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Unformatted text preview: Chapter 7 – Economic Systems Anthropologists study the means by which goods are produced, distributed, and consumed in the context of the total culture of particular societies. Although they have adopted theories and concepts from economists, most anthropologists understand that theoretical principles derived from the study of capitalist market economies have limited applicability to economic systems where people do not produce and exchange goods for profit. In nonindustrial societies there is always a division of labor by age and gender, with some additional craft specialization. Land and other valuable resources are usually controlled by groups of relatives, and individual ownership is rare. Production takes place in quantity and at the time required, and most goods are consumed by the group that produces them. Leveling mechanism: to ensure that no one accumulates significantly more goods than anyone else. Distribution and Exchange The money economy of industrial societies involves a two-step process between labor and consumption. The money received for labor must be translated into something else before it is directly consumable. In societies with no such medium of exchange, the rewards for labor are usually direct. The workers in a family group consume what they harvest; they eat what the hunter or gatherer brings home, and they use the tools they themselves make. But even where there is no formal medium of exchange, some distribution of goods takes place. Karl Polanyi, an Austrian economic historian who immigrated to North America, classified the cultural systems of distributing material goods into three modes: market exchange, redistribution, and reciprocity . These principles can all be present in the same society, and one of them usually dominates, however, they govern different kinds of transactions. The principle of exchange that dominates in a given society is the one that allocated the means of production. Market Exchange: In today’s world capitalist economy, the market principle dominates. It governs the distribution of the means of production: land, labor, natural resources, technology, and capital. Market exchange refers to the organizational process of purchase and sale at money price. With market exchange, items are bought and sold; using money, with an 1 eye to maximizing profit, and the value is determined by the law of supply and demand (things cost more the scarcer they are and the more people want them)....
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