Market-places are for circulating goods outside the traditional system of reciprocity and redistribution. At the early stages, trading that was conducted outside the village or town was made with foreigners to whom there were no social obligations, as depicted by Polanyi in the case of ancient Greece (Polanyi 1971, p. 104). The spatial separation of trade and other modes of circulating goods indeed mirrored the historic incompatibility of two different normative conceptions which constituted the basis for the exchange of goods. It was felt that the gift, to members of the same community, contained a social content inasmuch as the transfer of the gift confirmed the social bonds with kin, neighbours, and fellow villagers, thus contributing to the social cohesion and economic self-sufficiency of even smaller communities. Trading for money has always conveyed the notion of making profit at the expense of others; among friends and neighbours, it would have discredited the social content of the good (Malinowski 1922; Mauss 1966; Polanyi 1971, pp. 78-115). This notion did not apply, however, in transactions with foreigners, who were regarded as having a different set of values.

When the market principle penetrates and gradually dominates various aspects of community life, the market-place comes to be a central village institution which now not only serves the trading function but also has social and cultural purposes. In Minahasa, after the abolishment of the mapalus — the mutual aid groups involved in agricultural production which also provided the arena at festivities for confirming social and cultural relations — the marketplace, in addition to other new institutions such as local associations, took on some non-economic functions. For despite economic integration and social transformation, the villagers continued to feel the need for an informal public place in which to exchange all kinds of local news, including private and political gossip and slander (Frohlich 1940; Bohannan and Dalton 1968; Skinner 1968).

As the market-place mirrors various aspects of village life, the pasar as a research subject provides valuable access to a number of issues in the social sciences which relate to the village.