Background reading for a new economics – by James G. Carrier

photo credit: Pixabay

photo credit: Pixabay

We told ourselves that we know how economies work.

The economic crisis that began in 2008 showed how wrong we were.

The individualistic formalism of basic neoclassical economics had held sway in the World Bank and the IMF and in many government ministries. The crisis challenged its control of the commanding heights of policy and public debate, and many have called for a better view of economy to replace that neoclassical paradigm.

The world outside the textbooks

Anthropologists have never had much time for neoclassical economics and its view of the world. That is because economic anthropologists have long thought about the ways that the people they study actually carry out their economic activities. What these anthropologists have learned has often been interesting. With the appearance of the crisis it has become important.

The new edition of A Handbook of Economic Anthropology shows how this is so, and the different parts of it do so in different ways. Those parts lay out basic approaches that have shaped economic anthropology and describe the central areas of concern to those in the field. They present the ways that people’s economic activities are related to other areas of their life, as well as the main findings of economic anthropologists working on important regions in the world. Finally, this new edition has four chapters that consider the nature of the crisis and what we might learn from it, whether as citizens concerned with policy or as academics concerned with intellectual understanding. Chapter 1 can be downloaded here.

Homo œconomicus for real

Taken as a whole the authors demonstrate the inadequacies of the economic thought that was an important cause of the crisis. That is the sort of thought that led one of its leading advocates, Alan Greenspan, then head of the US Federal Reserve, to express his ‘shocked disbelief’ at the failures that brought about the crisis.

For one thing, they show what has always been obvious to those who look beyond that narrow view, and consider the world that it claims to describe. That is, it shows that people are not simply methodical seekers of their own material gain. What they seek in their economic dealings is much broader than that. The desire for things like esteem, salvation, and creating relationships are as important as securing the next meal.

They also show that the intense individualism of mainstream economic thought is wrong. In our lives, we are not isolated transactors confronting each other in the market, some with money in our pockets and others with things to sell. As those chapters show, we and our economic lives are much more complicated than that. Everywhere people think and act as members of families and of larger social groups, as believers in some religions and deniers of others, and as much more.

The chapters show the need for those interested in economy to do what Bronislaw Malinowski urged almost a century ago. That is, get down off the veranda and move in with the natives, whether they be in the Trobriand Islands that he studied, suburbs of Chicago or Cologne, Wall Street or the City. Doing this, we can replace the motivations that drive the transactors of neoclassical economics with a better understanding of what moves people in their daily lives.

For some, that will be the desire for wealth and lavish spending, for some it will be the desire for a more secure future, for some it will be the desire to do right, for all it will be a mixture of these and other motives. The picture that results is muddier than the clear, explicit reasoning presumed in conventional economics, but that is only because the world is no simple place.

Beyond neoclassical economics

Dislodging neoclassical simplicities from the commanding heights is worthwhile. But doing so requires reflecting on how else we might think about people in their economic lives, the desires they have, the forces that constrain them and the institutions that they create and confront.

Anthropology has long been concerned with this sort of reflection. Certainly it offers no ready nostrums to apply to the world. Equally certainly, though, it offers provocative ideas and findings that will stimulate those concerned with how economies really work.

For those who want to sample those ideas and findings, and for those who want to broaden their knowledge, this handbook is a good place to start.

James G. Carrier has taught and done research in Papua New Guinea, the United States and the United Kingdom. He has written extensively on economy and society, including Gifts and Commodities and the edited collections Meanings of the MarketVirtualism (with Daniel Miller) and Ethical Consumption (with Peter Luetchford).

A Handbook Of Economic Anthropology, Second Edition - jacket cover

Also available as an eBook for subscribing libraries on elgaronline

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One Comment on “Background reading for a new economics – by James G. Carrier”

  1. Paul Durrenberger Says:

    Thanks for this concise summary; it, like the Handbook, captures the essence of economic anthropology and what we have been about for a hundred years or so. Nowadays the problem goes two ways…one is the direction you lucidly indicate, or as I said in a note to my lecture, “The Last Wall to Fall” (Journal of Anthropological Research) the question is not per Ostrom et alia “why is there mutual aid,” it is, “why are there economists.” There is a good reason for them. They are the high priests of the religion of Economics that parades as a science while peddling a faith that justifies corporate repacity.– that is, they have an identifiable ideological role in our capitalist system as Dimitra Doukas documents in her book, Worked Over. The second direction,equally devoid of ethnographic information, is Charles Eisenstein’s book Sacred Economy. For an essay on an alternative position see the essay I just posted under the tab “rants” at the website for the current activities of my wife, Suzan Erem and me, dracohill.org. Paul Durrenberger

    Reply

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