Friday, 15 June 2012

Fire and trade

Matt Ridley writes at his blog
There may be an ancient parallel. The very first hunter-gatherers to start trading (about 120,000 years ago, according to the hazy archeological evidence) probably already had an ethos of communal sharing within the tribe-and an ethos of violent predation of other tribes. That's roughly how chimpanzee society works today. Then they gradually discovered a way to share with other tribes that was mutually beneficial: trade.

When the limitations of barter became too obvious-what the other lot has in surplus may not be what you need right now-a common currency was invented. But that only encouraged sharing through trade. Likewise the monetization of the Internet's sharing ethos will only spread it.
Is does rise the question that if you do have an ethos of violent predation against others just what would get you trading with them? How about a good which is very valuable to others, and yourself, but which you can trade without reducing amount you still have. So even if you make a "sale" to one person this doesn't reduce the amount of the good you have left to trade with others. Such a good would be, by definition, a non-rival good. Your consumption of it doesn't lower other people's consumption. If the good is also such that people can be excluded from its use then you have a powerful impetus for trade.

What is the good? Fire (at least before the invention of simple ways to start fires on demand). Trade is hot!

Haim Ofek in his book "Second Nature: Economic Origins of Human Evolution" writes,
The impact of fire on civilization from the hearth to the microwave oven is fairly well recorded. Yet, by comparison, the bearing of fire on human evolution prior to civilization is still poorly understood and far more speculative. Given its antiquity in human use, from 300,000 years according to fairly conservative indications, up to 1.5 million years according to others, it is hard to escape the conclusion that fire had a role to play not only as an agent of civilization but also as an agent of evolution promoting hardwired adaptations - not in the least, incitement to trade.
Ofek also notes that
Thanks to thousands of generations that have experienced the advantages of free trade and occasionally the dire consequences of abandoning it, we are no longer reluctant to cut (bilateral) commercial deals with each other. But early on, the very first converts to the games of trade had to overcome the full brunt of the inhibition - unmuted and undiminished - and without the aid of a (genetically, let alone, culturally) preconceived notion of exchange at their disposal. The only thing that could have possibly spurred exchange between such early traders was a persistent clear-cut opportunity to gain extraordinary large mutual benefit from the activity. In terms of the impetus to trade, the threshold necessary to trigger a transaction between them far exceeded the threshold necessary to trigger a similar transaction between veterans like us. This understanding should, in a way, help us trace exchange closer to its roots simply because it narrows the range of commodities (i.e., objects of exchange) that are reasonable candidates for scrutiny. This is not to say that we can open up a merchandise catalog and point with a great degree of certainty to the specific item that started it all going in the first place. What we can do with some degree of certainty is figure out, however generically, at least the relevant properties of such a commodity - and then rule out the rest.
Those properties are, in Ofek's view, exclusion and non-rivalry. Ofek calls goods with these properties, contrived commodities.
Fire takes the form of a contrived commodity by virtue of two peculiarities closely associated with the distinct characteristics that define such a commodity (exclusion but no rivalry). First, there is the requirement associated with all (nonspontaneous) chemical reactions: activation energy (i.e., a source of ignition). The enormity of this requirement is no longer fully appreciated by modern humans within easy reach of matches. But until a point not so distant in the past it still posed a major challenge to all fire users giving ample opportunity for exclusion. The second peculiarity of fire is its capacity for self-generation. Granted fuel, fire can propagate itself indefinitely, and its human handler can make-fire-with-fire at no extra cost. All the elements of a contrived commodity at the deliberate manipulation of humans were therefore in place not only as a prelude to history, but for several hundred thousand years before. Under the right configuration of conditions, it is not unreasonable to infer that there were many opportunities for the impetus to trade to arise and take effect.
So if Ofek is right, trade really was a burning issue for out ancestors!

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