Capital, Saving and Credit in Peasant Societies
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Capital, Saving and Credit in Peasant Societies

Studies from Asia, Oceania, the Caribbean and middle America

Raymond Firth, B.S. Yamey, Raymond Firth, B.S. Yamey

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eBook - ePub

Capital, Saving and Credit in Peasant Societies

Studies from Asia, Oceania, the Caribbean and middle America

Raymond Firth, B.S. Yamey, Raymond Firth, B.S. Yamey

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About This Book

The formation and management of capital are among the central issues in economic growth, especially in 'under-developed' countries, and form the main theme in this volume. The societies examined vary widely, both geographically and also in terms of types of social and economic structures.
First published in 1964.

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Publisher
Routledge
Year
2013
ISBN
9781136536687
Subtopic
Anthropology
Edition
1
1
Capital, Saving and Credit in Peasant Societies:
A Viewpoint from Economic Anthropology
By Raymond Firth
Contributions by anthropologists to the analysis of the diverse range of economic institutions they have observed have not yet been very impressive. This is partly because of their lack of training in formal economic theory and partly because much analysis by economists which might have been a stimulus may seem remote from the conditions studied by anthropologists. But as time has gone on the bearing of economic conditions on the character of a social system has become more apparent. Moreover, a more marked interest in problems of economic growth in the ‘under-developed’ countries, and an increasing realization that such growth depends as much on social as on economic conditions, have helped many economists to see more clearly the relevance of social factors to economic decisions. So the way is now open for closer co-operation in the empirical study of economic data, and for a more significant use of their knowledge by anthropologists for the clearer formulation of theory in the socioeconomic field.
Some work has already been done in this direction. The contributions of anthropologists in this field lie primarily in their knowledge of the working of socio-economic systems different from, though not now outside the orbit of, developed commercial and industrial economies. From this point of view anthropological study has shown, over a variety of systems ranging from those of very simple technology to those of what may be termed peasant character, a number of significant relationships.
These include: the ways in which different types of right-holding in land affect its use; what kinds of choices are involved in the assembly of a labour force; what sanctions maintain it in operation; how far magical and other ritual procedures affect the allocation of productive effort; what kinds of social factors provide the basis for and give meaning to the scheme of distribution of the product of labour; what local media of exchange there are and how they operate; what the major incentives, individual and communal, are in inter-community trade. More generally, anthropologists have been able to answer in some detail for many societies the three fundamental questions posed by economists as, for instance, by Samuelson (1948, pp. 12–13): what commodities shall be produced and in what quantities; by whom and with what resources of technology; how is the total product to be distributed among individuals and families? The what, how and by whom of economic effort have received examination by anthropologists in, one might estimate, some fifty different societies at least. Yet such examination is still apt to be selective, not systematic.1
To the anthropologist economic relationships are part of an overall system of social relationships (however weakly this system be structured and integrated). The economic system (or sub-system) is therefore to be fully understood only in a context of social, political, ritual, moral and even aesthetic activities and values, and in turn affects these. Studies on the more strictly anthropological side have benefited from this economic orientation. The social implications of alternative uses of labour power by individuals and by groups have been examined for their effects on family organization and authority structures—an important set of materials here has come from studies of the flow of labour from tribal economic conditions to industrial employment. Data on the complexities of land tenure, including the recognition of rights of a mystical order over land, have been correlated with the political structure and kinship structure of the societies concerned. For some spectacular and classic cases, such as the Trobrianders and the Rossel islanders (Malinowski, 1922, with critique by Firth, 1957; Armstrong, 1928, with critique by Lorraine Lancaster, infra, chapter 2), there are illuminating analyses of the relation between the accumulation and disbursement of capital and the status structure in the society. Similar analyses have multiplied in recent years. But anthropologists need much more systematic study of many phases of these and other problems. What are the actual processes of decision-making at various levels of economic enterprise and for various categories of groups and individuals, and what is their relation to political power? How far is the distribution process likely to facilitate the social aims of the community or the factional or individual aims of certain sectors of it only? Is the economy under scrutiny a stationary one or is it a progressive one with increase of net assets, and what are the effects in either case upon the structure of the society? What framework of ideas is required in order to tackle such questions?
Studies in the Peasant ‘Capital’ Sector
These and other problems can usefully be taken up in connection with the formation and use of capital since this constitutes one of the least developed aspects of socio-economic study. This introductory essay attempts merely to outline some of the major questions involved.
It is convenient for anthropologists to consider capital problems in the sphere of ‘peasant’ societies for two reasons. The ‘peasant’ concept emphasizes that the range of data is wider than the ‘primitive’, to include monetary economic systems and specifically allow of the inclusion of the work of modern anthropologists from relatively advanced countries such as China, India or Mexico. It also allows of more direct co-operation with economists, economic historians and rural sociologists, who have had little or no experience with nonmonetary economic systems but who, among them, have a vast historical and contemporary knowledge of European or Oriental peasantry.
Definition of the term ‘peasant’ has been the subject of some argument in recent years. It can be held that this is not a critical term, capable of much theoretical handling, but it is a broad descriptive term of an empirical kind, suitable only for demarcating rough boundaries in categorization.2 From this point of view, ‘peasant’ refers to a socio-economic category. It describes a socio-economic system of small-scale producers with a relatively simple, nonindustrial technology. The system is a rural one, though as Robert Redfield has shown, it depends on a rural-urban antinomy and interrelationship, particularly upon the existence of a market. Definition of a system as ‘peasant’ implies that it has its own particular local character, partly because of intricate community interrelationships and partly because, in economic and social affairs, it both contributes to and draws upon a town in trade, cultural exchange and general ideology. The term ‘peasant’ is commonly restricted to agricultural producers, even to those who retain effective control of the land and are not tenants. But such distinctions are difficult to maintain when owners and tenants, as in a Malay rice-growing area, are mingled together and may be related by kinship or live in the same village.
In my opinion it is not necessary then to restrict the term ‘peasant’ only to those people who cultivate the soil, and as owners. It can usefully include other ‘countrymen’ also, who share the social life and values of the cultivators, so that we can speak not only of peasant agriculturalists but also of peasant fishermen, peasant craftsmen and peasant marketers, if they are part of the same social system. In any case, such people are often in fact part-time cultivators as well. If the concept of ‘peasant’ be viewed as indicating a set of structural or social relationships rather than a technological category of persons engaged in the same employment, then this unconventional inclusive usage seems justified.
Identification of Peasant Capital
The definition of capital for economic and anthropological analysis is of a different, much more precise, order. Capital is a critical term, capable of much theoretical exploration, as the history of economic thought has shown. In the course of time the major elements in the definition of what is to be understood by capital have crystallized out. So while economists may differ among themselves as to precisely what elements should be included in the concept, especially for empirical measurement, the alternative implications of such inclusion or exclusion (e.g. stocks of consumer goods in the hands of consumers) are clearly recognized. The main delimiting elements in the concept of capital may be very briefly summarized as follows. Capital represents a stock of goods and services not devoted to immediate consumption but operated to increase the volume of consumption in future periods, either directly or indirectly, through production. A primary criterion of capital is thus its capacity to assist future consumption, and it is oriented towards the future, not merely held back in the present. Put another way, the stock of capital at any moment of time is the sum of the existing assets, i.e. resources capable of yielding goods and services in a future period. These resources are largely material. But there are also immaterial assets such as technical knowledge and skill. The difficulty here is to assign magnitudes to such assets, especially to make them comparable with other more material forms of assets. The value of assets derives from the expected value of the goods and services which may be obtained from them in the future, allowing by discounting for the fact that people normally prefer a less distant to a more distant benefit of otherwise equivalent value. This may raise difficulties of valuation in practice unless there is a continuing active market for the assets in question. One of the major problems in measurement of capital in peasant societies (especially for comparative purposes) often is the absence of regular markets for important types of asset, including perhaps productive equipment.
From this characterization emerge several critical questions which the anthropologist, if not the economist, must try to answer in any particular economic system. Why are goods withheld from consumption; what kinds of reasons determine people to save now and consume later rather than do what many consider to be a natural human action—consume now while they have the goods and take the future as it comes? If certain goods are withheld from present consumption, what type of goods—what principles of selection are involved? What kind of estimate is given to the future—long-term or short-term? If the value of assets derives from their expected value in the future, what is the nature of these expectations—by reference to what considerations? These questions about reasons, principles, estimates and expectations immediately suggest to an anthropologist that we are concerned here with factors of a social kind, involving on the one hand considerations of family interest or personal association and on the other the general pressures of social norms.
In relating it ‘functionally’ to the economic process, capital may be regarded, according to circumstance, from three major points of view: capital as productive assets; capital as affording control over purchasing power; and capital as a fund for investment. Anthropological studies have shown that in even the simplest economic systems, these three functions can usefully be identified. In Tikopia, for instance, an economy in which until recently the use of Western money was not understood, the productive equipment involved a capital of canoes, paddles, digging sticks, nets, etc., which in use yielded crops and fish. There was also considerable fixed capital, especially in land improved by generations of labour. The control over purchasing power was given by food, lengths of bark-cloth, pandanus mats, coconut sinnet cord and wooden bowls, which were used as ‘gifts’ to secure or repay various kinds of articles and services. Such goods were also used as a fund for investment by accumulating them over a period and then disbursing them en masse. They might be used to pay for having a new canoe built, which represented an addition to productive equipment providing a future yield; or they might be transferred at an initiation or funeral ceremony, thus laying upon the recipient an obligation to reciprocate with goods and services at a later period.3 Much of the food, bark-cloth, etc., was produced and accumulated a year or more in advance, with such aims in mind and consciously expressed.
Special problems about the valuation of such assets arise in a non-monetary economy of this kind, where no general medium of exchange allows of direct comparison of all types of goods and services. But the significant point to note is that consumer goods, even food, can perform an important capital role, and that liquidity, or ease of conversion into goods or services of another kind, is not necessarily confined to a monetary economy, or to the monetary sectors of an economy. The anthropologist then can look for capital functions in unexpected places. Moreover, even in non-monetary economic systems he can usually make some assessment of capital magnitudes by counting various types of goods and services, and by making quantitative estimates he can also note changes in the economic position over time without any monetary evaluation.
Can conceptions of the role of capital exist without any specific terms to refer to them? It would appear so. In Tikopia, for instance, no words can be directly translated as ‘capital’ or ‘income’. But these ideas are subsumed under terms connoting ‘valuable goods’, ‘reciprocity’, etc., combined with terms indicating more or less than equivalence in return. The notions of value, of durable stock, of increment over initial expenditure are there, though not arranged in the conventional economic form, and some capital accounting takes place. In most peasant communities it appears that such conceptions can be very directly expressed—as in Malaya, where capital (modal)is very clearly differentiated from its yield (untong). (Firth, 1939, pp. 237–78, 305; 1946, p. 128.)
Formation and Management of Peasant Capital
In general, all over the world it would seem that the level of peasant capital is low. On the whole, peasants are poor, and their low income level, their poverty, is one of the prime factors in creating such unfavourable conditions for saving and capital formation. One of the most significant practical problems of peasant economics at the present time is, then, how can their level of income and of capital operations be improved? This problem of economic growth raises some general questions for economic anthropology. What social and economic conditions are associated with a low income level and a small capital equipment? What possibilities of modification seem open, in view of the nature of the social structure, which sometimes seems to offer few possibilities of variation? What may be the effects on social relationships of capital improvement, for individuals and for the community?
These problems are important to economic anthropology because from an analytical point of view it does not seem to be always clear to administrators or even to economists just what are the factors in the peasant evaluation of resources which are most relevant to capital formation and operation. In consequence, well-meant practical efforts to improve the capital position of the peasant may fail in their aim or produce unintended effects (cf. Firth, 1951a). For an anthropologist, then, there are scientific jobs of both theoretical and practical value to be done, in investigation and interpretation both in relatively stationary and in developing economic conditions.
Few will expect that the level of peasant economies will be raised effectively by some dramatic increase in capital formation by peasants in their traditional or customary activities. The scale of individual operations is too small and income levels are too low for that. (The title of Penny Capitalism which Tax (1953) gave to his analysis of the economy of a Guatemalan peasantry is an apt illustration of this.) Improvements are to be expected, rather, where new types of superior market opportunity become available—for crops, as with rubber or cocoa, or for labour, as with factory development in the vicinity—or where external capital is provided, possibly with the imposition of a new overall administrative frame, as with the Gezira or other irrigation schemes. But if peasant saving be not the key to reasonably rapid economic advance, more general peasant economic attitudes may be the key to efficient capital maintenance and management.
A first point to discuss is whether indeed peasants in general are interested in capital formation, or indeed in the economical management of capital generally. This is necessary because among the reasons sometimes given for lack of success in a programme to develop peasant saving, or provide peasants with improved equipment, is that they seem not to have any wish to improve their position, and often no sustained interest in maintaining any advance. It is alleged that they are not interested in saving but only in maintaining their current level of consumption; that they have no concern for a better tool, especially a piece of machinery, but let it rust in the fields or run unserviced until it breaks down. There may be misconceptions here. Peasants are usually careful about the maintenance of their traditional equipment. They clean their tools and put them away in the house or shed after use. A Malay fisherman is careful to re-dye his nets and re-paint his boat periodically; a Malay cultivator will carry home his wooden plough on his shoulder after work and not let it lie in the fields. Failure to maintain new types of equipment properly is usually due to lack of proper technical training, including lack of general education in the basic principles involved; to lack of full employment for the equipment, which can lead to neglect; or to lack of cash to pay for running repairs. There is also a broader issue—the competing claims of other interests. When outlay is required, social demands—such as the requirements of a marriage or funeral of a kinsman—may make to the peasant a more imperative call upon his resources of cash or time than attention to a machine or to a savings programme. As Tax (1953, p. 204) and others have pointed out, simple disinterest can hardly ever be assumed as a reason for lack of response in a situation of potential capital accumulation. Patterns of consumption do not operate as a simple negative to the propensity to save; they have strong positive sanctions, and these sanctions are of a social as well as an individual order.
It is sometimes thought that obedience to the social dictates of ‘custom’ inhibits rational calculation. This is not at all the case. In some of the most primitive societies known, as in the Highlands of New Guinea or aboriginal Australia, there is the keenest discussion of alternatives in any proposal for the use of resources, of the relative economic advantages of exchange with one party as against another, and the closest scrutiny of the quality of goods which change hands and of services performed. Again, some men emerge as entrepreneurs by controlling the flow of capital goods in exchanges between groups and taking a profit thereby either in material items or in that intangible good, reputation, (v. e.g. Stanner, 1933–34; Reay, 1959, pp. 96–9, 110–11; Salisbury, 1962, pp. 52–60, 158.)
That there can still be misunderstandings in this field can be seen from a reference by Samuelson to the economics of the Northwest Coast Indians. He states (1948, loc. cit.) ‘… some tribes consider it desirable not to accumulate wealth but to give it away in the potlatch—a riotous celebration’. Such behaviour, described as a ‘deviation from the acquisitive behaviour of competition’, it is said, ‘will not surprise anthropologists’, used to the eccentricities of custom. But in fact such a description of the potlatchis likely to surprise anthropologists, especially coming from an economist noted for his subtlety of interpretation. The Haida, Kwakiutl, etc. do consider it desirable to accumulate wealth—they must in order to be able to give it away; the hundreds or thousands of blankets, the ‘coppers’ and other goods disbursed are patiently accumulated over a considerable period. Again, the goods are certainly given away—though some are destroyed—but the action takes place within the socioeconomic system, and those who receive them, members of the same or allied tribe, certainly are eager to have them. This may be as recognition of social bonds but probably also means a recognized increase to their capital stock. There is no absence of acquisitive competition at some level But the major competition is not for material goods but for immaterial resources—prestige and social...

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