Abstract
Among the Pacific Northwest Coast Indians of North America before and during the extended era of European contact, a pervasive institution known as the potlatch governed human relations through reciprocity rather than the hierarchical state. Potlatching involved recurring intertribal feasting, gift giving, ceremonial dance, storytelling, oratory, dispute resolution, declarations of claim or right, and some measure of property destruction. The tribes referred to this network of publicly declared favors given and owed and promises made and received as their customary “potlatch law.” Like law in the Western world, it was the foundation on which their economies rested. The potlatch memorialized obligations, enforced property rights, insured against risk, promoted knowledge accumulation, supplied investment capital, and served as a system of fractional reserve banking. Beyond that, it was the foundation of the tribes’ unique culture. The potlatch provides fascinating insight into the nuance and power of reciprocity in ordering human relations.
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Notes
I use the term “tribe” generically to refer to the resource management unit at any level in the social order of chiefs, sub-chiefs, and sub-sub-chiefs in the hierarchy of lineages, clans, houses, etc. All shared the exclusive right to manage owned resources and all engaged in potlatching.
Prior to European contact, the Copper River and other sites in northern British Columbia were the source of the ore from which coppers were made.
Women had their own resource sites and potlatch networks (Bracken, 1997).
In modern legal parlance, the chief held formal legal title as trustee for the tribe and the tribe (current and future members) held equitable title, just as in many trustee-beneficiary relationships. At least among some tribes, a chief could not alienate tribal territories, yet it appears that under limited circumstances he could pledge them as collateral. Title disputes sometimes arose owing to the circumstances of succession and other factors, possibly including default on outstanding potlach debts. Title could pass to the winner of a “rivalry” potlatch, for example, in which claimants essentially competed in a second-price auction (Johnsen, 2006).
By way of example, Sockeye run on a four-year cycle. Labeling the salmon run that spawns in any arbitrary year as Stock A1, their offspring spawn four years later as A5. The next year the run of Stock B2 spawns, and its offspring spawn four years later as B6, etc.
The nomenclature of property rights has evolved since the time North and Thomas wrote. What they refer to as common property rights are now widely referred to as open access rights, and exclusive communal property rights are referred to as common property. It is a mistake to conclude that open access means the complete absence of ownership. Even under open access, having captured a fish I have exclusive ownership over it, but the stock of fish that generates individual fish is subject to open access rights and dissipation is likely. In some cases, however, open access properly constrained can be efficient (Lueck, 1995; Johnsen, 2009).
This is exactly how the upstream tribes of the interior Fraser and Columbia River drainages organized production. During the salmon run, a multitude of tribes converged on known harvesting sites such as Si’lailo Falls on the Columbia River, where Ostrom-like norms of sharing, turn-taking, and conservation were carefully followed (Johnsen, 2007). In this setting, ETRs to salmon stocks were largely absent because migrating salmon had to run the gauntlet of downstream fishing and were essentially subject to open access. With property rights looser than on the Coast, potlatching, though practiced, was far less formalized (Johnsen, 2001).
In his discussions on the viability of anarchy, Tullock (1972) (and others) conclude that the strong, who have comparative advantage in violence, will defeat and subjugate the weak via the apparatus of the predatory state, leaving the weak no better off than under anarchy and possibly worse. Yet the distinction between strong and weak becomes ambiguous in a comparative advantage model and raises a serious dilemma. Once the relatively week but absolutely strong win an all-out war, the relatively strong but absolutely week will slowly assert their comparative advantage in violence and come to control the apparatus of governance as ressentiment sets in. As Nietzsche (1967) reflected, the more a person is active, strong-willed, and dynamic, the less time and attention is left for contemplating victimhood or engaging in reflective self-doubt. If left to their own devices, the absolutely weak will likely build a hierarchical state (or university administration) to redress their grievances and quietly neuter the absolutely strong, excluding them from state governance and leaving them to their productive pursuits and the payment of taxes. Angelbeck and Gier specifically identify the NWC tribes as having developed a “peer-exchange” network for mutual aid and that “individuals participating in them actively resisted the centralization of power” (2012, p. 553), thereby avoiding Nietzsche’s dilemma.
Most likely, potlatch partners shifted with circumstances. There is evidence that Tribe B, having been the beneficiary of a potlatch hosted by Tribe A, could delegate to Tribe C its obligation to repay, just as Tribe A could assign its right to collect to Tribe D.
Ellickson (1991) and others use the term “side-payments.”
In arguing against claims that gift giving should be abandoned because it invariably generates allocative inefficiencies (Waldfogel, 1993; Gill & Thomas, 2022) argue that long-run dynamic efficiencies likely outweigh these short-run allocative inefficiencies. My model of the NWC tribes provides specific theoretical and empirical support for their work.
Though it may sound fantastic, I can think of no evidence to refute the hypothesis that the five distinct species of Pacific salmon were genetically engineered from a single parent species to develop a diversified portfolio of species with different life histories and other characteristics. This is no more fantastic than that pre-Columbian Indians engineered modern maze from a tiny, barely edible seed pod (Mann, 2005).
In his revealing analysis of Shasta County cattle country norms, Ellickson (1991) prefers the behavioral postulate of welfare maximization, rather than wealth maximization, to avoid any suggestion that people are motivated by money alone. It is a fair point, but for my purposes it is one of second order importance to the focus wealth maximization puts on intertemporal resource allocation and the critical role the structure of property rights plays in providing the incentives to make decisions for the long run. Ellickson finesses this deficiency in welfare maximization when he modifies it to “long-run” welfare maximization.
Being in the bad state was just one circumstance that could generate valuable investment projects. Innovation obviously identified others.
In contrast to the Coast, in the Columbia, Fraser, Skeena and other large river interior plateaus, along which many different tribes resided, salmon had to run an open-access gauntlet to reach the spawning beds and were subject to depensatory fishing by downstream tribes. Perhaps for this reason, it was common in the interior for upstream tribes to encroach on downstream tribes’ territories during the harvest, and this encroachment was tolerated by downstream tribes, with shared access occurring at known sites under Ostrom-like norms.
Forced loans were apparently common in the ancient world (Homer & Sylla, 2005).
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Acknowledgements
This essay condenses, compiles, and expands on my past works on the potlatch system of the Pacific Northwest Coast Tribes of North America (Johnsen 1986, 1998, 2001, 2003, 2006, 2007, 2009, 2016). Where appropriate, I provide specific references to these and other works. At the same time, I am sensitive to distracting the reader with too many references. I thank Terry Anderson for comments and encouragement on this project and acknowledge my great debt to him for urging me forward. At his invitation, I presented an early version of this essay at the Public Choice Workshop on The Political Economy of American Indian Policy at the Hoover Institution, Stanford University, co-sponsored by the Center for Governance and Markets, University of Pittsburgh, and the Institution for Humane Studies, May 16–18, 2022. Adam Crepelle, Ilia Murtazashvili, Dominic Parker, Thomas Stratmann, and other workshop participants for their helpful comments. I also thank Jesse Morin for his insights from the field of archaeology.
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Johnsen, D.B. Potlatch economy: reciprocity among northwest coast Indians. Public Choice (2023). https://doi.org/10.1007/s11127-023-01062-z
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DOI: https://doi.org/10.1007/s11127-023-01062-z
Keywords
- Potlatch
- Reciprocity
- Trust
- Property rights
- Knowledge accumulation
- Statelessness
- Warfare
- Northwest Coast tribes
- Indian policy