Thursday, May 17, 2007

Exchange as the Alternative Practised Millennia Ago

Greg Mankiw writes one of the Big Blogs, in content and number of readers. Read it here. I followed one of his interesting pieces earlier, but saved it and then ‘lost’ it (a not uncommon experience at Lost Legacy), but found it again while setting up the system in France (with the talented assistance of my daughter – another not uncommon experience).

This piece was headed: ‘Charles Darwin versus Adam Smith’ and it comes from a piece by Professor Paul Rubin, Samuel Candler Dobbs Professor of Economics and Law at Emory University and the author of Darwinian Politics: The Evolutionary Origin of Freedom (Rutgers University Press, 2002). He has been writing a series on evolution and economic behavior for the Cato Institute's journal Regulation.

Rubin’s article is “Evolution, Immigration and Trade” published in Think Tank Town (7 May )

I selected only two paragraphs for my comments:

Our primitive ancestors lived in a world that was essentially static; there was little societal or technological change from one generation to the next. This meant that our ancestors lived in a world that was zero sum -- if a particular gain happened to one group of humans, it came at the expense of another.
This is the world our minds evolved to understand.

Conflict was common in the environment in which humans evolved. As primates, which are a very social order, our ancestors lived in relatively small groups in which everyone knew everyone else. Our minds are adapted to deal with populations of that size. Our ancestors made strong distinctions between members of the in-group and outsiders, and we still make such distinctions today -- social psychologists can create in-group and out-group feelings based on virtually any arbitrary difference between populations

Consider an alternative explanation of the same scenario presented by Paul Rubin. First what is missing?

Well it was headed by Greg Mankiw as ‘Charles Darwin versus Adam Smith’, though neither appeared in the article as posted, and Smith in Wealth Of Nations (Book I, chapter 2) did postulate that the ‘propensity to truck, barter, and exchange’ has a long history, going back to the ‘consequence of the faculties of reason and speech’, which places it sometime in the past 200,000 years, perhaps earlier depending on whether the hominids, such as the Neanderthals, had an ability to speak (we can accept that they could reason to an extent).

From the above propensity,humans developed the division of labour, which after many millennia was the cause of social evolution towards, eventually, commerce, via scavenger/hunter-gathering, shepherding and farming. (Smith’s four ‘ages’).

Now, we can accept that in the long duration from a small world population of humans in Africa to the occupation of the entire Earth, there were few opportunities for isolated bands of hunter-gatherers to make contact, except on an intermittent, possible multi-generational sequence. In these circumstances, Professor Rubin’s scenario has credibility.

However, as humans proliferated in relatively small but separate geographical regions (Europe, India, Australia, parts of China, North Western routes from Asia to America, North Africa), contact incidents increased. The processes that added a new experience to the human condition.

The choice on contact was two-fold: violent hostility (Rubin’s zero-sum) or exchange (Smith’s non-zero sum). That these co-existed seems to match the archaeological evidence; they still persist together, for which no counter-evidence is credible.

Exchange was not invented in the 18th century; its prehistory is understood fairly well (I have an as yet unpublished manuscript, ‘The Prehistory of the Deal’, awaiting my attention, which after my ‘Adam Smith’ volume is with the publisher, I shall return to it).

In short, exchange behaviour, which includes gift, reciprocation of favours, peace agreements, safe passage, hostage swaps, and much else, had been practised for many millennia, possibly as long as the human species has formed.

This assertion is perfectly comfortable with the zero-sum nightmare alluded to by Professor Rubins. If life on the open savannah was characterised by the zero-sum behaviours he mentions, it was also characterised by a different non-zero-sum set of behaviours, as deeply ingrained as the former.


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