16 



TECHNOLOGY AND ECONOMY 



important of these interferences, such as import 

 and export taxes, have few direct effects on the 

 regional economy, since the goods entering the 

 local economy are with few exceptions not only 

 domestic but even regional. Such revenue-produc- 

 ing taxes of the National Government as stamps 

 and stamped paper for legal documents, and those 

 on real estate, affect the regional economy very 

 slightly. Taxes on tobacco and liquors, and the 

 governmental controls on their manufacture and 

 sale are of greater importance. It is difficult 

 to say, however, whether people would drink or 

 smoke substantially more if the price were lower. 

 License fees, and market taxes, although not 

 very large, affect merchants and certain producers 

 and of course prices. Almost all taxes are levied 

 solely for the purpose of raising revenue; once 

 Panajachcl levied no market tax on vendors of a 

 scarce item (pitch pine) to encourage an increase 

 in the supply; this may be more common than I 

 know. Except as sumptuary taxes (liquor, to- 

 bacco) may have a moral element in their motiva- 

 tion, I know of no other such use of the power to 

 tax. 



There is occasional interference with the price 

 mechanism. Once during the period of this study 

 the Government controlled the price, and to some 

 degree the distribution, of corn when an extraor- 

 dinarily short supply produced a crisis. The 

 case emphasizes the rarity of such interference. 

 On the other hand, the Government has always 

 had laws respecting both land and labor. The 

 former, regulating the distribution of public lands, 

 etc., have had virtually no effect on the regional 

 economy; but the labor laws, always in effect dis- 

 criminatory against Indians, who by one means or 

 other have been forced to go to plantations to work, 

 have influenced the local economy. In the thirties 

 there were minimum wage laws, and similar pieces 

 of social legislation that in fact had little if any 

 effect. '^ Similarly, there have always been mecha- 

 nisms to supply labor on the roads and in other 

 public works; males are subject to head taxes that 

 may be worked out or paid in cash. Finally, the 

 Government enforces weights-and-measures regu- 

 lations (which in terms of economic theory need 

 not be thought of as hindrances to free compe- 

 tition). 



'> Since these data were gathered from 1936 to 1941, no accotxnt is taken of 

 changes that may well have occurred since the revolution o( 1944, after which 

 social lefrislation became much more important. 



The third class of interferences are those which 

 customs, institutions, and beliefs impose on the 

 "free play" of supply and demand. These are, I 

 think, remarkably few and unimportant. There 

 are a few beliefs that perhaps impede the most 

 efficient production, such as that lumber and 

 corn are to be cut and harvested only in certain 

 phases of the moon. There are some sentiments 

 impeding the most economic allocation of time and 

 resources; for example, in Panajachel it is felt 

 that every housewife should have chickens, even 

 if they do not "pay." There are social con- 

 siderations that prevent land, for example, from 

 being treated absolutely as a commodity, though 

 in Panajachel it is nearly that. But on the whole, 

 one is hard put to find clear examples of any 

 "cultural" interferences ^vith economic behavior; 

 even those just mentioned are equivocal. The 

 difficulty here is the methodological one of having 

 to document a negative statement. As one 

 examines the materials contained in this mono- 

 graph, it becomes clear that "cultural interference" 

 is largely absent; but there is a possible exaggera- 

 tion involved in the very bookkeeping method 

 that is employed. All I am able to say is that in 

 worldng out the economy of Panajachel I rarely 

 came across anything not quickly reducible to 

 economic terms. Customs, beliefs, sentiments, 

 and institutions seem, where they are not divorced 

 from, to be rather affected by, than affecting, 

 economic behavior. 



((/) The last paragraph drifts toward discussion 

 of the fourth criterion of a competitive market — 

 the assiunption of "rational" behavior on the part 

 of its participants. Rationality implies (1) con- 

 sistent behavior in terms of cultural values, prices, 

 and quality, (2) indifference on the part of buyers 

 and sellers as to their trading partners, and (3) 

 information on the part of buyers and sellers con- 

 cerning prevailing prices. 



With respect to the last, it is difficult to deter- 

 mine how much knowledge members of the market 

 have of what others are doing. The practice 

 of shopping in the market place is a device to 

 obtain information; a buyer rarely makes his 

 purchase at the first try, and I suspect that a 

 vendor does not begin to reduce his price imtil he 

 understands that others must be doing so. More 

 important is the fact that money values are the 

 favorite topic of conversation. The typical first 

 question is, "How much did you pay for it?" 



