Anthropologists study the economic activities of primitive societies. They study activities of food gathering tribes. They find that the agricultural system, handicrafts, etc., and the functioning of cooperative credit institutions and values are different from those of civilized society. For this purpose the economic anthropologist has to make a wide use of economic principles, as he is studying a society where money is not the medium of exchange.
He faces a lot of difficulties in determining economic values. He has no standard and measurement to determine the economic system. Hence he has to understand labour hours and labour wages, etc. He studies the production and its relationship to exchange. Keeping all these things in view he studies principles of primitive economy.
Every society has to fulfil unlimited human desires by means of limited resources at its disposal. The primitive societies use natural resources unsystematically due to a paucity of modern machines and tools.For example, primitive tribes in India practice shifting cultivation. Therefore, they fulfil even minimum needs by means of maximum labour. However, they do have some economic surplus. In brief, the principles of primitive economy are as follows:
1. Economic relationships are based on barter and exchange. There is no provision of currency. There are no banks and other credit societies.
2. Economic system isbased upon social customs, physical conditions and faith in ancestors. Almost no primitive crosses their limits. Profit is seldom the motive of economic activities. Mutual obligations and unity perform the function of motivation. Give and take among primitives is the basis of economic system.
3. Mutual cooperation and collective enterprises are characteristics of primitive economy. According to Thurnwald, the Indian tribes depict a strong communal organization.
4. There are no regular markets. Weekly moving markets are the bases of exchange. There is no monopoly and cut throat competition characteristic of civilized society.
5. There is no institution of private property. All the land is collectively owned. Land is equally divided among families and each family cultivates land alloted to it. There is more consumption than production. Consumption includes food, clothes and housing.
6. Economic values change in decades. Mostly, stability, equality and simplicity are the hall marks of primitive economy. This is particularly true about procedures and techniques. There is no specialization.
Division of labour is generally based upon sex distinction. In the words of Majumdar and Madan, "Specialization based on specially acquired specific technical abilities is absent in pre-urban societies. However, a division of labour based on factors other than specialization, like sex for instance, is widely prevalent."
In modern times tribal economy has been widely influenced by rapid industrialization in tribal areas. In the words of Majumdar and Madan, "The impact of industrialization has affected both men and women. Tribal men work in iron and steel factories, in coal mines and tea gardens. Tribal women workers are engaged in mica and coal mens, in tea gardens, in quarries and so on."