Economic Theory and Economic Anthropology

Author(s): Edward E. LeClair, Jr.

Source: American Anthropologist , Dec., 1962, New Series, Vol. 64, No. 6 (Dec., 1962), pp.
1179-1203
Published by: Wiley on behalf of the American Anthropological Association

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Economic Theory and Economic Anthropology

EDWARD E. LECLAIR, JR.

Rensselaer Polytechnic Institute

EXACTLY 40 years ago, Bronislaw Malinowski published the book which

was to have a powerful influence on the study of the economies of "primi-
tive" peoples (Malinowski 1922). The influence was mixed. Malinowski did
succeed in calling the attention of anthropologists to the fact that a considera-
tion of the economic activities of nonliterate peoples required the consideration
of much beyond their technologies. But his disdainful comments on what he
conceived to be then contemporary economic thinking convinced many anthro-
pologists that they had little to learn from conventional economics.
Nearly 20 years later, Raymond Firth and Melville J. Herskovits inde-
pendently sought to establish the respectability of economic theory in the eyes
of anthropologists (Firth 1939; Herskovits 1940, 1952). Their view, which Firth
sought to demonstrate with his materials from Polynesia, and which Hersko-
vits sought to demonstrate with materials culled from a massive body of
ethnographic material, was succinctly stated by Herskovits in the following
terms:

Considerations of sound analysis dictate that no comparison between our own and other
economies be attempted without full realization of the effect on the main lines of economic de-
velopment and the shaping of economic institutions exerted by the presence of a machine tech-
nology, the invasion of the evaluation process by pecuniary considerations, and the high develop-
ment of business enterprise.
Yet, practically every economic mechanism and institution known to us is found somewhere
in the nonliterate world ....
The distinctions to be drawn between literate and nonliterate economies are consequently
those of degree rather than of kind (1952:487-88).

Although the point is difficult to demonstrate, it seems clear that ethno-

graphic work in the last 20 years has been heavily influenced by this point of
view. A handful of major economic studies (see Belshaw 1955, Foster 1942,
and Tax 1953, for example), plus a number of shorter papers, reveal the impact
of this position. But the full weight of the approach manifests itself in more
subtle ways: in the altered organization, the new interpretation or phrasing, or
the shift of emphasis that is to be found scattered through the ethnographic
literature of the last 20 years.
In the last few years it has become apparent that a systematic reexamina-
tion of the position expressed by Herskovits was necessary. The postwar
interest in the problem of economic development of under-developed areas has
posed a number of new questions for research to answer. In addition, the in-
sights gained in the past 20 years provide the material which is needed to make
such a reexamination fruitful.

1179

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1180 A merican A nthropologist [64, 1962

The results of such a reexamination could take us in one of two directions,

one evolutionary and one revolutionary, or, more properly, counter-revolu-
tionary.

An evolutionary development would leave the basic positio

Changes would involve a refinement of concepts and furthe
analytical techniques. A revolutionary development would
stitution of a new basic premise.
In a recent paper, George Dalton has stated the revolution
1961).1 In this paper, I propose to offer a rebuttal to Dalto
offer the case for an evolutionary development.

CRITIQUE OF DALTON'S POSITION

Dalton's basic point is that there are" . . . important differences between
primitive market economy and Western market industrialism which makes
formal economic theory incapable of yielding analytical insights when applied
to primitive structures" (pp. 19-20). And, "Primitive economy is different
from market industrialism not in degree but in kind" (p. 20).
Entirely apart from the fact that Herskovits has expressed an apparently
well-founded contrary view, a judgment as sweeping as this is prima facie
suspect. Nowhere does Dalton explicitly define the terms: "primitive market
economy," "primitive structures," or "primitive economy." They are im-
plicitly defined as non-Western, nonmarket, and nonindustrial. Whatever the
definition, Dalton's assertion requires that these economies be assumed to
have a high degree of similarity and unity in respect to those characteristics
which are important for this issue. The weight of ethnographic evidence
strongly suggests that such an assumption is not warranted. (See Tax and
Mednick 1960.)
The foregoing questions only the extent to which Dalton's general
is valid. It is also necessary to consider whether the generalization
validity at all, and, if so, the conditions under which it may be valid. In o
to examine this question, we must turn to the line of reasoning which
offers in support of his generalization.
Space does not permit a point-by-point consideration of Dalton's argum
However, the core of the argument turns on a single fundamental is
nature and scope of economics-and by extension, of economic anthro
as well. In addition, several minor points require comment.

On the Nature and Scope of Economics

Throughout his discussion, Dalton equates "economic" (in one sense

term) with "material." Thus, we are told: "Especially significant in th
of the classicists was the delineation of purely 'economic' motivation (
self gain) as both necessary and sufficient to induce laborers to conf
market needs" (p. 3).
Then, in discussing "two meanings of economic," the substantive a
formal, Dalton paraphrases Polanyi's definition as follows: "In the sub

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LECLAIR] Economic Theory and Anthropology 1181

sense, economic refers to the provision of material goods which satisfy bio-
logical and social wants" (p. 5).
Polanyi's own statement of the distinction is worth quoting in full:
The substantive meaning of economic derives from man's dependence for his livelihood upon
nature and his fellows. It refers to the interaction with his natural environment, insofar as this
results in supplying him with the means of material want satisfaction.
The formal meaning of economic derives from the logical-character of the means-ends relation-
ship, as apparent in such words as "economical" or "economizing." It refers to a definite situation of
choice, namely, that between the different uses of means induced by an insufficiency of the means.
If we call the rules governing choice of means the logic of rational action, then we may denote this
variant of logic, with an improvised term, as formal economics.

The two root meanings of economic, the substantive and the formal, have nothing in com
The latter derives from logic, the former from fact (Polanyi, 1953, as reprinted in Fried 1959: 162).

Whatever may have been the view of classical (19th century) economists,
contemporary economists have long since adopted a broader view of the nature
of human wants. Consider the following: " . . . there is a loose sense of the
word utilitarian, implying a prosaic attachment to material ends, which has
passed into common English" (Brinton 1948:197).
George Stigler has outlined the main assumptions underlying contemporary
economic theory in the following terms:
First, it is assumed that individuals (or, more properly, the heads of family units) have specific
and complete information concerning the things they desire. By things we mean general ends of
activity, such as the satisfaction of hunger and the attainment of prestige . . .
Second, it is assumed that consumers know the technical means by which these general ends
may be attained. More specifically, we are to know of the effects of pork chops on hunger and
physical efficiency, and of a new car on our neighborhood position.
Third, it is assumed that consumers utilize their information in such a way as to maximize the
attainment of the ends they desire. This assumption is known, somewhat notoriously, as the con-
cept of an "economic man." . . . The concept of an "economic man" does not imply (as almost all
of its critics state) that the individual seeks to maximize money or wealth, that the human soul is a
complex cash register. It does not affect the formal theory ... in the least whether the individual
maximizes wealth, religious piety, the annihilation of crooners or his waistline (1946:63-64).2

Other economists have made the same point in a variety of ways. Machlup,
for example, insists that the fact "That a business man is motivated by con-
siderations other than the maximization of money profits does not necessarily
make his conduct 'uneconomic'" (1946:526).3
In short, economists no longer believe, if they ever did, that human wants
are confined, in market societies, to material wants, nor do they assume this
to be true of any society. Nor is an assumption of the materialistic nature of
human wants a necessary element in contemporary economic theory.
The issue posed by these two differing views of economics-and "economic"
-concerns the scope of economics, although neither Polanyi nor Dalton
phrases the issue in these terms. In short, we may ask why there is a "felt
need" for a substantive definition of economics.
As stated, Stigler's propositions do not imply or require that "economizing
calculation ... be confined to the creation, distribution, or use of material
goods" (Dalton p. 7). Therefore, there may be problems of economizing with
respect to, let us say, authority, or prestige, or religious merit; "goods and

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1182 A merican A nthropologist [64, 1962

services" may include the services of the ritual specialist, the political special-
ist, or the esthetic speicalist; in short, the purview of economics may extend
to all human wants, rather than merely to material wants. If so, economics
would seem to be a general social science concerned with the totality of social
life.
This conclusion makes most social scientists acutely uncomfortable. It
seems to deprive noneconomists of the integrity of their disciplines, and it
appears to impose upon economists responsibilities which they are not pre-
pared to accept. From a practical point of view, it is an entirely unreliable
guide to what economists actually do or may do.
The latter point suggests that a substantive definition of economics is
desirable. But we must first note that the imperialistic implications of the
formal concept are more apparent than real. To suggest that economics may
logically concern itself with all of social life does not imply that economics can
satisfactorily explain all of social life. Certainly, no logical basis for such a view
can be established.
But, if an economist, regarded as a specialist in the study of the economiz-
ing process, can offer useful or valid insights into the allocation of authority
there would seem to be no good reason why he should not be expected to do so
By the same token, if the political scientist can offer useful and valid insight
into the operation of business firms by studying the mobilization, validat
and application of authority, again there is not good reason why he should no
be expected to do so. If the notion of interdisciplinary research in the so
sciences has any meaning, surely it means precisely this: that representat
of two or more disciplines, observing phenomena from different points of vi
or employing different frames of reference, join forces to explain that which
no one of them can adequately explain by himself.
We have already quoted Polanyi's substantive definition. Later he says:
"The empirical economy . .. can be briefly. . . defined as an institution-
alized process of interaction between man and his environment, which secures
him material want satisfaction" (Polanyi, 1953, as reprinted in Fried 1959:
166).
The use of the word "material" in these statements either restricts the
scope of the concept unduly, or it is meaningless. Polanyi defines want satis-
faction as "material" "if it directly or indirectly involves the use of material
means to satisfy ends" (loc. cit.). By this definition, the following situations
or activities are examples of "material want satisfaction": a performance of
the New York Philharmonic-the instruments; a Kwakiutl potlatch-the
coppers and blankets; gaining religious merit in Burma-a gift of grain to a
Buddhist priest; gaining prestige in East Africa-building up a large herd
of cattle: "the expression of a loving mother's devotion"-feeding the child;
a funeral in Dahomey-goods are buried with the deceased; a wedding in
North India-the bride brings a dowry to her husband's family; an assignation
among the Siriono-the male gives the female some meat; the Kula ring
activites-canoes, armbands, bracelets, etc.

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 LECLAIR] Economic Theory and Anthropology 1183

All of the foregoing, and the list could be expanded almost without end,
suggests that the use of the term "material" in the various definitions is
meaningless, since it fails significantly to restrict the range of phenomena
admitted as "economic."
Dalton's statement of the substantive concept appears more restrictive,
since it "refers to the provision of material goods which satisfy. . . wants"
(p. 5). Thus the "provision" of musical instruments would come within the
purview of substantive economics, but their use in a performance would not.
More generally, this implies that substantive economics includes only the
fabrication, collecting, transport, storage, or other manipulation of material
things, where the objective is to make them available for use for whatever
purpose. Interpreted literally, this would exclude from the purview of sub-
stantive economics the whole realm of services: personal services of all kinds
and most of the professions. All of these things become the occasion for market
transactions. On these grounds alone, this interpretation is too restrictive.
If these definitions of the "substance" of economics do not serve, what will?
I have long since abandoned efforts to formulate a definition of the actual
scope of economics which is both accurate and succinct. My best approxima-
tion is the question-begging statement that "economics is what economists
do." Less accurate but more informative is the proposition that economists
concern themselves largely with economizing as a social process and with those
organizations, institutions, and groups which have specialized functions in
relation to that process. In practice, this has meant a primary concern with
market institutions together with other things to the extent that they have an
influence on the market. Further accuracy of definition can be secured only
by abandoning any effort at succinctness. However, an appreciation of many
of the nuances of the foregoing can be secured by skimming any standard
introductory economics text.
It is essential to recognize the ad hoc character of any definition of this sort.
In particular, a definition of this kind cannot become the basis for deductions
concerning either the nature of economic systems or of the scope of the dis-
cipline.

The natural history of any discipline involves steady expansion of its scope,
and it is at the frontiers of a discipline that a definition of this kind becomes
least adequate. And while I prefer to regard economic anthropology as a
sub-discipline of anthropology, it can equally well be regarded as a frontier
sub-discipline of economics, one which must explore for itself, and de novo, its
own proper scope.

The Meaning of Scarcity

Part of Dalton's case for the inapplicability of economic theory to primi-

tive societies turns on the concept of scarcity.
The concept of scarcity is a central one in contemporary economics, for it
is possible, if not customary, to define economics as the study of the conse-
quences of scarcity, and of man's individual and social efforts to adjust to the

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1184 A merican Anthropologist [64, 1962

fact of scarcity. Samuelson points out that if there were "no economic goods,
i.e., no goods that are relatively scarce . . . there would hardly be any need
for a study of economics, of 'economizing' " (1958:17). "Scarcity," as econo-
mists use the term, means simply that goods are not freely available-all
economic goods are scarce by definition.
Dalton argues as follows: "If man's material wants are insatiable, then
scarcity of enabling means exists by definition . . . [But this] obtains only in a
society which places great value of material acquisition relative to other goal
attainments, and whose institutional structure impels its members to behave
accordingly.... It is not so ... that the postulates of scarcity and economiz-
ing calculation are of universal relevance" (p. 5). The foregoing implies that
there is no scarcity of the means which are appropriate to "other goal attain-
ments." But Dalton does not specify what "other goal attainments" he has
in mind, nor the means which may be appropriate to them, nor does he identify
any particular society in which the postulates of scarcity and economizing
calculation are irrelevant. Consequently, the basis for his statement cannot be
evaluated.

The economists' concept of marginal utility gives precision to the concep

of scarcity. If a "good"-and the term is defined to include anything, whethe
tangible or intangible, which may satisfy a human want-is available i
sufficient quantity that its marginal utility is zero, then that good may b
said not to be scarce. If such a good is available in such quantities without th
expenditure of resources, then it is a "free good." Of the goods which are n
free, their scarcity or nonscarcity depends on the availability of the resources
necessary to produce them, on the productivity of those resources, and on the
desires or wants for the goods as reflected in the marginal utility schedules
There is a great deal of evidence which suggests that the "wants" for som
goods, notably the tangible goods which give sustenance, are expandable onl
to a limited degree. (Hence the proposition that the "demand" for agricultur
goods is inelastic.) But there is a great deal of additional evidence to sugges
that other wants are capable of expansion and elaboration without limit. Th
flowering of culture which seems more or less inevitably to accompany a basic
solution to the food-producing problem in any society represents the most
general kind of support for this proposition.
The general pattern of needs and wants, including relative priorities, ca
be inferred for any society by examining the allocation of resources, although
the inference cannot be drawn in as straightforward a manner as might b
supposed. It takes no more than a superficial examination of a number of
such patterns to realize that the elaborations over the physiological needs
include both "material" and "nonmaterial" wants in all societies. What also
becomes apparent is that all needs-wants are mutually competitive, in tha
there is at least one category of means which is common to all. That categor
is human energy-what the economist refers to as "labor."
Thus we may restate the postulate of the universality of scarcity in the
following terms: that men everywhere are confronted with the fact that their

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LECLAIR] Economic Theory and Anthropology 1185

aspirations exceed their capabilities. This being the case, they must everywhere
economize their capabilities in the interest of meeting their aspirations to the
fullest extent possible.
Despite the foregoing, it must be recognized that there may be societies
in which there is no scarcity, as the term has been defined here. If such societies
exist, there will be no need for economizing, and a study of the "economy"
will consist of a study of the technology plus a study of what we may call the
sociology of production.

Markets and Market Places

Dalton makes two points on the subject of markets which require com-
ment. One is in connection with the "materialistic" character of "economic,"
the other concerns markets themselves.
On the first, Dalton says: "What should be emphasized is that it is market
organization which compels its participants to seek material self-gain: each
must sell something of market value to acquire the material means of exist-
ence" (p. 2).
Market organization is a particular kind of organization the purpose of
which is to facilitate a particular kind of social interaction, namely, the ex-
change of goods and services. As such, it compels nothing beyond an adherence
to its own rules and conventions. One of the conventions in most markets
(but not all) is that transactions be made in terms of some medium of exchange
(money). This means that anyone who wishes to offer something for sale in
the market must expect to receive money for it, whether it is a bushel of
wheat, a year's services as a college professor, or a book manuscript. By the
same token, if you wish to purchase something in the market, you must expect
to offer money for it whether it is a ticket to a concert, a dozen eggs, or a
session with a psychoanalyst. It is also true, and inherent in the nature of
the market organization, that the principal or only way that most people
can secure the money necessary to buy things is to sell something first. The
only other ways to get money are to receive it as a gift or a loan, with the
latter simply begging the issue, or to steal it.
It is rather unfortunate that money income has come rather loosely to be
regarded as "material self gain," regardless of what it may be spent for.
Dalton's second point on markets deals with their character. In attempting
to show that apparently similar mechanisms which occur in both Western and
primitive societies are actually different, Dalton asserts: "... in economic
anthropology the term 'market' always is used to mean 'market place': an
actual site wherein goods change hands by purchase and sale.... In Western
economy, the term market is applied not only to specific market place sites . . .
but also to the diffusive economic forces of market exchange ..." (p. 14).
The first part of the foregoing statement is true, the second part is rather
badly stated. Many economics texts fail to give a concise definition of the
term "market." Those that do emphasize, in one way or another, its inter-
actional aspect. The following are representative: "A market is usually defined

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 1186 A merican Anthropologist [64, 1962

as a group of buyers and sellers actively trading in a more or less homogeneous

commodity" (Evans 1950:245). Or, " 'The market,' as we use the term, is a
set of pressures exerted by actual or potential buyers and sellers for a total
of related transactions" (Harriss 1953:36-37).
It is clear that a distinction must be made between a "market," as defined
above, and a "market place." We may then speak of a market as being "site-
confined" or "site-free." In the first case, it is necessary for the buyers and
sellers to be physically present in a particular place to "exert pressure" on
the price. In the second case, this necessity does not arise, although a market
place may exist in which most or all actual transactions do take place. Most
markets in the United States are "site-free," although some markets may
not be.

Dalton appears to infer, from anthropological use, that all "primitive"

markets are site-confined. Although few anthropologists have considered
markets with the foregoing distinction in mind, it is clear that many "primi-
tive" markets are not site-confined, and I suspect that many which appear to
be are not.
Three examples may establish the point:
1) The markets in and around Panajachel, Guatemala. Tax is at great
pains to demonstrate how and to what extent the Indians of Panajachel keep
themselves posted on price variations in and around their village and act
accordingly (Tax 1953:13-19).
2) The wholesale-retail produce markets around Abomey, Dahomey. The
market women know what prices must be paid at different wholesale farms,
the farmers in turn keep themselves informed concerning the retail prices in
the market and act accordingly (Herskovits 1938:1:56-62).
3) The "market" for armbands and necklaces which constitute the Kula
Ring. Although any particular transaction is a matter of bilateral bargaining
between a pair of trading partners, each one has a series of alternatives in
mind, as well as detailed knowledge about the past history of transactions
surrounding each item (Malinowski 1922:passim).

On Economists and Anthropologists

Dalton asserts that "... the difference- in economic organization and

processes between [primitive and Western economic systems] are more impor-
tant than the similarities, especially so on matters of interest to the anthro-
pologist" (p. 10). Then, after discussing the interests of anthropologists at
some length, Dalton sums up with the assertion that "Economists are not
concerned with technology, social institutions, or physical environment" (p.
11). This is in contrast to anthropologists, who are interested not only in
these but in many other things as well. Having made this judgment, Dalton
immediately qualifies it: "Technology, physical environment, and social in-
stitutions are of interest only in special instances: when they affect the
economic variables in which the economist is interested" (p. 11). And, "On
the rare occasion when the economist considers kinship, religion, or govern-

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LECLAIR] Economic Theory and Anthropology 1187

ment, he does so only for a special purpose: when they have significant impact
on economic quantities ..." (p. 11).
Several points must be made concerning these arguments:
1) There should be nothing surprising in the discovery that economists and
anthropologists have different interests.
2) If there is any difference in the interests of economists and economic
anthropologists-regarded as a special branch of anthropology-it lies in the
fact that the economist focuses his attention on Western society, the economic
anthropologist on non-Western society. Both are presumably interested, by
definition, in the structures and functioning of economic systems.
3) There is nothing surprising in the notion that economists are interested
in technology, physical environment, social institutions-or anything else-
only to the extent that they constitute significant variables in the economic
process. It is standard scientific practice to consider only those variables which
are believed to be relevant to the matter under study. Economic anthropolo-
gists are-or should be-subject to the same rules. That they should be is
sometimes obscured by two facts: a) economic anthropologists are always
general anthropologists as well; b) as general anthropologists, they have an
interest in the interrelation between the economic systems and the other sub-
systems in the total socio-cultural system, an interest few economists share.
4) If there is a difference between the economic anthropologist and the
economist in these matters, it lies in the economists' willingness (possibly
excessive) to assume the irrelevance of "noneconomic" variables and in the
economic anthroplogists' willingness (possibly excessive) to assume that prac-
tically everything is revleant.

Concluding Remarks on Dalton

Several more general points and a number of additional specific criticisms
could be made of Dalton's paper and the views it reflects. Generally, while
rightly calling attention to the danger of allowing superficial similarities to
mask fundamental differences, Dalton commits what I regard to be a more
grievous error: allowing superficial differences to mask fundamental sim-
ilarities.

TOWARD A NEW APPROACH TO ECONOMIC ANTHROPOLOGY

Earlier in this paper, it was argued that an evolutionary development of

economic anthropology now seems possible. Raymond Firth has outlined the
objectives of such a development in the following terms: '. . . what is re-
quired from primitive economics is the analysis of material from uncivilized
communities in such a way that it will be directly comparable with the material
of modern economics, matching assumption with assumption and so allowing
generalizations to be ultimately framed which will subsume the phenomena of
both civilized and uncivilized, price and nonprice communities into a body
of principles about human behavior which will be truly universal" (1939:29).
Fulfillment of such an objective requires something more than the application

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1188 American Anthropologist [64, 1962

of conventional concepts to unconventional situations. What is required in-

stead is a search for the general theory of economic process and structure of
which contemporary economic theory is but a special case.
At the present time, the existence of such a general theory can only be
postulated. Nevertheless, there are good grounds for doing so. While the
ethnographic literature is a record of the diversity of human experience, it
also provides witness to the existence of characteristically human problems
met in characteristically human ways. Were this not so, scientific anthropology
could not exist as a generalizing discipline.
If such a general theory exists, it must underlie and be implicit in the
special case. Accordingly, the search for such a theory logically can, and
practically should, begin with the available special case. But it must be
recognized that: 1) the general case may be obscurely buried in the specific
details of the special case; 2) any tentative formulation of the general theory
based entirely upon the single special case must be suspect until verified by
other materials. In practice, such verification must accompany the formulation
of the general case. Finally, the formulation of the general case will: 1) assist
in the formulation of the large number of special cases which must be formu-
lated to cover the varied economies to be found in the real world, and 2)
permit controlled and systematic comparisons among all the special cases,
including that of the Western market economy.
It would be premature to attempt to give even a tentative outline of a
general theory of economic process. The following is intended to indicate
what appears to me to be a promising approach to the problem of formulating
such a general theory.4 Some of the bases for the approach to be offered have
already been indicated in the discussion of Dalton's paper. In order to insure
consistency and clarity, the essential points will be repeated. In what follows,
key propositions will be italicized; explanation and discussion will not be.

Some Basic Concepts and Definitions

Economics is the study of economizing.
Economizing is the allocation of scarce resources among alternative ends.
This proposition contains a redundancy the nature of which is indicated
in the following proposition.
Resources subject to allocation are scarce by definition; resources are not scarce
if they exist in such abundance as not to require allocation.
What constitutes a suitable operational definition of "subject to alloca-
tion" will vary from circumstance to circumstance. No effort to consider the
possibilities will be made here.
"Wants" are defined as anything which human beings may desire or need.
The "ends" among which resources may be allocated are defined as the satis-
faction of the various wants human beings may have.
One end is an alternative to another only in relation to the resources which
may be used to satisfy them; they are alternatives when one or more of the re-
sources which may be employed to satisfy one may also be used to satisfy the other.

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LECLAIR] Economic Theory and Anthropology 1189

It may be noted that the fundamental human resource is human energy.

I find it difficult to imagine any human want being satisfied without the ex-
penditure of human energy. However, this does not warrant the assumption,
although it does create the expectation, that there are no human situations in
which the necessity for economizing is totally absent.

"Goods" or "goods and services" include anything (but not merely any "thi
which may be used to satisfy a human want. Such "goods" may be either tan
or intangible.
"Production" is any activity which utilizes resources for the purpose of c
ing or providing goods, or making them available, where such activity is a n
sary or desirable condition of availability. Production includes any an
activity which has this purpose or result.
Goods were defined first, and production was defined in terms of goods
does not involve any circularity at this point to define goods in relatio
production. This becomes useful and necessary because some things are
duced which are not used directly to satisfy human wants. Rather, the
used as an adjunct to production activity. Hence, the following definiti
necessary:
"Goods" which are not used directly to satisfy human wants, but are used
an adjunct to production activity, shall be referred to as "capital goods."5
Capital goods cannot be defined in terms of the properties of goods th
selves, but rather in terms of the manner of their use. A particular thing m
at some times be used as a capital good, at other times, it may be used direct
to satisfy a human want.
"Consumption" is the direct utilization of a good in the satisfaction of huma
wants. Consumption is also an activity.
Consumption activities may be inseparable from production activities in
some circumstances. Thus, to cite a trivial case, a man picking berries and
eating them as he picks them is engaging in an activity which is simultaneously
production and consumption. While it would be fruitless to attempt to dis
tinguish that part of the activity which peculiarly constitutes production from
that part which peculiarly constitutes consumption, the conceptual distinc
tion is best retained. A rather different and less trivial case is illustrated b
the public performance of a symphony by an orchestra. Here, the productio
activity and the associated consumption activity are quite distinct, but the
must occur simultaneously.
A number of additional propositions could be advanced, propositions
which would amplify or clarify those already made. Much more could be said
in explanation, or to show the practical or operating significance of these
concepts. However, we must turn to another aspect of the problem.

Economizing as a Social Process

All of the propositions advanced so far could apply to the economists'
favorite hermit: Robinson Crusoe. However, hermitry is an exceptional state
of affairs for human beings, and, while we may wish, from time to time, to

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1190 A merican Anthropologist [64, 1962
consider economizing in its individual aspects, we will ordinarily be more con-
cerned with economizing as it involves groups of people. For the time being,
at least, we will consider economizing as a "social" process only inasmuch as
it may involve human interaction of one sort or another. We shall see presently
that, in fact, economizing may be a social process in a much more fundamental
sense.

It is customary to speak of "economic systems." In accordance wit

ous definitions, such systems have as their function the provision o
procedures for resolving economizing problems which are social, a
the sense mentioned above. The approach to the study of economic s
to be proposed here grows out of the consideration of two question
implications of the notion that we are dealing with an economic sy
what are the detailed functions of an economic system.6
The idea that any society has an economic system implies that the or
tions, institutions, practices, and beliefs of the society which are c
with economic processes are something more than an unstructured a
To postulate the existence of a system is to postulate first that a n
identifiable entities stand in some structural relationship to each other.
system is a dynamic or operating one, it also implies that the parts
dynamically to yield a "systemic" outcome. The understanding of a
system requires an understanding of the structural articulation of
ponents of the system; it also requires an understanding of how the com
events of the dynamic process articulate to produce the systemic o
It follows from earlier propositions that the general function of an e
system is to provide an orderly mechanism for "social economizin
now useful to consider whether this general function may be resolv
series of interrelated specific functions-to determine what social eco
problems exist. While there is no unanimity among economists concerni
specific functions of economic systems, there is fairly general agre
three of them, and these may be used as the basis for further discu
three are as follows:7
1) To determine what goods are to be produced and in what relative
quantities. This is the problem of the product mix.
2) To determine how these goods shall be produced-where the issue con-
cerns the relative proportions of the "factors of production" (land, labor, and
capital). This is the problem of factor proportions.
3) To determine how the total output of goods and services shall be shared
among the members of the society. This is the problem of distribution of
product.8
Once the functions of a dynamic system are defined, it becomes possible
to make useful statements about the specific objectives of any intended
analysis. In this case, it is clear that the systemic outcome would be expressed
as statements concerning the identity and quantities of goods produced, the
manner in which they are produced, and how they are shared among the
members of the society: e.g., what each individual's "income" is. Such state-

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LECLAIR] Economic Theory and Anthropology 1191

ments can be made from a number of points of view, most of which are
mutually complementary. Space does not permit an exploration of the possi-
bilities.

Components of an Economic System

The components of an economic system are individuals or groups of indi-
viduals when such groups are organized in some way. They fall into two
clearly definable classes: production units on the one hand, and consumption
or income-pooling units on the other.
A "production unit" is any individual or group of individuals engaged in or
organized for the purpose of engaging in productive activity.
A production unit may consist of a single individual, or of thousands of
individuals standing in an elaborate organizational relationship with each
other-as for example in the case of a large American corporation. Production
units may differ in a number of dimensions besides size, including the follow-
ing: basis for recruitment of members, whether its productive functions are
generalized or specialized, whether it has functions other than productive
functions, its degree of permanence, and its internal organization.9 The term
"production unit" as used here is roughly analogous to the economists' term
"business firm." More properly, a "business firm" is a particular institutional
form that a production unit may take. While production units may differ
within wide limits with respect to a number of variables, differences among
such units within a particular system may be confined to a smaller number of
variables and to a narrower range of limits. In short, we can expect to find
cultural patterning in the forms and scope of production units.
A "consumption unit" (income-pooling unit) may consist of a single indi-
vidual, or of a group of individuals, who pool their incomes for consumption pur-
poses, sharing the pooled income among the members of the group without reference
to production considerations.
The terms "consumption unit" and "income-pooling unit" may be used
interchangeably and are roughly equivalent to the term "household" as used
by the economist. The terms suggested here are more descriptive, however.
Kinship appears to be the universal basis for the establishment of con-
consumption units, and indeed, such units are ordinarily identical to family
units as such units are defined in the society in question. Thus, consumption
units seem always to consist of monogamous or polygamous nuclear families,
or of conjugal or consanguine joint families. This basic situation may be
qualified in a number of respects. First, units having large numbers of mem-
bers may demonstrate incomplete income pooling so that the unit may be
seen as an aggregate of more or less closely-linked sub-units. Second, income
may regularly be shared between or among units as the occasion may require.
Third, there are situations in many societies where, as a result of cultural defini-
tion or because of the inherent characteristics of the situation, income may be
communally consumed. All of these will be found to represent variations on a
basic theme, however.

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1192 A merican A nthropologist [64, 1962

If the components of an economic system fall into two classes, the struc-
tural articulation of the system involves three possible classes of relationships:
1) relationships between or among consumption units; 2) relationships between
or among production units; and 3) relationships between consumption units
and production units. I do not believe that these relationships can be described
in purely structural terms. That is, it does not seem possible to describe the
structure of an economic system without making some statements, either ex-
plicit or implied, about associated social processes. Indeed, the units them-
selves are defined in terms of certain processes. We must therefore now con-
sider economic processes.

Processes of an Economic System

The economic process involves three classes of events: production events,
utilization events, and transfer events.
A "production event" is an act or series of acts the result or intended result of
which is to make goods or services available for utilization.
The terms "production event" and "production" are not strictly synony-
mous. A production event may consist of a single act or a series of acts which
are productive in intent. The production of a usable good may consist of a
single production event, or a series of them. In general, a production event
will be considered to have "terminated" when the "product" is given final
form, or when an intermediate form becomes the subject of a transfer event.
(See below.)
Reference to "intent" in the foregoing is designed to emphasize the fact
that a production event may be abortive. A hunter who returns empty-handed
must be considered nevertheless to have been engaged in productive activity.
It may be necessary, of course, to distinguish between those production events
which have the intended outcome and those which do not. One important
datum for any system may well be the ratio between the two.
A "utilization event" is the utilization of a good or service. It may be a "con-
sumption event": the utilization of goods for the direct satisfaction of human wants,
or a "capital consumption event": the utilization of goods for productive purposes.
Production events and capital consumption events occur in or are carried
out by production units; consumption events occur in or are carried out by
consumption units.
Transfer events cannot conveniently be defined without prior discussion.
The idea of a transfer event rests on the fact of rights in or control over
utilizable goods or services. Such rights almost always come into being when
production takes place. They may be defined in various ways, may be circum-
scribed, conditioned, limited, or otherwise modified by custom, convention, or
circumstance, but I know of no society in which they do not regularly arise and
are not regularly recognized.
A "transfer event" shifts control over, or rights in, an economic good from one
individual to another or from one group to another.
Transfer events include such things as giving, bestowing, borrowing, lend-

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LECLAIR] Economic Theory and Anthropology 1193

ing, sale-purchase, barter, exchange, theft,10 and appropriation. It is s

events which provide the links between and among units in the structure of
economic system.

The Structure of an Economic System

Assuming that it is possible to devise symbolic-schematic devices for
describing the structure of an economic system, two kinds of resultant mode
may be constructed for any system. Descriptive models are those in wh
an attempt is made to identify the specific units which exist, as well as descr
ing all of the structural links among them. If such models are further expand
to take account of actual events over a period of time-if, in short, the
namic functioning of the system is depicted-the result would be a high
specialized sociometric diagram. In an abstract-analytical model-the seco
possible type-the effort is made to express the fundamental properties
the system. Such a model could also be expanded to take account of the
dynamic processes involved. In any case, the structural articulation of
system may be described, at some convenient level of abstraction, in term
production units and their internal structure, of consumption units and t
internal structure, and in terms of the kinds of transfer events which link t
units together.

The Systemic Outcome and Its Determinants

The economic system and its processes are not an autonomous isolate
although, to this point, we have been discussing it as though it were. T
structure of the system, the characteristic forms of its components, and
specific nature of the associated processes will be determined or influenced by
a host of environmental, cultural, and social variables. The nature of th
relationships that are involved can best be indicated by considering how
systemic outcome for the three functions may be influenced by the m
variables.

Product Mix: The natural environment may influence what is produced in

a number of ways. In particular, the environment contains within it a set of
opportunities and associated limits. Put simply, this means that the environ-
ment, merely through the presence or absence of certain "raw materials" o
natural characteristics, makes it possible or impossible to produce certain
goods. The Plains Indians could not orient their subsistence around salmon
fishing, nor could the Northwest Coast tribes hunt bison. In a similar fashion,
the environment might lay down requirements: the Polar Eskimo could not
survive without producing goods suitable for protecting them from the cold
These opportunities, limits, and requirements are not absolute, nor are
they strictly independent variables among themselves. The joint presence of
two raw materials may make possible the production of something which
would be impossible in the absence of either one of them. And that part of
culture which is summed up in the term "technology" obviously plays a rol
in translating potentialities into realities. Pottery cannot be made in the ab

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1194 A merican Anthropologist [64, 1962

sence of suitable clays; their presence does not guarantee that pottery will be
made. An outstanding example of the operation of factors of this kind is the
acquisition of the horse by the Plains Indians. With horses, they were able to
exploit, in a decidedly new fashion, the bison that had always been there.
And, of course, the whole history of mankind is a record of the development of
techniques for greater and greater mastery of the potentialities of the environ-
ment.n.
The combination or interaction of these two variables result in the exist-
ence of certain "production possiblities." For any given range of production
possibilities, the goods which will be produced will be influenced by "con-
sumer preferences": the sum total of wants and the relative intensity of the
desire/need for various things. While it may be assumed that idiosyncratic
differences in preferences are to be found everywhere, it is also clear that
consumer preferences are culturally patterned. Furthermore, the range of such
preferences must be limited by experience, which in turn depends upon what
is possible. Finally, although there are many cases in which the range of choice
is severely restricted, there are few, if any, cases in which there is no possibility
for exercising choice.
One more determinant of the product mix must be mentioned: the economic
system itself. Insofar as the system constitutes or provides a mechanism for
converting consumer preferences into production decisions, it may influence
the outcome of the process. Not every economic system has this capability;
market systems do, and others may. What this means is that for any given set
of production possibilities and any given set of consumer preferences, a change
in the system would produce a change in the product mix.
Thus, we see that the product mix may depend upon four classes of varia-
bles: 1) environmental opportunities, limitations, and requirements; 2)
technological possibilities; 3) consumer preferences; 4) the economic system
itself. These variables are themselves interdependent to some degree, and, of
course, the specific variables which apply in any specific case may differ widely
from those which apply in another.
Factor Proportions: This problem, as defined by economists, is one which
assumes that there are known alternative possibilities in the design of produc-
tion events., To discuss this problem here in adequate detail would take us far
afield. I will simply assert that environmental and technological variables may
play a role in the solution of this problem, and, in some cases, the system will
also. In addition, want-like preferences concerning desirable or undesirable
activity may also be important in the final outcome. As before, the specific
variables and their relative importance, as well as the functional interrelation
among them, will var~ from case to case.
Distribution of/lroduct: If, and only if, every member of a society were pro-
ductive and fully self-sufficient in the satisfaction of his wants, the problem of
distribution of product would not exist. Since every viable society must have in
it members who are not productive-even if they are only children and in-

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LECLAIR] Economic Theory and Anthropology 1195

fants-it is a universal problem, the only one of the three for which an a priori
case for universality can be made. In practice, sharing exists universally be-
cause differential productivity of the members of a society is also universal.
In considering the problem of the sharing of total product, we may dis-
tinguish between the "system" of distribution and the pattern of distribution.
The system of distribution consists of the methods and devices by which the
share to be allocated to each individual is determined and perhaps also by
which the share is placed in his control. The pattern of distribution is the result
of the determination and can be expressed as lists of quantities of goods going
to different individuals or groups of individuals. The system of distribution
could be either determinate or indeterminate. A determinate system would be
one in which, if the system were known, and the total quantities of all kinds of
goods were known, the pattern could be predicted with great accuracy; an in-
determinate system is one in which, perhaps because individuals are given op-
tions concerning what they will do with goods, the pattern of distribution can-
not be predicted accurately, although it may be possible to predict it within
certain definable margins of error. That is, it may be possible to say that some
particular individual will get as much as some quantity but not more or as
little as some other quantity but not less, without being able to say what
quantity he would get between those limits until the distribution has been
completed. A system may be determinate with respect to some distribution
items and indeterminate with respect to others.
The system of distribution consists of all of the socially sanctioned claims
that may be made by the members of the society against the total product or
any part of it, together with any actions necessary on the part of the individual
to validate these claims. A complete description of the system will consist of a
list of all of these claims and of that which is necessary to validate them.
Any system of distribution must accomplish certain minimum objectives if
the society using the system is to be viable. Assuming that total output is large
enough, it must guarantee minimum subsistence to all or to a substantial pro-
portion of the productive or potentially productive members of the society. If,
after this basic kind of claim has been satisfied, there is some product left over,
a system of claims will ordinarily be expected to provide subsistence in some
fashion for those who are no longer productive. Thereafter, the distribution of
product may have any one of many possible outcomes; however, the claims
against this product will probably be defined and validated in such a way as to
reward certain kinds of behavior which are highly valued by the society. This
being the case, it would appear that a consideration of these claims will reveal
much about the basic values of the society.
It should be clear from the foregoing that, subject to the indicated con-
straints necessary to maintain a viable society over a period of time, the
principal variable in the solution of the sharing problem is cultural-evaluative.
Environmental and technological variables will ordinarily play no role in the
situation and may never do so. However, systemic variables, where they play a

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1196 A merican A nthropologist [64, 1962

role in the determination of factor proportions and product mix, will probably
play such a role here also. It should also be clear that the "system of distribu-
tion" concerns at least certain transfer events which involve a production unit
and a consumption unit, or two or more consumption units. Thus, the "sys-
tem" in effect consists of normative rules concerning certain transfer events,
rules concerning the conditions under which certain transfer events must or
should take place.

Concluding Remarks

The foregoing has been no more than a limited sketch of an approach to the
problem of describing, analyzing, and understanding nonindustrial economic
systems. Several additional general points must be made.
Insofar as Dalton is concerned with the uncritical application of the con-
cepts of economics to apparently similar phenomena in "primitive" societies,
his position has merit-although I think that the problem is not as serious or as
widespread as Dalton implies. The approach outlined here, with its insistence
upon a careful appraisal of the specific functional variables which are relevant
to the situation under study, offers the promise, I think, of an escape from this
difficulty without abandoning, as Dalton would have us do, everything which
is potentially fruitful in contemporary economic thought. Since "primitive"
societies are not a homogeneous class of socio-cultural entities, the relevance,
applicability, or fruitfulness of any approach to their study must and can only
be tested on the merits of each case, which means, ultimately, by the test of
available data.
Implicit in this view is the painfully-acquired conviction that there are
royal highroads to general, cross-cultural understanding of economic syst
and processes. The descriptive analysis of any single economic system will
most cases, be a task of some magnitude, although its magnitude will diminish
somewhat as concepts are tested and refined, and as experience is gained
their use. Comparative economics cannot mature either in its methods or in it
substantive findings until a substantial number of such descriptive analy
have been made and perhaps revised, not once, but many times.
Finally, it must be emphasized that despite the apparent dogmatism wi
which they were stated, the propositions advanced here must be regarded
subject to revision. Progress in any science is testimony to the inadequacy
its antecedents, and so presumably it will be here. This does not mean, ho
ever, that any conceivable alternative set of propositions may be substitu
for those given above. The present propositions were chosen with regard
four criteria: 1) compatibility with the main body of contemporary econom
thought; 2) compatibility with a limited, essentially impressionistic-intuit
analysis of ethnographic material; 3) logical consistency; 4) the capacity
generate insights which will lead to the required conceptual refinements.
second criterion makes refinement necessary; the fourth, it is hoped, will mak
systematic and well-grounded refinement possible.

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LECLAIR] Economic Theory and Anthropology 1197

APPENDIX

To illustrate the use of the framework presented in the latter part of thi
highly condensed analysis of three economies is presented below. All three ar
and gathering" societies and their choice was dictated by the following con
1) all have relatively simple economic systems; 2) since all have the same b
ence pattern, similarities and differences may be more sharply drawn; 3
sumably are representative of those economic systems which are most unlik
market industrial" systems; 4) the materials on which the analyses are based
known and readily accessible.

THE SIRIONO (Source:Holmberg 1950)

Structure

Consumption units: nuclear families; usually monogamous, may be polyg

Production units: usually, individuals or small groups drawn from a sin
family; groups from an extended family may cooperate in hunting, gardenin
ing, and house construction; larger groups drawn from two or more extende
may cooperate in a peccary "roundup"; all males of the band cooperate in c
the frame of a house. Practically, production units are not structurally auto
vis-a-vis their associated consumption units; a nominal distinction is made here for
analytical purposes.
Structural articulation: transfer between or among production units does not take
place; since production units do not have structural autonomy, transfers from produc-
tion units to the associated consumption units are automatic and are analytically
nominal; transfers between consumption units are invariably unilateral and seem to
involve only food.

Process and the Systemic Outcome

Product mix: The product mix cannot be specified in detail for any of the three
cases. The main categories of output for the Siriono may be specified as follows: food
production is the most important activity in terms of the amount of time spent on it; it
involves hunting, gathering, horticulture, and fishing in roughly that order of impor-
tance. Material culture is strictly limited and goes very little beyond what is required
for survival. "Nonutilitarian" production and activity is also minimal; time not spent
in doing what is physically necessary is most often spent in idleness.
The product mix reflects the following variables: a relatively niggardly environment,
one or two notable technological deficiencies, and a preference system which is probably
more severely hemmed in by production possibilities than is most. Systemic variables
have no influence on product mix.
The niggardly environment is the basic determinant of the situation. Not only does
this mean that a large percentage of total available productive effort is required simply
to survive, in addition, the apparent cost of this effort in physical and psychic energy
is sufficiently great that time not spent in "working" is given over to consumptive
leisure: resting, eating, indulging in sexual intercourse, sleeping, playing with their
children, being groomed, singing, dancing, or drinking. There is little enough time for
this activity, what there is is precious.
The technological deficiencies, none of which may be decisive, include the absence of
food-preserving techniques, specialized fishing gear, and traps and nets. The last two

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1198 A merican Anthropologist [64, 1962

mean that total output is probably below the theoretical possibilities, both in absolute
terms and in terms of return per unit of effort. The absence of techniques for food
preservation establish an almost day-to-day dependence on the vagaries of the hunt and
contribute to the inability to exploit agriculture to the fullest extent possible.
Factor proportions: The range of choice in respect to factor proportions is clearly
limited. The most obvious choice is that which exists between solitary and cooperative
hunting. The published material does not permit judgments to be made concerning the
basis on which actual choices are made.
Distribution of product: No details are available concerning the patterns of produc-
tion or of distribution. Initially and primarily, total output is distributed to the con-
sumption units of those individuals who produce the goods. Certain normative rules
designed to establish regular alternatives are honored more in the breech than in the
observance; principally these include taboos on a hunter eating portions of animals he
has killed, certain animals supposedly reserved for old people, and the idea that the chief
of the band is entitled to a portion of each kill. (The existence of such rules suggest that
the Siriono might have been somewhat better off in the past.) When a particular unit
has a temporary surplus, some of it will be given to other units within the extended
family-these are the only inter-unit transfers which occur. Such gift-transfers give rise
to the expectation of reciprocity, although there is no strict accounting. These transfers
are unilateral in the short run and probably bilateral in the long run, although, on the
average, better hunters may give up more than they receive. Adults no longer able to
support themselves will ordinarily be fed by other members of their family; however,
those unable to keep up with the band in its frequent moves are abandoned.

Summary

The Siriono have a highly simplified system with a minimum of interaction among
consumption-production units. Consumer preferences give rise directly to productive
activity; consumption units are self-supporting in principle and largely self-sufficient.
Transfer of goods from one unit to another are largely off-setting and have the effect of
smoothing out short-term fluctuations in individual productivity. The whole system
reflects the basic niggardliness of the environment. It is difficult to imagine a more
rudimentary system than this.

THE TIWI (Source: Hart and Pilling 1960)

Structure

Consumption units: nuclear families, usually polygynous; or "establishments": two

or more nuclear families, usually having some kinship ties, but normally brought
together as a result of considerations arising out of the "prestige game" (see below).
Production units: usually, individuals or small groups drawn from a single consump-
tion unit; the principal exception involves a cooperative kangaroo (wallaby) round-up.
Data on a somewhat anomalous group consisting of teen-age boys undergoing training,
together with their teachers, is too limited to permit classification. In principle, they
remain in the bush, separated from the rest of the group for extended periods of time.
Structural articulation: Transfers between or among production units do not take
place; food production units do not have structural autonomy with respect to their
associated consumption units, transfers between these units are automatic and are
analytically nominal; normally, transfers between consumption units do not take place
except through a stratagem which phrases a transfer as being from an individual in one

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LECLAIR] Economic Theory and Anthropology 1199

unit to a relative in another unit; there are a few exceptions to the preceding statement:
when a funeral is held, the host consumption unit (that of the deceased) is expected to
feed all the guests; however, if the guests include a wealthy group, they may help out
unobtrusively; ceremonial grave posts must be made by someone not a member of th
immediate family of the deceased, here, the transfer is from an autonomous production
unit to a consumption unit of which the producer is not a member; some men make
dugout canoes, these are transferred, in effect, to the community at large-they are lef
at appropriate places to be used by anyone who needs them.

Process and the Systemic Outcome

Product mix: the main categories of output for the Tiwi are as follows: food produc-
tion is the most important activity; it involves gathering, hunting, and fishing in that
order; "utilitarian" material culture is scarcely more elaborate than for the Siriono;
"nonutilitarian" production and activity is relatively important, but is carried out
largely by the men; this activity includes elaborate and lengthy ceremonial training for
young men, ardent participation of older men in the "prestige game," and for successful
and wealthy men, extensive participation in political and ceremonial functions as wel
as production of elaborately carved wooden objects of several types.
The product mix reflects an environment which has relatively limited possibilities,
but which is rich within those limits. There are no conspicuous technological deficiencies
relative to environmental possibilities. The preference system reflects the limits in the
environmental possibilities, as well as cultural factors which may be regarded as ex-
ogenous to the economic system. Systemic variables are significant in determining the
product mix only to the extent that they establish a particular control pattern for
productive resources, thus giving certain individuals opportunities which they might
otherwise not have.
Factor proportions: the range of choice in respect to factor proportions is clearly
limited. The principal variation occurs in gathering. Here, an ideal gathering party
consists of an old woman and several younger women working under her supervision.
Systemic variables and the outcome of the prestige game determine whether this ideal
is met in particular cases.
Distribution of product: Initially and primarily, food output is distributed to the
consumption units of those individuals who produce the food. The operation of relative-
to-relative transfers together with the food-distribution consequences of certain
ceremonies, notably funerals, undoubtedly result in some net transfer of food from
richer consumption units to poorer units, although the mechanisms involved are not
very well crystallized and probably rather erratic in their effects. However, the society
is decidedly not egalitarian in this respect and this has consequences for the distribution
of other income, notably "prestige income." The material well-being of the total com-
munity depends heavily on the gathering activities of the women. In aggregate, the
output of the women appears to be sufficient to satisfy the subsistence needs of the
entire society. Since production units generally transfer directly to their own consump-
tion units, the well-being of any consumption unit depends upon its size and, more
particularly, on the ratio of women to men. An elaborate prestige game is carried out by
the men. Those who are successful in this game receive prestige directly. Moreover,
their success gives them an average number of productive wives that is higher than
that possessed by those who are not successful. Thus, winners of the marriage game
become the heads of rich consumption units, this enables them to indulge in other

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1200 American Anthropologist [64, 1962

prestigeful activities, such as carving ceremonial grave posts. In short, the prestige
game is a part of the total operating system which has consequences for the distribution
of productive resources and consequently for the distribution of product.

Summary

The Tiwi have a system which is more complex than that of the Siriono, perhaps
reflecting primarily the increased scope that is implied by the greater average produc-
tivity of the Tiwi. Consumer preferences for food and "utilitarian" output give rise
directly to productive activity. Preferences in the "nonutilitarian" sector give rise to
more complex patterns of activity which have long-range consequences for the distribu-
tion of product.

THE AMMASSALIK ESKIMOS (Source: Mirsky 1937)

(Note: the material on which this analysis is based is much scantier than is true for
the previous cases. Only the main features of the structure will be sketched here.)

Structure

Consumption units: summer: nuclear families, usually monogamous, may be poly-

gynous; winter: communal collectivities (for food and shelter only).
Production units: usually, individuals, in some cases (whale hunts, shark round-ups,
building winter houses) larger units may be formed.
Structural articulation: transfers between or among production units may take
place, such transfers always involve exchange; in most cases, transfers between produc-
tion units and consumption units are only nominal, however some exchange transfers
take place between production units and consumption units with which they are other-
wise not connected, these transfers usually involve goods other than food; the provision
of shamanistic services always gives rise to such exchanges; some exchange transfers
also take place between consumption units, but seem rarely to involve food.

Process and the Systemic Outcome

Only limited comments can be made under this heading. All consumption units are
largely self-supporting and self-sufficient. However, communal consumption of food
and shelter during the winter season is a major exception to this proposition. In addi-
tion, there are the rudiments of a system of specialized production, which is most highly
developed with respect to shamans and shamanistic services.

Summary
The Eskimo system is the most complex of the three discussed here. Of particular
note is the use of exchange transfers and of the accompanying specialization.

GENERAL SUMMARY

The foregoing analyses are sketchy and somewhat crude, even in rela
available material. Nevertheless, sharp differences in the economic "syste
three hunting and gathering societies are clearly discernible. It is also a
these differences are not accidental and that they have nonaccidental consequences.
The comments which have been made in each case suggest, if only dimly, the lines of
inquiry that might be followed in a more complete analysis; they raise further questions
which could only be answered by similar analysis, not only of other hunting and
gathering societies, but by other societies as well.

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LECLAIR] Economic Theory and Anthropology 1201

NOTES

1 Hereafter, reference to Dalton 1961 will be by page number only.

2 It should also be noted that the foregoing contains an implied assumption of hum
cience which is clearly not in accord with reality. Such an assumption represents a ped
analytical simplification comparable to the assumption of a perfect vacuum in the theor
objects. No economist believes in the omniscience of human beings, and the validity of
does not stand or fall on the sharpness of these assumptions. The fallibility of human b
duces a complexity into the theory-it does not invalidate it.
3 Controversies on issues of this kind continue to recur within economics. See fo
Lester (1946), Machlup (1946), together with a series of comments and rejoinders b
Machlup, Stigler, and others in various issues of the American Economic Review (M
et seq.). The persistence of such controversy may very well arise out of a peculiar chara
the formal properties of deductive systems in economics which distinguishes them fr
systems in the natural sciences-a difference which has been pointed out by North
107-10, 235-54). Normally, deductive systems begin with logically arbitrary premis
validity of the system, including the premises, is tested by empirically verifying the em
clusions. In deductive systems in economics, on the other hand, it is the premises w
serted to be valid; if they are, the validity of the conclusions necessarily follows. The d
not so much in the reversal of the normal sequence, but in the mode of verification of
of the premises. The premises by their nature find their verification in introspective d
inherently not demonstrable. This means that just as there is no way of communicatin
man the concept of "blue" as a visual phenomenon, there is also no way to commu
skeptic the validity of the introspected data. When we realize that anthropologists gen
been prominent among skeptics in these matters, it is clear that this state of affairs has co
significance for economic anthropology. Unfortunately, such has been the depth of co
those for whom the premises have validity that they have tended to ignore the possibility
the issue by attempting to verify, through publicly available data, the conclusions
from their premises. Those who are interested might find it revealing to reread the e
tween Knight and Herskovits (Herskovits 1952:507-31) with this view in mind.
4 The approach outlined here was developed in connection with and as guidance
ploratory study of nonindustrial economic systems. In large part, the study has as its
clarification of conceptual and theoretical issues involved in the analysis of such sy
study grows out of earlier work carried out as a Research Training Fellow of the So
Research Council (see LeClair 1953). The present study has had financial support fro
mittee on Economic Growth of the Social Science Research Council. I wish to express m
tion for the support which made this research possible. I wish also to express my spec
to Melville J. Herskovits, whose support and encouragement over a considerable per
has meant much to me.
6 "Capital goods" are not ordinarily defined in this way, although this definition is not incon-
sistent with the more usual ones.
6 Portions of what follow are drawn from LeClair 1959 and 1960. My participation in the
Workshop in Economic Anthropology (see Current Anthropology 1960:149-50) resulted in many
alterations in my thinking-although my co-participants should not be charged with any responsi-
bility for my views. I owe much to them and to the organizers and sponsors of the Workshop. The
later paper led to a number of discussions which were of great benefit. Of particular value were
lengthy and searching discussions with Harold K. Schneider and Lilo Stern.
7 Characteristically, economists have generally considered this issue for pedagogical rather
than for analytical reasons. Consequently, the issue has not received as careful attention as we
might wish. It may conceivably be left for economic anthropologists to clarify the matter.
The list presented here follows Samuelson (1958:16). For longer and somewhat different lists,
see Harris (1959:6-8) and Frank (nd: 1-2).
Beals and Hoijer (1959:415-16) discuss three "problems of economics" which have a close
but superficial resemblance to the three "functions" given here. Since we define economics as the

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1202 A merican A nthropologist [64, 1962

study of economizing, the Beals and Hoijer problems are not strictly equivalent to our functions.
8 The italicized terms are ones which are conventionally used in economics. It must be kept
firmly in mind that "distribution" is used here and in this context strictly in the sense of sharing or
of allocation. Anthropologists tend most often to use it in the trading-marketing sense and have
tended to overlook the other meaning.
9 For a discussion of some of these variables, as well as a provocative study of some related
problems, see Udy (1959).
10 Theft belongs in this list because if it is successful it does constitute a de facto transfer of
control, even though de jure rights presumably cannot be transferred in this way.
n Although it has so far been applied only to a limited variety of materials, the "ethnoeco-
logical" approach being developed for the study of swidden agriculture appears to be a promising
development in the study of the consequences of the interaction of technology and environment. I
am inclined to think that the approach can fruitfully be adapted to productive situations other
than swidden agriculture. For a succinct statement of the approach, see Conklin (1961). I am in-
debted to Anthony Leeds for first calling my attention to this approach and for making available
to me the results of his own work prior to publication. (See Leeds 1961.)

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