BOOK ONE: 2015 - GLOBALIZATION

Chapter One: Economic Globalization

III. Trade: Genetic or Cultural?

In other words, was trade one of the features of early human groups which developed during the period before instruments of cultural transmission evolved (primarily spoken or symbolic language), meaning that the propensity to trade is genetically encoded; or was trade a 'social' or 'cultural' development, passed from generation to generation by example or teaching? Or are both mechanisms involved?

The existence of reciprocity (reciprocal altruism) in humans is not in doubt: individuals receiving generous treatment from others they will not meet again nevertheless respond generously to them in return. Unfair behaviour is also repaid in kind, without any apparent future advantage being gained. Paul Seabright describes experiments by Ernst Fehr at the University of Zurich 6 which seem to establish beyond doubt that reciprocity is instinctive (genetically encoded). This conclusion has been confirmed by many subsequent experiments.

It's difficult to know whether reciprocity was or was not adaptive at first as between the members of a group and the external individuals with whom they came into contact. Given that in the early stages of human development, most non-group visitors are enemies, it might be thought that it would be non-adaptive in such encounters. But then there would be no trade, evidently, and a group which trades is eventually fitter than a group that does not trade.

Seabright 7 says: 'Reciprocity has also mattered in the history of humanity because it has enabled hunter-gatherer bands to take the first cautious steps toward conducting exchange with strangers (such contacts occurred, as we have seen, well before the adoption of agriculture).'

It's no surprise then that reciprocity (which evolved within the group in order to cement personal relationships) would have been involved in permitting external trade; a visitor with good intentions may have used mimicry to appear friendly, obtaining a reciprocal result, after which trade is possible. It's also possible that reciprocity evolved within the group as much as to foster exchange (of which trade is merely a special case) as to encourage individual relationships.

There is therefore fairly strong evidence that genetic reciprocity is a basis for trade, but that doesn't answer the question of whether trade (exchange) is somehow genetically encoded, or just the reprocity.

Ulrich Witt 8 adduces von Mises in support of a general human propensity to trade. Von Mises believed that being alert in looking out for new possibilities and advantages is a general feature of 'homo agens'. For Mises, says Witt, entrepreneurship is a trait possessed by many.

The balance of opinion seems to be that the propensity to exchange is indeed an evolved, genetic adaptation, carrying with it the idea of comparative value, although the forms of modern commerce and the institution of money (stores of value) are no doubt cultural constructs. And it was trade which paved the way for constructive relations between tribes which would otherwise have been enemies, or at least, worse enemies than without trade.

References:

6 Fehr, E and Gachter, S (2000) Fairness and Retaliation: the Economics of Reciprocity, Journal of Economic Perspectives, 14, pp 159-81

7 Seabright, P (2004) The Company of Strangers, Princeton University Press

8 Witt, U (1999) Do Entrepreneurs Need Firms? A Contribution to a Missing Chapter in Austrian Economics, The Review of Austrian Economics, 1999, 11, issue 1-2, pages 99-109