Tuesday, December 13, 2005

Karl Polanyi: Reciprocity, redistribution, and market exchange in economic history

In this essay a student of Karl Polanyi,the anthropologist Anne MacKaye Chapman, provides a penetrating overview of his life and work. The analysis of his "three forms of integration": reciprocity,redistribution, and market exchange makes it easier to apply these concepts to the pre-modern history of Burma. Quoting from Ms. Chapman:

"Polanyi's two uniting themes, throughout his work, are labor and land. He is concerned with how labor and land are organized, how they are institutionalized in terms of "location" and "appropriation"...his interests lie precisely in separating economic institutions from their "embeddedness" in order to submit them to analyses"

"One of the main problems he [Karl Polanyi] faced is how economic processes acquire unity and stability. He proposes that it is achieved through a combination of three patterns, that he calls 'forms of integration:' reciprocity, redistribution and exchange. The dominance of a form in a given society is a function of the degree in which it regulates land and labor...These are perennial "forms" that reoccur and appear in a subordinate context in almost any society...Note that he was not concerned with individual behaviors (as the formalists are) but rather with organized structures, with institutions such as those based on kinship, community or on a body of rules and regulations of a central power. Both reciprocity and redistribution organize production of goods (via labor), the appropriation of land as well as goods, the circulation or distribution of goods and the allocation of labor. These factors must be kept in mind when applying his "forms" to any non-price-making market society."

Quoting from Chapman on redistribution:

"Redistribution’s "supporting pattern" is centricity, movements of the products of land and labor into and out of a center...The central controlling power allocates the land, and recruits the labor, though a margin of freedom may be allowed for the "lesser" structures. Products of land and of the craft industries, move inward as tribute, taxes, rent, fines, dues, gifts, offerings, etc. and outward as retributions for services, rewards, also gifts, allocations of various sorts to the different sectors of the center and the periphery, that is, to the society as a whole, in terms of the status of the different sectors which compose the society."

Chapman quoting from Polanyi on gift trade between empires:

"Over millennia trade between empires was carried on as gift trade - no other rationale of two-sidedness would have met quite as well the needs of the situation. The organization of trade is here usually ceremonial, involving mutual presentation; embassies, political dealing between chiefs or kings. The goods are treasure, objects of elite circulation; in the border case of visiting parties they may be of a more "democratic" character. But contacts are tenuous and exchanges few and far between."

According to Polanyi the so-called triad of trade, money and markets must be pulled apart. This is the major theme of Shigeru Ikuta's “Portuguese Trade Between Malacca and Pegu in the Early Sixteenth Century” (Shiroku 10 (1977): 55-62), namely that in the early sixteenth centurythere was no money that all the trading nodes along the Bay of Bengalheld in common.

If this is too abstract Brad De Long, an economist at U.C. Berkeleysimplifies the ideas with down to earth example in The Embedded Economy Hypothesis".