Anthropology and economy

ANTHROPOLOGY AND ECONOMY

Comparative and critical, Anthropology and Economy offers a uniquely
cross-cultural view of economy. Using examples from market and nonmarket situations, the book shows how economies are built on five increasingly abstract spheres, from the house to community, commerce, finance,
and meta-finance. Across these spheres, economy incorporates a tension
between self-interested rationality and the mutuality of social relationships.
Even when rational processes predominate, as in markets, economies rely
on sociability and ritual to operate, whether as cronyism, pleas to divinities
or the magical persuasions of advertising. Drawing on data and concepts
from anthropology and economics, the book addresses wealth inequality,
resource depletion, and environmental devastation especially in capitalism,
providing an understanding of their persistence and ideas for controlling
them. Given the recent financial crash, Gudeman offers a different understanding of the crisis and suggestions for achieving greater economic
stability.
STEPHEN GUDEMAN is Professor of Anthropology at the University of
Minnesota.

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NEW DEPARTURES IN ANTHROPOLOGY

New Departures in Anthropology is a book series that focuses on emerging
themes in social and cultural anthropology. With original perspectives
and syntheses, authors introduce new areas of inquiry in anthropology,
explore developments that cross disciplinary boundaries, and weigh in on
current debates. Every book illustrates theoretical issues with ethnographic
material drawn from current research or classic studies, as well as from
literature, memoirs, and other genres of reportage. The aim of the series is
to produce books that are accessible enough to be used by college students
and instructors, but will also stimulate, provoke, and inform anthropologists at all stages of their careers. Written clearly and concisely, books in the

series are designed equally for advanced students and a broader range of
readers, inside and outside academic anthropology, who want to be brought
up-to-date on the most exciting developments in the discipline.
Series editorial board
Jonathan Spencer, University of Edinburgh
Michael Lambek, University of Toronto

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Anthropology and Economy

m
STEPHEN GUDEMAN
University of Minnesota

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University Printing House, Cambridge CB2 8BS, United Kingdom
Cambridge University Press is part of the University of Cambridge.
It furthers the University’s mission by disseminating knowledge in the pursuit of
education, learning and research at the highest international levels of excellence.
www.cambridge.org
Information on this title: www.cambridge.org/9781107577206
© Stephen Gudeman 2016
This publication is in copyright. Subject to statutory exception
and to the provisions of relevant collective licensing agreements,
no reproduction of any part may take place without the written
permission of Cambridge University Press.

First published 2016
Printed in the United Kingdom by Clays, St Ives plc
A catalogue record for this publication is available from the British Library
Library of Congress Cataloguing in Publication Data
Gudeman, Stephen F.
Anthropology and economy / Stephen F. Gudeman.
pages cm. – (New departures in anthropology)
Includes bibliographical references and index.
isbn 978-1-107-13086-9 (Hardback)
1. Economic anthropology. I. Title.
gn448.g82 2016
306.3–dc23 2015028911
isbn 978-1-107-13086-9 Hardback
isbn 978-1-107-57720-6 Paperback
Cambridge University Press has no responsibility for the persistence or accuracy
of URLs for external or third-party internet websites referred to in this publication,
and does not guarantee that any content on such websites is, or will remain,
accurate or appropriate.

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Contents

List of Figures
Acknowledgments

page vi
vii

1

Strange Economies

2

The Strength of the House

24

3

Mutuality and Connections

52

4

Rituals of Economy

69

5

From Celebrations to Sales

93

6

Colonizing

124

7

Money and Abstraction

144

8

Rethinking Economy

168

1

Notes

193

References
Index

206
214

v

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Figures

2.1 Junta preparing mud for house walls, © Roxane Harvey
Gudeman
2.2 Applying mud to house frame, © Roxane Harvey
Gudeman
3.1 Cooperative pasturing in the Rhodope mountains,
© Detelina Tocheva
4.1 Market exuberance
4.2 Australian corroboree
5.1 Thanksgiving, © Roxane Harvey Gudeman
5.2 Black Friday, © Powhusku
6.1 Cutting sugarcane, © Roxane Harvey Gudeman
6.2 Loading sugarcane, © Roxane Harvey Gudeman
7.1 The Crash, © Alan Denney
7.2 Back to community, © Roland Zh

page 46
47
59
86
86
120
121
130
131
166

166

vi

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Acknowledgments

I wrote an initial version of Anthropology and Economy at the Max
Planck Institute for Social Anthropology (Halle, Germany) while I was a
member, cooperation partner, and joint director of the “Ritual and
Economy” project that lasted from 2009 until mid-2012. I am indebted
to Professor Chris Hann, a founding director of the MPI, for his invitation, our work together, and his many suggestions and encouragement.
Our research team included Jennifer Cash, Nathan Light, Miladina
Monova, Detelina Tocheva, Monica Vasile, and Bea Vidacs. My thanks
to them for our numerous individual and group discussions. I have
not cited their studies from the project because with Chris Hann, we
published two volumes from it in 2015: Economy and Ritual: Studies of
Postsocialist Transformations, eds. Stephen Gudeman and Chris Hann
(Berghahn), and Oikos and Market: Explorations in Self-Sufficiency after
Socialism, eds. Stephen Gudeman and Chris Hann (Berghahn).
Adam Kuper read an early draft of this book and his comments
sent me back to the drawing board for a number of months. As always,
Roxane, Rebecca, Elise, and Keren provided encouragement and suggestions. Roxane took some of the photographs as noted, and she tirelessly
prepared all of them for publication including the book’s cover.
Small portions of Chapters 1 and 8 were partly published in “Piketty
and Anthropology,” Anthropological Forum, 25(1):66–83. An earlier
version of Chapter 2 was published as “Vital Energy: The Current of
Relations,” Social Analysis 56(1):57–73 (2012). A short part of Chapter 4

was published in Stephen Gudeman and Chris Hann, “Introduction:

vii

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Acknowledgments

Ritual, Economy and the Institutions of the Base,” Economy and Ritual:
Six Studies of Postsocialist Transformations, eds. Stephen Gudeman and
Chris Hann, New York: Berghahn (2015). An earlier version of a portion
of Chapter 7 was initially published as “Creative Destruction: Efficiency,
Equity or Collapse?” in Anthropology Today 26 (1): 3–7. A segment of
Chapter 8 was published in “Misfits or Complements? Anthropology
and Economics,” Cash on the Table: Anthropological Engagements with
Economics and Economies, ed. Edward F. Fischer, 263–274. Santa Fe:
School of American Research Press (2014).

viii

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ONE

m
Strange Economies

When the Bernard Madoff pyramid collapsed in late 2008, financial

markets were falling and recessionary fears were growing. Over the
preceding thirty years, Madoff had constructed the largest pyramid scheme
the world has known. When he was no longer able to attract new funds for
recycling to his earlier investors, he confessed to his swindle. As the
remnants of his pyramid were uncovered, the fraud was estimated to be
65 billion dollars. Madoff investors dotted the map of the United States.
Some European banks were drawn in, and one French financier took
his own life. None of his participants seemed to realize that Madoff’s
unvarying returns of 10%–11% per year were improbable, but he carried
on for several decades until the December day when his empire collapsed.
Some commentators explained that the scheme was fed by greed.
Others thought Madoff’s investors failed to observe best practices and
were caught up by “irrational exuberance.”1 I view this “creative destruction” of wealth differently.2 Situated in Wall Street with threads across
the United States and elsewhere, the Madoff event exemplified the early
twenty-first century wave of bubbles from housing, to complicated
investment vehicles, to illegal deals. It typified the strange economy in
which we live.
But I am an anthropologist and think that all economies are strange,
including the ones anthropologists traditionally study. Economies are
strange because they juxtapose self-interest and mutuality. Many of
1

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Strange Economies

Madoff’s investors wanted to make money and to feel an ethnic
relationship with him, which is the strangeness, because the two are
different. We live with this tension everyday, however.

In this book, I offer my anthropologist’s view of economy but amplify
my discipline’s terrain to include developed market economies. Anthropologists usually study small-scale economies whether in the South
Pacific, Northern Canada, the margins of Asia, or the interior of
South America, and they have developed many tools for analyzing their
findings. But they have become rather enfolded in their local data, and
remain largely speechless in the face of developed market economies.
Conversely, economists scarcely look at the strange economies that
attract anthropologists, except to proclaim that the people act like us
but face constraints, which block their economy’s growth. My perspective
brings together what people do in their material lives with economists’,
anthropologists’, and everyday views.
Economy has two sides. One is the high-relationship economy that is
rooted in the house. Neglected by economic theory, it is prominent
in small-scale economies, and hidden and mystified yet salient in
capitalism. The other side consists of competitive trading. Anthropologists know one side of economy and economists know the other, but
the two are intertwined. Neither side is complete without the other
that influences it. Their balance varies across cultures and time. The
tension lies within economies and within us. We calculate our relations
to others, and we empathize with them. We measure some things and
consider others to be incomparable. The tension is social and personal.
This argument rests within a larger one, that economies are made
up of increasingly abstract spheres, which start with material life in
the house and expand through the commercial, financial, and metafinancial spheres of markets. As these spheres and abstractions develop,
markets colonize the house economy.3
The contrasting purposes of the house that aims for sufficiency and
nurtures social relationships, and of markets, which are made up of
2

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Strange Economies

separate actors focused on gain, run through economies from the small
scale to the advanced capitalist. In high market economies, their imbalance and separation undermine the viability of the house economy on
which markets paradoxically depend. The disparity between the house
economy and competitive markets helps lead to our contemporary
crises of inequality, environmental devastation, and cycles of growth
and recession. To moderate the instabilities, a broader economics and
economy must attend to both sides. At the end of my account,
the reader will find suggestions for countering inequality and our use
of the environment, but my larger aim is to present a different way of
understanding economy that justifies changes.
I develop these themes by working back and forth between examples
anthropologists have studied and contemporary situations. The book
starts with the house economy to show how long-term connections
provide the links through which this part of material life is conducted.
Ensured by kinship and other bonds, the material ties are sealed through
beliefs and rituals that close gaps in them. These local connections stretch
into the broader space of communities where their sociability helps
underwrite competitive trade.
Like house economies, markets draw on rituals, ceremonies, and
spells (as in advertising) but here to bridge the gap between the thrifty
householder and market sellers. These persuasions to buy ironically
draw on the image of the thrifty house whose self-sufficiency is contradicted by market purchases.
Today the market realm dominates the house economy ideologically
and through material practices. Whether at the margins of small-scale
economies or at the center of high market systems, the house helps
to subsidize markets. Rarely considered in standard theory, this support
is exposed in the rural economies I know and occurs in markets where it

is dispersed and veiled.
The abstraction of economic relations from the material world
ascends from the house through the commercial sphere of goods and
3

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Strange Economies

services, to the financial sphere where money is exchanged for money
(over time), to the meta-financial circuit that uses calculations of risktaking to secure money.
As this argument unfolds, the reader will find both familiar and
strange material as well as a comparative view of economy. Just as
economy is a shifting combination of competitive and mutual relationships, I continuously shift the focus between the smaller-scale economies that anthropologists study and market ones. The contrast of these
economies mirrors what is in all economies, as do the contrasting
analyses of economists and anthropologists.
But let the reader beware. Just as I locate a tension in economy, the reader
may find a tension in my approach. Some economic anthropologists
have admonished me for being too interpretive and too interested in local
meanings and explication, and a few economists have told me that I should
construct models, specify variables, and look at their interactions. From
the other side, some anthropologists say that my interest in economic
theory leads to the wrong kind of anthropology because it is too economistic. In today’s language I am both a “foundationalist” (there is a bottom
line because economy is composed of self-interest and social relationships)
and a “postmodernist” (there is no bottom line because the relation of
the two shifts). This friction between believing in a stable foundation
and denying it is woven into economy as well as this book.4
Some readers may be wary for a different reason. My view does
not fit a political economy or modes of production approach to

distribution as some anthropologists and others employ it. For Adam
Smith, David Ricardo, and Karl Marx, economy was set within a class
structure. Smith and Ricardo spoke of landowners, capitalists, and
laborers. Marx addressed the struggle between capital and labor. This
class analysis was largely set aside by the development of marginalist
analysis in the late nineteenth century and after, which has led to the
model of the perfect market that allocates resources in the most
efficient way.
4

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Strange Economies

In contrast, I see economy by its institutions or spheres, ranging from
the house to meta-finance. Each sphere secures and distributes wealth
distinctively from sharing to risk-taking, although the spheres and
distributional modes may be combined. The spheres might be likened
to a division of labor. The power of capital as well as closely held
knowledge and social relationships takes place within this structure. In
the market spheres (when there is perfect market information, a plethora of sellers and buyers, and open competition), resources are allocated
efficiently, but holding and controlling assets provides for rent taking in
all parts of economy.
Rent refers to a return independent of labor.5 Originally, rent
(or ground rent) referred to the receipts of a landowner who did no
more than possess a plot of land. In Chapter 6, I draw on the Ricardian
idea of a differential rent by which more and less fertile plots of land
are distinguished by their returns. (Ricardo used the idea to argue
against tariffs and the unproductive takings of landowners.) In the

twentieth century the Schumpeterian return or what accrues to the
innovator, especially when elongated over time by patents and other
protections, was distinguished as another form of rent. The term rent
now is used more broadly and refers to what a “rentier” receives for an
asset in excess of his labor. Market rents include interest, dividends,
ground rent, capital gains, royalties, profits, and arbitrage returns
enabled through use of financial tools. Rents can be established in
all economies, however. Social divisions such as gender asymmetry,
chieftainship, and slavery may be used to secure rents. Tribute and
tithes are rents. The free use of environmental resources is a kind of
rent. In these ways rents, which are a part of distribution, fall outside a
pure market analysis and a mode of production approach. They
depend on asset control, social relationships, and closely held knowledge from the mathematical to the sacred. At the book’s end, I shall
suggest that inequality in market economy is related to rent taking
within and between its spheres. Rent is like a subsidy and perhaps
5

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Strange Economies

is akin to a “free gift,” which is an oxymoron for anthropologists,
as I shall discuss in Chapter 3.
I focus as well on local models. By local model, I refer to a people’s
models of economy, to the incomplete and sometimes contested views
of these models, and to their contextual or limited nature. In fact, I often
see the models of economists as cultural models, because they are built
on local assumptions and practices.
Throughout the book, I use many examples from anthropological

studies including my own. They are taken from nearly a century of
work; however, I present them in current terms. Of course, the situations
have since changed including ones from the recent past in the United
States. In many cases, I try to locate the times and the ethnographer.
Even so, many of the situations were never so stable or separate from
national and global influences as may be suggested by their recounting.
In all the cases I have stayed true to the ethnographer’s report but
assembled and analyzed the data to exemplify the major themes of
this book. The reader will find numerous examples from the United
States, because it represents a very high market situation that is low on
economic mutuality, such as welfare and educational supports.

Puzzles
I have a broad puzzlement about our economy. When I plant and rake
my yard, fix the plumbing in the house, or change a light bulb, my work
is not considered to be part of “The Economy” as most people define it,
but if a gardener, plumber, or electrician does the work, it is. The same
physical movement can be differently classified. An economist peering
over my shoulder might interject that in one case the work is part
of a market exchange and in the other it is for myself. One is priced
and included in the GNP, whereas the other is not. He might add
that we could put a price on my household labor by comparing it to
my “opportunity foregone” in the market or what I could earn with the
6

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Puzzles

same time spent; or we could value my labor at the price I would need to
pay others to do the same work. So, all is right. But I am not convinced,
because I don’t earn money I “forego,” and no matter how high we value
my household labor, I don’t receive money for it.
I think the economist’s answer reflects a deeper problem about
how we think about economy. I have lived in Latin American cultures
where unpaid work at the house – building it, repairing it, cleaning it,
extending it, and maintaining it – is considered to be the heart of “The
Economy.” Why is use of the word “economy” reversed between the
two situations, and why does “The House Economy,” which I describe,
have no place in standard economics?
My perplexities do not end with the erasure of The House from The
Economist’s Economy. Most of us exchange money for goods we want,
and we work for that money. Exchanging different things and skills is
said to be the heart of economy and exemplifies the division of labor,
which is the efficient way to do things. In some cultures, however,
people exchange similar things or even the same thing with one another,
and sometimes at the same moment. We exchange dinners, drinks, gifts,
greeting cards, and clothes. Whether in other cultures or our own, these
exchanges require a lot of effort. Are they part of economy? A helpful
economist might cross his arms and say something about the fruits
of modernization that eliminate irrational behavior. But if the customs
that anthropologists report are irrationalities, why do people continue
doing them? Even more perplexing are practices that anthropologists
regularly report. In some cultures successful hunters set out an animal’s
bones and smoke a pipe to respect the spirits of the game they have
caught. Beforehand they may have tried to divine where animals can
be found. These ceremonies make little sense when viewed through the
lens of economic reason.
The puzzle about the presence of sociability and rituals in material life

multiplies when we turn to market economies. Consider the purchase
of a “big ticket” item in the United States, such as a car, a house, or a
7

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Strange Economies

household appliance. It is tension provoking. We are uncertain about
how much to spend, about the quality of the item, about how others will
view it, about our taste or desire, about comparative prices, and whether
to buy it. At these moments of hesitation, the salesperson inserts
himself. He is attentive and filled with conversation, sometimes showing
interest in the details of one’s life to a greater extent than desired. I once
had a car salesman remark about my clothes and watch. Another clearly
signaled that he did not think I could afford the car (which was at the
low end of the price range). I also have learned about the salesperson’s
life. One invited me to Las Vegas for a weekend where I could spend
the “grand” that I was saving on the car he was trying to sell me. Other
car dealers assure me that my choice is right for me and my family and
claim that their service department is the best. My new car friend
remains with me until she leaves to plea with the boss for a special
price for me, but after I sign the contract, my friend disappears. Why is
it that we rapidly gain and then lose a friend in these big purchases?
Car purchases are one example in which sociability and competitive
trade are mixed together; however, the interpretations of this intertwining are several. Some people think the mingling is good, for it shows
that people humanize their market relations and make them enjoyable.
Trade brings sociability. By this argument, I should feel good that every
waitress, waiter, and sales person seems happy to see me, and that every

telephone caller who wants my donation, help, or purchase always asks
“how are you doing?” Why do we respond appreciatively when the
waiter asks if our meal or wine was good, especially when it was not?
Our over-the-shoulder economist might observe that the time spent
on being friendly is inefficient for customer and seller, because each
could maximize more by shortening the transaction and turning to
another taste or using one’s scarce stock of affection on a friend. Other
economists might say that both seller and purchaser are maximizing
their preferences that include both monetary gain and friendship. Their
actions “reveal” their tastes.
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Puzzles

I am not convinced by these just-so stories and theories. In my view,
the car dealer maximizes his return by donning the cloak of friendship.
Using sociality, he draws the buyer closer and feigns concern to further
his market interests. The buyer, being uncertain about the purchase,
needs reassurance, which is supplied by the patter of the salesperson
who seemingly acts in his behalf. Both sides are complicit in the
friendship for different reasons. One wants to achieve a monetary gain;
the other may be trying to get a good deal and avoid thinking about
the cost. The overlay of friendship hides the antagonistic transaction in
which each seeks an advantage from the other. The ritual of sociability
supports yet opposes the market transaction, while the contractual
connection is seemingly independent of the rapport but requires it.
Mystifying market trade as mutuality often happens when transactions stall. When interests remain divergent or potentially hostile,

people frequently turn to sociability for assurance about the other’s
intentions and completion of the exchange. Through words and rituals
(such as “wining and dining”), one or the other pays to shift the market
trade to a context of sharing, even if the moment is fleeting and
surrounded by its opposite. Sociability, which on the large underwrites
market transactions through legal and political frameworks, emerges
on the small to cloak ambiguity and antagonism in purchases and sales.
Mutuality becomes a ritual of economy, expressing that people connect,
and plugging gaps in market relations. As in the case of my car
salesman, economic transactions often are filled with sociability from
going to Las Vegas together to displaying the bones of an animal a
hunter has captured.
Economic theory and common sense offer a compelling understanding of market transactions. Economists do find fault with the picture
of ideal markets. They know that people are not always rational and
operate with imperfect information. For example, some suggest that
experimental games, such as the “Ultimatum Game,” shake our traditional assumptions about optimizing behavior.6 Others, following
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Strange Economies

“Prospect Theory,” show how we can be wildly wrong in our estimates
and use of risk calculations.7 But even for these dissenters, the starting
point for analysis is calculated behavior in markets from which we
deviate. Most non-economists share this view that economy means
markets, and that theories about markets are theories about economy.
I call this perspective the 50% view, because it omits many aspects of
economic action. An over-the-shoulder economist might say that practices “outside” formal markets can be described by maximization theory,

because social relationships have attractions and detriments that we try to
balance. Standard economic theory is universal. This market-centric
view – from the microeconomics of pricing to the macroeconomics of
saving, consumption, investment, growth, and employment – is impressively developed. But it is limited, because economic transactions are
contained within larger social commitments that they use and subvert,
and are influenced by sociality on the small scale. The shifting, sometimes
antagonistic and sometimes supportive relation between competitive
pricing and mutuality affects all economies. I hope to show how it creates
economy, affects personal interactions in markets, and helps shape the
expansion of markets.

Anthropology’s Lens
My anthropological journey into strange economies has been guided
by the idea that if we can understand the material practices of others,
we can better understand our own. Anthropology’s examples offer us a
critical mirror, because some of the ethnographic puzzles that anthropologists find tell us about patterns in our social and economic life.
But first, let me explain what I do.
Like other anthropologists I gather information about local behaviors
and voices by living with a people, watching what they do, listening
to what they say, and describing what happens in daily life. Often,
anthropologists carry out these studies in distant places outside market
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Economy’s secret

economies but sometimes at the margins of markets near us, and even at
the center of high market economies. Anthropologists need a “good ear”

to interpret what people are saying. One of my goals is to uncover the
economic concepts that people use and make them sensible to us. I have
listened to people in the high mountains of Colombia and to professors
and students at the Harvard Business School where I took a master’s
degree. I start with the assumption that practices in other economies
cannot be shoe-horned into our accepted categories, such as rational
choice, efficiency, maximization, profit, or the gross national product
per capita. I try to understand and translate what others are doing and
considering, but I also have conducted surveys and collected statistical
information about production, consumption, and exchange behavior.
Sometimes the qualitative and the quantitative information do not
mesh, which can be revelatory.
For centuries, economists have been developing models of economy.
Their models can be descriptive, normative, or prescriptive, and their
insights can be dazzling, although they tend to assume their work applies
everywhere. As an anthropologist, I usually interpret economists’ models
as if they were people’s or local ones, although there can be important
differences between the ethnographic and formal ones. I try to bring
these different voices into conversation within a comparative vision of
economy. Most anthropologists today (who seem to be interested only
in local interpretations and histories) disagree with this quest, and most
economists (attached to the universality of rational choice) would denigrate my approach as based on a misguided foundation. But I am interested in the differences of the similarity (the interacting faces of economy)
and the similarity of the differences in economies.

Economy’s secret
I use various expressions for the tension in economy, but the distinction
between mutuality and self-interest captures it. Mutuality means
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connecting to others, while self-interest means turning inward to personal ends and calculating one’s relations. Mutuality or sociability
is expressed by sharing and is linked to empathy or the ability to see
oneself in the place of others.8 The distinction between self-interest and
mutuality is typified by the difference between calculated behavior in
markets and making material life through social relationships.
Using different terms, we can draw a distinction between instrumental and non-instrumental behavior. Instrumental behavior is a meansto-ends act, such as producing food, making a product, or driving to
an appointment. Non-instrumental behavior is a varied category. It can
refer to an act that is complete in itself, such as listening to music,
planting a flower garden, playing a musical instrument, having a conversation, relating to others, or doing nothing. One is done for the sake
of something else; the other is done for its own sake. The same act
can fall into either category depending on the context. If I walk to get
somewhere, walking is a means to an end. I also can walk as a pleasure,
in which case there is no end or objective beyond it, and I can combine
the two.
Can economic practice be anything other than an instrumental act?
Can non-instrumental behavior be anything more than an economic
frivolity? In fact, sometimes we experience instrumental behavior as an
act of well-being, or as something done for its own sake. Making money
is an instrumentality for something else, but for many it is a satisfying
act. Conversely, we sometimes represent satisfying acts as instrumentalities to justify doing them. I may look at a sculpture to enjoy it but
explain my act to others and to myself as a way of refining my artistic
tastes. I may visit a foreign art museum in order to talk about it to others
in a competitive display of knowledge and money spent but claim to
have done so only as an enjoyment.
Economy can be a mixed site of these actions. In market economies
we use self-interest and calculation in relation to others, and we connect

to them through empathy. In times of recession and downturns we may
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speak of the need to have “safety nets” for the unemployed. Is providing
unemployment benefits done from concern for them or is it a means for
getting people back “on their feet” to make the economy grow?
As in the circus metaphor, which presents the full employment
economy as a high wire act, people employ figurative modes of reason
in economy. This form of reason that includes drawing similarities and
imagining does not appear in market theories, although we talk about
bulls and bears, depressions and recessions, as well as growing and
contracting economies. Sometimes we explain market bubbles, such as
the spread of computer apps and the rise of subprime mortgages, as
“bandwagoning” and copying, which are hardly calculated practices.
Figurative reason lies at the heart of innovations. For example,
tinkering is a mode of figurative reason that appears in the economy
but does not enter our normal models. After the economic downturn in
2008 with its effect on unemployment, tinkering to keep things going
grew in importance, and making-do is a practice in many economies
that anthropologists study. Even the Wall Street Journal took note of these
practices during the crisis.9 But market expansion often replaces tinkering
with tooling, while ideological expansion of the market mentality replaces
figurative reason with figuring, and empathy with earnings.
Economies are never in equilibrium, because their two sides represent
different ways of relating to others and the world. In some cases, actions

are ambiguous or ambivalent. In others, they fit one side only. Each
aspect of economy may take on features of the other, or be mystified as
if it were the other. The balance between self-interest and connecting,
between emphasizing one set of values or the other, varies over time and
across economies. We are pulled in both directions and interweave them.

Spheres of economy
The tension between self-interest and mutuality is embedded within
the larger structure of economic spheres. Economies consist of spheres
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Strange Economies

that grow, shrink, overlap, and conflict.10 They include the house,
community, commerce, finance, and meta-finance sectors of economy
and range from the less to the more abstract and encompassing.
The innermost and longest-lasting component of economy is the
house. It provides a material base that is little noticed and partially
dismantled when markets spread, but its features leave traces on the
larger economy of which it is a part. By starting with the house
economy, I am contesting those early pages in texts by economists
where “the economy” is pictured as a circular flow of money that runs
from corporations who pay wages to houses that use the receipts to save
at banks, invest in corporations, and consume, which feed a stream of
cash back to corporations and lead to economic expansion. These
models assimilate house functions to market processes and make the
house an appendage of market actions. The house is connected to

systems of trade, but markets also need to be connected to houses.
The two institutions operate by different principles.
The house economy has a longer history than markets. We know it
from Aristotle’s compelling description and from its development in
European history and other areas of the world.11 Aristotle’s account
remained influential until Adam Smith showed the advantages of
market economy when he published the Wealth of Nations in 1776.
The house way of economy persists at the edges of markets today,
however, and is found in Latin America and in former socialist areas
of Eastern Europe.12 Anthropologists have recorded its many variations
in other parts of the world, such as family groups in Africa and parts
of Asia. Important elements of the house economy are encountered in
developed markets as well.
The house economy displays a variety of features, not all of which are
found in any situation. It is an irreducible institution because the nuclear
family, mother–child, and similar groupings make up its core, although
it may be built on singletons as well. The house economy is incomplete
because it is set within broader social relationships and exchanges. House
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relationships of empathy and closeness are extended to others as kinship,
friendship, collaboration, and other ties. House type relationships not
only extend beyond visible borders but also become autonomous as
population increases and their geographic spread enlarges.
The house economy varies in size and longevity. It can be a small unit

with few members, a combination of families as in Latin America,
a Great Estate as in medieval times, or parents with a grown child
who returns home while searching for work in the market. The house
fits many social and economic situations from ancient empires, to
feudalism, to colonial contexts, to socialism, to capitalism.
This economy is closer to the material world than the other spheres.
Sometimes it produces and distributes goods; always it is a consumption
unit. It holds the means for living from food, to tools, to assets.
These holdings are not capital but the base the house keeps for its use
and persistence. The base may have a broader meaning than a collection
of assets, however. It may include intangible items or emblems that
comprise an impartible legacy. The base may be epitomized as a lineage
of animals or a seed strain that house members raise, eat, and preserve.
Heirlooms, family saints, or the earth endowed with productivity by
the ancestors or divinity may be part of the base. The base is a badge
and assurance of identity in the world.
At a broader level, this imagery may reverberate in the market.
Goods may be designated by country of production where quality
may putatively vary by soil, climate, and care in production. Clothing
may be labeled by country of origin. Weavers may label their hand-knit
sweaters. Carpenters may sign their name inside the wall of a house. In
these cases, part of the market appeal is having something of the identity
or base of another.
The house tends toward self-sufficiency in which its products are
used as inputs rather than for exchange. Never realized or absolute, selfsufficiency is often a house ideal that may be enacted by reproducing a
crop or lineage of animals. Sometimes heirlooms, family saints, or land
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Strange Economies

represent this independence, which are part of its base.13 Larger social
forms, such as a tribal group, a community, or a nation may also strive
to be self-sufficient after the image of the house as in the case of tariffs
that protect not only infant industries but also industries deemed
central to national identity, such as rice in Japan.14
Sufficiency can have a double meaning, however. In the house, selfsufficiency refers to producing what the house needs and using what it
produces. Sufficiency also can mean having enough or being satisfied
with what the house has. In parts of Latin America, for example,
sufficiency means “meeting the needs” of the house. This notion of
having enough runs through many early texts from Aristotle through
the Mishnah. In Latin America it is often opposed to having wants that
are satisfied through the market.
Sharing unites the house in production and consumption. Unlike the
market, the house economy is built by joint efforts and mutual support.
Diverse values guide the distribution of its product. The pattern of
sharing in production, distribution, and consumption may reflect differences in power, gender, and age among members. It does not necessarily mean equality or equity.
Thrift in the use of materials to preserve them for the future is a key
house practice. The house economy cares for or looks after what it has.
The ways of thrift are innumerable from making-do with what is at
hand to recycling leftovers of food, containers, and building materials.
Guided by thrift, the house economy is filled with handymen, who
tinker, recombine, and invent. They make-do. Their new combinations
are moments of innovation, which is as much a feature of house
economies as it is of markets with the difference that innovation in
the latter brings profits. Innovations – whether new ways of sowing or
harvesting, new ways of building or repairing a house, or new ways
of breeding animals – when successful spread through a social terrain.

People copy the innovations and practices of other houses, even if this
diffusion is slower spreading than market innovations and bubbles.
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The house must be induced to spend or part with its holdings rather
than keep them, which is the other side of being self-sufficient.
The returns for exchanges with other houses are not profits but receipts
for parting with holdings. The house must be persuaded or compelled
to enter the market.15 Today, advertising draws houses into markets,
whether to purchase goods, to keep money at banks, or to make investments. Stimulating envy of others, encouraging copying, and inducing
wants, commercial advertising provokes houses to part with the image
of self-sufficiency and autonomy.
Unlike the corporation, growth of the house economy occurs through
slow accumulation rather than the “animal spirits” of investment.16
Savings are kept as hoards and often put into the house, such as adding
a room, a new story, and an agricultural plot, or acquiring display
items.17 In developed market economies savings may go toward house
improvements for the pleasure they afford, for their display value, or in
the hope they will yield a higher sale price of the house.
Reverberations and metaphors of the house economy are found in
the other economic spheres. For example, some people equate balancing
a household budget with balancing a national budget as if the two were
equivalent. Sometimes corporations present themselves as a family.
The community sphere of economy encompasses more extensive
social relationships. Community economies produce and share services,

ideas, resources, or symbols, although they are usually part-economies
and not all mutual activities have to do with economy. Communities
include lineage and ethnic groups, cooperatives, unions, states, and
alternative economies built on modes of sharing. Like the house they
may be connected with markets as in the case of ethnic traders who
support one another.
The community sphere has a base, which may be ethnicity, religion,
kinship, or other affiliation. This commons often has a physical embodiment such as a shared pasture, hunting areas, or agricultural land to
which the community accords access. Loss or capitalization of such a
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