Sustaining Trade Through Generations: The Māori Ethic of Reciprocity

In a previous article, I briefly explored the relevance of Tauutuutu for contemporary businesses. In this piece, I delve deeper into the historical foundations of this reciprocity ethic. Additionally, I provide a few more insights on the power of reciprocity for business, drawing from economic principles and the characteristics of frontier New Zealand organisations.

Behavioural economics has repeatedly shown that reciprocal behaviour builds trust, which is crucial for long-term relationships. Trust reduces transaction costs, and fosters repeated interactions, leading to sustained success in business and personal relationships [i]. Reciprocity is essential for challenges that require collective actions [ii]. People are more likely to contribute to collective efforts when they see others doing the same. This conditional cooperation creates a reinforcing cycle of mutual contribution, sustaining collective success over time. Māori place significant importance on reciprocity in relationships, and the ethic of Tauutuutu has fundamentally underpinned enduring trade relationships that generated escalating benefits for multiple generations.

Tauutuutu was the foundation of exchange within traditional Māori society. Often called ‘gift exchange,’ this label does not provide the full scope or nuance of Tauutuutu, which is better described as an ongoing cycle of mutually beneficial reciprocal exchanges.

A fundamental concept underpinning Tauutuutu is that of escalation. While Tauutuutu has been interpreted as “balanced exchange”, this does not capture the critical element of escalation that is so prescient in early accounts of Māori societal and economic interactions. Whether the occasion that calls for reciprocal exchange is jubilant or calamitous, these exchanges are characterised by ever-increasing stakes. In the positive, this typically manifested in feasts and gifts; in the negative, insults and slights would escalate to skirmishes and intertribal warfare at the extreme end. The requirement to reciprocate was so great that people would often take great pains to meet an obligation, including with precious taonga, pounamu, prized cloaks, and, on some occasions, land.

Viewed through an economic lens, Tauutuutu is a framework of exchange for goods and services. However, for Māori, it can also be understood as an ethic that guides relationships with each other and the natural world. The economic exchanges can be understood as one aspect of a more complex network of relationships. These relationships were usually understood in their totality. An economic exchange was simultaneously a social, political, and environmental relationship. Economic exchange was deeply embedded in broader Māori social and political relationships and with nature.

An illustration of a tauutuutu exchange was the hākari, or feast attended by other hapū (sub-tribes). These feasts were events of “considerable economic, political, and cultural importance” [iii]. In particular, hākari were a powerful expression of a chief’s mana within their own hapū and regarding their guests. At hākari, the host chief would divide up the food. Piles would be set up, and the host chief would go along and note that a particular pile was for a specific hapū; then, the chief of that hapū would again divide the food amongst his hapū [iv].

The guest hapū was obliged to provide a reciprocal hākari that equalled or bettered the original feast, helping create and maintain bonds between hapū as the hosting duties oscillated in dynamic equilibrium.

Another form of inter-hapū exchange sometimes referred to as kaihaukai, saw geographically dispersed, rare, or specialised goods and services bartered. Kaihaukai was uniquely focused on addressing resource and skill imbalances.

“Some intertribal gift exchanges were formerly largely economic in purpose as when coastal dwellers exchanged food supplies with inland tribes. Here, items of food not necessarily available to inland tribes were given to them in exchange for food items that were a speciality in inland areas such as huahua (preserved birds). Seafood was always highly desired by inland dwelling people and one way of having access was by way of an exchange relationship.”[v]

Unlike the hākari, the goods were often not consumed during kaihaukai but were returned to the respective settlements[vi]. While hapū were primarily self-sufficient, some highly specialised craftsmen were either temporarily ‘traded’ in these exchanges, going with the hapū to conduct their work or their work was bartered during these meetings [vii]:

“Stack mentions a visit to Kaikōura, in late 1828, by ‘friends [of Kāti Kurī] whom they were expecting from Napier’. Stack’s term ‘friends’ would be his own interpretation. In all probability they would have been distant relatives with whom trading relationships had persisted ever since Kāti Kurī ancestors had moved from the Hawkes Bay area. That they were ‘expected’ suggests that their visit was a regular event, most likely when a specific resource was in season.”[viii]

This was a primarily utilitarian trade; however, it still involved some social bonding, with a degree of kinship or friendship required between the two groups to set up the exchange. “Outright haggling or bargaining was severely frowned upon.”[ix]. Kaihaukai “was usually an irregular event involving groups without rights to the desired resources. If regular trade became established, it was ritualised… to a form of gift exchange”[x]. In other words, as the connections between groups grew, the previously utilitarian bartering took on greater social significance [xi].

Tauutuutu remains a cornerstone of Māori relationships and underpins highly successful Māori enterprises operating in modern global economies. Companies that embrace reciprocity are better positioned to navigate complex global challenges, build resilient supply chains, and maintain customer loyalty. Six highly critical business lessons can be distilled from the tauutuutu ethic.

Six Insights Businesses Can Gain from Tauutuutu

1. Building and Reinforcing Trust

Escalating reciprocal relationships begin with small acts of cooperation or generosity that gradually increase in scale and significance. This gradual escalation helps build and reinforce trust over time[xii]. Trust deepens as each party consistently reciprocates with greater commitments, reducing the need for costly enforcement mechanisms and detailed contracts. Trust fosters a stable and reliable business environment where long-term partnerships can flourish.

2. Escalating Benefits

Behavioural economics suggests that people are more likely to engage in cooperative behaviour when they see others doing the same. Escalating reciprocal relationships leverage this principle by creating a cycle of increasing cooperation. When one party makes a significant gesture, the other party feels compelled to reciprocate with an even greater one, leading to a continuous and mutually beneficial cycle of collaboration. This dynamic encourages ongoing investment in the relationship, enhancing cooperation and collaboration [xiii].

3. Creating Competitive Advantage

Businesses that foster escalating reciprocal relationships can differentiate themselves by developing deeper and more loyal connections with partners, suppliers, and customers[xiv]. These strong, trust-based relationships can become a source of competitive advantage, as they are harder for competitors to replicate. This can lead to more favourable terms, priority resource access, and collaborative innovations that drive sustained success.

4. Facilitating Risk Sharing

As reciprocal relationships escalate, the parties involved become more invested in each other’s success. This mutual investment can facilitate risk-sharing, where parties are more willing to support each other during challenging times[xv]. For instance, suppliers might extend more favourable credit terms during a business downturn, or partners might co-invest in new ventures, reducing the financial risk for each party. This collective risk management enhances the resilience of the businesses involved.

5. Encouraging Long-Term Thinking

Escalating reciprocal relationships encourage businesses to focus on long-term benefits rather than short-term gains. By gradually increasing the stakes of their reciprocal actions, businesses are incentivised to think strategically about the future of their partnerships[xvi]. This long-term perspective helps businesses plan for sustainable growth and invest in initiatives that may not yield immediate returns but are crucial for long-term success.

6. Strengthening Social Capital

Social capital, the network of relationships and norms that enable collective action, is significantly strengthened through escalating reciprocal relationships. As businesses engage in increasingly significant reciprocal actions, they build a robust network of reliable partners and stakeholders[xvii]. This network can provide critical support, resources, and information, enhancing the overall social capital of the businesses involved and facilitating their ability to navigate complex challenges.

References:

I. Bose, D., & Camerer, C. (2021). Trust and behavioral economics: Exploration of trust based on game theory. In F. Krueger (Ed.), The Neurobiology of Trust (pp. 36-53). Cambridge University Press.

II. Carattini, S., & Roesti, M. (2023). Trust, happiness, and pro-social behavior. The Review of Economics and Statistics. https://doi.org/10.1162/rest_a_01303

III. Petrie, H. (2006). Chiefs of Industry: Maori Tribal Enterprise in Early Colonial New Zealand. Auckland University Press.

IV. Keane, B. (2013). Māori feasts and ceremonial eating – hākari. Te Ara - The Encyclopedia of New Zealand. Retrieved from http://www.TeAra.govt.nz/en/maori-feasts-and-ceremonial-eating-hakari/print

V. Mead, H. M. (2003). Tikanga Māori: Living by Māori values. Wellington: Huia Publishers.

VI. Williams, H. W. (2004). A Dictionary of the Maori Language (7th ed.). Legislation Direct.

VII. Cumberland, K. B. (1949). Aotearoa Maori: New Zealand about 1780. Geographical Review, 39(3), 401-424.

VIII. O'Malley, V. (2012). The Meeting Place: Maori and Pakeha Encounters, 1642-1840. Auckland University Press.

IX. Payne, D. (2020). The Hau of Kai Hau Kai: The practice of intergenerational reciprocal exchange. Mahika Kai Journal, 1(1), 1-14.

X. Bauer, P. C., Keusch, F., & Kreuter, F. (2019). Trust and cooperative behavior: Evidence from the realm of data-sharing. PLoS ONE, 14(8), e0220115. https://doi.org/10.1371/journal.pone.0220115

XI. Pieperhoff, M. (2018). The explanatory power of reciprocal behavior for the inter-organizational exchange context. Sustainability, 10(6), 1850. https://doi.org/10.3390/su10061850

XII. Chen, J. K. C., & Sriphon, T. (2022). Authentic leadership, trust, and social exchange relationships under the influence of leader behavior. Sustainability, 14(10), 5883. https://doi.org/10.3390/su14105883

XIII. Kumagai, S., & Iorio, F. (2020). Building trust in government through citizen engagement. World Bank. Retrieved from https://openknowledge.worldbank.org/bitstream/handle/10986/33346/Building-Trust-in-Government-through-Citizen-Engagement.pdf