Economic Organization

At the end of this module, I can:

1. Analyze economic organization and its impact on the

lives of people in the society
2. Differentiate the types of economic subsistence
Due to various and numerous technological improvements,
the whole economic processes have also been developed.

Form (2014) argued that the shift in the technological

capacity of societies has allowed for “the formation and
extension of markets, modifications of property relations
(such as the change from feudal lord-peasant relations to
contractual proprietor-tenant relations), and changes in the
organization of labor (such as the change from independent
craftsmen to factories).”
Economic Processes
1. Reciprocity
In most situations, when you give something away, you expect
something in return. This kind of situation reflects the concept of
reciprocity. This economic process entails the exchange of
commodities between parties, often on an individual basis. It is also
a binding method which holds people, peers, and families together
(Anthropology, 2008).

In reciprocity, there are no goods and services lost because it is a

circular process wherein you just receive and return the favor.
Barter is the common for reciprocity as this process includes the
exchange of commodities between individuals.
According to Marshall Sahlins (1965), there are three main
types of reciprocity.
Type Characterization Example
Generalized reciprocity Gift giving without any Giving birthday presents
expectations of immediate to a friend
return

Balanced reciprocity Expecting immediate Selling goods and Sahlins’

return from any given services in the marker Types of
favor. The value of the Reciproci
commodities is expected ty
to be equal
Negative reciprocity The exchange tends to A merchant is selling fake
favor one party over the commodities at process of
other, as the value of the the original and genuine
goods for exchange is items
unequal
2. Transfers
When resources from one individual or
organization are given to another with no expectation
of return, an economic transfer is in place.

This type of economic process allows for the

redistribution of resources within an economic
system.
 Some examples of this process include the transfer of
financials aids, government subsidies, and social security.
Due to the nature of these transfers, individuals and
organizations tend to be reliant on these to mitigate their economic
problems.
To say that these economic transactions have no immediate
bearing on the participating individuals and organizations is
inaccurate. In fact, some critics claim that such transfers have
underlying agenda, such as when foreign governments transfer
resources to financially struggling organizations in the form of
loans, grants and subsidies to promote their organizational
policies.
3. Redistribution
Economic redistribution occurs when the resources of
one, several individuals, or groups are collected and
distributed proportionally or equally to participating
members.

Two of the best examples of redistribution are progressive

income tax systems and charity donations.
 For instance, progressive income tax systems allow for a
process of ensuring that the poorer members of society given ample
resources to cover their basic needs through the imposition of
higher taxes among the wealthy; this is a form of redistribution.

These donations can affect their social conscience or social

image, allowing them to gain public recognition and admiration. In
less complex societies, this can be seen in the form of a tribute, a
process where members of society give gifts to their chief, expecting
that the latter would ensure their group’s economic and political
security.
The marriage tradition of patrilineal societies known as
bride price, or the transferring of wealth from the man’s
family to the woman’s as a form of gift prior to the wedding
is an example of how redistribution occurs on a micro level.

Shows the type of gifts a

bride in Vanuatu usually
receives as gift from her
groom’s family
 On a community level, an example of
redistribution is the native American practice of
potlach, which is composed of feasting,
speeches, and gift giving to improve the public
figure of the giver. In these events, the giver
provides a feast wherein his social status is
affirmed by the amount of gifts that participants
would give him.
4. Market Transactions
Market is referred to as the exchange of goods and
services that involves buying and selling processes.

However, it is not a single process of exchanging materials,

goods, and services. It involves several elements and
transactions.

Market is about making money, capital, income, and growth

(Women and Economy, 2011).
 Humans have several needs and wants that are deemed
bases of market sellers for producing goods and services. After the
production of goods and services, everything is brought to the
market for the purpose of selling.

Buyers are then expected to purchase the available market

supplies (goods and services) for the purpose of consumption and
satisfying their needs. These market transactions will continue to
happen as long as there are buyers, sellers, supplies, and demands
in society.
 The key element that separates market transaction from
reciprocity and redistribution is the use of standardized currency.
This means that you cannot buy a can of soda from the grocery by
giving a chicken that you raised in your backyard.

Moreover, market transactions may affect not only part of the

economic aspect of human society; it affects the other societal and
economic aspects as a whole. One key argument against market
economy is its delimiting effect on the lives of participating
individuals.
 Economics, or a system of sharing limited
resources, is really just one aspect of human
existence, but in a market economy, economics
becomes more important than everything else.
Health, the environment, community--all of the
physical, social, religious, and emotional aspects of
our lives are subsumed or taken over by the
economic aspects of our lives (Women and
Economy, 2011).
5. Market and State
What do you think is the relationship between market and
state? Basically, market involves all the human actions associated
with economic aspects. On the other hand, the state serves as the
institution that protects and maintains economic balance through it
economic laws and policies.

Ferarro et al. (2010) argues that “societies with self-developed

market economies have to decide as to what extent they would
allow free markets or the government to control the economy.”
 This relates to the often dichotomous perspective on the
relation of the state and the market: the free hand of the market or
the heavy hand of the state. The first option, the free hand of the
market, promotes and unbridled economic exchange between
people and organizations in their pursuit of profit and surplus. The
second option, heavy hand of the state, promotes a highly
structured and codified economic engagement of individuals and
organizations as mandated by state-led procedures.

In the most ideal setting, the state, through its government,

should work hand in hand with the economic sectors of its society to
ensure economic and even political stability.
Types of Economic
Subsistence
 In the 19th and early 20th centuries, anthropologists
such as Edward B. Taylor and Lewis Henry Morgan created
categorizations that were used to classify human groups
that are believed to be following a unilinear evolutionary
pattern that progresses from savagery to civilization.

This theory of society has long been debunked due to

its inaccurate and racist provocations. Nevertheless, it has
paved the way for a differentiated analysis of human
subsistence patterns.
 Modern anthropologists subscribe to four categories of
economic subsistence that accepts the diversity of human
population without giving privilege to one category over the
other.

These four categories are foraging, horticultutre,

pastoralism, and agriculture.
Foraging
One of the most ancient types of subsistence pattern is known
as foraging. During ancient times, people lived in the simplest way
by being highly dependent on their environment. Hunting for animals
and gathering wild plants were their most common activities.

O’Neil (2011) further described the group’s activities: “They do

not plant crops and the only domesticated animals that they usually
have are dogs. These useful animals often have multiple functions
for foraging people. They serve as pets, hunting aids, watch-
animals, camp refuse scavengers, and even surplus food when
needed.”
Foraging
Due to the type of activities that they had, their form of
technology was also simple--ranging from digging sticks, to
hunting spears, and to other crude forms of hunting
materials. Human power and muscle had been their source
in performing economic roles.

Most tasks and work labor were divided according to

gender. There were specific tasks, and roles that were
associated with men and with women. Hunting wild animals
were for men, and gathering plants are for women.
Foraging
In terms of settlement, the foragers were considered to be the
early nomads. Nomads are individuals or group of people who stay
in a place for a short period of time. These people usually built
temporary dwellings in a certain area for the purpose of survival.
The length of their stay in a specific are is highly dependent on the
availability of resources, such as food and water, in that area.

Climate variability affected the length of stay of nomads in the

area as they adapted to the resource limitation per season in a
region This implies a more consistent movement dependent on type
of season.
 Type of Foraging Characteristics and Description
Pedestrian Hunting and gathering on foot was the
simplest way of living and survival.
Foragers mostly occupied riversides,
valleys, and grasslands. A simple digging
stick served as the tool of early foragers.
Equestrian Foragers hunted large mammals while on
horseback, which served as their mode of
transportation. Equestrians were larger
and more mobile. This society was
dominated by men
Aquatic Foragers hunted aquatic animals such as
fish, mollusks, and other marine animals
Types of Foraging Patterns
Examples
Well-known pedestrian foragers
were the Australian aborigines,
the Sanspeakers of Southwest
Africa, the pygmies of West
Central Africa, most Native
Americans in California, and the
Paiutes of the Great Basin in
Western North America.
North American equestrian
foragers are those in the Great
Plains in the late 19th century
Well-known aquatic foragers
lived on the Northwest Coast of
North America from the Klamath
river of California to the Aleutian
Islands of Alaska
Pastoral
Pastoralism is a subsistence pattern that is primarily
focused on “ending herds” of large animals”

(O’Neil, 2011). Various kinds of animals available in

their environment became the biggest source of the survival
of the pastoralists. These animals eat only plants and grass,
so they are domesticated herbivores. The most common
animals tended by pastoralist societies are sheep, deer,
goat, cattle, and horses.
Pastoral
Men appear to be more aggressive toward outsiders,
but they are very much cooperative within the group they
belong to.

Men are often involved in making fast economic

decisions, as the survival of the group is often reliant on
external forces such as drought, weather variability, and
threat of other predators.
Pastoral
There are two classifications of pastoralism: pastoral nomads
and transhumance pastoralists. Pastoral nomads have similarities
with the way of life of foragers because of temporary settlement.
However, the only difference is that early foragers do not focus on
tending animals. Therefore, their search for food and water is for
their own personal consumption. On the other hand, pastoral
nomads transfer from one place to another in search of food and
resources that are not just limited for their consumption alone but
also for the consumption of their animals. Most destinations of
pastoral nomads are highly dependent on the needs of their
animals.
Pastoral

Pastoral nomads have similarities with the way

of life of foragers because of temporary settlement.
However, the only difference is that early foragers do
not focus on tending animals. Therefore, their search
for food and water is for their own personal
consumption.
Pastoral
On the other hand, transhumance
pastoralists transfer from one place to another
in search of food and resources that are not just
limited for their consumption alone but also for
the consumption of their animals. Most
destinations of pastoral nomads are highly
dependent on the needs of their animals.
Pastoral
O’Neil (2011) descried transhumance
pastoralists as “following a cyclical pattern of
migrations that usually take them to cool highland
valleys in the summer and warmer lowland valleys in
the winter. This is seasonal migration between the
same two locations in which they have regular
encampments or stable villages often with
permanent houses.”
Pastoral

Transhumance pastoralists are not

dependent on their animals for food. They are
into planting and vegetation, which serves as
their food. These pastoralists are also in trading
their animals in exchange for grain or food from
the market.
Pastoral

Presently, pastoralism is still being

practiced by some modern societies and
different regions of the world, they still
share similar qualities that make them a
real breed of early pastoralist societies.
Horticulture

Horticulture is a combination of small-scale

farming and domesticating animals for the
purpose of food and prestige.

Unlike foraging, this subsistence pattern

allows for the selling in exchange of the goods
they cannot produce.
Horticulture
One of the primary characteristics of horticultural societies is
their shifting planting process that entails movement from one
cultivated land to another.

Swidden farming is one key example of this pattern, as

swiddeners prepare and plant in one land area for a period of time
and move to another area after the produce is harvested from the
first area.

In the Philippines, this takes the form of kaingin, a form of

slash-and-burn planting method.
Horticulture
Horticultural societies follow a certain pattern that can
shift rapidly, depending on their situations and conditions. It
also has several economic advantages because of it
flexibility and ability to adjust and resolve circumstances.

For instance, when farming lands are depleted of soil,

horticulturists move to another available field using their
strategies and techniques.
Agriculture
Most large-scale societies are dependent on agriculture as their
primary mode of economic subsistence.

As early as 10 000 years ago, farming methods and domestication of

animals were developed intensively to meet the needs of the growing
population. Improved water management systems paved the way for the
spread of agriculture among different societies.

The number of large animals for pulling plow rapidly increased for
better soil and agricultural production. This has been the reason that
farming is one of the major sources of living and income in early societies.
Most families are farmers who work together in agricultural lands.
Agriculture
During ancient times, agriculture was highly practiced
in the ancient civilizations in Egypt, Mesopotamia (now Iraq
and eastern Syria), India, Pakistan, North China,
Mesoamerica, and Western South America (Ferraro and
Andreatta, 2010).

As farming continued to flourish to the different regions

all over the world, agricultural system changed constantly,
especially when agricultural technologies and inventions
were discovered and introduced to different societies.
Agriculture
Societies viewed farming and agriculture as
permanent and sustainable subsistence pattern for
their survival.

As a result, permanent settlements in various

areas increased and more buildings and structures
were built.
 Market selling and trading also started, which
brought about an increase in population over time.

Agriculture resulted in the division of the social

classes, wherein the farmers who were the working
class decreased their power over their goods due to
the coming of the leaders or the upper classes who
controlled agriculture; services and production.