Social Education 58(1), 1994, pp. 13-15
1994 National Council for the Social Studies

American Indians as Economic Decisionmakers

Jean Caldwell and David Gash
Did the history of the land area that became the United States begin in 1607, with the establishment of the first successful English colony at Jamestown? Or earlier, when explorers such as Juan Ponce de Leon and Hernando de Soto moved north from the Spanish possessions in the New World? A formerly widely held historical view pictures our country as an essentially empty environment, waiting for European settlers to begin a march of progress toward the United States of 1994.
Other human beings, however, the ancestors of American Indians of the present time, lived on the North American continent for many thousands of years before the first European explorers arrived. In 1492 perhaps six million Indians lived in the area that is today the contiguous United States.1 Just as European peoples had over centuries developed ways of raising their living standards, of increasing food supplies, and of freeing time for the development of culture, art, and religion, so had the original settlers of North America.

From 1000 b.c. to a.d. 1000, many American Indian groups throughout North America began to farm, live in stable villages, and trade with other peoples. By a.d. 1000 the Anasazi of the southwest had built cities in the cliffs of Mesa Verde and Chaco Canyon and had constructed an extensive network of roads over which trade goods were brought from hundreds of miles away. By a.d. 1250, the great city of Cahokia, located across the Mississippi River from present-day St. Louis, was home to at least twenty thousand people, a larger population than London had at that time. And Cahokia was only the largest of many urban centers located along the Mississippi and throughout what is now the southeastern United States.2

Casting an Economic Eye on American Indian History
Social scientists rightly remind us that many American Indian cultures with widely varying customs and traditions occupied the American continental land mass. The stereotypical nomad wearing an eagle feather bonnet, roaming the Great Plains on horseback in search of buffalo, does not represent the peoples of the eastern half of the country, the southwest, or the northwest. In these places, many American Indians lived in permanent or semi-permanent settlements, raising crops and hunting game in a variety of settlement clusters or forms. On the coast of what is now the Northwest United States and western Canada, permanent villages housed prosperous communities with rich social and ceremonial traditions, whose economies were based upon the abundant fish and land and sea animals of the area.

From an economic viewpoint, however, each American Indian culture faced similar fundamental problems that human beings throughout history have had to solve-how to survive by using the scarce productive resources available in their environment. They had to make decisions about what to produce, how to produce, and how they would distribute goods and services throughout the society. American Indians, like all human beings, had to be economic decisionmakers.

We can apply the principles of economic reasoning that Wentworth and Schug developed in the preceding article to explain decisions made in American Indian cultures. Each village or tribe had to choose how to use the scarce amounts of natural resources, labor, and capital available to them. Each choice also involved opportunity costs. For example, in most of the pueblos of the Southwest, men hunted infrequently. They chose instead to devote most of their labor to farming and to maintaining the extensive irrigation systems that made raising crops possible in the dry climate. The opportunity cost of this decision was wild game that they could have obtained by hunting. Their use of masculine labor for farming was different from that of nearby nomadic tribes such as the Apaches, in which hunting was the predominant male occupation.

The inhabitants of the pueblos, however, did not lack for meat. Why not? The economic principle that people gain when they trade voluntarily suggests the reason. Through trading, the people of the pueblos acquired wild game, and the Apaches with whom they traded acquired corn raised in the pueblos. The total amount of wild game and of corn acquired by the trading partners was undoubtedly much larger than the amount each group could have produced if its men had had to hunt and raise crops.

Trading of food for food among various tribes was common throughout North America. Farming peoples traded corn to nomadic tribes living in lands not suited to the agricultural technology of the time, such as the Great Plains and Northern Canada. The communities of the coastal Northwest traded dried salmon to interior tribes. Less perishable trade items often traveled over long distances. Seashells were made into ceremonial and decorative objects by the Iroquois, the Choctaw, and many other peoples living hundreds of miles inland. A network of trails for trade existed in the eastern woodlands. In the Southwest, remains of a great system of roads built by the ancient Anasazi can still be seen. Rivers, too, served as avenues of trade.

Evidence of intertribal trade contradicts the popular view that Native American camps and villages were isolated and self-sufficient, except through raiding and warfare. Trade and exchange, however, were as common to Native Americans as they were to people in other parts of the world. They had, after all, the same incentive as others to trade. The prospect of acquiring products that one cannot obtain locally or can obtain only at a high cost provides a powerful incentive to meet with strangers in friendly contact.

Rules in Native American Economic Systems
A principle of economic reasoning is that different societies have different rules of behavior that inßuence their choices and incentives. Although Native Americans faced the universal problem of choosing how to use scarce resources, their choices were influenced by rules of behavior that varied from culture to culture. For example, among most of the American Indians who raised crops, women tended the fields while men hunted. Among the Choctaw of the Southeast, however, the annual spring task of clearing the &Mac222;elds and preparing them for planting involved men, women, and children. In most pueblos, men worked the fields whereas women ground corn, baked bread, and made pottery. The men, however, did not own the land they worked.

The concept of individual land ownership was foreign to the American Indians. In the pueblos and elsewhere, individual families often farmed the same piece of land for generations; however, the land belonged to the pueblo (or, in other places, the tribe) as a whole, and anyone could use a field that was not being cultivated. Native Americans east of the Mississippi typically farmed a particular area for a few years and moved to new land when the old land was no longer arable. As had been the case with the old land, the new land was open to anyone who wanted to cultivate it. The belief that the land belonged to the group rather than to individuals was so strong that in 1907, when the government of Oklahoma divided the former lands of the Five Civilized Tribes into individual land allotments, many conservative tribal members refused to accept their allotments.3

The accumulation of land and individual wealth was not an incentive for American Indians in the same way it was for Europeans. In almost all American Indian cultures, surplus food and other necessities were shared with those who had less. Trade often took the form of gift-giving, in which one individual gave items of value to another, with the expectation of someday receiving a gift in return. A tribal leader redistributed gifts of food and other valuables within the community. Among the wealthy cultures of the Northwest coast, important men accumulated surplus canoes, dishes, blankets, and many other items only to give them away at the famous potlatch ceremonials that enhanced the prestige of the giver.

Were the attitudes of American Indians toward private property and wealth irrational? We can partially explain this by considering some of the rules that governed property ownership among American Indians. The American Indian cultures lacked the institution of money.4 Money provides a way of storing the value of the things we produce and trade with others. We can save money to purchase things in the future. We can invest it for future gain.

A culture without money, however, tends to be limited to those things they can satisfy with relative immediacy-food, shelter, clothing, and tools. When they meet these immediate wants, why not share any surplus with the rest of the community? Why claim land beyond that which is needed to grow food for your family?

The way of life of American Indians before European contact deserves more attention than it currently receives in most American history classes. Economics can help students in these classes to see the first Americans as human beings deciding how best to use the elements of their environment to survive and prosper.

An Idea for Instruction
A simple suggestion for a lesson to introduce several of these ideas to your students follows. Explain to the class that when explorers and colonists first entered the territory that is today the United States, diverse groups of indigenous people populated the land. Use a wall map to illustrate the location of various American Indian groups.

Explain that native cultures were vastly different from the culture of the Europeans they encountered. Yet we can begin to understand the behavior of American Indians by means of the same economic principles that help explain European behavior as well as behavior in other cultures.

Explain to the class that their task is to use economic reasoning to gain insight into the behavior of the Choctaw. Distribute the handout "The Choctaw" to the class. Ask them to read it to find evidence of economic behavior, using each of the six principles found in the Handy Dandy Guide for Solving Economic Mysteries.5 The notes that follow each principle suggest some possibilities.

1. People choose.
The Choctaw chose to raise corn and beans together to preserve the fertility of the soil. They were choosing the anticipated benefits and costs most advantageous to them. Raising corn and beans together seemed to be the best alternative. The Choctaw produced more corn than they needed and traded it for desirable goods they couldn't produce.

2. People's choices involve costs.
The Choctaw overhunted the buffalo in the southeastern forests. One cost of the meat and skin they acquired at any time was meat and skin they would be unable to acquire in future years.

3. People respond to incentives in predictable ways.
The Choctaw specialized in crafts, such as tool-making, because they knew they could give their tools as gifts and receive presents in return. Gift-giving and receiving constituted a system of incentives.

4. People create economic systems that influence individual choices and incentives.
Choctaw families followed economic rules. They were allowed to own farmland only as long as they used it. In addition, the Choctaw were expected to give gifts to other villagers and to the chief.

5. People gain when they trade voluntarily.
The Choctaw traded their corn for salt, shells, buffalo meat, and hides. Their trading partners benefitted because they could not produce corn as cheaply. Both sides were better off in that they obtained products through trade that would otherwise have been more expensive to produce themselves.

6. People's choices have consequences that lie in the future.
The Choctaw chose to farm; they became prosperous later as a result.

Case studies of the Iroquois and the Pueblo Indians can be found in Schug et al., United States History: Eyes on the Economy. Students might also be asked to research other Indian peoples in the period before the Europeans came to America, using the Handy Dandy Guide approach.

1Estimates of the American Indian population of the land that is today the contiguous United States vary widely. The estimate of six million is from Alvin M. Josephy's introduction to his study, America in 1492: The World of the Indian Peoples before the Arrival of Columbus (New York: Alfred A. Knopf, 1992): 6.2At the same time, many other tribes existed whose cultures were less advanced, but members of these tribes probably lived as well as, or better than, the average European peasant.3The Five Civilized Tribes-the Cherokee, Chickasaw, Choctaw, Creek, and Seminole-were removed from the southeastern states in the 1830s and relocated into semi-sovereign Indian Nations in the Oklahoma territory. In 1907 these nations were absorbed into the new state of Oklahoma, and the land in the Nations was divided into individual plots which were allocated to individual tribal members.4Wampum, a bead made out of seashells, is often cited as Indian money because it was used as a medium of exchange between the Indians of the Northeast and the Dutch and European settlers. Most authorities agree, however, that before they made contact with Europeans, Indians used wampum only for ceremonial purposes.5The Handy Dandy Guide for Solving Economic Mysteries is a student handout from Robert W. Reinke, Mark C. Schug, and Donald R. Wentworth's Capstone: The Nation's High School Economics Course (New York: National Council on Economic Education, 1989).

Jean Caldwell is Professor of Economics and Director of the Center for Economic Education at the University of Central Oklahoma in Edmond. David Gash teaches social studies at Broken Arrow High School in Broken Arrow, Oklahoma.