ABSTRACT The conventional approach to economic development assumes that if a surplus of land and labor exists in village systems, the introduction of commercial activities will not be detrimental to the subsistence system. A cultural-ecological perspective on economic development reveals a more complex process of change in human-environment relationships than the conventional approach. An analysis of the impact of the introduction of cattle raising and coffee production in the highlands of Papua New Guinea indicates that the relative location of activities, the linkages within the local ecosystem, the seasonality of labor inputs, the sociocultural context, and the patterns of cash expenditure must be considered in examining the potential integration of subsistence and cash earning. Cash earning can have a detrimental impact on subsistence systems, even when surplus land and labor exist. Loss of autonomy in relation to outside commercial networks reduces the resilience of village systems.