I’m very much enjoying Benn Steil’s and Manuel Hinds’s Money, Markets & Sovereignty (Yale University Press, 2009). Right from the start, these authors hit important notes, solidly. For example (from pages 6 and 7; original emphasis):
Law and commerce were indelibly linked in the thought of David Hume, who argued that it is commerce itself that gives rise to notions of justice between people and peoples. Although commerce is today typically seen as something which is proactively enabled by law, it is much more accurate historically to see law as something which emerges because of its vital importance in commerce – and particularly commerce involving foreigners. Within the Roman Empire, it was the ius gentium, the “law of nations,” derived from custom rather than legislation, and applying specifically to noncitizens, that governed most types of commercial transactions.
The modern notion that law is inseparable from the will of a ruler or ruling body, antithetical to the idea of a universal natural law or a ius gentium, has, in parts of the world and during epochs where it has actually been applied, been devastating to economic development.
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Here’s a question that perhaps Progressives could answer for us. If markets don’t work well without regulations, how is it nations are able to trade with one another? There is no higher authority to regulate that trade.
How about specific examples to this extremely broad notion? Everyone is governed, even heads of state,at some level. Even dictators have transaction costs
I don’t want to speak for progressives, but from my perspective – to the extent that markets are problematic, they’re also problematic at the international level. Negative externalities associated with pollution, for example, are just as much a problem for US-China trade as they are for trade within the US.
Which really is exactly what we should expect – as Don often points out, there’s nothing qualitatively different about trade between two Americans and trade between an American and a Chinese person (with the one exception I always bring up, of course, that they use different currencies so there are currency adjustments that have to happen that don’t have to be made between two Americans).
Beautifully expressed.
Everything has a root, a point where it begins. Capitalism, law, agriculture, technology, mechanics, trade, and service.
Why shouldn’t codified law develop from custom, it only makes sense.
It might seem like a chicken-and-egg question forever lost to history, but logic produces the only answer–trade necessarily preceded the state. Trade is ultimately a one-on-one interaction, and in all culture and all times, the value of trade has been preeminent.
Do you think? I don’t know personally. I would definitely agree with you that trade preceded the modern state. But did exchange precede coercive dominance and coercive social organization? I don’t know about that. We certainly have some close evolutionary relatives who are much more practiced at coercive dominance than exchange (although there are signs of both).
Which isn’t to contradict your last point at all – that the value of trade is preeminent. After all, chronological preeminence isn’t required for preeminence of value. We don’t hang cave paintings in the Louvre.
So, DK,
You subscribe to the theory that Og did not trade with Mog until someone, a group bully perhaps, made him do it?
How would the group bully have taxed a trade between Og and Mog?
Use that imagination and play the scenario out in your head. One morning early Mog was shivering because his skin didn’t fit well, and Og was more comfortable because his woman tailored his skin to fit. Og had two tailored skins, and a crappy hand axe. Mog had two well made hand axes.
At this point we see a potential trade.
We can believe that Og and Mog sat there stupidly until Rog, the group bully, came along and said, “Og, trade one of your skins for Mog’s extra axe.”
Or, we can imagine that Mog, shivering, suggested the trade on his own, and Og readily agreed, because both saw the benefit of the trade.
I knew Og and Mog very well and they didn’t wait to be told to trade, they figured out this mutual benefit thing on their own. It didn’t take a tyrant, a collective, or a nagging Og-ina to make it happen.
The beautiful thing about my ancestors was their intelligence. Others in the group saw what happened and the beneficial results, understood what had happened, and looked for opportunities to make trades of their own.
Now neither Og or Mog would have been able to make the trade had they not already invented capitalism, in that they had created excess goods, capital, to invest when they invented trade.
Now DK, I wasn’t there at that first trade, but I can guarantee you that my imagination (based upon years of study, observation, and experience…not to mention perspective) tells me that it happened exactly that way. Perhaps not with skins and axes, but with excess goods possessed individually, coupled with need or desire shared by two individuals.
However, should you desire further evidence, I will find the notes great grandpa Og left me regarding that first trade.
BTW, did you imagine this: “We don’t hang cave paintings in the Louvre.”, is somehow profound?
If so, I’ll match it. We also do not spray paint modern art in French caves.
Wow, now we are both on top of our game.
You might want to reread what I wrote and perhaps edit some of your comment afterwards. It bears almost no resemblance to anything I said.
I didn’t say anything to suggest I think coercion motivated the first trades. I don’t think that. What I said was that “the state”, in the sense of a coercive governing group, probably existed before trade existed. NOT that that governing group orchestrated prehistoric trade deals. They probably did what government have always done – take things away from early men in their tribes, fight other tribes, and tell people where they should move to and make camp.
My understanding is that we have evidence for this governing behavior preceding evidence of trade. And like I said, it’s not surprising. We know there are primate communities that have a rigorous hierarchy of authority that is much more developed than their trading behavior. We also have evidence that homo sapiens beat out neanderthals precisely because while neanderthals could form coercive tribes, they didn’t really trade. That’s all I’m saying – I see no reason to assume that trade came first. And we shouldn’t really care if it did, because even if it came later that doesn’t mean that it’s “worse” – hence “we don’t hang cave paintings in the Louvre”, which isn’t especially profound at all.
DK,
What about nomads? History is rife with people that belonged to no traditional “state” or hierarchical structure (aside from the man as the head of the family, or similar). Nomads were the most traditional of traders because, as nomads, they often couldn’t produce what others could. They needed no state to realize the benefit of trade.
Additionally, you seem to be overlooking the overall function of a “tribe” or government or guilds or whatever. These are, at at the most basic level, trades. To be a member, I trade some of my freedom for the protection of the group. Or I trade some entry price to enjoy the fruits of membership in the guild. Nobody ever formed a successful organization entirely through force. For this reason alone, trade necessarily preceded government.
Disingenuous Kuehn,
Yep, you’re well trained and programed but limited in imagination and therefore true ability to perform intellectual functions.
But by-the-by on that.
This:
“What I said was that “the state”, in the sense of a coercive governing group, probably existed before trade existed.”
Implies exactly what I asked, which is that you seem to have some idea that trade couldn’t happen and did not happen until some sort of state existed; and that dear boy implies coercion to make trade happen. Do you subscribe to the theory that trade had to be compelled?
You say you don’t yet, you imply you do. Which is it?
And, in anthropology as well as archaeology there is evidence in known campsites around the world of artifacts that could only have been found there because of trade, and the dates precede anything that could possibly have been a state, even in the micro vision of a family group dominated by an all controlling father or male.
You need to expand your comprehension of the word trade. Trade is what happens when two individuals swap things, like little boys on a playground swapping marbles, oh that’s right, you’re too young to have known marbles…ok bad example. It is like too modern little boys swapping nude pictures, downloaded from the internet, of Madonna and Brittany on the playground. And, if you think Og and Mog waited for a state to swap goods, you are sadly limited in your understanding of the word trade.
Of course, trade preceded the state, but trade was a very different beast before the state, and when we speak of “trade” today, we discuss the modern beast, not the prehistoric one. I have no idea what a world governed by “natural law”, in Don’s sense, looks like, because I’ve never seen one. On the other hand, I know that Kings have claimed to rule by divine or natural right for time without memory, and they’ve always had their champions in the academies.
Or the modern notion that law is monolithic has come from religion. In fact I’d venture to say that statutory law is really derived from religious law. For example, take the law “to work on the Sabbath is a sin that will be punished by death”. Such a law wouldn’t evolve from quaint customs and trading but imposed by someone who decided on a whim that one day per week would be reserved for rest and have the authority to make working on that day a capital crime (and say that God made it so).
However the love of customary law cab not be automatically celebrated (unless people are going for an idyllic Anarcho-Libertarian society) and various tribes around the world have picked up cruel and barbaric traditions through time (e.g. FGM, wife burning, cannibalism, etc.).
As a fan of Ed Burke, thank you for a brilliant example of how “things work.”
Uncle Miltie would smile.
.
What I also find interesting is how radically different Hume’s view of commerce is from the early republican view that was held in the United States by men like Jefferson, who were supposed to be the American inheritors of the Scottish Enlightenment (at least in the very early nineteenth century – they came around somewhat eventually). The Ellusive Republic, by Drew McCoy gives a good account of it. Those guys deeply distrusted commerce to bring about anything like “notions of justice between people and peoples”.
Does anyone know if “jus gentium” was protected from the Roman Senate’s intervention? Did English Common Law derive from the same sort of thinking?
Shouldn’t there be a separation of work and state in a free society?
I think Marcus is on to an important question, and one that suggests that Hume can’t be right either (at least on one point). For people to engage in trade, they must already be regarding each other as having rights to property. And respect for property is, arguably, central to at least one kind of justice. So not only must justice and respect for it have antedated government, it seems to me it must have antedated (or at least been coeval with) trade. I don’t think trade makes for our recognition of justice any more than government does.
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On a somewhat off-topic note, Money, Markets & Sovereignty falls into the trap of three things. That is, the trap that all sorts of books like this fall into when it comes to choosing a title. The list of three things has been used by great works like Anarchy, State, & Utopia, but I think choosing this sort of format hurts these works by making them all blend together. It’s basic marketing that you should try to differentiate your product from the other guys. It’s like Goodyear vs. Goodrich.
Where is the boundary between a universal natural law and any convention of the TRIPS agreement? On which side of the line does a 120 copyright fall, as opposed to the 14 year copyright that existed in the U.S. in the eighteenth century? Do Kings rule by divine right or not? How do I know which decrees of statesmen are “natural” and which are not? Do I ask you?
Certainly, the law of Gravity is not simply a decree of statesmen and neither is the value of Pi, but the TRIPS agreement is, and so is the Fed Funds rate. “Lawful property” in the real world describes what attorneys read in state constitutions, legislative codes and judicial precedents unconstrained by these codes.
A black market may operate by other rules and may operate more effectively, but if you trade much in the light of day, you have an attorney on retainer, at least, and you play by the rules of the statutory rulers, because they shoot you otherwise. Custom then emerges within these constraints. Any custom that might have emerged without the constraints is theoretical and counterfactual, and assuming that existing custom would have emerged without existing statutory constraints is also counterfactual.
So I don’t deny some natural order in the state of nature or an emergent order in an anarcho-capitalist utopia (which is not the state of nature). I only deny that anyone, including Murray Rothbard, knows what that order is, because states thoroughly dominate the modern world, and we have hardly an empirical clue what a stateless world looks like, aside from the remains of the natural world.
Commerce got a big boost from arithmetic, something the law had no control over. As knowledge goes, so goes commerce.
OK – well I wasn’t saying that prehistoric man always had a notable hierarchical structure, or that somehow we were too dumb to trade. And I’ve never said anything to suggest we needed a state to realize the benefits of trade. Come on guys!
Yes – if you want to think of the “social contract” as a sort of trade, then by definition trade precedes the state.
I’m just trying to push back on this idea that we can know for sure that we traded first, and that only over time “the state” creeped in. I’m sure in some parts of the world you had individuals trading long before they were organized. In others it went differently. My whole point is that “the state” is more than just a residual corrosion of free exchange – it’s an organizational pattern that we see in pre-humans and in modern primates and other animals completely independent of the act of exchange.
And I guess in that sense I’d push back on your social contract approach too, James. The state often isn’t exchange or brute force – sometimes it’s just evolved instinct.
The search for a “state of nature” is futile, and it’s also a bad argument for the benefits of trade. The benefits of trade are unquestionable – but we don’t conclude that by purporting to know that “people traded before they governed”. How could we possibly know something like that, and what possible reason would we have for assuming one way or another? My whole point is that I don’t know but I have no trouble accepting that trade did not come first – that it came second. In fact I used those three magic words twice in my original post.
vidyohs, once again we’re in a situation where I’m not even getting a chance to defend my position – I have to correct every misconception of my position that you hold, so that there’s no space left to talk about what I’m actually saying.
“Implies exactly what I asked, which is that you seem to have some idea that trade couldn’t happen and did not happen until some sort of state existed; and that dear boy implies coercion to make trade happen.”
By what possible rule of logic does it imply that vidyohs – please enlighten me. You should know that correlation does not imply causation – and if correlation doesn’t imply causation, then certainly chronology doesn’t imply it. I implied no such thing – you inferred it.
“Do you subscribe to the theory that trade had to be compelled?”
Of course I don’t – do you?
“You say you don’t yet, you imply you do. Which is it?”
I know this can be tough – but just read me again and remember: I don’t imply, you infer/chronology is not causation. Remember those two little gems of wisdom, and you’ll do OK vidyohs.
Your description of trade – of either marbles or porn – is exactly my understanding of trade. I’m not sure why this is so hard for you to understand.
Well, this is sort of silly. Who’s we? Man? Of course you can find examples of peoples that formed governments that had no interest in trade. You can also find examples of peoples engaged in trade for their entire history that never formed any sort of real government or state.
I’m not searching for a “state of nature”. I don’t even know what you mean by this statement. My point was that, against the protests of the anti-free trade group, government did not make all trade possible. We would still be here without massive government intervention. We would still trade. This line of thinking, that government is absolutely crucial to any sort of trade, is often a precursor in the argument for confiscatory taxation, or the theft of civil liberties. After all, without the government, none of those things would be possible anyway, so they’re not taking away some right of yours, merely scaling back the “privilege” of living under that wonderful government.
“My point was that, against the protests of the anti-free trade group, government did not make all trade possible. We would still be here without massive government intervention. We would still trade.”
Anti-free trade groups? Oh OK – I thought we were discussing whether governance or exchange came first. Well of course we don’t need governments to trade – regardless of “which came first”.
Disingenuous Kuehn,
I really have learned to detest the run to the mulberry bush and the resulting circles one has to engage in with you, martin, and muirduck. But, this once and then it is off to bed.
Let’s do some chronology, OK?
1. vikingvista said this: “but logic produces the only answer–trade necessarily preceded the state. Trade is ultimately a one-on-one interaction, and in all culture and all times, the value of trade has been preeminent.”
2. to which you replied: “Do you think? I don’t know personally.”
3. which led me to ask this: “You subscribe to the theory that Og did not trade with Mog until someone, a group bully perhaps, made him do it?”
After number three I then gave you an example of how trade may have been invented. I gave you an example of possession of tradable goods. I gave you an example of motivation for trade. I gave you an example of a probable trade resulting from the factors of possession of goods and motivation. Thus giving an imaginary scenario true, but one very likely extremely close to the reality. And I pointed out that it most certainly happened long before any kind of coercive state was created, long before any benevolent state was created, and in all probability was not the actual first trade, in that I can imagine the very first trades coming long before even the flint chip was invented. I would surmise from my own studies and observations that trade, along with capitalism, was invented about the time our ancestors began to show limited ability to reason. I can see trades happening before caves, before rudimentary shelters. I can see where Og sharing his kill got him some time with Mog’s daughter, possibly even bought her.
You seem to think our ancestors were a bunch of dirt scratching dummies that couldn’t look, see, and reason, when all the evidence is that that is exactly what set us apart from the other primates.
Trade is natural to many animals, humans being the most developed, and in humans became very sophisticated, amd was development that happened, or was invented concurrently if not simultaneously where ever humans were found.
Just think, Jr., if Homo Erectus had the ability for rapid communications as do we, how long would you imagine it would have taken the human race to go from flint chips to the bow, from cupped hands to skilled pottery? A million years or so? I don’t think so.
The fact of the matter is that our ancestors were very bright and certainly, as archaeology shows, were trading hundreds of thousands of years ago. Ivory from Walrus tusk found in the form of figurines far far from any body of water where Walrus lived. Copper items far far from any source of copper. Those are just two examples.
4. then you said this:
“I’m just trying to push back on this idea that we can know for sure that we traded first, and that only over time “the state” creeped in.”
Which is really very silly, considering a very well developed archaeological research has been and is being done all over the world.
Furthermore, I believe we can agree that trade constitutes an exchange of goods or services, right?
With that in mind I can tell you that if you go observe primates, from the smallest monkey to the Gorilla, in zoos or in the wild, you will see them frequently trading services. It is rudimentary, but it is trade.
I groom you, brush your fur out, pick the nits, and clean you up; when finished, we swap and you groom me. It has to be an agreeable trade because there is no evidence of coercion compelling one to groom the other, or the swap to be made. (I can imagine the remote possibility that I simply missed the coercion because it happened some years or month ago and I just wasn’t there….but somehow, I doubt this.)
Now how far back in human history does that behavior extend?
Your beloved state is not even a distant second in this contest, it isn’t even on the map until long after trade had acquired a great degree of sophistication and became widespread.
That is it, one trip around the bush is enough for me.
vidyohs, it’s amazing how well your “around the “mulberry bush” line mirrors how it always feels talking to you.
I said I don’t know what comes first – not that I was sure the state came first. So don’t put those words in my mouth like you often try to do.
I said that even if the state did come first, it doesn’t mean you need the state to trade. So don’t put those words in my mouth like you often try to do.
I said that humans are very intelligent – which is exactly why they’ve been trading for so long. So don’t put those words in my mouth.
I’m tired of arguing a faux case that you’ve imputed to me. I’ll give you the same advice I did when methinks tried one like that:
you should just comment under two names: vidyohs1 and vidyohs2. Vidyohs1 can write down whatever dumb position you impute to me but that I never actually say, and vidyohs2 can correct and argue with vidyohs1. I don’t need to be a part of it if you continue to distort what I’m saying.
Gee that is a good idea Disingenuous Kuehn.
Vidyohs1 – “Daniel said this: 2. to which you replied: “Do you think? I don’t know personally.”
Vidyohs 2 – No damnit Daniel did not say that!
Vidyohs 1 – Then Daniel said this: “I’m just trying to push back on this idea that we can know for sure that we traded first, and that only over time “the state” creeped in.”
vidyohs 2 – Again Daniel did not say that.
vidyohs 1 – Yes he did I saw it above.
vidyohs 2 – no you blind shit, he did not write those things.
vidyohs 1 – (rubbing eyes) but but I am looking right at them under his post name.
vidyohs 2 – you’re not seeing what you think you’re seeing.
vidyohs 1 – Ohhhhhhh, I understand. Daniel can’t stake out a position and stick to it, so he writes things so disingenuous that he can claim later any position he wants, is that it?
vidyohs 2 – No. I told you he didn’t write those things.
————
You see Disingenuous Kuehn, I don’t have to make up or impute anything to you; and what I did above what not contest any of your particular statements about which came first, trade or state, if you could read you’d know I was pointing out that it is ignorance, lack of imagination, and inability to really think that makes you doubt that trade preceded the state by hundreds of thousands of years, possibly even millions.
How could not you understand that scenarios I gave you above with Og and Mog, and primate behavior in exchanging services are infinitely more probable in reality and time line than any kind of organization that could be interpreted as a state?
It is your doubt about the intelligence and creativity of the human race including ancestors, and your devotion to the state as the true source of motivation and creativity, that I point out.
From the time you appeared here in the Cafe it has seemed that you think humanity is nothing without the state; and I oppose that presentation because I know that the state is nothing without humanity.
DK, have you ever contemplated the simple truth that when government destroys the people, government destroys itself? Yet, when the people destroy government, any government, they simply create a new one.
Get over your idea that government must of necessity be involved in every detail, every idea, every theory, every action, every philosophy, and the wellspring from which all creativity and innovation flows.
I know, I know, you’ve never directly said that, but DK, I am a man who spent years dissecting communications of all natures and was damn good at my job; your communications, in the way you say them, the consistency with which you underlay your themes, your viewpoints, you always display that bedrock belief you hold that without a state man is nothing. You are no different than muirduck in this, you always display more faith in government than in your fellow man. You can deny this all you want, but your writing is simply not skilled or clever enough to cover it up.
You seem to a reasonably nice guy, but you’re consistently disingenuous in your posts and I for one and for what it is worth do not trust that. Typically I see an agenda and manipulation in disingenuous words. You’re a well programed little data source but I’d not be encouraged to go to you for original thinking.
I hold no personal or particular animosity towards you, no more than I do anyone who I see consistently support the thief more often than the victim.
I “think humanity is nothing without the state”?!?!?!?!
Nevermind, vidyohs – just forget about it. It really is impossible to have a real conversation with you, isn’t it?
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