Traditional Exchange and Modern Markets

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Prentice-Hall, Inc., Englewood Cli§s, N.


Traditional Exchange




Markets C Y R I L S . BELSI-IAW

The University of British Columbia

© 1965 by PRENTICE-HALL, ING., Englewood Cliffs, N. ]. All rights reserved. No part of this book may be reproduced in any form, by mimeograph or any other means, without permission in writing from the publishers.

Library of Congress Catalog Card No.: 65-23229 Printed in the United States of America

C-92610 ( C )

C-92609( P )

Current printing (last digit) : 11






















Modernization of Traditional Societies Series

The twentieth century will be called many things by future historians-the Age 013 Global War, perhaps, the Age of Mass Society,

the Age of the Psychoanalytic Revolution, to name a few possibilities. One name that historians certainly will not fail to give our century is the Age of the New Nation. For, evidently, the convulsive emergence of the colonies into independence and their

subsequent struggle to join the ranks of the prosperous, powerful, and peaceful is the most remarkable revolution of our time.

Taking the world as a whole, men are now preoccupied with no subject more than they are with the travail of the New Nations. The world of the social sciences has been studying the pace of social change in these newly emergent areas, and from time to time has been engaging in technical assistance and even in the giving of advice on high levels of social strategy. Little of this effort has reached publicly accessible form. Though technical treatises abound, and isolated, journalistic reports of distinctly exotic countries are not wanting, college curricula have scarcely reiiected either the scientific endeavors or the world-wide revolutions in technology and in political of-Pairs.

This series on "Modernization of Traditional Societies" is designed to

inform scholars, students, and citizens about the way quiet places have come alive, and to introduce at long last materials on E D1 T



the contemporary character of


Editorial Foreword


developing areas into college curricula for the thought leaders of the near future. To these ends we have assembled experts over the range of the social sciences and over the range of the areas of the underdevelo_ped and new7y developin sections of the earth that were once troublesome only to themselves. We are proud to be participants in this series, .__J proud to offer each of its volumes to the literate world, with the hope that that world may increase, prosper, think, and decide wisely. WILBEBT E. MOORE NEIL



My aim has been to compare several kinds of economy, from the primitive to the modern,

to show the themes they have in common and their differences, and to indicate the principles of modernization that new

nations are attempting to follow. I have tried to do this in a way which brings economic, anthropological, and sociological ideas together, since in my view those disciplines should constitute one system. This is a rapidly growing Held of study, with a short history and a long future. I have tried to sort out the various theoretical approaches and bring them together or give reasons for discarding them as the


case may be, and to indicate sources for their further study. But as theoretical ideas change, new questions arise for answering; I believe it to be an important task for a book such as this to raise those questions, and to suggest inquiry perhaps by stimulating disagreement as well as agreement.-cyRIL s. BELSHAVV






Economy and Society Exchange and Markets




Gift Exchange and Reciprocity

Trade Rings of Papua The Kwakiutl Potlatch East African Cattle Comdex

An Overview of Melanesian Exchange Melanesia in a Modern Context


Prestation and Gift~Giving

39 46

Prestation and Modernization


The Markets of Haiti and Mesoamerica Malayan and Indonesian Markets West African Trade Marketing as Innovation Colonial Market Control Market Place Systems Social Relations of the Market Place Limitations in Peasant Marketing



12 20 29 35

Monetized Peasant Marketing




54 62 68 71

74 '75 '78 81

Approaches to Articulation in the Economy


85 89 95 Dual Economy and Plural Society 101 Similaritie§§ Babylonian Administration

Port of Trade Enclaves






Conditions for the Modernization of the Market Economy 108 The Basis of Exchange 110 Coordinating Mechanisms I l l Volue Orientations

The Allocative and Distributive

System The Entrepreneur Legitimate Authority The Bureaucracy Political Articulation

Adjustment Reaction Systems


Reactive Aspects of the Mobility of Production Fodors Adoptcsbility of Organizations Boundcries in Social Structure information Flow Physical Communications

Some Conditions of Operation 130 Achievement Orientation Security, Predictability, and




The Dynamic Orientation 133 Expansion


Motivation investment



Population Distribution



Index 147

In popular and scholarly thought alike, the fundamental characteristic of a developed society is a complex and dynamic economy. However, many of the new nations engaged in the task of rapid moderniza-

tionare handicapped on the one hand by a lack of developed wealth, and on the other by the lack of a well-integrated economy oriented towards rapid growth. There are many conceptual problems underlying the analysis of this situation and the steps that might be taken to correct it. Many of them turn upon a presumed interrelationship between the economic system and the social and cultural context in which it works. It has been argued, for

example, that economic individualism is a necessary condition for economic progress, since individualism provides the motivations upon which determined eHort can be based. If this social premise is accepted, it leads to the notion that the individual family characteristic of Western society is a more appropriate base for economic growth than the extended kinship systems of some African and Asian countries. Hence such a country, faced with the task of modernization, should first of all alter the basis of its family life. This example of

individualism is an inaccurate oversimplification of one complex social factor which must be analyzed before an adequate picture of social, cultural, and economic



interrelations can be achieved. The rapid growth of new nations has led to the examination of the growth of income and

Economy and Society 1

Economy and Society


wealth in a context of widely variable cultures and social structures. At First there was concern about the social consequences of economic growth, seen in such terms as family change, urbanization, and political development. Then attention was given to the social concomitants of economic growth, on the assumption that there was an interplay and mutual influence between society and economy. This, of course, was not a new idea, since it had formed the basis of much of the writing of Adam Smith, Alfred Marshall, Marx and Veblen, and those anthropologists who interested themselves in economics. But the growth of formal economic theory had tended to exclude examinations of the social variables until cross-cultural comparisons reinforced their rele-

vance. And in the past few years another step has been taken. We now hear of the social prerequisites to economic growth. The Marxian idea that something economic determines forms of society has been modified by the notion that certain social and cultural forms may be necessary before economic growth can take place. Whatever the theories may he explicitly, they imply an interrelationship between an economy and a society, or at least between something economic and something social. It is then at least reasonable to assume that the entities to be interrelated are identifiable or observable. Although economists have not on the whole attempted to define the economy, it is not difficult to infer what they would delineate, basing the inference on their approach to the subject matter of economics. One departure point is that the economy has to do with those actions and institutions which are related to time wealth of the society. This premise can lead directly to aII approach whit integrates society and economy, as was the case with Adam Smith and much of the writing of Alfred Marshall, on the assumption that all institutions have something to do with wealth. Marshall, indeed, described economics as the study of mankind "in the ordinary business of life," 1 which makes the econ-

omy life as a whole. Others see a dilemma in this position, and in order to esc e it introduce the idea that wealth is material, or that it is useful antlgexrhanae-


ablc. The idea that wealt only material is not stri'ct7y supportable, since at the very least we are concerned wit services of a nonmaterial land. To define entertainment or health services bE OT the economy would be arbitrary, and computations of national income always include them. And if this is done, WI should treat ceremonial and witch-being

useful and exchangecraft in the same light. To think of wealth as able is more acceptable, and leads directly to the position that exchange 1

Alfred Marshall, Principles

of Economics ( London:

Macmillan & Co., Ltd., 1898).

Economy and Society


and the market are the central features et the economy, which is indeed a central theme of the present study. Another school of thought, led by A. C. Pigou, refers to those activities which can be related to the measuring rod of money. This operational approach is a sharpening of the "useful exchange" idea, since money cannot be used to measure unless there is the paten tiality of exchange, and exchange will not take place unless there is utility. It should be stressed here, since this is most important in the cross-cultural comparison of economic systems, that usefulness or utility refers not to

some objective criterion of technical electiveness but to the purely subjective notion of the actor that the good or service is valuable to him, or that he wants it. Vlfhy he wants it (for aesthetic or pleasurable reasons, because of religious or secular values) is quite irrelevant to the notion of utility. This usage of economists should be carried over into anthropology and sociology.

The measuring rod of money is a precise and useful criterion. for economists to apply when they are examining their own society, and in fact most economists use it. It leads to skilled technical analysis of the price mechanism, markets, and certain forms 0? production and consumption. But this is at a cost of a cons-ideraljle difculty which inhibits our ability to handle the problems of developing societies. One part of the difBeulty is that many similar kinds of activities ( tor example, extensive subsistence agriculture with distribution through kinship net5vorlts rather than through buying and selling) take place in developing economies outside the influence of money, and we would be out of step in talking of primitive economies if, by money, we mean the kind of cash exchange bank balances typical of capitalism. The other part of the diiiticulty at the type of analysis which results does not admit 0"i` a rcaH-yiinl