Chapter 7

Exchange and Economic Systems

Chapter Outline Reciprocity Redistribution Market Exchange

 Reciprocity Individuals or groups pass objects back

and forth with the aim of:

1. Helping someone in need by sharing goods.

2. Creating, maintaining or strengthening social relationships.

3. Obtaining objects for oneself.

Reciprocity

Redistribution Collection of goods or

money from a group followed by a reallocation to the group by a central authority.

Market Products are sold for

money which is used to purchase other products, with the goal of acquiring more money and/or accumulating more products.

Three Types of Reciprocity General - parents and children Balanced -birthday gift exchanges Negative - barter

Generalized Reciprocity The giving of goods without expectation

for return of equal value at any definite time in the future.

Balanced Reciprocity The exchange of goods considered to

have roughly equal value; social purposes usually motivate the exchange.

Negative Reciprocity Exchange motivated by the desire to

obtain goods, in which both parties try to gain all they can from the exchange while giving up as little as possible.

Reciprocity and Social Distance Reciprocity changes as relationships change. Changing the form of reciprocity can change the

nature of the relationship. Social distance is the degree to which cultural

norms specify that two individuals or groups should be helpful to, intimate with, or emotionally attached to one another.

Redistribution Provides goods, services and assistance to

individuals and groups in need. Common conflicts over who should provide the

resources and how much should be given to those who collect and distribute them.

Those who make decisions about redistribution often use resources for themselves.

Tribute The rendering of goods (typically

including food) to an authority such as a chief. 

Requirements for Market Exchange Some object to use as a medium of exchange

(money). A rate at which goods exchange for money

(prices). Parties to exchanges who have alternative

buyer or sellers and are free to make deals (supply and demand).

Most resources are privately owned (private property)

Money Serves as a media of exchange Serves as a standard of value Also a store of value Has symbolic significance (social status) Durable and divisible Controllable Portable

Limited-purpose Money Money that may be used to purchase only

a few kinds of goods.

Market Economies Whole economy is based on market principles Most goods and services can be bought and

sold Most people make their living selling

something on the market Factors of production are allocated by the

market Economy is self-regulating

Peasant Marketplaces Less dependent on market forces. Categories of products sold are limited. Producing and marketing goods for profit

are part-time activities for many vendors. Peasant vendors usually sell products

they or their family members produce.

Quick Quiz

1. The one type of economic system found in all human populations is:

a) redistribution

b) reciprocity

c) market

d) all of the above

Answer: b

The one type of economic system found in all human populations is reciprocity.

2. Negative reciprocity:

a) is like market exchange without using money

b) is usually motivated by the desire to obtain material goods at minimal cost

c) can take the form of barter

d) all of the above

Answer: d

Negative reciprocity includes all of these features: it is like market exchange without using money, it is usually motivated by the desire to obtain material goods at minimal cost, and it can take the form of barter.

3. Which of the following is not a requirement of market exchange?

a) money or money objects

b) prices

c) governmental regulation of prices

d) prices determined by supply and demand

Answer: c Market exchange requires money or

money objects, prices, and that prices are determined by supply and demand, but does not require government regulation of prices.