Economy is not a compartment of social activity but a process of choice. It is concerned with issues of accommodating to problems of scarcity: subject to some scarcity constraint(s), what goods and services and how much of each are to be produced, how far different wants may be satisfied, the methods of allocating resources, the adoption of different modes of production, the establishment of systems of exchange and the distribution of benefits between different individuals and groups. These choices do not occur in a social vacuum — a large variety of aspects of social behaviour impinge more or less strongly on the process. Indeed, there is an interaction between economics and other social considerations. The value systems of any society, the institutions through which choice operates, systems of property rights, the methods of enforcing agreements or contracts and the relationships between individuals and larger groups all underlie choice. In considering the development, structure and function of Aboriginal economy, it is essential to approach the subject as a process of choice within this larger interactive context.

Economists have tended until recently to ignore these underlying issues and to focus unduly on market activity as an abstraction. In principle, allocation, exchange and distribution are then seen as achieved either by the market or, as an alternative, by some form of direction. But is there an alternative mode of solving economic problems?