University of the Philippines Cebu
College of Social Sciences
Anthro 181
Lecture Notes. Economic organization: gifts, reciprocity and exchange
A. The meaning of economic
Substantive meaning versus the formal meaning of economic (Polanyi, 1953)
Substantive meaning – the provision of material goods
Formal meaning – the pattern of choices between alternative uses of insufficient means;
this meaning is used as the framework for the investigation of economics
in social sciences; said choices involved the allocation of scarce
resources such as time, material, or energy to alternative ends
What, then, is economics – a type of behavior or a study of an aspect in behavior?
B. Economic organization
This is an organization by which goods and services are produced and allocated (means) to serve given
ends. Both organizational means and ends are a function of social, cultural, environmental, and human
physiological factors and vary from society to society. When and how the resources of the environment
are exploited are influenced by technological knowledge, cultural values and social organization.
Economic organization is one aspect to the ordering of group life, delegating responsibilities and
privileges in such a way that ideally all members will have at least the material necessities of life .
C. The issue of universal economic goals
The concept of economizing and rational behavior can be ascertained and evaluated in context by
determining local goals and measuring means against those goals. The belief that all peoples everywhere
intrinsically desire the same basic economic goals as those manifested by Americans, and that they will
develop economically or at least strive to develop economically if only given aid and opportunity is often
questioned by anthropologists.
D. The institutions of production and consumption
What and how goods are produced and their manner of distribution are bound up in social values as well
as in technology. It is assumed that an individual as a rational being constantly works to maximize her/his
gains which is measured in material goods. But what behavior is this when we frequently exchange gifts
for which neither the recipient nor the giver have any feasible use? Or, in home sewing and knitting –
these are inefficient means of production. Much more cadillacs – these are extravagant consumers of
irreplaceable natural resources. And so with warehouses that are stacked with unsaleable goods because
they are out of fashion.
Values of social status, personal relations, aesthetics, and the satisfactions of creative activity pervade our
system of economics. For these reasons economic organization viewed cross-culturally varies
enormously, yet all institutions of production and consumption are based on choices among possible
alternative uses of available resources and performance of services. Religious, social, and aesthetic values
modify and are modified by the economic system.
E. Typology of economic organizations
a. According to the means of allocation of goods and services
Karl Polanyi, an economic historian, divided the means of allocation into three categories –
reciprocity, redistribution and market exchange. An economic system may use all three methods.
Reciprocity is the dominant mode of allocation in small communities. This uses pre-existing, relatively
non-hierarchical social relationships, established for a wide variety of non-economic purposes. Reciprocal
distribution is not governed by whim. For example, the Bushman hunters share their giraffe with the
understanding that their generosity would be reciprocated. Redistribution is the systematic movement of
goods toward an administrative center and a reallotment of these goods by authorities. This method of
allocation is dependent on, or is an outgrowth of a social organization that has a hierarchical ranking.
Market exchange is the exchange of goods and services according to impersonal forces of supply and
demand. Market exchange includes use of multi-purpose money, and requires the establishment of a legal
authority able to enforce contracts – voluntary agreements between individuals.
b. by the manner by which society structures the division of labor
Economic organization directs production and distribution of goods utilizing the division of labor and the
concept of ownership. Division of labor is based on any combination of the principles of differentiation,
age, sex/gender, kin, caste and class, and special skills.
c. by the concept of property
This concept is universal in human societies. Common and private ownership is recognized with varying
emphasis. But what may be owned and by whom varies from one society to another. Even the transfer of
ownership shows considerable cultural variation. Anthropologists are more interested in the rights and
privileges that are associated with ownership. Property rights are the rights to possess, enjoy and dispose
of things and ideas. Property rights also include rights over people. Slavery is the most obvious example.
In a society based on patrilineal descent a man has a right to his wife’s reproductive capacity. Marriage
partners may have rights to each other’s labor and to the labor of their children.
Economic organization is subject to social control. The concept of property as rights and duties explains
why a large number of conflicts concerning goods and services are basically economic in nature.
A.P. Talam ‘21
Condensed from
“C. C. Kelsey and Pertti J. Pelto. 1967. Economic Organization. Guide to Cultural Anthropology.”
