American Indian Culture and Research Journal

Trade can be considered a mechanism of social change from many perspectives. It serves to spread cultural elements from one society to another (diffusion). It encourages societies and areas within societies to specialize production within the national and international economies according to available resources (comparative advantage). Yet nowhere is the role of trade as an effective agent of change more striking or pivotal than in areas where traditional economic activities and relations are confronted by capitalistic ones-a situation typical of reservations. In this situation, the nature, scope, and operating practices of trade greatly affect production, determining to a large extent the economic options and well-being of the resident population. Consequently, an historical analysis of trade is crucial in understanding the dynamics of reservation economies. This analysis of the Navajo economy focuses on the middleman activities of the traders in relation to the Navajo crafts industry. Supplementing the previously established wool trade, this industry was at the cutting edge in the expansion of market relations on the Reservation. Composed primarily of blankets and silver jewelry, craft production grew constantly until it peaked in the 1920’s before collapsing with the failure of the national economy into the Great Depression. However, far from being a static industry-save for the increase in output-this industry proved to be highly dynamic as forces from within and without the Reservation wrought changes in the design, production, and distribution of these crafts.