Indulge me in a little sermon. The tradition among many anthropologists and archaeologists has been to treat the past as a very different place from the present, a place with its own mysterious rituals. To cram the Stone Age or the tribal South Seas into modern economic terminology is therefore an anachronistic error showing capitalist indoctrination. This view was promulgated especially by the anthropologist Marshall Sahlins, who distinguished pre-industrial economies based on ‘reciprocity’ from modern economies based on markets. Stephen Shennan satirises the attitude thus: ‘We engage in exchanges to make some sort of profit; they do so in order to cement social relationships; we trade commodities; they give gifts.’ Like Shennan, I think this is patronising bunk. I think people respond to incentives and always have done. People weigh costs and benefits and do what profits them. Sure, they take into account non-economic factors, such as the need to remain on good terms with trading partners and to placate malevolent deities. Sure, they give better deals to families, friends and patrons than they do to strangers. But they do that today as well. Even the most market-embedded modern financial trader is enmeshed in a web of ritual, etiquette, convention and obligation, not excluding social debt for a good lunch or an invitation to a football match. Just as modern economists often exaggerate the cold-hearted rationality of consumers, so anthropologists exaggerate the cuddly irrationality of pre-industrial people.
– This little “sermon” is on pp. 133-4 of The Rational Optimist by Matt Ridley (also quoted in this earlier posting here), in the chapter about the simultaneous rise of agriculture and early industrial specialisation, all within the context of a wider web of exchange relationships. What most clearly distinguishes humans from animals, and successful humans from all the failures, says Ridley, is trade.
Early agriculture and early industrial specialisation are both manifestations of the division of labour, which depends on trade. You can’t have early agriculture without specialists supplying crucial agricultural implements, such as axes to clear forests. You can’t have specialist suppliers of agricultural implements without specialist food-growers feeding them.