The analysis of markets and marketing has been one of the central issues in economic anthropology, and of course it is a subject much theorized in economics. The relationship between anthropology and economics is often uneasy, and this tension is apparent in the attempts to reconcile exotic ethnographic material with the theoretical interests of economics. Of major theoretical significance is the simple grammatical step of contracting the plural form ‘markets’ to its singular ‘market’ to suggest a formal, ideal model which some commentators take to explain culturally diverse types of markets and trade practices.
A market, in its rudimentary sense, entails the buying and selling of things by persons, as distinct from barter or other forms of social exchange that do not use an intermediary token of common exchange value — namely, money of some sort. Characteristically, exchange of this former type is immediate and not delayed over time, and is conventionally contrasted with gift exchange. A market-place denotes an arena in time and space to which these interactions are confined, and marketing generally denotes the process of buying and selling not necessarily confined to one place. The fact that people may or may not buy and sell things within or outwith a market-place is not simply at issue; but whether what they do can be described in terms of Western market theory, and whether such description sheds light or obscures the nature of people’s practices, have been points of contention.
Formal models
Market models developed by economists have supplied many of the theoretical underpinnings for those anthropologists attempting to find continuities between diverse forms of trading practice in different cultures. For economists, a market is an arena of ‘perfectly competitive transactions’ between many buyers and sellers sharing complete market information (about price, quality of goods and so on); thereby an efficiency in production and distribution is achieved. Real markets only ever approximate to this ideal; nonetheless, it is a model against which actually existing markets and practices are compared and explained.
Much of the formalist-substantivist debate focused on the two referents of the term ‘market’: market-places as physical locations and market-principles as abstract factors determining wider economic processes. The substantivists’ own position, however, was perceived as increasingly untenable – as they themselves recognized -due to the spread of market-principles over the global system. As Plattner (1985) argues, ‘the pretense that theories of markets and marketing were irrelevant became less viable’ in a world that increasingly resembled a market system.
Developments in theory in the 1970s were twofold: formal models grounded in a broad anthropological knowledge of local contexts gained increasing sophistication; Marxist-inspired theory displaced an interest in systems of exchange alone to a concern with local modes of production and distribution and world systems. Whilst these latter trends deflected attention away from the issues of liberal economics and towards questions of political economy, the extent to which these approaches took market theory for granted is, however, open to question.
Central-place analysis of peasant markets was also developed (see settlement patterns), and G.W. Skinner’s work in 1964 on marketplace systems in rural China was particularly influential. The formal model was further elaborated by Carol Smith from the early 1970s onwards in various publications, and she argues that central-place theory helps reduce the confusion of market activity to economic patterns through which a complex commodity economy is integrated. As a formal model, the predictions of central-place theory are reconciled to the ‘real-world deviations’, which are explained with reference to social, political or geographical factors. The universality of central-place theory provides a model against which actually existing markets are compared. Moreover, it concentrates primarily on the material flows of traded items, types of trader, and the social integrative effects of these flows. Markets thus form part of a social system and structure.
The micro-level behaviour of individuals in market contexts is also subject to formal methods that attempt to make sense of market behaviour as rational, and of individuals as decision-makers (see individualism). Over-simplistic notions of economic man as individual maximizer of economic value have now receded in the face of theoretical criticism that such assumptions provide few convincing explanations of socioeconomic action. The rationality of economic action as a relationship of means-to-ends has been increasingly contextualized, and these issues have been challenged by ideas about intentionality of exchange and differing styles of reasoning. That it has to be shown that rationality, however defined, is not confined to Western industrial society should be seen in some measure as part of a political debate in social anthropology that defends exotic others from the charge of irrationality. Whether such a specific focus on forms of individual behaviour leads to further insights into the differences in trading practice in various cultures is moot. Indeed, questions about our own ‘rationality’ in economic matters have also been raised.
The treatment of markets as systems of information is a further aspect of the analysis of market behaviour. Evidence suggests that, contrary to market models, information is not evenly shared, but it is differently allocated and is difficult to acquire not only for local traders but also for ethnographers. These ‘inefficiencies’ in the flow of information arise from particular kinds of social and cultural organization, such as traders dealing in small quantities of unstandardized commodities that are subject to variations in supply. Various institutional practices are recognized as ways of dealing with such ‘inefficencies’ and ‘uncertainties’ in markets.
That issues such as information and uncertainty are defined as problematic arises from assumptions deriving from our own market models, which are predicated on the perfect distribution of information. A series of important publications from the mid-1980s by Jennifer and Paul Alexander (e.g. Alexander and Alexander 1991), which focus on bargaining, price-setting, market information and trading partnerships in Java, shows that the control of the flow of information is strategically important for traders to make profits. Market buyers and sellers are not autonomous individual agents, but are linked by power relationships in which knowledge and agency are intimately connected in trading practice.
A formal definition of a market such as ‘any domain of economic interactions where prices exist which are responsive to the supply and demand of items exchanged’ bears perhaps little resemblance to any real market. Indeed, bargaining over prices in Javanese markets may appear economically more efficient as a method of price-setting than Western posted-prices (Alexander in Dilley 1992). What needs explanation, in Alexander’s view, is the simultaneous presence in industrial economies of a dominant ideology of market efficiency through the price mechanism, and a method of price-setting that inhibits the efficient operation of the market. Prices in Western markets, he points out, are less responsive to changes in demand than to changes in cost, and cultural notions of ‘fairness’ are important in price-setting.
Cultural economics
Stephen Gudeman’s work represents a different approach, termed ‘cultural economics’, to questions of economic theory and modelling. Formal analyses drawing on Western economic models, he suggests, ‘continually reproduce and discover their own assumptions in the exotic materials’ (1986: 34). The centrality of culture must be recognized in the analysis of economics. Culture does not stand opposed to economics such that, say, cultural explanations are given to account for why their market practice does not coincide with our market theory. Rather, culture and economics are mutually constitutive. A more comprehensive and dialectical process of comparison between actual market practices in both Western and non-Western markets is needed, and, as Alexander argues, all markets are cultural constructs.
Gudeman focuses on the cultural models and metaphors produced by ourselves and others to account for the economic practices we all engage in. By treating our own economic theories as cultural models that are produced in specific sociohistorical contexts (see Gudeman and Rivera’s Conversations in Colombia, 1990), we see how models are generated and how they form parts of longer conversations amongst ourselves, between ourselves and others, and amongst others. Investigations of market models and practice from a similar perspective include Dilley 1992 (see also Friedland and Robertson’s 1990 volume which adopts a critical interest in the market). The inspection of market models, rhetoric, and discourse, as well as their deployment in specific social contexts, links with concerns expressed by some economists about the metaphors and meanings within economic discourse (see, for example, McCloskey 1986). One aim is to situate the conversations we conduct about economics as well as those that other people conduct about the systems they inhabit. Native accounts (including our own) of how people conceive their engagement with a global system of trade and power relationships (conventionally glossed as the ‘world market’) require further study.
Knowledge of ‘local models’ (Gudeman) not only adds to an understanding of how peoples may act in relation to this global network, but the method contextualizes the processes of cultural-economic modelling and reveals the ways these models are invoked in political activity.
This project moves beyond the early sub-stantivist perspective, which accepted the ideological separation of economy and society in Western capitalism (a distinction that may not hold at the level of practice); and which failed to seriously challenge the cultural construction of market theory. The inspection of how we construct our notions of markets is as important as the analysis of how other cultures construct theirs. A parallel development is "Appadurai’s work on the social life of things (1986), which traces the social biographies of items as they move through different networks of exchange. The conventional dichotomies labelling systems — for example gift versus commodity; non-market versus market and so on — appear less relevant once it is seen that the processes of social exchange within any one culture (or even between cultures) can transform the status of an item.
Morality and the market
The great transformation in European society, for "Karl Polanyi, was the replacement of morality by the market; similarly, for Bohannan and Dalton the "moral economies of tribal or peasant peoples were being overrun by an amoral market system. But market theory embodies its own special morality: economic action is seen as oriented towards the common good; exchange is advantageous to all parties (cf. a gain for one is a loss to another). The market as a self-regulating system of apparent discord produces a harmony of interests and social co-ordination, through what economists take to be "Adam Smith’s notion of the ‘invisible hand’ of the market. These are two contrasting moral positions relating to the market: on the one hand, market negates traditional moral systems; on the other, it is a ‘civilizational process’ through which humans and societies reach their full potential (see Blanton in Ortiz 1983).
The connection between the market and morality is also made by social agents involved in exchange. Moral evaluations of trade and commerce — negative or positive — must be viewed empirically as arising from the context of changing politico-economic relationships (see also Appadurai’s notions of pathways and diversions, 1986). The establishment of market systems is as much a political struggle as an economic matter, and negative moral representations of trade practices arise from a loss of control over previously known and indigenously transparent relationships. Moral outcries at the introduction of market relationships are a response to a sense of uncertainty and opaqueness often triggered by the activites of high-profile middlemen or women who redefine the politics of exchange. The analytical positions of theorists over morality and markets reflect native perceptions on the morality of exchange generated from experiences in trading.
Power, agency and the market
The term ‘market’ carries a significant political weight in a post-Cold War world represented as the triumph of Western liberal market economics over state-planned, communist economic systems. This marriage of market theory and political ideology is a potent union, and its forms of discourse dominate many local, national, as well as global, debates about how we should conduct our lives. The apparent triumph of market ideology in the 1980s has paradoxically spawned an increasing sense of unease about the status of the market concept. Whilst the concept has become hegemonic, it is also in crisis; and this crisis concerns one of the master concepts of social and economic science.
The fetishization of the market as a powerful transformative social agent is an issue which reveals the nature of our own cultural constructions of market phenomena. The ideological strength and attractiveness of market rhetoric and its construction as an agent of change connect with Western political agendas that dominate contemporary social debate. To disentangle these complex matters has become an urgent issue for the analysis of actual market practice, for the anthropology of development, and for social theory itself.
The market and the domain of market relations is a contested field of power played out through the medium of economic and cultural value. The market as an ideological representation of capitalism fails to portray power in terms of either the imbalances within individual exchange relations, or the connections between market structures and political institutions. But the problem goes beyond conventional issues in political economy.
The hegemony of market discourse reveals itself in the ‘power to name’ other people’s trading activities in Western market terms; in its ability to intervene in other discourses and to impose its own metaphors. The voices of non-Western cultures, speaking of their participation in global relationships, have hitherto remained muted. The attention given to alternative ways of making sense of, and making a living within, the global system not only redresses the balance between our models and theirs, but also suggests the idea of multiple discourses about ‘the market’. How these discourses are employed and invoked in relation to social and political practices on local as well as global stages has, and no doubt will have, continued relevance for all our lives.
