This article takes as its starting point the debate over whether or not peasants operate according to capitalist rationality. I argue that neither the assumption that peasants operate according to noncapitalist principles, nor the assumption that peasant households operate like capitalist enterprises can account for the behavior of peasants. The analysis of subsistence production in a Sudanese peasant community reveals that market and nonmarket resources, and wage and unwaged labor are inextricably enmeshed. This suggests that we need to rethink not only our notions of «peasant economy,» but also some of our assumptions about capitalism. [peasants, markets, capitalism, economic rationality, subsistence production]