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What is Economic Anthropology?

Updated on December 6, 2012

My interest of economics began in high school. I was setting up my schedule for Senior year and needed one more class. I choose the microeconomics class which gradually perked my interest more and more over the year. Our class field trip to New York City to visit the financial district stole the show.

We spent some time at the stock exchange watching the men and women stand in suits and casually talk amongst each other. At the end of the day, we heard the closing bell. We gathered in front of the bull in Bowling Green park. However, the most eye opening experience was the hectic, arm flailing, constant yelling of the commodities exchange.

The commodities exchange is still true to the chaotic, strategic, and calculated mess which use to be the stock exchange. Teams of people work together to buy and sell coffee, gold, silver, iron, oil, and every other commodities available for public trade. They violently flap their hands giving signals to their co-workers letting them know what is going on. One doesn't have to visit the commodities exchange to experience (and take part) in this form of activity. To a lesser degree (not always) you can see this vocal arm flailing taking place in marketplaces, large cities, and rural towns all over the world.

A Modern Perspective on (Ancient) Exchange

Traveling around the world, I have participated in facets of an economy that depend on negotiation skills to close a deal. Not to often will one find this in Western societies for the public to actively participate, but it does happen. For example, when you jump in a cab in NYC the cab driver turns on their meter. When you go to the grocery store the cost of an item is posted below. Not to often will you find a chance to actively negotiate a "fair" price. However, places such as car dealerships can be the rare outlier.

I have spent hours arguing with cab drivers over a reasonable price. I have visited local markets in which my pale complexion and less than perfect mastery of the local language has gotten me ripped off. I have even bought souvenirs from a seller at a more affordable price than the vendor next door. When I think about ancient economies, I imagine them to be like my numerous experiences from around the globe and like that of the commodities exchange.

(The video below was uploaded to youtube by Mexico Today)

Mexican Market

What is Economic Anthropology?

Our lives revolve around economies both at the institutional and domestic levels. With people comes the inevitable exchange of good and services. So, what is economic anthropology?

  • Economic Anthropology- At the most basic level it is the study of the way people make a living. It is the description and analysis of economic life using an anthropological perspective. In other words, it is a holistic, cross cultural, non-time bound, adaptive, and non-objective view on human behavior.
  • Economy- A culturally mediated field where activity from the population takes place. It allows people to interact in a physical and social environment in a deliberate attempt to acquire goods from production areas for use and exchange.

Alright, but what exactly makes up an economy? An economy is made up of 5 distinct components:

  • Systems of Production- This is the system(s) of how things are produced and more than one can exist in the same society.
  • Systems of Valuation- They are a mental construct that helps determine the goals of work and the price of goods and services. Systems of valuation can and do vary from society-to-society.
  • Systems of Resource Concentration- Concerned with wealth, capital, and the way it is utilized. It also looks at ownership and systems of inheritance.
  • Systems of Distribution- This is how the resources move from the area of production to the places of consumption.
  • Consumption of Resources- The consumption of resources takes place at two levels: domestic (household) and institution (political).

Some merchants selling goods in Cusco, Peru.
Some merchants selling goods in Cusco, Peru. | Source

Domestic and Institutional Economies

Under the consumption of resources, economies occur at both the institutional and domestic levels of a society. They contribute and feed into one another. Without the household, the institutional economy would not be able to function. However, households are never isolated and their own entity, but makeup part of a larger social network.

  • Institutional Economy- Institutions are special purpose organizations that support large scale social, political, and religious activities. The goal of the institutional economy is social and reproductive maintenance.
  • Domestic Economy- The purpose of the domestic (household) economy is to provide for the unit members. Its main focus is on life and reproduction as the members of the family, household, or minimal domestic unit deal with production, procurement and consumption of food, clothing, housing, knowledge and technology.

Economies are made up of many niches that contribute to society. People conduct behavior through various types of exchange.

Forms of Exchange

An economy is created through the exchange of goods and services. We are constantly exchanging things with family, friends, acquaintances, and complete strangers through various forms of "gift giving".


Barter is the exchange of one good for another good. An example of barter is exchanging one commodity for another (corn for wheat). This type of exchange can be a bit difficult to do as each item is given a value from the person that will be receiving the good. To get 1 lbs of wheat from one person might cost 1/2 lbs of corn and from another 2 lbs.

Political cartoon from 1911.  The cartoon suggests an imbalance in reciprocity between Canada and the United States.
Political cartoon from 1911. The cartoon suggests an imbalance in reciprocity between Canada and the United States. | Source


There are three types of reciprocity:

  • General- Exchanging without keeping track of the value in the hopes that over time everything will be equal. One great way to look at this form of reciprocal exchange is the parent-child relationship. Throughout our lives, our parents give us food, education, shelter, etc. At that immediate point in time, we, as the children, give nothing back. However, as we get older and become adults ourselves and our parents become less independent, they need our help with food, shelter, etc.
  • Balanced- Giving with the expectations of a fair and returned exchange (specified amount, time, and place). You give a friend $5. Well, it might be 10 minutes, 3 days, 7 weeks, or even years before your friend pays you back, but you fully expect your friend to pay you back.
  • Negative- An exchange where everyone involved intends to be better off, usually at the expense of the other(s). An example of this can be found with going to a car dealership. The dealer could start out with an outrageous high price. You then counter with an equally outrageous low price. Eventually, a common price may be found. If not, you go to the next dealership and start the process all over again.


Redistribution is the exchange of a good for nothing in return. People do this everyday through a generous donation to a charity, giving someone food in need, or even in the hand-me-downs our brothers and sisters give us. Another example is the Native American potlatch. It is a gift giving ceremony of food, clothing, and other goods in celebration of a marriage, newborn child, acquisition of title, inheritance, ransom of a captive, captive rescue, and the claiming of biological rights.

(The video below was uploaded to youtube by Chris Byerly. He has the other 6 parts on his youtube channel.)

Ongka's Big Moka (Part 1 of 7)

"From Ongka's Big Moka which is part of the 'Disappearing World' series from Shanachie 1974. A classic anthropological documentary film about the Big Men society of the Kawelka of Papua, New Guinea. Produced and directed by Charlie Nairn."


Economic anthropology is not only a way for us to look at past and modern less "civilized" cultures, but a way to analyze "modern" economies. It analyzes the very things that make up an economy, people.

Over the years, economists have been picking up and really running with this idea of holistic study. There is even a sub-field called behavioral economics. As far as the world of economics is concerned, it is not very highly regarded because it is hard to plug feelings and other drastically changing variables into a mathematical formula.

My problem with the study of economics has always been its view on people. To an economist and his mathematical model, everyone is logical. Economic anthropology does not do this and views people for what they are, imperfect and emotional.

© hockey8mn, 2012. All Rights Reserved.


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      5 years ago

      Actually I did not have any idea about Economic Anthropology, when I read in your article, I learn about many thing which is related to economic anthropology. This article is very useful for me and my department. Thanks a lot... It is a great job...

    • hockey8mn profile imageAUTHOR


      5 years ago from Pennsylvania

      Thanks for reading and the comment Pavlo.

    • Pavlo Badovskyy profile image

      Pavlo Badovskyi 

      5 years ago from Kyiv, Ukraine

      That was a very informative hub. I liked it!

    • bankscottage profile image


      5 years ago from Pennsylvania

      Interesting, informative and well written Hub.


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