Economic Essay Sample-Exchange Systems

1 1 1 1 1 1 1 1 1 1 Rating 0.00 (0 Votes)


A trade network or exchange system refers to the manner in which individual consumers interact with producers. The existence of exchange systems can be dated to the onset of human interaction with one another. According to archaeology, exchange systems can be defined as the networks that people used to acquire or purchase raw materials, ideas, goods and services, from individual sources or producers. Exchange systems facilitated the movement of goods across landscapes. Since not all landscapes were equally endowed with resources, the need for exchange systems arose. Individuals had to travel from one region to another in search of resources they did not have or those that were not sufficient enough to meet their needs. The main purpose of exchange systems is for individuals to acquire their basic and luxury needs.

Archaeologist applies a variety of techniques to identify networks of exchange. The techniques are applied on material culture, also by keying raw material targets and techniques used in the manufacture of specific type of artifacts. Since the mid 19th century, exchange systems have been a sector of interest in archaeological research. Economic anthropologist place the distribution of goods and services into three categories: reciprocity, market exchange and redistribution. In reference to these three categories, individuals and cultures around the world managed and currently manage to distribute goods and services produced by them. Since individuals have numerous wants, and resources are however limited in supply, these exchange systems ensure survival of various people belonging to various cultures applying these systems. There are other exchange systems which have been applied by cultures in the past. However, reciprocity, market exchange and redistribution are the common exchange systems,eciprocity refers to a behavioral system of trade whereby cultures are involved in more or less equal apportioning of goods and services. Simply, reciprocity refers to the exchange of goods and services of almost the same value, between individuals. Reciprocity as an exchange system is based on doing something for an individual on agreement that the gesture will be reciprocated. The concept of reciprocity is evident in various cultures around the world. However, with the current trends in our world today, reciprocity is not as popular as it was in the past. This is so because, the use of money as a monetary medium has been completely embraced by cultures.

Reciprocity can be categorized into three distinct types: generalized reciprocity, balanced reciprocity and negative reciprocity. Generalized reciprocity refers to the giving of gifts without expecting anything in return immediately. For instance, parents look after their children in expectation that once their children grow up they will in turn take care of them. On the other hand, balanced reciprocity involves the equivalent exchange of goods and services. Goods and services exchanged in this case have to be of equal value. Negative reciprocity refers to the exchange of goods and services, whereby one individual tries to gain advantage over the other. This is done in an attempt to maximize profits. Although reciprocity is the exchange of goods and services between two parties, redistribution, on the other hand is a social centre where goods are redistributed. A good example of a redistribution system is the scenario in which a village chief or elder collects a portion of the village produce and makes it accessible other individuals in need.

         Generally, redistribution refers to the flow of goods and services from a cardinal authority to other individuals in a different form. It involves the reallocation of goods and services collected from individuals. Somehow it is a form of reciprocity since the same goods collected from individuals and redistributed among the same individuals. The main concept in redistribution is pooling a system of reciprocities. The third category of exchange system is market exchange. Market exchange is an exchange system which involves the congregation of producers of goods and services at specific locations and at specific duration. This category is broad in nature. This is so because; it not only involves barter exchange, but also money exchange. Individuals trade in market places with an aim of maximizing their profits. Market exchange system involves two actors. We have the suppliers, who are willing and capable of supplying goods to the market. We also have the purchasers who are willing and capable of purchasing goods at the agreed price.

            Interaction between this two parties results in the equilibrium price. This is the price at which suppliers and purchases agree on during transactions. Market exchange happens to be one of the main exchange systems applied today. Since we are living in a world of business, the market exchange system has gained a lot of popularity in our world today compared to the other exchange systems. However, reciprocity is vastly used in our culture today. Family members, friends, workmates and other acquaintances exchange goods and services in form of gifts. Reciprocity in this case falls under the generalized reciprocity where immediate response to a good or service offered is not necessary. 

Work cited

Turnbull. Collin. The Forest People

 Check below the PDF Sample of the above Copy.