Cultural economics is the branch of economics that studies the relation of culture to economic outcomes. Here, 'culture' is defined by shared beliefs and preferences
of respective groups. Programmatic issues include whether and how much
culture matters as to economic outcomes and what its relation is to
institutions. As a growing field in behavioral economics,
the role of culture in economic behavior is increasingly being
demonstrated to cause significant differentials in decision-making and
the management and valuation of assets.
Cultural
economics develops from how wants and tastes are formed in society.
This is partly due to nurture aspects, or what type of environment one
is raised in, as it is the internalization of one's upbringing that
shapes their future wants and tastes. Acquired tastes can be thought of as an example of this, as they demonstrate how preferences can be shaped socially.
A key thought area that separates the development of cultural
economics from traditional economics is a difference in how individuals
arrive at their decisions. While a traditional economist will view
decision making as having both implicit and explicit consequences, a
cultural economist would argue that an individual will not only arrive
at their decision based on these implicit and explicit decisions but
based on trajectories. These trajectories consist of regularities, which
have been built up throughout the years and guide individuals in their
decision-making process.
Combining value systems and systems thinking
Economists have also started to look at cultural economics with a systems thinking
approach. In this approach, the economy and culture are each viewed as a
single system where "interaction and feedback effects were
acknowledged, and where in particular the dynamic were made explicit". In this sense, the interdependencies of culture and the economy can be
combined and better understood by following this approach.
Said E. Dawlabani's book MEMEnomics: The Next-Generation Economic System combines the ideas of value systems (see value (ethics)) and systems thinking
to provide one of the first frameworks that explores the effect of
economic policies on culture. The book explores the intersections of
multiple disciplines such as cultural development, organizational behavior, and memetics all in an attempt to explore the roots of cultural economics.
Growth
The
advancing pace of new technology is transforming how the public
consumes and shares culture. The cultural economic field has seen great
growth with the advent of online social networking which has created
productivity improvements in how culture is consumed. New technologies
have also led to cultural convergence where all kinds of culture can be
accessed on a single device. Throughout their upbringing, younger
persons of the current generation are consuming culture faster than
their parents ever did, and through new mediums. The smartphone is a
blossoming example of this where books, music, talk, artwork and more
can all be accessed on a single device in a matter of seconds. This medium and the culture surrounding it is beginning to have an
effect on the economy, whether it be increasing communication while
lowering costs, lowering the barriers of entry to the technology
economy, or making use of excess capacity.
An example of culture being consumed via smartphone.
This field has also seen growth through the advent of new economic studies that have put on a cultural lens.
For example, Kafka and Kostis (2021)
at a recent study published in the Journal of Comparative Economics,
use an unbalanced panel dataset comprised from 34 OECD countries from
1981 to 2019, conclude that the cultural background during the overall
period under consideration is characterized as post-materialistic and
harms economic growth. Moreover, they highlight both theoretically and
empirically the cultural backlash hypothesis since the cultural
background of the countries under analysis presents a shift from
traditional/materialistic (from 1981 up to 1998) to post-materialist
values (from 1999 up to 2019). Doing so, they conclude on a positive
effect of cultural background on economic growth when traditional /
materialistic values prevail, and a negative effect when
post-materialistic values prevail. These results highlight culture as a
crucial factor for economic growth and indicate that economic policy
makers should take it seriously into account before designing economic
policy and in order to explain the effectiveness of economic policies
implemented.
Another study on Europeans living with their families into adulthood was conducted by Paola Giuliano,
a professor at UCLA. The study found that those of Southern European
descent tend to live at home with their families longer than those of
Northern European descent. Giuliano added cultural critique to her
analysis of the research, revealing that it is Southern European culture
to stay at home longer and then related this to how those who live at
home longer have fewer children and start families later, thus
contributing to Europe's falling birthrates. Giuliano's work is an example of how the growth of cultural economics is beginning to spread across the field.
An area that cultural economics has a strong presence in is
sustainable development. Sustainable development has been defined as
"...development that meets the needs of the present without compromising
the ability of future generations to meet their own needs...". Culture plays an important role in this as it can determine how people view preparing for these future generations. Delayed gratification
is a cultural economic issue that developed countries are currently
dealing with. Economists argue that to ensure that the future is better
than today, certain measures must be taken such as collecting taxes or
"going green" to protect the environment. Policies such as these are
hard for today's politicians to promote who want to win the vote of
today's voters who are concerned with the present and not the future.
People want to see the benefits now, not in the future.
Economist David Throsby
has proposed the idea of culturally sustainable development which
compasses both the cultural industries (such as the arts) and culture
(in the societal sense). He has created a set of criteria in regards to
for which policy prescriptions can be compared to in order to ensure
growth for future generations. The criteria are as follows:
Advancement of material and non-material well-being: implies balance amongst economic, social, and cultural forces
Intergenerational equity and the maintenance of cultural capital: current generation must recognize their responsibility to future generations
Equity within the present generation: distribution of cultural resources must be fair
Recognition of interdependence: policy must understand the
connections between economic, cultural and other variables within an
overall system.
With these guidelines, Throsby hopes to spur the recognition between
culture and economics, which is something he believes has been lacking
from popular economic discussions.
Cultural finance
Cultural finance a growing field in behavioral economics
that studies the impact of cultural differences on individual financial
decisions and on financial markets. Probably the first paper in this
area was "The Role of Social Capital in Financial Development" by Luigi Guiso, Paola Sapienza, and Luigi Zingales. The paper studied how well-known differences in social capital
affected the use and availability of financial contracts across
different parts of Italy. In areas of the country with high levels of
social capital, households invest less in cash and more in stock, use
more checks, have higher access to institutional credit, and make less
use of informal credit. Few years later, the same authors published
another paper "Trusting the Stock Market" where they show that a general
lack of trust can limit stock market participation. Since trust has a
strong cultural component, these two papers represent important
contribution in cultural economics.
In 2007, Thorsten Hens and Mei Wang pointed out that indeed many areas of finance are influenced by cultural differences. The role of culture in financial behavior is also increasingly being
demonstrated to have highly significant effects on the management and
valuation of assets. Using the dimensions of culture identified by Shalom Schwartz, it has been proved that corporate dividend payments are determined largely by the dimensions of Mastery and Conservatism. Specifically, higher degrees of conservatism are associated with
greater volumes and values of dividend payments, and higher degrees of
mastery are associated with the total opposite. The effect of culture on
dividend payouts has been further shown to be closely related to
cultural differences in risk and time preferences.
A different study assessed the role of culture on earnings management using Geert Hofstede's cultural dimensions and the index of earnings management developed by Christian Leutz;
which includes the use of accrual alteration to reduce volatility in
reported earnings, the use of accrual alteration to reduce volatility in
reported operating cash flows, use of accounting discretion to mitigate the reporting of small losses, and the use of accounting discretion when reporting operating earnings. It was found that Hofstede's
dimension of Individualism was negatively correlated with earnings
management, and that uncertainty avoidance was positively correlated. Behavioral economist
Michael Taillard demonstrated that investment behaviors are caused
primarily by behavioral factors, largely attributed to the influence of
culture on the psychological frame of the investors in different nations, rather than rational ones by comparing the cultural dimensions used both by Geert Hofstede and Robert House, identifying strong and specific influences in risk aversion behavior resulting from the overlapping cultural dimensions between them that remained constant over a 20-year period.
In regards to investing,
it has been confirmed by multiple studies that greater differences
between the cultures of various nations reduces the amount of investment
between those countries. It was proven that both cultural differences
between nations as well as the amount of unfamiliarity investors have
with a culture not their own greatly reduces their willingness to invest
in those nations, and that these factors have a negative impact with
future returns, resulting in a cost premium on the degree of foreignness
of an investment.Despite this, equity markets continue to integrate as indicated by
equity price comovements, of which the two largest contributing factors
are the ratio of trade between nations and the ratio of GDP resulting from foreign direct investment. Even these factors are the result of behavioral sources, however. The UN World Investment Report (2013) shows that regional integration is occurring at a more rapid rate than distant foreign relations, confirming an earlier study concluding that nations closer to each other tend to be more integrated. Since increased cultural distance reduces the amount of foreign direct investment, this results in an accelerating curvilinear correlation between financial behavior and cultural distance.
Geographical
characteristics were linked recently to the emergence of cultural
traits and differences in the intensity of these cultural traits across
regions, countries and ethnic group. Geographical characteristics that
were favorable for the usage of the plow in agriculture contributed to a
gender gap in productivity, and to the emergence of gender roles in
society. Agricultural characteristics that led to a higher return to
agricultural investment generated a process of selection, adaptation,
and learning, that increase the level of long-term orientation in
society.
Economic anthropology is a field that attempts to explain human economic behavior in its widest historic, geographic and cultural scope. It is an amalgamation of economics and anthropology.
It is practiced by anthropologists and has a complex relationship with
the discipline of economics, of which it is highly critical. Its origins as a sub-field of anthropology began with work by the Polish founder of anthropology Bronislaw Malinowski and the French Marcel Mauss on the nature of reciprocity as an alternative to market exchange. In an earlier German context, Heinrich Schurtz has been cited as a “founder of economic anthropology" for his pioneering inquiries into money and exchange across different cultural settings.
Post-World War II, economic anthropology was highly influenced by the work of economic historian Karl Polanyi.
Polanyi drew on anthropological studies to argue that true market
exchange was limited to a restricted number of western, industrial
societies. Applying formal economic theory (Formalism) to non-industrial
societies was mistaken, he argued. In non-industrial societies,
exchange was "embedded" in such non-market institutions as kinship,
religion, and politics (an idea he borrowed from Mauss). He labelled
this approach Substantivism. The formalist–substantivist debate was highly influential and defined an era.
As globalization became a reality, and the division between market and non-market economies – between "the West and the Rest" – became untenable, anthropologists began to look at the relationship between a variety of types
of exchange within market societies. Neo-substantivists examine the
ways in which so-called pure market exchange in market societies fails
to fit market ideology. Economic anthropologists have abandoned the
primitivist niche they were relegated to by economists. They now study
the operations of corporations, banks, and the global financial system from an anthropological perspective.
Reciprocity and the gift
Bronislaw Malinowski, anthropologist at the London School of EconomicsA Kula bracelet from the Trobriand Islands.
Malinowski and Mauss: Debate over the Kula exchange
Bronislaw Malinowski's groundbreaking work, Argonauts of the Western Pacific
(1922), posits the question, "why would men risk life and limb to
travel across huge expanses of dangerous ocean to give away what appear
to be worthless trinkets?" Carefully traced the network of exchanges of
bracelets and necklaces across the Trobriand Islands, Malinowski established that they were part of a system of exchange, the Kula ring. He stated that this exchange system was clearly linked to political authority.
In the 1920s and later, Malinowski's research became the subject of debate with the French anthropologist, Marcel Mauss, author of The Gift (Essai sur le don, 1925). Contrasting Mauss, Malinowski emphasised the exchange of goods between individuals, and their non-altruistic motives for giving: they expected a return of equal or greater value. In other words, reciprocity is an implicit part of gifting; no "free gift" is given without expectation of reciprocity.
Mauss, however, posited that the gifts were not merely between
individuals, but between representatives of larger collectivities. These
gifts were, he argued, a "total prestation." They were not simple,
alienable commodities to be bought and sold, but, like the Crown jewels, embodied the reputation, history, and identity of a "corporate kin group". Given the stakes, Mauss asked, "Why anyone would give them away?" His answer was an enigmatic concept, hau,
"the spirit of the gift." Largely, the confusion (and resulting debate)
was due to a bad translation. Mauss appeared to be arguing that a
return gift is given to keep the very relationship between givers alive;
a failure to return a gift ends the relationship and the promise of any
future gifts. Based on an improved translation, Jonathan Parry
has demonstrated that Mauss was arguing that the concept of a "pure
gift" given altruistically only emerges in societies with a
well-developed market ideology.
Mauss' concept of "total prestations" has been developed in the later 20th century by Annette Weiner,
who revisited Malinowski's fieldsite in the Trobriand Islands.
Publishing in 1992, her critique was twofold: Weiner first noted that
Trobriand Island society has a matrilineal
kinship system. As a consequence, women hold a great deal of economic
and political power, as inheritance is passed from mother to daughter
through the female lines. Malinowski missed this insight in his 1922
work, ignoring women's exchanges in his research. Secondly, Weiner
further developed Mauss' argument about reciprocity and the "spirit of
the gift" in terms of inalienable possessions: "the paradox of keeping while giving." Weiner contrasted "moveable goods," which can be exchanged, with
"immoveable goods," which serve to draw the gifts back. In the context
of the Trobriand study, male Kula gifts were moveable gifts compared to
those of women's landed property. She argued that the specific goods
given, such as Crown Jewels,
are so identified with particular groups that, even when given they are
not truly alienated. Not all societies, however, have these kinds of
goods, which depend upon the existence of particular kinds of kinship
groups. French anthropologist Maurice Godelier pushed the analysis further in The Enigma of the Gift (1999).
Albert Schrauwers has argued that the kinds of societies used as examples by Weiner and Godelier, such as the Kula ring in the Trobriands, the Potlatch of the Indigenous peoples of the Pacific Northwest Coast, or the Toraja of South Sulawesi, Indonesia, are all characterized by ranked aristocratic kin groups that fit with Claude Lévi-Strauss'
model of "House Societies" where "House" refers to both noble lineage
and their landed estate. Total prestations are given, he argues, to
preserve landed estates identified with particular kin groups and
maintain their place in a ranked society.
Three tongkonan noble houses in a Torajan village.
The misunderstanding about what Mauss meant by "the spirit of the
gift" led some anthropologists to contrast "gift economies" with "market
economies," presenting them as polar opposites and implying that
non-market exchange was always altruistic. Marshall Sahlins, a well-known American cultural anthropologist, identified three main types of reciprocity in his book Stone Age Economics (1972). Gift or generalized reciprocity
is the exchange of goods and services without keeping track of their
exact value, but often with the expectation that their value will
balance out over time. Balanced or Symmetrical reciprocity occurs
when someone gives to someone else, expecting a fair and tangible
return - at a specified amount, time, and place. Market or Negative reciprocity
is the exchange of goods and services whereby each party intends to
profit from the exchange, often at the expense of the other. Gift
economies, or generalized reciprocity, occur within closely knit kin
groups, and the more distant the exchange partner, the more imbalanced
or negative the exchange becomes.
This opposition was classically expressed by Chris Gregory in his book "Gifts and Commodities" (1982). Gregory argued that
Commodity exchange is an exchange of alienable objects between people who are in a state of reciprocal independence that establishes a quantitative relationship between the objects exchanged… Gift exchange is an exchange of inalienable objects between people who are in a state of reciprocal dependence that establishes a qualitative relationship between the transactors" (emphasis added.)
Commodity exchange
Gift exchange
immediate exchange
delayed exchange
alienable goods
inalienable goods
actors independent
actors dependent
quantitative relationship
qualitative relationship
between objects
between people
Other anthropologists, however, refused to see these different "exchange spheres" as polar opposites. Marilyn Strathern, writing on a similar area in Papua New Guinea, dismissed the utility of the opposition in The Gender of the Gift (1988).
The relationship of new market exchange systems to indigenous
non-market exchange remained a perplexing question for anthropologists. Paul Bohannan
(see below, under substantivism) argued that the Tiv of Nigeria had
three spheres of exchange, and that only certain kinds of goods could be
exchanged in each sphere; each sphere had its own different form of
money. Similarly, Clifford Geertz's model of "dual economy" in Indonesia, and James C. Scott's model of "moral economy" hypothesized different exchange spheres emerging in societies newly
integrated into the market; both hypothesized a continuing culturally
ordered "traditional" exchange sphere resistant to the market. Geertz
used the sphere to explain peasant complacency in the face of
exploitation, and Scott to explain peasant rebellion. This idea was
taken up lastly by Jonathan Parry and Maurice Bloch, who argued in Money and the Morality of Exchange
(1989) that the "transactional order" through which long-term social
reproduction of the family takes place has to be preserved as separate
from short-term market relations.
In his classic summation of the gift exchange debate, Jonathan Parry
highlighted that ideologies of the "pure gift" (as opposed to total
prestations) "is most likely to arise in highly differentiated societies
with an advanced division of labour and a significant commercial
sector." Schrauwers illustrated the same points in two different areas in the context of the "transition to capitalism debate" (see Political Economy). He documented the transformations among the To Pamona of Central Sulawesi, Indonesia,
as they were incorporated in global market networks over the twentieth
century. As their everyday production and consumption activities were
increasingly commodified, they developed an oppositional gift (posintuwu)
exchange system that funded social reproductive activities, thereby
preserving larger kin, political and religious groups. This "pure gift"
exchange network emerged from an earlier system of "total prestations."
'Free gifts' of Posintuwu culminate in the exchange of bridewealth at a To Pamona wedding.
Similarly, in analyzing the same "transition to capitalist debate" in
early 19th century North America, Schrauwers documented how new,
oppositional "moral economies"
grew in parallel with the emergence of the market economy. As the
market became increasingly institutionalized, so too did early utopian socialist experiments such as the Children of Peace, in Sharon, Ontario,
Canada. They built an ornate temple dedicated to sacralizing the giving
of charity; this was eventually institutionalized as a mutual credit
organization, land sharing, and co-operative marketing. In both cases,
Schrauwers emphasizes that these alternate exchange spheres are tightly
integrated and mutualistic with markets as commodities move in and out
of each circuit. Parry had also underscored, using the example of charitable giving of alms in India (Dāna),
that the "pure gift" of alms given with no expectation of return could
be "poisonous." That is, the gift of alms embodying the sins of the
giver, when given to ritually pure priests, saddled these priests with
impurities that they could not cleanse themselves of. "Pure gifts" given
without a return, can place recipients in debt, and hence in dependent
status: the poison of the gift. Although the Children of Peace tried to sacralize the pure giving of
alms, they found charity created difficulties for recipients. It
highlighted their near bankruptcy and hence opened them to lawsuits and
indefinite imprisonment for debt. Rather than accept charity, the free
gift, they opted for loans.
Rather than emphasize how particular kinds of objects are either
gifts or commodities to be traded in restricted spheres of exchange, Arjun Appadurai
and others began to look at how objects flowed between these spheres of
exchange. They shifted attention away from the character of the human
relationships formed through exchange, and placed it on "the social life
of things" instead. They examined the strategies by which an object
could be "singularized"
(made unique, special, one-of-a-kind) and so withdrawn from the market.
A marriage ceremony that transforms a purchased ring into an
irreplaceable family heirloom is one example; the heirloom, in turn,
makes a perfect gift.
Singularization is the reverse of the seemingly irresistible
process of commodification. These scholars show how all economies are a
constant flow of material objects that enter and leave specific exchange
spheres. A similar approach is taken by Nicholas Thomas,
who examines the same range of cultures and the anthropologists who
write about them, and redirects attention to the "entangled objects" and
their roles as both gifts and commodities. This emphasis on things has led to new explorations in "consumption studies" (see below).
Cultural construction of economic systems: the substantivist approach
Non-market subsistence farming in New Mexico: household provisioning or 'economic' activity?
The opposition between substantivist and formalist economic models was first proposed by Karl Polanyi in his work The Great Transformation
(1944). He argued that the term 'economics' has two meanings: the
formal meaning refers to economics as the logic of rational action and
decision-making, as rational choice between the alternative uses of
limited (scarce) means. The second, substantive meaning, however,
presupposes neither rational decision-making nor conditions of scarcity.
It simply refers to the study of how humans make a living from their
social and natural environment. A society's livelihood strategy is seen
as an adaptation to its environment and material conditions, a process
which may or may not involve utility maximisation. The substantive
meaning of 'economics' is seen in the broader sense of 'economising' or
'provisioning'. Economics is simply the way members of society meet
their material needs. Anthropologists embraced the substantivist
position as empirically oriented, as it did not impose western cultural
assumptions on other societies where they might not be warranted. The
Formalist vs. Substantivist debate was not between anthropologists and
economists, however, but a disciplinary debate largely confined to the
journal Research in Economic Anthropology. In many ways, it reflects the common debates between "etic" and "emic" explanations as defined by Marvin Harris in cultural anthropology of the period. The principal proponents of the substantivist model were George Dalton and Paul Bohannan. Formalists such as Raymond Firth and Harold K. Schneider
asserted that the neoclassical model of economics could be applied to
any society if appropriate modifications are made, arguing that its
principles have universal validity.
For some anthropologists, the substantivist position does not go
far enough. Stephen Gudeman, for example, argues that the processes of
making a livelihood are culturally constructed. Therefore, models of
livelihoods and related economic concepts such as exchange, money or profit
must be analyzed through the locals' ways of understanding them. Rather
than devising universal models rooting in Western economic terminologies and then applying them indiscriminately to all societies, scholars must come to understand the 'local model'.
Stephen Gudeman and the culturalist approach
In his work on livelihoods, Gudeman seeks to present the "people's own economic construction" (1986:1); that is, people's own conceptualizations or mental maps of economics
and its various aspects. His description of a peasant community in Panama
reveals that the locals did not engage in exchange with each other in
order to make a profit but rather viewed it as an "exchange of
equivalents", with the exchange value of a good being defined by the
expenses spent on producing it. Only outside merchants made profits in
their dealings with the community; it was a complete mystery to the
locals how they managed to do so.
Gaining
a livelihood might be modelled as a causal and instrumental act, as a
natural and inevitable sequence, as a result of supernatural
dispositions or as a combination of all these.
— Gudeman 1986:47
Gudeman also criticizes the substantivist position for imposing their
universal model of economics on preindustrial societies and so making
the same mistake as the formalists. While conceding that substantivism
rightly emphasises the significance of social institutions in economic
processes, Gudeman considers any deductive universal model, be it
formalist, substantivist or Marxist, to be ethnocentric and tautological. In his view they all model relationships as mechanistic processes by taking the logic of natural science based on the material world and applying it to the humanworld.
Rather than to "arrogate to themselves a privileged right to model the
economies of their subjects", anthropologists should seek to understand
and interpret local models (1986:38). Such local models may differ radically from their Western counterparts. For example, the Iban use only hand knives to harvest rice. Although the use of sickles
could speed up the harvesting process, they believe that this may cause
the spirit of the rice to flee, and their desire to prevent that
outcome is greater than their desire to economize the harvesting
process.
Gudeman brings post-modern cultural relativism
to its logical conclusion. Generally speaking, however, culturalism can
also be seen as an extension of the substantivist view, with a stronger
emphasis on cultural constructivism, a more detailed account of local
understandings and metaphors of economic concepts, and a greater focus on socio-cultural dynamics than the latter (cf. Hann, 2000). Culturalists tend to be both less taxonomic and more culturally
relativistic in their descriptions while critically reflecting on the
power relationship between the ethnographer (or 'modeller') and the
subjects of his or her research. While substantivists generally focus on
institutions as their unit of analysis, culturalists lean towards
detailed and comprehensive analyses of particular local communities.
Both views agree in rejecting the formalist assumption that all human
behaviour can be explained in terms of rational decision-making and
utility maximisation.
Culturalism can be criticized from various perspectives. Marxists
argue that culturalists are too idealistic in their notion of the
social construction of reality
and too weak in their analysis of external (i.e. material) constraints
on individuals that affect their livelihood choices. If, as Gudeman
argues, local models cannot be held against a universal standard, then
they cannot be related to hegemonic ideologies propagated by the
powerful, which serve to neutralise resistance. This is further
complicated by the fact that in an age of globalization
most cultures are being integrated into the global capitalist system
and are influenced to conform to Western ways of thinking and acting.
Local and global discourses are mixing, and the distinctions between the
two are beginning to blur. Even though people will retain aspects of
their existing worldviews, universal models can be used to study the
dynamics of their integration into the rest of the world.
Householding
Entrepreneurs in "imperfect markets"
Inspired by a collection on "Trade and Market in the early Empires"
edited by Karl Polanyi, the substantivists conducted a wide comparative
study of market behavior in traditional societies where such markets
were embedded
in kinship, religion and politics. They thus remained focused on the
social and cultural processes that shaped markets, rather than on the
individual focused study of economizing behavior found in economic
analysis. George Dalton and Paul Bohannon, for example, published a collection on markets in sub-Saharan Africa. Pedlars and Princes: Social Development and Economic Change in Two Indonesian Towns by Clifford Geertz compared the entrepreneurial cultures of Islamic Java with Hinduized Bali in the post-colonial period. In Java, trade was in the hands of pious Muslims, whereas in Bali, larger enterprises were organized by aristocrats. Over time, this literature was refocused on "informal economies", those
market activities lying on the periphery of legal markets. Modernization theory
of development had led economists in the 1950s and 1960s to expect that
traditional forms of work and production would disappear in developing
countries. Anthropologists found, however, that the sector had not only
persisted, but expanded in new and unexpected ways. In accepting that
these forms of productions were there to stay, scholars began using the
term informal sector, which is credited to the British anthropologist Keith Hart in a study on Ghana
in 1973. This literature focuses on the "invisible work" done by those
who fall outside the formal production process, such as the production
of clothing by domestic workers, or those who are bound labourers in
sweatshops. As these studies have shifted to the informal sector of
western economies, the field has been dominated by those taking a political economy approach.
Neo-Substantivism and capitalism as a cultural system
While
many anthropologists like Gudeman were concerned with peasant economic
behaviour, others turned to the analysis of market societies. Economic sociologistMark Granovetter provided a new research paradigm (neo-substantivism) for these researchers. Granovetter argued that the neo-liberal
view of economic action which separated economics from society and
culture promoted an 'undersocialized account' that atomises human
behavior. Similarly, he argued, substantivists had an "over-socialized"
view of economic actors, refusing to see the ways that rational choice
could influence the ways they acted in traditional, "embedded" social
roles. Neo-Substantivism overlaps with 'old' and especially new institutional economics.
Actors do not behave or decide as
atoms outside a social context, nor do they adhere slavishly to a script
written for them by the particular intersection of social categories
that they happen to occupy. Their attempts at purposive action are
instead embedded in concrete, ongoing systems of social relations.
Granovetter applied the concept of embeddedness to market societies, demonstrating that even their, "rational" economic exchanges are influenced by pre-existing social ties. In his study of ethnic Chinese business networks in Indonesia, Granovetter
found individual's economic agency embedded in networks of strong
personal relations. In processes of clientelization the cultivation of
personal relationships between traders and customers assumes an equal or
higher importance than the economic transactions involved. Economic
exchanges are not carried out between strangers but rather by
individuals involved in long-term continuing relationships.
Money and finance
A
sample picture of a fictional ATM card. The largest part of the world's
money exists only as accounting numbers which are transferred between
financial computers. Various plastic cards and other devices give
individual consumers the power to electronically transfer such money to
and from their bank accounts, without the use of currency.
Special and general purpose of money
Early anthropologists of the substantivist school were struck by the number of "special purpose monies," like wampum and shell money,
that they encountered. These special purpose monies were used to
facilitate trade, but were not the "universal" money of market-based
economies. Universal money served five functions:
Medium of exchange: they facilitated trade
Unit of account: they are an abstract measure of value or worth
Store of value: they allow wealth to be preserved over time
Standard of deferred payment: they are a measure of debt
Means of payment: they can be used in non-market situations to pay debts (like taxes).
Special purpose monies, in contrast, were frequently restricted in
their use; they might be limited to a specific exchange sphere such as
the brass rods used by the Tiv of Nigeria in the early twentieth century
(see "spheres of exchange"
above). Most of this early work documented the effects of universal
money on these special purpose monies. Universal money frequently
weakened the boundaries between exchange spheres. Others have pointed
out, however, how alternative currencies such as Ithaca HOURS in New York state are used to create new community based spheres of exchange in western market economies by fostering barter.ized in the edited collection: Money and Modernity: State and Local Currencies in Melanesia. A second collection, Money and the morality of exchange
examined how "general purpose money" could be transformed into a
"special purpose money" - how money could be "socialized" and stripped
of its moral danger so that it abets domestic economies free of market
demands.
William Reddy undertook the same kind of analysis of the meanings
of monetary exchange in terms of the growth of Liberalism in early
modern Europe. Reddy critiques what he calls the "Liberal illusion" that
developed in this period, that money is a universal equivalent and a
principle of liberation. He underscores the different values and
meanings that money has for those of different classes.
David Graeber argues that the inefficiencies of barter in archaic society has been used by economists since Adam Smith to explain the emergence of money, the economy, and hence the discipline of economics itself. "Economists of the contemporary orthodoxy... propose an evolutionary
development of economies which places barter, as a 'natural' human
characteristic, at the most primitive stage, to be superseded by
monetary exchange as soon as people become aware of the latter's greater
efficiency." However, extensive investigation since then has established that "No
example of a barter economy, pure and simple, has ever been described,
let alone the emergence from it of money; all available ethnography
suggests that there never has been such a thing. But there are economies
today which are nevertheless dominated by barter."
Anthropologists have argued "that when something resembling barter does occur in stateless societies it is almost always between strangers, people who would otherwise be enemies." Barter occurred between strangers, not fellow villagers, and hence
cannot be used to naturalistically explain the origin of money without
the state. Since most people engaged in trade knew each other, exchange
was fostered through the extension of credit.Marcel Mauss, author of 'The Gift', argued that the first economic contracts were to not act in one's economic self-interest, and that before money, exchange was fostered through the processes of reciprocity and redistribution, not barter. Everyday exchange relations in such societies are characterized by
generalized reciprocity, or a non-calculative familial "communism" where
each takes according to their needs, and gives as they have.
Other anthropologists have questioned whether barter is typically between "total" strangers, a form of barter known as "silent trade".
However, Benjamin Orlove has shown that barter occurs through "silent
trade" (between strangers), but also in commercial markets as well.
"Because barter is a difficult way of conducting trade, it will occur
only where there are strong institutional constraints on the use of
money or where the barter symbolically denotes a special social
relationship and is used in well-defined conditions. To sum up,
multipurpose money in markets is like lubrication for machines -
necessary for the most efficient function, but not necessary for the
existence of the market itself."
Barter may occur in commercial economies, usually during periods
of monetary crisis. During such a crisis, currency may be in short
supply, or highly devalued through hyperinflation. In such cases, money
ceases to be the universal medium of exchange
or standard of value. Money may be in such short supply that it becomes
an item of barter itself rather than the means of exchange. Barter may
also occur when people cannot afford to keep money (as when
hyperinflation quickly devalues it).
Money as commodity fetish
Metal money fetishism: A political poster shows gold coin as the basis of prosperity. (ca. 1896)
Anthropologists have analyzed these cultural situations where
universal money is being introduced as a means of revealing the
underlying cultural assumptions about money that market based societies
have internalized. Michael Taussig, for example, examined the reactions
of peasant farmers in Colombia as they struggled to understand how money
could make interest. Taussig highlights that we have fetishized
money. We view money as an active agent, capable of doing things, of
growth. In viewing money as an active agent, we obscure the social
relationships that actually give money its power. The Colombian
peasants, seeking to explain how money could bear interest, turned to
folk beliefs like the "baptism of money" to explain how money could
grow. Dishonest individuals would have money baptized, which would then
become an active agent; whenever used to buy goods, it would escape the
till and return to its owner.
Schrauwers similarly examines a situation where paper money was
introduced for the first time, in early nineteenth century Ontario,
Canada. Paper money, or bank notes, were not a store of wealth; they
were an I.O.U., a "promisory note," a fetish of debt. Banks in the era
had limited capital. They didn't loan that capital. Instead, they issued
paper notes promising to pay that amount should the note be presented
in their office. Since these notes stayed in circulation for lengthy
periods, banks had little fear they would have to pay, and so issued
many more notes than they could redeem, and charged interest on all of
them. Utilizing Bourdieu's concept of symbolic capital, Schrauwers
examines the way that elite social status was converted into economic
capital (the bank note). The bank note's value depended entirely on the
public's perceptions that it could be redeemed, and that perception was
based entirely on the social status of the bank's shareholders.
Banking, finance and the stock market
More recent work has focused on finance capital and stock markets. Anna Tsing for example, analyzed the "Bre-X stock scandal" in Canada and Indonesia in terms of "The economy of appearances." Ellen Hertz, in contrast, looked at the development of stock markets in
Shanghai, China, and the particular ways in which this free market was
embedded in local political and cultural realities; markets do not
operate in the same manner in all countries. A similar study was done by Karen Ho on Wall Street, during the 2008 financial crisis. Her book, Liquidated: an ethnography of Wall Street, provides an insiders view of how "market rationality" works, and how it is embedded in particular kinds of social networks.
Bill Maurer
has examined how Islamic bankers who are seeking to avoid religiously
proscribed interest payments have remade money and finance in Indonesia.
His book, Mutual Life, Limited, compares these Islamic attempts
to remake the basis of money to local currency systems in the United
States, such as "Ithaca Hours." In doing so, he questions what it is
that gives money its value. This same question of what gives money its value is also addressed in David Graeber's book Towards an Anthropological Theory of Value: The false coin of our own dreams.
James Carrier has extended the cultural economic and
neo-substantivist position by applying their methods to the "science of
economics" as a cultural practice. He has edited two collections that
examine "free market" ideologies, comparing them to the culturally
embedded economic practices they purport to describe. The edited
collection, "Meanings of the market: the Free Market in Western
Culture", examined the use of market models in policy-making in the United
States. A second edited collection "Virtualism: A New Political
Economy," examined the cultural and social effects on western nations
forced to adhere to abstract models of the free market: "Economic models
are no longer measured against the world they seek to describe, but
instead the world is measured against them, found wanting and made to
conform."
The anthropology of corporate capitalism
Symbolic and economic capital
Similar insights were developed by Pierre Bourdieu, who also rejected the arguments of the new institutional economists.
While these economists attempted to incorporate culture in their
models, they did so by arguing that non-market "tradition" was the
product of rational maximizing action in the market (i.e., to show they
are the solution to an economic problem, rather than having deep
cultural roots). Bourdieu argued strongly against what he called RAT
(Rational Action Theory) theory, arguing that any actor, when asked for
an explanation for their behaviour will provide a rational post hoc
answer, but that excuse does not in fact guide the individual in the
act. Driving a car is an example; individuals do so out of an acquired
"instinct", obeying the rules of the road without actually focusing upon
them. Bourdieu utilized an alternate model, which emphasized how
"economic capital" could be translated into "symbolic capital" and vice
versa. For example, in traditional Mexican villages, those of wealth
would be called upon to fulfill "cargo offices" in the church, and host
feasts in honour of the saints. These offices used up their economic
capital, but in so doing, it was translated into status (symbolic
capital) in the traditional role. This symbolic capital could, in turn,
be used to draw customers in the marketplace because of a reputation for
honesty and selflessness.
Actor-Network theory
Michel Callon has spearheaded the movement of applying Actor–network theory
approaches to study economic life (notably economic markets). This body
of work interrogates the interrelation between the economy and
economics, highlighting the ways in which economics (and
economics-inspired disciplines such as marketing) shapes the economy
(see Callon, 1998 and 2005).
Ethnographies of the corporation
Corporations
are increasingly hiring anthropologists as employees and consultants,
leading to an increasingly critical appraisal about the organizational
forms of post-modern capitalism. Aihwa Ong's Spirits of resistance and capitalist discipline: factory women in Malaysia (1987) was pathbreaking in this regard. Her work inspired a generation of anthropologists who have examined the
incorporation of women within corporate economies, especially in the
new "Free trade zones" of the newly industrializing third world.Others have focused on the former industrialized (now rust-belt) economies. Daromir Rudnyckyj has analyzed how neo-liberal economic discourses have
been utilized by Indonesian Muslims operating the Krakatau Steel
Company to create a "spiritual economy" conducive to globalization while
enhancing the Islamic piety of workers. George Marcus has called for anthropologists to "study up" and to focus on corporate elites, and has edited a series called Late Editions: Cultural Studies for the End of the Century.
The National Grange, also known as The Grange and officially named The National Grange of the Order of Patrons of Husbandry,
is a social organization in the United States that encourages families
to band together to promote the economic and political well-being of the
community and agriculture. The Grange, founded after the Civil War in 1867, is the oldest American agricultural advocacy group with a national scope. The Grange actively lobbied state legislatures and Congress for political goals, such as the Granger Laws to lower rates charged by railroads, and rural free mail delivery by the Post Office.
In 2005, the Grange had a membership of 160,000, with
organizations in 2,100 communities in 36 states. It is headquartered in
Washington, D.C., in a building built by the organization in 1960. Many
rural communities in the United States still have a Grange Hall and
local Granges still serve as a center of rural life for many farming
communities.
History
The commissioner of the Department of Agriculture commissioned Oliver Kelley, after a personal interview with President Andrew Johnson, to go to the Southern states and to collect data to improve Southern
agricultural conditions. In the South, poor farmers bore the brunt of
the Civil War and were suspicious of Northerners like Kelley. Kelley
found he was able to overcome these sectional differences as a Mason.
With Southern Masons as guides, he toured the war-torn countryside in
the South and was appalled by the outdated farming practices. In the
western states, Kelley deplored the lack of "progressive agriculture",
with illiterate "ignorant" farmers who were "using a system of farming
[that] was the same as that handed down by generations gone by". He saw the need for an organization that would bring people together
from across the country in a spirit of mutual cooperation. After many
letters and consultations with the other founders, the Grange was born. The first Grange, Grange #1, was founded in 1868 in Fredonia, New York. Seven men and one woman co-founded the Grange: Oliver Hudson Kelley, William Saunders, Francis M. McDowell, John Trimble, Aaron B. Grosh, John R. Thompson, William M. Ireland, and Caroline Hall. In 1873 the organization was united under a National Grange in Washington, D.C.
Paid agents organized local Granges and membership in the Grange
increased dramatically from 1873 (200,000) to 1875 (858,050). Many of
the state and local granges adopted non-partisan political resolutions,
especially regarding the regulation of railroad transportation costs.
The organization was unusual at this time, because women and any teen old enough to draw a plow (aged 14 to 16)
were encouraged to participate. The importance of women was reinforced
by requiring that four of the elected positions could be held only by
women.
1967 U.S. postage stamp honoring the National Grange
Rapid growth infused the national organization with money from dues, and many local granges established consumers' co-operatives, initially supplied by the wholesaler Aaron Montgomery Ward.
Poor fiscal management, combined with organizational difficulties
resulting from rapid growth, led to a massive decline in membership. By
the turn of the 20th century, the Grange rebounded and membership
stabilized.
Grange
membership has declined considerably as the percentage of American
farmers has fallen from a third of the population in the early 20th
century to less than two percent today. Between 1992 and 2007, the
number of Grange members fell by 40%, largely due to the National Grange
no longer offering insurance for its members. Washington has the largest membership of any state, at approximately 13,000.
In 2022, the National Grange reported a net gain in membership for the first time in almost seven decades.
As of 2024, the Grange continues to press for the causes of farmers, including issues of free trade and farm policy. In its 2006 Journal of Proceedings,
the organization's report on its annual convention, the organization
lays out its mission and how it works towards achieving it through
fellowship, service, and legislation:
The Grange provides opportunities
for individuals and families to develop to their highest potential in
order to build stronger communities and states, as well as a stronger
nation.
In February 2024, the National Grange revised their Mission Statement:
Strengthening individuals,
families, and communities through service, education, nonpartisan
grassroots advocacy, and agricultural awareness.
As a non-partisan organization, the Grange supports only policies,
never political parties or candidates. Although the Grange was founded
to serve the interests of farmers, because of the shrinking farm
population the Grange has begun to broaden its range to include a wide
variety of issues, and anyone is welcome to join the Grange.
The Junior Grange is open to children 5–14. Regular Grange
membership is open to anyone age 14 or older. The Grange Youth, a group
within the Grange, consists of members 13 1/2 to 30.
In 2013, the Grange signed on to a letter to Congress calling for the doubling of legal immigration and legalization for undocumented immigrants
currently in the United States. However, this position has been
somewhat revised, and the Grange now emphasizes an expansion in the H-2A visa
program to increase legal immigration and address the crisis-level
labor shortage in agriculture. They support the enforcement of
immigration law but urge discretion with regard to the impact on labor
availability.
Rituals and ceremonies
Grange in session, 1873
When the Grange first began in 1867, it borrowed some of its rituals and symbols from Freemasonry, including oaths, secret meetings, and special passwords necessary to keep railroad spies out of their meetings. It also copied ideas from Greek, Roman and Biblical mythology. Small,
ceremonial farm tools are often displayed at Grange meetings. Elected
officers are in charge of opening and closing each meeting. There are
seven degrees of Grange membership; the ceremony of each degree relates
to the seasons and various symbols and principles.
During the last few decades, the Grange has moved toward public
meetings and no longer meets in secret. Though the secret meetings do
not occur, the Grange still acknowledges its rich history and practices
some traditions.
Organization
The Grange is a hierarchical organization ranging from local
communities to the National Grange organization. At the local level are
community Granges, otherwise known as subordinate Granges. All members are affiliated with at least one subordinate. In most
states, multiple subordinate Granges are grouped together to form Pomona Granges.
Typically, Pomona Granges are made up of all the subordinates in a
county. Next in the order come State Granges, which is where the Grange
begins to be especially active in the political process. State Masters
(Presidents) are responsible for supervising the administration of
Subordinate and Pomona Granges. Together, thirty-five State Granges, as
well as Potomac Grange #1 in Washington, D.C., form the National Grange.
The National Grange represents the interests of most Grangers in
lobbying activities similar to the state, but on a much larger scale. In
addition, the National Grange oversees the Grange ritual. The Grange is
a grassroots organization; virtually all policy originates at the subordinate level.
The motto of the Grange is In necessariis unitas, in dubiis libertas, in omnibus caritas
("In essentials, unity; in non-essentials, liberty; in all things,
charity"). Indeed, the word "grange" comes from a Latin word for grain,
and is related to a "granary" or, generically, a farm.
William M. Ireland (???–1891), Founder of the National Grange. First Treasurer of the National Grange
Oliver Hudson Kelley
(1826–1913). Agriculturalist, organizer. Primary founder of the Order
of Patrons of Husbandry. First Secretary of the National Grange
Evander M. Law (1836–1920). Confederate general and organizer of the Alabama Grange
David Lubin
(1849–1919), California. Founder of the California Fruit Growers Union
and U.S. delegate to the International Institute of Agriculture
William Saunders
(1822–1900). Botanist, landscaper, designer of Soldiers Cemetery in
Gettysburg, PA. Founder of the National Grange. First Master/President
of the National Grange
