Chapter 7.docx

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10 Apr 2012
Chapter 7
Definition of Economy
- Refers to the kinds of decisions people make when they have only limited resources or wealth
and there are unlimited goods and services they would like to acquire or use
- Economizing refers to the choices people make that they believe will provide the greatest
benefit to them
- An economy refers to the activities people engage in to produce and obtain goods and services
- Economics is embedded in the social process; production is carried out in families and
communities and distribution, exchange and consumption have social and political functions
- Cultural traditions shape the specific motivations for producing, exchanging, and consuming
goods and servicesdifferent cultures value different goods and services and tolerate or
prohibit different kinds of relationships among the people who produce, exchange and consume
- Humans either directly consume the products of their labor or they distribute it by means of
- Exchange is the practice of giving and receiving valued objects and services
- Generalized reciprocity involves mutual giving and receiving among people of equal status in
which there is 1) no need for immediate return and 2) no systematic calculation of the value of
the services and products exchanged and 3) an overt denial that a balance is being calculated or
that the balance must come out even
- Some individuals will come to enjoy reputations as diligent gathers or hunters, whereas others
will acquire reputations as shirkers or malingerers
- Reciprocal exchanges are expressed as kinship obligationsthey establish reciprocal
expectations with respect to food, clothing, shelter and other goods
- Balanced reciprocity involves the expectation that goods or services of equivalent value will be
returned within a specified period of time
- Involves a more formal relationship in contrast to generalized reciprocity among family
membersthe motivation for balanced reciprocity is that it forges and maintains relationships
that can be utilized in times of need and enables people to gain access to goods or services that
are either regionally or periodically in short supply
- Silent trade is when the objects to be exchanged are set out in a clearing and the first group
retreats out of sight
- More extensive trade relations occur between agricultural villagestrade based on marketing
and all-purpose money is associated with the evolution of the state and with the use of soldiers
and market police to enforce peaceful relations between buyers and sellers
- The kula ring is a system of exchange in the Trobriand Islands,where trading partners from
different islands take risky voyages to exchange shell ornaments around the ring of islands;
white cowrie shell armbands are traded in a counterclockwise direction and red shell necklaces
are traded clockwise
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