object or substance that serves as a payment for a good or service.
• Money is a form of currency: an object used as a medium of exchange. Anthropologists are interested in money not just as a kind of currency but because of its significant cultural dimensions.
• Another obvious question is: 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.
• As significant, and taken for granted, as money is in our culture, the meanings and uses of money are not universal.
• Different types of money shape the distribution of power.
• David Graeber (2011) argues that when people in the U.S. are in debt they feel great moral pressure to pay it off. This began in practices 5000 years ago when states started creating new kinds of money to promote trade.
• Commodity money, money which has another value beyond itself, was common because it requires no trust, but it can be problematic because it can be stolen.
• As an alternative, governments created fiat money, money created and guaranteed by a government, to control the flow of money and levels of indebtedness. Debtor-creditor relationships can be tense and lead to political unrest.
• Not all societies see debt as a problem. Graeber labels these “human” (as opposed to commercial) economies. In these economies, people don’t focus on acquiring money but on building social relationships through the exchange of money. For much of history most economies worked this way.

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 inter-island 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 13.4).
• 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.
• Although Malinowski described high-ranking men, women were also active participants in the Kula (see “Thinking Like an Anthropologist: The Role of Exchange in Managing Social Relationships”).
• 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.
• For example, the Maori of New Zealand perceive gifts as possessing spirits (“hau”) that expect reciprocation—if the recipient did not return a gift, the spirit could be angered.
• If spirits inhabiting objects sounds strange, consider why Marilyn Monroe’s dress sold for so much at auction. It’s just cloth, but because some people believe her life force imbues, it they will pay a lot of money.
• 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.

• Recent studies of reciprocity have focused less on types and more on how gifts are interpreted within a cultural framework. For example, Marilyn Strathern (1990) has shown that certain Melanesian groups do not view gift exchange as “something that people do” but as the activity that “makes them people” to begin with.
• Even in market economies, gift exchanges are imbued with cultural significance; from political bribes to holiday gifts, implicit rules guide exchanges.
• For example, political bribes are not usually expressed as such, just a “gift” with the implicit assumption that political favors will follow.
• Personal gifts fall on a personal–impersonal spectrum. Personal gifts indicate knowledge of the receiver’s likes and dislikes. Impersonal ones, like cash, can be given to anyone, so they are not a reliable signal of friendship. Wrapping cash or putting a bow on it are “cheap” signals but more personal than just handing someone a bill.
• Moderately personal gifts are things like commodities: mass-produced and impersonal goods with no meaning or history apart from themselves. We even have businesses devoted to “personalizing” commodities by engraving a name or slogan on them. This also explains why people wrap gifts.

What is the Point of Owning Things?

• “What is the point of owning things?” is a question best addressed through a cross-cultural lens.
• For anthropologists, ownership is about interactions between people
• These interactions can be about the assertion and negotiation of rights in something.
• They can involve claims rooted in culturally specific forms of symbolic communication.
• In some societies some objects cannot be given away because their inherent value transcends their exchange value.
• Maori sacred cloaks, for example, can be lent but not given away because they represent a kin groups origins and historical continuity.
• Consumption begins with appropriation: the process of taking possession of an object, idea, or relationship.
• Why do people want certain things? Sometimes it is about gaining access to a central resource. Sometimes it is about being trendy.
• 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 constantly exchange everything from handcrafted string purses to T-shirts and CDs. These items need not be possessed “permanently” to have value, and having objects from afar indicates a wide circle of friends.
• Changes in consumption patterns are often visible manifestations of broader cultural changes.
• 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. Nothing is inherently cool. The idea is culturally constructed and locally specific.
• For example, the shift in the Chinese economy allows increased consumption. The Chinese have long been consumers, relying on goods and services not of their own making, but now they have more choices. The choices of rich entrepreneurs influence what items and services common Chinese people decide carry symbolic prestige.
• Consumption creates cultural meaning, social relationships, and personal identities.
• Consumption is a key feature of capitalism, but if consumption varies around the globe, does the capitalist system also vary?

Are There Distinct Cultures of Capitalism?

• For most of the twentieth century, we lived in a perpetual state of Cold War between capitalism and socialism. In 1989 this war ended and 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 (rather than a universal “invisible hand”). Capitalism makes the fundamental cultural assumption that well-being can be achieved through consuming material things.
• Richard Robbins (2005) identifies four social roles in the culture of capitalism: capitalists, laborers, consumers, and the state. Capitalists invest, workers work, consumers consume, and the state insures that each fulfills its role. These basic roles are held constant across capitalist systems, but there is local variability between cultural contexts.
• 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 almost as if it were a living thing, bringing economic harmony to the world. But Ho’s findings did not line up with this rosy emic outlook.
• Since the 1980s investment banks have completely altered the goals of American capitalism, formerly producing a quality product sustainably to provide income for investors, jobs for workers, and a product for consumers.
• In the 1990s and early 2000s these goals shifted toward limitlessly increasing shareholder profits. Larger corporations purchased smaller ones, sold their assets for profit, and fired their employees. This spurred record-breaking profits for investors but did little to create jobs or innovative products. They imposed this model on the rest of the economy.
• Ho also observed how 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.