In the Prehistories & Civilizations lesson, we explored the ways that humans developed technological adaptations to the environment such as stone tools and agriculture. These technologies allowed people to manipulate their environment and maximize resources to meet their needs. As people form groups, they create a society, and within a society, humans work together and engage in adaptive strategies as a means of extracting their needs from the environment. Adaptive strategies are organized into livelihoods, which are tasks and duties that are carried out according to the positioning of the individual within their society. Social positioning such as gender, age, and kinship oftentimes determines the tasks, duties and obligations of individuals within a community. Livelihoods are frequently linked to  personal identity such as ‘attorney’, ‘teacher’ or ‘farmer’.  As people engage in livelihood activities, they participate in a system of exchange within their society by contributing resources other people need in exchange for the resources they need. The system of exchange, production, distribution and consumption of resources taking place in a society and between societies is called an economy.

Small Scale Economies

Small scale economic systems are organized by social positioning such as gender, age, kinship, and/or clan. Activities are often based on a system of risk avoidance. In agricultural economies, for example, environmental events such as drought, landslides, early freezes, and/or flooding can incur catastrophic effects on the crops and animals that people rely on for subsistence. To avoid disaster, such as famine from loss of food crops, agriculturalists engage in an age-old strategy to diversify the resource base. What this means is that the farmer will produce multiple different crops to increase security; if an early freeze kills one crop, the family or community will be able to depend on alternate crops that survive. Within small-scale economies, people also rely on social networks to increase security. Social networks increase security by providing people with a safety net to access resources and assistance. Because of this, markets are both economically and socially significant in small-scale societies.
Markets are a social locus for people to interact and engage in exchange relations. Geographically, markets are the nodes that connect villages and communities across vast distances. Throughout Africa and many parts of the world, open-air markets are festive locations where people congregate to buy, sell, and trade as well as interact. The video below depicts Roque Santeiro, the largest market in Angola. Watch the video and consider the ways that markets are both socially and economically significant.

Large-Scale Economies

Large-scale societies are generally characterized by national and international economic exchanges. The lessons included in the Histories Module addressed the ways that early trading routes and colonialism contributed to the development of a large-scale world economic system based on international trade. This economic system is often referred to as a ‘formal’ economy because it is usually taxed, regulated through laws, monitored by government agencies, documented into economic indices such as ‘per capita income’, ‘gross national product’, stock and trading prices, etc.

In many cases, formal economies are accompanied with ‘informal’ economic activity. Informal economies are comprised of economics activities that are undocumented. In the United States, this is referred to as ‘working under the table’ and it is illegal. In many poor areas throughout the world, however, informal economies play a key role in meeting the needs of the poor. This is because the formal sector fails to provide adequate wages and resources for people to live. Throughout Africa, formal commercial enterprises are characterized by high unemployment, no labor regulations, flexible (non-contract or temporary) labor agreements. As a result, people must engage in a dual economic system, one that is based on formal and informal economic activities, in order to meet their needs. The video below shows how some women in the Gambia are making objects from recycled plastic bags in order to earn additional income for themselves and their families.

What did you learn? Take the self-quiz below and find out.

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For discussion: Research and describe the livelihoods practiced in your selected country. Be sure to cite your sources and reply to another student’s post.

When you complete the discussion, move on to the Expressions lesson.