Hot on the heels of reading Raymond Firth's Economics of the New Zealand Maori (which I reviewed here earlier this week), I read Indigenous Economics, by Ronald Trosper. This book attempts to explain economics using an Indigenous worldview. This is incredibly ambitious, given that Indigenous groups are not all alike. However, there is enough commonality that Trosper is able to weave together a coherent text using examples from North America, South America, Australia, and New Zealand.
The common themes that, according to Trosper, underlie Indigenous economics and distinguish it from 'traditional economics' are relationality and consciousness of all beings (including nonhuman beings such as animals, and more-than-human beings such as rivers or mountains). As Trosper explains in the introduction to the book:
This book explains how a focus on relationships generates a different kind of economic theory than the mainstream approach in all its variations. Persons replace the individual in standard economics; persons become active agents in the creation of the lives they live rather than passive responders to incentives given by prices. Persons combine into relational subjects of many different types that are similar in their dependence on dialogue and reflexivity among the persons who comprise them. Relational subjects can differ in scale with corresponding differences in the modes of dialogue and interaction. Relational subjects include all beings in a landscape.
The book had both strengths and weaknesses. The key strengths include the wealth of examples that Trosper uses to illustrate his ideas. However, that strength also contributed to the weakness, which is that the book is light on developing theory and principles and explaining in depth how an Indigenous economics could be constructed from those principles. I will acknowledge though, that this criticism is really based on the book that I wanted to read, which is not necessarily the book that Trosper wanted to write. If Trosper's intended audience is mainly Indigenous readers who have already in their minds rejected traditional economics and want to see their own worldview presented as economics, then he has nailed it. And indeed, the book could have been written in this way because of relationality. But for a reader like myself, who wants to understand how an Indigenous worldview enhances our understanding of economics, or even better, how a truly Indigenous economics can be constructed from principles drawn from an Indigenous worldview, the book falls short.
As you might expect, Trosper mainly does a good job of contrasting the views of 'traditional economics' with views through an Indigenous lens, and that is where the book offers the greatest value. For instance, a large section of the book essentially explains why the western conception of 'private property', especially in relation to land, is inappropriate in an Indigenous context. This is tied very closely to the two themes:
An economic system based on relationships that include nonhumans cannot use a private property system or even a property system because to do so fails to recognize the consciousness and agency of nonhumans who enter relationships. The owner of a thing as property has control over it in a way that is inconsistent with treating it in a respectful manner.
That section was particularly strong, and yet at the same time it was underdeveloped. Trosper acknowledges a counterargument based on efficiency without taking nonhumans into account, but then flippantly explains this away, with:
These criticisms ignore the ways in which Indigenous territorial systems do have incentives to use the land well; those with leadership responsibility are expected to have solid relationships with the beings living on the land. The valuation of the land includes the relational values created through relational goods.
I agree with his counterargument here, but these ideas could have been explained in more detail and the counterargument would have been much more solid. Also, linking more explicitly to the economic theory of property rights, such as from Nobel Prize winners Oliver Williamson and Oliver Hart, would have provided either a stronger foundation, or a clearer critique.
Similarly, in the section on Indigenous entrepreneurship, Trosper doesn't engage with the idea of profit maximisation (a key assumption in mainstream economics) until near the end of the section. At that point, he reframes profit as a constraint, rather than a goal, of Indigenous business:
The need to accommodate Indigenous viewpoints by business presents an obvious issue: How can one make a profit selling things or experiences without fully giving in to market culture with its individualistic focus? Part of the answer is to distinguish between maximizing profits as a goal and achieving positive profits as a constraint. This is often stated in this manner: rather than making profits the goal of the firm, the profit requirement is changed into a constraint. How can a firm pursue other goals without profit falling into negative territory?
I feel like that statement would have been a good place to start the section on Indigenous entrepreneurship, and building out the theory of profit as a constraint rather than a goal. Again, this seemed like a lost opportunity. The book did link to ideas of social enterprise, but could have looked at some of the research on social preferences beyond the work of Samuel Bowles. I also thought that there was a strong case to include some of the ideas on identity economics from Akerlof and Kranton (whose book Identity Economics I reviewed here).
Trosper also makes some simple errors in basic economics, such as claiming that "[i]n standard economics, states produce public goods and individuals produce private goods". As my ECONS102 students would attest, this is one of my pet hates. Governments can (and do) provide private goods, and many public goods are provided privately. Similarly, Trosper creates a strawman argument when he writes that:
Standard economics focuses only on private goods and public goods (Samuelson 1954).
The fact that his supporting citation is Samuelson's textbook that is over seventy years old should tell you that this statement lacks support. It is in fact quite untrue, and Elinor Ostrom's work (which Trosper cites extensively) on common resources clearly demonstrates that the statement is unsupportable. It is also quite unnecessary to create such a strawman argument. This book shouldn't be about pitting Indigenous economics against traditional economics, but instead showing how they differ in meaningful ways.
Despite my gripes, I did enjoy reading this book, and it opened my eyes to some of the possibilities for a truly Indigenous economics that is constructed from its own principles. Someday perhaps we will see that ideal fulfilled. Unfortunately, this was not the book to do it. I’d still recommend this book for readers who want an accessible introduction to Indigenous perspectives on economics, but economists looking for a fully articulated alternative theory may come away wanting more.
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