The Anthropology of Economy: Community, Market, and Culture

by Stephen Gudeman

Recent, dramatic changes in local and global economies have profoundly affected the lives of millions and have demanded that students of economy rethink their analytical approaches. In The Anthropology of Economy , noted anthropologist Steve Gudeman presents a model and lexicon for thinking about and discussing "things economic."

Genres: Anthropology, Economics

200 pages, Paperback

First published May 28, 2001

Reviews

[Anthony Buckley · Rating 4 out of 5]

The free market is not the only kind of economic structure. I’m not just talking about “communism”; rather that the different kinds of economic patterns are legion. The western household has its own distinctive economy; so do prisons; there have been slave-economies; friendly societies; gifts of drink between strangers in bars; there are dowries and bride-price; the friendly society; the kula; the tribute paid by vassals to rulers: one could go on. It has become common to dichotomise these different kinds of economy between on the one hand “Society” or “Gesellschaft” and on the other, “Community” or “Gemeinschaft”, and this book is one such attempt. Gudeman makes a radical distinction between the Market and the Community. It is a useful and a fruitful approach, and Gudeman’s book is interesting. However, I have some worries. .
Gudeman’s is a broadly theoretical study of the nature of economic practice seen through anthropological eyes and making special use of his knowledge of South and Central America. As well as creating a dichotomy between Community and Market, he also thinks there is a “dialectical relationship” between two kinds of economy, based respectively in community and in the market. That is, he rejects approaches that treat these two spheres separately. It follows that “Economies are built on the interlocked realms of communal and commercial value, not [for example] gift versus commodity p81.

This having been said, he nevertheless clings to the idea that “market and community provide two transactional realms which, however complement one another, conjoin and are separated in acts, institutions and sectors”. So when he speaks of dialectic, he does indeed mean that these two realms are differentiable and separate but intertwined. “No trade or market system exists without the support of communal agreements, such as shared languages, mutual ways of interacting, and implicit understandings. For example, he says “Communities are also inside markets, as households, corporations, unions, guilds, and oligopolies, and contain them as nation-states that provide a legal structure for contracts and material infrastructures” p11.

“In a market people exchange goods, buying and selling at the best price available until satisfied they cannot better their personal holdings. Exchanges in community are different, for they revolve around ways of dividing a shared base, are guided by multiple values, and have to do with fashioning identities as well as material life” p52 And indeed, the notion of a shared base is central to his idea of community. This base “consists of a community’s shared interests, which include lasting resources (such as land and water), produced things, and ideational constructs such as knowledge, technology, laws, practices, skills and customs”..p7 .

What I found useful about this analysis is that he detaches the conceptual distinction between community and market from other conceptual dichotomies. The distinction between gift and exchange, for example, though undoubtedly important, is not a necessary feature of community. Nor are notions of equality.

Many communities, indeed, are founded in inequality and some may be thought tyrannical. And his chapter four is a study of a variety of communities which together he calls “the great estate” as this existed from Roman times into the late Middle Ages and even beyond, where there were forms of slavery and serfdom. “The great estate, throughout much of its evolution, was not directed to securing a monetary profit. - - - The ideal was to be self-sufficient. - - - The project of the great estate was not only to maintain itself but to expand, by increasing the number of its dependents and its base for defence and display. - - - The intention was to establish housekeeping on a large scale, to be lavish, and never to be short of consumable goods. The powerful man could eat as much as he wished and provide others with food, always striving to increase the numbers dependent on him and the size of his immediate household. Not material accumulation but expanding the community was the goal p75“

His chapter five denies that community is constituted by the gift. Gifts, he argues, are usually tactical attempts to extend the base of a community beyond its usual boundaries. Reciprocity, which involves the eventual return of the gift, seals such an extension. “An initial gift, then, is a trial-and-error practice, because the giver operates in the realm of uncertainty about its acceptability and appropriateness, and whether it will be returned. Gifts are converted to reciprocity for different reasons. Reciprocity can cement a relationship and establish community. The gift may express affection and mutuality but also a power difference, for the giver is able to cede part of her base without requiring a requital” p89.

I think that this chapter is an important one, but also that it contains a flaw. This flaw is that it depends on a false reification of the “community”. A gift is indeed a “trial-and-error practice. However, even within an apparently existing and established institution, its members have to engage in trial and error. When I greet an old friend or send him a card at Christmas, the sealing of our pre-existing friendship depends on some kind of return of the greeting or the gift. Such a gift and such reciprocation exist in long-standing as well as new relationships, but they can be just as fragile as the ones found in more tentative first-time approaches to strangers. Even a long-standing friendship will be as strong as the last greeting or the last Christmas card. Not only attempts to extend the base of a community but also existing communities are fragile and they all depend on the ongoing giving of gifts (and maybe other transactions too) and their reciprocation.

Chapter Six goes on to discuss trade and specifically profit. It seems that Joan Robinson in the 1960s tried to compare Karl Marx’s “classical” theory of profit with that of the neo-classical economists who succeeded Marx. Unfortunately, she could find no neo-classical economist who had actually constructed a satisfactory neoclassical theory of profit with which she could make her comparison (p97). Gudeman understands this deficiency to have arisen because – in the competitive equilibrium beloved of neo-classical economics - “it does not pay for an outside firm to enter a market because profit ‘at the margin’ or for a new entrant is zero”. Gudeman usefully discusses a range of theories of profit, from the mercantilists and the physiocrats who thought that profit arose outside of human will in the God-given gift of land to the later classical theorists, Ricardo and Marx, who thought it arose from human labour.

Gudeman offers his own theory (derived from Joseph Schumpeter) that profit it is the reward that arises due to the creation of new productive conditions. This, he says, is found both in communities and in market conditions. Entrepreneurial activity consists in innovation, “in forging new products, methods of production, or forms of organization, or in finding cheaper sources of supply and new markets. Innovations, by making new connections between means and ends, create knowledge-in-practice or ‘technology’.” And similar activities exist in communities. “In one realm, they strengthen the [community] base; in the other they expand capital”. It follows that in perfect market conditions, normal profit will dissipate when other companies catch up with the innovations made by an entrepreneur. However, imperfections in the market – cartels, monopolies, oligopolies, patents, secret processes etc – may allow such profits (or superprofits) to persist.

I have my doubts about Gudeman’s presuppositions. In particular, it is plain that the “firm” found in neo-classical economics and the “community” in his own analysis are just two forms of social institution that have much in common. The difficulty is that by dichotomising them in this particular manner he says either too much or too little. Too many diverse and complicated institutions are embraced by his concept of “community”. Generalizing about institutions as varied as modern villages, families, public houses and slave-holding estates is not a sensible project. My own feeling is that it is better to identify the kinds of transactions and relationships found within and between particular social institutions and talk about these.

I worry too about the way he dismisses the notion expressed, in rather different forms, by both Levi-Strauss and Sahlins, and implied in Mauss, that all human relationships are founded in different kinds of reciprocity. For Gudeman, “reciprocity” is attached only to giving, and he prefers other terms such as “apportionment” and “allotment” for transactions within communities. . It seems likely that much of the difficulty found here comes from semantic dissention around the word “reciprocity”, with Sahlins and Levi-Strauss defining the term broadly, and Gudeman defining it narrowly. My own inclination is to follow Sahlins and Levi-Strauss and see exchange (and therefore reciprocity) as the basis for all kinds of relationship and all kinds of social institution.

Let me also add that what leaped out of the page in the discussion of profit, was the fact that the discourses of economics, for all their seeming mathematical precision – expressed in graphs, algebraic formulae ad high-flown language – are not a dispassionate attempt to describe how a slice of the world operates but they also contain, more or less hidden, a justification of the way the world is, or else a criticism of it. It seems impossible to formulate a theory of the origin of profit without implicitly claiming either that profit is just or that it is unjust. And a concern with justice permeates the whole of economics.

My own belief is that transactions of all kinds, including those of slave-owners, householders, friends in pubs, parents, children, entrepreneurs, managers, workers, are bound by particular and peculiar rules of reciprocity. However, some practices and some rules of conduct may be thought to be “just” and others to be “unjust” or exploitative; and some descriptions of economic systems are truthful and others fictional or “ideological”. These are topics that always keep peeping out in economic discussion, but they are topics not really addressed by this nevertheless interesting book.

[ties · Rating 4 out of 5]

The anthropological foundations of economy should be a mandatory read for all economics and business students. Such a shame that these disciplines have lost track of the foundations in which they are grounded and how they have become what they are. This reproduces a one-dimensional narrative of what economy is and should be, instead of showing the wide variety of disciplines that it is based upon

[Leanne Hoffmann]

Read a few chapters in college Anthropology class.