The Rational Optimist_ How Prosperity Evolves - Matt Ridley [26]
As you can tell, I like neither theory. I am going to argue that the answer lies not in climate, nor genetics, nor in archaeology, nor even entirely in ‘culture’, but in economics. Human beings had started to do something to and with each other that in effect began to build a collective intelligence. They had started, for the very first time, to exchange things between unrelated, unmarried individuals; to share, swap, barter and trade. Hence the Nassarius shells moving inland from the Mediterranean. The effect of this was to cause specialisation, which in turn caused technological innovation, which in turn encouraged more specialisation, which led to more exchange – and ‘progress’ was born, by which I mean technology and habits changing faster than anatomy. They had stumbled on what Friedrich Hayek called the catallaxy: the ever-expanding possibility generated by a growing division of labour. This is something that amplifies itself once begun.
Exchange needed to be invented. It does not come naturally to most animals. There is strikingly little use of barter in any other animal species. There is sharing within families, and there is food-for-sex exchange in many animals including insects and apes, but there are no cases in which one animal gives an unrelated animal one thing in exchange for a different thing. ‘No man ever saw a dog make fair and deliberate exchange of a bone with another dog,’ said Adam Smith.
I need to digress here: bear with me. I am not talking about swapping favours – any old primate can do that. There is plenty of ‘reciprocity’ in monkeys and apes: you scratch my back and I scratch yours. Or, as Leda Cosmides and John Tooby put it, ‘One party helps another at one point in time, in order to increase the probability that when their situations are reversed at some (usually) unspecified time in the future, the act will be reciprocated.’ Such reciprocity is an important human social glue, a source of cooperation and a habit inherited from the animal past that undoubtedly prepared human beings for exchange. But it is not the same thing as exchange. Reciprocity means giving each other the same thing (usually) at different times. Exchange – call it barter or trade if you like – means giving each other different things (usually) at the same time: simultaneously swapping two different objects. In Adam Smith’s words, ‘Give me that which I want, and you shall have this which you want.’
Barter is a lot more portentous than reciprocity. After all, delousing aside, how many activities are there in life where it pays to do the same thing to each other in turn? ‘If I sew you a hide tunic today, you can sew me one tomorrow’ brings limited rewards and diminishing returns. ‘If I make the clothes, you catch the food’ brings increasing returns. Indeed, it has the beautiful property that it does not even need to be fair. For barter to work, two individuals do not need to offer things of equal value. Trade is often unequal, but still benefits both sides. This is a point that nearly everybody seems to miss. In the grasslands of Cameroon, for example, in past centuries the palm-oil producers, who lived on the periphery of the region on the poorest soils, worked hard to produce a low-value product that they exchanged for cereal, livestock and iron with their neighbours. On average it took them thirty days to afford the price of an iron hoe that had cost its makers just seven person-days of work. Yet palm oil was still the most profitable product they could make on their own land and with their own resources. The cheapest way for them to get an iron hoe was to make more palm oil. Or imagine a Trobriand island tribe on the coast that