IS TRADE AN INTRINSIC PART OF HUMAN NATURE?

Before There Was Money (Part 1)

“This division of labour, from which so many advantages are derived, is not originally the effect of any human wisdom, which foresees and intends that general opulence to which it gives occasion. It is the necessary, though very slow and gradual consequence of a certain propensity in human nature which has in view no such extensive utility; the propensity to truck, barter, and exchange one thing for another.”

-Adam Smith, 1776

Societies have progressed in so far as they themselves, their subgroups, and lastly, the individuals in them, have succeeded in stabilizing relationships, giving, receiving, and finally, giving in return. To trade, the first condition was to be able to lay aside the spear. From then onwards they succeeded in exchanging goods and persons, no longer only between clans, but between tribes and nations, and, above all, between individuals. Only then did people learn how to create mutual interests, giving mutual satisfaction, and, in the end, to defend them without having to resort to arms. Thus the clan, the tribe, and peoples have learned how to oppose and to give to one another without sacrificing themselves to one another. This is what tomorrow, in our so-called civilized world, classes and nations and individuals also, must learn. This is one of the enduring secrets of their wisdom and solidarity.

- Marcel Mauss, 1925

Hey Folks,

Lately, I have been exploring the question “What is Money?”

Because the reality that we inhabit is shaped by money in so many way, it is difficult for most people to imagine life without it.

Yet anatomically modern humans have been around for over 200 thousand years, whereas money has only existed for 5000. That means that for the vast majority of the time that human beings have existed, money was simply unknown.

Economists have long taught that money was a technological innovation that allowed human civilization to advance, but it should be noted that the introduction of money is also highly correlated the rise of brutal empires. Indeed, since money was invented, the world has constantly been at war.

Empires, which began in the Middle East, eventually spread across the entire world, subjugating their conquered subjects to the rule of money.

Now, in the 21st century, almost every person on Earth needs money to survive. Yet this need did not always exist. It is a human creation.

So, was the invention of money a good thing? I’m sure that some people would make the argument that “you can’t make an omelette without breaking a few eggs”.

“Sure,” they might argue, “ancient civilizations may have imposed their rule through brutality and violence, but look at all the progress we’ve made. Would you rather go back to living in the Stone Age?”

It is true that humanity has made many advances in the past 5000 years, many of which probably wouldn’t have happened without the specialization of labour engendered by a class society. That said, we’d also be spending most of our lives hunting, fishing, picking berries, singing songs, telling stories, dancing, drumming, stargazing, sharing food, and making love. That doesn’t sound that bad, does it?

Even if you believe that the invention of money was ultimately beneficial to humanity, though, one must acknowledge that the progress it has enabled has come at a terrible cost.

As Sophocles said, “Nothing vast enters the life of mortals without a curse.”

As for myself, I am more interested in the future than in the past. For more than a year, I have been studying the past in order to understand how we got to where we are now. Ultimately, however, my interest is in how we can create a better world.

Even if you believe that money helped humanity advance, the fact remains that money is not intrinsic to the human experience, and countless societies have gotten by just fine without it for thousands of years.

If we want to understand the full extent of human possibility, we must look beyond money.

So what did humans do before the invention of money? Well, we can speculate about prehistory, and learn interesting things about human nature from biology, psychology, and evolutionary theory, but the most valuable information we have comes from indigenous societies who lived without money until quite recently.

If we wish to understand how human societies existed prior to the introduction of money, we can start there.

The anthropological record contains detailed descriptions of countless ways in which human societies met their needs without money.

Many of these descriptions can be quite bewildering to read about, because prior to the invention of money there was no division between the economic, political, social, and spiritual realms. The ways in which goods and services were exchanged were embedded within cultural beliefs and practices which often seem very exotic and bizarre. To understand how exchange occurs in a specific society, one must understand its culture. Perhaps this is why the subject remains obscure.

Prior to the introduction of money, most societies were what anthropologists call “gift economies”.

They differ widely, and operate according to different rules, but what gift economies have in common is the base unit of economic exchange is not the sale, but the gift.

Whereas the sale is characterized by two parties agreeing upon a price, a gift is voluntarily given from one party to another without the giver receiving anything in return, at least initially.

This idea of this gift might be somewhat misleading, however, because in gift economies there is a social obligation to reciprocate. A gift demands a counter-gift. Until a counter-gift has been made, the recipient remains in the giver’s debt. This is what makes gift economies work. Gifts continually circulate because everyone is obliged to give.

IS TRADE AN INTRINSIC PART OF HUMAN NATURE?

In 1776, Adam Smith declared that the “propensity to truck, barter, and exchange” was inherent in human nature and gave rise to the division of labour that characterizes every human society.

The word “truck”, in this sense, is defined as “the payment of workers in kind or with vouchers rather than money.

So, was Smith right? Yeah, pretty much.

One might quibble with his statement on semantic grounds, but I would have to agree with Smith that there is something uniquely human about how human beings exchange goods and services. If it has parallels in the animal kingdom, I am unaware of them.

Wolves are highly cooperative, but they do not trade. None of us have ever seen a dog or cat trade one thing for another. Nor is there any human society where human beings do not exchange goods in one way or another.

It does appear that the instinct to trade is a major part of what makes us human.

That said, anatomically modern humans have existed for over 200 thousand years, yet money was only invented some 5000 years ago, and the field of economics did not exist before Adam Smith invented it in 1776.

For the vast majority of human existence, humans neither bought nor sold, but they most certainly gave and received.

WHY DO HUMANS TRADE?

I believe that I know why humans trade: because of language.

If you think about it, language is a way of exchanging one thing for another.

Consider this example:

Caveman 1: Where is the Lake?

Caveman 2: That way.

Caveman 1: Thanks!

In that example, something has been exchanged, has it not? A desire to know something has been communicated, and a corresponding piece of information has been transmitted from one mind to another. In fact, three things have been exchanged between two minds.

They are:

• A desire to know something

• A piece of information

• Gratitude

I propose that the reason why humans trade goods and services in a way that animals do not is because language primes us to exchange ideas.

As I have previously argued, I believe that the development of human language can likely be traced back to the complex childcare needs of human beings. Because human children take so long to reach maturity, humans evolved a strategy of “cooperative breeding”.

You know that saying “it takes a village to raise a child”. It’s true. This is something that anthropologist Sarah Hrdy proves in her groundbreaking masterpiece Mothers and Others: The Evolutionary Origins of Mutual Understanding.

My theory is simple: Humans invented language because they had complex communication needs.

Our distant ancestors had to develop a high degree of cooperation in order to meet their needs. Hence the development of language.

As to the question of why human children take so long to reach maturity, evolutionary theorists have a good answer to that - the invention of cooking.

THE INVENTION OF COOKING MADE US HUMAN

As James C. Scott put it in his classic Against the Grain:

It is virtually impossible to exaggerate the importance of cooking in human evolution. The application of fire to raw food externalizes the digestive process; it gelatinizes starch and denatures protein.

The chemical disassembly of raw food, which in a chimpanzee requires a gut roughly three times the size of ours, allows Homo sapiens to eat far less food and expend far fewer calories extracting nutrition from it. The effects are enormous.

It allowed early man to gather and eat a far wider range of foods than before: plants with thorns, thick skins, and bark could be opened, peeled, and detoxified by cooking; hard seeds and fibrous foods that would not have repaid the caloric costs of digesting them became palatable; the flesh and guts of small birds and rodents could be sterilized.

Even before the advent of cooking, Homo sapiens was a broad-spectrum omnivore, pounding, grinding, mashing, fermenting, and pickling raw meat and plants, but with fire, the range of foods she could digest expanded exponentially.

In cooking, fire rendered a host of previously indigestible plants both palatable and more nutritious.

We owe our relatively large brain and relatively small gut (compared with other mammals, including primates), it is claimed, to the external predigestive help that cooking provides.

WHAT IS THE SEXUAL DIVISION OF LABOUR?

This led to the sexual division of labour, which is a human universal.

Richard Wrangham explains:

The sexual division of labor refers to women and men making different and complementary contributions to the household economy. Though the specific activities of each sex vary by culture, the gendered division of labor is a human universal. It is therefore assumed to have appeared well before modern humans started spreading across the globe sixty thousand to seventy thousand years ago.

In almost every human society ever, cooking is women’s work.

That women tend to cook for their husbands is clear. In 1973 anthropologists George Murdock and Catarina Provost compiled the pattern of sex differences in fifty productive activities in 185 cultures. Although men often like to cook meat, overall cooking was the most female-biased activity of any, a little more so than preparing plant food and fetching water.

Women were predominantly or almost exclusively responsible for cooking in 97.8 percent of societies.

So, I would have to agree with Adam Smith that the “propensity to truck, barter, and exchange” and “division of labour” are indeed inherent to human nature.

Adam Smith might have been right about this one thing, but The Wealth of Nations also went on to create a misconception about pre-monetary societies which persisted for over two hundred years: the Myth of Barter.

WHAT IS THE MYTH OF BARTER?

The Myth of Barter is a fable that economists tell that allow them to portray the invention of money as a game-changing technological breakthrough that was voluntarily adopted by everyone in the world because it was so convenient that it made life better for everyone. In reality, money was invented so that people could pay tax.

According to Adam Smith’s imagination, quid-pro-quo (this-for-that) exchange systems must have preceded economies based on currency. It is important to note that this wasn’t based on any actual ethnographic information.

The basic idea goes something like this:

Imagine life before money. Say, you made bread but you needed meat.

But what if the town butcher didn’t want your bread? You’d have to find someone who did, trading until you eventually got some meat.

You can see how this gets incredibly complicated and inefficient, which is why humans invented money: to make it easier to exchange goods.

Now, if you take some time to think about it, barter certainly would have been incredibly inconvenient, because it would depend upon two people each having something of equal value that the other happened to want. How often does that happen?

By now, the data is in: there has never been any society on Earth that has worked that way, and it’s not hard to guess why. It just wouldn’t work.

So how did human beings conduct trade before the invention of money? Well, that depends on how far back you want to go.

In the next instalment of this series, I will cover what is called the “Egalitarian Origins Hypothesis”, which is the widely-accepted theory that human beings evolved cooperative survival strategies over the course of the hundreds of thousands of years we were nomadic hunter-gatherers.

After that, I will write an article exploring gift economies beginning with the seminal text on the subject, Marcel Mauss’s 1925 Essay on the Gift.

Next, I will explore more recent developments exchange theory with a study of David Graeber’s 2002 The False Coin of our Own Dreams, which was a major contribution to anthropological theory.

We’ll see where this project takes me from there. Wish me luck!