FAQ

Doesn't the word "economy" refer to things that are related to money?
The word "economy" refers to the production, distribution, and consumption of goods and services. Since Western society is capitalist and industrialized, we use "economy" to refer to things that are related to money. However, most nonindustrial societies don't use the capitalist mode of production, but they still produce, distribute, and consume goods and services. As a result, most of this chapter is devoted to these kinds of societies (foragers, horticulturalists, agriculturalists, and pastoralists) and the key components of their economies. It is important to realize that industrialized capitalism is a very recent development in human society. From the time that Homo sapiens first appeared around 300,000 years ago until 10,000 years ago when the first farming communities emerged, all humans were foragers. Industrialized capitalism has been around for less than 150 years.

Aren't the best economies those that are the most productive and the most efficient?
In capitalist systems, where high productivity and high efficiency increase profit margins, the answer to this question is yes. However, it is important to understand that maximizing profit margins is not the driving principle behind most traditional nonindustrial economies. As a result, productivity and efficiency alone should not be used to determine what makes one kind of economy better than another. What about sustainability? Environmental diversity? The quality of public health? It is important to understand that each of the five basic economies has their advantages and disadvantages. For instance, foraging is a very efficient and sustainable economy that incorporates a wide range of species into the diet. However, it is not very productive. In contrast, agriculture is very productive, but this productivity is based on only a few staple crops. This restriction of the diet is less healthy than the foraging diet. With agriculture, people start living in large, densely populated settlements that create a wide range of public health issues like infectious diseases, waste disposal, and adequate drinking water. The industrialized economy of the Western world is extremely productive, but it is not very sustainable. Industrialization has a hugely negative impact on the environment including acid rain, global warming, and deforestation.

What role do religious and social ceremonies play in an economy?
The potlatch of the native groups of the North Pacific Coast of North America is a good example of how a festival can play an integral part in a group's economy. During a potlatch, the sponsors of the event traditionally gave away food, blankets, pieces of copper, or other material goods. In return, the sponsors gained social prestige, and the more they gave away, the more their prestige increased. Like most regions of the world, the North Pacific Coast of North America is subject to local fluctuations in resource abundance. One village can have a good year while another is experiencing a bad one. A village enjoying a good year will take advantage of their surplus and increase their prestige. To do this they will host a potlatch and invite the members of several surrounding villages to attend. In this way, the potlatch created and maintained a regional economy in which a series of villages pooled their resources through the potlatch. The needy villages would receive the surplus from the wealthy villages, who in turn gained prestige.