Economic Systems

Economics The study of how the choices people make determine how their society uses resources to produce and distribute goods and services.

Economic System The part of society that deals with production, distribution, and consumption of goods and services. The way production is organized has consequences for the family and the political system. Economics is embedded in the social process and cultural pattern.

Economic Behavior Choosing a course of action that pursues the course of perceived maximum benefit. Patterns of consumption are affected by social organization, exchange and redistribution systems, and cultural norms. Examples?

Allocating Resources Each society has rules to regulate access to resources. Productive resources are used to create other goods or information. Land, water, tools and knowledge are productive resources.

Producing Goods Degree of craft specialization affects what goods are produced and how they may be used. Surpluses for: when resources run low. to trade for other goods. redistributed to serve social functions. public services/taxes.

Productive Resources: Foragers Foraging requires people to spread out over a large area. Boundaries can be adjusted as the availability of resources change. Where resources are scarce and large areas are needed to support the population, boundaries are not usually defended.

Productive Resources: Foragers Where resources are abundant, groups may be more inclined to defend their territory. Typically, there is no sense of land ownership or craft specialization.

Productive Resources: Pastoralists The most critical resources are livestock and land. Livestock are owned and managed by individuals, land and water are generally not owned.

Productive Resources: Pastoralists In the rainy season, cattle graze in areas unsuitable to farming. In the dry season, they move to areas occupied by farmers. Agreements with landowners allow animals to graze on the stubble from harvested fields.

Productive Resources: Horticulturists Land is communally owned by an extended kin group. Designated officials allocate rights to use land, which may not be sold. Since almost everyone belongs to a land controlling kin group, few are deprived of access to this basic resource.

Productive Resources: Agriculturists Enormous amounts of labor are invested in clearing, cultivating, and maintaining the land and large quantities of food are produced. The rights to the land and its products are vested in those who work it. Individuals may die while the land is still productive, so a system of inheritance is established.

Productive Resources: Agriculturists Control of the land becomes an important source of wealth and power. Land ownership moves from the kin group to the individual or family. The owner has the right to keep others off the land and dispose of it as desired.

Productive Resources: Agriculturists Land and other productive resources are likely to be owned by an élite group. Most fieldwork is done by laborers, often referred to as peasants. Landowners enjoy relatively high standards of living but peasants do not.

Organizing Labor In small-scale preindustrial and peasant economies, the household or some extended kin group is the basic unit of production and consumption. Labor is just one aspect of membership in a social group such as the family.

Organizing Labor In Western society, work has important social implications as control of labor and production can provide prestige, status, wealth, and power. For many, particularly of the middle classes, work is a source of self-respect, challenge, growth, and personal fulfillment.

Organizing Labor: Households In most nonindustrial societies, production is based around the household. The household is an economic unit, people united by kinship or other links who share a residence and organize production, consumption, and distribution among themselves.

Gendered Division of Labor In all human societies, some tasks are considered appropriate for women and others appropriate for men. Different tasks are ascribed different social values. In some cases, the sexual division of labor is biological since only women can bear and nurse children. Caring for infants is almost always a female role and usually central to women’s identities.

Specialization in Complex Societies The division of labor becomes more specialized as the population increases and agricultural production intensifies. Occupational or craft specialization spreads as individuals are able to exchange services or products for food and wealth. Specialists are likely to include soldiers, government officials, members of the priesthood, artisans, craftsmen, and merchants.

Mode of Production According to Karl Marx, a society’s mode of production is the combination of: Human labor The means of production The social and technical relations of production. The means of production are capital, equipment, buildings, technologies, materials, and land.

Patterns of Exchange Reciprocity Redistribution Market

Types of Reciprocity Generalized - Distribution of goods with no specific return expected. Balanced - Exchange of goods of equal value, with an obligation to return them. Negative - Exchange conducted for material advantage.

Generalized Reciprocity Involves closely related exchange partners and giving with no specific expectation of exchange, but with a reliance upon similar opportunities being available to the giver in the future. In industrialized societies, this occurs between kids and parents and spouses.

Generalized Reciprocity Involving food is an important social mechanism among foraging peoples. Hunters distribute meat among members of the kin group or camp. Each person or family gets an equal share or a share dependent on its kinship relationship to the hunter.

Chukchi Whale Hunters

Generalized Reciprocity Hunters gain satisfaction from accomplishing a highly skilled and difficult task. Because all people in the society are bound by the same rules, the system gives them all opportunity to give and receive.

Balanced Reciprocity Involves greater social distance and includes the obligation to return, within a reasonable time limit, goods of nearly equal value to those given. Trading partners establish important social relationships. Characteristic of trading relations among non-industrialized, tribal peoples without market economies.

Kula Ring Pattern of balanced reciprocity among trading partners in the Trobriand Islands. The kula trade moves two types of prestige goods from island to island around the Kula circle. necklaces of red shell, move in a clockwise direction. bracelets of white shell, move counterclockwise.

Kula Mwali White armbands Counter clockwise Bagi/soulava Red necklaces clockwise Village chief organizes expedition Some women have started to do it

Kula Ring Although Kula items can be owned and may be taken out of circulation, people generally hold them for a while and then pass them on. Kula trading partnerships are lifelong affairs, and their details are fixed by tradition.

Negative Reciprocity Involves very socially distant trading partners. Each partner attempts to maximize profit and expects immediate exchange. Is central to barter and market economies. Mercado de Sonora, Mexico City

Redistribution Exchange in which goods are collected from members of the group and then redistributed to the group. Taxes in state-level societies.

Chiefly Redistribution The typical mode of exchange in chiefdoms. Chiefs collect food and goods, including prestige goods as tribute (upward movement). Chiefs later redistribute the goods at feasts (downward movement). Prestige goods may be recirculated through chiefly redistribution or destroyed through sacrifice.

Chiefly Redistribution Chiefs are able to exert their political power by being “generous” to those of lower rank. Those of lower rank are also able to show political support by “giving” a portion of their surplus in exchange for favors from the chief, thus renegotiating their status and rank and forging political alliances.

Potlatch Feasts Contexts for competitive giveaway practiced by the Kwakiutl and other northwest North Americans. Ritualized exchanges in which mid-ranked sponsors gave away resources and manufactured wealth while generating prestige for themselves. They allowed adjustment for alternating periods of local abundance and shortage.

Gallic Feasts The Gauls (Celts) of France were a chiefdom-level, warrior culture. Goods were consumed and sacrificed for increased prestige through competitive conspicuous consumption. They were contexts for the renegotiation of social identities, and the renegotiation of crucial alliances.

Gallic Feasts: Gournay-sur- Aronde, France

Leveling mechanism A practice, value, or form of social organization that evens out wealth in a society. If generosity rather than the accumulation of wealth is the basis for prestige, those who desire prestige will redistribute much of their wealth. Potlatch feasts are a leveling mechanism.

Market Exchange Economic system in which goods and services are bought and sold at a price determined by supply and demand Impersonal and occurs without regard to the social position of the participants. When this is the key economic institution, social and political goals are less important than financial goals.

Capitalism Economic system in which: people work for wages land and goods are privately owned. capital is invested for individual profit. A small part of the population owns most of the resources or capital goods.

Capitalism The goal is to gather wealth to gain control over the means of production to gain even more wealth. Workers do not control the means of production. Workers produce surplus value that is turned into profit and capital by the few who do control the means of production.

Capitalism Workers are alienated from their production and each other. Workers in nonindustrial societies reap the financial and social profits of their work and are usually kin or fictive kin, and thus their labor is part of their overall social lives.

Coexistence of Exchange Principles Most economies are not exclusively characterized by a single mode of reciprocity. For example, in the U.S., we practice market exchange and redistribution (taxes), but also generalized and balanced reciprocity in personal relationships, and negative reciprocity when we barter.