# The Anthropology of Markets



## ob1kenobi (29 May 2005)

We here a lot these days about the 'Psychology of the Investor' and certainly it is useful to know and understand. The other of the behavioural sciences, which can be just as informative, is Anthropology and its cousin Sociology. Anthropods are people. Thus Anthropology is the study of people within a defined context, their interactions, social structures, belief systems and the like. Usually Anthropology refers to this in the context of simple societies (eg. the Roro people of PNG). When done on more complex societies such as Australia, Anthropology morphs into Sociology. The language is and techniques are similar, their work slightly different!

When a Cultural Anthropologist goes to study a village for example, they can do so in one of two ways. Either way they are conducting an Ethnographic study. For example Robert.B.Ekvall in 1968 published an Ethnographic study he had done entitled "Fields On The Hoof: Nexus Of Tibetan Nomadic Pastoralism". The study was on a group of people called the aBrog Pa, who live on the side of a Tibetan mountain. A cursory glance of his contents page reveals the focus of the study: Livestock as a resource, Cultural Identity, Ownership and Social Structure, Protection, Care, Trade as Reaping, Raiding, Hunting, Harvesting, Food, Shelter, Clothing, Language, Social Interaction, Hospitality, Social Control, Religion, Personality Traits and Determinants, Childhood Experiential Determinants, Situational Determinants, Ethos-Cultural Determinants, Knowledge Basis of Chinese Policy, Need Basis of Chinese Policy, Policy and its Implementation.

If an Anthropologist researches by living as one of them for an extended period of time, this is known as "Emic Research". If they observe without trying to mix with them, in a detached manner, they are conducting top down or birds eye research called "Etic Research".

The same can be applied to markets. Markets are merely sophisticated forms of trading or bartering. They determine ownership of companies and can through the wealth they create for the companies and the investor, become a form of social control. If you are researching the company by taking their charts, imagining yourself as a part owner (shareholder) and how this would impact you by looking at the direction of the charts and then after discerning yourself in the mix of the company, compare it to other companies or indices, etc, you are doing 'bottom up research' or "Emic Research". If you do the reverse, take the indices, locate some undervalued stock, explore each one without getting too involved or 'attached' to one in particular, you are conducting 'Etic Research'. Understanding how your actions plays itself out in the market by seeing the market as a microcosm of society, is perhaps one part of Emic or Etic Research that most traders, especially the Corporates, probably forget.

As a trader, I find the major I did in my undergraduate studies in Anthropology and Sociology very useful. I offer this as a different perspective from another behavioural science. I'd be happy to explore this further, if there is enough interest.


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## Milk Man (30 May 2005)

wouldn't you have to weigh-in pretty heavily within a company for that to work? correct me if im wrong.

sounds like a great theory for take-over bids.


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## Knobby22 (30 May 2005)

Fascinating.
Has anyone done research in this manner?
I can imagine some of the belief systems would include
 - I am smarter than the next guy.
 - Warren Buffett is a god.
 - Capitalism is good.
 ect.


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## ob1kenobi (31 May 2005)

loakglen said:
			
		

> wouldn't you have to weigh-in pretty heavily within a company for that to work? correct me if im wrong.
> 
> sounds like a great theory for take-over bids.




In its purest form, yes! However, no matter how long you live amongst a group as an observer, you are never really one of them.


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## ob1kenobi (31 May 2005)

Knobby22 said:
			
		

> Fascinating.
> Has anyone done research in this manner?
> I can imagine some of the belief systems would include
> - I am smarter than the next guy.
> ...




I agree. I think the belief systems at work within markets and those of the traders (professionally), has a lot to do with the eventual outcomes we say on the market each day.


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## ob1kenobi (31 May 2005)

Another way to look at things is through the Macro perspective of 'The Social System' Talcott Parson in his Thesis in 1951 proposed that the Social System is made up of 4 insitutional elements, with their respective sub elements. He further suggested that these Institutional Elements need to work in creative tension with each other, challenging each other when necessary, supporting each other when required. Later on in 1964, Chris Argyris took this a step further on Organisational Theory. "It is my hypothesis that the present organisational strategies developed and used by administrators (be they industrial, educational, religious, governmental or trade union) lead to human and organisational decay. It is also my hypothesis that this need not be so."

A diagram of the Social System espoused by Talcott Parson is attached.


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