Skip to main content
Social Sci LibreTexts

7.4: Modes of Exchange and Reciprocity

  • Page ID
  • \( \newcommand{\vecs}[1]{\overset { \scriptstyle \rightharpoonup} {\mathbf{#1}} } \)

    \( \newcommand{\vecd}[1]{\overset{-\!-\!\rightharpoonup}{\vphantom{a}\smash {#1}}} \)

    \( \newcommand{\id}{\mathrm{id}}\) \( \newcommand{\Span}{\mathrm{span}}\)

    ( \newcommand{\kernel}{\mathrm{null}\,}\) \( \newcommand{\range}{\mathrm{range}\,}\)

    \( \newcommand{\RealPart}{\mathrm{Re}}\) \( \newcommand{\ImaginaryPart}{\mathrm{Im}}\)

    \( \newcommand{\Argument}{\mathrm{Arg}}\) \( \newcommand{\norm}[1]{\| #1 \|}\)

    \( \newcommand{\inner}[2]{\langle #1, #2 \rangle}\)

    \( \newcommand{\Span}{\mathrm{span}}\)

    \( \newcommand{\id}{\mathrm{id}}\)

    \( \newcommand{\Span}{\mathrm{span}}\)

    \( \newcommand{\kernel}{\mathrm{null}\,}\)

    \( \newcommand{\range}{\mathrm{range}\,}\)

    \( \newcommand{\RealPart}{\mathrm{Re}}\)

    \( \newcommand{\ImaginaryPart}{\mathrm{Im}}\)

    \( \newcommand{\Argument}{\mathrm{Arg}}\)

    \( \newcommand{\norm}[1]{\| #1 \|}\)

    \( \newcommand{\inner}[2]{\langle #1, #2 \rangle}\)

    \( \newcommand{\Span}{\mathrm{span}}\) \( \newcommand{\AA}{\unicode[.8,0]{x212B}}\)

    \( \newcommand{\vectorA}[1]{\vec{#1}}      % arrow\)

    \( \newcommand{\vectorAt}[1]{\vec{\text{#1}}}      % arrow\)

    \( \newcommand{\vectorB}[1]{\overset { \scriptstyle \rightharpoonup} {\mathbf{#1}} } \)

    \( \newcommand{\vectorC}[1]{\textbf{#1}} \)

    \( \newcommand{\vectorD}[1]{\overrightarrow{#1}} \)

    \( \newcommand{\vectorDt}[1]{\overrightarrow{\text{#1}}} \)

    \( \newcommand{\vectE}[1]{\overset{-\!-\!\rightharpoonup}{\vphantom{a}\smash{\mathbf {#1}}}} \)

    \( \newcommand{\vecs}[1]{\overset { \scriptstyle \rightharpoonup} {\mathbf{#1}} } \)

    \( \newcommand{\vecd}[1]{\overset{-\!-\!\rightharpoonup}{\vphantom{a}\smash {#1}}} \)


    There are three distinct ways to integrate economic and social relations and distribute material goods. Contemporary economics only studies the first, market exchange. Most economic models are unable to explain the second two, reciprocity and redistribution, because they have different underlying logics. Economic anthropology, on the other hand, provides rich and nuanced perspective into how diverse modes of exchange shape, and are shaped by, everyday life across space and time. Anthropologists understand market exchange to be a form of trade that today most commonly involves general purpose money, bargaining, and supply and demand price mechanisms. In contrast, reciprocity involves the exchange of goods and services and is rooted in a mutual sense of obligation and identity. Anthropologists have identified three distinct types of reciprocity, which we will explore shortly: generalized, balanced, and negative.[17] Finally, redistribution occurs when an authority of some type (a temple priest, a chief, or even an institution such as the Internal Revenue Service) collects economic contributions from all community members and then redistributes these back in the form of goods and services. Redistribution requires centralized social organization, even if at a small scale (for example, within the foraging societies discussed above). As we will see, various modes of exchange can and do coexist, even within capitalism.


    While early economic anthropology often seemed focused on detailed investigations of seemingly exotic economic practices, anthropologists such as Bronislaw Malinowski and Marcel Mauss used ethnographic research and findings to critique Western, capitalist economic systems. Today, many follow in this tradition and some would agree with Keith Hart’s statement that economic anthropology “at its best has always been a search for an alternative to capitalism.”[18] Mauss, a French anthropologist, was one of the first scholars to provide an in-depth exploration of reciprocity and the role that gifts play in cultural systems around the world.[19] Mauss asked why humans feel obliged to reciprocate when they receive a gift. His answer was that giving and reciprocating gifts, whether these are material objects or our time, creates links between the people involved.[20]

    Over the past century, anthropologists have devoted considerable attention to the topic of reciprocity. It is an attractive one because of the seemingly moral nature of gifts: many of us hope that humans are not solely self-interested, antisocial economic actors. Gifts are about social relations, not just about the gifts themselves; as we will see, giving a gift that contains a bit of oneself builds a social relationship with the person who receives it.[21] Studying reciprocity gives anthropologists unique insights into the moral economy, or the processes through which customs, cultural values, beliefs, and social coercion influence our economic behavior. The economy can be understood as a symbolic reflection of the cultural order and the sense of right and wrong that people adhere to within that cultural order.[22] This means that economic behavior is a unique cultural practice, one that varies across time and space.

    Generalized Reciprocity

    Consider a young child. Friends and family members probably purchase numerous gifts for the child, small and large. People give freely of their time: changing diapers, cooking meals, driving the child to soccer practice, and tucking the child in at night. These myriad gifts of toys and time are not written down; we do not keep a running tally of everything we give our children. However, as children grow older they begin to reciprocate these gifts: mowing an elderly grandmother’s yard, cooking dinner for a parent who has to work late, or buying an expensive gift for an older sibling. When we gift without reckoning the exact value of the gift or expecting a specific thing in return we are practicing generalized reciprocity. This form of reciprocity occurs within the closest social relationships where exchange happens so frequently that monitoring the value of each item or service given and received would be impossible, and to do so would lead to tension and quite possibly the eventual dissolution of the relationship.

    Definition: generalized reciprocity

    Giving without expecting a specific thing in return.

    However, generalized reciprocity is not necessarily limited to households. In my own suburban Kentucky neighborhood we engage in many forms of generalized reciprocity. For example, we regularly cook and deliver meals for our neighbors who have a new baby, a sick parent, or recently deceased relative. Similarly, at Halloween we give out handfuls of candy (sometimes spending $50 or more in the process). I do not keep a close tally of which kid received which candy bar, nor do my young daughters pay close attention to which houses gave more or less desirable candy this year. In other cultures, generalized reciprocity is the norm rather than the exception. Recall the Dobe Ju/’hoansi foragers who live in the Kalahari Desert: they have a flexible and overlapping kinship system which ensures that the products of their hunting and gathering are shared widely across the entire community. This generalized reciprocity reinforces the solidarity of the group; however, it also means that Dobe Ju/’hoansi have very few individual possessions and generosity is a prized personality trait.

    Balanced Reciprocity

    Unlike generalized reciprocity, balanced reciprocity is more of a direct exchange in which something is traded or given with the expectation that something of equal value will be returned within a specific time period. This form of reciprocity involves three distinct stages: the gift must be given, it has to be received, and a reciprocal gift has to be returned. A key aspect of balanced reciprocity is that without reciprocation within an appropriate time frame, the exchange system will falter and the social relationship might end. Balanced reciprocity generally occurs at a social level more distant than the family, but it usually occurs among people who know each other. In other words, complete strangers would be unlikely to engage in balanced reciprocity because they would not be able to trust the person to reciprocate within an acceptable period of time.

    Definition: balanced reciprocity

    The exchange of something with the expectation that something of equal value will be returned within a specific time period.

    Image of a Mwali armband from the Kula exchange
    Figure \(\PageIndex{1}\): Mwali from the Kula Exchange

    The Kula ring system of exchange found in the Trobriand Islands in the South Pacific is one example of balanced reciprocity. A Kula ring involves the ceremonial exchange of shell and bead necklaces (soulava) for shell arm bands (mwali) between trading partners living on different islands. The arm bands and necklaces constantly circulate and only have symbolic value, meaning they bring the temporary owner honor and prestige but cannot be bought or sold for money. Malinowski was the first anthropologist to study the Kula ring, and he found that although participants did not profit materially from the exchange, it served several important functions in Trobriand society.[23] Because participants formed relationships with trading participants on other islands, the Kula ring helped solidify alliances among tribes, and overseas partners became allies in a land of danger and insecurity. Along with arm bands and necklaces, Kula participants were also engaging in more mundane forms of trade, bartering from one island to another. Additionally, songs, customs, and cultural influences also traveled along the Kula route. Finally, although ownership of the arm bands and necklaces was always temporary (for eventually participants are expected to gift the items to other partners in the ring), Kula participants took great pride and pleasure in the items they received. The Kula ring exhibits all the hallmarks of balanced reciprocity: necklaces are traded for armbands with the expectation that objects of equal value will be returned within a specific time period.

    The Work of Reciprocity at Christmas

    How many of us give and receive gifts during the holiday season? Christmas is undeniably a religious celebration, yet while nine in ten Americans say they celebrate Christmas, about half view it to be more of a secular holiday. Perhaps this is why eight in ten non-Christians in the United States now celebrate Christmas.[24] How and why has this one date in the liturgical calendar come to be so central to U.S. culture and what does gift giving have to do with it? In 1865, Christmas was declared a national holiday; just 25 years later, Ladies’ Home Journal was already complaining that the holiday had become overly commercialized.[25] A recent survey of U.S. citizens found that we continue to be frustrated with the commercialization of the season: one-third say they dislike the materialism of the holidays, one-fifth are unhappy with the expenses of the season, and one in ten dislikes holiday shopping in crowded malls and stores.[26]

    When asked what they like most about the holiday season, 70 percent of U.S. residents say spending time with family and friends. This raises the question of how and why reciprocal gift giving has become so central to the social relationships we hope to nurture at Christmas. The anthropologist James Carrier argues that the affectionate giving at the heart of modern Christmas is in fact a celebration of personal social relations. [27] Among our family members and closest friends this gift giving is generalized and more about the expression of sentiment. When we exchange gifts with those outside this small circle it tends to be more balanced, and we expect some form of equivalent reciprocation. If I spend $50 on a lavish gift for a friend, my feelings will undoubtedly be hurt when she reciprocates with a $5 gift card to Starbucks.

    Christmas shopping is arduous–we probably all know someone who heads to the stores at midnight on Black Friday to get a jumpstart on their consumption. Throughout the month of December we complain about how crowded the stores are and how tired we are of wrapping presents. Let’s face it: Christmas is a lot of work! Recall how the reciprocity of the Kula ring served many functions in addition to the simple exchange of symbolic arm bands and shell necklaces. Similarly, Christmas gift giving is about more than exchanging commodities. In order to cement our social relationships we buy and wrap gifts (even figuratively by placing a giant red bow on oversize items like a new bicycle) in order to symbolically transform the impersonal commodities that populate our everyday lives into meaningful gifts. The ritual of shopping, wrapping, giving, and receiving proves to us that we can create a sphere of love and intimacy alongside the world of anonymous, monetary exchange. The ritualistic exchange of gifts is accompanied by other traditions, such as the circulation of holiday cards that have no economic or practical value, but instead are used to reinforce social relationships. When we view Christmas through a moral economy lens, we come to understand how our economic behavior is shaped by our historical customs, cultural values, beliefs, and even our need to maintain appearances. Christmas is hard work, but with any luck we will reap the rewards of strong relational bonds.[28]

    Negative Reciprocity

    Unlike balanced and generalized reciprocity, negative reciprocity is an attempt to get something for nothing. It is the most impersonal of the three forms of reciprocity and it commonly exists among people who do not know each other well because close relationships are incompatible with attempts to take advantage of other people. Gambling is a good example of negative reciprocity, and some would argue that market exchange, in which one participant aims to buy low while the other aims to sell high, can also be a form of negative reciprocity.

    Definition: negative reciprocity

    An attempt to get something for nothing; exchange in which both parties try to take advantage of the other.

    The emails always begin with a friendly salutation: “Dear Beloved Friend, I know this message will come to you as surprised but permit me of my desire to go into business relationship with you.” The introduction is often followed by a long involved story of deaths and unexpected inheritances: “I am Miss Naomi Surugaba, a daughter to late Al-badari Surugaba of Libya whom was murdered during the recent civil war in Libya in March 2011….my late Father came to Cotonou Benin republic with USD 4,200,000.00 (US$4.2M) which he deposited in a Bank here…for safe keeping. I am here seeking for an avenue to transfer the fund to you….Please I will offer you 20% of the total sum for your assistance…..”[29] The emails are crafted to invoke a sense of balanced reciprocity: the authors tell us how trustworthy and esteemed we are and offer to give us a percentage of the money in exchange for our assistance. However, most savvy recipients immediately recognize that these scams are in fact a form of negative reciprocity since they know they will never actually receive the promised money and, in fact, will probably lose money if they give their bank account information to their correspondent.

    The anthropologist Daniel Smith studied the motives and practices of Nigerian email scammers who are responsible for approximately one-fifth of these types of emails that flood Western inboxes.[30] He found that 419 scams, as they are known in Nigeria (after the section of the criminal code outlawing fraud), emerged in the largest African state (Nigeria has more than 130 million residents, nearly 70 percent of whom live below the poverty line) in the late 1990s when there were few legitimate economic opportunities for the large number of educated young people who had the English skills and technological expertise necessary for successful scams. Smith spoke with some of the Nigerians sending these emails and found that they dreamed of a big payoff someday. They reportedly felt bad for people who were duped, but said that if Americans were greedy enough to fall for it they got what they deserved.

    The typical email correspondence always emphasizes the urgency, confidentiality, and reciprocity of the proposed arrangement. Smith argues that the 419 scams mimic long-standing cultural practices around kinship and patronage relations. While clearly 419 scammers are practicing negative reciprocity by trying to get something for nothing (unfortunately we will never receive the 20 percent of the $4.2 million that Miss Naomi Surugaba promised us), many in the United States continue to be lured in by the veneer of balanced reciprocity. The FBI receives an estimated 4,000 complaints about advance fee scams each year, and annual victim losses total over $55 million.[31]


    Carrier, James. Gifts and Commodities: Exchange and Western Capitalism Since 1700. New York: Routledge, 1995.

    Hart, Keith. “Money in Twentieth Century Anthropology.” In A Handbook of Economic Anthropology, edited by James Carrier. Northampton, MA: Edward Elgar, 2012.

    Mauss, Marcel. The Gift: The Form and Reason for Exchange in Archaic Societies. London: Routledge, 1990[1925].

    Smith, Daniel. A Culture of Corruption: Everyday Deception and Popular Discontent in Nigeria. Princeton, NJ: Princeton University Press, 2007.


    1. Marshall Sahlins, Stone Age Economics (Chicago: Aldine, 1972).
    2. Keith Hart, “Money in Twentieth Century Anthropology,” 179.
    3. Marcel Mauss, The Gift: The Form and Reason for Exchange in Archaic Societies (London: Routledge, 1990[1925]).
    4. Richard Wilk and Lisa Cliggett, Economies and Cultures: Foundations of Economic Anthropology, 158.
    5. Ibid.,162.
    6. Ibid.,120.
    7. Bronislaw Malinowski, Argonauts of the Western Pacific (New York: Dutton, 1961[1922]).
    8. Pew Research Center, “Celebrating Christmas and the Holidays Then and Now,” December 18, 2013.
    9. James Carrier, Gifts and Commodities: Exchange and Western Capitalism since 1700 (New York: Routledge, 1995), 189
    10. Pew Research Center, “Celebrating Christmas and the Holidays Then and Now.”
    11. James Carrier, Gifts and Commodities.
    12. Ibid., 178.
    13. Erika Eichelberger, “What I Learned Hanging out with Nigerian Email Scammers,” Mother Jones, March 20, 2014.
    14. Daniel Smith, A Culture of Corruption: Everyday Deception and Popular Discontent in Nigeria (Princeton, NJ: Princeton University Press, 2007).
    15. Erika Eichelberger, “What I Learned Hanging out with Nigerian Email Scammers.”

    Adapted From

    "Economics" by Sarah Lyon, University of Kentucky. In Perspectives: An Open Invitation to Cultural Anthropology, 2nd Edition, Society for Anthropology in Community Colleges, 2020, under CC BY-NC 4.0.

    7.4: Modes of Exchange and Reciprocity is shared under a CC BY-NC license and was authored, remixed, and/or curated by LibreTexts.