Implications for Exchange Systems - Essay Example

? Topic: Lecturer: Presentation: Introduction The exchange of goods and services has been going on in the society from time immemorial. It is believed that the traditional societies exchanged goods for goods – a process which is commonly referred as barter trade, but due to its inconveniences such as bulkiness of goods and lack of proper measure of goods that can be exchanged for other goods, as well as scarcity of some items, money was invented as the medium of exchange (Kranton, 1996). However, other anthropologists and social scientists dispute this fact and argue that before the emergence of barter economy, a gift economy existed (Carrier, 1995; Hart, 2005; Yan, 1996). A gift economy is whereby valuable goods and services are given without any agreement for future return but they instill in someone an obligation to reciprocate. Traditional gifts used to be in form of personal items such as the shells by the Trobriands, but in modern societies, gifts are manufactured, thus transforming commodities into gifts (Miller, 1993). It is, thus, evident that various forms of exchange exist in society, such as gifts, commodities, money, and services, but they depend on cultural practices and values. Though modern societies rely on money as means of exchange, gifts are still in existence. For example, the ‘Kula Ring’ of the Trobriand society is still in existence, but in modern society gifts have been commercialized. The aim of this paper is to analyze some general aspects of the economic processes such as the gift, commodity, service economies and their implications for exchange systems. To achieve this, the gift economy will first be explored and the commodity economy will be discussed thereafter. Differences between the gifts and commodities will also be outlined. The service economies will then be discussed as well as the implications of these economies on exchange systems. This is based on the anthropologists’ belief that the mode of production of a certain community determines the mode of exchange, thus exchange systems depend on the culture in existence. The Gift Economy A gift economy is defined by Cheal (1988, p. 19) as a mode of exchange where valuable goods and services are given often without any agreement for return in the future. It is “a system of redundant transactions within a moral economy, which makes possible the extended reproduction of social relations” (Cheal, 1988, p. 19). Gifts can be given collectively by the society or individually depending on the purpose of the gift. For example, bridewealth is a collective affair while birth day gift is personal or a gift to a friend. Gifts are exchanged on various ceremonial as well as non-ceremonial occasions. For example, it is a norm for Christians to exchange charismas gifts or for people to receive gifts on their birthdays or weddings. However, traditional society’s gifts were used as a means of exchange. For example, the Trobriands exchanged Kula variables such as armshells and necklaces with their trading partners (Yan, 1996). Though gifts can be seen as mere presents, they are theorized differently by different individuals. Anthropologists such as Mauss believe that gifts are not free since they must be returned. There has been a lot of controversy as to whether gifts are philanthropic acts or they are an economic rationality, i.e. they arise from self-interest. For Hide (2007), two economies exist: the gift economy and the commodity economy depending on the motive of the gift. This distinction will be elaborated further in the following sections. According to Mauss’s theory, giving of gifts was driven by the principle of reciprocity in that whoever received a gift was expected to return a gift of equal or higher value (Mauss, 1990). The gift economy is, thus, dominated by three essential features: obligation to give, obligation to receive and obligation to make a return for gifts received (Cheal, 1988, p. 2). If gifts are given voluntarily, why then do people have to reciprocate gifts? This is an issue that has been debated widely in anthropology. Some societies believe that it is the spirits who motivate people to return the gifts. For example, in the Maori concept of the hau, it is believed that valuables (taonga) possess mystic power which motivates the recipients to return gifts failure to which serious consequences befall the recipient (Yan, 2005, p. 249). For Mauss, therefore, the spirit of the gift drives people to return gifts (Mauss, 1990). On the other hand, anthropologists such as Marshall Sahlins and Parry dispute this notion of the ‘spirit of the gift’ since some societies such as the Indians give gifts without expecting return (Carrier, 1990; Weiner, 1992; Yan, 1996). The caste system of the Indians allows gifts to flow from higher to lower castes. However, these gifts are believed to be transferring poison (illness, death, and misfortunes) to lower castes, thus no returns are expected (Yan, 2005, p. 252). In contemporary societies, the capitalists also offer gifts to the laborers and do not expect to be reciprocated. Weiner (1992), though critical of the principle of reciprocity, argues that the inalienability of gifts is the motivation behind returning of gifts. Contrary to Mauss and Marx who believe that objects alienate people, Weiner believes that objects cannot be alienated from their owners; hence, the receiver of the gift must return the gift. In traditional societies, the items given as gifts were made by the person and there were no property rights; hence, a property was not transferable to another person. Besides, kinship ties determined nature of gifts and exchange. Weiner (1992, p. 62) is of the view that it is the desire to keep something from the pressures of give and take that establishes difference, thus attracting other kinds of wealth. The Trobriands exchanged armshells and necklaces to gain power and wealth for their kins. Some of them sought partners with more valuable items than what they had, and used them to build relationships with powerful societies. Economic anthropologists are more concerned with value. The reciprocity principle or moral economics meant that those who give gifts do not get any profit or returns. Marxists believe that value is inherent in human labor, hence the exchange of properties led to alienation of people from the product of their labor (Hann and Hart, 2009). This view is criticized by Simmel (1907) in his writings on the ‘philosophy of money. For Simmel, “value is not rooted in human labor and does not depend on larger social system; rather, it arises from exchange” (Graeber, 2001, p. 30). What is value? For sociologists value refers to what is good or desirable, but for economists value is the degree to which objects are desired (Graeber, 2001, p. 1). The big question is: Does exchange of gift make economic sense? This would be determined by the individual actors and their motivations. Gifts are reciprocated and, thus, do not add value for the giver. However, based on motivations this notion may be untrue. Take the case of the Trobriands as an example. Powerful Trobriands exchanged items of less value for more valuable items in the Kula Ring of exchange, thus gaining more wealth and power. This involves economic rationalization. Though profit is not the motive such as in market economies, those who give gifts gain something, be it prestige or power. The Trobriands gifts were based on the principle of ‘giving good measure’ of yams for peaceful coexistence, but in Kula exchange they gained prestige and self-esteem and could receive more valuable items (Carrier, 1995). The exchange was also competitive in nature as powerful people wanted to keep the more valuable items. The Native Americans used potlatch to gain prestige and power. Though gifts were reciprocated, rival chiefs were given excessive gifts which they could not manage to return, hence remaining in debt (Yan, 2005, p. 251). On the other hand, some recipients maintained superiority, whether they returned the gift or not, especially those in higher hierarchies. Carrier (2012) argues that gifts cannot lead to gains since it is hard to detect the motive of givers. Even in capitalist societies, firms give gifts or donations to the community (perfect gift) without expecting returns, but in the process they gain reputation, more customers and suppliers (Carrier, 1990). It is, therefore, hard to evaluate whether gifts lead to losses or profit for those involved. The Commodity Economy This is the market economy whereby goods and services are exchanged and value is determined by forces of demand and supply (Isaac, 2012). Commodities in this case are alienable, hence not requiring reciprocity. Unlike the gift economy which is characterized by reciprocity and obligations to return gifts of equal value, the commodity economy has a standard means of exchange in terms of money (Hart, 2005). However, in early days traders used to exchange goods for goods believed to be of equal value, but unlike gifts, the exchange was not redundant. According to Cheal (1988), a gift is redundant in the sense that it has no advantage to the recipient, i.e., the recipient may not be interested in the type of gift. The gift may also have no net benefit to the recipient since the receiver must reciprocate with a gift of equal value and besides, the recipient can afford to get the item for oneself (Cheal, 1988, p. 19). In barter trade, one got what one could not produce and which was of interest to him/her. In a commodity economy, people have the right to own property and to dispose of the property; hence, it is alienated from the owner. There is a tendency to make commodity a capitalist phenomenon since its value rests on human labor. Graeber (2001, p. 30) defines a commodity as an object produced to be sold in commercial market. Contrary to Karl Polanyi who emphasizes single standard and money as self-adjusting mechanisms of demand and supply, Simmel insists on other forms of exchange. He generally views commodity as something that can be exchanged for something else or something one is willing to give up to get what one desires more. A commodity in this case is not a capitalist phenomenon as many forms of exchange can be made. Commodities are produced by use of labor and the dominant means of production determines the mode of exchange. In pre-capitalist societies the means of production was owned by the producers who were mostly agriculturalists (feudal system). People owned the land and its production, but with the industrialization and breakdown of feudal societies, the means of production is owned by capitalists. The laborers produce goods in exchange for wages, hence they are alienated from the product of their labor (Hart, 2005; Isaac, 2012). The products of these capitalist societies are, therefore, commodities as opposed to gifts since they are exchanged for money without expectation for reciprocity. However, for Appadurai it is wrong to make a distinction between gifts and commodities (Graeber, 2001). This is due to the fact that in contemporary western societies, gifts are in form of commodities, i.e., individuals give gifts in form of manufactures and wrap them to become gifts (Carrier, 1995; Eisenstein, 2011; Miller, 1993). Gift and Commodities What is the difference between a gift and a commodity in modern day society? It is hard to make a distinction between the two since it all depends on motives of givers and recipients. However, some distinctions can be made. Weiner (1992) views gifts as inalienable objects while commodities are alienable, hence the explanation for reciprocity. While exchanging a commodity, one gives up the right of ownership and gets money in exchange or something else which one desires. A gift, on the other hand, is a personal item and cannot be separated from the owner whatever the distance, hence it instills a sense of obligation to be returned to the owner. Instead of transferring ownership, it enhances relations between people and social solidarity (Hyde, 2007). Another distinction is that commodity economies are class-based while gift economies are clan-based (Carrier, 1995). This is because gifts bring members of society together and strengthen kinship ties while commodities are traded between classes of people. Those who have more sell the surplus and the higher classes pay wages to lower classes to produce products. Service Economies Keen (2005) introduces three concepts of the service: helping, help and helping out. People in society help each other as a duty or obligation or voluntarily. Women have a duty to care for their families especially in primitive societies. In the Aborigine culture people voluntarily gave services such as child caring for those not able to care for children. However, in some cases, helping entailed debt repayable in future. All human acts in money economy are assigned a value (Keen, 2005, p. 163). In this economy there were good and bad times. In hard times people helped each other and the debts were repaid in the time of plentitude at discounted rates. Service value was referred as to be in need. For example, if one gave money to someone to buy unnecessary items, it was less valuable than giving somebody the same amount of money to buy foodstuff. If one helped a sick person to get to hospital or did any other heroic acts, that somebody was indebted to the rescuer and witnesses made sure to remind that person that he/she should help the other person if he faced with problems as a repayment of debt. Saving a person was regarded as helping out. Those who help received praise and good repute. Even in modern societies there are caregivers who are paid for their services, but women in general have an obligation to take care of the family, especially the children and the aged. Those who help out people in distress as considered as heroes and more valued. Implications on the Exchange Systems Gifts, commodities and service economies have great implications on the exchange system. Primitive societies such the Trobriands had multicentric forms of exchange; the Kula and money. The Aborigines also used money in some exchanges, helping and helping out (Keen, 2005). The Trobriands had three spheres of exchange: subsistence, prestige and the Kula. However, with introduction of capitalism and commodity economy, multicetricism was destroyed. One standard of exchange was established in form of money making it easier for exchange. It also destroyed the idea of the gift whereby gifts are now commodities (Carrier, 1990). However, the various forms of exchange do coexist. People still give gifts to each other, though in form of wrapped commodities and individually rather than as collective affair. The exchange system is determined by culture of the corresponding society. Conclusion There exist various forms of exchange depending on cultural context. Some societies still embrace the idea of gift which is governed by the principle of reciprocity while other societies rely on commodities which are exchanged for money. For Sahlin gift exchange and commodity exchange are just extreme points of a continuum and not opposites. Gift giving was the most prominent form of exchange but was destroyed by the expansion of market exchange. Today, gifts have been commercialized in that they involve use of commodities converted into gifts. Some services such as mutual aid have been taken over by commercial companies such as insurance agencies. Though helping out is considered heroic, no one has obligation to repay. Gifts can also be used for personal gains such as esteem and prestige unlike in the past. However, the impact on exchange system depends on the cultural context. References Carrier, J. G., 1990. Gift in a world of commodities: the ideology of the perfect gift in American society. Social analysis, 29, pp. 19–37. Carrier, J. G., 1995. Gifts and commodities: exchange and western capitalism since 1700. London: Routledge. Carrier, J. G. ed., 2012. A handbook of economic anthropology. UK: Edward Elgar. Cheal, D. J., 1988. The gift economy. London: Routledge, pp. 1–19. Eisenstein, C., 2011. Sacred economics: money, gift and society in the age of transition. North Atlantic Books. Graeber, D.. 2001. Toward an anthropological theory of value: the false coin our own dreams. New York, NY: Palgrave, pp. 153–154. Hann, C. and Hart, K. eds., 2009. Market and society: the great transformation today. Cambridge: Cambridge University Press. Hart, K., 2005. Money: one anthropologist’s view. In: J.G. Carrier, ed. A handbook of economic anthropology. UK: Edward Elgar. Hyde, L., 2007. The gift: creativity and the artist in the modern world. Knopf Doubleday. Isaac, B. L., 2012. Karl Polanyi. In: J. G. Carrier, ed. A handbook of economic anthropology. UK: Edward Elgar. Keen, I. ed., Being black: aboriginal cultures in settled Australia. In: J.G. Carrier, ed. A handbook of economic anthropology. UK: Edward Elgar. Kranton, R., 1996. Reciprocal exchange: a self-sustaining system. American Economic Review, 86 (4), pp. 830–51. Mauss, M., 1990. The gift: the form and functions of exchange in Archaic societies. London: Routledge. Yan, Y., 1996. The flow of gifts: reciprocity and social networks in a Chinese village. Stanford: Stanford University Press. Yan, Y., 2005. The gift and gift economy. In: J.G. Carrier, ed. A handbook of economic anthropology. UK: Edward Elgar. Weiner, A., 1992. Inalienable possessions: the paradox of keeping-while giving. Berkeley: University of California Press. 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