- Kenneth Boulding
Máire A. Dugan
On the surface, exchange power is a quite simple concept. I want you to do something which I value. To convince you to do it, I offer you something, which you value. Beyond this, its operation in social life is both time-honored and complex.
More broadly speaking, exchange power can be economic power. Economic power "derives from being able to buy compliance. It is based on the simple principle of material rewards and deprivations. The human organizations of production and exchange determine access to resources and goods that are both needed and desired for subsistence and social life."
In order to be able to give you something which you value, I have to have it first. So, it is not only the exchange itself which is important, but also the processes which precede it. Most obviously, these include extraction and production. Beyond this, accumulation and storage as well as the negotiation of the terms of the trade can all be subsumed under exchange power. It is largely this range of aspects which make exchange power more complicated than it might appear at first blush.
Another complication of exchange power is that it is a base for both shared power (power with) and power over. In the first case, it leads to integrative power, in the second, to coercive power. Blau points out this paradox, noting that exchange "gives rise to both social bonds between peers and differentiation of status." If the values to the parties of the goods, services, or appreciations exchanged are relatively equal, the parties have a peer relationship. If, on the other hand, the items exchanged are of unequal value, the "principle of least interest" becomes operative: "the person who has the greater power in a relationship with another person is the one who gets the least out of the exchanges taken as a whole."
A final complication of exchange power is that the goods and services exchanged may not always have a clear use. Human beings are the only animals to set store by discovering, acquiring, and displaying materials comparatively rare in nature, frequently to be obtained from distant sources and commonly useless for the purposes of daily life. By designating such materials as in varying degrees precious they have created symbols of excellence, a quality which stems from aesthetic awareness but the striving for which lies at the very root of the civilizations created by man.
The Operation of Exchange in Society
Exchange is a very basic aspect of society. Each of us engages in exchange every day, whether in purchasing our groceries at the store in exchange for the money we give the clerk, or in working in return for our pay (which, of course, we then use at the grocery store, among other places).
There are some small societies for which exchange is THE principle of social cohesion, where almost all power rests in exchange. The Wola of New Guinea is such a people.
Any relationship in Wola society demands some co-operation in exchange activities, if not the direct exchange of wealth, at times during its existence, and these serve an important socializing purpose and promote interaction between people in this fractious society where the value placed upon the individual threatens the existence of an ordered social life.
Wealth and the capacity to exchange wealth to one's advantage are the sole determinants of stature within Wola society. Coercive power is constrained by the emphasis on exchange, and no amount of wealth gives a person the power to enforce his will on others. In fact, wealth and stature adds little to a member's capacity to influence his fellows. Further, integrative power has very little play in Wola society. While settlements are relatively permanent, the bonds between members of a settlement involve little intergroup responsibility and the group action is negotiated on a case-by-case basis, with self-interest being the primary criterion for each member. The complex set of norms surrounding exchange is the only glue that holds the society together. For example, reparation payments following a violent death are not simply compensation for the deceased's kin; they are a statement by the party responsible for the death that it was unintentional and that they do not wish it to terminate their social relations. The other exchanges, both small and large, of Wola society serve similar sociological purposes.
While the Wola are unusual in that virtually all power has its source in exchange, they are not unique in the primacy of economic power. The ancient Phoenicians based an entire empire on trade; they serve as "an example of a trading group whose actions decisively altered the lives of the producing groups whose needs originally created their power." Both our alphabet and money systems owe much to their influence. In his study of several early societies (in what is now modern Denmark , Hawaii, and Peru), Timothy Earle concludes that "[T]he effective use of political power depends on its control, and control rests firmly on the nature of the political economy." Marx and his disciples attribute extraordinary primacy to economic power: the means of production are seen as the organizing base of all society.
Marxism notwithstanding, in a complex society, exchange and productivity, while important sources of power, do not have the primacy they do among the Wola. Unfortunately, some of the major thinkers on exchange theory, like Homans, tend to exaggerate its import, reducing all forms of social behavior to exchange. Some everyday language seems to support this. We may refer to an "exchange of gunfire" on the coercive end, or an "exchange of greetings" on the integrative side. To reduce such situations to their exchange characteristics tells, however, only a partial story.
The gunslinger may in fact be the target of a barrage from his opponent as well as the initiator of his own attack on the same opponent. Neither one's focus, however, is on the exchange; both are trying to render the foe incapable of returning the onslaught. The case of the greeting is a bit more complicated. While I greet you because I am glad to see you, rather than because I am looking for a greeting in return, I am likely to be disappointed if your response is cool or nonexistent. Such a response may well discourage me from greeting you warmly on our next meeting at which, in fact, I may not be glad to see you.
Peter Blau differentiates between social and strictly economic change. He identifies the degree of specificity about an acceptable response as the basic difference between the two. "In social exchange, one party supplies benefits to another, and although there is a general expectation of reciprocation, the exact nature of the return is left unspecified." In our discussion of the three faces of power, the line between integrative and exchange power blurs. Social exchange, as Blau describes it, is included in the discussion on integrative power. For this discussion of exchange power, we are interested in exchanges, social or economic, in which the expected response is relatively clear.
Much of exchange is grounded in normative expectations regarding the need to give back in return for something of value given. In all cultures, people tend to return favors. Cialdini refers to this as the "law of reciprocity." While neither the time nor the substance may be specified contractually, norms suggest relatively clear parameters for acceptable responses. The penalty for not honoring this norm often takes the form of a termination or at least diminishment of the exchange relationship. Further, behavior out of keeping with broadly accepted norms is often the subject of conversation within the community in which it takes place. The person(s) guilty of the infraction may be endangering not one exchange relationship, but many.
Advantages of Exchange Power
Exchange power can be used as a mechanism to initiate, cement, or restore relationships. It is the last that is most impressive and probably of greatest use in intractable conflict.
Civil wars are particularly devastating in their impact on societies, with great costs in both human lives and property. In the long run, even more devastating is the cost at the level of social infrastructure. The fabric of society has been rent. We can see this illustrated in the Civil War in the United States. In terms of loss of life and financial expenditure and destruction, the Civil War ranks second only to World War II in terms of cost. These are absolute figures; if more relative figures are used, such as the percentage of combatants killed, the ranking increases to first. The actual costs are not, however, limited to this. The war's legacy includes long-term societal divisions, as evidenced in current political conflict in the states of the former Confederacy regarding its flags and their use by hate and New-Confederacy groups.
In a more recent civil war, however, Paul Wehr and Sharon Erickson Nepstad credit exchange power with undergirding moves toward conciliation. The civil war in Nicaragua was a particularly complicated one in that it was a dual conflict. The Sandanistas were not only at war with the Contras, but involved in an additional violent conflict with the Indian and Creole people of the Atlantic Coast.
By 1988, the Contras were essentially defeated, a fact increasingly clear as the U.S. government withdrew its support. Pure threat had been costly and ineffective for both groups.
It is in the exchange process that threat reduction and conciliation enhancement are actively pursued. As opponents communicate, clarify positions and interests, and trade concessions, threat is reduced. Mere civility may give way to genuine mutual respect.
As parties trade items of value, they can begin to learn to trust each other's promises. This is obviously a careful dance in the ashes of social violence. But, with careful tending, what Wehr and Nepstad are suggesting is that it can form the foundation for, and lead to the restoration of, integrative power.
Further, exchange power can have a powerful trust-building impact in intractable conflict even when negotiations do not produce jointly agreed-upon steps or when the negotiations have not even been entered. Charles Osgood's (1962) Graduated Reciprocation in Tension Reduction (GRIT) provides one model of how exchange may be used to foster improved relations with neither outside intervention nor direct negotiation.
Suggested at the height of the Cold War, GRIT is a series of unilateral moves, inviting but not demanding reciprocity. Osgood suggests several criteria for such moves: the steps should be small; they should be publicly announced; they should not endanger one's own security. When first published, GRIT met with a great deal of criticism on the part of realists who considered the strategy utopian. The United States and the Soviet Union, after all, were bitter enemies, poised against each other at the brink of nuclear Armageddon. What could small unilateral moves accomplish? At best, it would be a waste of time since the Soviet Union would never respond to such gestures; at worst, the United States would put itself in a disadvantageous position by appearing weak.
Amitai Etzioni (1968) then analyzed a several-month period during the Kennedy administration and found impressive support for the utilization of the design. The time period began with a speech at American University during which President Kennedy announced the cessation of atmospheric nuclear testing. The overture did not meet all of the conditions of GRIT. While it was publicly stated, no reciprocation was invited. And while it did not endanger U.S. security, its motivation was not a function of searching for a path to lowering hostility; rather, what the United States could learn from further testing did not justify the expense. Nonetheless, the Soviet Union did reciprocate and several unilateral moves were exchanged over the next several months. This cooling of tensions led to the first bilateral pact of the Cold War Era, the Hot Line Agreement; Etzioni also found that popular attitudes toward the other had softened, despite the short length of the exchange period.
Limits of Exchange Power
In general, exchange power is not operative unless I have something to offer which my colleague values and vice versa. Expressed differently, "a high capacity to perform a particular kind of action is not a basis for power unless other people find that action rewarding... To use the language of economics, there must be some demand for the reward."
In the midst of intractable conflict, we are dealing with parties who do not value each other. They are unlikely to value what the other has to offer unless it is only from the adversary that they can obtain it. Even when this is the case, additional problems may arise. Such problems are highlighted in the oft-used Israeli slogan, "No land for peace."
First of all the question arises: to whom does the item to be exchanged rightfully belong? While the Israelis have controlled land such as the Gaza Strip and the West Bank for decades, some Palestinians might counter Israel's right to control such lands and claim the lands as their (the Palestinians') own. So, if the Israelis do choose to trade land for peace, many Palestinians may feel that all that they are receiving in the bargain is something that was illegitimately taken from them to begin with.
Second, land is at least a measurable commodity. Peace is not. As expressed in the slogan, something tangible is being traded for something intangible. The challenge is to define and specify both ends of the bargain. If peace is the only thing of value for which the Israelis would be willing to make a trade, much work is required (as evidenced by the difficulty in coming up with agreements) to determine what are the prerequisites of peace and whether even these are sufficiently specifiable to be the objects of an exchange.
Third, many Israelis define the land in question as an integral part of their original homeland, and not subject to being traded away. Beyond this, in the years between the 1967 war when they took control of the West Bank and Gaza, and the current moment, these lands have been settled. Returning them to Palestinian control requires removing settlers whom the Israeli government previously allowed, sometimes encouraged, to move there. It is not only their houses which are built on the land; their very lives are connected to it.
When items required by the other side in a trade are considered non-negotiable items by significant elements on one's own side, much advance work needs to be done with partisans on one's own side to reframe the item in contention. Otherwise, an agreement may be made to give it away, but the resentment and ill will the planned or actual swap generates may cause the peace process to fail, or may render an agreement unenforceable or non-durable after the negotiation.
Exchange power, while not the primary form of power, is a potent tool for both negotiators and interveners. When adversaries have control over resources of value to their counterparts, trades of such resources can not only serve as the basis of agreements; they can also provide the foundation for improved relations in the future.
 Earle, Timothy. How Chiefs Come to Power: The Political Economy in Prehistory. Stanford, CA: Stanford University Press, 1997, pp. 6-7. <http://books.google.com/books?id=4AjAk15WSbQC&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false>
 Blau, Peter M. Structural Contexts of Opportunities. Chicago: University of Chicago Press, 1994, p.158. <http://books.google.com/books?id=K0idAnxKAbEC&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false>
 Homans, George Caspar. Social Behavior: Its Elementary Forms. New York: Harcourt, Brace Jovanovich, Inc., 1974, p.73.
 Clark, Grahame. Symbols of Excellence. Cambridge: Cambridge University Press, 1986. <http://books.google.com/books?id=dUrsDklHqLIC&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false>
 Sillitoe, Paul. Give and Take: Exchange in Wola Society. New York: St. Martin's Press, 1979, p.283.
 Mann, Michael. The Sources of Social Power: Volume 1, A History of Power From Beginning to AD 1760 - 1914. Cambridge: Cambridge University Press, 1993, p. 24
 (Ibid., pp. 191-195).
 Earle, Timothy. How Chiefs Come to Power: The Political Economy in Prehistory. Stanford, CA: Stanford University Press, 1997, p.208.
 Blau, Peter M. On the Nature of Organizations. New York: John Wiley & Sons, 1974, p.208.
 Cialdini, Robert B. Influence: Science and Practice.4th Ed. Boston: Allyn & Bacon, 2001
 Nofi, Al. Statistical Summary: "American's Major Wars," United States Civil War Center, Louisiana State University. Available at http://www.cwc.lsu.edu/cwc/other/stats/warcost.htm. (Link unavailable as of May 13, 2013)
 Brunner, Borgna, "Confederate Flags of the New South." Available at http://www.infoplease.com/spot/confederate2.html.
"Rebels with a Cause," Southern Poverty Law Center, (April 9, 2001). Available at http://www.tolerance.org/news/article-hate.jsp?id=132,
 Paul Wehr and Sharon Erickson Nepstad, "Violence, Nonviolence, and Justice in Sandinista Nicaragua" in Paul Wehr, Heidi Burgess and Guy Burgess, Justice WithoutViolence Boulder, CO: Lynne Rienner Publishers 1994. p. 95. <http://www.colorado.edu/conflict/5025/nicaragua.htm>
 Charles E. Osgood, An Alternative to War or Surrender (Urbana , Ill.: University of Illinois Press, 1962.
 Homans, 1974, p. 75.
Use the following to cite this article:
Dugan, Máire A.. "Exchange Power." Beyond Intractability. Eds. Guy Burgess and Heidi Burgess. Conflict Information Consortium, University of Colorado, Boulder. Posted: September 2003 <http://www.beyondintractability.org/bi-essay/exchange>.