Chapter 8 Chapter 3 The Evolution of Markets: Trade and Civilization

Besides the bounty of money, what value will it bring? Where there is commerce, there is virtue. Order expands into unknown territory Having shown some of the conditions for the production of an extended order, and why this order both came into being and required separate property, liberty, and justice, we may now examine more closely some of the other problems that have been hinted at, especially the development of trade and Specialization is associated with this to find out some of the deeper relationships.These developments also contributed greatly to the growth of the extended order, but at the time, and even centuries later, even the greatest scientists and philosophers had little understanding of it; s arrangement.

The epochs, circumstances, and processes in question are shrouded in the mists of time, the details of which cannot be definitively verified.Certain specializations and exchanges may have occurred in early small societies dominated by consensus among members.Primitive people tracked the migratory routes of animals, and when they encountered other people or groups, some negligible trade might have occurred.While there is convincing archaeological evidence for long-ago trade, it is both rare and misleading.Most of the basic means of subsistence obtained through trade are consumed without leaving a trace, and those rare items that their owners love so much that they give up necessities often mean that they will keep them for themselves. It is therefore also more durable.Ornaments, weapons, and tools provide us with the main evidence, and we can only infer that their acquisition must depend on trade, from the absence of local natural resources from which to manufacture them.Archeology is also unlikely to find salt that people got from very far away, although salt producers do find occasional rewards for selling their salt.However, it was not the desire for luxury but the necessities of life that made trade increasingly an indispensable institution for the survival of ancient societies.

Whatever was being exchanged, trade must have occurred very early.Long-distance trade, and trade in those articles of which the dealers did not know their origin, is certainly older than any other intercourse which can now be discovered between distant groups.Modern archeology confirms that trade predates agriculture or other normal productive activities (Leakey, 1981: 212).In Europe, there is even evidence of long-distance Paleolithic trade at least 30,000 years ago (Herskovitz, 1948, 1960).The Catalan mounds in Anatolia and Jericho in Palestine were centers of trade between the Black Sea and the Red Sea 8,000 years ago, even before the pottery and metal trade.These two places also provide early examples of the "population boom," often described as the Agricultural Revolution.Later, "in the late 7000 BC there existed a network of water and land routes transporting obsidian from Milos to the interior of Asia Minor and Greece (see Introduction by S. Green in Childe, 1936/1981; See also Renfrew, 1973:29; 1972:297-307). "There is evidence that, even before 3200 BC, there were extensive trade networks linking Baluchistan (in West Pakistan) Together. (Child, 1936/1981: 19) We also know that subsistence in predynastic Egypt had a secure trade basis (Pirna, 1934).

The importance of everyday trade in Homer's time is illustrated by the stories in the Odyssey (I, 180-184).Athena, disguised as a captain, went to meet Telemachus with a ship of iron that was exchanged for bronze.According to archaeological evidence, the great expansion of trade that enabled the rapid development of later classical civilization also occurred during a period when little historical documentation is available, namely in the 200 years from 750 to 550 BC.Around the same time, the expansion of trade also seems to have led to a rapid increase in the population of the Greek and Phoenician trading centers.These centers competed fiercely with each other for the establishment of colonies, so that the life of the important cultural centers of the early classical era became entirely dependent on the daily market process.

The existence of trade in these early ages is as indisputable as its role in the extended order.However, it is difficult to say that the establishment of this market process will be smooth sailing. It must be accompanied by the fundamental collapse of early tribal society.Even where separate property has been recognized, some other previously unheard-of pattern of behavior is required to incline a group to consent to its members taking necessary things owned by the group for the use of strangers (even traders) I only partially understand the purpose of doing this, not to mention the local people)-if there is no such transaction, these items have always been for the common use of the local people.For example, the shipowners who founded the Greek city-states shipped clay pots full of oil and wine to the Black Sea, Egypt, and Sicily in exchange for grain, and in the process they gave their neighbors much-needed goods. Neighbors are strangers.For members of the clique to agree to this approach, they must first let go of their own prejudices and begin to understand the world from a new perspective—a world in which the clique has greatly diminished importance.As Pigott says in "Ancient Europe," "Explorers and miners, merchants and brokers, shipping and caravans, promises and agreements, views of distant Gentiles and their customs—all this Everything involves the enlargement of social understanding that was necessary for technological progress into the Bronze Age" (Piggott, 1965: 72).The author also speaks of the mid-2000 B.C. Bronze Age: "The network of sea, river and land routes gave much of the international character of the bronze industry at the time, and we find a wide variety of techniques and styles from one end of Europe to the other. distribution." (ibid., 118)

What kind of behavior provided these new starting points, leading not only to new insights into the world, but even to a certain "internationalization" (an anachronistic term, of course) of styles, techniques, and ideas?At a minimum, these include friendly treatment of distant visitors, defensive capabilities, and safe passage (see the next section).The vaguely defined territories of primitive tribes, even in earlier times, were likely to overlap with each other as a result of trade intercourse established by individuals along these lines of behaviour.This personal contact can form a continuous chain of relationships, and it is in this chain that the small but indispensable "trace elements" can be spread to far places.This made permanent occupation, and thus specialization, possible in many new areas, and eventually led to an increase in population density.A chain reaction occurs: greater population density leads to the discovery of opportunities for specialization or division of labor, which leads to further increases in population and per capita income, which in turn make possible further increases in population.So back and forth.

Trade makes possible increases in world density The "chain reaction" initiated by new settlements and trade could be studied in more detail.Some animals can only adapt to special and very limited environmental "niches" without which they cannot survive, while a few other animals, such as humans and mice, can adapt to almost any place on earth.It is difficult to attribute this solely to individual adaptability.Only a few relatively small areas could provide small groups of hunter-gatherers with everything that even the most primitive tool-using sedentary groups needed, and if they cultivated the land, the natural products were even more scarce.Without the support of their fellows elsewhere, most will find the places they propose to live either uninhabitable, or capable of being settled by very few.

The relatively self-sufficient niches that did exist, wherever they were, were likely already permanently occupied and resistant to outsider invasion.Even those who live there will come to know that the neighborhood provides most, if not all, of what they need, and that there may be a lack of basic items they need only occasionally: flints, bowstrings, stationary knives Wood glue for handles, tanning materials, etc.Convinced that these needs could be satisfied by occasional return to their homelands, they would leave their group to occupy some of these adjoining places, or even some further sparsely populated new territories on the land they inhabited.The importance of these early migrations of people and transfers of necessities cannot be measured in purely quantitative terms.Without the possibility of importation, it would have been impossible for the early settlers to maintain their own existence, let alone reproduce, even if these items constituted an insignificant portion of the current consumer goods in a certain place.

As long as those still living at home knew people who had moved out, they had little trouble going back to replenish their necessities.Within a few generations, however, the descendants of these original groups became strangers to each other; those who still lived in the original more self-sufficient areas often protected themselves and their possessions differently.In order to be allowed to enter the original territory, in order to obtain certain special items produced only there, for the purpose of expressing peaceful wishes, and to arouse the desire of the local residents, they must bring some gifts.For gifts to work best, they should not be something that is readily available in the local area for daily needs, but rather something exciting, unusual, new decorations or delicacies.One reason for this is the fact that the goods offered by one party to the intercourse are often "luxuries," but it is difficult to say that the goods exchanged are not necessities for the other party.

Initially, regular intercourse involving the exchange of gifts likely developed between families, who assumed obligations of mutual hospitality, which in turn had a complex relationship with the custom of intermarriage.From this practice of gift-giving among family members and relatives, to the more impersonal hosts or "introducers" who act as guarantors for visitors according to custom and allow them to stay long enough to get what they need The emergence of the system, and then the practice of exchanging specific items according to the ratio determined by the degree of scarcity, this transformation process is undoubtedly very slow.But by recognizing the minimum value at which it can still be regarded as a good deal, and the maximum value at which it is no longer worth exchanging, the specific article gradually develops a specific price.Another unavoidable thing is that traditional equivalents must constantly adapt to changed conditions.

We can indeed find in early Greek history the important institution (institution-tion of the xenos), which gave individuals in foreign countries the right of passage and personal protection.Of course, trade must have developed largely as a personal relationship, even if military aristocrats would have disguised it as if it were nothing more than personal gifts.Not only were already wealthy people able to entertain members of particular families in other areas, but such relationships provided channels through which important needs of the group were met and thus enriched people.Telemachus asks a visitor from Pylos and Sparta about his "Odyssey, the traveling father" (Odyssey, Act III), who probably used his wealth to ascend to the throne merchant. Undoubtedly, this widening of opportunities for profitable intercourse with Gentiles would also reinforce the break with the solidarity, unity of purpose, and collectivism that had occurred among the primitive small groups.Indeed, some individuals, freed from the control and obligations of small groups, began not only to settle in other groups but to network with other group Forking process and eventually a global network - laying the groundwork.Even if these individuals neither knew nor intended to do so, they were able to contribute their part to the creation of a more complex and broader order far beyond that of either themselves or their contemporaries. people's vision. In order to create such an order, these individuals must be able to use information for purposes known only to them.They would not do so without some mode of conduct favorable, such as the guest system observed with distant groups.These behavioral patterns must be common, while the specific knowledge and goals of individuals who follow them can vary and can be based on specific information.This in turn encourages individual initiative. Since only an individual, and not his group, was allowed to enter Gentile territory peacefully, he acquired knowledge that his own people did not possess.Trade cannot be built on collective knowledge, only unique individual knowledge.This individual creativity can only be harnessed if there is an increasing recognition of separate property.Ship owners and other merchants were at the mercy of their personal gain, but soon, as they pursued their wealth through trade rather than production, the wealth and sustenance this brought to the ever-increasing population at home depended only on them Sustained by constant innovation in discovering new opportunities. Lest the above be misleading, it must be remembered that why people adopt any particular new custom or invention is a secondary matter.More importantly, for a habit or invention to be maintained, two definite prerequisites are required.First, conditions must exist that enable the transmission of behaviors whose benefits have not necessarily been understood or appreciated.Second, groups that retain these habits must have acquired a definite advantage that enabled them to expand more rapidly than other groups and eventually outcompete (or assimilate) groups that did not possess similar habits. trade is older than states Mankind was at last able to occupy large parts of the earth as densely as it is now, and even to maintain large populations where scarcely any necessities could be produced, because man, like a self-extending gigantic organism, learned to extend to the furthest reaches Each corner draws different nutrients needed by the whole from each place.Of course, even in Antarctica it did not take long for thousands of miners to earn ample means of subsistence.To an observer from space, this global phenomenon of constantly changing surfaces might well resemble the process of an organism growing.But it is not so: it is achieved by individuals who no longer act spontaneously, but follow traditional customs and rules. These businessmen and hosts knew as little as their predecessors did about the specific needs they served.Nor do they need this knowledge.Many of these needs are of course so long in coming up that one cannot even predict their general character. The more one learns about economic history, the more one finds it wrong to think that the creation of a highly organized state constituted the pinnacle of the development of early civilizations.Since we necessarily know much more about what organized government does than what is accomplished by the spontaneous cooperation of individuals, historical account has greatly exaggerated the role of government.This deception due to the nature of things, such as those documents and monuments, may be exemplified by the following story (hope it is not instructive): The earliest record of specific prices according to archaeologists is inscribed on From this fact on a stone pillar, it follows that prices are always fixed by the government.And that's not the worst, a well-known work argues that since no suitable clearing was found in the excavations of the city of Babylon, there were no fairs there - how could such a market be held in the open air in a hot climate ! Rather than promoting commerce over long distances, the government often hinders it.Governments that provide greater independence and security to individuals engaged in commerce are the beneficiaries of the information and population that such commerce brings.But when governments find their populations increasingly dependent on imports of certain basic foodstuffs and raw materials, they themselves often struggle in one way or another to secure this supply.For example, some early governments, when they first learned of the existence of necessary resources from individual trade, tried to acquire them by organized military or colonial expeditions.The Athenians were not the first, and certainly not the last, to do this.But it would therefore be absurd to conclude, as some modern writers (Polanyi, 1945, 1977) do, that at the height of Athens' prosperity, its trade was "regulated," governed by government contracts. Treaty-bound and at a fixed price. The reality seems to be that the evolutionary process of culture has been aborted by the repeated sabotage of spontaneous improvements by powerful governments.Take the Byzantine government of the Eastern Roman Empire as an example (Rostovtsev, 1930; Inodi, 1948).Chinese history also provides many examples of governments trying to impose a perfect order that made innovation impossible (Needham, 1954).This country is far ahead of Europe in terms of technology and science. Just one example: in the 12th century, it had ten oil wells in production on the side of the Huangpu River. The government's control must have caused its later stagnation, not Its early progress.What makes the highly advanced Chinese civilization lag behind Europe is that its government is so restrictive that it leaves no room for new developments, whereas Europe, whose extraordinary medieval expansion, as the preceding chapter has shown, may well have It is due to political anarchy (Beschler, 1975: 77). philosopher's blindness The main commercial centers of Greece, especially Athens and later Corinth, were not riched by the policies of the government, and the real reasons for this prosperity were hardly understood.Aristotle, who completely failed to understand the developed market order in which he lived, may be the best example of this.Although he is sometimes said to be the first economist, what he discusses as "economy" (oikonomia) is exclusively domestic management, or at most private property such as a farm.He simply cursed the effort to profit from the market, what he called the "study of chrematistika."Although the Athenians depended on grain trade with distant lands for their livelihood, his ideal order was one of self-sufficiency (autarkos).Although he was also called a biologist, he was completely ignorant of two of the most crucial aspects of any complex structure: evolution and the self-formation of order.As Ernst Mayer puts it (1982: 306): "The idea that the universe could have developed out of primordial chaos, or that higher organisms could have evolved from lower Dodd's thinking is out of place. Aristotle, again, is against any evolution." He doesn't seem to notice that "nature" (or "physis") is meant to describe the process of growth (see Supplement A), and he Also does not seem to be familiar with certain distinctions in self-forming orders that were known to pre-Socratic philosophers, such as between the spontaneously growing kosmos and the kind of deliberately arranged order (such as in the army) that early thinkers called taxis different (Hayek, 1973: 37).According to Aristotle, the order of all human activities is the result of taxis, the special organization of individual actions by an orderly mind.As we saw earlier (see Chapter 1), he plausibly claimed that order can only be established in a place small enough that everyone can hear the voice of the commander, a place within sight ("Politics" , 1326a, 1327a).He declared, "too great a number to participate in an orderly manner" (1326a). In Aristotle's view, only the known needs of an existing population provide natural or legitimate reasons for economic effort.He believes that human beings and even nature have always existed as they are now.This static view leaves no room for the theory of evolution, or even to ask where existing institutions came from.It never seems to have occurred to him that most of the existing human communities, and especially his numerous fellow Athenians, would not have arisen at all if their ancestors had been confined to satisfying their own known present needs.The experimental process of adapting to unforeseen changes by obeying abstract rules, which if successful would lead to population growth and routine formation, was also foreign to him.Therefore, Aristotle also formulated a general research model for ethics. Under the domination of this model, the clues of the role of these rules provided by history are not perceived, and it would not occur to analyze this kind of rule from the economic point of view. function, because the theorist can easily forget that the answer is contained in the question of the rule. In Aristotle's mind, only behaviors aimed at leaving benefits to others are behaviors that can be approved morally, and behaviors that only focus on personal benefits are definitely bad behaviors.Commercial considerations may not affect the day-to-day activities of most people, but this by no means means that in the longer run their lives do not depend on the proper conduct of trade that enables them to buy basic items.Aristotle denounced as unnatural production for gain which had long before him been the basis of an extended order far beyond the known needs of others. We now know that, in the evolution of the structure of human activity, the possibility of profit served as a signal that guided people to make choices that would make their work more productive; often, only those things that were more profitable In order to feed more people, because its output is greater than consumption.At least some Greeks before Aristotle knew this well.In the fifth century B.C.—which certainly predates Aristotle—the first truly great historian set out to write the history of the Peloponnesian War by thinking that early peoples "if there was no commerce, Without freedom of communication by land or sea, and without cultivating more land than for their own needs, it is impossible for them to surpass the level of nomadic life", so "neither will build huge cities, nor any other great deed” (Thucydides, I, 1, 2).Aristotle, however, ignored this insight. Had the Athenians followed Aristotle's advice--advice ignorant of economics and evolution--their city-state would have quickly degenerated into villages, for his ideas about the formation of order in humans led him toward a Ethics applicable to static states.Yet his teachings dominated philosophical and religious thought for the next two thousand years, despite the fact that most of this thought emerged in a highly dynamic, rapidly expanding order. The influence of Aristotle's formulation of morality in the microscopic order was aggravated by Thomas Aquinas' adoption of Aristotle's teachings in the thirteenth century, which later led to Aristotle's The ethics of virtue was actually proclaimed the orthodoxy of the Roman Catholic Church.The anti-commercial attitude of the medieval and early modern church, its denunciation of interest as usury, its preaching of just prices and its contempt for profit, was Aristotelian through and through. Of course, by the eighteenth century Aristotle's influence in this (as in other matters) began to wane.David Hume found that the market can make people "serve others without sincere goodwill" (1739/1886: II, 289); public interest, though he did not intend to do so” (1739/1886: II, 296), all because of an order in which “even a bad man, it is in his interest to serve the common good”.Because of this insight, the idea of ​​self-organizing structures began to come down to earth, and since then it has been the basis for our understanding of all such complex orders, which used to be like some miracle, a superhuman version of our own mind that humans only knew , to generate it.It is now gradually understood how the market enables each individual, within prescribed limits, to use his personal knowledge for his own personal ends, even though he knows little about the order in which he operates. In spite of this great development, and of course because of its complete neglect, a view that still pervades Aristotelian thought, a naive, animistic worldview, came to dominate social theory , has become the ideological basis of socialism.