Difference Between Gift Exchange and Market Transactions
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Published: Mon, 15 Jan 2018
What is the difference between gift exchange and market transactions, and how do they both relate to gender relations?
Karl Polanyi (1968), in his critique of the principles that underlie the formalist approach to economic analysis, attempted to define the tools by which the economies of ‘traditional’ societies could be analysed. Central to the substantivists’ claims was the understanding that the introduction of money destroyed indigenous social relations by introducing the notion of ‘equivalencies of value’ where none had previously existed. In this approach, the substantivists were following the legacy of Marcel Mauss, who, in his seminal The Gift (1954), had argued that in contemporary and archaic societies as widespread as North America, Polynesia and Ancient Rome the assumptions of economic analysis, as used in explaining market transactions, were not relevant as these societies were gift economies.
In this essay, I will first examine what Mauss meant by the term gift economies, before providing a contemporary example from the work of Usula Sharma (1984) who demonstrates how a gift exchange may be instrumental in the subordination of women. In the second section, I then look at market transactions and, by drawing on the work of Maria Mies (1998), I reveal the gendered nature of the market. In the conclusion, I problematise the division between ‘gift’ and ‘market’ economies, suggesting that both are weberian ‘ideal types’ and that neither is fully adequate to account for the complexity of both market transactions and gift exchanges, as both are deeply embedded in social relations and thus in relations of power.
Gender and Gift Exchange
Marcel Mauss argued that in contemporary western society we make a distinction between gift exchange and market transactions, and that in the west we presume the former to be free of obligations (Douglas in Mauss, 2000: vii). However, Mauss argued that the gift in fact entails an obligation to reciprocate and thus creates ties between individuals and/ or groups. For Mauss, this form of economy differs from the ‘disinterested’ and ‘self-interested’ exchange of modern societies (Mauss, 2000: 75-6) and he believed that all economies were originally gift economies: ‘[t]he system that we propose to call the system of ‘total services’, from clan to clan […] constitutes the most ancient system of economy and law [&] forms the base from which the morality of the exchange-thorough-gift has flowed’ (Mauss, 2000: 70). An example of gift exchange is that of Northern India, and the Dowry system as described by Ursula Sharma (1984), complete with mutual obligations and the creation of lasting ties.
Sharma describes a marriage system whereby the family of the bride must pay a dowry to the family of the groom, creating lasting ties between the two families, premised on the ability of the brides’ family to give:
when they arrange the marriage of a son, parents do not just look forward to the dowry they will receive at the wedding. They look forward to the bride’s family’s general capacity to give (Sharma, 1984: 64).
Although, if asked, most participants would describe the dowry as ‘freely given’ in fact behind the scenes ‘explicit bargaining’ takes place (Sharma, 1984: 64). In a society sharply divided, not only by gender but also by age and caste, control over what is given and what happens to these gifts once received is subject to division along lines of gender and age. Senior women in the household are responsible for ‘seeing that obligations are met and proper relations maintained’ (Sharma, 1984: 65), but when the gifts are of cash, then it is the senior men who are most in control (Sharma, 1984: 66). The ties created by the dowry may have severe consequences for the dis-empowered bride: ‘[d]owry favours and is favoured by a cultural ethos in which brides can be viewed as objects to be passed from one social group to another’, further, ‘in India the rapid inflation of dowries […] has led to a situation in which brides are more controlled by than controllers of property’ (Sharma, 1984: 73). Finally, ‘dowry deaths’ may occur when the grooms’ family is disappointed with her dowry and hope to negotiate a better one for a second marriage (Sharma, 1984: 71). However, her powerlessness is eased by time, as she moves to being a ‘dowry-taker’ on the marriage of her sons (Sharma, 1984: 72). Thus, we can see that in the gift exchange lasting relationships are created, and that these relations are differentiated according to age and gender.
Gender and Market Transactions
In this section I examine the ‘market transaction’ through the work of Maria Mies (1998), revealing the gendered nature of the supposedly ‘disinterested’ market. In a market transaction, rather than the exchange of gifts which then creates lasting ties between people, it is presumed that in the exchange of commodities only a relationship between things is created: ‘the transactors are strangers in a state of reciprocal independence which persists after the transaction’ (Thomas, 1991: 14). Such an understanding is supported by our ‘common sense’ understandings of the different spheres of exchange: for example, Paul Bohannan (1968), in his discussion of the ‘spheres of exchange’ among the Tiv of Northern Nigeria, identifies a similar division in Tiv ideology between the ‘gift’ and ‘markets’. The former representing the formation and continuation of social relationships, while the later ‘calls up no long-term personal relationship, and which is therefore to be exploited to as great a degree as possible’ (Bohannan, 1968: 300); in this set of relationships, all items have an exchange equivalent. After all, when I exchange cash for a commodity I do not feel myself to be tied into a reciprocal relationship with the shopkeeper.
However, Mies argues that rather than the formally free, atomistic individuals, engaged in disinterested exchange (Polanyi, 1968) of theoretical liberalism, and therefore of much economic thought, instead we find that actors are no less entwined in power relations than in the gift economies outlined above. Indeed, she argues that ‘the exploitative sexual division is the social paradigm upon which the international division of labour is built up’ (Mies, 1998: 4, emphasis added). First, many have debated the way in which the public sphere is dominated by men, but Mies argues that it is in fact the unpaid work of the housewife, of caring and nurturing within the domestic sphere (Mies, 1998: ix), or ‘women’s work’, that allows men to be free to enter the public realm (Mies, 1998: 31). Next, Mies argues that the ‘housewifization’ of labour not only naturalizes women’s restriction to the private realm, but also means that her paid work is considered ‘only supplementary’ to that of her husband (Mies, 1998: ix): ‘[t]he process of proletarianization of the men was, therefore, accompanied by a process of housewifization of women’ (Mies, 1998: 69). Finally, Mies argues that third world women are valued by capitalism as producers due to their ‘nimble fingers’ and as they are ‘considered to be the most docile, manipulable labour force’ (Mies, 1998: 117): in short, due to ascribed gender stereotypes. The symbolic hierarchy of gender thus has material effects as women are placed in an economically vulnerable position and are concentrated in low paid, part-time employment: women and their children are the most economically disadvantaged group across the globe. Further, women are locked into an international division of labour whereby the ‘third world women produce not what they need, but what others [first world women] can buy’ (Mies, 1998: 118, original emphasis). Thomson echoes this argument: ‘[e]veryone is now tied up in a historical network of global relations […] we are all caught up in international relations of production and appropriation which stretch across the spaces separating us’ (Thomas, 1991: 8-9) and this international relation of production is gendered.
Nicholas Thomas rejects Mauss’ argument that the economies of Melanesia and Polynesia can be regarded as ‘gift economies’, which are thus opposed to the market economies of Europe. He argues that this division misses the way that these ‘traditional’ economies are in fact deeply entangled with the global capitalist trade (Thomas, 1991: 4): ‘a wider range of evidence from indigenous Oceanic societies suggests that there is a broad continuum between systems in which it is possible to substitute only people for people, or food for food, and those in which a wide range of expansive conversions are permitted’ (Thomas, 1991: 4). Divisions, such as Mauss makes, between ‘gift exchange’ and ‘market transactions’ are part of the reification of difference between ‘us’ and ‘them’ (Thomas, 1991: 34), further, ‘the grand polarities almost always turn out to be implausible’ (Thomas, 1991: 27). Thomas argues that by scrutinising our concepts via the lens of gender we can reveal the theoretical flaws or weaknesses that we might otherwise miss (Thomas, 1991: 2)
For Polanyi, the economic sphere – as defined by the discipline of economics – is based on a conflation of two distinct meanings: the ‘substantive’ and ‘formal’. ‘The formal meaning of economic derives from the logical character of the means-ends relationship […] it refers to a definite situation of choice’ (Polanyi, 1968: 122), whereas in the substantive definition ‘the economy here is embodied in institutions that cause individual choices to give rise to interdependent movements that constitute the economic process’ (Polanyi, 1968: 125). In short, formal economics is based on the notion of formally free individuals, making rational economic decisions and which create no lasting ties, whereas substantive economics views all economies, whether regarded as gift economies or those based on market transaction, as embedded in social relations. Thomas concurs: ‘[e]xchange is always, in the first instance, a political process, one in which wider relationships are expressed’ (Thomas, 1991: 7) for exchange relationships are always differentiated by power (Thomas, 1991: 22), by race, class, gender and age.
Thomas would not have us abandon the distinction between gift and commodity entirely (Thomas, 1991: 29), perhaps it would be better to view them as points along a continuum, with each ‘ideal’ type at the opposing ends but the majority of actual cases lying somewhere in between; further it is necessary that we recognise the coexistence of both types (Thomas, 1991: 33). Whether or not the introduction of money destroyed indigenous social relations, by introducing the ‘equivalencies of value’, as the substantavists claimed, the ties that are created by contemporary commodity exchange may be less evident, but Maria Mies reminds us that nonetheless the global division of labour links third world producers to first world consumers in an asymmetrical power relationship that makes a lie of the supposed disinterestedness of market transactions.
Bohannan, Paul (1968) ‘Some Principles of Exchange and Investment among the Tiv’, Economic Anthropology: Readings in Theory and Analysis, LeClair & Schneider (Eds.), London: Holt, Rinehart & Winston, pp 122 – 143.
Levi-Strauss, Claude (1969 ) ‘Nature and Culture’ & ‘The Problem of Incest’, The Elementary Structure of Kinship, London: Eyre & Spottiswoode, pp. 3-25.
Mauss, Marcel (2000 ) The Gift: The Form and Reason for Exchange in Archaic Societies, New York: W. W. Norton.
Mies, Maria (1998 ) Patriarchy and Accumulation on a World Scale: Women in the International Division of Labour, London: Zed Books.
Polanyi, Karl (1968 ) ‘The Economy as Instituted Process’, in Economic Anthropology: Readings in Theory and Analysis, LeClair & Schneider (Eds.), London: Holt, Rinehart & Winston, Inc. pp 122 – 143.
Sharma, Ursula (1984) ‘Dowry in North India: Its Consequences for Women’, Women and Property: Women as Property, Hirschon, R. (Ed.), London: Croom Helm, pp. 62-74.
Thomas, Nicholas (1991) ‘Introduction’ and ‘Objects, Exchange, Anthropology’ in Entangled Objects: Exchange, Materialism and Colonialism in the Pacific, Cambridge: Harvard University Press, pp. 1-34.
 As well as that of Bronislaw Malinowski, who in his influential (1922) Argonauts of the Western Pacific: An Account of Native Enterprise and Adventure in the Archipelagoes of Melanesian New Guinea, (London: Routledge) closely described the Kula exchange of the Trobriand Islanders.
 Levi Straus, following Mauss, argued that the exchange of women (exogamy) provided the basis for ties between different groups (Levi Strauss, 1969: 14) via the incest taboo (Levi Strauss, 1969: 9-10) and thus provided the basis for culture (Levi Strauss, 1969: 24-5).
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