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Peasant economics is an area of economics in which a wide variety of economic approaches ranging from the neoclassical to the marxist are used to examine the political economy of the peasantry. The defining feature of the peasants are that they are typically seen to be only partly integrated into the market economy - an economy which, in societies with a significant peasant population, is typically found to have many imperfect, incomplete or missing markets. Peasant economics treats peasants as something different from other farmers as they are not assumed to be simply small profit maximizing farmers; by contrast, peasant economics covers a wide range of different theories of peasant household behavior. These include various assumptions about the maximization of profits, risk aversion, drudgery aversion, and sharecropping. The assumptions, logic, and predictions of these theories are examined and the impact of subsistence is typically found to have important implications in terms of producers decisions about supply, consumption and price. Chayanov was an early proponent of the importance of understanding peasant behaviour arguing that peasants would work as hard as they needed in order to meet their subsistence needs, but had no incentive beyond those needs and therefore would slow and stop working once they were met. This principle, the consumption-labour-balance principle, implies that the peasant household will increase its work until it meets (balances) the needs (consumption) of the household. A possible implication of this view of peasant societies is that they will not develop without some external, added factor. Peasant economics has been seen as being an important area of study by some development economists, agricultural sociologists, and anthropologists.
Marx describes how serfdom disappeared in England by the end of the 14th century. Feudal agriculture was “characterised by division of the soil amongst the greatest possible number of subfeudatories.” These “subfeudatories” were typically large estates who would hire peasants to work for wages on their large estates, as well as allocating them small plots of “4 or more acres,” and “common land” which could be used collectively by all the peasants of an estate. However, Marx writes that new textile industries overseas created an increase in the price of English wool. This led to land enclosures, where land which was once owned by peasants for their own agriculture was fenced-off and used for pastures. This culminated in the “Acts For Enclosures of the Commons,” where large estate owners would grant themselves ownership of common land through parliamentary decree. These enclosures took from peasants the land which was previously their subsistence. This led to a massive displacement of the population, which would later become concentrated into an industrial working class. This is seen by Marx as the shift from feudalism into capitalism.