Karl Polanyi and the Modern World – Part 2

Before we go any further, we should take a historical detour. Is the picture I presented last time of the primordial economy according to libertarians an accurate one? Was it really all solitary individuals peacefully making mutually-beneficial exchanges in “free and open” markets using a mutually agreed upon medium of exchange until the state came along to “steal” money from everyone? Does the market economy spontaneously arise from thousands of people walking around bartering for what they need from other people?

As it happens, I’ve been doing research in this area recently. And the answer is, “not even close.”

As David Graeber, an anthropologist and author, has pointed out, in none of the cultures anthropologists have studied that resemble the ancestral past is life ruled by anything like markets as we know them:

[T]here’s a standard story we’re all taught, a ‘once upon a time’ — it’s a fairy tale.

It really deserves no other introduction: according to this theory all transactions were by barter. “Tell you what, I’ll give you twenty chickens for that cow.” Or three arrow-heads for that beaver pelt or what-have-you. This created inconveniences, because maybe your neighbor doesn’t need chickens right now, so you have to invent money.
The story goes back at least to Adam Smith and in its own way it’s the founding myth of economics. Now, I’m an anthropologist and we anthropologists have long known this is a myth simply because if there were places where everyday transactions took the form of: “I’ll give you twenty chickens for that cow,” we’d have found one or two by now. After all people have been looking since 1776, when the Wealth of Nations first came out. But if you think about it for just a second, it’s hardly surprising that we haven’t found anything.

Think about what they’re saying here – basically: that a bunch of Neolithic farmers in a village somewhere, or Native Americans or whatever, will be engaging in transactions only through the spot trade. So, if your neighbor doesn’t have what you want right now, no big deal. Obviously what would really happen, and this is what anthropologists observe when neighbors do engage in something like exchange with each other, if you want your neighbor’s cow, you’d say, “wow, nice cow” and he’d say “you like it? Take it!” – and now you owe him one. Quite often people don’t even engage in exchange at all – if they were real Iroquois or other Native Americans, for example, all such things would probably be allocated by women’s councils.[1]

In fact, in hunter-gatherer economies, there really are no such concepts as “property,” or “ownership.” making markets somewhat difficult. But what about societies that have both sedentism and surpluses, two preconditions for the development of the kinds of larger, specialized economies like the ones we are studying?

Polanyi distinguishes three concepts that define the primordial economy: reciprocity, redistribution, and householding. It is these three concepts that form the basis of the primordial economy, not money or markets.

Reciprocity is described by anthropologist Marvin Harris:

Reciprocity is the technical term for economic exchange that takes place between two individuals in which neither specifies precisely what is expected in return nor when they expect it. Superficially, reciprocal exchanges don’t look like exchanges at all. The expectation of one party and obligation of the other remain unstated. One party can continue to take from the other for quite a while with no resistance from the giver and no embarrassment in the taker. Nonetheless, the transaction cannot be considered a pure gift. There is an underlying expectation of return, and if the balance gets too far out of line, eventually the giver will start to grumble and gossip. Concern will be shown for the taker’s health and sanity, and if the situation does not improve, people begin to suspect that the taker is possessed by malevolent spirits or is practicing witchcraft [2]

…to really see reciprocity in action you must live in an egalitarian society that doesn’t have money and where nothing can be bought or sold. Everything about reciprocity is opposed to precise counting and reckoning of what one person owes to another. In fact, the whole idea is to deny that anybody really owes anything. One can tell if a lifestyle is based on reciprocity or something else by whether or not people say thank you. In truly egalitarian societies, it is rude to be openly grateful for the receipt of material goods or services.[3]

That sounds like the antithesis of market exchanges! Clearly individuals attempting to make a profit or to “get one over” on someone else, as capitalists regularly do (“gotcha” capitalism) would not work in ancient societies. This is because in such societies, one’s social standing was paramount. In ancient societies, hoarding the best for oneself and depriving other people of what they needed for survival would lead to ostracism, not admiration:

The outstanding discovery of recent historical and anthropological research is that man’s economy, as a rule, is submerged in his social relationships. He does not act so as to safeguard his individual 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.

The explanation, in terms of survival, is simple. Take the case of a tribal society. The individual’s economic interest is rarely paramount, for the community keeps all its members from starving unless it itself is born down by catastrophe, in which case interests are again threatened collectively, not individually. The maintenance of social ties, on the other hand, is crucial. First, because by disregarding the accepted code of honor, or generosity, the individual cuts himself off from the community and becomes an outcast; second, because, in the long run, all social obligations are reciprocal, and their fulfillment serves also the individual’s give-and-take interests best…[4]

Thus Homo economicus, the rational man constantly calculating how he will get ahead by cunningly trading in markets, is a fiction. Man is instead emerged in social relationships, and the economy grows out of that that, not impersonal market exchanges with an eye towards profit.

The second key to the primordial economy is redistribution. Nearly every ancient state was based in part on some sort of central player redistributing the collective fruits of the society to its members. Rather than a dirty word as it is in modern-day America, redistribution is what allowed primitive economies to form. Central repositories where food and goods were redistributed and stored were the earliest structures put up by ancient civilizations. Those who sought power did it by increasing production, first through exhortation and cajoling, and then through reinforcement of mutual obligations and tribute. They then gave away the surplus to their followers as a means of attaining prestige and status.

A well-known example of this phenomenon is the “big man” system of the Pacific Islands. In such societies, competitive feasts are held, with the organizer of the feast seeking esteem and prestige, and getting people to work harder to engender a surplus. But, the big man has no coercive power, and not only doesn’t get the best of everything, but sacrifices his own well-being to make sure others get the “meat and the fat”:

Early in the present century, anthropologists were surprised to discover that certain primitive tribes engaged in conspicuous consumption and conspicuous waste to a degree unmatched by even the most wasteful of modern consumer economies. Ambitious, status-hungry men were found competing with each other for approval by giving huge feasts. The rival feast givers judged each other by the amount of food they provided, and a feast was a  success only if the guests could eat until they were stupefied, stagger off into the bush, stick their fingers down their throats, vomit, and come back for more.

The big man can be described as a worker-entrepreneur–the Russians call them “Stakhanovites”–who renders important services to society by raising the level of production. As a result of the big man’s craving for status, more people work harder and produce more food and other valuables. p. 118

Among the Kaoka-speaking people of the Solomon Islands…the status-hungry individual begins his career by making his wife and children plant larger yam gardens…the Kaoka who wants to become a big man then gets his kinsmen and age-mates to help him fish. Later he begs sows from his friends and increases the size of his pig herd. As the litters are born he boards additional animals among his neighbors. Soon his relatives and friends feel that the young man is going to be a success. They see his large gardens and his pig herd and they redouble their own efforts to make the forthcoming feast a memorable one. When he becomes a big man they want the young candidate to remember that they helped him. Finally, they all get together and build and extra-fine house. The men go off on one last fishing expedition. The women harvest yams and collect firewood, banana leaves, and coconuts. As the guests arrive, the wealth is stacked in neat piles and put on display for everyone to count and admire… [5]

Such big men only arise in societies where intensification of effort produces surpluses. There can be no big men in hunter-gatherer societies, since additional work does not result in additional food. In fact, quite the opposite would occur. Hunter-gatherer societies would not be able to sustain such a surplus, and status-hungry individuals are kept in check. It is the survival of the group, not the individual, that is paramount. Thus, big men can only arise in societies where horticulture, animal husbandry, or agrarian agriculture is present:

Primitive hunters and gatherers work less that we do–without the benefit of a single labor union–because their ecosystems cannot tolerate weeks and months of intensive extra effort. Among the Bushmen, Stakhanovite personalities who would run about getting friends and relatives to work harder by promising them a big feast would constitute a definite menace to society. If he got his followers to work like the Kaoka for a month, an aspiring Bushman big man would kill or scare off every game animal for miles around and starve his people to death before the end of the year. So reciprocity and not redistribution predominates among the Bushmen, and the highest prestige falls to the quietly dependable hunter who never boasts about his achievements and who avoids any hint that he is giving a gift when he divides up the animal he has killed. [6]

In order to maintain their status, the big men must constantly throw new feasts or risk falling back to being a commoner:

The feast-giving days of the big man…are never over. On the threat of being reduced to commoner status, each big man is obliged to busy himself with plans and preparations for the next feast. Since there are several big men per village and community, these plans and preparations often lead to complex, competitive manuevering for the allegiance of friends and neighbors. The big men work harder, worry more, and consume less than anybody else. Prestige is their only reward.[7]

Competitive feasting may seem like some sort of crazy behavior, but as Marvin Harris points out, it serves a very important role in primitive societies:

Under conditions where everyone has equal access to the means of subsistence, competitive feasting serves the practical function of preventing the labor force from falling back to levels of productivity that offer no margin of safety in crises such as war and crop failures.

Furthermore, since there are no formal political institutions capable of integrating independent villages into a common economic framework, competitive feasting creates an extensive network of economic expectations. This has the effect of pooling the productive effort of larger populations than can be mobilized in any given village.

Finally, competitive feasting by big men acts as an automatic equalizer of annual fluctuations in productivity among a series of villages that occupy different microenvironments—seacoast, lagoon, or upland habitats. Automatically, the biggest feasts in any given year will be hosted by villages that have enjoyed conditions of rainfall, temperature, and humidity most favorable to production.[8]

For example, in the case of the potlatch among the fish-foragers of the Pacific Northwest:

Despite the overt competitive thrust of potlatch, it functioned aboriginally to transfer food an other valuables from centers of high productivity to less fortunate villages. I should put this even more strongly: Because of the competitive thrust, such transfers were assured. Since there were unpredictable fluctuations in fish runs, wild fruit and vegetable harvests, intervillage potlatching was advantageous from the standpoint of the regional population as a whole. When the fish spawned in nearly steams and the berries ripened close at hand, last year’s guests became this year’s hosts. Aboriginally, potlatch meant that each year the haves gave and the have-nots took. To eat, all a have-not had to do was admit that the rival chief was a great man.[9]

Redistribution has been observed in nearly every primordial society:

Redistribution has a long and variegated history, which leads up almost to modern times. The Bergdama returning from his hunting excursion, the woman coming back from her search for roots, fruit, or leaves are expected to offer the greater part of their spoil for the benefit of the community. In practice, this means that the produce of their activity is shared with the other person who happen to be living with them. Up to this point, the idea of reciprocity prevails: today’s giving will be recompensed by tomorrow’s taking.

Among some tribes, however, there is an intermediary in the person of the headman or other prominent member of the group; it is he who receives and distributes the supplies, especially if they need to be stored. This is redistribution proper.

Obviously the social consequences of such a method of redistribution may be far reaching, since not all societies are as democratic as the primitive hunters. Whether the redistributing is performed by an influential family or an outstanding individual, a ruling aristocracy or a group of bureaucrats, they will often attempt to increase their political power by the manner in which they redistribute the goods.[10]

That last part is important. Harris believes that redistributor big men eventually evolved into hereditary war chiefs. These war chiefs still accumulated surpluses and still played the role of “great provider,” but now they used a portion of the surplus to pay for an retinue that was dependent upon the chief for their livelihood, such as skilled craftsmen, administrators, and magicians. They began to engage in “image building” activities. They also used a portion of the surplus to support larger war parties and long-distance raiding activities that could not be carried out otherwise. The establishment of an entourage and the undertaking of military activity served to enhance their power and prestige. The “great provider” big men slowly transitioned to being warlords.

We begin to see differences emerging between the elite and the “commoners;” for example, only war chiefs can wear certain regalia of office, and no one can sit higher than them.  However, even these chiefs’ ability to exercise coercive power is still limited, because they cannot cut people off from their primary means of subsistence. In the case of the Trobriand Islands, for example, the chief cannot cut people off from the coasts and lagoons where they derive protein from shellfish and seafood. Also, the yams which form the principal crop cannot be stored for more than a few months. One recent paper argued that cereal crops would be more likely to lead to organized, hierarchical state-level societies because they can be appropriated, unlike roots and tubers which are less vulnerable to being appropriated by authorities and last only a few months.

Kula trade necklace (Wikipedia)

Trading of durable goods, as well, seems to have mainly functioned as a way to bind societies together, rather than trying to secure some form of profit. Not only was feasting competitive, but so was gift giving. Such gifts were not trades to exchange, but rather, gifts to give away. Polanyi uses the example of the Kula Ring maintained by the war chiefs of the Trobriand Islands:

The Kula ring spans 18 island communities of the Massim archipelago, including the Trobriand Islands, and involves thousands of individuals. Participants travel at times hundreds of miles by canoe in order to exchange Kula valuables which consist of red shell-disc necklaces  that are traded to the north (circling the ring in clockwise direction) and white shell armbands that are traded in the southern direction (circling counterclockwise). If the opening gift was an armband, then the closing gift must be a necklace and vice versa. The exchange of Kula valuables is also accompanied by the trade in other items known as gimwali (barter). The terms of participation vary from region to region. Whereas on the Trobriand Islands the exchange is monopolised by the chiefs, in Dobu all men can participate.

All Kula valuables are non-use items traded purely for purposes of enhancing one’s social status and prestige. Carefully prescribed customs and traditions surround the ceremonies that accompany the exchanges which establish strong, ideally lifelong relationships between the exchange parties. The act of giving…is a display of the greatness of the giver, accompanied by shows of exaggerated modesty in which the value of what is given is actively played down. Such a partnership involves strong mutual obligations such as hospitality, protection and assistance…a good Kula relationship should be “like a marriage”.

Kula valuables never remain for long in the hands of the recipients; rather, they must be passed on to other partners within a certain amount of time, thus constantly circling around the ring. However, even temporary possession brings prestige and status. Important chiefs can have hundreds of partners while less significant participants may only have fewer than a dozen.[11]

Polanyi identifies two central features to redistribution networks: symmetry and centricity.

Symmetry means that there is certain element of regularity and balance in the exchanges: “…each coastal village on the Trobriand Islands appears to have its counterpart in an inland village, so that the important exchange of breadfruits and fish, though disguised as reciprocal distribution of gifts, and actually disjoint in time, can be organized smoothly. In the Kula trade, too, each individual has his partner on another isle, thus personalizing to a remarkable extent the relationship of reciprocity.” (p 49) We see this continuing in our modern concept of money, which is a reciprocal obligation of debts and credits denominated in some socially accepted unit of account. For each debtor, there is an equal creditor, and so forth. It’s worth noting, however, the extreme lopsided nature of what economists today refer to “trade,” such as between oil-producing nations and the industrialized world, or in manufactured goods between China and the United States.

Centricity means that some sort of centralized institution is required for the redistributive network to function properly: “The institutional pattern of centricity…provides a track for the collection, storage and redistribution of goods and services. The members of a hunting tribe usually deliver the game to the headman for redistribution. It is in the nature of hunting that the output of game is irregular, besides being the result of collective input. Under such conditions as these no other method of sharing is practicable if the group is not to break up after every hunt. Yet in all economies of kind a similar need exists, be the group ever so numerous.” (p. 49). We see this today in the role of banks as central clearinghouses for debits and credits among members of society, whether it be a private or national bank, and central governments which perform redistributive roles, without which no modern society could function for long.

Polanyi concludes:

Symmetry and centricity will meet halfway the needs of reciprocity and redistribution; institutional patterns and principles of behavior are mutually adjusted. As long as social organization runs in its ruts, no individual economic motives need come into play; no shirking of personal effort need be feared; division of labor will automatically be ensured; economic obligations will be duly discharged; and, above all, the material means for an exuberant display of abundance at all public festivals will be provided.

In such a community the idea of profit is barred; higgling and haggling is decried; giving freely is acclaimed as a virtue; the supposed propensity to barter, truck and exchange does not appear. The economic system is, in effect, a mere function of the social organization. [12]

Redistribution is collecting the surplus produced by the society, and parceling out among the members of the society so that there is no want. Another example is given by the practice of the Cherokee in North America:

The Cherokee, like the Iroquois, had matrilineal and matrilocal institusions and practiced external warfare. Their principal crops were maize, beans and squash. At the center of the principal settlements was a large, circular “council house” where the council of chiefs discussed issues involving many villages and where redistributive feasts were held.

The council of chiefs had a supreme chief, or mico, who was the central node in the Cherokee redistributive network. Bartram reported that at harvest time a large crib, identified as the “mico‘s granary,” was erected in each field. “To this each family carries and deposits a certain quantity according to his ability or inclination, or none at all if he so chooses.” The mico‘s granaries functioned as a public treasury…to fly to for succor” in the case of crop failure, as a source of food “to accommodate strangers, or travelers,” and as a military store “when they go forth on hostile expeditions.” Although according to Bartram every citizen enjoyed “the right of free and public access,” commoners clearly had to acknowledge that the store really belonged to the supreme chief since the “treasure is at the disposal of the king or mico,” who had “an exclusive right and ability…to distribute comfort and blessings to the necessitous.”

The fact that the mico, like the Trobriand chief, was far from being a “king” shows up clearly in Bartram’s comment that when outside the council “he associates with the people as a common man, converses with them, and they with him in perfect ease and familiarity.”[13]

Harris argues that such redistributive networks are what likely bound the earliest proto-states together. Most likely a combination of feasting and redistribution networks, such as potlatch, were the foundation for the earliest proto-economies. These would have functioned thousands of years before the invention of anything resembling money or markets. He furthermore concludes that the ancient monuments we see in various societies are the remnants of such ancient redistribution networks:

Redistribution undoubtedly provides the key to the understanding of numerous ancient monuments and structures which for centuries have puzzled scholars and tourists. As we have seen…”big men,” headmen, and chiefs have the capacity to organize labor on behalf of communal enterprises. Among such enterprises was the construction, involving hundreds of workers, of large canoes, buildings, tombs, and monuments.

Colin Renfrew has drawn attention to the rather striking similarity between the circular Cherokee feast center council houses and the mysterious circular buildings whose wooden post-holes have been found within the precincts of neolithic ceremonial enclosures, or “henges,” in Great Britian and northern Europe. The increasingly elaborate burial chambers, earth mounds, and megalithic alignments characteristic of the period from 4000 BC to 2000 BC in Europe have rather precise parallels among the mounds erected by prehistoric inhabitants of the Ohio and Mississippi valleys, the stone burial platforms and monoloithic statues of Polynesia, and the monolithic tombs and memorials of modern Borneo.

All of these constructions played a role in the smooth functioning of pre-state redistributive systems, serving as the locus for redistributive feasts, community rituals dedicated to controlling the forces of nature, and memorials to the generosity and prowess of deceased “big man” hero chiefs. They seem enigmatic only because they are the skeletons, not the substance, of redistributive systems. Since we cannot see the investment of extra labor in agricultural production, monument-building appears to be a kind of irrational obsession among these ancient peoples. But viewed within the living context of a redistributive system, tombs, megaliths, and temples appear as functional components whose costs are slight in comparison with the increased harvests which the ritualized intensification of agricultural production makes possible.[14]

We know, for example, that feasting and monument construction went hand-in-hand in the earliest complex pristine states in the ancient Near East:

Michael Hudson:…The problem in these early periods was how to get labour to work at hard tasks, if not willingly? For 10,000 years there was a labour shortage. If people didn’t want to work hard, they could just move somewhere else. The labour that built temples and big ceremonial sites had to be at least quasi-voluntary even in the Bronze Age c. 2000 BC. Otherwise, people wouldn’t have gone there…There weren’t that many people in the world in 10,000 BC, 3000 BC or even 2000 BC. If a government got too oppressive, or when they would raise the contributions or taxes too high, people would just flee to another area. Or if they were too much indebted the debtors would flee, as they did from Babylonia around 1600 BC. We are talking about free labor, not slave labor.

We found that one reason why people were willing to do building work with hard manual labour was the beer parties. There were huge expenditures on beer. If you’re going to have a lot of people come voluntarily to do something like city building or constructing their own kind of national identity of a palace and walls, you’ve got to have plenty of beer. You also need plenty of meat, with many animals being sacrificed. Archaeologists have found their bones and reconstructed the diets with fair accuracy.

What they found is that the people doing the manual labour on the pyramids, the Mesopotamian temples and city walls and other sites were given a good high protein diet. There were plenty of festivals. The way of integrating these people was by public feasts. This was like creating a peer group to participate in a ceremonial creation of national identity…to begin with, you would have a beer party to get everybody friendly. You would have big feasts, and also these were the major occasions for socialization. All over the world, communal feasts were the primordial way to integrate societies.

Q: So they built a social contract around these feasts, around this sense of belonging by being at this public works event. It sounds like a fascinating way to keep society on track and organise labour so that civilisation would develop on some level. Have you found any indication of a managerial class and how they developed through the chieftains?

A (Michael Hudson): First the priesthoods, then the accountants and scribes. The calendar keepers were usually the chiefs (there may have been “sky chiefs” and “war chiefs” separately, or perhaps their roles were combined as dynastic rulers developed). Most of the religions were cosmological. They wanted to create an integrated cosmology of nature and society (“On earth, as it is in heaven”). Administration was based on the astronomical rhythms of the calendar, lunar and solar cycles. For instance, you typically find a society divided into 12 tribes, as you had in Israel and also in Greece with its amphictyonies. In a division of 12 tribes, each could take turns administering the ceremonial centre for one month out of the year.

The physical design of cities also was based on the calendar. Big cities would have 12 gates. Most cities had maybe four gates, representing the four seasons or the four quarters of the Earth. The outline of the land and the Earth was based on a calendrical cosmology, much like a mandala.

Ceremonial sites such as Stonehenge also were calendars in miniature, designed so that the light would fall on the stones in a particular way on a solstice or equinox. We have this going back into the Ice Age around 30,000 BC. Alex Marshak’s article in our volume on urbanisation found that these sites already in the Ice Age were usually sited on waterways, so that everybody could get to them. They often were located with mountains in the background and in between them the sun would shine in a particular way on the equinox or on the solstice in a particular alignment that occurred just at that calendrical time. They were recreating the cosmos on Earth….The great ceremonial sites from Stonehenge to Turkey were based on the particular equinox or solstice. Chieftains usually would be the calendar keepers. ..The job of the chieftain was to keep the lunar calendar, trace the waxing and waning of the moon to calculate how long the month would be, and to decide that, “Ah, in this month, six months after the equinox, here’s where we have to get together and have everybody come to the gathering and begin working on the big site”. [15]

Eventually, the redistributive war chiefs would become kings, and the payments in kind would become obligations, or as we call them today, taxes. The chieftainships would thus, little by little, evolve into the first “pristine” states:

The larger and denser the population, the larger the redistributive network and the more powerful the redistributor war chief. Under certain circumstances, the exercise of power by the redistributor and his closest followers on the one side and by the ordinary food producers on the other became so unbalanced that for all intents and purposes the redistributor chiefs constituted the principal coercive force in social life. When this happened, contributions to the central store ceased to be voluntary contributions. They became taxes. Farmlands and natural resources ceased to be elements of rightful access. They became dispensations. And redistributors ceased to be chiefs. They became kings. [16]

Essentially, the redistributive economy evolves into a tribute economy. In the tribute economy, a specified portion of goods are to be returned, or services rendered, to the ruling elite of the country in exchange for the ability to farm a certain piece of land. This is often accompanied by the transition of war chiefs and warlords to true kings.
In the tribute economy, rather than the leader by dependent upon the generosity of the food producers, the power relations are inverted: the food producers are dependent upon the generosity of the king.

For example, the potlatch chiefs eventually became supervisors, making others do the work for them, as Marvin Harris points out:

As I have said, the Kaoka redistributor big man works harder, worries more, and consumes less than anybody else in the village. This is not true of the Kwakiutl chief redistributor. The great potlatch chiefs performed the necessary entreprenurial and managerial functions that were necessary for a big potlatch, but apart from an occasional fishing or sea-lion expedition, they left the hardest work to their followers. The greatest potlatch chiefs even had a few war captives working for them as slaves.

Continuing along the evolutionary line leading from…the impoverished worker-entrepreneur big man, to the semihereditary Kwakiutl chiefs, we end up with state-level societies ruled over by hereditary kings who perform no basic industrial or agricultural labor and who keep the most and best of everything for themselves. At the imperial level, exalted divine-right rulers maintain their prestige by building conspicuous palaces, temples, mega-monuments, and validate their right to hereditary privileges against all challengers–not by potlatch, but by force of arms. Reversing  direction, we can go from kings to potlatch chiefs to big men, back to egalitarian lifestyles in which all competitive displays and conspicuous consumption by individuals disappear, and anyone foolish enough to boast about how great he is gets accused of witchcraft and is stoned to death. [17]

Harris uses the example of the Bunyoro of Uganda as a true kingship level society where the tribute economy is in full bloom:

Ruled over by a hereditary chief called the mukama, the Bunyoro numbered about 100,000, occupied an area of 5,000 square miles of that portion of the central lake area of East Africa which is now known as Uganda, and earned their living primarily by raising millet and bananas.

The Bunyoro were organized in into a feudal, but nonetheless authentic state society. Their mukuma was a king, not a mere redistributor chief. The privilege of using all lands and natural resources was a dispensation granted by the mukama to a dozen or so chiefs, who then passed on the dispensation to the commoners. In return for this dispensation, quantities of food, handicrafts, and labor services were funneled up through the power hierarchy into the mukuma‘s headquarters. The mukama in turn directed the use of these goods and services on behalf of state enterprises.

Superficially, the mukama appears to be just another ‘great provider” redistributor chief….But a comparison of the mukama with the Trobriand of Cherokee supreme chief reveals that power relationships have been inverted. The Trobriand and Cherokee chiefs were dependent on the generosity of the food producers; the Bunyoro food producers were dependent on the generosity of the king. The mukama alone could grant or withold permission for blood vengeance, and failure to contribute to the mukama‘s income could result in the loss of one’s lands, banishment, or corporal punishment. Despite his lavish feast-giving and reputation as a “great provider,” the mukama used much of his income to bolster his monopoly over the forces of coercion. With his control over the central grain stores he maintained a permanent palace guard and heaped rewards on warriors who displayed bravery in combat and loyalty to his person. The mukama also spent a considerable portion of the state treasury on what we would today call “image-building” and public relations.

He surrounded himself with numerous officials, priests, magicians, and such regalia keepers as the custodians of spears, of royal graves, of the royal drums, of royal thrones, and of royal crowns, as well as “putters-on” of the royal crowns, cooks, bath attendants, herdsmen, potters, bark-cloth makers, and musicians. Many of the officials had several assistants. Other advisers, diviners, and retainers hung around the court in the hope of being appointed to a chieftainship. Also present were the mukama‘s extensive harem, his many children, and the polygynous menages of his brothers and of other royal personages. To keep his power intact, the mukama and portions of his court made frequent trips throughout Bunyoro land, staying at local palaces maintained at the expense of chiefs and commoners. [18]

In other words, they had become Immortan Joe from Mad Max.

How did such people usurp power? It’s critical to understand that this can only come about through surplus, not scarcity. While economics argues that is about allocating scarce means to unlimited wants, in early societies, all wants were taken care of. Thus, if some accumulated more, none had to go without. In such societies where everyone is provided for, what does it matter if some work a little harder and accumulate a little more, especially if they are sharing the fruits of their labor with the village?

In a study of the salmon-fishing villages of Keatley Creek in British Columbia, archaeologist Brian Hayden wondered how a hierarchy would form from what began as a village of equals. Over time, in these transegalitarian societies, central storage facilities become attached to people’s houses, and certain houses become larger and more elaborate. Certain fishing grounds become the property of prominent families:

As scarcity transitioned to plenty, the aggrandizers were freed to pursue their goals. Their selfish behavior was no longer grounds for excommunication, because everyone was able to get enough to eat — if they were willing to work. Slowly, through a variety of strategies such as bride prices and competitive feasts, aggrandizers consolidated their power. They developed new sorts of relationships based on debt and obligation. Eventually these strategies led to establishment of private property rights over valuable resources, such as the fishing rocks in the Fraser Canyon.[19]


Whereas the norms of fairness among hunter-gatherers are common to all members of the group, in transegalitarian societies fairness is essentially an agreement among a sufficient number of the wealthy and well-connected, who are able to enforce their version of fairness on the society as a whole.

If Brian [Hayden’s] theory is correct, the process is a slippery slope. What begins as favoritism within a small circle of friends becomes cronyism among the members of an in-group. It’s a system that tends to concentrate power in the hands of a few, but it’s simply a consequence of the natural variability in human personality evolving in conditions of surplus. [20]

Harris argues that one final element is required to tip things over the edge to state-level societies. As redistributor chiefs acquired more and more power and became kings, more and more areas came under their control. In places where people could not run away, they had no choice but to submit to increasingly despotic leaders:

Under what circumstances would a conversion of a redistributive chieftainship to a feudal state be likely to occur? To intensification, population growth, warfare, storable grains, and hereditary redistributors, add one more factor: impaction [21]

As Malcolm Webb has pointed out, all of [early state formation] regions contain fertile soils surrounded by zones of sharply reduced agricultural potential. They are, in fact, river valleys or lake systems surrounded by deserts or at very least dry zones.The dependence of ancient Egypt, Mesopotamia and India on the flood plains of the Nile, Tigris-Euphrates, and Indus is well-known. In ancient China conditions of climate, soil, and topography limited intensive forms of agriculture beyond the river margins of the Yellow River Basin. Central highland Mexico south to Tehuantapec is also dry and in addition “suffers from severe rain shadow effects in the highland basins and stream valleys that were the aboriginal population centers.” And finally, the Peruvian coast is notable for the stark contrast between the lush vegetation bordering the short coastal rivers that flow down from the Andes and the desert conditions that prevail everywhere else. All of these regions present special difficulties to villages that might have sought to escape from the growing concentration of power in the hands of overly aggressive redistributor war chiefs.[22]

The ancient Mesopotamian economy, the world’s first state, was organized as a tribute economy based abound centralized city-states and their associated hinterlands. These cities emerged at strategic places along the vast canal system which distributed water to farms across the alluvial plains of the Tigris and Euphrates river basin. All of the land theoretically belonged to the city’s patron deity, with the priests of the deity running a tribute/redistributive economy out of the temple complexes:

A tributary economy is characterized by a political elite extracting goods and labor from primary producers…The Ubaid economy was by and large a tributary economy: most households had to produce mundane goods such as food and cloth, with surplus being exacted by elites who may have couched this as a voluntary religious duty. Surplus may have been stored extra to guard against disaster, but records of this indicate that payouts in emergencies were a fraction of the total collected. By the Middle Uruk era in the 4th millennium, it had become the norm for mundane utilitarian goods to be centrally produced in cities. A larger pool of available specialized labor offered elites who could afford to employ it the opportunity to commission luxury goods; also, the laborers needed employment, as the cities were too densely populated and the fields too far away for the laborers to have grown their own food. Simultaneously, and likely as a result of this, tribute exactions were increasing. This may have precipitated sedentary agriculturalists to vote with their feet and become nomads or move to a different region (these outcasts were later targeted by governments and known as habiru), or else move into the city. [23]

A related concept is the palace economy. This term was coined to describe the economies of pre-classical (Mycenaean) Greece. In a palace economy, goods are also centrally allocated and redistributed. The palace is also able to keep a number of specialists on hand to produce certain goods that are not practical for the households to produce themselves in sufficient quantities. Palace complexes not only stored a large variety of goods for the society, but also exercised a degree of control over economic production:

The term ‘palace economy’ was coined by archaeologists and historians studying the Mycenaean and Minoan civilisations; that is, Bronze Age Greece and Crete. They noticed similarities to the temple-based city states of Mesopotamia, which had already been studied in detail at that point; but enough differences that a new term was desired. As such, strictly speaking the term only applies to that one historical culture. However, the expression is flexible enough that it has subsequently been applied to other societies which seem to share common features, from the stone-age Inca of Peru to the iron-age Kingdom of Dahomey in West Africa, and even the nuclear-age Democratic People’s Republic of Korea.

The most prominent feature of the Mycenaean and Minoan civilisations was the existence of large palace complexes in each major population centre, which were administrative centres and had vast storerooms attached to them. About one-third of the floor area of a typical Cretan palace was devoted to storage, with rooms lined with big clay jars. Another significant area was devoted to large, well-lit but utilitarianly decorated workrooms. Crete and Greece were the first cultures in Europe to introduce writing (although the Mycenaean alphabet, Linear B, was not deciphered until the 1950s and the Cretan alphabet, Linear A, remains a mystery to this day) and the palaces also contain extensive written records.

The palace economy was based on the principles of centralization and redistribution. This was a society which had already invented writing, but not invented money; and its economic and political system reflected that.
The palace collected contributions of staple produce from the surrounding districts – wheat, barley, figs, olive oil, wine, wool, and so forth. These were placed in storage and carefully catalogued by the scribes. They were then distributed back out again to the people, in shares which were apparently based on their social status and value to the community rather than necessarily being equal.

Some of the produce was allocated as rations to specialist full-time craftspeople, such as weavers or metal-workers, who were employed in workshops attached to the palace compound. The goods they produced would also go to the storerooms. Some would be distributed to the people; other items (the more high-status ones) would be given out by the king as gifts to neighbouring kings or rewards to loyal followers.

The stored foodstuffs would also provide a buffer against famine, since they could be kept in the royal granaries until required. As well as regular rations, some of the food would also be put towards grand feasts on ceremonial and/or religious occasions, to which the people would be invited. This seems to have been a key way of keeping their loyalty and cementing communal feelings.

At one point it was speculated that the palace controlled all aspects of the economy; that the people were required to hand over everything they produced to the king’s officials, and received back as rations everything they needed for subsistence. However, this would be impractical in any society larger than a single village, so it’s now generally accepted that local communities were still mostly self-sufficient, and the palace was collecting and redistributing the surpluses rather than the entire production.

There does seem to have been some degree of central control. The palace would tell certain districts to raise sheep for wool, others to grow grapes for wine, and so on, rather than leaving it to their own discretion. The craftspeople who wove cloth and made pottery and cast bronze were accommodated and fed by the palace – in modern terms they were State employees. As such, it could be called a planned economy, but I’m not sure how meaningful the phrase is in a mostly subsistence agricultural society. Farmers have always had to plan when to plant and when to harvest; and the choice of what to grow, at least in ancient times, was largely determined by “what the soil and climate will bear” and “what seeds I have available” rather than any sort of free choice.

It is suggested that the system of palace economy grew out of the principle of reciprocal gift-giving and sharing between rural communities once specialization took place. A single extended family group growing, say, barley on its farm would naturally consider their crop to be family property, and everybody in the family would be given a fair share of the barley. If the next farm over was growing figs, then it was an obvious idea to offer them half of your barley in return for half of their figs, so you could both eat a more varied diet. But when another nearby farm was growing olives, and another was growing grapes for wine, and another was raising sheep, it all got complicated.
At this point, so the theory goes, someone had the bright idea of suggesting that everybody bring their produce to a central point, and he would count it all up and put it into storage, and then give it out again in fair shares so everybody got a little bit of everything. Of course, since it was his idea and he’d be doing all the work, it was only fair for him to skim a little off the top of everybody’s contribution for his own use, wasn’t it? It seems a perfectly reasonable idea: but that’s how monarchy got started. (At least it’s different to the more usual theory of ‘big man with a gang of thugs beating everybody up until they promise to give him their stuff’!) [24]

As Polanyi notes, redistribution formed the basis of the early economies of both states:

All large-scale economies in kind were run with the help of the principle of redistribution. The kingdom of Hammurabi in Babylonia and, in particular, the New Kingdom of Egypt were centralized despotisms of a bureaucratic type founded on such an economy. The household of the patriarchal family was reproduced here on an enormously large scale, while its “communistic” distribution was graded, involving sharply differentiated rations.

A vast number of storehouses was ready to receive the produce of the peasant’s activity, whether he was cattle breeder, hunter, baker, brewer, potter, weaver, or whatever else. The produce was minutely registered and, in so far as it was not consumed locally, transferred from smaller to larger storehouses until it reached the central administration situated at the court of the Pharaoh. There were separate treasure houses for cloth, works of art, ornamental objects, cosmetics, silverware, the royal wardrobe; there were huge grain stores, arsenals, and wine cellars.

But redistribution on the scale practiced by the pyramid builders was not restricted to economies which knew not money. Indeed, all archaic kingdoms made use of metal currencies for the payment of taxes and salaries, but relied for the rest on payments in kind from granaries and warehouses of every description, from which they distributed the most varied goods for use and consumption mainly to the nonproducing part of the population, that is, to the officials, the military, and the leisure class. This was the system practiced in ancient China, in the empire of the Incas, in the kingdoms of India, and also in Babylonia. In these, and many other civilizations of vast economic achievement, an elaborate division of labor was worked by the mechanism of redistribution. [25]

The final element of the primitive economy was the household. The household was never about exchanges in markets, but production for the members of a nuclear or extended family for self-sufficiency. These were Marx’s “pretty commodity producers.” The household economy played a central role in societies from Mesopotamia to China to Ancient Greece:

The third principle, which was destined to play a big role in history and which we will call the principle of householding, consists in production for one’s own use. The Greeks called it oeconomia, the etymon of the word “economy.”…The individualistic savage collecting food and hunting on his own or for his family has never existed…the practice of catering for the needs of one’s household becomes a feature of economic life only on a more advanced level of agriculture; however, even then it has nothing in common either with the motive of gain or with the institution of markets. Its pattern is the closed group. Whether the very different entities of the family or the settlement or the manor formed the self-sufficient unit, the principle was invariably the same, namely, that of producing and storing for the satisfaction of the wants of the members of the group. the principle is as broad in its application as either reciprocity or redistribution. [26]

Scholars call this the oikos economy. The oikos is a self-sufficient household producing commodities for its own use. This type of economy was common in both ancient Greece and Mesopotamia. In the above examples, households would produce for their own use and give some of the tribute to the temple or palace where redistributors would distribute the surplus, tying together the society in webs of mutual assistance and cooperation.

Textual studies have revealed that the Sumerian é and Akkadian bîtum, roughly translated as household, subsumed various entities not included in the modern Western notion of a household. A household meant anything from a nuclear or extended family living under one roof, all the way to grand temples (a deity’s earthly residence), royal palaces and public officials’ wealthy estates. Temples, palaces and wealthy estates are in modernity referred to as oikoi, with each oikos serving as a socioeconomic unit with a dependent and not-kin-related workforce and management, in addition to animals, pastures, fields, orchards, storage facilities and workshops.

The oikos is identifiable as a large structure (or set of related structures) with evidence of: varied craft residues (bead-making, textiles) and sustenance-related production; storage of raw materials and goods; participation in exchange and accounting; and display and/or exercise of force. With its own accounting and production means, these oikos households must have relied on non-kin labor that was paid in rations, and maintained themselves with some measure of force.

What strongly distinguishes the oikos and tributary economies’ archaeological record is that in the oikos economy, non-elites could work in one or more oikoi and receive rations in exchange; thus, many small kin-based households lacked tools and resources for production, with these instead being held by the oikoi. [27]

So, rather than the state being an aberration, the state is primary, and the economy grows out of it, the exact opposite of what libertarians argue. And rather than the wealthy hoarding the best of everything and claiming “redistribution” is a dirty word, or “theft,” redistribution is at the heart of all ancient economies. Neither goods, not land, not labor, were rationed by prices in impersonal markets until the last few centuries in Western Europe. Finally, rather than scarcity which is emphasized by the modern discipline of economics (which forms a modern-day priesthood akin to the high priests of ancient Mesopotamia or the Aztecs), early economies were based on abundance and plenty, with an elimination of want or extreme poverty. People were not dedicating scarce means to unlimited wants; rather thy were dedicating essentially unlimited means to limited wants through the mechanism of the oikos and palace economies.

Polanyi concludes:

Broadly the preposition holds that all economic systems known to us up to the end of feudalism in Western Europe were organized either in the principles of reciprocity or redistribution, or householding, or some combination of the three. These principles were institutionalized with the help of a social organization which, inter alia, made use of the patterns of symmetry, centricity, and autarchy.

In this framework, the orderly production and distribution of goods was secured through a great variety of individual motives disciplined by general principles of behavior. Among these motives gain was not prominent. Custom and law, magic and religion co-operated in inducing the individual to comply with rules of behavior which, eventually, ensured his functioning in the economic system. [28]

Next time, we’ll take a look at some examples of ancient economies around the world and see how money and markets really emerged.

[1] http://www.nakedcapitalism.com/2011/08/what-is-debt-%E2%80%93-an-interview-with-economic-anthropologist-david-graeber.html

[2] Marvin Harris; Cows, Pigs, Wars and Witches, p. 122

[3] Marvin Harris; Cows, Pigs, Wars and Witches, pp. 123-124

[4] Karl Polanyi; The Great Transformation, p. 46

[5] Marvin Harris; Cows, Pigs, Wars and Witches, p. 117

[6] Marvin Harris; Cows, Pigs, Wars and Witches, p. 127

[7] Marvin Harris; Cows, Pigs, Wars and Witches, p. 118

[8] Marvin Harris; Cows, Pigs, Wars and Witches, pp. 118-119

[9] Marvin Harris; Cows, Pigs, Wars and Witches, pp. 119-120

[10] Karl Polanyi; The Great Transformation, pp. 50-51

[11] https://en.wikipedia.org/wiki/Kula_ring

[12] Karl Polanyi; The Great Transformation, p. 49

[13] Marvin Harris; Cannibals and Kings, p. 111

[14] Marvin Harris; Cannibals and Kings, pp. 111-112

[15] http://michael-hudson.com/2015/04/sovereignty-in-the-ancient-near-east/

[16] Marvin Harris; Cannibals and Kings, pp. 113

[17] Marvin Harris; Cows, Pigs, Wars and Witches, pp. 121-122

[18] Marvin Harris; Cannibals and Kings, pp. 113-115

[19] https://psmag.com/seeing-fairness-evolve-10c0443687f0#.s0hxg0tc5

[20] https://psmag.com/conclusion-the-judgment-of-fairness-3677740ed398#.lbfu4byme

[21] Marvin Harris; Cannibals and Kings, pp. 115

[22] Marvin Harris; Cannibals and Kings, pp. 117

[23] http://studentreader.com/tributary-and-oikos-economies-of-ancient-mesopotamia/

[24] https://www.quora.com/What-is-Palace-Economy

[25] Karl Polanyi; The Great Transformation, pp. 51-52

[26] Karl Polanyi; The Great Transformation, p. 53

[27] http://studentreader.com/tributary-and-oikos-economies-of-ancient-mesopotamia/

[28] Karl Polanyi; The Great Transformation, p. 55

4 thoughts on “Karl Polanyi and the Modern World – Part 2

  1. I can actually comment on here? Wow, I’m amazed!

    First, a reader has to know the old site, then they have to know to click on the link for the new site, which gets them the new site but an OLD article, then they have to know to click on the masthead to get the latest post … then they had to register somehow to post a reply at all.

    That’s the point where you stop doing this and put some serious time into fishing or hitch-hiking or something.

    1. Thanks, I’ll put up a more clear link to this new site.

      I had to activate the login feature to stop the 30+ spam messages a day I was getting (there is no way to disable comments entirely). The anti-spam plugin I installed suddenly stopped working with no warning and demanded payment to reactivate it, sending spam flooding back into my inbox. I have installed a new spam blocker which should hopefully continue working.

      Fishing and hitchhiking are worthwhile pursuits anyway 🙂

  2. I’ve been a long-time reader actually, but I’m a reluctant commenter. I have to say that I continue to really enjoy the progression of your blog! I honestly just finished my second re-reading of The Great Transformation myself. It’s great to see your own thoughts and reflections on this book. I’ll definitely have to pick up Marvin Harris as well.

    The idea that institutional power structures arose out of surplus is incredibly engaging. It makes our common narrative of capitalism all that more pronounced and even bolsters Polanyi even more. He really points out the paradoxes created by ever-increasing wealth and the resulting levels of poverty. It’s interesting to consider cultures that experienced class divergences from those with access to surplus, and those exposed to scarcity. It’s an interesting way to consider and explain some of Polanyi’s later arguments regarding more spontaneous forms of regulation that pop up.

    I’m curious if you already have your next reading project(s) planned out in terms of future post. I’d love to be able to read a text before you post about it. It’s been fun getting to see you write about Polanyi, since I finished my own reading just a month or so ago. It’d be great if you wouldn’t mind sharing some of your future plans.

    1. Harris is good and very readable. He’s known for the two books I cited. There is some overlap between them.

      I don’t really plan ahead that much; it’s kind of whatever’s on my mind. Often times, such as with this series, I go down a rabbit hole and go off in a totally different direction than I intended to when I started.

      One text I planned on looking at again was “The Origins of Political Order” by Fukuyama, which considers how modern state institutions formed. That ties in with the latest posts. Also, I’ve been meaning to look at “Why Nations Fail” by Acemoglu and Robinson. I’ve already written a bunch of stuff about the last couple of chapters of Marvin Harris’ “Cannibals and Kings,” which is even more relevant now than when he wrote it.

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