Wednesday, 22 December 2010

Trade and farming

Which came first? In his book "The Rational Optimist: How Prosperity Evolves" Matt Ridley writes,
"One of the intriguing things about the first farming settlement is that they also seem to be trading towns. [ ... ] it is a reasonable guess that one of the pressures to invent agriculture was to feed and profit from wealthy traders - to generate surplus that could be exchanged for obsidian, shells or other more perishable goods. Trade come first." (Ridley 2010: 127).
The basic point here is that there is a conflict between the fact that we specialise in production but diversify in consumption. We produce, or help to produce, a very limited number of things but we consume a great many things. This conflict is reconciled by redistribution, i.e. via exchange/trade. Thus the first farmers who produced a limited number of goods, eg wheat or meat, but wished to consume more that just what they produced needed to be able to trade to expand their consumption set. Hence the necessity of trade for farming to survive.

No comments: