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Concepts in Economic Institution

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  Concepts in Economic Institution Distribution / Exchange of Goods -   The movement of resources or goods from where they are found or produced to where they will be used is referred to as distribution (Crapo, 2002). -   While transfer of goods between individuals and or groups is termed as exchange (People & Bailey, 1997). either way, distribution and exchange imply similar idea, of how good or resources are produced and consumed where are basic activities in any economic system. Different societies or other human groups organize the exchange or distribution of products in various ways depending on the overall culture or adaptation to environment. Economic anthropologists, one who specializes in the comparative study of economic system, classify three types of exchange or in the same way, systems by which distribution is controlled (Crapo,. 2002; People & Bailey, 1997) 1. Reciprocity  –  In which two individuals or groups pass goods back and forth, with the aim of (1) helping someone in need by sharing goods with him or her; (2) creating, maintaining, or strengthening social relationships; (3) Obtaining goods for oneself. 2. Redistribution  –  in which members of an organized group contribute goods or money into a common pool of fund; a central authority usually has the privilege and responsibility to make decisions about the goods or money later will be reallocated among the group as a whole. 3. Market  –  in which goods are sold for money, which is turn is used to purchage other goods, with the ultimate goal of acquiring more money and accumulating more goods. Reciprocity -   Giving and taking and taking of objects without the use of money or other media of exchanges (Peoples & Bailey, 2002). Crapo (1997) equally defines reciprocity as the system of exchange in which goods or services passed from one individual or group to another as gifts with the need for explicit contracting for specific payment. The system can be in form of sharing, barter, hospitality, and gift giving particularly observed during occasions. It is understood that sharing is mutual and will eventually even-handed which is different from usual buying and selling. -   Reciprocity primarily developed from family or kinship groups especially in economically more complex societies. -   For modern societies, participants typically share symbolic goods and services like gift and greeting cards and parties; while in simple societies, the life-sustaining goods like foods are what they shared.  Marshall Sahlins, an American anthropologist, proposed the three basic forms of reciprocity (Crapo, 2002): 1. Generalized Reciprocity  –  where there is no expectation of immediate exchange for the given gifts. People are motivated by the sense of obligation towards the welfare of the others provides goods and services to the children even though children may not reciprocate in kind. 2. Balanced Reciprocity  –  Between person who lacks a sense of kinship or obligation to help one another with no expectation of return, but who each have something that the other would like to have, balance reciprocity is like to occur, in which a return gift is expecting within a relatively short time. This is commonly practiced by neighboring communities in which one specializes in the production of different goods or controls different resources. Simple barter or supermarket purchases may apply in this type of reciprocity. 3. Negative Reciprocity  –  when an individual or group is a reciprocal exchange system attempts to get more than what is gives. Negative reciprocity may take exchange through deceit in bargaining or outright theft because the profit motive procedes over generosity. It is commonly observed among strangers within the same communities or members of different culture. Redistribution - Carpo (2002) defines redistribution as an exchange system wherein commodities are contributed by all members of the social group to a common pool from which they are then distributed to where they will be used. It differs from reciprocity in a way the transfer of good is organized. Reciprocity (two-party participants) has no third party to act as intermediary while redistribution requires an intermediary or a third party wherein goods or money collected from many individuals or groups are taken to thereby serving as a central pace where collection were put into a common pool or fund (Peoples & Bailey, 1997). This third party, who manages the redistribution, is typically rewarded with prestige and some possess power and wealth, will later draws from this pool and fund in returning public goods and services that allegedly benefit the group as a whole. Market Transactions -   Considered as the major economic force in the industrialized societies of the world, market is a place where direct exchanges of commodities occur. It also refers to a group of buyers (group that determines the demand of the product) and sellers (Supplier of the product) of a particular commodity (Liwanag et al, 2014) -   Markets requires: Objects used a medium of exchange, i.e. money. A rate at which goods exchange for money. I .e price and parties to exchange who have alternative buyers or seller and are free to make the best deal they can. This is free market is — no third part sets the prices or forces anyone to buy or sell from anyone else. (Peoples & Bailey, 1997).  -   Market transactions occur freely in any society but in most developed society where large number of people are involved, marketplace are found convenient to carry out the exchange, stranger and people from different community can see each other infrequently but like negative reciprocity, there is little emphasis on mutual obligation as each party in only concerned with his own welfare in the transaction.
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