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.
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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.
Ridley
in The Origins of Virtue describes research carried
out by Frans de Waal at the Yerkes Primate Center in Atlanta
(F B M de Waal, Journal of Human Evolution, 18:
433-459, 1989). Reciprocity is the order of the day: 'If A
often gives foliage to B, then B will often give to A. There
is a pattern of turn-taking: A is more likely to give food
to B if B has groomed A recently, but not if A has done the
grooming favour. A chimp will punish another that has been
stingy by attacking it. To de Waal all this implies that chimpanzees
'possess a concept of trade'.'
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.
Says
Ridley: 'I do not believe it is too far-fetched to see in
the actions of hunter-gatherers distant echoes of the origins
of modern markets in financial derivatives. . . . According
to Hill and Kaplan (Population and dry-season subsistence
strategies of the recently contacted Yora of Peru, National
Geographic Research, 5: 317-334) (the
hunter) is entering into a contract to swap the variable rate
return on his hunting effort for a more nearly fixed return
rate achieved by his whole group.'
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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.
Paul
Seabright in The Company of Strangers describes experiments
by Ernst Fehr at the University of Zurich (Ernest Fehr and
Simon Gachter, 'Fairness and Retaliation, the Economics of
Reciprocity', Journal of Economic Perspectives, 14:
159-181) which seem to establish beyond doubt that reciprocity
is instinctive (genetically encoded). This conclusion has
been confirmed by many subsequent experiments.
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.
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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.
L.
Sharp, in "Steel Axes for Stone Age Australians,"
Human Problems in Technological Change, 69-92 describes
the Stone Age Yir Yoront tribe living in the north of Australia,
who trade sting-ray barbs for stone axes produced 400 miles
to the south, through a long line of intermediate tribes.
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.
N
Chagnon, in Yanomamo, The Fierce People, 1983, describes
a system of villages in the Venezuelan rain forest which display
highly developed division of labour between villages, based,
he believes, on the need to maintain a stable pattern of political
alliances between villages.
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.
Says
Mark Ridley in The Origins of Virtue: 'There is nothing
modern about commerce . . . On the contrary, trade, specialization,
the division of labour and sophisticated systems of barter
exchange were already part of a hunter-gathering life. Indeed,
they had probably been so for many hundreds of thousands of
years. Perhaps even millions. It is possible that Homo Erectus
was mining stone tools at specialized quarries, presumably
for export, 1.4 million years ago.'
And
again: 'Trade is the beneficent side of human groupishness.
I have argued that humans, along with chimpanzees, are unusual
in their addiction to group territoriality and inter-group
conflict. . . . The shared fate that we enjoy with other members
of the group drives us into a mixture of xenophobia and cultural
conformity, an instinctive subservience to the larger whole
that partly explains our collaborative nature. But this segregation
into groups also allows trade between specialized groups.'
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.
Seabright
in The Company of Strangers says: 'Reciprocity has
also mattered in the history of humanity because it has enabled
hunter-gatherer bands to take the first cautious steps toward
conducting exchange with strangers (such contacts occurred,
as we have seen, well before the adoption of agriculture).'
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.
Seabright:
'Although our ancestors were certainly highly wary of strangers,
most of whom would have been hostile, if not lethal, friendly
strangers may have been a great rarity, certainly unusual
enough for there to be no great adaptive pressure in favour
of cheating them. Indeed, friendly strangers can be thought
of as successful mimics of our genuine friends, successful
because of their comparative rarity until very recent times.
A second possibility is that there was indeed some real selective
pressure against reciprocity at an individual level, but that
this was offset by the adaptive benefit to groups
that displayed reciprocity (such groups might be better placed
to trade with others, for instance).'
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.
Stuart
Plattner, in Economic Behaviour in Markets, (included in Economic
Anthropology, ed. Plattner), quotes Healey (1984) who
studied Kundagai Maring trading patterns in Papua New Guinea.
Among un-related traders, immediate exchange took place 483
times as against 35 cases of delayed exchange; among related
traders, there were 697 cases of delayed exchange as against
71 cases of immediate exchange. Healey notes: 'The search
for kinship ties between erstwhile strangers introduces moral
principles that should obtain between the parties'.
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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).
Prince
Petr Kropotkin, in Mutual Aid, sets out the case
for the groupish origins of trading and markets, with special
relevance to German and Eastern European models. Propotkin
suggests that: 'The guild merchant was a body entrusted with
commerce in the interest of the whole city, and only gradually
became a guild of merchants trading for themselves'.
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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.
Matt
Ridley in The Origins of Virtue, referencing B Benson,
The spontaneous evolution of commercial law, Southern
Economic Journal, 55, pp644-61, points
out that the groupish virtue of reputation lay at the heart
of successful international trade in the 12th century in Europe:
'Merchants travelling abroad had substantial protection in
disputes with local merchants under the merchants law. The
only and final sanction against a transgressor was ostracism,
but . . . ostracism can be a powerful force.'
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.
Frances
F Berdan in Trade and Markets in Precapitalist States (Economic
Anthropology, ed. Stuart Plattner) describes Aztec artisanal
and trading structures: 'Artisans . . . tended to cluster
in their own districts of the cities. They were, by all appearances,
grouped into guild-like organizations, with the craft being
handed down from parent to child. There was an internal system
of quality control as well as social differentiation within
the 'guild'. . . . Merchants who conducted long distance foreign
trade were organized into guilds much as were the luxury artisans,
residing in separate city districts, controlling membership,
providing training for the neophyte, collectively worshipping
a patron deity.' Merchants who travelled long distances were
safeguarded in foreign markets by the organisers of those
markets. This structure is extremely similar to that of the
European Hansa.
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.
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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.
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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.
Bronislaw
Malinowski in Argonauts of the Western Pacific notes
that the effect of the Kula is to create a safe and comfortable
framework within which it's possible to conduct non-Kula relationships,
including economic trade. But he doesn't say that's the aim
of the Kula.
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.
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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.
Schmandt-Besserat,
1978, Professor of Art & Middle-Eastern Studies at the
University of Texas, How Writing Came About, 1997,
describes the use of counters in recording economic data,
and links the growing sophistication of the symbols used to
the parallel development of social institutions. Dr Schmandt-Besserat
supposes that accounting may be related to the rise of an
elite, when communities had grown beyond the possibility of
egalitarian governance. 'The appearance of tokens in the earliest
rank societies, their inclusion in rich burials, and the place
of the complex tokens in the state bureaucracy, suggest that,
from the beginning, accounting was the privilege of an elite
and that the more the system became efficient and precise,
the more power it wielded.' Dr Schmandt-Besserat also points
to the occurrence of tokens among burial goods from 6,000
BC onwards.
The
fact that the first stage of the token system (plain tokens)
coincided with agriculture and the second (complex tokens)
with urban formation, seems of great significance. It clearly
indicates that the evolution of accounting coincided with
major socioeconomic developments.
The
emergence of writing (the transition from pictorial to conceptual
symbols) may also have taken place in connection with trade.
Donald
(Origins of the Modern Mind) says: 'Writing had its
origins in the most mundane of daily dealings: trade. The
great majority of early written documents are records of transactions.
The earliest documented artifacts are over 100,000 cuneiform
tablets found in the ruins of ancient Mesopotamia, the oldest
dated back to Uruk about 5,000 years ago.'
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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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