The meaning and relevance of indigenous economic theory
By Ronald L. Trosper
In their negotiations with Dutch, English, and French settlers, the Haudenosaunee utilized a Two-Row Wampum belt to illustrate an Indian canoe and a European ship traveling together while each pursued its own course with its own laws and religion.
An agreement between the two, a Covenant Chain, governed trade and relations, assuring each side’s non-interference with the other. As the North American continent was settled, however, the economic system of the ship came to dominate, while that of the canoe retreated. While the economic system of the ship has been studied and developed by the field of economics, the economic system of the canoe is not well understood. In an era of growing inequality and political unrest, the principles of an indigenous economic theory need articulation and exploration. The integrity of traditional economic systems can guide Native nations as they work to build healthier societies. The model of the canoe might have something to offer the ship, as well.
Indigenous economic theory is grounded in an indigenous worldview that relationships are primary and that the land and all of its components are conscious and able to respond in their own manner to the actions of humans. For example, the western concept of “natural resource management” becomes “building healthy relationships with everyone in our territory” (with “everyone” understood to mean all conscious beings in that place). Whereas standard economics considers individuals the basic units of analysis, indigenous economics considers relationships the basic units of analysis. Persons do not stand alone; they depend on their relationships, create them, and act in the context of them.
Three examples illustrate these principles. First, the indigenous peoples of the Northwest Coast of North America prospered because of relationships with salmon. They learned from the salmon that giving to others is good. For the gift of salmon lives, the peoples cared for the rivers, streams, and lakes. They harvested salmon wisely, with respect. Second, indigenous peoples supplied the fur trade based on relationships in the hunting territories in what became Canada. The fur trade was based on solid relationships humans created with beaver and other animals. The indigenous beaver stewards of the boreal forest, the Head Trappers, harvested neither too much nor too little in their relationships with beaver. The beaver, from its viewpoint, gave the right amount to have the humans tend their home ranges. In both examples, humans and animals engaged each other in a mutually beneficial relationship–challenging the meaning of “wild.”
Third, the Haudenosaunee League created peace among five separate nations, using effective treaty-making principles to eliminate wars. The league was a relationship of relational units; each of the nations also were based on village relationships. This example shows that relationality can be scaled up; it is not just a small-scale or local phenomenon. In building the Covenant Chain with European settlers, the Haudenosaunee demonstrated that international relations could be structured using their methods of maintaining peace.
When many entities create one or more relational goods shared among them, their mutual appreciation of the shared relational goods creates a relational unit. This relational good, or goods, is obtained by everyone paying attention to each other and each other’s contributions to the good that they share. The good is not available to entities not in the relationship. A couple or an extended family share love and affection among themselves. A group of families working together to form a clan build trust and shared identity. The clans can together form a larger unit that also includes the beings in their place that sustain all members. Examples of relational goods are a cooperative spirit among people dependent on other beings of their place, a feeling of safety among residents of an area, the collaborative spirit of a sports team, and the joy felt by everyone at a major feast. Māori offer concepts such as mana, a power generated by the joint cooperative action of many conscious beings. Peace among nations is a relational good.
Recognizing the world as composed of interacting relational units presents a different kind of theory than that developed by standard economics, which focuses on persons as individuals, capable of completely independent existence, who gather together to trade products among themselves to make more products. The trades among individuals are impersonal. A modern market economy results from these trades, which are maintained through contracts enforceable by the police power of a national state. The products are made from things extracted from nature, and the waste made by the production of those things are returned to nature. We now know that the world cannot process all the waste produced by the production of things; the impersonal basis of the trades removes all personal responsibility for the outcomes. Beaches covered with things washed up from the ocean illustrate the result, as does the changing climate.
In a relationship, however, the entities care for each other so that they can enjoy the benefits of working together. If joint activities make some of the participants suffer, others are concerned about the suffering, because all are involved in a system of reciprocity, of jointly caring for and respecting each other. The use of mutual reciprocity is part of the generation of relational goods. Impersonal markets generate and ignore externalities; personalized relationships recognize externalities and act to deal with them.
• • •
Because of the imposition of the rules of individualized economies, when retaining at least a small part of their place, indigenous peoples have developed hybrid economies that allow them to maintain some of their desired relationships while managing to make a living within the larger system that challenges the maintenance of relationships. Hybrid economies result when Indigenous peoples try to limit the dangerous effects of individualization and of disrespectful treatment of all living beings.
Much of the mainstream economics literature claims that indigenous economies would benefit from privatizing land ownership within reservations. This literature criticizes the nineteenth century policy of allotment for failing to correctly implement private property in land to empower individuals. In addition, mainstream economic theory holds that businesses located in indigenous communities should be autonomous (not tribally controlled) and follow the corporate top-down model, with weak relations to the communities in which they exist, free from politics. These arguments reflect a longstanding perception that tribally-run firms are inefficient and prone to political influence.
If carried to an extreme, these recommendations destroy economies based on relationality. Because conscious beings should not be enslaved, ownership is not a way to organize humanity’s relationships with other beings occupying a place. While people can trade products of the land, to create a market in land threatens relationships, the basis of survival. Because buying and selling land threatens relationships, when indigenous peoples must own land to protect it in the presence of settler colonialism, significant problems must be addressed. Fully autonomous firms, possibly available for purchase by outsiders, focus only on their bottom line, ignoring significant issues of relating the communities in which they exist. The federal government has encouraged tribes to set up such independent entities, which have not succeeded on reservations.
Some tribes in the United States have an enclave, such as a casino or a business park, organized as standard corporations or with land leased to outside corporations. A hybrid element is that the profit or rent from such enclaves support relationships through supporting community buildings, housing, education, language revitalization, health care and similar projects. Since the funds are their own, a tribe does not need to contend with the restrictions often placed on support from a nation-state. Such enclaves allow other parts of an economy to maintain relationships to place.
An example of such a hybrid economy is that of the Menominee Tribe, which has protected their forest while operating a casino. They have a different kind of relationship to their forest in comparison to their casino. The forest is resilient with the help of the Menominee foresters, loggers, and mill workers. Unlike corporate forests, their forest has increased in standing timber volume and has a high proportion of old trees. Tribal members use the forest for products other than lumber.
A hybrid economy needs to have firms that are also hybrids. They meet the demands of the external economy to be profitable enough to persist, while also building solid relationships with the community. Family firms would be strongly relational in their operating style, especially the families working in the sector with a traditional relationship to their place. Firm structures would exist in a continuum from the most individualist/capitalistic to the ones more relational.
Australia, Canada, and New Zealand also have hybrid indigenous economies. Indigenous peoples of the Andes are asserting the importance of relationship and connection to place; they have achieved changes in national constitutions in Ecuador and Bolivia. While implementation has been difficult, the indigenous communities in those countries advocate a “plurinational” composition of their nations, with autonomous communities each pursuing their own relationships to their places. The proposals may resemble the peace among nations advocated by the Haudenosaunee. If the constitutional provisions prevail, both countries will become associations of indigenous hybrid economies coexisting with more justly organized non-indigenous communities.
The ships of the Two-Row Wampum have become larger. Some, such as oil supertankers, threaten our atmosphere and transport species to homes where they do not belong. Yet the principles that governed the canoes have survived, and the biodiversity hotspots of the earth are also the homes of indigenous peoples who are maintaining their relationships with other beings of their places. The canoes have proved themselves resilient; the supertankers’ ocean threatens to engulf the continents. The wealth inequalities created by individualism threaten world peace. The principles of indigenous economic theory need to be understood and utilized for the sake of the earth.
Ronald Trosper is professor of American Indian Studies at the University of Arizona. His latest work has been on Indigenous economic theory, traditional ecological knowledge, and community-based research methods. He is working on a book tentatively titled Principles of Indigenous Economics (University of Arizona Press). He examined the institutions that provided stability for the peoples of the Northwest Coast in his book, Resilience, Reciprocity and Ecological Economics: Northwest Coast Sustainability (Routledge, 2009). He co-edited a book, Traditional Forest Knowledge: Sustaining Communities, Ecosystems and Bio-cultural Diversity (Springer, 2012), with John Parrotta. He has worked for the Council of Energy Resource Tribes, the Confederated Salish and Kootenai Tribes, University of Washington, Boston College, Northern Arizona University, and the University of British Columbia. He earned his Ph.D. degree in economics from Harvard University in 1974. He is a member of the Confederated Salish and Kootenai Tribes of the Flathead Indian Reservation, Montana.