ANTHROPOLOGY AND ECONOMY Comparative and critical, Anthropology and Economy offers a uniquely cross-cultural view of economy Using examples from market and nonmarket situations, the book shows how economies are built on five increasingly abstract spheres, from the house to community, commerce, finance, and meta-finance Across these spheres, economy incorporates a tension between self-interested rationality and the mutuality of social relationships Even when rational processes predominate, as in markets, economies rely on sociability and ritual to operate, whether as cronyism, pleas to divinities or the magical persuasions of advertising Drawing on data and concepts from anthropology and economics, the book addresses wealth inequality, resource depletion, and environmental devastation especially in capitalism, providing an understanding of their persistence and ideas for controlling them Given the recent financial crash, Gudeman offers a different understanding of the crisis and suggestions for achieving greater economic stability STEPHEN GUDEMAN is Professor of Anthropology at the University of Minnesota Downloaded from http:/www.cambridge.org/core Boston University, Mugar Memorial Library, on 04 Jan 2017 at 06:27:17, subject to the Cambridge Core terms of use, available at http:/www.cambridge.org/core/terms http://dx.doi.org/10.1017/CBO9781316442739 NEW DEPARTURES IN ANTHROPOLOGY New Departures in Anthropology is a book series that focuses on emerging themes in social and cultural anthropology With original perspectives and syntheses, authors introduce new areas of inquiry in anthropology, explore developments that cross disciplinary boundaries, and weigh in on current debates Every book illustrates theoretical issues with ethnographic material drawn from current research or classic studies, as well as from literature, memoirs, and other genres of reportage The aim of the series is to produce books that are accessible enough to be used by college students and instructors, but will also stimulate, provoke, and inform anthropologists at all stages of their careers Written clearly and concisely, books in the series are designed equally for advanced students and a broader range of readers, inside and outside academic anthropology, who want to be brought up-to-date on the most exciting developments in the discipline Series editorial board Jonathan Spencer, University of Edinburgh Michael Lambek, University of Toronto Downloaded from http:/www.cambridge.org/core Boston University, Mugar Memorial Library, on 04 Jan 2017 at 06:27:17, subject to the Cambridge Core terms of use, available at http:/www.cambridge.org/core/terms http://dx.doi.org/10.1017/CBO9781316442739 Anthropology and Economy m STEPHEN GUDEMAN University of Minnesota Downloaded from http:/www.cambridge.org/core Boston University, Mugar Memorial Library, on 04 Jan 2017 at 06:27:17, subject to the Cambridge Core terms of use, available at http:/www.cambridge.org/core/terms http://dx.doi.org/10.1017/CBO9781316442739 University Printing House, Cambridge CB2 8BS, United Kingdom Cambridge University Press is part of the University of Cambridge It furthers the University’s mission by disseminating knowledge in the pursuit of education, learning and research at the highest international levels of excellence www.cambridge.org Information on this title: www.cambridge.org/9781107577206 © Stephen Gudeman 2016 This publication is in copyright Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press First published 2016 Printed in the United Kingdom by Clays, St Ives plc A catalogue record for this publication is available from the British Library Library of Congress Cataloguing in Publication Data Gudeman, Stephen F Anthropology and economy / Stephen F Gudeman pages cm – (New departures in anthropology) Includes bibliographical references and index isbn 978-1-107-13086-9 (Hardback) Economic anthropology I Title gn448.g82 2016 306.3–dc23 2015028911 isbn 978-1-107-13086-9 Hardback isbn 978-1-107-57720-6 Paperback Cambridge University Press has no responsibility for the persistence or accuracy of URLs for external or third-party internet websites referred to in this publication, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate Downloaded from http:/www.cambridge.org/core Boston University, Mugar Memorial Library, on 04 Jan 2017 at 06:27:17, subject to the Cambridge Core terms of use, available at http:/www.cambridge.org/core/terms http://dx.doi.org/10.1017/CBO9781316442739 Contents List of Figures Acknowledgments page vi vii Strange Economies The Strength of the House 24 Mutuality and Connections 52 Rituals of Economy 69 From Celebrations to Sales 93 Colonizing 124 Money and Abstraction 144 Rethinking Economy 168 Notes 193 References Index 206 214 v Downloaded from http:/www.cambridge.org/core Boston University, Mugar Memorial Library, on 04 Jan 2017 at 06:35:40, subject to the Cambridge Core terms of use, available at http:/www.cambridge.org/core/terms http://dx.doi.org/10.1017/CBO9781316442739 Figures 2.1 Junta preparing mud for house walls, © Roxane Harvey Gudeman 2.2 Applying mud to house frame, © Roxane Harvey Gudeman 3.1 Cooperative pasturing in the Rhodope mountains, © Detelina Tocheva 4.1 Market exuberance 4.2 Australian corroboree 5.1 Thanksgiving, © Roxane Harvey Gudeman 5.2 Black Friday, © Powhusku 6.1 Cutting sugarcane, © Roxane Harvey Gudeman 6.2 Loading sugarcane, © Roxane Harvey Gudeman 7.1 The Crash, © Alan Denney 7.2 Back to community, © Roland Zh page 46 47 59 86 86 120 121 130 131 166 166 vi Downloaded from http:/www.cambridge.org/core Boston University, Mugar Memorial Library, on 04 Jan 2017 at 06:52:07, subject to the Cambridge Core terms of use, available at http:/www.cambridge.org/core/terms http://dx.doi.org/10.1017/CBO9781316442739 Acknowledgments I wrote an initial version of Anthropology and Economy at the Max Planck Institute for Social Anthropology (Halle, Germany) while I was a member, cooperation partner, and joint director of the “Ritual and Economy” project that lasted from 2009 until mid-2012 I am indebted to Professor Chris Hann, a founding director of the MPI, for his invitation, our work together, and his many suggestions and encouragement Our research team included Jennifer Cash, Nathan Light, Miladina Monova, Detelina Tocheva, Monica Vasile, and Bea Vidacs My thanks to them for our numerous individual and group discussions I have not cited their studies from the project because with Chris Hann, we published two volumes from it in 2015: Economy and Ritual: Studies of Postsocialist Transformations, eds Stephen Gudeman and Chris Hann (Berghahn), and Oikos and Market: Explorations in Self-Sufficiency after Socialism, eds Stephen Gudeman and Chris Hann (Berghahn) Adam Kuper read an early draft of this book and his comments sent me back to the drawing board for a number of months As always, Roxane, Rebecca, Elise, and Keren provided encouragement and suggestions Roxane took some of the photographs as noted, and she tirelessly prepared all of them for publication including the book’s cover Small portions of Chapters and were partly published in “Piketty and Anthropology,” Anthropological Forum, 25(1):66–83 An earlier version of Chapter was published as “Vital Energy: The Current of Relations,” Social Analysis 56(1):57–73 (2012) A short part of Chapter was published in Stephen Gudeman and Chris Hann, “Introduction: vii Downloaded from http:/www.cambridge.org/core Boston University, Mugar Memorial Library, on 04 Jan 2017 at 06:20:52, subject to the Cambridge Core terms of use, available at http:/www.cambridge.org/core/terms http://dx.doi.org/10.1017/CBO9781316442739 Acknowledgments Ritual, Economy and the Institutions of the Base,” Economy and Ritual: Six Studies of Postsocialist Transformations, eds Stephen Gudeman and Chris Hann, New York: Berghahn (2015) An earlier version of a portion of Chapter was initially published as “Creative Destruction: Efficiency, Equity or Collapse?” in Anthropology Today 26 (1): 3–7 A segment of Chapter was published in “Misfits or Complements? Anthropology and Economics,” Cash on the Table: Anthropological Engagements with Economics and Economies, ed Edward F Fischer, 263–274 Santa Fe: School of American Research Press (2014) viii Downloaded from http:/www.cambridge.org/core Boston University, Mugar Memorial Library, on 04 Jan 2017 at 06:20:52, subject to the Cambridge Core terms of use, available at http:/www.cambridge.org/core/terms http://dx.doi.org/10.1017/CBO9781316442739 ONE m Strange Economies When the Bernard Madoff pyramid collapsed in late 2008, financial markets were falling and recessionary fears were growing Over the preceding thirty years, Madoff had constructed the largest pyramid scheme the world has known When he was no longer able to attract new funds for recycling to his earlier investors, he confessed to his swindle As the remnants of his pyramid were uncovered, the fraud was estimated to be 65 billion dollars Madoff investors dotted the map of the United States Some European banks were drawn in, and one French financier took his own life None of his participants seemed to realize that Madoff’s unvarying returns of 10%–11% per year were improbable, but he carried on for several decades until the December day when his empire collapsed Some commentators explained that the scheme was fed by greed Others thought Madoff’s investors failed to observe best practices and were caught up by “irrational exuberance.”1 I view this “creative destruction” of wealth differently.2 Situated in Wall Street with threads across the United States and elsewhere, the Madoff event exemplified the early twenty-first century wave of bubbles from housing, to complicated investment vehicles, to illegal deals It typified the strange economy in which we live But I am an anthropologist and think that all economies are strange, including the ones anthropologists traditionally study Economies are strange because they juxtapose self-interest and mutuality Many of Downloaded from http:/www.cambridge.org/core Boston University, Mugar Memorial Library, on 04 Jan 2017 at 05:01:11, subject to the Cambridge Core terms of use, available at http:/www.cambridge.org/core/terms http://dx.doi.org/10.1017/CBO9781316442739.001 Strange Economies Madoff’s investors wanted to make money and to feel an ethnic relationship with him, which is the strangeness, because the two are different We live with this tension everyday, however In this book, I offer my anthropologist’s view of economy but amplify my discipline’s terrain to include developed market economies Anthropologists usually study small-scale economies whether in the South Pacific, Northern Canada, the margins of Asia, or the interior of South America, and they have developed many tools for analyzing their findings But they have become rather enfolded in their local data, and remain largely speechless in the face of developed market economies Conversely, economists scarcely look at the strange economies that attract anthropologists, except to proclaim that the people act like us but face constraints, which block their economy’s growth My perspective brings together what people in their material lives with economists’, anthropologists’, and everyday views Economy has two sides One is the high-relationship economy that is rooted in the house Neglected by economic theory, it is prominent in small-scale economies, and hidden and mystified yet salient in capitalism The other side consists of competitive trading Anthropologists know one side of economy and economists know the other, but the two are intertwined Neither side is complete without the other that influences it Their balance varies across cultures and time The tension lies within economies and within us We calculate our relations to others, and we empathize with them We measure some things and consider others to be incomparable The tension is social and personal This argument rests within a larger one, that economies are made up of increasingly abstract spheres, which start with material life in the house and expand through the commercial, financial, and metafinancial spheres of markets As these spheres and abstractions develop, markets colonize the house economy.3 The contrasting purposes of the house that aims for sufficiency and nurtures social relationships, and of markets, which are made up of Downloaded from http:/www.cambridge.org/core Boston University, Mugar Memorial Library, on 04 Jan 2017 at 05:01:11, subject to the Cambridge Core terms of use, available at http:/www.cambridge.org/core/terms http://dx.doi.org/10.1017/CBO9781316442739.001 ... version of Anthropology and Economy at the Max Planck Institute for Social Anthropology (Halle, Germany) while I was a member, cooperation partner, and joint director of the “Ritual and Economy ... Stephen F Anthropology and economy / Stephen F Gudeman pages cm – (New departures in anthropology) Includes bibliographical references and index isbn 978-1-107-13086-9 (Hardback) Economic anthropology. .. anthropologists and others employ it For Adam Smith, David Ricardo, and Karl Marx, economy was set within a class structure Smith and Ricardo spoke of landowners, capitalists, and laborers Marx