System of exchange
Reciprocity
The oldest mode of exchange is Reciprocity which is used in
egalitarian societies, like that of the Ju/’hoansi. There are three different
types of reciprocity: generalized, balanced, and negative reciprocity.
Generalized reciprocity is an exchange where return isn't
expected right away and the value of this return isn’t specified. This is based
on the assumptions that all exchange balances out, like that between family
members. This is largely based on trust.
Balanced reciprocity (or also known as Symmetrical
reciprocity) is when exchange is made with the expectations that those who give
an amount will get the same in return. This, unlike generalized reciprocity,
has a specified time limit as to when the return should be made. The
Ju/’hoansi, who use reciprocity in their societies in all forms, use balanced
reciprocity. They distinguish between what they barter, which requires
immediate balanced exchange (this is similar to our shopping experiences, where
it's expected that money will be immediately exchanged for goods). With in the
Ju/'hoansi, this also includes hxaro, which establishes that this exchange
entitles obligations between the two in the future.
Negative reciprocity is when a party tries to exchange
without having to give up any value, which is the opposite of balanced
exchange. "This can range from haggling prices to outright seizure."
Reciprocity, the most ancient mode of exchange, was the
exchange of goods and services of equal value. Generalized reciprocity can be
defined as when the individuals involved just assume that the exchange will
balance out. Nothing is expected immediately and a value of return is not
established before the exchange is made. This type of reciprocity occurs often
between parents and children. Balanced reciprocity, the opposite of
generalized, is when a specific value of return and under an established time
limit is expected. This exchange can be found between those in relationships.
For example, when boyfriends and girlfriends exchange gifts of equal value and
expect the same in return at Christmas. Negative reciprocity is the exchange of
goods or services when at least one party attempts receive something for
nothing in return without suffering consequences. This type of reciprocity can
involve haggling or in some cases seizure.
Redistribution
Redistribution is a mode of exchange that involves some sort
of centralized social organization. Members of a group contribute items such as
food, money, clothing, etc. to the central organization, and the organization
then redistributes the items to the members of the group.
Redistribution can occur on a small scale or a very large
scale. A small scale example of redistribution is a class party. Each person is
assigned something to bring – chips, salsa, pop, brownies, napkins, utensils,
etc. On the day of the party, everyone brings in their items to share with each
other. The Salvation Army is a good example of a rather medium-sized scale of
redistribution. The Salvation Army collects money, clothing, household goods,
cars, and even airline miles to redistribute to those in need. A large scale
example of redistribution is the Internal Revenue Service. The IRS collects
taxes from citizens and redistributes the money throughout our governmental system,
to education, post offices, road construction, and the like.
Salvation Army in Lausanne
One widespread local example of redistribution is church
potlucks. For special events, several churches hold potlucks. Every family who
comes brings a single dish – anything from veggie trays to fried rice to potato
salad. All the dishes are placed together in a central area, and when everyone
has arrived, the congregation can eat a meal together from the assortment of
dishes.
Another example of this is under Big Man/Big Woman political
groupings in the South Pacific where the leader, chosen by favor, is in charge
of general affairs, and collects a certain sum (i.e. a pig) from their group
and redistributes it. This gives the Big Man/Big Woman the label of generous,
although they personally don’t give any more than anyone else. This is also an
example of the tradition of potlatch, where group members all give goods to
one, who evenly distributes these goods among the community. The main point of
this is to redistribute wealth.
Redistribution requires some form of centralized social
organization. Those who own the central position of the organization receive
economic contributions from all members of the group. With the contributions
they receive from all members of the group they redistribute those goods to all
the members of the groups in fair amounts to meet the needs of every member of
the group. A potlatch is a good example of redistribution. When people go an
event and are provided with food they then take that food and redistribute it
to all members of their family or some kind of group they belong to. An example
of this is the indigenous Americans of the northwest coast of North America.
This is a very common mode of exchange among tribes and groups in all part of
the world. It is a fair and normally well organized mode of exchange and valued
by the members of most tribes and groups.
Potlatching
Potlatches are ceremonies held by First Nations peoples on
the Pacific Northwest coast of the United States and Canadian province of
British Columbia such as the Haida, Tlingit, Salish and Kwakiutl
(Kwakwaka'kawakw). The potlatch takes the form of a ceremonial feast
traditionally featuring seal meat or salmon. In it, hierarchical relations
between groups were observed and reinforced through the exchange of gifts and
other ceremonies. The potlatch is an example of a gift economy, whereby the
host demonstrates their wealth and prominence through giving away their
possessions and thus prompt participants to reciprocate when they hold their
own potlatch. Although this sort exchange is widely practiced across the planet
(consider, for example, the Western practice of buying one's friends rounds of
drinks), the Northwest Coast potlatch is of a massive scale, and also served to
redistribute goods from coastal to inland ecological zones.
The native peoples of the Northwest Coast of North America
institutionalized this ceremonial redistribution of food and gifts. The
southern Kwakiutl people were the most elaborative on this custom until 1904
when the potlatch was outlawed, however the ceremony did continue to be
practiced in many societies. In 2004, the Tlingit clan members re-enacted the
ritual in Sitka, Alaska, for the 100th Anniversary Commemoration of "The
Last Potlatch". The clan members dressed in traditional Tlingit attire and
practiced Tlingit traditions for the two day long celebration. Watercolour by
James Gilchrist Swan (1818-1900) of the Klallam people of chief Chetzemoka
(nicknamed 'the Duke of York'), with one of Chetzemoka's wives (nicknamed
'Jenny Lind') distributing 'potlatch' at Port Townsend, Washington, USA
Market Exchange
Market Exchange is used in Capitalist societies and is the
most recently developed mode of exchange. Market exchange is the trade of goods
that are calculated in value based on a standard of value and typically money,
which are carried out by the market. Although trade and money were developed
independently, they are used together to create market exchange. This is
generally used in the Western societies, in places such as, Europe and the
United States.
Modes of exchange are the patterns involving the three
distribution techniques: reciprocity, redistribution, and market exchange.
Exchange can either be balanced or unbalanced.
Balanced Exchange: Exchange with no short or long term
marginal gain (profit).
Unbalanced exchange: Exchange where profit or marginal gains
are the end goal.
Market Exchange was invented by the capitalist society that
uses an economic system in which wealth, and the means of producing wealth, are
privately owned and controlled rather than commonly, publicly, or state-owned
and controlled. It is where currency exchange takes place. It is where banks
and other official institutions facilitate the buying and selling of foreign
currencies. Trade, money, and market institutions developed independently and
were not invented to work together. Capitalism is unique because the three
(trade, money, and market) ended up working together. This was first done in
the societies of early modern Europe. It is said that different modes of
exchange often co-exist within a single society meaning that each society has
their own way of operating and exchanging good in their day-to-day lives.
For example, in the United States we use the market mode or
exchange, but you can still find redistribution and reciprocity. Reciprocity if
you recall is the most ancient mode of exchange, was the exchange of goods and
services of equal value and redistribution requires some form of centralized
social organization. In families in the U.S., most parents have and income and
then redistribute that income to their children and loved ones. Parents using
their income to buy their children food and clothing without expecting return
is an example of reciprocity. Some people believe that you cannot properly
understand the exchange process without first fully understanding the
production process. People who meet exchange have different resources to use
when bargaining with one another, and it is said that these differences in
resources are not shaped by the market but by the productive process.
As consumers, it is also important to take into account what
kind of trade or exchange you are supporting with your purchase. Take a highly
consumed north-west product, a cup of coffee. Like any product there is a story
about where it came from. In this case there is the farmer, the distributor,
and the company which you are buying it from. Is the coffee fair trade? Does it
support organic farming? It is good to know what kind of exchange in which you
are participating, but also important to know if your dollar is being spread
out in a way that you think is appropriate.
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