ANTHROPOLOGY AND ECONOMY Comparative and critical, Anthropology and Economy offers a uniquely cross-cultural view of economy. Using examples from market and non- marketsituations,thebookshowshoweconomiesarebuiltonfiveincreas- ingly abstract spheres, from the house to community, commerce, finance, and meta-finance. Across these spheres, economy incorporates a tension betweenself-interestedrationalityandthemutualityofsocialrelationships. Even when rational processes predominate, as in markets, economies rely onsociabilityandritualtooperate,whetherascronyism,pleastodivinities or the magical persuasions of advertising. Drawing on data and concepts from anthropology and economics, the book addresses wealth inequality, resourcedepletion,andenvironmentaldevastationespeciallyincapitalism, providing an understanding of their persistence and ideas for controlling them. Given the recent financial crash, Gudeman offers a different under- standing of the crisis and suggestions for achieving greater economic stability. STEPHEN GUDEMAN is Professor of Anthropology at the University of Minnesota. Downloaded from http:/www.cambridge.org/core. Boston University, Mugar Memorial Library, on 04 Jan 2017 at 06:27:17, subject to the Cambridge Core terms of use, available at http:/www.cambridge.org/core/terms. http://dx.doi.org/10.1017/CBO9781316442739 NEW DEPARTURES IN ANTHROPOLOGY NewDeparturesinAnthropologyisabookseriesthatfocusesonemerging 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 currentdebates.Everybookillustratestheoreticalissueswithethnographic material drawn from current research or classic studies, as well as from literature,memoirs,andothergenresofreportage.Theaimoftheseriesis toproducebooksthatareaccessibleenoughtobeusedbycollegestudents and instructors, but will also stimulate, provoke, and inform anthropolo- gistsatallstagesoftheircareers.Writtenclearlyandconcisely,booksinthe series are designed equally for advanced students and a broader range of readers,insideandoutsideacademicanthropology,whowanttobebrought up-to-date on the most exciting developments in thediscipline. Series editorialboard Jonathan Spencer, Universityof Edinburgh MichaelLambek, Universityof Toronto Downloaded from http:/www.cambridge.org/core. Boston University, Mugar Memorial Library, on 04 Jan 2017 at 06:27:17, subject to the Cambridge Core terms of use, available at http:/www.cambridge.org/core/terms. http://dx.doi.org/10.1017/CBO9781316442739 Anthropology and Economy m STEPHEN GUDEMAN University of Minnesota Downloaded from http:/www.cambridge.org/core. Boston University, Mugar Memorial Library, on 04 Jan 2017 at 06:27:17, subject to the Cambridge Core terms of use, available at http:/www.cambridge.org/core/terms. http://dx.doi.org/10.1017/CBO9781316442739 UniversityPrintingHouse,CambridgeCB28BS,UnitedKingdom CambridgeUniversityPressispartoftheUniversityofCambridge. ItfurtherstheUniversity’smissionbydisseminatingknowledgeinthepursuitof education,learningandresearchatthehighestinternationallevelsofexcellence. www.cambridge.org Informationonthistitle:www.cambridge.org/9781107577206 ©StephenGudeman2016 Thispublicationisincopyright.Subjecttostatutoryexception andtotheprovisionsofrelevantcollectivelicensingagreements, noreproductionofanypartmaytakeplacewithoutthewritten permissionofCambridgeUniversityPress. Firstpublished2016 PrintedintheUnitedKingdombyClays,StIvesplc AcataloguerecordforthispublicationisavailablefromtheBritishLibrary LibraryofCongressCataloguinginPublicationData Gudeman,StephenF. Anthropologyandeconomy/StephenF.Gudeman. pages cm.–(Newdeparturesinanthropology) Includesbibliographicalreferencesandindex. isbn978-1-107-13086-9(Hardback) 1. Economicanthropology. I. Title. gn448.g822016 306.3–dc23 2015028911 isbn978-1-107-13086-9Hardback isbn978-1-107-57720-6Paperback CambridgeUniversityPresshasnoresponsibilityforthepersistenceoraccuracy ofURLsforexternalorthird-partyinternetwebsitesreferredtointhispublication, anddoesnotguaranteethatanycontentonsuchwebsitesis,orwillremain, accurateorappropriate. Downloaded from http:/www.cambridge.org/core. Boston University, Mugar Memorial Library, on 04 Jan 2017 at 06:27:17, subject to the Cambridge Core terms of use, available at http:/www.cambridge.org/core/terms. http://dx.doi.org/10.1017/CBO9781316442739 Contents List of Figures page vi Acknowledgments vii 1 Strange Economies 1 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 Notes 193 References 206 Index 214 v Downloaded from http:/www.cambridge.org/core. Boston University, Mugar Memorial Library, on 04 Jan 2017 at 06:35:40, subject to the Cambridge Core terms of use, available at http:/www.cambridge.org/core/terms. http://dx.doi.org/10.1017/CBO9781316442739 Figures 2.1 Junta preparing mud for house walls, © Roxane Harvey Gudeman page 46 2.2 Applying mud to house frame, © Roxane Harvey Gudeman 47 3.1 Cooperative pasturing in the Rhodope mountains, © Detelina Tocheva 59 4.1 Market exuberance 86 4.2 Australian corroboree 86 5.1 Thanksgiving, © Roxane Harvey Gudeman 120 5.2 Black Friday, © Powhusku 121 6.1 Cutting sugarcane, © Roxane Harvey Gudeman 130 6.2 Loading sugarcane, © Roxane Harvey Gudeman 131 7.1 The Crash, © Alan Denney 166 7.2 Back to community, © Roland Zh 166 vi Downloaded from http:/www.cambridge.org/core. Boston University, Mugar Memorial Library, on 04 Jan 2017 at 06:52:07, subject to the Cambridge Core terms of use, available at http:/www.cambridge.org/core/terms. http://dx.doi.org/10.1017/CBO9781316442739 Acknowledgments I wrote an initial version of Anthropology and Economy at the Max PlanckInstituteforSocialAnthropology(Halle,Germany)whileIwasa 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 invita- tion, our work together, and his many suggestions and encouragement. Our research team included Jennifer Cash, Nathan Light, Miladina Monova,DetelinaTocheva,MonicaVasile, andBeaVidacs.Mythanks 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),andOikosandMarket:ExplorationsinSelf-Sufficiencyafter 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 Kerenprovidedencouragementand sugges- tions. Roxane took some of the photographs as noted, and she tirelessly preparedall of themfor publication includingthe 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 Downloaded from http:/www.cambridge.org/core. Boston University, Mugar Memorial Library, on 04 Jan 2017 at 06:20:52, subject to the Cambridge Core terms of use, available at http:/www.cambridge.org/core/terms. http://dx.doi.org/10.1017/CBO9781316442739 Acknowledgments Ritual,EconomyandtheInstitutionsoftheBase,”EconomyandRitual: SixStudiesofPostsocialistTransformations,eds.StephenGudemanand ChrisHann,NewYork:Berghahn(2015).Anearlierversionofaportion ofChapter7wasinitiallypublishedas“CreativeDestruction: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 Downloaded from http:/www.cambridge.org/core. Boston University, Mugar Memorial Library, on 04 Jan 2017 at 06:20:52, subject to the Cambridge Core terms of use, available at http:/www.cambridge.org/core/terms. http://dx.doi.org/10.1017/CBO9781316442739 ONE m Strange Economies When the Bernard Madoff pyramid collapsed in late 2008, financial markets were falling and recessionary fears were growing. Over the precedingthirtyyears,Madoffhadconstructedthelargestpyramidscheme theworldhasknown.Whenhewasnolongerabletoattractnewfundsfor 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 onforseveraldecadesuntiltheDecemberdaywhenhisempirecollapsed. Some commentators explained that the scheme was fed by greed. Others thought Madoff’s investors failed to observe best practices and werecaughtupby“irrationalexuberance.”1Iviewthis“creativedestruc- tion” of wealth differently.2 Situated in Wall Street with threads across theUnitedStatesandelsewhere,theMadoffeventexemplifiedtheearly twenty-first century wave of bubbles from housing, to complicated investment vehicles, to illegal deals. It typified the strange economy in which we live. ButIamananthropologistandthinkthatalleconomiesarestrange, including the ones anthropologists traditionally study. Economies are strange because they juxtapose self-interest and mutuality. Many of 1 Downloaded from http:/www.cambridge.org/core. Boston University, Mugar Memorial Library, on 04 Jan 2017 at 05:01:11, subject to the Cambridge Core terms of use, available at http:/www.cambridge.org/core/terms. http://dx.doi.org/10.1017/CBO9781316442739.001 StrangeEconomies 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. Inthisbook,Ioffermyanthropologist’sviewofeconomybutamplify mydiscipline’sterraintoincludedevelopedmarketeconomies.Anthro- pologists usually study small-scale economies whether in the South Pacific, Northern Canada, the margins of Asia, or the interior of SouthAmerica,andtheyhavedevelopedmanytoolsforanalyzingtheir 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 butfaceconstraints,whichblocktheireconomy’sgrowth.Myperspective brings together what people do in their material lives with economists’, anthropologists’,and everyday views. Economyhastwosides.Oneisthehigh-relationshipeconomythatis 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. Anthropolo- gists 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 tensionlieswithineconomiesandwithinus.Wecalculateourrelations to others, and we empathize with them. We measure some things and consider others to be incomparable.The tension issocial andpersonal. 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 meta- financialspheresofmarkets.Asthesespheresandabstractionsdevelop, 3 markets colonize the house economy. The contrasting purposes of the house that aims for sufficiency and nurtures social relationships, and of markets, which are made up of 2 Downloaded from http:/www.cambridge.org/core. Boston University, Mugar Memorial Library, on 04 Jan 2017 at 05:01:11, subject to the Cambridge Core terms of use, available at http:/www.cambridge.org/core/terms. http://dx.doi.org/10.1017/CBO9781316442739.001