Gregory, C. A. Exchange and Reciprocity

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EXCHANGE AND RECIPROCITY

C.A.Gregory
The concepts of exchange and reciprocity are closely related. This much is
clear from the Oxford English Dictionary, which defines exchange as the action,
or act of, reciprocal giving and receiving, and reciprocity as mutual action,
influence, giving and taking. Indeed the words are often used as synonyms.
However, in the anthropological literature over the past century the term
reciprocity has acquired a special meaning, and a distinction between
exchange and reciprocity of great theoretical importance has arisen. The
distinction turns on fine differences in meaning between the words mutuality,
giving, receiving and taking, and to understand these nuances it is
necessary to situate the anthropological theory of exchange in the broader
historical and theoretical context from which it has emerged.
The general theory of exchange is concerned with analysing acts of
exchanging things, people, blows, words, etc. Exchange is a total social
phenomenon, to use Mausss (1990 [1925]:3) famous expression, and, as such,
its study involves the fields not only of economics but also of law, linguistics,
kinship and politics, among others. Most anthropological theorizing about
exchange, however, has been restricted to exchanges of wealth. But what is
wealth? The answers to this question fall into three broad categories. For
economists of the nineteenth century wealth consisted in commodities, whereas
for those of the twentieth, it consists in goods. Either way, it is stuff which is
valued by the market. For anthropologists, on the other hand, wealth consists
above all in gifts, products that are valued according to the non-market
principle of reciprocity. The notion of reciprocity, then, is at the heart of
theoretical debates concerning the distinction between market and non-market
forms of valuation. But ethnographers have also found the principle of
reciprocity operating in tribal trading systems and peasant markets, and these
findings have led to a revision of the theory of commodity exchange itself.
To understand the anthropological concept of reciprocity, it is necessary to
compare and contrast economic and anthropological theories of the exchange
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of wealth. I propose to do this under the following five headings. Under the
first, Commodities as wealth, I briefly discuss the nineteenth-century political
economy approach to exchange. This is followed, under the heading, Goods as
wealth, by a discussion of twentieth-century economic theories of exchange. In
the third section, Gifts as wealth, I provide an overview of the anthropological
notion of reciprocity. This is followed by a discussion of Barter and other
forms of counter-trade, in which I introduce some anthropological revisions to
the theory of the commodity. In the final section, on Market-place trade, I
show how anthropological work also requires certain revisions to the theory of
market exchange.
COMMODITIES AS WEALTH
The wealth of those societies in which the capitalist mode of production
prevails, Marx (1954 [1867]:43) declares in the first sentence of Capital,
presents itself as an immense accumulation of commodities. This notion of
wealth was part of the conventional orthodoxy of eighteenth- and early
nineteenth-century European thought, and all the leading theorists of the
timeQuesnay, Smith, Ricardodeveloped their particular conceptions of
the principles regulating the market within this general paradigm. The truly
radical break came in the 1870s with the development of the theory of goods
and, with it, a new set of answers to the fundamental questions of market
exchange: What is profit? What determines relative prices? What determines
the level of wages? In this section I present, in very general terms, the answers
developed within the commodity-theory paradigm; in the next section these
will be set in contrast to the answers given by the goods-theory paradigm.
The notion of a commodity has its origins in the Aristotelian idea that a
product has two distinct values: a value in use and a value in exchange. Shoes,
for example, are useful because they protect ones feet when walking over rough
ground. This value is called use-value and is quite distinct from the value
shown on the price-tag of a pair of shoes displayed in a shop window. The
price-tag value is called exchange-value, and it was value in this sense that
pre-twentieth-century commodity theorists sought to explain; the study of the
useful properties of objects, and that of the manner in which they satisfy
human wants, were regarded as falling outside the scope of political economy
(Marx 1954 [1867]:43). Within the overall commodity-theory paradigm many
different theories of exchange-value were formulated. Quesnay, the eighteenthcentury French physiocrat, found the answer in the natural productivity of
land; Adam Smith, the so-called father of economics, opposed this theory and
developed a labour theory of value in its place; this theory was developed, in
turn, by Ricardo and Marx, among others.
Marxs contribution to the theory of the commodity, though it hinged upon
the labour theory of value, gave it a new twist. Marx (1954 [1867]:53) claimed that
he was the first to point out that labour, too, possesses a use-value and an
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exchange-value. To make shoes, for example, requires a certain quality of effort, a

particular kind of skilled technical practice. The use-value of the shoemakers
labour lies in these qualitative aspects of his performance. As such, it differs from
the use-value of the labour of the farmer in growing wheat. If, however, we
abstract out the particular, technical qualities of the shoemakers and the
farmers labour, reducing both to their lowest common denominator, then they
may both be regarded as representing certain quantities of labour, which may be
measured and compared in terms of identical units of (chronological) time. As a
commodity measured in these terms, and exchangeable for other things, labour
has exchange-value. Now suppose that the shoemaker exchanges one pair of shoes
for, say, ten kilograms of wheat. In quality and hence in their respective usevalues, shoes and wheat are quite different. How come, then, that they are
equated in exchange? Marxs answer was that they are equated because an
identical amount of abstract human labour was expended in the production,
respectively, of the pair of shoes and the ten kilos of wheat. Or more generally, the
equation in exchange of heterogeneous commodities comes about by virtue of the
equality in the amounts of homogeneous, abstract labour which they embody.
Marx distinguished between a number of different historical forms of the
commodity. Following Aristotle, he speculated that commodities emerged on
the boundaries of tribal communities where people would enter into
transactions with strangers and exchange products for which they had no use in
return for those which they desired. Following its birth in these marginal
regions the commodity form, Marx argued, began to grow like a cell,
developing ever more complex manifestations as it divided and multiplied.
Initially, on the boundaries of the community, exchange took the form of the
barter of one commodity (C) directly for another (C-C). With the
development of peasant markets, and the need for a generalized medium of
exchangenamely money (M)to facilitate trade, barter gave way to selling
(C-M) in order to buy (M-C), and the tribal community disappeared under
the corrosive influence of the new commodity form. The subsequent
development of mercantile capitalismbuying (M-C) in order to sell at a
profit (C-M)and of moneylending at interest (M-M), further eroded the
agrarian pre-capitalist society. Following a series of bloody struggles involving
the emerging capitalist class and the pre-capitalist peasants and landlords, a
new class of propertyless wage-labourers was born and the commodity
assumed its most generalized form, C=c+v+s, where c is constant capital, v
variable capital, and s surplus value, these values corresponding to the
quantities of abstract labour embodied in raw materials, wages and profit
respectively.
The historical prerequisite for the emergence of capitalism, and of the
C=c+v+s form of the commodity, was, according to Marx, the emergence of a
proletariat. With this, labour-power became a commodity with an exchangevalue like any other. But this historical development gave rise to a new problem:
What determines the exchange-value of labour-power?
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Marxs answer is long and involved but is based on a simple idea. He

observed that under feudalism the rate of exploitation, i.e. the ratio of surplus
labour to necessary labour, is expressed in a simple and direct form. Suppose,
for example, that a serf farms three days per week for his own benefit and that
he gives his landlord three days of labour per week as rent for the land he uses.
The former is called necessary labour and the latter surplus labour. This
relation, Marx argues, did not disappear with the development of capitalism; it
merely changed its form as rent was transformed, firstly, into a share of the
physical output (e.g. half the harvest) and then into money (e.g. half the money
profits or a fixed rent per acre of land used). With the emergence of labourpower as a commodity, necessary labour assumed the abstract form of variable
capital (v), corresponding to the amount of money paid as wages, while the
profit over and above this amountcorresponding to the product of surplus
labourwas shared between the capitalist and the landlord.
Marxs immediate concern was to analyse the principles governing the
production, consumption, distribution and exchange of this most generalized
form of the commodity; pre-capitalist forms of commodity exchange were of
interest to him only to the extent that they illuminated the social preconditions
of the capitalist form. In any case, his understanding of the pre-capitalist and
non-commodity forms of exchange was severely constrained by the absence, at
the time, of reliable ethnographic and historical data.
Apart from the distinction between use-value and exchange-value, two other
defining characteristics of the commodity-theory paradigm deserve mention.
One of these concerns the prominence given to the notion of reproduction.
Exchange was not seen as an isolated act but as a phase in a reproductive cycle
consisting of successive acts of production, exchange and distribution. This
conception of the economy was first developed in 1759 by Quesnay, in his
Tableau conomique (1962 [1759]), and it has provided the conceptual
framework for all discussions of commodity-value theory ever since. The
notion has been refined over the years, the most recent and logically
sophisticated being the version found in Sraffas (1960) Production of
Commodities by Means of Commodities. As the title of this book suggests, a
commodity is both an output and an input, and Sraffa argues that these inputoutput ratios, combined with a given distribution of income, determine the
exchange-values of commodities.
The other defining characteristic of the commodity-theory paradigm is the
focus on class relations. Even though some of the early commodity theorists
espoused naturalistic theories of wealth, they all addressed the problem of the
principles governing the distribution of surplus among competing classes.
Quesnays theory, for example, distinguished three classesthe landlords, the
peasant farmers and the artisansa division that captured the essence of the
social organization of the eighteenth-century French countryside; Ricardo
based his theory of value on the opposition between landlords and capitalists, a
key social conflict in the England of his time; and Marx, as is well known, based
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his theory on the opposition between wage-labour and capital. These class
relations of production were seen to be crucial because they gave exchange
relations their particular form and content. In other words, the classical
political economists conceptualized exchange as an expression of underlying
power relations.
GOODS AS WEALTH
Following the marginalist revolution of the 1870s, which saw the fall of the
theory of commodities and the rise to dominance of the theory of goods,
exchange came to be seen as an expression of the subjective preferences of
individuals rather than of underlying power relations. This change in thinking
was reflected in a new concept of wealth. The marginalists, or neoclassicals, as
they are sometimes called, no longer saw the unit of wealth as a commodity but
as a good whose magnitude was measured by its subjectively attributed utility.
In other words, the concept of a commodity, with its distinction between usevalue and exchange-value, was replaced by the concept of a good with an
undifferentiated utility value.
This new concept of wealth quite literally affected the way people viewed
the world. Emphasis was placed on consumption and scarcity rather than on
reproduction, and on choice and subjective preferences rather than on
objective class relations of production. The new paradigm also provided a novel
conceptual framework for posing, and answering, the old questions concerning
wages, prices and profit. This can be seen by examining, in a little more detail,
the notion of a good.
Despite appearances to the contrary, the word utility does not mean the
same as use-value. Use-values refer to the objective properties of things and are
a function of the technological and scientific knowledge available to a society at
a given point in its history. For example, the discovery of photography in the
nineteenth century meant that silver acquired a new use-value to complement
its other uses as a store of value, as jewellery, as cutlery, and so on. Utility, on
the other hand, refers back to the subjective preferences of an individual
consumer. A cup of tea, for example, has positive utility to a thirsty person, but
that utility will be less for each additional cup consumed. Thus the marginal
utility of the tea declines, until the point is reached when the consumers thirst
is quenched and she desires no more; at this point the tea ceases to be a good
and, logically speaking, becomes a badalthough this term is rarely used.
The utility of a good, then, derives from its ability to yield subjective
satisfaction. It refers to individual psychological feelings about scarce objects
and not to the objective properties of different things. As Robbins (1932:47) has
noted, Wealth is not wealth because of its substantial qualities. It is wealth
because it is scarce. This conception of wealth is obviously very different from
its classical precursor. Among other things it contains the paradoxical
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implication that wealth, because it is the subjective sum of enjoyments, might

increase as material abundance declines (Heilbroner 1987:882).
This new theory of wealth opened up a new angle on ancient problems.
Consider the water-diamond paradox which was concerned with the following
question: Why does water have a high use-value and negligible exchange-value
while diamonds have a high exchange-value and negligible use-value? The
classical economists regarded this problem as peripheral and answered it in
terms of a highly technical theory of rent. The neoclassical theorists, on the
other hand, regarded it as central and made it the basis for an alternative theory
of price. Their answer, in a word, was scarcity. The marginal utility of water is
low because of its great abundance, the marginal utility of diamonds is high
because of their scarcity, and the ratio of the marginal utility of water to that of
diamonds determines their relative prices.
This proposition applies to the prices of all goods, according to an argument
that runs as follows. Suppose water became scarce because of a drought. In this
case its marginal utility would rise relative to the marginal utility of diamonds
and a price for water would emerge; if the drought was particularly severe the
price of water would rise even further and it may even become more valuable
than diamonds. Thus all exchanges, and hence prices, are expressions of
relative scarcity as manifested in the ratios of marginal utility.
The great appeal of this theory of exchange and price lies in its generality.
Indeed, it is difficult to imagine a form of exchange to which it cannot be
applied. Take, for example, the well-known exchange of kula valuables
armbands and necklaces of polished shellthat are traded by the people of the
Trobriand Islands off the eastern tip of Papua New Guinea (described by
Malinowski 1922). Traders obviously prefer the scarce, high-ranking shells to
the relatively abundant, low-ranking shells. Thus it is possible to conceptualize
kula exchange in terms of marginal utilities. Furthermore, it could be argued
that the paradoxical conception of wealth contained in the theory of goods is
just what is needed to explain the notorious destruction of wealth that occurs in
the potlatch ceremonies of the Kwakiutl and other indigenous peoples of the
Northwest Coast of North America (Codere 1950). In the face of a superabundance of material goods, their worth is effectively eroded.
It is not without some justification, then, that Jevons, one of the founding
fathers of marginalism, could claim in 1871 that the science of economics is in
some degree peculiar, owing to the fact that its ultimate laws are known to us
immediately by intuition, and that from the notion of utility it is possible to
reason deductively to theories of value and exchange (Jevons 1970 [1871]: 18).
The leading figures in the theory-of-goods paradigm todayNobel
prizewinners such as Samuelson (1947), Debreu (1959) and Friedman (1962)
have all developed highly complicated theories of value by reasoning
deductively in this way.
Like the theory of commodities, the theory of goods has many internal
divisions. However, these are mere dialectal variations of the one language. The
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language of the theory of goods shares a common grammar and lexicon which
have nothing in common with those of the language of the theory of
commodities. The terms good and commodity epitomize this difference, the
etymology of the former suggesting a subjective approach to value, the latter an
objective approach.
The new language in which economists began to talk around the 1870s can
be likened to Esperanto, and the old language of the commodity theorists to,
say, German. This is not to say that one is better than another. Indeed, there is
no meta-theory by which they can be compared and evaluated. The two
paradigms have different consequences for understanding human life which
can only be evaluated in specific contexts. This implies some notion of
adequacy in relation to practical aims. To pursue the language analogy, do we
try to overcome the communication problems of the world by teaching people
Esperanto or do we try to learn some particular languages in order to develop
our general ideas from a comparative analysis of them? Needless to say,
anthropologists have tended to find the latter path more attractive, and few
have embraced the Esperanto of the theory of goods.
In this sense, then, anthropologists took up the implicit questions left
unanswered by the commodity theorists: What, in positive terms, does noncommodity exchange mean, and by what principles is it governed? What
principles govern the circulation of commodities on the periphery of tribal
communities? Is commodity exchange the end of an evolutionary sequence?
Does it have a corrosive influence on other forms of exchange? And are these
the right questions to be asking anyway?
The fieldwork tradition pioneered by Malinowski, Boas and others has
provided us with the means to answer these questions. It is ironic that at the
very time that these means were becoming availablein the era of European
capitalist imperialism (18701914)economists ceased to be interested in the
concrete problems posed by the theory of commodities and turned instead to
the abstract and formal problems posed by the new paradigm of goods. Many
of the theories formulated within the latter paradigm contained ill-considered
assumptions about the workings of tribal economies, and these provided
ethnographers such as Malinowski (1922) with easy targets to criticize in the
course of developing their own ideas. But fieldwork anthropologists, for the
most part, remained ignorant of the classical tradition of economic thought and
of the challenging questions that lay waiting to be answered. (It was not until
the 1970s, when neo-Marxist anthropology flourished, that anthropologists
took the theory of commodities seriously.) But it is now possible, with the
benefit of hindsight, to see that anthropologists have provided implicit answers
to the questions posed by the commodity theorists and, in the process, have laid
the foundations for a whole new approach to the theory of exchange of wealth
by posing many new questions.
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GIFTS AS WEALTH
Though the terms wealth and valuables are often used in anthropological
literature in the common dictionary sense of riches and abundance, they also
take a more precise and anthropologically specific meaning. The word gift
captures this meaning in a very general way and, like the words commodity
and goods, it signifies a distinct paradigm (see Belshaw 1965, Sahlins 1972,
Gregory 1982, Strathern 1988 and Weiner 1992 for analytical overviews of the
literature).
The notion of gifts as wealth has assumed a variety of concrete forms, most
of which are now very familiar: the celebrated coppers and blankets of the
Kwakiutl, the armshells and necklaces of the Trobriand Islanders, the brass
rods and cowrie shells of the Tiv of Nigeria, the pigs and pearlshells of the
peoples of the Papua New Guinea Highlands, and so on. Many of these objects
are nowadays valuable in conventional money terms. In the Trobriand Islands,
for example, a vigorous trade in real and counterfeit (plastic) necklaces goes on
outside the tourist centres. However, the most highly prized shells are quite
literally priceless, and have remained in circulation in the kula ring throughout
the colonial period despite the attempts of outsiders to buy them (Campbell
1983). The reasons for this are complex, but it would seem that they have as
much to do with the intricacies of local-level politics as with subjective
preferences. What is clear, though, is that these objects, when exchanged as
gifts, are valued by transactors according to a standard that has quality rather
than quantity as its basis.
Consider Campbells (1983) discussion of the ranking criteria used for
Trobriand armshells (mwari). Five named categories are distinguished and
these are ordered according to their personal history, personal name, colour,
and size. Shells of the top category, mwarikau, have personal names and
histories; they have red striations and are the largest of all. Shells of the lowest
category, gibwagibwa, have neither names nor personal histories; they are white,
unpolished and small in size. Necklaces (vaiguwa) are ranked in a similar way.
The ranking system, then, is ordinal rather than cardinal.
Ordinal ranking systems are ethnographically widespread and their
character is commonly captured in anthropological literature by the expression
spheres of exchange. Bohannan (1959), for example, uses this expression to
describe the ranking system of the Nigerian Tiv. Among the Tiv objects are
classified as belonging to one of three spheres. The first, and lowest sphere, is
what the Tiv call yiagh. This includes locally produced foodstuffs, some tools,
and raw materials which are traded at the markets. The second sphere
comprises items of a kind that carry prestige (shagba) and whose transaction is
independent of the markets. Slaves, cattle, horses, white (tugudu) cloth, and
brass rods circulate within this sphere. The third sphere, considered supreme,
contains a single item: rights in human beings, especially women and children.
The theoretical significance of this distinction between quality and quantity
918
has, by and large, escaped the notice of twentieth-century economists. J.M.

Keynes (1982) was the prominent exception. Unlike many of his
contemporaries, he had an interest in comparative economy and, during the
1920s, studied the monetary system of the ancient Greeks. In a remarkable
essay, not published until 1982, he noted that cows, corn, iron and bronze,
which were the principal materials of exchange, had a conventional order of
value and even a conventional relation of value for customary purposes
(1982:256, original emphasis). He argued that three types of monetary or
quasi-monetary practice coexisted: (1) a cow-sheep standard for purposes of
ostentation, religion, reward and punishment; (2) a corn standard for
agricultural rents, wages and loans; and (3) an iron or bronze standard for
market purposes.
It is not surprising that Keynes and Bohannan independently developed the
notion of spheres of exchange, since the ethnographic and historical evidence
repeatedly posed a question for which this theory was the answer. This
question took many forms, one of which was to explicate the puzzling notion of
equivalence which Malinowski (1922:355), among others, used to describe the
relationship between objects of gift exchange. This notion is broadly similar to,
but nevertheless subtly different from, the notion of equality which holds in a
price relation. For example if a loaf of bread costs two dollars, then this relation
can be expressed as an equation of the type $2=1 loaf of bread. But if a kula
bagiriku necklace is held to be equivalent to a mwarikau armshell, then this
relation cannot be put in the form of an equation because to do so would be to
reduce a qualitative relation to one of quantity.
An analogy with playing cards helps to clarify this point. The four aces
constitute an equivalent set superior in rank to the set of four kings; the set of
kings, in turn, constitutes an equivalent set superior in rank to the four queens,
and so on. This relation can be expressed using the greater than sign (>) as
follows: aces>kings>queens>jacks>tens>nines>etc. These relationships are
ordinal and cannot be expressed in equations of the type 1 ten=2 fives. Within
equivalent sets ordinal relations also hold. An ace of hearts, for example, is of a
higher rank than an ace of clubs. Objects of gift exchange are similarly ranked,
though the analogy should not be pushed too far. The ranking of gifts is a
serious matter of politics rather than a mere game, and the ordering is often
disputed, especially at the lower end of the scale.
The existence of these qualitative standards poses new questions concerning
the principles governing the exchange and distribution of wealth items. It was
the great achievement of Mauss, in his classic essay on The Gift, first published
in 1925, to pose these questions in a precise way. What, he asked, is the basis of
the obligations to give, to receive, and to return gifts? His answerimplied in
one of the ways he phrased the question: What power resides in the object
given that causes its recipient to pay it back? (1990 [1925]:3)can be criticized
for its implicit objectification of power relations, by which a property of the
relations between persons is made to appear as though residing in things.
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Nevertheless, his comparative analysis of the ethnographic evidence, which

demonstrated the widespread importance of inalienable bonds between
persons and things, was an extremely valuable contribution to the theory of
exchange. Among other things, it replaced the vacuity of Marxs theory of the
non-commodity with a positive theory of the gift. Mauss makes no reference
to Marx in his essay, but his ghost haunts its every page as a kind of invisible
antithesis. Mausss method was, like Marxs, dialectical, evolutionary,
comparative and political. Dialectics enabled Mauss to see that even though
gifts appear voluntary they are, in reality, repaid under obligation; his
evolutionary approach led him to suggest the primacy of gift exchange over
barter; and his comparative method enabled him to see the significance of the
distinctions between stranger and relative and between the alienable and the
inalienable in terms that were the mirror-image of those employed by Marx.
Mausss essay on the gift is also very much a political tract. Indeed, it could
be argued that the essay is primarily about early-twentieth-century France. In
the last chapter he discusses the implications of his survey of archaic
economies for the France of his day. Mauss, it must be remembered, was a
socialist but not a communist revolutionary, and his conclusion offers a gift
theory of capitalism to counter Marxs surplus-value theory. He likens the
wage-labour contract to a gift exchange, notes that the worker is giving his time
and life, and that he wishes to be rewarded for this gift (1990 [1925]:77). He
favours a form of welfare capitalism because, as he put it (1990 [1925]:69),
Over-generosity, or communism, would be as harmful to himself [the worker]
and to society as the egoism of our contemporaries and the individualism of our
laws.
Mausss theory of the gift owed much to the ethnographic work of
Malinowski and a limited number of other scholars. Since Malinowskis time
the number of high-quality ethnographic reports on exchange has been
increasing apace. These detailed first-hand accounts have been synthesized and
generalized by, among others, Polanyi (1944), Lvi-Strauss (1969 [1949]) and
Sahlins (1972). The significant logical and conceptual developments which
anthropologists have made to the theory of exchange can be identified by
comparing the approaches of these three authors.
Polanyi, an economic historian, first became interested in the theory of gift
exchange in order to understand the extraordinary assumptions underlying
the market economy of Europe, the principal subject of his magnum opus, The
Great Transformation (1944). For him the market economy was a system of selfregulating markets in which the prices of commodities organized the whole of
economic life. The basis of this system was seen to lie in the profit motive and
in the existence of commodities in the form of land, labour and money. The
non-market economy, he noted, is the very opposite of this: the motive of gain
is absent, there is no wage-labour, and no distinctively economic institutions.
How then, he asked, is production, exchange and distribution organized? His
argument rests on the identification of three principles of economic
920
Table 1 Relations between principles of economic behaviour, forms of social organization

and institutional arrangements, according to Polanyi (1944).
behaviourreciprocity, redistribution, and householdingwhich are a

mere function of social organization (1944:49) and which, in turn, are
associated with distinct institutional patterns. Polanyis argument is
summarized in Table 1.
Reciprocity has family and kinship as its basis. The reciprocal obligations
that parents and children, brothers and sisters, and husbands and wives have
towards each other help safeguard production and family sustenance
(1944:48). Exchange between groups of kin is facilitated by the symmetry
inherent in the principle of duality upon which many tribal societies are based.
The subdivision of a tribe into moieties, the pairing of villages in different
ecological niches, alliances of individuals from different communities, and
other expressions of the duality principle lend themselves to the creation of
exchange partnerships which personalize the relation of reciprocity and make
long-term exchanges possible.
Redistribution refers to the process by which a substantial part of the annual
produce of a society is delivered to a central figure of authority, who keeps it in
storage for subsequent disposal on special occasions such as annual feasts, the
ceremonial visit of neighbouring tribes, and so on. The social basis of this form
of exchange is a political organization headed by village elders, a chief, king or
despot. It was practised, says Polanyi, in ancient China, the empire of the Incas,
the kingdoms of India, by Hammurabi of Babylonia, in the feudal society of
Europe and in the stratified societies of Africa and the Pacific.
The third principle, householding or production-for-use, is based on the
closed, self-sufficient and territorial household group. The internal
organization and size of the group is a matter of indifferencePolanyi lists the
European peasant farming household and the Carolingian magnates as
examplesbecause the principle is always the same, namely, that of producing
and storing for the satisfaction of the wants of the members of the group
(1944:53).
For Polanyi, then, the comparative economic history of humanity is
characterized by a great divide: on one side is the self-regulating market; on the
other, economies based on the principles of reciprocity, redistribution and
householding (or some combination of these three principles). This is just
another way of saying that the capitalist economy that emerged at the end of the
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eighteenth century ushered in a radically new form of economic organization,

which was unique in world history.
This is a bold generalization, but it is still a great advance on the mistaken
idea that there was no divide at allthat all economies were commodity
economies. This fallacy, which lay at the base of the writings of Adam Smith,
was uncritically accepted by many twentieth-century economists, and
Polanyilike Malinowskiwas concerned to challenge it. Like Marx, Polanyi
started with Aristotles distinction between householding and moneymakingprobably the most prophetic pointer ever made in the realm of the
social sciences (1944:53)but was able to develop the distinction much
further. Marx, we have seen, developed the category of production-forexchange by calling it commodity exchange and distinguishing between its
various forms: barter (C-C); selling-in-order-to-buy in peasant markets (CM-C); buying-in-order-to-sell for mercantile profit (M-C-M), usurious
money lending (M-M), and industrial capitalism (M-C-M) where labourpower is the principal commodity. Polanyis great divide is not between the
presence and absence of commodities but between industrial capitalist
exchange and all other forms. Thus Polanyi was not claiming, any more than
was Marx, that commodity exchange did not exist prior to the emergence of
capitalism. His claim was rather that prior to capitalism, commodity exchange
was subordinate to the principles of reciprocity and redistribution; in other
words that it was socially embedded and hence regulated rather than selfregulating.
Perhaps the most enduring legacy of Polanyis work was the equation of
reciprocity with gift exchange. However, this usage is something of a coded
shorthand because the adjective positive is elided. Thus it is positive
reciprocity which is being equated with gift exchange. The logical corollary of
this formulation was that negative reciprocity came to be synonymous with
commodity exchange. This much is clear from Sahlinss well-known essay On
the sociology of primitive exchange (first published in 1965 and reprinted in
Sahlins 1972: ch. 5), which revises Polanyis arguments in the light of new
ethnographic data.
Sahlins does not use the term positive reciprocity, but it is implicit in his
notion of a kind of reciprocity that he called generalized (as opposed to
negative). Generalized reciprocity and negative reciprocity are defined,
respectively, as the solidary and unsociable extremes in a spectrum of
reciprocities. Negative reciprocity is the attempt to get something for nothing
with impunity (Sahlins 1972:195): haggling, barter, gambling, chicanery, theft,
and other varieties of seizure are examples. Generalized reciprocity refers to
transactions that are putatively altruistic, transactions on the line of assistance
given and, if possible and necessary, assistance returned (1972:194): examples
include food-sharing, the suckling of children, help and generosity.
The distinction between positive (generalized) and negative reciprocity that
Sahlins proposes here is really an application of Aristotelian logic to the
922
Table 2
oppositions giving-receiving and losing-taking. Giving, for example, is the

converse of receiving and the contradictory of taking; losing, the contrary of
giving, is the converse of taking and the contradictory of receiving. This logic
defines two modes of mutuality between the transactors, positive reciprocity
(giving-receiving) and negative reciprocity (losing-taking), and two positions in
relation to the transmission of objects, remittance (giving-losing) and admittance
(receiving-taking). These logical relations are summarized in Table 2.
This table clarifies, at least in a formal sense, the distinction between
reciprocity and exchange. Exchange is the transmission of wealth from one
transactor to another, whereas reciprocity refers to the specific quality of the
relationship between the transactors. This relationship is characterized by
mutual friendship at one extreme (positive reciprocity) or mutual hostility at
the other (negative reciprocity). Thus specification of the qualitative form of
reciprocity enables particular forms of exchange to be distinguished from
exchange in general. Where wealth is defined as either commodities or gifts this
specification of the quality of the relationship necessarily involves a concrete
investigation into the spatio-temporal forms of social and political organization
of the economy in question. This much is common to the approaches of Smith,
Ricardo, Marx, Mauss and Polanyi, notwithstanding the great differences
between them.
Sahlins places positive and negative reciprocity at two ends of a continuum
whose mid-point specifies a third type which he calls balanced reciprocity.
This form of reciprocity is less personal than generalized reciprocity and
more economic (in the Western sense of the term). It expresses the need to
transcend hostility in favour of mutuality, to strike a balance in a relationship.
Examples include formal friendship or kinship involving compacts of solidarity
and pledges of brotherhood, and the affirmation of corporate alliances in the
form of feasts, peace-making ceremonies and marital exchanges.
Sahlins summarizes his argument in terms of a diagram (Figure 1) in which
kinship distance is correlated with reciprocity. Kinship distance, he argues, is
defined by the intersection of consanguinity and territoriality. This defines a
set of ever-widening spheres of co-membershiphousehold, lineage, village,
etc.such that as one moves out through these spheres positive reciprocity is
923
SOCIAL LIFE
Figure 1 Reciprocity and kinship residential sectors. (After Sahlins 1972:199)
gradually counteracted by a negative charge. Each sector is, therefore,

characterized by the dominance of a certain type of exchange, with the purest
form of gift exchange occurring in the closest sphere and the purest form of
commodity exchange in the most distanti.e. in the inter-tribal sector.
This model of exchange has been modified and developed by Ingold (1986),
who has noted that the negativity of reciprocity is independent of kinship
distance. Ethnographic reports on contemporary hunter-gatherer economies
show that negative reciprocity, in the form of demand sharing (Peterson, in
press), exists at the very core of the system; it also exists on the outermost
periphery in the form of theft and burglary. Likewise, positive reciprocity exists
not only at the core, as sharing in which the donor takes the initiative, but also
on the periphery, in the form of haggling and barter. Thus, as kinship distance
increases it is not that positive reciprocity gradually becomes negative but
rather that one form of positive (or negative) reciprocity is transformed into
another form of positive (or negative) reciprocity. Figure 2 illustrates Ingolds
argument; intermediate cases have been omitted for ease of exposition.
Sahlinss neat modeland Ingolds variationis of course complicated by
the presence of other factors. The most important of these is political rank,
which can be thought of as a vertical axis that intersects, and interacts with, the
horizontal axis of kinship distance. This vertical axis is associated with what
Sahlins calls a system of reciprocities. Under this system products are pooled in
a many-to-one and a one-to-many pattern of exchange.
924
Figure 2 Modified model of reciprocity and residential sectors. (After Ingold 1986:232)
Sahlinss conceptual framework, which has Mausss theory as its basis

(Sahlins 1972: ch. 4), provides an answer to Mausss question about the
obligation to return gifts. As Figure 1 illustrates, this answer is given in terms
of the social organization of kinship and rank typical of tribal societies. Like
Polanyi, Sahlins was more concerned to examine the implications of this
proposition than to investigate its philosophical basis. Furthermore, there is a
sense in which he considered such a task to lie beyond the scope of his analysis,
for it had already been undertaken by Lvi-Strauss in his great work, The
Elementary Structures of Kinship (1969 [1949]).
One of the innovations of Lvi-Strausss book was to conceptualize
marriage as the gift exchange of sisters (daughters) by brothers (fathers). This
notion, as Sahlins (1972:181) observed, provoked a reaction from British and
American anthropologists who recoiled at once from the idea, refusing for
their part to treat women as commodities (emphasis added). Such a reaction,
as Sahlins correctly noted, betrayed a misunderstanding of the comparative
theory of exchange and an inability to distinguish gifts from commodities.
Lvi-Strausss conceptualization of marriage as gift exchange enabled him
to develop a definition of reciprocity of great generality and rigour; this, in
turn, enabled him to synthesize a vast amount of data from Oceania and Asia
and to find patterns of exchange where others had found none. His primary
distinction is between elementary and complex structures of kinship; the
former, the focus of his analytical attention, are further subdivided into
structures of restricted and generalized exchange.
925
SOCIAL LIFE
Restricted exchange, his theoretical starting point, takes the following

general dyadic form:
Lvi-Strauss shows that alliance relations based on the bilateral marriage rule,
that a man should marry a woman in the combined kinship category of
mothers brothers daughter and fathers sisters daughter, take this form. The
notion of sister exchange, which is often used to describe this form of
reciprocity, precisely captures the essence of restricted exchange. The
perspective is, of course, from the male point of view (compare Strathern 1988
and Weiner 1992), but this is as much the indigenous males point of view as it
is the ethnographers. In other words, Lvi-Strausss perspective on exchange
is that of the powerful men who do the exchanging, rather than that of the
women whose place of residence is usually changed as a result of marriage. He
draws illustrative examples from ethnographic studies of the Australian
Aborigines, among whom dual organization is widespread. This conception of
restricted exchange corresponds exactly with Polanyis correlation of
reciprocity with a symmetrical kinship structure, the difference being only that
Polanyi was mainly concerned with the exchange of objects rather than the
exchange of persons (i.e. sisters or daughters).
By contrast to restricted exchange, generalized exchange takes the following
form:
This form of exchange

establishes a system of operations conducted on credit. A surrenders a daughter or a
sister to B, who surrenders one to C, who, in turn, will surrender one to A. This is
its simplest formula. Consequently, generalized exchange always contains an
element of trust. There must be the confidence that the cycle will close again, and
that after a period of time a woman will eventually be received in compensation for
the woman initially surrendered.
(Lvi-Strauss 1969 [1949]:265)
Generalized exchange is another way of expressing the matrilateral marriage

rule that a man should marry a woman in the kinship category of mothers
brothers daughter, and it is associated with a long cycle of reciprocity.
These two systems of exchange are conceived of as extremes between which
lies a third form of exchange, delayed exchange, which establishes a short cycle
of reciprocity of the following form:
926
Marriage with the fathers sisters daughter, the patrilateral rule, is consistent
with exchanges of this type, in which the direction of exchange is reversed
rather than repeated in each successive generation.
These three forms of exchange are all of the elementary type. Lvi-Strauss
sees in such elementary structures of kinship the basis for the gift exchange of
things. A bridewealth exchange, for example, is a process whereby the woman
provided as a counterpart is replaced by a symbolical equivalent (1969 [1949]:
470). A transformation such as this can only occur, however, if the marriage is
of the generalized or delayed kind. All three elementary forms, in LviStrausss scheme, are then opposed to complex structures which leave the
determination of the spouse to other mechanisms, economic or psychological
(Lvi-Strauss 1969 [1949]:xxiii). Lvi-Strausss great divide, between
elementary and complex structures of kinship, can be mapped onto Polanyis
between non-market and market exchange. The fit is by no means perfect, but
the degree of correlation is high.
These different forms of exchange, argues Lvi-Strauss, are an expression
of the incest taboo, the supreme rule of the gift (1969 [1949]:22). As he put it,
the prohibition of incest is less a rule prohibiting marriage with the mother,
daughter or sister, than a rule obliging the mother, sister, or daughter to be
given to others (1969 [1949]:22). This is not only Lvi-Strausss answer to
Mausss question about the basis of the obligation to give, it also underwrites
his theory of cultural evolution. Lvi-Strauss argues (1969 [1949]: ch. 28) that
it was mans desire to maximize the kinship distance between himself and his
wife that saw society progress through different evolutionary stages of
development.
There is, in sum, a sense in which the theories of Mauss, Lvi-Strauss,
Polanyi and Sahlins, taken together, provide a conceptual framework which is
the mirror image of Marxs. Whereas the gift theorists begin their analyses with
the direct gift exchange of people and then progress through various mediating
forms to the generalized gift exchange of things, commodity theorists like Marx
begin with the direct commodity exchange of things and progress to the
generalized commodity exchange of labour (Gregory 1982:68). This method of
analysis is evolutionary to the extent that it is making claims about actual
historical processes, but it can also be seen as a logical historical method
(Meek 1967), a mode of reasoning employed in the process of developing an
abstract conceptual framework. This distinction is important because the
logical historical method makes no claims about actual historical processes.
Thus, an evolutionary theory can be rejected without affecting the legitimacy
of the logical historical method. The importance of this distinction should
927
SOCIAL LIFE
become clear in the course of the following discussion of barter and other forms
of counter-trade.
BARTER AND OTHER FORMS OF COUNTER-TRADE
Counter-trade is the general form of non-monetized commodity exchange.
Barter, the simultaneous exchange of commodities (C-C), is the best known
example of counter-trade, but there are many other non-simultaneous forms
(e.g. delayed barter exchange). The latter necessarily involve a time element
and, in consequence, some notion of credit. In formal terms they are analogous
to delayed exchanges of gifts, and in practice it is often impossible to
distinguish between gift and commodity components of a counter-trade
transaction.
The phenomenon of counter-trade poses two questions: What is the
evolutionary status of barter? And what determines the rate of exchange?
For both classical and neoclassical economists barter is the origin of all
exchange. They believe that the original economy was a natural one based on
an elementary division of labour and lacking any form of money. This
inefficient system gave way to money-based exchanges with the progressive
division of labour and the development of markets. Thus the invention of
money was the answer to the problem of barter. This origin myth, as Hart
(1987) has aptly called it, is based on a priori logical reasoning about an
imagined past rather than on contemporary ethnographic evidence. The myth
was repeatedly attacked by early anthropologists as ethnographic evidence on
actual barter exchanges began to accumulate. The evidence shows that different
forms of exchange co-exist rather than following one another in a temporal
sequence. An object can participate in many different forms of exchange in the
course of a day. For example, a pig may begin the day by being sold in a market
for cash, then be bartered for another commodity, later resold at a profit, then
given away as a gift, and finally consumed as a good.
The first reliable evidence to point along these lines came from Malinowskis
(1922) classic study of the tribal economics of the Trobriand Islanders. From a
comprehensive list of gifts, payments and commercial transactions he
distinguished seven types of exchange, and showed how they were interrelated
in the concrete ecological and social context of the Trobriand Islands in the
early part of this century. His study showed that much geographically based
barter trade took place within the framework of the annual kula gift-exchange
ritual. Recent studies from the Milne Bay area show that these gift exchanges
continue to take place today under the umbrella of the world market economy.
This complexity poses few problems for indigenous transactors in the region,
who know exactly what type of transaction they are entering into, but it has
posed many theoretical problems for anthropologists who have tried to
comprehend what is going on.
Mauss was one of the early synthesizers. He recognized the implications of
928
Malinowskis data for the economists theory of barter and developed the
alternative thesis that gift exchange preceded commodity exchange. He
proposed a three-stage theory: first came the restricted exchange of gifts within
a tribe, next came generalized gift exchange, and finally the money economy
originated when the ancient Semitic societies invented the means of
detachingprecious things from groups (1954 [1925]:94).
It is interesting to note, in passing, that barter exchange is re-emerging in
the heartland of international financial capitalism as the hegemony of the
United States wanes and with it the value of the dollar. Barter has long been a
major component of international trade between East and West (i.e. on the
boundaries of United States power), but now many multi-national companies
are resorting to it to safeguard losses from deals involving a declining dollar;
within the United States the rise of computerized exchange, where debts can be
cancelled without the aid of money, has begun to worry the Internal Revenue
Service (Hart 1987:197).
The ethnographic and historical evidence, then, does not support any
simplistic theory of the evolution of economic forms. This is not to say that the
logical historical method, which organizes concepts in a sequence from simple
to complex, is invalid. To the contrary, as the above discussion has shown, it has
underlain all the significant conceptual developments in the theory of exchange
over the past two centuries.
Let me now turn to consider the question of exchange-rate determination.
Classical political economy, as we have seen, proposed the labour theory of
value as the key to understanding the exchange-rate of commodities. It was
argued that two heterogeneous commodities can be equated in value because of
the equality of the labour time contained therein. Neoclassical economists, on
the other hand, proposed that scarcity and utility determine the prices of
goods. What contribution have anthropologists been able to make to this
debate?
The controversy has been uppermost in the minds of many ethnographers
as they observed and collected quantitative data on tribal systems of barter and
counter-trade. Godelier (1977), for example, explicitly addressed the debate on
the theory of value in his article on Salt money and the circulation of
commodities among the Baruya of New Guinea.
The Baruya are a people of the Eastern Highlands of Papua New Guinea for
whom the production of sweet potatoes is the principal economic activity. They
are also specialists in the production of vegetable salt which is redistributed
among relatives within the tribe and bartered for various products and services
beyond its borders. The latter exchanges were conducted in pre-colonial times
by daring individuals who made contact with hostile neighbours and managed
to establish trade and protection pacts with certain members of the host
groups. Trading partners would feed and protect their guests and do their best
to find the merchandise which the latter desired. Salt was a highly desired
prestige item which was stored above the hearth to be used on ceremonial
929
SOCIAL LIFE
occasions involving the exchange and consumption of gifts. Baruya traders

bartered their salt for a range of commodities, one of which was bark cloth
obtained from the Youndouy, long-time friendly neighbours. Godelier noted
that the exchange rate was one bar of salt (average weight 2 kg) for 6 bark cloths,
and he calculated the labour time required to make the two products. A single
bar of Baruya salt entailed, on average, days of labour, whereas 6 bark cloths
entailed 4 days of labour. In other words, the exchange rate was imbalanced in
labour terms, with the Baruya receiving the equivalent of almost three times
more labour than they gave.
Godelier denies, however, that the Baruya exploit other peoples labour.
What counts, he argues
is the reciprocal satisfaction of their need and not a well-kept balance of their labour
expenditure. For this reason, the inequality of exchange expresses the comparative
social utility of exchanged products, their unequal importance in the scale of social
needs and the diverse monopolist positions of exchange groups.
(1977:150)
Godeliers conclusion is based on an interpretation of the statement of one of

his informants, who declared that If we receive enough, then work belongs to
the past, it is forgotten.
This looks like a victory for neoclassical theory. However, it could also be
argued that the unequal exchange reflects a difference in the quality of the
labour because the skills required to produce salt are much more highly
specialized than those involved in making bark cloth. The labour theory of
value requires that differences of quality be reduced to those of quantity, and if
the reduction factor was such that three hours of Baruya labour is equivalent to
one hour of Youndouy labour, then it could be argued that the exchange is
indeed equal.
The conclusion that both theories are valid is, perhaps, to be preferred,
because evidence such as this cannot resolve the fundamental problems of the
theory of value. What is at issue are different methods of apprehending the
world. If we conceptualize Baruya salt as a commodity certain implications
follow; if we conceptualize it as a good different implications follow. They are
incommensurable paradigms and, as such, no way of comparing them exists.
Furthermore, accurate accounting of utility value and labour value is
impossible, even in the Baruyas own terms. How does one reduce skilled
labour time to unskilled? How does one measure marginal utility and make
interpersonal comparisons? There are no satisfactory answers to these hotly
debated questions.
The labour-value and utility-value paradigms do not exhaust the universe of
possibilities, and there is room for other theories of value. Sahlinss essay,
Exchange value and the diplomacy of primitive trade (in Sahlins 1972), can be
seen as an attempt to develop an alternative. He begins by noting that the
930
characteristic fact of primitive exchange is indeterminacy of the rates

(1972:278). By this he means that similar commodities move against each other
in different proportions in different transactions. He addresses the usual
explanations, finds them wanting, and argues that, in partnership trade, the
rates are set by social tact, by the diplomacy of good measure appropriate to a
confrontation between comparative strangers (1972:302). Sahlins maintains
that in times of scarcity when, according to neoclassical theory, prices are
supposed to rise, the partnership absorbs the pressure and the exchange rate
remains undisturbed. In other words, the flexibility of the system depends on
the social structure of the trade relation (1972:313).
This theory moves the focus of attention from the economic value of objects
to the political value of the trade partnership. In this regard, it invites
comparison with Marxs (1954 [1867]:76) theory of the fetishism of
commodities, which argues that in a world of generalized commodity
circulation, relations between people assume the fantastic form of relations
between things. Sahlins, by way of contrast, argues that in the highly
particularized world of counter-trade, relations between people always appear
as such.
MARKET PLACE TRADE
In the discussion of market exchange, it is essential to distinguish between
market principles and market places. The former have to do with the abstract
principles that determine the formation of wages, prices and profit. Market
places, by contrast, are the loci where concrete exchanges take place. Marketing
systems are organized frameworks for the purchase and sale of commodities;
their features include customary market centres and a calendar of market days
so that buyers and sellers can meet in regular and predictable ways.
Economists have shown little interest in market places, confining themselves
almost exclusively to the analysis of abstract principles. Most research on
market places has been carried out by geographers and anthropologists, the
former concentrating on their spatial aspects and the latter on their social and
cultural aspects (as Bromleys (1979) comprehensive bibliography illustrates).
Anthropological studies of markets mainly take the form of ethnographic
accounts of particular local regions. General and comparative studies of the
kind that Mauss, Polanyi, Sahlins and others made of gift exchange are rare.
However, while all the classic ethnographic studiesSkinner (19645) on
China, Mintz (1959, 1961) on the Caribbean, Dewey (1962a) on Indonesia,
Malinowski and Fuente (1982 [1957]) on Mexico, Geertz (1979) on Morocco
are concerned with the analysis of particular situations, they do contain many
important general analytical points. Some of these have been drawn out by
Bohannan and Dalton (1962) in their introduction to an important collection of
essays on African rural markets.
931
SOCIAL LIFE
Markets can be classified by the types of commodities transacted, by the

forms of trade, by the roles of traders, and by the mode of spatio-temporal
organization.
The commodities traded in markets can be divided into those of the
vertical and those of the horizontal type (Mintz 1959). Vertical commodities
are either upwardly mobile or downwardly mobile (Skinner 19645).
Upwardly mobile commodities are those which are produced in a rural area and
exported from it by wholesalers. They usually consist of agricultural products,
but may also include products of artisanship such as ceramic pots, basketware,
iron tools, folk art, and so on. These products will ascend through a hierarchy
of wholesalers and eventually become the downwardly mobile commodities of
another area, usually urban and possibly overseas, where they will be
consumed. For a rural area, downwardly mobile commodities usually consist of
manufactured commodities of urban provenance such as clothing or jewellery.
They are brought into a marketing area by wholesalers who resell them to
retailers who, in turn, offer them for sale at the market place. The image of a
vertical commodity, then, captures the nested hierarchy of markets that
characterizes many peasant marketing systems, and locates them in a system
that incorporates local economies into the regional, national and international
economy. By contrast with vertical commodities, horizontal commodities move
across a limited local space. They are usually sold direct to the final consumer
by the producer at the market place, without the mediation of wholesalers.
This distinction, then, provides the first means of classifying markets: some
will be characterized by a predominance of vertical commodities (e.g. China),
others by a predominance of horizontal commodities (e.g. West Africasee
Hill 1966:298).
A second method of classifying markets is by the form of trade. All the forms
of commodity trade discussed abovebarter C-C, selling in order to buy C-MC, buying in order to sell M-C-M', and moneylending M-M'are found in
rural peasant markets. Barter trade is extremely rare. I observed barter
transactions in the markets I studied in Central India, but they accounted for a
negligible proportion of total commerce. Reports exist of Andean markets
operating almost exclusively by barter (Mintz 1959:29), but the vast majority of
transactions are of the C-M-C and M-C-M' variety. In Central India selling in
order to buy is the basis of the system from the farmers perspective. Farmers,
or rather the female members of farming households, bring small loads of
agricultural produce to sell at weekly markets in order to purchase kerosene,
cloth, ornaments or other items. Selling is obviously more intense at the end of
the harvest, but so too is buying. I was struck by the difference in the trading
patterns of markets in the more prosperous areas of northern India. Here
markets are solely of the M-C-M' variety, as farmers only go to the markets to
buy. Their produce, which is grown using more capital-intensive techniques, is
not brought to the market but sold through other channels in a manner similar
to that found in the rich capitalist countries.
932
Classification by the roles of traders is yet a third way to characterize

different market place systems. Traders fall into two main categories: the
mobile trader and the settled shopkeeper. Mobile traders include pedlars, who
wander from place to place hawking commodities in an unsystematic,
opportunistic way. They may be artisans who provide a service or add value to a
product, or they may be pure merchants who buy in order to sell at a profit.
Pedlars of this type usually possess a very small trading capital and travel by
foot, but there are also relatively wealthy individuals who possess motorized
transport. Thus pedlars can be distinguished by the type of trade they do, by
the size of their capital and by their means of transport.
Pedlars are only one kind of mobile trader, and they should be distinguished
from periodic market place traders. These traders have a set round of places,
which are visited on specified weekly market days. A cloth trader I interviewed
in India, for example, would set up his ten thousand rupees-worth of stock at
the big market in his home town of Kondagaon on Sunday, travel 20 km by jeep
to Sampur on Monday, 50 km to Makdi on Tuesday, 70 km to Randha on
Wednesday, rest on Thursday, travel 80 km to Bare Dongar on Friday, and 50
km to Mardapal on Saturdayand so on in this way for 52 weeks of the year.
Like the pedlars, traders in this category can be divided into artisans and
merchants and ranked in terms of their capital (which for many is often less
than a hundred rupees); they can also be divided into wholesalers and retailers.
In addition, traders who attend periodic markets can be distinguished by the
particular locations in the market where they set up shop. Rich traders usually
have a fixed establishment (e.g. a thatched-roof stall covering a small piece of
cleared ground), poor traders will crouch in the dust under an umbrella, while
the pedlar will wander around the market place hawking his or her
commodities.
Mobile traders of all kinds are to be distinguished from shopkeepers. Again,
this category can be subdivided along a variety of axes: wholesaler-retailer,
rich-poor, and so on, all of which are salient in rural areas. They usually
surround the central market place. In Western European countries the relative
importance of the periodic market trader has declined significantly over the
past two centuries as shopkeeping has emerged as the dominant form of
exchange. Nowadays the large department stores reign supreme as the central
loci of exchange. In many non-European countries, however, periodic market
traders are still the key merchants in most rural areas. They capture almost all
of the trade and customers only go to stores for emergency purchases or to buy
insignificant items such as a toothbrush, a pencil, or a packet of biscuits.
It is obvious that the distinct ways of characterizing markets outlined above,
according to types of commodities, forms of trade and roles of traders, are
interrelated. But it is also obvious that they allow for very diverse combinations
of features, and hence for a great variety of possible market place systems. The
task of the observer, looking at such systems in their empirical manifestations,
is to identify the principal tendencies and to account for them. But before we
933
SOCIAL LIFE
examine some of the factors which have been used to explain the observed
patterns (such as the predominance of periodic market traders in the rural areas
of poor countries, of hierarchical markets in China, of C-M-C markets in
Central India, and so on), it is necessary to consider some of the many different
types of spatio-temporal organization found in periodic markets.
Periodicity concentrates the demand for a product to a certain place on a
specified day between set hours. A trader can, by repositioning him or herself at
regular intervals, tap the demand of a market area and obtain an income from
commerce that is adequate for survival. From the point of view of farming
households the periodicity of markets reduces the distance they must travel in
order to sell their produce and to buy goods for consumption. In effect,
periodicity disperses the central market-town throughout the countryside and
converts sleepy backwaters into thriving commercial centres for a few hours
each week. This pattern of dispersal is a function of the availability of
transport: for rich market-town traders there is a limit to how far they are
prepared to drive each day, and for poor farmers there is a limit to how far they
are prepared to walk.
The distribution of periodic markets over time and space poses a problem
that can be expressed in mathematical terms. Christallers (1966 [1933]) classic
application of central place theory is one such expression that has proved very
influential with geographers and with some anthropologists (e.g. Skinner
19645). However, rather than elaborating on formal models of this kind, it is
more appropriate here to give some indication of the actual variations found in
the spatio-temporal organization of marketing systems.
In China market schedules are usually based on a ten- or twelve-day week.
This structure allows for the development of cyclical systems of great
complexity. For example, the 12-day cycle yields three regular cycles of 12-day,
6-day and 3-day market weeks; within these cycles many further possibilities
for scheduling are found. Six different schedules make up the 6-day week for
example: the first consists of the 1st and 7th day of the cycle, the second of the
2nd and 8th day, the third of the 3rd and 9th day, and so on. If town A chooses
the first schedule, town B the second, town C the third and so on, then it can be
seen that a farming household living equidistant from these three towns has 3
markets close by on 6 of the 12 days of the market week; towns D, E, F, G, etc.
will provide the household with a range of more distant markets to choose from
on the other days of the week.
In Central India the system is comparatively simple. The market week is a 7day one. The major market is held on Sundays at the central market town;
intermediate level centres hold their markets on Fridays, Saturdays and
Mondays; and small centres hold their markets on the remaining days. In West
Africa there is a standard market week of 3, 4, 5, 6, 7 or 8 days in length, such
that all markets in a given locality are based on the same cycle.
In areas where vertical commodities predominate, space becomes ordered in
a hierarchical way with market centres of various sizes constituting the nodal
934
points. Skinner (19645) proposes a multi-level typology of central places,

ranging from the local minor marketing area, based on a central village, to the
major regional trading area based on a regional city. He finds that the
arrangement of minor market areas in China approximates to a honeycomb
pattern and that this hexagonal spatial grid is reproduced at the higher levels.
Abstract models like this are useful heuristic devices for understanding the
empirical complexity of market systems and have stimulated much
geographical research (Smith 1978), but it is the social organization of markets
that has been the anthropologists prime concern.
A persistent theme of anthropological literature is the ubiquity of economic
and social differentiation in periodic market places. Mintz (1959), for example,
notes that in Haiti horizontal exchange occurs among class equals, while
vertical exchange occurs between class unequals. In other words, as we move up
the hierarchy of vertical commodities we also move up through a class
hierarchy. Dewey (1962b) found a similar situation in Java. Here Javanese
farmers dominate the small-scale trade, Chinese, Arabs and Indians dominate
the large-scale inter-market trade, and Europeans retain control over the really
large-scale economic enterprises. This pattern, she claims, is found throughout
South-east Asia. In India the marketing system is entirely in the hands of
Indians, but the general correlation of class and ethnicity is still to be found.
The lite traders found in almost all market areas of India are the Marwaris.
They are migrants from Marwar in Rajasthan and, as a group, control a
disproportionate share of the industrial and mercantile wealth of the country.
Explaining this social differentiation has been a central concern for
anthropologists. How is it, they ask, that markets that are the closest known
approximation to the economists ideal of free competition are nevertheless
characterized by such gross social and economic inequalities? Many
explanations have been put forward. Investigations have focused, among other
things, on culture, ecology, population pressure, the labour-intensive
technology of poor farmers, and systems of land tenure.
One paradox that anthropologists have identified is that the competitive
market system is backed by a strong personalistic element which affects the
nature of internal marketing activity (Mintz 1959:25). In Haiti this personal
relationship is called pratik. It means that buyer and seller emphasize the
reciprocal nature of relationships (1961:55, my emphasis). Women who buy
and sell on these terms call each other bel me (stepmother) or matelot
(concubine of the same man). Reciprocity of this kind between buyer and
seller is called goodwill in European countries, where it has been converted
into a commodity: shopkeepers and sellers of professional services (e.g. doctors,
lawyers, dentists) pay huge sums for it.
Another important kind of reciprocity in market systems is that obtaining
between sellers of a given type of vertical commodity. As we have seen, these
merchants tend to belong to families or ethnic groups whose members identify
with each other in opposition to the world at large. These groups, Dewey (1962b)
935
SOCIAL LIFE
notes, develop a social structure that enables them to bring informal sanctions to
bear on their members. In these localized power systems coercion and
collaboration create solidary relations which bring benefits to the in-group and
problems for the out-group. One of the greatest benefits to the in-group is access
to credit. This provides members of the in-group with initial capital and the
ability to accumulate more. Whereas debt can enchain a consumer, for merchants
it is their lifeblood, for without it they cannot expand their capital. It is obvious
that credit will not be extended where there is neither trust nor sanction and, in
periodic market systems, this marks the boundary between the in-group and the
out-group. Thus we find that credit for merchant capital expansion flows upon
the foundations laid by consanguinity and territoriality. Here, then, is an
important factor behind the observed hierarchies found in market places and,
when considered in the light of the particular history of a merchant class, it goes
some way towards explaining the wealth of some and the poverty of others.
Deweys argument, for which a wide range of supporting evidence can be
marshalled, amounts to the claim that positive reciprocity asserts itself in unique
ways in the heartland of negative reciprocity, the market place.
This argument seems to contradict Sahlinss theory of positive and negative
reciprocity. However a distinction must be maintained between the analysis of
abstract principles of exchange and the analysis of exchange in concrete
situations. The theories developed by scholars such as Smith, Ricardo, Marx,
Malinowski, Mauss, Polanyi and Sahlins are abstractions which must be
recognized as such and applied with caution to the analysis of concrete reality.
The message of Deweys argumentand of the growing body of literature
concerned with applying the theory of the gift to European history (White
1988), literature (Hyde 1984), economy (Zelizer 1989) and culture (Agnew
1986)is that concrete reality is riddled with contradictions. This means that
any attempt, say, to characterize the European economy as a commodity
economy and the Melanesian economy as a gift economy, is bound to fail
because positive and negative reciprocity is at work in both economies. The
notion of reciprocity, then, can be defined in the abstract but its real meaning
will always depend on the concrete political context.
REFERENCES
Agnew, J-C. (1986) Worlds Apart: The Market and the Theater in Anglo-American
Thought, 15501750, Cambridge: Cambridge University Press.
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Bohannan, P. (1959) The impact of money on an African subsistence economy, The
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Bohannan, P. and Dalton, G. (eds) (1962) Markets in Africa, Evanston, Ill.:
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936
Supplement to 1979, Centre for Development Studies Monographs no. 5, University

of Swansea.
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Christaller, W. (1966 [1933]) Central Places in Southern Germany, Englewood Cliffs,
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Codere, H. (1950) Fighting with Property, New York: J.J.Augustin.
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Dewey, A. (1962a) Peasanting Marketing in Java, New York: Free Press.
(1962b) Trade and social control in Java, Journal of the Royal Anthropological
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Friedman, M. (1962) Price Theory: A Provisional Text, Chicago: Aldine.
Geertz, C. (1979) Suq: the bazaar economy in Sefrou, in C.Geertz, H.Geertz and
L.Rosen, Meaning and Order in Moroccan Society, Cambridge: Cambridge
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Gregory, C.A. (1982) Gifts and Commodities, London: Academic Press.
Hart, K. (1987) Barter, in J.Eatwell, M.Milgate and P.Newman (eds) The New
Palgrave: A Dictionary of Economics, New York: Macmillan.
Heilbroner, R.L. (1987) Wealth, in J.Eatwell, M.Milgate and P.Newman (eds) The
New Palgrave: A Dictionary of Economics, New York: Macmillan.
Hill, P. (1966) Notes on traditional market authority and market periodicity in West
Africa, Journal of African History 7:295311.
Hyde, L. (1984) The Gift: Imagination and the Erotic Life of Property, London: Vintage.
Ingold, T. (1986) The Appropriation of Nature: Essays on Human Ecology and Social
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Jevons, W. (1970 [1871]) The Theory of Political Economy, Harmondsworth: Penguin.
Keynes, J.M. (1982) Ancient currencies, in D.Moggridge (ed.) Collected Writings,
New York: Macmillan.
Lvi-Strauss, C. (1969 [1949]) The Elementary Structures of Kinship, London: Eyre &
Spottiswoode.
Malinowski, B. (1922) Argonauts of the Western Pacific, London: Routledge & Kegan
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Malinowski, B. and de la Fuente, J. (1982 [1957]) Malinowski in Mexico: The Economics of
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Marx, K. (1954 [1867]) Capital, vol. I: A Critical Analysis of Capitalist Production,
Moscow: Progress.
Mauss, M. (1954 [1925]) The Gift: Forms and Functions of Exchange in Archaic Societies,
trans. I.Cunnison, London: Routledge & Kegan Paul.
(1990 [1925]) The Gift: The Form and Reason for Exchange in Archaic Societies,
trans. W.D.Halls, London: Routledge.
Meek, R.L. (1967) Economics and Ideology and Other Essays, New York: Chapman.
Mintz, S.W. (1959) Internal market systems as mechanisms of social articulation,
Proceedings of the 1959 Annual Spring Meeting of the American Ethnological Society,
ed. V.F.Ray, Seattle: Washington University Press.
937
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(1961) Pratik: Haitian personal economic relationships, Proceedings of the 1961

Annual Spring Meeting of the American Ethnological Society, ed. V.E.Garfield,
Seattle: Washington University Press.
Peterson, N. (in press) Demand sharing: reciprocity and the pressure for generosity
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Sahlins, M. (1972) Stone Age Economics, London: Tavistock.
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Zelizer, V. (1989) The social meaning of money: Special monies, American Journal
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FURTHER READING
Belshaw, C.S. (1965) Traditional and Modern Markets, Englewood Cliffs, NJ: PrenticeHall.
Bohannan, P. and Dalton, G. (eds) (1962) Markets in Africa, Evanston, Ill.:
Northwestern University Press.
Dalton, G. (ed.) (1967) Tribal and Peasant Economies, Austin: University of Texas Press.
Geertz, C. (1963) Peddlars and Princes: Social Change and Economic Modernization in
Two Indonesian Towns, Chicago: University of Chicago Press.
Godelier, M. (1977) Perspectives in Marxist Anthropology, Cambridge: Cambridge
University Press.
Gouldner, A. (1960) The norm of reciprocity: a preliminary statement, American
Sociological Review 25:16178.
Gregory, C.A. (1982) Gifts and Commodities, London: Academic Press.
Gregory, C.A. and Altman, J.C. (1990) Observing the Economy (ASA Research Methods
in Social Anthropology, 3), London: Routledge.
Humphrey, C. and Hugh-Jones, S. (eds) (1992) Barter, Exchange and Value: an
Anthropological Approach, Cambridge: Cambridge University Press.
Leach, J. and Leach, E.R. (eds) (1983) The Kula: New Perspectives on Massim Exchange,
Cambridge: Cambridge University Press.
938
Lvi-Strauss, C. (1969) The Elementary Structures of Kinship, London: Eyre &

Spottiswoode.
Malinowski, B. (1921) The primitive economics of the Trobriand Islanders, Economic
Journal 31:116.
Mauss, M. (1990) The Gift: the Form and Reason for Exchange in Archaic Societies, trans.
W.D.Halls, London: Routledge.
Parry, J.P. and Bloch, M. (eds) (1989) Money and the Morality of Exchange, Cambridge:
Cambridge University Press.
Polanyi, K. (1944) The Great Transformation, New York: Rinehart.
Polanyi, K., Arensberg, C. and Pearson, H. (eds) (1957) Trade and Markets in the Early
Empires, New York: The Free Press.
Sahlins, M. (1972) Stone Age Economics, London: Tavistock.
Skinner, G.W. (19645) Marketing and social structure in rural China, Journal of
Asian Studies 24:343, 195228, 36399.
Strathern, M. (1988) The Gender of the Gift, Berkeley: University of California Press.
939

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33

EXCHANGE AND RECIPROCITY

EXCHANGE AND RECIPROCITY

exchange-value. To make shoes, for example, requires a certain quality of effort, a

Marxs answer is long and involved but is based on a simple idea. He

EXCHANGE AND RECIPROCITY

implication that wealth, because it is the subjective sum of enjoyments, might

EXCHANGE AND RECIPROCITY

EXCHANGE AND RECIPROCITY

has, by and large, escaped the notice of twentieth-century economists. J.M.

Nevertheless, his comparative analysis of the ethnographic evidence, which

EXCHANGE AND RECIPROCITY

Table 1 Relations between principles of economic behaviour, forms of social organization

behaviourreciprocity, redistribution, and householdingwhich are a

eighteenth century ushered in a radically new form of economic organization,

EXCHANGE AND RECIPROCITY

oppositions giving-receiving and losing-taking. Giving, for example, is the

Figure 1 Reciprocity and kinship residential sectors. (After Sahlins 1972:199)

gradually counteracted by a negative charge. Each sector is, therefore,

EXCHANGE AND RECIPROCITY

Sahlinss conceptual framework, which has Mausss theory as its basis

Restricted exchange, his theoretical starting point, takes the following

This form of exchange

Generalized exchange is another way of expressing the matrilateral marriage

EXCHANGE AND RECIPROCITY

EXCHANGE AND RECIPROCITY

occasions involving the exchange and consumption of gifts. Baruya traders

Godeliers conclusion is based on an interpretation of the statement of one of

EXCHANGE AND RECIPROCITY

characteristic fact of primitive exchange is indeterminacy of the rates

Markets can be classified by the types of commodities transacted, by the

EXCHANGE AND RECIPROCITY

Classification by the roles of traders is yet a third way to characterize

EXCHANGE AND RECIPROCITY

points. Skinner (19645) proposes a multi-level typology of central places,

EXCHANGE AND RECIPROCITY

Supplement to 1979, Centre for Development Studies Monographs no. 5, University

(1961) Pratik: Haitian personal economic relationships, Proceedings of the 1961

EXCHANGE AND RECIPROCITY

Lvi-Strauss, C. (1969) The Elementary Structures of Kinship, London: Eyre &

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