GroupsRus

Groups And Trade

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Introduction

It's likely that many people think of trade as being one of the 'highest' achievements of humans, some kind of coping stone on the edifice of civilization. That it is a force for good is beyond doubt: it adds to the material wealth of the parties who trade, it spreads knowledge about cultural artefacts and even the cultures which produce them, and it diminshes the chance of aggression between trading partners. But far from being a result of the civilizing process, it is becoming more and more likely that trade is a main cause of that process. An extreme view would be that it was a necessary precursor of settled human life in the tribal group. At the minimum it is hard to imagine the successful development of inter-group relationships in the early stages of human civilisation without the benign and informing influence of trade.

Exchange In Early Groups

It is reasonable to see exchange in primate groups and later in human groups as the precursor of trade. Exchange is driven by reciprocity, which originated before humans evolved, perhaps in primate groups, or perhaps earlier. Among chimpanzees, food sharing is prevalent. Males exchange food for social benefits, including sex with receptive females, and appear to have deliberately constructed the exchanges.

Hunter-gatherer tribes display the same behaviour, but on an expanded canvas. Individual choose to kill large animals which are far beyond the capacity of themselves or their immediate family to consume, with the purpose of exchanging the surplus meat for a variety of social goods, including prestige, sex, expectation of future food, repayment of past favours, payment in advance for future favours, and so on.

Trade: Genetic or Cultural?

In other words, was trade one of the features of early human groups which developed during the period before instruments of cultural transmission evolved (primarily spoken or symbolic language), meaning that the propensity to trade is genetically encoded; or was trade a 'social' or 'cultural' development, passed from generation to generation by example or teaching? Or are both mechanisms involved?

The existence of reciprocity (reciprocal altruism) in humans is not in doubt: individuals receiving generous treatment from others they will not meet again nevertheless respond generously to them in return. Unfair behaviour is also repaid in kind, without any apparent future advantage being gained. This is fairly strong evidence that genetic reciprocity is a basis for trade, but doesn't answer the question of whether trade (exchange) is somehow genetically encoded, or just the reprocity.

A more detailed study of the beginnings of trade makes it clear that the propensity to exchange at least is an evolved, genetic adaptation, carrying with it the idea of comparative value, although the forms of modern commerce and the institution of money (stores of value) are no doubt cultural constructs.

The Origins of Trade

Archeological evidence suggests but does not prove that trade took place between human groups of Homo erectus prior to the emergence of Homo sapiens, in other words between 1.4 million years ago and 300,000 years ago. These groups were kin-groups with a hunter-gatherer and sometimes nomadic life-style.

It is tempting to suppose that the gradual expansion of Homo erectus from its African home to coverage of most of Europe and Asia would have created many demands for trade. If a sub-group splits off from a group whose current territory includes a stone quarry (for axe-heads) and migrates to an area where game is plentiful but there are no quarries, it is easy to see that a trading network will come into existence to maintain the supply of axe-heads to the sub-group.

Among surviving Stone-Age tribal cultures, division of labour seems to take place to a marked degree even within an area in which groups are in constant touch with one another, and even in the absence of environmental features to drive it. Groups which develop and practise different skills will inevitably need to trade with each other; the suggestion here is that the propensity to trade may be the cause rather than the result of division of labour, with the benefit being a more harmonious, or at least less bloodthirsty system of communal inter-group alliances.

Here we may see the first origins of the modern city-state, and eventually of the nation-state, and it is based on the genetically hard-wired propensity of individuals to trade as members of their group.

It's difficult to know whether reciprocity was or was not adaptive at first as between the members of a group and the external individuals with whom they came into contact. Given that in the early stages of human development, most non-group visitors are enemies, it might be thought that it would be non-adaptive in such encounters. But then there would be no trade, evidently, and a group which trades is eventually fitter than a group that does not trade.

It's no surprise then that reciprocity (which evolved within the group in order to cement personal relationships) would have been involved in permitting external trade; a visitor with good intentions may have used mimicry to appear friendly, obtaining a reciprocal result, after which trade is possible. It's also possible that reciprocity evolved within the group as much as to foster exchange (of which trade is merely a special case) as to encourage individual relationships.

The trust that is displayed in reciprocal exchanges, especially when the second half of an exchange is deferred, owes much to its origins within the kin-group, to the extent that putative trading partners often attempt to find a basis of trust by exploring possible relationships, even if distant ones. Although this behaviour is most marked in tribes which have not departed far from the kin-group model, it is an everyday occurrence among modern humans, who eagerly seize upon any basis for relationship with people they meet, such as common friends or common origins (membership of the same group, in other words) and feel much reassured when such a relationship is found. While this doesn't damage the concept of reciprocity, it does emphasize the extent to which group membership is helpful in creating the trust needed for successful trading.

Trade Was Communal

Although in the modern mind, trading is essentially an activity carried out by individuals, and the joint stock company is thought of as a recent innovation, it is clear from the last section that trading by an early human kin-group was almost certainly thought of as a group activity. Much later, the mediaeval guild is an expression of the groupishness of trading as an activity. The city-states themselves seem to have evolved from the 'market-place', which had a special protected status quite similar to that of consecrated ground (and maybe even stemming from the same mythic roots).

Trade Before Law

That sounds topsy-turvy to modern minds; it is commonly thought, even by free-traders, that trade can only flourish where the rule of law has been established, as in 'Trade follows the flag'. The reality is almost exactly the reverse, as the colonial histories of European nation states demonstrate: the East India Company is just one of dozens of examples of private enterprise based on trade which were later subsumed by nation states as the basis of colonies.

It has been so throughout recorded history. The example of the Yanomamo quoted above demonstrates how trade leads to political alliances rather than following from them; and the same can be observed in the development of merchant guilds in mediaeval Europe. The city-states of Europe indeed provided a settled environment in which trade could flourish, but they were certainly not the expression of feudal power; on the contrary, they were created on the basis of the guilds, associations of traders of various types, and commercial law was developed by the guilds in the form of codes of conduct. This was even more true internationally (so far as that term has a meaning before nation states existed). The Hansa is the supreme expression in Europe of the pre-eminence of private commercial law; it is nowadays hardly remembered, but in its day the Hanseatic League, uniting the traders of modern Germany and the Baltic States was the strongest and longest-lived institution in Northern Europe. For hundreds of years it provided a legal and social framework within which commercial acitvity could take place.

The Hansa and the European city-states were straightforward expressions of groupish behaviour among traders and craftsmen, confronting the State (still quite weak) rather than within it. In the Aztec Empire (AD 1200 - 1500), the state had perhaps more power than was the case in Europe, but international or long-distance trade was still organized around a structure of merchant guilds which seems to have been remarkably similar to the European model, operating with a quasi-independent legal structure, and making much use of privately sponsored marketplaces.

By the time of the colonial trading companies, the State had become much more powerful, and easily took over their private activities.

The State as it developed between approximately 1600 and 1900 also took over the legal systems which the traders had developed, as it would later take over education and the provision of other social goods. And with similarly adverse results: by the 19th century, traders, especially international ones, were so dissatisfied with State legal systems that they re-invented their own legal systems through the arbitration process. In the 20th century the State was busy once again trying to nationalize arbitration (States after all are run by lawyers!). However, globalization has undermined the nation state and has given a new lease of life to independent (private) commercial law. The WTO is nothing but the Hansa writ large.

The message is that trade takes place within and between groups, and that the rules governing trade are best developed within and among those groups. The State, which is the negation of groupedness - a kind of devil in the face of the God of groups - is very bad at managing trade.

Ricardo's Law Of Comparative Advantage

Although the division of labour is an evolutionary innovation that predates humankind (ants - bees - etc), it was humans who first developed the practice of division of labour between groups. Groups of ants or other animal species may fight each other, but only human groups co-operate, and the possibility for this rests squarely upon the groupish propensity to exchange allied to reciprocal altruism.

Without the benefit of 18th century hindsight (not to denigrate Ricardo, a very great economist), the division of labour between groups that led to or was driven by trade 300,000 or more years ago was perfectly in accord with the law of comparative advantage, which says at its simplest that each group should do only what it is best at, and rely on trade for everything else it needs. The relative competence of a group may be assisted or constrained by its environment (raw materials etc), but even on a completely level playing field two groups will collectively achieve the best result if each one becomes a specialist in a particular technique, rather than trying to compete against each other.

This is the basic argument for free trade, and has been distorted in modern times by the nation state, which is driven by the desire to increase its own power, or by the stupidity of a narrow merchantilist class which appeals to that power for protection against the market (representing groupish human nature).

Perhaps it is too obvious to mention that without groups there could have been no Law of Comparative Advantage, and no Ricardo. Individuals can specialize with advantage, of course, within the group, and do so; but there are fairly few activities which are more commercially viable when conducted by one individual than when conducted by a group.

The importance of the division of labour as a driving force for inter-group development is nowhere better illustrated than in the Kula, the subject of Malinowski's immortal book, Argonauts of the Western Pacific, discussed in the next section.

The Kula

The Kula is an institutionalized and non-commercial system of trading practised by a series of primitive tribes in part of the Western Pacific. The objects traded (craft-works of various types, but always exactly the same types) travel around a vast circle of tribes from island to island. Some types of object travel clockwise; other types travel counter-clockwise. The process of trading (conducted by canoe parties of tribesmen) is highly stylized and imbued with mythic rituals. Participation in the trading ring gives status; and high status individuals tend to be involved more than low status ones, although very high status individuals (chiefs) do not travel, acting only as recipients (and then donors) of the objects traded (exchanged would really be a better word, since money is not involved).

The Kula, which is by now no doubt much broken down, if it even survives at all, is (was) a ritualized system of exchange which can be seen as the backbone of inter-group relationships in the extended tribal community. Malinowski himself maddeningly refused as a plain 'anthropologist' to speculate on the origins and evolutionary or social purposes of the Kula; but his language hints at many social benefits to be gained from the institution.

First of all, the frequent social and ritual events of the Kula provide many opportunities for non-Kula (commercial) trading to take place. The frequent inter-tribal contacts mandated by the Kula ensure that relationships are conducted on a non-aggressive and co-operative basis. The Kula also provides opportunities for inter-tribal cultural exchange, and serves to maintain linguistic compatability between tribes.

It's easy to say, but hard to prove, that the Kula is an evolved mechanism which maintains overall inter-group harmony, cultural compatibility and economic exchange (via parallel trading). It's easy to believe, indeed, that without the Kula there would be a far greater amount of aggression and far less economic trading between the various tribes involved.

Clearly, the Kula is based on a genetic propensity for exchange; it also involves reciprocal altruism and a heavy reliance on mythic governance. It is founded on a kin-group hierarchy, within each separate tribe, and even to some extent between related tribes. All these factors are clearly genetic. It's hard to say how far non-genetic, cultural factors were involved in the development and the maintenance of the Kula. Of course, there isn't a 'Kula' gene. But only a thin coating of cultural continuity may have been needed to maintain the Kula tradition from generation to generation, given all of the powerful genetically-driven psychic needs that it satisfies and expresses.

The Role Of Trade In The Development Of Language

The use of pictorial symbols was a feature of trade in the pre-historic period. Clay tokens were used in Mesopotamia c. 8,500 BC as a means of describing and recording the contents of a shipment; and were gradually replaced by lists impressed on clay, using symbols which were a mixture of direct pictorial images (ten pictures of a stylized chicken = 10 chickens) and derivative (abbreviated?) symbols which can be viewed as the precursor of symbolic writing as such.

It is likely that the growing sophistication of the counting and recording systems used primarily in trade is linked to the emergence of major centres of population requiring large scale imports of food and other commodities. The need for accurate recording can also be tied to the emergence of a governing elite which needed and wanted to tax the production and movements of goods.

The emergence of writing (the transition from pictorial to conceptual symbols) may also have taken place in connection with trade.

Trade As The Basis For Multi-Group Social Development

In the end it doesn't matter much whether reciprocity is directly or indirectly responsible for the development of extra-group trade; the connection is indisputable, and it was trade which paved the way for constructive relations between tribes which would otherwise have been enemies, or at least, worse enemies than without trade.

It's a very noticeable fact that almost all successful international bodies of law have to do with trade. The WTO, the International Chamber of Commerce, international maritime treaties, Free Trade Agreements (EFTA and then the EU), OPEC, NAFTA, and many other organizations and treaties are essentially commercial in their origins and effects, and by and large they are welcomed by all nations, who more or less willingly submit to their jurisdiction. Not so with attempts at political, ecological and social international co-operation, which are usually bitterly disputacious, and often ineffective.

From a groupish perspective, this situation can be summed up quite neatly: groups are xenophobic except when it comes to exchange, when they become cooperative.

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