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6.1: Prelude to Economics

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    One of the hallmarks of the human species is our flexibility: culture enables humans to thrive in extreme artic and desert environments, to make our homes in cities and rural settings alike. Yet amidst this great diversity there are also universals. For example, all humans, like all organisms, must eat. We all must make our living in the world, whether we do so through foraging, farming, or factory work. At its heart, economic anthropology is a study of livelihoods: how humans work to obtain the material necessities such as food, clothing, and shelter that sustain our lives. Across time and space, different societies have organized their economic lives in radically different ways. Economic anthropologists explore this diversity, focusing on how people produce, exchange, and consume material objects and the role that immaterial things such as labor, services, and knowledge play in our efforts to secure our livelihood.1 As humans, we all have the same basic needs, but understanding how and why we meet those needs—in often shared but sometimes unique ways—is what shapes the field of economic anthropology.

    Economic anthropology is always in dialogue (whether implicitly or explicitly) with the discipline of economics.2 However, there are several important differences between the two disciplines. Perhaps most importantly, economic anthropology encompasses the production, exchange, consumption, meaning, and uses of both material objects and immaterial services, whereas contemporary economics focuses primarily on market exchanges. In addition, economic anthropologists dispute the idea that all individual thoughts, choices, and behaviors can be understood through a narrow lens of rational, self-interested decision-making. When asking why people choose to buy a new shirt rather than shoes, anthropologists, and increasingly economists, look beyond the motives of Homo economicus to determine how social, cultural, political, and institutional forces shape humans’ everyday decisions.3

    As a discipline, economics studies the decisions made by people and businesses and how these decisions interact in the marketplace. Economists’ models generally rest on several assumptions: that people know what they want, that their economic choices express these wants, and that their wants are defined by their culture. Economics is a normative theory because it specifies how people should act if they want to make efficient economic decisions. In contrast, anthropology is a largely descriptive social science; we analyze what people actually do and why they do it. Economic anthropologists do not necessarily assume that people know what they want (or why they want it) or that they are free to act on their own individual desires.

    Rather than simply focusing on market exchanges and individual decision-making, anthropologists consider three distinct phases of economic activity: production, exchange, and consumption. Production involves transforming nature and raw materials into the material goods that are useful and/or necessary for humans. Exchange involves how these goods are distributed among people. Finally, consumption refers to how we use these material goods: for example, by eating food or constructing homes out of bricks. This chapter explores each of these dimensions of economic life in detail, concluding with an overview of how anthropologists understand and challenge the economic inequalities that structure everyday life in the twenty-first century.