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a203-11f-13-EmbeddedExchange - Introduction to Cultural...

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Introduction to Cultural Anthropology: Class 13 Economic exchange embedded in social relations Copyright Bruce Owen 2011 - In our culture, we assume that people are “ rational actors ” or “ rational maximizers - rational: behave in a logical sensible way - maximizer: intention is to maximize material gain - classical capitalist market theory assumes that - people have infinite wants and limited means - so they rationally allocate limited resources to alternative ends - in order to maximize the satisfaction of their needs - each actor intends to maximize his or her benefit in every exchange (or over a series of exchanges) - people are never satisfied, always striving for ever more gain - Anthropologists say that this classical theory of exchange is not universal - this concept that people are “rational maximizers” is just an arbitrary social construct - even though it seems so normal and obvious to us - some people simply do not show unlimited wants - they act satisfied with what they have, and don’t bother to try for more - like the Ju/’hoansi, or some people I met in Peru - other models of behavior are just as possible - “Rational comparative maximizer”: do enough to have slightly more than others, then stop - “Rational goal seeker”: do enough to satisfy certain goals, then stop - “Rational work minimizer”: do as little work as possible - “Irrational conformist”: do whatever others do, regardless of its effect on own needs - and many other models are possible… - Economists respond that classical market theory can handle all of these alternative models - by saying that what people rationally maximize is not just material wealth, but “utility” - utility is the total of everything that a person values, including both material goods and non-material things - includes free time, sleep, liberty, friendship, sex, honor, “job satisfaction”, etc. - even the satisfaction of being a conformist - if we include the right things in “utility”, then maybe everyone really does strive to be a rational maximizer of all those complex values - example: someone chooses to work a low-paying, half-time teaching job - an economist might say that this person is still a rational maximizer - she simply values free time highly - and values the satisfaction of doing what she considers important work - so she is maximizing her overall utility - by getting less pay, but more free time and personal satisfaction - but in practice, economists almost always focus only on material gain - non-material utility is too difficult to measure and model - so economists usually ignore it
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Intro to Cultural Anthro F 2011 / Owen: Economic exchange embedded in social relations p. 2 - another problem with classical economic theory: people are not very good at actually maximizing utility, no matter how it is defined - people often make irrational decisions, swayed by emotion - make decisions based on insufficient information - overestimate immediate costs and benefits while underestimating future costs and benefits
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