Let's continue our discussion of exchange
or distribution systems
Having looked at reciprocity, let's now consider
redistribution, market exchange and money.
We touched on markets and money in the module
on globalization, but its useful to return
to them briefly here to compare them with
reciprocity & redistribution.
As a system of exchange, redistribution operates
different from reciprocity.
Redistribution requires the presence in a
society of some central person or institution,
such as a chief, king, or a state. Goods flow
toward this central point and are then redistributed
among members of the society according to
cultural norms of what is appropriate.
Thus with redistribution, products, money
or objects collected from many individuals
or groups are taken to a central place and
put into a common pool or fund. An overarching
authority later draws from this pool or fund
to return public goods and services that allegedly
benefit the group as a whole.
Tribute is a form of redistribution where
goods (typically including food) are given
to an authority such as a chief to manage
and redistribute for the common good (e.g.
Polynesia and Micronesia).
In modern nations, taxes on wages, profits,
retail sales, property, inheritance, and other
income and assets are centralized and then
redistributed in the form of government services.
Citizens receive law enforcement, national
defends, infrastructure (dams, roads, airports),
parks, regulation of polluting industries,
and so forth. Taxes also provide assistance
to individuals in need.
Conflicts often arise over who should provide
the resources and how much should be given
to those who collect and distribute them.
Those who make decisions about redistribution
often use resources for themselves rather
than for the common good. [In kingdoms, for
example, the nobility may use the taxes to
purchase luxury goods.]
Let's briefly review market exchange, which
we've already discussed in the globalization
module.
Market exchange occurs through buying and
selling goods and using money at prices determined
by the forces of supply and demand.
In market economies of industrialized nations,
governments protect and enhance the market
through printing and controlling money, protecting
private property, breaking up monopolies,
etc.).
Market Exchange Requires the following:
(1) Some object is used as a medium of exchange
(money).
(2) A rate at which goods are exchanged for
money (prices).
(3) Parties to exchanges, that is buyers & sellers,
who are free to make deals.
(4) Privately owned productive property that
can be used to generate more
money by leasing, selling, investing, or producing
resources.
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