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Arapesh and Embedded vs. Disembedded economy

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Arapesh and Embedded vs. Disembedded economy

Polanyi says, regarding the economy, “the economic process….is embedded in noneconomic institutions.” An embedded economy is an economy in which economic activities occur such as, production and distribution; however other activities, which are not economic also occur. Activities such as forming friendships or helping other people may be happening, but it might just seem like the normal economic process because it is an embedded economy.

When Polanyi says that the economy is “embedded in noneconomic institutions” he means that while economic activity is occurring, it is occurring for noneconomic reasons. The economic activity may be occurring in order to continue a friendship or help someone. Activities in an embedded economy often seem like they are not economic activities. They seem like this because usually the reason the economic activity is occurring is for noneconomic reasons. For example, if two bakers both produce wheat bread, but do not eat their own, instead they exchange bread, because they want to have a reason to be friends. This situation does not seem like economic activity, it seems like two people sharing their food. It actually is economic activity, because the two bakers are both producing and distributing their bread. So, even though the bakers are only exchanging the bread because they want to maintain their friendship, what they are doing is an economic activity that would happen in an embedded economy.

Today most economic activity is considered to be part of a disembedded economy. In a disembedded economy, economic activity occurs only for economic reasons, so it is the opposite of an embedded economy. Economic activity is completely independent from such institutions as family or friendship. An example, of activity in a disembedded economy is a person going to a grocery store and buying bread. There is no other institution involved in the economic process of production and distribution of the bread which is why this would occur in a disembedded economy. The producer of the bread is making the bread so that he can sell it and get money for it, the consumer is buying the bread so it will belong to him.

Economic activities of production and distribution are perceived by the Arapesh to just be part of their society. Everything that the Arapesh use and take care of daily belongs to someone else, whether it is their trees or pigs. The Arapesh believe that they must share what they own with the other Arapesh to help them survive. The Arapesh believe that they cannot eat their own meat; they must give their meat to other Arapesh because in their culture it is a crime to eat the meat that they caught themselves. They see trading meat as an activity that is beneficial for them because they maintain kinship with other Arapesh, however it is really economic activity.

In the Arapesh society there does seem to be some exchange of products. The Arapesh, in their society, trade meat that one group of people catches, for meat that another group catches. The odd part about the exchange of meat is that the meat that the Arapesh are exchanging is almost exactly the same. The exchange does not occur for economic reasons or survival purposes; the Arapesh could keep their own meat and survive. The Arapesh are involved in exchange in order to keep kinship with the other Arapesh. By giving the meat that one group of Arapesh have to another group they are making certain that they all stay in contact with each other and help each other, which results in better relations between the Arapesh.

This type of exchange is much different than the exchange that occurs in today’s economy, because today’s economy is a disembedded economy. In the current economy exchange is most often thought of as giving money for a product. In this case the consumer gets a product that he needs and the producer or distributor gets the money that he needs. In exchange in the current economy each product is given a monetary value which allows the consumer and distributor to easily and fairly exchange what they have. However, the Arapesh had no monetary system with which to use and give their meat value. Today it is illogical to exchange identical products, because there is no gain for either of the people participating in the trade. The economy is also no longer an embedded economy, so there is no other reason to participate in economic activity, unless it is for economic reasons. Today, exchanging products as the Arapesh did would only create controversy because both groups would have to agree on what amounts of meat would be equal.

Exchange in today’s society does have one concept in common with the exchange that occurred in the Arapesh society. In both economies, both parties involved in the exchange agreed with the arrangement in which they were involved. For example, in the modern economy when most people go to grocery stores they do not argue about the price of the products. They accept that they have a certain monetary value and are willing to give that amount of money to purchase the product. In Arapesh society, the Arapesh accepted the fact that they had to exchange meat and other necessities with other Arapesh in order to live peacefully. The Arapesh also got the benefit of kinship from their trade, so they actually got more benefit out of their economic activity than people do in the current economy.

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