Friday, June 07, 2013

From My Notebook, no. 12

Is money-making the same as household-management or a part of it or subsidiary to it?  And it is subsidiary, is it so in the same way as shuttle-making is subsidiary to weaving, or as bronze founding is to the making of statues? For these two are not subsidiary in the same way; the one provides instruments, the other provides the material, that is, the substance out of which a product is made, as wool for the weaver, bronze for the sculptor.  It is obvious that household management is not the same as money-making; it is the task of the one to provide, the other to use; for what other activity than running the house is going to make use of what is in the house? But whether money-making is part of management or a different kind of activity altogether – that is a debateable question, if, that is to say, it is the money-maker’s task to look around and to see from what sources money and property may be derived.” (Aristotle:  4th century BCE: 1962. “The Politics”, Book 1, Chapter 8, pp. 38. Translated by J. A. Sinclair, Penguin Classics, Harmondsworth).
This is one of many other paragraphs I could cite where `Aristotle mentions en passant of his main thesis various activities that constituted separate established functions from farming or shepherding, the principal activities of the established communities with which he and his readers were familiar.
Reading this extract I was struck by its relevance to my ‘debate’ last yearwith David Graeber’s severe criticism of Adam Smith for his statements about the social evolution and roles of “truck, barter, and exchange” in Wealth Of Nations (ch. 1, Book 1). 
David Graeber makes great play in his severe criticism of Smith for stating in 1776 that “trade” emerged as  “truck, barter, and exchange” behaviours in early human societies.  David believes this is manifestly wrong and he uses as his crowning evidence against Adam Smith is from his search in the anthropological literature, and his own fieldwork, is the fact that he found no references in his or his colleagues’ work in the field to the effect that barter played any role in the societies they studied, which societies are regarded by anthropologists as precursors in respect of ‘modern’ societies. 
Of course, it seems farfetched to come to that conclusion given that they survived for millennia without evolving into even simple forms of pre-market societies.  This alone should provoke scepticism, not about Smith’s reported fallacious assertions of a sequence of “truck, barter, and exchange”, but instead about the significance of surviving pre-market societies without that reported experience implied in Smith’s assertion. The fact that such societies survived outside the geographical domains of those societies that did develop is itself significant but not for the reasons asserted by Dr Graeber.  They did not survive within that geographical area, either because they were pushed by choice to move to more remote areas beyond the geographic fringes or they were violently destroyed by the first appearances of evolving property conscious, proto-changing societies, in the deep past during tens of millennia ago.
Those societies that remained within the hunter-gatherer technologies outwith the geographical reach of those modern societies that made contact with them including that deep past and up to relatively recently (in the past three centuries) often suffered grieviously from those first contacts. [In this respect I would not expect any people on Earth to benefit necessarily if it is ever visited by an high-tech, alien society in some future millennia.]
When ‘primitive’ precursor societies are asked about their relationships they tended to consider “trade” an alien idea set against their traditional relationships of reciprocity and social solidarity.
Such evidence-based rebuttals were produced with polemical vigour against Smith and his successors, and the newer neo-classical economists, whom Graeber sternly mocked in his “Debt: The First 5,000 Years , 2011. (Melville House Publishing, New York)
I remain sceptical of his stern rebukes, not because I doubted his evidence from anthropology, but from what I initially summed by responding that he and his colleagues asked the wrong questions of the wrong people perhaps from an over emphasis of “exchange” as meaning “trade”.
Anthropology is a relatively new science, and, to its credit, is heavily evidence based.
Detailed studies of societies that survived through to the 19th and 20th centuries without contact with, for the sake of cutting though longish qualifying statements, what we regard, as “modern” (NB: “modern” does not mean “better” in all or any ways). Nor does it make any statements about what happened once higher technology societies came into contact with them.
One observation we might make is that those early societies that continued to live out their lives as hunter-gatherers but remained in close proximity to societies that had changed their modes of acquiring their subsistence through shepherding, and eventually farming, either moved further away and out of their easy reach, or they were violently eliminated of absorbed via forms of slavery.
Some were protected to by geographical distance, though they too were eventually contacted and, usually, severely treated by so-called “civilised” invaders (who seldom ceased to invade and violently disrupt each other through to the 21st Century).
So when travellers from the 18th Century reported on surviving early societies (in the Americas, Africa, Asia) their impressions were often accompanied by fancy and fantasy than the more scientific reports of early anthropologists from the 19th Century through to the 20th century. They reported on societies that had remained outside the experience of several, in some cases many, millennia of early the economies outside the experience of shepherding, farming and commerce already well established mainly in Europe, North Africa, and Northern Asia.
For reasons discussed by Deidre McCloskey, the related technologies that grew out of elements of commerce in largely agricultural societies in North Western Europe increasingly widened the per capita income and product gap with the diminishing number of the remaining earlier societies.
In Smith’s day almost all of his knowledge about human societies were limited to the history of European societies that showed considerable written evidence of the effects of early commerce within largely agricultural societies over the 5 millennia of written history. Smith had a good working knowledge of Latin and Greek classic texts, and French, and some knowledge of Italian (his fluency in Latin helped). 
There is much relevance to what we take for granted in our European, Middle-Eastern and Egyptian history, and in varying degrees of awareness of the ancient empires of China and India. 
This takes us back to my notebook notes of Aristotle above. Putting to one side his, and others, views on the ethics of commerce, we can see in his reports of the apparently normal existence of clear differences in the range of products and the divisions of labour for separate industries technologically different from pure shepherding and farming in 4th-century Europe that were associated with commerce and monetary transactions.
The only contrast Smith makes between what Europeans called “savage” societies in the 18th century and labourers in commercial societies was in their relative ability to consume products from developing market societies and the absence of such products in surviving pre-market societies in the Americas and Africa (Wealth Of Nations, Book 1, chapter 1).  Smith asserted boldly that the “poorest common labour” in Europe was much better off in living standards than the richest and most powerful of “savage princes”.
On this basis he opens Wealth Of Nations with firm statements on the historic significance of exchange behaviour, not necessarily confined to direct “trade” only (see his “Lectures On Rhetoric and Belles Lettres”, 1762-3).
Societies that do not evolve the means for at least proto-market exchanges, post-reciprocation behaviours, survived as exhibits for anthropologists to study.  Indeed, every human society could have remained without ever evolving into market type economies (as appears to be the case for all of then through the c.200,000 years of the homo sapiens from the proto-human speciation from the common ancestor species of chimpanzees some six million years ago in central Africa.  But some proto humans did evolve and, as their populations grew, so did their occupation of geographical space from Africa into Asia. Over the millennia they continued to evolve and the scope for studying those localised societies that did not evolve in pace with societies in Europe and Asia from 12,000 years ago in this manner and from 500 years ago their geographical isolation shrunk rapidly (though some societies in Central America did begin to form elements of post-hunter gatherer societies relatively recently.  Social evolution has always been more complex than a simple universal 'Stadial' sequence (such as in the "Four Ages of Man" sequence at the root of Smith's and others' speculations). 
These considerations show the limited relevance of Dr Graeber’s argument over Adam Smith ‘supposed’ errors.
That is why examining the information in such works as Aristotle’s, let alone the entire genre of classical literature, is vital for our understanding of Smith’s assertions. It also shows how well-rooted in history and pre-history were Smith’s speculations.
[GK: Edited: 8 June] 


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