Describing Indigenous Economies
Understanding Indigenous Economies
Dr. Jeffrey D. Burnette
Department of Economics
Native American Future Stewards Program
Rochester Institute of Technology
Dr. Jeffrey D. Burnette
Understanding Indigenous Economies
Describing Indigenous Economies
Background
I
I
Indigenous economies are commonly perceived as
hunter-gatherer or nomadic.
Many satisfied their consumption needs via a combination of
organized communal, family and individual efforts to grow,
gather, and complete manufacturing projects.
I
I
I
In the 1600s, Indians in New England produced 65% of their
diet from agriculture.
Some American Indian cities were larger and controlled by more
sophisticated societies than European countries of the time.
Discrepancy viewed as coming from either ignorance or other
motives
“...colonials liked to regard the Indians as members of a nomadic hunting race with no fixed
habitation...[and used it] as an excuse for taking Indian land.”
- Thomas R. Wessel, Agriculture, Indians and American History, Agricultural History (1976)
Dr. Jeffrey D. Burnette
Understanding Indigenous Economies
Describing Indigenous Economies
Definition
I “a highly complex notion that includes vital economic, social, cultural and
spiritual dimensions. . . . Subsistence means much more than mere
survival or minimum living standards. It enriches and sustains Inuit
communities in a manner that promotes cohesiveness, pride and sharing.
It also provides an essential link to, and communication with, the natural
world of which Inuit are an integral part.”
- ICC, Principles and Elements for a Comprehensive Arctic Policy
(Montreal: Centre for Northern Studies and Research, 1992)
Dr. Jeffrey D. Burnette
Understanding Indigenous Economies
Describing Indigenous Economies
Key Features of Indigenous Economies
I
Sustainability and Reciprocity - People reciprocate not only
with one another but also with the land and the spirit world.
I
Traditional Ecological Knowledge - Knowledge and
understanding of various subsistence activities for the local
environment that enables individuals to live directly from the
land. This is generally passed down from tribal elders.
Property Rights -
I
I
I
Land - communally owned by the tribe. A family could take
any uncultivated land and use it as long as they used it.
Other Assets - owned by the individual and could be rented to
others. These were passed down from generation to generation
within the family.
Dr. Jeffrey D. Burnette
Understanding Indigenous Economies
Describing Indigenous Economies
The Native America and Early U.S. Economic Growth
I “They [Native Americans] were simply too important numerically to
ignore, and economic history’s neglect of them may have led to a
misunderstanding of the forces that shaped the early American economy.
Our alternative estimate of GDP per capita in which we try to measure
the economic activity of Native Americans yells another striking result:
with Native Americans included the output per capita grew at the rates
put forth by previous researchers. This is not to say that Native
Americans generated that growth. In our conjectures that growth
materializes because Native Americans had lower incomes and were
becoming a smaller share of the aggregate population. Nevertheless, one
implication is that the transfer of some resources from Native Americans
to colonists may have pushed up productivity and output.”
- Mancall, Peter C. and Thomas Weiss “Was Economic Growth Likely in
Colonial British North America?”
Dr. Jeffrey D. Burnette
Understanding Indigenous Economies
Describing Indigenous Economies
Economic Explanations for Key Features
I
Explaining Communal Property Rights
I
I
I
I
I
I
Low predicability of food sources within tribal territory
Public good nature of information concerning food sources
Large variance in individual success
Economies of scale in food gathering/hunting
Pooling of Risk
Comparative Advantage
Dr. Jeffrey D. Burnette
Understanding Indigenous Economies
Describing Indigenous Economies
Economic Explanations for Key Features
I
I
Explaining Communal Property Rights
Costs of Communal Property Rights
I
I
I
Externalities - the effect of a decision by one person on others
who did not have a choice and whose interests were not taken
into account
Transaction Costs - costs associated with monitoring and
measuring the productivity of others
Agency Costs - costs associated with individuals using the
organization to their own benefit
I
I
Moral Hazard - because risk is shared individuals may engage
in additional risky behavior
Principal-Agent Problem - caused by assymmetric information,
it is the problem of designing an incentive scheme such that
the principal’s and the agent’s interests align
Dr. Jeffrey D. Burnette
Understanding Indigenous Economies
Describing Indigenous Economies
Economic Explanations for Key Features
I
Explaining Communal Property Rights
I
Costs of Communal Property Rights
Explaining Gift Giving
I
I
I
“many of the distinctive institutions of primitive society,
including gift giving and reciprocal exchange, customary prices,
polygamy and bridesprice, the size of kinship groups, and the
value placed on certain personality traits, such as generosity
and touchiness, can be explained as adaptations to uncertainty
or high information costs.” - Richard Posner “A Theory of
Primitive Society with Special Reference to Primitive Law”
Exertion of social norms is easier in small groups
Dr. Jeffrey D. Burnette
Understanding Indigenous Economies
Describing Indigenous Economies
Technological Change: Introduction of the Horse
I
Decreased transportation costs
I
More efficient hunting
I
Tribes became more sedentary
I
Reduced economies of scale in hunting
I
Increased economies of scale in military actions
I
Increased demand for land
Dr. Jeffrey D. Burnette
Understanding Indigenous Economies
Describing Indigenous Economies
References
I Miller, Robert J. “Reservation “Capitalism”: Economic Development in
Indian Country” Chapter 2 - Historic American Indian Economies and
Property Rights [pp. 9-24]. ABC-CLIO, LLC. 2012
I Barrington, Linda “The Other Side of the Frontier: Economic
Explorations into Native American History” Chapter 3 (The Institutional
Change in the Indian Horse Culture by Terry L. Anderson and Steven
LaCombe) [pp. 103-126]. Wesview Press. 1999
I Kuokkanen, Rauna “Indigenous Economies, Theories of Subsistence, and
Women: Exploring the Social Economy Model for Indigenous
Governance.” American Indian Quarterly, vol. 35, no. 2 (Spring 2011),
[pp. 215-240].
I Mancall, Peter C. and Thomas Weiss “Was Economic Growth Likely in
Colonial British North America?” The Journal of Economic History, Vol.
59, No. 1 (March 1999), [pp. 17-40].
Dr. Jeffrey D. Burnette
Understanding Indigenous Economies