3^ I

THE FAILURE OF SUBSTAHTIVIST SOCIAL THEORY

A CRITICAL REASSESSMENT OF KARL POLANYI

Ellen Antler, B.A.

University of Chicago, 196?

A Thesis

Submitted in Partial Fulfillment of the

Requirements for the Degree of

K&ster of Arts

at

The University of Connecticut

1971 APPROVAL PAGE

Master of Arts Thesis

THE FAILURE OF SUBSTAIJTIVIST SOCIAL THEORY:

A CRITICAL REASSESSMENT OF KARL POLANYI

Presented by

Ellen Antler, B.A.

Major Adviser /'i—-

Associate Adviser

Associate Adviser a c,£-,,v<

The University of Connecticut

1971

ii ACKNOWLEDGMENTS

I wish to thanlc Dr* Janes Chester Faris, Daryl Clark White and the Wilbur Cross Library.

iii TABLE OF CONTENTS

INTRODUCTION ...... 1

PART I.

Chapter I. THE RATIONALE FOR POLANYI*S MORALIST, HUMANITARIAN UNDERTAKING: BERATING THE SCOURGE OF INDUSTRIALIZATION .... 8

II. THE CONTENT OF THE NSW ECONOMICS: BOTH HISTORY MID THEORY REVEAL THE MARKET TO BE UNIQUE AND PERNICIOUS ..... 11

III. THE STRATEGY OF THE NEW ECONOMICS I ...... 16

IV. THE STRATEGY OF THE NEW ECONOMICS II ...... 21

V. THE STRATEGY OF THE NEW ECONOMICS III ...... 25

VI. THE NEW ECONOMICS BECOMES A NEW SOCIAL THEORY ...... 30

VII. EVALUATION OF POLANYITS SOCIAL THEORY ...... 1,0

PART II.

I. THE SEARCH FOR THE NON-MARKET STATE OF NATURE WITH POLANYI »S OWN TOOLS OF ANALYSIS ...... 46

II. THE NON-MARKET STATE OF NATURE ...... 50

III. SUMMARY AND CONCLUSIONS ...... 77

APPENDIX ...... 83

REFERENCES CITED ...... 88

iv LIST OF ILLUSTRATIONS

Figure Page

1. Polanyi^ Patterns of Integration ...... 33

2. Map of the Trobriand Islands ...... 54

3. To^uluwa^ Harvest Gifts ...... 61

4« Trade Items Price List ...... 70

v INTRODUCTION

The decision to commit more resources to the Fomalist-

Substantivist Debate in Economic Anthropology is one made with great caution. The history of the debate is often not interesting, and many of the arguments and counterarguments have sailed past each other; much of the controversy has been over issues not im­ mediately relevant to anthropologists. Too much argument has centered around the epistemological status of formal economic theory and of the applicability of neoclassical models to other than market economies. These concerns are peripheral to anthro­ pology although they are surely legitimate—and economists are now waging their own version of the Formalist-Substantivist debate over the "Mew Economic History" to determine whether or not market models can be fruitfully applied to the American economy of 150 years ago (Andreano 1970).

The most unfortunate aspect of the debate is that with few exceptions (Cook 1966, 1969; LeClaire 1966; Kaplan 1963) little of the verbiage lias been directed to the especially relevant issues such as the relation of economy and society, or to the nature of the parameters set on social institutions by the demands of produc­ tion, or to the relation between institutional constraints and human behaviors.3. Most of the debate has centered, instead, on the gloss

■‘■Even George Dalton, perhaps Polanyi's most persistent supporter has noted this elipsis in the literature (1969: 96-97).

1 2 of the arguments, that is, on the substantivist position that

"marhet analysis loses much of its analytical value in non-market

economies" (Polanyi 1957a: 143).

Yet, there has been virtually no critical examination of the assumptions about society and social processes that this statement rests upon. There is great value in the examination of the logic that precedes this summary statement and of its implications; this thesis will bo directed to that examination.

We will need to closely scrutinize the work of Karl Polanyi

for Kaplan is quite correct in asserting that all of substan­ tivist theory rests ultimately on his work:

As both Nash and Cook rightly point out, it was largely under the impact of the writings of Karl Polanyi and his followers that anthropologists divided themselves into "formal­ ist" and "substantivist" camps. The ensuing debate seems to have had as its major catalyst the collection of essays in Polanyi, Arenbsbcrg, and Pearson (1957). It is interesting to note, however, that all of the basic ingredients of the substantivist position can be found in Polanyi1s The Great Transformation. origanally published in 1944 [l96Sl 233jf7

Polanyi has been the subject of much study—as historian (Humphreys

1969), and economist (Sievers 1949; Dalton 1965a, 1953, 1969).

What is surprising is that no one has yet done a rigorous examin­ ation of Polanyi as social scientist. Scott Cook, in his second discussion of the substantivist position (1969), has done but a brief sketch of Polanyi's social theory; Manning Nash r/ho has been most out-spokenly critical of the quality of Polanyi*s social science has done only a casual critique:

There is confusion on Polanyi's part among explaining the institutional structure...explaining economic performance... and explaining the cognitive and enotional bases for choice... The confusion can be partly resolved by understanding some of the general principles of social anthropology rather than the 3

homemade sociology Polanyi uses in his explanations of prim­ itive economies. , .The institutional analysis of Polanyi is rather crude and ad hoc Ofash 1969:

We need to scrutinise Polanyi1 s ■rorlcs in depth because it is his sociological formulations that are at the heart of the substantivist position. His single notion of "embeddedness that is, that "man's economy is as a rule submerged in his social relationships" (1947: 112)^ generates quite directly nearly all of the foundations of the substantivist framefrork. They are:

1. Only market economies are not embedded in, that is, are distinct from the social system (Polanyi 1946, 1947, 1957a, b, 1968).

2. Embeddedness of the economic functions in the social system precludes the possibility of "choice" as the lavs of the social institutions in which the economy is embedded (and the often limited material resources of non-market economies) determine action. This makes it not useful to discuss economic choice.

In subsistence (non-market) economies, the ques­ tion of choice among real alternatives (J.e., "yield times expected money price compared to money costs of production^ does not arise in such explicit fashion (Js it does in modern America}...the Trobriander... does not "choose" to plant j«mas.. .the question does not arise in this form... (Balton 1969: 6^].

3. In the embedded state neither economic institutions nor economic motives have an independent existence; therefore.

suggest that part of the reason for the general lack of critical analysis of Polanyi's social theory has been that many anthropologists have assumed that by "embeddedness" Polanyi was simply asserting that an examination of economic systems should not be done outside of their societal contexts. Surely a reasonable position. This is not, however, the only implication of his form­ ulation. The implication of his position that too often is glossed over is that in non-market societies "man's social relationships" determine economic action, i.e., that economic systems are epi- phenomenal, simply reflections of social relationships. I will suggest, on the contrary, that in no way can such a simplistic assertion be construed as adequate explanation of the complex— but ascertainable—relationship Of economic and social systems. (See below. Part I, Chapter 6.) 4

actors in primitive societies are not economically rational in their behaviors. The assumptions outlined above D..e.> Polanyi's dictums on the distinctness of capitalist economic institutionsj...imply a very special institutional setting in the absence of which one would not behave in an economically rational fashion even if one v/anted to {Kaplan 1963: 23£]»

4. Finally, for these three reasons (and, in addition, be­ cause of difficulties in quantifying material from prim­ itive economies) it is not useful to apply formal economic theory to the discussion of non-market economies and performances.

Although the notion of embeddedness figures so centrally in

substantivist theory it remains a difficult concept to penetrate.

This results, in part, because in The Great Transformation Polanyi 3 was really concerned with describing "disembeddedness," that is,

the condition of industrial capitalist societies in which the economic

institutions are not embedded in but rather are distinct from the

social system; and in v/hich, conversely, the society is embedded

in the economic system. Disembeddedness was Polanyi's real con­

cern; embeddedness appears at first in his work as more of a

residual category—as not-disembeddedness. The disembedding of

the economic system was a unique historical event brought about by the operation of economic motives. Polanyi devised this con­ cept to describe the overwhelming pov/er of economic motives and

to describe hov; their operation could have overturned the previously

existing natural order in which such motives were absent. 3

3 Polanyi coined this word in 1957 in "Aristotle Discovers the Economy" which appeared in the collection of essays edited by Polanyi, Pearson and Arensberg Trade and Markets in the Early Empires. 1957. All page references from "Aristotle Discovers the Economy" and "The Economy as Instituted Process" are from the 1963 collection of Polanyi's works edited by George Dalton. 5

Embeddedness might present itself as a kind of useful

descriptive device (I will suggest, however, that it has no

analytic content) if it were descriptive of certain kinds of

pre-capitalist economies in which institutions are multifunctional,

or even of those classless or primitive societies in which there

is unity and integration of functions, hut that is not the

meaning of embeddedness as Polanyi used it. It is rather used to

describe that contrast—-so central to Polanyi*s concerns—bet?/een

the pre-capitalist state of nature in which the rules of the

embedding social institutions determine economic action and of the market society of the nineteenth century in which the rules of the market determine the rules of society. (I will suggest below

that both of these formulations are essentially reductionist.)^

To accomplish this scrutiny I propose in Part I an expli­

cation (and an explication it must be, for if the notion of

embeddedness has any reality at all, it is as a description of

Polanyi*s social theory) of Polanyi*s works relevant to the

^Cook has called embeddedness an "amorphous concept" (1969: 335). I contend (see below Part I, Chapter 6) that it is much worse than that; it is counterproductive in its focus of attention on human motives and behaviors. I assert that the proper inquiry into the relation of economies and societies is one that makes assumptions about human behaviors and motives (just as modem economists make assumptions that man behaves as if he were a rational actor) and then focuses analysis on such issues as the nature and kind of parameters that production sets on possible kinds of social organisation; the relationship of social institutions to production and distribution within society; the economic and social constraints on human behavior. Surely it was these issues that Frankenberg was addressing when he said that economic analyses that focus on the individual actor can only lead down a blind alley (1963: 58). 6 fomalist-Gubstantivist controversy: The Great Transformation

(1944); "Our Obsolete Market Mentality" (1947); "Economy as

Instituted Process" (1957); and "The Place of Economies in Soc­ ieties" (1963). In Part II, I propose to submit Polanyi’s as­ sertions (and by extension, those of the substantivist school)^ to empirical test on some of the very data that generated it, the Trobriand Island materials.

I will contend that Polanyi's assertions will not stand the scrutiny, and that they lack explanatory value in that they cannot adequately account for how or why things proceed as they do in the Trobriand Islands. I will further contend that the reasons that the substantivist formulations do not prove adequate is that they are based on a social theory that is circular both in its definitions and its logic, psychologistic in its focus, and ultimately pernicious in its implication that persons in primi tive societies cannot be rational actors.

^Names and categories are often misleading and arbitrary. And it is true that substantivists are not all of one kind. criticisms in this paper are directed most acutely at substan­ tivists such as George Dalton, Conrad Arensberg, and those that Dalton considers members of the "Polanyi group" (see his most recent work "Traditional and Peasant Economies: an Introductory Survey of Economic Anthropology", 1971): Bohannon, fteale, Fusfeld Sahlins, who counts himself among this group, is—I believe—a substantivist in name only (see below, Part II, chapter 2). PART I

7 CHAPTER I

THE RATIONALE FOR POLANYI*S IDEALIST, HUMANITARIAN

UNDERTAKING: BERATING THE SCOURGE

OF INDUSTRIALIZATION

Polanyi’s work, which has become the keystone of the sub­

stantivist school of economic anthropology, comes to modern an­ thropologists via a circuitous route. The Great Transformation (first published in 1944)^ and "Our Obsolete Market Mentality"

(1947) v/ere not tracts in social anthropology, but a special kind of economic history. Neither were written in the careful, measured tones of the historian or economist, but rather with the fervour of the moral philosopher and the flamboyance of an expert polem­ icist. (it is simply not convincing when George Dalton tells us that Polanyi*s works merely "read" like polemic; there can be no doubt that they are, and were meant to be so.)^

This position as dean of the subtantivists is Polanyi’s both by design and by default. His initial goal was humanitarian: to save mankind from the social dislocations accompanying indus-

-'•All references to The Great Transformation are to the 1946 edition, published under the title. Origin of Our Times: The Great Transformation. This second edition is identical to the first except for additional Appendix entries.

^Dalton has said of his mentor, "...what was forceful, lucid and articulate in the lecture hall sometimes became hyperbole and polemic in print." (196G: x)

B 9

trialization. He did indeed intend to develop a new kind of

econonics, distinct from Classical and Neoclassical schools of

economic thought, and he did purposefully make use of social

anthropological materials to this end. Yet, he was not by

training a social scientist and his efforts were not occasioned

by a desire to elevate either the theory or methodology of the

social sciences. Cook (1966, 1969) has said that Polanyi's work

is characterized by a romantic idealization of the primitive.

It is more precise, however, to say that Polanyi's work reflects

both a purposeful (see quotations below) anti-social science

bias and an unintentional one in his consistent lack of scientific rigor in dealing with social phenomena.^

He says of his undertaking in The Great Transformation:

Nothing could seem more inept than the attempt to reduce civilization, its substance and ethos, to a hard-

Yet, it is this we are undertaking. In doing so we are consciously adjusting our aim to the extreme singularity of the subject matter. For the civilization of the 19th Century was unique in that JLt centered on a definite institu­ tional mechanism 5946: l-£j.

Polanyi saw his task in The Great Transformation and "Our

Obselete l&rket Mentality" as the chronicling of the rise and

fall of a utopian experiment, the self-regulating market economy

of tire nineteenth century. That market society had to fail and

-^This writer acknowledges that this is a heady charge. In­ stances of Polanyi's lack of rigor are noted below pages 12, 18, 30-31j 40-44. Note also the comments of Manning Nash, cited above, page 2. Ify position is simply that Polanyi's work is perfectly adequate as philosophy or as ideology, but that to assert that his work is ade­ quate as social science is erroneous. 10 did fail. It thus became necessary to publish an attack on the vestiges of a mentality created for that society vhich was no more, and to rebut the economic philosophy on which it had been based. Polanyi wrote from outrage at the cost of the market society while it operated, especially the cost to the poor of

England during the disclocations of the Industrial Revolution:

Damped into this bleak slough of misery, the immigrant peasant,...was soon transformed into a nondescript animal of the mire. It was not that he was paid too little, or even that he laboured too long—though both happened often to ex­ cess —but that he was existing under physical conditions which denied the human shape of life y.946: 10jf|.

And he objected, too, to the later costs incurred by the failure of the market society: the monetary crises of the 1930's, the birth of fascism and the birth of bolshevism.

A new set of ruling ideas superceded the world of the self- regulating market. To the stupefaction of the vast majority of contemporaries, unsuspected forces of charismatic leader­ ship and autarchist isolationism broke forth and fused soci­ eties into new forms {1946: 200}.

Polanyi was attempting to write a new economics that would be an alternative to liberalism (and to Marxism) in order to save man from annihilation at the hands of industrialization and to protect individual freedom.

I plead for the restoration of that unity of motives which should inform man in his everyday activity as producer, for the re-^bsorption of the economic system in society, for the creative adaptation of our ways of life to an industrial environment....

Today, we are faced with the vital task of restoring the fullness of life to the person,... (to accomplish thiH ...In different countries, in different ways classical lib­ eralism is being discarded...[1947: 112]. CHAPTER II

THE CONTENT OF THE NEW ECONOMICS: BOTH HISTORY

AND THEORY REVEAL THE MARKET TO BE

UNIQUE AND PERNICIOUS

What was the content of Polanyi1s new economics? What

are the lessons to be learned from The Great Transformation’,

and "Our Obsolete Market Mentality"? Essentially, Polanyi's

dictums can be summed up in one sentence: Prior to the nine­

teenth century, economies were embedded in social systems; with

the market economy came a reversal, the economy became distinct

and determinant, and society was embedded in the economy. The

specific argument in The Great Transformation is that this later state of affairs is unnatural and injurious. These conclusions are not obviously true; the proof rested on the assertions devel­ oped in the historical sections of The Great Transformation:

1. All societies previous to that of the 19th century lacked specific economic institutions £i.e., they v/ere embedded] and were based instead on certain "traits" that struc­ tured existing patterns of interaction. These traits are reciprocity, redistribution, autarchy (1946: 46, 4&, 53-62, 74, 77) 1947: 112).

2. Previous to the 19th century, markets^ had been present *

^Yfoen Polanyi uses the word "market" he means the "self­ regulating market." Characterized thusly: "(l)...cnce it is established, it must be allov/ed to function without interference, (2)...Profits are not any more guaranteed, (3)...Prices must be allowed to regulate themselves...." (1946: 49)

11 12

in societies, but had been only incidental to the operations of their economies: "Though the institution of the market v/as fairly common since the later Stone Age, its role v:as no more than incidental... .never be­ fore our own time were markets more than accessories of economic life"’ (1946: 50, 73).

3. The market pattern of interaction v/as unique in that it could itself create economic institutions (thus, economic institutions became disembedded). This unique ability results from the coupling of market interaction (barter and truck) with specific motives: "...being related to a peculiar motive of its own, the motive of track and barter, it is capable of creating a specific institution, namely, the market" (1946: 63).

4. The self-regulating market was necessarily destructive of society and thus, society took countermeasures to protect itself. These countermeasures hampered the functioning of the market and, thus, were in themselves injurious to society.

...the idea of a self-regulating market implied a stark utopia. Such an institution could not exist for any length of time without annihilating the human and natural substance of society;...Inevitably, society took measures to protect itself, but v/hatever measures it took, impaired the self-regulation of of the market, disorganised industrial life, and thus endangered society in yet another way [1946: I3-I4].

5. This contradiction was insoluable, and inevitably the market collapsed.

The nineteenth century attempted to establish a self-regulating economic system on the motive of individual gain. V/o maintain that such a venture v/as in the very nature of things, impossible(1946: 260].

Nineteenth-century civilization was not destroyed by the external or internal attack of barbarians;...It disintegrated as the result of...the measures v/hich society adopted in order not to be, in its turn an­ nihilated by the action of the self-regulating market [1946: 242J.

-’This writer acknowledges that this formulation reflects a good deal of social theoretical and of logical imprecision. The imprecision is characteristic of Polanyi—as v/ill be noted below. 13

It can be said accurately that Polanyi saw his history not

simply a chronicle of why the market society did not work, but

rather why it could not work. I suggest that he devised this

schema not really as a means to understand economic systems in

general, but in order to have a theoretical framework from which

to critique industrial capitalism.

Another, although somewhat less developed,constituent of

Polanyi's new economic theory involved a rebuttal of classical

economic thought. Smith, Ricardo and Marx are the major targets of the attack. Ricardo is taken to task for having authored

the economic theory upon which the market society was based, and then for misunderstanding the dynamics of that very system.^

The attack on Ricardo is not rigorously theoretical; it is rather moral outrage. He berates Ricardo first for the identification of labor as the source of economic value. This piece of theory,

Polanyi believed, was the ideological justification for the cre­ ation of a free market for labor and that "was an act of vivi­ section performed on the body of society" (1946: 130).

Polanyi attacked Ricardo, too, for his failure to campaign for reform of the Poor Laws;? this position Polanyi regarded as fraught with inhumanity.

Ricardo's assertion that the interests of landlords, capitalists and laborers were not congruent (enunciated most clearly in his third edition of The Principles of Political Economy and Taxation. 1S21) led Polanyi to say of him, "It follows that neither Ricardo nor Malthus understood the work­ ings of the capitalist system" (1946: 127).

^Ricardo was opposed to the Poor Laws. This was clear in his Principles (see especially Chapter 18). His objection was first economic and secondly humanitarian. Polanyi ignored Ricardo's theoretical objections to the Poor Laws. 14

And even more impressive even than the outbursts of pain ... that cams from poets about the Speenhamland System of poor relief.. .v/as the icy silence v/ith v/hich Malthus and Ricardo passed over the scenes out of which their philosophy of secular perdition was born jl946: 10f],

Polanyi1 s rebuttal of Marx v/as also less than direct.

It would appear that a refutation of Marx v/as ever on his mind

as the second edition of The Great Transformation has an enlarged

Appendix regarding the Poor Laws. But, just as he ignored

Ricardo, he did not confront Marx^ analysis of the Speenhamland <> System.

Instead Polanyi praises the direction of Marx's theoret­

ical efforts which he saw as an attempt to infuse "naturalism"

into economic theory, but notes v/ith dismay that Marx failed to

understand the uniqueness of the nineteenth century society.

Marx did not understand the notion of "disembeddedness" and his

work suffers from even a more serious 'flaw' i.e., he shared

Ricardo's mistaken notion that labor is the origin of economic

value:

The true significance of the tormenting problem of poverty now stood revealed: economic society was subject to lav/s v/hich were not human laws.... (emphasis in original] From this time onward...the reintegration of society into the human v/orld became the persistently sought aim of the evolution of social thought. Marxian economics—in this line of argument—was an essentially unsuccessful attempt to achieve this aim, a failure due to Marx's too close adherence to Ricardo and the traditions of liberal eco-

®Marx believed that the Pool’ Laws were not meant as human­ itarian relief for the poor, but rather as a means of circum­ venting tlie true market price for labor by keeping wages arti­ ficially low (1867, Vol. 1: 363ff). Polanyi's treatment of Marxist theory is discussed below, page 52. 15 nomics [1946:

Adam Smith, however, surely bears the lion's share of

Polanyi's attack. On Smith, Polanyi placed the largest portion

of the burden of blame for the development of the "market mental­

ity," that is, for the belief that "economic motives" have any

legitimacy. As we have seen his grounds for rebuttal of class­

ical economic thought were not entirely theoretical, it is clear

that Polanyi percieved that that was the school of thought that

needed by some means to be dismantled. The attack on classical

theory became a foundation of the new economics.

Q Polanyi was not, of course, the first one to have misun­ derstood Marx. His lack of understanding v;as regretable and fateful, for Marxian economics could surely have led Polanyi out of his ultimate muddle. CHAPTER III

THE STRATEGY OF THE NEW ECONOMICS I

In Vfaich Polanyi Critiques Smith for Misunderstanding the Essence of Self-Interest, Truck and Barter

Polanyi attributed the evils of industrial capitalism to its

unique Mnd of social system. That is, industrial capitalism had

distinct (separate) economic institutions. The source of this

distinctness—this disembedding-was the interaction of a market pattern which had been present since the Stone Age and of a mo­

tive, for some reason unique to the nineteenth century, "gain."

All types of societies are limited by economic factors. Nineteenth century civilisation alone v/as economic in a different and distinctive sense, for it chose to base it­ self on a motive only rarely acknowledged as valid in the history of human societies, and certainly never before raised to the level of justification of action and behaviour in everyday life, namely gain Jl946: 40 emphasis mine].

The preoccupation v/ith motives is intense:

The mechanism v/hich the motive of gain set in motion was comparable in effectiveness only to the most violent outbursts of religious fervour in history. Within a gener­ ation the whole human world was subjected to its undiluted influence [1946: 40].

Polanyi*s strategy of rebutting classical economics explains, in part, his preoccupation with economic motives. Specifically, he sets out to disprove that economic motives existed prior to the nineteenth century. This particular assertion is the corner­ stone of his sociology. ''Economic" motives occupy a very special place in his theoretical framework; they have a special meaning.

16 17

They are not simply motives surrounding "material" things:

This new v/orld (of the nineteenth century] of "economic motives" was based on a fallacy. Intrinsically/ hunger and gain are no more "economic" than love or hate, pride or prejudice. IJo human motive is per so economic. There is not such a thing as a sui generis economic experience in the sense in v/hich a man may have a religious, aesthetic or sexual experience. Tnese latter give rise to motives that broadly aim at evoking similar experiences....What made the 19th century think of hunger and gain as "economic" was simply, the organization of production under a market economy (1947: llfl.

He squarely placed the original infusion of "economic" into

human motives on the market type economy and the presence of

truck and barter which he identified as market-specific behaviors.

Surely, Polanyi could have made a tight case for the unique­

ness of industrial capitalism without making such claims about

the force of motives, but he did not, and it is this turn of theory

that we have to deal with today in the corpus of substantivist economic anthropology.1^

I suggest that the reasons Polanyi sought to rebut Adam

Smith, et al. on the level of motives was that the concepts

"gain," "market," and "self-interest" were to him laden with

emotional repugnance that others do not necessarily impart to

them. Yet more important, Polanyi perceived that Adam Smith’s

^There has been some discussion of Polanyi’s concern with motives and their relation to institutions (Dalton 1968a; Cook 1969; Kaplan 1969). In defense of Folanyi's use of motives Kaplan has said:

"Polanyi is not concerned with 'innate' economic propensities or for that matter with the behavior of individuals qua indi­ viduals at all. What does concern him is institutional be­ havior. .. .patterns of economic motivation differ from society to society, and these reflect not the social interaction of rational, autonomous individuals but different institutional orders....In short, there is a fundamental difference between

/ 18 assumptions about economic action also rested on endowing man v/ith the proper motives.

It would be useful to let Adam Smith speak for himself rather than to take the distillation of his work as we receive it in The Great Transformation. Smith, in writing about truck and barter, was simply making some assertions about human nature and not about particular motivations. It was his description of the relation of the origin of the division of labor to truck and barter that prompted Polanyi’s vehemence. Smith writes:

This division of labour, from which so many advantages are derived is not originally the effect of any human wis­ dom, v/hich forsees and intends that general opulence to which it gives occasion. It is the necessary, though very slow and gradual consequence of a certain propensity to truck, barter and exchange one thing for another [1937: 13j*

Smith makes no claims for the innateness of this "certain pro­ pensity." Its phylogenetic status is really irrelevant to his argument:

Whether this propensity be one of those original principles in human nature...or whether, as seems more reasonable, it be the necessary consequence of the faculties of reason... it belongs not to the present subject to enquire [p. l^*

Rather it is sufficient that it is an observable regularity of behavior and unique to man, "it is common to all men, and

the substantivists and the adherents of the basic tenets of formal economics...--a difference in terms of whether the greater causal v/eight is to be placed on individual actors or on institutions" [l969: 233-3'Q.

We should expect to find, then, a clear statement from Polanyi enabling us to understand just hov/ "institutional orders" function and how to distinguish individual action qua indivi­ dual action and individual action the context of institutional orders. But it is precisely in making a delineation betv/een individual behaviors and institutional orders that Polanyi fails (See below, pages/+0 -44). 19

to be found in no other race of animals" (p. 13).

Smith saw the inclination to truck and barter, or more

precisely, the behaviors of truck and barter to be a "consequence

of the faculties of reason" and a result of the fact that man

is a social animal, that he cannot live alone and survive, that

he needs the assistance of his fellows:

In civilized society he stands at all times in need of the cooperation and assistance of great multitudes, and it is vain for him to expect of theix* benevolence only [P. 14].

Truck and barter can insure this necessary interpersonal cooper­

ation, because, men by nature pursue their self-interest:

He v/ill more likely prevail if he can interest their self- love in his favour, and shew them that it is for their own advantage to do so for him what he requires of them. Whoever offers a bargain of any kind proposes to do this..,[jj. 14}.

Then, Smith's argument for the origins of the division

of labor follows pretty directly: some men have greater dex­

terity or inclination to do one thing rather than another and if

they can do it better than their neighbors, it is in their self-

interest to specialize, to make only that thing or only perform

that task and to trade it for their neighbors' specialities.

Otherwise, Smith is not much interested in the origins of

anything. He was really drawing an analytic construct, trying

to explain why things may have come to be the way they are; his

discussion of the division of labor does assume exchange, differ­

ential interests and talents, and that the interests of the ac­

tors of any society need not be the same, but must be at least

complementary. His discussion does not make assumptions about history and does not require historical verification. 20

Polanyi's criticism, however, is precisely that history belies Smith's arguments. There must be, according to Polanyi, a state of benevolence and that in this state truck, barter, and exchange may not co-exist with benevolence. The propensity to truck and barter is appropriate to the market only, these motives and behaviors exist under no other organization of society;

Smith has mistakenly assumed that what was true of England of his time (i.e., that a market existed) was true of all societies at all times.

Thus begins Folanyi's presentation of some very different notions of truck, barter, exchange and "self-love." CHAPTER IV

THE STRATEGY OF THE NEW ECONOMICS II

A Redefinition of Terms

Folanyi perceived that Smith's argument rested on the

operation of the proper motives, and Smith does suggest that

men vtill act in their self-interest ("self-love"). The crucial

difference was that for Polanyi "self-love" was not some gener­

alized, emotionally neutral statement about human nature, and

truck and barter took on new shades of pejorative meaning.

These redefinitions follow from 7/hat Polanyi believed to

be the emotional essence of the market: antagonism—the essence

of the market exchange—was an adversary win-lose situation,

necessarily fraught with hostility:^

In order for exchange to be integrative the behavior of the partners must be oriented on producing a price that is as favorable to each partner as he can make it. Such a behavior contrasts sharply with that of exchange at a set price. The ambiguity of the term "gain" tends to cover up the difference. Exchange at set prices involves not more than the gain to either party implied in the decision to exchange...exchange at fluctuating prices aims at a gain that can be attained only by an attitude involving a distinc­ tive antagonistic relationship between partners 11-957: 155] .

The market exchange for gain, as Polanyi describes it, necessarily

involves antagonism. Further, when he uses the term "gain" he

^Polanyi*s view did not allow for the benign reality of the market place described by Milton Friedman where both parties may be combattants, but they are also both victors and are alv/ays both satisfied, whore "one man's poison is another man's meat" (l964)«.

21 22

is referring to a distinct sort of self-interested behavior,

a Mnd of behavior we might be tempted to classify as "profit­

eering." To make clear the implication of this new definition

of exchange for gain, Polanyi presents a story of an archaic

trader who rejects "gain" for the loftier motives of honor and

duty:

Tilings being what they are, gains made on exchange do not usually add up to more than paltry sums that bear no compar­ ison with the wealth bestowed by his lord upon the resource­ ful and successfully venturing trader. Thus, he who trades for the sake of duty and honor grows rich, vhile he v/ho trades for the filthy lucre remains poor—an added reason why gain­ ful motives are under a shadow in archaic society [l957: 160J.

The only possible interpretation of this story is that

gain is only that motive that has to do with exchange in which

there is antagonism and immediate profit. We might object to

Polanyi's analysis of this story, and assert that the trader

was not trading for the sake of duty and honor at all, but

rather pursuing his long-range rather than his short-range

interests. But to insist on this interpretation would be to miss

the crux of Polanyi's economic theory. In his economics, "gain" v

refers only to appropriate (basically insidious) marketplace motives.

Truck and barter, being the essential market activities

also bear this quality of antagonism; they are carrying for

Polanyi an extra semantic burden. In being related to exchange,

they have become synonomous with haggling and destructive profit­

eering: each actor pursuing his short-range economic interests

that are necessarily in opposition to those of other actors in

the community and to the community as a whole. 23

"Self-interest'' as Polanyi uses it, also occupies a pejor­

ative category:

The true criticism of market society is not that it was based on ecoitonics-dn a sense every society must be based on it—but that its economy ?^as based on self-interest.... Such an organization of economic life is unnatural... (1946: 242-42 emphasis minej.

Having set-up these definitions and assumptions about

human behavior, and the unnaturalness of market society, Polanyi

could well attack Adam Smith and the other classical economists

for devising a scheme of "secular perdition" (1946: 103). Adam

Smith’s assertions—thus revamped—about man’s propensity to

truck and barter, originally so benign have become for Polanyi

the bogy of the age:

This phrase (the "propensity to barter, truck and exchange^] was later to yield the concept of Economic Man. In retro­ spect it can be said that no misreading of the past Ji.e., Adam Smith's mistake that such behavior existed prior to the eighteenth century] ever proved more prophetic of the future. For while up to Adam Smith's time that propensity had hardly shown up on a considerable scale in the life of any observed community, and had remained, at best, a subordinate feature of economic life...a hundred years later an industrial sys­ tem was in full swing over the major part of the planet which, practically and theoretically, implied that the human race was swayed in all its economic activities, if not also in its political, intellectual, and spiritual pursuits, by that one particular propensity [1946: 50-51].

Basing his argument for the uniqueness of industrial cap­

italism on this level of refutation of Adam Smith forced Polanyi

down a logical path that Smith, Ricardo, Maithus, and indeed, the man at the beginning of their intellectual line-John Locke-

never found themselves on. Smith, et al.. did not need to find

the state of nature, the pristine benevolent state where truck

and barter need not occur. Polanyi, however, had to demonstrate 24

that there is a '’non-economic" natural state and that '’economic"

motives are newly arrived on the planet. And he did, in fact,

devote a great amount of effort to proving the existence of such

a stato.^

•^polanyi should have, hut did not, explained also why market appropriate behaviors still persist after the demise of the market society. Polanyi1s discussion of "market society" strictly speaking should not be applicable to modern monopoly capitalism. It is hard to understand why those who have followed Polanyi have not addressed themselves to this problem. (See also note below, page29.) CHAPTER V

THE STRATEGY OF THE NEW ECONOMICS III

Tho Proof of Ne?f Economics Assunptionr? by defining tha Embsdded Stats of* Natural Economies

Based on Polanyi*s first two assertions (above, page 11)

and the development and description of his thought from the pre­ vious pages, we can accurately predict that his state of nature would be characterized by: (l) embeddedness of the economic functions in multi-functional institutions in as much as specific

economic institutions (i.e., the market) are not present; (2) absence of market integrated economy which would result in the absence (at least the non-effectiveness if present) of market- specific behaviors of truck, barter and exchange; (3) the absence of market-specific motives of gain and self-interest.

Polanyi insists that this is, in fact, an accurate depiction of all "natural" state economies, and the existence of such economies would have been clear to both classical and neoclassical economists alike if they had not examined only the recent history of England and assumed that what was true then of England was true of all men and all societies at all times. He proposed the study of social anthropology as remedy.

The corrective of such a "short-run" perspective would obviously...have been the linking up of economic history with social anthropology, a course which was consistently avoided [1946: 52].

25 26

In social anthropology Polanyi sought the alternative,

i.e., natural articulation of society and economy.1-^ The natural

pre-market articulation that he derived v/as ''embeddedness":

....man's economy, as a rule, is submerged in his social relationships...neither the process of production nor that of distribution is linked to specific economic motives... the economic system will be run on non-economic motives...

The human economy...is embedded and enmeshed in institutions economic and non-cconomic. The inclusion of the non-economic is vital...they may be as important for the structure and functioning of the economy as monetary institutions... [l957: 14ZJ-

The essence of "embeddedness" is two-fold. On the one hand it suggests that in societies prior to the 19th century,

economic processes were carried out by social Institutions that were multi-functional (e.g., kinship, chieftainship). That in itself is not so unreasonable. But, on the other hand, it suggests, too, that the sources of "disembeddedness" must not be present in these societies. The source of disembeddedness is "economic" motives.

Embeddedness implies, then, the absence of economic motives

(1946: 13, 14, 15, 20, 50-75, 137, 165, 260-270; 1947: 111-113;

1957a: 141-143, 148-150; 1957b: 85). These motives simply do not exist in non-capitalist societies. Polanyi makes use of the ethnographic data to prove this. Modern ethnographers agree on very little, he notes, except

^^Polanyi relied most on the works of Richard Thumwald (1932) and Malinowski (1922, 1926, 1935). He makes brief refer­ ence (1947) to the following authors and works: M. J. Hersko- vitz. The Economic Life of Primitive Peeples: L.D. Mair, An African People of the Twentieth Century: E. M. Loeb, Tha Distri­ bution and Function of Money in Early Society. 27

....the absence of the motive of gain...and especially the absence of any separate and distinct institution based on economic motives {I946: 54].

Polanyi's formulation of "embeddedness" is such that we cannot have only its first implication without its second.

We must accept both multi-functional institutions and the absence of economic motives.^

Polanyi*s discussion of the second characteristic of the natural state (the absence of the market form of integration) is drawn largely from his grasp of economic history, (it has been amply discussed in other sources, Sievers, 1949; Humphreys,

1969; re-examination of the arguments is beyond the scope of this paper.)

The natural state economy model also contains a corollary proposition. Since markets don't exist, and since market-specific behaviors don't exist, the division of labor must be the product of other forces.

Division of labour, a phenomenon as old as society, springs from the differences inherent in the facts of sex, geography, and individual endowment; and the alleged propensity of man to barter, truck and exchange is almost entirely apocryphal E946: 53.

We have good reason to insist on this point with all the emphasis at our command. No less a thinker than Adam Smith suggested that the division of labour in society depended on the existence of markets, or as he put it, "upon man's propensity to barter, truck and exchange one thing for an­ other" @946: 50).

In sum, the essential components of the model of the natural

^■^The price for accepting embeddedness has been raised significantly by latter day substantivists such as Kaplan and Dalton. The concept now implies not only absence of economic motives, but also the absence of economic rationality. (See Kaplan, 1968.) 28

economic state are:

Embeddedness of the economic functions and as corollary, the absence of economic motives.

Absence of market integrated economies and therefore.

Absence of truck, barter and exchange.

Re-attribution of the origin of the division of labor to non-economic forces (sex, geography, individual differences).

It is characteristic, although unfortunate, that Polanyi’a model is really a counter-model. He was not so much interested

in discussing primitive economies as he was in exposing the source of the unnaturalness of nineteenth century economy. His assertions do not really constitute an attempt to define non-capitalist economies, but rather an attempt to disprove Adam Smith's ra- tionale for truck and barter behaviors.15

Polanyi believed that sufficient proof of his assumptions could be obtained by reaccounting for apparently economic be­ haviors. That is, by proving that the origins of structures and behaviors (division of labor, production, distribution) we have naively assumed to be economic--are not economic in non-market societies.

The mechanics of the proof rest in part on Polanyi's spe­ cial social theory—constructed initially for the purposes of this proof—^nd in part on his special definition of the true meaning of "economic." In Part II we will look at his discussion of the non-market state of the Trobriand Islands to determine

15"^Considering the reasons for his attempt, it is especially unfortunate that his criticism of Smith is so far afield. Snith placed the origin of the division of labor in society, not in the market. 29

if he does succeed in the reaccounting of apparently economic

behaviors. First, however, we need to scrutinize this theory

of society and social action that he constructed as support for

his nevr economics.

We need consider yet one more qualification before the

evaluation of Polanyi*s method and analysis can begin. We must

be aware that there is*not complete congruence between the Polanyi

of The Great Transformation and the Polanyi of some thirteen

years later as he writes in "Economy as Instituted Process."

In 1944 Polanyi was chafing at the very prospect of doing an

institutional analysis, but by 1957, he had backed off from

this entrenched position and was instead searching for a frame *1 of reference broad enough to include all economies.

....neither time nor history has provided us those concep­ tual tools required to penetrate the maze of social relation­ ships in which the economy was embedded. This is the task of v/hat we will here call institutional analysis.

I do not mean to suggest that Polanyi*s point of view was at

all changed, nor was his social science much elevated. His

approach was, however, more self-consciously "social scientific."

But it remained an attempt to graft a cohesive institutional an­ alysis onto the materials of The Great Transformation. In 1957, the "new economics" was dressed as a new social theory. 16

16 It is interesting to note that part of the reason that Polanyi was searching for a new frame of reference was that the market analysis was not strictly relevant to modern v/estern, industrial capitalist economies either—since as he pointed out in 1944> the market economy was no more. (See especially 1957a: 156-57.) We may vrander, then, if substantivist economic anthro­ pologists are as hesitant to apply neoclassical models to present- day America as they are to apply them to other kinds of non- market economies. CHAPTER VI

THE NEW BCONOIHCS BECOMES A NEW SOCIAL THEORY

Economies Defined

It is a reflection of Polanyi’s change in focus that he

came to define "economy" only in 1957. (it was also then that

he formulated the now famous definitions of Substantive and Formal economies.)1^ For the purposes of this discussion, we

shall use his definition of "empirical" economies, which Polanyi

formulated to be general enough to include both market and non-

market economies. The empirical economy is defined as an "in­

stituted process of interaction between man and his environment,

which results in a continuous supply of want satisfying material means" (1957a: 145).13

"Economies is compounded of two meanings, with two roots: the substantive meaning of economic derives from man's dependence for his living upon nature and his fellows. It refers to the interchange with his natural and social environment, in so far as this results in supplying him with some means of mater­ ial want satisfaction. The Formal meaning of economic derives from the logical character of the means-end relationship, as apparent in such words as 'economical' or 'economising.' It refers to a definite situation of choice, namely that between the different uses of means induced by an insufficiency of these 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...have nothing to do with each other" (1957a: 140).

l8Polanyi excludes services from his definition; it remains ambiguous just what role services play in his institutional analysis. Want satisfaction is material "if it involves the use

30 31

Instituting the Econony and the Proper Sort of Institutional Analysis

Institutional arrangements are those that articulate tech- ^

nology with social relations (1957a: 146). Economic institutions

are, then, those institutional arrangements that articulate

the "material means of want satisfaction" with social relation­

ships. Instituting the economic process vests the process of want satisfaction with "unity and stability."

The instituting of the economic process vests that process with unity and stability: it produces a structure with a definite function in society; it shifts the place of the process in society, thus adding significance to its his­ tory; it centers interest on values, motives, and policy. Unity and stability, structure and function, history and policy spell out operationally the content of our assertion that the human economy is an instituted process [l957a: 146 emphasis in original].

For Polanyi, a proper sort of institutional analysis would need to study how empirical economies are assured of unity and stability, structure and function. In addition, a proper analysis would need to pose three questions of its data regarding (l) the degree of embedding of the economic institutions, (2) the actual psychological motives of the actors, and (3) the laws of progress in the evolution of institutions .-*-9 of material means to satisfy ends; in the case of physiological v/ants, such as food or shelter, this includes the use of so- called services only" (1957a: 140). All we know for sure about services is that they are not ordinarily performed for payment in tha non-market state (see below p.71). A discussion of the role of services in economies otherwise is conspicuously absent.

■^•^The third question, that of the evolution of institutions, figui’es least in Polanyi1 s thought. The fact that he chose to title a chapter of The Great Transformation. "Evolution of the Market Pattern" reflects more a desire to isolate industrial capitalism as a distinctive fbrm than an attempt to provide an evolutionary perspective. He abandons even the attempt to 32

The problem of the place of the economic system in society involves several important questions such as the separate­ ness or the embeddedness of these institutions; the actual psychological motives on which the individuals participate in running those institutions; or the possible laws of progress in the evolution of institutions |l968: 122].

Clearly, the sort of institutional analysis Polanyi advo­ cates is tailored directly to consider data that could prove the assertions of his counter-model (embeddedness, absence of market- specific motives, absence of market specific behaviors).

The Means of Instituting the Economy

This process that insures stability and unity operates the same 7/ay in all societies, that is, "through a combination of a very few patterns, which may be called forms of integration"

(1957a: 149). Thus, in all societies at all times the economy is integrated by that process in which "institutional patterns meet halfway the principles of behavior" (1957a: 151, 1946: 55).

(See Figure 1, p. 33.)

Although there are only three patterns^ they may co-exist

provide an evolutionary perspective. He abandons even the at­ tempt to discuss a set of stages of economies. Any form of economic integration—or any combination of forms may occur in societies: "...forms of integration do not represent •stages’ of development. No sequence in time is implied. Several sub­ ordinate forms may be present alongside of the dominant one which may itself recur after a temporary eclipse" (1957a: 156). Polanyi suggests that lend-lease policies during WWII were the result of Reciprocal economic patterns re-emerging in times of emergency. Polanyi remained hostile to evolutionary perspec­ tives, and this may account in part for his consistent slighting of Marxist theory.

Tho Great Transformation Polanyi makes reference to a fourth pattern of integration, "autarchy" or householding. This form of integration is supposedly characteristic of classical civilization. The form drops out of Polanyi’s work in 1957, and in any case, its consideration is not v/ithin the concerns of this paper. 33

POLANTPS PATTERNS OF INTEGRATION

prn of Integration: Achifived by Mutual Adjustment of: ■RECIPROCITY (Principle of Behavior) RECIPROCITY •SYMMETRY (Institutional Pattern) •REDISTRIBUTION REDISTRIBUTION -CENTRICITY -ECONOMIC MOTIVES MARKET -PRICE SETTING MARKETS

FIGURE 1

in a society in any combination. A society will be called

"reciprocity," "redistributive," or "market" after the pattern of integration that organizes the greatest amount of material 22 means of want satisfying processes.

The Economies Described

Reciprocal societies are characterized by reciprocity which

"works mainly in regard to family and kinship" (1946: 54). For the success of its application in the instituting of the economic 21 22

21This table constructed from The Great Transformation, pages 51-73 passim, and "The Economy as Instituted Process" pages 148-157.

22It is a significant reflection of Polanyi*s true concerns that he chose to name these patterns of integration after the principle of behavior involved. It foreshadows, too, his consis­ tent inability to clarify the relations between individual be­ haviors and institutions. (See below, pages 40-44.) 34

processes, it requires the institutional pattern of "symmetry11

(1946: 54; 1957a: 149). Symmetry works by patterning out

persons and groups into dualities so that reciprocal give-and-

take behaviors can proceed efficiently.

But for the frequency of the symmetrical pattern on the subdivisions of the tribe, in the locations of settlements, as well as in intertribal relations, a broad reciprocity relying on the long-run working of separated acts of give- and-take would be impractible (l946: 56^j.

Through the operation of reciprocity, Polanyi intends

to "re-account" for the distribution and consumption of goods

as not economic operations but rather as aspects of locational,

tribal, and kin relations

Redistributive societies are characterized by redistribu­

tive behaviors, i.e., sharing by means of handing goods to a central place for storage and redistribution. Redistributive behaviors require the institutional pattern of centricity, i.e., an allocative center, a "track for collection, storage and handing back of goods and services," and for some kind of central figure,

either chief or big-man (1946:. 56; 1957a: 149).

For Polanyi, the real importance of the Redistribution/ centricity pattern was that he attempted to explain the division of labor through its operation.

...the larger the territory, and the more varied its produce, the more will redistribution result in an effective division of labour, since it must help to link up geograph­ ically differentiated groups of producers (1946: 56].

^Although consumption and distribution, even if tribal or kinship oriented, might well be considered economic actions, we shall see that Polanyi demands that they not be such. See Part II for full discussion of this point. 35

(Polanyi had anticipated that his readers night be confused

about the epistemological status of his "institutional patterns."

As a partial (and not very satisfactory) solution to this problem,

Polanyi offered the following "clarification":

Symmetry is no more than a sociological arrangement, which gives rise to no separate institutions, but merely patterns out existing ones....

Centricity, though frequently creating distinctive institutions, {[generally of a political nature] imolies no motive that would single out the resulting institutions for a single, specific function.... |l946: 63 emphasis mine].)

Further, Polanyi asserts that reciprocity and redistribu­ tion are sufficient to organize society, and that through their operation economic functions will be fulfilled without economic behaviors and motives:

As long as social organization runs in its ruts, no Individual economic motives need come into play: no shirking of personal effort need be feared, the division of labour will be auto­ matically discharged; and above all, the material means for an exurberant display of abundance at all public festivals will be provided 11946: 56 emphasis rainej.

The presumed absence of economic motives is central to

Polanyi's description of redistributive (and reciprocity) type economies. There should be no mistake that Folanyi considers non-market economic action to be strictly submerged in and deter­ mined by social relations. He did not mean that "material means of want satisfaction" activities did not occur; he did mean that the rules which governed ‘these activities were not those of procuction but rather those of social relations.

Economically, redistribution of food and trading of gifts ...is an essential part of the existing system of the divi­ sion of labour, of foreign trading, of taxation for public purposes, of defense provisions. But these functions of an economic system proper are completely absorbed by the in- 36

tensely vivid oxn^rignces which offer superabundant non­ economic motivation for every act -performed in the frame of the social system as a whole [i946: 55 emphasis minef].

Market societies stand in clear contradistinction to

reciprocity and redistribution societies as described above,

market society is characterized by the presence of motives ap­

propriate to truck and barter (i.e., in Polanyi's terms, antag­

onistic haggling). The market appropriate motive requires the

supporting institutional pattern of price setting markets to be

integrative of the economy. These two factors account for the

uniqueness of the market pattern.

The market pattern,...[unlike the preceding two] being related to peculiar motive of its own, the motive (appropriate to and supportive^ of truck and barter, is capable of creating a specific institut5.on. namely the market (1946: 63 emphasis mine] .

The market pattern is the only one characterized by disem­ beddedness or separateness. We are now confronting the full

effects that Polanyi attributed to ’economic' motives. They produce distinct economic institutions, they overturn the natural order by embedding the social system in the economic institutions.

Once the economic institutions become distinct, the effect of any countervailing forces over those institutions diminishes:

...once the economic system is organized in separate insti­ tutions, based on specific motives and conferring a special status, society must be shaped in such a manner as to allow that system to function according to its own laws. This is the meaning of the familiar assertion that a market economy can function only in a market society [1946: 63-643.

The unique state of affairs is the forced outcome of the plain reality that the proper functioning of any society's econ­ omy is necessary for its continuing existence, and that the market 37

can only operate properly if it is allowed to set prices without

outside interference. Thus, the market economy ended hy embedding

society. That is, the rules which governed the market ultimately

governed society as a whole.

The market economy created a v/hole new type of social

order:

The economic or productive system was here entrusted to a self-acting device. An institutional mechanism controlled human beings in their everyday activities as well as the resources of nature...As a result, the market mechanism became determinative for the life of the body social Q-947: ug.

The Fffects of Instituting the Economy; Unity and Stability

We have seen now how Polanyi envisioned the process by which the economy is ’'instituted." It is only a short step, then, to the means by v/hich this instituting process can insure stability and unity. Polanyi never defines these concepts, but they seem to be descriptive of those economies in which random or non-appropriate subsistence oriented activities don't exist and in which the system v/orks to insure that only the proper sorts of subsistence oriented activities do occur. Unity and stability could not mean, of course, that only one pattern of integration would be operating in any one society (see above pages 31-32), but their presence could mean, for example, that actors would not truck and barter with kinsmen or expect reci­ procity in a market place exchange for gain.

It is because the instituting of the economy requires that certain institutional patterns be matched with specific appro­ priate behaviors that unity and stability are achieved. The 38 mutual adjustment of certain principles of behavior with the matching institutional patterns will tend to keep other, non-

appropriate behaviors from occuring.

Non-appropriate behaviors will tend not to occur for several reasons. First, they will not have an integrative effect.

That is, all the give-and-take activity in the world will not produce an economy integrated by reciprocity in the absence of symmetrically arranged groupings. Only where allocative centers exist will redistributive behaviors have any integrative effects.

And only in the presence of price setting markets will barter have any integrative effect (1957a: 151). Apparently these non-appropriate behaviors wither from ineffectiveness. Polanyi suggests that this is the case; "...in the economic sphere in­ terpersonal behavior so often fails to have the expected societal effects in the absence of definite institutional preconditions"

(1957a: 157).

Second, only appropriate behaviors will produce the necessary outcomes, i.e., the provision of material means of want satis­ faction. Thus, in the Trobriand Islands, native actors behave in the generous, sharing manner appropriate to the institutional pattern of a redistributive economy because "...any other be­ havior than that of utter self-forgetfulness will simply not pay" (1946: 54).

Third, the community will swiftly punish non-appropriate behaviors. Predictably,^ the community will punish most ve-

24lhat is to say, not logically predictable, but predictable knowing Polanyi*s particular inclinations. 39 hemently those non-appropriate behaviors that are mrhct-specific:

Qn an institutional setting other than that of price-setting markets^)...acts of barter will remain ineffective and there­ fore tend not "to occur. Should they nevertheless happen, in a random fashion, a violent emotional reaction would set in, as against acts of indecency or acts of treason, since trading behavior is never emotionally indifferent behavior and is not, therefore, tolerated by opinion outside of the approved channels [I946: ISlJ.

It is not difficult to see that Polanyi’s theoretical structure leads to the forced conclusion that behaviors resulting from "economic" motives—as Polanyi has described them—do not occur (systematically, repetitively) in non-market economies.

These particular assertions, and in fact, all of his social theory v/ere constructed as support for the familiar proposition that in their natural state economies are embedded in social relations and that gain, slef-interest, truck and barter are absent.

I CHAFIER VII

EVALUATION OF POLANYI'S SOCIAL THEORY

Polanyi's social theory •was constructed in order to validate

a series of economic and social assertions formulated from a

passionate disdain of capitalism. This fact does not necessarily preclude its worth. However, the fact that it is ad hoc, shot-

through with logical, flaws, ultimately circular, and that it is wrong, that it does not accord with the data, does.

He presents three "principles of behavior," except that one of them is a "motive." He presents three institutional patterns, each of them having a different epistemological status:

"symmetry" arranges existing institutions, but creates no new ones of any kind; "centricity" apparently does not arrange

existing institutions but can create multi-functional insti­ tutions; the price-setting market creates a specific-function ■ economic institution that tears asunder the remaining institution­ al relations and assumes control.

He argues for the necessity of and presents a generalized definition of "economy" (1957a: 139-142) but ends by insisting that "economic" motives and "economic" behaviors are only those that occur in the presence of the market institution. It is hard to understand why some activity having direct relation to the

"material means of want satisfaction" could not be perceived by its performer as "economic." But Polanyi asserts many times

40 41

that this could not he the case; only those behaviors appropriate

to the supporting institutions will tend to occur. Thus, gardening

in tho Trobriand Islands could not be construed as directed towards the mundane concern to eat at harvest time—this percep­ tion smacks of the economic—the activity is rather directed toward reciprocity—as the Trobriander must give half of his harvest to his married sister’s households and receive, in turn, 25 produce from his wife’s brothers. The motives directing action in the Trobriand Islands are not "economic"; they are

"joy of work," "social approbation," and "competition" [1946: 262j.2526

I suggest that the only way in which the behaviors of the

Trobriand Islanders can be construed as not economic is by fiat.

That is, by defining "economic motives" as only those that appear in the presence of the price-setting market institutional pattern.

That assertion, however, reduces Polanyi's logic to an unfor­ tunate geometric shape. We are left with this explanation of the market pattern: the market pattern of integration results from the process in v/hich "economic." motives and the behaviors they induce—truck, barter and exchange—are mutually adjusted to the institutional pattern of price-setting markets. But, motives become "economic" only through the operation of the market economy ("V/hat made the 19th century think of hunger and gain [to be read "self interest’]] as "economic" was simply the

25 This practice, called urigubu. is discussed in greater detail below. Part II, Chapter 2. 26These motives are discussed below. Part II, Chapter 3. 42

organization of production under a market economy? 1947! 111).

The argument is circular: motives are bath a necessary cause and

the effect of the market institution.

Further, it is not certain v/hat relation his institutional"

patterns have to social organization. And, v/here do they come from? V/hy is one society dominated by one rather than another?

V/hat are the origins of the "principles of behavior"? V/hat is

the relation between personal behaviors and "principles of be­ havior"? From a theory that purports to explain the development

(even if in non-evolutionary terms) of a specific pattern of

integration, v/e should expect some answers to these kinds of questions.

To be fair to Folanyi, we should point out that he did, indeed, attempt to speak to certain flaws in his theory. He did'make some attempt to explain the origins of "institutional patterns" and their relationship to "principles of behavior."

He correctly perceived that he could not say on one hand that certain behaviors would be integrative and regularly occuring only in the presence of certain institutional preconditions, and then on the other hand to attribute these institutional patterns to accretions of these behaviors. That is, institutional patterns are not simply accretions of the corresponding forms of personal behaviors.

The significant fact is that mere aggregates of the personal behaviors in question do not by themselves produce such struc­ tures ...

We merely insist that if in any given case, the societal effects of individual behavior depend on the presence of definite institutional conditions, these conditions do 43

not for that reason result from the personal behavior in question... jl957a: 15CT].

Polanyi agrees that his theoretical structures may seem to suggest precisely that. But, he insists that institutional patterns could not be accretions of the corresponding forms of personal behaviors because the "vital elements of organiza­ tion and validation are necessarily contributed by an altogether different type of behavior'.' (1957a: 150). He anticipates our next question, and provides an "answer":

We do not wish to imply, of course, that those supporting patterns are the outcome of some mysterious forces acting outside the range of personal individual behavior [l957a: 150].

What then could this "altogether different type of behavior" be? Polanyi is silent. He never returns to a consideration of this problem. He provided no further explanation.

He does tell us of a "factual connection" elucidated betv/een

"reciprocative behaviors and symmetrical groupings" .in his.reading of Thurnwald (1957a: 151), but a factual connection does not tell us much. It does not explain how or why these "connections" came to be, nor can it account for the origins of "behaviors" and "groupings."

Polanyi could not, of course, suggest that these behaviors and groupings v/ere adjustments of social organization to production in a particular society. Such a suggestion would imply that reciprocal societies were just as economic as market societies.

Perhaps, if Polanyi had provided us with a more exhaustive set of all those forces that do not produce the institutional patterns in question, we would have a more precise idea of those 44

forces that do-. It remains the uncorrectable flaw of his theory

that we can neither formulate the content of these institutional patterns nor penetrate to relations between these institutional

constraints and human behaviors. PART II

45 CHAPTER I

THE SEARCH FOR THE NON-MARKET STATE OF NATURE WITH POLANTPS OVJN TOOLS

OF ANALYSIS

If so-called economic motives were natural to man, we would have to judge all early and primitivo societies as thorouglily unnatural. —Cur Obsolete Market Mentality

We have now explicated Polanyifs theory of economies and societies and demonstrated that it is flawed. Even so, rebuttal of Polanyi*o work must also include the testing of his theory end method against some body of data.

Let us, then, assume that somehow the flawed logic and faulty as­ sumptions have been put right and proceed to do the kind of analysis that Polanyi, et al.. were advocating in 1957, and that Dalton and the rest of the ’'Polanyi Group” would advocate doing today.

Wo remember that Polanyif3 method of proper institutional analysis includes examination of ecabeddedness/separateness and of ths motives of the participants. And further, that from these two seninal consid­ erations that major theoretical tenets of his social theory are generated, to be eminently fair, let uo test his theory and method of analysis on the came data from which it was constructed, the Trobriand Island mat­ erials, to determine if it produces results that meet any of the canons of proper explanation.

We remember, too, that this analysis must adequately explain the workings of the non-market state of nature and to sucessfully ro-account

46 47

for apparently econoisic behavloro.

Ordinarily economic behaviora—auch as these involving gain in any

osnss, or any aelf-interested behaviors—are, according to Polanyi, neces­

sarily disruptive behaviors in ncn-ciarket societies, and vill not occur

with regularity (and should thoy occur will call dovn "violent emotional

reaction"), Neither should activities occur that are appropriate to

"formal" economies such as rational calculation of moans to ends. In

those nen-narket societies which are characterised by unity and stability

these behaviors should occur only randomly and infrequently.

The problem that Polanyi must solve, then, is to explain how "or­

dinarily economic" functions are accomplished in ncn-economic ways in

non-market societies. Thus Polanyi’s analysis of the Torbriand social

system which will include, of courso, all of their embedded economic

functions and motives, begins with a statement of tho familiar process of tho complementarity of behavior principles and institutional patterns.

The patterns of integration found in the Trobriand Islands are those

characterised by embeddedness, that is, reciprocity and redistribution.

Thus Polanyi asserts that on the ground va mill, find reciprocative and redistributive behaviors meeting halfway the institutional patterns of

symmetry and csntricity (1946: 56).

Polanyi is net suggesting that the activities coordinated by re­ ciprocity and redistribution are devoid of economic content (that is, tho material means of want satisfaction) or import, but that rather they occur in non-economic contexts and tliat thoy aro not perceived of as economic by native actors.

Superabundant non-economic motivation exists in the state of nature because motives spring from the "context of social life." In the Tro­ briand Islands thoso motives are thoso appropriate to kinsmen, compatriots 48

and chiefs. As thoso are not economic contexts, there are no economic

motives present. Polanyi asks that vo assume that Trobriand Islanders

somehow don,t notice that the ends of much of thoir activities have to

do with T,economic,f matters. Tho assumption may seem to stretch our imag­

inations a bit, but in Polanyi*3 theoretical schema it presents no prob­

lem; for the moaning of Kunity and stability0 is precisely that motivatioiis

and behaviors not appropriate to supporting institutions will not occur.

Thus the demonstration of tho absence of non-appropriate behaviors

becomes as critical to tho proof of his model of non-market society as

is the demonstration of the presence of appropriate behaviors. The re­

petitive, systematic occuranco of non-appropriate behaviors is as damaging

to his argument as would bo the non-occurance of appropriate behaviors.

Often Polenyi’s logical strategy is simply to state that the pre­

sence of appropriate behaviors is sufficient evidence of the absence

of non-appropriate behaviors. Hs says:

The performance of acts of exchange by ’jay of free gifts that aro expected to be reciprocated...a procedure minutely articulated and perfectly safeguarded by elaborate methods of publicity,...and by the establishment of "dualitiesn in groups which aro linked in mutual obligations—should in itself explain the absence of tho notion of gain or even of wealth other than that consisting of objects traditionally enhancing social prestige [1946: 54[~

Wo should not be surprised at the assertion that tho truth of his position is self-evident. We should not, however, assume that it is; that proof can b© had only through the test of his theory. Based on

Polanyi’s model we can construct the following hypotheses and predict

This statement loaves xis in tho Polanyi-substantiviot bind— "economic" can bo only profit taking in the market and because Polanyi would not and could not assume that social preotigo has some long-range pay-off—economically or otherwise—vxo can only conclude that the Trobriand Islanders are not rational actors. 49

that thoy must bo truo of tho Trobriand Islands:

1. Tho division of labor is tho result of redistribution of goods from varying geographical areas.

2. Market specific behaviors of truck, barter, exchange and of rational calcualtion of means to ends are absent,

3. Social organization comprised of Reciprocity and Redistribution •patterns of integration embeds economic functions and accordingly, economic motives aro absent.

Our investigation must be two-fold. First, can wo find support

in the ethnographic record for the hypotheses formulated from Polanyi*o

theory of the non-market state. Second, will the results of our recon­

struction of the data with his model account for and explain the Trob­

riand materials. Will we have an accurate depiction of on tho ground

behaviors, and will we have answers to "how11 and ‘'why" questions about 2 those behaviors.

In fairness to Polanyi, it should bo noted that in general his handling of the Trobriand data was gosturo at analysis rather than rigorous analysis. Aparcntly he was presenting ths material as so clearly supportive of his model of non-market economies that very little needed to bo said. (This fact should not imply that wo bo any less de­ manding of the validity of Ms model.) CHAPTER II

THE NON-MARKET STATE OF NATURE

To prove that apparently economic behaviors did not exist in the

Trobriand Islands, Polanyi asserted tho follov/ing:

1. ''Division of labour does not originate in trade or exchange, but in geographical, biological, and other non-economic facts" (1946: 267).

To prove that explicitly economic behaviors did not exist in tho

Trobriand Islands, he asserted tho following:

2. "Individual acts of truck, barter and exchange are only ex­ ceptionally practiced in primitive society" (1946: 26l).

To prove that economic motives did not exist in the Trobriand Is­ lands, he asserted the following:

3. "The motive of gain is not ’natural* to man" (1946: 261).

4. "To expect payment for labour is not ’natural* to man" (1946: 261).

5. "To restrict labour to tho unavoidable minimum is not ’natural* to nan" (1946: 262).

To prove the operation of non-economic motives, he asserted tho following:

6. "The usual incentives to labour are not gain but reciprocity, competition, joy of work, and social approbation." (1946: 262).

And, in sum, he asserted tho follov/ing:

7. "Economic systems, as a rule, are embedded in social relations; distribution of material goods is ensured by non-economic motives" (1946: 263).

50 51

"Tho division of labour does not orjb?lnato in train or exchange, but in georraphical, biolo-dcal and other r,on-ocor,c,-iic fr.ctn.u

Polanyi had encountered and discarded several versions of the con­

ditions necessary for the division of labor. Aden Smith, who Polanyi

was most interested in attacking, supposed that it was tho product of

nan’s being a special sort of social animal, that is, that he could

not exist except with a significant amount of interpersonal cooperation.

Truck and barter made this interpersonal cooperation possible.

Harx had suggested a slightly different theory. It was, like Smith’s,

based on tho concept of nan as a special kind of social being, but

suggested a somewhat differait relation between tho division of labor

and exchange. Marx theorized that both interpersonal cooperation and

specialization of functions wero products of man acting in a societal

context. Cooperation and specialization presuppose as well as increase the ability of a society to produce a surplus. Existence of both this surplus and of the social division of labor makes exchange possible

(Kobsbaura 1964: 12-13).

Polanyi suggested an alternative explanation. The division of labor is occasioned by redistribution:

3 Smith’s analysis carries with it, as a corrolary, that tho upper most limit on the degree of specialisation of functions (for example, occupations) would bo tho degree of development of the market, that is, the extent to which a producer can exchange his specialty for someone else’o.

"As it is tho powor of exchange that gives occasion to the division of labour, so the extent of this division must always bo limited by tho extent of that power, or in other words, by the extent of the market. When tho market is small, no person can have any encouragement to dedi­ cate himself entirely to one employment, for want of the power to ex­ change all that surplus part of his own labour, which is over and above his own consumption, for such parts of the produce of other men’s labour as he has occasion for" {Smith 1937: IZi* 52

And tho larger the territory and the rcoro varied the produce, the more will redistribution result in an effective division of labour, since it mst help to link up geographically dif­ ferentiated groups of producers... (1946: 56].

hard to understand why Polanyi rejected both his and Adam Smith’s analyses.

Both imply an economic—or at least material-basis as either the cause ^

or result of the division of labor, and according to Polanyi’s version

of economic action, if an activity was at all based upon or directed

towards things economic, it had to be occasioned by economic motives*

Since the whole rationale for examining the Trobriand data lias to prove

that economic motives do not exist, clearly Polanyi would need to sub­

stitute "non” economic actions in his etiology of the division of labor.

For Polanyi*s explanation of the division of labor to be correct we would need to find the following geographic factors, behaviors, and institutions in tho Trobriand Islands: (l) Areas with specialization in food production or manufactured goods related to geographic or eco- logic variables; (2) come sort of Paramount Chief standing in an ex­ plicit political relationship to all villages of the Islands such that these villages aro required to harid goods to the chief for accumulation

^Except for soms historical references to Marx in The Great Trans­ formation , ’’Aristotle Discovers tho Economy” (1957b) and some lectures "(published by Dalton in 1968), Polanyi refers directly to Marxist theory only a few times: Once, in The Great Transformat a on to object to Marx’s attribution of economic value to labor only; second, in ”The Economy as Instituted Process” to object to Marx’s notion of evolutionary stages of economic formations; and third, in a lecture in which Polanyi pro­ jected onto Marx some his own theoretical bogys:

”Tho discovery cf tho importance of ’economic* under a market economy induced him (Marx)to overstress the influence of the economic factor generally, at all-times, and places. This proved a gravo mistake. * '' ’ J i of 53

and redistribution; (3) sons means of extensive ceremonial redistribution

of food involving persons from geographically scattered villages in

which the specialties from each of the regions aro shared and rearranged

so that all districts have some supply of all specialties (or at least

all of thoso specialties necessary to life); (4) in the absence of a

redistributive network such as described above, the exchange of regional

specialties accomplished through reciprocal exchanges with kinsmen through

urigubu payments or through ceremonial partnerships (ouch as Kula or wasi.j\

In addition, and as essential to the proof, the absence of any sig­

nificant amount of individual bartering of one set of regional specialties

for another (such as vegetables for fish; baskets for yams; oi* skill

ouch as canoe-making for payment).^

5 I suggest this qualification in order to give Polanyi*3 model every chance of proving valid, that is, oven in the absence of tho in­ stitutional conditions necessary for a redistributive pattern of in­ tegration, Trobriand transactions could still be said to be ,,non-oconomic,, if they were all carried out by reciprocal institutional patterns and behaviors* ^This writer notes that such transactions are explainable using Sahlinj? formulations of ,fbalanced reciprocity'’ and "negative reciprocity” (as described in Tribesmen and "On the Sociology of Primitive Exchange”). However, it should bo clear that vrith these formulations Sahlins is des­ cribing individual, economic actions unallowable in Polanyi*1s scheme. It should also be clear that although Sahlins uses Polanyi’s terminology refers to him in positive terms (1965, 1968) ho writes from an economic, and ultimately contradictory, theoretical frame of reference. 54

!3rvtfnt?/xf&/afids

t. '\ UATAULA

0 P£ N S £ A

v Manu^aTa I

•/■^KyyAWA !.

B OYO WA I SjLA Ni'3

rROBPlANO LAGOON (WAOOM) * f -—J~ m tr AAVSWAG'N-V//. &m*¥* Ji*T7

v%.\V»• ;\

Ajub*»< -//SJJ/aKUTA I.

SEA-ARM OF PILOLU

FIGURE 2 — Map of the Trobriand Islands

(Reproduced from Argonauts of the Western Pacific) 55

To relieve tho reader of acme burden, I am presenting a brief ethno­

graphic summary of tho Trobriand Islands. The materials that follcir

have been drawn largely from Patrilineal Kinship (Schneider and Gough 1961);

some data has been culled directoly from Hallnonksi*s works.

The Trobriand Islands lie northest of Heir Guinea. The main island

of the group, Boyowa, is 27 miles at its greatest length and 10 miles

at its greatest width. There is a limited amount of agricultural land

which cannot bo expanded by acquisition of new territory. Subsistence

is based primarily on agriculture} before the British Administration

tho indigenous crops wore yams, taro, bananas and coconuts. Each year

the natives grot/ twice as much produce as thoy need to eat. Fishing

is second to agriculture in importance for subsistence} hunting and

gathering aro of no importance for subsistence under normal conditions.

Tho min island is divided into two geographical areas corresponding

gnerally with different means of food production. The North, which is

predominantly agricultural, is densely settled with villages. The South,

largely oriented to fishing, is loss densely settled and the villages

are clustered in a semi-circular pattern near the western coast to give best access to tho "Trobriand Lagoon" lying between Boyowa and the smaller

islands of Kuyava, Manuwata, Kayleula (see Figure 2).

Tho people reside in villages throughout the islands. Villages are composed of families cf natrilineally related men who have mythical

charter to the lands cf the village. In larger villages, for example,

Onarakana, commoners who have no mythological righto to land reside by paying tribute to the chief.

There are four matrilineal, toteaic clans of which tho Halasi is the highest ranking. Clans are subdivided into sublcans, functionally 56

tho basic unit of social structure. Sublcans are ranked in relation

to each other by nyfchological charter. The highest ranking aublan of

the highest ranking clan is the Tabaltu

Villages are combined into districts, each district is controlled

by a chief who would be head of the highest ranking subclan of the dis­

trict. The chief has the privilege of polygyny—denied to all but the

high ranking neabers of the Trobriand Islands. Polygyny is ultimately

the source of the chief*3 power; ho woilds his power by controlling largo

stores of wealth. That wealth is accumulated by the chief*a ability to marry many women—usually by marrying a sister of each of tho headmen in the villages in his district.- It is incumbent upon a man to make gifts of food (urigubu) to his sisters* husbands (or more precisely, to the households); therefore, a chief as husband to many tdves receives an extremely large income which he uses to mobilize goods and services.

The characteristic of the Islands that has received most attertion by anthropologists is its participation in the Kula. an extensive trading cycle in which arm shells (mwnli) are exchanged for necklaces (soulava).^

There is a certain amount of specialisation in food production and manufacture among the districts. The districts are described by Malinowksi as follows:

KIRIttINA- The district farthest north of tho main Island of Boyowa. It is politically dominant and tho wealthiest; as a reflection of its importance, Kiriwina has become of tho eponyn for the Trobriand Islands. It has the best agricultural lands and two fishing villages which are bound by mythological charter to share their catch with other villages in tho district. The chief of Kiriwina has been called tho ’’Paramount Chief” of the Islands by Malinowski. He is the chief with moot authority of the highest ranking subclan, Tabalu.

n A more extensive discussion of tho Kula is presented below, pages 66-6?. 57

TILATAULA- Also a northern district of Boyova Island. Agriculturo is its only basa of subsistence. It is, however, tha leading nilitary power of the islands (s»ro properly, it the major nilitary power until the British ^pacified” the area). This district has no canoes; there aro artisans v.ho do stone polishing (a long process v/hich re­ quires support of the stone polishers for the duration) usually by commission of a chief or wealthy headman. The chief of this district is not of tho Tabalu subclan, but rather of an intermediately ranking subclan.

KUBCSIA-A northwestern district of Eoyowa Island. It consists of ten villages. Having generally rocky soil, it rolios largely on industry. The best agricultural lands belong to tho village of Gunilaba, tho residence of tho district chief. He is of tho Tabalu subclan. Kubcnans belong to what Malinowski termed an "industrial casto" and asserted that "their high maual ability does not give then rank but rather places them among tho despised...as in any caste system..." (1935 Vol.l: 15)°

KULUHATA-A northern lagoon district of Boyowa. The largest village is Kavataria whose headman is a Tabalu. This district, however, has no single chief and would not act as a single political unit in warfare, Kula, etc. The district is divided between agriculture and fishing as the subsistence base. One village, Sinaketa, has traditional rights to the best pearling area on the lagoon and is becoming dominant in the area; as tho result of income derived from European traders. The district also is the pro­ duction center for red-shell disks used in the Kula.

KAYLEULA-A small island lying off tho western coast of Boyowa. In this district Malinowksi includes the smaller islands of Manuwata, Kuyawa, Nubiyam. The district is the second largest producer of am shells; its villages figure largely in pre-Kula trade when trade (barter)items are acquired for tho Kula expedition proper,

LUBA and KAYF/ffilGIHA districts are mentioned but not described by Malinowski.

Aside from certain rough correspondences between food production and ecological variables—for example, inland villages do not fish; villages on the lagoon do fish; villages with poor soil don’t have as great a reliance on agriculture as do villages with good soil, there is no clear-cut evidence to suggest that regional specialisations are wholly attributable to the respective micro-environments. There are only a few industrial items that can be produced only by persons in

Aether nor not castes in fact exist, and the social and political structure generally will bo discussed more fully below. 53

the industrial district (Kuboma). Otherwise, it is generally true that

...there is no article which cannot bo produced not only in wood- carving Bwoutalu (Kubcaa district^] but also in the agricultural capital, Omarakar.a...All crafts are practiced, and tho moro specialized articles, such as wooden dishes, clubs, spears, fine basket^ aro produced and reproduced everywhere [1935 Vol. 1: 22].

It is truo, however, that certain villages in Kuboma, and sons fishing villages aro dependent cn tho agriculturally more productive villages for garden produce. So, clearly, there is some evidence to support Polanyi*s assertion of differences in geography as explanatory of the division of labor. To deternine if his nodel is correct, then, wo need to find evidence of redistributive institutional patterns.

One of the prerequisites of redistribution would be the presence of a chief and an allocation center, or at least a "track for collection of goods." Is the institution of chieftainship in tho Trobriand Islands such that we could expect to find these institutional patterns?

The question of chieftainship and power in the Islands involves a careful consideration of their political economy. Tho foundation of power is wealth, and the foundation of wealth is garden produce:

...agriculturo and its consequences enter very deeply into tho social organization of our South Sea coc."unity—and eny community for that matter; they form tho foundation of political power and of domestic arrangements; they are the mainstay of the obligations kinship and of the law of msrriago...[1935 Vol. 1: ix, xj.

The rules determining claims to the land understandably figure to bo of great importance in determining just who will have power. Mythi­ cal charter and the concept of rank deternine legal claim and over­ rights to land in the Islands for the Tabalu sublcan.

There is no doubt, that in the minds of the natives this general myth (of autochthonous origin of the Tabalu in Omarakana) estab­ lishes the Tabalus as overlords of tha whole district. Their right to spread, to settle wherever they like, to assume lordship _ over any community is to a largo extent base-d on this myth jl935 Vol. 1: 22j. 59

Tho doctrino of rank and Tabalu over-rights to land, accounts for

both tho spread of Tabalu chiefs over the Trobriand Islands (Malinowski

notes their chieftainship in Kubona, Luba, Kayleulo, Kulumata as well

as in Kiriwina) and for tho consolidation of village units into districts*

Tho doctrino of rank organizes village lands into bigger units re­ presenting a district. Within such a district tho exploitation of land is associated with the substantial tribute given to tho chief in urigubu or pokala (that is, tribute proper) and of other gifts [1935 Vol. 1: 2^1.

Does this mean that those districts having Tabalu chiefs act in

unison, and that the chief of Kiriwina could be considered to bo the

"Paramount Chief" of the entire island group, and that he does for the

Trobriand Islands as a whole, what each chief does in his separate dis­

trict; that is

Tho chief...accumulates and stores this quota of the district*s yield (that is, the amount given to him as uricubu and tribute), and uses it later in connexion with tribal enterprises, warfare, and public ceremonies[1935 Vol Is 2%].

This does not seem to bo the case. It appears that not only is

there no such thing as "tribal" undertakings, no such thing as clan level undertakings, it appears that the most important unit of action at all times is the village:

Sociologically, the village is an important unit in the Tro- briands. Even the mightiest chief in the Trobriands wields his authority over his own village and only secondarily over the district.

...within each district, the several village communities have each a great deal of independence. A village community is represented by a headman, its members make their gardens in one block and under the guidance cf thoir garden magician; they carry on their own feasts and ceremonial arrangements...In all big affairs, whether of the district or of tho tribe, members of a village community keep together and act in one group...Jl922: 57J.

The possibility of the "Paramount Chief" having any political reality— and therefore standing as the center of an allocation track for redis- 60

tribution—geem3 rcmoto. Even 30, remembering that the source of power

is wealth and tho chief does obtain vrivoa from hio vassal villages, is

it possible that the chief of Omarakana, through his marriage alliances

could exert something resembling leadership (and of importance to Polanyi,

redistributive functions) over the whole territory?

Malinowski does present an inventory of tho urigubu and tributary

gifts received by the chief of Kiriwina in 1918 (see Figure 3). It

suggests that the answer to this particular conjecture is in the negative.

It is easily demonstrable that the institution of chieftainship

exists in the Trobriand Islands and .that chiefs do indeed accumulate

and redistribute wealth. The evidence, however, for a Trobriand-wide

chieftainship is flimsy. Uboroi, in Politics of the Kula Ring, conducted

as scrupulous an examination of the Trobriand data as has been done. He

concluded that, in fact, the villages and districts of tho islands were

politically and economically distinct, that there was no all-Trobriand-

wido scheme of political rank, and finally that tho concept of a

^Paramount Chief” is a chimera.

There is no government, nor any caste system. And the first citi­ zen of a stateless society is not a Paramount Chief. Although it was Malinowski who gave this fiction currency, he must not, in fairness, be credited with its invention. The Paramount Chief of the Trobriand Islands was invented by Sir William MacGregor in 1896[Uberoi 1962: 47-48]. 9

It would seem, then, that a major portion of the institutional pre­ conditions of redistribution are lacking. Further, it seems unlikely- given the descriptions of. the districts that Malinowski presents—that redistribution within districts could account for distribution of regional

9Tho kind and degree of colonial incursion in the Trobriand Islands is a problem that neither Malinowksi nor Polanyi considered. For dis­ cussion of this issue, see Appendix I. 61

specialties in any but the district of Kulamata. This is the district,

however, which does not constitute a single political entity and is not

consolidated under a single chief.

HARVEST GIFTS PRESENTED TO T0*UIUWA, CHIEF OF KIRIWINA, AT OMARAKANA 191810

Village Kind of Number of Community District Gift Baskets

Osapola KUBOMA urisrubu 450

Okayboma TILATAULA urirubu 200

Okayboma TILATAULA uricubu 160 1 Villalima LUBA driwbu no Omarakana KIRIWINA tribute 172

Omarakana KIRIWINA tribute 100

Liluta KIRIWINA urigubu

Mtawa KIRIWINA urifrubu

Kabola KIRIVHNA uricubu

Tilakayua KIRB'UNA uricubu

Kapwani KIRROTfA uricubu

Omarakana KIRIWINA uricubu 8,524 (Kiriwina total)

TOTAL BASKETS: 9,716 TOTAL OUTSIDE KIRIWINA: 920 PER CENT OUT­ SIDE KIRIWINA: 10.5#

FIGURE 3 — Totuluwa,s Harvest Gifts

Data from Coral Gai-dens and Their Magic(3.935 Vol.: 398-405)• Note that all tributary payments aro from To*uluv/aTs own village, none from other villages in his district. This erodes still more the credibility of district chiefs* wielding influence over their districts as a whole. 62

Thus far wo have failed to find evidence that redistribution—as

defined by Polanyi—could account for Trobriand-wide division of labor.

Yet, Polanyits Eodcl could still be salvaged if we could find sufficiently

extensive ceremonial redistribution of food and manufactures between

villages (or individuals), that is, if redistribution of regional specialties

could be explained without resort to truck, barter and exchange.

There are several kinds of ceremonial exchanges of food (sagali).

A man who commissions construction of a canoe (tollwaga) can givo a

sagali to repay his shipbuilder and workmen. It may involve food being

brought from inland villages to the toliwaga (usually, but not necessarily,

a chief) for redistribution, and includes foodstuffs, pigs, and ceremonial

valuables. From Malinowski’s description, it appears that no manufactured

goods are part of the redistribution(1922: 147-148). This kind of sagali

could probably account for the division of labor if, in fact, enough

canoes aro made with any regularity. The total number of canoes in all

Kula communities is sixty (1922: 122). This doesn’t seem enough to

insure a constant flow of goods between regions. And canoes apparently

aren’t built very oftonj Malinowski reports construction of only one during his presence of over throe years in tho islands.

Mortuary rituals aro given by and for tho kinsmen of tho deceased; they include extensive exchanges of food. Such exchanges couU perhaps contribute to the redistribution of regional products. The proper items for display at funeary rituals are "uncooked tubers and fruit" which could hardly,dn itself, produce a redistribution of regional specialties, but it could bo that in order for fishing or industrial villages to ob­ tain the necessary agricultural produce, a good deal of reciprocal exchanges between such villages would need to occur. 63

Malinowski describes another sot of reciprocal exchanges that could,

in part, contribute to tho necessary Redistribution.” There aro certain

harvest sagalis that require that inland villages display large quanti­

ties of fish, and that lagoon villages display largo quantities of vege­

tables. Men from tho agricultural communities seek out thoir partners

in tho lagoon villages to arrange exchanges. This practice was described

by Malinowski as "ceremonial barter with deferred payment” (wasi).

Such exchange practice exists also between food producing villages and

the industrial villages of Kuboma district (1922: 187)•

Malinowksi, unfortunately, provides no quantitative data so that

we might evaluate how much intervillage exchange is done via wasi part- 11 nerships. It seems that wasi is done only prior to certain ceremonial

displays (and that often tho displayed fish is not eaten). Yet, we cannot

assert that vast exchange is insufficient to account for. redistribution

of regional specialties.

It would appear, perhaps, that Polanyi’s explanation could be cor­

rect, or at least that we cannot with certainty disprove it. It might

appear so, except for the presence of behaviors that Polanyi cannot

explain away, and that end by destroying the verity of his assertions.

That is, that in addition to ceremonial exchange of fish for vegetables, there is also barter of fish for vegetables (vavai and there is a fairly extensive barter of manufactured goods for garden produce as well.

This bartering, pure and simple, takes place mainly between the industrial communities of the interior, which manufacture on a largo scale the wooden dishes, combs, lime pots,...and tho agricultural districts of Kiriwina, the fishing communities of the West and tho sailing and trading communities in tho South [1922: 182.

^Malinowski himself regrets this flaw (1935 Vol.l: 13)> but he said in defense that it is not possible to collect quantitative data in the field. 64

Malinowski reports cn the trading activities of sono Kubcnans in a man­

ner that suggests that truck and barter aro not infrequent, random or

disruptive in occuranco; tho report suggests that barter plays at least

some part in the redistribution of goods:

Tho industrials, who aro regarded as pariahs...are nevertheless allowed to hawk their goods. When they have plenty of articles on hand, they go to the other places and ask for yams, coco­ nuts, fish, and betel-nut....They sit in groups and display their wares, saying "You have plenty of coconuts, and vie have none. We have made fine wooden dishes. This one is worth forty nuts, and some betel nuts and seme betel pepper." [1922: 189].

What follows in Malinowski*s report is conversation that sounds dis­ tinctly like "higgling and haggling":

The others may then answer, "Oh, no I do not want it. You ask too much."...An offer may then be made, and rejected by the peddlers, and so on, till a bargain is struck [1922: 189].

Further, this barter may be initiated by anyone:

...at certain times, people from other villages may need some ob­ jects made in Kuboma, and will go there, and try to purchase seme manufactured goods... {1922: 180.

Malinowski gives some evidence to suggest that exchange rates, even of wasi transactions, are not fixed by custom, but respond to conditions of supply and demand (see below, pages 72-73) • Assuming the Trobriand

Islands to be a non-market (that is, embedded) economy, and their social system to be characterized by unity and stability, it should not be pos­ sible for barter behaviors such as described above to occur. Neither should ajustment of price to supply and demand factors be present; that behavior is specific to formal economies.

But such behaviors do occur, and apparently do not call down the opprobrium that Polanyi predicted. Further, the presence of these be­ haviors is damaging to his theory of the origin of the division of labor.

Even though there is no accurate way of determining just how much re­ distribution is accomplished by barter and how much by ceremonial exchange. 65

the fact that barter obviously accounts for some measure of it cannot

be reconciled with Polanyifs model of the division of labor.

Further, the failure to find the necessary institutional structures

to support Trobriand-wide redistribution through a chief, and the wall-

defined presence of barter as a means of exchanging regional specialties

suggests that something is wrong with Polanyifs explanation.

The inadequacy of his theory to account for the division of labor

casts doubt on the adequacy of his other assertions in so far as they,

too, demand the absence of ’'economic" action. Vie need to continue the

scrutiny to ascertain this.

"Individual acts of truck, barter and exchange are only exceptionally practiced in primitive society."

This assertion is both astounding and eminently logical. Logical,

that is, in that it is the forced conclusion of a theoretical framework

that posits embeddedness of economic functions and that defines embed­

dedness as the absence of specifically economic behaviors and institutions.

Astounding, in that it is so obviously incongruent with the Trobriand

data. Even ignoring the conclusions of the previous section, it is hard

to understand how Polanyi could use Trobriand data on one hand and then make an assertion such as this on the other. Understandably, Polanyi does do some precarious tiptoeing with tho data.

He mentions first that "Barter of goods and services is carried on mostly within a standing partnership..." (1946: 263). Presumedly, the fact that some exchanges are done by villages acting in concord rather than (actually, in addition to) by individuals makes that trade and ex­ change somehow less economic. 66

Next, Polanyi retreats to a higher level of abstraction, to dis­

cuss primitive society in general. His authority is Carl Bucher:

"Barter is originally completely unknown. Far from being possessed with

a craving for barter, primitive man has an aversion to it" (1946: 265>

quoted from Bucher 1904: 109).

Malinowski, it seems, had heard this argument too. If devoting

a 527 page book to primitive trade and entire section of that book to

the seven kinds of exchange in the Trobriand Islands were not in them­

selves enough of a refutation, Malinowski makes his position perfectly

clear:

Another error more or less explicitly expressed in all writings on primitive economics, is that the natives possess only rudimentary forms of trade and exchange; that those forms play no part in tri­ bal life, are carried out only spasmodically and at rare intervals... [1922: 166], The natives distinguish it [Kula transaction^ from barter, which they practice extensively, of which they have a clear idea, and for which they have a settled term—in Kiriwinian: gimwali... [1922: 96].

Further, tho picture of the Kula that emerges from Argonauts of the V/estern Pacific is most certainly one of extensive exchange, truck and barter.

The Kula is a fora of exchange, of extensive inter-tribal character... on every island and in every villags, a more or less limited number of men take part in the Kula...

Kula is ceremonial exchange of two articles Soulava and Kwali... but associated with it, and done under its cover, we find a great number of secondary activities...side by side with the ritual ex­ change the natives carry on ordinary trade, bartering from one is­ land to another a great number of utilities, often unprocurable in the district to which they aro imported, and indispensible there. [1922: 82-82].

Polanyi does enthusiastically mention Kula transaction as an ex­ ample of primitive exchange which is reciprocal and ceremonial rather than resembling market-place exchanges for gain. Yet, somehow Polanyi 67 , >12 missed the other sorts of exchanges talcing place (ginwali, vava),

he surely missed tho essence of Malinowski*s approach to his data:

«*«the main theme of this volume is tire Kula, a form of exchange, and I would be untrue to my chief principle of method, vrero I to give tho description of cno form of exchange torn out of its most intimate context; that is, were I to givo an account of tho Kula without giving at least a general outline of tho forms of Kiri- T/inian payments, gifts, and barter[l922: 166J.

Polanyi*s assertion of the absence of truck, barter and exchange

simply is not supported by tho data. We should examine noxt his assertions

of the absence of economic motives to determine if that argument has

any more validity.

'♦Tho motive of gain is not * natural* to g.an.n

Polanyi relies on tho Trobriand data in a rather round-about way to prove this assertion. That is, he relies not on Malinowski*s des­

criptions but on his analysis; they are sometimes not the same thing.

This potential problem was compounded in that the analysis that Polanyi used to prove his argument was really about something quite different.

The quote as it appears in Polanyi*o work reads:

"Another notion which must be exploded, once and for ever, is that of the Economic Man of some current text books." [1946: 261J.

lo ‘‘"It may be that Polanyi*s apparent selectivity is the result of the same reducticnism that informed his definition of "economic behaviors." Just as he collapsed the categories defined by proper emotional content appropriate to profit-taking in the market place, so Polanyi seems to consider only that trade "economic" which involves large movements-of goods that are shipped with a certain amount of risk, where the price at ths port is not known ahead of time, where profits are not guaranteed (cf., his definition of the market, above page 11). Then, hio neglect to consider all of the Trobriand trading materials is not pernicious nor purposeful manipulation of the data. It simply indicates that ho did not consider trade in the absence of price setting markets as relevant to his argument. But then, hio argument becomes not pernicious, but simply uninformative, that is, all Polanyi can tell us is that in the absence of price setting markets, trade and profit are not regulated by price setting markets. 68

Polanyi was detennined to prove that '’Economic Man" (that is, an explicitly

economically motivated actor) did not exist in non-market situations.

Malinowski, too, was refuting "primitive economic man" as he understood

its meaning. However, Malinowski understood that construct to mean that

primitive economic man had to bo trading off satisfaction from leisure

against satisfaction from income (work) in tho same way that actors in

capitalist societies v/ero supposedly doing.^ Most of his argument is

directed against this sort of comparison.

The passage from Malinowski quoted more completely reads:

Another notion which must be exploded...is that of Economic Man... This fanciful, dummy creature who has been very tenacious of exis­ tence in popular and scad-popular literature...prompted in all his actions by a rationalistic conception of self-interest, and achieving all his aims directly with the minimum of effort,... [In contrast the real Trobriander whoj works...prompted by motives of a highly complex social and traditional nature...which are not directed to­ wards satisfaction of present wants, or to tho direct achievement of of utilitarian purposes...All this shows how entirely the real na­ tive of flesh and bone differes from the shadowy Primitive Economic Man, on whose imaginary behavior many of the scholastic deductions of abstract economics are based... [j.922: 60-62[]

Malinowski, in this passage, was not using "utilitarian" and "ration­ alistic" in any orthodox economic sense. It is not really clear what

Malinowski meansj however, knowing that he was consistently interested in tho psychological bases of Trobriand exchange and gardening activity, we could guess that Malinowksi*s version of rationalistic and utilitarian was descriptive of activity devoid of emotional value and goal seeking only a material sense. But, by this, he did not mean that Trobriand Islanders

^Firth points out that it is not exactly clear what economists and kinds of economic theory Malinowski had come into contact with, and that his grasp of economics was "always very limited" (Firth 1957: 209).

Malinowski points out that regardless of tho non-reality of "eco­ nomic man" still "This doesn*t moan that the general economic conclusions are wrong" (1922: 62). 69

were not seeking after wealth. He simply wanted to substitute a different 15 picture of the acquisitive nature of primitive man. He does, in fact,

identify the psychological foundation of the Kula as "lust for wealth"

(1922: 169).

More important than tho psychological bases of gardening, or of the

definition of rationalistic or utilitarian, however, is that the descr5.ption

of Trobriand natives .and how they work in no way suggests that the "motive

of gain is not Natural* to man." The behaviors described merely suggest

that work, leisure, income and satisfaction have somewhat different

statuses in the Kiriwinian economy than they do in industrial capitalist

economies.

Polanyits attack on "Economic Man" was of somewhat different content.

He wanted to demonstrate that primitive actors were not motivated by gain

either to produce or exchange. To explode this image of "economic man"

Malinowski cannot bo of much service.

Malinowski reports natives seeking gain both in the sense of profit

taking in a barter situation and in a more generalized sense of pursuing

perceived self-interest in their gardening and in their trade.

If Polanyi is to abolish "gain" from Trobriand economic activities,

how can he account for the pricelist that Malinowski provides, describing

tho price of trade items procured in Kuboma and sold-off in Dobu as part

of the Ordinary trade" that precedes under cover of tha Kula (see figure 4)•

The "pricelist" clearly reflects at least a carrying-charge accruing to the traders. Malinowski calls it "gain": "Thus we see that there is

^Malinowski also wanted to substitute a different notion of "economic value." To destroy the prevailing concept that value derived from rational calculation, Malinowski suggested that value instead originated from "human sentiment." (1922: 167). 70

in this transaction a definite gain obtained by the middle-men" (1922: 364).

PURCHASE PRICE SELLING PRICE TRADE ITEM (in Kuboma)(in Dobu)

1 tanepopo basket 12 coco-nuts 12 coco-nuts + sago + 1 belt

1 comb 4 coco-nuts 4 coco-nuts + 1 bunch of betel

1 armlet 8 coco-nuts 8 coco-nuts + 2 bunches of betel

1 lime pot 12 coco-nuts 12 coco-nuts + 2 pieces of sago

FIGURE 4 — Trade Items Price List

It appears that the evidence for the absence of gain—at least in exchange—is not bettor than that for the absence of truck, barter and exchange activities themselves. Let us continue and attempt to determine if the non-market data will allow other parts of Polanyi* s •’Economic Man" to be dismantled. Let us determine if Polanyi can make a case for the absence of economic motives surrounding production activities. 71

"To expect paynent for labour is not ♦natural* to mnrt

Polanyit3 authority for this assertion is again a piece of analysis

rather than of description front the Argonauts. "Gain such as is often the

stimulus for work in more civilised cornunities, never acts as an impulse

to v;ork under the original native conditions" (1946: 261, quoted from

Malinowski 1922: 156).

This quote represents even the analysis a bit out of context. Its

intent was somewhat different:

...a Kirivinian is capable of working well, efficiently, and in a con­ tinuous manner. But ho must trark under an effective incentive...he must be lured by ambitions and values also dictated by custom and tra­ dition. Gain as is often the stimulus for work in more civilized communities, never acts an in impulse to work under the original na­ tive conditions. It succeeds very badly, therefore, when a white man tries to use this incentive to make a native work [1922: 15^1 •

Malinowski was referring to the dilemma facing every colonial power seeking native workers, that is, to find some items for which the natives will be willing to trade their labor. Malinowski did not mean that Tro- brianders "under original native conditions" perform services without expectation of payment; he meant only that white pearl traders had had 16 a difficult time finding goods that the Trobriand Islanders wanted.

In fact, Malinowski documents many instances of services exchanged for food, for Kula valuables, or for something also of value. For example, anyone who commissions a boat to be made, hires a carver and a crew of

^Malinowski reports the British Administration had disallowed white pearlers from diving for the gens themselves, forcing them to employ natives. Traders tried at first to manufacture ersatz Kula valuables,but the natives refused them. The goods that the natives finally accepted were axes, used in gardening, rice which could be easily stored to be eaten in a drought year, and genuine ceremonial valuables. Traders were forced to hire

"...retinues of native workers who polish large axe-blades, rub spon- dylus shell into the shape of small disks, occasionally clean an arm- shell—so that for savage valuables civilized valuables may be ex­ changed" [1935: 20]. 72

laborers. In return for their services he cakes payment:

Another point of importance [of the Kula~| from the econonic aspect is the payment given by the chief to the builder of the canoe... a specialist from Kitava.. .-was veil paid vith a quantity of food, pigs and vavgua... [1922: 1621.

There should be no need to mistake what is going on:

...it will be enough to say that whenever a canoe is built for a chief or a headman by a builder this has to be paid for... [1922: 162 emphasis mine]].

What’s more, Malinowski tells us that all services are paid for, either

in food or vaygua or both:

The actual i/ay in which a chief in the Trobriands exercises his power is largely economic. For every service received he has to pay.. .[j.935 Vol. 1: 47 emphasis mineQ.

If Polanyi should assert that payment is really a corollary, only a ritual overlay to services that must be rendered under pain of custom, we need only have reference to instances in which the rate of exchange for these services is responsive to certain disturbingly economic variables.

Malinowski provides comparative data on two ship-building enterprises, one in Kiriwina district, one in Vakuta where the differential in wealth between chiefs and commoners is very small. In both districts the chief pays his shipbuilder, but in Kiriwina the payment is much larger, the chief both supports his builder during the actual work and rewards him with valuables as well. In Vakuta, the payment resembles more an exhange of needed services between men. The rate of payment is not determined by custom, but rather by a realistic assessment of the quantity of ac­ cumulated wealth available.

Kalinowksi reports another example of supply and demand factors op­ erating to determine ’’price" in wasi exchanges. Kavataria fishermen have traditional fishing righto to a certain lagoon that gives them something of an advantage over other fishermen in that they can provide more reliable 73

service. That is, they can fish when other fishing coEniunities cannot,

and can, therefore, always provide fish for whatever ritual they are required.

For this they "exact about double the usual price fron the other party,

but in return offer punctual and reliable delivery" (1935 Vol. 1: 17).

It seems that even ritual exchanges are marked by what looks suspiciously

like economizing behaviors. The presence of behaviors appropriate to formal

economies makes one wonder both about the usefulness of the distinction

between "substantive" and "formal" economies and, too, of the correctness

of Polanyi*s model which requires that such non-appropriate behaviors not

be present.

The Trobriand data does not support Polanyi*s assertion that to expect

payment for labor is not natural to man, unless of course, v;e assume that

Trobriand society is "thoroughly unnatural." Let us next examine Polanyi*s

corollary assertions: that the restricting of labor to the minimum is

not natural and that the usual incentives to work are not gain, but re­

ciprocity and joy of work.

"To restrict labour to the unavoidable minimum is not *natural* to man."

This assertion is another piece of the argument against the universal

existence of rational economic behavior as described by neoclassical econo­ mists. This theory assumes that man maximizes satisfaction in that he

trades-off satisfaction derived from material goods (which presumedly are obtained by work) with satisfaction derived from leisure. I tore pre­ cisely, the "individual human being" (not "Economic Man") as described in neoclassical economic theory is an analytic construct who is assumed

....subject to economic motives in the sense that there are material goods of which it always prefers more to less, provided, at least that they can be gotten without more effort; and that it prefers less to 74

to greater effort, provided, at least, that it yields no less goods [Robinson I960: 2-3].

It ciay be that Trobriand natives do not maximize least effort versus

greater returns in the sense described above. But Polanyi does not really

argue this. He vould have us believe that none of the determinants of

Trobriand gardening activity are economic, that instead gardening is mo­

tivated by a ''natural or acquired functional urge to activity” (1946: 262).

We remember, too, the evidence that he mustered previously:

The non-utilitarian element in their garden work is still more clearly perceptible in the various tasks which they carry out en­ tirely for the sake of ornamentation...and in obedience with tri­ bal usage [Malinowski 1922: 59]].

Malinowski does report that Trobrianders spend an enormous amount

of time over and above that absolutely necessary to grow produce in these

rituals of "tribal usage” (specifically in garden magic rituals). Ho also

says, however, that "...in the long run...there is no doubt that by its

influence in ordering, systematizing and regulating work, magic is eco- nomically invaluable for the natives” (1922: 60). 171

More significantly, however, is that Polanyi*3 attack on neoclassical theoryf3 "individual human being" is misdirected. Neoclassical theory will not rise or fall on whether or not the majority of persons in any given society say that they do indeed prefer the lesser effort to the greater provided that there is no sacrifice in the amount of goods they can con­ sume; or that they prefer more goods to less provided that they need ex­ pend no greater effort. Neoclassical theory proceeds from these assumptions

^At best, this statement reflects doubt on Polanyi^s assertion. It does not moan that Malinowski has figured out the optimum land/labor ratio and determined that freeing time from ritual and devoting it to other gardens or to other productive pursuits would yield greater returns. Malinowski consistently ignored ouch crucial considerations. 75

about human nature to predict outcomes of economic action. It asserts

that persons behavo as if these assumptions are true. And it may be that

the hedonistic image of human nature that emerges from this school of thought

is, in fact, not an accurate depiction of reality. The proof of its ac­

curacy does not lie, however, in trying to penetrate the psyches of in­

dividual actorsj for the "individual human being" of the neoclassical

school is not really an actor somewhere—he is a wholly abstract creature.

Proof or disproof of the construct must be made by an anlysis of the or­

ganization of production and the distribution of wealth in the Trobriand

Islands.

Neither is the disproof complete when Polanyi tells us that he has found a society where the trade-off between leisure and resources is ap­ parently not what is-going on in the minds of the actors. The neoclassical, economist does not care what the Trobriand native thinks to himself while ho is working in his gardens. The disproof of the neoclassical construct could be made only by analyzing the outcomes of certain economic actions.

For instance, would dispensing with garden magic rituals reduce the labor time reeded to produce the same amount of vegetables? If so, would it be possible to free some men from the land to work at some other productive tasks? Would decreasing labor time per unit of output allow each man to cultivate more fields and produce greater surpluses? Would dispensing with garden magic rituals increase or decrease productivity per worker?

These are the sorts of questions that Polanyi must answer before wo

18 l-Ialinowski was clearly attempting to do juetthis: "When I speak about ideas underlying accumulation of food stuff...I refer to the present, actual psychology of the natives...it is in this emotional attitude of the natives toward their canoes that I see the deepest ethnographic reality— which must guide us right through the study of other aspects...economic conditions and the associated beliefs and traditions" [1922: 169J. 76 can consider dismantling the construct of the "individual human being."

Polanyi must convince us that the Trobriand organisation of production is purposefully irrational, that is that gardening is done without regard for the productive capabilities of the land and without regard'for the most advantageous ratio of workers to garden plots. CHAPTER III

SUMMARY AND CONCLUSIONS

It is time to stop and take stock of the adequacy of Polanyi*s model.

We have found in the Trobriand Islands the presence of behaviors (and pre­

sumedly the appropriate motives) not only not predicted by his theory, but disallowed. The presence of these behaviors in a regular, systematic way disproves those parts of his model of the non-market state of nature that rely on the absence of economic action:

(1) that behaviors not supported by the necessary institutions (that is, market-specific behaviors) will not occur;l-9

(2) that the division of labor is not based on economic facts;

(3) that trade, truck, barter and exchange occur only exceptionally;

(4) that rationalizing responses to supply and demand factors do not exist.

The presence of economic behaviors alone is enough to destroy much of the validity of Polanyi*s model. But what, then, of his positive as­ sertions? That is, ''The usual incentives to labour are not gain but re­ ciprocity, competition, joy of work, and social approbation" and that

"Economic systems, as a rule are embedded in social relations; distribution of material goods is ensured by non-economic motives."

^Of course, it is possible that Polanyi*3 model is correct, but that the example is wrong; that is, that he was mistaken in assuming that the Trobriand Islands were a non-market economy. See Appendix 1 for consideration of this problem.

77 73

It seems absurd to examine the ethnographic record to determine if

vre can find competition, joy of work and reciprocity; these are pan-human <0 experiences.And once wo find them, ire would still have no sure guarantee

that the actions occasioned by these motives were devoid of economic con­

tent. Even Polanyi»s authority, Malinowski, did not presume that.

The general importance of give and take to the social fabric of Boyowan society, the great amount of distinctions and subdivisions of the gifts can leave no doubt as to the paramount role v/hich eco­ nomic acts and motives play in the life of these natives [1922: 194].

The social code reciprocity ouch as we find it among the natives of the Kula, is, however, far from weakening the natural desire of pos­ session; on the contrary, it lays dou*n that to possess is to be great, and that wealth is the indispensible appanage of social rank and at­ tribute of personal virtue £1922: 97].

What we have discovered through all of this, is that Polanyi,s theo­ retical framework cannot be rigorously applied. It cannot stand-up to careful scrutiny; it cannot adequately explain documented behaviors.

20 The discussion of the existence of ncompetiticn, joy of work, and reciprocity” and the operation of the economic system by ”non-economic motives” (that is, the content of Assertions 6 and 7, page 50 above)has not been done hire in depth both because they have been discussed more fully elsewhere and also becuase Polanyi himself did not attempt an in depth proof of these assertions. Perhaps he perceived that it was not necessary to prove the existence of universal human motives. What he should have done that he did not, how­ ever, was to explain why theso particular motives were more appropriate to Reciprocity and Redistribution patterns of integration than to the Mar­ ket pattern of integration. In any case, for the sake of completeness, I reproduce the content of Polanyi*s ”proof” of these two assertions:

”*Reciprocity: Most if not all econonic acts are found to belong to some chain of reciprocal gifts and countergifbs, which in the long run balance both sides equally...* (quoted fron Malinowski 1926: 40-41).

”*Competition: Ken vie with one another in their speed—in their thoroughness, and in the weights they can lift, ’when bringing big poles to the garden or in carrying away the harvested yams* (quoted from Malinowski 1922: 6).

"Joy of Work: ’Much time and labour is given up to aesthetic pur­ poses, to making the gardens tidy...there can be no doubt that the natives push their conscientiousness far beyond the limit of the purely necessary* (quoted from Malinowski 1922: 59). 79

What of the concept of '’embeddednessj’ Surely, vre have seen that in

the Trobriand Islands subsistence and political activities are carried

out largely in the context of the kinship system which regulates land ten­

ure and rank relations. Does, then, embeddedness have any usefullneos

descriptively or analytically? It does tell us that in those societies

where there is no self-regulating market—where land, labor and capital

are not commodities procured on the market—that production, distribution

and consumption of goods and services will be accomplished through some

other institutions. This could, then, be a resonably useful descriptive

device (although it could never explain why such institutional constellations

occur and thus, could have no analytic-value). It is not necessary to

say that because relationships are multiplex in classless societies that

there are not rational consequences. But ,,e^lbeddedness,, as Polanyi uses

it also has some different and insidious implications.

Embeddedness demands the absence of economic action; it requires

that actors do not understand the implications—the ends—of their sub­

sistence activities, and they not perceive that objects such as food and

manufactured goods have economic value.

It forces analysis to focus on "principles of behavior." Embeddedness

suggests that the rules of behavior will determine the rules of the economy.

It forces the analysis to focus not on the rules that surround the organi­

zation of production, of exchange, of consumption, but to focus on the rules of kinship, or of sharing or of redistribution at ceremonial feasts.

It forces the analysis to the level of persons interacting. Polanyi1s calling of personal interactive behaviors "principles of behavior" does

"Social Approbation^Perfection in gardening is the general index to the social value of a person* (quoted from Malinowski 1935 Vol 2: 124)o” (1946: 262j. 80

not mako then any less individualistic in focus. Kaplan (1968) seems to

believe that calling the sort of analysis Polanyi did "institutional"

makes it so. It renains true, however, that Polanyi^ grasp of institutions,

structure, and of the nature of individual behavior in an institutional

context was most vague and imprecise (see above, pages 40-44).

Focusing analysis on personal behaviors locks one into searching for

the causes of these behaviors; on the personal level those causes nay well

be the motives Polanyi describes. It is a big jump from this sort of as­

sertion, however, to an economic analysis. Motives can the proper content

of economic analysis only if we can be convinced that economies are simply

accretions of psychological motivations. Polanyi himself was warned that

we must not assume this: "mere aggregates of the personal behaviors in

question do not by themselves produce ouch structures..." (1957a; 150)o

We can agree that for economic analysis to proceed at such a level is

disastrous.

The search for personal motives leads one to the kind of analysis

that Malinowski did. He attempted to define the emotional basis of eco­

nomic action, and he discovered that Trobriand Islanders did not see

value inherent in commodities. Value originated, instead, in human sen­

timent :

Value is not the result of utility and rarity, intellectually compounded. But is the result of a sentiment grown around things, which, through satisfying human needs are capable of evoking emotions Q-922: 1723.

His search led him to posit conclusions similar to (and as absurd as) Polanyi1s. For example, Malinowski suggests that food has "value" not because it satisfies hunger, sustains life, or because someone had to expend labor to produce it.

They Trobriand Islanders only dimly realize that food possesses nutritive value...the main importance is that it is a lively pleasure.

It is this indirect sentiment, rooted of course, in the pleasures of eating, which makes for the value of food in the eyes of the natives. This value makes accumulated food a symbol of wealth. [1922: 38].

Manufactured goods similarly have value only in so far as they are

reservoirs of human sentiment:

The value of manufactured objects of use must also bo explained through man’s emotional nature and not be reference to his logi­ cal construction of utilitarian views... (jL922: 172]].

Embeddedness implies that in non-market societies the rules of eco­

nomic action, the rules that organize production, distribution, consumption

hove nothing to do ;d.th things economic . How could they? If, in non-market

societies, actors have no concept of value except as ’’lively pleasure” how

could they behave in ‘a rational way?

Polanyi further asserts that perception of long-range interests is unique to the disembedded state, that by extention, actors in embedded

states could not and do not have long-range strategies regarding economic matters. How then could one expect rationality from actors who not only cannot perceive of some commodity itself as having "value” but who cannot perceivo that their actions may have some long-range outcome not exactly identical to its short-range effect? These arc understandable sorts of assumptions for British Colonial Administrators (and for British Social

Anthropologists of Malinowski’s time), but they are devastating sorts of assumptions for social scientists today—especially those who, like George

Dalton, are involved in planning strategies for underdeveloped countries

(see, for example, Dalton 1965b).

The basic flaw in Polanyi’s substantive economics is that it suggests that the rules of economies are somehow determined by actors interacting in some (ill-defined by Polanyi) institutional context. The rules of eco-- nomies are not so determined. Economies have rules; they are structural rules, and they have to do with the organization of production. I do not B2 suggest that tho rules governing economies are determinate of societies

(that is Polanyi*s mistaken argument); I an suggesting that the rules governing the operation of economies arc not determined by individual interactions, but rather by production in society.

Polanyi’s theoretical framework will not allow us to look beyond the

"mutual adjustment of principles of behavior and institutional patterns."

This framework forces us to ignore the real sources of economic action; it forces us to conclude that actors in non- market societies are not rational economic actors.

Polanyi has for too long been given more credit by 'social scientists than his work deserves. Substantive economic anthropologists of the

"Polanyi Group" —because their theory has the outward trappings of em- pircism—have for too long enjoyed more recognition than their theories deserve. Their theories rest on asertions that are logically flawed, incorrect and, ultimately, by focusing our concerns in the wrong areas, do anthropological theory a disservice. APPENDIX

83 APPEIDIX I

THE EUROPEAN PRESENCE IN THE TROBRIAND ISLANDS

Malinovraki insisted both that it was possible to describe tho Tro­

briand Islands in their pre-contact state (1935 Vol. 1: 16) and that it

was not. Ultimately, we remained dissatisfied with his treatment of this

aspect of the ethnographic materials:

The empirical facts 'which the ethnographer has before him in the Trobriands nowadays are not natives unaffected by European in­ fluences, but natives to a considerable extent transformed by these influences...[l935 Vol. 1: 481J.

He did develop a sensitivity to the problems created for ethnography by the incursion of foreign influences, but he did not operate with that sensitivity during his work in the Trobriands:

This is perhaps the most serious shortcoming of my whole anthro­ pological research in Melanesia[1935 Vol. 1: 481].

The problem of Just how extensive the incursion of British industry into the Trobriand economy was, is hard ,to determine. It could be done, of course, with careful investigation of the British Colonial Records in order to determine the capital flows (in and cut) of Kiriwina; how many men were leaving the islands for planations, how many and how long mission­ aries were active in the area.

We cannot make quantitative Judgments regarding the amount of decay of native institutions or of the incursion of European influence without such an examination of the colonial papers. However, we can construct some general outlines of the effects of the British presence on tho indigenous Trobriand economy.

84 83

Vte can infer tho general direction of effects of the colonial situation.

The major effect of the presence of Western Europeans seems to have been

tho destruction of the native chieftainships (but not destruction of

'•Paramount Chiefs"—-whom the British needed to construct in order to im-

plment their policy of "indirect rule"). This destruction •was accomplished

largely through the influence of European Missionaries. The first missions

in tho area of the Kula Ring was established in the Woodlark Islands in

1797, long before Malinowski's presence in 1914.

Missionary influence was eroding the right of polygyny by discrediting

the morality of polygynous unions. Polygyny—and the relatively large urigubu payments that could be amassed because of it— had been the major

source of wealth for district chiefs. The influx of the missionaries was hardly accidental; the first mission in the Trobriand Islands proper was invited there in 1894 by Britian's first resident magistrate. Sir

William MacGregor who served from 1887-1898. He saw his function as

"pacification and research" (Morrell I960: 420).

During Ms administration the Native Employment Ordinances became increasingly lax in prescribing distances and length of service that em­ ployers could seek Trobriand laborers for. This growing laxity coincided with the groi/ing number of plantations in the Pacific.

The beginning of the erosion and disintegration of the tribal or­ ganization was described by Malinowski (even if ho did not fully realize its significance until later). He reports, for example, the effects of the European presence on the ceremonial activities surrounding the Kula.

A brief outline of his observations follows:

A superficial onlooker could have hardly perceived any sign of the white man's influence...but alas, for one who could look below the surface and read tho various symptoms of decay, deep changes would bo discernible... 86

Nowadays, other interests, such as diving for pearls, working on the white manTs plantations, divert the native attention, while many events connected i/ith Mission and government and trading, eclipse tho importance of the old customs...

Three generations ago the whole event would have been much more solemn and dramatic...War, dancing and the Kula supplied tribal life with its romantic and heroic elements. Nowadays, with war prohibited by the Government, idth dancing discredited by missionary influence, the Kula alone remains and even that is stripped of some of its glamour...[1922: 154-56].

Malinowski relates, just enough to alio;/ us to suspect that there sig­ nificant amounts of goods and laborers moving in and out of the Trobriand

Islands. He tells us, for instance, that garden surpluses are no longer stored but are rather sold off to support laborers on European plantations

(1922: 58).

Even more suggestive of the degree and kind of European incursion is Malinowski1 s shadoi/y references to the pearling industry and its effects on the indigenous economy. We can tease out the following facts:

(1) The British prohibited white traders from diving for pearls, thereby forcing them to employ nativo divers (1935 Vol.l: 20).

(2) Because of land-tenure rules and the natural occurance of oyster beds, only certain villages could engage in pearl diving. Spe­ cifically tliis meant that the originally powerful northern dis­ trict of Kiriwina which could not pearl was being eclipsed by southwestern fishing districts that did have access to pearling grounds.

Malinowski suggests that the effects of tho pearling industry were

"revolutionary" on the native economy (1935 Vol.l: 19), and as evidence he reports that the "Paramount Chief" of Kiriwina had been bettered in an inland Kula transaction by the lesser ranking chief of pearl rich Sina- keta. Although Kula transactions are ceremonial, the rules of exchange are such that the richer partner should come out aheadj thus, the suggestion that the Paramount Chief was not the "winner" in an inland Kula exchange is convincing evidence that wealth—and therefore—power relations were g? changing.

This evidence that the Trobriand economy and social system were under­ going some degree of change suggests that perhaps we should reconsider some of Polanyi’s failures to account for the Trobriand data. Even though no quantitative judgments of the degree of incursion of world market inluences are possible, could they explain soma of the market-specific behaviors that Malinowski documents and the Polanyi cannot explain away?

This is a pointless way to try to save Polanyi’s theory. Clearly the Kula(and gimwali) were even more extensive before the British pre­ sence than they were during Malinowski’s field work. And surely, it is a hopeless exercise to scour the ethnographic literature in search of a pristine, pre-colonial society in which to try to apply Polanyi’s model.

Even assuming the Trobriand economy to be in flux, the presence of the

British in the South Pacific is not sufficient to explain away the prob­ lems with Polanyi’s analysis. REFERENCES CITED

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