Economics Appears Late

Didn’t 5th-century Athens trade a lot of olive oil? Doesn’t that count as being produced? Is that an exception to the argument that pre-modern economies are based on plunder and coercion?

Aristotle had ideas about household management. Medieval thinkers like Thomas Aquinas had ideas about usury. Of course modern economists feel, probably rightly, that they have little to learn from these thinkers, and the supply-and-demand, market-clearing model that emerged with Adam Smith is so central to the discipline that the Wealth of Nations is a convenient start-date for the discipline. But I wonder if economics is so different from other fields. Modern physicists don’t pay much heed to Aristotle, or Aquinas, either.

I would suggest that Arnold Kling (and Tyler Cowen), if they have not read it) that they read Morris Silver’s, Economic Structures in Antiquity’ (Greenwood Press, 1995), which also includes his studied demolition of Karl Polanyi’s thesis that markets did not exist until the mid-19th century (originally published in the Journal of Economic History, 1983).

Silver also wrote other articles and books that demonstrate the prevalence of the ‘propensity to truck, barter, and trade’ across the classical world and long before.

My own research (unpublished) on the ‘Pre-History of Bargaining’, supports Adam Smith’s speculative assertion on the longevity of the said propensity, and its earlier evolution from teamwork for unequal shares of meat from kills to reciprocity behaviour (what I call the quasi-bargain) evident not just among humans –and presumably the hominids before them – and in the behaviours of primates.

I am reading just now a most valuable book bordering on these issues, edited by Paul J. Zak, Moral Markets: the critical role of values in the economy (Princeton University Press), which develops themes contributing to an understanding of the social-evolutionary importance of humans establishing the criteria by which fairness and unfairness is mediated in primate and human relationships.

Now most economists reading Blogs by other economists would never dream of reading such material (the maths is minimal), but if they did it would inform them of greater depth in what they think they are doing practicing economics they way we do now.

I’m reading Bill Greene’s book “Common Genius” and in it he talks about how late intellectuals are to recognizing what is happening in the world. The other thing intellectuals do is come up with theories that, no matter how much evidence to the contrary there is against it. will stick with that theory. I and many others have provided quite a bit of evidence for ancient trade practices, but no amount of evidence seems sufficient for Kling. Never mind the textual evidence I have supplied. Never mind the archeological evidence. Kling has a theory, and he’s sticking to it! I guess free market intellectuals are no less prone to this than are Leftist ones. It was not uncommon until the Modern Era for writers to be concerned only with heroes and leaders and not with the common man (who would have been doing the trading). One of the benefits of comedians is that their material was often the common man. This is why I have repeatedly recommended Aristophanes as a source, since Aristophanes repeatedly talks about the disruption of trade as a problem caused by the Athenian war with Sparta. Rather than go into the textual evidence from Aristophanes here, though, I think I will do so over on my blog.

p.s. as a blog reading, libertarian, pro-free market economist, I must say that some of the criticisms here against my kin, labeling all of us as blind to history and dogmatically closed, are way off the mark. In fact, a world of entrepreneurial atomistic agents stretching all the way to antiquity, nay, to pre-history, nay, existing as the natural state of the species and even to our ancestors, now that’d be conceptual nirvana to us: given that, institutional evolution towards freer and freer markets (in trade and in politics) could be more easily conceptualized, defended, and promoted.

I may have missed it, but what is the situation with your father?

The claim isn’t that there was no trading at all before Adam Smith, it’s that there wasn’t really such a thing as a “market economy” before the late 18th century. Does a Biblical-era barter/haggle-based bazaar really have that much in common with a modern market economy?

I had faith in those pygmy chimpanzees to lead the way into a better future! 😉

To Sean: the claim in this piece is twofold: (a) that there was no economic thought/science before Smith; (b) that this is evidence for the lack of “a universal propensity to truck and barter.” The lack of modern economies too long before that is a corollary. Arnold has also claimed that the later is true elsewhere.

The problem for these arguments is that there seems to be plenty of evidence of economic thought, of a universal propensity to trade, and of markets qualitatively similar to today’s (voluntary trade, enforcement of contracts, regulations, etc) for millennia. Not just the Middle Ages and the Roman Empire, but way before.

And now, back to the pygmy chimpanzees…

the absence of a developed economics until the mid-18th century remains a startling anomaly in the history of ideas. Why was that?

Is it any less startling to consider that biology and psychology as independent fields of study weren’t developed until the mid-to-late 19th century?

A theory that offers a plausible explanation as to what the facts may be is a brainchild. The scientist who gives birth to it has an innate desire to nurture it and see it grow. Consequently, it’s difficult for the scientist to come to terms with a brainchild that is found to be terminally flawed.

In light of all the evidence to the contrary, Dr. Kling’s Plunder Economy Theory, like Darwin’s Theory of Natural Selection, is a theory in crisis.

To suppose that the eye with all its inimitable contrivances for adjusting the focus to different distances, for admitting different amounts of light, and for the correction of spherical and chromatic aberration, could have been formed by natural selection, seems, I freely confess, absurd in the highest degree. – Charles Darwin

Troy,

Darwin was unfortunately ignorant of complexity theory and emergence and self-organization, so what seemed absurd to him is now easily explained.

Easily explained? Darwin conceded that “if it could be demonstrated that any complex organ existed, which could not possibly have been formed by numerous, successive, slight modifications” his theory would “absolutely break down.” Modern science has proven that “irreducible complex systems” are pervasive on a cellular level. Surely you’re aware of this, having studied recombinant gene technology.

Although I’m a proponent of intelligent design, I don’t particularly want to argue the merits of irreducible or specified complexity vs. natural selection on this thread. There certainly remain enough unanswered questions, as far as I’m concerned, not to accept either theory as incontrovertible. At a certain point, both require a leap of faith. I simply choose to place mine in the grain of a mustard seed.

Incremental changes result in a system moving toward greater chaos until it reaches a critical point where it leaps into a new level of complexity — as demonstrated by catastrophe theory. Thus modified, Darwin’s theory remains intact and so-called irreducible complexity is explained without having to resort to theorizing that God is so incompetent as to not be able to create a world that could evolve without him having to intervene periodically. As a Christian I tend to think my God to be more clever than that.

Markets and trade are not the same as economics as a science. I think Cowen if off on his date; he assumes Adam Smith was the first economist. But the Scholastics of the at least the early modern era had a detailed understanding of economics and championed free markets.

Along with economics, Cowen should ask why it took so long to get to modern science. Modern science first took off with the protestant reformation which emphasized reason because God is reasonable. Protestants set out to rationalize all aspects of life, including economics and science.

Troy: “Incremental changes result in a system moving toward greater chaos until it reaches a critical point where it leaps into a new level of complexity…”

So how does that square the the second law of thermodynamics, which says that in a closed system matter degenerates into lower states of complexity.?

Darwin: “further, the eye does vary ever so slightly, and the variations be inherited, which is certainly the case;”

That’s certainly not the case. In the first place, the ratio of beneficial to damaging mutations is about one in a million. Second, natural selection must operate on the whole animal, not just specific mutations. The odds that the blunt tool of natural selection could accidently select for one gene in one member of the population are next to nil. Finally, the idea that a partial eye might in some way benefit an individual is ridiculous and wishful thinking. It takes far more irrational faith to accept Darwinian evolution than intelligent design.

Anyone interested in this topic would be well served by reading The Company of Strangers by Paul Seabright. In it he explains how exchange with strangers could have evolved, what aspects of our personalities predisposed us to this behavior, and what institutions arose to further the practice.

He also offers some evidence that sho9ws that exchange between strangers or unrelated bands has occurred for thousands of years and is not a modern development.

Incremental changes result in a system moving toward greater chaos until it reaches a critical point where it leaps into a new level of complexity — as demonstrated by catastrophe theory. Thus modified, Darwin’s theory remains intact and so-called irreducible complexity is explained without having to resort to theorizing that God is so incompetent as to not be able to create a world that could evolve without him having to intervene periodically.

These are theory-dependent observations, and pitting one theory against another is useless. Even a cursory review of the literature indicates Irreducible Complexity (IC) as a theoretical proposition remains unsettled. One of the most robust examples to date is the ribosome. Evolutionary biologists have thus far failed in their attempts to get below the ribosome (ie. construct a synthetic ribosome that is functionally capable in the absence of proteins). That’s not to say that it’s impossible. But to date, the only explanation offered by proponents of Evolutionary Theory is the indirect metabolic pathway, more popularly known as “Darwin of the Gaps”, which is the logical equivalent of “God of the Gaps.” In chess, I believe this is referred to as a stalemate.

As a fellow Christian, we really have no quarrel. Couldn’t Adam have been an ape, or perhaps a pygmy chimpanzee?

Snark: “Couldn’t Adam have been an ape, or perhaps a pygmy chimpanzee?”

Many good Christians follow that compromise, which some call theistic evolution. Dr. Collins of the Human Genome project is one. However, don’t think that it wins you any points with evolutionists. And it’s impossible to reconcile with the Biblical account of creation, especially the idea of death. Theistic evolution requires billions of years of massive death to get to humans, whereas the Bible claims that death didn’t appear until after the creation of humans.