Modes of Exchange:
Karl Polanyi , Sahlins and Service studied the existence of different types of exchange in different societies mainly in primitive societies.
I. According to Polanyi , there are 3 modes of exchange.
- 1) Reciprocity.
- 2) Re-distribution
- 3) Trade
- (i) Gift trade
- (ii) Administrative trade
- (iii) Market trade
1) Reciprocity – it is the exchange of goods and services between units of the same kind, such as individuals , households, kinship groups. These exchanges usually follow pre-existing networks of social relationships, those based on kinship and friendship . Material gain or profit does not seem to be the object of reciprocal exchange. The main function of reciprocal exchange is the re-affirmation of the relationship already existing between the parties. Reciprocity does not create ties but serves to maintain them. Eg. Hospitality , sharing , help , free gift, generosity.
2) Re-distribution – It is a kind of exchange in which goods from members of a group flow to some central point from which they are distributed to the society. In other words , the products of labour are combined into one source and they are paralleled out again.The contributions may be voluntary or involuntary. Re-distribution is a characteristic of chiefdoms. In some chiefdoms like the Burin and Trobriand islanders in Melanesia , the contributions are involuntary. In several other chiefdoms in Melanesia and Polynesia, the contributions are voluntary.
3) Trade – it is a form of exchange based on the principle of supply and demand . Market exchange exists only when there is a standard monetary system.
According to Polanyi , trade has 3 variants: i) Gift trade ii) Administered trade iii) Market trade.
- i) Gift Trade – This links the partners in reciprocal relations . This trade exists in simple societies , The organisation of trading is usually ceremonial involving mutual presentations , The gift must be repaid within limited time.
Gift exchange in form of ‘ Prestations ’ comes under this category . Prestations are often associated with life cycle ceremonies , Further , the pot -latches (gift) of north west coast Indians like Kwakiutl , Tlingit and others are examples of gift exchange ,In this regard the wealthy give copper plates and blankets as gifts. in return they receive political esteem, support , courtesy and rank. - ii) Administered Trade – It has its firm foundations in the relationships that are more or less formal . On both sides, the import and export interest is as a rule determinative . Trade runs through government controlled channels. Consequently , the whole trade is carried on by administrative bodies. This trade exists in complex societies.
- iii) Market Trade – Market exchange is an exchange of goods . Its prices are based on demand and supply. Here , exchange is in the form of integration that relates partners to each other . The range of goods is unlimited. Market is the locus of exchange. Trade is the actual exchange. Money is the means of exchange . Trade is directed by prices , prices are a unction of market. All trade is market trade .
II. Service:
Service studied the economics of simple societies (Service 1962: “Stone age Economics’ ) . According to him reciprocity is of three types :
1) Generalized Reciprocity
2) Balanced Reciprocity
3) Negative Reciprocity.
1) Generalized Reciprocity : It occurs between close relatives , It is an exchange of goods and services between kinship units of the same kind such as individuals and households. Neither the value of what is given nor time of repayment is specified. Kinship obligations are foremost in this exchange. Kinship obligations unite the individual and groups.
Generalized reciprocity is in form of sharing , hospitality , help , gift and generosity. Parents give things to children and provide services to children out of love. The distribution of meat among Bushmen of Kalahari also reveals generalized reciprocity. The Bushmen divide the game food into 4 parts, One part is given to hunters and owners of arrows Second part is given to kinsmen. Third part to visitors and fourth part to non -participants.
2) Balanced Reciprocity : Here, the partners are linked by reciprocal relationships. The parties concerned are not relatives yet they know each other. Examples are
- The trade between Bushmen and Tswana of Africa highlights the process of balanced reciprocity.
- Silent trade or dumb barter is another example of balanced reciprocity. In this there is no verbal communication between Parties concerned. Eg:- Semang of Malaya, Veddas of Sri Lanka , Raji of Uttar Pradesh.
- Kula trade otherwise known as Kula ring/kula exchange or ceremonial exchange is another example of balanced reciprocity. Eg:- Trobriand Islanders and other islanders of Melanesia.
3) Negative Reciprocity – According to Sahlins and Service, it is an exchange in which the giver tries to get the better of the’exchange. Even they used cheating also to gain more.
Eg:- Navajo Red Indians quote high prices for their products. The whites purchase the goods from them paying the quoted price. In this transaction , the giver gets better of the exchange; Thefts and raids are perfect’ examples of negative reciprocity , they take place in Nuer, Dinka , Kirgis , Kazak settlements highlight the process of negative reciprocity.