The bazaar economy or how bizarre is the bazaar really? more

The Bazaar Economy or How Bizarre is the Bazaar Really? Author(s): Frank S. Fanselow Reviewed work(s): Source: Man, New Series, Vol. 25, No. 2 (Jun., 1990), pp. 250-265 Published by: Royal Anthropological Institute of Great Britain and Ireland Stable URL: http://www.jstor.org/stable/2804563 . Accessed: 11/11/2011 19:13 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. Royal Anthropological Institute of Great Britain and Ireland is collaborating with JSTOR to digitize, preserve and extend access to Man. http://www.jstor.org THE BAZAAR ECONOMY OR HOW BIZARRE IS THE BAZAAR REALLY? FRANK S. FANSELOW Yarmouk University Critiques theviewthat bazaar a modelofthecompetitive of the is market often portray as exotic it and irrational. article This showsthatthefolkcategory 'bazaar'glosses overtheanalytical distinction two types market: between of thosein commodities whichare standardised terms quality in of and and and quantity therefore substitutable, thosein commoditles arephysically that heterogeneous and therefore non-substitutable. features The associated thebazaar itsethnographers only with typically are by in found thelatter typeof market. Drawing ethnographic on from southIndiantown,the a matenal in article showsthat differencesthetransactional the of of properties thetwokinds goodsaccount a for in series contrasts therelations of and the amongand between of buyers sellers, operation theprice the of the and mechanism, control information, organisation recruitment labour, of and the rolesof and money credit. Introduction There are two common theoretical approachesto the bazaar. While older accounts its similarities modern capitalist to emphasise and even see it as a prototype markets, of the competitive market(e.g. Tax 1953; Katzin 1960), more recentethnographies from of thebazaar emphasise differences its moderncapitalist markets and concentrate on itsbizarreand sometimesapparently irrational characteristics. example,in his For studyof a markettown in northIndia, Fox describesas a characteristic the 'nonof westerndeployment businessenergies'thatbusinesses of lack specialisation and often tradein seemingly unrelated kindsof commodities:'a bizarrecombinationof saleables in the same shop' (1969: 127-30). But farfrombeing an exotic businesspractice, is in diversificationa standard for risk strategy anytypeofmarket spreading and reducing fuller ofexisting overheadcostsby use resources. While emphasising lackofbusiness this Fox also describesoverspecialisation businesses anotherpeculiarity of as specialisation, of the bazaar: 'the profusion commercialenterprises absolutenumbersand types in of and lack ofanyform "generalstore"...Three typesofshopsexistwhich in thekinds of of goods concerned,capitalization, and size could well be combined into one: the the grocery, provisions shop, and the drygoods concern' (1969: 143). In thisarticleI shall seek to show thatthereare fundamental economic and organisational discontinuitiesbetween these types of business,which make them organisationally and functionally incompatible. in Similarly, his studyof the bazaar in Sefrou,Geertz makes the bazaar an exotic What constitutes coherentclassof the and bizarrephenomenon alnost by definition. economic phenomenacalled 'bazaar' is theirapparent incoherence:'[s]tructurally, the Man (N.S.) 25, 250-65 FRANK S. FANSELOW 251 Sefroubazaar is a partitioned system, behaviourally, is unbrokenconfusion'(1979: it 129). The structural partition here refers the physicaldivisionof the 'bazaar' into to theweeklymarket held outsideSefrou,the traditional bazaarin the old town,and the 'show window bazaar' oftheformer colonial quarters; behaviouralconfusion the refers to the general uncertainty which supposedlyoccurs equally in all three structural partitions. shallseek to show thatthesestructural I partitions not equally characare terised behaviouralconfusion but constitute distinct by typesof markets. Geertz's (1978; 1979) descriptionof the Sefrou bazaar is folk economics. One consequence of his attemptto presenta view of the bazaar economy as the actors see formulation the information of in themselves it-'a qualitative situation the suq as the Moroccans themselves conceive it' (1979: 198)-is thatit deals with the actorsin thebazaaras persons rather thanin therespective economic rolesin whichtheyconfront each otherin particular transactions. Elsewhere,in his account of peddlersin Modjokuto, Geertzdoes recognisea 'role asymmetry' (1963: 34) between regularbazaar traders and peasantscheated on occasionalvisits a market to town. But he considers thisrelationship between trader and non-trader atypical thebazaar,where the commonestrelationship thatbetween as of is traders (middlemen).The reasonwhy the role distinction between buyerand selleris not partof the economic discourseof the bazaar seems to lie in the empirically high incidence of the combinationof the roles of buyer and seller in the same person, namely middleman. the The structural distinction betweenthemisusually onlybrought out into the open when thereis a clear empiricaldistinction between the two, such as in the trader-non-trader But thereis a buyer and a seller in every relationship. in theseroles,theformer structurally is transaction thebazaar,andbyvirtue ofoccupying It positionedto operateunderconditionsof greater uncertainty thanthelatter. might in well be correctthatthe two are not distinguished Sefroufolkeconomics: from the wholly Buying and selling are regardedas a unitaryactivityto be looked at simultaneously interchangeable perspectivesof the man who is passing goods to his tradingpartnerand the man who is passingmoney, a difference of itself no essentialimport (Geertz 1979: 185). But thisdoes not mean thatthe distinction between buyer and selleris structurally kind of commodityfromthe goods tradedin insignificant. Money is a verydifferent the the bazaar. It is the moststandardised therefore most reliableand predictable and in whose it commodity thebazaar.With theexceptionofcounterfeits', is a commodity value is perfectly certain.The kindsof goods tradedin the bazaar,on the otherhand, are unstandardised and therefore unpredictableand unreliable; their inspection is and therefore difficult, time-consuming costly. Compared to money, they are of and therefore uncertain of value. dubious quality,of indeterminate relatively quantity In Geertz's terms,'the man' who is passingon goods in returnformoney is far more certainof what he receives,than 'the man' who is passingon money in return forgoods. There therefore existsin the bazaar transaction information an asymmetry in uncertain return something for betweentheseller, who passeson something certain, feature I as and thebuyer, who does thereverse. takethisasymmetry thedistinguishing structural of the bazaar compared to othertypesof markets because it has important for of of implications the organisation trade.In Geertz'sdescription the bazaar trader for on return something as somebodypassing somethingin else,thesecrucialdistinctions between seller and buyer,and between the type of good tradedin the bazaar and money,remainunexamined. 252 FRANK S. FANSELOW One ofthereasons suchan exoticeconomic whythebazaarseems phenomenon is that to thewayitis usually due it from defined, embraces everything prostitutes to pharmacists (Geertz 1979: 179-81);from chewing tobaccostalls shoeshops(Fox to 1969: 128-9);from firewood to shops banks (Mines1972:30-1); andfrom spiceand to oil traders bookshops a (Ostor1984:91-2),to namebuta fewfrom rather bizarre listof bazaarbusinesses. brothels, But tobaccostalls, firewood chewing dealers and in kinds grocers trade very different ofcommodities those pharmacies, from of banks, shoe shopsand book depots. These examples contrast all 'natural' withindustrially produced commodities, this but distinctiondifferent theone emphasised is from here, whichis that between substitutable non-substitutable and commodities. Agricultural products besubstitutable industrial can and can products be non-substitutable. Examples oftheformer packaged, are and fruits vegetables quality-controlled, branded and sold insupermarkets2, examples thelatter counterfeit second-hand of and are and products. The twotypes commodities differ terms their in of of transactional and properties in of therefore thekinds functions in performed businesses by These trading them. in functional differences paralleled, turn, different are of by organisational structures business market. former The in and involves trade physically highly heterogeneous in andunstandardised ofcommodities which kinds there consequently is a high degree in ofuncertainty thebuyer what for he because goodis exactly no precisely buys, like the anyother seller havebought good he canbuyfrom sameor a different or might in thepast. contrast, latter the involves standardised therefore and economiBy highly kinds the substitutable ofcommodities, which buyer collect about information can cally to direct or with prior purchase through comparison, precedent consultation other buyers. The standardisationproduct of and quantity a condition product is quality for which the substitutability, balances information asymmetry between and buyer seller andthereby for becomes precondition theefficient a of mechfunctioning theprice anism. quality quantity standardised, seller If and the are as cannot, in thebazaar, adjust themto priceby adulterating short-measuring, must and but instead adjust priceto and quality quantity. TheKalakkadu bazaar In thefollowing shalltry apply analytical I to this framework explain to someofthe of in a complexity thebazaar Kalakkadu, small commercial townin thesouth Indian state TamilNadu.In this thecontrast of case between twotypes markets the of appears to be particularly in moreso perhaps than other cases.The great sharp, and majority the financially in largestand most profitable transactions Kalakkaduinvolve non-perishable goods.Theseareeither mass-produced commodities in thecaseof or, items dried foodstuffs, and semi-perishable suchasgrains, pulses, spices oils.Forvarious fresh and minor in theeconomy the of reasons, vegetables fruits a relatively play role and in soldnot through outlets thebazaaritself by small-scale, bazaar, areoften but mobiletraders. markets perishable In for commodities usually are products, displayed andrelatively inspectable often piecemeal, and sold easily thereby counteracting quality andquantity of due uncertainty. Instead, to theperishabilitygoodsandthevariability ofsupply, is muchhigher in markets non-perishable than for price uncertainty goods. characterised theprominence bargaining a price-making of as Theyaretherefore by mechanism & (Dewey 1962a;1962b;Davis 1973;Alexander Alexander 1987). FRANK S. FANSELOW 253 Quality standardisation standards quality, themanipuof and In thebazaar there no verifiable reliable are and with superior products through or outright lationof qualityby mixinginferior withaliensubstancesbelieved be endemic. is to Commodities passed are adulteration who bulkat different of levels through longchainof middlemen, bulkand break a and of becomes unidentifiable themarketing system that provenance a product so the of between producer itsqualities uncertain. Consequently isno channel feedback there decisions of and consumer traders. Producers independent thechainofintermediary for ofinferior can in evenifthere no realdemand is quality produce stay themarket aremarketed mixing by them with superior their products. Products inferior of quality and of are to there general is quality products, sincestandards quality difficult verify, is whichleadsto an uncertainty aboutwhatexactly and whatis not adulterated, in of is that and atmosphere suspicion everything themarket adulterated no bazaar is trader honest. in In contrast such maverick to a environmentwhich almost everything isuncertain, inthestandardised brand names trademarks asclassificatory and act commodity market, devices whichtheprovenance goodsin themarket of becomesidentifiable and by of therefore theirquality morepredictable. They thusprovideefficient channels of the between and whichare independent communication producers consumers, the and The of to chainof intermediary traders middlemen. ability buyers identify of to of and greater uniformityquality therefore provenance a goodleadsthem expect to exercise choicebetween of quality. products different there a comprehensive is folklore Evenin suchlower-level markets Kalakkadu, as and of limited number aboutthecomparative advantages disadvantages therelatively for and ofbranded brands developspecific preferences particular goodssold.Buyers to advice Theyarealways prepared offer readily exchange information aboutthem. or as batteries longest. last on suchsubjects which rubber sandals thesoftest, which are of but able not brands, also Theyaretherefore to compare onlythequality different in to whichis extremely their an to evaluate price, operation quality relation their difficult thebazaar. in The introduction brandnamestherefore of alters of fundamentally the nature in It from between buyer competition therelationship competition themarket. moves to between becausebuyers consistently to are able andseller therelationship sellers, the to choice and of between identify provenance quality a goodandtherefore exercise This forces sellers compete adjusting to rather thanby different by prices products. stock adulteration short-measuring. and making savings through standardisation Quantity The ability identify provenance a commodity to the of introduces conflicts new of into not but and interest the market onlybetweensellers also between producers the it is of retailers. Once thebuyer able to identify provenance a commodity, is in the ofhis the interest protect integrity products to manipuagainst deceptive producer's Brandsare therefore with the lationby intermediary traders. alwaysassociated could always intermediate sellers and of Otherwise prepackaging sealing products. brand a smaller a bigger for a cheaper a moreexpensive for or substitute quantity. the and eliminates thesales from transaction technical Standardised packaging sealing curtails seller's the of or of greatly process weighing measuring goods,and therefore 254 FRANK S. FANSELOW in for of Bazaar transactions which goods are opportunities the manipulation quantity. and i.e. instruments soldlooselyrequirea technology ofweighing measuring, specialised are and skills.These means of measurement controlledby the sellerswho therefore have theopportunity manipulate to themin their favour, and are universally suspected of so doing. Standardised packaged goods, on the otherhand, are not sold by weight is or volume but by number,and the onlyskillrequiredto verify quantity elementary arithmetic. The buyergets,forexample,two packetsof coffee powder each weighing 100 grammes, insteadof 190 or 180 grammesweighed and packaged by the seller. allow the buyernot only to evaluate quality Branded and packaged goods therefore is in relationto price,but also to be reasonably certainthatquantity held constant. Price dispersion difference between the structure markets unbranded, of in There is a fundamental and those in branded,standardised preungradedand loosely sold commodities, and packaged commodities. In the bazaar price competitionbetween sellersis highly in because buyersare unable to evaluatesystematically imperfect, qualityand quantity certainand comparable,the qualityand relationto price. While pricesare relatively of and difficult compare.Consequentlyprice to uncertain quantity goods are relatively with qualityand quantity and buyers'decisionsare correlates only veryimperfectly on based primarily price, because it is precise and comparable,whereas qualityand and are as quantity uncertain incomparable. Higherpricesare not interpreted evidence of the higherqualityof the productand the integrity the seller,but of overpricing of in additionto adulterating short-measuring; lower pricesare seen as evidence and and in forexcessiveadulteration short-measuring. and Price dispersion thebazaaris thereforeminimised. are relatedto qualityand quantity While price differences only veryimperfectly in variation,theyare closely relatedto differences buyers' commercialcompetence to and marketexperience,and theirwillingness bargainwith and canvass different in is sellers orderto testthe market:'price dispersion a manifestation-and,indeed, it is the measure-of ignoranceof the market'(Stiglitz1971: 62). Sellersseek not only but to adjustqualityand quantity, also price. The particular methodofadjustment dependson thenumberand size oftransactions. In the case of basic foodstuffs, such as grains,pulses and spices, which are sold to in consumersregularly similarly small quantitiesfor daily household requirements, to are and similarity the of price adjustments difficult make, because the regularity purchasescreatesa large number of precedentswhich allow the buyersto monitor of each ofverysmall priceconditions closely.In thecase oflargenumbers transactions, in are thanprice adjustments, volume, adjustments quantity more profitable because the profit primarily function the numberof transactions-moreparticularly is a of of the acts of measurement-ratherthan of the size of the transactions; therefore the the will be the savingsin stock. On the higherthe numberof transactions, greater other hand, the rarerthe good or the largerthe quantitiesbought, the fewer the hence the greater price uncertainty the precedentsto which the buyercan refer; for the buyer,the greater the seller'sopportunities increasing are for profit through price become an important adjustment. Only undersuch conditionsdoes bargaining pricemakingmechanismin the bazaar. FRANK S. FANSELOW 255 of In markets standardised for goodsthesituation reversed. is Quality quantity and the in goodsaregiven theseller onlytheoption altering price. and has of Differences quality quantity therefore and are linked price to variations. under Only such conditions cantheprice system function an efficient as means communication of matching supply are ascertainable comparable the and to demand. Sinceprices muchmoreeasily for in buyer thanquality quantity thebazaar, and those sellers offering lowest the prices identifiable. Traders state that of are easily clearly theyfollowthestrategy keeping margins low aspossible order maximise total in to the number transactions, of profit as of than the transactionbazaar traders rather maximising profit margin eachindividual as interest keeptheprices to do. It is therefore in theseller's in thebuyer's and as both the militates of which low as possible, this shared interest and against climate mistrust in prevails thebazaar. and variation between Sincepricedispersion between sellers quality brands appear consider them forms deception, as of tobe clearly do identifiable, buyers notgenerally do of as they in thecase of non-standardised fewallegations goods.Therearevery of sellers substitutable commodities. Sharedmarket dishonesty against intelligence of for revolves around advantages disadvantagesspecific the and brands among buyers whichsellers notheldresponsible. are variation between is Quality branded products attributed producers' to technical and sellers sophistication, pricedispersion between is attributed differencestraders' in to to commercial competence rather attempts than cheat. The ownerofa small textile whosegoodswereofsomewhat shop,forexample, moreoutoffashion higher and than poorer quality, rather priced those thebigger of downtheroad, never was accused cheating. of Almost knewthat his shops everybody lowerthanthoseof hiscompetitors, because werehigher hisquality and and prices him.In a transactionwhich buyer the in knewit,fewbought from the has everybody to whatis on offer, moral-as wellas thelegal-principle the opportunity ascertain of he ofcaveat and emptor applies, ifhe doesnottakeadvantage this opportunity, has to on wherethebuyer onlyhimself blame.In thebazaar transaction, theother hand, to hasonly very limited opportunitiesascertain quality quantity topurchase, and prior itis theseller who is accusedofdishonesty.3 In thebazaar information between seller buyer and the the asymmetry gives former is over The a competitive advantage thelatter. primary competitive relationshipthat the oftheseller versus buyer. thestandardised the In has goodsmarket, seller no such overthebuyer. structural information takes advantage Competition placebetween sellers between and but sellers buyers. and The moreoffers a buyers, notbetween can he trader canvass themorepotential and customers canin turn attract canvass to hisoffers, greater hiscompetitive is the In the of advantage. sucha market strategy individual inspection intensive or information searchis replaced thatof price by or information search 1979:224). canvassing extensive (Rees 1966;Geertz Advertising In contrast theexcessive of out to secretiveness thebazaar whichbothgrows ofand in seeds market flooded are with inforsuspicion, buyers thesubstitutable commodity trader obsessed is with and business mation. Wherethebazaar secrecy with protecting of and the information hissources supply, sizeofhisinventory ofhisclientele, on the his trader advertises comprehensive standardised commodity rangeof stock,the 256 FRANK S. FANSELOW A and whomhe purchases, thesize of his clientele. wide rangeof producers from or and attracts prices, quantities sizesat various quality in different goodsofdifferent individual and of with different economic preferences ofdifferent a widerange buyers a of the that way means. The easiest to convey message a shopofferswiderange goods of is and appearance architecture suchbusinesses is to display them.The physical to godowns in contrast bazaarshops.Such shopshave no secret therefore marked salestax and pricecontrol in aroundthe corner whichgoods are concealedfrom are the up Instead many as officers. goodsas possible displayed: wallsarecovered to often behind sits withshelves filled withgoodsand theshopkeeper glass theceiling overintothestreet. These spaceis notenoughand theshopspills cases.Frequently rather of whichhavepurpose-designed buildings are also theonlykinds businesses than rented purpose premises. generalit is to the attractiveness, also important makeit from increasing physical Apart in to its range: demand known its vicinity order increase maximum beyond immediate to a a it shopintoa central place institution, replace i.e. to transformfrom corner of relations witha moreuniversalistic built reputation on a network inter-personal whichare onlyknownby their bazaarshops, In to attraction. contrast traditional suchshops nameandtherefore to peoplewho knowtheowner, have, owner's only of own.4 liketheproducts sell,names their they to Having given the shop a name, it is important make the name known as widely a shopshave as possible.Only withinthelastfewyears, numberof textileand fertiliser better known withinthe techniquesto make theirbusinesses begun to use advertising on of ruralhinterland Kalakkadu. These include paintingadvertisements emptywalls withtheirnames near roadjunctions,the use of specialpaper and cottonbags printed of and logos or printed wrappingpaper,and the distribution theirown wall calendars for motivesdesignedseparately their Hindu, Muslimand Christian often withreligious bigger businessessometimesassume the role of customers.During temple festivals rituals. traditional sponsorof particular to In all thistheystandin markedcontrast bazaar shops.These usuallylook equally their ownersarerenowned also neverhave a name and therefore neveradvertise, dingy, and lack of friendliness. factthereis littleto In fortheirsecretiveness, suspiciousness because they of choose between themin terms appearance,serviceor price,precisely with each otherand but do not compete againsteach otherforcustomers, do business insteadcompete with buyers. Business organisation of and of substitutable comThe respectiveeconomic properties non-standardised in moditiesentaildifferent trading problemsforthe businesses typesof organisational in and associatedwithbasic differences businessorganisation them.They are therefore a In to substitutable market structure. contrast the bazaar trader, sellerof standardised, to markets purchasehis supplies,find goods does not have to travelto higher-order out prevailing inspectthe pricesand arrangecredit, price levels,negotiatepurchasing their nor measurement, packagingand transport; goods he wantsto buy,and supervise does he have to choose between havingto relyon unreliableemployeesto keep his while delegatingthese in shop open in the meantime,and staying the shop himself of fraudulent tasksto a potentially employee.Due to the substitutability the products about specific brands of particularcommodities is involved, reliable information FRANK S. FANSELOW 257 and or available himfrom to previous purchases, through samples specimens through or centre himself delegating employee an catalogues. Instead travelling thesupply of to of Some ofthese to do so, he can order them from distributing agents theproducer. in to orders from bigger the and towns thecountryside collect tour villages smaller the he shops; alternatively,can order from them postor telephone. by can Traders standardised, in substitutable commodities therefore canvass much a at risk. This enables larger number offers little of costand limited themto extend greatly search better their for wholesale offers to seekto establish closerelationand as shipsas possiblewithproducers and theiragents, thuscutting the chain of out middlemen. itinerant commission Obtaining producers' catalogues, inviting agents, withregional are contacts and establishing distributing agents amongthe various and the used market number of methods to monitor developments canvass maximum priceoffers. This typeof organisational reduces operational the environment greatly scopeof and of traders arecharacteristic who brokers allkinds intermediary ofthe middlemen, The bazaar. wholeself-perpetuatingself-sustaining ofindependent and middlesystem in menandbrokers thebazaar depends their on ability passon goodsofuncertain to provenance, dubious quality indeterminate and quantity eachother. bazaar to A trader his to his whomanages purchase supplies than fellow traders cheaper usually continues at to sellatthesamepriceas they andarranges supply do to them a reduced price. In this and wayhe keepshisown as well as their prices profit margins high, instead of on to and passing hischeaper purchasing prices hiscustomers thereby increasing his share themarket theexpense other in at sellers. Structural of limitations business in and risks sales organisation increasing ofcredit lethimseekhigher profits increasing by margin eachtransaction of than the theprofit rather byincreasing number transacof In contrast, central the is intermediary in thestandardised figure goodsmarket the of and acts agent who,as theterm indicates, on behalf theproducer noton hisown are in canvass behalf. Suchagents appointed particular by producers whosenamethey for for are commission basis. Thereis localtraders orders whichthey paidon a fixed and therefore institutional an betweenwholesaleand retailbusinesses separation businesses to eachother whichdoesnotexist thebazaar, in where most sell markets, are as well as to consumers. Whereas markets dominated competing wholesale by of and the market consists businesses comproducers their distributing agents, retail each other lowering and the to peting against by profit margins seeking maximise number customers, of rather giving than credit a limited to number buyers high of at as bazaar traders. thebazaar scopefor In the business profit margins is thecaseamong is limited theuncertaintieshaving sellon credit having of to and expansion severely by This results the fragmentation in to relyon potentially fraudulent of employees. businesses of The modeofbusiness is typical thebazaar. bazaar operation encompassing it out and rather competitive:is lessaimedatdriving than competitors ofthemarket, businesses to supply seek moreatindirectly in participatingtheir business; expanding onesrather to takethem than over. smaller in in of of are These contrasts theorganisation businesses thetwo types markets in Labouris never standardised market. paralleled differencesthelabour by perfectly is particularly andsubstitutable (Stiglitz 1962;Rees 1966),butitsnon-substitutability and nature significantthebazaar in Giventheuncertain easily economy. manipulable tions. 258 FRANK S. FANSELOW in and ofcommodities thebazaar, theconsequent about uncertainty their precise value, is of to trader ofcrucial The personal loyalty employees thebazaar significance. only means ensunrng personal such effective of are As as loyalty tiesofkinship. far possible recruited whichcan to someextent labouris therefore alongkinship lines, serve to on which inherent overcome someofthestructural limitations business are expansion in thebazaar economy. of business is Thisfeature bazaar organisationbest illustrated theexample one by of in ofthe most business failures Kalakkadu. involved biggest This spectacular the grocery whichsupplied shopin thebazaar, manyof thesmaller shopsin thetownand the surrounding villages, whoseownerattempted modernise business. was the to his He to a an and first instal telephone he employed accountant, sent twoeldest line, his sons to study commerce theDistrict in Sincehissonswereawayhe relied headquarters. on in exclusively employees. Today everybody townknowsthattheseemployees him he deceived overa longperiod until finally unable repay accumulating was to the himanyfurther. debts hissuppliers, thenrefused supply to who to Becausehe was unable supply own customers, turned other to his they to traders ceasedto repay and debts him.Thisleft their to withlargedebts hissuppliers to him,on theone hand, withevenlarger owed to himbyhiscustomers, amounts the and,on theother hand, most of wereother His has important which shops. former accountant meanwhile set withhisformer business up hisown grocery employer's capital, manyof thesame and but instead hissons.This on suppliers customers, without employees, any relying is a typical of from inside. thebazaar find segmentary In we a the example a take-over a is to typeof business organisation. Externally business oriented be encompassing rather thancompetitive, internallytends and it towards as employees fragmentation turn entrepreneurs, runtheir into who ownbusiness within their business. employer's In thestandardised on is commodity market, theother hand, personal loyalty not ofthesamecrucial to thebusiness as in thebazaar. as the Just importance organisation for trader's own opportunities deceptive of and quantity are manipulation quality so of curtailed, are the opportunities his enterprising employees do the same. to and are Comparedto the bazaar,disloyalty larceny employees relatively by easily and If source be identified, areeasily can detectable quantifiable.their they punished because traders themselves lessaccessible blackmail employees arebazaar are to than by of are so in traders, many whosebusiness operations illegal that caseofdisputes legal is not to If is remedy usually available them. their source notidentifiable canbe they addedto priceas extra than an rather remaining unquantifiable on capital drain cost, whenthebusiness whichonlysurfaces crashes. finally of Withthedeclining in the importance personal loyalty thelabourmarket, imincreases. portance ofprevious experience, training, andevenformal skill, qualifications Thesenotonly meanincreased but oflabour. competence, alsogreater substitutability Formal educational economic becausethey makethe qualifications convey benefits, to for holders in or or eligible apply employment government organisationsbanks, to certain such of and But practise professions as medicine pharmacy. in themajority ofthis in Kalakkadu, andprevious businesses skill rather formal than type experience, are Two textile qualifications, soughtby employers. shops,forexample, employ ownedsmall but accountants had themselves who textile previously shops had gone In businesses overnotonlythemarket take share but bankrupt. this wayexpanding FRANK S. FANSELOW 259 also some of the skilland labour of less successful ones. In the bazaar, on the other hand, such previous experiencein runningtheirown businessis seen as a potential threat the employer,because of the suspicionthatemployeeswill use such skills by fortheirown rather thanthe shopkeeper'sbenefit. The greater importanceof skilland experienceover personalloyalty the labour in marketincreasesthe potentialforbusinessexpansion and can ultimately lead to the separationof managementfromownership.A formof organisational innovationin which ownershipand managementare only partially separated,but where thereis nevertheless substantial is of delegationof management, the establishment subsidiary outletsor branches.All examplesof thisformof businessexpansionin Kalakkadu are concentrated the tradein standardised in such as textiles and provisions. commodities, A completeseparation management of and ownershipagain occursonly in the standardisedcommoditytrade.Apartfromthe businesses, namelythe fourbanks,trading in the most standardised all commodities (money), such a separationbetween of managementand ownershipis found only in the case of a medicine shop, the local outletof the Tamil Nadu Handloom Co-operative Societyand thelocal cinema. The only businessin Kalakkaduto sell unstandardised, non-substitutable commoditiesand in which managementis separatedfromits (public) ownership,is the government ration shop. Such shopsarenotorious giving for short measureand adulteration, because the stock savingsmade throughsuch methodsare sold by the employeesto private black markettraders, who buy the groceryshops. In additionthereare professional rations-and sometimes rationcards-from people who do not need them,either the because theyare too poor to afford rationgoods even at subsidised prices,or too rich to need them,and who thenbulk and resellthemto privateshops. The government rationshops are therefore exceptionthatproves the rule. the Moneymarket for Similarconditionsof uncertainty prevailin the market businesscapital.The main sources of capital for the bazaar traderare those within the bazaar economy itself, and chit funds.These are expensivebecause of the high risk namelymoneylenders mustmaintainsecrecyabout theirbusiness involved forlenders.Since bazaar traders formalbureaucratic sources of businesscapitalsuch as low interest bank operations, loans and overdraft facilities largely are inaccessibleto them.Banks requiredocumenthat and to assurances tationofbusinessactivities performance assesscreditworthiness, the loans are reallyused forthe purposesforwhich theywere taken out, and often are securities well. Bazaar traders unwillingand oftenunable to providethese.Most as but oftheir transactions conductednotthrough are official channels, on an interpersonal In and cash basiswithoutany documentation. contrast cheques, invoices,etc., cash to is anonymousand untraceable.In its concretefonn,it can be hidden or passed on in transaction. Were bazaar tradersto provide the privacy of an under-the-counter evidence of documentationof theirbusinessdealings,thiswould oftenonly furnish tax evasion,black marketdealingsand otherillegalactivities. In thestandardised on commodity market, the otherhand,secrecyis less crucialfor the trader, because he generally less to hide. Tradersare betterable to balance the has financedby cheap loans, advantagesof increasingprofits throughmore investment businesses to interests. Since theyare withthe need forsecrecynecessary protecttheir traces of theirbusiness operations,they are more less obsessed with covering the 260 FRANK S. FANSELOW accountableto theircreditors. Most of theirbusinessis conductedthrough one of the local banks at which theymaintainaccounts with overdraft facilities. Their stock of for goods providesa security loans because itsvalue is relatively reliableand verifiable and much ofit is publiclydisplayed rather thanhiddenaway in secretgodowns. These shops oftencarry signswhich declarethattheirstock of goods is 'hypothecated'to a certain bank; theirdebtsare thuspublic knowledge and it would be difficult them for to obtainmore thanone loan on thebasisofthesame security. Since theriskofdefault is considerably reduced,such loans are substantially cheaperthanthosefrominformal sourcesin thebazaarand their for cheaperpricecompensates thegreater accountability which is necessary receive them. to Since thereis no separationbetween wholesalingand retailing the bazaar, the in of majority transactions not betweenretailers consumers, betweenmiddleare and but men. The flowof goods is dividedinto countless streams smallvolume of meandering but perennialnature, because the goods are in constant demand and divisible into tiny amounts. This providesincentivesforboth sellersand buyersto establishenduring credit a to to relationships. givingcredit a buyer, sellertries monopolisetheformer's By future demand. When therewas, forexample, a sudden influxof labourersworking in the nearbyforests, of the bazaar traders one extendedcreditto them. immediately In such cases thereis an interdependence between the two, since the sellerdepends on the buyer'srepayment and can apply the threatof refusing further suppliesas a sanctionagainstdefault.These relationships nonetheless are There extremely fragile. is no institution described Mintz (1967) in Haitianmarkets comparableto the'pratik' by or the 'suki' describedby Davis (1973: 216-34) in the Philippines. There is a constant in tug-of-war which the buyer triesto accumulate more and more credit,and the sellerseeks to increasepricesas a formof interest and to retrieve credit,untilone of thembreaksoff relationship. course thebazaar trader turndoes precisely the Of in the same in his role as buyer.As a resultthe bazaar folkloreis littered with accounts of brokentraderelationships of how former and friends have turnedinto bitter enemies. Justas a traderin the standardised commoditymarketis less dependent on the than a bazaar trader, he is also less so personalloyaltyof his employeesand partners dependent on the personal loyaltyof his customersbecause credit sales are rare. are institutionally with Wholesaling and retailing separatedand while relationships wholesalersare enduring,relationships which involve retailtransactions tend to be devoid of the element of ephemeralbecause theyare on a cash basis and therefore which forms basisof creditrelationships the bazaar. the in enduring interdependence, Of course, many buyersstillfinancesuch expenditures throughloans, but these are obtainednot in the formof creditfromsellers, frommoneylenders chitfunds but and in the bazaar at high ratesof interest. The sellersthus divestthemselves the high of risk of having to finance their customers'demand. While in the bazaar business expansion is limitedby the number of buyersabout whom the traderhas enough and personalknowledge to be able to assesstheircreditworthiness forwhom he has a enough capitalto sell on credit,in a marketdominatedby cash payments sellercan attract potentially a unlimitednumberof customers. Conclusion Such discontinuities withinthesupposedly uniform of category economic phenomena which the bazaaris supposedto embracehave not, of course,escaped the attention of FRANK S. FANSELOW 261 Fox and Geertz,but theyappear as yet anotherbizarrefeature the bazaar and their of remainunexamined. theoretical implications Fox, forexample,mentions passingthatbetweenthetwo categories businesses in of distinguished here,profit margins can differ more thanfivehundredper cent. by These figures[wholesale profitmark-ups of 8-10%, and retail ones of 20%] refer,of course, to an unadulterated, fairly weighed commodity. When one considersthe various possibilitiesfor chicanery, the mark-up can be fantastically high upwards of 100%. Some businesses have less opportunityto practisedeception than others,and the mark-upsquoted above apply to relatively'sure' businessesas cloth, drygoods, and provisions.They are less valid fortradein food grains,oilseeds, and sugar (1969: 148). Geertz describesthe bazaar as a world of dubious goods, namelessshops, and poor market signalling whicheverybody equallygroping thedark.But this in is in supposedly uniformcategoryof economic phenomena in the Third World also includes the so-called 'show window bazaar' in the Frenchcolonial quarterof Sefrou: The last,with its glass-fronted stores,side walk cafes,and motion picture houses strungout along the main street..., with signsproclaimingwhat they are and oftenthe owner's name and telephone number, looks about like any small-town business district-complete with sidewalks, parking zones, a and the inevitableronde pointe-in provincialFrance (1979: 177). stoplight, In hisaccountofcommercein Modjokuto Geertzdoes distinguish bazaareconomy the from firm-type the economy (1963: 47). There, the equivalentoftheshoppingdistrict in theformer Frenchquarters Sefrouis that up bytheDutch colonial government in set (1963: 51). Geertz considersthatthe crucialdifferences between the bazaar business and the firm-type businesslie in formal organisational innovation,thepermanenceof businessorganisation, reliability relationships the of with producersand distributors, and the expansionof the urbanpublic market(Geertz 1963: 58), characteristics which I have foundto be associatedwithstandardised markets. But Geertzrelates commodity theseorganisational a and changesto Muslimreformism,non-conformist individualistic ethoswhich converts into other-worldly credit:in otherwords,he this-worldly profit sees an independentevolutionof the Protestant ethicin Modjokuto. But thisargument equallyplausibleifturnedaround: the firm-type is organisation reformist to thembetteropportunities mightwell attract Muslims,because it affords combine thepursuit moralintegrity of withoutinvolving withthatofsuccessful trade, themin theethicalcontradictions in inherent thebazaartrade.In a firm-type economy a reformist Muslim can survive economically without compromisinghis religious recourseto corrupt for principles through What is more, a reputation piety practices. and integrity confera competitive can advantagein such a market because, as long as it is verifiable, attracts it in buyers.In theirstudyof corruption developingcountries, among which they include Britain during the IndustrialRevolution, Wraith and Simpkinsmake preciselythe same point in relationto the prominenceof reformist the Christians, particularly Quakers, in trade: Being men of intelligence and characterthey built a 'nation of shopkeepers' and often advocated a creed in an age when standardised policy of a 'just price'. It was a fortunate goods were beginningto come on to the market,and it helped to make Britishcommercial institutions respected throughout the world (1963: 157). It seems therefore more than coincidence that all Geertz's examples of firm-type businesses by reformist run Muslimsin Modjokuto deal in homogeneous,standardised and substitutable commodities.The mainstays the threehe describesin detail are of Bata shoes, ready-madeclothingand patentmedicines; other lines of goods carried 262 FRANK S. FANSELOW include tinnedfoods,hardware,stationery, household equipment,toys,etc. (Geertz 1963: 51-8). On the other hand, his examples of bazaar trade involve unbranded, suchas baskets heterogeneous, loosely-sold goods and unstandardised services, ofmaize, and bicycle repairs,as well as pieces of cloth, haircutting, cobbling, blacksmithing horsecart and pedicab transport (1963: 31-2). In markets heterogeneous, for non-substitutable in goods and services, whichstandardsarerelatively unverifiable uncertain, consequently whichscrupulousness and and in is not rewardedand unscrupulousness punished,bazaar tradeis economicallythe not morerational indeeditbecomesa precondition continuation themarket. for in strategy, of of Unscrupuloustradeis thennot a function the actor'sethicbut of the rationality the market(Becker 1968; Akerlof1970). Under such conditionseitherhonestsellers or are drivenout of the market, honestyis drivenout of the sellers. Such markets not bizarreand exotic phenomena,a massof namelessgoods and are shops and countlessmiddlemenof limitless unscrupulousness. They can equally be found in developed industrialised economies. In such economies most transactions involvegoods,which are branded,prepackaged, sealed or otherwise processed, highly and But standardised substitutable. theyremainso onlyas long as theyare 'brand'new. economies can containconsiderable Marketsin used capitalgoods in industrial uncerand for tainty risk.The mostcommon exampleis themarket used carsin which quality is is uncertainty veryhigh,even thoughprice dispersion small(Akerlof1970; Stiglitz in 1971; Rees 1966; Geertz 1979: 224). Similarprinciples applyto markets real estate and labour (Stiglitz1962; Rees 1966). of in But thecharacteristics markets unstandardised, non-substitutable commodities in modem economies are scarcelytaken into account by economic theory,which tendsto assumeproductsubstitutability. Product standardisation primarily is seen in the contextof the standardisation productionprocessesas a means ofrationalisation of and reductionof unit costs.Since producersseek to differentiate productsfrom their of otherproducersthe standardisation productionleads to the differentiation those of ofproducts, and thiscreatesimperfect monopolisticcompetition or because it implies thatproducersdo not compete solelyin termsof price,but also in termsof product quality.Perfectcompetition, contrast, in can only occur in markets which sellers in offer so homogeneous,undifferentiated products that onlyvariable the can they control, and in termsof which they compete, is price. As examples of such homogeneous oftenmentionsupposedly productseconomists undifferentiated materials, raw such as wheat, potatoes or cotton (e.g. Samuelson 1976: 484). One reason why some economistsand economic anthropologists the bazaar as approachingthe model of see theperfectly market the apparent is competitive absenceofmonopolistic competition. The presentanalysis the bazaar economy,however,indicatesthe naivetyof the of assumptionthatcommoditiessuch as wheat, potatoes or cotton represent naturally homogeneous raw materials.In reality, such materials heterogeneous;thereare are variations qualitythatopen the door formanipulative in practices aimed at disguising thesevariations fromthe sellerwhilstexploitingdifferences buyingprice. Because in of the uncertainty of concerningthe classification thesematerials, buyersare unable to evaluate qualityand quantity in systematically relationto price. In fact,therefore, is in price competition minimised the bazaar. The price mechanismdoes not operate in relationto raw materials such,but in relationto materials as artificially standardised in terms an imposedsystem classification. of of Such relatively simpledevicesas brand FRANK S. FANSELOW 263 are effective and of names, trademarks, prepackaging, sealing highly systems authenof tication quality quantity. and The pricemechanism function an efficient can as communicative system the for and are optimal allocation resources of onlyifbothbuyers sellers relatively certain in market, that arecomparable about quality quantity and ofcommoditiesthe so the they of is relative price.Thus thelogicalcorollary thepricesystem an accurate to and verifiable measurement quality and control. system of In thebazaarthis system measurement control highly of and is imperfect the and This function such pricemechanism cannot therefore efficiently. doesnotmeanthat a system whichevenin scientific must perfect terms itsphysical be in of accuracy, is variations inevitable, must are it measurementan unattainable Whilerandom ideal. so the limit uncertainty the aboutquality quantity as to eliminate suspicion and of and the confidence price that systematic interference theseller to maintain buyer's by of reflect and quantity differences. terms thepurely In differences quality physical and properties products, of their differentiation be wholly might illusory achieved to of But through persuasive advertising. thisis irrelevant the operation theprice is which notconcerned thephysical with of but system, properties thegoodsinvolved beliefs aboutthem their and decisions basedon these.5 withtheactors' I In this article havesought explain to many theapparently of irrational features of of of therein. thecase of In thebazaarin terms theproperties thegoodstransacted in of markets non-standardised of means qualitative and goods,theabsence a reliable abouta situation verification toa general ofconfidence, leads loss quantitative bringing accuses else This inwhich everyone everyone ofchicanery. imposes crippling structural on of and limitations theexpansion businesses, leadsto all thestereotypical features suchas limited associated withbazaars, scaleofoperation, of the proliferationtraders, and and of of in unity household business, thespatial aggregation businesses dealing of thesamekinds commodities. NOTES Fieldwork in Kalakkadu was carried out for a total of seventeen months at various periods between September 1981 and April 1984 and was financlallysupported by the Wenner-Gren Foundation for AnthropologicalResearch, a Tweedie Exploration Fellowship fromthe Universityof Edinburgh and a grant from the Central Research Fund of London University to all of which I am grateful.Earlier versions of thls articlewere presentedat seminarsat the London School of Economics and at Yarmouk as M. Gilsenan, M. Mines, and Drs University;I am thankfulto the participants, well as to Professors C.J. Fuller and J. Parryfor detailed comments on the earlierversions of the article,for whose content, however, none of them can be held liable. 1 At one time during my fieldworkit became extremelydifficult pay with Rs. 100 banknotes to because therewere reportedto be large numbersof counterfeit notes in circulation.This example should make it clear that we are not dealing with inherentbut with putative propertiesof the commodities 2 In this context it is interesting thatsome supermarkets buyersthemselveschoose and weigh fruits let and vegetablesas an alternative prepackaging. to 3 Since the shopkeeper in the above example had quite a lot of time, he was a good informant of rmneand I occasionallypurchased fromhim. In these cases it was I who was subsequentlyreproachedby and I was given ample advice on where to buy next time, ratherthan he being othersformy foolishness accused of cheatingme. 4 Apart fromtheirindividualnames, there existsforsuch shops an elaborate nomenclaturemeant to be informative the functionalspecialisationof the businesses.Provision shops selling western type goods of are appropriately called shop katai,the latterbeing the Tamil termfor shop; a dry goods shop is a 'fancy involved. 264 FRANK S. FANSELOW are a shop a 'medicalhall'; and stores'; streetside selling stalls lottery tickets 'luckycentres', chemist's 'handloom and 'ready made','silkemporium', house',or 'shirting textile shopscanbe 'cutpiece centres', of informative business of at specialisation all, suiting hall'. In fact, coursemanyof theseare not really in is a which Theirfunction instead prestige-raising device, becausemostpeoplearenotliterate English. of to hasbecomeso pronounced in 1984 theGovernment TamilNadu saw it as a threat theTamil that be that signsmustfirst foremost in Tamil and language and issuedan ordinance all shop and business rather in English. than 5 In thebazaarthere general is that is to is suspicion nothing whatit appears be and thateverything comand even this not In adulterated short-weighed, though might be thecasein fact. thestandardised is that is to this not market there confidence everythingwhatit appears be, eventhough might modity In in brand is anybody be thecase,as we knowfrom growing the industry faked products. fact, hardly is do whereas in in becauseeverybody suspecting they notgetwhatthey for; that ask cheated thebazaar, which market are naively buy things thestandardised commodity buyers in factdeceivedbecausethey not be to might really whatthey appear be. 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Cambridge: Umv. Press. of in Social Economic 9, 297-331. Stud. M.F. 1960.The business higglering Jamaica. Katzin, New behaviouran Indian Muslim merchants:economic the of community. Delhi: Shri Mines,M. 1972. Muslim for & Ram Centre Industrial Relations HumanResources. of of in market S. place,Haiti. R. Mintz, 1961.Standards valueandunits measure theFond-des-Negres J. Inst. anthrop. 91, 23-38. a economic In Ethnological relationship. Proceedings American ofthe 1967.Pratik: Hawaiian personal Press. Seattle: Univ.ofWashington society. ina New A. SagePublications. Ostor, 1984.Culture andpower: and legend rebellion Bengalisociety. Delhi,London: in effects moreknowledge-information of networks labour markets. Rees,A. 1966. Laboureconomics: Am.Econ.Rev.56, 559-66. New P.A. 1976.Economics. York:McGraw-Hill. Samuelson, in market. polit. Econ.70, 94-105. GJ. Stiglhtz, 1962.Information thelabour J. and In and of 1971.The economics information knowledge. Theeconomics ofinformationknowledge Harmondsworth: Penguin. (ed.) D.M. Lamberton. Inst. Publ. 16). a Indian economy (Smithson., socialAnthrop. Tax, S. 1953. Penny capitalism:Guatemalan Smithsonian Institution. Washington: London:Allen& Unwin. 1963. Corruption indeveloping countries. R. Wraith, & E. Simpkins FRANK S. FANSELOW 265 L'Economie de bazar, ou combien bizarre le bazar est-il vraiment? Resume Des critiquesdes vues que le bazar est un modele de marche compeitif le depeignentsouvent comme Cet articlemontreque le 'bazar' de categoriefolkloriquedissimulela distinction exotique et irrationnel. en analytique entredeux typesde marche: ceux en articlesqui sont standardises termesde qualite et de et quantite et donc substituables, ceux en articles qui sont physiquementheterogenes et donc non Les caracteristiques substituables. typiquementassociees aux bazars par les ethnographesne se trouvent le que dans ce dermertype de marche. Utilhsant materielethnographiqued'une ville de l'Inde du Sud, dans les proprietestransactionnelles deux typesde marchandises l'articlemontre que les differences des resultent une seriede contrastes en dansles rapports parmiet entreles acheteurset les vendeurs, l'operation du mecanismede prix,le controlede l'information, du et l'organisationet le recrutement travail, les r6les de l'argentet du credit.