Behavioral Economic Anthropology

Behavioral Economic Anthropology Giuseppe Danese1 School of Economics and Management and CEGE Universidade Católica Portuguesa (Porto) Rua Diogo Botelho, 1327 4169-005 Porto (Portugal)

Luigi Mittone Department of Economics and Management and CEEL Universitá di Trento Via Inama, 5 38122 Trento (Italy)

Paper prepared for the book “Behavioral Economics with Smart People” (Morris Altman editor), Edward Elgar.

This version: April 2015 First draft

1

Corresponding author. Email address: [email protected].

1

Introduction Among the social sciences, anthropology occupies a special place for its focus on behavior observed in often-remote areas of the world. The relationship between economics and anthropology has been an uneasy one over the years2, the first discipline positing for a long time a universal model of economic man, the second documenting variability in behavior and the influence of society and culture on human choices. The ethnographic method employed by many anthropologists should be of interest to the scholars of experimental and behavioral economics, i.e. those branches of the discipline of economics where observable behaviors are taken to be the starting point of the inquiry, rather than inductively derived axioms of choice. The subject pool of ethnographic fieldwork, i.e. individuals living in traditional societies3, might yield richer conclusions about how men and women think and what they value compared to the traditional subject pool of laboratory experiments, namely undergraduates living in the Western world (cf. Henrich et al., 2010; Astuti and Bloch, 2010). In this essay we are interested in anthropology as a source of ethnographic studies that show a variety of institutions being developed in human societies. Our objective is to contribute to the understanding of the function and role played by these institutions with the tools of behavioral economics. In order to understand the place of institutions in these 2

Cf. as an instance the exchange between Frank Knight and Melville Herskovits on the pages of the Journal of Political Economy (Knight, 1941; Herskovits, 1941). Cf. also Pearson (2000) for an historical discussion of the relationship between anthropology and economics. 3 We use the term “traditional societies” to describe human societies from the past and the present characterized by low population densities and by limited contact with “modernized” industrial societies (cf. Diamond, 2012, p. 6). We acknowledge that it is unsatisfactory to group together in this category human societies that differ along many dimensions such as culture and environment, but stick to this rather common simplification for ease of exposition.

2

societies we will have to first discuss what it is that men and women in these societies value, how their “savage mind”4 functions, and what kind of influence society has on their individual choices. The history of 20th century economic anthropology has been largely shaped by the debate on a fundamental question concerning the savage mind, which we deliberately push to the extremes: whether people living in traditional societies were fully rational in their economic decisions, or whether their decisions are determined by environment, culture and social circumstances (Isaac, 2012; Wilk and Cliggett, 2007). A more circumscribed debate has also taken place in economics between neoclassical economics and its axioms of choice, and the mounting evidence of non-neoclassical (or nonstandard) beliefs, preferences, and decision-making (cf. Della Vigna, 2009, for a survey). According to the formalist school in economic anthropology the rational actor model (abbreviated as RAM) is applicable across cultures, because economizing behavior is a universal reality applicable to men and women living in any place and time (Schneider, 1974, p. 9) due to the scarcity of resources and to the needs of human provisioning5. In this perspective, there seems to be hardly any need to distinguish between a savage mind and the “civilized mind” of a present-day market participant. The substantivist school denies instead the cross-cultural applicability of the RAM, and posits that there is an indissoluble tie between the institutions of society and choices (Isaac, 2012).

4

This is the title (in English translation) of Claude Lévi-Strauss’s classic text of 1962 (Lévi-Strauss, 2004). “Provisioning” is a term employed by anthropologists to highlight that “in any society there are several possible paths for the provision of similar goods and services” (Narotzky, 2012, p. 77). 5

3

In this essay we will defend the thesis that behavior observed by anthropologists and ethnographers in traditional societies cannot be described in terms of the RAM, being typically intertwined with features of the social life of the decision-makers. We will also argue that men and women living in traditional societies have often created institutions that serve economic functions, such as arranging marriages, trading commodities, and creating alliances. A detailed description of the Kula of the Trobriand Island natives will set the stage for our analysis of institutions from traditional societies as sources of coordination among the native players, living in environments characterized by competition for scarce resources. 2. Karl Polanyi and substantivist economic anthropology Much of the disagreement between the two contending schools of thought in economic anthropology, the formalist school and the substantivist school, can be traced back to how each understands the terms “economy” and “economical” (Dalton, 1990, p. 253). The understanding of these two words of the formalist school is the same of neoclassical economists. More precisely “economical” refers to the (rational) choice regarding how to satisfy unlimited wants through limited means. Anthropologist Karl Polanyi (1886-1964) was among the most outspoken and prolific critics of this notion of “economic” when applied to traditional societies. The substantive interpretation of the term “economic” he defends “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 the means of material want satisfaction” (Polanyi, 1957b, p. 243). He argues that while the substantive view is useful in comparing political economies that 4

differ in temporal and spatial setting, the formal meaning of economic is useful only for the study of modern market economies (Isaac, 2012, p. 15). This view of the economy takes us to Polanyi’s two key contentions. The first is that markets played a minor role in traditional societies, being the prevailing way to allocate resources only in industrial economies. This is a historical claim that requires quantifying the weight that market exchanges had on the formation of national income at different points in time in human history. Douglass North (1977, p. 706) recognizes that “Polanyi was correct in his major contention that the nineteenth century was a unique era in which markets played a more important role than at any other time in history''. Silver (1983), on the other side, criticizes Polanyi's contention and case study analysis, in particular of Babylonia, arguing that markets played a prominent role in ancient Mesopotamia and the Middle East. Polanyi wrote rich accounts of the economic life of traditional societies, in different areas of the world such as Mesopotamia and Egypt. He argues that trades in these societies occurred mainly within non-market institutions. He argues that: “the anthropologist, the sociologist or the historian, each in his study of the place occupied by the economy in human society, was faced with a great variety of institutions other than markets, in which man’s livelihood was embedded” (Polanyi, 1957, p. 245). The word “embedded”, popularized by Polanyi in sociology and anthropology, makes explicit the link between each trading institution and underlying social relationships. This leads us to Polanyi’s second key contention: “man's economy, as a rule, is submerged in his social relationships. He does not act so as to safeguard his individual 5

interest in the possession of material goods; he acts so as to safeguard his social standing, his social claims, his social assets. He values material goods only in so far as they serve this end” (Polanyi, 1944, p. 46). In this key passage Polanyi claims that in traditional societies, before the “great transformation”6 that occurred after the Industrial Revolution, “social standing”, “social claims” and “social assets” were an overriding concern for economic actors, who would acquire material goods only as an intermediate step in the pursuit of this ultimate goal. Polanyi did agree that “catallactics” forms the basis of market exchanges. Catallactics, an Austrian economics notion, “is the analysis of those actions which are conducted on the basis of monetary calculation” (Mises, 1996, p. 234). He denied, however, that this was the case for the trading institutions that prevailed in the past, namely reciprocity and redistribution. This is why Polanyi operates a distinction between trades, which have occurred throughout history, and (market) exchanges, which are a peculiarity of the industrial age. While the authors of the Austrian school stress the importance of haggling and bargaining as the essence of market exchange, Polanyi argued that bargaining is not “natural” for human beings. Polanyi uses Aristotle’s first book of the Politics (Polanyi et al., 1957a), in order to argue that exchanges of equivalents with the aim of personal enrichment are unnatural for humans. The peculiarity of the household economy described, among others, by Aristotle, is that exchanges take place, instead, at set rates.

6

This is the title of Polanyi’s most famous book, originally published in 1944 (Polanyi, 1944).

6

Polanyi did not negate that provisioning is a necessity of all societies 7, but argued that provisioning was not done as part of a means/end type of calculation in traditional societies, but rather as part of a social process that was aimed at increasing the status of the economic actor. 3. Formalism in the history of economic anthropology Formalist anthropologists applied the RAM to traditional societies, highlighting that the needs of human provisioning prompted the same type of reasoning across space and time8. As typical of the neoclassical economic approach, formalist economic anthropology takes preferences as given, and makes no assumption about how selfinterested behavior might be pursued: “[F]or one person, self-interest may be served by storing wealth and investing it for profit; for another, it may be served by spending wealth and incurring debt to host a feast” (Johnson and Earle, 2000, p. 18). Among the merits of the formalist approach, there is the emphasis on choices (id), that takes us away from the very narrow bounds imposed by the purely status-seeking view of economic behavior that we have seen is associated to Karl Polanyi. What is unsatisfactory about this approach is, however, the reluctance to discuss motivations and sources of preferences (id). 7

“Other societies and other civilizations, too, were limited by the material conditions of their existence … all types of societies are limited by economic factors. Nineteenth-century civilization alone was economic in a different and distinctive sense, for it chose to base itself on a motive only rarely acknowledged as valid in the history of human societies, and certainly never before raised to the level of a justification of action and behavior in everyday life, namely, gain” (Polanyi, 1944, p. 30). 8

Among the exponents of the school, an important name is Harold K. Schneider (Schneider, 1974). Other references can be found in Johnson and Earle (2000, p. 17-20) and Wilk and Cliggett (2007, Chapter 1).

7

Few anthropologists today can be described as strictly belonging to one of the two camps. It is probably true, as Johnson and Earle (2000, p. 18) remark, that members of traditional societies can be motivated both by status and by other economizing concerns. Johnson and Earle in their joint work The evolution of human societies provide an example of how the substantivist and formalist approaches can be bridged. Their approach, close to the school of “human ecology”9, posits that that motivator of behavior is the pursuit of health and safety. In their quest for health and safety, men and women give rise to institutions and ceremonial practices. We examine one example of such institutions in the next section. 4. Institutions in traditional societies Our own position on the debate between formalists and substantivists is that no single approach can fully capture the multi-purpose, and typically evolutionary, nature of institutions developed in traditional societies. Typically these institutions served multiple functions and responded to different needs, some of them dealing with economical provisioning of resources, and some other with needs of social prominence in traditional societies. We argue further below that institutions developed in traditional societies can be fruitfully analyzed as social norms that have evolved to solve coordination problems in environments characterized by intense competition for resources. In order to illustrate our own approach to the interpretation of institutions in traditional societies we will make use of a very well-known case study from Melanesia: the Kula of the Trobriand Island natives.

9

Cf. references in Johnson and Earle (2000), pp. 21-22.

8

4.1 The Kula The Kula has been described as the “best-documented example of a non-Western, preindustrial, non-monetized, translocal exchange system” (Appadurai, 1986, p. 18), reason for which we shall devote devote a great deal of attention to this practice. Polishborn anthropologist Bronislaw Malinowski (1884-1942) observed this complex ceremonial practice involving canoe expeditions during his journey in a group of islands off the eastern tip of Papua New Guinea10, the Trobriand Islands. The Kula is the subject of Malinowski’s masterpiece, Argonauts of the Western Pacific: An account of native enterprise and adventure in the archipelagos of Melanesian New Guinea (Malinowski, 2014, often abbreviated as AWP in this essay), originally published in 1922. Malinowski conducted most of his ethnographic work on the island of Kiriwina (Boyowa in the local language), the biggest of the group. Kiriwina, the islands to the east of Kiriwina11, as well as some other islands not formally part of the Trobriand group, such as Dobu and the Amphlett Islands, were involved in the practice of the Kula and form the ideal shape of a ring, whence the name of “Kula Ring” (cf. AWP, Chapter 1, containing several maps of the area and Chapter 2). The inhabitants of these islands, which we refer to as simply “Trobriand island natives”12, speak languages belonging to the group of Austronesian languages (Scoditti, 2004, p. xvii).

10

The word Kula is a verb that describes a type of interaction, described below, between islanders. E.g., one could say that “islander A kulas with islander B” (AWP, p. 99). 11 These are: Kitawa, Iwa, Gawa, Kwaiwata, Dugumenu, Yanabwa, Muyuwa (also known as Woodlark) and Nada. These islands form the group of Marshall Bennett Islands (Scoditti, 2004: xxii). 12 We are hence ignoring that some of the islands are not administratively part of the Trobriand group, and that there are significant differences among the islands, and among the different villages of the same island (Scoditti, 2004: xxii). The area where these islands are located is often referred to as the “Massim country” or the “Kula circuit”.

9

As typical of the area, the diet is mainly based on tubers such as yams and taro, whose production has been intensified to the point that Malinowski found little uncultivated land at the time of his expedition. The Trobriand society is characterized by the presence of chiefs (or “Big Men”), who collect large number of yams in ceremonial presentations and store them in yam houses, the most recognizable sign of their status in the village. An important way to acquire yams is through marriage, with chiefs reportedly having up to forty wives13. The yams are provided by the male members of the prospective wife’s lineage (her dala, cf. Johnson and Earle, 2000, pp. 274-276; AWP, Chapter II; Uberoi, 1962). The Trobriand society is matrilineal, meaning that membership in kin and other social groups descends from one’s own mother. Consequently social standing derives from the status of the mother, with chiefs being always the sons of highly-ranked women (AWP, p. 287). Differently from other societies one finds in nearby Papua-New Guinea (discussed further below), trade among the islands is an important part of the Trobriand economy (Johnson and Earle, 2000, p. 272), due to the unavailability of certain commodities such as stones for axes and clay pots. It is also frequent for people to relocate to different islands, especially from the Northern islands to the Southern islands, in connection to marriage (AWP, p. 300). Each participant in the Kula has a certain number of partners located outside his original village with whom he kulas, i.e. he trades valuable objects. The valuables in

13

This is the case of the main chief of Kiriwina, named To’uluwa (Malinowski, 2004, p. 66).

10

question (vaygu'a) come in two varieties: armshells14 made of white shells (mwali) and necklaces made of red shells (soulava). During expeditions east the natives donate the necklaces, receiving back armshells. During expeditions west they donate armshells, receiving back necklaces (AWP, p. 100). The Kula valuables are usually kept for periods up to two years, with certain districts being particularly notorious for keeping the valuables for an unacceptably long period of time. Possession of these objects is according to Malinowski “in trust” (p. 102) or one might add that the temporary owner acts like a custodian with respect to these objects. A typical Kula valuable takes two to ten years to return to the original giver of the item (AWP, p. 102). Little is left to improvisation in the Kula, which is a highly regulated practice involving a precise protocol and etiquette. In a typical Kula expedition undertaken by men of Kiriwina, they stop in the Amphlett islands, where a number of transactions are conducted, particularly related to the local core activity, the production of pottery. Once the travelers from Kiriwina arrive in the host island (e.g. Dobu, south of Kiriwina), they line up according to their rank in the home community, and are greeted by their local hosts. The guests then disperse around to meet their life-long Kula partners, soliciting repayments of past gifts, or initiating new trades through the presentation of valuables15

14

These look essentially like wrist bands, the main difference being that that they are worn just above the elbow. A picture of men wearing them, a rare occurrence, can be found in Malinowski’s text (plate XVII, p. 86). In the past armshells were accompanied by another article with the dignity of Kula valuable, a circular boar’s tusks (doga). Malinowski reports that these articles had disappeared from the Kula by the time of his ethnographic work, apparently because these articles were diverted towards Papua-New Guinea, and the Trobriand islands did not have enough availability of boars with circular tusks to produce new doga’s (AWP, pp. 366-367). 15 The natives would not bring any vaygu’a with them if the expedition was a major one (uvalaku, AWP, p. 222). In these expeditions the guests set to receive gifts from their hosts, and they bring no Kula valuable with them. The reciprocation of the gifts will happen in a later visit of the current hosts. In an ordinary Kula expedition (Kula wala, AWP, p. 218), the guests would bring instead a few vaygu’a with them, only to be

11

(AWP, pp. 360-362). Malinowski reports that commoners typically have only a few partners, while a chief could have hundreds of partners (AWP, p. 99). Typically partners are located in different points of the Kula ring, and they differ in terms of what they offer (necklaces or armshells), which is determined by the position of the partner given the strict rules that govern the flow of the two types of objects. What we have described are some of the features of the “ceremonial exchange” (Strathern and Stewart, 2012) of the Kula objects. Other more “lowly” (or “utilitarian”16) objects are also exchanged in possibly less formal ways by barter during the visit in the host island. Each trip reinforces or creates relationships that will continue when the hosts will visit the island of the current guests in a future expedition. After three or four days in the host island the guests return home, not without having first made several intermediate stops where the acquired objects are displayed. Malinowski reports that a typical large expedition would take home over 600 Kula valuables (AWP, pp. 402-403). Both armshells and necklaces are made of seashells and would appear to an outsider to be of little value and of little practical use. We shall later comment further on the notion of value in traditional societies. If value is linked to the scarcity of a particular commodity, then the vaygu’a appear to have low value, being made of shells that are

used as a repayment for a past gift (yotile). No vaga, or opening gifts, would ever be taken on a Kula wala (AWP, pp. 363-364). Taken as a whole, this protocol implies that opening gifts (vaga) can only be given by a Kula participant when he acts as the host, and never when he acts as a guest. 16 This is the adjective employed by Johnson and Earle (p. 278) for the non-Kula objects that are exchanged during the Kula expeditions. The word can be traced back to that fact that these goods generated a utility, while the Kula objects did not, which seems dubious. We return later in the essay to the question of “value” and “utility” in traditional societies.

12

“freely, though by no means, easily” (AWP, p. 375) available in the area of the Kula. Because of their lack of intrinsic value, to exchange with someone else a vaygu'a might be considered as an activity that is void of any economic significance. Malinowski reports instead that those involved in the Kula, directly or indirectly, appear to attribute a symbolic value to each specific vaygu'a (AWP, p. 97). Old Kula valuables are coveted by the islanders, because these vaygu’a have circulated for a long time. The value acquired by the objects increases with time despite of any other obsolescence consideration, due to the fact that the old vaygu'a were possessed by important people. The vaygu'a come to acquire a memory of their own, an example of objects acquiring a social life (Appadurai, 1986) or a “spirit” (Mauss, 1954) This opinion is reinforced by the fact that Kula objects have a name, and a renown of their own, a feature that has made it possible to track valuables as they move from island to island over time (Damon, 2002, p. 121 and ff.). Other scholars have criticized the view according to which the Kula objects acquire a life of their own in the eyes of the natives, pointing instead out that, at least in Woodlark island, objects of the highest rank are not those that have circulated for a long time, but rather those that are, quite simply, of large size (Damon, 2002, p. 114). This mechanism of value acquisition, ignited by the previous possession of the valuables by famous people, is at work also in industrial societies. One of the clearest instances is the price paid in public auctions for common items that were previously owned by show business stars or artists17. The main difference between the Kula

17

Cf. e.g. the ruby slippers worn by Judy Garland in “The Wizard of Oz”, with an estimated selling price of $2-$3 US million before they were bought by Hollywood stars, for an undisclosed price, to be displayed in a Los Angeles museum (cf. http://www.telegraph.co.uk/culture/film/film-news/9099959/Dorothys-rubyred-Wizard-of-Oz-slippers-find-their-way-home.html, retrieved April 20, 2015); or Elvis Presley’s bible

13

valuables and the present-day memorabilia is that the former cannot be owned forever, nor can they be exchanged for regular items. The Kula expeditions are probably a way to recreate the first, original sea journeys that led these remote islands to be settled (cf. Stille, 1999, p. 58). Myths like the one of the “flying canoe” told by Malinowski (AWP, pp. 324 and ff.) and by Scoditti (2004) are important in that these oral stories form the basis of magical practices, which become part of the complex institution of the Kula (AWP, p. 313). It is beyond the scope of this paper to discuss the myths and magic of the Kula, to which large sections of Malinowski’s book are dedicated. We focus instead in the next section on some key aspects of the Kula that seem more related to the economic life and to the need of provisioning of the islanders. 4.2 An institutional analysis of the Kula Malinowski declared the Kula the primary activity of the Trobriand Islands, to which all other aspects, such as bartering and the construction of canoes, are subordinate18. In this section we take a bird’s eye view on the institution Malinowski observed in the Trobriand, an institution where ceremonial as well as more economic aspects coexist, although they typically do not mix. These aspects we discuss below will hopefully decompose into some basic elements the one feature of the life of the Trobriand natives

sold for about $90,000 US (cf. http://www.bbc.com/news/uk-england-manchester-19531917, retrieved April 20, 2015). 18 Malinowski claims that, for those communities that participate in the Kula, this practice overrides in importance all other “allied activities” (AWP, p. 112). He did not deny that local communities not participating in the Kula had an economic life and undertook sea expeditions just like the Kula “Argonauts” (id).

14

that Malinowski identified, namely that “the whole tribal life is permeated by a constant give and take” (AWP, p. 180, italic in the original). The first feature of this institution is its gift component, typically associated to the Kula valuables (vaygu'a). The role of gifts and of gift exchanges in traditional societies is the subject of a great body of anthropological literature that we have no hope of surveying here (cf. e.g. Mauss, 1954; Polanyi, 1957b; Liebersohn, 2010; Yan, 2012; Gregory, 2015). The Boyowan language spoken on Kiriwina has a number of different terms for “gift”. The opening gift made when receiving guests is called vaga, which can be an armshell or a necklace. In a future expedition, the partner might offer back a return gift that is of the same quality of the vaga, this return-gift named yotile (a necklace if the vaga was an armshell, or vice versa). If the partner does not have any adequate yotile, he will give a basi, an “intermediary gift” (AWP, p. 109 and p. 365). Malinowski reports that if the host does indeed have a valuable of the desired quality, but refuses to give it to his partner, the partner is customarily entitled to take it by force (AWP, p. 363). If a basi is given, at a later stage another “clinching” gift will be given from the partner, kudu, which concludes this specific transaction. Even though haggling is not part of the social etiquette of the Kula, Malinowski reports that some of the vaygu'a are particularly coveted. The custodian of such object will be given offerings (pokala, i.e. pigs) and “solicitary gifts” (kaributu, usually axe-blades, with no practical use, AWP, p. 109 and p. 367). Gifts are not only made in connection to the Kula, but also in relation to other transactions such as marriage and magical practices (AWP, p. 186).

15

The gifting process described by Malinowski has probably little of the generous and disinterested character we associate nowadays to gift-giving, such as when we donate blood or make Christmas presents19. The great sociologist and anthropologist Marcel Mauss (1872-1950) was among the first to claim in his well-known Essai sur le don (Mauss, 1954) that in traditional societies gifts are rarely free, and they often give rise to obligations of reciprocity. The experience of donating a gift is in traditional societies is probably closer to the experience of lending a commodity. Mauss broke off with a narrative of the Trobriand islanders, which finds some foundations in Malinowski’s work20, according to which the islanders “give because they enjoy giving” (Lee, 1940, p. 367, italics in the original), at least for what concerns the opening gift. Mauss discusses three different obligations that form part of the gift in different human societies described by anthropologists: giving, i.e. the necessary initial step for the creation and maintenance of social relationships; receiving, for to refuse to receive is to reject the relationship initiated by the giver; and returning, in order to demonstrate one's own liberality, honor and wealth. Gifts, unlike commodities, are never fully alienated

19

Malinowski considers the category of “pure gifts”, conceding that they are not very common in the Trobriand Islands. According to Malinowski such pure, disinterested gifts are only given within the household, either from husband to wife or from parents to children (AWP, pp. 189-191). According to Mauss even the payments a husband makes to his wife (mapula), are not different from the other Kularelated gifts observed by Malinowski. In the case of the mapula, Mauss (1954) claims that these gifts are a “salary for sexual services” (Mauss, 1954, p. 71). We do not enter into this debate, noting however that if it is true that “The sexual life of these natives is extremely lax” (AWP, p. 38), then it is not clear why a man would need to pay for sexual services provided by one of his wives. 20 Cf. AWP, p. 186, where Malinowski describes “the love of give and take for its own sake” of the natives.

16

from the giver, but give rise to reciprocal obligations, a feature which keeps relationships alive in societies characterized by no formal contract-enforcement device. According to Mauss the exchange of Kula valuables in the Trobriand Islands illustrates all three obligations. The Kula, however, is not the only institution of its kind. Mauss points out how the Kula is equivalent to the potlatch of the natives of British Columbia (pp. 33 and 90), a ceremonial practice involving the display and destruction of decorated copper items. Mauss’ general point that gifts are rarely, if ever, free is supported also by a linguistic analysis of terms related to property and “things” in different languages. The great merit of Mauss’ Essai, a pioneering work in comparative anthropology, was to recognize that despite cross-society variations in the objects exchanged, gifts are expression of relationships between the parties that are of greater interest than the objects exchanged. The second feature of the Kula is indirect and delayed reciprocation. As we have seen, objects circulate in well-defined ways, and typically it takes time before a return gift reaches the original give. Reciprocity is the subject of a vast literature in the social sciences, and more recently in economics (cf. e.g. Malmendier et al, 2014 and references cited therein). Alexander (1987) was among the first to point out that reciprocity can be both direct (involving the same parties), and indirect, meaning that the counter-gift is expected by someone who needs not be the original author of the gift, or, as in the Kula, the return gift is of a different type from the opening gift21.

21

The indirect-reciprocation of the Kula continues to attract the interest of scholars, as witnessed by the recent theoretical contributions by Corriveau (2012) and Lee (2011), and an experimental contribution by the authors (Danese and Mittone, forthcoming), discussed further below.

17

Indirect reciprocation and gift exchanges are phenomena that have been documented also in modern market societies. Starting from a case study about cash posters discussed years before by Homans (1954), Akerlof (1982) elaborates an early theory about workers’ motivations to produce effort above the minimum required by their contract based on the notion of gift exchange, direct and indirect reciprocity. He conjectured that employers pay higher wages than predicted by the interplay of demand and supply of labor in return for higher effort exerted by the workers. Inherent in this exchange is a principle of fairness, where fairness is defined with respects to the norms that govern the gift-exchange process. Workers are not only involved in a gift-exchange relationship with the firm, but also in a gift-exchange relationship with the coworkers. The resulting behavior of the workers follows a norm that can be thus summarized: “I (the worker) do more than the agreed because you (the firm) will reciprocate me with an above-market-rate wage – an example of direct reciprocity – and you commit to avoid retaliation against my low-effort coworkers – an example of indirect reciprocity – .” Another example of indirect-reciprocation, of a negative type this time, is the so called “altruistic punishment” mechanism described by Fehr and Fischbacher (2004). While in the Akerlof-Homans example of the cash posters the norm of behavior was sustained by “positive” gift giving, in the altruistic punishment setting a norm of fair behavior is sustained by the possibility for by a third party who is not directly involved in the gift exchange to punish unfair behavior. Fehr and Fischbacher study two different games, a Dictator Game and a Prisoners’ Dilemma (PD), by adding a third player who observes the choices made by the main players and who can punish them. The authors

18

report that the third players often decide to punish the “greedy” dictators (dictators who send less than the 50% of the endowment) and the free riders in the PD game. The third feature is the bartering of commodities (gimwali in the local language of the Trobriands, AWP, p. 103) that takes place during the Kula expeditions. We have already remarked that etiquettes differ for the Kula and for bartering. As an instance, Malinowski reports that a typical way to reproach a Kula participant is to say that “he conducts his Kula as if it were gimwali” (AWP, p. 103). The islanders conduct Kula and gimwali with different partners (AWP, p. 372), a feature that probably helps in not falling into inappropriate behavior while conducting Kula22. Although gimwali is a topic Malinowski examines only in suborder to the trade of the vaygu’a, the later literature has re-assessed the importance of bartering in the expeditions (Uberoi, 1962). As we have already mentioned, the inhabitants of Kiriwina must import certain items (i.e. pottery) which are unavailable at home. The fourth feature is the presence of informal monitoring and informal sanctions, meaning that the monitoring and the sanctioning of inappropriate behavior is not carried out by any external agency according to formalized rules of law. Malinowski himself clearly saw that if the counter gift given by a Kula partner fails to meet expectations, there is no way to enforce the terms of the relationship (AWP, p. 103). Even though the recipients of the Kula objects are carefully selected with a view to the return gifts that the current recipient will make in the future, this arrangement seems 22

Uberoi (1962) has a different, more formalistic in spirit, interpretation of this finding, namely that “this separation [between Kula and gimwali] is part of the mechanism whereby the ceremonial exchange of symbolic objects provides the cover for an exchange of utilities” (p. 140).

19

prone to mistakes and miscalculations. If a contract of some sort exists between the Kula partners regarding the transfer of the valuables, this contract does not include any external forum that will sanction non- (or partial-) compliance. The sanction against non-compliance with the rules of the Kula seems to be mostly of a reputational type, although Mauss wondered if the person “hard” in the Kula might also incur a loss of authority in his home community (Mauss, 1954, p. 24). A Kula partner, like a modern market participants, typically “desires to acquire and dreads to lose” (AWP, p. 103). According to Malinowski, the social rules concerning the Kula override the natural acquisitive tendencies of the Trobriand islanders, which keeps gifts mostly flowing around, keeping the institution alive. According to North (1977, p. 713) “spontaneous” reciprocation of gifts can be viewed as a least-cost response to the lack of formal external monitoring bodies. The lack of an external enforcement agency in Kula dealings does not imply that the entire society of the Trobriand Islands has no forms of external enforcement whatsoever. Forms of external enforcement exist at the level of the village, which is the basic unit of the Trobriand society (Powell, 1969, p. 581). Powell (1960, p. 133) reports that typically the village leaders are able to exclude people from the kin, and deny people use of certain local resources and the support of other village men. Several features of the Kula contribute to reinforce the informal sanctions against keeping the valuables for too long. One of these is the fact that some of the valuables are individually owned in some areas of the Kula circuit (Damon, 1980). The inhabitants of Woodlark Island hold the belief that all of the Kula valuables are somebody’s kitoum, 20

which means that a specific person owns it. According to Damon (1980, p. 281) the Kula valuables are to some natives just circulating objects, while for the owner the valuables are also a kitoum. While the Kula valuables are not intended for ownership, but only for temporary custodianship, kitoum can instead be freely bought, sold, destroyed and used to purchase canoes or compensate for deaths (Damon, 1980, p. 282; Godelier, 1996, pp. 122-124). Even in a gift exchange economy like the one of the Trobriand and nearby islands not all ceremonial objects are subject to the obligation to donate postulated by Mauss: some of these objects must instead be kept, rather than given. Giving obligations do not pervade hence all of the “sphere of the social” (Godelier, 1996, p. 49, translation of the authors), a finding complemented by the evidence that the same important men who store temporarily Kula valuables store other types of valuables, such as yams, and do not relinquish control over them under any circumstances, letting them rather rot in their “yam houses”. It was already clear from Malinowski’s reports that all the vaygu’a

were

originally produced by artisans in particular districts of the Kula. It is not surprising that in certain vaygu’a producing districts such as Woodlark (an armshell producing site that Malinowski never visited), the vaygu’a are originally treated by the locals as a personal possession. The fact that the original owner of the kitoum decides to “inject” these articles into the Kula Ring reinforces the informal sanction against keeping these valuables for too long. The original owner of the kitoum in fact renounced his ownership,

21

probably in a show of liberality and status, and it would be then considered socially inappropriate for others to keep these articles for too long. The fifth feature is the presence of “allied activities” (AWP, p. 112). These are activities related to the Kula, and which involved many people, not only the “Argonauts” that physically travelled to the other islands (AWP, p. 110). The building of canoes to be used in the expeditions is an example of an allied activity of the Kula. Italian ethnologist Giancarlo Scoditti provides an eyewitness account of this activity on the island of Kitawa in a fascinating interview by Alexander Stille published in The New Yorker (Stille, 1999). He tells how a “ceremonial canoe is sixty or seventy feet long and can carry forty men. Creating a new one is an expensive enterprise, which involves the entire village. There are lots of stories about clans that have been ruined by commissioning a canoe” (p. 56). Malinowski similarly notices that “in studying the construction of a canoe, we see the natives engaged in an economic enterprise on a big scale” (AWP, p. 123). He discuss at length in Chapter VI how canoe building involves both individual and communal labor. 4.3 The rationale of the Kula A rich literature has developed that tries to explain the raison d'être of the Kula. An economic explanation that comes immediately to mind is that the islanders were alert to the possibility of gains from trade through specialization of labor23. There is some evidence that some islands, e.g. the Amphlett group, possess a kind of monopoly over pottery. In a society based on a simple, tuber-based diet like the one of the Trobriand it 23

Polanyi would disagree with this logic, arguing that labor is a “fictitious” commodity: “division of labor, a phenomenon as old as society, springs from 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” (Polanyi, 1944, p. 43).

22

seems unlikely, however, that the Kula is uniquely the product of comparative advantages in the production of certain commodities. Malinowski was strongly opposed to the “current views of primitive economic man”, that essentially describe him as ‘indolent’, unable to coordinate with other labourers as part of a concerted effort, and strictly acquisition-driven and greedy in his dealings (AWP, p. 180). He observes that “even one well established instance should show how preposterous is this assumption that man, and especially man on a low level of culture, should be actuated by pure economic motives of enlightened self-interest” (AWP, p. 63, italics in the original). He observes that the Trobriand Island natives were instead “prompted by motives of a highly complex, social and traditional nature, and towards aims which are certainly not directed toward the satisfaction of present wants, or to the direct achievement of utilitarian purposes” (id.). Malinowski is a proponent of the theoretical position named functionalism (Barth, 2010, p. 22), positing that each single aspect of a society’s culture plays a role in all the other aspects of culture. Cultural and ceremonial aspects that seem cumbersome to an outsider can be explained in relation to other cultural aspects, and as ways to cope with the surrounding environment (id). Ellickson (1991, pp. 149-152), in a pioneering contribution on social norms, criticizes functionalism on the basis that it does not provide objective elements to judge whether a particular aspect of a culture is functional to a particular group. Johnson and Earle (2000) describe four challenges that the inhabitant of the Kula district face: the first is the uneven distribution of certain commodities, such as pottery; 23

the second is the risk of food shortages due to the unpredictable rain cycle; the third is intergroup warfare, a feature of many societies also on Papua-New Guinea, as we shall see later24; the fourth is variability of agricultural output, requiring trades usually at the local level. The Kula in their interpretation can be explained as an institution that copes with these four problems. Johnson and Earle (2000, p. 278) argue that “in essence” the Kula establishes a market for non-Kula objects, foods and crafts of the different islands, and that the Trobriand Island natives regularly bargained over the rate of exchange between different commodities in this bartering economy. This explanation leaves however unanswered the question of why the exchange of the Kula objects stood the test of time and became a prominent feature of the life of the natives, rather than being progressively dismissed as a burdensome ancient practice. Singh Uberoi offers a comprehensive re-evaluation of the Kula in his Politics of the Kula Ring (abbreviated as PK, Uberoi, 1962). He claims that “taken together kula activities constitute an arena of struggle between the corporate units of Trobriand society for the working out of their relative ranks” (PK, p. 97). The corporate unit he refers to is the local lineage, or dala, which is the basic kinship unit of the Trobriand society. He continues by noticing that the Kula serves two functions: “it provides socially sanctioned occasions for the assertion of individual self-interest; and it provides the idiom in terms of which the corporate units of Trobriand society can work out their political relations” (id.) While the first function of the Kula is a rather standard formalist claim, the second assertion is more interesting. Uberoi claims in fact that local “quarrels” (PK, p. 108)

24

At the time of Malinowski’s expeditions, warfare was already more sporadic due to the pacification that was imposed by the British just before Malinowski’s arrival (cf. Johnson and Earle, 2000, p. 268)

24

among competing corporate groups at home become trading rivalries in the Kula. The Kula in this perspective is both an occasion for fellow village men to compete in their dealings abroad, asserting status that can be leveraged in one’s own home affairs 25; and the Kula serves also to suspend the “latent enmity” among different communities, improving in a certain sense their foreign relations (PK, pp. 146-147). The development of such a rich institution shows in our opinion that the islanders were sufficiently rational to understand the advantages of trading. They were, however, unable to develop a price system or develop a market distinct from the ceremonial practices of society. Probably as a result of the “embeddedness” of the economy into ceremonial and magical practices, the set of institutions observed in these islands did not result in an efficient outcome (cf. also Robinson, 2013, p. 27). Malinowski provides a number of examples of transactions that are clearly wasteful of resources and time. For example, it is quite usual for individual A to give yams to B in exchange for a blade, and for the transaction to be reversed weeks after (AWP, p. 187). Another examples are the fishing expeditions that end up in large quantities of fish becoming rotten (AWP, p. 198). 4.4 On the possibility of a market for Kula valuables An interesting question is then why we do not observe in the district of the Kula a market for the valuables, and an associated price, and a progressive disappearance of

25

In his account of a Kula expedition, Scoditti remarks that there is an element of “sport and competition” to the trade (Stille, 1999, p. 58). The canoes race to arrive first to an island, and there is an attempt by the participants of the Kula to gather more gifts than their neighbors.

25

wasteful behaviors. The analysis of the conditions under which markets prevail as a way to allocate resources has attracted the attention of institutional economists and economic historians, who have focused on the role of contract enforcement institutions (North, 1977; Greif, 2005). We have already noticed that the Kula does not feature any form of external enforcement of the terms of the contracts among the partners. We outline here a demand and supply analysis for the Kula valuables that will hopefully lend further insights into the failure of the islanders to develop a market for Kula objects. Social and hierarchical features of society determine the demand for these objects: commoners typically get only one or none, while the heads of the canoe expedition receive large quantities (AWP, p. 403). The supply of the objects is determined by ceremonies and taboos around the fishing of the Spondylus shells out of which the necklaces are made (AWP, Chapter XV) and of the Conus shells out of which the armshells are made (AWP, p. 519). Commenting on the fact that only certain classes of people fish for the shells, Malinowski notices that: “the main reason for the exclusive monopoly … is the inertia of custom and usage which traditionally assigns to them this sort of fishing and manufacture. For the shells are scattered all over the Lagoon, nor is the fishing and diving for them more difficult than any of the pursuits practiced by all Lagoon villages” (AWP, p. 519). Malinowski’s account does not allow any hypothesis regarding the emergence of such customs concerning the fishing for the shells, a general weakness of Malinowski’s functionalism. It is apparent, however, that the fishing of the Spondylus, far from being an activity pursued in an entrepreneurial way by the natives, is a ceremonial practice on its own within the Kula.

26

A partial-equilibrium (demand and supply) approach to the Kula valuables seems therefore laden with problems due, once again, to the embeddedness of practices concerning the production and possession of the Kula valuables within the social and political life of the natives. The key to understanding the value of these objects is probably to understand what kind of commodity they were. Malinowski opposed interpreting these objects as a currency (AWP, p. 528), noting that these objects are not used as a medium of exchange26. Adam Smith brought into the economic discussion two classes of objects that share little, diamonds and water. He was puzzled in the Wealth of Nations by the fact that diamonds command many more commodities in exchange compared to water, notwithstanding the fact that water is much more crucial to human livelihood than diamonds (Smith, 1986, pp. 131-132). After having established that the vaygu’a are not a currency, we can also exclude that they share any feature with diamonds and water. We have already noticed that, unlike diamonds, the raw material out of which the Kula valuables are made appears not to be scarce. The valuables share little with water, as these objects are not helpful to support the livelihood of the islanders and are (rarely) worn as embellishments. Adam Smith pointed out that the paradox of water and diamonds can be resolved by distinguishing between two different notions of value: water possesses “value in use” while diamonds “value in exchange” (or purchasing power). The vaygu’a can never be 26

Mauss thought instead that currency is a fruitful way to think about the vaygu’a (Mauss, 1954, p. 71 and pp. 93-94). He points to some anecdotal evidence that the vaygu’a were used as a form of salary for pearl fishers, and to the fact that there is an exchange rate between vaygu’a and yams. Both episodes lack however references in Malinowski’s work. Furthermore, the existence of an exchange rate between vaygu’a and yams goes against the principle that barter (gimwali) and Kula “do not mix”.

27

used to purchase consumer goods or utensils, these commodities being appropriate for bartering (gimwali) and not for the Kula27. The vaygu’a therefore do not possess any Smithian value in exchange. Regarding the possibility that these objects enjoy value in use, Smith did link “value in use” to the “utility of some particular object” (Smith, 1986, p. 131), and it is plausible that the temporary possession of the Kula valuables was a source of utility for the islanders. Most likely this utility does not derive directly from the possession of these objects, which are rarely worn and shown, but it is mediated by the renown associated with possessing such objects, in particular the old ones that have circulated many times around the Kula Ring. Whether objects possess value in exchange or value in use, or both to some degree, depends also on the specific context of production and consumption of these objects, context-dependence being a topic to which behavioral economists have contributed over the last decades (cf. e.g. Tversky and Simonson, 1993). The discussion regarding why the Kula objects are valuable in the eyes of the natives is enriched by the consideration of the specific context, or ecology, of the Trobriand Islands. One of the distinguishing features of the natural environment of Melanesia is the total lack of metals. This condition probably pushed the natives to develop a surrogate, the Kula valuables, which perform the role that in continental societies has traditionally been played by metals (cf. Smith, 1986, Chapter 4 and 11). Adam Smith (1986, p. 276) noticed that in Western societies the demand for metals derives both from their utility, as resistant materials, as well as from their beauty, for example their ability not to deteriorate and 27

There are reports however that occasionally foreign money is used to acquire vaygu’a, possibly in an attempt by certain classes of people excluded from the Kula to enter this trade. Cf. Uberoi (1962, p. 157) and references therein.

28

oxidize over time (especially precious metals like gold). While the Kula valuables might not be as resistant as metals, it is plausible that these objects were considered “beautiful” in the eyes of the Trobriand natives28. At the same time the raw material – shells – used to manufacture the vaygu’a is almost totally unaffected by oxidization and this gives to these valuable a long life expectancy. Our discussion of the failure of the natives to develop a market for Kula valuables points hence to the influence of social factors surrounding the demand and supply of these objects, as well as to environmental features. Incidentally, we have also sketched how a behavioral anthropology theory of value might look like, a topic we hope to further develop in future research. 4.4 The Kula as a source of coordination We believe that behavioral economics can contribute to the understanding of the Kula in novel ways. In this section we describe the Kula as an arrangement that shares features with social norms. Ever since Lewis’s (2008) pioneering work on conventions, social norms have been analyzed as solutions to coordination problems (cf. also Bicchieri, 2005; Guala and Mittone, 2010). Norms, which occasionally come to acquire the status of convention or custom in human societies, help players solve coordination problems, in situations where the agents are rational enough to understand the benefits of coordination, but are unable to arrive at a coordination outcome due to cognitive bounds, or to the absence of an effective coordination device. 28

And not only by the Trobriand Island natives: “Spondylus shells were prized as seafood but also invested with social and symbolic significance in many prehistoric cultures” (Ifantidis and Nikolaidou, 2011, p. 3).

29

The Kula is an institution, of the social norm type, that provides a source of coordination among the Trobriand Island natives. It establishes a framework of rules that allow gift exchanges, barters and allied activities to take place, suspending the latent enmity among neighboring communities. It also constitutes an equilibrium of a game characterized by players with complex preferences and beliefs about other players and the surrounding environment. Institutional scholars have long debated whether institutions and norms constrain behavior by determining which strategies can be used (the rules of the game view associated to Nobel Laureate Douglass North) or whether institutions are rather equilibria of games (a view with no undisputed father, cf. Greif and Kingston, 2011, for a discussion of these two perspectives and for references). This distinction is not useful for the Kula, which at the same time establishes rules of the game in the form of protocols and etiquette; and it is a long-lasting equilibrium in the area of the Massim. At the micro-level of the individual decision-makers, the Kula ensures that a proper balance is stricken between the natural acquisitive tendencies of the islanders, and the demands of a well- (or partially-)ordered society. In this sense the Kula establishes a political economy in the Trobriands, i.e. an economy characterized by institutions that try to limit free-riding behavior29. The protocols of the Kula establish a decorum whereby it is “dishonorable to be mean” (p. 368), which constraints the acquisitive tendencies of human nature, and favors exchanges of various types that ultimately benefit the islanders in both material as well as in psychological ways.

29

A political economy is in this regard different from a subsistence, or household economy (Johnson and Earle, 2000, p. 23), which provides for the basic human needs of health and safety, but is usually unable to produce a storable surplus that could be subject to a “tragedy of the commons” (Hardin, 1968).

30

Coordination among the individuals might lead to an equilibrium that is not Pareto optimal, and which involves burdensome and often wasteful actions of the type we have discussed earlier. People living in traditional societies are hence ideally suited to illustrate how not fully-rational individuals can devise smart, although perhaps not perfect or optimal, solutions to problems of provisioning and coexistence. Lewis (2008) and Bicchieri (2005) have reconstructed norms as situations where it is common knowledge that most people conform to a rule of behavior, that most people expect most other people to conform to this rule of behavior, and that there are some sanctions against non-compliance. The rules of the Kula act as the source of mutual and conforming expectations needed for behaviors to become common knowledge, a process that eventually leads to these behaviors becoming conventional or customary. Although Malinowski does not use the expression “norm” for the Kula, norm being a notion popularized in the social science by Ullman-Margalit’s book of 1977, his analysis is compatible with this explanation. According to Malinowski, the main force that governs the life of individuals living in traditional societies is “the love of uniformity of behavior” (AWP, p. 338), what we might call abidance by the norm. This abidance is guaranteed by many features of the life of these communities, such as the rules of kinship, environmental features (i.e. the unavailability of certain commodities in one’s home island), and by the mythology of the Kula that sanctifies behaviors and the institution itself (AWP, p. 339). The Kula belongs to a class of norms developed in traditional societies that all aim at limiting conflict in environments where competition for resources is usually high. 31

We discuss here two such norms: the kaiko of the Tsembaga Maring and the tee of the Central Enga. The Tsembaga Maring and the Central Enga inhabit different areas of Papua-New Guinea, and share linguistic roots with the Trobriand Island natives, as well as a common geographic location (Australasia). The typical size of a Tsembaga Maring community is 200 individuals, while for the Central Enga it is approximately 350 individuals. By comparison, the size of the Trobriand Island communities is usually between 200 and 400 individuals, but this number goes up to 1,000 individuals if one considers the size of the polity, i.e. the number of people that are subject to a particular chief. The kaiko is a ceremonial practice that usually follows a period of indecisive hostilities between local Maring groups competing for productive land (cf. Johnson and Earle, 2000, pp. 185-191 and references cited therein). The truce is sanctioned by the ceremonial planting of a tree. While the tree grows, for a period of five to twenty years, hostilities between the local groups cease. The truce comes then to an end with the uprooting of the tree, an action that is followed by inter-group ceremonies. Johnson and Earle (2000, pp. 190-191) present different explanations advanced by scholars to explain the kaiko. One possible explanation is that the kaiko is a homeostat, i.e. a device the restores the society’s equilibrium. Other scholars object that the kaiko does not promote the return to anything like an equilibrium division of resources. Johnson and Earle’s explanation of the kaiko (p. 191) is that it provides both a group and an individual advantage to participants. The kaiko promotes the formation of alliances between different local groups, an important determinant of success in a society marked by 32

endemic warfare. The individual advantage is the one that accrues to each single kaiko participant thanks to the acquisition of new allies. Finally, Johnson and Earle remark that the kaiko “institutionalizes” the local group of Maring, meaning that the ceremonies serve to define membership and to create a living reference to (possibly shared) ancestors. Johnson and Earle even claim that “when we speak of Maring social groups, we must conceive them in terms of their kaiko ceremonies and the associated cultural landscape” (p. 191), much in the same way in which Malinowski conceived the Trobriand Island society in terms of their Kula. The institution therefore establishes and perpetuates the identity of the group, to the point that the institution and the group become one and the same thing, each defining the other. The Central Enga live in a densely-populated area of the New Guinean highlands, the high population density being associated with agricultural intensification and with a higher degree of political integration (compared e.g. to the Tsembaga Maring) under a local “Big Man” (Johnson and Earle, 2000, pp. 217-233). Similarly to the Tsembaga Maring, warfare is frequent among Enga clans, and it is mostly the result of competition for high-quality land for the farming of sweet potato, which feeds the Enga as well as the large population of pigs that they raise. The tee is a ceremonial practice that has been explicitly analyzed in opposition to warfare in this society (cf. Johnson and Earle, 2000, p. 232 and references therein). The tee is a cycle of exchanges that involves many Enga clans. A clan initiates the ceremony through an “initiatory gift” of small pigs and other valuables. These exchanges proceed down the chain of clans. Eventually, the initiators of the exchange demand repayment in the form of pigs, giving rise to a new wave of exchanges and to ceremonial practices that take place under the leadership of the Big 33

Men of the different clans. In these ceremonies other important matters are settled, including

indemnifications

for

warfare-related

homicides.

In

an

environment

characterized by conflict for the control of productive agricultural land, the tee and the Big Men that lead it create the conditions for a “well-developed political economy. Goods are mobilized from the constituent households to support a set of actions that are basic both to the rise to power of an individual Big Man and to the long-term political survival of the local group” (Johnson and Earle, 2000, p. 232). Taking a bird’s eye view of New Guinean societies, Feil (1986) pointed out that societies of the Western New Guinean highlands are characterized by high population densities, agricultural intensification and intensive pig husbandry. These circumstances are associated with ceremonial practices like the kaiko or the tee which, as we saw, try to reduce endemic warfare. Societies living in the Eastern New Guinea have more recently intensified agriculture, and have not yet developed ceremonial practices and institutions to keep warfare under control (cf. also Feil, 1995; Johnson and Earle, 2000, p. 232). Although the societies we have described, the Trobriand society in particular, are “institutionalized” and have created political economies, this institutionalization process did not result in the development of a market economy detached from the (often burdensome) ceremonial aspects of these societies. We have already discussed earlier in the essay some possible reasons why we do not observe a market for Kula valuables. There are several possible answers to the question of why the political economy of these societies failed to transform into a full-fledged market economy. In the “ecological” perspective of Johnson and Earle (2000, pp. 1-37) intensification of the subsistence 34

economy leads to the progressive institutionalization of societies, in the form of a high degree of political integration and of social stratification. An hypothesis is that the low level of political centralization of certain societies did not allow the creation of anything like a marketplace, due to the lack of infrastructures and trade opportunities, and due to the frequency of warfare (Johnson and Earle, 2000, p. 248-256). 5. Conclusion It

is

our

hope

that

the

dialogue

between

economic

anthropologists

and

behavioral/experimental economists will intensify over the coming years. In this essay we propose institutions and norms as an ideal ground for scholars of the two disciplines to interact. The dialogue between the two disciplines has also followed other paths we have touched upon only briefly in the essay: economists have gone to traditional societies to test the robustness of the data collected in Western societies from games such as the ultimatum game. This approach has been pioneered by Joseph Henrich and coauthors, who report evidence of games played by natives of fifteen small-scale societies (Henrich et al., 2004), finding evidence of behavioral variability and embeddedness of behaviors in the social and political features of the different traditional groups. Another strand of the literature has studied themes that are of direct anthropological interest, such as the emergence of reciprocal exchange relationships, in laboratory experiments (cf. e.g. Kaplan et al., 2012). In a previous contribution by the authors (Danese and Mittone, forthcoming) they study two non-market ways to allocate resources described by Karl Polanyi, namely reciprocity and redistribution. They find evidence in favor of Polanyi’s 35

contention that non-market allocation modes rest on norms, such as symmetry in the case of reciprocity and centrality in the case of redistribution, in order to “integrate” within society. It is the scope of ethnographic and anthropological work “to arrive at invariants beyond the empirical diversity of human societies” (Lévi-Strauss, 2004, p. 247). We have pointed in this paper to institutions as one such invariant. We have argued that the natives of a small sample of traditional societies have developed institutions of economic relevance. We have also argued that these institutions might not allocate resources efficiently. Explaining inefficiencies in the political economy of traditional societies purely as the results of poor judgment seems hard to justify, considering the persistence of these behaviors. An explanation of these behaviors on the basis of biases and heuristics, the traditional territory of behavioral economics, seems possible and will hopefully attract the attention of experimental and behavioral economists in the future.

36

Bibliography Akerlof, G. A. (1982). Labor contracts as partial gift exchange. The Quarterly Journal of Economics, 543-569. Alexander, R. D. (1987). The biology of moral systems. Transaction Publishers. Appadurai, A. (1986). Introduction: commodities and the politics of value. In Appadurai, A. (Ed.). The Social Life of Things: Commodities in Cultural Perspective. Cambridge University Press. Astuti, R., & Bloch, M. (2010). Why a theory of human nature cannot be based on the distinction between universality and variability: Lessons from anthropology. Behavioral and Brain Sciences, 33(2-3), 83-84. Barth, F., Gingrich, A., Parkin, R., & Silverman, S. (2010). One discipline, four ways: British, German, French, and American anthropology. University of Chicago Press. Bicchieri, C. (2005). The grammar of society: The nature and dynamics of social norms. Cambridge University Press. Bowles, S. (2009). Microeconomics: behavior, institutions, and evolution. Princeton University Press. Corriveau, L. (2012). Game theory and the kula. Rationality and Society, 24(1), 106-128. Dalton, G. (1990). Writings that clarify theoretical disputes over Karl Polanyi's work. Journal of Economic Issues, 249-261.

37

Damon, F. H. (1980). The kula and generalised exchange: considering some unconsidered aspects of the elementary structures of kinship. Man, 267-292. Damon, F. H. (2002). Kula Valuables. L'Homme, 162(2), 107-136. Danese, G. & Mittone, L. (forthcoming). Norms and trades: an experimental investigation. Rationality and Society. DellaVigna, S. (2009). Psychology and Economics: Evidence from the Field. Journal of Economic Literature, 47(2), 315-372. Diamond, J. (2012). The world until yesterday: what can we learn from traditional societies?. Penguin. Ellickson, R. C. (2009). Order without law: How neighbors settle disputes. Harvard University Press. Fehr, E., & Fischbacher, U. (2004). Third-party punishment and social norms. Evolution and human behavior, 25(2), 63-87. Feil, D. K. (1986). A Social Anthropologist's View of Papua New Guinea Highlands Prehistory. American anthropologist, 88(3), 623-636. Feil, D. K. (1995). The evolution of highland Papua New Guinea societies: A reappraisal. Bijdragen tot de Taal-, Land-en Volkenkunde, 23-43. Godelier, M. (1996). L’énigme du don. Paris: Fayard. Gregory, C. A. (2015). Gifts and commodities (2nd edition). HAU Books. 38

Greif, A. (2005). Commitment, coercion, and markets: The nature and dynamics of institutions supporting exchange. In Handbook of new institutional economics (pp. 727786). Springer US. Greif, A., & Kingston, C. (2011). Institutions: Rules or Equilibria?. In Political economy of institutions, democracy and voting (pp. 13-43). Springer Berlin Heidelberg. Guala, F., & Mittone, L. (2010). How history and convention create norms: An experimental study. Journal of Economic Psychology, 31(4), 749-756. Hardin, G. (1968). The tragedy of the commons. Science, 162(3859), 1243-1248. Herskovits, M. J. (1941). Economics and anthropology: a rejoinder. The Journal of Political Economy, 269-278. Homans, G. C. (1954). The cash posters: A study of a group of working girls. American Sociological Review, 724-733. Henrich, J., Boyd, R., Bowles, S., Camerer, C., Fehr, E., & Gintis, H. (2004).Foundations of human sociality: Economic experiments and ethnographic evidence from fifteen smallscale societies. Oxford University Press. Henrich, J., Heine, S. J., & Norenzayan, A. (2010). The weirdest people in the world?. Behavioral and brain sciences, 33(2-3), 61-83. Ifantidis, F., & Nikolaidou, M. (2011) Introduction. In: Ifantidis, F., & Nikolaidou, M. (Eds.). Spondylus in Prehistory: New Data and Approaches: Contributions to the Archaeology of Shell Technologies. Archaeopress. 39

Isaac, B. L. (2012). Karl Polanyi. In Carrier, J. G. (ed.) A Handbook of Economic Anthropology (2nd edition). Cheltenham, UK: Edward Elgar. Johnson, A. W. (2000). The evolution of human societies: from foraging group to agrarian state. Stanford University Press.

Kaplan, H. S., Schniter, E., Smith, V. L., & Wilson, B. J. (2012). Risk and the evolution of human exchange. Proceedings of the Royal Society B: Biological Sciences. Lee, D. D. (1940). A primitive system of values. Philosophy of Science, 7(3), 355-378. Lee, J. (2011). Kula and relation capital: Rational reinterpretation of primitive gift institution. Rationality and Society, 23(4), 475-512. Liebersohn, H. (2010). The return of the gift: European history of a global idea. Cambridge University Press. Lévi-Strauss, C. (2004, original French edition 1962). The Savage Mind (La Pensée Sauvage). Oxford: Oxford University Press. Lewis, D. (2008). Convention: A philosophical study. John Wiley & Sons. Malmendier, U., te Velde, V. L., & Weber, R. A. (2014). Rethinking reciprocity. Annu. Rev. Econ.,6(1), 849-874. Mauss, M. (1954). The gift: forms and functions of exchange in archaic societies. Glencoe, IL: The Free Press. Mises, L. V. (1996). Human Action (4th revised edition, or. ed. 1949). San Francisco: Fox and Wilkes. 40

Narotzky, S. (2012).

Provisioning. In Carrier, J.G. (ed.) A handbook of economic

anthropology (2nd edition). Cheltenham, UK: Edward Elgar. North, D. C. (1977). Markets and other allocation systems in history: the challenge of Karl Polanyi. Journal of European Economic History, 6(3), 703-716. Pearson, H. W. (1957). The economy has no surplus: critique of a theory of development. Trade and market in the early empires, 320-41. Pearson, H. (2000). Homo economicus goes native, 1859-1945: the rise and fall of primitive economics.History of Political Economy, 32(4), 933-989. Polanyi, K. (1944). The great transformation: The political and economic origins of our time. Beacon Press. Polanyi, K. (1957a), Aristotle discovers the economy, in K. Polanyi, C. Arensberg & H. Pearson, eds, `Trade and market in the early empires', The Free Press, New York. Polanyi, K. (1957b), The economy as instituted process, in K. Polanyi, C. Arensberg & H. Pearson, eds, `Trade and market in the early empires', The Free Press, New York. Powell, H. A. (1960). Competitive leadership in Trobriand political organization.Journal of the Anthropological Institute of Great Britain and Ireland, 118-145. Powell, H. A. (1969). Territory, hierarchy and kinship in Kiriwina. Man, 580-604. Robinson, J. A. (2013). Measuring institutions in the Trobriand Islands: a comment on Voigt's paper. Journal of Institutional Economics, 9(01), 27-29.

41

Scoditti, G.M.G. (2004). Malinowski e la canoa volante. Introduction to Malinowski, B. Argonauti del Pacifico occidentale. Riti magici e vita quotidiana nella societá primitive. Bollati Boringhieri, Torino. Schneider, H. K., & Schneider, H. K. (1974). Economic man: The anthropology of economics. New York: Free Press. Smith. A. (1986, or. ed. 1776). The wealth of nations (Books I-III). London: Penguin Books. Stille, A. (1999). The man who remembers. The New Yorker: Feb, 15(5). Strathern, A., Stewart, P.J., 2005. Ceremonial exchange. In: Carrier, J.G. (Ed.), A handbook of economic anthropology. Edward Elgar Publishing, Cheltenham, UK. Tversky, A., & Simonson, I. (1993). Context-dependent preferences. Management science, 39(10), 1179-1189. Uberoi, J. S. (1962). Politics of the Kula ring. Manchester University Press. Ullman-Margalit, E. (1977). The Evolution of Norms. Oxford: Oxford University Press. Wilk, R. R., & Cliggett, L. (2007). Economies and cultures: foundations of economic anthropology (2nd edition). Boulder, CO: Westview Press. Yan, Y. (2012). The gift and gift economy. In Carrier, J.G. (ed.) A handbook of economic anthropology (2nd edition). Cheltenham, UK: Edward Elgar.

42