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Economic Anthropology: The Three Forms of Economic Exchange

several piles of coins

One of the many topics that Cultural Anthropology studies is economics. There is even a subfield of Cultural Anthropology called Economic Anthropology, and it studies the economic behavior of cultures around the world. One of the things Economic Anthropology focuses on is the ways that goods and services are exchanged in different cultures. Methods of exchange can be grouped into three major types: reciprocity, redistribution, and market. Let’s take a brief look at each of these forms of exchange.

Reciprocity

Reciprocity is an informal give and take between people who know each other and are about equal in terms of power and status. This give and take of goods is part of their continuous social relationship, and the exchange creates and maintains their relationship. An example of reciprocity is giving a friend a gift for their birthday and expecting a gift from them in return on your own birthday.

There are three forms of reciprocity: generalized reciprocity, balanced reciprocity, and negative reciprocity. In generalized reciprocity, you give someone something but you don’t expect something equal in return at a specific time in the future. For example, a parent who gives their child shelter and food, or pays for their education, does not expect the child to actually pay them back. Usually, the parents expect some kind of assistance in return when they become elderly. Here’s another example. In hunting and gathering societies, a hunter who kills a large animal keeps some meat for his family and distributes the rest among his relatives. Then, if the hunter is unsuccessful in the future, he can expect others to share their kill with him and his family.

two hands holding a gift wrapped in gold paper with a gold bow

In balanced reciprocity, you give someone something and you expect something fairly equal in return at some point. Here’s an example. In Oaxaca, Mexico, men are supposed to sponsor at least one celebration, but each event involves too much for a single man to provide, due to the amount of food and entertainment expected. So, when a man sponsors an event, he asks his family, friends, and neighbors for help in paying for the expenses. Then, when it is their turn to host a celebration, they will expect the man to repay them.

With negative reciprocity, you give something but expect to receive more value than you actually give. In this form of exchange, you want to obtain things with as little cost to yourself as possible. The most common form of negative reciprocity is bartering and is usually practiced between strangers.

Redistribution

In redistribution, people in a group contribute goods or money into a common pool. Then, a central authority reallocates the pooled resources among the group. The people in the group may or may not be in social relationships with each other, but they all are in a relationship with the central authority. An example of redistribution is when you receive a paycheck from employment in the United States. The federal, state, and/or local governments take some of the wages that you earned through taxes. Then, the governments use the money collected for the benefit of the group (like building roads) or to benefit those in need (like supporting the elderly).

One type of redistribution is called chiefly redistribution or tribute. This is when people contribute things, usually food, into a common pool that is controlled by a chief. The chief’s family gets some of the pooled food, and the rest is distributed. For example, some of the pooled food can be given to those who specialize in making crafts rather than producing food, such as weavers and potters. Also, the pooled food can be given back to the whole group through public feasts and celebrations.

Several coins and some paper money

Market

With a market exchange, goods and services are sold for money. Then the money earned is used to buy other goods and services. In this form of economic exchange, the people involved don’t need to know each other, and the exchange process is less personal. You are probably most familiar with this type of exchange, but it is important to note that this type of exchange did not exist for most of humanity’s past, and may not exist in some traditional cultures.

Learn More

Want to learn more about the three forms of economic exchange? Check out this page of Palomar College’s website.

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