This chapter establishes the background for further research into the production and circulation of Chivay obsidian in the prehispanic Andes. The chapter began with a review of different forms of exchange based on Polanyi's framework but discussed in light of Andean prehistory. The specific geographical and cultural conditions that distinguish ancient Andean economies were placed in a context that is comparable with other mountain culture regions.

Theories of culture change might suggest that regional exchange requires the managerial or coercive power of elites to organize caravans and benefit differentially from the trade goods. However, archaeological evidence shows that the persistent obsidian exchange that moved small quantities of obsidian since the Early Archaic saw a significant increase during the Terminal Archaic. This increased circulation of obsidian is an early symptom of the dramatic economic and social changes that would occur in the south-central Andean highlands in Formative times.

The evidence of this circulation was perhaps not apparent at early centers because these centers were not yet dominating regional exchange patterns through the control of labor and large herds of camelids that are believed to have been a feature of Late Formative primate centers. The mechanism responsible for disseminating obsidian to the region beginning in the Terminal Archaic is perhaps related to a number of interrelated phenomena. The principal factors governing this change may include: the lowered cost of interaction and transport of weight facilitated by caravan animals, the expansion of regional-scale social networks, and the impetus provided by the needs of some to differentiate themselves in this time of emergent social ranking through the ownership of non-local goods such as obsidian.