Overview

While classical economics assumes humans are rational profit-maximizers (“Homo economicus”), anthropologists show that economic behavior is embedded in social relationships, religion, and politics.

Core Idea

Polanyi identified three modes of exchange:

  1. Reciprocity: Exchange between equals (e.g., gift-giving).
  2. Redistribution: Goods flow to a center and are then redistributed (e.g., taxes, potlatch).
  3. Market Exchange: Buying and selling based on supply and demand.

Formal Definition (if applicable)

The Gift (Mauss): Gifts are never truly free; they create a triple obligation: the obligation to give, to receive, and to reciprocate. This cycle creates social solidarity.

Intuition

If you invite a friend to dinner, you don’t charge them for the food. You expect them to invite you back later. That’s reciprocity. If you paid them, it would turn a social relationship into a market transaction.

Examples

  • Kula Ring: A ceremonial exchange of shell necklaces and armbands in the Trobriand Islands that builds prestige and alliances.
  • Potlatch: A Native American ceremony where wealth is given away or destroyed to demonstrate status.
  • Hunter-Gatherers: Often described as the “original affluent society” because they satisfied their needs with little work.

Common Misconceptions

  • “Barter came before money.” (Anthropological evidence suggests credit and gift systems preceded barter.)
  • “Everyone wants to get rich.” (In some societies, hoarding wealth is shameful; sharing is the goal.)
  • Moral Economy: Economic activities guided by moral and social norms.
  • Cultural Materialism: The theory that material conditions (resources, technology) determine culture.
  • Commodity Fetishism: Perceiving value as inherent in objects rather than social labor.

Applications

  • Development: Designing economic programs that fit local cultural norms.
  • Marketing: Understanding the cultural meaning of consumption.
  • Sustainability: Learning from non-capitalist resource management systems.

Criticism / Limitations

The debate between Formalists (who apply standard economic theory to all societies) and Substantivists (who argue economics is culturally specific) remains a central tension in the field.

Further Reading

  • Mauss, The Gift
  • Polanyi, The Great Transformation
  • Sahlins, Stone Age Economics